KWS SAAT SE & Co. KGaA Q4 Earnings Call Highlights

Key Points

• KWS reported resilient profitability despite headwinds: Fiscal 2025/2026 sales fell 1% organically to €1.63 billion, but EBITDA reached €343 million, net income rose more than 13% to €158 million, and free cash flow was approximately €123 million. Net debt declined to less than €9 million.
• Growth was led by selected businesses: Sunflower sales increased 35%, rapeseed sales rose 24%, and sugar beet maintained an EBITDA margin near 42% despite a 10% decline in global acreage. Vegetable sales fell 6.8%, while cereals faced weaker market conditions and a €5 million antitrust-related provision.
• KWS expects a modest recovery in 2026/2027: The company forecasts organic sales growth of around 3% and an EBITDA margin of 19% to 20%, supported by improved commodity prices and farm profitability. It proposed raising the dividend to €1.30 per share.

KWS SAAT SE & Co. KGaA ETR: KWS reported full-year 2025/2026 sales of €1.63 billion, with organic revenue declining 1% amid lower crop acreage, cautious farmer sentiment and unfavorable currency movements. Despite the market headwinds, the seed company maintained profitability, generated approximately €123 million in free cash flow and reduced net debt to less than €9 million.

Chief Financial Officer Jörn Andreas said the agricultural sector faced a challenging year, including acreage reductions in several crops. Currency effects, mainly from the U.S. dollar, Turkish lira and Ukrainian hryvnia, reduced reported sales by roughly one percentage point, while portfolio effects accounted for another percentage-point decline. The portfolio impact was largely related to the absence of research-and-development service revenue from the former AgReliant joint venture.

“While sales were affected by market conditions, we maintained a strong profitability, we generated excellent cash flow, and further strengthened our balance sheet,” Andreas said.

Profitability and Dividend Proposal

EBITDA totaled €343 million, while net income increased more than 13% to €158 million, supported by a significantly improved financial result. The company said adjusted EBITDA margin remained within its 19% to 21% guidance range despite weaker acreage development and currency headwinds.

KWS said efficiency measures contributed around €25 million in savings during the year. EBITDA also benefited from a €29 million gain on the disposal of North American corn license rights, completing the company’s strategic alignment of its corn segment.

The company proposed increasing its dividend to €1.30 per share, representing a payout ratio of approximately 29%. Andreas said the proposal was consistent with KWS’ policy of maintaining stable or increasing dividends. The proposed dividend would compare with €0.70 per share in fiscal 2019/20, representing a compounded annual growth rate of roughly 11%, according to the company.

Sugar Beet Resilience, Corn and Rapeseed Growth

In sugar beet, global acreage declined by about 10% as high sugar inventories led producers, particularly in Europe, to contract lower beet volumes. Nevertheless, KWS reported an organic sales decline of only 0.6% in the segment and an EBITDA margin of nearly 42%.

Andreas said the company’s differentiated CONVISO SMART and CR+ products continued to gain share and accounted for 63% of sugar beet segment sales. He said higher sugar prices and expectations for lower yields in many sugar beet regions could support stable or growing acreage in the upcoming season.

During the question-and-answer session, Andreas said KWS had used a stable acreage assumption in its outlook and described that approach as cautious. He said European sugar inventories could be balanced out during the current season, with Europe potentially becoming a net importer because domestic supply may be insufficient.

The corn segment’s reported sales decline reflected lower acreage and portfolio effects associated with the AgReliant transaction. Excluding Russia, comparable sales rose 2%, according to KWS, as the company gained market share in grain and silage corn across Europe.

Sunflower sales increased 35%, although Andreas characterized the business as still relatively small. KWS reiterated its ambition to generate €100 million in sunflower revenue by the end of the decade.

In cereals, rapeseed sales rose 24%, supported by market-share gains. Andreas said KWS had become the No. 1 player in Europe in oilseed rape following a strong start to the new season. Rye, wheat and barley continued to face weaker conditions during the reported year, reflecting lower commodity prices and greater use of farm-saved seed.

Cereals profitability was affected by a €5 million provision related to an antitrust investigation in France. Andreas said the investigation concerns a transparent mechanism used to establish royalties and basic seed prices in conjunction with French authorities. KWS and other market participants reject the claim, he said.

Vegetables, Ukraine and Financial Position

Vegetable sales declined organically by 6.8%, primarily due to developments in spinach, lower demand in North American food service and timing effects for certain orders. Andreas noted that the comparison followed 16% growth in the prior year. He said KWS plans to return the segment to growth in 2026/2027 while continuing investments in breeding, infrastructure and new crops.

The company said a prior-year €10 million write-off of the Pop Vriend brand affected comparisons for selling expenses. Excluding that one-time item, selling expenses increased slightly as KWS continued investments in research and development and go-to-market infrastructure.

In Ukraine, Andreas said revenue increased by a significant single-digit percentage despite difficult operating conditions. He cited the company’s exposure to crops including oilseed rape, corn and sunflower. Russia remains a revenue contributor representing less than 10% of KWS’ overall portfolio, he said, with sugar beet remaining the principal business there.

2026/2027 Outlook

For fiscal 2026/2027, KWS expects organic sales growth of around 3%, based on an assumption of improved market conditions. The company expects an EBITDA margin of 19% to 20% while continuing substantial investment in research and development.

Andreas said commodity prices had recovered in recent weeks, which could improve farm profitability and acreage development. With low net debt and continued cash generation, he said KWS enters the new fiscal year with financial flexibility to invest in existing businesses and pursue opportunities that create long-term shareholder value.

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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