Business performance of the segments
The Corn Segment grew its net sales significantly to €200.7 (131.8) million in the first half of the year. KWS’ core markets in South America, Brazil and Argentina, mainly contributed to that growth. The business in Brazil benefited not only from an increase in cultivation area and sales prices, but also from the growing market success of our variety portfolio. Since the segment does not generate the major part of its annual net sales until the third quarter (January to March) in the Europe and North America regions, the segment’s earnings were negative, as customary for the period under review, and totaled € –66.4 (–69.1) million. However, the operating result improved significantly in Brazil.
Net sales at the Sugarbeet Segment rose in the first half of the year to €60.9 (43.1) million. The increase is mainly attributable to earlier shipments in Germany and business expansion in North Africa. Due to seasonal reasons, revenue from sugarbeet seed is low in the first half of the year; significant net sales are not generated until the spring sowing season in the third quarter (January to March). The segment’s income was € –45.2 million and thus at the level of the previous year (€ –45.3 million). The Turkish lira’s sharp depreciation impacted the value of internal financial instruments (€ –6.0 million), which thus reduced the segment result.
Net sales in the Cereals Segment, which generates the predominant share of its annual net sales in the first half of the year, rose by 12% to €174.9 (€156.1) million, mainly due to strong growth in rapeseed seed. That business was boosted (by 41%) in particular on the back of favorable market conditions and an improved performance by the variety portfolio. Rye seed business also developed very strongly. While net sales from wheat seed likewise increased, revenue from barley seed declined due to unfavorable weather conditions. Given the strong growth in net sales and an improved product mix, the segment posted an above-proportionate increase in result to €62.3 (52.3) million.
Net sales at the Vegetables Segment fell to €21.9 (26.0) million, mainly due to high inventories at distributors in the wake of the COVID-19 pandemic. Business is expected to pick up in the second half of the fiscal year. As a result of the course of business and further expansion of the Business Unit Vegetables, the segment’s income fell to € –10.6 (–8.7) million. Excluding effects from the purchase price allocation as part of company acquisitions, the segment’s result declined to € –0.8 (4.1) million.
Net sales in the Corporate Segment rose to €5.1 (3.6) million. They are mainly generated from KWS’ farms. Since all cross-segment costs for the KWS Group’s central functions and research expenditure are charged to the Corporate Segment, its income is usually negative. The sharp decline in the segment’s results to € –52.9 (–39.1) million is mainly attributable to positive effects of €12.3 million from the valuation of US$-based financial instruments in the same period of the previous year.
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 reconciliation table below: