Business performance of the segments
Net sales at the Corn Segment declined slightly to €131.8 (133.4) million. Business expanded buoyantly (in terms of local currency) in Brazil and Argentina, our main markets in South America. On the other hand, there were significant negative exchange rate influences from the Brazilian real and Argentinian peso. The business in North America declined in the face of a challenging competitive environment. The segment’s income was € –69.1 million, on a par with the previous year’s figure of € –68.2 million. The Corn Segment does not generate significant net sales and contributions to earnings until the spring sowing season in the third quarter (January to March).
Net sales at the Sugarbeet Segment rose in the first half of the year to €43.1 (27.9) million. The sharp increase is mainly attributable to a higher proportion of early sales in Germany and Eastern Europe. In the previous fiscal year, such deliveries were not recorded until after the New Year. The segment’s income in the first six months was € –45.6 million and so at the level of the previous year (€ –46.3 million). Although net sales rose, there were in particular higher negative exchange rate effects and higher research and development expenditure. As is customary, 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).
Net sales at the Cereals Segment in the first six months were €156.1 million, on a par with the previous year (€157.1 million). Whereas exchange rate effects likewise negatively impacted the figure, there was a noticeable increase in sales volumes for wheat, barley and rapeseed seed. Business operations with hybrid rye seed were stable, although net sales fell 4% year over year due to exchange rate effects. The medium-term growth prospects for hybrid rye remain positive. The segment’s income was €52.3 million and so at the level of the previous year (€53.8 million).
Net sales at the Vegetables Segment fell sharply to €26.0 (44.3) million due to lower demand for spinach seed in the wake of the Covid-19 pandemic, which hit the food service market segment particularly hard. 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 € –8.7 (2.3) million.
Net sales in the Corporate Segment rose to €3.6 (2.5) million. They are mainly generated from KWS 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 € –39.1 (–54.4) million, mainly due to positive exchange rate-related valuation effects from financial instruments and lower costs as a result of the pandemic.
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: