Einbeck, November 12, 2024      

KWS publishes results for the first quarter 2024/2025 and confirms forecast

• Strong sales growth of 18% due to early sales
• Key earnings figures improved (negative due to business seasonality)
• One-time gain of €110 million from divestment of corn and sorghum business in South America 
• Net debt significantly decreased by around €500 million year-on-year
• Forecast for the 2024/2025 financial year confirmed

“KWS has made a good operational start to a challenging new fiscal year thanks to a robust cereals business and early sales of sugarbeet seeds,” commented Eva Kienle, Chief Financial Officer of KWS. “At the same time, we have significantly improved our financial position with the proceeds from the sale of the South American corn and sorghum business. KWS thus has a strong financial foundation to master the challenges of the future and continue its success story as one of the world's leading seed companies.”

Business development Q1 2024/2025

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

The KWS Group’s net sales in the first three months of fiscal 2024/2025 were €248.6 million and thus well above the level of the previous year (€209.9 million), mainly due to early sales in the Sugarbeet Segment. Comparable net sales growth (excluding exchange rate and portfolio effects) was +17%. Exchange rate effects only had a slight impact all in all in the period under review.

The KWS Group’s key indicators for operating income are typically negative in the first quarter, but they improved – in some cases significantly – on the back of the positive business performance. Earnings before interest, taxes, depreciation and amortization (EBITDA) improved to € –10.0 (–24.2) million, while earnings before interest and taxes (EBIT) were
€ –37.4 (–46.4) million. The higher gross profit was offset by the planned increase in research & development and sales costs, whereas administrative expenses decreased.

Net financial income/expenses improved to € –17.3 (–22.4) million. Income taxes totaled
€ –13.7 (–13.5) million. That gave earnings after taxes from continuing operations of €–41.0
(–55.3) million or €–1.24 (–1.68) per share.

The free cash flow from continuing operations rose to € –66.0 (–143.7) million. Free cash flow from discontinued operations increased to €271.3 (21.3) million, mainly due to the sale of the South American corn and sorghum business.

The equity ratio rose to 55.1% (42.0%), while total assets at September 30, 2024, were €2,690.9 (2,963.0) million. Net debt fell significantly to €195.3 (702.0) million, due to the sale of the corn and sorghum business in South America, the repayment of local loans and the repayment of the first tranche of financing for the promissory note loan related to the acquisition of the vegetable business (2019).

Overview of the key figures (for continuing activities)

Business performance of the segments

The Corn Segment does not generate the major part of its annual net sales until the spring sowing season in Europe and North America in the third quarter (January to March). Its net sales in the period under review were €12.2 (10.6) million. The segment’s income in the first quarter is typically negative and was € –59.3 million and thus at the level of the previous year (€ –59.6 million).

The Sugarbeet Segment does not generate the major part of its annual net sales until the spring sowing season in Europe and North America in the third quarter (January to March). The increase in net sales to €56.9 (24.2) million in the quarter under review is mainly attributable to early sales in Eastern Europe and North Africa. The segment’s income in the first quarter is typically negative but improved significantly to € –16.0 (–35.7) million on the back of the business performance.

In the quarter under review, the Cereals Segment generated net sales of €165.2 million and thus at the level of the previous year (€163.7 million). Our oilseed rape and wheat business posted slight increases, while net sales from rye seed declined slightly. Net sales from the other activities in the Cereals Segment remained largely unchanged. The segment’s income was €72.0 million, on a par with the previous year (€70.8 million).

Net sales at the Vegetables Segment increased by 7.3% to €12.5 (11.6) million. This is mainly due to higher sales of bean seed. The segment’s income declined to € –13.2 (–6.4) million, in particular due to increased planned expenses for the expansion of vegetable breeding and higher amortization of intangible assets totaling € –7.2 (–2.9) million from the acquisition of Pop Vriend Seeds.

Net sales in the Corporate Segment, which are mainly generated by KWS’ farms in Germany, France and Poland, were €2.8 (1.9) million. The segment’s income was €–37.6 million and thus down on the previous year’s figure of € –33.0 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.

Forecast for fiscal year 2024/2025 confirmed

Unchanged to the previous guidance of the KWS Group, the Executive Board expects net sales in fiscal 2024/25 to increase by 2% to 4% year on year (on a comparable basis, excluding currency and portfolio effects). EBIT margin is anticipated to be between 14% and 16%. The R&D intensity is expected to be in the range of 18% to 19%.

About KWS

KWS is one of the world’s leading plant breeding companies. Nearly 5,000 employees* in more than 70 countries generated net sales of around €1.68 billion in the fiscal year 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 sunflower. 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.
*excl. seasonal workforce

 More information: www.kws.com. Follow us on LinkedIn: LinkedIn_KWS Group

 Contacts:

Peter Vogt  
Head of Investor Relations
Phone: +49-30 816914-490
peter.vogt@kws.com

Sina Barnkothe
Corporate Communications
Phone: +49-5561 311-1783
sina.barnkothe@kws.com