25.02.2014
KWS SAAT AG DE0007074007
DGAP-News: KWS SAAT AG: KWS confirms forecast for 2013/2014 with its Semiannual Report
DGAP-News: KWS SAAT AG / Key word(s): Half Year Results
KWS SAAT AG: KWS confirms forecast for 2013/2014 with its Semiannual
Report
25.02.2014 / 07:30
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Einbeck, February 25, 2014
No. 11 | mw
KWS confirms forecast for 2013/2014 with its Semiannual Report
Net sales in the first six months up by 1.6% to EUR209.5 million -
Continued expansion of research and development activities and higher
expenditure by the sales and production units to ensure future growth
KWS SAAT AG (ISIN: DE0007074007), one of the world's leading seed
companies, performed in line with its planning in the first six months of
fiscal year 2013/2014 (ending June 30). Net sales rose by 1.6% to EUR209.5
(previous year: 206.3) million. Strong corn business compensated for a fall
in net sales from cereals, which was caused by the expected unfavorable
price trends in the market for cereals for consumption. Since only cereals
business is largely completed in the first half of the year and the main
revenue drivers corn and sugarbeet are not sown until the spring, operating
income (EBIT) is negative in this period. Higher expenditure on research
and development and sales reduced EBIT above-proportionately compared to
the previous year to EUR -93.8 (-59.1) million.
Forecast for the fiscal year confirmed
In view of the KWS Group's performance in the first six months, the
Executive Board confirmed its forecast for the year and still expects net
sales to grow by as much as 5% to about EUR1.2 billion (1,147 million) and
operating income to fall by approximately 8% to around EUR140 million for
fiscal 2013/2014 as a whole, giving an EBIT margin of 11.7% (13.1%). "The
foundation for our company's long-term growth clearly lies in
systematically expanding our research and breeding activities and
continuously strengthening our sales and production units. That's why we
are continuing to invest in our future and planning to increase our budgets
from year to year - in this year alone by additional expenditure of some
EUR40 million," is how Philip von dem Bussche, CEO of KWS SAAT AG,
explained the growth strategy. Around EUR20 million of that amount was
allocated in the first half of the year, although most of the Group's net
sales and planned growth is not achieved until the sales season for its
revenue drivers corn and sugarbeet in the second half of the fiscal year.
Strong business in the Americas despite negative currency effects
Aided by strong growth in business in South America, net sales in the Corn
Segment increased by 15.3% to EUR95.6 (82.9) million. Together with initial
revenue in North America from seed for the spring sowing season, business
in the Americas contributed about two-thirds to the segment's net sales in
the first six months, despite negative currency effects. As anticipated,
the segment's income fell as a result of the considerable expansion of
production and sales structures as well as higher expenditure on the
development of varieties. Since higher net sales partially compensated for
that, EBIT fell only by 26.6% to
EUR -56.1 (-44.3) million.
Net sales at the Sugarbeet Segment were EUR25.9 million, virtually at the
level of the previous year (EUR25.5 million). The lower revenue in the
first three months, which was caused by shifts between quarters, was thus
fully offset. Around one-third of net sales came from seed potato business,
which is part of the Sugarbeet Segment. Higher function costs likewise
reduced this segment's net income for the period: EBIT fell by 21.3% to EUR
-35.3 (-29.1) million.
Weaker consumer prices resulted in the Cereals Segment posting a 9.7% drop
in net sales to EUR85.3 (94.5) million. Following record highs in the
previous year, the price of rye fell again, causing farmers - especially in
Germany and Poland - to significantly reduce the area used to cultivate it.
Wheat and rapeseed prices also fell. That and additional expenditure on
product development and sales meant the segment's income dropped by 32.3%
to EUR25.2 (37.2) million.
The planned increases in all central functions meant that the Corporate
Segment's income was well in the red at EUR -27.6 (-22.9) million. The KWS
Group's cross-segment function costs and research expenditures are pooled
in this segment, while its only source of revenue is from the farming
operations, which contributed EUR2.7 (3.4) million in the first six months.
Total capital expenditure well up year on year
In addition to increasing the research and development budget, KWS invested
EUR29.0 (27.6) million in property, plant and equipment in the first half
of the year. Depreciation and amortization was EUR14.1 (12.5) million,
meaning that, once again, investments exceeded depreciation by a
significant margin. The main single investments went to expanding
production capacities for corn seed processing in Europe and North and
South America, as well as modernizing sugarbeet seed production in North
America. Total capital expenditure increased by 16.7% to EUR33.6 (28.8)
million, of which more than half was allocated to the Corn Segment.
Contact:
Georg Folttmann
Head of Investor Relations
Phone: +49(0)5561 311 640
Mobile: +49(0)173 29 10 520
[email protected]
KWS SAAT AG
www.kws.com
End of Corporate News
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Language: English
Company: KWS SAAT AG
Grimsehlstraße 31
37555 Einbeck
Germany
Phone: +49 (0)5561 311-0
Fax: +49 (0)5561 311-322
E-mail: [email protected]
Internet: www.kws.de
ISIN: DE0007074007
WKN: 707400
Indices: S-DAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hannover;
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart
End of News DGAP News-Service
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