BayWa AG
XETRA:BYW6
Earnings Call Analysis
Q3-2023 Analysis
BayWa AG
In recent discussions, there were questions about whether the company would be paying a dividend, but now it's confirmed they will maintain similar dividend levels from last year. Additionally, the company is on track to significantly reduce its net debt, with expectations of lowering trade inventory by EUR 200-250 million early into 2024, which should positively affect the debt levels.
Interest expenses have been a point of concern, but the company has managed to perform better than expected. The year-end interest expenses are projected to be in the range of EUR 290-300 million, which is an improvement on previous estimates. This is a key figure for investors to watch, as it impacts the company's net profitability and overall financial health.
Global Produce has seen a negative growth of 5% after nine months, which is concerning. However, expectations for growth range from a positive 5% to 8%. This indicates an anticipated uptick in revenue that can range between 10% to 13% due to additional claims and performance improvements.
The company's Solar Trade business is undergoing restructuring, which may include the sale of certain parts previously not considered. This could potentially impact the financials depending on whether the restructuring leads to streamlining or expansion of the business segments on offer.
There's a balance in the renewable energy business, with wind projects generating EUR 295 million in revenues while the solar project business accounts for EUR 163.9 million. This diversity in renewable offerings suggests a strategic approach to harnessing different sources of renewable energy, thereby potentially offering a hedge against market fluctuations in either segment.
Refinancing efforts have been robust, with the largest project being the extension of a Syn loan until the end of 2025. Furthermore, there have been smaller yet significant steps like increasing hybrid bonds and completing private placements. The management of capital and innovative financing solutions are crucial for sustaining business growth and meeting upcoming obligations without undue pressure on cash flows and liquidity.
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Hello, ladies and gentlemen and welcome to the BayWa Analyst Conference Call Q3 2023. [Operator Instructions]. Let me now turn the floor over to Mr. Josko Radeljic of Baywa.
Good morning, everybody, and welcome to BayWa's conference call on the results of the third quarter 2023. With me on the call today are Mr. Marcus Pollinger, CEO; and Mr. Helber, our CFO and my colleagues from the Financial and IR department. As usual, Mr. Pollinger will comment on the market and business development of each business unit and Mr. Helber will provide you with further details of BayWa's Group financial figures in the first 9 months of 2023 compared with the previous year period.
After that, we will open the Q&A session. I also would like to remind you that you can download all relevant documents for this call from our IR website. In case you have not received it by mail this morning and that this call will be recorded and published on BayWa IR website. I hand over now to Mr. Pollinger.
Good morning, ladies and gentlemen, and thank you for joining us today and for your interest in BayWa AG. I'm very glad to bring you a very strong performance in the third quarter. Our diversified business model has once again proven itself and contributed significantly to achieving an above-average operating results despite the difficult market situation. However, the high interest rates remain a challenge, the effects of which we must take even more into account in our trading strategy and in our inventory management.
Please follow me on Slide 4 for the revenue and the EBIT. Of course, please be remind that the comparison with the previous year 2022, is probably not the right thing to do. I wouldn't look too closely on that one because it was an extraordinary good year as you all know. The revenue and earnings determined by a strong decline in commodity prices compared to the previous year, as I just mentioned. We see a quarter -- third quarter results of EUR 214.6 million EBIT, which is a very good result, looking into the past as we will do on the next slide. And probably the most important information today is that we as management at BayWa, me and my team we strongly confirm our EBIT target in 2023 of EUR 320 million to EUR 370 million.
Turn over to Page 5. This is what I just mentioned. This is now stand-alone third quarter. It is as you all know, a quarter, which we normally see the harvest, and we don't have the results, especially from the renewable energy business. So we didn't sell any big project in this quarter. So this quarter reflects the performance, I'd say, of the AG of the Agri Equipment part of the strong Cefetra part and not so much of the renewable energy part.
We will see a huge contribution to the EBIT and the [ EGT ] of the Renewable Energy part in the last quarter, as you following our company for a longer period, already know the last quarter is always the most important quarter. On Page 6, you find the EBIT compared to the years of '19, '20, '21. And you see it's a very good operational performance, which we, as I mentioned before, need to cover the high interest rates, which Andreas Helber will talk about a bit later.
I'll just follow me into our operational business is on Page 9, starting with the renewable energy market. And here, you see the price development of the solar panel, which is a very -- well, it's actually a very good development for our project business for our big solar parks, it's not a good development for our solar trade business and the whole market for our project selling our solar trade business, which I will come to a bit later.
Following me on the next slide, Slide 10, you see that the renewable energy business is still stronger than in the year '21, even though we didn't sell projects up to now, but the demand and especially of the solar panels and especially the IPP and the trading of our energy is a strong contributor to our EBIT in the renewable energy sector, of which we are very happy. Now let me just highlight a bit on our solar trade business entity, which we are willing to sell.
Unfortunately, the market environment, as you all know, the overproduction of the panels in the Chinese market is not very favorable for selling this business in Q4 and Q1 2024. So we will take ourselves a bit more time for selling this business be assured that we will sell this business in the '24 year to come because as we mentioned before, we have to look at our portfolio very closely, and we decided that we will sell this business.
There are interest. There are investors who are strongly interested in our business. But to be very honest with you, the price range we assumed and we have calculated is not reflected in the market. And so we will take ourselves a little bit more time and start and restart the whole process beginning next year. Looking at the next slide, Slide #12, you see our, let's say, conventional energy business. I'm very happy with the performance in this one. We see a strong performance in our charging business. As you know, we have the BayWa Mobility solution company, a company who provides and build charging stations for electrical vehicle.
You are all are familiar with the situation of the -- or the market situation of the electric vehicle. We have about 1.8 million electric vehicles in Germany today as today, and it's going to be up to 15 million in 2023 -- in 2030, sorry. So this is a huge market to come. This is a huge market, which will -- we will be -- we will play a big part in that one. We just won the so-called Deutschlandnetz in which we will build new charging stations in all over Germany and it will provide a good amount of money into our EBIT in the Energy segment. And it's going to be a good future business.
Looking on the next slide, the Agriculture business. As you all know, the market development, especially the price trend of wheat and Rapeseed, the prices fall dramatically from the higher peak in 2022, and our trading teams of Cefetra, [indiscernible] and in Munich as well in Vienna managed very successfully to deal with this falling prices. And within the strong execution of our contracts, I'm very happy with the margin these teams contributed to our earnings.
The market development of the Agriculture Product, as you all know, you're familiar with the global grain balance, and you see that the production and consumption balance out. We see a short supply despite our higher output, which means good margin for our business and a good future for this -- especially for our trading business ahead.
The upper -- on the next slide, Slide 16, you see the input business, the Crop Protection fertilizer. And as I've already mentioned, the commodity prices have fallen and even though the fertilizer prices, of course, but our team of crop protection and fertilizer managed very well to get out the stocks before the prices fall, and so we see a very good result compared not to last year but to the previous years in the fertilizer and Crop Protection business in the first 3 quarters.
On the other -- on the right side of the Page 16, you see the -- our global produce -- our fruit business. And this is what I meant in my beginning when I was talking about the diversified business. Bear in mind that we have got 2 large business units. It's a global produce, which has seen this cyclone in New Zealand and therefore, doesn't provide any or not the amount of EBIT we have budgeted as well as the building material business, which everyone knows it in Germany, the market is quite down, to be honest. And so this big part of the company, these 2 great business units do not contribute as they should have to the results.
And even though we stick to our budget, we stick to our forecast of EUR 320 million to EUR 370 million, which is -- which I am a CEO, I'm very happy to be able to bring this information to you today. On the next slide, you're going to find Cefetra, it's Slide 17. Cefetra really is a success story now, the management in Rotterdam achieved a very strong new role in the market of specialty business. This is not only the commodity business, but specialty business, as I elaborated, already in the previous meeting, and therefore, we see a very strong result in the first 3 quarters, and we're going to hopefully look to my CFO, see a 60-ish EBIT in 2023.
Next slide, please. It's 18. And there, we've got our Agri Trade and Service business. I'm very happy with this result, it's quite tough to say this, when you look at the figures and say, well, there's a decline of 70% and is still favorable and happy with the result, yes, I am because the trading business is growing very well. I've just been to our deep sea port in North Germany, where we have deepened the harbor to be able to handle now. So beginning next year, our Panamax ship class, and we've got already 5 trains running the grain from all over Germany from Poland into this new harbor.
So the export of the grain and therefore, the margins are developing very, very well. It's just been on a ship on our big vessel who was on its way to Casablanca. So this is a very good international business, and I'm very happy with that one.
Next slide, please. Let's go back to to Germany to Bavaria, Page 19, you see the Agricultural Equipment segment. It's a very, very strong year, even better than last year. It's a strong demand for service and maintenance. And please, if you go deeper into the details, you have a -- few of you have been to Bamberg. It's not only the selling of the tractor. It's the service and parts, which brings the music to the game to this kind of business. So the population of machinery is growing in our region. And therefore, I'm looking very positively into the future of our Agricultural Equipment segment for the years to come.
Now on the next slide, Page 20. You see now the -- frankly, spoken the problems we see in our Global Produce segment. It's now in the red actually, but there is only an insurance claim of EUR 3 million integrated in that figure, we will see at the end of the day, a positive low figure in the Global Products segment. And then for the years to come as the Apple business is recovering very well in New Zealand. We're going to see better figures in this segment in the years to come.
if you follow me on the other business units, which has a strong, a very hard market today. You see the market developments in building materials and that you -- the permits in Germany for construction and can only say that this business is going to be a very strong and good business for BayWa in the years to come because Germany does need this kind of building material, does need houses, does need need apartments, and therefore, does need all the insulation materials. So this business will come back, probably not this year, probably not in '24 but in '25, we're going to see this business coming back.
As you see now, we are despite other businesses in the -- or other companies in the market, we are still positive with close to EUR 6 million due to the fact that we have our Development department where we construct our own flats and houses, and it will contribute over EUR 7 million to this business, and we also have the DIY market in Austria, which is still strong. So not the results we used to from this business, but it's going to be not in the red for the year 2023. And with this positive outlook, I would love to hand over to my colleague, Andreas Helber, to give you more details about the financials.
Yes. Thank you. And Marcus, and good morning, everybody, also from my side. Firstly, Marcus, I think I can assure you, Global Produce will meet the [ 60 ]. This is something that we can say .
Cefetra.
Sorry. Cefetra, what you are saying?
Global Produce.
[indiscernible] last night, but that was, of course, Cefetra. Starting on Page 25, and it's always the other activities. The sum up of costs being covered here in this segment, the overhead costs and so on. And you see a very positive development year-on-year compared to last year down to roughly EUR 50 million after the 9 months period. And this is, of course, that we had some onetime last year, but also we saw a better performance on our Austria Juice business in Austria as well as higher proceeds from sale of real estate also in Austria being covered. The outcome, and this is, I guess, what you are interested in to see what the last quarter means for all of that last year, it comes up to EUR 100 million roughly, and this will pretty much be less this year.
I guess it's in the range of maybe EUR 70 million which goes all good, maybe EUR 70 million, EUR 75 million or in that range for the other activities as a cost sector. I'll then go through the next 3 slides, and this is the summary, as you know it from the business units, starting with energy consisting of the Renewable energy Business as well as the classical one.
Marcus already went through the details, so I can reduce it on the reflection of the 9 months number, and you see the total performance of roughly EUR 120 million with a positive interest coverage if it goes to the earnings before tax also was 21% below the last year's record number. But on an average, if you see covered through the years, so nobody should be worried about the all year, the full year performance.
There's a way to go the last quarter is expected to get a contribution of roughly EUR 100 million and that will probably mostly come out of the renewable energy sector, of course, a little bit also from the classical energy sector, but as we indicated, there are 2 large projects in the pipeline. It will be the race -- how do you say, the run of the race for December. Again, we probably will have a very nice last month because these 2 projects are mostly closed or at least in December.
On the Agriculture segment, you see the overall performance pretty good after the 9-month period even. It includes the Global Produce. And now unlike the Global produce downturn via the cyclone Gabrielle, which Marcus elaborated on, what is the expectation, almost the rate other than in the Energy business unit is mostly through. There is a portion to come in the range of EUR 40 million to EUR 50 million for the overall performance in the last quarter, driven by a very positive development in Cefetra Group as well as in the Agricultural Equipment, but also from a better-than-expected performance in our classical Agricultural segment and at least Marcus made the comments on that from the insurance compensation that we expect in New Zealand.
And finally, it's Building Materials. This is the situation that we suffer the most from after even the 9 months period, you see it again, the EUR 6 million contribution only underwater when it comes to the interest expense, not covering because, of course, not -- there is a bit to go into -- within the final quarter and the performance in September as well as in October was better than expected, slightly better than expected. The expectations are not high. But I think this is also something that we have to look at in the last quarter.
Summarizing it in the financial statement, income statement on Page 29. It tells you that the EBIT with EUR 250 million is on its way as Marcus indicated on its way to the EUR 320 million to EUR 370 million. The final outcome will be seen, but we also need the EBIT contribution was strong last quarter to cover the interest rate. We are after 9-month period with minus EUR 17 million total net income, which is not quite unusual. It is, of course, the interest expense situation, the development was unusual within the last 12 months, 10x increases. You all know the story about it. So we need a strong performance operational, but we have also seen after 9 months period of negative numbers in the years before.
And one thing I have to elaborate a little bit is the earnings per share. You know that we gave guidance beginning of the year on the EBIT, and this is what Marcus indicated, we will stick to. We have been challenged last conference call a little bit on the earnings per share number. And I must confess I was a bit bullish in putting it into a range of EUR 1 to EUR 2. I haven't seen the 2 last interest increases. And I thought it would be easier to reduce working capital in most of our entities. It went very well in the Agri sector; it went very well in the Building Material one, but it was pretty difficult or pretty challenging, I should say, on the technical equipment, which is a good thing for next year to come, but this is still on a higher level.
And of course, on our renewable energy business, whereas the sale of the project, not only the 2 last ones, but all the other ones and the reduction on the working capital inventory or the inventory levels on the solar trade business went -- it's later -- it's coming in later. As I said, the cash is reducing the interest burden, now is only expected for December. So this impact, of course, also our earnings per share, which I would now say would be in the range of, as we had it years before, in EUR 0.5 to EUR 1, either then EUR 1 to EUR 2. So I think this is what I have to state on the earnings per share.
We are not giving any guidance on earnings per share, as you know, but this is the estimation in accordance with what we did in August. Final picture, the balance sheet number, year-on-year, you see the reduction on the total asset number of roughly EUR 1 billion already. And if you look on last year's performance after 9 months to year-end, there's another reduction being expected in accordance also with the outflow of the renewable energy project and trade inventory. The equity ratio up from year-on-year 13.5% to 14.1%. This is not where we want to have it at the end.
But as you know, we are working on that, both on the total asset number and other transaction that Marcus elaborated on that. And I think this should be it for the time being. This is -- will have a closer look on at the year-end with the outflows that I mentioned to come. And I think with that, we could hand over back to Josko.
Thank you, Mr. Helber. Thank you, Mr. Pollinger. Now it's your turn and we are ready to take your questions.
And the first question comes from Oliver Schwarz of Warburg Research.
I appreciate that the operating results [indiscernible] expectations. However, the interest result wasn't that was, let's say, much more negative than we had anticipated. Helber, alluded to the increase in interest rates as well as to the high level of net debt. When you're looking at year-end, what, let's say, level of net debt would you expect by the end of the year by were to reach when the working capital reductions you hinted at are finally done?
And what's the level of interest costs or, let's say, financial result, what you expect by the end of the year? That would be my first question. Second one is more housekeep. Can you give me [indiscernible] already give that number. I could you repeat the number for the write-down in the solar Trade that would be helpful.
Yes, Mr. Schwarz. I take your 2 questions, but the internet connection with you is very bad. It's very poor. We could hardly really get you really good through here. I hope you can hear me better. Is that.
On my side, it's perfect.
Okay. Then -- yes, but we got the things -- the first -- I'll take the last question first, the level of write-offs that we had included in the 9-month figures is [EUR 1-8, 18 million].
The second question on the interest rate. And yes, you are absolutely right. I have seen the levels coming down in the second half of the year faster than it's now being doable. What we expect our cash inflows from the project sales of roughly in the range of EUR 100 million we are -- but this is only a change of financing. From the running business, I expect another EUR 100 million probably getting in. So this should now for the year and being reflected in the debt level.
It is not the big plunge. I think we are getting through to the work of reducing the trade inventory on the solar module business in the range of roughly EUR 200 million to EUR 250 million within the beginning month of '24, that would further reduce the debt level. But this is a [indiscernible] for the year-end. And the indication for the interest expense, I am now roughly seeing the number that we had after 9 months in a range of EUR 290 million to 300 million better than the number that we had in mind before.
And on the other financial result, we already discussed it in August, I guess, I have the EUR 10 million in mind. It was less than it was last year, but we had a a write-down in one of our Australian projects on the financial side coming into this number. So this is the number I'm indicating for the full year. We are expecting dividends coming in, in the last quarter from our Austrian friends, Raiffeisen Bank International, they announced that they will pay a dividend, which was unclear throughout the year and also the dividend is coming in, in the same amount roughly from the [indiscernible] Bank in Frankfurt.
And the next question comes from Guido Hoymann, Metzler.
I think I've got a few ones, 3 follow ones. First one would be on your developer activities, and in particular, the offshore activities. We have seen these massive problems of Ørsted recently with their offshore U.S. projects and the whole industry seems to be sort of paralyzed at the moment. So my question is, are you still convinced about your decision to move into this business. You could, of course, say you're just starting so until first progress will be made, will be probably in 1 or 2 years' time.
But nevertheless, is that still valid this decision? The second one is on the insurance payment. I think you mentioned what is still to come for the New Zealand damage, but can you repeat that, please? Next one. Would be on the order backlog in Agri Equipment. I think it's still high. You mentioned. But can you also give us the order intake or the development of the order intake quarter-by-quarter this year.
And the last one on the Building Materials business, looking at the development of the construction activity in Germany, which is -- it's terrible I could almost be surprised that your business is still generating positive results. So what is still going well there? What is the miracle behind that? So I guess it's probably a renovation and public construction. But could you elaborate a little bit on that, please?
Mr. Hoymann, Marcus Pollinger, I will start with your last question. Building Materials. What we achieved in the last, I guess, 3 to 4 years with Building Materials, we broaden our portfolio. So it's not only the logistical part and distribution of Building Materials is going into specialization. So we have -- as you already mentioned, the public sector.
We've even been included into -- it's probably not the best project. But for us, as a trader, it was a very good one, [indiscernible] the airport in Berlin where we delivered in the lending strip technical equipment before even one plane touched the ground. As I mentioned before, we've got our DIY in Austria and in this business, it's called [indiscernible], is doing very, very well. And we've got our project development company, which provides a a good impact into the EBIT.
So it's a very broad portfolio. And what we have done is -- let's say, we've done a bit of a housekeeping in the last year. We have a very, very strong very good, efficiently performing logistics. So our trucks are now our own fleet is not standing around. It's now working for the agricultural business, it's bringing fertilizer to the farmers. So as we achieved in the last years, to get the whole logistics not only into the business units, but looking on a broader view of the efficiency of the logistics, this will help us. And then we put some measurements into place very early. So we sold branches. We closed down branch -- 5 branches. Now in Germany, we have a hiring stop for the last 8 months.
And still working very high in cost efficiency in this segment. So this will help us to get over this period of time. Your third question was about the, the Agricultural Equipment segment. So we do see a decrease of about 6% in the intake of new machinery. So the demand is slowing a bit down, but not as dramatically as in other businesses, I was just speaking to the President of the farmers last year yesterday, and he told me that it's still for a farmer, the best way to invest in our high-class machinery.
So I'm very optimistic about that. Then I would hand over to Andreas for your second question, but just give me -- let me answer your first question coming concerning about the offshore. Well, please keep in mind, the offshore is a very, very tiny little business for BayWa. Renewable Energy, to give you an idea, we've got close to 4,000 people working in this business unit and the offshore business, 20 to 25 people.
And what we are achieving to do and there's only one little project now or the plan -- the business plan the offshore is just developing the project, ready to build. We will never have build a project like this ourselves because the risks are too high. We're just developing the project, getting all the rights and then sell it. As we do now, for example, in this huge solar project in the U.S. It's called Big Creek. It has over 500 megawatt. It's already -- it's ready to build, and now we're selling it on a very high margin. And this is the same with the offshore business. And then I would hand over to Andreas.
Yes. Mr. Hoymann. That was the last outstanding question was on the insurance claim, with global projects and what we expect there. I think we -- Marcus already indicated that we -- an amount of EUR 3 million is already included the total claim roughly what the guys in New Zealand are making up is in the range of some EUR 25 million in total.
But we do not expect everything to come in. The Global Produce is now at after 9 months standing minus 5%. I would see them in a range of 5% plus to 8% plus. So a range of maybe 10% to 13% additionally coming out of this claim and performance, of course, but mostly of this claim.
The next question comes from Markus Mayer, Baader-Helvea.
I have 2 questions, if I may. The first one is on the restructuring of the selling process of your Solar Trade business. Does this mean when you say it will be restarted, it sounds that it would be also restructured. Does this mean that you split up this potential business for sale? Or will you include additional parts. You've previously not included. That would be my first question. And then my second question is, given the back-end loaded business in Q4, at least out of the indication, do you expect to reach more the lower end of the guidance? So is the middle or upper point that possible.
Great questions. I would like to hand over to Andreas.
Maybe on the first one and on the Solar Trade transaction. Firstly, once again, the feedback that we got from the investors was pretty good. Of course, and we have seen other transactions being canceled. Think about the IPOs that we have seen. I think the market environment on investment of that size was not very favorable developing within the last couple of weeks or even the last 2 quarters, I must say. And finally, I think -- now at the closing quarter, so we always know that from other transactions, it's better to start with a fresh book with fresh investors and with a new move in '24. So it's nothing that we see structure wise that we have to change something. What we see is that mostly the private equity investors were quite happy. But also the more strategic investors are looking on this business. But that might be a fact that it's a bit too big for them to take it at one bite. So I'm not talking about restructuring the transaction or the business on it on a whole. But of course, we are looking on taking the feedback from the investors that we get, but we are -- and this is a very strong confirmation from the -- also from the CFO of the group because it's quite crucial for me to get the proceeds in whatever it will be at the end of the day, but to get the proceeds and we stick to that strategic division to divest the solar trade and to cash it out.
But I think if we can do -- we take the time, as we did remember 2 years again, when we took the other investor into the renewable energy business, that these transactions are not being done in a hurry. We take our time. It took us 2 years then, we will not have the time this time, but we need just some better -- some more time and a better window for investments to conclude or to close this transaction. And by talking too much, I forgot the other question that was.
The second question was basically on the guidance and the [indiscernible] business, lower, mid or upper point even if possible.
I would say, if I don't know it better, I would say it's in the midrange, yes. So we are probably not on the lower, not in the upper, it's for me, it's in the mid run. As always, it is. We have also some risk in the final quarter. You know it, as we indicated, a lot of the results in the renewable energy relies on these 2 transactions being closed. You never know until the [indiscernible] is talking what will happen. And so we are very positive on this, but my best guess is what I just indicated.
Maybe if I can still add on question on these 2 projects. So even if they would be not signed in the fourth quarter of this year, I'm pretty sure that will be signed in at least in 2024, correct?
Yes, of course.
The next question comes from Heinz Muller, Dr. Kalliwoda Research.
Heinz Muller speaking. I would like to raise 3 questions. So in cooperation with the Deutsche Kreditbank AG, you started a project called Climate and Agriculture in order to support farmer technically as well as financials. So perhaps you could give us some more explanations of this project? And the second question is with regard to the building material. So do you plan to implement the concept of the smart store of BayWa Building Material, which we implemented in Altoting. Also to other segments like, perhaps, agriculture, for example, in order to reduce the required manpower. And the third question is with regard to the agricultural equipment. So the program of the so-called [indiscernible] will stop in the next year. So do you expect a negative impact on your equipment segment due to the fact that this program will run out.
So Mr. Muller, thank you very much for your question. I'm going to start with the third one, the [indiscernible]. So as being one of the largest -- worldwide largest trader for tractors and harvesters, these products are not included into the [indiscernible]. So we do not expect a decline in the business due to the fact that [indiscernible] won't be in 2024. We do hope for the Agritechnica, one of the largest trade fair for agriculture machinery, as you know, starting this Sunday in Hanover that this trade fair will stimulate the whole business and will push even more in quarter -- in the fourth quarter, our Agri Equipment business as well. The second question was about our Smart Store in Altotting. Yes, absolutely. This is a technology not only for the building material, but also for the Agri input business. And as you probably have heard, we've just built 2 new branches under the new strategy under the new concept, 2 shops, where the technique -- so the Agricultural Equipment and the Input businesses are aligned under one roof to bring down the cost to raise the efficiency in Nurturing and Forchheim and this is the way we're going to develop our infrastructure in the agricultural business, as you might remember, I mentioned in Bamberg that the money employed in this business, especially in the Agri Input business is too high.
I want to get out EUR 150 million out of this business and the infrastructure is one part of this new strategy when it comes to bringing down the manpower, bringing down the stock inventory, et cetera. And your first question was about the [indiscernible]. Yes, as you know, my colleague. [indiscernible] her own farming experience in the very northeast of Germany. She runs a -- she runs, you have to see, a business with 3,000 hectares, so she's very close to this kind of ideas and so-called [indiscernible]. This is, of course, an idea for our sustainability business, but it's just in the very beginning, it won't contribute to the EBIT, unfortunately, to the cash flow. It's more -- it's a nice marketing tool and that's probably it to be truly honest to you.
The next question comes from [indiscernible] BadaBank.
Two questions on the Renewable business. First one, do you see a limitation or potential delay to the development of the PV business, if the ban on Chinese modules should come to the EU? And second one, can you explain how is the split between solar and wind revenues in the third quarter?
So year-to-date, thank you for your question. It's a very good question. Year-to-date, we have to go into the figures to see the split here. So I'll probably start with the first the first question. Banning any kind of materials from the EU, it's going to be a tough one because we do need renewable energy to supply enough energy to our industry and to the whole of Europe.
So yes, it's going to be a problem for the EU taking into consideration that 80% of the solar panels are coming from China. But as you have already noticed, probably now there are other routes that are opening via India, for example, the very basic, the materials, of which the panels are produced are still from China, but they are manufactured in India.
And even in Saudi Arabia, there are companies now producing solar modules. So we will get our models I don't -- I'm not afraid of that one. But I don't think it's going to be a very smart choice for the EU to ban a product which is truly, truly necessary to to build up our renewable energy supply. The second question, the revenues actual, I don't -- split up the wind projects at EUR 295 million revenues and the solar project. It's just the project business. It's not a Solar Trade business is 163.9.
So at the moment, there are no further questions. [Operator Instructions] And there is 1 question coming from [indiscernible], Kepler Cheuvreux.
I was reading -- I don't know if you mentioned it, I came a little bit late, but can you tell me about your different options that you're pursuing to refinance your business? And how would it look like? What segments is it going to be? And yes, how you're going to refinance it?
This is probably a question for the CFO on refinancing. We just completed the largest refining project that was the the Syn loan that we extended until the end of 2025. So the other transaction that we went through this year and are going to finalize smaller ones. We increased our hybrid bonds in the second -- or the third quarter, I guess it was in the third quarter already from -- on a smaller portion from EUR 60 million to EUR 100 million upwards.
What else we did a private placement with the State Bank of India of EUR 25 million, and we are now in the final steps of our Schuldscheindarlehen, 2023 in the range of roughly EUR 70 million to come in November and December. This is the steps that we are going through in 2023. For 2024, what we have on the list is the refinancing, if necessary, if required, of the green bond, which is expiring by the end of June.
But as I said before, I'm not quite sure if we really needed to refinance it because we are reducing sharply the resources taken in the renewable energy business, and we have a completely different situation on the [architecture] so far. So this is one thing that we are going to prepare to be prepared. This is all that we have on the agenda now for refinancing the business. The most thing is through already and the biggest take was the extension of the EUR 2 billion Syn loan financing this year.
So thank you very much. As there are no further questions at this point, I'd like to hand it back to the speakers.
Thank you very much for your time and your interest. I think it's a little bit too early to wish you Merry Christmas. So I hope that we will see many of you at the Eigenkapitalforum in Frankfurt by the end of this month. Until then, we wish you a good time.
Thank you very much.
Looking forward to see you. Thank you so much. Have a good day.