KWS SAAT AG – annual shareholder meeting approves conversion into European Company (SE)

December 18, 2014

Shareholders approve a dividend of €3.00 per share - Change in the Executive Board will be completed as scheduled at the beginning of 2015 - KWS SAAT AG intends to continue growing profitably in the 2014/2015 fiscal year - double-digit EBIT margin in line with another increase in R&D and sales expenses

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The shareholders of KWS SAAT AG (ISIN: DE0007074007) approved all proposals of the Supervisory Board and Management Board by a large majority today at the regular annual shareholder meeting in Einbeck. The dividend remained stable in the 2013/2014 fiscal year, despite a nine percent decline in the operating result (EBIT). With a generally good operating performance, revenues were reduced mainly by the planned increase in expenses for product development and sales. In addition, the shareholders called for conversion of KWS SAAT AG into a European Company (SE). The Executive Board spokesman Philip von dem Bussche, who is retiring as part of the succession plan on the Executive Board at the end of 2014, was sent off by the shareholders with great applause.

A strong balance sheet forms the basis for profitable sales growth

KWS shareholders welcomed the long-term growth strategy of the Executive Board. As a result, investments in future corporate growth were increased again in the 2013/2014 fiscal year (as of June 30). R&D expenses increased by 6.0% to €148.8 (previous year: 140.4) million. This resulted in an R&D ratio of 12.6% (12.2%) of sales. Sales increased by 2.7% to €1.178 (1.147) billion. Adjusted for negative currency effects, sales growth would be 7.1%. Due to higher expenses for product development and sales in the amount of €21.9 million, and earnings-reducing currency effects of around €4 million, KWS achieved an operating result (EBIT) of €138.4 (152.1) million. The EBIT margin amounted to 11.8 (13.3) percent. Due to special tax effects, however, the net profit for the year fell disproportionately to €80.3 (92.3) million. In the cash flow statement, cash earnings amounted to €110.4 (109.5) million. By contrast, cash flow from operating activities fell to €61.0 (84.6) million due to higher inventories due to good harvests. The balance sheet total rose slightly by 3.6% to €1.262 (1.218) billion. Equity was slightly down by 1.8% at €637.8 (649.6) million as a result of currency effects of €19.2 million and effects from the acquisition of minority interests in the grain business. This corresponds to a stable equity ratio of 50.5% (53.3%).

Conversion into SE underscores the international orientation of KWS

The Executive Board and Supervisory Board received a great deal of support for the proposal to convert KWS SAAT AG into a European Company (SE). This measure is intended to take account of the growing importance of European-wide and international business activities within the KWS Group. After all, almost two thirds of employees currently working for KWS are located outside of Germany. KWS SAAT AG continues to be unaffected by the legal form of the SE and shareholding remains unaffected.

Changes in the KWS Executive Board at the end of 2014

As already announced by the Chairman of the Supervisory Board Dr. Andreas J. Büchting at the 2013 annual shareholder meeting, the long-serving spokesperson, Philip von dem Bussche, will retire from the Executive Board of KWS SAAT AG at the end of 2014. Dr. Hagen Duenbostel, who was KWS CFO until mid-2013 and has since been responsible for the corn segment, will assume the position of spokesperson on the Executive Board effective January 1, 2015. Effective October 1, 2014, the Supervisory Board had already appointed Dr. Peter Hofmann to the Executive Board of KWS. Dr. Hofmann assumes responsibility for the product segments sugarbeet and cereals, as well as corporate marketing from Philip von dem Bussche. Dr. Peter Hofmann has been with KWS for 20 years, and since 2005 has been responsible for the operational business of the sugarbeet segment.

Outlook: Sales growth with double-digit profit margin aspired to

KWS started the first quarter of the 2014/2015 fiscal year with an increase in sales of 7.8 percent. At the same time, functional costs, including expenses for sales and research & development evolved according to plan. In the full year, these should once again be significantly increased, in order to open up young sales markets and to further promote the breeding of high-yielding new varieties. Overall, the Executive Board expects a revenue increase of 5% and an EBIT margin of at least 10% for the 2014/2015 fiscal year for the KWS Group.