BayWa - Transitioning to project-based business model
BayWa is changing its business model so that a higher proportion of revenues are derived from projects, thus adding value and reducing the exposure to fluctuations in demand for agricultural inputs/outputs, heating and fuel oil or building materials. The change is most marked in the Energy segment, with renewables activity – predominantly the sale of wind and solar projects – constituting 42% of group FY18 EBIT. Management is replicating this in other segments, with a JV developing greenhouses in UAE and two housing construction projects in Bavaria. As part of the transition it is selling non-core activities including a stake in Kartoffel-Centrum Bayern, a potato trader and Tessol, its petrol station business.BayWa is a trading and service company. Co. operates in six business units: Agricultural Trade, which comprises trading in agricultural produce and operating resources; Fruit, which includes activities of fruit growing and trading; Agricultural Equipment, which provides agricultural equipment and services; Energy, which supplies heating oil, fuels, lubricants and wood pellets to customers; Renewable Energies, which provides customers services geared to project planning for wind power, biogas facilities and solar power plants; and Building Materials, which comprises building materials sales activities as well as the operation of DIY and garden centres of Co.'s Austrian group companies.
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