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BayWa GroupCapital Market Day 2016
BayWa 4.0 - Digitalization Strategy
Jörg Migende, Head of Digital FarmingThe Hague, 13/10/2016
Page 2BayWa Capital Market Day, J. Migende
1 Why is BayWa Agri-Services focusing on digital opportunities?
1.1 The threat of disruption1.2 New business opportunities1.3 Implementation
2 What does Smart Farming mean?
3 Why did we change eCommerce into eBusiness?
Agenda
13 October 2016
Page 3BayWa Capital Market Day, J. Migende
1 Why is BayWa Agri-Services focusing on digitalopportunities?
13 October 2016
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BayWa creates added-value to the farmers gate:traditional position in the market
Source: Project Team Smart Farming
– Integrated offerings to the farmers:
advice + sales + after sales services
– BayWa brand values from the farmersperspective: trust, solid foundation,innovative
High customer loyalty
Portfolio follows customer needs
– One-stop-shop: inputs, Ag.equipment,commodity trading, energy, etc.
– BayWa’s decentralized infrastructure iskey to meet farmers’ needs for productsand recommendations
– Own model farms with trial operations,20 agronomists + other specialists
– Local and international network
BayWa Capital Market Day, J. Migende 13 October 2016
Close to the farmers since 1923 Not only sales
Page 5
BayWa future challenge: the threat of disruption
365FarmNet
?Start-ups
Advice to the farmer based on big data analytics=> digital proximity => sales will be easy to add
BayWa Capital Market Day, J. Migende 13 October 2016
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Financialstrength
Technicalcapabilities
Agronomicalknow-how
Proximity tofarmer
Top relevant companies
Ag.chemicals
Monsanto, Bayer Crop Science,BASF Plant Science
Equipmentproviders
John Deere, Trimble
Fertilizerproducers
Mosaic, Yara
Distri-butors
BayWa, Invivo, Land O’ Lakes
Consul-tants
Ag. techno-logy firms
RELX (Farmade, Farmplan)F4F, Geo-Koncept, Granular,AEF, DKE
Techno-logy firms
Google, Amazon
Competitors analysis: position of BayWa will be highcompetitive if they improve technical capabilities
Source: Project Team Smart Farming; A.T. Kearney No low competencies High competencies
BayWa Capital Market Day, J. Migende 13 October 2016
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Digital Farming: new business opportunities
Source : Roland Berger Strategy Consultants GmbH Automotive Competence Center (July 2015):Business opportunities in Precision Farming: Will big data feed the world in the future?, München.
BayWa Capital Market Day, J. Migende 13 October 2016
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Implementation:the business unit BayWa Digital Farming
eBusiness“BayWa Online World”
– Digital consultancy and services for betterservice (crop advisory, telematics, etc.)
– Provision of products (eCommerce)
– Digital processes between BayWa andfarmers (eProcurement)
Smart BayWa AgricultureSmart BayWa AgricultureDigital
FarmingDigital
Farming
Existing business: digitalization of BayWa New business: agronomic optimization
Smart FarmerSmart Farmer& =
Smart FarmingFarmFacts GmbH
– Farm management tools
– Yield increase / reduction of inputs throughoptimal agriculture realization (yieldoptimization)
BayWa Capital Market Day, J. Migende 13 October 2016
Page 9BayWa Capital Market Day, J. Migende
2 What does Smart Farming mean?
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Smart Farming helps growers in improving theiryields with respect to where they stand today
Local weatherstation
Aerialimaging(drones)
Cloud datastorage &analysis
GPS
Satelliteimaging
GPS
Camera
– Mechanisa-tion withoutautomation
– MinimalisticFarm MgmtInformationSystem(Excel)
– …
– StandardFarm MgmtSystem
– Steeringsystem
– Applicationmap
– Sectioncontrol
– …
– AdvancedFarm MgmtSystem
– Steeringsystem
– Variableapplica-tion map
– Variableratetechnology
– …
– Cloud basedFarm MgmtSystem
– Steeringsystem
– Variableapplicationmap basedon collabo-rativeknowledge
– Variableratetechnology
– …
Traditional Automated Variablerate Big data
Traditional Emerging Leading World-class
Controllingbreakthrough
Performancebreakthrough
Integrationbreakthrough
Continuous improvement with Smart Farming
BayWa Capital Market Day, J. Migende 13 October 2016
Stages of excellence for crop productionand Smart Farming
Vison of digital/smart farming
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BayWa as the Smart Farming enabler:milestone - acquisition of the leading FMIS and SmartFarming services company
Products/Services : Software solutions (AO Agraroffice, NEXT Farming, special tools); Soilanalyses; Satellite images, Sensoric => Digital crop advisory services; FarmFactsacademy, etc.
Company Profile
Founded 1985, headquartered in Pfarrkirchen, Germany; 100% owned by BayWa since2015
Employees approx. 100
Team: experienced team with know-how in programming and sales of smart farmingsolutions
Customer base: approx. 30,000 customers in Germany, Poland, Hungary and BalticStates; and of these approx.10,000 FMIS user
BayWa Capital Market Day, J. Migende 13 October 2016
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How do we make money in Digital Farming?
Product/Service Company Revenue FC 16
Software Farmer/OEM +Supportcontracts
€ 4.3 m, marketleader GER, orderper customer 3T€
„Big data maps ready foruse“,Soil analytics, Consulting
€ 1.9 million,fast growingsegment
Sensors +SF Hardware
€ 0.8 million
Guidance Steering,Telematic Systems,High Tec Machinery
€ 100 m (machinerywith Smart Farmingcomponents inside)
„Precision FarmingSolutions“(Inputs +Software/Hardware +Application maps + DataConnectivity)
Pilot projects:- Fertilizer appl.- Planting- Biological pest
control- Irrigation
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0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
5.500
6.000
6.500
7.000
7.500
(in T€)
Open the market to small and mediumsize farmers with the new NEXT Farmingsoftware line
Add to software more digital advisoryservices based on big data, satellite data,agronomical know-how
Internationalization
Partnering with ag.machinerymanufactures
Cross selling with input business as aresult of precision farming solutions
BayWa Capital Market Day, J. Migende 13 October 2016
Further growth potential
FarmFacts GmbH revenues 2000 – 2016 FC
Page 14BayWa Capital Market Day, J. Migende 13 October 2016
What does a Precision Farming solution mean?
Page 15
Site-specific seeding as an example of a BayWaPrecision Farming solution
Farm Management Systeme Big Data Soil, Satellites,
Farm Application maps
Less Input costs
Higher yield
Open system:Independently from anymanufacturer
High level of data privacyand security
Crop Advisory Service Field trials + Monitoring Seeds
Automatic Steering Connectivity Sensoric and Telematics
Digital Farming Unit
Ag. Machinery Unit
Agri-Services Unit
USP Farmer
DigitalFarming
AgriServices
Ag.Machinery
1
2
3 USP Society
Less negativenviromental impact
Optimizing world foodproduction
BayWa Capital Market Day, J. Migende 13 October 2016
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Munich/Pfarrkirchen:processing of data, producingapplication map
Mubuyu Farm, Zambia:precision fertilizer application of80 ha wheat (NEXT FarmingShape-file + Consultancy)
The potential of FarmFacts: walk the talk
13 October 2016BayWa Capital Market Day, J. Migende 13 October 2016
Page 17BayWa Capital Market Day, J. Migende
3 Why did we change eCommerce into eBusiness?
13 October 2016
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BayWa eBusiness: from the existing eShop to theBayWa Online World for enhanced connectivity withour customers
Telematics
OnlineService
OnlineSales
OnlineAdvice
Our customers
BayWa Online Welt
13 October 2016BayWa Capital Market Day, J. Migende
Page 19
Outlook: managing the internal change into aomnichannel organization
BayWa Capital Market Day, J. Migende
Digitalization of theexisting business
BayWa CoreBusiness
DigitalServices
SmartSolutions
BayWaOnline World
Ideation &Incubation
In cooperation with:
BayWa Ideenpool
Start-Ups
Universities
Start-UpDevelopmentStrategy
Establishment
Financing
Management
(Proceed or Fail Fast!)
Pla
ttfo
rm
New approaches/amendments to our core
business
Digital Education BayWa
1 2
Growth
Acceleration
„Omni-Channel“
Future Topics
Smart Farming, Smart Housing
New, detached digital business models3
Initiated
4
13 October 2016
Thank youvery much for yourattention!
