Business performance of the segments
The Corn Segment grew its net sales by 5.0% to €775.7 (739.0) million in the year under review. That increase is mainly attributable to positive business performance in Europe and South America. In North America, net sales at our 50:50 joint venture AgReliant were on a par with the previous year, while corn and soybean seed business declined slightly as a result of turbulence on the commodity markets due to the pandemic. On the other hand, there were positive exchange rate effects from the increase in the US dollar’s value against the euro. The segment’s income rose by 15.9% to €67.1 (57.9) million. The segment’s EBIT margin rose from 7.8% to 8.6%.
Net sales at the Sugarbeet Segment rose by 6.6% to €491.8 (461.2) million. The successful launch of CONVISO® SMART, an innovative system for controlling weeds that is now available in 24 countries, and exchange rate effects related to translation to the US dollar had a positive impact in the period under review. On the other hand, there was a negative impact from the reduction in sugarbeet cultivation area in the EU27 and in Eastern Europe. The segment’s income was €170.1 million, down from the high level of the previous year (€179.6 million), in which there was the positive non-recurring effect from the establishment of the joint venture Aardevo B.V. Hence, the EBIT margin was 34.6%, as expected below the figure for the previous year (38.9%).
Net sales at the Cereals Segment rose significantly by 11.9% to €191.2 (170.8) million. Hybrid rye seed business made a major contribution to that, largely on the back of good market conditions, rye’s relatively stable yield in dry years and much higher demand for it as feed. While revenue from wheat and barley seed was at the level of the previous year, rapeseed seed was down slightly from the previous year, in particular due to adverse weather conditions at the time of sowing. The segment’s income increased by around 15% to €26.4 (23.0) million, while the EBIT margin was 13.8%, slightly up over the previous year (13.5%).
The Vegetables Segment, which includes the business activities of the vegetable seed producer Pop Vriend Seeds acquired effective July 1, 2019, made a significant contribution of €83.5 million to the KWS Group’s increase in net sales. Its business in the year under review benefited from large demand for spinach seed in North America. Moreover, sales of spinach and bean seed were increasingly buoyant in Europe. The segment’s income (before acquisition-related effects) was €25.5 million. Including noncash effects as part of the purchase price allocation from the sale of inventories that were taken over and remeasured at fair value (€ –11.1 million) and from amortization of intangible assets (€ –21.9 million), the segment’s income was € –7.5 million.
Net sales at the Corporate Segment were €4.6 (3.9) million. They are mainly generated from KWS’ farms. Since all cross-segment costs for the KWS Group’s central functions and basic research expenditure are charged to the Corporate Segment, its income is usually negative. The segment’s EBIT was € –104.9 million and so below the previous year’s figure (€ –97.1 million) due to extra expenditure as part of our reorganization project GLOBE, higher expenses for central R&D activities, and lower income from instruments for hedging foreign currency risks.
The difference from the KWS Group’s statement of comprehensive income and segment reporting is due to the requirements of the International Financial Reporting Standards (IFRSs) and is summarized for the key indicators of net sales and EBIT in the reconciliation table below:
