DGAP-News: KWS SAAT SE & Co. KGaA / Key word(s): Annual Results KWS successfully completes fiscal year 2020/2021 and increases dividend 2021-10-20 / 07:00 The issuer is solely responsible for the content of this announcement.

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Einbeck, October 20, 2021

KWS successfully completes fiscal year 2020/2021 and increases dividend

Net sales up 2%, currency-adjusted by 9% - Net income and earnings per share +16% - Higher dividend of EUR0.80 per share proposed (PY: EUR0.70) - Further growth planned for fiscal year 2021/2022

The KWS Group (ISIN: DE0007074007) achieved net sales growth of approximately 2% to EUR1.31 billion in fiscal year 2020/2021. The key figures EBIT and EBITDA were at the level of the previous year; net income and earnings per share recorded a significant increase.

"Our business figures again developed very pleasingly last year, enabling us to increase our dividend significantly," commented Eva Kienle, Chief Financial Officer of KWS. "With our focus on innovative seed, we are scoring in established and new markets and thus growing steadily and sustainably. At the same time, we are systematically expanding our digital farming offerings and thus providing additional service to our customers. In the new fiscal year, we will continue on this successful path and grow further."

Net sales increased by 2.2% to EUR1,310.2 million (EUR1,282.6 million) in fiscal 2020/2021. On a comparable basis (excluding currency effects), net sales rose by 8.8%. The KWS Group's operating income before depreciation and amortization (EBITDA) improved by 2.4% to EUR230.9 (225.5) million. Operating income (EBIT) was on a par with the previous year at EUR137.0 (137.4) million, despite planned higher expenditure on research & development and significant currency burdens.

The financial result improved significantly to EUR 5.2 (-7.8) million compared with the previous year. In addition to improved net interest expense of EUR -12.2 (-18.6) million, this was due to higher net income from equity-accounted companies amounting to EUR 17.4 (10.8) million. Taxes on income amounted to EUR -31.6 (-34.3) million. This resulted in net income of EUR 110.6 (95.2) million and earnings per share of EUR 3.35 (2.89).

Free cash flow improved significantly in the reporting period to EUR84.2 million (previous year: EUR31.5 million excluding the acquisition of Pop Vriend Seeds), mainly as a result of strict working capital management and a more cautious investment policy in light of the COVID-19 pandemic.

Overview of the key figures 


in EUR millions                       2020/2021 2019/2020   +/- 
Net sales                             1,310.2   1,282.6  2.2% 
EBITDA                                  230.9     225.5  2.4% 
EBIT                                    137.0     137.4 -0.3% 
Net financial income/expenses             5.2      -7.8     - 
Result of ordinary activities           142.2     129.5  9.8% 
Income taxes                             31.6      34.3 -7.9% 
Net income                              110.6      95.2 16.2% 
Earnings per share             in EUR      3.35      2.89 15.9%

Business performance of the segments

In the year under review, the Corn Segment generated net sales of EUR774.0 million, on a par with the previous year (EUR775.7 million); adjusted for exchange rate effects, the segment recorded an increase of 8.3%. The main contributors to the currency-adjusted growth were the South American markets of Argentina and Brazil and the Europe region. In Europe, the high-performance hybrid varieties for grain corn launched in recent years performed particularly well, enabling us to significantly strengthen our market position in this area. In Brazil, the successful commercialization of high-performance hybrid corn varieties led to a significant expansion in business volume and market share gains. In North America, sales of the AgReliant joint venture declined slightly in a challenging competitive environment. Currency effects from the devaluation of the U.S. dollar against the euro also had a significant negative impact. Segment earnings rose by 6.3% to EUR71.3 (67.1) million. This was due in particular to increased earnings contributions in North America and Brazil. The EBIT margin for the segment increased slightly from 8.6% to 9.2%.

Net sales in the Sugarbeet Segment rose by 6.6% to EUR524.3 (491.8) million as a result of the growing success of innovative KWS varieties. Demand for CONVISO(R) SMART continued in the year under review, with the corresponding varieties now available in 25 countries. In addition, initial sales were generated with newly launched varieties based on a new Cercospora tolerance (CR+). Re-seeding due to winter weather conditions in spring 2021 had a positive impact on sales development, particularly in France, Germany and the USA. Currency effects, mainly from the translation of the U.S. dollar and the Turkish lira, impacted sales by -6.4%; adjusted for currency effects, the segment recorded an increase of 13.0%. Segment profit increased to EUR174.7 million (EUR170.1 million), while the EBIT margin was slightly below the previous year's level at 33.3% (34.6%).

In the Cereals Segment, net sales remained at the previous year's level of EUR191.2 million (EUR191.2 million); adjusted for exchange rate effects, net sales rose by around 3%. While business with barley seed declined slightly by 5%, mainly due to weather conditions, sales of rapeseed increased (10%) as a result of higher prices. Wheat seed business also increased by around 10%. Sales of hybrid rye seed declined slightly due to lower cultivation areas in the EU and adverse currency effects. Segment profit declined to EUR21.3 million (EUR26.4 million), mainly due to higher research and development expenses. The EBIT margin was 11.1%, down on the previous year (13.8%).

Sales in the Vegetables Segment, which includes the business activities of the acquired vegetable seed company Pop Vriend Seeds, came to EUR58.2 million, significantly below the previous year's figure (EUR83.5 million). The decline was largely due to lower sales of spinach seed as a result of the COVID-19 pandemic and to adverse currency effects. By contrast, the bean seed business recorded an increase of around 13%. Segment profit (adjusted for effects relating to the purchase price allocation for the acquisition of Pop Vriend Seeds) reached EUR7.9 million. Taking into account non-cash effects from the purchase price allocation of inventories measured at fair value (EUR-4.1 million) and amortization of acquired intangible assets (EUR-21.9 million), the segment result was EUR-18.1 million.

Net sales at the Corporate Segment were EUR6.0 (4.6) million. These are mainly generated by KWS farms in Germany, France and Poland. In addition, all overarching costs for the KWS Group's central functions and basic research expenses are reflected in the Corporate segment, which is why the segment's income is regularly negative. The segment's income improved significantly to EUR-92.0 million (EUR-104.6 million), mainly due to positive currency effects from financing instruments and pandemic-related cost savings.

The difference from the KWS Group's statement of comprehensive income and segment reporting is due to the requirements of the International Financial Reporting Standards (IFRSs) and is summarized for the key indicators of net sales and EBIT in the reconciliation table below:

Reconciliation table 


in EUR millions   Segments  Reconciliation KWS Group^1 
Net sales        1,553.8          -243.6     1,310.2 
EBIT               157.2           -20.2       137.0

^1 Excluding the shares of the equity-accounted companies AGRELIANT GENETICS LLC., AGRELIANT GENETICS INC. and KENFENG - KWS SEEDS CO., LTD.

Capital spending

Against the backdrop of the COVID-19 pandemic, the KWS Group pursued a cautious investment policy in fiscal 2020/ 2021, as a result of which capital expenditure fell to EUR81.3 (108.0) million. Investment activity in the year under review followed the long-term growth plans with a focus on establishing and expanding production and research & development capacities.

Planned appropriation of profits: Significant increase in dividend

In view of the company's pleasing operating performance, the Executive Board and Supervisory Board will propose to the Annual Shareholders' Meeting on December 2, 2021, that a dividend of EUR0.80 (0.70) per share would be distributed for fiscal 2020/2021. This means that EUR26.4 (23.1) million would be distributed to the shareholders of KWS SAAT SE & Co. KGaA. That would correspond to a payout ratio of 23.9% (24.3%), once again in line with the KWS Group's earnings-oriented policy of paying a dividend of 20% to 25% of its net income.

Forecast for the 2021/2022 fiscal year: Further growth expected

In view of a brightening agricultural environment with price increases for agricultural raw materials, the Executive Board expects demand for seed to rise in fiscal 2021/2022. The KWS Group expects to achieve net sales growth of 5 to 7%. The EBIT margin is expected to be around 10% and, adjusted for non-cash effects from purchase price allocations as part of company acquisitions, in a range between 11% and 12%. The research & development ratio is expected to be in the range of 18% to 20%.

The Annual Report and the Sustainability Report can be downloaded on the Internet at www.kws.com.

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October 20, 2021 01:00 ET (05:00 GMT)