KWS grows in all segments and raises guidance for 2011/2012 (2012-02-24)
Cereals and corn business better than planned – KWS Group expected to grow net sales by around 10% – Workforce growing in Germany and abroad
KWS SAAT AG (ISIN: DE0007074007), one of the world’s leading seed companies, grew across all segments in the first six months of fiscal 2011/2012 (ending June 30). Boosted by strong cereals and corn business, net sales rose by 27% to €191.5 (previous year: 151.1) million. Operating income (EBIT) rose year on year by €8.4 million to
€ –31.2 (€ –39.6) million, a figure affected by the fact that substantive sales activities in the main business segments corn and sugarbeet do not begin until spring. The net sales figure of the KWS Group in the first half of the fiscal year is only about a fifth of the annual total; income in the first six months thus primarily reflects costs.
Cereals Segment surpasses previous year’s net sales in the first half
On the back of strong demand in hybrid rye business and the sharp rise in sales in Poland, net sales in the Cereals Segment rose to €78.1 (63.7) million and have thus already surpassed the figure for the whole of 2010/2011. Sales of winter cereal varieties matched the high level of the previous year. Overall, the continuing good level of prices for cereals for consumption had a positive impact on the segment’s net sales.
Demand for corn unbroken – Sugarbeet Segment stable
Net corn sales were better than expected, rising by almost 34% to €71.5 (53.5) million on the back of growth in the key markets of North America, France and Germany. Net sales in the Sugarbeet Segment increased by 22% to €37.2 (30.6) million. Particularly customers from the Netherlands and Russia purchased seed earlier than usual.
KWS hires new employees and increases capital expenditure
To secure the company’s long-term growth, KWS is hiring additional employees in Germany and abroad. In the first six months, the number of employees increased to 3,885 (3,561). The company is also staying with its investment policy. In the period under review capital expenditure was increased to €26.9 (20.2) million, well above depreciation at €10.9 (10.2) million. The funds were used in part to acquire new breeding areas and buildings for the potato business in the Netherlands and to expand production capacities in Argentina.
Outlook: Forecast for the year raised slightly
Since cereals and corn business is above expectations, the KWS Group’s net sales and income guidance needs to be revised. “Due to our performance in the first half of the fiscal year, we are raising our forecast for net sales slightly to around €940 (previously 910) million. The EBIT margin is expected to be almost 12%,” said Hagen Duenbostel, Chief Financial Officer of KWS SAAT AG.
Head of Investor Relations