DGAP-News: BayWa AG / Key word(s): 9-month figures BayWa AG up slightly on the previous year after nine months 10.11.2016 / 10:30 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- BayWa AG up slightly on the previous year after nine months BayWa AG, Munich, Germany, finished the first nine months of 2016 with a 3.3 percent EBIT increase to EUR85.4 million (nine months 2015: EUR82.7 million)* compared to the same period in the previous year. Revenues climbed to EUR11.4 billion as at 30 September 2016 (2015: EUR11.1 billion). "The international fruit business and global renewable energy activities were able to compensate for the agricultural market developments, which continue to be difficult, and ensured that the result after nine months was up slightly on the previous year," said Klaus Josef Lutz, Chief Executive Officer of BayWa AG, summarising business performance for the year through the end of September. The building materials business and conventional energy in particular benefited from a favourable economic situation and also contributed to this result. Agricultural markets on the national and international levels, however, were shaped above all by producer prices, which continued to fall. "This is impacting the entire agricultural industry. As a result, we are forced to deal with the known effects arising from a six-year-low in wheat prices, for example. They include increasing pressure on margins, less willingness among producers to sell their grain and reticence among farmers to purchase fertilisers, crop protection and agricultural equipment," Lutz explained. Another example that he provided to illustrate the difficult agricultural market development was exceptionally volatile soya trading: erratic weather conditions in South America, as well as constantly changing harvest forecasts and consumption estimates led to a rollercoaster ride for prices this year on a scale seldom seen before. This was intensified by the increasing influence of algorithmic trading at hedge funds. Lutz noted that BayWa was also unable to escape this trend, resulting in a year-on-year EBIT decline in the Agriculture Segment after nine months. Due to the strained situation in the agricultural industry, it will remain challenging to match the previous year's result. In looking ahead to 2017, Lutz said that apart from continued positive performance in particular with renewable energies and fruit, "we are already beginning to see good indications in the agricultural industry that agricultural trading will improve again next year." As an example, he cited rising producer prices for dairy and meat in Germany, which stand to revive demand for operating resources and agricultural equipment. The sale of grain and oilseed is also increasing once more. In connection with the positive development at the moment concerning the availability of goods, national trading in 2017 promises to have a solid basis from which to start, Lutz explained. In international agricultural trade, BayWa seeks to enhance profitability within its own trade network and leverage opportunities through further market consolidation. International fruit business continues to strengthen the Agriculture Segment The Agriculture Segment comprises national and international trade in agricultural operating resources and produce as well as the Agricultural Equipment and Fruit business units. The Agriculture Segment recorded a rise in revenues after the first nine months of the current year, which was due to the significant increase in produce trading volume, among other factors. As a result, 26 percent more grain and oilseed was traded in a year-on-year comparison, primarily through international trading activities. International fruit trading also made a significant contribution to the rise in revenues. The fruit business benefited from TFC Holland B.V., included in the scope of consolidation for the first time, and its trading activities in tropical fruits, as well as higher export volumes of New Zealand company T&G Global Limited to Asia in particular. As it was possible to achieve price increases during the marketing season in the southern hemisphere, EBIT for the Fruit business unit as at 30 September 2016 also rose in a year-on-year comparison. Despite the strong result that fruit delivered, the Agriculture Segment as a whole after the first nine months fell short of the previous year's level due to the difficult developments outlined in agricultural trade and the expected decline in the agricultural equipment business. Conventional and renewable energy on track for success The Energy Segment comprises the BayWa Group's 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. As at 30 September 2016, the Energy Segment was able to significantly expand its year-on-year lead. This was due to an improvement in profit margins in the heating oil trade and increased fuel sales, among other factors. Higher wood pellet sales also compensated for the decline in demand for heating oil during the summer months. The drop in conventional energy revenues was due exclusively to the further year-on-year decline in oil prices. The rate of growth in the Renewable Energies business unit picked up once again during the summer months, on the other hand. After the pipeline for commissioning wind and solar farms in Germany, Austria and especially the UK filled up nicely during the first half of 2016, it was possible to sell four projects in the third quarter, as planned. The sales involved a wind farm in France and the UK, as well as Germany's two geothermal power plants with the highest output, which are located in Kirchstockach and Dürrnhaar, Bavaria. BayWa also expanded its trading activities with solar components to the Australian market by acquiring the company Solar Matrix in September. Revenues rose as a result, and EBIT nearly doubled year on year. The outlook for renewable energies continues to remain very favourable, as a larger portfolio of solar projects in North Carolina and Virginia will be developed in the medium term as part of a new partnership with the US project developer Geenex Solar LLC, for example. Building Materials Segment benefits from solid order situation The Building Materials Segment mainly comprises Group trading activities involving building materials in Germany and Austria. The building materials business was also shaped in the summer by companies in the construction industry continuing to operate at high capacity. Sales volumes for all building materials products saw positive development, with demand for civil engineering and road construction products being particularly high most recently. BayWa was able to maintain the lead in revenues generated in the first half of 2016 as compared with revenues in 2015 after the conclusion of the third quarter as well. EBIT was up considerably on the previous year after the first nine months. The prospects for building materials remain favourable, as the rising number of building permits issued for additions of another storey and roof extensions indicate that there will be higher demand in subsequent quarters for roof and interior construction products, for example. This might offset the seasonal decline in civil engineering and road construction during the winter months. * Figure adjusted, mainly for the effect from the accounting of a finance leasing in the financial year 2013 and the early application of a new IFRS standard. BayWa Group performance Revenues* EBIT* In EUR million 9M/16 9M/15 % 9M/16 9M/15** % 11,439.3 11,096.7 3.1 85.4 82.7 3.3 Agriculture Segment performance*** Revenues EBIT In EUR million 9M/16 9M/15 % 9M/16 9M/15** % Agricultural 6,769.4 6,247.8 8.3 10.4 33.3 - 68.8 Trade (BAST, BAV) Agricultural 910.8 966.7 - 5.8 - 0.7 9.7 > - 100 Equipment Fruit 506.1 473.6 6.9 35.4 21.3 66.2 Agriculture 8,186.3 7,688.1 6.5 45.1 64.3 - 29.9 Segment Digital Farming Segment performance*** Revenues EBIT In EUR million 9M/16 9M/15 % 9M/16 9M/15** % Digital 4.4 - - - 6.2 - - Farming Energy Segment performance Revenues EBIT In EUR million 9M/16 9M/15 % 9M/16 9M/15** % Conventional 1,479.1 1,692.0 - 12.6 10.7 7.5 42.7 Energy Renewable 591.5 580.9 1.8 47.0 25.6 83.6 Energies Energy Segment 2,070.6 2,272.9 - 8.9 57.7 33.1 74.3 Building Materials Segment performance Revenues EBIT In EUR million 9M/16 9M/15 % 9M/16 9M/15** % Building Materials Segment 1,168.6 1,125.7 3.8 18.8 15.4 22.1 * Comprises the figures of the Agriculture, Energy, Building Materials and Digital Farming Segments, the Other Activities as well as the transition. ** Figures adjusted, mainly for the effect from the accounting of a finance leasing in the financial year 2013 and the early application of a new IFRS standard. *** The Agriculture Segment was restructured with effect from 1 January 2016: The activities of the Agricultural Trade business unit were split up into the new BayWa Agri Supply & Trade (BAST) and BayWa Agrar Vertrieb (BAV) business units. BAST combines BayWa's national and international trade, distribution and logistics activities for grain, oilseed and additional products. The collection business and trade in operating resources and feedstuff have been pooled in the new business unit known as BAV. The Fruit and Agricultural Equipment business units remain unchanged. Digital Farming is managed as its own segment from 1 July 2016. Contact: Marion Danneboom, BayWa AG, Head of PR/Corporate Communications, tel. +49 (0)89/92 22-36 80, Fax +49 (0)89/92 22-36 98, e-mail: [email protected] --------------------------------------------------------------------------- 10.11.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de --------------------------------------------------------------------------- Language: English Company: BayWa AG Arabellastraße 4 81925 München Germany Phone: 089/ 9222-3691 Fax: 089/ 9222-3698 E-mail: [email protected] Internet: www.baywa.de ISIN: DE0005194062, DE0005194005, WKN: 519406, 519400, Indices: SDAX Listed: Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Stuttgart, Tradegate Exchange End of News DGAP News Service --------------------------------------------------------------------------- 519327 10.11.2016