BayWa AG presents figures for the third quarter of 2024: business performance shaped by the restructuring situation

• After nine months, BayWa posted consolidated revenues of €16.0 billion and EBIT of minus €77.6 million.
• Taking into account extraordinary impairment losses in accordance with IAS 36 – mainly in the Renewable Energies Segment – EBIT totalled minus €299.8 million.
• BayWa’s restructuring in the third quarter weighed particularly heavily on the performance of the agricultural produce and building materials trade.
• The agricultural equipment and service business remains on a solid course. Sales of used machinery are up 30%.

The business figures of BayWa AG for the first nine months of this year were influenced by the impairment losses (impairment tests pursuant to IAS 36) explained in detail in the half-year report. With revenues of €16.0 billion (previous year: €18.2 billion), earnings before interest and tax (EBIT) came to minus €77.6 million (previous year: €214.6 million) without impairment. Taking into account the impairment losses in accordance with IAS 36, the group’s EBIT at the end of the third quarter was minus €299.8 million.

While the Agricultural Equipment Segment once again achieved a solid result, the negative impact of business performance in the Renewable Energies Segment in particular weighed on consolidated EBIT. In trading with photovoltaic components, the market continued to struggle with massive overcapacity and a decline in the price of solar modules. Added to this were delays in project business and lower revenues in energy trading due to a decline in electricity prices.

Individual segment performance

The Agri Trade & Service Segment posted revenues of €3.6 billion for the nine-month period (previous year: €3.9 billion). Operating income of €16.4 million (previous year: €46.5 million) was below last year’s figure. After impairment charges under IAS 36, EBIT came to €5.6 million. The segment’s business performance was characterised by a number of negative factors: adverse weather conditions during the planting season, a below-average grain harvest in Germany and lower than average prices for agricultural products. And in addition, a temporary reluctance on the part of individual business partners to deliver grain due to BayWa’s difficult financial situation during the harvest months.

The crisis in the residential construction market continues to have a firm grip on the Construction Segment. With revenues of €1.4 billion (previous year: €1.5 billion), the segment also recorded negative operating EBIT of minus €8.2 million (previous year: €5.8 million) after nine months. Taking into account the impairment under IAS 36, EBIT came to minus €9.5 million.

The slump in demand in the German heating market has characterised the course of business in the Energy Segment. With revenues of €1.9 billion (previous year: €2.0 billion), EBIT fell significantly and amounted to €4.3 million at the end of the third quarter (previous year: €13.5 million). Taking into account the impairment pursuant to IAS 36, EBIT amounted to minus €0.2 million.

The main reasons for the slump in operating earnings were the ongoing uncertainty surrounding the German Buildings Energy Act and the resulting dampened investment climate for new heating systems such as heat pumps and pellet heating systems. There was also less demand for heating energy sources such as wood pellets and heating oil. Due to the mild winter of 2023/24, consumers are well stocked up and are waiting for prices to fall further, especially for heating oil. Only the trade in fuels and lubricants recorded a slight increase in sales during the reporting period.

The Agricultural Equipment Segment once again saw positive developments: BayWa increased both revenues to €1.8 billion (previous year: €1.7 billion) and operating EBIT to €68.0 million (previous year: €52.6 million). Taking into account impairment losses under IAS 36, EBIT came to €66.5 million. The good business performance in the reporting period was due to a high order backlog at the end of 2023, which was mainly realised in the first half of the current year, as well as investment incentives from the German government's Growth Opportunities Act.

Development of significant subsidiaries/affiliated companies

With revenue of €3.6 billion (previous year: €3.9 billion), the international agricultural trade in the Cefetra Group Segment generated an above-average operating profit of €33.4 million (previous year: €50.6 million). EBIT amounted to €19.6 million after impairment losses pursuant to IAS 36. Cefetra Group benefited from stable trade in standard products such as grain and oilseeds.

The Global Produce Segment recovered significantly in the reporting period. While the previous year was still affected by the negative consequences of a cyclone in New Zealand, the segment is benefiting from good apple prices in both hemispheres this year. Revenues after nine months amounted to €781.1 million (previous year: €749.7 million). The result came to €1.1 million (previous year: minus €4.7 million).

The Renewable Energies Segment continued to suffer from difficult market conditions, which affected all areas in the segment. With revenue of €2.9 billion (previous year: €4.3 billion), EBIT decreased year-on-year to minus €164.8 million (previous year: €105.8 million). Taking into account the impairment losses in accordance with IAS 36, the segment result was minus €336.3 million.

The price decline for solar modules led to high write-downs on inventories and price reductions in sales. Although sales in the project business picked up, they remained below expectations: 600 megawatts of total output from projects and project rights were sold in the reporting period. The costs for restructuring BayWa r.e. AG, which is the umbrella company for the renewable energies business, are included in the result.

Further information can be found in the quarterly report on our website.