KWS continues its successful expansion (2013-02-26)
Guidance for the end of the fiscal year confirmed / net sales in first half increased by 7.7% to €206.3 million.
KWS SAAT AG (ISIN: DE0007074007) has confirmed the higher guidance it published on February 11, 2013, for the end of fiscal 2012/2013. Apart from positive performance in its cereals business, which is now essentially complete for the year, there are signs of higher demand for corn seed in particular.
Cereals and corn record sharp growth
The first half of fiscal 2012/2013 was impacted by high demand for cereal seed and launch of our business operations in Brazil. KWS’ net sales increased year on year from €191.5 million to €206.3 million. Its operating income in the first half of the year is always negative for seasonal reasons and was € –59.1 million compared with € –31.2 million in the same period of the previous year. The sharp decline in EBIT is attributable not only to the special effects of the previous year but also to the planned expansion of research and development activities and distribution.
KWS grew its net sales in the Corn Segment by 15.9% to €82.9 million in the first half of the fiscal year, with this growth coming from the Brazilian market. As usual for the season, the segment’s income was negative and totaled € –44.3 million compared with € –33.1 million in the same period of the previous year. The planned expansion of distribution structures was mainly responsible for this sharp decline.
KWS also posted a sharp increase in net sales of 21.0% to €94.5 million in its Cereals Segment. In particular, hybrid rye varieties were sold out. Accordingly, the segment’s income improved significantly from €28.0 million to €37.2 million. Since the vast majority of cereals business is transacted in this period, the semi-annual figures are a good indicator of the results for the year as a whole.
By contrast, the performance of the Sugarbeet Segment in the first six months is not indicative of its performance for the year as whole, since sugarbeet is not sown until the spring. Net sales in the first half are due to early orders by our customers, which can vary greatly from year to year. Net sales at this segment were €25.5 million in the first six months and its income € –29.1 million compared with
€ –6.7 million in the same period of the previous year. However, the latter figure was impacted positively by special effects of around €10 million.
Forecast: Another year of strong earnings
After raising its guidance for fiscal 2012/2013 as a whole, the KWS Group anticipates an increase in consolidated net sales of just over 15% to €1.140 billion. On the strength of the increase in demand for corn and cereals that is already visible at this stage of the fiscal year, it will be possible to generate that growth in these segments of the company in particular. KWS now expects its operating income (EBIT) to reach the previous year’s level of €140 million. Accordingly, an EBIT margin of just over 12% is anticipated.
“Our cereals business is going especially well, and we’ll surpass the €100 million mark for net sales for the first time. We’ll also reach that mark in our North American sugarbeet business – a success story written by our genetically improved varieties,” said Dr. Hagen Duenbostel.
Head of Investor Relations
KWS SAAT AG