DGAP-News: BayWa AG / Key word(s): Final Results BayWa AG: Excellent performance in 2010 30.03.2011 / 11:30 --------------------------------------------------------------------- Excellent performance in 2010 BayWa: Renewable Energies' EBIT exceeds expectations. Further growth in core businesses announced. Munich, 30 March 2011 - 'An excellent performance over the year, with a considerable increase of 16 percent in earnings before tax in conjunction with a very pleasing improvement in the operating results of the business units', stated Klaus Josef Lutz, Chief Executive Officer of BayWa AG, in presenting the results for financial year 2010. Lutz is optimistic about the current year and predicts further growth in the company's core businesses. The international trading group closed the financial year with earnings before interest and tax (EBIT) of EUR 128.9 million (2009: EUR 115.4 million) on the back of revenues which came to EUR 7.9 billion (2009: EUR 7.3 billion). EBIT was therefore raised by 11.7 percent measured against the year 2009, and revenues climbed by 8.9 percent. To enable shareholders to participate in BayWa's successful performance, a proposal to raise dividend by 25 percent to 50 cents per share as against the previous year will be put to the Annual General Meeting of Shareholders. The financial year ended was influenced mainly by the economic upswing which benefited BayWa in all its segments. Farmers were encouraged by the increase in the prices of grain and milk to invest more, which resulted in a positive impact on the demand for fertilisers and crop protection and orders placed for agricultural equipment. All in all, this development in business led to a significant increase in operating profit as compared with 2009. 'We have therefore achieved an important goal in 2010', was Lutz's pleased comment. Another significant goal was achieved in the renewable energies business: The EBIT target of EUR 20 million was even slightly exceeded, with EBIT posting EUR 21.1 million (2009: EUR 1.8 million). Lutz announced that BayWa intends to promote growth in its core segments measured by revenues and profit. The Chief Executive Officer also sees potential for raising operativ result and cited the Building Materials segment as the only segment which has not yet been able to earn its cost of capital. Here BayWa is working on strategic prospects which, however, excludes the option of a complete sale. More investments aimed at strengthening the core business and raising profit in the Agriculture Segment have been planned. Investments will, for instance, include committing funds of EUR 20 million to expand the location in Regensburg's harbour. In the renewable energies business, Lutz anticipates another above-average growth and rising contributions to profit. This will be achieved partly by acquisitions and partly by organic growth in the holdings acquired. He assumes that renewable energies will become even more important against the backdrop of events in Japan. Agriculture segment characterised by stronger demand and higher prices The Group's Agriculture Segment generated revenues of EUR 3.5 billion in 2010 (2009: EUR 3.3 billion), thereby contributing 44 percent to consolidated revenues. There was a significant increase in EBIT which climbed to EUR 63.9 million (2009: EUR 44.2 million). The Agricultural Trade business unit, with its focus on agricultural produce and operating resources, lifted revenues to EUR 2.5 billion (2009: EUR 2.4 billion). This revenue growth of around 7 percent is mainly price induced: mid-2010 saw the price of grain rise steeply owing to widespread drought in Europe and Russia during the main growth phase. The poor weather conditions during the harvest in late summer and early autumn resulted in more crop shortfalls which, on occasion, drove the prices of grain by up to 80 percent above the previous year's level. Prices remained at a higher level than in 2009 throughout the whole second half of the year, to the benefit of farmers, and more than compensated for the lower harvest yield. This development also impacted BayWa's business as farmers pared down their grain stocks with the result that grain turnover at BayWa climbed by almost 4 percent to 5 million tons. At the same time, demand for fertilisers and crop protection gained momentum despite rising prices. The fruit trading business, comprised under the Agriculture segment, had a favourable impact on revenues and profit. The BayWa Group is a leading supplier of German dessert fruit to food retailers and the largest supplier of pipfruit from organic production. Together with Frucom, a company acquired in 2010 trading in tropical fruit, the business unit raised its EBIT to EUR 3.7 million (2009: EUR 3.2 million). Despite the lower harvest volume, revenues increased to EUR 102.8 million (2009: EUR 83.3 million) owing first and foremost to higher prices and through the inclusion of the large fruit and vegetable markets acquired in 2009 in Ingelheim and Weisenheim. The Agricultural Equipment business unit achieved revenues of EUR 873.3 million (2009: EUR 826.6 million) and an EBIT of EUR 10.8 million (2009: EUR 13.0 million) in 2010. The growth in revenues is mainly attributable to expanding the Claas agencies in Lower Bavaria and in the southern part of Upper Bavaria, as well as the successful placement in the market of BayWa's own tecparts brand for second-hand machinery. Services and maintenance also recorded growth. The demand for agricultural machinery and equipment for yard and barn picked up momentum in the second half of the year from the growing improvement in farmers' income. Lower EBIT as against the previous year is primarily the result of the higher level of expenses incurred by converting locations for the Claas and AGCO/Fendt brands. Based on the data available, BayWa anticipates that the willingness of the Agriculture Segment's customers to invest will continue to develop well in 2011, and expects an increase in profit. Building Materials Segment achieves revenue growth The revenues of the Building Materials Segment came to around EUR 1.9 billion (2009: EUR 1.8 billion). EBIT stood at EUR 18.3 million (2009: EUR 24.2 million). The main influences on the Segment's financial year were the severe winter with slow demand, followed by business gaining momentum over the course of the year. The Building Materials business unit benefited both from the German government's economic stimulus programmes and from the recovery in housing construction. For the first time after a decade, housing construction in Germany recorded an increase again of 4.4 percent. The business unit generated revenues of EUR 1.4 billion (2009: EUR 1.3 billion). Fierce competition and strong pressure on margins caused the Building Materials business unit's EBIT, which came to EUR 8.5 million (2009: EUR 12.8 million), to fall short of expectations. The DIY & Garden Centres business unit benefited not only from the improved economic climate but also to a great extent from the new product mix and the continued implementation of the specialist store concept. Revenues climbed to EUR 5.2 million (2009: EUR 4.9 million). EBIT fell to EUR 9.8 million (2009: EUR 11.4 million) mainly due to the higher level of depreciation and amortisation which came to EUR 1 million for investments for converting and refurbishing centres in the previous years. Klaus Josef Lutz underscored the fact that, in 2011, all efforts would be undertaken in the Building Materials Segment to significantly raise the operating result. 'We continue to work on the strategic prospects of the Segment which is exposed to harsh competition and low margins', stated Lutz. Energy Segment delivers greater profitability at BayWa r.e The Energy Segment achieved an increase in revenues of almost 30 percent to EUR 2.4 billion in 2010 (2009: EUR 1.8 billion). EBIT soared by more than 70 percent to EUR 30.3 million (2009: EUR 17.7 million). This positive development was due first and foremost to BayWa r.e GmbH which comprises all the renewable energies activities of BayWa. The company generated revenues of around EUR 255 million and, in its first full year within the Group, delivered an EBIT of more than EUR 21 million which outperformed expectations. 'This is proof that the strategy of investing in this sector was absolutely right and has paid off', was Klaus Josef Lutz's pleased comment. The Segment's conventional energy business also performed well in 2010: The demand for lubricants and fuels picked up momentum, buoyed by the economic environment, and resulted in a substantial increase in sales. Only the sale of heating oil declined due to the relatively high price level and hesitant demand by customers despite the cold winter and the increasingly lower filling levels of heating oil tanks. All in all, margins developed well not only in the heating market and the filling station business but also in the lubricants business which improved its operating result. 'We intend to grow in both our conventional energy business and in the field of renewable energies', was Lutz's affirmation of BayWa's strategy. 'We will achieve this through acquisitions on the one hand, and through organic growth on the other, as the shareholdings acquired will also expand their businesses in their own right', commented the Chief Executive Officer. 'Other Activities' in 2010 In the financial year 2010, 'Other Activities' generated revenues of EUR 136.3 million (2009: EUR 376.9 million). The decline was due in the main to the disposal of BayWa's car dealer activities in 2009 and the sale of other shareholdings as part of BayWa's focusing on its core businesses. At the end of the year, BayWa's 'Other Activities' comprised the Austrian food producer Ybbstaler and a number of financial investments which, from the standpoint of the Group, are of secondary importance. Pending approval by the anti-trust authorities, Ybbstaler Fruit Austria GmbH will be combined with AGRANA Juice Holding GmbH as part of a joint venture and no longer be included in the Group's balance sheet. Contact: Marion Danneboom, BayWa AG, Head of PR/Corporate Communication, tel. +49 (0)89/92 22-36 80, Fax +49 (0)89/92 22-36 98, e-mail: marion.danneboom@baywa.de End of Corporate News --------------------------------------------------------------------- 30.03.2011 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: BayWa AG ArabellastraÃe 4 81925 München Deutschland Phone: 089/ 9222-3691 Fax: 089/ 9222-3698 E-mail: presse@baywa.de Internet: www.baywa.de ISIN: DE0005194062, DE0005194005, WKN: 519406, 519400, Listed: Regulierter Markt in Frankfurt (Prime Standard), München; Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 117516 30.03.2011
DGAP-News: BayWa AG: Excellent performance in 2010
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