Interim Report of the BayWa Group as per 31 March 2013

Transcription

1 I n t e r i m r e p o r t of the BayWa Group 1 January until 31 March 2013

2 Interim Report of the BayWa Group as per 31 March 2013 The Report provides information on the business performance of the BayWa Group in the first quarter of financial year The BayWa Group: Late start to season due to weather forecast for the year as a whole remains positive In million Q1/13 Q1/12 % Revenues 3, , EBIT > -100 Due to the long winter, the BayWa Group has had a slow start to financial year 2013 in its Agriculture and Building Materials Segments. However, there are indicators that it will be possible to make up the seasonal shortfalls in subsequent quarters. The forecast for the financial year remains positive. The international acquisitions in the Agriculture Segment helped compensate for a great deal of the shortfall. Both the fruit business in New Zealand and the initial consolidation of Rotterdam-based international grain trader Cefetra B.V. made a positive contribution to profits in the first quarter. In the Energy Segment, the lacklustre diesel business in agriculture and construction, which was also weather-related, led to slight declines. Renewable energies compensated partially for this trend and balanced out weak diesel sales in the conventional energy business. The project business saw the sale of two plants as planned. However, the closing on one of these sales will not take place until the second quarter. As a result, this sale did not make a contribution to the results in the first quarter. Although the Building Materials Segment lagged behind due to the weather, the forecast for the construction industry remains optimistic. Overall, the first quarter was unexpectedly subdued due to the long, snowy winter. 1

3 At just under 3.7 billion, consolidated revenues in the first quarter were up around 67.3% year on year. About 1.6 billion of this total was attributable to the Agriculture Segment s acquisitions of Cefetra and Turners & Growers Limited (T & G). Adjusted for these transactions, the Group saw revenues decline by 3.2%. As expected, earnings before interest and taxes (EBIT) were unable to keep up the pace of the previous year s above-average performance. The Group s EBIT fell from 6.7 million to -7.4 million, reflecting a loss typical of the season s business developments. However, the Agriculture and Energy Segments were able to generate positive EBIT for the first quarter. Earnings in the Agriculture Segment increased year on year by around 5% to a total of 21.1 million despite weaker demand for operating resources. The international acquisitions alone accounted for 6 million in EBIT. Increased trading quantities in grain and fruit made a substantial contribution to this rise. The operating result in the Energy Segment totalled nearly 2 million after the first three months of the year. Although the Energy Segment was not able to match the strong first quarter of the previous year, it has a stable platform for the rest of the year. In the Building Materials Segment, EBIT fell from million to million. The decline is mainly attributable to the snowy, cold first quarter. Owing to the seasonal influences on BayWa s business performance and market fluctuations induced by the weather conditions, the first three months are only of limited informative value for the result of the year as a whole. The positive market environment and the progressing integration of the new companies are indicative of a good basis for significantly increasing revenues and earnings year on year. The figures for April confirm this trend. 2

4 Segments of the BayWa Group Agriculture Segment In million Q1/13 Q1/12 % Revenues 2, ,090.5 > 100 EBIT Industry trends Sentiment in agriculture remains positive. The German Farmers Association s business activity index recently increased slightly. At 35.3 points, the agricultural sector s sentiment barometer has now returned to the same high value seen in the first quarter in the previous year. Stable price development is currently being registered for all key agricultural produce except for grain. Following initial forecasts of a slight easing of the cereals balance for the 2013 harvest, wheat prices started to fall from their high of 277 per tonne in December Since early March 2013, the price for one tonne of milling wheat has fluctuated around the 240 mark, remaining at an above-average level. In keeping with this, not even the snowy, long winter was able to negatively impact the favourable economic situation of agricultural operations. Compared to previous years, vegetation is behind by several weeks due to the unusually cold temperatures, which has led to a delayed start to the fertiliser season. The demand for operating resources, which has been slow so far, has led to a sideways trend in fertiliser prices. However, prices could start to increase again as a result of the increase in demand expected in the near future. The number of tractors newly registered remains around 12% lower year on year due to the late start to spring. It can therefore be assumed that deliveries of tractors will increase significantly as weather conditions improve. In its most recent report on the grain market, the US Department of Agriculture revised its figures for global wheat inventory stocks at the end of the 2012/13 season upwards by around 4 million tonnes. The current estimate by the International Grains Council (IGC) also forecasts an increase in global wheat production of 4% in grain year 2013/14. 3

5 According to the IGC, harvests will rise most strongly in countries bordering the Black Sea and in the EU. With farmers in the USA set to cultivate a record amount of land and the European Commission s harvest forecast predicting growth of around 18% for maize in Europe, the global maize harvest could also increase. However, Deutscher Raiffeisenverband (German Raiffeisen Association) has revised its original forecast for the grain harvest in Germany downward slightly from 45 million tonnes to a below-average 44.4 million tonnes for 2013 due to isolated damage from winter kill. A normal fruit harvest volume is expected in Germany in The apple harvest currently underway in New Zealand gives reason to expect promising quality and high demand coupled with moderate quantities. Business development In the first three months of the current financial year, the Agriculture Segment, which comprises trading in agricultural operating resources and produce as well as the Agricultural Equipment and Fruit business units, generated revenues totalling around 2.7 billion (previous year: around 1.1 billion). Compared with the first quarter of 2012, this corresponds to an increase of around 1.6 billion. The strong growth in revenues is mainly attributable to the initial consolidation of international grain trader Cefetra B.V. In addition, the fruit trading business in New Zealand was included for the full year for the first time. T & G had not been included in the first quarter of the previous year because its initial consolidation did not occur until 31 March Higher prices for agricultural produce also contributed to the increase in revenues. In comparison with the already exceptionally good result of the previous year, EBIT had increased by around 1 million to 21.1 million by 31 March Revenues in Agriculture Trade increased by some 1.5 billion to around 2.4 billion. Revenues increased not only as a result of the inclusion of Cefetra, but also benefited from brisk grain trading in BayWa s sales regions. Larger inventories from the previous year generated better margins. 4

6 The Agriculture Trade business unit generated an increase in earnings of around 0.9 million to 19.4 million (previous year: 18.5 million). As a result, the grain trading business was able to more than compensate for weak demand in the operating resources business. The unfavourable weather conditions led to a lag in demand for operating resources and correspondingly weaker year-on-year performance in the seed, fertiliser and crop protection product areas. It was almost impossible to sow seeds for spring cereals and spread fertiliser on account of a blanket of snow that lasted until the end of March. On a positive note, the snow protected soil and crops, sparing farmers from winter kill for the most part. Therefore, there should be no obstacles to more dynamic trading in operating resources in the second quarter. Business in tractors and other agricultural machinery remains at a high level on the heels of two exceedingly strong sales years, even though the financial key figures in the reporting quarter do not necessarily reflect this good performance. Revenues in the Agricultural Equipment business unit fell slightly in the first quarter by around 3% to million. The business unit s EBIT declined by 2.4 million to a total of -2.1 million. The negative earnings are due to automatic inventory devaluation on vehicles that could not be delivered due to the weather as well as sluggish service business. As a result, the Agricultural Equipment business unit was unable to escape the impact of the capricious weather conditions. The business unit seems likely to gather up steam significantly in the subsequent quarters due to high order intake at the end of financial year 2012 and in the reporting quarter. Revenues more than quadrupled year on year in the Fruit business unit, corresponding to an increase of 90.4 million to million. EBIT grew by 2.4 million to around 3.9 million. The growth in revenues and earnings was mainly attributable to the full-year consolidation of T & G. The months January to March were not taken into account in the previous year. 5

7 Energy Segment In million Q1/13 Q1/12 % Revenues EBIT Industry trends The German economy got off to a slow start in This was mainly due to the long winter. In addition, insecurity in the eurozone grew once again as a result of the increasingly serious debt crisis in Cyprus and the government crisis in Italy, preventing an economic upturn. With a 17% year-on-year decrease in new vehicle registrations in March, the lubricants and fuel industry in Germany recorded falling sales. However, Germany is expected to see dynamic economic growth over the course of the rest of the year following the weak first quarter. The sluggish economic growth also likely had an impact on the price of crude oil, which fell below the USD100 mark per barrel. Correspondingly, the price for heating oil in Germany has remained lower year on year since February 2013, recently falling to around 83 per 100 litres. The combination of falling prices and an extended cold spell both of them major factors in consumers ordering behaviour led to brisk demand for heating oil in Germany in the reporting quarter. As a result, the industry recorded an increase in sales of around 10% year on year in the first three months of In regenerative energies, the expansion of capacities in wind power, solar power and biomass is progressing slowly but surely as the energy transition in Germany continues. The monthly reduction of feed-in tariffs for PV power, introduced in Germany in November 2012, has led to a drop in the number of new solar systems installed. The inclement weather conditions further exacerbated the situation. As a result, Germany saw the installation of new PV systems with a total output of 775 megawatts (MW) in the first quarter (previous year: 1,970 MW), according to estimates. In the same quarter in the previous year, the industry had also benefited from upfront buying effects resulting from announced subsidy cuts slated to take effect on 1 April

8 Analysts expect more than 35 gigawatts (GW) of photovoltaic power to be installed worldwide in Rising demand in Asia and the USA seems likely to compensate for the decrease in the German and European markets. The wind power industry remains optimistic, although the debate over a cap on electricity prices in Germany has led to risk surcharges in pricing. Following a veto by German federal state governments of an amendment to the German Renewable Energies Act (EEG), experts from the German Wind Energy Association (BWE) predict the construction of new on-shore wind power plants with a capacity of 2,900 MW (previous year: 2,439 MW) by the end of the year. The intervention in subsidies for older biogas plants that had been discussed is now highly unlikely following the rejection of the recommendations by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety to limit electricity prices. As a result, the conditions for investing in biogas remain favourable. Business development The Energy Segment comprises both trading in conventional energy carriers and the renewable energies business. Compared to the previous year, total revenues in the segment fell in the first three months by around 8.2% to million. The decrease in revenues is mainly attributable to lower oil prices. In operating terms, the segment generated EBIT of around 2.0 million (previous year: 7.1 million). In the previous year, the Renewable Energies business sector profited in particular from upfront buying effects in solar trading and increased purchasing of systems in the project development business. The Renewable Energies business generated total revenues of 73.7 million. The year-on-year drop in revenues in the reporting quarter of around 12.5% is mainly attributable to weaker business in solar trading. EBIT fell to 2.6 million (previous year: 7.3 million). Alongside a lack of systems sales, which are planned for the second half of the year, earnings were impaired by the rebranding costs necessary for creating a uniform brand identity BayWa intends to use to further strengthen its presence on the renewable energies market. Having secured further project rights for the construction of wind farms with a total output of almost 240 MW in Scotland and Italy, and owing to the planned sale of several completed projects, BayWa r.e. renewable energy believes it is well positioned to be able to compensate for the 7

9 negative impact of regulations in the current financial year. New service and maintenance orders and the recovery of PV trading on the heels of better weather will likely have a supportive effect. Revenues in conventional trading and distribution decreased in the first quarter by around 7.7% to million year on year due to the fall in oil prices. While demand for heating oil and wood pellets, both of them energy carriers in heating systems, increased by around 4% or 21% respectively owing to the extended cold spell, sales of fuels and lubricants saw a slight decline. The heating business profited from the long winter and the fall in heating oil prices. Higher order intake was recorded towards the end of the first quarter in particular. Invoicing for these orders will have an impact in the subsequent quarter. Sales of fuels and lubricants did not reach the levels seen in the previous year. Whereas the lubricant business recorded a slight decrease due to contractions in the metal processing industry on account of the economy, the long winter led to sluggish fuel sales. These were weak because of postponed or cancelled deliveries of diesel to farmers and building sites due to the snowy winter. However, rising demand is expected in the warmer subsequent quarter. Overall, EBIT in the conventional energy business declined slightly to -0.6 million (previous year: -0.2 million) on account of weaker development of margins in the fuel business. 8

10 Building Materials Segment In million Q1/13 Q1/12 % Revenues EBIT Industry trends Following the premature onset of winter in early November 2012, the snowy, cold weather lasted until the end of March Many construction projects experienced delays as a result, as the weather conditions did not permit building to begin before April. In addition, an early Easter holiday season also had an impact on business. Correspondingly, it became necessary to revise the originally forecast growth in construction investment downward by 2.8% for the year as a whole. Experts currently expect an increase of 1.8% in Germany for full year The industry is currently profiting from the highest number of new building permits in residential construction since This growth is supported primarily by an increase in the construction of multiple-family houses, which is flourishing due to the growing need for housing in major metropolitan areas. Up to 204,000 new residential units could be built in Germany this year, according to estimates. Renovations to existing buildings are an increasingly popular investment alternative on account of the ongoing phase of low interest rates. As a result, the renovation industry is also recording growth. Construction activity has been in high gear since the weather improved towards the end of the reporting quarter. The industry is therefore optimistic that it will be able to make up the winter s shortfalls over the remaining course of the year. Business development The Building Materials Segment mainly comprises trading in building materials in Germany and Austria. Capricious weather conditions typically have the most significant effect on this segment s business. The long, snowy winter brought exterior work on building sites to a complete standstill in some places. Construction companies voiced little demand for mass building materials, such as roofing tiles and bricks, which are usually in high demand at this time of year. 9

11 Despite normal sales for products for interior finishing, such as insulating materials and gypsum plasterboard, it was not possible to compensate for the corresponding decrease in this so-called transit business. As a result, revenues in the Building Materials Segment declined by 12.4% year on year to million in the first three months of The typical drop in earnings in the first quarter was additionally exacerbated by an early Easter holiday season. In contrast, savings in logistics owing to the optimisation of delivery routes had a positive effect. As per 31 March 2013, the Building Material Segment s negative EBIT, which is typical of the season, stood at million (previous year: million). The Building Materials Segment used the quiet start to the building season to burn off leave time and implement strategic streamlining measures in order to be able to focus its entire energy on the wave of orders anticipated with the onset of better weather conditions. Other Activities EBIT includes gains from the sale of the small real estate portfolio (nine locations), expenses for a bonus payment to employees and lease payments for the Group s headquarters. Taking additional account of consolidation effects, EBIT amounted to -3.8 million in the first quarter of Report on the assets, financial position and result of operations Asset position The total assets of the BayWa Group came to 5,500.3 million on 31 March 2013, thereby exceeding the 4,457.4 million posted at the end of financial year 2012 by 1,042.9 million. Non-current assets increased by 47.5 million, mainly due to changes in intangible assets and other financial assets. The 18.2 million rise in intangible assets resulted from the preliminary goodwill from the initial inclusion of Cefetra B.V. and its subsidiaries in the consolidated financial statements of BayWa AG. The increase in other financial assets was mainly due to a rise in the shareholder loan granted to BayWa Bau- & Gartenmärkte GmbH & Co. KG, Dortmund, Germany. Additions from 10

12 the initial consolidation of Cefetra B.V. and earnings contributions from shareholdings helped increase participating interests recognised at equity to 96.7 million. Current liabilities climbed by 1,045.2 million as against the end of the 2012 to 3,489.5 million, of which million is due to higher inventories and million to an increase in liabilities and other assets. These additions predominately relate to the initial inclusion of Cefetra B.V. and its subsidiaries. Other assets include commodities futures measured at market value. The seasonally-induced increase in Agricultural Equipment and Building Materials inventories also contributed to this development. The start of the spring business resulted in a rise in the BayWa Group s trade receivables. The non-current assets held for sale/disposal groups declined from million at the end of 2012 to million, prompted by property sales by BayWa AG in the first quarter of In the Interim Report for the first quarter, this item includes additional BayWa AG properties held for sale as well as the technical facilities of two wind parks that are allocated to the Renewable Energies business unit. The BayWa Group s shareholders equity stood at 1,076.0 million on 31 March 2013 and has therefore fallen by 9.2 million in comparison with the end of This was mainly due to the seasonal quarterly losses as well as the differences resulting from currency translation. Non-current financial liabilities have remained almost unchanged since the end of financial year The slight rise of 5.4 million to 1,403.4 million is due to noncurrent financial liabilities for project financing in the Renewable Energies business as well as deferred tax liabilities from the initial consolidation of Cefetra B.V. Current liabilities stood at 2,995.3 million on 31 March 2013 and have therefore increased by 1,048.0 million in comparison with the end of 2012 due to the million rise in non-current financial liabilities, which was largely caused by the initial inclusion of Cefetra B.V. and its subsidiaries. An impact continues to be felt from the brisk business at the end of the first quarter; this also explains the million rise in trade payables and liabilities from inter-group business relationships. 11

13 The increase in other liabilities of million is mainly due to Cefetra B.V. s commodities futures; pursuant to IAS 39, these are classified as financial instruments and carried at market value. As at the end of 2012, liabilities from non-current assets held for sale/disposal groups include financial liabilities and provisions allocated to the wind parks held for sale in the Renewable Energies business unit. Financial position Cash earnings fell from 5.2 million to 1.9 million due to the 6.0 million yearon-year decline in consolidated results for the quarter as well as the 2.0 million rise in depreciation and amortisation. The seasonally-induced increase in inventories and trade receivables, which were down year on year, was offset by the rise in trade payables. This resulted in a rise in cash flows from operating activities by 10.4 million year on year to 72.0 million. Cash outflows from investment activities came to 82.2 million and were therefore 54.8 million less than in the previous year. This was mainly due to cash inflows from the acquisition of BayWa AG properties as well as the year on year drop in outgoing payments for investments in intangible assets, property, plant and equipment, despite the payment of million for the acquisition of Cefetra B.V. The negative cash flow from financing activities of 10.1 million is attributable to the reduction of financial liabilities. Total cash and cash equivalents have fallen by 14.7 million since 31 December 2012 to 68.6 million due to the incoming and outgoing cash payments from operating, investment and financing activities, and also taking account of incoming funds from changes in the group of consolidated companies and from exchange rates, which came to 5.7 million. Earnings position The revenues achieved by the BayWa Group in the first quarter of financial year 2013 came to 3,712.8 million and have therefore risen by 1,493.3 million, the equivalent 12

14 of 67.3%, year on year. The Agricultural Segment reported the largest increase in revenues of 1,627.6 million. This was boosted especially by the Agricultural Trade business unit due to the initial inclusion of Cefetra B.V. and its subsidiaries in the consolidated financial statements of BayWa AG, with higher prices for agricultural products also influencing developments. The 90.4 million increase in revenues in the Fruit business unit was primarily influenced by the initial recognition of the Turners & Growers subgroup, which was only included in the BayWa Group from the second quarter last year. However, revenues in the Agricultural Equipment business unit were down slightly, mainly due to lower sales of agricultural machinery on account of poor weather conditions as well as a drop in services. The Energy Segment saw revenues decline by 65.4 million, or 8.2%. Of this amount, a decrease of 54.9 million was attributable to the conventional energy business. This development is due to higher sales of heating oil and a drop in mineral oil prices as well as declines in sales of diesel and Otto fuel. The fall in revenues in the Renewable Energies business unit is largely due to upfront buying effects in the previous years due to a pending reduction in feed-in tariffs. Revenues also declined in the Building Materials segment to 37.0 million as the long winter resulted in lower demand for mass construction materials. No significant revenues are expected in Other Activities in the current financial year due the integration of Ybbstaler Fruit Austria GmbH, Kröllendorf, Austria, and Ybbstaler Fruit Polska Sp. z o.o., Chelm, Poland, into the joint venture AUSTRIA JUICE GmbH, Kröllendorf, Austria, in the previous year. Other operating income of the BayWa Group has risen by 23.8 million to 48.1 million year on year. This was largely due to income from sales of BayWa AG properties and income from the fair valuation of Cefetra B.V. s commodities futures. Taking account of changes in inventories and other own work capitalised, the BayWa Group s overall performance climbed by 1,526.5 million, or 66.3%, year on year to 3,830.5 million. With an increase in material costs of 74.7%, primarily due to the initial inclusion of the Cefetra subgroup, gross profit rose by 15.9 million, or 5.6%, to million. Personnel expenses were up 19.4 million as against the previous year, mainly as a result of the initial inclusion of the Turners & Growers subgroup in the first quarter as 13

15 well as the inclusion of Cefetra B.V. and its subsidiaries into BayWa AG s consolidated financial statements. This also resulted in the depreciation and amortisation of property, plant and equipment and intangible assets increasing by 2.0 million. The 13.6% rise in other operating expenses to 97.1 million was mainly as a result of the costs of the vehicle fleet and increased rental expenses due to the above-mentioned changes in the group of consolidated companies and cost increases at BayWa AG. In contrast, consultancy and legal fees have fallen. The 3.1 million year-on-year rise in income from participating interests is largely a result of the shares in AUSTRIA JUICE GmbH being recognised at equity. Adding the result of operating activities to the income from participating interests results in EBIT of -7.4 million for the BayWa Group for the first quarter of 2013, a drop of 14.0 million as against the same time last year. Net interest rose by 2.3 million year on year on account of a drop in interest rates. Including tax income of 3.7 million, this results in a loss for the first quarter of 2013 of 16.4 million which is 6.0 million lower than the figure for the previous year. Employees At the end of the reporting period, the BayWa Group had a workforce of 17,175, which is 616 more employees than at the end of The number of employees in the Agriculture Segment increased by 678. Due to the initial recognition of Cefetra B.V. and its subsidiaries, the number of employees in the Agriculture Trade business sector increased by 248. The Fruit business sector accounted for an increase of 399 employees due to the expansion of full-time equivalents during the harvest in New Zealand. In the Energy Segment, the number of employees increased marginally over the end of financial year 2012 by six. 14

16 The workforce in this segment now totals 1,623 employees. While the number of employees in renewable energies increased by 17, the corresponding figure in conventional energies decreased slightly. The number of employees in the Building Materials Segment fell by 56. Outlook The weather-related shortfalls will likely be made up in subsequent months. The development of revenues and profit in April confirmed expectations of being able to increase revenues and earnings year on year in all three segments by the end of The healthy economic situation of farmers and general economic conditions for construction are fuelling this optimism. Furthermore, increasing international activities in the Renewable Energies business unit should result in further opportunities for development in the segment. In international grain trading, the prospect of higher global harvest forecasts will likely mean promising trading volume. For grain year 2013/14, wheat production is forecast to grow in Europe, and a significant increase in the maize harvest is expected in the USA. According to estimates, the wheat harvest could increase by 4% and the maize harvest could grow by almost 10% worldwide year on year. The marked year-on-year increase is the result of last year s modest harvest, which was impacted by unfavourable weather influences in many regions. Agriculture in Germany continues to be characterised by a high willingness to invest. This optimistic forecast is supported not only by the German Farmers Association s recently published economic barometer, but also by the prospect of continuing above-average prices for key agricultural produce. The operating resources business seems likely to profit from compensating effects following the weather-related delays. 15

17 Full order books for agricultural equipment indicate a strong wave of deliveries of new machinery once the weather improves. The fruit harvest so far promises good sales opportunities for apples from New Zealand. Bohnhorst Agrarhandel GmbH is also set to begin contributing to the results in the second quarter of This will likely generate additional growth in earnings in the Agriculture Segment. In view of the forecast economic growth of 0.6% in Germany in 2013, more dynamic development is expected in the fuels and lubricants business in subsequent quarters following a weather-related slow start to the year. The further development of oil prices, which are currently down around USD15 per barrel year on year, will play an important role. A deteriorating economic outlook in Europe and lower-than-expected economic growth in China could continue to weigh down the price of fossil fuels. This will likely have a beneficial effect on the heating oil trade, as price-sensitive consumers tend to use low-price phases to fill up their tanks. The long winter is also expected to have fuelled consumption of heating oil. In the renewable energies sector, the Group will likely be able to participate in the growth forecast to start in 2013 in the solar industry, particularly in Asia and the USA, via its US subsidiary Focused Energy. Our entry into the Swiss market through the takeover of Würth Solar subsidiary SolarMarkt GmbH at the end of the first quarter should also strengthen the solar trading business. The project business with wind power and biogas plants is expected to develop as planned following the failure of a cap on electricity prices. The Federal Requirement Plan Act, which is intended to speed up the expansion of the network as part of the energy transition, should lead to positive momentum in the field of renewable energies in Germany. Abroad, BayWa should profit from the completion of two major wind projects, especially in the USA. Because the number of building permits continued to increase in the first quarter despite the inclement weather conditions, the construction sector is optimistic that it will rapidly be able to make up the shortfalls from the winter months. 16

18 Strong recovery in building activities since early April in conjunction with the anticipated positive effects resulting from internal streamlining measures should give earnings in the Building Materials Segment a moderate year-on-year boost. The first quarter is of limited informative value for revenues and earnings over the course of the year as a whole. Management is optimistic that the Group will be able to achieve its targets for the year, provided that no negative influences are exerted on business by exceptional weather conditions and market developments. The statements and figures forecast in this document are based on assumptions and are subject to unforeseeable risk. In as much as the assumptions of the company should prove to be inaccurate, or should other unforeseeable risks occur, the possibility of the net worth, financial position and earnings situation of the Group diverging negatively from the target figures cited in this report should not be discounted. 17

19 Consolidated Financial Statements of BayWa AG pursuant to IFRS Consolidated Balance Sheet as at 31 March 2013 In million Assets 31/03/ /03/2012 Non-current assets Intangible assets Property, plant and equipment 1, , Participating interests recognised at equity Other financial assets Non-current biological assets Investment property Tax assets Other receivables and other assets Deferred tax assets , , Current assets Securities Inventories 1, , Current biological assets Tax assets Other receivables and other assets 1, Cash and cash equivalents , , Non-current assets held for sale/disposal groups Total assets 5, , Shareholders' equity and liabilities 31/03/ /03/2012 Equity Subscribed capital Capital reserve Revenue reserves Other reserves Equity net of minority interest Minority interest , , Non-current liabilities Pension provisions Other non-current provisions Financial liabilities Financial lease obligations Trade payables and liabilities from inter-group business relationships Other liabilities Deferred tax liabilities , , Current liabilities Pension provisions Other current provisions Financial liabilities 1, Financial lease obligations Trade payables and liabilities from inter-group business relationships 1, Tax liabilities Other liabilities , , Liabilities from non-current assets held for sale/disposal groups Total shareholders' equity and liabilities 5, ,

20 Consolidated Income Statement for the First Quarter of 2013 In million 01/01-31/03/ /01-31/03/2012 Revenues 3, , Inventory changes Other own work capitalised Other operating income Cost of materials - 3, , Gross profit Personnel expenses Depreciation and amortisation Other operating expenses Result of operating activities Income from participating interests recognised at equity Other income from shareholdings Interest income Interest expense Financial result Result of ordinary activities (EBT) Income tax Net loss for the period of which: Profit share of minority interest of which: due to shareholders of the parent company EBIT EBITDA Average number of shares 34,432,612 34,324,520 Basic earnings per share* (in ) Diluted earnings per share* (in ) * For the calculation of earnings per share, reference is made to the Notes In the Interim Report. 19

21 Transition to Consolidated Statement of Comprehensive Income for the First Quarter of 2013 In million 01/01-31/03/ /01-31/03/2012 Net loss for the period Revaluation of financial assets Actuarial gains/losses from pension obligations and provisions for severance pay Differences from currency translation Gains and losses recognised directly in equity Consolidated total result for the period of which: Profit share of minority interest of which: due to shareholders of the parent company Consolidated Cash Flow Statement for the First Quarter of 2013 In million 01/01-31/03/ /01-31/03/2012 Cash earnings Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Cash-effective changes in cash and cash equivalents Cash and cash equivalents at the start of the period Outflow/inflow of funds due to changes in the group of consolidated companies and in exchange rates Cash and cash equivalents at the end of the period

22 Statement of Changes in Consolidated Equity in the First Quarter of 2013 In million Subscribed Capital reserve Revenue reserves Other Other Equity net of Minority Equity capital revaluation revenue reserves reserves minority interest interest As per: 01/01/ , Differences resulting from changes in the group of consolidated companies Capital increase against cash contribution/share-based payments Changes in the fair value of assets classified as "available for sale" Actuarial gains/losses from pension obligations and provisions for severance pay Dividend distribution Differences from currency translation Transfer to/withdrawal from revenue reserve Net loss for the period from 01/01-31/03/ As per: 31/03/ , As per: 01/01/ , Differences resulting from changes in the group of consolidated companies Capital increase against cash contribution/share-based payments Changes in the fair value of assets classified as "available for sale" Actuarial gains/losses from pension obligations and provisions for severance pay Dividend distribution Differences from currency translation Transfer to/withdrawal from revenue reserve Net loss for the period from 01/01-31/03/ As per: 31/03/ ,

23 Segment information by segment (income statements) 01/01-31/03/2013 In million Agricultural Trade Fruit Agricultural Equipment Agriculture Energy Renewable Energies Energy Building Materials Other Activities Transition Group Revenues generated through business with third parties 2, , , Inter-segment revenues ,--- Total revenues 2, , , Earnings before interest, tax, depreciation and amortisation (EBITDA) Depreciation and amortisation Earnings before interest and tax (EBIT) Earnings before tax (EBT) Income tax Net loss for the period Segment information by segment (income statements) 01/01-31/03/2012 In million Agricultural Trade Fruit Agricultural Equipment Agriculture Energy Renewable Energies Energy Building Materials Other Activities Transition Group Revenues generated through business with third parties , , Inter-segment revenues ,--- Total revenues , , Earnings before interest, tax, depreciation and amortisation (EBITDA) Depreciation and amortisation Earnings before interest and tax (EBIT) Earnings before tax (EBT) Income tax Net loss for the period

24 Segment information by segment (balance sheet) as per 31/03/2013 Agricultural Trade Fruit Agricultural Equipment Agriculture Energy Renewable Energies Energy Building Materials Other Activities Transition Group In million Assets 2, , , , , , of which: non-current assets held for sale Inventories , , of which: non-current assets held for sale Liabilities 1, , , , , , of which: non-current assets held for sale ,--- -, Investments in intangible assets, property, plant and equipment and investment property (incl. company acquisitions) Employees at month's end 4,069 2,094 3,766 9,929 1, ,623 5, ,175 Segment information by segment (balance sheet) as per 31/03/2012 Agricultural Trade Fruit Agricultural Equipment Agriculture Energy Renewable Energies Energy Building Materials Other Activities Transition Group In million Assets 1, , , , , , of which: non-current assets held for sale Inventories , , of which: non-current assets held for sale Liabilities , , , , , of which: non-current assets held for sale Investments in intangible assets, property, plant and equipment and investment property (incl. company acquisitions) Employees at month's end 3,821 1,695 3,735 9,251 1, ,617 5, ,559 23

25 Segment information by region In million External sales Investments in intangible assets, property, plant and equipment and investment property (incl. company acquisitions) Assets 31/03/ /03/ /03/ /03/ /03/ /03/2012 Germany 1, , , , Austria Other international operations 1, , Group 3, , , ,

26 Notes to the Interim Report for the period from 1 January to 31 March 2013 Accounting policies and valuation methods The Interim Report of the BayWa Group as per 31 March 2013 was prepared in accordance with IAS 34 (Interim Financial Reporting), taking into account the framework set out under the International Financial Reporting Standards (IFRS) and valid on the reporting date. The reporting currency of the Group is the euro. There have been no changes in the accounting policies and valuation methods applied to the consolidated financial statements as against 31 December However, please note that the commodities futures of Cefetra B.V. and its subsidiaries, which were included in BayWa AG s consolidated financial statements for the first time, are classified as financial assets held for trading pursuant to IAS 39. Commodities futures are measured at their market values as of the balance sheet date; resulting gains and losses are recorded as profit and loss in the income statement. The positive and/or negative market values of the commodities futures are reported in these BayWa AG consolidated financial statements for the quarter in other assets and/or other liabilities. Changes to the market values of the commodities futures are recorded as profit or loss in the income statement under other operating income and other operating expenses. For more information on the details pertaining to the accounting policies and valuation methods applied, reference is made to the consolidated financial statements of BayWa AG as at 31 December Changes in the group of consolidated companies and additions of assets from asset deals Along with BayWa AG, the consolidated financial statements include all major companies in which BayWa AG holds a majority participation, either directly or indirectly, or the majority of voting rights, and where it is able to determine the corporate policies pursuant to the control concept. BayWa Agrar Beteiligungs GmbH, Munich, Germany, BayWa Agrar Beteiligungs Nr. 2 GmbH, Munich, Germany, BayWa Agri GmbH & Co. KG, Munich, Germany, BayWa Dutch Agrico B.V., Rotterdam, the Netherlands (formerly: Amsterdam, the Netherlands), and BayWa r.e. Betriebsführungs GmbH, Munich, Germany, which 25

27 were all founded in the reporting year or in previous years, were consolidated for the first time as of 31 March In addition, RWA RAIFFEISEN AGRO d.o.o., Zagreb, Croatia, BGA Bio Getreide Austria GmbH, Vienna, Austria, and Agrosaat d.o.o., Ljubljana, Slovenia, which had not been consolidated by the end of financial year 2012 due to their being of minor significance, were included in BayWa AG s consolidated financial statements for the first time as of 1 January 2013 in accordance with the standards applicable to full consolidation. BayWa AG acquired the building material business of Becker und Co. GmbH, Neuwied, Germany, by way of an asset deal with effect from 1 January 2013, so as to expand its business activities. The preliminary purchase cost of the net assets comes to million. No transaction costs have been incurred to date in connection with the acquisition. The net assets acquired in connection with the acquisition of operations comprise the following (provisional figures): In million Book value Fair value Fair value adjustments Intangible assets Property, plant and equipment Financial assets Inventories Receivables Deferred tax assets Cash and cash equivalents Non-current liabilities Current liabilities Deferred tax liabilities Total purchase price (provisional) No goodwill was recorded from the acquisition. 26

28 BayWa AG acquired the commodities trading business of the Sommerhausen site of Volksbank Raiffeisenbank Würzburg eg, Würzburg, Germany, by way of an asset deal with effect from 1 January 2013, so as to expand its business activities. The provisional purchase cost of the assets transferred on 1 January 2013 comes to million. No transaction costs have been incurred to date in connection with the acquisition. The agreed purchase price breaks down as follows (preliminary figures): In million Purchase price Intangible assets Property, plant and equipment and inventories Total purchase price (provisional) No goodwill was recorded from the acquisition. BayWa AG acquired the segments handling the sale of agricultural machinery, maintenance and repair work, and the sale of accessories and spare parts of Heumos Landtechnik, Oderding, Germany, by way of an asset deal with effect from 1 February 2013, so as to expand its business activities. The provisional purchase cost of the assets transferred on 1 February 2013 comes to million. No transaction costs have been incurred to date in connection with the acquisition. The agreed purchase price breaks down as follows (preliminary figures): In million Purchase price Intangible assets Property, plant and equipment and inventories Total purchase price (provisional)