KWS publishes results for the first quarter of 2023/2024 and confirms forecasts

Einbeck, 09 November, 2023

Sales at €267.7 (266.3) million at the previous year's level
Strong growth in European autumn sowing
Earnings figures negative on a regular basis
Forecasts for the 2023/2024 financial year confirmed

"For us, the European business with winter crops is particularly crucial in the first quarter; we were able to make good growth here with our strong portfolio, especially in the rapeseed sector,” commented Eva Kienle, CFO of KWS. “Despite climatic and geopolitical challenges, we are confident about the rest of the financial year and confirm our forecasts."

Business development Q1 2023/2024

The KWS Group's sales revenue increased by 0.5% in the first three months of the 2023/2024 financial year and reached a value of €267.7 (266.3) million. Overall, currency effects had a minor impact on sales. The KWS Group's operating earnings figures are, as regularly, negative in the first quarter. EBITDA amounted to €–21.3 (–7.1) million and EBIT was €–48.3 (–33.1) million. A higher gross profit was offset by planned higher costs for research & development, selling and administration. At €–28.4 (–29.8) million, the financial result was at the same level as the previous year. Income taxes amounted to €–21.5 (–16.7) million. This resulted in a result after taxes of €–55.3 (–46.2) million or €–1.67 (–1.40) per share. Free cashflow fell to €–122.4 (–72.0) million, mainly due to the development of operating earnings and the build-up of working capital in the course of the planned business expansion.

Overview of the key figures

in € millions	Q1 2023/2024	Q1 2022/2023	+/-
Net sales	267.7	266.3	0.5 %
EBITDA	-21.3	-7.1	>-100 %
EBIT	-48.3	-33.1	-45.9 %
Net financial income/expenses	-28.4	-29.8	4.5 %
Earnings before taxes	-76.8	-62.9	-22.0 %
Income taxes	-21.5	-16.7	-28.9 %
Earnings after taxes	-55.3	-46.2	-19.6 %
Earnings per share (in €)	-1.67	-1.40	-19.6 %

Business development by segment

Net sales at the Corn Segment fell in the first quarter of 2023/2024 by around 16% to €68.9 (82.1) million. This was mainly due to a decline in demand in the summer season in Brazil, which accounts for a low share of total annual net sales. In the regions of Europe and North America, no significant net sales were generated in the quarter under review due to seasonal reasons. Since the segment does not generate the major part of its annual net sales until the third quarter (January to March), the segment’s earnings were negative, as customary for the period under review, and totaled €–62.3 (–46.5) million.

Net sales at the Sugarbeet Segment, which posts only low sales volumes in the first quarter due to seasonal reasons, rose to €24.2 (20.1) million in the quarter under review. This increase is mainly attributable to earlier deliveries compared with the previous year. The segment’s income was €–35.1 (–34.4) million, on a par with the previous year.

Net sales at the Cereals Segment rose by around 5% year over year in the quarter under review to €163.1 (155.7) million; on a comparable basis*, the increase was around 9%. The increase in net sales is mainly attributable to stronger demand and higher sales prices for oilseed rape seed (€+9.9 million or +16%). Our product portfolio again performed impressively in national variety comparisons. Meanwhile, the rye seed business recorded a decline of €3.4 million in the first quarter due to seasonal fluctuations (–4% compared to the previous year). Net sales from other activities in the Cereals Segment were at the level of the previous year. The segment’s income rose to €71.5 (62.3) million on the back of its successful business performance.

Net sales at the Vegetables Segment rose by around 6% to €11.6 (10.9) million, mainly due to higher sales of spinach seed in North America. The segment’s income fell to €–6.4 (–2.6) million, in particular due to greater planned expenditure on expanding vegetable breeding.

Net sales at the Corporate Segment were €1.9 (1.5) 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 income was €–32.7 million and thus down on the previous year’s figure of €–30.7 million, in particular due to planned higher administrative expenses and research costs.

*excluding exchange rate and portfolio effects

Outlook for the KWS Group for fiscal 2023/2024 confirmed

For the KWS Group, the Executive Board continues to expect sales growth of 3 to 5% (on a comparable basis, excluding currency and portfolio effects) with an EBIT margin of between 11 and 13%. The research & development quota should be in a range of 18 to 19%..

About KWS^*

KWS is one of the world’s leading plant breeding companies. More than 5,000 employees* in over 70 countries generated net sales of around €1.8 billion in fiscal 2022/2023. A company with a tradition of family ownership, KWS has operated independently for over 165 years. It focuses on plant breeding and the production and sale of seed for corn, sugarbeet, cereals, vegetables, oilseed rape and sunflowers. KWS uses leading-edge plant breeding methods to continuously improve yield for farmers and plants’ resistance to diseases, pests and abiotic stress. To that end, the company invested more than €300 million last fiscal year in research and development.

^{*excl. seasonal workforce}