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BayWa AG Annual Report 2011

BayWaAG

Annualreport

2011


Key data at a Glance

BayWa Group

In EUR million 2008 2009 2010 2011

Revenues 8,794.6 7,260.2 7,903.0 9,585.7

Agriculture segment 4,048.9 3,269.8 3,505.1 4,258.9

Agricultural Trade 3,117.3 2,359.9 2,529.0 3,029.6

Fruit 86.1 83.3 102.8 129.7

Agricultural Equipment 845.5 826.6 873.3 1,099.5

Energy Segment 2,462.5 1,837.5 2,358.5 3,111.8

Energy 2,462.5 1,825.0 2,103.7 2,805.9

Renewable Energies - 12.5 254.8 306.0

Building Materials Segment 1,785.8 1,776.1 1,903.1 2,065.6

Building Materials 1,354.8 1,327.0 1,370.8 1,508.5

DIY & Garden Centers 431.1 449.1 532.3 557.1

Other Activities 497.3 376.9 136.3 149.4

EBITDA 258.1 209.7 228.2 253.6

EBIT 161.9 115.4 128.9 151.4

EBT 103.5 75.1 87.1 97.7

Net income for the year 76.7 59.4 66.8 69.8

of which: profit due to minority shareholders 18.4 14.3 16.4 18.5

of which: profit due to shareholders of the parent company 58.3 45.0 50.4 51.3

Total assets (as per 31/12) 3,065.8 2,939.3 3,253.3 3,913.0

Non-current assets 1,305.6 1,427.2 1,427.4 1,614.4

Current assets 1,755.5 1,507.4 1,776.8 2,039.8

Non-current liabilities 644.9 691.8 881.0 1,147.6

Current liabilities 1,505.8 1,290.0 1,333.7 1,615.2

Equity 915.1 957.5 1.005.5 1.068.0

Equity ratio in percent 29.8 32.6 30.9 27.3

Share capital (as per 31/12) in EUR million 87.0 87.3 87.6 87.9

Number of shares (as per 31/12) in million shares 34.0 34.1 34.2 34.3

Earnings per share in EUR 1.72 1.33 1.48 1.50

Dividend per share in EUR 0.34 0.40 0.50 0.60

Special dividend per share in EUR 0.06

Employees (as per 31/12) number 16,596 16,177 16,432 16,834


Page Table of Contents

3 Letter to the Shareholders

6 The Board of Management

8 The Supervisory Board

9 The Cooperative Council

1 The Company

13 The Business Model of the BayWa Group

16 Agriculture segment

22 Energy segment

28 Building Materials Segment

32 goals and strategy

37 Conducting Sustainable Business

2 BayWa and the Capital Market

41 The Share

45 Investor Relations

3 management report on the

Company and the Group

49 Summary of Performance

51 Business and General Conditions

58 Earnings, Financial Position and Assets

69 Opportunity and Risk report

74 Significant Events after the reporting date

75 Remuneration report

77 Outlook

4 Consolidated Financial Statements

85 Affirmation by the Legally Authorized Representatives

86 Consolidated Balance Sheet

88 Consolidated Income Statement

89 Consolidated Statement of Comprehensive Income - Transition

90 Cash Flow Statement

92 Statement of Changes in Equity

94 Notes to the Consolidated Financial Statements

191 List of Group Holdings (Appendix to the Notes to the Consolidated Financial Statements)

197 auditors report

198 report of the Supervisory Board

202 Corporate Governance report / Statement on Corporate Governance

208 Remuneration report

210 imprint

211 Financial Calendar


Letter to the Shareholders

Letter to the Shareholders

Foreword by Klaus Josef Lutz, Chief Executive Officer

BayWaAGAnnualreport2011

Dear Shareholders,

The year 2011 was determined by the euro and

the sovereign debt crisis, the consequences

of the tsunami and the nuclear catastrophe in

Japan, compounded by turbulence from political

unrest in North Africa and in the Middle East.

Against this backdrop, the BayWa Group once

again delivered an excellent result in the past

year. Revenues rose by 21% to € 9.6 billion, with

the segments of Agriculture, Energy and Building Materials all contributing to this

strong performance. EBIT came in at € 151 million, which is an increase of 17.5%.

The fact is that we have fully achieved our targets and guidance and met the

high expectations - another success for the group’s around 17,000 employees.

We will continue to energetically pursue our goals with the requisite flexibility,

underpinned by sound risk management.

This is particularly applicable to progressing our strategy of innovation and

internationalization. The takeover of Turners & Growers Ltd (T&G), New

Zealand’s market leader in the fruit business, is BayWaIt's largest international

transaction ever. More than 73% in the shares in T&G and close cooperation with

the fruit producers in New Zealand will enable BayWa to position itself as a global

player in the supply of pome fruit. We believe that Asia will be the world's highest

growth market for fresh fruit. BayWa’S domestic fruit business and the German

fruit farmers will also benefit through this investment from improved selling

opportunities for the products in a global market.

3


4 Letter to the Shareholders

We intend to forge ahead with expanding our project business in the field of

renewable energies in the international and national arena. Having activities

in different countries makes sense simply from the standpoint of evening out

market fluctuations from political framework conditions. We will remain open for

interesting acquisitions in Germany and abroad in all our businesses, which also

particularly applies to the agricultural market. Our international network, which

is becoming increasingly strong, releases numerous synergies for more growth

phases in our trading, logistics and services group.

Similar to 2010, BayWa Also issued a bonded loan at the end of 2011. We had

great success again in placing this bonded loan of € 220 million in the capital

market. The original request was for € 100 million. The order book, however, what

oversubscribed almost three times. The response underscores how sound BayWa

is and the trust of investors in our company. The bonded loan, which will be used

exclusively to secure the financing of working capital in the longer term, will

further strengthen the financial position of the group.

At the end of 2011, BayWa made a strategically important decision with far

reaching consequences: to hive off the DIY & Garden Centers Business Unit and

integrate it into newly founded BayWa DIY and garden centers GmbH & Co. KG.

This step enables an operational link with Hellweg, a well-known operator of DIY

and garden centers. It is also a forward-looking solution for the BayWa DIY and

garden centers business in Germany which was unable to operate profitably

due to lack of critical mass and a fiercely competitive market environment. The

new constellation with Hellweg, effective at the start of January, will sharpen the

competitive edge and profitability of the 56 DIY and garden centers carved out

and promote job security. We have therefore found a good way, firstly of ensuring

that the business can continue to operate in a future-oriented manner and

secondly of enabling BayWa to withdraw in the medium term without loss of value.

The new company will be reported at equity in future and is thus no longer part of

the group of fully consolidated companies.

BayWaAGAnnualreport2011


Letter to the Shareholders

Our company is in good shape for the BayWa anniversary year 2013 when it will

be 90 years old. BayWa has made huge leaps and bounds in its development

and evolution in this decade - unchanged, however, is our view of its underlying

cooperative structure as a sound foundation. The BayWa brand also reaps the

benefit of this: A strong brand contributes to success, in national and international

markets alike. This is why we consistently pursue our family brand strategy. To

promote awareness of the brand still further, we have opted for sport sponsoring,

among other measures. BayWa is the new premium partner of the first basketball

league team of FC Bayern Munich.

Now to our development on the stock market: BayWa’S registered share with

restricted transferability surpassed the € 35 threshold for the first time, i.e. in 2011.

Over the course of the year, the BayWa share was unable to decouple from the

downturn in Germany’s leading DAX index. BayWa’S success is clearly reflected

in its dividend. The Executive Board and the Supervisory Board will therefore

put forward a proposal to the Annual General Meeting of Shareholders to raise

dividend from 50 to 60 cents, an increase of 20%. Since 2007, when it was 32

cents, dividend from the BayWa share has almost doubled. Moreover, an increasing

number of analysts are regularly covering the share, which is very pleasing. BayWa

is and remains a worthwhile investment because the group, with its core segments

of Agriculture, Energy and Building Materials, stands for satisfying the fundamental

need for food, shelter, energy, warmth and mobility.

BayWa intends to grow sustainably, while achieving a balance between economy,

ecology, commitment to society and corporate social responsibility. My board

member colleagues and I view open dialogue with our customers, shareholders

and business partners as an integral part of value-oriented company management.

May I thank you on behalf of all our employees and the whole BayWa Group for

your renewed solidarity and support in the year 2011.

Your

Klaus Josef Lutz

Chief Executive Officer of BayWaAG

BayWaAGAnnualreport2011

5


6 The Board of Management

The Board of Management

A.

Klaus Josef Lutz since July 1, 2008

(Chief Executive Officer)

PR / corporate communication, group audit, corporate

Marketing, corporate business development, group risk

Management, Building Materials Segment, Personnel and

Senior executives

B.

Klaus Buchleitner since March 1, 2003

RWA Raiffeisen Ware Austria AG, Vienna

C.

Andreas Helber since November 15, 2010

Finance, investor relations, lending, corporate real estate

Management (CREM), Central Controlling, Information Systems,

Law, Regional Administration Centers

BayWaAGAnnualreport2011

D.

Dr. Josef Krapf since October 1st, 2002

Agriculture, Fruit

E.

Roland Schuler since October 1, 2002

Energy, Agricultural Equipment, BayWa r.e, coordination of the

Württemberg region

Executive manager

Götz Ganghofer since November 10, 2010

Building Materials Segment

Information on mandates is included in the Notes to the Consolidated Financial Statements under (E.8.)

Allocation of operations as per 31/122011


E.

B.

D.

The Board of Management

BayWaAGAnnualreport2011

C.

A.

7


8 The Supervisory Board

The Supervisory Board

Manfred Nüssel

MSc Agriculture (University of Applied Sciences), Chairman,

President of the German Raiffeisen Association e.V.

Ernst Kauer

MSc Agriculture, Vice Chairman

Chairman of the Works Council of BayWa Headquarters

General Att. Ecological Council Dr. Christian Konrad

Vice Chairman, Chairman of RAIFFEISEN-HOLDING

LOWER AUSTRIA-VIENNA reg.Gen.m.b.H., Vienna

Georg Fischer

Master Mechanic for Agricultural Machinery

Dr. E. Hartmut Gindele

MSc Agriculture, farmer

Prof. Dr. H. c. Stephan Götzl

Association President, Chairman of the Board of Management

of Genossenschaftsverband Bayern e.V.

Otto Kentzler

MSc Engineering, President of the German Confederation

of Skilled Crafts

Peter King

Secretary of the Union, ver.di, Bavaria

BayWaAGAnnualreport2011

Stefan Kraft M.A.

Secretary of the Union, ver.di, Bavaria

Erna Kurzwarth

Regional Administration Center Manager of BayWaAG

Dr. Johann Lang

MSc Engineering, farmer

Albrecht Merz

Member of the Board of Management of DZ Bank AG

Gunnar Metz

Chairman of the Main Works Council of BayWaAG

Gregor Scheller

Chairman of the Board of Directors of Volksbank Forchheim

eG, member of the Board of Directors of Bayerische

Raiffeisen investmentAG

Werner Waschbichler

Vice Chairman of the Works Council of BayWa Headquarters,

Operations Manager Logistics (until 16 February 2012)

Bernhard Winter

Head of Accounting Control Agriculture

Information on other mandates is included in the Notes to the Consolidated Financial Statements under (E.8.)


The Cooperative Council

The Cooperative Council

Wolfgang Eckert

MBA, Chairman, Chairman of the Board of Directors of

VR-Bank eG

Members pursuant to Article 28 para. 5

of the Articles of Association

Manfred Nüssel

MSc Agriculture (University of Applied Sciences), Chairman,

President of the German Raiffeisen Association e.V.

Dr. Johann Lang

MSc Engineering, farmer

Other members

Wolfgang Altmüller

MBA, Chairman of the Board of Directors of

VR my Raiffeisenbank eG

Dietmar Berger

MSc Agricultural Engineering & Economics, President of

Central German Cooperative Association

Franz Breiteneicher

Managing Director of Raiffeisen-Waren GmbH Erdinger Land

BayWaAGAnnualreport2011

Albert Dess

Member of the European Parliament

Günter Dreher (until 31 May 2011)

MSc Administration, Chairman of the Board of Directors of

Augusta-Bank eG (until 4 May 2011)

Martin Empl

MSc Agriculture, farmer

Manfred Geyer

Chairman of the Board of Directors of RaiffeisenVolksbank eG

Commercial bank

Erhard Gschrey

Certified Public Accountant / Tax Consultant, Vice Chairman of the

Board of Management of Genossenschaftsverband Bayern e.V.

Lorenz Hebert (until 31 July 2011)

Chairman of the Board of Directors of Raiffeisenbank in Stiftland

eG (until 31 July 2011)

Lothar Hertzsch

MSc Agricultural Engineering & Economics, farmer

Franz-Xaver Hilmer (since August 1 2011)

Managing Director of Raiffeisenbank Straubing eG

9

(1/2)


10 The Cooperative Council

The Cooperative Council (2/2)

Karl Hippeli

Member of the Board of Management of Raiffeisenbank

Ochsenfurt eG

Konrad Irtel

Spokesman of the Board of Directors of VR Bank

Rosenheim-Chiemsee eG

Martin Körner

MSc Engineering (University of Applied Sciences), farmer,

fruit farmer

Franz Kustner

farmer

Alois Pabst

farmer

Hans Paulus

MSc Agriculture, Director, Commodities Department of

Raiffeisenbank im Stiftland eG

Josef Raffelsberger

farmer

Joachim Rukwied

MSc Engineering (University of Applied Science), President of

State Farmers Association in Baden-Württemberg e.V.

BayWaAGAnnualreport2011

Hermann Schultes

President and National Councilor of the Chamber of Agriculture

of Lower Austria, farmer

Gerd Sonnleitner

President of the German Association of Farmers, the Bavarian

Association of Farmers and the European Association of Farmers

Ludwig Spanner

farmer

Wolfgang Vogel

President of Sächsischer Landesbauernverband e.V.

Thomas Wirth (since August 1 2011)

Spokesman of the Board of Directors of Raiffeisenbank im

Stiftland eG

Maximilian Zepf

Member of the Board of Management of Raiffeisenbank

Schwandorf-Nittenau eG


The Company

vision

In a closely knit international market

environment, we rank among the

leading trading and services companies

in our core segments of Agriculture,

Energy and Building Materials. We

intend to sustainably reinforce this

position and continue to grow profitably.

These goals will raise the group’s

earnings strength and secure our future

in increasingly globalized markets.

(Taken from BayWaAG’S corporate guidelines)

Section

page

13 The Business Model of the BayWa Group

16 Agriculture segment

22 Energy segment

1

28 Building Materials Segment

32 goals and strategy

37 Conducting Sustainable Business


Turners & Growers

- a special acquisition

March 6, 2012: The takeover of Turners & Growers (T & G), Auckland, New

Zealand, has been approved. For BayWa, this is not only one of its largest

acquisitions ever but also a purchase of exceptional significance. With more

than 73%, BayWa now holds a majority stake in New Zealand’s leading

exporter and producer of fresh fruit and has access via the global distribution

and trading structures of T & G to all important international sales regions, in

particular to Asia as the high-growth market of the future. In joining up with

T & G, BayWa has taken a major step in the direction of globalization which

So wants benefit BayWa’S domestic fruit business.

89

years old

BayWa what established in

1923, which is 89 years ago.

Trust, solidity and innovation

are the hallmarks of the

company and the foundation

of its long-standing success.

17

countries

+ 44%

A sign of BayWa’S growing internationalization:

The Group's international revenues (excluding

Austria as home territory) rose 44% in 2011

compared with a year ago.

The BayWa Group is re-

presented in 17 countries:

15 European states, the

US and New Zealand.


All about the offerings of Agri-

culture, energy and building

Materials under www.baywa.de,

and information on the company

under www.baywa.com

1 • The Company • The Business Model of the BayWa Group

The Business Model of

the BayWa Group

The BayWa Group’s business model is based on trading and services in its three core segments of Agriculture,

Energy and Building Materials. Efficient logistics across all segments play an important role in the company’s

successful development. BayWa has evolved from a regional agricultural trader into one of the leading trading

and services groups through growth geared to the long term, coupled with the steady expansion and adjusting

of its range of products and services. With strong roots its home market, the BayWa Group is currently

represented in 15 countries in Europe, the US and New Zealand.

Growth in the global population, the rising standard of living in many parts of the world and the associated increase

in the need for resources, particularly food and energy, are the great challenges of the 21st century. At the same

time, there are good growth opportunities especially in the business of catering to the fundamental human need for

food, shelter, energy, mobility and warmth. The development of harvest volumes and the fluctuating availability of

fossil energy carriers in important producer countries have a direct impact on the price of these commodities in the

global market. Individual countries, sub-markets and companies are no longer able to decouple from this trend.

BayWa covers the fundamental need for food, shelter, energy, mobility and warmth in its three segments of

Agriculture, Energy and Building Materials. At the same time, the diversification of its activities is also a stabilizing

component in the development of the company. BayWa’S core competences reside in its extensive product

Know-how as well as in its logistics and control of the flow of goods. Beyond this, BayWa expands its offering

of supplementary services on an ongoing basis.

Revenues by segment

1.6%

21.5%

Agriculture Energy Building Materials Other Activities

BayWaAGAnnualreport2011

44.4%

32.5%

13


14 1 • The Company • The Business Model of the BayWa Group

What BayWa stands for

BayWa’S thought and action is aligned to long-term customer relationships built on the premise of partnership and

fostered through trust, solidity and innovation. These are the values ​​which BayWa stands for - values ​​which are

also perceived by its customers. As a listed company, BayWa attracts the attention of the capital market as well, and

the corresponding expectations of return are derived from competition with other corporations. In markets where

the pace of change is accelerating the capacity for innovative solutions is becoming increasingly important. The

key words here are: growth orientation, flexibility and sustainability. Adjusting flexibly to accommodate changing

requirements and leveraging promising new business opportunities to preserve sustainability are the prerequisites

underpinning future growth. The center of BayWa’S strategy is therefore the steady development of the

company, sustainable success and seizing new opportunities for growth, especially abroad.

Clear path to the future

Structure of the BayWa Group

Group BayWaAG

Agriculture Energy Building Materials segment

Business units

down-to-earth

BayWaAGAnnualreport2011

competent

sustainable

Agricultural Trade

Fruit

Solidity

fit for the future

Agricultural Equipment

based on partnership

Trust

1 Business line 2 Hiving off of DIY & Garden Centers in Germany effective 1 January 2012

innovation

Energy

BayWa r.e 1

close to the customer

forward-looking

growth-oriented

flexible

Building materials

DIY & Garden Centers 2


€ 9.6 billion

Revenues of the BayWa Group

in 2011

1 • The Company • The Business Model of the BayWa Group

Strong customer loyalty through regional presence

The BayWa Group generated revenues of more than € 9.6 billion with a workforce of almost 17,000 employees

in 2011. The Group's three core segments of Agriculture, Energy and Building Materials operate as decentralized

units, each responsible for their own profitability, with their own locations and sales networks. They are managed

through clearly defined levels of autonomy under the uniform corporate strategy. A tight regional sales network in

all three segments ensure proximity to the customer and promotes strong customer loyalty. This proximity often

gives BayWa a unique selling proposition in its regions compared with competitors. BayWa optimizes its network

of locations and the range of products and services offered on an ongoing basis, adjusting the offering to changing

customer needs and business requirements in order to maintain and strengthen this competitive advantage.

With its know-how and strong regional roots, BayWa is a reliable partner to its customers and bridges the gap

between local producers and the international markets. At the same time BayWa continues to develop through

organic growth and tapping into new areas of business. Ultimately, BayWa’S business is determined by increasingly

globalized markets and through growth in foreign countries.

BayWa’S business activities

Customers

• Farmers

• End customers

• Industry

• Commerce

• Trade

Operating activities

• Trade

• Logistics

• Services

• Finance

BayWaAGAnnualreport2011

Markets

• Agriculture

• Energy

• Construction

15

Unique selling proposition

• Customer proximity

through full coverage

network for sales and

logistics


16 1 • The Company • Agriculture Segment

€ 6.4 million

Investment in the Schweinfurt

agri-center

Agriculture segment

Structural change in the agriculture sector, Germany’s new energy policy, globalization and growing price

volatility in the markets for agricultural produce are the challenges to be met in the Agriculture segment.

BayWa Shapes this change by continually aligning its activities to suit new framework conditions. In doing

so, it focuses on optimizing and modernizing its locations, extending its product and service range and

internationalizing its agribusiness.

4,258.9

million

A prerequisite for covering the global growth in the demand for food and renewable resources used to produce

energy is higher productivity in crop farming. Structural change in the agriculture sector is leading to increasingly

larger farming operations which can only efficiently farm their land by stepping up the use of machinery and

equipment. At the same time, acreage yield is on the rise thanks to the optimization of cultivation procedures.

Renewable raw materials are becoming increasingly important as a result of the new energy policy. BayWa supports

the farmers in all these areas through innovative offerings. The efficiency of BayWa’S agricultural centers plays a key

role as considerably larger volumes of both operating resources and agricultural produce need to be handled.

Efficiency enhanced through investment

BayWa has taken account of its customers ’wish for greater efficiency by implementing an extensive modernization

program at its various locations focused specifically on raising intake, handling and warehouse capacities. A prime

example in the Agricultural Trade Business Unit is the investment of € 6.4 million in the Schweinfurt agri-center in

October 2011 where grain warehousing capacity was almost doubled to 26,000 tons and intake efficiency raised

to 250 tons an hour. In addition, BayWa has increased its fertilizer warehousing capacity to 7,000 tons. The new

high-performance agriculture center replaces three former operations and, with a port, railway connections and a

motorway nearby motorway, has optimal prerequisites for fulfilling customer requirements for more efficiency.

BayWaAGAnnualreport2011

6,859

employees

44.4

%

Revenues in 2011 Number of employees in 2011 Share in consolidated revenues in 2011


1 • The Company • Agriculture Segment

Structure of the Agriculture Segment

Agriculture segment

Business units Trade Fruit Agricultural Equipment

Products /

services


Grain and oilseed

• Seed

• Fertilizers

• Crop protection

• Feedstuff

• Cultivation and advisory

services

Revenues of the Agriculture Segment (in € bn)

4.2

3.8

3.4

3.0

2.6

2.2

1.8

1.4

1.0

0.6

0.2

Key operating data of the Agriculture segment

BayWaAGAnnualreport2011


Dessert pome fruit

Soft and stone fruit

Pome fruit from organic

contract farming

2008 2009 2010 2011

Agricultural Trade Business Unit (sales volume in ktons)

Grain 4,361.7 4,832.1 5,013.8 4,909.5

Fertilizers 2,019.3 1,599.0 1,847.7 1,896.1

Seed 256.1 243.3 257.0 256.3

Feedstuff 2,198.3 2,089.8 2,316.7 2,372.1

Fruit Business Unit (sales volume in ktons)

Dessert pome fruit 62.7 66.0 64.5 85.9

Soft and stone fruit 4.3 5.9 7.1 6.6

Agricultural Equipment Business Unit (units)

Number of tractors sold - new 3.315 3.038 3.168 3.850

Number of tractors sold - used 1.058 1.148 1.308 1.382





Agricultural equipment for

farmers, foresters, local

authorities and commerce

Agricultural buildings

Customer service / workshop

service

Spare parts

• Leasing

Brokerage services for financing

and lease agreements

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Agricultural Trade and Fruit business units Agricultural Equipment Business Unit

17


18 1 • The Company • Agriculture Segment

44%

The Agriculture Segment comprising

the Agricultural Trade, Fruit and

Agricultural equipment business

units as the mainstay of revenues

Similar to Freiberg am Neckar,

16 of BayWa’S agricultural

locations have their own ports

with optimum logistics.

Other important projects in 2011 included the expansion of the Heilbronn location, building a new state-of-the-art

center in Aufhausen and extending the Bamberg Port location. In Heilbronn, warehouse capacity for grain was

expanded up to 40,000 tons and the intake capacity raised to 600 tons per hour. Moreover, ship loading facilities

permit the use of the waterways. The Aufhausen site, situated at the heart of the largest vegetable growing area in

Lower Bavaria, replaces the former locations of Reisbach and Eichendorf and has fertilizer mixing facilities where

fertilizers can be tailored to meet the needs of the individual plants. Business formerly conducted at the locations in

Ebelsbach, Sonnefeld and Pretzfeld has now been combined under the extended Bamberg Port site.

Agribusiness is the BayWa Group’s largest segment with a share of 44% in consolidated sales. The three business

units of Agricultural Trade, Fruit and Agricultural Equipment comprised under this segment encompass virtually the

whole agricultural value chain. The extensive product range is rounded off by advisory services and general services,

from specialist questions relating to crop growing across technical advice and service through to aspects of running

farming operations, marketing and sales.

BayWa’S Agriculture Segment in Germany is situated mainly in the Federal States of Bavaria, Baden-Württemberg,

Saxony-Anhalt, Thuringia and in southern Brandenburg in around 483 locations, 16 of which have their own ports.

In its agribusiness, BayWa operates via its subsidiaries throughout virtually the whole

of Austria. Furthermore, the BayWa Group is represented through its own local

companies in selected countries in Central and Eastern Europe, such as the Czech

Republic, Slovakia, Poland, Slovenia, Croatia and Serbia.

BayWaAGAnnualreport2011

From sowing the seed to the sale of agricultural produce

Agricultural Trade supplies the farmer with a full range of operating resources,

including seeds, fertilizers and crop protection, as well as feedstuff for livestock

farming. The most important services in the business of agricultural trade include the

collection, storage and sale of the harvest. BayWa’S core competencies in performing

These tasks lie in its in-depth product know-how, logistics and the management of the

flow of goods in both large and small volumes. BayWa is one of Europe’s largest fullline

in the agriculture sector and also trades some of its products worldwide suppliers.

Its extensive know-how has made it a preferred partner of the farmers for many years. Against the backdrop of

greater price volatility in the markets for agricultural produce, BayWa provides the farmers with a price hedging

system called Landea which they can use to secure their income while, at the same time, benefiting from future

price increases.

The group supplies seed to the farmers from its own seed production as well as through the sale of seed sourced

externally, thereby ensuring that a complete range is offered. In the sale of fertilizers and crop protection, the

product mix and timely advance storage for use on the respective dates are particularly important. To guarantee the

supply of different fertilizers customized for the respective crops, many BayWa locations have equipment for mixing

fertilisers. This enables farmers to provide the right nutrition for the specific crops through spreading fertilizers

specially mixed for this purpose.


BayWa plays a key role in

logistics between producer

and processer, trader and

consumer.

1 • The Company • Agriculture Segment

BayWa The above-average quality of resources ensures and feedstuff bought from third parties by working together

with selected renowned suppliers. With a trading volume of around 1.9 million tons of fertilizer a year, BayWa is a

key distribution partner of the industry. Its own feed mills in southern Germany and Austria

produce more than 780 ktons of various feedstuff for livestock breeding, mainly for cattle,

pigs and poultry. BayWa The highest standards in its own ensures feedstuff production

through meticulous quality controls applied to all input materials sourced from third parties.

The product range is also supplemented in this instance by extensive services such as advice

on optimizing feeding, application consulting and mixing feedstuff tailored to individual

requirements.

BayWaAGAnnualreport2011

Grain and oilseeds are some of BayWaIt's most important agricultural products with sales

amounting to around 4.9 million tons in the 2010/11 grain year. BayWa focuses its activities in

this business on the collection, processing, drying, storage and selling of produce. The Group

maintains warehouse capacities of around 2.4 million tons for storage and sale at a later date

date. In terms of logistics, BayWa Performs a central interface function between producers

and processors, such as grain or oil mills, malt houses, animal feed plants and trade and

consumers, through its ability to concentrate large volumes of goods and transport them in

homogenous lots.

Fruit from BayWa

In its Fruit Business Unit, BayWa is a leading supplier of German dessert fruit for food retailers

and, through its ten locations situated on Lake Constance, the Neckar and in Rhineland

Palatinate, including an organic fruit wholesale center, the biggest single seller of German

dessert and the largest supplier of organic pome fruit from organic farming. The Fruit

Business Unit has numerous collection points for dessert pome fruit, industrial pome fruit,

organic fruit as well as soft and stone fruit. Furthermore, it makes an important contribution

in Württemberg to conserving the orchards so typical of the landscape through its regionwide

collection of fruit. Storage, sorting and packaging is carried out in the fruit wholesale markets

of the business unit in accordance with international quality standards and using cutting-edge technology. The

merchandise can be suitably packaged for trade in more than 200 variations and delivered to the customer through

the business unit’s own just-in-time logistics. In addition, BayWa collects, sorts, stores and packages as a marketer

under contract to Württembergische Obstgenossenschaft Raiffeisen eG and sells the dessert fruit to customers in

Germany and abroad. As a system supplier, BayWa delivers fruit from South America to wholesalers and retailers

through its subsidiary Frucom. Finally, the Fruit Business Unit has tapped new potential in international growth