24.11.2016
KWS SAAT SE DE0007074007
DGAP-News: KWS Group kicks off fiscal 2016/2017 with growth in net sales and income
DGAP-News: KWS SAAT SE / Key word(s): Quarterly / Interim Statement
KWS Group kicks off fiscal 2016/2017 with growth in net sales and income
24.11.2016 / 07:30
The issuer is solely responsible for the content of this announcement.
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Einbeck, November 24, 2016
No. 70 | ww
KWS Group kicks off fiscal 2016/2017 with growth in net sales and income
Operational growth in the first quarter - Revenue increases in particular
in Argentina and Brazil - Net income for the period influenced positively
by special effects - Additional expenditures reduce EBIT margin
expectations for the fiscal year as a whole
The KWS Group (ISIN: DE0007074007) has increased its net sales by 13.7% to
EUR133.3 million in the opening quarter of fiscal 2016/2017. Net income for
the period before taxes (EBIT) was EUR-28.8 million, an improvement of
38.7%. Corn and soybean seed business in Brazil and Argentina was expanded.
Winter rapeseed business in Europe also contributed to the increase in net
sales. However, winter cereals business in Europe declined slightly. Due to
additional expenditures, KWS anticipates an EBIT margin of between 10.0%
and 10.5%.
"We are pleased about our overall good performance in the first quarter.
However, the major part of the fiscal year is still ahead of us. How the
spring sowing season goes in our core markets is crucial to KWS' success in
the year as a whole," said Eva Kienle, Chief Financial Officer of KWS SAAT
SE, about the published results. Higher revenues were accompanied by a
moderate rise in the cost of sales. Among other things, the fact that the
company no longer has to pay license fees for corn technology in Argentina
had a positive impact. While selling expenses remained stable year on year,
expenditure on research & development rose by around 9%. Administrative
expenses declined. As to the other operating expenses, negative exchange
rate effects had a far lower impact on net income for the period than in
the previous year. Inventory write-downs increased slightly due to the rise
in inventories. All in all, EBIT for the first quarter improved by 38.7%.
It was EUR-28.8 million as of September 30, 2016.
Segment reports: Corn and oil seed business help increase net sales
The Corn Segment grew its operational business in the first quarter,
increasing its net sales by nearly 42% to EUR71.4 (50.3) million. The
strongest growth in net sales was from corn business in Argentina, despite
significant negative exchange rate influences. An increase in local corn
cultivation area helped in this regard. Revenue also increased in corn and
soybean seed business in Brazil. The segment's income benefited among other
things from lower negative exchange rate effects and the fact that the
company no longer has to pay license fees in Argentina. It totaled EUR-24.5
(-45.2) million. The positive trend in the segment's income in the first
quarter does not allow any conclusions to be drawn about earnings for the
entire fiscal year due to the quarter's slight importance for the year as a
whole. The lion's share of net sales at the segment is generated in the
third and fourth quarters (January to June).
Net sales at the Cereals Segment fell by around 11% to EUR50.0 (56.4)
million. Rapeseed business in the first quarter was a little lower year on
year; some net sales shifted to the second quarter. Revenue from rye
declined slightly and the performance of the British pound also had a
negative impact on the segment's net sales. However, barley business
remained stable and revenue from wheat was increased. As a consequence of
the decline in net sales, the segment's EBIT fell to EUR11.9 (15.7)
million.
Net sales in the Sugarbeet Segment remained at the good level of the
previous year and totaled EUR12.8 (12.8) million. Revenues in the first
quarter come mainly from the sale of sugarbeet seed in the U.S., Chile and
the Middle East. The segment's income improved largely due to lower
negative exchange rate influences and was EUR-13.1 (-16.4) million.
All cross-segment costs, such as expenditure for all central functions at
the KWS Group and long-term research projects, are carried in the Corporate
Segment. Its income is therefore always negative. A slight increase in
research expenditures and the fact that, unlike in the previous year, there
were no positive exchange rate effects resulted in an EBIT of
EUR-20.2 (-16.8) million.
Reconciliation table
in EUR million Segments Reconciliation KWS Group1 Net sales 135.6 -2.3 133.3 EBIT -45.9 17.1 -28.81) Excluding the shares of the equity-accounted companies AGRELIANT GENETICS LLC., AGRELIANT GENETICS INC. and KENFENG - KWS SEEDS CO., LTD. Forecast: Net sales growth below 5% - Reduced EBIT margin expectations KWS does not expect to see any easing in the economic climate this fiscal year. The competitive situation remains challenging, especially in its core market of Europe. The KWS Group therefore still expects its growth of net sales below 5%. Additional expenses as a result of newly planned distribution projects, the rising cost of sales and higher anticipated write-downs of inventories due to the above-average increase in inventories in the first quarter will reduce expected earnings at the end of the fiscal year. KWS expects an EBIT margin of between 10.0% and 10.5%. Capital spending is forecast at EUR100 million and the R&D intensity at around 17%. The full quarterly report can be downloaded on the Internet at www.kws.com/ ir. About KWS* KWS is one of the world's leading plant breeding companies. In fiscal 2015/2016, 4,850 employees in 70 countries generated net sales of EUR1,037 million and earnings before interest and taxes (EBIT) of EUR113 million. A company with a tradition of family ownership, KWS has operated independently for 160 years. It focuses on plant breeding and the production and sale of seed for corn, sugarbeet, cereals, 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 EUR182 million last fiscal year in research and development, 17 percent of its net sales. For more information: www.kws.com. Follow us on Twitter(R) at https://twitter.com/KWS_Group. * All figures excluding the shares of the equity-accounted companies AGRELIANT GENETICS LLC., AGRELIANT GENETICS INC. and KENFENG - KWS SEEDS CO., LTD. Contact: Wolf-Gebhard von der Wense Head of Investor Relations Phone: +49-5561-311-968 Mobile: +49-151-18855673 [email protected] KWS SAAT SE www.kws.com --------------------------------------------------------------------------- 24.11.2016 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. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de --------------------------------------------------------------------------- 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, Tradegate Exchange End of News DGAP News Service --------------------------------------------------------------------------- 523727 24.11.2016
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