Corporate | 25 February 2011 07:30

KWS SAAT AG: KWS posts strong growth in all segments

KWS SAAT AG / Key word(s): Half Year Results

25.02.2011 / 07:30

KWS posts strong growth in all segments

Net sales expected to grow by about 5% this year – Return on sales of KWS Group to climb above 12% – More corn and cereals sold in first half of current fiscal year – Improved results in all segments

(Einbeck, February 25, 2011/No.14/gf) – KWS SAAT AG (ISIN: DE0007074007), one of the leading international seed companies, grew its net sales and improved its operating income across all segments in the first six months of fiscal 2010/2011. Revenues rose by just over 25% to EUR151.1 (previous year: EUR120.6) million on the back of a strong performance by corn and cereals. Operating income improved compared to the previous year by EUR12.5 million to EUR -39.6 (EUR -52.1) million. Due to the seasonal nature of seed business, KWS generates only around a fifth of its annual net sales in the first half of the year, so it regularly posts negative income in that period.

Corn is growing dynamically – cereals stronger than in the previous year
With revenue of EUR63.6 (55.9) million, the Cereals Segment was the largest contributor to net sales in the first half. Above all, hybrid rye business and sales of winter wheat in the UK contributed to this development. This was positively influenced by the rise in cereal prices. A slight increase in net sales and income in the Cereals Segment is expected by the end of the fiscal year. The Corn Segment is characterized by far greater dynamic growth. Net sales at the segment rose by almost 60% to EUR50.5 (31.7) million, benefiting from good advance sales of corn seed in North America. Because of high world market prices for corn for consumption, greater demand for corn seed is anticipated for the coming sowing season. The company expects to grow net sales at the segment by at least five percent for the year as a whole. Sales of sugarbeet seed in the EU 27 will also increase in view of the continuing high level of sugar prices on the world market. On the other hand, there has not been a final decision on the extent to which genetically improved sugarbeet from KWS can be cultivated in the U.S. – a final court ruling is expected in this respect.

Capital spending remains at a high level
KWS is continuing its investment strategy to secure its long-term growth. Its investments are focused on the construction of corn production facilities abroad and expansion of the research facilities at Einbeck. KWS invested a total of EUR21.2 (27.1) million in the first half of the year. The number of employees increased to 3,561 (3,375) and is expected to rise to around 3,600 (3,492) by the end of the fiscal year.

Outlook: Return on sales to rise to just over twelve percent in the fiscal year
Operating income at the KWS Group will grow faster than net sales. At the same time, the company is significantly increasing its R&D budget in the current fiscal year. Overall, the KWS Group again expects to see operational growth in the current fiscal year. ‘We expect net sales to increase by about 5% and to achieve higher margins. On top of this, special effects will have a positive impact on earnings,’ said Hagen Duenbostel, Chief Financial Officer of KWS SAAT AG. The KWS Group’s return on sales is therefore expected to climb from almost 11% to just over 12% in fiscal 2010/2011.

Contact:
Georg Folttmann
Phone: +49 (0)5561 / 311-640
g.folttmann@kws.com

* The figures in parentheses are those for the previous year

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Language:	English
Company:	KWS SAAT AG
	Grimsehlstraße 31
	37574 Einbeck
	Deutschland
Phone:	+49 (0)5561 311-0
Fax:	+49 (0)5561 311-322
E-mail:	info@kws.com
Internet:	www.kws.de
ISIN:	DE0007074007
WKN:	707400
Listed:	Regulierter Markt in Frankfurt (Prime Standard), Hannover; Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart

End of News DGAP News-Service

113452  25.02.2011