.
- Net sales increase by more than 15% to €986 million
- Operating income (EBIT) up 21% to €141 million despite much higher R&D expenditure
- Growth in all product segments
- Dividend to be raised by 22% to €2.80
KWS SAAT AG (ISIN: DE0007074007), one of the world's leading seed companies, achieved outstanding figures in net sales and earnings in fiscal 2011/2012 (ending June 30). The guidance figures, which were raised twice in the course of the year, were again surpassed. On the back of high prices for agricultural raw materials worldwide, the KWS Group's net sales rose by 15.3% to €986.3 million. EBIT improved above-proportionately by 20.8% to €140.9 million, mainly due to expansion in operational business, the reversal of allowances on receivables and positive exchange rate effects. The EBIT return was 14.3%, an increase from the previous year's already high figure of 13.6%. So that the KWS Group can keep on improving its competitiveness, research & development expenditure was increased as planned by 11.5% to €126.6 million. Net income for the year rose by 29.5% to €94.4 million, benefiting from the fact that the tax rate fell to 30% (previous year: 34%). Given these gratifying financial statements, the Executive Board and Supervisory Board will propose to the Annual Shareholders' Meeting that the dividend be increased by almost 22% to €2.80 (previous year: €2.30) a share.
Corn Segment continues its dynamic growth
Business in the Corn Segment, which makes the largest contribution to our net sales, benefited from the still very dynamic nature of the market in North America and Europe, which the KWS Group was able to leverage with its portfolio of high-performance varieties and high seed availability. Net sales in this segment increased by 19.7% to €571.5 million. Operating income improved even more sharply, by 22.3% to €77.8 million, on the back of the reversal of allowances. As a result of the high prices for agricultural raw materials worldwide, farmers mainly used quality seed and further increased the area used to grow grain corn. Market share was increased both in the U.S. and in Europe using regionally differentiated distribution systems.
Net sales at the Sugarbeet Segment over €300 million for the first time
The Sugarbeet Segment's net sales rose by 6.7% to €313.4 million, likewise driven by strong business in North America. Almost 90% of this revenue is attributable to the sugarbeet product area, while 10% is accounted for by seed potato business, which was fully consolidated in the Sugarbeet Segment for the first time in fiscal 2011/2012. While revenue from sugarbeet increased in North America, it did not quite reach the previous year's level in the EU 27. Income increased by 21.2% to a total of €79.9 million. The reversal of allowances and effects from exchange rate movements had a positive impact on the segment's income. Philip von dem Bussche, CEO of KWS, commented: "Our success in North America continues to be based on our genetically improved sugarbeet varieties."
Cereal business increases sharply
Net sales in the Cereals Segment increased by 19.9% to €93.3 million. Income improved better than expected and was at €18.9 million, an increase of 30.3%. Income was boosted by the positive price trends for cereals for consumption, but especially by the QualityPlus® brand, with which a new standard of quality has been established in Germany.
Breeding & Services Segment discontinued
Net sales at the Corporate Segment (formerly Breeding & Services) were €8.1 million in the year under review (previous year: €6.5 million). They are made up of revenue from our farms, services for third parties and net sales from strategic projects. The segment's income was € -35.7 (-27.4) million and includes all cross-segment expenses. That includes administrative costs for all central functions at the KWS Group, as well as costs for long-term research projects whose results are not yet ready for the market. However, product-related expenses for breeding activities have been carried directly in the product segments since the beginning of fiscal 2011/2012. The segment's income thus reflects KWS' extensive research activities.
Net cash from operating activities increases again - company's growth underpinned by solid financing In fiscal 2011/2012, cash earnings at the KWS Group increased to €117.8 (104.1) million. After the increase in receivables and inventories and higher short-term provisions are netted off, the cash flow from operating activities is €104.2 (101.2) million. Hagen Duenbostel, Chief Financial Officer of KWS, noted: "Cash flow from operating activities was again above the high level of €100 million. €56.6 (52.4) million were used for investments, including €9.0 million for the acquisitions in Brazil. That leaves a strong free cash flow of €47.6 (48.8) million." On the balance sheet date (June 30, 2012), cash and cash equivalents, including securities, amounted to €183.0 (146.9) million. Minus borrowings, net liquidity was thus €107.9 (113.3) million. Equity rose by €72.8 million to €603.1 million and, as in the previous year, fully covers noncurrent assets and inventories. Since total assets also increased, the equity ratio fell slightly to 55.2% (58.8%).
Research budget increased as planned and jobs created
Research & development expenditure was increased as planned in fiscal 2011/2012 to enable the future development of high-performance varieties. "Modern plant breeding is high-tech, in which we steadily improve our seed," said Philip von dem Bussche. "Every year, we spend between 12% and 15% of our revenue on R&D. In the year under review, we invested €126.6 (113.5) million in order to keep on improving our competitiveness. That safeguards existing jobs and creates additional ones at KWS." The KWS Group's workforce, which is now made up of employees in more than 70 countries, increased by more than 8% to an average of 3,851 (3,560) in the fiscal year.
Outlook: Continuation of operational growth
KWS anticipates further growth in the Corn Segment in fiscal 2012/2013. Apart from increases in North America and China, net sales will be generated in Brazil for the first time. While the level of net sales of the previous year in our sugarbeet seed business can hardly be maintained, seed potato business is to be expanded further after the tough previous year with its difficult market conditions. The sales opportunities for cereals are again rated positively.
"The KWS Group will likely continue its path of operational growth in fiscal 2012/2013. However, special factors like those that had a positive impact in the previous year are not anticipated as far as can be seen at present," was the summary of Philip von dem Bussche. "Overall, we therefore expect the KWS Group's net sales to increase by up to 10%. After the particularly high EBIT margin of 14.3% in the past year, our target is a margin of just over 11%, despite the cost increases for product development and expansion of our distribution and production activities in the current fiscal year."
The 2011/2012 Annual Report can be downloaded as of 7:30 a.m. on October 18, 2012, from http://www.kws.de/ir.
- Net sales increase by more than 15% to €986 million
- Operating income (EBIT) up 21% to €141 million despite much higher R&D expenditure
- Growth in all product segments
- Dividend to be raised by 22% to €2.80
KWS SAAT AG (ISIN: DE0007074007), one of the world's leading seed companies, achieved outstanding figures in net sales and earnings in fiscal 2011/2012 (ending June 30). The guidance figures, which were raised twice in the course of the year, were again surpassed. On the back of high prices for agricultural raw materials worldwide, the KWS Group's net sales rose by 15.3% to €986.3 million. EBIT improved above-proportionately by 20.8% to €140.9 million, mainly due to expansion in operational business, the reversal of allowances on receivables and positive exchange rate effects. The EBIT return was 14.3%, an increase from the previous year's already high figure of 13.6%. So that the KWS Group can keep on improving its competitiveness, research & development expenditure was increased as planned by 11.5% to €126.6 million. Net income for the year rose by 29.5% to €94.4 million, benefiting from the fact that the tax rate fell to 30% (previous year: 34%). Given these gratifying financial statements, the Executive Board and Supervisory Board will propose to the Annual Shareholders' Meeting that the dividend be increased by almost 22% to €2.80 (previous year: €2.30) a share.
Corn Segment continues its dynamic growth
Business in the Corn Segment, which makes the largest contribution to our net sales, benefited from the still very dynamic nature of the market in North America and Europe, which the KWS Group was able to leverage with its portfolio of high-performance varieties and high seed availability. Net sales in this segment increased by 19.7% to €571.5 million. Operating income improved even more sharply, by 22.3% to €77.8 million, on the back of the reversal of allowances. As a result of the high prices for agricultural raw materials worldwide, farmers mainly used quality seed and further increased the area used to grow grain corn. Market share was increased both in the U.S. and in Europe using regionally differentiated distribution systems.
Net sales at the Sugarbeet Segment over €300 million for the first time
The Sugarbeet Segment's net sales rose by 6.7% to €313.4 million, likewise driven by strong business in North America. Almost 90% of this revenue is attributable to the sugarbeet product area, while 10% is accounted for by seed potato business, which was fully consolidated in the Sugarbeet Segment for the first time in fiscal 2011/2012. While revenue from sugarbeet increased in North America, it did not quite reach the previous year's level in the EU 27. Income increased by 21.2% to a total of €79.9 million. The reversal of allowances and effects from exchange rate movements had a positive impact on the segment's income. Philip von dem Bussche, CEO of KWS, commented: "Our success in North America continues to be based on our genetically improved sugarbeet varieties."
Cereal business increases sharply
Net sales in the Cereals Segment increased by 19.9% to €93.3 million. Income improved better than expected and was at €18.9 million, an increase of 30.3%. Income was boosted by the positive price trends for cereals for consumption, but especially by the QualityPlus® brand, with which a new standard of quality has been established in Germany.
Breeding & Services Segment discontinued
Net sales at the Corporate Segment (formerly Breeding & Services) were €8.1 million in the year under review (previous year: €6.5 million). They are made up of revenue from our farms, services for third parties and net sales from strategic projects. The segment's income was € -35.7 (-27.4) million and includes all cross-segment expenses. That includes administrative costs for all central functions at the KWS Group, as well as costs for long-term research projects whose results are not yet ready for the market. However, product-related expenses for breeding activities have been carried directly in the product segments since the beginning of fiscal 2011/2012. The segment's income thus reflects KWS' extensive research activities.
Net cash from operating activities increases again - company's growth underpinned by solid financing In fiscal 2011/2012, cash earnings at the KWS Group increased to €117.8 (104.1) million. After the increase in receivables and inventories and higher short-term provisions are netted off, the cash flow from operating activities is €104.2 (101.2) million. Hagen Duenbostel, Chief Financial Officer of KWS, noted: "Cash flow from operating activities was again above the high level of €100 million. €56.6 (52.4) million were used for investments, including €9.0 million for the acquisitions in Brazil. That leaves a strong free cash flow of €47.6 (48.8) million." On the balance sheet date (June 30, 2012), cash and cash equivalents, including securities, amounted to €183.0 (146.9) million. Minus borrowings, net liquidity was thus €107.9 (113.3) million. Equity rose by €72.8 million to €603.1 million and, as in the previous year, fully covers noncurrent assets and inventories. Since total assets also increased, the equity ratio fell slightly to 55.2% (58.8%).
Research budget increased as planned and jobs created
Research & development expenditure was increased as planned in fiscal 2011/2012 to enable the future development of high-performance varieties. "Modern plant breeding is high-tech, in which we steadily improve our seed," said Philip von dem Bussche. "Every year, we spend between 12% and 15% of our revenue on R&D. In the year under review, we invested €126.6 (113.5) million in order to keep on improving our competitiveness. That safeguards existing jobs and creates additional ones at KWS." The KWS Group's workforce, which is now made up of employees in more than 70 countries, increased by more than 8% to an average of 3,851 (3,560) in the fiscal year.
Outlook: Continuation of operational growth
KWS anticipates further growth in the Corn Segment in fiscal 2012/2013. Apart from increases in North America and China, net sales will be generated in Brazil for the first time. While the level of net sales of the previous year in our sugarbeet seed business can hardly be maintained, seed potato business is to be expanded further after the tough previous year with its difficult market conditions. The sales opportunities for cereals are again rated positively.
"The KWS Group will likely continue its path of operational growth in fiscal 2012/2013. However, special factors like those that had a positive impact in the previous year are not anticipated as far as can be seen at present," was the summary of Philip von dem Bussche. "Overall, we therefore expect the KWS Group's net sales to increase by up to 10%. After the particularly high EBIT margin of 14.3% in the past year, our target is a margin of just over 11%, despite the cost increases for product development and expansion of our distribution and production activities in the current fiscal year."
The 2011/2012 Annual Report can be downloaded as of 7:30 a.m. on October 18, 2012, from http://www.kws.de/ir.
