Annual General Meeting

Information on the last financial year

Shareholders are fully briefed about the preceding financial year at the Annual General Meeting. It is also a decision-making body and elects members of the Supervisory Board and Advisory Board.

Franz-Josef Holzenkamp and Stephan Weil
Franz-Josef Holzenkamp (left), AGRAVIS Supervisory Board Chairman, and Stephan Weil, Lower Saxony Prime Minister

Annual General Meeting 2019

The AGRAVIS Raiffeisen AG Annual General Meeting took place at group company AGRAVIS Niedersachsen-Süd GmbH in Wunstorf on 9 May.

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AGRAVIS Annual General Meeting

In the first four months of 2019, AGRAVIS generated a turnover of 2.1 billion euros, thus achieving the same value for the same period in the previous year. However, earnings before tax are currently significantly lower than the previous year. “Nevertheless, we’re sticking to our plans for 2019,” stressed Chairman of the Board Dr Dirk Köckler during the Annual General Meeting in Wunstorf-Kolenfeld, Lower Saxony. “We want to end the year with a good turnover compared to the previous year of 6.5 billion euros and we’re also anticipating a stable operating profit compared to the previous year at 30.1 million euros.”

Expensive dry period for the AGRAVIS Group

The AGRAVIS executive was also aware that the consequences of the 2018 drought would continue to have a significant effect on business performance in the first six months of 2019. Overall, the previous year’s dry period has cost the AGRAVIS Group about 40 million euros on its earnings before tax. Of this amount, 24 million euros corresponded to the financial year 2018 and 16 million euros to 2019. “We’ve already looked at this total figure to some extent, but, all things considered, the start of the year was difficult,” explained Dr Dirk Köckler. This was also evident in the figures. After another dry April, rain arrived at the end of the month, just at the right time, boosting the hope for a “normal” financial year.

Ambitious goals and high investments

The CEO did not deny that the turnover and earnings targets were very ambitious from a current perspective and when looking at the present figures. “However, we expect to achieve the target figures, provided we have a normal harvest and don’t succumb to African swine fever or another abnormal year.”
Investments should remain high at 51.3 million euros in 2019 and stand at depreciation level. AGRAVIS wishes to extend its equity capital to 600 million euros with a stable equity ratio of 30 per cent. Dr Köckler explained further: “These are also key business figures which we wish to measure ourselves against.”

Dr Dirk Köckler AGRAVIS Annual General Meeting 2019
Dr Dirk Köckler

After a financial year 2018, AGRAVIS wishes to stabilise its turnover and operating profit in 2019 to return to growth mode from 2020. The Chairman of the AGRAVIS Board of Directors Dr Dirk Köckler looked to the future at the agricultural trade and service company’s Annual General Meeting: The company boss established clear goals in front of around 850 shareholders and guests in Wunstorf-Kolenfeld, Lower Saxony: The first requirement he mentioned was the strengthening of the cooperative association and expanding business with all associates. He also made it clear that: “AGRAVIS must earn money in the shape of retained earnings. AGRAVIS must be capable of paying dividends to its shareholders. AGRAVIS must be an attractive employer for its employees. AGRAVIS must become or remain the market leader in the relevant core areas to achieve these goals.”

Cooperatives on equal footing

He is convinced that the AGRAVIS Group will visibly achieve these goals together with the cooperatives on an equal footing. “To do so, proper, targeted investments must be made and structural change and the market must be regarded as an opportunity, not a risk.” The marked structural change offers the cooperative association the chance to gain freed market shares thanks to lean processes, innovation and market access. Extra service due to the use of new technologies and data management offers further opportunities for adding value. “This new intensity is essential to evolve with regard to our cooperative owners and thus further develop business models which customers will ask and pay for.” AGRAVIS is ultimately required to be a top performer in all fields. If AGRAVIS does the best possible job, cooperative shareholders, suppliers and customers in industry will find it easy to do business with AGRAVIS. As a manager in the capacity of Chairman of the AGRAVIS Board of Directors, he has been referring to this “passion for business” since mid-March 2019 as part of the way he understands market leadership.

Concentrating on our brand essence

Thanks to the completed Hanse strategy project, AGRAVIS has already set a streamlined course towards a more operational direction on an organisational level. “AGRAVIS concerns itself with what customers need and for which they are now also prepared to pay a market price. AGRAVIS must do what AGRAVIS is capable of and for which it can deliver a sustainable, commercial business model,” he affirmed, calling for a focus on the brand essence. As examples of implementing the group strategy, Dr Köckler referred to the construction of a liquid fertiliser plant in Schwedt as a joint venture with the Verbio Group, the founding of Regio Baustoffe GmbH & Co. KG, the highly effective new set-up in the special feed business and the introduction of a standardised ERP system environment providing streamlined processes. The company is also winning the race in the Plants, Animals and Machinery business units to handle the processes that customers and the market require efficiently, more reliably and more effectively than others. “This is where AGRAVIS delivers as an affiliate partner.”

AGRAVIS plans for organic farming and digitisation

Dr Dirk Köckler affirms that focusing our capabilities on customer needs is one key area in AGRAVIS’s current and future tasks. This should be translated into joint business within the cooperative association: “On an equal footing. With professionalism and mutual appreciation.” Turning to operational activities, Dr Köckler outlined the plans that AGRAVIS has for organic farming and digitisation: AGRAVIS plans to enter the organic market with a separate company called biovis in the second half of the year and wishes to package and expand its digital services for customers. He used feedstuff production, one of AGRAVIS’s core expertise, as an example to describe the challenges of the market. “We’re very familiar with the low margins, high technical standards and volatile markets in this business.” AGRAVIS is ready for its forthcoming structural change through cooperation models with cooperatives and a growth strategy outside its core field of activity. It is just as important, however, to provide our customers with integral solutions and concepts that are stronger than ever before and that go far beyond the supply of feedstuff. This is where AGRAVIS is already active, for example, using the nutrients software Delos, which helps farmers implement the fertiliser ordinance.

Commitment to Danish partner, the DAVA Group

To finish off his first Annual General Meeting speech as Chairman of the Board of Directors, Dr Köckler made a firm commitment to cooperation with the Danish partner, the DAVA Group: “Cooperation in different joint ventures is going exceptionally well.” Ceravis AG, however, remains a problem. A turnaround is urgently required.

AGRAVIS continues on its course for growth

Chief Financial Officer Johannes Schulte-Althoff presented the figures for the financial year 2018 at the start of the Annual General Meeting. Despite months of drought and an increasingly more competitive market, AGRAVIS managed to end the last financial year with a pleasing jump in sales to 6.6 billion euros and earnings before tax of 30.4 million euros. “All things considered, we are pleased under the special circumstances. We’ve defied the weather conditions. AGRAVIS continues on its course for growth despite the drought,” affirmed Schulte-Althoff.

Pragmatic solutions for customers

The key business figures substantiate the AGRAVIS Group’s performance according to his statements. Turnover managed to increase by 2.2 per cent while earnings before tax gained 20.2 per cent in comparison with the previous year. At 81 million euros, the operating EBIT also increased again by some 9.4 per cent compared to 2017. “However,” affirmed Schulte-Althoff, “We based our plans on other figures in autumn 2017. Our target was more ambitious. Lost revenues caused by the drought period hit agricultural trade and the supplies business particularly hard. While our broad portfolio helped us endure this situation, the animals, machinery, markets and energy business units only managed to recover their loss of earnings to a certain extent.” Taking the entire crop year, from harvest 2018 to harvest 2019, Schulte-Althoff placed the drought-related gap in earnings before tax at 40 million euros. AGRAVIS employees developed pragmatic solutions for customers and did a good job under these circumstances. “That’s why we were able to gain market shares and expand further. We made steady progress.” This is also evident from the growth in equity capital, which increased to 581 million euros by the end of the financial year 2018.