KWS SAAT AG reaffirms forecast following release of half-year figures

(Einbeck, Feb. 28, 2007/No. 3/gf) – KWS SAAT AG (ISIN: DE 0007074007) is well on track after the first half of its current fiscal year ended December 31, 2006. Sales reported by the KWS Group were EUR 91.4 million (previous-year: EUR 91.3 million). Seasonally-related earnings before interest and taxes (EBIT) improved 9.5% from EUR -49.4 million to EUR -44.7 million. The KWS Executive Board has reaffirmed its forecast for fiscal 2006-7 as a whole, according to which KWS Group sales will rise slightly on the year and profits will increase significantly.

In H1, when winter grains and rapeseed are in particular demand, sales increased over the previous year by 13.8% in the cereals segment and by 8.5% in the corn segment (including oil seed). Sugar beet business was down 21.6% under the influence of impending quota reductions by the EU Commission as part of its Sugar Regime. H1 operating profits improved due to the more profitable cereals business, stronger sales of rapeseed hybrids, and structural adjustments in the sugar beet segment.

Strong cash flow – improved financial position

At December 31, 2006, thanks to enhanced inventory and receivables management, the KWS Group improved free cash flow to EUR -2.4 million after EUR -26.4 million year-on-year. The cash flow from current business activities surged to EUR 11.4 million (after EUR -11.1 million a year earlier). After the dividend disbursement, the net cash position rose to EUR 69.5 million from EUR 55.6 million a year earlier.

In H1 2006/2007, KWS invested EUR 9.9 million in property, plant and equipment, compared with EUR 11.0 million one year before. The investments were thus higher than depreciation of EUR 7.1 million (EUR 7.3 million one year before). The largest single capital outlays were in a corn processing plant in North America and a new warehouse at the company’s HQ in Einbeck.

Forecast confirmed

The KWS Executive Board continues to expect that fiscal 2006/2007 (ending June 30) will see a slight rise in sales volume (prior year: EUR 505.0 million). It predicts that the anticipated decline in sugar beet business of as much as 10% will again be offset by growth in corn activities. Given the good H1 income trend, operating income is likewise expected to increase for the year as a whole (previous year: EUR 46.7 million). Moreover, a corporate income tax credit in Germany will impact favorably on net income for the year (previous year: EUR 28.4 million).

The individual product segments: 

Semiannual Report FY 2006/2007.pdf.

For more information, please contact:

Georg FolttmannTel.:
+49-5561-311-640
g.folttmann@kws.com