KWS kicks off fiscal 2012/2013 with double-digit growth in net sales (2012-11-29)
Net sales rise by 22% to €113.1 million – Brazil contributes to revenue for the first time – Strong demand in cereals business – Capital spending remains at a high level
KWS SAAT AG (ISIN: DE0007074007), one of the world’s leading seed companies, has gotten off to a strong start in the new fiscal year 2012/2013 (ending June 30). The KWS Group’s net sales rose by 22% to €113.1 (93.1) million. A third of this growth comes from Brazil, where KWS launched its operations in July 2012. Operating income, which is typically negative in the first two quarters due to the seasonal course of KWS’ business, was at the level of the previous year’s first quarter, at € –22.2 (–22.6) million. As in previous years, cereals business was the mainstay in the period July to September, accounting for over 60% of net sales. Our main contributors to net sales for the year as a whole – corn and sugarbeet – are not sown until the spring.
Strong demand for rye – counter-seasonal corn business off to a good start
Strong demand in the market for consumer cereals induced famers to expand cultivation areas, especially for rye. KWS benefited from the resultant much stronger demand for high-yielding hybrid varieties. Sales of winter wheat and winter barley varieties also rose sharply. Net sales at the Cereals Segment thus increased to €69.5 (55.5) million. The segment’s income improved significantly to €27.6 (18.9) million.
The Corn Segment benefited for the first time from the company’s new activities in Brazil. However, net sales of winter rapeseed were lower year on year due to weather conditions. Overall, net sales from corn business rose to €32.7 (25.4) million. The segment’s income was € –24.4 million, on a par with the previous year’s figure of € –24.0 million.
Sugarbeet seed business was slightly weaker than in the same period of the previous year, with net sales totaling €9.0 (10.6) million, while income fell to € –14.3 (–7.6) million. A particular factor here was that, unlike in the previous year, there were no special factors that positively impacted results. Income for the period was thus at the level of fiscal 2010/2011.
Headcount increases – Capital spending at a high level
KWS continues to make high investments in property, plant and equipment: €17.2 (17.4) million, as usual well above depreciation of €8.7 (6.4) million. They mainly related to expenditure to modernize sugarbeet seed production in North America and to expand corn production capacities in France. The number of employees increased to 4,423 in the period under review, primarily as a result of acquisition of the Brazilian operations. By the end of the fiscal year, the KWS Group’s workforce is to be increased by around 15% over the previous year (3,851).
Outlook: KWS plans growth with a double-digit return
Hagen Duenbostel, Chief Financial Officer of KWS SAAT AG, makes the following forecasts for fiscal 2012/2013: “Our performance in the first quarter confirms our forecast. We expect the Group’s net sales for the year as a whole to grow by about 10% (previous year: €986.3 million). Given that product development and distribution expenses will rise at the same time, we currently assume that we can achieve an EBIT margin of just over 11%.”
Head of Investor Relations