Financial year 2015
AGRAVIS a strong player on a difficult market
"The weak grain prices as well as the weak energy, meat and milk prices have not made life easy for us in the past financial year of 2015," explains AGRAVIS chairman, Dr. Clemens Große Frie. "We have asserted ourselves strongly in a difficult market and once again shown that AGRAVIS is a 7-billion-euro company with stability and perspective."
According to Große Frie, the past financial year has been "quite fast-paced and has demanded a great deal from us. A significant effort was needed to achieve a turnover of around 7 billion euro – 6.94 billion euro, to be exact. However, we have done it – despite a highly challenging market environment." In the financial year of 2015, AGRAVIS Raiffeisen AG was not swayed from its fundamental growth trend and showed that "difficult market situations must be tackled with an entrepreneurial approach". This becomes particularly evident when looking at the company's earnings before taxes. "With 45.1 million euro, we have been able to achieve earnings considerably above the level of the previous year." Große Frie adds: "AGRAVIS has achieved very good earnings in all fields – there have been problems in only a small number of areas. In the overall earnings, there were setbacks resulting from currency fluctuations and market developments in the highly volatile agricultural products industry. This field was not very productive in 2015. Here, it was all about reining in costs, but this was not always possible."
Alliances, growth, profitability, controlled international growth – be it via the company's own subsidiaries or international investments – serve as signposts for the AGRAVIS Group, as Große Frie puts it. "We are not a global corporation; we are a solid German company that pursues entrepreneurial goals and has developed a good position as an employer. This is reflected in what is now our third successful placement in the FOCUS employer rankings."
"For the continued profitable development of the AGRAVIS business, we want to internationalise at a controlled pace," remarks Große Frie. With the big picture in mind, it makes sense that the company has launched the agricultural trading activities of Getreide AG under the name of Ceravis via DAVA AGRAVIS International, together with Danish partners, Danish Agro and Vestjyllands Andel. In 2016, Ceravis AG is to be expanded into a powerful company with a turnover of 1.3 billion euro. It was for this purpose that AGRAVIS handed over its former subsidiaries in Schleswig-Holstein and Mecklenburg-Vorpommern, namely Fugema Futtermittel- und Getreidehandelsgesellschaft mbH in Malchin, Raiffeisen Mölln GmbH & Co. KG in Mölln and Raiffeisen-Zentrum-Idstedt GmbH in Idstedt, to Ceravis AG on 1 January 2016. This provides Ceravis with a good starting position in the north of Germany.
It makes equally good sense that AGRAVIS is currently a participant in the international trade company Bögel, of which it has taken over 33 percent – subject to the approval of the antitrust authorities. Bögel has more than 125 years of experience in the domestic and international trade of animal feed components and wants to continue its profitable growth in the future. AGRAVIS will gain access to the direct procurement of feed components, such as palm oil and palm kernel expeller, as well as to procurement markets in Asia.
"These international milestones will help us to secure and expand our profitability as well as our market shares and market access. We must be ready to take steps today that will become pivotal tomorrow," says Große Frie with a view to the future. "The distinctive, recognizable willingness of AGRAVIS to change plays a significant role in our successfully achieving this."
On the domestic market, AGRAVIS Raiffeisen AG documents a considerable number of acquisitions, cooperations, alliances and investments that direct its focus towards continuous growth. "For example, we have expanded our animal feed business by taking over the Heidemark plant in Holtinghausen, and our technology business by taking over various regional traders in agricultural technology," explains the AGRAVIS chairman. In the past ten years, the overall turnover of the AGRAVIS Group has grown by about 1.7 billion euro through mergers and acquisitions. "The scale is remarkable, in my opinion," comments Große Frie and adds: "At the same time, we have sustainably expanded our investments in the existing AGRAVIS site structure as well as the company's equity base."
By retaining profits and issuing participation rights, AGRAVIS has seen its equity grow to 515 million euro – which, by the end of 2015, has tripled since the start of AGRAVIS Raiffeisen AG in 2004. "This is a development that highlights the solidity and the attractiveness of AGRAVIS."
Further growth and establishing even closer customer relationships are focal points for 2016. Große Frie revealed that new investments of 60 million euro are planned above depreciation in 2016. Further cooperation, alliances and acquisitions are also on the agenda. "Currently we are taking a vital step in cooperative partnership with 13 cooperatives in the region. As AGRAVIS, we will hand 50 percent of our company over to AGRAVIS Kraftfutterwerke Münsterland GmbH – which includes the plants here in Münster and Dorsten. This enables us to run our production in cooperation with our customers and strengthens us against the competition. It means that customers are also shareholders." This is a model that has proven successful for AGRAVIS.
For the current financial year, AGRAVIS is expecting further development on a subdued market level. "In a normal year, without any currency fluctuations, with a good harvest, good springtime sales, a normal summer – that is, a normal year without a great many exceptional influences – we can expect a turnover of around 6.7 billion euro and a profit before tax of 48 million euro, if price trends remain stable. Why the predicted decline in sales? By selling our three companies in the north to Ceravis AG, we have relinquished around 300 million euro in turnover – and we have taken this turnover into account in the forecast," explains Große Frie, adding: "However, it remains our stated goal with AGRAVIS, to hold firm to our 8/80 strategy – that is, 8 billion euro in turnover and 80 million euro of profit before tax. We plan to achieve this goal in 2018. AGRAVIS has the potential."