Business performance of the segments
Net sales at the Corn Segment in the first nine months were €602.7 (607.4) million and thus at the level of the previous year; the segment grew net sales by 9% after adjustment for exchange rate effects. The main contributors to operational growth were the Europe region (in particular Southeastern and Eastern Europe) as well as Argentina and Brazil. However, our U.S. joint venture AgReliant posted lower sales and contributions to earnings in the face of a challenging competitive environment. The segment’s income was €77.7 (79.7) million.
Net sales in the Sugarbeet Segment in the first nine months rose by around 14% to €425.4 (372.4) million. This significant increase is mainly attributable to earlier deliveries of seed compared with the previous year. A slight increase in net sales for the full year is expected for the segment. Moreover, innovative KWS varieties enjoyed increasing success, despite slight declines in cultivation area in Europe. Alongside the continuing progress in launching CONVISO® SMART in Central and Eastern Europe, initial net sales were already generated from newly introduced Cercospora-tolerant varieties (CR+). Cercospora is one of the most widespread and damaging diseases in sugarbeet cultivation. The segment’s income rose to €164.3 (156.9) million.
Net sales at the Cereals Segment in the first nine months were €176.9 (177.3) million and thus on a par with the previous year (growth after adjustment for exchange rate effects: 3%). In particular, there was an appreciable increase in sales volumes for wheat, barley and rapeseed seed. Business operations with hybrid rye seed were stable, although exchange rate effects resulted in a fall in net sales in nominal terms. The medium-term growth prospects for hybrid rye remain due to its high yields, even in arid conditions, and greater animal welfare as a result of using rye in fodder. The segment’s income was €44.4 million, down from the previous year’s figure of €47.4 million.
Net sales at the Vegetables Segment fell significantly to €38.5 (65.0) million, in particular due to lower demand for spinach seed in the wake of the Covid-19 pandemic. The food service market segment in the U.S., our key sales market, was mainly hit by that. This drop in business also meant that EBITDA declined to €2.8 (19.1) million and EBIT (including effects from the purchase price allocation) to € –13.0 (–1.6) million; excluding these effects, EBIT was €6.6 (23.4) million.
As part of expansion of its new business unit for vegetable seed, KWS took over Geneplanta S.r.l., Noceto/Parma, Italy, in March 2021. The company, which was established in 2011, focuses on breeding tomatoes and on producing and selling tomato seed.
Net sales in the Corporate Segment totaled €5.4 (3.4) million. They are mainly generated from our farms. Since all cross-segment costs for the KWS Group’s central functions and basic research expenditure are charged to the Corporate Segment, its income is usually negative. The segment’s income improved to € –75.4 (–81.6) million, among others, due to lower costs as a result of the pandemic and special items.
The difference from the KWS Group’s statement of comprehensive income and segment reporting is due to the requirements of the International Financial Reporting Standards (IFRSs) and is summarized for the key indicators of net sales and EBIT in the table below: