KWS publishes results for the first half of 2024/2025 and confirms its forecasts

“After a good first half of 2024/2025, our particular focus is on KWS’ key business as part of the upcoming spring sowing season in Europe and North America. KWS is a reliable partner to farmers and, with its innovative high-quality seed, is again helping to secure agricultural yields in this growing season,” said Dr. Jörn Andreas, Chief Financial Officer of KWS. “With our numerous new products and strong financial foundation, we are tackling the current challenges in the agricultural market and confirming our forecasts.”

Business performance in the first half of 2024/2025

The key indicators reported below relate to the continuing operations of KWS following the sale of the South American corn and sorghum business, unless otherwise stated. The transaction was closed in the first quarter of 2024/2025 (effective July 31, 2024). The corn and sorghum business in South America is recognized as a discontinued operation and the previous year’s figures have been adjusted accordingly.

The KWS Group’s net sales in the first six months of fiscal 2024/2025 rose by 5.3% to €417.2 (396.0) million, mainly due to stronger early sales in the Sugarbeet Segment (+14.5%). Comparable net sales growth (excluding exchange rate and portfolio effects) was +5.8%.

The KWS Group’s key indicators for operating income are negative in the first half of the year due to seasonal reasons and were below the previous year’s figures due to special effects. Earnings before interest, taxes, depreciation and amortization (EBITDA) declined to € –65.9 (–58.3) million and earnings before interest and taxes (EBIT) to € –120.7 (–102.0) million. The decline in EBIT is attributable, among other things, to recognition of the portion of the proceeds from divestment of the Chinese corn portfolio in the same period of the previous year (which yielded a positive earnings contribution of around €16 million) and to amortization of the residual carrying amount of the “Pop Vriend” brand (Vegetables Segment) to an amount of €10.4 (1.5) million in the period under review. After adjustment for the above-mentioned effects, a higher gross profit was partly offset by planned higher expenditure on distribution, research and development and administration.

Net financial income/expenses improved to € –32.2 (–39.1) million. Income taxes totaled € –38.2 (–38.3) million. That gave earnings after taxes from continuing operations of € –114.7 (–102.7) million or € –3.48 (–3.11) per share. Taking into account the profit of €106.5 (–6.1) million from the sale of the corn and sorghum business in South America, earnings per share significantly increased to € –0.25 (–3.30).

The free cash flow from continuing operations improved to € –176.2 (–205.0) million. The free cash flow from discontinued operations rose to €270.8 (25.0) million due to the sale of the South America corn and sorghum business.

The equity ratio rose to 54.2% (38.6%), while total assets at December 31, 2024, were €2,589.9 (2,940.6) million. Net debt fell significantly to €343.5 (798.4) million as a result of the sale of the corn and sorghum business in South America.

Business performance of the segments

The Corn Segment grew its net sales by 5.3% to €72.6 (68.9) million in the first half of the year. Since the segment does not generate the lion’s share of its annual net sales until the third quarter (January to March), the segment’s income was negative, as customary for the period under review, and totaled € –115.0 (–105.4) million. The sharp decline in the segment’s income is mainly attributable to recognition of the portion of the proceeds from divestment of the Chinese corn portfolio in the same period of the previous year, which yielded a positive earnings contribution of around €16 million.

Due to seasonal reasons, revenue in the Sugarbeet Segment is low in the first half of the year, since the main net sales for the segment are not generated until the spring sowing season in the third quarter (January to March). However, net sales rose sharply by 14.5% to €137.2 (119.8) million in the first half of the year. The increase is mainly attributable to early sales in some European and Asian markets. The segment’s income is negative as customary in the first half of the year but improved sharply to € –12.0 (–21.8) million.

Net sales in the Cereals Segment, which generates the predominant share of its annual net sales in the first half of the year, were €221.3 million and thus at the level of the previous year (€222.2 million). Oilseed rape, wheat and barley seed business posted slight increases, while net sales from rye seed declined. Net sales from the other activities in the Cereals Segment remained largely unchanged. The segment’s income was €86.1 (87.4) million, likewise on a par with the previous year.

In the Vegetables Segment, net sales rose by 6.3% to €26.1 (24.6) million due to growth in spinach and bean seed business. The segment’s income declined to € –25.8 (–16.1) million due to greater planned expenditure on expanding vegetable breeding and higher amortization of intangible assets totaling €14.8 (5.9) million from the acquisition of Pop Vriend Seeds. The increase in depreciation and amortization is attributable to amortization of the residual carrying amount of the “Pop Vriend” brand to an amount of €10.4 (1.5) million.

Net sales in the Corporate Segment, which are mainly generated by KWS’ farms in Germany, France and Poland, were €6.2 (4.2) million. The segment’s income was € –77.8 million and thus down on the previous year’s figure of € –72.3 million, in particular due to planned higher R&D costs. 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.

Forecasts for fiscal year 2024/2025 confirmed

The Executive Board still anticipates that the KWS Group will grow its net sales by 2% to 4% (on a comparable basis, excluding exchange rate and portfolio effects) and post an EBIT margin in the range of 14% to 16%. The R&D intensity is expected to be between 18% and 19%.

About KWS

KWS is one of the world’s leading plant breeding companies. Around 5,000 employees* in over 70 countries generated net sales of around €1.68 billion in fiscal 2023/2024. A company with a tradition of family ownership, KWS has operated independently for almost 170 years. It focuses on plant breeding and the production and sale of seed for sugarbeet, corn, 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.

*Excluding seasonal workers