BayWa r.e. presses ahead with strategic realignment
BayWa r.e. is pressing ahead with its strategic realignment based on an updated plan following significantly deteriorated framework conditions for the entire renewable energy sector. BayWa r.e.'s business model has already been streamlined in the first year of restructuring; strategic market exits and various portfolio adjustments were carried out in rapid succession.
According to the updated planning, the operational business – viewed on the basis of an adjusted EBITDA (excluding special or one-off effects) – will be significantly profitable by 2027. Specifically, based on the current business model, the plan shows an adjusted EBITDA of over €140 million for 2027, and around €150 million adjusted EBITDA from today's five-year plan perspective, by the end of 2030. This is based on the already streamlined and cost-efficient setup of BayWa r.e. Given sufficient financial resources, the day-to-day business remains unaffected by the adjusted planning.
Furthermore, there will be additional restructuring measures in view of the overall difficult market situation for the renewable energy sector. In this context, the company's planning horizon is also being extended by two years to 2030. BayWa r.e. will continue the separation from unprofitable non-core business units, further significantly improve cost structures, and thus unlock additional earning potential as a more compact unit. The Management Board plans to achieve an adjusted EBITDA significantly higher than €150 million in 2030 with a substantially more efficient future setup of BayWa r.e.
Hans-Joachim Ziems, CRO of BayWa r.e. AG: “The restructuring is on track, however, there is still a long way to go. We must account for our reduced business volume whilst maintaining unchanged positive and sustainable earnings expectations. In view of the significantly clouded market conditions, further continuous restructuring measures will be necessary. In doing so, we will focus on specific core markets in Europe. All of this is imperative to create a sustainably profitable, streamlined company based on a then further improved cost structure. I am confident that we will find the right solutions together with the owners.”
Focus on European core markets and selective US approach
In detail, the company will continuously focus on its core markets in Europe. The review of US activities initiated last year has now been completed: Especially in view of the prevailing regulatory and energy policy uncertainties there, BayWa r.e. will pursue a selective approach in the future.
The triggers for the far-reaching measures regarding the realignment of BayWa r.e. are a series of factors adverse to the overall market: Not only in the US, but also in Germany and a multitude of European markets, the regulatory hurdles for all market participants in the wind, solar, and battery storage sectors have risen significantly in recent months.
These include, among others, the massive impacts in connection with energy policy changes in the US (“OBBBA”). Likewise, disruptions in global energy markets as well as dramatically increased geopolitical risks that are to be expected in the future.
