I n t e r I m r e p o r t of the BayWa Group 1 January until 30 … · 2014. 11. 12. · The Report provides information on the business performance of the BayWa Group in the third

I n t e r I m r e p o r t

of the BayWa Group

1 January until 30 September 2014

Interim Report of the BayWa Group for the Period from1 January until 30 September 2014

The Report provides information on the business performance of the BayWa Group

in the third quarter and in the first nine months of the financial year 2014.

BayWa Group: Agriculture Segment feels the impact of sales

restraint among farmers; positive development in the Energy andBuilding Materials Segments

In € million Q3/14 Q3/13 % 9M/14 9M/13 %

Revenues 3,751.3 3,885.1 - 3.4 11,442.3 12,157.9 - 5.9EBIT 12.4 20.5 - 39.5 74.5 177.7 - 58.1

Inconsistent developments in the Agriculture, Energy and Building Materials

Segments shape the current financial year for the international trading and services

group. In the first nine months, the Energy and Building Materials Segments

managed to exceed the operating EBIT (earnings before interest and tax) of the

previous year, while the earnings contribution from the Agriculture Segment fell.

Steadily decreasing commodity prices for agricultural produce and with that

apprehension in buying activities and low willingness to sell were apparent in nearly

all agricultural markets. The Energy Segment benefitted in particular from the

planned sale of several wind and solar parks in Europe and the USA. The Building

Materials Segment also recorded growth, thanks in part to site optimisation

measures, which had a positive impact.

In the first nine months of the year, consolidated revenues came to €11.4 billion, a

year-on-year decline of just under 6%. EBIT fell by approximately €103 million to

€74.5 million (2013: €177.7 million). The major difference between the two results of

the first nine months in 2013 and 2014 is particularly due to the disposal of three real

estate portfolios and the resulting accounting profit of €95 million during the previous

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year. The operating EBIT from the segments’ business activities fell year on year by

around €22 million to €111.4 million. This decline is mainly due to the Agriculture

Segment where trading margins have been under intense pressure from falling wheat

prices since April 2014. This effect is not only due to the price trend, but also

because of the seasonality of business activities. As the quarter in which the harvest

occurs, the third quarter is shaped by early contracts and a lower level of logistics

services, as the distribution of harvest volumes mostly proceeds directly from the

fields to the industry. The large volume of wheat on hand should provide excellent

marketing opportunities for the subsequent quarters, especially on the back of a

renewed rise in prices.

The margins of the Fruit business unit have also come under pressure as a result of

Russia’s import ban on fruit and vegetables. The additional quantities of fruit and

apples from other countries that flooded onto the already well-supplied EU market

intensified the price competition, especially in the apple business. In this regard,

BayWa was able to capitalise on its global distribution network for marketing. The

acquisition of New Zealand-based company Apollo Apples has not yet been included

in the result of the Fruit business unit because the New Zealand authorities

responsible in this matter have still not given their final approval.

The Agricultural Equipment business unit was not quite able to match the strong

result of the previous year as sales of new machinery fell by approximately 13%.

However, the outlook is positive thanks to the order-intake situation, which continues

to be stable – especially in terms of indoor equipment, such as farm and animal

equipment – and the anticipated demand for services, which experience shows rises

after harvest activities.

Trade in heating fuels, fuels and lubricants in the Energy Segment recently registered

considerable momentum, due to the sharp decline in oil prices. The result achieved in

the conventional energy business in the third quarter was higher than in the entire

first six months of the current financial year. Orders for heating oil will likely increase

further on account of the coming winter months. The Renewable Energies business

sector benefitted from the sale of several international wind and solar parks and from

a slight stabilisation of domestic solar trading. It was possible for the first time to sell

a completed wind park in the USA. In addition, BayWa managed to gain entry into the

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US solar project business thanks to the acquisition of business activities from Martifer

Solar USA, Inc.

While the growth rates for the main construction industry forecast at the start of the

year are slowing down overall, the market – especially for multi-family homes –

remains positive. The Building Materials Segment was able to capitalise on the

positive climate and further increase its results despite personnel-related capacity

constraints in the construction industry arising from holiday leave. The year-on-year

increase is also due to the favourable weather conditions and the disposal of loss-

making building materials locations in North Rhine-Westphalia and Rhineland

Palatinate.

The problematic framework conditions in the agricultural sector, coupled with

structural changes within the Group, mean that the fourth quarter is likely to prove

challenging, but opportunities should present themselves if markets develop

positively. In the Energy and Building Materials Segments, business developments

thus far and the current climate provide a solid basis for increasing the previous

year’s results.

BayWa places bonded loan

In September 2014, BayWa placed a bonded loan in the amount of €383 million with

terms of between five and ten years. The issuance of the bonded loan was highly

oversubscribed. BayWa AG will use the proceeds to refinance the bonded loan

issued in 2010 ahead of schedule and will use the current bonded loan to sustainably

secure short-term working capital lines, as it did in 2011. National and international

banks, as well as institutional investors, entered themselves into the order book. For

the time being, there are no further plans for raising outside capital on the capital

market.

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Segments of the BayWa Group

Agriculture Segment

In € million Q3/14 Q3/13 % 9M/14 9M/13 %

Revenues 2,420.0 2,494.4 - 3.0 7,704.2 8,329.3 - 7.5EBIT 3.6 15.9 - 77.5 69.8 103.3 - 32.5

Industry trendsAccording to the latest forecasts, the supply situation on global grain markets is once

again improving significantly in the 2014/15 season after last year’s record harvest.

The USDA (United States Department of Agriculture) estimates that the global

harvest volumes for wheat will rise to 721 million tonnes (2013: 715 million tonnes)

and for corn to 991 million tonnes (2013: 989 million tonnes), which would set new

records. In addition, record volumes of soy have been reported in the USA, which is

the most important crop-growing country for soy. The USDA also recently increased

its estimate for this year’s wheat production in the European Union (EU) to

154 million tonnes, of which some 27.9 million tonnes are set to be harvested in

Germany, according to the Federal Statistical Office (Destatis). In terms of wheat, this

is a year-on-year increase of 11%. And because domestic harvest volumes of other

types of grain – with the exception of rye – are rising as well, the German grain

harvest has set a new record with 51.9 million tonnes. The mediocre summer had

only a slight effect on the quality of the harvest in Germany. As a result, German

wheat in particular fulfilled the high quality standards necessary for export. Positive

global development in terms of harvest volume in the current harvest is likely to have

led to declines in the prices of agricultural commodities on commodities future

markets MATIF and CBoT since April 2014. After wheat and corn reached several-

year lows at the end of September, prices rebounded considerably and are currently

trading at around €170 per tonne for wheat and around €150 per tonne for corn. The

steep decline in prices created reluctance amongst farmers to part with their harvest

and sell. Most recently, the early orders business for base fertilisers was affected by

farmers’ reticence to buy, due to rising fertiliser prices. The new and stricter fertiliser

regulation in Germany could increase this reluctance. The application of crop

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protection materials in the autumn treatment phase is likely to have increased

significantly in recent weeks, due to the ideal weather conditions.

Besides fertilisers, investments in agricultural equipment are also feeling the effects

of farmers’ wait-and-see attitude. This is reflected in the slight 1.2% year-on-year

decline of new tractor registrations after nine months. The German Engineering

Foundation (VDMA) has correspondingly reduced its revenues forecast for 2014 as a

whole down to approximately €7.9 billion. There continues to be stable development

in demand in the animal and milking technology businesses, however. The Russian

import restrictions on certain agricultural products such as fruit and vegetables from

the EU that have been in effect since early August represent a new challenge for the

agricultural industry. There is an oversupply on the market as good fruit harvests

were recorded across the EU this year and those quantities intended for export to

Russia now have to be sold elsewhere. Prices may erode as a result of the fact that

the German apple harvest in particular benefitted from excellent growing conditions.

The apple harvest volume in Germany is set to increase by around 29% year on year

to 1.04 million tonnes. The pome fruit marketing season from this year’s harvest in

the southern hemisphere showed stable development and is currently drawing to a

close.

Business development

Within a challenging market environment, the BayWa Group generated revenues

totalling around €7.7 billion as at 30 September 2014 in the Agriculture Segment,

which comprises trading in agricultural operating resources and produce as well as

the Agricultural Equipment and Fruit business units. The 7.5% fall in revenues

compared to the same period in the previous year was due to a significant decline in

grain and oilseed prices against the backdrop of stable agricultural equipment

business. The operating segment earnings (EBIT) at the end of the first nine months

of the financial year totalled around €69.8 million (2013: €103.3 million).

High worldwide harvest volumes have led to declines in the price of grain and oilseed

during the period under review. As a result of low producer prices and the uncertainty

concerning further price trends, the trading activities in BayWa AG’s core regions

were extremely subdued both on the part of the sellers (farmers) and the buyers.

Prices bottomed out at the end of the harvest quarter, which resulted in growing

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willingness to buy and sell. It should be possible to market the higher inventories as

compared to the previous year, combined with larger volumes during subsequent

collection, at more favourable conditions in the coming quarters. The breakdown in

domestic trading was only of minor significance to international agricultural business.

Cefetra recorded stable sales volumes, though they were traded at considerably

smaller margins, due to the price development. After a strong first six months, the

field of operating resources registered reluctance to buy as regards the early orders

business for fertilisers and crop protection products on the back of selling prices that

have begun to rise recently. In light of this, revenues in Agricultural Trade as at

30 September 2014 fell by 8.7% year on year to €6.3 billion on account of prices. It

was not possible to repeat last year’s excellent result because of this development.

EBIT of €40.3 million was generated after the first nine months of the current

calendar year (2013: €66.1 million). Larger amounts of grain collected compared to

the previous year and the persistent increase in grain prices since the end of

September mean that the earnings potential for this year’s harvest is attractive with

respect to the rest of the marketing season.

The Group’s fruit trading activities recorded growing demand during the summer

months. On the one hand, the positive development of sales is due to catch-up

effects in BayWa AG’s domestic sales regions, which are themselves due to below-

average sales volumes during the first half of 2014. On the other hand, the marketing

season for apples from the southern hemisphere went well, which benefitted the

trading volumes of New Zealand majority holding Turners & Growers Limited (T & G).

Revenues in the business unit as at 30 September 2014 totalled €432.7 million, down

3.8% year on year. The emerging oversupply of apples on the European market,

which was triggered by the large harvest volumes from this year’s EU apple harvest

in connection with the Russian import ban on fruit from Europe, has recently caused

prices to erode and increased the pressure on trade margins. After the first nine

months of the financial year, the Fruit business unit generated EBIT of €15.9 million

(2013: €21.0 million). Earnings in 2013 additionally benefitted from one-off effects at

T & G. In the subsequent quarters, the Group’s global trading network is set to open

up international marketing opportunities for the large inventories from the domestic

apple harvest.

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In the quarter under review, the Agricultural Equipment business unit was able to

match the good business development seen during the first half of the year. With

falling demand for new machinery (down 13% compared to 2013), the sales figures

for used machinery are on par with the same high levels as the previous year: In the

first nine months of 2014, 1,276 used tractors were sold (2013: 1,283). In addition,

brisk business was recorded with milking and animal equipment, which made it

possible to nearly offset the decline in revenues from the new machinery business.

Revenues of €971.9 million had been generated as at 30 September 2014

(2013: €981.7 million). The operating result (EBIT) was unable to keep pace with the

previous year, due to greater depreciation and amortisation caused by higher

inventories of used machinery, and a delayed service business resulting from the

harvest. EBIT for the Agricultural Equipment business unit decreased as compared to

the same period during the previous year, which was marked by catch-up effects, by

€2.6 million and totalled approximately €13.6 million after the first nine months of the

current financial year. There is reason to anticipate a strong fourth quarter for

Agricultural Equipment since the current level of orders exceeds the solid level of the

previous year and because experience tells us that demand for services increases

following harvest activities.

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Energy Segment

In € million Q3/14 Q3/13 % 9M/14 9M/13 %

Revenues 890.8 870.6 2.3 2,496.3 2,537.1 - 1.6EBIT 7.0 - 0.02 > 100 24.5 17.7 38.6

Industry trendsFollowing strong economic growth in Germany at the beginning of 2014, this trend

steadily lost momentum during the spring and summer months. According to the

autumn reports by the leading economic institutes, there are third-quarter indications

that economic performance in Germany is stagnating, a fact which has caused

economists to reduce their growth forecast to 1.3% for the full year. Despite growing

geopolitical conflicts in oil-rich regions, including in the Middle East, the price of crude

oil on the global market has plummeted after reaching an annual high of

approximately USD113 per barrel at the end of June. At around USD88 per barrel,

the price of crude oil is currently the lowest it has been in years. In keeping with this

trend, prices of heating oil in Germany have once again recently fallen to

approximately €0.75 per litre after trading under the previous year’s levels throughout

the whole of 2014. According to companies in the industry, the coming autumn and

winter months and the consumer-friendly price trend were likely the precipitating

factors in the substantial uptick in the previously sluggish demand for heating oil seen

from August. In the lubricants sector, the slowdown in economic momentum meant

that sales volumes were down year on year by 1.4% at the end of August. Demand

for fuels are likely to have benefitted from the 2.9% rise in new vehicle registrations in

the first nine months as compared to 2013.

The amendments to the Renewable Energy Sources Act (EEG) in Germany, which

came into force as at 1 August 2014, comprised the key issue surrounding renewable

energies. The new set of regulations is hailed as a more reliable framework,

particularly in the wind and solar industries, which should provide greater planning

security. According to forecasts, more wind power plants (on- and offshore) than ever

before are being constructed in Germany this year. The expansion target for solar

power of 2.5 gigawatts (GW) per year with a flexible cap to serve as a control

function for the amount of feed-in tariffs once again presents opportunities for an

increase in installations; they were down by 45% year on year in the first half of 2014.

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However, the feed-in tariffs for new biogas plants have been slashed so significantly

that the German Biogas Association forecasts a decline in the rate of expansion

down to around 37 megawatts (MW) for 2014 as a whole (2013: 191 MW). The

production of renewable energies is currently being intensified at the international

level, especially in Asia. Industry experts believe that apart from the USA, China and

Japan will be the main drivers in 2014 behind the anticipated record figure of 50 GW

of new photovoltaic installations worldwide. The UK is set to make a significant

contribution to that figure with up to 4 GW. Global growth of 25% is expected this

year for wind power. The largest portion of that is likely to be generated in China,

while the established markets in Europe and the USA will post somewhat lower

growth rates.

Business developmentThe Energy Segment encompasses BayWa Group activities in conventional

energies – with the trade of fossil and renewable fuels and lubricants – as well as its

business in renewable energies, which is pooled in BayWa r.e. renewable energy

GmbH. Where revenues are concerned, a considerable expansion of the renewable

energies business managed to virtually offset the year-on-year decline in the heating

business that was caused by oil prices and volumes. In the first nine months of the

current reporting year, the Energy Segment generated revenues of €2.5 billion, which

is a year-on-year shortfall of 1.6%. The Group’s result also benefitted from the

international activities of BayWa r.e., as strong growth compensated for the lower

earnings contribution from the conventional energy business, particularly in the first

half of the year. All in all, EBIT of €24.5 million had been generated as at

30 September 2014. This corresponds to a year-on-year increase of 38.6%.

Within the conventional energy business, sales of diesel and Otto fuels – which at

approximately 1.1 million tonnes were on par with the previous year’s solid level –

benefitted from additional deliveries to construction sites, which compensated for the

overall decline in consumption. It was possible to buck the general market trend in

the lubricants sector and expand volumes by 9%. In addition, trade in the heating

energy carriers heating oil and wood pellets registered an upturn in demand during

the period under review and was able to reduce the decline in sales as compared

with 2013. Accordingly, revenues for the business unit as at 30 September 2014

came to €2.0 billion. This equates to a year-on-year decline of 9.6%, which is

9

primarily the result of heating oil prices that have been consistently lower than those

in the previous year. Positive business development in the quarter under review led

to catch-up effects in the operating result after subdued development in the first half

of 2014, which resulted in EBIT of €4.0 million as at 30 September of the current

calendar year (2013: €7.5 million). The recent momentum seen in the heating

business is likely to intensify with the onset of winter and will help meet the business

unit’s annual targets.

During the summer, the Renewable Energies business sector managed to ramp up

the growth rate compared to the first half of 2014. In addition to international

activities, the launch of innovative lease models for PV systems for use on residential

and commercial buildings in Germany and offered in cooperation with energy utilities

helped contribute to this improvement. In addition, the takeover of business activities

from American company Martifer Solar USA, Inc., in July expanded the project

development business for solar parks to the USA where BayWa r.e. has already

successfully established itself in PV components trading and wind park project

development. As a result, revenues jumped by 60.4% year on year. The Renewable

Energies business had generated revenues of €463.9 million as at 30 September

2014. The operating result (EBIT) for the first nine months of the current financial

year recorded even stronger growth, more than doubling year on year to €20.5 million

(2013: €10.2 million). The sale of several completed projects had a positive impact on

performance. For example, the “Supernova” solar park in England with a capacity of

18.5 MW and a wind park in the USA with a total output of 19.8 MW were sold.

Additional plants from BayWa r.e.’s international project pipeline are likely to be put

into operation and sold during the fourth quarter, which means the business sector is

on course to achieve at least the same result as it did in 2013.

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Building Materials Segmentin € million Q3/14 Q3/13 % 9M/14 9M/13 %

Revenues 436.0 517.7 - 15.8 1,160.9 1,284.1 - 9.6EBIT 9.1 17.0 - 46.3 17.1 12.8 33.7

Industry trendsFollowing the unusually early start to the season in 2014, the boom in the German

construction industry eased off somewhat during the summer months. Due to the fact

that companies in the construction industry were operating at full capacity from

January onwards, the number of days leave taken in the months of July and August

was higher than in a normal seasonal cycle. This is confirmed by the decline in the

number of hours worked in the industry. The ifo Business Climate index also recently

revealed a drop of 7.1 points for the construction sector, which reflects the overall

slowdown in the sector. Although 9.6% more building permits were issued in the first

half of 2014 compared to the same period in the previous year, German construction

companies registered a decline in order intake in the months of June and July.

Nevertheless, growth in the number of multi-family homes constructed continues to

fuel optimism. Total construction volume in full-year 2014 is expected to increase by

2.3% year on year in real terms. Given the strong start to the year, industry

associations recently confirmed their forecast of nominal revenues growth of 4.5% in

construction and a 3.2% rise in construction investment compared to 2013. Growing

leeway for public sector investments thanks to the robust budget environment in

Germany should have a positive impact in this regard. In addition, the weather

conditions during the remaining months of the year have a major influence on the

development of demand for construction services.

Business developmentThe BayWa Group’s Building Materials Segment mainly comprises trading in building

materials in Germany and Austria. In the current reporting period, the revenues and

earnings contributions of the building materials locations in North Rhine-Westphalia

and Rhineland-Palatinate that were transferred to the new owners in the second

quarter of 2014 have been assigned to the Other Activities Segment. Business

performance in the building materials industry was impacted by a higher than

average amount of leave taken in the construction industry in the summer quarter

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due to continuous full capacity in the first half of 2014. This resulted in

correspondingly lower construction activity, primarily in building construction: Given

the unusually dynamic comparable period in the previous year in which the company

benefited from catch-up effects, sales volume in the reporting period was slightly

below expectations. However, we continued to record strong demand for the range of

products in the areas of civil engineering as well as gardening and landscaping.

Overall, in terms of volume, this development would have resulted in a year-on-year

increase in revenues if the premises for calculation had been identical; unlike in the

current reporting period, however, the previous year’s figures included the revenues

of locations in the regions of North Rhine-Westphalia and Rhineland-Palatinate,

which have since been sold. In view of this fact, we recorded a 9.6% drop in

revenues in this segment to around €1.2 billion for the first nine months of the current

financial year. The high number of building permits issued for the construction of new

single and multi-family homes in urban areas continues to drive the German

construction industry. The building materials industry benefited from this, boosting

both the warehouse and transport business: The operating result (EBIT) as at

30 September 2014 stood at €17.1 million (2013: €12.8 million). Should the

favourable weather continue, the fourth quarter traditionally sees an increase in the

share in the sales of building materials for building extensions and refinement.

Other ActivitiesRevenues amounted to €81.0 million as at 30 September 2014, which primarily

reflects the building material trading activities in the current financial year up until the

respective dates of sale of the locations in North Rhine-Westphalia and Rhineland-

Palatinate to the new owners in the second quarter. EBIT is primarily composed of

the earnings contributions of the disposed building materials locations as well as the

costs incurred in connection with their disposal. Taking into account consolidation

effects, EBIT for the first nine months of 2014 stood at €-36.9 million. In the same

period of the previous year, the disposal of BayWa AG real estate inventories,

allowing for offsetting effects, resulted in EBIT of €43.9 million.

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Report on the assets, financial position and result of operations

Asset positionAs at 30 September 2014, the BayWa Group’s total assets totalled €5,673.7 million.

This equates to a rise of €658.5 million as against the end of 2013.

Non-current assets rose by €58.8 million to €1,973.5 million as at 30 September

2014. While the book value of the intangible assets fell by €1.4 million, property,

plant and equipment rose by €54.1 million to €1,128.3 million. Of this amount,

€118.4 million is mainly due to investments in the modernisation and expansion of

the Group’s locations as well as asset deals to expand business activities in the

Agricultural Trade and Energy business units. This amount was offset by depreciation

and amortisation of €72.2 million as well as disposals of €11.9 million. Changes in the

group of consolidated companies, exchange rate effects and reclassifications also

impacted the Group’s assets. Participating interests recognised at equity increased

by €1.1 million in the first nine months of the year to €102.7 million. The addition of

shares in Agrimec Group B.V. and the earnings contributions of existing affiliated

companies were offset by distributions. The accrual of a subsidiary that had

previously not been taken into account for reasons of materiality as well as the

reduction in loans to affiliated companies contributed to a €2.3 million fall in other

financial assets to €318.1 million. This effect was compensated for by capital

increases conducted by existing participations.

Current assets increased by €623.2 million to €3,680.2 million as against

31 December 2013. This development was mainly due to inventories, trade

receivables and other assets. While the €178.9 million rise in inventories to

€2,015.0 million is a result of both developments in renewable energies projects and

an increase in inventories from the harvests in the Agricultural Trade segment, the

increase in trade receivables was due to the BayWa Group’s seasonally strong

business activities in the Agriculture and Building Materials Segments in the second

and third quarters as well as a recovery in the energy business in the third quarter.

The increase in other assets is primarily due to an increase in Group companies’

commodity futures classified as financial instruments; consequently, current

receivables and other assets rose by a total of €427.0 million to €1,487.5 million.

13

Liabilities from non-current assets held for sale/disposal groups as at the balance

sheet date declined to €23.4 million as at the end of the quarter. This development

was mainly due to the disposal of BayWa AG building materials locations in North

Rhine-Westphalia and Rhineland-Palatinate in the first half of 2014. The non-current

assets held for sale reported in these financial statements at €20.0 million include

properties intended for disposal.

The equity of the BayWa Group stood at €1,136.1 million as at 30 September 2014,

down €45.9 million as against the end of 2013. This was due to dividend distributions

by BayWa AG and other Group companies of €33.9 million as well as the acquisition

of the remaining 40% of the shares in Bohnhorst Agrarhandel GmbH and a

corresponding reduction in the minority interest in equity. In contrast, net income for

the first nine months of the year of €22.7 million and differences from currency

translation of €4.7 million increased equity.

The €42.7 million rise in non-current liabilities is primarily due to proceeds from

additional non-current financial liabilities in connection with developments in the

Renewable Energies business sector.

Current debt increased by €661.7 million to €3,075.9 million as against 31 December

2013. In addition to a rise in commodities futures measured at market value included

in other liabilities, this development is also largely due to an increase in obligations

arising from the harvests in the Agricultural Trade segment as well as an expansion

of project financing in the renewable energies business. As a result, increases were

reported in both trade receivables and current financial liabilities.

Financial positionBased on net income for the first nine months of €22.7 million, the cash earnings

of the BayWa Group, taking into account non-cash depreciation and amortisation

as well as the countering effect from the reduction of non-current provisions,

amounted to €89.6 million, down €101.1 million year on year; this was mainly due to

BayWa AG’s net income for the previous year realised from BayWa AG real estate

disposals in the previous year. The rise in inventories and trade receivables was

14

offset by an expansion in liabilities from operating activities. As a result, cash flow

from operating activities for the reporting period amounted to €132.4 million, down

€35.1 million year on year.

Cash outflows from investing activities totalled €128.8 million as at the end of the

quarter. Of this amount, €122.6 million was mainly shaped by new and replacement

investments at BayWa AG and other Group companies as well as asset deals in the

Agricultural Trade and Energy business units. Payments of €36.9 million were also

made for company acquisitions, most of which relates to the additional acquisition of

shares in Bohnhorst Agrarhandel GmbH. Investments were made in financial assets

by acquiring 49% of the shares in Agrimec Group B.V. and participating in the capital

increases of existing participations. In contrast, cash inflows were generated from the

sale of building materials locations in North Rhine-Westphalia and Rhineland-

Palatinate as well as the repayment of loans received from affiliated companies.

Last year’s positive cash flow from operating activities of €71.7 million reflected in

particular incoming payments from the disposal of BayWa AG real estate inventories,

which offset the outflows of cash and cash equivalents for the acquisitions of

Cefetra B.V. and Bohnhorst Agrarhandel GmbH.

In the cash flow from financing activities of €1.1 million, outgoing payments for

dividend distributions by BayWa AG and other Group companies of €33.9 million

were offset by incoming payments for loan repayments. In the previous year’s period,

cash flow from financing activities at €-236.9 million was shaped by the utilisation of

funds released by real estate disposals to repay financial liabilities.

Total cash and cash equivalents have increased by €3.7 million since 31 December

2013 to €95.7 million due to the incoming and outgoing cash payments from

operating, investment and financing activities, with outgoing funds from changes in

the group of consolidated companies and exchange rates of €-1.0 million also being

taken into account.

15

Earnings positionThe revenues generated by the BayWa Group in the period from January to

September 2014 came to €11,442.3 million. Compared to the same period in the

previous year, this corresponds to a decline of €715.5 million or 5.9%.

This development was mainly due to the Agriculture Segment. Revenues in the

Agricultural Trade business unit declined by €597.9 million, or 8.7%, in the first nine

months of 2014 to €6,299.6 million, largely as a result of the continued drop in grain

and soy prices. Revenues in the Fruit business unit fell by €17.3 million or 3.8%.

The strong third quarter was unable to completely compensate for the below-average

sales volume in the first half of the year. Revenues in the Agricultural Equipment

business unit remained on par with the previous year’s level, only declining by a

slight 1.0% to €971.9 million. A drop in new machinery sales was largely

compensated by a constant level of used machinery sales and lively sales of

agricultural milking and animal equipment.

Revenues in the Agriculture Segment for the first nine months of 2014 came to

€7,704.2 million, down 7.5% year on year.

The Energy Segment saw revenues decline by €40.8 million, or 1.6%, to €2,496.3

million. Conventional energy business revenues fell by €215.5 million or 9.6%; this

development is largely due to the price of heating oil, which was constantly down on

the previous year’s level, while diesel and Otto fuel sales volumes were more or less

unchanged year on year and lubricants sales volumes even rose, flying in the face of

the general market trend. The declines in the sales of heating oil and pellets in the

first half of the year were also reduced. The Renewable Energies business sector on

the other hand reported a 60.4%, or €174.7 million, rise in revenues to €463.9 million.

This was due to the international expansion of the solar and wind park project

business, including the resulting rise in system sales, as well as the reintroduction of

innovative lease models for PV facilities.

The Building Materials Segment benefited from the favourable weather as well as

positive economic conditions in the first half of the year, although these did weaken

somewhat over the summer. Despite this, demand for civil engineering products

and road construction and landscaping products in particular was high. The 9.6%

16

year-on-year drop in revenues to €1,160.9 million is therefore largely due

to the fact that the revenues of the sold building materials locations in North Rhine-

Westphalia and Rhineland-Palatinate generated until these were disposed were

allocated to Other Activities in the current reporting period.

At €81.0 million, Other Activities revenues largely reflected trade activities of the

building materials locations in Rhineland-Palatinate and North Rhine-Westphalia,

which have been transferred to the buyer effective 1 May 2014 and 1 June 2014

respectively; as these were being sold, they were no longer viewed as part of the

Building Materials Segment’s operating activities.

Other operating income of the BayWa Group has fallen by €78.9 million to

€104.1 million year on year, primarily due to the fact that the previous year’s

operating income included income from the disposal of BayWa AG real estate

inventories. Taking account of increases in inventories and other own work

capitalised, the BayWa Group’s overall performance fell by €826.6 million, or 6.7%,

year on year due to revenues of €11,607.9 million. With a drop in the cost of

materials of €746.1 million, or 6.6%, gross profit fell by €80.6 million, or 6.9%, to

€1,089.3 million.

Personnel expenses climbed by €5.1 million or 0.9%. In spite of the drop in personnel

expenses seen at BayWa AG due to the disposal of building materials locations, the

development is primarily a result of a rise in the number of employees following the

expansion of business activities in the renewable energies business. The Bohnhorst

Group, which was acquired in May 2013 and therefore only included pro rata in the

first half of 2013, as well as the solar trading business acquired from the Würth Group

– also in May 2013 – contributed to this increase.

At €87.7 million, depreciation and amortisation of property, plant and equipment and

intangible assets was only up slightly on the previous year’s €85.7 million, mainly due

to changes in the group of consolidated companies.

Other operating expenses rose by €5.1 million, or 1.5%, to €348.0 million, primarily

due to higher rental and vehicle fleet costs.

17

As a result of these changes, the result of operating activities amounted to

€63.3 million, down €92.9 million year on year, mainly due to the previous year’s

income from real estate.

The result of participating interests declined year on year by €11.2 million to

€10.3 million and is largely due to lower income from participating interests

recognised at equity.

BayWa Group EBIT amounted to €74.5 million for the period from January to

September 2014, down €103.2 million, or 58.1%, year on year.

At €-44.0 million, net interest in the first nine months of 2014 was down slightly on the

first nine months of 2013 (€-40.7 million) due to a rise in liabilities.

Including tax expenses of €7.8 million, net income for the first nine months of the year

amounted to €22.7 million, a year-on-year drop of €79.1 million.

EmployeesThe BayWa Group employed a total of 16,873 people as at the end of the third

quarter of the current financial year. Compared to 31 December 2013, the number of

employees therefore rose by 39. There was a major change in the Building Materials

Segment thanks to the successful sale of locations in North Rhine-Westphalia and

Rhineland-Palatinate and the associated transfer of staff. As a result, the number of

employees fell by 557 to 4,453. In the Agriculture Segment, the number of employees

rose by a total of 482 to 9,994. The Agricultural Trade and Fruit business units saw

seasonal increases in the number of employees of 169 and 180 respectively. The

increase in the Fruit business unit was the result of the recruitment of additional

employees for the fruit harvest in Germany. In the Agricultural Equipment business

unit, the number of employees increased by 133 to 3,981. In the Energy Segment,

the number of employees rose by 24 to 1,843. While the number of employees in the

conventional energy business decreased by 30, the corresponding figure in

renewable energies increased by 54 to 800.

18

OutlookThe BayWa Group’s performance looks likely to remain positive in the final quarter of

the year. High global harvest volumes will offer promising marketing opportunities in

the Agriculture Segment. Moreover, commodity prices are expected to recover slowly

after having bottomed out in April 2014, which should stimulate buying in the industry.

Against this backdrop, we can expect that the grain trading business will be shaped

by attractive trade activities. This trend is likely to be supported by consistently high

demand for grain worldwide. As prices have been falling to date, this is more likely to

provide a basis for greater selling potential in the final quarter of 2014 and the

subsequent quarters of 2015. Effects from the storage and sale of fertilisers are not

expected to materialise until the beginning of next year or until the harvests have

been sold, when farmers have a higher liquidity buffer.

In our Agricultural Equipment business unit, high sales of new machines in the past

quarters are likely to mean that companies offering services will be operating at full

capacity until the end of the financial year. The high order intake is a sign that we can

expect this business unit to continue to develop positively. There is also potential for

additional earnings in the fruit business. Approval for the acquisition of Apollo in New

Zealand should be finalised in the fourth quarter. There is also potential for using the

global distribution network more effectively with a view to marketing the high volumes

of European apple stocks in the southern hemisphere.

In the energy sector, it can be assumed that trade with heating oil will increase in the

winter months ahead. Below-average energy prices compared with calendar years

2012 and 2013 could raise demand further. We expect stable development of our

business with fuels and lubricants.

The renewable energies business will be shaped by project sales at the end of the

year. In addition to the planned sale of a solar park in France with a total output of

57 megawatts (MW), several wind farms are intended for sale in the current financial

year. Increasing stabilisation of our solar module trading in Germany and our entry

into the solar project management business in the USA offer additional potential for

earnings.

19

The Group will continue to expand its activities in the Building Materials Segment.

Due to the fact that employees at craft enterprises took more leave in the summer

months, these companies now have higher personnel capacities to cope with the

high level of orders. In addition, it is safe to assume that the higher-margin

warehouse business will have an increasing effect in the further course of the year in

line with seasonal demand. However, this development could be counteracted if

winter should come early.

All in all, business performance in the first nine months of the year failed to meet our

expectations, which was entirely due to the development of the agricultural trade

market. Given the current market environment and demand situation, we do not

expect to see an increase in revenues and earnings compared to last year’s record

levels. Better business prospects should emerge in the subsequent quarters of 2015.

The Energy and Building Materials Segments will either be on par with the

previous year or surpass those levels if the market continues to develop

favourably.

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.

20

Consolidated Financial Statements of BayWa AG pursuant to IFRS

Consolidated Balance Sheet as at 30 September 2014In € million

Non-current assets Intangible assets 155.583 157.020 Property, plant and equipment 1,128.280 1,074.189 Participating interests recognised at equity 102.714 101.601 Other financial assets 318.074 320.415 Biological assets 13.931 12.814 Investment property 79.528 82.393 Tax assets 5.995 4.910 Other receivables and other assets 33.608 33.297 Deferred tax assets 135.824 128.108

1,973.537 1,914.747

Current assets Securities 2.241 2.171 Inventories 2,014.982 1,836.038 Biological assets 0.339 0.847 Tax assets 79.361 65.365 Other receivables and other assets 1,487.514 1,060.492 Cash and cash equivalents 95.730 92.069

3,680.167 3,056.982

Non-current assets held for sale/disposal groups 19.950 43.392

Total assets 5,673.654 5,015.121

Equity Subscribed capital 88.409 88.409 Capital reserve 98.154 98.154 Revenue reserves 600.644 576.941 Other reserves 96.541 150.658

Equity net of minority interest 883.748 914.162

Minority interest 252.356 267.8261,136.104 1,181.988

Non-current liabilities Pension provisions 508.429 512.083 Other non-current provisions 84.670 86.381 Financial liabilities 664.115 621.896 Finance lease obligations 7.687 6.689 Trade payables and liabilities from inter-group business relationships 2.403 3.042 Other liabilities 34.144 26.103 Deferred tax liabilities 160.218 162.776

1,461.666 1,418.970

Current liabilities Pension provisions 28.885 28.765 Other current provisions 148.878 145.366 Financial liabilities 1,380.199 1,131.943 Finance lease obligations 2.426 4.613 Trade payables and liabilities from inter-group business relationships 1,070.734 766.611 Tax liabilities 66.800 76.830 Other liabilities 377.962 260.035

3,075.884 2,414.163

Liabilities from non-current assets held for sale/disposal groups -.--- -.---

Total shareholders’ equity and liabilities 5,673.654 5,015.121

31/12/2013

31/12/2013Shareholders’ equity and liabilities

Assets 30/09/2014

30/09/2014

21

Consolidated Income Statement for the period from 1 January to 30 September 2014

Revenues 3,613.857 4,077.130 3,751.349 11,442.336 3,712.818 4,560.008 3,885.058 12,157.884Changes in inventories 92.358 - 44.167 10.842 59.033 69.014 - 9.622 32.478 91.870Other own work capitalised 0.316 0.950 1.125 2.391 0.482 0.667 0.577 1.726Other operating income 28.904 36.363 38.840 104.107 48.139 115.862 19.025 183.026Cost of materials - 3,405.297 - 3,664.317 - 3,448.920 - 10,518.534 - 3,531.998 - 4,154.851 - 3,577.764 - 11,264.613

Gross profit 330.138 405.959 353.236 1,089.333 298.455 512.064 359.374 1,169.893

Personnel expenses - 189.374 - 201.104 - 199.842 - 590.320 - 184.705 - 200.745 - 199.722 - 585.172Depreciation and amortisation - 28.804 - 29.279 - 29.637 - 87.720 - 28.821 - 27.821 - 29.018 - 85.660Other operating expenses - 110.603 - 119.758 - 117.668 - 348.029 - 97.130 - 128.118 - 117.653 - 342.901

Operating result 1.357 55.818 6.089 63.264 - 12.201 155.380 12.981 156.160

Income from participating interests recognised at equity - 0.309 - 2.739 3.515 0.467 2.070 2.439 5.294 9.803Other income from shareholdings 3.247 4.739 2.788 10.774 2.771 6.707 2.220 11.698Interest income 1.293 1.235 1.267 3.795 1.354 1.501 2.044 4.899Interest expense - 14.342 - 17.502 - 15.959 - 47.803 - 14.111 - 15.559 - 15.946 - 45.616Financial result - 10.111 - 14.267 - 8.389 - 32.767 - 7.916 - 4.912 - 6.388 - 19.216

Earnings before tax - 8.754 41.551 - 2.300 30.497 - 20.117 150.468 6.593 136.944

Income tax 1.701 - 9.141 - 0.388 - 7.828 3.677 - 35.010 - 3.869 - 35.202

Net income for the period - 7.053 32.410 - 2.688 22.669 - 16.440 115.458 2.724 101.742

of which: Profit share of minority interest 3.986 8.511 3.029 15.526 3.945 12.741 3.721 20.407 of which: due to shareholders of the parent company - 11.039 23.899 - 5.717 7.143 - 20.385 102.717 - 0.997 81.335

EBIT 4.295 57.818 12.392 74.505 - 7.360 164.526 20.495 177.661

EBITDA 33.099 87.097 42.029 162.225 21.461 192.347 49.513 263.321

Average number of shares 34,534,846 34,432,612

Basic earnings per share* (in €) 0.21 2.36Diluted earnings per share* (in €) 0.21 2.36

* For the calculation of earnings per share, reference is made to the Notes in the Interim Report.

In € million 1Q2013 2Q2013 01/01 – 30/09/20131Q2014 2Q2014 01/01 – 30/09/20143Q2014 3Q2013

22

Consolidated Cash Flow Statement as at 30 September 2014

Cash earnings 89.590 190.734

Cash flow from operating activities 132.395 167.544

Cash flow from investing activities - 128.827 71.671

Cash flow from financing activities 1.076 - 236.910

Cash-effective changes in cash and cash equivalents 4.644 2.305

Cash and cash equivalents at the start of the period 92.069 83.239Outflow/inflow of funds due to changes in the group of consolidated companies and in exchange rates - 0.983 8.762Cash and cash equivalents at the end of the period 95.730 94.306

01/01 – 30/09/2014 01/01 – 30/09/2013In € million

Transition to Consolidated Statement of Comprehensive Income as at 30 September 2014

In € million

Net income for the period 22.669 101.742

Actuarial gains/losses from pension obligations and provisions for severance pay recognised in the reporting period - 0.016 - 0.075

Sum of items not subsequently reclassified in the income statement - 0.016 - 0.075Net gain/loss from the revaluation of financial assets in the "available for sale" category recognised in the reporting period and other income from interests accounted for using the equity method - 1.244 2.516Reclassifications due to disposal of financial assets in the "available for sale" category recognised in the reporting period

Differences from currency translation 4.733 - 5.261Sum of items subsequently reclassified in the income statement 3.489 - 2.745

Gains and losses recognised directly in equity 3.473 - 2.820

of which: Profit share of minority interest 0.630 - 2.293of which: due to shareholders of the parent company 2.843 - 0.527

Consolidated total result for the period 26.142 98.922

of which: Profit share of minority interest 16.156 18.114of which: due to shareholders of the parent company 9.986 80.808

01/01/ – 30/09/2014 01/01/ – 30/09/2013

23

Statement of Changes in Consolidated Equity as at 30 September 2014

In € million Subscribed Capital reserve Revenue reserve Other Other Equity net of Minority Equitycapital revaluation revenue reserves reserves minority interest interest

As per: 01/01/2014 88.409 98.154 - 5.229 582.170 150.658 914.162 267.826 1,181.988

Differences from changes in the group of consolidated companies -.--- -.--- - 12.526 - 2.050 - 14.576 - 23.631 - 38.207

Capital increase against cash contribution/share-based payment -.--- -.--- -.--- -.--- -.--- -.--- 0.119 0.119

-.--- -.--- - 1.267 -.--- -.--- - 1.267 0.023 - 1.244

-.--- -.--- -.--- - 0.016 -.--- - 0.016 -.--- - 0.016

Dividend distribution -.--- -.--- -.--- -.--- - 25.824 - 25.824 - 8.114 - 33.938

Differences from currency translation -.--- -.--- -.--- -.--- 4.126 4.126 0.607 4.733

Transfer to/withdrawal from revenue reserve -.--- -.--- -.--- 37.512 - 37.512 -.--- -.--- -.---

Net income for the period from 01/01 – 30/09/2014 -.--- -.--- -.--- -.--- 7.143 7.143 15.526 22.669

As per: 30/09/2014 88.409 98.154 - 6.496 607.140 96.542 883.749 252.356 1,136.105

As per: 01/01/2013 88.147 94.612 - 7.368 519.061 167.300 861.752 223.386 1,085.138

Differences from changes in the group of consolidated companies -.--- -.--- -.--- - 1.681 - 8.457 - 10.138 12.203 2.065

Capital increase against cash contribution/share-based payment -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.---

-.--- -.--- 2.740 -.--- -.--- 2.740 - 0.224 2.516

-.--- -.--- -.--- - 0.036 -.--- - 0.036 - 0.039 - 0.075

Dividend distribution -.--- -.--- -.--- -.--- - 22.311 - 22.311 - 4.123 - 26.434

Differences from currency translation -.--- -.--- -.--- -.--- - 3.231 - 3.231 - 2.030 - 5.261

Transfer to/withdrawal from revenue reserve -.--- -.--- -.--- 11.483 - 11.483 -.--- -.--- -.---

Net income for the period from 01/01 – 30/09/2013 -.--- -.--- -.--- -.--- 81.335 81.335 20.407 101.742

As per: 30/09/2013 88.147 94.612 - 4.628 528.827 203.153 910.111 249.580 1,159.691

Changes in the fair value of assets classified as “available for sale” and other income from interests accounted for using the equity method

Changes in the fair value of assets classified as “available for sale” and other income from interests accounted for using the equity method

Change in actuarial gains/losses from pension obligations and provisions for severance pay

Change in actuarial gains/losses from pension obligations and provisions for severance pay

24

Segment information by segment (income statements)

01/01 – 30/09/2014In € million

Agricultural Trade Fruit Agricultural Equipment

Agriculture Energy Renewable Energies

Energy Building Materials

Other Activities Transition Group

Revenues through third-party business 6,299.649 432.679 971.893 7,704.221 2,032.375 463.901 2,496.276 1,160.886 80.953 -.--- 11,442.336Revenues within the segment 443.608 -.--- 14.740 458.348 161.711 9.296 171.007 18.664 33.699 - 681.718 -.---Inter-segment revenues 1.230 -.--- 0.644 1.874 10.129 0.481 10.610 2.040 2.062 - 16.586 -.---Group 6,744.487 432.679 987.277 8,164.443 2,204.215 473.678 2,677.893 1,181.590 116.714 - 698.304 11,442.336

Earnings before interest, tax, depreciation and amortisation (EBITDA) 63.946 23.774 20.844 108.564 10.888 38.179 49.067 24.869 - 8.275 - 12.000 162.225

Depreciation and amortisation - 23.641 - 7.832 - 7.292 - 38.765 - 6.856 - 17.714 - 24.570 - 7.733 - 11.186 - 5.466 - 87.720

Earnings before interest and tax (EBIT) 40.305 15.942 13.552 69.799 4.032 20.465 24.497 17.136 - 19.461 - 17.466 74.505

Earnings before tax (EBT) 20.739 12.251 3.420 36.410 4.046 8.792 12.838 12.194 - 13.290 - 17.655 30.497

Income tax - 7.828

Net income for the period 22.669

01/01 – 30/09/2013In € million


Agriculture Energy Renewable Energies

Energy Building Materials

Other Activities Transition Group

Revenues through third-party business 6,897.550 449.986 981.733 8,329.269 2,247.876 289.176 2,537.052 1,284.074 7.489 -.--- 12,157.884Revenues within the segment 353.773 -.--- 14.483 368.256 137.402 11.682 149.084 18.067 28.800 - 564.207 -.---Inter-segment revenues 1.214 -.--- 0.799 2.013 6.532 0.093 6.625 1.472 1.494 - 11.604 -.---Group 7,252.537 449.986 997.015 8,699.538 2,391.810 300.951 2,692.761 1,303.613 37.783 - 575.811 12,157.884

Earnings before interest, tax, depreciation and amortisation (EBITDA) 86.957 29.930 24.219 141.106 14.042 26.994 41.036 22.186 79.511 - 20.518 263.321

Depreciation and amortisation - 20.817 - 8.964 - 7.982 - 37.763 - 6.556 - 16.806 - 23.362 - 9.371 - 10.710 - 4.454 - 85.660

Earnings before interest and tax (EBIT) 66.140 20.966 16.237 103.343 7.486 10.188 17.674 12.815 68.801 - 24.972 177.661

Earnings before tax (EBT) 50.139 17.689 9.033 76.861 7.630 - 1.485 6.145 8.260 71.253 - 25.575 136.944

Income tax - 35.202

Net income for the period 101.742

25

Segment report by business segment (income statement)

In € million 1Q2014 2Q2014 3Q2014 01/01 – 30/09/2014

Y/y change in %

1Q2013 2Q2013 3Q2013 01/01 – 30/09/2013

Revenues through third-party business Agricultural Trade 2,214.395 2,152.950 1,932.304 6,299.649 - 8.7 2,354.065 2,525.963 2,017.522 6,897.550

Fruit 115.788 152.391 164.500 432.679 - 3.8 119.400 183.323 147.263 449.986

Agricultural Equipment 269.479 379.224 323.190 971.893 - 1.0 244.614 407.524 329.595 981.733

Agriculture 2,599.662 2,684.565 2,419.994 7,704.221 - 7.5 2,718.079 3,116.810 2,494.380 8,329.269 Energy 601.334 697.897 733.144 2,032.375 - 9.6 656.588 821.127 770.161 2,247.876

Renewable Energies 96.037 210.244 157.620 463.901 60.4 73.741 114.951 100.484 289.176

Energy 697.371 908.141 890.764 2,496.276 - 1.6 730.329 936.078 870.645 2,537.052 Building Materials 278.634 446.234 436.018 1,160.886 - 9.6 261.349 505.068 517.657 1,284.074 Other Activities 38.190 38.190 4.573 80.953 > 100 3.061 2.052 2.376 7.489Total 3,613.857 4,077.130 3,751.349 11,442.336 - 5.9 3,712.818 4,560.008 3,885.058 12,157.884

Agricultural Trade 30.713 27.448 5.785 63.946 - 26.5 26.086 47.090 13.781 86.957

Fruit 4.615 13.311 5.848 23.774 - 20.6 6.982 17.413 5.535 29.930

Agricultural Equipment 5.738 10.370 4.736 20.844 - 13.9 0.529 14.431 9.259 24.219

Agriculture 41.066 51.129 16.369 108.564 - 23.1 33.597 78.934 28.575 141.106 Energy 1.729 3.084 6.075 10.888 - 22.5 1.572 7.908 4.562 14.042

Renewable Energies 5.950 22.732 9.497 38.179 41.4 8.722 15.112 3.160 26.994

Energy 7.679 25.816 15.572 49.067 19.6 10.294 23.020 7.722 41.036 Building Materials - 10.785 23.968 11.686 24.869 12.1 - 23.413 25.677 19.922 22.186 Other Activities - 6.709 - 0.467 - 1.099 - 8.275 > - 100 2.488 81.480 - 4.457 79.511Transition 1.848 - 13.349 - 0.499 - 12.000 41.5 - 1.505 - 16.764 - 2.249 - 20.518Total 33.099 87.097 42.029 162.225 - 38.4 21.461 192.347 49.513 263.321

Agricultural Trade 23.342 19.010 - 2.047 40.305 - 39.1 19.362 40.109 6.669 66.140

Fruit 1.977 10.682 3.283 15.942 - 24.0 3.865 14.506 2.595 20.966

Agricultural Equipment 3.282 7.941 2.329 13.552 - 16.5 - 2.117 11.768 6.586 16.237

Agriculture 28.601 37.633 3.565 69.799 - 32.5 21.110 66.383 15.850 103.343 Energy - 0.322 1.071 3.283 4.032 - 46.1 - 0.612 5.748 2.350 7.486

Renewable Energies 0.081 16.680 3.704 20.465 > 100 2.581 9.979 - 2.372 10.188

Energy - 0.241 17.751 6.987 24.497 38.6 1.969 15.727 - 0.022 17.674 Building Materials - 13.316 21.314 9.138 17.136 33.7 - 26.680 22.487 17.008 12.815 Other Activities - 10.915 - 3.745 - 4.801 - 19.461 > - 100 - 1.026 77.951 - 8.124 68.801 Transition 0.166 - 15.135 - 2.497 - 17.466 30.1 - 2.733 - 18.022 - 4.217 - 24.972Total 4.295 57.818 12.392 74.505 - 58.1 - 7.360 164.526 20.495 177.661

Agricultural Trade 16.908 12.904 - 9.073 20.739 - 58.6 15.964 32.253 1.922 50.139

Fruit 0.887 9.365 1.999 12.251 - 30.7 2.883 13.316 1.490 17.689

Agricultural Equipment - 0.103 4.585 - 1.062 3.420 - 62.1 - 3.327 8.344 4.016 9.033

Agriculture 17.692 26.854 - 8.136 36.410 - 52.6 15.520 53.913 7.428 76.861 Energy - 0.257 1.013 3.290 4.046 - 47.0 - 0.585 5.829 2.386 7.630

Renewable Energies - 2.625 11.270 0.147 8.792 > 100 - 0.718 6.484 - 7.251 - 1.485

Energy - 2.882 12.283 3.437 12.838 > 100 - 1.303 12.313 - 4.865 6.145 Building Materials - 14.979 19.332 7.841 12.194 47.6 - 27.261 20.295 15.226 8.260 Other Activities - 8.836 - 1.588 - 2.866 - 13.290 > - 100 - 4.346 82.203 - 6.604 71.253 Transition 0.251 - 15.330 - 2.576 - 17.655 31.0 - 2.727 - 18.256 - 4.592 - 25.575Total - 8.754 41.551 - 2.300 30.497 - 77.7 - 20.117 150.468 6.593 136.944

Earnings before interest, tax, depreciation and amortisation (EBITDA)

Earnings before interest and tax (EBIT)

Earnings before tax (EBT)

26

Assets 2,401.055 327.441 618.085 3,346.581 376.084 1,688.067 2,064.151 528.903 2,778.241 - 3,044.222 5,673.654 of which: participating interests recognised at equity 2.988 11.906 -.--- 14.894 -.--- 4.896 4.896 0.051 82.873 -.--- 102.714 of which: non-current assets held for sale/disposal groups -.--- 0.504 0.240 0.744 0.224 0.715 0.939 0.755 17.512 -.--- 19.950

Inventories 994.161 29.156 338.172 1,361.489 49.454 423.977 473.431 148.747 1.781 29.534 2,014.982 of which: non-current assets held for sale/disposal groups -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.---

Liabilities 1,466.401 208.177 430.313 2,104.891 473.562 1,317.560 1,791.122 425.349 2,183.888 - 1,967.700 4,537.550 of which: Liabilities from non-current assets held for sale/disposal groups -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.---

Additions in intangible assets, property, plant and equipment and investment property (incl. company acquisitions) 36.208 11.466 11.621 59.295 21.667 32.640 54.307 6.820 13.283 -.--- 133.705

Employees at month's end 4,369 1,644 3,981 9,994 1,043 800 1,843 4,453 583 - 16,873

Assets 1,886.478 313.852 549.075 2,749.405 291.400 873.687 1,165.087 531.841 3,288.782 - 2,719.994 5,015.121 of which: participating interests recognised at equity 2.567 11.008 -.--- 13.575 -.--- 4.223 4.223 -.--- 83.803 -.--- 101.601 of which: non-current assets held for sale/disposal groups -.--- 0.742 0.205 0.947 0.224 -.--- 0.224 32.344 9.877 -.--- 43.392

Inventories 955.717 27.534 308.716 1,291.967 43.900 322.883 366.783 135.195 0.289 41.804 1,836.038 of which: non-current assets held for sale/disposal groups -.--- -.--- -.--- -.--- -.--- -.--- -.--- 17.595 -.--- - 17.595 -.---

Liabilities 1,223.273 186.933 424.838 1,835.044 389.522 683.900 1,073.422 412.716 2,132.131 - 1,620.180 3,833.133 of which: Liabilities from non-current assets held for sale/disposal groups -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.--- -.---

Additions in intangible assets, property, plant and equipment and investment property (incl. company acquisitions) 119.791 13.020 14.128 146.939 9.718 48.945 58.663 10.924 15.213 -.--- 231.739

Employees at month's end 4,200 1,464 3,848 9,512 1,073 746 1,819 5,010 493 - 16,834

Agriculture Energy Renewable Energies Energy

Segment information by segment (balance sheet)As at: 31/12/2013

In € million


Building Materials Other Activities

Transition GroupBuilding Materials Other Activities

Transition Group

Segment information by segment (balance sheet)As at: 30/09/2014

In € million

Agricultural Trade Fruit Agricultural Equipment Agriculture Energy Renewable

Energies Energy

27

01/01/ – 30/09/2014

01/01/ – 30/09/2013 30/09/2014 31/12/2013

Germany 5,298.760 5,671.317 1,262.671 1,240.401

Austria 2,080.851 2,221.179 365.297 368.215

Netherlands 873.121 1,013.081 -.--- -.---

Other international operations 3,189.604 3,252.307 345.569 306.131

Group 11,442.336 12,157.884 1,973.537 1,914.747

Segment information by region

In € million

External sales Non-current assets

28

Notes to the Interim Report for the period from 1 January to

30 September 2014

Accounting policies and valuation methodsThe Interim Report of the BayWa Group as at 30 September 2014 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 2013. 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 2013.

Changes in the group of consolidated companies

Along with BayWa AG, the consolidated financial statements include all major

companies over which it can exercise direct or indirect control.

Since the start of the financial year 2014, the following companies that were either

founded in the reporting year or in previous years were consolidated for the first

time: BayWa r.e. 205. Projektgesellschaft mbH, Gräfelfing, Germany; Solarpark

Andromeda GmbH & Co. KG, Munich, Germany; Windpark Kraubatheck GmbH, Kilb,

Austria; Beethoven Wind LLC, San Diego, USA; Aurora Solar LLC, Santa Monica,

USA; Berryfruit New Zealand Ltd, Kerikeri, New Zealand; Samsonwind Wirtsnock

GmbH, Thomatal, Austria; BayWa r.e. Solar Projects LLC, Los Angeles, USA;

BayWa r.e. Scandinavia AB, Malmö, Sweden; BayWa r.e. 206. Projektgesellschaft

mbH, Gräfelfing, Germany; Windpark Melfi GmbH, Gräfelfing, Germany.

In addition, the following companies, which had not been consolidated by the end of

the financial year 2013 due to them being of minor significance, were included in

BayWa AG’s consolidated financial statements for the first time as at 1 January 2014

in accordance with the standards applicable to full consolidation: Bautechnik

Gesellschaft m.b.H., Vienna, Austria; RUG Raiffeisen Umweltgesellschaft m.b.H.,

Vienna, Austria; Immobilienvermietung Gesellschaft m.b.H., Traun, Austria;

29

r.e Bioenergie Betriebs GmbH & Co. Zehnte Biogas KG, Regensburg, Germany;

r.e Bioenergie Betriebs GmbH & Co. Zwölfte Biogas KG, Regensburg, Germany;

Aufwind BB GmbH & Co. Bioenergie Dessau Sechzehnte KG, Regensburg,

Germany; Aufwind BB GmbH & Co. Sechsundzwanzigste Biogas KG, Regensburg,

Germany; BayWa r.e. Solardächer II GmbH & Co. KG, Grünwald, Germany;

Eko-En Kozmin Sp. z o.o., Poznan, Poland; RI-Solution Data GmbH, Vienna, Austria;

BayWa Energie Dienstleistungs GmbH, Munich, Germany.

Effective 1 January 2014, BayWa-Tankstellen-GmbH, Munich, Germany, was

merged with TESSOL Kraftstoffe, Mineralöle und Tankanlagen GmbH, Stuttgart,

Germany; consequently, BayWa-Tankstellen-GmbH is no longer reported in

BayWa AG’s group of consolidated companies as an independent company.

BayWa AG, Munich, Germany, acquired the remaining 40% of the shares in Bohnhorst

Agrarhandel GmbH, Steimbke, Germany, effective 30 September 2014, through Group

company BayWa Agri GmbH & Co. KG, Munich, Germany. As a result, BayWa Agri

GmbH & Co. KG has held 100% of the shares in the company since the acquisition.

The purchase cost of the shares comes to €36.000 million and includes the contractually

agreed first purchase price instalment of €19.200 million, which was disbursed in

September. Additional purchase price instalments totalling €16.800 million are due by

2019. The book value of the previous minority interests in the equity of Bohnhorst

Agrarhandel GmbH amounted to €23.366 million as at the time of acquisition. As a result

of this transaction, the minority interest in equity included in the consolidated financial

statements fell by €23.366 million and the equity attributable to the shareholders of the

parent company declined by €12.634 million due to the offsetting of the goodwill arising

from the successive acquisition. The transaction costs incurred in connection with the

purchase of the shares amount to €0.052 million. These costs are included in the

income statement under other operating expenses.

BayWa AG, Munich, Germany, acquired the agricultural trading business of HAGRO

Handels- und Agrodienst GmbH Haßleben, Boitzenburger Land-Haßleben, Germany,

by way of an asset deal effective 1 July 2014 so as to expand its business activities

in the Agricultural Trade business unit. HAGRO Handels- und Agrodienst GmbH

30

Haßleben is an agricultural trader with locations in Boitzenburger Land, Germany,

and Mittenwalde, Germany. The acquired agricultural trading business comprises

trading in grain, fertilisers, crop protection and feedstuffs, seed as well as agricultural

operational products. The preliminary purchase cost of the acquired assets comes to

€2.127 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 andequipment and inventories

2.127

Total purchase price(preliminary) 2.127

No goodwill was recorded from the asset deal.

BayWa Energie Dienstleistungs GmbH, Munich, Germany, acquired the business unit

comprising the operation of heat and power plants and the supply of heat from JRS

GmbH & Co. KG, Geiselhöring, Germany, and Biber Biomasse GmbH, Geiselhöring,

Germany, by way of an asset deal with effect from 1 January 2014, so as to expand

its business operations in the Energy Segment. The preliminary purchase cost of the

net assets comes to €14.000 million.

The transaction costs incurred in connection with the acquisition of the shares amount to

€0.101 million. These costs are included in the income statement under other

operating expenses.

31

The net assets acquired in connection with the acquisition of operations comprise the

following (preliminary figures):

in € million Book value Fair value

adjustments

Fair value

Intangible assets -.--- -.---

Property, plant and equipment 12.594 1.250 13.844

Financial assets -.--- -.---

Inventories 0.100 0.100

Receivables and other assets -.--- -.---

Deferred tax liabilities -.--- -.---

Cash and cash equivalents -.--- -.---

Non-current liabilities -.--- -.---

Current liabilities -.--- -.---


12.694 1.250 13.944

Preliminary goodwill 0.056

Total purchase price (preliminary) 14.000

BayWa r.e. Solar Projects LLC, Los Angeles, USA, acquired the business activities of

Martifer Solar USA, Inc., Santa Monica, USA, and Martifer Aurora Solar, LLC, Santa

Monica, USA, consisting of assets and project companies Studios Solar LLC, Santa

Monica, USA; Studios Solar 2 LLC, Santa Monica, USA; Studios Solar 3 LLC, Santa

Monica, USA; Studios Solar 4 LLC, Santa Monica, USA; and Studios Solar 5 LLC,

Santa Monica, USA, which make up the business activities, by way of an asset deal

with effect from 5 June 2014 so as to expand its business activities in the field of

renewable energies. The preliminary purchase cost of the net assets comes to

€5.669 million.



operating expenses.

32

The net assets acquired in connection with the acquisition of operations comprise the

following (preliminary figures):


adjustments

Fair value

Intangible assets -.--- 1.744 1.744

Property, plant and equipment -.--- -.---



Receivables and other assets 0.228 0.228


Cash and cash equivalents -.--- -.---

Non-current liabilities 0.045 0.045


Deferred tax liabilities -.--- 0.116 0.116

4.257 1.628 5.885

Preliminary negative goodwill - 0.216


The preliminary negative goodwill of €0.216 million was recognised under other

operating income through profit and loss.

BayWa AG, Munich, Germany, acquired 100% of the shares in Cornwall Power

(Polmaugan) Limited, London, UK, through Group company BayWa

r.e. 148. Projektgesellschaft mbH, Gräfelfing (formerly: Grünwald), Germany, by way of

a share deal to expand the project business in the Renewable Energies business sector.

BayWa r.e. 148. Projektgesellschaft mbH has had a controlling influence over this

company since 17 January 2014, the date when the purchase price was paid for the

acquired shares. The initial consolidation of the company therefore took place on this

date within the scope of full consolidation.

The preliminary purchase cost of the shares came to €0.760 million and includes the

contractually agreed purchase price component which was disbursed in January 2014.



operating expenses.

33

The net assets acquired in connection with the purchase of Cornwall Power

(Polmaugan) Limited break down as follows (preliminary figures):

If the purchase of the company had been concluded by the first day of the financial

year, there would have been no impact on the consolidated revenues and the

consolidated result attributable to investors.

Since 17 January 2014, the date of its initial inclusion in the group of consolidated

companies, Cornwall Power (Polmaugan) Limited has generated revenues of

€0.254 million and gains of €0.193 million.

The final purchase price allocation pertaining to this acquisition has not yet been

made as the fair value of the assets and liabilities had not yet been definitively

calculated at the time when the Interim Report was drawn up.

BayWa AG, Munich, Germany, acquired 100% of the shares in KS SPV 23 Limited,

London, UK, through Group company BayWa r.e. 205. Projektgesellschaft mbH,

Gräfelfing, Germany, by way of a share deal to expand the project business in the

Renewable Energies business sector. BayWa r.e. 205. Projektgesellschaft mbH has had

a controlling influence over this company since 27 January 2014, the date when the


adjustments

Fair value





Receivables 0.016 0.016

Deferred tax liabilities 0.020 0.020

Cash and cash equivalents 0.022 0.022


Current liabilities 0.110 0.110


- 0.062 - 0.062


Total purchase price(preliminary)

0.760

34

purchase price was paid for the acquired shares. The initial consolidation of the

company therefore took place on this date within the scope of full consolidation.

The preliminary purchase cost of the shares comes to €3.437 million and includes the

contractually agreed first purchase price instalment of €2.206 million which was

disbursed in January. Two additional purchase price instalments totalling €1,231 million

were paid in June and August.


€0.017 million.

The net assets acquired in connection with the purchase of KS SPV 23 Limited breakdown as follows (preliminary figures):


adjustments

Fair value











0.585 0.585






Since 27 January 2014, the date of its initial inclusion in the group of consolidated

companies, KS SPV 23 Limited has generated revenues of €1.655 million and gains

of €1.416 million.

35

The final purchase price allocation pertaining to this acquisition has not yet been

made as the fair value of the assets and liabilities had not yet been definitively

calculated at the time when the Interim Report was drawn up.

BayWa AG, Munich, Germany, acquired 100% of the shares in Dörenhagen

Windenergieanlagen GmbH & Co. KG, Osnabrück, Germany, through Group company

BayWa r.e. Asset Holding GmbH, Gräfelfing (formerly: Munich), Germany, by way of a

share deal. BayWa r.e. Asset Holding GmbH has had a controlling influence over this

company since 9 September 2014, the date when the purchase price was paid for the




contractually agreed purchase price component which was disbursed in September.


The net assets acquired in connection with the purchase of Dörenhagen

Windenergieanlagen GmbH & Co. KG break down as follows (preliminary figures):


adjustments

Fair value


Property, plant and equipment 7.028 7.028


Inventories -.--- -.---







2.664 2.664

Preliminary goodwill -.---


36


year, the share in consolidated revenues would have been €0.550 million higher and

the consolidated profit attributable to investors €0.179 million higher.

Since 9 September 2014, the date of its initial inclusion in the group of consolidated

companies, Dörenhagen Windenergieanlagen GmbH & Co. KG has generated

revenues of €0.115 million and a loss of €0.155 million.

BayWa AG, Munich, Germany, acquired 76% of the shares in HS Kraft AB, Malmö,

Sweden, through Group company BayWa r.e. Scandinavia AB, Malmö, Sweden, by way

of a share deal. BayWa r.e. Scandinavia AB has had a controlling influence over this

company since 1 May 2014, the date when the purchase price was paid for the acquired

shares. The initial consolidation of the company therefore took place on this date within

the scope of full consolidation.


contractually agreed purchase price component which was disbursed in May.


€0.387 million.

37

The net assets acquired in connection with the purchase of HS Kraft AB break downas follows (preliminary figures):


adjustments

Fair value

Intangible assets 0.025 0.025







Non-current liabilities -.--- -.---



0.396 0.396

Proportionate net assets 0.301



Portion of net assets attributable to non-

controlling shares

0.095

The portion of net assets of €0.095 million attributable to the non-controlling shares in

HS Kraft AB comprises the book value of the assets and liabilities attributable to

minority interests.


year, the share in consolidated revenues would have been €0.477 million higher and

the consolidated profit attributable to investors €0.039 million higher.

Since 1 May 2014, the date of its initial inclusion in the group of consolidated

companies, HS Kraft AB has generated revenues of €0.605 million and gains of

€0.094 million.

BayWa AG, Munich, Germany, acquired 100% of the shares in Furukraft AB, Malmö,

Sweden, through Group company BayWa r.e. Scandinavia AB, Malmö, Sweden, by way

of a share deal. BayWa r.e. Scandinavia AB has had a controlling influence over this

company since 1 September 2014, the date when the purchase price was paid for the

38






The net assets acquired in connection with the purchase of Furukraft AB break down

as follows (preliminary figures):


adjustments

Fair value





Receivables -.--- -.---






0.012 0.012







companies, Furukraft AB has generated revenues of €0.000 million and gains of

€0.000 million.

BayWa AG, Munich, Germany, acquired 100% of the shares in Lyngsåsa Kraft AB,

Malmö, Sweden, through Group company BayWa r.e. Scandinavia AB, Malmö, Sweden,

by way of a share deal. BayWa r.e. Scandinavia AB has had a controlling influence over

39

this company since 1 September 2014, the date when the purchase price was paid for

the acquired shares. The initial consolidation of the company therefore took place on this





The net assets acquired in connection with the purchase of Lyngsåsa Kraft AB break

down as follows (preliminary figures):


adjustments

Fair value





Receivables -.--- -.---






0.004 0.004







companies, Lyngsåsa Kraft AB has generated revenues of €0.000 million and a loss of

€0.001 million.

40

BayWa r.e. Asset Holding GmbH, Gräfelfing (formerly: Munich), Germany, sold 100% of

its shares in Windpark Selmsdorf III GmbH & Co. KG, Grünwald, Germany, and 75% of

its shares in WP SDF Infrastruktur GmbH & Co. KG, Grünwald, Germany,

on 28 February 2014 within the scope of operating activities. The effect of this transaction

on the consolidated financial statements is as follows (preliminary figures):

41

Consideration received

in € million 28/02/2014

Consideration received for the sold shares 4.886

Assets and liabilities derecognised owing to control relinquished

in € million 28/02/2014

Non-current assets

Intangible assets -.---

Property, plant and equipment -.---

Financial assets -.---

Deferred tax assets 0.019

0.019

Current assets

Inventories 14.200

Receivables and other assets 0.884

Cash and cash equivalents -.---

15.084

in € million 28/02/2014

Non-current liabilities

Non-current provisions -.---

Financial liabilities 11.331

Trade payables and other liabilities -.---

Deferred tax liabilities -.---

11.331

Current liabilities

Current provisions 0.095


Trade payables and other liabilities 1.805

2.596

Net assets on the disposal date 1.176

of which: attributable to minority shareholders -.---

of which: attributable to shareholders of the parent company 1.176

42

Gains/losses from the disposal of Group companies

in € million 28/02/2014

Consideration received for the sold shares 4.886

Net assets relinquished (attributable to shareholders of the parent company) - 1.176

Disposal gain 3.710

The disposal is disclosed in the income statement under revenues and cost of

materials, while tax components are disclosed under tax expenses.

Incoming net cash and cash equivalents from the disposal of Group companies

in € million 28/02/2014

Purchase price settled through cash and cash equivalents 4.886

Less cash and cash equivalents paid out in connection with the disposal -.---

4.886

RENERCO GEM 1 GmbH, Grünwald, Germany, sold 100% of its shares in GEM

WIND FARM 1 Ltd., London, UK, on 27 June 2014 within the scope of operating

activities. The effect of this transaction on the consolidated financial statements is as

follows (preliminary figures):


in € million 27/06/2014

Consideration received for 100% of the shares 20.897

43


in € million 27/06/2014

Non-current assets





0.925

Current assets

Inventories 34.914


Cash and cash equivalents 3.747

41.422

in € million 27/06/2014


Non-current provisions 0.206



Deferred tax liabilities 0.886

31.221

Current liabilities




9.432



in € million 27/06/2014


Net assets relinquished - 1.694

Disposal gain 19.203

44



Incoming net cash and cash equivalents from the disposal of the Group company

in € million 27/06/2014


Less cash and cash equivalents paid out in connection with the disposal - 3.747

17.150

BayWa r.e. Asset Holding GmbH, Gräfelfing (formerly: Munich), Germany,

sold 100% of its shares in Parham Solar GmbH, Grünwald, Germany,

on 26 June 2014 within the scope of operating activities. Until they were sold,

Parham Solar GmbH, and the shares in GGRenewables Ltd., London, UK, which were

held by Parham Solar GmbH until these were disposed, were also included in

BayWa AG’s consolidated financial statements within the scope of full consolidation.

The effect of this transaction on the consolidated financial statements is

as follows (preliminary figures):

Consideration receivedin € million 26/06/2014


45


in € million 26/06/2014

Non-current assets




Deferred tax assets -.---

-.---

Current assets

Inventories 30.262



36.548

in € million 26/06/2014


Non-current provisions




32.401

Current liabilities


Financial liabilities -.---


4.315

Net assets on the disposal date - 0.168


in € million 26/06/2014


Net assets relinquished 0.168

Disposal gain 0.193



46

Outgoing net cash and cash equivalents from the disposal of the Group company

in € million 26/06/2014



- 0.224

BayWa r.e. 203. Projektgesellschaft mbH, Gräfelfing (formerly: Grünwald), Germany,

sold 100% of its shares in SESMP112 Supernova Solar Farm Ltd., London, UK, on

26 September 2014 within the scope of operating activities. The effect of this

transaction on the consolidated financial statements is as follows (preliminary

figures):


in € million 26/09/2014


47


in € million 26/09/2014

Non-current assets





0.004

Current assets

Inventories 24.114



30.191

in € million 26/09/2014






32.041

Current liabilities




1.284



in € million 26/09/2014



Disposal gain 3.713



48

Incoming net cash and cash equivalents from the disposal of the Group company

in € million 26/09/2014



0.078

BayWa r.e. Wind, LLC, San Diego, USA, sold 100% of its shares in Brahms Wind,

LLC, San Diego, USA, on 3 July 2014 within the scope of operating activities.

Broadview Energy Prime, LLC, San Diego, USA; Broadview Energy Prime II, LLC,

San Diego, USA; Broadview Energy Prime Investments, LLC, San Diego, USA;

Broadview Energy Prime Investments II, LLC, San Diego, USA; and BEP

Interconnect, LLC, San Diego, USA, which were also included in BayWa AG’s

consolidated financial statements within the scope of full consolidation, were also

sold together with Brahms Wind, LLC. The effect of this transaction on the

consolidated financial statements is as follows (preliminary figures):


in € million 03/07/2014


49


in € million 03/07/2014

Non-current assets





-.---

Current assets

Inventories 20.281

Receivables and other assets -.---

Cash and cash equivalents -.---

20.281

in € million 03/07/2014






-.---

Current liabilities




0.293



in € million 03/07/2014


Net assets relinquished - 19.988

Disposal gain 4.310



50

Incoming net cash and cash equivalents from the disposal of Group companies

in € million 03/07/2014


Less cash and cash equivalents paid out in connection with the disposal -.---

24.298

Aufwind BB GmbH & Co. Zwanzigste Biogas KG, Regensburg, Germany, left the fully

consolidated group effective 11 July 2014 on account of the BayWa Group

relinquishing control over the general partner and has since been included in the

consolidated financial statements of BayWa AG as an associated company

recognised using the equity method due to the significant influence exercised by the

Group. No purchase price was paid in connection with the change in the general

partner’s corporate structure. The effect of this transaction on the consolidated

financial statements is as follows (preliminary figures):


in € million 11/07/2014

Participating interests in Aufwind BB GmbH & Co. Zwanzigste Biogas KG recognised at

equity

0.000

51


in € million 11/07/2014

Non-current assets

Intangible assets 0.440

Property, plant and equipment 3.567



4.007

Current assets

Inventories -.---



0.181

in € million 11/07/2014






-.---

Current liabilities




4.608


Gains/losses from the transitional consolidation

in € million 11/07/2014

Participating interests in Aufwind BB GmbH & Co. Zwanzigste Biogas KG recognised

at equity

0.000


Disposal gain 0.420

The disposal gain is disclosed under other operating income in the income

statement.

52


in € million 11/07/2014



- 0.001

IFS S.r.l., Bolzano, Italy, was withdrawn from the fully consolidated group effective

1 January 2014 for reasons of immateriality after IFRS 10 (Consolidated Financial

Statements) was applied in the financial year 2014 for the first time as required and

has since been included in the consolidated financial statements of BayWa AG as an

associated company recognised at equity. The effect of this transaction on the

consolidated financial statements is as follows (preliminary figures):


in € million 01/01/2014

Participating interests in IFS S.r.l. recognised at equity 0.051

53


in € million 01/01/2014

Non-current assets

Intangible assets 0.002

Property, plant and equipment 0.023



0.025

Current assets

Inventories 0.002



1.091

in € million 01/01/2014


Non-current provisions 0.030




0.030

Current liabilities

Current provisions -.---



1.023


of which: attributable to minority shareholders 0.031

of which: attributable to shareholders of the parent company 0.032

Gains/losses from the transitional consolidation

in € million 01/01/2014

Participating interests in IFS S.r.l. recognised at equity 0.051

Net assets relinquished (attributable to shareholders of the parent company) - 0.032

Disposal gain 0.019

54

The disposal gain is disclosed under other operating income in the income

statement.


in € million 01/01/2014



- 0.001

Effective 27 May 2014, BayWa AG, Munich, Germany, acquired a 49% share in

Dutch company Agrimec Group B.V, Apeldoorn, the Netherlands. Agrifirm Group

B.V., Apeldoorn, the Netherlands, one of the largest agricultural cooperatives in the

Netherlands, holds a 51% share in the agricultural equipment company. The

purchase price of the 49% share amounted to €4.135 million. Agrimec Group B.V. is

a newly founded joint venture between Agrifirm Group B.V. and BayWa AG. Agrifirm

will transfer its entire agricultural equipment business (called Abemec) in the

Netherlands to the new joint venture. The Company will sell and service among

others the AGCO products Fendt and Massey Ferguson as well as the corresponding

service business in its sales territories, which focus on the southern Netherlands.

Since the acquisition, the acquired shares in Agrimec Group B.V. have been included

in the consolidated financial statements of BayWa AG using the equity method.

As at 30 September 2014, a total of 259 companies (31 December 2013:

240 companies) were included in the consolidated financial statements in

accordance with the standards applicable to full consolidation. In addition,

29 associated companies (31 December 2013: 26 companies) have been included

in the consolidated financial statements in accordance with the equity method set

out under IAS 28.

Assumptions and estimates

In as much as assumptions and estimates were made in the context of reporting,

they have remained unchanged as to the methodology used during the financial year

and between financial years. There are no reportable changes which have had a

material impact on the period covered by this Interim Report.

55

Seasonal and economic influences on business activitySeasonal influences typical to the business have an impact on all the core activities

of the Group. Over the course of the year, these lead to fluctuations in revenues and

profit which partly offset one another. In the Agriculture Segment, the main activities

take place in the first three quarters of the financial year, with the focus on the

second quarter. The Energy Segment is impacted more by economic influences

which cause fluctuations in business. The price trend exerts a major impact on

consumer behaviour and therefore on the development of the segment’s revenues.

The backlog in demand subsequently evens out over a number of years. In the

Building Materials Segment, business picks up after the first quarter and slows in the

fourth quarter due to the weather.

Bonds/equity instrumentsIn the period under review, there were no issues, share buy-backs or repayments,

neither for bonded loans nor for other equity instruments. The treasury share portfolio

has remained unchanged since the financial year 2003 and comprises 19,500

shares, which correspond to €49,920, or the equivalent of 0.06% of the share capital.

Appropriation of 2013 retained earningsOn 17 June 2014, the Annual General Meeting of Shareholders approved the

following appropriation of BayWa’s unappropriated retained earnings in 2013:

Dividend of €0.75 per dividend-bearing share €25,839,084.00

Transfer to other revenue reserve: €31,179,563.59

Profit available for distribution: €57,018,647.59

The dividend was paid out on 18 June 2014.

The amount distributed to the shareholders was reduced by the portion of the shares

owned by BayWa AG at the time when the resolution on profit appropriation was

made, as these shares are not entitled to dividend pursuant to Section 71b of the

German Stock Corporation Act (AktG). This portion was additionally transferred to

other revenue reserves.

56

Earnings per shareBasic earnings per share (EPS) are calculated by dividing the net profit for the period

(net of minority interest) by the average number of shares. So-called potential shares

(above all share options and convertible bonds) which can dilute earnings per share

were not issued, which means that diluted and basic earnings per share are the

same.

Transactions and events to be reportedInterim reporting for the third quarter must contain information on transactions and

events which affect the assets, liabilities, equity, result for the period under review or

the cash flow, and which, due to their type, scope or frequency, are unusual. In the

period under review, there were no matters requiring reporting. In respect of effects

from the acquisition and disposal of companies, reference is made to the

explanations above.

Tax computationTax computation is carried out by using the weighted average annual income tax rate

for each separate region. The deferred tax assets include tax-reducing claims which

arise from the expected utilisation of loss carryforwards in the periods ahead, the

realisation of which is assured with sufficient probability.

Contingent liabilities and contingent receivables

There are no contingent receivables. There were no major changes in contingent

liabilities as against the reporting date of 31 December 2013.

Cash flow statement

The cash flow statement has been drawn up pursuant to IAS 7 by applying the

indirect method, and broken down into cash flows from operating, investing and

financing activities.

Other transactions and events to be reported

BayWa AG, Munich, Germany, will acquire the business activities of the third-largest

apple producer in New Zealand, Apollo Apples Limited, through its New Zealand

subsidiary Turners & Growers Limited, Auckland, New Zealand, by way of an asset

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deal: Turners & Growers Limited agreed a purchase price of NZD36 million

(approximately €23 million) with the owners of Apollo Apples Limited. With this

acquisition, the share of BayWa Group companies in apple exports from New

Zealand will increase to 35%. This transaction also includes the acquisition of the title

and the leasehold rights to a total of approximately 500 hectares of crop land in the

Hawke’s Bay region of New Zealand. The effectiveness of the acquisition is subject

to approval by the Overseas Investment Office (OIO) of New Zealand, which deals

with foreign investments. Apollo Apples Limited currently sells approximately 30% of

its annual export volume to Asia; roughly another 30% is sold to Europe. The total

annual trading volume of the company is approximately 25,000 tonnes of apples, the

main varieties of which are JazzTM, Royal Gala and Braeburn. Apollo Apples Limited

and Turners & Growers Limited have been working together in the sale of Jazz

apples for years. Unlike Turners & Growers, which markets fruit such as grapes and

kiwis as well as approximately 100,000 tonnes of apples each year, Apollo Apples

Limited focuses exclusively on apples. Apollo Apples Limited employs around 120

staff to store, package and sell the apples around the world. Apollo Apples Limited

posted revenues of approximately €32 million in the financial year 2013.

On 6 October 2014, BayWa AG, Munich, Germany, issued a bonded loan in a total

amount of €383.000 million. The bonded loan consists of six bullet tranches with

terms of 5, 7 and 10 years and comprises both fixed- and variable-rate components.

The issue of the bonded loan allows the BayWa Group to benefit from the prevailing

favourable interest rate conditions. The bonded loan also serves to diversify the

Group’s financing. Proceeds of €83.000 million from the new bonded loans will be

used to repay the bonded loan placed in the financial year 2010.

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Audit of the Interim ReportThis Interim Report was not subject to any audit review.

Munich, 31 October 2014

The Board of Management

Prof. Klaus Josef Lutz

Chief Executive Officer

Andreas Helber

Dr. Josef Krapf

Roland Schuler

Reinhard Wolf

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Documents

I n t e r I m r e p o r t of the BayWa Group 1 January until 30 … · 2014. 11. 12. · The Report provides information on the business performance of the BayWa Group in the third