BayWa AG expects earnings to improve in the financial year 2024

EQS-News: BayWa AG / Key word(s): Annual Results
BayWa AG expects earnings to improve in the financial year 2024 (news with
additional features)

28.03.2024 / 10:30 CET/CEST
The issuer is solely responsible for the content of this announcement.

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Number: 01224-PIU05 | Date 28 March 2024

BayWa AG expects earnings to improve in the financial year 2024

  * BayWa AG closes the financial year 2023 with operating earnings of
    EUR304.0 million, just below the forecast for the year.

  * The rapid rise in interest rates is having a negative effect on earnings
    across all business divisions.

  * After interest and tax, the consolidated net loss for the year stands at
    EUR93.4 million, compared to a net profit of EUR239.5 million in the
    previous year.

  * With 'Strategy 2030', CEO Marcus Pöllinger aims to boost the Group's
    profitability in the long term and return BayWa to positive territory in
    2024.

Munich, 28 March 2024 - After years of strong growth, the macroeconomic
environment changed massively for BayWa AG in 2023, as reflected in the
balance sheet for the most recent financial year. Consolidated revenues
totalled EUR23.9 billion in the financial year 2023 (2022: EUR27.1 billion). At
EUR304.0 million (2022: EUR504.1 million), operating earnings before interest
and tax (EBIT) were down on the previous year's exceptional results, as
expected. The Group therefore only fell just short of its annual forecast of
EUR320 to EUR370 million. Although BayWa succeeded in increasing EBIT by 14%
compared to 2021, before the start of the war against Ukraine, the rapid
rise in interest rates had a negative impact on all business divisions and
put pressure on the internationally active portfolio company's earnings.
After deducting interest and tax, BayWa closed the past financial year with
a loss of EUR93.4 million, down EUR332.9 million year on year.

'We are using 2024 for consolidation,' says Marcus Pöllinger, Chief
Executive Officer of BayWa AG. 'To this end, we are currently looking at
each of our 500-plus Group companies and defining areas for growth or
optimisation, as well as business areas that BayWa intends to divest. Going
forward, each entity must be profitable in its own right. By rolling out our
'Strategy 2030', we will increase BayWa's profitability and reduce our costs
across all business divisions and administrative units. This will enable us
to move the equity ratio towards 20% in the medium term and continue to
strengthen our crisis resilience. The Board of Management's goal is to
return BayWa to profitability by 2024.'

The company aims to achieve earnings of between EUR470 and EUR520 million by the
end of 2026, having originally intended to reach this target in 2025. BayWa
is counting on the consistently strong appeal of the markets it serves in
the fields of food and energy, both of which offer good prospects for the
future. 'Our major growth areas are the international grain and speciality
products trade, as well as renewable energies,' Pöllinger says. 'Those are
fields where we are making sustainable investments. I see a need for
optimisation in the agriculture and building materials business units. That
is something we are tackling with determination.'

Operating earnings satisfactory in 2023 - Cefetra Group and Agricultural
Equipment improve on high prior-year level once again

In the Agricultural Equipment Segment, sales were boosted by the resolution
of supply chain problems and farmers' high propensity to invest. As a
result, the previous year's record revenues and EBIT were once again
exceeded. The Cefetra Group Segment was able to successfully seize trading
opportunities offered by fluctuating prices in both the traditional and
speciality business.

In the Renewable Energies Segment, increased earnings in energy trading were
unable to compensate for the weak demand and drop in prices in the solar
module business. Both revenues and EBIT fell short of an exceptional 2022.

The Global Produce Segment continued to struggle with the consequences of
Cyclone Gabrielle, which destroyed large parts of the plantations and
harvest in New Zealand in February 2023. Alongside the harvest losses,
insurance payments, some of which were not fully settled in the previous
year, also impacted the result. Rising prices for exotic fruits on the
market were unable to compensate for this shortfall.

The Agri Trade & Service Segment suffered from significant price drops,
particularly in the fertilizer business. Extreme weather conditions over the
course of the entire growing season also had a negative impact on both the
volume and quality collected in domestic grain trading.

The drastic slump in German residential construction led to a huge drop in
demand in the Building Materials Segment. The company had already taken
steps to counter this trend in the previous year with a cost-cutting
programme, site closures and recruitment freeze. The effect of these
measures will be reflected in the 2024 result.


Individual segment performance

Renewable Energies Segment

The Renewable Energies Segment closed the financial year 2023 with revenues
of EUR5.8 billion (2022: EUR6.5 billion) and EBIT of EUR193.8 million (2022:
EUR239.1 million). Generally weak demand in the solar module trade and
increased competitive pressure due to the import of inexpensive solar
modules from China weakened the result compared to the exceptionally good
figures of the previous year. The IPP (Independent Power Producer) business
entity expanded its portfolio by six solar parks compared to 2022. Overall,
31 wind farms and solar parks in Europe, North America and Australia with a
total capacity of 0.8 GW were operational at the end of the year. In
addition, the foundations were laid in 2023 for a further expansion of the
portfolio, with 0.5 GW already under construction or about to start
construction.
BayWa expects the Renewable Energies Segment to continue on its growth
course in the international markets in 2024. The sale of the solar trading
business is also to be continued in the current financial year and finalised
in 2025. The planned proceeds from the sale will be channelled into both
debt reduction and the core business of BayWa r.e. AG. Specifically, the
funds will be allocated to promote the growth of the wind and solar project
pipeline, the IPP portfolio and the expansion of the Energy Solutions and
Services business.

Energy Segment

In the Energy Segment, BayWa recorded a 15.7% decline in revenues to EUR2.8
billion (2022: EUR3.3 billion). At EUR17.8 million (2022: EUR53.6 million), EBIT
was down by 66.8% year on year. The sector was dominated by weaker trading
momentum for fossil fuels and lubricants, as well as lower trading margins
in the wake of falling prices on the energy commodity markets.
Electromobility continues to gain ground. BayWa Mobility Solutions GmbH
entered the charge point operator (CPO) business in 2023 after being awarded
the contract for the German network in Bavaria. It will build and operate 20
charging parks by the end of 2026 with an investment volume of EUR15 million
funded by the German federal government. Building services benefited from
blanket orders for prefabricated houses and house renovations in 2023.
Thanks to the faster pace at which the transition to renewable energies is
taking place, BayWa expects the strong demand for refurbishments -
especially in the area of heating - to continue in the current financial
year.

Cefetra Group Segment

With EBIT of EUR64.6 million (2022: EUR59.5 million), the Cefetra Group Segment
exceeded its previous record result from 2022 by 8.6%. At EUR5.3 billion
(2022: EUR6.1 billion), revenues were down on the previous year. This was
mainly due to falling prices for many products following the market
exuberance in the previous year. In the speciality business, BayWa continues
to profit from its strong market position and sound supply chains.

The company anticipates lower volatility on the agricultural commodities
markets in the current financial year. The aim is to counteract the
shrinking margin potential in the agricultural markets by developing new
business areas and continuing to diversify into other sectors, such as pet
food and feedstuff for aquaculture. Less profitable sales flows, especially
those that employ large amounts of capital, will be rationalised to increase
the quality of earnings.

Agri Trade & Service Segment

In the Agri Trade & Service Segment, the financial year 2023 ended with
revenues of EUR4.9 billion (2022: EUR5.8 billion) and EBIT of EUR26.4 million
(2022: EUR104.7 million). Market conditions have returned to normal following
the outbreak of the war in Ukraine. Improved availability of agricultural
commodities led to increased competition for grain and oilseed trading in
Germany and Austria. Extreme weather conditions, especially at harvest time,
reduced the quantity and quality of products, as well as the demand for
agricultural inputs such as crop protection and fertilizer. Nevertheless,
BayWa generated more than twice as much EBIT in its domestic agricultural
business as in 2021.

For 2024, the company expects earnings to be considerably above the average
level of previous years, thanks to positive prospects in the product trade
and an expected return to normality in the agricultural input business.
BayWa sees opportunities for growth in the seed trade through the
cultivation of new and improved varieties with greater resistance to disease
and extreme weather conditions.

Agricultural Equipment Segment

The Agricultural Equipment Segment was able to increase the previous year's
record result by a clear margin with revenues of EUR2.2 billion (2022: EUR2.1
billion) and EBIT of EUR84.6 million (2022: EUR70.2 million). Sales of new
machinery increased by 5%, while the maintenance and service business, as
well as the trading of spare parts and specialised trade products, also
performed well.

BayWa expects the upward trend in the new machinery business to continue in
the first half of 2024 due to high order backlog. In order to reduce capital
commitment and the corresponding interest burden in used and new machinery
trading, BayWa will also continue to optimise its inventory management.

Global Produce Segment

Due to persistently difficult conditions, the Global Produce Segment closed
the financial year 2023 with EBIT of minus EUR15.1 million (2022: EUR21.1
million). Revenues amounted to EUR0.9 billion (2022: EUR0.9 billion). Although
prices for fresh produce rose due to weak harvests in Europe and other
sourcing countries, they were unable to compensate for the losses in the New
Zealand apple business following Cyclone Gabrielle.

BayWa anticipates strong earnings growth in the current financial year,
largely driven by a good apple harvest in New Zealand. The company also
expects a positive turnaround in the exotic fruit trade. In addition, the
payment of most of the insurance compensation for the cyclone damage will
have a positive effect on EBIT.

Building Materials Segment

Revenues in the Building Materials Segment amounted to EUR2.0 billion in 2023
(2022: EUR2.3 billion). EBIT fell to EUR6.6 million (2022: EUR70.4 million). Sales
fell in the civil engineering, gardening, landscaping and roofing product
ranges in particular. As a result, the rapid slowdown in the housing
construction sector hit BayWa's business faster than expected.

To counter this trend, BayWa took extensive measures over the most recent
financial year. The company reduced costs by optimising processes,
increasing efficiency, closing locations that were not economically viable
and cutting staff. BayWa does not foresee a rapid trend reversal for the
market itself, but expects the Building Materials Segment to show a strong
improvement in earnings during the current financial year. The company will
also continue its strategy of transformation from a pure product trader to a
provider of efficient all-in-one solutions and services. The main focus will
be on sustainability in construction and climate protection in the building
sector.


More information is available at www.baywa.com/press.
Print-ready press photos, footage material and video statements can be found
here.
BayWa AG on LinkedIn: www.linkedin.com/company/baywa
The LinkedIn profile of BayWa Investor Relations can be viewed here.

Press contact
Anja Richter
Tel.: +49 151 16175177
E-mail: anja.richter@baywa.de


About BayWa AG

BayWa AG is a globally active group with the business units energy,
agriculture and building materials. As a global player with revenues of
EUR23.9 billion in 2023, it develops innovative and sustainable solutions for
the basic human needs of food, energy, heating, mobility, construction and
housing. The company has around 25,000 employees in over 50 countries. The
headquarters of the parent company, which was founded in 1923 and celebrated
its 100th anniversary in 2023, are in Munich. BayWa AG's roots lie in
agricultural cooperative trading, and its mission is to provide rural
regions with everything they require for agriculture. More information is
available at www.baywa.com/press.




Contact:
Jenny Levié, BayWa AG, Head of Corporate Communications,
tel. +49 (0)89/92 22-36 80, Fax +49 (0)89/92 12-36 80,
e-mail: jenny.levie@baywa.de


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Additional features:

File: https://eqs-cockpit.com/c/fncls.ssp?u=b5cdb7a060bb98e09f701f28c6f2bf65
File description: BayWa headquarter in Munich
File: https://eqs-cockpit.com/c/fncls.ssp?u=3c3c71f7a0236e90106dbc9c569463a9
File description: 01324_FY2023_Key Figures

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28.03.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS
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The issuer is solely responsible for the content of this announcement.

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   Language:       English
   Company:        BayWa AG
                   Arabellastraße 4
                   81925 Munich
                   Germany
   Phone:          +49 (0)89/ 9222-3691
   Fax:            +49 (0)89/ 9212-3680
   E-mail:         prcc@baywa.de
   Internet:       www.baywa.com
   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
   EQS News ID:    1869349

End of News EQS News Service
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1869349 28.03.2024 CET/CEST