Ladies and gentlemen, good day and welcome to the Baihua Analyst Conference Call Q3 2020. Today's conference is being recorded. At this time, I would like to turn the conference over to Jos Korodovich. Please go ahead.
Yes. Good morning, everybody, and welcome to our conference call on the results of the Q3 for the fiscal year 2020. As usual, Professor Claus Josep Lutz, our CEO and Andreas Helder, our CFO, will guide you through the presentation. At the end of the presentation, we will be happy to take your question. All relevant information has been sent out this morning.
Additionally, you can also download it from our Investor Relations website. I will hand over now to Professor Claus Houssz.
Mr. Rodelich, thanks. A warm welcome from my side as well. Good morning to everyone on the phone. I would like to lead you through the presentation.
I guess, you have it in front of you. I always say, we'll take it. First, a personal remark. This is my 5.0 Analyst Conference over the last more than 12 years, being in the position as CEO of Baibars. Okay.
Thank you for the congratulation. And now we come to Page 4. Page 4 is the summary of the group for the 1st 9 months. So it's an extraordinary positive result, which we can offer to the capital markets. The 1st 9 months, our revenue is €12,100,000,000 more or less flat, a little decline due to the disposal of Tesol, our fuel station company, which we sold last year.
And of course, also the volatility of the commodity markets and the oil price, I'm coming back to that a little bit later. Very positive result and is a real result. It's not adjusted. It's not pure operational or something like that. It's the real EBIT plus of 33 percent from €77,000,000 to €102,000,000 And in this result, we embedded also the burden of around about €18,000,000 due to the corona crisis, which was absorbed in this P and L statement due to the excellent performance of our operational unit.
And the extraordinary income of 2019, we made some sale and divestments, as you know, may have been compensated. And as always, and we are more and more used to that, the project development business of fiber renewable energy will really take place in the last quarter and it's the last 4 to 6 weeks as it happened over the last year. So we are still expecting a huge rise in revenue, but also in our profitability due to the Renewable Energy subsidiary. So the overall picture is very positive. Baiva is of essence as a service company for Agriculture, especially Energy and Building Materials.
As you know insofar, we are not really suffering at this point in time due to the corona crisis. Also the supply chain is more or less okay. And also the flow of the commodities and the goods all over the world had no breakdown. So a very positive picture. Now let's turn to Page 56.
You can see here the Q3 result, which is really very positive, nearly €50,000,000 in Q3. The overall picture in comparison to the previous years, €102,700,000,000 is a very positive development. We turn to Page 8, the overview of our energy sector. And here, the market the international market developments, no change to the previous analyst conference a few months ago. So the renewable energy, the forecast for the global installation in 2020 is still valid, 66 gigawatts for onshore wind facilities and 127 for solar facilities.
So no change to our forecast. So far, it's an increase in the wind business of nearly 20% year to year and 5% in the solar business. And you'll see that especially in Germany, the installation from January to August 2020 has been increased again of 30.2% to 4 gigawatts coming from more or less 3 gigawatts. So a very positive outlook from an overall market perspective for Baiva, which is affecting positively our business as well. The conventional, the classical energy sector is in extremely positive and very good shape.
You will see that in the figures. And we are we have some benefits from the decline of the Brent crude oil price, of course, and a very high demand due to the crisis from the customers. So this increased demand is the key reason for this very positive result. Turning to Page 9. Well, this is just a flashlights.
Of course, much more important will be the final year result, which we are going to report in March 21. So you see here an increase of 23% in the revenue and €22,000,000 EBIT. But this is just due to the fact that we sold 2 wind farms in Germany and the Le Chonron in France and the Wansoula Pak in Malaysia. Very positive in this context is our PV trading, trading from MoDuros is nearly 30% higher on a year to year basis. And the converters, we sold 34% higher than in 2019.
So our success story, which started more than 10 years ago as we established our Vaibar Renewable Energy segment still wetted. The tendency is very positive. And I'm coming back to that a little bit later because I think you expect a comment from my side regardless of the equity increase, which we are planning, and we are talking about that for more than 1 year. So maybe the one or the other guy here listening to me is a little bit impatient. But I think I can relax you a little bit later.
We come to Page 10, the conventional energy sector. The revenue is lower due to the price development, as I said. And Pesol is not anymore a part of our group. But nevertheless, the margins were very positive. And the VAT reduction was the reason for the upfront buying of our customers with a positive impact on the bottom line.
And we well, you see it. It's 21.5% to 26 In a sector which is over years shrinking, this development is very positive because Tesol was, from a profit point of view, more or less the most important part of our international energy sector. Now we were able to mitigate the burden more or less what we had due to the sale of Tesol, which we sold for a sensational price, by the way, maybe you remember. Turn to Page 11. I don't want to comment too much about it because I don't want to comment at all because a little bit later, Andreas Helber will explain to you the financials, the P and L and the balance sheet.
So we turn to Page 13, the agricultural sector. Again, the market development internationally, the agri commodity prices, we have a higher volatility over the last months. Since a few weeks, we see an increase of grain prices. So especially FAST is going to get some benefits out of that. This is a very positive development.
And nevertheless, due to the global grain balance, you see that on the right side of the slide, the storage is going to be increased of around about 20,000,000 tons. That's the forecast on a global basis from 2020 to 2021. This probably means that we do not see we do not expect a real price really over the next months. Nevertheless, as you know, I'm very careful. You must be cautious with the focus to the behavior of hedge funds, algorithm traders and support at the Decargo Board of Trade.
So you never thought exactly what's going to happen, but fundamentally, I don't expect a rally. Turning to Page 14. Here, you'll see past 5 aircrafts of mine in trade. By the way, we are going to change the name of this unit in Rotterdam, this is a grain trading operation. Cifetra, Cifetra brand well known in the markets of the world.
So, Basel is a little bit artificial and management is going to change. We have a decline of 10% in the revenue. Why? Because we do not make revenues where we don't see a real chance of profit. And it's getting more and more important to us that we are successful with our specialty strategy.
Maybe you remember, we changed the strategy of Fast over the last 2 years because we made some acquisitions in the specialty sector like organic grain, vitamins, minerals and so forth. Complete food industry, feed industry. And it was our intention to increase the profitability in the specialty sector. First of all, this is very successful. And also over the last weeks, get some profit from the international soy trading due to the price development, but also supply chain.
The supply chain management is still in order. Turning Page 15, our agri sector, the rest of the agriculture business and especially that's Germany, Austria, Eastern Europe and our international operation Global Proteus. First of all, we have a great harvest in New Zealand, much better from the quality point of view, but also the volume comparison to 2019 with a weak apple harvest and season in Europe. Nevertheless, the demand was very high due to the corona crisis and the apple prices in Germany. They see, at this point in time, a 5 year high with an increase of probably something 50%.
So Global Projects, we'll see we will have a very good performance coming back to that because in a moment, the input resources business is weak or weaker as it was over the last years because of the regulation of Fresenion with regard to fertilizer, then the low energy cost oil price development in the global market, These are the prices of fertilizers, so we are suffering here a little bit. And also the overall demand for crop protection, of course, due to the climate situation in Europe was weaker in previous years. The agriculture equipment or the machinery business of 5R is really in a very, very good shape. And we see here in the international market forecast and the market development an increase of 7.7% with regard to the registration of new vectors in Germany, the biggest market in Europe, also the investments in stable and stable technology, stable equipment of the pharma is declining less demand for the previous year. This is a little bit consolidation process in the farming business, especially in Germany and in some other European countries.
Turning to Page 15. So you'll see Global Proteus maybe. I'd say we will be much better than last year, but it's exactly the same profit, EUR 30.2 billion to EUR 30.2 billion, a little increase in. What is the reason for that? Last year, we had a onetime due to the sale of the headquarter Marcheng in Auckland.
Was around €10,000,000 And so far, operationally, we are much better than last year. Also, the acquisition we made a few months ago, Freshmix in New Zealand is contributing 2,500,000 operational profit to our global products. So finally, we expect a very good year in 2020. For us, the operational strength has been improved over the last months. Turning to Page 17.
This is the weakest figure I have to show to you, And this has to do with some significant reasons here in Germany, especially, but also Austria is affected. First of all, we are more or less flat on the revenue side, and the profit is down to CHF 6,700,000. This is not at all satisfying due to the fact that we are picking up APIS bottom line if you include or if you deduct the state tax and so forth. So we are really negative. The reason for that is we are going through a very hard and also strong and strict restructuring process in Germany.
We are reorganizing ourselves in Eastern Germany, and we are also reorganizing the site structure, silo structure, the harbor structure and so forth as well. And in Czech Republic, for instance, we are in a restructuring process. Also in Austria, we have to change some parameters for our business. So in other words, the process is tough. We are also laying off people.
But the restructuring cost, the fees, the severance packages are not covered by a restructuring accrual. In other words, it's completely included in the P and L statement. So what we need here is patience for the next, let me say, 2 years. But it's not only internal restructuring process, which we are going through. It has to do with the new regulations of the European Union, the uncertainty in regard to the gap between the IP policy in the European Union and the consolidation process in the Arctic sector in many European countries.
In other words, that's a normal restructuring process. And personally, meanwhile, very positive and also pleased with the operational development in our local grain origination and supply chain management. I'm much more positive with the input business as I was a few months ago. And our responsible board member, Markus Fellinger, is by the way, his contract was extended last yesterday by the Supervisory Board, another 5 years on top. He is one of our really great talents we have here in the Board, 40 3 years old, and he's responsible for the restructuring process.
And he was very successful in restructuring the building materials sector a few years ago, so is really qualified for this. But we need patience. This is a process which can't be finalized and the growth can't be achieved within a short period of time in 2 years. And he gets the money and he gets the time. Turning to Page 18, the machine food business, really great performance.
We have an up of 11.1 percent in the revenue, and you see the profit is very positive due to the increase of sales, the new track record of 18.5% or what is the figure, 18% on a year to year basis. And the used equipment by weight has a decline of 13%. What does this mean? That the farmers are investing in technology. Why?
Because they want to protect their money. That's the background for all these investments. Page 19, Andreas is explaining that. We're coming to the business materials sector. The overall room is still valid.
We don't have any break here in Germany, especially you see that on Page 21. So I'm personally very positive. We turn to Page 22. The Building Materials segment revenue has an increase of 10% and the EBIT, 68%, nearly EUR 40,000,000. This is really sensational background.
So that is the boom on the one side in the construction sector in Germany. But on the other hand, the change of the product mix and the change of the strategy in the business over the last years. So we are meanwhile part of building together in joint ventures building, especially apartments, houses and so forth. So that is the first time included here. In 2020, we expect just out of the project business, it's a small profit, but the first step around about EUR 2,000,000.
Then we have higher earnings driven by the gardening and the landscaping construction at plus 20%. And we have also very positive developments in the e commerce business. We are now market leader in Germany. Of course, the revenue is still small, but the margins are much higher. And so far, we believe that due to the fact that vacation doesn't really take place, the budgets of the consumers will be invested in gardening, homing, construction and so forth.
Page 23, no comment from my side. That's Andreas' cup of tea. 24, here you see he's smiling. Page 24, the innovation and digitalization segment is always the same. You see here, it's not a real operational loss.
It has to do with our investments in e commerce, in the software for smart farming, precision farming and the digital farming process, which is not yet finalized. And of course, the e business development is expensive, but we need to be part here of this development. We are jeopardizing our business. Page 25. Don't be too astonished that we have EUR 43,000,000 load very percent with the corona crisis on the one hand that run about 18,000,000, 20,000,000 euros and the onetime of last year are not in the course.
And we expect a lower figure maybe end of 20 20, we will see I don't know. It depends a little bit on the sale of real estate. As always, so that's quite usual. But due to the fact that we have a much higher operational EBIT in comparison to the previous years and we have this load with other activities to carry. You see the operational strength of this conglomerate fiber.
And I think this has to do with our city, the globalization, our international operations and the restructuring process we through. And this makes me very optimistic also for our agribusiness that we are going to achieve more positive results in the next years, especially Germany, the international business, as you have seen, is very positive. So I hand over to my colleague, Andreas, and he leads you through the financials.
Yes. Thank you, Claus. What could one add to this excellent presentation of the numbers? There's not really a lot of potential comments that I would make or could make. I think to summarize it, and we have the numbers coming on the next two slides.
To summarize it, it's really worth to underpin what Claus took mentioned at the end. The quality of earnings is different to what we saw in the previous years, not only the increase from the 77 to 102 after 9 months, but also the increase in the all segments bookings segment increased the results even in the IT segment, driven by global projects, driven by faster performance and also driven by despite the lower results that we have in the national German and Austrian agri business. So there are substantially no one timers on the earnings side this year in, but we have the burden from the corona issues as Claus said in the beginning, roughly €18,000,000 to €20,000,000 as you count it. And some of them will also turn back in the final quarter. So with respect to the other activities that Claus mentioned, we have a couple of deviations in there from year to year.
He mentioned the proceeds from real estate portfolio measurement. We will only see in the final quarter about €10,000,000 coming in. Then we have a currency issue with €7,000,000 now accounted for after 9 months that will partly be turned out when we are going to sell the project final project in the business. But nevertheless, we have a couple of issues in the other countries that do not come in here. If we expect I'm talking about the dividend from the Austrian and German banks.
You are aware of this issue. The German and the Austrian banks are not paying dividends, are forced not to pay any dividends. That means a cut down of some EUR 7,000,000 for the financial year in 2020 that we will not see. But we are expecting them to come double into 2020 sorry, 2021 if the banks will remember this, what they promised the shareholders. So this is something that we will not have in the future.
But given and I take this as a final comment on the other activities, What you might expect for the year end last year, we had some €56,000,000 I guess or €55,000,000 in total for the year end. This is also what I expect for 2020. So we should not have a further big increase in this number could be offset and compensated by some earnings coming in. So expected on level. I think one well, on the group financials, on the income statement and the balance sheet, you know, as always, it's after 3 quarters, the final story will be written only in the last quarter.
And Claus will elaborate on the outlook in a minute. So I think we can just jump over this. With respect to the balance sheet number, also there are snapshots that we'll turn back in Q4. Now the increase the main increase on the balance sheet structure that you see is an increase in work in process, which is quite normal given that we are turning or we are a part of turning the renewable energy projects that are mostly completed, and that will lead to a decrease of some EUR 450,000,000 to EUR 500,000,000 on the balance sheet total number, cash income coming in the final quarter out of the sale of these projects, and part of them has already been sold in October now. And we have no impact coming in from the Emerald transaction that I could say on the 2020 numbers.
Claus will come back to this issue. And therefore, I will not say talk about it now. But the most important change that we will have is the reduction in work in process combined with the cash in for year end. I think that's all that was being mentioned now for 9 months period. And more important is the outlook and the comment on the Emil transaction from Claus.
And therefore, I hand over back to him.
Thank you, Andreas. Now we come to the operational outlook. As always, we don't give you a guidance in figures, but I'll try to describe a little bit the expectation for 2020. First of all, turning Page 30, here you see a summary of the Energy segment, what we are going to expect. So the Renewable Energy is anticipating a very positive.
Again, It's over the last 10 years, more or less always the same story. So I think we have a chance to be on the same level as last year from the EBIT point of view, maybe even a little bit better. The conventional sector is better already better than last year. I think the figures we are we have seen just a few minutes ago, they will lead to a very positive result and the conventional energy again. So one comment on our big project regarding renewable energy.
I know some of you are a little bit questioning what we are doing. Some are unpatent. Some have doubts whether we can accomplish anything here. So due to the corona crisis, of course, it was not easy over the year to have all these necessary cash and cash flow, diligent processes and support for potential divestiture, of course, because people could not travel, they couldn't visit us and to make a capital increase of more than 500,000,000 euros just on the phone is a little bit complicated. So you wouldn't get money from me, for instance, personally.
And so far, it took a little bit longer as we thought. This is an unpleasant situation, but was not caused by the management. And well, I would say be a little bit patient and maybe we will have a final conclusion and solution over the next weeks. And we are coming back and I'm going to announce here already, if we are through the process and we have something to announce that we offer to you also a special analyst conference via phone. And then I would like to explain or we would like to explain to you what we expect or what's going to happen.
So with other words, the process is not over. So we turn to Page 31. As Andreas said, we expect a higher result in comparison to 2019. Also, the corona crisis damaged a little bit our fertilizer business, but it was is going to be overcompensated by the machinery business, global produce and our international commodity trading and specialty business, So agriculture, most of course, is the building material has a great year already. So also the last depends a little bit on the weather as always, of course, but we are anticipating a much better learning and further earning increase for the last quarter.
So the overall picture is that we believe that 2020 is a very good year for BioBalance and the underlying business, really better than us year and the years before. So thank you. And I hand over to Yoshio.
Okay. Thank you very much, Professor Lutz and Henwer for guiding us through the presentation. Now it's your time to ask questions. And let me before we start with the question, I would like to congratulate you for the anniversary. Well done today in
32 minutes. That's pretty quick.
So more time for
I expect some gifts here.
Don't be too reluctant. Ask him all. Be brutal.
We will take our first question from Roland Pfizer. Your line is open. Please go ahead.
Yes, good morning. I would have two questions on the Renewable Energy segment. Firstly, interest rates in the market, being it Europe or U. S, declined further. Do you have any impact on demand pricing project value, your rights you hold on the balance sheet?
Secondly, are there any project delays that you could highlight which might happen this year and might be postponed? And will it be of significance? Thank you.
Okay. Thank you. First of all, we have no decline regard the value in the United States and other areas. And our international business is absolutely in a good shape. But they are and the margins are much better.
This is the reason why we expect in the last quarter a very positive development on the bottom line, but we have some delays on those.
Yes. Mr. Handel, thank you. On this issue, I mean, talking about the interest rate and the market conditions, how that impacted the pricing of the project or things like that. I think one might say that we have seen a couple of delays in project, but we'll slip over from 2020 2021.
We announced beginning of the year that we expect to 1.2 gigawatt to be sold. We are the latest forecast is that we are coming out with 8 80 or 900 megawatts, so it's slightly below that number. But the good thing is that we compensate this delay due to higher margin that we have experienced in those projects being sold or are being to be sold in 2020. This is Malaysia and this is Japan first hand. So that's what Claus mentioned that with margin improvements that will overcompensate the project delays in 2 projects actually in the U.
S. Wind project that will only be executed or has been sold beginning of 2021.
But it's important to say that the projects are not jeopardized. It's just a timing issue. And overcompensation is also caused by the Solar Model trading facility. And insofar, well, we are as I said, the outlook is very positive.
And maybe if I may just add one comment on the reasons for the delay. It's nothing to do, as Claus mentioned, with our performance or with the performance of our subcontractors. It's mainly because of the workload of the authorities, which are needed to take up this project. This is they are also affected by corona. You might imagine it in the west of California or the west of U.
S. So this causes mainly the delays in the U. S. Project. It's nothing to do with performance on our side or with subcontractors or wind turbines or
things like that. Maybe it's worthwhile to mention compares to other project development companies, we don't have a problem with the acceptance declaration. It's just the reason for this delay, as Andreas correctly said, of course, the permissions and also all the necessary work to be done by official authorities. I know that other companies have a problem with the acceptance declaration legally because they can't send the teams to the project locations to go through this process. And this is not the case here because we have the teams in the countries.
And so the project development itself is not at all a problem.
Maybe a follow-up. Would you expect to keep these margins maybe into next year? Or is it really depending always on the contract situation at the point of signing?
Yes, please, Mr. Adelich has the answer. So he has the word as well. Come on. Show what you know.
Yes, Mr. Fender, I do believe in some regions like in Asia, we will keep the high margins in Europe rather unlikely.
Quick short to the point. This is here you see the leadership in this company is unbelievable. Was the answer okay for you? Good. Yes, sure.
Thanks. Next question please.
Our next question comes from the line of Anne Margarett Carroll. Your line is open. Please go ahead.
Good morning, gentlemen, and congratulations on the I guess it's a golden presentation, if it's the 50th.
Thank you very much. It's so lovely to hear you.
So well, thank you. I'm delighted to be here this morning. I've got a couple of questions. The first one is the overall cost of restructuring in the agricultural business to give some idea of the scale of that. And so the cost within the 1st 9 months of the year And also some indication of when this program of restructuring is going to be complete?
Renewables business, you have you say there's the benefit from sales of photovoltaic components. If you could give some idea of the percentage of EBIT that's attributable just roughly to that activity? And then the third I think, in the Q4 of this year. I think in the Q4 of this year. There was an analogous program in agriculture with greenhouses in Saudi Arabia.
And I was wondering if you could provide an update on that program as well.
It's really hard work now. Unbelievable. A lot of questions. Thank you for that. So that restructuring process in our agribusiness is over.
That's our internal project view And also the timing for the local management is 2 years. So 2020, we started with a much more straightforward approach. 2021 and then 2022 end of 2022, we expect that we are especially in Germany back in on a profit level. But and this is very important to understand, I do not believe that we are coming back to the profit levels we have seen 10 years or 8 years ago. This has to do with the consolidation.
The farms are going to become much bigger. We expect some changes in the subsidy structure from the European Union. And while the margins are still under pressure and the uncertainty in the agri sector, the farmers are investing in machinery and technology, but the rest is a big question mark at this point in time. So it's very hard to say what is a reasonable profit level in the future, but the expectation is over the next 2 years. And with regard to the restructuring costs, Andreas, what is the right figure?
Yes. We already included in the 9 month number SEK1.6 million so far. There will be an accrual at year end around SEK6 million, and we expect another SEK6 million or SEK7 million coming next year. So this will be the overall short term or for the next 2 years cost of restructuring
in this respect. And maybe that they have a feeling what are we doing in this restructuring process. We are reducing our sites and branches in Eastern Germany from 43 branches down to we closed 19. And in Germany, we are closing a lot of branches. And the expectation is that all over Germany will be covered by roundabout 80 to 90 sites and branches of Bayer AGL.
But this is only the local business. That's the one thing. And the other question you had is the percentage of the solar trading, module trading and the component trading in the overall profit. Normally, we don't talk about product lines and the profitability. But in this case, because you were so charming this morning, I make an exception.
What is the 15% to 20% of the overall profit, the EBIT profit. Let me say 15%, 20%, if I don't know exactly the figure, I take always the middle, so roundabout 17%, 18%.
Okay. And is that for renewables or the whole of the energy segment?
No, that's just only renewable. Renewable Energy 5 are each MBH. Then the question regarding the project business in building Material, the contribution will be around about €2,000,000 €2,500,000 this year. But we expect over the next year exponential increase of profitability due to the projects we have in the pipeline. And the last question, yes, Alain, with one of our big talents down in the Emirates, who is taking care together with the new team of our greenhouse project.
And as you know, in the beginning of 2020, we had this flood catastrophe in the Emirates, which is really unusual that in the desert you have such an climate event and our greenhouse was nearly completely destroyed. Now we are back on track. We are refurbishing, rebuilding our greenhouse and the insurance companies took over the bottom line, so to say. So with other words, we expect profit contribution from Alain. And we are in, let me say, full operation mode back in 2021.
The expectation is Q1. I think it's more end of Q1 2021 due to the corona crisis and all these current time regulations in the Emirates. It's very complicated. And you can't just travel to Alain. You need 2 to 4 weeks till you are in the at the ground of our facility over there.
So it takes time. But I'm very positive. And the market demand is increasing. We have our partner, Al Daghra. And maybe you referred that Al Daghra sold around about 50% of the shares to the state owned agri investment funds.
Right. Okay. That's really helpful. Thank you very much.
My pleasure.
We'll take our next question from the line of Heinz Muller. Your line is open. Please go ahead.
Yes, good morning. Heinz Muller speaking, Kalevoda Research. Also congratulations regarding your very good figures. I would like to raise 3 questions. The first is, how do you assess the new proposals regarding the CAP with less direct payments in the first pillar and perhaps the impact on your agricultural business?
And the second question is due to the more restrictive legislation, especially in Germany, regarding animal welfare, do you expect a structural change of animal husbandry? And in consequence, negative impacts on your feed business, perhaps a declining soy business? And perhaps the third question, what are your expectations regarding AKPV? Thank you.
Hi, Milla, good morning. Nice to hear you. I hope you are doing fine. First question, 1st pillar change in the European agri policy. I think more important is the uncertainty among the farmers and the whole industry what's going to happen over the next years.
I expect more greenery, more sustainability demands from the European Union regarding the farmers? And the second question you have asked with concerning the animal welfare is, so to say, part of it. So we expect a negative impact on the resources, the input resources business, which we are faced already in this year. So I do not see a significant increase of profitability. And you are absolutely right.
And this has to do with the change in the policy, but also this uncertainty among the farmers. So what is going to be very important for the farmers? They need to have a very good digitalization process. They need to get all these smart farming software packages to improve the processes and also to improve the output with less chemistry on the soil. And this has to do also with the subsidy structure in the future.
And so far, it's going to affect us. Then the second point is it's not only to do with the subsidies that some chemical and crop protection remedies are not anymore either allowed or maybe they will be forbidden in the future. And this will have an impact as well. So this is one reason why we are going through this very tough restructuring process at this point in time. The animal welfare and all these scandals and discussions and rigidities and misunderstandings and so forth, We expect, of course, that this is going to affect the livestock development here in Central Europe.
It's not only Germany. And I think that the production is going to be moved more and more to Eastern Europe and to Asia. And we see, for instance, that the demand for soy as part important part for the development of compound feed products is really dramatically increasing in China. So China tries to become more and more independent on the compound feed production, but also the livestock. So they want to be more and more self sufficient.
And that's, of course, affecting our business. And this was the reason why we started the specialty program, specialty product strategy in Bast and Sevetra because we see a decline of opportunities in the normal commodity trading for the compound feed industry. And here we are in Europe number 1. So we have to change a little bit the product mix, and we did that already successfully. And what is this the answer?
Do you have further questions, Helmut?
The expectations regarding your
Yes, That's just we have this Agri Insight. I know for the sharing process on this. Well, this is a niche market at this point in time. And in Germany, for instance, you don't get EEG, the legislation you need what we have here for photovoltaic because the double function of acres for photovoltaic on the one side and agriculture on the other side is not subsidized. It is punished still.
So this needs to be changed. We are in we are part of some legal and legislation initiatives in Berlin because in other countries, this is already a very successful program for farmers to have a second revenue stream. And I'm very positive. We have some projects in the Netherlands, but big figures at this point in time to announce is really too early.
Okay. Thank you.
Thanks.
Our next question comes from the line of Noord Henkel. Your line is open. Please go ahead.
Yes, good morning. Congratulation also from my side for good numbers and for the personal anniversary It's a lot. My questions, I have 4. 1st of all, on renewable energy. So just to confirm, you said there are some project delays.
So this means that these project delays will all occur in Q4 because Q3 answered Q3, everything looked great. So that is my first question. 2nd question is on conventional energy. Looking at your guidance, it seems looks extremely cautious that you guide for increasing earnings if the test result last year is stripped out. So what's the reason for that?
So do you expect the business to fall off a cliff in Q4? Or is it just normal, cautious? And thirdly, on FX in Latin America. FX has been very weak during the year. Does it affect any of your businesses?
Does it affect any of your customers? Is there something you can report on that? So that would be my three questions.
Thanks for the congratulation. And Andreas is answering the currency issue, please. If I should start, if
I got the question right, I don't really understood it right. It was about the Southern American currency. Latin America. Latin America.
This is
not a fact that our business, as far as I know from Peru, this is the only it's a very small business, though any impact that it should have should come in, in the T and G results in New Zealand, but it's not been reported that it should be an issue. We have a currency issue that we currently have is the €7,000,000 impact, which is accounted for in other activities, but that relates to the dollar development in our projects. And that will, as I mentioned before, turn out when we sell the project. So no nothing on the Latin America thing.
Okay. Then conventional energy, so I think that year 2020 is really exceptional. I don't expect that we repeat on the basis of the structure in which we are right now without TESOL that we are going to reach a similar result in 2021 again. Maybe it's not so bad as we expected after the sale of Tesol, but it will be better, but not this high level we have right now. And of course, we are always cautious.
And Q4, well, we have now what was the result was 26 or something. What maybe it's worthwhile to be mentioned, we are we have we founded a subsidiary for LNG and for other mobile mobility business small business models. And this is already successful and positive bottom line. I think the contribution is €1,500,000 at this point in time. So the electrical stations for e cars and all this stuff, where we are investing really and where we are also in the consultancy business and where we have a lot of new business models.
And I think this is going to support the commercial energy sector in the future. So Q4, I'm careful. But bottom line, it will be an excellent year. To be repeated? I don't know at this point in time.
And to Renewable Energy, did I understand yes? Should I answer this?
Yes. Doctor. Hingel, you asked about the project delays. They come in the final quarter. Actually, yes, that has been planned.
It's related to 2 projects in the U. S. I mentioned that the one is the project a wind project, 200 Megawatt Amazon And the other one is a solar project. I don't know if you got the name, right, Kuervos Corazon. It's a solar project also in the range of 200 Megawatts.
So that has been the deviation from the 880 that I mentioned to the 1.2 gigawatt. But once again, that will not be seen in the profitability. This has been overcompensated by higher margins in the project that we realized or that we will realize on other parts in the world in Q4. And maybe one word to on the classical, on the conventional energy, It's really surprisingly good development after 9 months. And just keep in mind, we have the 26 now compared to the 21 last year, but these 21 last year included roughly €9,000,000 on profit contribution from TESOL.
So the performance not only from new businesses, but also the performance overall in Austria internally from the heat business, from the fuel business has been extremely strong. So as I mentioned before, the quality of earnings is different.
Yes. I'm still struggling with your guidance. If you say, okay, Q4, there will be project delays, but profitability will be higher. But still, you're expecting result at 2019 level. So this means that the higher margins will not compensate for the project related to full extent.
So that's in Q4.
Yes. Even more because we have a chance I can't make a commitment at this point in time, but we have even a chance to be better than last year, first thing. And secondly, don't forget the other activities which we have, especially the our trading activity.
And once again, to make it very clear, solar trade, the solar trade business, the components business has been much stronger than expected. And the margin of some projects, I mentioned that the project in Japan and Malaysia, the margin has been incredibly high compared to what we expected. So given what we said last year, we expect and Claus mentioned it, a similar result than we had last year. So then you can see that we compensated the delay of these 2 projects.
And to be honest, there's also another answer on the question. Of course, we say corona is the reason why we are postponing and we have a delay here. Maybe the picture is a little bit mixed. In previous years, we decided whether we are going to sell all the projects yes or no, or we are going to do that the next upcoming fiscal year to have a sustainable profit development for us and for the capital market, because this was a commitment from my side as we invested in this business segment that we are sustainable from the profitability point view. And you have to take in consideration and this is very important what I'm saying now.
You have to take in consideration that our project management, engineering and development resources are globally limited. We have 2,500 people, soon nearly 3,000 employees and yes, employees in this business segment coming from 25, by the way, a few years ago. And we can't handle all projects at the same time. And this is was in the past also the reason why we postponed projects to the next fiscal year. And we shouldn't make one mistake that we say, okay, it's 900 megawatts, which we are selling in 2020.
The expectation was 1.2 gigawatts. So we have a gap of 200 megawatts, 300 megawatts. And we add that on 2021 because it always is the bottleneck is the available stuff to handle all these projects. And now we have more than 13 gigawatts in the pipeline at this point in time. This is also one of the key assets for a potential investor now with regard to the equity increase, which we are going through.
And so far, I'm completely relaxed.
Okay, understood. Thanks.
We'll take our last question from Doctor. Norbert Kalevoda. Your line is open. Please go ahead.
Yes, thank you. Good morning, sir. So congrats to your nice figures, very good. And I have some questions. First is just short, the solar modules you are getting from China, what's about the price development there?
And then also congrats to your precision farming. And I see on your web site, you have Accra, Roberta. Smart farming is a big issue in your company. Maybe you can give some insights how the farmers are willing to spend? Is it increasing or so?
And last but not least, you mentioned the Netherlands is very strong in regards of solar energy. You had lots of megawatts and you still have it, I think, and you wanted to increase this. Can you give us some more insight, please? Thank you so much.
Thank you. Thanks for the compliment and congrats. I like to hear that, of course, because there are some years where you have a different approach. I don't mean you in general remark, you. Coming to the Netherlands part with the last question.
Remember, was it 2 years ago, we made this big acquisition, Groenleben in the Netherlands because the Netherlands have to catch up with renewable energy due to the gas contract they had and the legislation for the gas supply in Holland. And this has been canceled. And now the RE, the Renewable Energy sector, is very significant for the energy supply in the future also due to some sustainability and legislation acts of the government and the parliament in Holland. And well, we are insofar we are a market leader in the Netherlands. We have this floating solar park projects developed.
This is on the basis of the knowledge of and developments of our engineering in renewable. And well, we acquired roundabout 1.5 to 2 gigawatts through this acquisition 2 years ago. And now we go through the process to realize all these solar projects. So more figures I don't have available at this point in time. So the smart farming business, indeed, this is going to be more and more important for us.
But as you can see, it's still negative due to the investments. And farmers are still reluctant to invest in this digital farming process. Nevertheless, they have to due to the changes in the subsidies, as I said, and also due to the competitiveness of the European and it's an European issue, not a German challenge. The competitiveness is very weak in comparison to the international agribusiness. And if you want to export, you need to be really more than competitive.
And therefore, you need technology, you need smart farming, precision farming. But it is still it's the people are still hesitating, unfortunately. But I'm convinced due to the change in the generation on the farms, this generation change, that the younger farmers are more willing to invest in this. Of course, we have these Robiters, we have Harvest Robiters in New Zealand coming from our joint venture with Google in Silicon Valley. Abandoned Robotics, we have 2 prototypes.
Last year, we had some interesting experiences with these roboters. Unfortunately, this year was not possible because we couldn't ship the roboaters from the United States to New Zealand due to the corona crisis. So we have some burden here as well. But I think the future is smart farming, but it's not and I said that always, by the way, it's not a revolution. It's an evolutionary process.
And that's the big difference to other industries where digitalization is absolutely key. This is not yet the case here in this very conservative customer base in farming. The question regarding the Solamodules coming from China, well, we have some frame contracts not only with Chinese suppliers, but also in South Korea, in the United States, in the U. S. Because you need to use the manufacturer in the United States due to the regulations of the U.
S. Government under Trump. By the way, I don't expect a big change here of the presidential election. And so with regard to the prices, Andreas, do we have something where we can explain a little bit? But it's not an issue for us.
So the profitability, as we said, the margins are high. And I don't see
Doctor. Kahlipoda, I'll get back to you.
If you need figures, Mr. Jopscur. Great. Thank you.
Yes. Thank you. Thanks a lot.
Maybe Doctor. Kalliboda, the question that has not been on the table. But as Claus just mentioned, they just brought us into slides from the impacts. They had a meeting yesterday, our in with our U. S.
Business with the impacts of the result of the U. S. Election, which might come Biden as President and then the different option that we have, the same as being dominated by the Democratic Party or the situation as we had it in the past, so the Republicans in the Senate and the House of the Democrats. So what would that mean? I think overall and quite interesting also for our U.
S. Business is that in both scenarios, Biden, of course, it's an advantage for our renewable energy business. You probably have heard the announcement that Biden made before the election regarding the renewable energy business that he will strongly support. So both, whatever that means, if we do not have to see another Trump in the house, then with Biden as President, that would be probably very favorable for our renewable business in the U. S.
As for the renewable in the States as well.
Thank you. Speakers, we have a follow-up question. Would you like to take this?
Yes. Jan, yes.
Yes. We have Mr. Muller again on the line. Please go ahead.
Yes. Thank you for taking my additional questions. The first question is, do you think there could be a serious danger for the traditional egg trading business by trading platforms, which we are establishing now? So perhaps you have in mind the acquisition of a start up? And the second question is, do you think that you can again increase dividends due to these excellent figures?
Thank you.
Okay. We'll start with the second question. I of course, we can't make any commitment at this point in time, but the management, the Board, Andreas and myself, and of course, we need the approval of the Supervisory Board. And finally, the AGM has to take this decision. But due to the structure of our shareholders, I think I don't make a too big mistake to say that we could imagine that €1 is a nice euro.
Do you understand what I mean?
Okay.
That similar as €1 or €1 can be possible. But it depends on especially the performance of renewable energy. Coming with the figures we believe in will mean that we increase the dividend. So this is a preannouncement without being an announcement. This is legally what I'm doing here.
They put me in jail. Mr. Miller, do you visit me? So and the first question with regard to the platform, whether it's really a danger, we are it's more or less the same argumentation with regard to the digital farming process because the people are reluctant, the farmers are reluctant. And the platform, we initiated 1 together with some partners, and we opened it.
But it's not, yes, let me say, Amazon 2 or something like that or Alibaba. And it's a niche market. Of course, it will play a role in the future. Whether it's significant or not depends on the behavior of the markets of participants. We need not to buy something because we are in this business already, but I forgot the name of the platform.
What was the name? Do you know this? It's a joint venture with this university. Onamira. Onamira.
Yes, this is our CFO. He is all in his mind. Yes, Onamira, that's where we are, a co shareholder. And we are in the, let me say, training process. And well, we will see.
But we are in the business as always. Fiber is always worth the innovation of course. And partner join it now. And partner are going to join. More and more partners are joining this platform because if you do it just alone, then you can't be profitable.
This doesn't make sense at all.
Okay. Thank you very much.
We have no further questions. Please go ahead for any additional closing remarks.
So if there are no further questions, I would like to thank you for your interest and participation. Our next official conference will take place on the 26th March. However, I have the feeling that eventually we will have an extraordinary telco. Let's see. Until then, stay healthy and talk to you soon.
Bye bye.
That concludes today's conference call. Thank you everyone for your participation. You may now disconnect.