KWS SAAT SE & Co. KGaA

Earnings Release • Feb 26, 2009

News Details

Corporate | 26 February 2009 08:52

KWS SAAT AG continues its growth in the first half of 2008/2009

KWS SAAT AG / Half Year Results/Half Year Results

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KWS SAAT AG continues its growth in the first half of 2008/2009

A 10% increase in net sales and operating income on a par with the previous
year are expected in fiscal 2008/2009 (July 1, 2008 - June 30, 2009)

(Einbeck, February 26, 2009/No.5/gf) - KWS SAAT AG (ISIN: DE 0007074007),
one of the leading international seed companies, increased its consolidated
net sales in the first half of fiscal 2008/2009 (which ends on June 30) by
almost 30 percent to EUR141.8 (110.3)* million. The sales of cereals seed
developed particularly well. 'The hybrid rye business of KWS LOCHOW again
drove growth,' said Hagen Duenbostel, CFO of KWS SAAT AG, about the Group's
performance. 'Our winter rapeseed varieties also showed increases in net
sales.' Sales revenue from the new potato joint venture Van Rijn - KWS B.V.
is included in the KWS Group for the first time.

KWS' seed business is characterized by seasonal fluctuations. While costs
are spread relatively evenly over the year, most sales are generated in the
third quarter. The crops that account for by far the largest net sales -
corn and sugarbeet - are not sown until the spring season. Seen as an
average over many years, KWS generates just under 20 percent of its annual
revenue in the months July to December. As a result, income for the first
half of the year is typically negative, and KWS does not pass the
break-even point until the third quarter. In the first six months of
2008/2009, KWS improved its operating income (EBIT) by EUR5.7 million to
EUR -39.9 (-45.6) million. Finance income/expenses fell to EUR -2.1 (+4.8)
million, since the figure for the same period of the previous year was
boosted by the profit from the sale of its former potato activities. Net
income for the period was EUR -30.2 (-25.1) million.

High-yielding hybrid varieties post gratifying increase in sales and
profits

Net sales in the cereals segment grew by 35% to EUR74.2 (54.8) million in
the first half of the year, in which demand is mainly for winter cereals
and rapeseed. The corn segment (including oil seed) recorded just above a
20% increase in net sales to EUR37.7 (30.5) million. Since the main sales
season for corn begins in the third quarter, 40 percent of net sales in
this segment were generated by winter rapeseed. 'The slight decline in
cultivation area was more than compensated for by additional revenue from
high-yielding hybrid varieties, which now account for more than half of
rapeseed sales,' said Duenbostel. Net sales of EUR20.2 (21.4) million were
achieved in sugarbeet seed business. Net sales at the breeding & services
segment increased in the first six months to EUR9.7 (3.6) million. The
figure includes not only farm revenues, but also net sales from the seed
potato joint venture for the first time. However, the main business for the
new potato activities does not begin until spring.

Capital expenditure well above depreciation

In order to strengthen its leading market position, the KWS Group has
significantly increased its workforce to 3,147 (2,760). Research and
development activities at the Einbeck location also benefited from this
increase. In the first six months, KWS

* The figures in parentheses are those for the previous year

invested EUR14.3 (14.8) million in property, plant and equipment, mainly in
the corn segment, where new drying, processing and storage capacities were
created in Romania, Ukraine, Turkey and the U.S. As a result, capital
expenditure was again well above depreciation of EUR7.7 (7.2) million.

Forecast for the year as a whole confirmed

KWS' Executive Board confirms its net sales and earnings forecasts for the
whole of fiscal 2008/2009 on the basis of current planning. Net sales are
expected to grow by 10%, and the Group will likely be able to maintain the
previous year's income, despite higher costs.

Now that the radical changes brought about by reform of the European Sugar
Market Regime are largely complete, we expect business at the sugarbeet
segment to increase slightly. However, its income will be strained by
negative currency effects and possible allowances for receivables. Given
the positive course of business, we expect the cereals segment to increase
its net sales by around 20% and improve its income by some 35%. Despite
greater expenditure for research and breeding, income at the breeding &
services segment will develop positively as a result of royalties. Overall,
we expect to surpass the previous year's net sales (EUR599.1 million) by
approximately 10%. We are confident that operating income will be on a par
with the excellent mark of the previous year (EUR70.1 million).

The individual product segments:

In million EUR (at December 31) H1 2008/2009 H1 previous
year
Consolidated net sales 141.8 110.3
Sugarbeet 20.2 21.4
Corn 37.7 30.5
Cereals 74.2 54.8
Breeding & services 9.7 3.6
Operating income -39.9 -45.6
Net income for the period -30.2 -25.1

The semiannual report can also be obtained at www.kws.de/ir.

Contact:

Georg Folttmann
Phone: +49 (0) 55 61 / 311-640
g.folttmann@kws.com
26.02.2009 Financial News transmitted by DGAP

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Language: English
Issuer: KWS SAAT AG
Grimsehlstraße 31
37574 Einbeck
Deutschland
Phone: +49 (0)5561 311-0
Fax: +49 (0)5561 311-322
E-mail: info@kws.com
Internet: www.kws.de
ISIN: DE0007074007
WKN: 707400
Indices: S-DAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hannover;
Freiverkehr in Berlin, Hamburg, Düsseldorf, München,
Stuttgart

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