Business development by segment
The Corn Segment posted a sharp fall in net sales to €191.2 (290.9) million in the first half of the year. The effects of a delayed corn growing season due to weather-related reasons, coupled with lower area cultivation, the withdrawal from the distribution of soybean seed in Brazil and a decline in U.S. business weighed on the segment’s performance. In addition, the significant devaluation of the Argentinean peso resulted in appreciable negative exchange rate effects that impacted the segment’s net sales and earnings. Since the Corn Segment does not generate the major part of its annual net sales until the third quarter (January to March) in the Europe and North America regions, the segment’s earnings were negative, as customary for the period under review, and totaled € –100.1 (–70.1) million. The sharp drop in the segment’s income is attributable to the above-mentioned factors, but also takes into account the contribution in the low double-digit million range from a portion of the proceeds from divestment of the Chinese corn portfolio. Further positive earnings contributions from this transaction are expected in the course of the current fiscal year.
Net sales at the Sugarbeet Segment rose sharply in the first half of the year to €119.8 (93.8) million. The increase is mainly attributable to greater early purchases of seed in several European markets. Due to seasonal reasons, revenue from sugarbeet seed is low in the first half of the year; the main net sales for the segment are not generated until the spring sowing season in the third quarter (January to March). The segment’s income is negative as customary in the first half of the year but improved sharply to € –21.8 (–36.1) million year over year.
Net sales in the Cereals Segment, which generates the predominant share of its annual net sales in the first half of the year, rose sharply by 7% to €222.6 (207.8) million, mainly due to strong growth in rye, oilseed rape and wheat seed. On a comparable basis*, the increase was around 10%. This growth was mainly achieved in our core markets Central and Northern Europe. Given the strong growth in net sales and an improved product mix, the segment posted an above-proportionate increase in income to €87.5 (77.5) million.
Net sales at the Vegetables Segment fell by around 14% to €24.6 (28.7) million, mainly due to lower net sales in China and North America. The segment’s income declined to € –16.1 (–3.8) million, in particular due to greater planned expenditure on expanding the vegetable business.
Net sales at the Corporate Segment were €4.1 million and thus at the level of the previous year (€4.3 million). They are mainly generated from KWS’ farms. Since all cross-segment costs for the KWS Group’s central functions and research expenditure are charged to the Corporate Segment, its income is usually negative. The decline in the segment’s income to € –72.2 (–59.3) million is mainly attributable to the expansion of central R&D activities and an increase in administrative expenses.
