DGAP-News: BayWa AG: Strong first quarter with leap in earnings

| Source: EQS Group AG
DGAP-News: BayWa AG / Key word(s): Quarter Results
BayWa AG: Strong first quarter with leap in earnings

08.05.2014 / 09:00


BayWa AG: Strong first quarter with leap in earnings

BayWa AG has had a successful start to the financial year 2014. The
internationally active trading and services company was able to improve its
earnings before interest and tax (EBIT) by EUR11.7 million, generating an
operating result of EUR4.3 million (2013: EUR-7.4 million). In the first
three months of the year, BayWa's business benefited from the mild weather
and strong international business. With revenues on par with the previous
year of around EUR3.6 billion (2013: EUR3.7 billion), BayWa AG was able to
attain a significantly better operating result than usual for this period.
The first quarter usually sees negative growth due to seasonal influences.

"The unusually mild winter was very positive for the Agriculture and
Building Materials Segments. The business with agricultural equipment,
operating resources and building materials benefited from the earlier start
to the season," Klaus Josef Lutz, Chief Executive Officer of BayWa AG,
explained. Internationalisation also played a key role in the positive
earnings development in the first quarter, he said. The trading activities
of Dutch subsidiary Cefetra and the global project business in the field of
renewable energies made a significant contribution to this.

While he emphasized that the first three months
are only of limited informative value for the result of the year as a whole
owing to the seasonal influences on BayWa's business performance, Lutz
highlighted the positive expectations for the current financial year: "The
positive start in the Agriculture and Building Materials Segments
reinforces the target of increasing revenues and earnings year on year once
again by the end of 2014."

Weather and internationalisation boost agriculture business
The Agriculture Segment, which comprises trading in agricultural operating
resources and produce as well as the Agricultural Equipment and Fruit
business units, generated revenues of around EUR2.6 billion. This equates
to a decline of 4.4%, primarily as a result of lower grain and fertiliser
prices. The operating result (EBIT) rose considerably year on year by 35.5%
to EUR28.6 million. Strong business performance by Cefetra and the
full-year consolidation of Bohnhorst for the first time contributed to this
rise in earnings (initial consolidation as per 1 June 2013).

The advanced development of vegetation had a particular impact on the sale
of operating resources such as fertilisers, seed and crop protection.
However, revenues in Agricultural Trade fell by 5.9% to around EUR2.2
billion. The reason for this was the decline in fertiliser and grain
prices. In terms of the operating result, international trading activities
had a particularly important role to play: The Dutch holding Cefetra
capitalised on high turnover volumes on the world market to double its
earnings contribution year on year. The Bohnhorst Group also recorded
positive business performance, resulting in an overall year-on-year
increase in the Agricultural Trade business unit's EBIT of 20.6% to EUR23.3

In the agricultural equipment business, BayWa exceeded the good figures
from the first quarter of the previous year. Alongside the high level of
orders on hand for new machinery from 2013, sales of used machinery also
increased. Revenues in the Agricultural Equipment business unit rose
correspondingly by 10.2% to a total of EUR269.5 million. In addition to the
early start to the season, stable business at workshops also had an impact,
improving the business unit's EBIT by EUR5.4 million. Following the
previous year's decline, EBIT totalled EUR3.3 million as per 31 March 2014.
"Sentiment in agriculture is very positive. The good start to the new year
is raising expectations for yields here in Germany. What's more, the
Ukraine crisis and the unstable weather conditions in the US are currently
leading to an increase in grain prices on the global market. On account of
global demand, we also expect stable, high prices going forward," Klaus
Josef Lutz explained.

The Group's fruit trading activities were successful on international
markets. The business was boosted by high sales volumes at New Zealand
majority holding Turners & Growers Limited from the current fruit harvest
in the southern hemisphere. However, volumes sold from the German apple
harvest in the fall of 2013 were below the prior-year figures. All in all,
against the backdrop of stable prices, the Fruit business unit generated
revenues of EUR115.8 million in the first quarter, nearly matching the
previous year's total (EUR119 million). Earnings were unable to match the
previous year's figures. The poor fruit harvest in Germany last year and
lower trade margins meant that the operating result for the first quarter
in 2014 came to EUR2.0 million, down by EUR1.9 million on the previous
year's figure. This shortfall in earnings is likely to be recovered over
the course of the year with the help of the fruit business in the southern
hemisphere. Due to the promising development of vegetation so far, high
yields are expected in the upcoming German fruit harvest that will give the
business unit extra impetus through to the end of the year.

Project business with renewable energies bolsters Energy
The Energy Segment comprises the trading activities in fossil and renewable
heating fuels, fuels and lubricants as well as its business in renewable
energies, which is pooled in BayWa r.e. renewable energy GmbH. Compared to
the first quarter of 2013, revenues in the Energy Segment were down by 4.5%
to EUR697.4 million. At EUR-0.2 million, EBIT was down by EUR2.2 million
year on year.

In the field of renewable energies, the Group profited from the double
diversification of business activities by products and by regions.
Lacklustre performance in trade with solar modules in Continental Europe
was offset by the recovery of demand in the solar business in the US. In
addition, the project development business of BayWa r.e. was successful.
For example, three solar parks were commissioned in Germany and the UK with
a total output of 30.8 MW. Revenues in the BayWa r.e. renewable energy
business sector increased year on year by 30.2% to EUR96.0 million. The
operating result fell by EUR2.5 million to EUR0.1 million, however, due to
investments in new projects. "We will realise additional project sales over
the remaining course of the year. We expect the framework conditions for
the industry in Germany to improve as a result of the EEG amendment.
Combined with the good international market development for renewable
energies, we are optimistic that we will meet our targets in 2014," Lutz

In the traditional trading and distribution business, revenues fell in
light of the good weather by 8.4% to EUR601.3 million, primarily as a
result of the decline in heating oil prices and sales volume. Boosted by
the dynamic development in agriculture and the construction sector in
Germany, sales of fuels and lubricants rose. The business unit's EBIT rose
correspondingly year on year to EUR-0.3 million as per 31 March 2014 (2013:
EUR-0.6 million).

Building materials business benefits from mild weather
The Building Materials Segment comprises Group trading activities involving
building materials in Germany and Austria. The lack of winter weather led
to an unusually early start to the building materials season and a 6.6%
rise in revenues to EUR278.6 million in the first three months of the year.
Construction and civil engineering products benefited in particular from
the framework conditions. The transport business, which comprises the
direct supply of mass building materials such as bricks and concrete to
construction sites, also grew. The widespread lack of ground frost had a
beneficial effect on road construction and gardening. Overall, earnings
were significantly improved and the typical loss was more than halved. As
per 31 March 2014, the segment's EBIT, which is generally negative in this
season, came to EUR-13.3 million (2013: EUR-26.7 million). Thanks to this
solid start to the year, the Group is confident of achieving the targeted
increase in the annual result for 2014 in the Building Materials Segment.

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


08.05.2014 Dissemination of a Corporate News, transmitted by DGAP - a
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Language:    English                                                    
Company:     BayWa AG                                                   
             Arabellastraße 4                                           
             81925 München                                              
Phone:       089/ 9222-3691                                             
Fax:         089/ 9222-3698                                             
E-mail:      marion.danneboom@baywa.de                                  
Internet:    www.baywa.de                                               
ISIN:        DE0005194062, DE0005194005,                                
WKN:         519406, 519400,                                            
Indices:     SDAX                                                       
Listed:      Regulierter Markt in Frankfurt (Prime Standard), München;  
             Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,      
End of News    DGAP News-Service  
267193 08.05.2014