Business performance of the segments
The Corn Segment posted a sharp increase in net sales of around 25% to €900.5 (723.2) million due to strong growth in its core markets of Europe and Brazil. In Europe, net sales increased by around 21%, mainly due to higher market share and better prices. Higher sales prices and positive exchange rate effects resulted in an increase in net sales of around 37% in Brazil. By contrast, our U.S. joint venture AgReliant recorded a decline in its business activities and thus performed worse than expected. The segment result improved significantly to € 92.6 (72.6) million as a result of the overall positive business development.
Net sales in the Sugarbeet Segment rose sharply by around 25% to €551.1 (441.4) million in the period under review. This increase was mainly attributable to growth in Central and Eastern Europe and in the U.S. The industry is currently benefiting from a good price level for raw sugar. Once again, the sustainable product innovations CONVISO® SMART and CR+ made a noticeable contribution to business success, accounting for around 40% (28%) of net sales. Against a backdrop of increasing regulation of pesticides and rising disease pressure as a result of climate change, these innovations make an important contribution to achieving stable beet yields with less use of pesticides. Despite burden on earnings from destruction of inventories as a result of changes in the regulatory framework the segment’s income was at €194.7 and thus well above the previous year’s figure of €162.4 million.
Net sales in the Cereals Segment in the first nine months rose sharply to €240.9 (200.2) million, or by around 20%, mainly due to buoyant growth in oilseed rape, wheat and rye seed. The Cereals Segment also achieved high growth rates with its catch crops, an area with a highly promising future, and with its organic seeds. In addition, business with sorghum seed in Brazil was very pleasing. The segment’s income rose to €72.0 (53.5) million on the back of the strong growth in net sales and an improved product mix.
Net sales at the Vegetables Segment rose in the first nine months by 32% to €45.7 (34.5) million. This growth is mainly attributable to an improved business with spinach seed in the U.S. and China. In addition, there was an increase in sales of bean seed. The segment’s income improved to € –9.5 (–15.3) million as a result of the course of business and lower effects from the purchase price allocation as part of company acquisitions. The segment’s income takes into account the planned increase in R&D expenditure of €10.8 (7.1) million, which is mainly earmarked for the establishment of breeding programs for new types of vegetables.
Net sales in the Corporate Segment totaled €7.2 (7.2) million. They are mainly generated from our farms. Since all cross-segment costs for the KWS Group’s central functions and research expenditure that cannot be allocated to the segments are charged to the Corporate Segment, its income is usually negative. The segment’s income fell to € –83.0 (–77.8) million, in particular due to higher R&D expenditure.
