Baywa Ag · XETR:BYW
Baywa — Investor Day (October 2011)
37 slides from Baywa's investor day presentation, Oct 5, 2011
Slide 1: Capital Market Day 2011
Capital Market Day 2011 Leipzig, 05 October 2011 Andreas Helber (CFO)
Slide 2: Agenda
Agenda 1. Group Financials 2. Strategic Prospects – Agriculture 3. Strategic Prospects – Building Materials 4. Strategic Prospects – BayWa r.e 5. Summary BayWa Capital Market Day 2011 05/10/2011 page 2
Slide 3: Group Financials: Performance in the first half of 2011
Group Financials Performance of the Group in the first half of 2011 Revenues in EUR m EBIT in EUR m EBT in EUR m 21.4% 85.2% 4 586 2 4,586.2 57.5% 66 5 66.5 3,777.7 88.7 56.3 35.9 H1/2010 H1/2011 H1/2010 H1/2011 H1/2010 H1/2011 Hi hli ht Highlights – Optimal start to the season holds steady in the s
Slide 4: Group Financials: Market trends
Group Financials Market trends 1-9/2011 1 9/2011 Agriculture – Grain harvest slightly below last year’s volume; roughly 41 million tons in Germany (-6% vs 2010) – Grain losses in the north of Germany higher than in the south – Wheat price remains high due to stock reduction worldwide – Stable demand
Slide 5: Group Financials: Estimated financials for 2011
Group Financials Estimated financials for 2011 Revenues in EUR m Expected development of revenues ≈ + 5-10% – Revenues expected to be higher than a year ago due to 7.900 rise in commodities prices – Price-induced increase in Agriculture and Energy – Agri-equipment could generate record sales – Build
Slide 6: Strategic Prospects - Agriculture
Strategic Prospects - Agriculture BayWa Capital Market Day 2011 05/10/2011 page 6
Slide 7: International agricultural business - trade flows
International agricultural business - trade flows Enormous opportunities - but also challenges – will arise from the ongoing internationalisation and globalisation of the agricultural markets. More important than ever will be the fostering of global relationships with all market participants and imm
Slide 8: From domestic to emerging markets
From domestic to emerging markets Domestic markets: Focus on efficiency EUR ”improving” Goal-oriented organisation structures Lean cost structure Customised product portfolio Customer-oriented service portfolio (CRM) Æ Potential of raising g performance p in saturated markets is capped t EUR
Slide 9: Positioning of Agriculture Segment
Positioning of Agriculture Segment Forward integration Procure- 1st 2nd POS – Agricultural Sales ment Agriculture processing processing Point of input suppliers business business stage stage Sale Agricultural input business Agricultural product business Backward integration Possible drivers for inte
Slide 10: Fruit Business / Apples: From niche to core business
Fruit Business / Apples From niche to core business BayWa Capital Market Day 2011 05/10/2011 page 10
Slide 11: Fruit – the most profitable Business Unit of the Agriculture Segment
Fruit – the most profitable Business Unit of the Agriculture Segment Positioning of BayWa Fruit Significant milestones - acquisitions BayWa Fruit as the largest stone fruit supplier for the German Cooperation food retail industry (130,000t) Frucom Fruitimport BayWa Nord, Jork GmbH, Hamburg - 2010
Slide 12: Apple consumption and Asia as growth market
Stagnation in the domestic market – Asia is the growth market for apples Apple consumption in Germany Asia - growth market 874 867 866 ∑578 Tsd. t 860 700 g/population ∑522 Tsd. t 757 ∑442 Tsd. t 800 25 600 ∑382 Tsd. t 12 614 ∑338 Tsd. t 67 ns ny ibn thousand ton Apple consumption in kg 600 500 00 ∑
Slide 13: Global production of apples
Global production of apples Comments on China Chinese apple yield is currently low compared with key exporters due to poor orchard management and poorer soils Chinese fresh apple quality is currently poor; as a result fresh apples are only exported to low value/ low price tertiary markets (e.g.
Slide 14: Apple zones - opportunity for internationalisation
Apple zones - opportunity for internationalisation Apples can only be grown commercially in the two apple zones in opposite seasonal windows; the Southern Hemisphere supplies the Northern Hemisphere for six months of the year; both supply the tropics. BayWa Capital Market Day 2011 05/10/2011 page 14
Slide 15: Strategic Prospects – Building Materials
Strategic Prospects – Building Materials BayWa Capital Market Day 2011 05/10/2011 page 15
Slide 16: Building Materials: Business model and development in H1/2011
Strategic Prospects – Building Materials Business model and development in H1/2011 Market Development H1/2011 BUILDING MATERIALS – Improvement in business climate index in the construction industry – Increase in the number of building permits – Share of refurbishment in building construction on the
Slide 17: Critical financial development of Building Materials
Strategic Prospects – Building Materials Critical financial development of Building Materials Economic profit 2010 – Agriculture and Energy segments deliver positive economic profit – Building Materials segment: NOPAT of EUR 17.6 million insufficient to earn cost of capital Æ action needed Economic
Slide 18: Building Materials: Historical Development
Strategic Prospects – Building Materials Historical Development 1995 Boom after reunion slows; second half of 90s characterised by declining results, especially affected by activities in Eastern European countries 1999 Acquisition of SGBDD / Raab Karcher rejected 2000 Launch of “bausolution“ bausolu
Slide 19: Building materials wholesale market in Germany – BayWa second
Building materials wholesale market in Germany – BayWa comes second - ca 6% market share Market share in Germany (2010) Market: SGBDD / Raab Karcher Germany is Europe‘s single largest BayWa Building Materials market 8% 6% Bauking Trend towards energy-saving and low- Kemmler emission building SIG
Slide 20: Market structure DIY & GC in Germany
Market structure DIY & GC in Germany BayWa no no.10, 10 behind market leaders Market: German market ranking (2010) by sales in EUR m 1. Obi 5.900 Highly saturated and competitive market 2 2. Praktiker/Extra/Max Bahr 4 355 4.355 Market concentration in German DIY 3. Bauhaus 4.150 sector likely 4.
Slide 21: Building Materials: PROs and CONs
Strategic Prospects – Building Materials PROs and CONs + PROs Wholesale Wholesale CONs - Huge market potential High capital costs BayWa among market leaders Low margins Experienced new turnaround managers in Seasonal business charge of the Business Unit Fragmented market BUILDING Syn
Slide 22: Strategic Directions – Building Materials
Strategic Directions – Building Materials Current activities Strategic options Conditions for options Baustoffe Wholesale Carve-out Carve out assessment Forward integration Split Building Materials (M&A) Segment into two Internal restructuring independent legal Joint Venture entities Ree
Slide 23: Strategic Prospects – BayWa r.e
Strategic Prospects – BayWa r.e BayWa Capital Market Day 2011 05/10/2011 page 23
Slide 24: Green Energy Market in Germany
Green Energy Market in Germany Æ Huge potential, especially for photovoltaics and wind BayWa Capital Market Day 2011 05/10/2011 page 24
Slide 25: Global development of photovoltaic markets
Global development of photovoltaic markets - PV capacity installed through to 2015 2009 2015E 16.000 14.278 CAGR 70% – US was already the worlds‘s third 14.000 largest PV market in 2010 12.000 11.275 – In the medium term, US market expected to replace Germany as 9.787 the world‘s largest PV market i
Slide 26: Global development of wind markets
Global development of wind markets Summary of market studies: Cumulative capacity of wind energy in 2010: Wind energy is the technologically most advanced and economically most efficient renewable energies technology Attractive wind markets: USA, Germany, UK, France, Spain, China, India Expected
Slide 27: Profile of BayWa r.e: Development
Profile of BayWa r.e Development Feb. 2009 Founding of the holding company Aug. 2009 Acquisition of Aufwind Neue Energien GmbH (51%) Dec. 2009 Acquisition of Renerco AG (87,8%) Jan. 2010 Acquisition of MHH Solartechnik GmbH (100%) Feb. 2010 Renaming of company as BayWa r.e GmbH May 2010 Acquisition
Slide 28: Profile of BayWa r.e: Goals & Strategy
Profile of BayWa r.e Goals & Strategy GOALS Profitable Sustainable growth profitability STRATEGY Positioning in the market through Expansion into existing and acquisition of established market emerging markets and profitable, participants organic growth Evolving into one of the leading contacts t t
Slide 29: Profile of BayWa r.e: Strategic direction
Profile of BayWa r.e Strategic direction D l diversification Dual di ifi i strategy Products Regions Wind USA, USA UK, UK France, France Spain, Spain Austria, Italy… Photovoltaic Diversifying risk Biomass (state subsidies) Quick adoption of new Reducing inventory risks technologies by
Slide 30: Renewable Energy Business Lines
Profile of BayWa r.e Renewable Energy Business Lines Tasks Planning/ Energy- Trade Installation p Operation/ production/ Project segments Project Mgmt. maintenance trading Retail Rooftop Wholesale PV Plants Onshore Windparks Large Biogas plants Small Biogas plants ((< 500 kW)) Wood pellets Lubricant
Slide 31: Project Overview of Renewables
Project Overview of Renewables Name Type of Energy Capacity (MW) Real Invest ( m) Equity (€ m) Debt (€ m) Completion La Muela Wind Power 99.0 44.3 26.6 56.9 In operation p Wind am Speckberg Wind Power 28.0 35.0 3.2 33.0 In operation enerco Kamionka Wind Power 30.0 48.0 24.0 24.0 12/2011 Everswinkel
Slide 32: Acquisition of onshore windparks in the UK
Acquisition of onshore windparks in the UK Total capacity: 200 MW Takeover of RWE´s windparks in the UK. Npower renewables (subsidiary of RWE) sold Renerco for EUR17m. Two approved onshore windparks and options for another eight wind projects. 2 approved d projects j t “Kildrummy“ - target capac
Slide 33: Financing sources 2007 - 2012
Financing sources 2007 - 2012 In EUR m 250.0 236.0 36,0 200,0 50.0 21.0 0.5 2007 2008 2009 2010 2011 2012 Sale of: Planned: Kelly Linz Car dealer Intrade External Sale of operations Animedica funding properties not (incl. real estate Frisch & Frost needed for EUR 30m) R+V Touristik
Slide 34: Investment in renewable energies 2011
Investment in renewable energies 2011 ∑ 131.5 In EUR m ∑ 4.0 5.5 114.8 7.2 12 1.2 05 0.5 6.3 13.1 20.3 73.4 Renerco MHH Focused Schraden Aufwind re r.e Capital WKN Dulas Ecowind Capital Energy Biogas Neue Biomethan invested invested Energien EBIT (EUR m) 26.0 26.0 ROIC (%) 22.6 19.8 Net debt (EUR m)
Slide 35: Cash back renewables
Cash back renewables In EUR m Wind Biogas Geothermal PV 23 0 23.0 20.2 Energy 16.0 15.9 8.6 5.3 6.5* 3.5 4.0* 1.9 2.0 Voyennes Saint Evers- Namborn Holleben Szarvas Hünxe Friedrichs- Dürrnhaar Kirch- Maisach Fraigne winkel ruhe stockach ∑ 55 3 55.3 39 1 39.1 10 5 10.5 20 2.0 Grand total EUR 106.9m L
Slide 36: Summary
Summary BayWa Capital Market Day 2011 05/10/2011 page 36
Slide 37: Summary
Summary Agriculture – Limited Li it d expansion i possibilities ibiliti within ithi Germany G due d to t antitrust tit t restrictions t i ti – Current acquisition prices for grain trading companies at a peak (EBIT multiples above 10) – Higher trading margins in the fruit sector vs grain trading – Fr