Thank you very much for the introduction. Josko Radeljic is, of course, with me as well, and our CFO, Andreas Helber. I'll start immediately because I'm a little bit busy today. First of all, our financial year 2019 was very successful. We provided all commitments. We accomplished all our goals with one exception, where we need a little bit more time. This is page number, what is this? Four. The financial year's highlights, I would like to emphasize a little bit. Operating earnings increased. Also, we are in challenging markets still. Last year, of course, we had this settlement over EUR 68 million with the antitrust authority in Germany. Nevertheless, we started an official liability claim against the Federal Republic of Germany due to some misjudgment and mistreatment of BayWa by the officers, and we would like to get the money back.
Whether we are successful or not, we will see over the next two years, I guess. It will take a little bit of time. How did we manage that you do not see in the operational result the EUR 68 million? We had some adjustments in the corporate portfolio, we made some sales. The overall earnings we made with these divestments covered more or less the EUR 68 million, not completely. You will see that at the end of my presentation, because there were some lawyers and other consultancies fees we couldn't cover completely. Nevertheless, it had not really an impact on our overall performance and results. We were very successful to issue the Green Bond. This was the very first one in Europe for our green company. The amount of money we got from the capital market was EUR 500 million.
We are very proud of having this Green Bond now in our financial structure, in our financial portfolio. This was a great success. We are still in the ongoing negotiation process for the private placement we intend to do with a minimum amount of money of around about EUR 0.5 billion with a minority shareholder. We are not through the process yet because the result 2019 was much better than we thought. We have to embed that in the plans for the future. Unfortunately, of course, now we are affected by the coronavirus crisis. All the discussions and negotiations are only possible via Skype, video conferences, and data room. This is an unpleasant situation also for our business relationship. It will take a little bit longer as we thought, but we are still in very promising discussions with candidates.
What is the overall picture? Page five. The revenue is up 2.6%. Very first time, more than EUR 17 billion. The EBIT, the real EBIT, not an adjustment and super adjustment and something like that, it's EUR 188 million. We suggested to the supervisory board, and the supervisory board accepted that unanimously, to make a suggestion to the AGM of EUR 0.95. It's an increase of EUR 0.05 in comparison to 2018. We would like to participate the shareholders in the success of BayWa and the operational performance. The employees we have in the consolidation in the balance sheet are here still 1,808, today that's 20,300 employees. The overall picture is very positive. You see page six, the comparison over the last years. That's the most successful year in 2019. Also, we had all these challenges. You see on page seven, the comparison for Q4 over the last years.
Last year, we had the 144. 2018, 144. Now 111. Why? It's quite simple because in 2018, we sold most of the wind and solar projects during the last weeks, and this year it was a little bit more balanced over the fiscal year. We come to page eight. You'll see the expansion strategy over the last 12 years is very successful. Though 65% of the overall EBIT contribution is coming from Renewable Energy and some others, like Global Produce, international grain trading activity, and our expansion business. Nevertheless, it's quite interesting too. We have these problems in the agribusiness in Germany and in Austria, consolidation, restructuring, refocusing, and all these things you know, probably. We are quite stable in the traditional BayWa business as well. Coming to page nine, the energy segment.
That's the combination of the conventional energy business and then our rising superstar, the renewable energy business. We have a revenue of EUR 4.4 billion, EBIT EUR 127 million, it's a record high, an increase of 32%. More than 2,800 ultimo employees. Now we have more than 3,000 people employed in especially the renewable energy sector. We sold nearly 1 GW or 911 MW last year, which is also record high. Meanwhile, coming from 5.7 GW, we have under management, under the operational management, which means maintenance and the handling and all that stuff, 8.3 GW. It's still very fast growing, this business, though the service business will become much more important in the future as well. Also interesting, of course, low level margins are small. Nevertheless, the wood pellets business is increasing over the last years.
Last year, we had 24%. That's significant and interesting growth due to the green and renewable and sustainable orientation of BayWa. Coming to page 10. I do not want to jump in the details here. It's interesting and for us clear, of course, and it's not really new for you guys. In the renewable energy sector, wind and solar is still increasing all over the world, especially the solar business. The solar projects all over the world are increasing. The volume is going up. Over the next years, our project business is really absolutely safe. We have more than 13 GW in our portfolio as options and so far, it's clear what's going to happen here. The Conventional Energy was interesting market environment, record high. We made a transaction, as you know, we sold our fuel station business, Tessol, to one of our partners, AVIA, in Germany.
In the future, we will have a lower profit. In 2019 was really great. Coming to page 11. You see nearly EUR 2 billion revenue in renewable energy sector, EUR 101 million EBIT. We had all over the different business sub-segments an increase. I'm very proud that our solar module trading unit is very profitable. Again, you know that over the last years, we had some problems due to the market development. We were underwater. We had minus EBIT contribution, unfortunately. Meanwhile, we are back on track. We are number one in Europe, and so far it was for us very important to keep going with this business. Now we are very profitable again and EUR 100 million, the first time that we provide more than EUR 100 million EBIT.
You'll see on page 12, that's just for your information and looking back a little bit, the normal average growth rate over the last 10 years. We had our anniversary celebration last year, 10 years renewable energy with BayWa, is 32.4%. We expect an increase over the next years as well, without discussing at this point the impact of the coronavirus crisis. Page 13, that's just an example of a cooperation. AB InBev, one of the largest brewers in the world, is one of our partners here for solar energy, which will be created by BayWa r.e. That's an interesting cooperation. It's a global cooperation, I think that's a good example also for future type of informal joint ventures or corporations with other big companies. If you have questions for that, you can answer that later on.
Page 14, you see the Conventional Business, EUR 2.5 billion revenue, a slight increase and EUR 26 million EBIT. It was volume driven, also a little bit price driven. Well, we had a little decrease in the sale of fuels. Nevertheless, the profitability was good and we had a decrease, a little downturn in the lubricants business, but the rest was very profitable and very positive. You see page 15, the P&L statement of the Energy Segment. If you have questions, Andreas is taking care of the figures later on. We come to the Agriculture, still the largest one. We started this time with the Energy Business because from the EBIT contribution, it's the most important one, the most innovative one, of course. Now Agriculture with EUR 10.8 billion revenue, is the largest revenue part of BayWa, of course, nearly EUR 100 million EBIT.
It's not a quantity negligible. Nevertheless, with 10,500 employees and 32 million grains and oil seeds we are trading, we are not really pleased with the performance, especially in Germany and Austria. We go right now through a very detailed restructuring plan. It will take two years round about till we are back, I wouldn't say on track, because we just are in advance with regard to the changes in the markets, the consolidation process, the changes of the behavior of the participants in the markets in Germany. The big farmers in Eastern Germany, for instance, they have enough storage capacity themselves so that they do not really need us anymore. Digitalization, automation will take care, will play a significant role in the future of our German and Austrian agriculture business. The international operations, I'm coming to that in a moment, are very successful.
The market development, first of all, the products business, grain business, grain trading, origination, and so forth. We had commodity prices in 2019, with a sideways movements, they were stagnating a little bit. The key figures are -29 million tons in the season 2018, 2019. The storage is decreasing and -11 is the forecast for the season 2019, 2020. We will see. That's important because consumption is still high, is increasing, and we are reducing on a global basis, the Global Grain Balance without rice. We are reducing the storage volume. Coming to page 18, you'll see we have a little decrease in our BayWa Agri Supply & Trade business, which is international operation for grain trading and specialties down to EUR 4.8 billion. Why? Because we are reducing the volumes we are trading. You see that just really 2 million.
We were up to 40 million the previous years, but this was just to turn money without profit. This is nonsense business, we reduced the volumes. The key success here is that the specialty business and the strategy for the specialty business is successful. You see EUR 19.1 million EBIT, of course, in comparison to last year. It's a significant decrease and we are not happy with that. The EUR 20 million, this EBIT comes from the specialty business, and we always said we would like to have around about EUR 20 million coming from the new participation of the companies we acquired and which are part of the BAST organization. The rest decrease comes from Iran because we had to stop the supply of milling wheat.
We have problems due to the crisis, the trading crisis or trade war, how you want to call it, between China and the United States. Some changes in the supply flow of soy, the soy business from Argentina, Brazil to China, and from the United States to Argentina and to Europe. All these changes, unfortunately, had an impact on our P&L bottom line result. We come to Global Produce. Global Produce was very successful in 2019. You see on the left side a little bit the volumes of apple harvest, just for your information. On the right side, unfortunately, in German language, [Non-English content] Apfelpreis means apple price, prices for apples in Germany. You can make your own judgment. Do not want to comment on that.
More importantly, page 20, you'll see the increase, 4.5% of revenue, EUR 843 million, and an increase of our EBIT of 35%. We have to admit that part of the EUR 36 million is the sale of the headquarter in New Zealand, Mount Wellington. A few millions, I don't know, a few millions, I guess, EUR 8 million or EUR 9 million or so. The rest is more or less the operational performance. I'm happy with this development. Also, we had quality and quantity and size issues with the apples from New Zealand. Jazz and Envy . Page 21, we come to the Inputs business, which was very complicated, and it's going to be also not easy in the future. We have a decrease of 6% in the fertilizer volume year-to-year. The same for the crop protection. Also, the seed is a little bit lower than in 2018. Why?
It has to do with, A, the farmers, fishing in Europe, B, the legislation, which was changed, and also the increase of the organic farming. Where are we? Page 22. Of course, we are not happy with the result. It's nevertheless a little bit better than in 2018. Revenue, EUR 3.4 billion, EUR 7.8 million EBIT. Of course, this is not acceptable, and that's the reason why we are going through a restructuring process. I can only beg for your patience over the next two years. I expect that we are then back on a much better level because we are cutting costs. We are restructuring our site structure in Germany. We are going to reduce the size from more than 200 down to 80-100.
We are focusing ourselves a little bit more on the deep harbors sites in the Baltic Sea, and we hope that we can start with the expansion of Mukran, this big harbor site, which is important for us, that we can load also with Russian and Ukrainian grain, the Panamax vessels in the future. This will take two years, maybe from now. It's not through all these processes. The permissions are not yet finalized from the European Union. The federal government and the state government in Germany. That's not really positive. We are also reducing the capital employed in this business segment. Now we come to page 23. Again, a very good result in the agri equipment business. It's not as high as it was in 2018.
The new registration for tractors in Germany is stable, also the sentiment on page 23, you see this farmer sentiment, that's more feeling. The mood, the atmosphere in the business is not too bad. You see on page 24, that we are stable on the revenue side, EUR 32.8 million is really great success again. For us, it's also important to see that the billable hours in the service business is very high. It's higher as in the previous years, this is also the proof of the investments we made in new service stations in Germany especially, and in Austria. We are more or less through the lower times, now we are back on track and it has also to do with the new products delivered by John Deere.
Page 25, P&L statement. Don't want to waste too much time on that because Andreas is coming back to the overall figures. Building material, again, successful with EUR 32.1 million. We have a revenue plus of 5.3%, up to EUR 1.7 billion. We are in a boom situation in Germany especially. You see that on page 27. The German construction industry has a plus of 8.4%, and homes completed 4.5%. 300,000 new homes were built last year. Nevertheless, we have some political issues in Germany, in Berlin, for instance, this cap for rental fees and so forth, which is not constitutional, by the way, and from a political point of view, it's absolutely stupid nonsense and remembers me the GDR times I thought we had overcome, but some of these left-wing politicians are as they are.
We see that in Berlin, by the way, already the people are a little bit reluctant to invest in real estate and in buildings. It's not the case in the southern part of Germany here. The world is still in order, conservative, business-oriented, and so forth. In Berlin and other northern cities, it's a little bit different. I do not deny that we have a problem with the apartments and the flats and the prices, the rental fees and so forth in Germany. Nevertheless, the only answer can be building of houses and apartments. To make a cap is maybe nice for populists, but is not really the solution for the problem. It's just stupid and nonsense. On page 28, you see the revenue of EUR 1.7 billion, a slight increase of 5.3%, and more or less flat profit, EUR 32 million.
29, you'll see the P&L statement and page 30, our investments in digitalization and innovation, another EUR 14.6 million. Over the last years, we invested a lot of money in the product portfolio of FarmFacts. We are market leader in Germany. Just around 25% of the agri land is using NEXT Farming, which is our product portfolio from FarmFacts. We have 18,700 customers so far. We are number one in Germany. Nevertheless, still loss-making, and the task for the future is that FarmFacts is going to be a European company. We need to conquer the European markets as well. You see on page 31, the result, and now page 31 is a little bit the market overview. I do not want to jump into details here. That's investment.
In so far, the losses are necessary to make BayWa safe for the future and also to help the farmers to become more digitalized. As I said at the beginning of my small presentation, it is very important in Germany that the farmers are going to be digitalized. Otherwise, we are not really competitive in the European markets. So far, that is the big change in the future, and the farmers and we together have to invest a lot of money in these type of technology. That is my first part here, summarizing, first of all, very successful performance. I am happy that we can offer to our shareholders EUR 0.95, so an increase to 2018. This was also the expectation. More or less we accomplished all our goals, and I ask you for a little bit more patience in the private placement process for BayWa r.e. renewable energy.
I'm going to hand over now to my colleague and friend, Andreas Helber, for the group financials.
Good morning. Also from my side, being back here in office, very happy after two weeks of home office. Physically good and physically here. I just want to keep it rather short on the financials, because I think it's more relevant to talk about the running business and what we expect for 2020 than looking back on 2019. Klaus pointed already out the most important things. Just to look on the 2019 from a financial perspective, I think it's worth to summarize again that we achieved the increase in results, and we covered the settlement on the antitrust issue. Even we did not expect in the beginning of the year to have such a burden from the settlement, but it's done and we made it, that we have no negative footprints from this settlement in our P&L in 2019.
I think this is the most relevant thing looking on 2019. If you look on the overall performance and we run through the segments, if you put all the operational segments together, energy, agriculture, and the building material segment for the first time, in 2019, we achieved the EUR 250 million EBIT contribution over the three segments, with the outperformer, of course, the energy segment with EUR 127 million. Also the agriculture segment, where we have the structural problems Klaus mentioned in the domestic business, contributed all in with the four sub-segments, with Global Produce and the agricultural equipment as well as the international trading activities. Another rather EUR 100 million of EBIT contribution. Finally, the building materials with over EUR 32 million.
Just going to page 35. I think 34 has already been covered for the contribution of the final quarter. If you look on the summary of the income statement for the first time, we achieved EUR 17 billion total revenue number. The EBITDA went up to over EUR 400 million, EUR 403 million, and the EBIT of EUR 188 million already been mentioned. It's worth to be mentioned also that the contribution of EUR 10 million on EBIT level comes out of the IFRS 16 effect. It's not the real operational increase in performance, if you look on the operational increase in performance from the EUR 220 million on the operational segment, EUR 227 million to the EUR 256 million. This is an operational increase, of course, we need to keep in mind that within the result, we covered another roughly EUR 20 million on one-time costs related from fees for the antitrust issue, also upfront costs for the Emerald Project, where Klaus is probably coming back to that earlier on the question side.
A portion of roughly EUR 8 million one-time external upfront costs for the investor search in the renewable energy segment. The overall income for the consolidated group is EUR 61.1, an increase of 11.3% year-on-year. That's mainly related to the tax quota that you see. It more or less normalized again with the 23%, whether it's the 40% that we had last year, and these 23% tax quota also includes a write-off of deferred tax assets in an amount of roughly EUR 4 million. The earnings per share, not diluted, is EUR 1.05, and the part of the income on the consolidated net income per share is EUR 1.74. Looking on the balance sheet on page 36, you see an increase on the total assets number from EUR 7.5 billion to EUR 8.8 billion. We have to keep in mind that roughly EUR 600 million is related to the first time adoption of IFRS 16.
We have been projected a report that through all the year. The effect on the asset base, it's roughly a bit over EUR 600 million. The remaining EUR 600 million mostly relates to the RE business, which is strongly picking up. You saw it on the megawatts numbers that we turned in 2019, and we expect a similar development in 2020. A lot of these projects that we are going to sell in 2020 are already in preparation. This is related to the increase in there. It's good news for that. Given the equity ratio, that's a bit down from 18.5%-15.3% currently. This is mainly related to two effects.
The one effect is the leverage effect on the increase of total assets, and the other effect is a further downturn on the interest rate on our pension liability, which came down from 1.85% or 1.9%, what it was the year before to 1.1% at least now. This is the lowest number I really could expect, but it had an increase on the equity of roughly EUR 60 million. These effects are running not through the P&L, but directly into the equity, into the retained earnings, and there was a reduction of this amount. If you look on the equity ratio adjusted, that we always point out because the interest rate also can change and it will probably also change coming out of the coronavirus crisis, I expect this. The adjusted number would be 20%.
I think I'm coming in a minute to a little bit projection what the IPP, the investor case, would meet on the equity ratio. This is one reason we are looking for an investor to speed up with the RE business, but that will also have an increasing effect on the equity and the equity ratio for the overall group. Going on with the cash flow statement on page 37, you see that the cash earnings are as strong as last year's, more or less level. The cash flow from operating activities slightly negative, rather reduced compared to last year, but that reflects the increase in assets on the working capital side for the time being at the end of December 2019, and the cash flow from financing activities reflecting more or less the Green Bond that we issued in summer 2019. Overall, it's stable.
Looking on the debt situation within the whole group and also on our trading business, the debt situation still is adjusted net debt EUR 2.4 against an EBITDA of EUR 403 with a ratio of 6x, that's including also the project business. Last year it was 6.2x. It's already still including the project development business, this, if we excluded it, you see on the page 39, which is relevant for our trading business, we are down at 3.2x coming from 4.2x ratio with EUR 860 net debt with an EBITDA of EUR 265. That's okay. That's in the range of 3.0x-4.5x that we need for the investment grade ratio. Looking on page 40, this is the simulation that I mentioned before that we made looking from the 2019 equity situation to the 2020.
Once an investor comes in with an expected increase of EUR 500 million or EUR 500 million+ on the equity side and through the business plan and throws it up to 2023 and 2028. The equity ratio will further increase because of the planned retained earnings increase of the proceeds from the investors and from the benefits from the RE business. The economic profit on page 41 reflects pretty good what Klaus already mentioned. We are well on track with mostly all of our activities. Of course, outstanding the Energy segment, both renewable as well as the conventional side. Global Produce, okay. Agricultural Equipment, okay. Building Materials, also okay. The one bleeder that we have, and that's been already discussed, is the Agri Trade & Service domestic business with a too high invested capital and a too low return for that.
This is the focus that we are working on, and where we have to reduce the capital employed. Looking on BAST, it seems worse than it is, because this already included in 2019 a loss of the BMTI international trading activities with Iran. Klaus mentioned it with a number of EUR 6 million, which has been closed down now and also the invested capital reduced by some EUR 80 million. If we reflect these two effects against each other, then also BAST will earn its cost of capital, and we'll be back on track in 2020 so far. One word on the last page 42, the other activities before I hand over again to Klaus for the outlook. This is a number of EUR 53.1 million . Definitely too high and probably above what you expected, but please keep in mind, these EUR 53 million includes a portion of EUR 18 million-EUR 20 million overall.
The external advisor costs that I mentioned, the fees for the attorneys on the antitrust issue, defending costs, also the EUR 8 million one-timer on Emerald activities that we had, the financial advisors, the lawyers and things like that, which are already fully included here in this number and which will not come in in 2020 in full, I guess. We stick with that, what we always said, EUR 35 million-EUR 40 million should be a normalized other activities part.
That should be it for the financial, I give it back to Klaus.
Okay. Thank you, Andreas. We are coming now to the operational outlook, which is very difficult task today due to the coronavirus crisis situation, which is really affecting most of us and all over the world in the countries in which we are making our business. Normally, the operational outlook for 2020 without the coronavirus impact, I would be very positive because the energy sector is in excellent shape. You see on page 45 that we plan very first time, more than 1 GW to be sold, 1.2 GW, for instance. The agri business, especially our Global Produce sector, is in excellent shape. The order intake for the agri equipment business is higher than last year.
While the agri input business will be under pressure again, nevertheless, we expect an increase of our international trading activities and the specialties, and the building material is also still in a booming period. The question is, of course, what means corona now for our business? At this point in time, we do not have a serious impact on our business. The first quarter will be good. Second quarter, we will see maybe there are some impacts due to the supply chain where we have some problems. We are facing some problems, especially on the international level, but we can't quantify it at this point in time.
Insofar for the first six months, I'm not so negative, but we are running on site, which means every two weeks we go through a very detailed forecast process to have a feeling for the development and also to cover issues, to handle issues. At this point in time, it's a little bit unclear yet. What did we do? We have a crisis management team in Germany and in the most important business countries for BayWa as well. I think we do all which is necessary to protect our people. The health of our people is key, is the most important aspect, and also the health of our customers and other stakeholders. Of course, liquidity is also number one. The most important, let me say, KPI, so to say, for BayWa. It's not really the result at the end of the day if something seriously is happening.
So far, corona will affect us. At this point in time, it does not sound as if it is very serious. It can be changed within two or three weeks. One thing is clear to me that the complete shutdown we have in many countries where we are in the business is not easy. It is not easy to overcome the consequences. I just had a phone call this morning with some political advisors of our federal government and also some local governments. I had a phone call with New Zealand, with our management in Auckland. We are in permanent contact with the management team and the crisis management team in Austria. Austria is responsible also for Eastern Europe and all the CE countries. We are in permanent contact with the United States and also with Latin America.
We opened our offices again in Shanghai, in Beijing, in Hong Kong. Singapore is not really affected. Thailand closed the borders last day, I guess, or two days ago. So far, there will be an impact. I'm very concerned about the supply chain management in Europe. Yesterday, the presidents, prime ministers, federal chancellors, and so forth, tried to find a solution to open the borders again for transportation and for logistic provider. Verbally, there is an agreement, but in reality, it's really not easy. All the workers for the harvest are not available. For instance, in Germany, this is affecting also other European countries. We have a gap of around about 300,000 people in Germany. This is important for the farmers. Of course, if it's important for the farmers, it's also important for us that we get the volumes to be traded, especially in the Global Produce business.
So far, there are a lot of open questions I can't seriously answer at this point in time. I think you will understand that because no one can make a significant forecast or a very serious forecast at this point in time. While the intake is good, the options we have in the renewable energy sector is extremely high, more than 13 GW, the highest option volume ever had. The order intake for the agri equipment is very good. The Global Produce business sounds as if all is in order. Also, the export from New Zealand to China. Of course, the export from Washington State to China, this supply chain has been broken, but not due to the corona crisis. It has to do with the trade war between China and the United States. This was the case already last year. We stopped our activity in Iran.
Andreas mentioned that the BMTI impact last year on the P&L was around about EUR 6 million. We don't have that anymore. The specialty business is running pretty well. Insofar, I'm not too negative for 2020 with coronavirus, without a serious impact from coronavirus, I'm positive. We will see what's happening. Final remark from my side, a personal one. Maybe you heard about or you read about it, that my contract has been extended the other day by the supervisory board till 2025. I turned a few days ago, 62. If I make it with a new contract, I'm going to be 67. You know, guys, then the 67s are more the 35 or 40 ages in the future.
So far, I'm fit, and I'm really happy to have the honor to be the CEO of BayWa also for the next five years and I can tell you something privately, it was not easy that my personal supervisory board was convinced to accept prolongation of my contract, but our chairman of the supervisory board made it in a private meeting in Vienna as we could still travel to Vienna. My wife, finally, she accepted it, and Manfred Nüssel made really a great job. Far, you have to deal with me over the next years. Thank you for your attention, and we are now more than happy to take your questions.
We'll now take our first question. Please go ahead. Your line is open.
Yes. Who's going to be the first one?
Please go ahead, Markus Schmitt from BHF. Your line is open.
Yes. Thanks for taking the question. I've just one actually. There was a statement made by the Ministry of Agriculture in Germany that agri companies and for instance, fertilizer companies are systemically relevant. My question is if you have been in touch with them, and what that means in terms of support, if needed, because I have a bit of trouble to translate this message and what it could mean for BayWa. Maybe you have a view here or comment.
Well, Klaus speaking. We are system relevant. In New Zealand, it is called essential service company, which we are, and not only in Germany, in Austria, of course, in New Zealand and some other countries, because we are in between the farmers, the retailers, the farmers, the brewers, the malting companies, and so forth, so the industry, so to say, BayWa is system relevant. This means that we have still the permission to open all our sites, even the building material sites are opened in Germany. Unfortunately, not in Austria, but all sites related to the agri business and the energy business are still open. I think that's the key message that we are obliged to take care of the customers, to take care of the population, and to support the supply chain for food to the people in the different states.
In New Zealand, it was, as far as I'm correctly informed by our management, it was also mentioned in a speech of the Prime Minister that Turners & Growers is one of the key, which is true, by the way, is one of the key companies of New Zealand, and insofar, essential for the service to the domestic people, the domestic market. By the way, we see that also. If I said that Q1, the likelihood that we are negative or so, the likelihood is not very high because it's not a boom, it's just the type of buying of customers, which is a little bit unusual. We have high volumes in the input business in the first quarter from the farmers. They just fulfill their own storage. We have a similar demand in the Global Produce business. The highest demands we ever had.
I'm now more than 12 years with BayWa. In this period, we never had such a high domestic demand in the Global Produce sector for fresh food and especially for pip fruit, apples and so forth. This applies more or less for all different business segments and all the building materials sector, the demand is incredibly high. We are only in the B2B business allowed to service companies and craftsmen and so forth. We are not allowed to provide goods to the private sector, which will be punished. Is this an answer?
Okay. The implicit support is more operational than implying support for the cap structure in terms of equity or debt funding, if needed, if I understand this correct.
We are not discussing financials with the political institutions. Our financial situation is absolutely safe, and maybe we will be preferred also, but I don't know. I didn't take care of that on Andreas as well, because the finance structure is not an issue for us.
Okay, understood. Many thanks.
Welcome.
We'll now take our next question. Please go ahead, caller. Your line is now open.
Hello? Hello?
Yeah. Who is there?
Can you hear me now? It's Marc Gabriel.
Yeah, we can hear you.
Yeah. Hello. Thank you very much. Was a little bit tricky. First of all, I have a question regarding--
Sorry, who are you? I'm sorry.
Who is speaking?
Could you introduce yourself, please?
It's Marc Gabriel, Bankhaus Lampe.
Marc Gabriel. Good morning. Yes. [crosstalk]
I have several questions for you guys. First of all, looking at the potential investor in BayWa r.e. renewable energy, assuming you will have a partner which injects, let's say, EUR 500 million at least, which you will, as you stated, use for further growth. Looking at the business contribution, which is very strong for the group, and taking into consideration that 49% of that revenues goes to a minority shareholder, you would have been left with almost no profit on the net profit line. That's my question. How much additional earnings contribution do you expect from that partnership in the BayWa r.e.? That's the first question.
The second question will be, I wanted to understand why you increased the dividend, given the EPS of only EUR 0.86 per share and still a negative free cash flow. You're paying dividend out of the substance of the group currently. Is that a little bit too risky? The third question will be on the real estate deal you did for the headquarter of Turners & Growers. Can you please quantify that amount? The final question is on the revenue contribution of Tessol in 2019. Maybe one additional. In your report on page 91, you showed the book value of the real estate assets with a EUR 1,377 million number after EUR 827 million last year. Could you give an explanation why that increased so much? Thank you very much.
Gabriel, I answer the first question, renewable energy. Okay. It's a long process, I have to admit, for the private placement, which is true. Why is it so? Because the performance was better than our plans. That's the one thing. The other thing is that we had to adjust our business plan, and the potential partner is going through a due diligence, let me say, review of the figures 2019. With other words, we expect a better business plan for the future, ex-corona. I have to say that, because this will have an implication, and it's unclear which impact we are faced. The business plan for the next years has a forecast, from an overall result that we are going to more than double the EBIT and the PBT.
At the end, bottom line, we get more money out of r.e. as it is right now. Therefore, we plan this capital injection of EUR 500 million to use for the growth strategy in BayWa, and it will strengthen also the equity of BayWa Corporation itself. In so far, that's positive, we are planning to change a little bit our strategies today, the build, own, operate it and transfer strategy, as you know. We would like to add a part, a new business segment in r.e. It's called IPP, which means we take more assets on the balance sheet to have a stable income and a positive, stable cash flow on this asset then and the balance sheet of BayWa r.e. AG. The GmbH will be transferred in an AG. We are now in a very complicated process.
I have really to admit that because all the discussions are on the phone, video conferences, and this is not easy, if you want to take a new partner on board and, well, it takes a little bit more time. It's not a safe bet at the end of the day that we really will make it very soon. It has to do with the crisis. That's clear.
Mr. Gabriel, if I may, just to add what Klaus mentioned. Yes, you are completely right. Looking on the earnings per share for 2020 and 2021, once the investor comes in, it will have the decreasing effect by the 50% or 49%, which the investor takes into the minorities. This is the thing behind it, given the business plan that we have, it is not only this upfront contribution of EUR 500+ million that the investor will bring to the party, but he is willed to have more capital injection in there, and that should leverage also the result, the overall result on the PBT and the EBIT level, but also then on the EPS, which remains with BayWa Group looking on the EPS number. I hope that make it a bit clearer.
It's a process of one to three years. Then we are back on the level that we have. Then the leverage comes that it's more than 2.5x increase in the result. Looking on the dividend, I know the discussion that you have and we always have this. We are looking paying the dividend out on the undiluted earnings per share, which is EUR 1.05. You mentioned the EUR 0.68, which includes also under IFRS, the contribution on the hybrid, which is disclosed as equity and which is not a part here of this EPS thing, which we have to adjust for the undiluted and diluted earnings per share. We think the overall performance of the group, and if you look on the total net income, that was EUR 174.
We always have the discussion. For that reason and the performance of the overall group, we think that we can pay the EUR 0.95 per share, which comes out of contributions out of the different parts of our group. The effect on the headquarters in New Zealand, the net effect after reducing the advisory cost and things like that, transaction cost was roughly EUR 15 million. Just to be very clear, that could not be reduced now looking on 2020 as the performance ex-corona always. The performance in the business plan says that this one-timer in 2019 should be compensated by an improvement on the operational performance that we strongly see already in the apple harvest, which just started in the New Zealand business and the very promising pickup business here in the first quarter within our New Zealand business.
You asked for Tessol, the revenue, or was it the result number?
No, you said revenue.
EUR 60 million or something.
Just the revenue.
EUR 60 million, EUR 70 million.
Yeah, something EUR 70 million.
The total sales contribution to conventional energy was? EUR 600 million.
EUR 600 million, yeah.
EUR 550 million. Yeah. Okay. Thank you.
The last question was on the increase in book value on the real estate.
Just a second. I hear Gabriel. One moment.
Mr. Gabriel, let us give the chance to check the Tessol revenue. We are discussing it currently here. Let us recheck it, yeah, once again. We're coming back on this Tessol issue. The increase on the book value on the real estate of some EUR 600 million, I do not have it in front of me here now because a lot of our colleagues are in the home office, but that must be the impact of the IFRS 16 on the real estate.
Okay. Yeah, understood.
What I said, the right of use, it's now included. The long-term or the fixed assets. That's not an increase in the book values. In total, that must be the effect of IFRS 16, which is currently roughly EUR 600 million.
Okay. Thank you very much.
Let's see if we got the Tessol. No--
Yeah, that's million. [audio distortion]
It's roughly EUR 375 million. That's the correct number, EUR 375.
Okay. Thank you very much.
[audio distortion] I just explained to my new personal assistant what it means to the necessity to have the absolute correct statements here.
Perfect. Thank you very much. Good luck for corona crisis time. Thank you.
Thank you, Mr. Gabriel.
Same for you, Mr. Gabriel. Stay healthy, please. We need you.
We'll now take our next question from Knud Hinkel from Pareto Securities. Your line is open. Please go ahead. No, my apologies. We're taking our next question, in fact, from Heinz Müller. Please go ahead. Your line.
Thank you. Heinz Müller, Kalliwoda Research. First of all, congratulations, Mr. Lutz, due to the extension of your contract.
Thank you.
I would like to raise several questions. The first is, do you expect due to corona, a postponement of the AGM, what was also announced by several companies? Of the dividend payments. Second question would be, you mentioned that the digitalization would become more important. When do you expect the positive EBIT contribution of the innovation and digitalization segment? The third question is, could you give us an indication regarding the impact of the new regulations regarding the application of fertilizer, which is called in Germany? Perhaps an explanation of the remarkable increase of sales in Austria of 13%. Thank you.
Mr. Müller, thanks a lot also for your personal remark. We know each other now more than 12 years. As time goes by, it's unbelievable. Coming to your first question, the AGM. Well, we discussed that internally to postpone the AGM, but we plan now that it takes place on, I think it's the 26th of May. It will be a virtual AGM, always under the prerequisite that today the German Federal Council, the Bundesrat, is going to approve the legislation from the Bundestag, the German parliament. If this is the case, we can have the AGM on the 26th. The Munich Conference Center, this international conference management center here, where we have our physical AGM always, is offering an interesting virtual network to all of us, not only BayWa, of course, also the other stock-listed companies.
Insofar, please, we would like to stick with the 26th of May. No postponement for the dividend payment as well, if this is the key of your question. Okay. The second one is digitalization. Well, I tried to explain what it means and why we see the necessity for the digitalization and also the automation. By the way, automation is key also for the harvest period for the farmers to become a little bit more independent on all the harvest workers coming from Eastern Europe, which was not easy over the last years as well, by the way, because they have meanwhile enough jobs at home and also not bad paid. Insofar, that's now only a little bit stronger, or let me say worse, due to the corona crisis. Insofar, the digitalization is extremely important.
To become profitable in Germany and Austria alone is not possible. We can forget about it because we're talking about niche markets. The European approach is extremely important. I know I was mentioning that over the last years again and again, but the farmers, not only in Germany, also in other countries, are still very reluctant in investing money for this new technology. We are starting discussions as soon as we can meet physically again, because you can't do that only via the phone and video conferences. We start to open FarmFacts for either further investments from third parties, which have a European network we can use to provide our NEXT Farming products on a European level.
If this is the case, and it depends, I would say, on the speed to have these partners, well, I would say two, three years it will take till we are profitable. The prerequisite is that we are international. Without internationalization of this digital business, then it's just supporting our traditional business, but it will not be profitable. The fertilizer. The fertilizer legislation, we just received at this moment, 10 minutes or nine minutes after 12:00, the Federal Council, the Bundesrat, approved the new fertilizer legislation here in Germany. We expect an increase of the digitalization in the farms because they need the software tools to be in compliance with the new legal requirements.
For the farmers, this is very complex and very complicated to be really completely aligned and compliant with the new legislation. So far, I see here an upside potential for us. We are talking about some software licenses, and this is not really the solution for the profit question. The upside in Austria, 13% more revenue. Andreas, do you have an explanation for this?
Actually, not yet. I think that has to do with a couple of effects. One coming out of the energy business, Genol and WAV, the Wärme Austria, that had an increase and we changed a bit of consolidation. The activities in the Czech Republic are now fully reported through Austria. That might have another effect, but no, I think that should be it. It's not in one crucial effect.
We had some volumes indeed in the oil business.
Yeah.
In the fuel business. We are really one of the leading fuel station companies in Austria. That's one aspect, volume and maybe also price-driven.
Yeah.
The same impact as we had in Germany as well.
We saw some improvements also in the technical equipment. Division on some of these entities. Finally, there was one new consolidation, City Green, in that I think that's not one effect in total. Yeah. That's all.
And the compound feed production was also much better. Well, that's always excellent performance, as you know, Garant, and it was also in comparison to 2018 on the higher level.
Okay. Thank you very much.
Thank you. We'll now take our next question from Knud Hinkel from Pareto Securities. Your line is open.
Good afternoon. This is Knud Hinkel from Pareto Securities. I got two questions left, if I may. First one, a follow-up question on the question by Mr. Gabriel. I would like to know, as you sold three assets, if I'm not mistaken, how much EBIT has been contributed by these three assets, which are Tessol, Kartoffel-Centrum Bayern , and ahg Autohandelsgesellschaft? That would be my first question. The second question, a more general one. We saw a lot of stress on asset prices in the recent weeks because of Corona prices. I guess that much of your customers in the energy project business, they're looking at different asset classes. Do you expect some impact from this in the next year or in the running year, depressing prices for projects that are running and that should be sold in 2020? Thanks.
Answering your second question, Andreas is calculating still. I do not expect a decrease of the margins in the project business. Maybe we have some postponements. This can happen due to the supply of devices and equipment we need to build the wind and the solar facilities. The solar module trading, by the way, is intact. That's absolutely on track. I don't expect anything, especially because China has opened the plants again. The supply chain should not be broken. Our stock inventory is also on a level where we do not see, at this point in time, significant impact from coronavirus on the business. Maybe there are some postponed projects in this year. This is also, I wouldn't say normal business. It can happen, and it's the usual stuff.
The most important thing will be what's happening in the fourth quarter, especially in the last six weeks of this calendar and fiscal year for BayWa, as always. We have a little bit of time to lead us also through potential impacts due to the crisis. At this point in time, I'm not able, I'm not in the position to tell you something about the financial impact on this. We are still very positive.
Yes, Mr. Hinkel , if I may, the answer on the contribution of the other two sold participations. The one that we saw was Tessol, Klaus also already mentioned, I think the EBIT contribution for 2019 was EUR 10 million, which was really outstanding. For the other two, the AHG, that was the car dealerships, the KCB, which is the Kartoffel-Centrum Bayern , they were only at equity in, the contribution of AHG was roughly about EUR 2 million-EUR 3 million or EUR 2.5 million net profit at equity. The KCB was, I guess, EUR 0.5 million or EUR 0.8 million. Minor issues on that effect. Maybe one word on both transactions, the big one, Tessol and the AHG. I think that we were very lucky to have made these disposals last year.
I think both industries would be probably more hit than through the Corona, if we still had them in.
Yeah, good timing.
Yeah.
Thanks. [audio distortion]
Thank you.
We'll now take our next question from Anne Margaret Crow from Edison Investment Research.
Good morning, gentlemen. Thank you for taking my call.
Pleasure.
Thank you. I'd like to agree that 60 is definitely the new 40.
Thank you. Thank you. Should we switch off all the other lines? Thank you. Yeah.
I have a question about the digitalization, because you've stressed that you need to increase the coverage to get it to profitability and mentioned perhaps working with partners overseas. I'm wondering what types of partners they would be, what countries, and whether you'd be looking at primarily partners serving the arable industry, or whether it would be appropriate talking to perhaps other suppliers. That was my first question. Perhaps we'll take that, and then I'll ask my second question.
Okay. The answer is, we are looking for partners who are closely linked to the farmers because the farmers are the customers, and the access to the farmers, this is absolutely crucial for this digitalization process. That's our experience in Germany and Austria, in some eastern countries, because the farmers are reluctant still, especially the 60s, unfortunately. The other generations maybe a little bit, not seriously, is maybe a little bit different. They are reluctant because they fear that cloud-based data are too easy to get for, let me say, official institutions, if you know what I mean.
Yeah.
Insofar you need someone who understands the needs exactly, and the mood and atmosphere and so forth of the farmers. That's very important. We started some discussions in U.K., for instance, in France, in some Eastern European countries, already. The access to the farmers. Not only a distribution company, let me say, for inputs is a potential partner. Of course, they need to be also involved in this software business and the digitalization business, because this is a very complex one. To explain the products to the farmers, why it's useful for him to improve his processes, to reduce the cost, to become more competitive, and at the end of the day, also profitable, and to understand the structure of the product. The software is not easy to explain. It's not only a turnkey solution type of software.
It is always necessary to have a very individual adaptation of our cloud-based NEXT Farming package, for the farmers. Otherwise, it does not really work. That's the intention. We did not really start in concreto, this process, because our resources are right now more with a private placement in renewable energy, and they had to take care of all these divestments last year. We discussed now and in so far 2019, and we thought we can start at the end of the Q1 in 2020, but now we have, of course, this problem with the corona crisis, because we need physical meetings. We can't do that over the Skype and video conference systems at this point in time. I do not have that we have a such a significant delay.
As you see, we have this loss, which is an investment, but now it's really time to start the rollout process in Europe. I don't speak about abroad, by the way, overseas in the United States also. They are not really waiting for our software products. There's The Climate Corporation and others, Indigo and all these companies, which have also software packages and portfolio, which are similar to BayWa's.
Would that be working, you mentioned working with companies, potential partners who were involved in providing inputs to farmers. Is that primarily arable type farming, or would livestock farming or mixed farming be appropriate, too?
It doesn't matter. Most important thing is that people understand the needs of farmers and understand also the mentality of farmers and the reluctance to invest in such type of technology. I had a little bit, to be honest, two years ago or so, I was a little bit too optimistic that farmers are willing to invest a lot of money very fast in this digitalization. This was, from my point of view, a little bit too aggressive or too positive. Now, for instance, take the automation and the robots for the support in the harvest period. I think that we will have push forward due to the crisis. Maybe you know, we have this joint venture with Google in Silicon Valley called Abundant Robotics, and we have two robots in operation right now in New Zealand, to support the apple harvest.
It's not yet, it's still a prototype machine or a prototype robot. If we are through all the technical adjustments and improvements, we will sell these agri equipment in Europe as well, and I hope that we can, maybe in the autumn period now in Germany, we can use some of these prototype robots to support the farmers for the harvest. Here I see really an interesting business segment for BayWa as well. Well, this type of robot is only for the harvest of apples, but you can adjust the technology also for others.
That'll be interesting watching that development.
Yes.
My other question was relating to the changes that you're making within the agricultural division. You said that this was not just sort of a straight, "Well, let's cut some cost restructuring," but very much refocusing, realigning the business because there's a change in what the market is doing and what the market requires. You mentioned one of the issues being the larger farmers no longer needing storage because they've got their own. Is there anything else that you might be able to pinpoint?
First of all, it depends where we are with the agribusiness. Our international operation BayWa Supply and Trade, we reduced the cost over the last years, around about EUR 13 million, EUR 14 million. We changed the strategy coming from pure commodity trading, not origination, but trading and supply chain as a supply chain manager, especially for soy, wheat, and corn. Most of them was an import coming from Argentina, Brazil, and the United States. We changed that a little bit in reducing the volumes down to something 30 million tons and investing money in specialty companies. Companies who are providing the compound feed, let us say, for instance, with minerals, vitamins, and some other components, and also a little organic products and niche products on the organic basis and so forth.
This was necessary because the volatility of the prices and the volatility of our result in the commodity trading was not really acceptable. You see that this year again. With that, or last year, 2019, again. With other words, for the stability of the BayWa organization, it's extremely important to be invested in specialties. You see that the EUR 20 million, that's coming more or less completely from the specialty business. This was the first strategic change. The second one in Germany was cost-cutting, and we are in the process of cost-cutting, especially in Eastern Germany, because the farms over there are much bigger than in Western Germany, and cost-cutting is necessary because we can't afford anymore the costs. The farmers invested, the big farms invest a lot of money in silos and logistic capacity.
What is our task? Our task is to handle then the logistics for the farmers and to use the deep sea harbors in the Baltic Sea and for the export, because we can organize that for the farmers. They can't do it. We have more and more functional responsibility or functional tasks to the farmers in the future. It's not only that we are the infrastructure for the farmers in East Germany, we are more a service provider, logistics provider, supply chain manager. This means we have to reduce the sites. We have also reduced, unfortunately, the workforce step by step on a social basis, social plan, and all that stuff which is required in Germany. I think we are back on a profitable level over the next, let me say, two years.
In Western Germany, it's a little bit different. Here, we need more digitalized service centers for the farmers. The farms are much smaller than in Eastern Germany. We need silos, we need the infrastructure, this must be a little bit much more modern as it is right now. We have to invest money. Also we have too many sites, around about 200 something, and we are going to reduce it down to 80, 85. That's our plan over the next two years.
Which means new services. We support the customer, the farmers with our digital products. It's a mixture of different things we are doing, especially in Germany. It's a different story in Austria due to the so-called Lagerhaus infrastructure. It's a different business model. In the CEE countries, it's also a mixture of origination, supply chain management for the farmers, digitalization services, and so forth. It is a very complicated and especially a complex task to come back on track with the traditional agribusiness. Of course, we have to obey the consolidation process. It is due to the legislation changes and also the competitiveness, which is not really very good in Western Germany.
A lot of farmers have to surrender, unfortunately. The size of the farms are increasing as well. Insofar, the consolidation process means that we have adapt our business model to the size of the farms in the future, and that's one reason why we have to reduce the number of agri sites here in Western Germany. Is that nonsense logic to you?
It does. It's quite similar to the pattern that's happening in the U.K., in that it's fewer farmers, but the farmers that there are becoming much more sophisticated, much more professional in what they're doing.
Yeah, absolutely. U.K. is through the process, insofar U.K. is for us type of example, good example, or whether it's best in class, I don't know, but it's a good example. Eastern Germany is not really a good example for Western Germany. It has to do with the different structures. You can't compare it. There was the former GDR, the socialist communist cooperatives. That's a completely different story as we had in Western Germany. It's more U.K. Yeah, you're right. It's a good comparison. Like that.
Thank you. Thank you very much for taking my questions.
Yeah, my pleasure.
We will now take our next question from Roland Pfänder from ODDO BHF. Your line is open.
Yes, good afternoon. Three questions from my side. Firstly, if you were to assume that the crisis would take or would last until, let's say, mid-year, how fast could you manage down labor costs or your rental costs? Would you consider opting for Kurzarbeit, for example? Second question, could you specify your undrawn credit facilities? In other words, what's your current liquidity situation? Third question, could you specify the restructuring costs you're planning for the German agricultural business for the next two years? Thank you.
The last question, easy. It's a complex way to go, of course, but it's EUR 17 million restructuring costs. The question with regard to the liquidity, Andreas, you are going to answer, please.
I think we are financed through, as one would say. We are bilaterals. We have the long-term running programs as the hybrid and the Schuldscheindarlehen and all these programs, they are on the long-term good for it. Then we have bilaterals. Please understand, I'm not talking about liquidity lines that we have here in the context, though. It's all safe, I would say, and it's financed through. That's what I could say on that.
Then your question--
On crisis situation? Sorry.
Yes, of course. I mean, of course, we are looking on all these programs also that the governmental sides are offering, if one could think adapt or not. I'm feeling very comfortable on that situation now.
I think on the political level, due to my different jobs I have also for the German Raiffeisen organization or the German Chamber of Commerce and so forth, and the close contact to politicians and the Prime Minister and also the ministers and Federal Government in Berlin, we argue that we in Germany, the economy can't handle the situation for a too long period of time. Otherwise we are really creating significant social troubles and this can't be paid by the Federal budget so easily, because someone has to earn the money, to make the money. It does not come from the bank account alone. Insofar, I'm also in a political position, so to say, together with my colleagues.
Klaus, if I may, just a final remark on this. I mean, just keep in mind that we are still in the circle. We are still open. Our business is running. It's a different situation to what we have seen on shutdowns and different industries. Our business is running. This is not the issue for us, to make this very clear. As Klaus pointed out, this is a system relevant company, being relevant for the consumer industry as well.
For the food supply security, which is absolutely crucial. Coming to the short-time work issue, so to say. The short-time work, we did not apply with the different authorities at this point in time because we don't have a necessity. Maybe once upon in Lake of Constance, it could happen. We had that a few years ago already. At this point in time, we are fully in charge for the supply chain management, as Andreas said. I'm not quite sure whether we asked for short-time work subsidy in Austria, didn't we?
Yes.
I think in Austria we did, because we had to close their building material stores. Austria is an exception, but in Germany, we did not do anything with regard to the short-time work.
Maybe one follow-up specifying the situation with building materials. Do you see any change demand pattern from customers in Germany yet, or do you expect that to come? What's your view on that?
At this point in time, we have a very high demand, higher demand as last year from the craftsmen and the building companies at this point in time. I do not think we can expect that this high demand will be continued over the complete fiscal year. Maybe we will have a dip, and it really depends, of course, on this shutdown period. This is the most crucial thing. At this point in time, we do not see any negative impact. The supply chain with the material we need for the distribution to our customers, the supply chain is on track, so we don't have a broken supply chain. Due to the fact that China is open again, well, I don't see a negative impact.
Maybe we will have on the investor side for new buildings, we will see some problems over the next months. We will have an impact as well, but this is always a little time delay in between. Maybe we'll see that also, maybe earliest, in the third and fourth quarter or also in 2021. At this point in time, we don't have signals from the markets which are so negative.
Okay. Thank you very much.
Welcome.
Thank you. We'll now take our next question from Axel Herlinghaus from DZ Bank.
Hello. From my side, congratulations to contract extension also for me and the important permission of your wife. Just one question to the r.e. business. What were the catalyst for the r.e. project sale being 912 MW when you thought in November it should be around 650 MW? It's really pretty high. Were there some special catalyst for that?
Yes. Besides these physical products that we sold on that was mainly what we communicated on the 600 MW, 700 MW throughout the year. That was add up by some project rights, which they sold, I guess it was in the U.S., and elsewhere. It's not a finalized project, but it's project right, that accounts also for the megawatt numbers.
Okay. Thank you very much.
Thank you. As a reminder, star one to ask a question. Our next question comes from Oliver Schwarz from Warburg Research.
Thank you for taking my questions. First of all, congratulations to the extension of position in BayWa, Mr. Lutz.
Yes, Oliver.
Downside is you'll have to deal with my questions for another five years. Sorry for that.
That's the only reason why I extended my contract, Oliver Schwarz.
Well, glad to hear that. Coming back to those silly questions.
Silly questions, silly answers.
I try to prove you wrong. Corona-related question here. Due to the crisis and due to, I guess, margin calls and else, price for soft commodities went down quite substantially over the last couple of weeks. Are there any inventory write-downs at BayWa in Q1 related to that? That is my first question.
The answer is quite simple, no. Nothing.
Wonderful.
Especially rapeseed. I think you referred to other companies, which made a significant loss with the rapeseed due to the long position they had. We are not involved in that. Well, we didn't make money, to be honest, especially, we are not in a loss position, and we closed all the positions. We don't have any open contracts at this point in time.
Glad to hear that. Very well. Another question refers to some points in your P&L. I saw that advertising spend has gone up by 9% year-on-year in 2019. That's substantially more than the EBIT increase or sales increase. What's behind that? What's behind the increase in advertising?
Yeah. We had Agritechnica, which was as far as very important.
Fair-related cost.
to push the NEXT Farming product portfolio. This was expensive, to be honest. The previous year, we didn't have such an event.
In the current year, that's expected to come down because there's no Agritechnica this year, right?
Not an Agritechnica . It will come down due to FC Bayern Munich, because we will not be any more the key sponsor or main sponsor of Bayern Munich basketball. We are reducing our engagement on a much lower level. There is one event, maybe, it's unclear whether it will take place. That's the ZLF, the German agri fair in Munich.
Yeah. Okay. Next question is mostly, I guess, related to the legal issues you had to face in 2019. I saw that external personnel went up by 20%, and cost for, let's say, anything to do with jurisdiction and the like went up by 41%. All together, those two costs, EUR 31 million and EUR 67 million, almost were half of your EBIT, or resembled half of your EBIT in 2019. As you are currently in a legal dispute with the German state over the payment of the EUR 69 million to the respective authorities, are we to see those costs to drop materially? I heard Mr. Helber said that what we saw in others may come down by EUR 20 million. That would be, let's say, judging from those two cost blocks taken together, like 20% down to EUR 80 million. Would that be a fair assumption?
You mean now for 2020?
Yep, correctly.
No, the cost for this litigation against the federal state is called Amtshaftungsklage, § 839. [Non-English content] BGB, civil code, German Civil Code. The costs for that are. What did we calculate, round about?
It's max EUR 3.5 million, it comes over a couple of years. It will not come only in 2020. This is the overall amount. Yeah, it should be substantially down. I do not expect the EUR 8 million on Emerald. It might have a counter effect on what we have to pay to the investment bank, at least. This is what we do not expect, we do not expect all these RE-related due diligence, vendor diligence, KPMG and whatever it was. This is included in that amount, that should be significantly down.
If I take the external personal cost of EUR 31 million and the legal cost or legal related cost of EUR 67 million, coming up to EUR 90 million, if I deduct the roundabout EUR 20 million or EUR 25 million, I should be on the right path, or would that be too much or too low?
I'm a bit unclear now. I don't have what you're looking at on now in front of me, but I'm a bit unclear on the external personal cost.
I guess that's consultants and the like. It's called Fremdpersonal in the German.
No, this is not included in there. The external costs are third-party workers within the company, mainly. The advisory costs, also the legal advisory costs, that should be all in legal advisory or things like that in our position. If that makes sense, I think that it would be worth to bilateral work through this. I think it's better to have both, that we both have the same document in front of us that we look after.
Fair enough.
You are right. This will be a decrease because we don't have this complex legal advice anymore for the antitrust litigation investigation. This Amtshaftungsklage [Non-English content], we are going to move forward. I think the key amount or most of the amount of money we have to pay to the lawyers will be in 2021, not this year.
Okay. Thank you very much for that. Another specific question in the other operating income in the P&L. In the other item of this compound of income, I saw that there were FX-related capital gains that had no relation to the business. I saw that the capital gain increased quite substantially in 2019. Could you quickly elaborate on what was that? Because that sounds to me a bit like pure speculation on FX, and how is that going to evolve in the current fiscal year?
Mr. Schwarz, definitely, I don't know, once again, where you're looking on it now, but we do not have any currency losses or gains which are not related to the business. Speculation, not knowing where it is now, but I can really say there is no income or losses from speculation. That normally should be offsetted by another position under the other operating expenses. There we have the offset effect. All that we have in there is from hedging activities mainly on the currency issues in RE-related Australian dollar or U.S. dollar or whatever it is. Be sure that we do not have any speculative position in our books as well, not even in the agri trading, but at least in no way on the foreign currency books.
Okay, glad to hear that. A very last question. I promise. I'd like to pick your brain a bit more in relation to what Marc Gabriel tried to weasel out of you. Judging on the EPS, which is now following the adjustment for the hybrid dividend, down to EUR 0.68 per share and was EUR 0.56 per share. In relation to that, the dividend payment of EUR 0.90 for 2018 and the planned EUR 0.95 for 2019 seems to be rather high as it is basically 30% roundabout ahead of net profit. On the other hand, you increased your net debt level because you need more funds, basically. You're basically distributing money you are lending from third parties as a dividend. How long do you think you have to go down that path, basically?
Is there some rationale behind that? Is that a demand from a key shareholder or something? Completely unrelated to that, on page 40 of your presentation, if we can come to that, please, for a second. I'm not quite sure about your calculation behind those numbers, looking on 2020, I see the total assets increasing by EUR 450 million and the equity increasing by EUR 550 million as a projection in this calculation. What is behind that? What are the prime assumptions that lead to those numbers?
Okay, Mr. Schwarz, I would answer this question. Firstly, the first part on the dividend and on the debt structure. Let me be very clear on this. I don't like this EPS concept, to be very honest on it, and we had discussions also with the auditors to show the diluted one or to show the undiluted one. They forced us to show both on the diluted one, if it's a hybrid in or not. I say the following: we have the overall performance of the total group. If it comes then to the EPS, you only calculate the part of the mother group. I have all the costs which is included in BayWa AG, and which covers a lot of functions for the whole group.
If you take the concern first, and you might say they are not worth working, but if it's part of cost and if you take compliance, if you take whatever it is, sustainability management, all the things that we have to do as a group today. This is all related. The whole cost is only related on the mother part of the net income, which is then divided through the number of shares and comes to the EPS. On the other hand, I have the majority of all these companies where I can distribute and where I can, how to say, guide the distributions and the dividends out of these entities into the mother company. This is the one thing. Therefore, I'm looking on the overall performance on the net income of the whole group. This is for me relevant if it comes to dividends.
I know this concept is not very uncritical, and you might have a different view on it, but I like this more because it shows the whole performance of the group. The second thing on the debt structure. Look at the year-end. We discussed it several times already. At the year-end, I have the highest point. The EUR 1.6, for example, which is tied up at year-end as total assets in the renewable energy sector, is already reduced now by another EUR 300 million of cash in the meantime in 2020. This is reducing, and this is floating. I don't know if it's fair enough to say we are distributing the substance, and if you ask anyway, how long can you go through it? We are preparing the thing mainly for the future, and this is in particular with the renewable energy business.
Once we increase the performance and we increase also the results out of these activities, this will further strengthen the dividend contribution of the dividends that we can divide.
Okay. Thank you. In relation to page 40.
Mr. Schwarz, Lutz here. Maybe I understand all these arguments, and I understand also a little bit the concerns, and I understand all that. For me, the most important thing is the operational power of the group and of the BayWa cooperation with all the subsidiaries. Over the last 10, 12 years, we moved more and more to a half, so to say, half-time, part-time holding structure. The most important EBIT contribution comes from our either international business or the new businesses. So far, we soon are going to start a project to review the legal structure of BayWa AG to have, let me say, a more clear picture legally with an immediate consequence also for the dividend policy of our subsidiaries and also the overhead cost structure for the overall group. I'm also not happy with the permanent discussions again and again.
It's always a repeating mode in which we are regarding the question, can we provide to the shareholders the dividend, and how do we organize it? Is this affecting negatively the BayWa AG, and what does it mean? So forth. We are going to change that. This is a significant project we are dealing with over the next, let me say, 12 months, and we are going to start that in the second quarter 2020s.
Great. Thank you very much.
Finally, on your question on page 40, unfortunately, I can't answer that. I've seen the equity effect should reflect the investment of the investor, which is the EUR 560 million or EUR 530+ million X, Y, Z, but I can't comment now out of the blue from the total asset base. I will check it and come back to you on that, if that's fair enough.
Yeah. It was just that there was a discrepancy of total assets and equity, the increase in both parts that made me wonder what's behind that. Yeah, thank you very much for that.
I don't want to give an answer out of the blue now.
Understandable. Thank you very much.
Thank you.
Thank you. As a reminder, it's star one to ask a question. Our next question comes from Dr. Norbert Kalliwoda from Dr. Kalliwoda Research. Your line is open.
Yes. Hello. Thank you for taking my question. Super. I have only one question regarding your acquisitions in Canada. Please, maybe you can quantify this earnings potential, because I think that's a nice market. As I heard, you have there a market potential of three gigawatt. How is it working the last year, and how do you see this in this year contributing to your EBIT, please?
You mean the acquisition PowerHub in Canada?
Yes.
Okay. That's working quite well, but I don't have the figure and I don't know it by heart. We'll check it. Just give me a second. [Non-English content] We are looking for the contribution. Just a second, please.
Thank you.
Do you have another question maybe we can answer that before?
Yeah. You said that you are restructuring that. Is it referring to the personal stuff? Can you give us a figure which personal staff costs we can expect this 2020?
This was the previous years. We are through the restructuring process for BAST already, and we reduced, was it two years ago, I guess, the cost around about EUR 30 million. In 2020, we are in a normal operational mode. Important for us was the investment in the specialty companies like Royal Ingredients, like Tracomex, like, well, then the companies, I forgot the names, the companies in U.K. and so forth. This is a contribution of around about EUR 20 million EBIT.
EUR 1.1 million in revenue.
That's a little startup we acquired in Canada. The EBIT contribution is still quantity negligible.
Okay. Yeah. Thank you so much. Yeah. Nice weekend.
Yeah, same for you.
There appears to be no further questions at this time.
Good. Thank you very much. Thank you, Professor Lutz. Thank you, Mr. Helber. Thank you also to our service provider that the lines are working. This is not always the case in these times. Yes, I hope we will see now soon in a hopefully healthy and stable environment. Until then, we wish you happy and a nice weekend. Thank you.