KWS’ quarterly numbers confirm outstanding spring business (2012-05-24)
Double-digit growth in all segments in the key third quarter – Strong business in North America boosts corn and sugarbeet sales
KWS SAAT AG (ISIN: DE0007074007), one of the world’s leading seed companies, posted double-digit growth rates across all segments in the first nine months of fiscal 2011/2012 (ending June 30). Net sales at the KWS Group increased by 21% to €793.7 (previous year: 656.2) million. Operating income (EBIT) improved by €34.6 million or just over 25% to €171.0 (136.4) million. The company’s third-quarter performance is crucial to its success in the year as a whole, since the main contributors to its net sales – corn and sugarbeet – are sown in this period. There was particularly strong demand for KWS’ high-yielding corn varieties in the 2012 spring sowing season. In the view of the company, the upward revision of its guidance in April has been borne out by the latest quarterly figures.
Dynamic growth in the corn segment continues – sugarbeet sales increase sharply
On the back of strong business in North America and increased sales in France, Southeastern Europe and Russia, net sales in the Corn Segment grew by 22% to €463.8 (380.4) million. Net sales for the Sugarbeet Segment, in which KWS’ seed potato business has been fully integrated for the first time, rose to €235.0 (198.4) million. The mainstay here was once again business in North America, which is based almost wholly on herbicide-tolerant varieties. While KWS maintained its strong position in its home market of Germany, it significantly expanded business in Russia and Ukraine.
Cereals Segment profits from hybrid rye
The Cereals Segment posted revenue of €87.5 (71.8) million, helped by a 25% increase in sales of hybrid rye. Because the latter is very winter-hardy, it did not suffer frost damage while, in contrast, long spells of black frost with extremely low temperatures resulted in regional failures of the winter wheat and winter barley harvests.
KWS increases workforce and capital spending
The number of employees in the KWS Group increased across all regions. The Group expects the workforce to total 3,850 at the end of the fiscal year, an increase of 8%. Apart from the higher headcount, capital spending, which was increased as planned, will secure KWS’ long-term growth. Investments in the first nine months rose to €33.8 (30.3) million, well in excess of depreciation at €19.9 (17.7) million.
Outlook for fiscal 2011/2012
KWS expects to post net sales of €980 million and operating income of around €140 million in fiscal 2011/2012, giving an EBIT margin of just over 14%. “At the same time, we have increased our product development investments as planned by 8 million to 122 million euros to further improve our competitiveness,” stressed Dr. Hagen Duenbostel, Chief Financial Officer of KWS SAAT AG.
Head of Investor Relations