Struggles at Baywa Corporation underscored by disclosed financial data - Yearly statistics underscore the severity of the Baywa predicament
In a significant turn of events, Baywa, the Munich-based diversified conglomerate specialising in agriculture, food supply, and renewable energy, has announced a restructuring plan to address a staggering **EUR 1.6 billion loss** for the 2024 financial year. The loss, confirmed a week ago, was accompanied by a delayed and unusual quarterly report for the first three months of the current year.
The loss is primarily attributed to unsuccessful international ventures, particularly in grain trading, and a heavy debt load. Baywa's acquisition of Rotterdam grain trader Cefetra in 2012 was aimed at internationalising its core business, but the anticipated results were not achieved, contributing to the financial strain and the necessity for divestments.
Frank Hiller, CEO of Baywa, acknowledged the company's most severe corporate crisis in its history. In response, Baywa has outlined a restructuring plan scheduled to run through the end of 2028. The plan involves refocusing the company on its core businesses, primarily German agriculture and construction, while divesting several of its international holdings to reduce its debt burden.
Significant divestments include the sale of Baywa's stake in Cefetra for up to €186 million, reducing debt by approximately half a billion euros. Additionally, Baywa has sold its stake in Austrian sister company Raiffeisen Ware Austria and plans to sell New Zealand fruit trader T&G Global and its renewable energy subsidiary BayWa r.e.
The overarching goal of the restructuring is to reduce Baywa's debt from over five billion euros to around one billion euros and stabilise the company by concentrating on its core competencies. Baywa aims to reduce its revenue from the current 21.1 billion euros to 11.3 billion euros by 2028.
Despite the massive loss, there are signs of improvement, with shrinking debts and the first results for 2025 showing that Baywa is above plan and at the level of the previous year. The Technology segment generated the highest positive operating result, at 60 million euros. The fruit and vegetable trade is the only segment that improved its operating result in 2024, partly due to severe weather in 2023.
However, other segments, such as Agriculture, grain trading, and Energy, are also suffering significant losses. Renewable energies experienced a 29% decrease in revenue to 4.1 billion euros and an operating loss of 732 million euros. As a result, Baywa plans to sell its renewable energy business due to its struggles.
The restructuring concept also includes job cuts, with a total of 1,300 full-time jobs to be eliminated, with more than half already implemented. The company expects its results to significantly improve by 2028, reflecting the necessary, tough, and bold fundamental decisions made to address the crisis.
- In an effort to address the financial crisis and focus on its core competencies, Baywa is considering the sale of its renewable energy subsidiary, BayWa r.e., a division that experienced a 29% decrease in revenue and an operating loss of €732 million.
- As part of the restructuring plan, Baywa is also looking to expand its vocational training programs within its core businesses, such as German agriculture and construction, to promote industry growth, sustainability, and financial stability in the business and energy sectors.
