pv Europe: Baywa r.e. has announced its intention to sell its trading division. This has surprised many players in our industry. Before we delve deeper: How many employees will this affect?
Frank Jessel: Worldwide, we are talking about 21 companies and more than 1,400 employees. In the past few years we have founded or bought numerous new branches or sales offices, among others in Austria, Poland, Latvia, Lithuania, Bulgaria and the Czech Republic. Last year alone, we hired about 500 new employees.
Where is the focus of your trading business?
Currently on Europe. Here alone we have 14 non-German-speaking companies and about 1,000 employees. Last year we achieved a turnover of about two billion euros in Europe. In addition, we are also growing very strongly in America and in Asia and the Pacific region.
Is the solar components business profitable?
Yes, our solar trading business has never been as successful as it was in 2022, and we were able to further strengthen our position as one of the world's leading solar traders. Of course, problems in the supply chain are also affecting us, like other players in our industry. But we were able to increase our results significantly. Globally, we had a turnover of 2.76 billion euros in 2022. In the past two years, we have also managed to increase our gross profits. In 2022, we sold 3.5 gigawatts of solar modules and 4.6 gigawatts of inverter power.
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Why do you want to sell the business?
The sale gives us the opportunity to continue the success story of Solar Trade. Solar Trade has the potential to increase annual sales of solar modules and inverters to more than ten gigawatts each. Baywa r.e. has six major business units. In Solar Trade, there is an opportunity to divest the business so that it can develop in line with the markets. Through this strategic realignment, Baywa r.e. intends to focus on global solar and wind project development, the expansion of the operational management and energy solutions business units and the expansion of the IPP portfolio. The sale also serves to re-allocate the capital invested. We are therefore looking for an investor who shares our values and wants to take over the global trading business.
The entry of Baywa r.e. brought MHH's solar trading business through the crisis at the time. Is it now time to go your own way again?
That's one way of looking at it. The global energy and climate crisis is leading to an accelerated transition to renewable energies. This leads to a highly dynamic market environment with enormous potential for all market players. In this context, our shareholders want to focus more on solar and wind power plants. For this reason, the project business at Baywa r.e. is to be expanded further. This is also a business with enormous growth opportunities.
Do you want to sell the entire trading business or just selected branches?
The entire solar trade, including Germany, Austria and Switzerland. Only with a new, strong investor can we sustain the enormous growth that lies ahead of us.
When it comes to supply bottlenecks, what challenges are lurking in the trade business?
In addition to the current bottlenecks, the sales prices for modules, inverters or storage will fall in the future. They have to fall in order to further stimulate the construction of new plants worldwide. So we have to move more goods through at falling gross yields. That requires digital processes. In this respect, the photovoltaic industry is still almost in the Stone Age. Many installers still order by phone or email. This has to become much more digital. We need to further expand e-commerce, from planning to delivery.
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What does that mean for investment needs?
I can tell you that. So far, we have invested an amount in the millions in digital solutions. By 2025, we will turn over around one billion euros annually with e-commerce. We have 52 warehouse locations worldwide so far and 105,000 square metres of new solar warehouses in planning. People often underestimate how difficult it is to get very good locations at reasonable prices. These are real challenges if you want to keep up with the growth of our industry.
The decision to sell has been made. How do you proceed now?
Since the announcement, we can't complain about a lack of interest. We are currently holding the first loose talks. The teaser will go out in the summer, by then we will have completed the internal due diligence. The management presentations will start in autumn. If everything goes well, we could complete the process in the course of next year.
What is the mood like among the staff?
Understandably, there is a certain amount of uncertainty. We are counting on consistency and trust, because the entry of a new investor should secure the future of our business and enable further growth. Furthermore, it should of course fit in with our values and our great corporate culture, to which we attach great importance. That is why we are holding a lot of talks with our colleagues in the retail division to explain the necessary and right step.
The interview was conducted by Heiko Schwarzburger.
www.solar-distribution.baywa-re.de
Baywa r.e.
