KWS quarterly figures confirm excellent spring business

May 24, 2012

Double-digit growth in all segments in the important third quarter - Strong North American business boosts corn and sugarbeet

KWS SAAT AG (ISIN: DE0007074007), one of the leading international seed companies, posted double-digit growth rates in all segments in the first nine months of the 2011/2012 fiscal year (as of June 30). Sales of the KWS group rose by 21% to €793.7 (previous year 656.2) million. The operating result (EBIT) improved by over 25% or €34.6 million to €171.0 (136.4) million. The development in the third quarter is decisive for the annual success of the company, as the mainstays of sales, corn and sugarbeet, are sown in this period. During the spring sowing season of 2012, the high-performance KWS corn varieties were in particular demand. The company saw its forecast, which was revised upwards in April, confirmed with the available quarterly figures.

Growth dynamics in the corn segment continue - sugarbeet grows significantly

Driven by the strong development of the North American trade, as well as sales increases in France, Southeastern Europe and Russia, corn sales grew by 22% to €463.8 (380.4) million. In the sugarbeet segment, into which KWS’s seed potato business has been fully integrated for the first time, segment sales have increased to €235.0 (198.4) million. The main sales driver for sugarbeet was North American business, which is almost entirely based on herbicide-tolerant sugarbeet varieties. While KWS maintained its strong market position in its home market of Germany, business in Russia and Ukraine significantly expanded.

Cereal segment benefits from hybrid rye

Hybrid rye, which increased its sales by 25%, contributed to the revenues of the grain segment in the amount of €87.5 (71.8) million. Due to its pronounced winter hardiness, the stocks were spared from frost damage, while the persistent black frosts with extremely low temperatures for winter wheat and winter barley led to regional failures.

KWS increased staffing levels and boosted investment

The number of employees in the KWS group rose across all regions. By the end of the business year, a headcount of 3,850 employees is expected. This is an increase of 8%. In addition to the increase in staff numbers, the planned increase in investments will secure KWS’s long-term growth. The investment volume in the first nine months rose to €33.8 (30.3) million and clearly exceeded the depreciation of €19.9 (17.7) million.

Outlook for the 2011/2012 fiscal year

KWS reports a sales forecast of €980 million with an operating profit of €140 million for the 2011/2012 fiscal year. This corresponds to an EBIT margin of over 14%. “We have systematically increased our expenses for product development by €8 m to €122 m, in order to further improve our competitiveness,” emphasized Dr. Hagen Duenbostel, CFO of KWS SAAT AG.