KWS SAAT SE & Co. KGaA ETR: KWS reported slightly higher nine-month sales and improved earnings for fiscal 2025/2026, with Chief Financial Officer Jörn Andreas citing resilient demand, cost discipline and a diversified seed portfolio amid a difficult agricultural backdrop.
Andreas told analysts that agriculture remains challenged by political tensions, volatile commodity prices and pressure on acreage and farm economics. Even so, he said KWS delivered “a resilient top line, solid earnings, and a strong operational discipline,” supported by its portfolio mix and innovation-led business model.
For the first nine months, net sales reached EUR 1.35 billion, slightly above the prior-year period. Organic sales growth was 2.6%, partly offset by currency headwinds of 1.8% and a negative portfolio effect of 0.5%. EBITDA rose to EUR 386.8 million from EUR 360.8 million, while net income from continuing operations increased to EUR 220 million from EUR 202.8 million.
Andreas said reported EBITDA benefited from several special effects, including a EUR 29 million positive contribution from the sale of license rights related to the North American corn business. Adjusted for special items, EBITDA rose modestly to EUR 357 million from EUR 353 million, which he attributed to “active cost mitigation measures.”
Cash Flow Hit by Receivables, but Leverage Improves
Capital expenditures fell to EUR 56 million from EUR 73.6 million, reflecting a normalization after elevated spending in the prior year. Free cash flow was negative EUR 52.4 million, compared with negative EUR 3.9 million a year earlier, mainly due to lower operating cash flow from higher receivables. Andreas said the higher receivables reflected seasonality and sales phasing, including some orders moving from the fourth quarter into the third quarter.
Net debt was essentially stable at EUR 179 million. The trailing 12-month net debt-to-EBITDA ratio improved to 0.4 times from 0.5 times. Andreas said KWS expects net debt to be “significantly lower” at year-end as working capital unwinds seasonally.
The company also said it is confident full-year free cash flow will exceed the prior year’s EUR 123 million, driven by improved operating and investing cash flow.
Sugar Beet Sales Rise Despite Acreage Pressure
In sugar beet, sales increased to EUR 703.8 million, including negative currency effects of 2.7%. Organic sales growth was 4.2%, helped by pull-forward effects and a higher share of innovation-led products. Andreas said CONVISO SMART and CR+ accounted for 62% of sugar beet sales, up from 57% a year earlier.
He said global sugar beet acreage for 2026 is estimated to decline about 6% to roughly 4.3 million hectares, but added that KWS continues to generate more value per hectare through premium products. Looking ahead, he said the negative acreage trend appears to have “somewhat bottomed out,” with stable or slightly growing acreage expected next season, though he described the outlook as still early.
During the question-and-answer session, Andreas said sugar beet profitability remained strong despite market pressure. He attributed margin movements mainly to regional sales mix and currency effects, including a negative translational impact tied in part to the U.S. dollar.
Corn Segment Benefits From License Sale and Sunflower Growth
Corn segment sales were EUR 349.4 million, below the prior year, though organic growth was 1.3%. Andreas said the segment saw clear pull-forward dynamics, with part of fourth-quarter volume moving into the third quarter.
In response to an analyst question, Andreas estimated the overall pull-forward effect at roughly EUR 30 million, with about two-thirds in corn and one-third in sugar beet. Excluding those effects, he said growth would have been “more or less flat,” consistent with full-year guidance.
KWS also highlighted growth in sunflower seeds, which are consolidated within the corn business unit. Andreas said sunflower sales grew at a double-digit rate, supported by a renewed variety portfolio. In a follow-up exchange, he confirmed year-to-date sunflower revenue of EUR 15 million, and reiterated the company’s target of reaching EUR 100 million in sunflower revenue by the end of the decade.
Corn EBITDA improved significantly, including the EUR 29 million one-off gain from the sale of license rights. Andreas clarified that the gain related to license rights for KWS germplasm previously provided to AgReliant and formed part of the broader AgReliant transaction with buyer GDM.
Cereals Mixed, Vegetables Investment Continues
Cereals sales were stable at EUR 243.4 million, with organic growth of 0.7%. Oilseed rape sales rose 21% on a high-performance portfolio, while hybrid rye declined 14% due to low rye market prices. Wheat was broadly in line with the prior year.
EBITDA in cereals was “clearly below” the prior year, Andreas said, due to increased research and development efforts and a provision for a legal risk in the mid-single-digit million euro range. In response to an analyst question, he said the provision relates to an ongoing antitrust investigation in France. He said KWS is defending its position and is not pursuing a settlement, but declined to comment further due to the ongoing proceedings.
Vegetables sales increased to EUR 46.5 million, with organic growth of 2% supported by higher bean seed sales and stable spinach demand. EBITDA was more negative year over year, which Andreas said was in line with plans as KWS invests in expanding vegetable breeding capacity.
Andreas said fiscal 2026/2027 will be a “pivotal milestone” for the vegetables business, with market launches planned for tomato, pepper, cucumber, melon and watermelon varieties. He said the initial revenue contribution from these launches is expected to be in the mid-single-digit million euro range next year, with KWS targeting EUR 100 million in vegetables revenue by the end of the decade, compared with roughly EUR 70 million today.
Outlook Confirmed
KWS confirmed its full-year forecast for fiscal 2025/2026, citing the nine-month performance and current visibility. Andreas said currency volatility and regional order patterns remain factors to monitor, but underlying business performance and cost discipline support the outlook.
Asked about longer-term EBIT margin potential beyond the company’s 19% to 21% target range, Andreas said KWS remains ambitious but is comfortable with the current range. He said any additional profitability could likely be reinvested in research and development, which remains a priority for the company.
About KWS SAAT SE & Co. KGaA ETR: KWS
KWS SAAT SE & Co KGaA develops, produces, and distributes seeds for farmers in Germany, rest of Europe, North and South America, and internationally. It operates through four segments: Corn, Sugarbeet, Cereals, and Vegetables. The Corn segment breeds, produces, and distributes seed for corn, soybeans, and sunflowers. The Sugarbeet segment engages in the development, breeding, production, and distribution of diploid hybrid potatoes and sugar beet seeds. The Cereals segment breeds, produces, and distributes seeds for rye, wheat, barley, and rapeseed.
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