Annual press conference: The 2017 financial year

“2017 was a year of growth”

As Andreas Rickmers, head of the agricultural trading and service company since January last year, explained, 2017 was a year of growth for AGRAVIS Raiffeisen AG. “In general, it was a tough year, with difficult harvest conditions harvest conditions, fierce competition and public debate about present-day agriculture. Given this environment, we have positioned ourselves and worked with the Raiffeisen cooperatives in our operational area to lay the foundations for growing market share and increasing turnover,” said Rickmers. In particular, the major investments in AGRAVIS’s core strategic areas investments in AGRAVIS’s core strategic areas and in customer retention have paid off. “Our investment of around 87 million euros is well above what we originally planned, but the market was offering opportunities that we wanted to exploit,” explained the Chairman of the AGRAVIS Board.

AGRAVIS Raiffeisen AG turnover up by 3.8 per cent

Overall, AGRAVIS increased turnover by around 3.8 per cent to 6.4 billion euros in 2017. Particular contributors were agricultural trading, the compound feed compound feed and machinery division machinery division and the retailing retailing and energy energy areas. Overall, AGRAVIS improved EBIT by 7.3 per cent to 74 million euros.

Systematic strategy process initiated to establish foundations

“Structural change is ongoing and unabated in agriculture and the agribusiness. This means that the AGRAVIS Group is engaged in cut-throat competition, as we found out in 2017. But our aim is to leave the arena victorious,” affirmed the Chairman of the Board of Directors, Andreas Rickmers. The company, based in Münster and Hanover, embraced the looming challenges early on, and drew up targeted plans for the coming years in the second half of 2017, in the form of the “Hanse” strategy process. “With Hanse, the focus is on the customer's interests, the customer's needs and customer contact. But we are also hoping that the programme brings together values and goals, such as trust, dependability, responsibility and success in the cooperative association. What’s more, we also want to show off our strengths as an employer employer – open, courageous, efficient. That will automatically result in further growth. Over the mid-term, we are tying it in to a turnover target of 10 billion euros,” explains Rickmers, “And, more than ever, we and the Raiffeisen cooperatives are aiming to be the first point of contact for domestic agriculture.”

In 2017 AGRAVIS achieved several milestones of significance for the future. These include, in particular, our partnership with RWZ Rhein-Main eG in the Raiffeisen Market Raiffeisen Market area and in the feedstuff segment feedstuff segment. During this last fiscal year, AGRAVIS took over the Raiffeisen Market segment from RWZ and took majority stakes in the feedstuff plants in Wiesbaden and Neuss. The launch of the “myfarmvis“ “myfarmvis“ agriculture portal is also a vital part of AGRAVIS's customer focus. “It’s all about giving customers convincing solutions, both digital and analogue, which offer them real added value,” said Rickmers.

Tight cost management and a clear customer focus

Looking at 2018, Rickmers predicts modest growth. “We're planning for a turnover of around 6.5 billion euros, another modest increase in EBIT and earnings before tax of around 42 million euros. But to achieve that, we need tight cost management, a clear customer focus and further development of our operational business.” So the key business figures for 2018 should already be showing improvements deriving from the measures taken recently. “We're expecting the first positive effects from our investments and from the integrated acquisitions,” said the AGRAVIS Chairman.

He is also anticipating an upturn in the flagging agricultural products business. “We’ve reorganised in this area, to focus particularly on our supply and service function for cooperatives and our own plants.” Seeing as, despite a small increase in turnover and better operating profits, AGRAVIS suffered a drop in earnings before tax to 25.3 million euros in 2017, primarily due to one-off expenditures. Rickmers says, “This underlines how crucial it is that we continue to run with the systematic strategy process we initiated in 2017. Because the bottom line is that we need to plan for how AGRAVIS can improve turnover and profits and, ultimately, give our customers, staff and investors a successful future.”