(Einbeck, November 26, 2009/No. 42/gf) – KWS SAAT AG (ISIN: DE0007074007), one of the leading international seed companies, started the new fiscal year 2009/2010 with lower net sales following the record level of net cereal sales in the previous year. In the first three months, from July to September, the company primarily sells winter cereal and winter rapeseed varieties, which are sown in the fall and normally account for around ten percent of annual net sales. Consequently, the figures for the first quarter are not a clear indication of the fiscal year as a whole. Corn and sugarbeet, the main contributors to net sales, are not sown until the spring. However, the KWS Group’s net sales in the first quarter were €65.3 (82.8) million, once more on a par with the high level of the fiscal year before last, 2007/2008.
Lower consumer prices for cereals resulted in higher levels of farm saved seed in Europe
Demand for certified cereals seed was impacted through mid-2008 by very high selling prices for farmers. As a result, KWS posted clear growth in sales and income in this segment last fiscal year. “It was foreseeable that prices would fall sharply as a result of the large cereal harvests worldwide in 2008 und 2009,” explained Hagen Duenbostel, KWS SAAT AG’s Chief Financial Officer. “To cut their costs, European farmers responded by increasingly doing without certified seed and instead growing cereal from seed they produced themselves.” Rapeseed business also fell in the first quarter of 2009/2010 compared with the record high of the same period in the previous year. Strong competitive pressure meant that KWS was not able to maintain the level of prices for winter rapeseed varieties. There was, on the other hand, a strong start into the fiscal year regarding sales of sugarbeet seed. KWS achieved the biggest increases outside Europe, namely in Chile and Northern Africa. However, advance sales in Europe were also higher year-on-year. As a result of declining net cereal and rapeseed sales, the KWS Group’s net income at September 30 fell to € -28.1 (-11.2) million.
Net financial income/expenses was € -0.9 (0.1) million, since income from investments fell as a result of the currently low level of interest rates. Income after taxes in the first quarter was € -20.7 (-6.3) million.
KWS continues to focus on investment
To strengthen and expand its international competitiveness, KWS is continuing its steady investment in research & development. The greenhouse areas at Einbeck are currently being expanded considerably, and the foundation for additional jobs is being laid with the creation of new office space, for example. The number of employees worldwide increased to 3,286 (3,103).
Outlook: Strong level can be attained again
KWS aims to achieve the strong level of the previous year once more in the current fiscal 2009/2010. “Assuming the stabilization of current currency levels, particularly regarding the US dollar, and despite the decline in cereals business, we expect the KWS Group to grow its net sales slightly over the previous year,” was Duenbostel’s forecast. On the back of its continuing high earnings strength, KWS plans to expand its R&D activities significantly in the current fiscal year so as to bolster its competitive position and has increased its R&D budget by 10%.
The product segments in detail:
|
In € million (at 30 September) |
Q1 2009/2010 |
Q1 previous year |
|
Consolidated net sales |
65.3 |
82.8 |
|
Sugarbeet |
8.7 |
4.8 |
|
Corn |
15.6 |
20.4 |
|
Cereals |
37.9 |
56.1 |
|
Breeding & Services |
3.1 |
1.5 |
|
Consolidated operating income (EBIT) |
-28.1 |
-11.2 |
|
Net income for the period |
-20.7 |
-6.3 |
Contact:
Georg Folttmann
Phone: +49 (0) 55 61 / 311-640
g.folttmann@kws.com
* The figures in parentheses are those for the previous year
