DGAP-News: KWS SAAT AG / Key word(s): Quarter Results
KWS SAAT AG: KWS intensifies efforts aimed at future growth
27.05.2014 / 07:30
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Einbeck, May 27, 2014
No. 21 | gf
KWS intensifies efforts aimed at future growth
Net sales rise after nine months of fiscal 2013/2014 by 4.6% to EUR921.7
million - Negative exchange rate effects and planned expansion of R&D and
sales activities impact income - Profitability remains high
KWS SAAT AG (ISIN: DE0007074007), one of the world's leading seed
companies, increased its net sales by 4.6% to EUR921.7 (previous year:
880.9) million in the first nine months of fiscal year 2013/2014 (ending
June 30). However, operating income (EBIT) fell to EUR167.8 (185.6)
million. Negative exchange rate effects reduced net sales and income. The
announced expansion of research and development (R&D) activities and sales
resulted in additional costs of around EUR30 million in the first nine
months. This expenditure will help the company create the foundations
needed for long-term growth.
A total of just over 13% (11.6%) of the anticipated net sales will be used
for research and breeding in 2013/2014 as a whole. Research activities will
remain focused at Einbeck. In the coming fiscal year, KWS will also begin
work at a second research facility in the U.S. "This will strengthen our
position in global plant research while also further expanding our presence
in one of the key seed markets," said Philip von dem Bussche, CEO of KWS
SAAT AG. "In China, too, we can now take a further step, following the
approval granted by the Chinese Ministry of Agriculture for our joint
venture with our long-standing partner Beidahuang Kenfeng Seed Ltd. This
joint venture will now establish the structures needed to begin its
operations in fiscal 2015/2016."
Higher volumes for corn in North America despite smaller cultivation area
The Corn Segment remains the Group's largest contributor to net sales.
Revenue rose by 7.1% to EUR561.3 (524.2) million, thanks largely to strong
growth in South America and Southeastern Europe. Sales volumes grew in
North America despite a reduction in corn cultivation area due to increased
sowing of soybeans. Exchange rates in North and South America and Eastern
Europe had a negative impact, and EBIT fell by 1.5% to EUR103.5 (105.1)
million.
The performance of the Sugarbeet Segment was helped by continuing high
demand in North America and large parts of Northern Europe. Net sales rose
by 4.7% to EUR259.2 (247.5) million. Higher revenue year on year partly
compensated for greater R&D and sales expenditures, with the result that
the segment's EBIT fell only slightly to EUR75.6 (76.8) million.
Business in the Cereals Segment was impacted by the change in the price of
rye relative to that for wheat. While the price of rye was above that for
wheat in the previous year, the situation was reversed in the current
fiscal year, leading to lower demand for rye seed, in particular in Germany
and Poland. Net sales consequently fell to EUR97.2 (104.8) million. The
changes in the sales mix, coupled with higher expenditure on research and
sales, resulted in EBIT of EUR25.4 (31.9) million. In addition, KWS has
reached an agreement with the family shareholders of KWS LOCHOW GMBH to
acquire the remaining 18.9% stake. A purchase agreement to this effect was
certified on May 26, 2014. The transaction is to be concluded in the
current fiscal year. The family shareholders intend to maintain an
investment in the industry and possibly acquire shares in KWS SAAT AG with
some of the proceeds.
Income in the Corporate Segment was EUR -36.7 (-28.2) million. The KWS
Group's cross-segment function costs and research expenditures are pooled
in the Corporate Segment, whose revenue comes from farms. This revenue
totaled EUR4.0 (4.4) million in the first nine months.
In line with our strategy of sustainable growth, total capital expenditure
by the KWS Group in the first nine months of fiscal 2013/2014 increased to
EUR48.8 (41.7) million. Of that figure, EUR43.3 (38.7) million was on
property, plant and equipment. As in previous years, capital expenditure
was therefore well above depreciation of EUR29.2 (25.8) million.
Outlook: KWS increasing net sales
The KWS Group expects net sales in 2013/2014 as a whole to grow by up to 3%
to about EUR1.2 (1.1) billion, despite negative exchange rate developments
in some important regions. EBIT will be around EUR134 (150.7) million as a
result of higher R&D expenditure, expansion of sales structures and
negative exchange rate effects, giving an expected EBIT margin of 11.4%
(13.1%). "That's still a high level in view of the investments we are
making in our future," noted Philip von dem Bussche.
Contact:
Georg Folttmann
Head of Investor Relations
Phone +49 (0)5561 311 640
Mobile +49 (0)173 29 10 520
georg.folttmann@kws.com
KWS SAAT AG
www.kws.com
End of Corporate News
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Language: English
Company: KWS SAAT AG
GrimsehlstraÃe 31
37555 Einbeck
Germany
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,
Stuttgart
End of News DGAP News-Service
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270569 27.05.2014
DGAP-News: KWS SAAT AG: KWS intensifies efforts aimed at future growth
| Source: EQS Group AG