KWS in Figures

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KWS in Figures Annual Report 2017 | 2018 KWS in Figures The KWS Group (in € millions) 2017/2018 2016/2017 2015/2016 2014/2015 2013/2014 Net sales and income Net sales 1,068.0 1,075.2 1,036.8 986.0 923.5 EBIT 132.6 131.6 112.8 113.4 118.3 as a % of net sales (EBIT margin) 12.4 12.2 10.9 11.5 12.8 Net financial income/expenses 5.4 16.6 14.8 16.7 7.5 Net income for the year 99.7 97.7 85.3 84.0 80.3 Additional key figures on earnings R&D intensity in % 18.5 17.7 17.6 17.7 16.2 Key figures on the financial position and assets Capital expenditure 71.7 63.3 99.6 132.5 69.4 Depreciation and amortization 50.1 49.4 48.2 45.9 41.2 Equity 881.8 836.9 767.9 738.7 637.8 Equity ratio in % 58.1 56.0 53.5 55.2 54.7 Return on equity in % 13.3 13.1 11.9 13.6 12.8 Return on assets in % 7.1 7.3 7.0 7.8 7.8 Net debt1 37.4 48.5 87.9 105.9 31.6 Total assets 1,517.7 1,495.2 1,436.6 1,337.1 1,165.0 Capital employed (avg.)2 981.1 990.1 906.9 851.0 737.5 ROCE (avg.) in %3 13.8 13.3 12.4 13.3 16.0 Cash flow from operating activities 98.1 122.4 125.9 48.1 76.0 Employees Number of employees (avg.)4 5,147 4,937 4,843 4,691 4,150 Personnel expenses 253.9 247.0 232.2 216.9 189.9 Key figures for the share Earnings per share in € 15.08 14.78 12.92 12.53 11.69 Dividend per share in € 5 3.20 3.20 3.00 3.00 3.00 Segments (in € millions) Corn Sugarbeet Cereals Corporate –11.0% 825 734 +0.1% 455 455 +6.4% +38.2% –18.6% 151 161 151 –12.5% 109 +78.6% –27.6% 58 47 10 18 5 4 EBIT Net sales EBIT Net sales EBIT Net sales EBIT Net sales –61 –77 2016/2017 2017/2018 Reconciliation (in € millions) Segmente Über leitung KWS Gruppe Net sales 1,344.6 –276.6 1,068.0 EBIT 149.0 –16.4 132.6 1 = Short-term + long-term borrowings – cash and cash equivalents – securities. 2 = Total capital employed at the end of the quarters ((intangible assets + property, plant and equipment + inventories + trade receivables – trade payables) / 4.) 3 = EBIT / capital employed (avg.). 4 Average number of employees in the year under review. 5 The dividend for 2017/2018 is subject to the consent of the 2018 Annual Shareholders´ Meeting. Contents To Our Shareholders To 2 1. To Our Share holders 2 Foreword of the Executive Board 5 Report of the Supervisory Board 12 KWS on the Capital Market 14 Spotlight Topic 18 2. Combined Management Report 18 2.1 Fundamentals of the KWS Group 26 2.2 Research & Development Report 29 2.3 Economic Report 43 2.4 Environmental Report 48 2.5 Employee and Social Report 54 2.6 Corporate Governance 65 2.7 Opportunity and Risk Report 71 2.8 Forecast Report 73 2.9 Report on KWS SAAT SE and Non-Financial Declaration (Declaration based on the German Commercial Code (HGB)) 79 3. Annual Financial Statements Léon Broers Research & Breeding Peter Hofmann Sugarbeet, Cereals, Marketing Eva Kienle Finance, Controlling, Global Services, IT, Legal, Human Resources Hagen Duenbostel (CEO) Corn, Corporate Development and Communications, Compliance 2 To Our Shareholders | Foreword of the Executive Board Annual Report 2017/2018 | KWS Group To Our Share­ holders Foreword of the Executive Board High-yielding, yet eco-friendly arable farming – is that an unattainable vision or a realistic scenario? Most people agree: Things have to change if we are to achieve that goal. There is declining public accept- ance of agriculture. Consequently, more than 80% of German farmers see acceptance of their work in society as their biggest challenge. Farmers and con- sumers have become alienated from each other. Many problems have already been identified, but there is no social consensus on how to solve them. Agriculture is nowadays high tech – in all areas. Technology in agriculture stands for safety and inno- vation and enables transparency and precision. Yet the growing application of technology in agriculture strengthens the sense of alienation among consumers. Many feel that farming should be environmentally friendly and animal-friendly, and, if at all possible, done by hand. And a good feeling is important when consumers reach for a product from the shop shelf. However, an often ignored fact is that arable farming worldwide has to satisfy demand of more than 2 billion tons of cereals a year, while keeping price fluctua- tions to a minimum. KWS Group | Annual Report 2017/2018 Foreword of the Executive Board | To Our Shareholders 3 A discussion on the future of agriculture is not a our customers, we remain independent – as we have one-way street. Our industry must accommodate been for more than 160 years. From the outset, we consumers’ wishes and take new paths – otherwise have steadily expanded our plant genetic resources progress in winning public acceptance will remain – because genetic diversity is a key success factor in wishful thinking. A particular focus here is on making plant breeding. agriculture greener. Reducing the use of pesticides is an acknowledged objective of the Central Committee We will also continue to grow independently and keep of German Agriculture and also a key concern in on enlarging our innovative portfolio for agriculture. In “The Timetable for the 2050 Agricultural Revolution: order to strengthen our independence and position Ecologized Agriculture in Germany.” ourselves ideally for growth moving ahead, we and the Supervisory Board are proposing to the upcoming Plant breeding offers extensive eco-friendly solutions. Annual Shareholders’ Meeting that we change our KWS’ variety portfolio is already one of the most legal form into a partnership limited by shares (KGaA) diversified and highest-performing in the industry. – KWS SAAT SE & Co. KGaA. This move means we Apart from delivering yield progress, we believe that will be able to exploit opportunities to raise funds on our key tasks lie in developing and selecting resistant the capital market more flexibly, yet the shareholder plant varieties, in ideal crop rotation and in bio diversity. families, Büchting and Arend Oetker, will continue to All in all, our new varieties need fewer resources such shape and put their stamp on our company. as fertilizer or pesticides. They are the result of inten- sive research and the use of cutting-edge breeding Seeding the future means shouldering responsibility. technologies. The recent critical assessment of new We look forward to shaping the future actively together breeding measures by the European Court of Justice with our shareholders, employees and customers. Our was counter productive in this regard. The use of focus will remain on our core corporate objectives of mutagenesis in plant breeding has proven its worth innovation, independence, sustainability and profitable for generations and can now be used in a far more growth, flanked by the values of a company steeped in targeted way. A failure to leverage this potential a tradition of family ownership. in Europe is tantamount to accepting social and economic harm. My thanks for our success in the past fiscal year go to our employees for their untiring efforts, as well as Progress and innovation to promote more sustainable to our partners and shareholders. I hope this Annual agriculture is encouraged by a functioning system of Report proves informative for you. competition. The greater the number of companies that conduct their own research & development, the With best regards from Einbeck on behalf of the entire greater diversity of products. Consolidation in our Executive Board, industry has further reduced the number of competi- tors. Freedom to choose what means of production to use and thus entrepreneurial business management in agriculture are being increasingly restricted. Like Dr. Hagen Duenbostel Chief Executive Officer 4 To Our Shareholders | Foreword of the Executive Board Annual Report 2017/2018 | KWS Group Report of the Supervisory Board In the year under review, the agricultural sector was important individual projects, risk management at again impacted by low producer prices, low incomes the KWS Group were the subject of detailed dis- and new regulatory conditions. Business with sugar- cussions. The Chairman of the Supervisory Board beet and cereals seed developed successfully in this continued the bilateral discussions with the Chief environment, while our Corn Segment was strained by Executive Officer and individual members of the declining net sales in Brazil and North America. The Executive Board in regular talks outside the meetings major process of consolidation in the industry ended of the Supervisory Board. In addition, there were with completion of the multiyear international antitrust monthly meetings between the Chairman of the Su- reviews. KWS also discussed potential acquisitions. pervisory Board and the Executive Board as a whole, Preserving our company’s independence remains a where the company’s current business development key concern of the family shareholders. In this spirit, and, in particular, its strategy, occurrences of special the Executive Board and the Supervisory Board once importance and individual aspects were dealt with. again cooperated successfully in the past fiscal year. The Chairman of the Supervisory Board informed the Super visory Board of the results of these meetings. The Supervisory Board discharged the duties incum- The Supervisory Board did not make use of its right bent on it in accordance with the law, the company’s to conduct an examination granted by Section 111 Articles of Association and the bylaws, regularly (2) AktG (German Stock Corporation Act) since the advised and monitored the Executive Board in its reporting by the Executive Board meant there was no activities and satisfied itself that the company was reason to do so.
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