KWS SAAT SE & Co. KGaA

Earnings Release • Nov 26, 2009

News Details

Corporate | 26 November 2009 08:20

KWS SAAT AG: Business remains at a strong level

KWS SAAT AG / Quarter Results/Quarter Results

26.11.2009

Dissemination of a Corporate News, transmitted by
DGAP - a company of EquityStory AG.
The issuer / publisher is solely responsible for the content of this announcement.

---

KWS' business remains at a strong level

Despite a clear drop in business volume in the first quarter, the company
is optimistic about the fiscal year as a whole.

(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
EUR65.3 (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 EUR -28.1 (-11.2)
million.

Net financial income/expenses was EUR -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 EUR -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 EUR million (at September 30) 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

The quarterly report can be downloaded at www.kws.de/ir.

Contact:

Georg Folttmann

Phone: +49 (0) 55 61 / 311-640

g.folttmann@kws.com

* The figures in parentheses are those for the previous year

26.11.2009 Financial News distributed by DGAP. Media archive at www.dgap-medientreff.de and www.dgap.de

---

Language: English
Company: 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, Düsseldorf, München, Hamburg,
Stuttgart

End of News DGAP News-Service

---