25.02.2016
KWS SAAT SE DE0007074007
DGAP-News: KWS Group confirms net sales and EBIT targets
DGAP-News: KWS SAAT SE / Key word(s): Half Year Results
KWS Group confirms net sales and EBIT targets
25.02.2016 / 07:30
The issuer is solely responsible for the content of this announcement.
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Einbeck, February 25, 2016
No. 15 | ww
KWS Group confirms net sales and EBIT targets
Revenue increased in the first half of the year - First-half income (EBIT)
impacted by planned increase in spending on research and distribution -
Expected EBIT margin of at least 10% at the end of the fiscal year
confirmed
KWS SAAT SE (ISIN: DE0007074007), one of the world's leading seed breeding
companies, reports a rise in net sales for the KWS Group after the first
six months of fiscal 2015/2016. Revenue increased sharply year on year by
13.1% to EUR219.5 million. Income (EBIT) is typically negative in the first
half of the year and was impacted in particular by the planned increase in
spending on research and development and on distribution. It was EUR-106.3
(-96.8) million. An EBIT margin for the KWS Group of at least 10% is still
expected at the end of the fiscal year.
"We are very pleased to be able to confirm our expectations for net sales
and earnings at this point, because it wasn't necessarily a given in view
of the currently challenging market climate in the agricultural sector,"
said Eva Kienle, Chief Financial Officer of KWS SAAT SE. "We're also
managing that without jeopardizing our future growth, since expenditure on
research & development and on distribution is being increased as planned."
After the first half of the year, spending on research & development was
EUR87.3 (78.7) million and selling expenses were EUR83.5 (74.9) million.
Administrative expenses were EUR37.6 million, i.e. at about the same level
of the previous year (EUR37.0 million), despite a sharp expansion in the
volume of business. Operating income, which is usually negative at this
time of the year, was EUR-106.3 (-96.8) million. Apart from spending on
growth, the net effect from negative currency influences and higher cost of
sales due to extreme weather in seed production were responsible for the
year-on-year decline.
Total capital expenditure in the first six months was EUR54.2 (78.7)
million. It was sharply higher in the previous year due to the acquisition
of the remaining shares in the French cereal breeder SOCIETÉ DE MARTINVAL
S.A. (MOMONT).
Segment reporting: All product segments grow net sales year on year
Net sales in the Corn Segment were EUR115.7 (99.6) million, a year-on-year
increase of 16.2%. Early sales of corn seed in North America and positive
business performance in Argentina contributed to that. In Brazil, organic
growth was offset by the significant devaluation in the real. In Europe,
the performance of winter rapeseed business was particularly gratifying,
with a sharp increase in revenue. The segment's income was mainly affected
by higher expenditure on research & development and on distribution, as
well as by negative exchange rate effects. In addition, extreme weather in
South America and Europe resulted in bottlenecks in seed production in some
regions. That increased the costs of sales. The segment's income at the end
of the period under review was EUR-87.3 (-63.2) million.
Net sales at the Sugarbeet Segment increased markedly in the first six
months. Revenue rose to EUR46.9 (28.9) million, mainly due to higher early
orders. The markets of the UK, the Netherlands and Turkey contributed to
that in particular. Due to higher net sales and lower adverse exchange rate
factors in Eastern Europe, the segment's income increased to
EUR-28.6 (-42.2) million or by 32.2%.
In view of low producer prices, net sales in the Cereal Segment were, as
expected, restrained in the first half of 2015/2016. Although net sales
rose slightly to EUR86.0 (83.7) million, this was mainly due to the
previous year's acquisition in the French cereal market. Hybrid rye and
wheat sales declined. However, winter barley business performed positively.
The segment's income fell clearly to EUR19.0 (23.7) million, primarily due
to the decline in the hybrid rye business.
The Corporate Segment carries cross-segment function costs and research
expenditures, and its only revenue comes from our farms. The segment's
income developed as planned and was EUR-33.0 (-32.6) million in the first
half of 2015/2016.
Forecast: EBIT margin of at least 10% confirmed for 2015/2016
Although the general conditions in the market are challenging, KWS expects
to grow net sales by 5% to 10% in the current fiscal year 2015/2016. The
basis for this continued positive performance is the large number of
marketing approvals for new high-performance varieties, which increased by
almost 30% to 429 in the last fiscal year. We expect to gain market share
in particular in the regions Southeastern and Eastern Europe, but also once
again in South America. A crucial factor here will be how the currently
strained market situation develops.
Expenditure on future growth will be expanded moderately as planned. The
research & development intensity is expected to be 17% to 18% of net sales
at the end of the fiscal year. We confirm our earnings expectations from
the last quarter and anticipate an EBIT margin of at least 10% for the KWS
Group at the end of the fiscal year. Capital expenditure will again exceed
EUR100 million, in particular due to expansion of our research and
production structures and acquisition of access to new trait-technology.
About KWS*
KWS is one of the world's leading plant breeding companies. In fiscal
2014/15, 4,700 employees in 70 countries generated net sales of EUR 986
million and earnings before interest and taxes (EBIT) of EUR 113 million. A
company with a tradition of family ownership, KWS has operated
independently for some 160 years. It focuses on plant breeding and the
production and sale of seed for corn, sugarbeet, cereals, potatoes,
rapeseed and sunflowers. KWS uses leading-edge plant breeding methods to
continuously improve yield and resistance to diseases, pests and abiotic
stress. To that end, the company invested EUR 174 million last fiscal year
in research and development, 17.7 percent of its net sales. For more
information: www.kws.com. Follow us on Twitter(R) at
https://twitter.com/KWS_Group.
*All figures exclude KWS' 50/50 joint ventures AGRELIANT GENETICS LLC.,
AGRELIANT GENECTICS INC., GENECTIVE S.A.
Contact:
Wolf-Gebhard von der Wense
Head of Investor Relations
Phone +49 (0) 5561 311 968
Mobile +49 (0) 151 18 85 56 73
[email protected]
KWS SAAT SE
www.kws.com
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25.02.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: KWS SAAT SE
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: Regulated Market in Frankfurt (Prime Standard), Hanover;
Regulated Unofficial Market in Berlin, Dusseldorf,
Hamburg, Munich, Stuttgart
End of News DGAP News Service
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439889 25.02.2016
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