Business development by segment
The corn and sorghum business in Brazil and Argentina is no longer included in the management reporting for the Corn and Cereals Segments because of the intention to sell it. Comparative segment information has been adjusted retroactively.
The Corn Segment posted a decline in net sales by around 9% to €572.1 (629.4) million. Negative exchange rate effects, particularly from Eastern European currencies, the Turkish lira and the US dollar, meant that the change on a comparable basis* was –4%. In Europe, net sales after adjustment for exchange rate effects remained stable. However, our U.S. joint venture AgReliant recorded a decline in its business activities in a challenging environment and thus performed worse than expected. The segment’s income rose to €82.7 (60.7) million and includes a positive earnings contribution of around €30 million from the completed divestment of the Chinese corn portfolio.
Net sales in the Sugarbeet Segment rose exceptionally sharply by around 25% to €687.6 (551.1) million in the period under review (on a comparable basis*: +38%). The strong increase in net sales resulted from double-digit growth in all main sugarbeet markets. In addition to positive market conditions for sugarbeet cultivation overall, the sustainable product innovations CONVISO® SMART and CR+ made a particular contribution to that and now account for around 56% (40%) of net sales. The success in this year’s growing season once again underscores KWS’ leading position in the sugarbeet seed market. The segment’s income rose above-proportionately to €291.0 (194.7) million due to the improved product and price mix.
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 9% to €250.9 (230.1) million, mainly due to growth in rye, oilseed rape and wheat seed. Allowing for negative exchange rate effects, particularly in Eastern Europe, the increase on a comparable basis* was even 12%. This growth was mainly achieved in the core markets Central and Northern Europe. The Brazilian sorghum business, which was previously included in the Cereals Segment, was reclassified to discontinued operations. Given the growth in net sales and an improved product mix, the segment posted an increase in income to €79.0 (69.8) million.
Net sales at the Vegetables Segment fell by 11% to €40.6 (45.7) million, mainly due to lower net sales in China and North America. The segment’s income fell to € –21.8 (–9.5) million due to greater planned expenditure on the long-term expansion of the vegetable business and lower earnings contributions from existing business operations (mainly spinach and bean seed). The segment’s income includes effects from the purchase price allocation as part of company acquisitions totaling € –8.8 (–9.0) million.
Net sales in the Corporate Segment totaled €7.1 (7.2) million. They are mainly generated from KWS farms. Since all cross-segment costs for the KWS Group’s central functions and research expenditure that cannot be allocated to the segments are charged to the Corporate Segment, its income is usually negative. The segment’s income fell to € –96.0 (–82.6) million, in particular due to higher R&D expenditure.
