DGAP-News: KWS SAAT AG: KWS confirms guidance for the year despite restrained start to fiscal 2013/2014

| Source: EQS Group AG
DGAP-News: KWS SAAT AG / Key word(s): Quarter Results
KWS SAAT AG: KWS confirms guidance for the year despite restrained
start to fiscal 2013/2014

28.11.2013 / 07:30


Einbeck, November 28, 2013
No. 60 | gf

KWS confirms guidance for the year despite restrained start to fiscal

Net sales fall in the first quarter by 9% to EUR103.1 million - Budget for
research and development raised by 13% to around EUR159 million

KWS SAAT AG (ISIN: DE0007074007), one of the world's leading seed
companies, has followed the outstanding results of previous years with a
more restrained start into the new fiscal year 2013/2014 (ending June 30).
The KWS Group's net sales in the first quarter fell by 9% to EUR103.1
(113.1) million, primarily as a result of lower sales volumes in the
Cereals Segment stemming from a sharp drop in prices for cereals for
consumption. In contrast, corn and sugarbeet, the main contributors to net
sales for the year as a whole, are not sown until the spring. This highly
seasonal nature of KWS' business means that its operating income is usually
negative in the first two quarters. In addition, the company has markedly
increased its expenditures for research and development as well as for
distribution in order to secure its long-term growth. Consequently,
operating income (EBIT) fell to EUR -38.9 (-22.2) million.

Net sales from cereals fall - Corn benefits from South American business

Lower consumer prices dampened trends in the Cereals Segment. As a result,
cultivation areas - especially for rye - were reduced significantly in
Germany and Poland. Net sales for the segment fell by 15.5% to EUR58.7
(69.5) million. However, it should be noted in this regard that the rye
business experienced a special boost last year because of the exceptional
circumstance that rye prices were above those for wheat. The lower
contribution margins from the rye business, coupled with additional
expenditure on product development and distribution for all cereals, were
reflected in an above-proportionate decline in income of 25% to EUR20.7
(27.6) million.

In contrast, net sales in the Corn Segment rose by almost 11% to EUR36.2
(32.7) million, primarily as a result of growth in South America. Business
with winter rapeseed was at the level of the previous year. The segment's
income fell by 15% to EUR -28.1 (-24.4) million due to the planned increase
in function costs. The greatest growth potential at the KWS Group is still
in the Corn Segment, which for seasonal reasons generates only about 5% of
annual sales in the first quarter. A crucial factor will be the price of
corn for consumption in the spring of 2014, which will influence the
planting decisions of North American farmers.

Net sales in the Sugarbeet Segment fell by 24% to EUR6.8 (9.0) million due
to shifts between quarters. The reduction in net sales, and the fact that
expenditures are distributed evenly over the year, meant that the segment's
income decreased to EUR -18.0 (-14.3) million.

Expansion of activities in all central functions

As a result of the planned expansion of activities in all central
functions, income at the Corporate Segment was EUR -13.5 (-11.1) million.
The KWS Group's cross-segment function costs and research expenditures are
pooled in this segment.

Capital expenditure on property, plant and equipment was also increased
throughout the Group to EUR18.1 (17.2) million and was thus well above
depreciation at EUR9.1 (8.7) million. The main individual investments
related to the expansion of corn production capacities in North America and

Outlook: KWS plans to grow net sales with a double-digit return

KWS expects that weaker cereals business and slightly lower revenue from
sugarbeet will be more than compensated for by growth in the Corn Segment.
The company currently expects to increase net sales overall by 5% to around
EUR1.2 billion (1,147 million) and to post an EBIT margin of 11.5% (13.1%).
Eva Kienle, CFO of KWS, adds: 'Up-front costs for developing new products
and markets mean a lower margin. In fiscal 2013/2014 we will spend some
EUR159 million, compared with EUR140.8 million last year, on product
development alone. On top of that will be major investments of around
EUR100 million to underpin our future growth.'


Georg Folttmann
Head of Investor Relations
Phone: +49(0)5561 311 640
Mobile: +49(0)173 29 10 520


End of Corporate News


28.11.2013 Dissemination of a Corporate News, transmitted by DGAP - a
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Language:    English                                                     
Company:     KWS SAAT AG                                                 
             Grimsehlstraße 31                                           
             37555 Einbeck                                               
Phone:       +49 (0)5561 311-0                                           
Fax:         +49 (0)5561 311-322                                         
E-mail:      info@kws.com                                                
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,        
End of News    DGAP News-Service  
242015 28.11.2013