Klaus Josef Lutz, CEO of German agricultural conglomerate BayWa AG, has revealed the group's ernings for the full-year of 2015, highlighting the importance of the group’s path towards international growth.
Lutz said that in 2015, the share of operating earnings before interest and taxation (EBIT) accounted for by international business relating to agriculture and renewable energies rose to more than 55 per cent for the first time.
Group EBIT increased last year to €158.1m from €152.1m in 2014, although, as a result of extremely low commodity prices, revenue fell slightly in 2015 to €14.9bn from €15.2bn.
As a result, at this year’s AGM of shareholders, the shareholders approved a dividend increase of €0.05 to €0.85 per share.
The EBIT improvement was due to further internationalisation in the agriculture segment − particularly with regards to fruit − and the national and international project business for renewable energies. “This enabled us to compensate the difficult situation on the German agricultural markets in particular,” Lutz said.
He called on policymakers to provide the agricultural sector in Germany with export opportunities to growing markets in Asia, as it has not been possible so far to import agricultural products to China, for example.
“Trade agreements open doors,” Lutz said. "Even if Germany’s policymakers have now heard the wake-up call, other countries − including some in Europe − have long since established a considerable edge for themselves. BayWa has secured itself access to these growing markets primarily through the acquisition of companies. Proceeding from operations in New Zealand, for example, BayWa is successfully tapping into the markets in China and other countries in Asia, which is not possible from Germany due to a lack of trade agreements."
BayWa is seeking to expand its international business in agriculture in future, above all with respect to specialities, Lutz sggested.
At the beginning of the year, it acquired TFC Holland B.V., which trades in tropical fruit and "enhances the importance of BayWa to the supply of the German retail food industry". “We want to further enhance our focus on precisely these speciality markets. We will therefore specifically continue to strengthen our profile where they are concerned,” Lutz said.
He regards digitalisation as another area for growth. Digital Farming has since become its own business unit at BayWa AG, and it will help further drive innovation in agriculture.
The CEO noted that in the current financial year, BayWa will take advantage of the great opportunities presented by renewable energies and the international business in agriculture in order to considerably increase revenues in 2016 and once again improve EBIT.