DGAP-News: KWS SAAT AG: KWS kicks off fiscal 2014/2015 with growth in net sales


DGAP-News: KWS SAAT AG / Key word(s): Quarter Results
KWS SAAT AG: KWS kicks off fiscal 2014/2015 with growth in net sales

26.11.2014 / 07:30

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Einbeck, November 26, 2014
No. 49 | gf

KWS kicks off fiscal 2014/2015 with growth in net sales

Net sales in the first quarter rise by 7.8% year on year - Function costs
increased as planned to strengthen long-term growth - Expectations for the
year as a whole confirmed

KWS SAAT AG (ISIN: DE0007074007), one of the world's leading seed
companies, has begun the new fiscal year 2014/2015 by growing net sales
7.8% to EUR105.3 (previous year: 97.7) million. Function costs, in
particular spending on distribution and research and development, increased
as planned in the first quarter of 2014/2015 in line with the corporate
strategy of long-term growth. "Our goal is to continue working rigorously
to tap our newer sales markets. At the same time, we intend to expand our
leading position in established markets with high-yielding new varieties,"
said Philip von dem Bussche, CEO of KWS SAAT AG, in outlining the
foundation of the company's further growth.

The first quarter is traditionally impacted by cereals business and, to an
increasing extent, corn activities in South America. Corn and Sugarbeet,
the two segments with the highest net sales, generate the lion's share of
their revenue only when the spring sowing season starts. That means
operating income (EBIT) is always negative in the first two quarters. EBIT
fell to EUR -35.1 (-26.8) million in the period under review. This figure
includes additional expenditure on research and development, distribution
and administration of EUR12.1 million compared with the same quarter of the
previous year. In order to prepare for its planned growth in the coming
years, KWS is also increasing its capital spending, mainly in expanding
seed processing capacities. Capital expenditure in the first quarter of
2014/2015 rose by EUR24.2 million to EUR37.2 million, of which EUR20.2
million was on property, plant and equipment.

Net sales in the Corn Segment benefited from strong growth in South America
and a positive performance in winter rapeseed business, which improved by
just over 15%. Net sales rose by 32.0% to a total of EUR47.8 (36.2)
million. Including the planned rise in function costs, the segment's income
(EBIT) was EUR -34.6 (-28.1) million.

Net sales at the Sugarbeet Segment rose overall by 10.3% to EUR7.5 (6.8)
million. Given large harvests and sugar stocks, as well as an anticipated
decline in cultivation area in the 2015 growing season, however, this
cannot be regarded as a trend for the fiscal year as a whole. The segment's
income (EBIT) was EUR -15.3 (-18.0) million.

Low consumer prices dampened trends in the Cereals Segment in the first
quarter of fiscal 2014/2015. Net sales fell by 4.3% to EUR56.2 (58.7)
million. Higher expenditure on product development and distribution,
coupled with lower contribution margins from hybrid rye business, led to a
drop in the segment's income (EBIT) by 5.3% to EUR19.6 (20.7) million.

Cross-segment function costs and basic research expenditure are charged to
the Corporate Segment, whose income is therefore always negative. The
segment's income in the first quarter of 2014/2015 was EUR -17.6 (-13.5)
million.

French cereals activities acquired in full

KWS acquired the remaining 51% stake in the French seed company Société de
Martinval S.A. from the Momont family effective September 30, 2014. With
the established brand name MOMONT, which will be retained, KWS will
strengthen its wheat breeding activities in France and is planning in
particular to intensify research into as well as production and marketing
of cereal seed and rapeseed in this important market.

Outlook: Guidance confirmed despite difficult market environment

Large harvests in the 2014 growing season are currently resulting in low
consumer prices for corn, soybean and wheat in the agricultural sector. The
world market price for sugar has also fallen sharply. Despite this rather
difficult market environment, the company is confirming its guidance at the
segment level. Consequently, growth in net sales of just over 5% to around
EUR1.25 billion and a double-digit EBIT margin are still anticipated for
fiscal 2014/2015. "We've decided to issue our guidance and segment
information on the basis of our internal corporate controlling structure so
that we can continue to report transparently on our operational development
even after the changes to IFRS 11 and the adjustment to the consolidated
methods that entails," explained Eva Kienle, CFO of KWS SAAT AG. "As a
result, the guidance and presentation of the segments' results still
include our 50:50 joint ventures proportionately. However, the contribution
margins of these companies are reported in the net financial
income/expenses in the income statement."

The full report on our business performance in the first quarter of
2014/2015 can be downloaded in the Internet at www.kws.com/ir.

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



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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:      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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