BAYWA AG 
The new CEO Marcus Pöllinger now wants to get BayWa back on track with a cost-cutting course. "We are using the year 2024 to consolidate. To this end, we are currently looking at each of our more than 500 holdings and defining growth areas, optimization areas and business areas that BayWa wants to divest," said Pöllinger at the annual press conference on Thursday. "The ultimate goal is profitability." Costs must be reduced in all areas, including the building materials trade, where short-time work is likely to be introduced in the second half of the year due to the slump in residential construction. BayWa should be back in the black this year.
Last year, the Group had pinned great hopes on the sale of its solar trading business. This had failed due to massive overcapacities in solar modules and the fact that Chinese competitors were selling them at dumping prices. Following a drop in prices of up to 50%, BayWa expects the market to recover in the second half of 2024. It then wants to make a new attempt - but for less money. A year ago, CFO Andreas Helber had hoped for proceeds of €2.2 to €2.4 billion. "We will have to lower the price a little," he admitted on Thursday. The Group intends to use the proceeds to reduce its debt, but also to invest in further wind and solar projects. Solar trading is part of the renewable energy subsidiary BayWa r.e., which was acquired by the former Credit Suisse subsidiary EIP in 2021.
Due to write-downs on solar trading and an apple harvest in New Zealand that was partially destroyed by a cyclone, BayWa fell short of the targeted range of €320 to €370 million in 2023 with earnings before interest and taxes (EBIT) of €304 million (previous year: €504 million). The bottom line was a loss of €93.4 million, as rapidly rising interest rates weighed on earnings. A year earlier, BayWa had generated a profit of €239.5 million. Revenues fell by twelve percent to €23.9 billion in 2023.
Pöllinger's predecessor Klaus Josef Lutz had expanded the Group with debt-financed acquisitions. "BayWa took advantage of 15 years of cheap money. That was important and the right thing to do," said Pöllinger. Now the mountain of long-term liabilities of more than three billion euros is to be reduced - by 500 million this year alone. The interest burden is to be reduced from 340 million to 300 million, with Helber hoping that key interest rates will fall in the second half of the year. This should result in a net profit again - and a dividend, which will not be paid this time. EBIT is expected to improve to between 365 and 385 million euros. However, BayWa will not reach the 470 to 520 million originally targeted for 2025 until a year later, Pöllinger admitted.
At the end of last year, he won a power struggle with Lutz, who had accused him of breaching rules of conduct as Chairman of the Supervisory Board. Lutz resigned after the Supervisory Board expressed its confidence in Pöllinger. The final report by a law firm, which re-examined the allegations, did not reveal any breaches either. "The Supervisory Board therefore considers the matter to be fully resolved and closed," the Board announced. "We want to look to the future," Pöllinger simply said.
(Report by Alexander Hübner, edited by Olaf Brenner. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
