DGAP-News: KWS SAAT SE / Key word(s): Final Results
KWS SAAT SE: The KWS Group continues its profitable growth - Profit
beats expectations
15.10.2015 / 07:00
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Einbeck, October 15, 2015
No. 46 | ww
The KWS Group continues its profitable growth - Profit beats expectations
Operating income (EBIT) surpasses original expectations - Technology
platform expanded - Dividend of EUR3.00 per share proposed - Handover to
next generation at Arend Oetker - Further growth anticipated for fiscal
2015/2016
KWS SAAT SE (ISIN: DE0007074007) and its international subsidiaries
continued with their profitability in fiscal 2014/2015. Despite the tough
market environment and planned higher expenditure for research and
development (R&D) and distribution activities, the KWS Group showed
operating income of EUR138.0 (previous year: 138.4) million. As already
announced on September 1, it was thus above the original expectations and,
at 10.9%, markedly higher than the long-term EBIT goal of 10%. Net sales at
the KWS Group rose by 7.0% to EUR1,260.4 (1,178.0) million.
Unlike in the previous year, net sales and expenses of the 50:50 joint
ventures are not allowed to be recognized in the KWS Group's statement of
comprehensive income due to first-time application of International
Financial Reporting Standard 11 (IFRS 11). The figures from the previous
year have thus been adjusted to enable comparison in the current Annual
Report.
<pre>
In EUR millions Net sales EBIT
2014/2015 2013/2014 2014/2015
2013/2014
According to segment reporting 1,260.4 1,178.0 138.0 138.4
According to IFRS statement of 986.0 923.5 113.4 118.3
comprehensive income
(application of IFRS 11)
</pre>
Internal corporate controlling will still take into account the net sales
and expenses from the 50:50 joint ventures. To enable better assessment and
greater transparency of the individual segments' operating performance and
our capital expenditure, the following figures include, as in previous
years, the KWS Group's 50:50 joint ventures proportionately.
Segment reporting: All segments with an EBIT margin above 10%
The Corn Segment increased its net sales by 5.5% to EUR754.4 (714.9)
million in the year under review. There were considerable boosts to growth
in particular in North and South America, while cultivation area declined
overall worldwide. Adjusted for exchange rate effects - appreciation of the
US dollar and Argentinean peso and depreciation of the Brazilian real,
Russia ruble and Ukrainian hryvnia - net sales were EUR736.0 million.
Selling and research expenses rose by EUR31.7 million over the previous
year, giving income for the segment (EBIT) of EUR84.2 (100.9) million, or
an EBIT margin of 11.2 (14.1)%.
The Sugarbeet Segment, which also includes KWS' seed potato business, grew
net sales by 11.2% to EUR390.5 (351.1) million. Of that figure, sugarbeet
seed business accounted for EUR364.4 (318.5) million and seed potato
business for EUR26.1 (32.6) million. In particular, positive trends in
North America, Russia, Turkey and France contributed to this strong overall
rise. The segment's income (EBIT) increased above-proportionately to
EUR93.0 (70.2) million. In particular the strong performance in North
America, positive exchange rate effects and lower allowances on receivables
had a positive impact, with the result that the significant increase in
selling and research expenditure was more than compensated for. The EBIT
margin was 23.8 (20.0)%.
Net sales in the Cereals Segment increased by 3.7% to EUR111.3 (107.3)
million. That was an good performance despite low consumer prices for
wheat, barley and rapeseed; net sales of barley seed group-wide even
increased by around 50%. The complete acquisition of MOMONT added about
EUR6 million to revenue in the year under review. Lower net sales of
high-quality hybrid rye varieties and the planned increase in function
costs resulted in a decline in the segment's income (EBIT) to EUR12.0 (17.1
million), giving an EBIT margin of 10.8 (15.9)%.
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. Due to the increase in
R&D spending, its EBIT in fiscal 2014/2015 was
EUR -51.2 (-49.7) million.
"Despite some turbulence in agricultural markets and a reduction in
cultivation area in many places, we were able to stay on our growth path in
the past fiscal year," said Hagen Duenbostel, Chief Executive Officer of
KWS SAAT SE. "Our objective is still to develop the company sustainably by
further expanding our research and breeding activities to develop strong,
competitive varieties." The R&D budget rose as planned by 15.9% to EUR173.8
(150.0) million in fiscal 2014/2015, corresponding to an R&D intensity of
13.8 (12.7)% relative to net sales. The KWS Group obtained 429 (336)
marketing approvals for new varieties across all crops, so the product
pipeline is very well filled. At the same time, global distribution
structures were expanded further as part of the company's continuing
expansion of its international business operations. Selling expenses
consequently increased by 11.5% to EUR236.7 (212.3) million. Net income for
the year was EUR84.0 (80.3) million.
Additional licensing agreements
Additional long-term licensing agreements have been concluded with Syngenta
in order to strengthen the technology platforms of KWS and Vilmorin & Cie,
listed company of Limagrain. These agreements authorize KWS and Vilmorin &
Cie and their common joint ventures GENECTIVE and AGRELIANT on a separate
and independent basis to make commercial use of current and future
genetically improved corn traits developed and marketed by Syngenta. The
upfront payments made by the respective companies total 200 million US
dollars. Further payments may mature in the long run, depending on
regulatory approvals. The agreement complements and widens KWS' future
product portfolio in addition to the existing long-term trait licensing
agreements.
"As an independent seed company it has always been our primary desire to
deliver the best products to the farmer. With this renewed agreement we
will be able to meet the requirements of our customers, based on the global
strength of our corn germplasm and a wide range of competitive GM corn
traits delivering sustainable solutions. Furthermore the agreement allows
GENECTIVE to follow its open architecture strategy of combining its own
corn GM traits with leading trait platforms in the industry," commented
Hagen Duenbostel.
Capital expenditure increases by 70%
The KWS Group invested a total of EUR140.6 (82.6) million in fiscal
2014/2015, around EUR58 million more than in the previous year. The focus
was on the acquisition of the remaining 51% share in the French seed
company SOCIETÃ DE MARTINVAL S.A. (MOMONT) and measures to support planned
future growth, such as establishment of a corn processing plant in Serbia
and various projects to further expand the Einbeck location.
Unchanged dividend of EUR3.00 a share proposed
The Executive Board and the Supervisory Board intend to continue the
earnings-oriented dividend policy, which envisages a payout of 20% to 25%
of the KWS Group's net income for the year, for fiscal 2014/2015. Their
joint proposal on the appropriation of the profits to shareholders is to
keep the dividend unchanged at EUR3.00 a share. Subject to the consent of
the Annual Shareholders' Meeting on December 17, 2015, a total of EUR19.8
million from the net retained profit of KWS SAAT SE will therefore be
distributed.
Handover to next generation at Arend Oetker
Dr. Arend Oetker has informed KWS that he has transferred 95% of the shares
of his asset management company in equal parts to the next generation of
the family - Marie Schnell, Johanna Oetker, Leopold Oetker, Clara Oetker
and Ludwig Oetker - as part of an anticipated succession. This company,
Kommanditgesellschaft Dr. Arend Oetker Vermögensverwaltungsgesellschaft mbH
& Co., holds 25% of the voting shares in KWS SAAT SE. Arend Oetker has
transferred entrepreneurial responsibility for the KWS shares held by the
Oetker family to his daughter Dr. Marie Theres Schnell, Munich.
Arend Oetker has pooled his shares in KWS with those of the founding family
Büchting since 1994. Arend Oetker's heirs have now notified KWS that they
have likewise joined this pool effective October 7, 2015. The pool still
holds the majority of voting rights in KWS SAAT SE, meaning that the
families Büchting and Oetker ensure the company's independence. Both
families intend to continue their joint involvement over the long term.
Forecast: Continued sustainable earnings outlook for 2015/2016
Application of International Financial Reporting Standard 11 (IFRS 11)
means that the forecast for the KWS Group's statement of comprehensive
income will no longer include the net sales and expenses of the 50:50 joint
ventures. In its future financial reporting, KWS will mainly use this
forecast as a benchmark and report on the KWS Group's net sales and profit
in accordance with the new standard.
"Our strategic focus is still on expanding our business operations in our
young growth markets and increasing our already high level of
competitiveness in our core markets," said Eva Kienle, Chief Financial
Officer of KWS SAAT SE. "We'll therefore further increase our expenditure
on research and development and distribution activities." These measures
will be supported by extensive investment projects. A particular focus of
that will be on expanding and modernizing production plants in the growth
markets of Eastern and Southeastern Europe and in the U.S. and on expanding
research and development facilities at several locations. All in all, the
Executive Board expects net sales to grow further in a range between 5% and
10% and the EBIT margin to be at least 10.5% in fiscal 2015/2016.
Expectations for the 2015/2016 fiscal year
<pre>
Forecast In EUR millions Sales (e) EBIT margin
for 2015/ (e)
2016 for 2015/2016
According to IFRS statement of comprehensive 1,035 - > 10.5%
income 1,085
(application of IFRS 11)
</pre>
The full report on fiscal year 2014/2015 can be downloaded from the
Internet at www.kws.com/ir.
You can find the Sustainability Report at www.kws.com/sr2015.
Contact:
Georg Folttmann
Head of Supervisory Board's Office
Phone +49-5561-311-640
Mobile +49-173-2910-520
georg.folttmann@kws.com
KWS SAAT SE
http://www.kws.com
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Language: English
Company: KWS SAAT SE
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: 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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402755 15.10.2015
DGAP-News: KWS SAAT SE: The KWS Group continues its profitable growth - Profit beats expectations
| Source: EQS Group AG