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1 Annual Report
2010 I 2011
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1 Annual Report
2010 I 2011
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KWS Sa at aG
Key figures of the KWS Group
Figures in € millions. unless otherwise specified (IFRS)
KWS worldwide
Fiscal year
Net sales
Operating income (= EBIT)
as a % of net sales (= ROS)
Net income
as a % of net sales
Operative cash flow
Net cash from investing activities
Equity
Equity ratio in %
2010/11
2009/10
2008/09
2007/08
2006/07
855.4
754.1
717.2
599.1
537.9
116.6
13.6
72.9
8.5
101.2
–52.4
530.3
58.8
82.4
10.9
51.5
6.8
27.4
–55.4
492.9
57.5
77.9
10.9
50.1
7.0
82.0
70.1
11.7
54.6
9.1
74.6
–59.4
–18.1
434.5
398.0
57.5
59.3
671.1
15.3
9.2
63.9
11.9
38.2
7.1
51.1
–26.7
366.1
60.0
609.8
11.6
6.8
Balance sheet total
902.0
857.4
756.0
Return on equity in %
Return on assets in %
15.2
8.8
12.2
7.1
13.0
7.8
Fixed assets
290.1
275.2
231.9
197.1
189.4
Capital expenditure
Depreciation
49.3
27.6
58.4
22.0
Average number of employees
3,560
3,492
Personnel costs
165.0
147.2
Performance of KWS shares in €
Dividend per share
Earnings per share
Operative cash flow per share
Equity per share
2.30*
10.64
15.33
80.35
1.90
7.51
4.15
74.68
61.1
23.3
3,215
135.0
1.80
6.98
12.42
65.83
30.4
17.0
2,856
119.0
1.70
7.74
11.30
60.31
27.2
16.1
2,739
111.3
1.40
5.61
7.74
55.47
* €2.10 dividend plus €0.20 bonus dividend
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Financial calendar
November 25, 2011
December 14, 2011
February 24, 2012
May 24, 2012
October 18, 2012
November 29, 2012
December 13, 2012
Key data of KWS SAAT AG
Securities identification number
ISIN
Stock exchange identifier
Transparency level
Index
Share class
Number of shares
Capital stock at June 30, 2011
Share price high June 13, 2011 (Xetra)
Share price low July 20, 2010 (Xetra)
Average number of shares traded
– in Xetra
– in floor trading in Frankfurt
Report on the 1st quarter of 2011/2012
Annual Shareholders’ Meeting in Einbeck
Report on the 2nd quarter of 2011/2012
Report on the 3rd quarter of 2011/2012
Publication of 2011/2012 financial statements
Annual press conference in Frankfurt;
Analyst conference in Frankfurt
Report on the 1st quarter of 2012/2013
Annual Shareholders’ Meeting in Einbeck
707400
DE0007074007
KWS
Prime Standard
SDAX
Individual share certificates
6,600,000
€19,800,000
€166.95
€116.00
4,021
307
• Breeding stations
• Trial locations
Seeding the Future
Working at the highest levels of quality, we breed new varieties for the moderate climatic zone to produce
seed for sugarbeet, corn, cereals, oil seed and potatoes. In doing so, we make a significant contribution to
high-yield agriculture. Our varieties are precisely tailored to the needs and requirements of our customers in
over 70 countries around the world. That demands a global network of breeding and trial stations so that
our seed can be adapted to the local conditions typical of our markets. As part of this process, we are
committed to careful use of natural resources at all times.
KWS Saat aG
Grimsehlstrasse 31 • 37555 Einbeck • P.O. Box 1463
Phone +49 (0) 5561/311-0 • Fax +49 (0) 5561/311-322
www.kws.com • E-mail: info@kws.com
This translation of the original German version of the Annual Report has
been prepared for the convenience of our English-speaking shareholders.
The German version is legally binding.
Photos/Illustrations:
Eberhard Franke • Michael Löwa • Stefan Blume • KWS Group archive
Key figures of the KWS Group
Figures in € millions. unless otherwise specified (IFRS)
KWS worldwide
Fiscal year
Net sales
Operating income (= EBIT)
as a % of net sales (= ROS)
Net income
as a % of net sales
Operative cash flow
Net cash from investing activities
Equity
Equity ratio in %
2010/11
2009/10
2008/09
2007/08
2006/07
855.4
754.1
717.2
599.1
537.9
116.6
13.6
72.9
8.5
101.2
–52.4
530.3
58.8
82.4
10.9
51.5
6.8
27.4
–55.4
492.9
57.5
77.9
10.9
50.1
7.0
82.0
70.1
11.7
54.6
9.1
74.6
–59.4
–18.1
434.5
398.0
57.5
59.3
671.1
15.3
9.2
63.9
11.9
38.2
7.1
51.1
–26.7
366.1
60.0
609.8
11.6
6.8
Balance sheet total
902.0
857.4
756.0
Return on equity in %
Return on assets in %
15.2
8.8
12.2
7.1
13.0
7.8
Fixed assets
290.1
275.2
231.9
197.1
189.4
Capital expenditure
Depreciation
49.3
27.6
58.4
22.0
Average number of employees
3,560
3,492
Personnel costs
165.0
147.2
Performance of KWS shares in €
Dividend per share
Earnings per share
Operative cash flow per share
Equity per share
2.30*
10.64
15.33
80.35
1.90
7.51
4.15
74.68
61.1
23.3
3,215
135.0
1.80
6.98
12.42
65.83
30.4
17.0
2,856
119.0
1.70
7.74
11.30
60.31
27.2
16.1
2,739
111.3
1.40
5.61
7.74
55.47
* €2.10 dividend plus €0.20 bonus dividend
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Financial calendar
November 25, 2011
December 14, 2011
February 24, 2012
May 24, 2012
October 18, 2012
November 29, 2012
December 13, 2012
Key data of KWS SAAT AG
Securities identification number
ISIN
Stock exchange identifier
Transparency level
Index
Share class
Number of shares
Capital stock at June 30, 2011
Share price high June 13, 2011 (Xetra)
Share price low July 20, 2010 (Xetra)
Average number of shares traded
– in Xetra
– in floor trading in Frankfurt
Report on the 1st quarter of 2011/2012
Annual Shareholders’ Meeting in Einbeck
Report on the 2nd quarter of 2011/2012
Report on the 3rd quarter of 2011/2012
Publication of 2011/2012 financial statements
Annual press conference in Frankfurt;
Analyst conference in Frankfurt
Report on the 1st quarter of 2012/2013
Annual Shareholders’ Meeting in Einbeck
707400
DE0007074007
KWS
Prime Standard
SDAX
Individual share certificates
6,600,000
€19,800,000
€166.95
€116.00
4,021
307
• Breeding stations
• Trial locations
Seeding the Future
Working at the highest levels of quality, we breed new varieties for the moderate climatic zone to produce
seed for sugarbeet, corn, cereals, oil seed and potatoes. In doing so, we make a significant contribution to
high-yield agriculture. Our varieties are precisely tailored to the needs and requirements of our customers in
over 70 countries around the world. That demands a global network of breeding and trial stations so that
our seed can be adapted to the local conditions typical of our markets. As part of this process, we are
committed to careful use of natural resources at all times.
KWS Saat aG
Grimsehlstrasse 31 • 37555 Einbeck • P.O. Box 1463
Phone +49 (0) 5561/311-0 • Fax +49 (0) 5561/311-322
www.kws.com • E-mail: info@kws.com
This translation of the original German version of the Annual Report has
been prepared for the convenience of our English-speaking shareholders.
The German version is legally binding.
Photos/Illustrations:
Eberhard Franke • Michael Löwa • Stefan Blume • KWS Group archive
Table of contents
7
8
12
15
15
16
18
19
22
28
30
32
36
39
42
45
48
49
84
Foreword of the Executive Board
Spotlight topic: The potato – much more than just a ball of starch
Report of the Supervisory Board
Corporate Governance Report
Compliance declaration in accordance with Section 161 AktG
(German Stock Corporation Act)
Compensation Report
The KWS share
Agenda of the Annual Shareholders’ Meeting
Management Report of the KWS Group
• Sugarbeet Segment
• Corn Segment
• Cereals Segment
• Breeding & Services Segment
• Outlook for the fiscal year 2011/2012
• Employees
• Risks and chances for future development
• Disclosures in accordance with Section 315 (4) HGB
(German Commercial Code)
Annual Financial Statements of the KWS Group
Auditors’ Report
Foreword of the Executive Board
Dr. Léon Broers
Philip von dem Bussche
(Chief Executive Officer)
Dr. Hagen Duenbostel
Dr. Christoph Amberger
Research & Breeding,
Corporate Affairs, Sugarbeet,
Finance, Controlling, Legal,
Corn, Cereals, Marketing
Energy plants
Human Resources
Information Technology
The KWS Group can again look back on a successful fis-
cal year. With our new varieties, we provide agriculture with
constant breeding progress – year after year. That is the
basis for an extensive range of feed and food and renew-
able energies. Especially in uncertain economic times, plant
breeding is a factor for stability in view of a rising world
population and the growing evidence of climate change.
In the past fiscal year we far surpassed our growth
and earnings targets. The KWS Group’s net sales rose
by just over 13% to €855 million. Operating income
(EBIT) improved above-proportionately by around 42%
to €117 million, mainly thanks to growth in our opera-
tional business. The quality of our earnings is under-
scored by the fact that we were able to grow our al-
ready double-digit EBIT return despite a significant
increase in R&D expenditure by €16 million to almost
€114 million.
All product segments developed very well last fiscal year.
Corn seed business generates the largest net sales and now
also contributes the most earnings at the KWS Group. Ex-
cellent variety performance meant we were able to grow our
market share in our key European regions. Net sales also in-
creased in North America. Since sugar prices remained high,
global cultivation area rose by some 4% to 4.8 million ha.
European sugarbeet seed sales rose sharply, particularly in
France, Northern Europe and Germany. Business in North
America benefited from the decision by the United States
Department of Agriculture (USDA) to allow the cultivation of
herbicide-tolerant Roundup Ready® sugarbeet, subject to
conditions. As a result, farmers in the U.S. again decided to
grow genetically improved varieties on more than 90% of the
area used for sugarbeet cultivation. In our cereals business,
sales of hybrid rye in Germany and winter wheat in the UK
developed particularly well. Good cereal prices made farm-
ers more willing to buy high-quality, certified seed.
Our seed potato business was newly integrated in the Sugar-
beet Segment. We acquired the whole of the joint venture
VAN RIJN – KWS B.V. effective April 1, 2011, and transferred
it to the company KWS POTATO B.V. Synergies with KWS’
breeding and sugarbeet distribution operations are to be
leveraged to a greater extent in the future. We have devot-
ed this year’s “Spotlight topic” on page 8 to potatoes.
Investments in research and development secure KWS’
long-term growth. That is why we have significantly ex-
panded our research and development work at Einbeck
in recent years. We also plan to keep the focus of our
research activities in Germany, which is why we call on
lawmakers to give a clear commitment to freedom of re-
search into cutting-edge technologies such as “green
genetic engineering.” The increase in illegal actions, such
as the destruction of field trials combined with violence
against people, is not acceptable. Now and in the future,
KWS will seek a constructive dialog with society and nur-
ture the transparent use of new technologies.
Our dividend policy is aligned with the company’s earn-
ings power. 2010/2011 was an exceptional fiscal year in
which we enjoyed good market success and income to
match. There were also lower allowances on receivables
and inventories. We will therefore propose payment of a
dividend of €2.10 (€1.90) and a bonus dividend of €0.20
to the Annual Shareholders’ Meeting. A key goal of our
dividend policy has been and will continue to be to ful-
fill our shareholders’ interest in obtaining a return on their
investment and to ensure the company’s positive devel-
opment. As far as can be seen at present, our good busi-
ness performance of the past year should also continue
into the future.
This extremely gratifying performance is due to the great
commitment of all KWS employees around the world. Out-
standing precision in the complex work of breeding, quality
in seed production and our ability to stay close to farmers
and their needs are the success factors that give KWS its
exceptional market position and bring great respect from
its customers.
With best regards from Einbeck on behalf of the entire
Executive Board,
Philip von dem Bussche
Chief Executive Officer
Foreword of the Executive Board I 7
Spotlight topic:
The potato – much more than just a ball of starch
Some 300 million tons of potatoes are harvested every year, making it one of the world’s most important
crops alongside corn, rice and wheat. However, it is a very demanding niche product for plant breeders
and multipliers. That means that this field holds interesting potential for KWS, with its more than 150 years
of experience in niche markets and a focus on research into and breeding and production of high-quality,
certified seed.
Potato cultivation area is growing continuously around
the world, especially in the emerging countries of China
and India. In the past 20 years there has been an even
sharper increase in yield per hectare and total global pro-
duction – over 100% in China and India. In the highly de-
veloped Western markets, a shift in focus away from pure
quantity and toward special quality can be observed in
potato cultivation. The harvested goods are increasingly
purchased not by consumers, but a chain of customized
processing businesses: It is increasingly rare for potatoes
to go directly from the field onto the stove. The growing
number of one-person households is boosting demand
for ready-to-serve products. Processing companies need
specifically adapted raw materials for this. For example,
special varieties of potatoes that are not marketed as
table potatoes are used for French fries or chips.
Pharming – medicine from the field
Growing plants for medicinal purposes dates back several
millennia. In the last 30 years, special use has been made of
microorganisms to produce medications – for example to ob-
tain vaccines and hormones such as insulin. Over 140 drugs
produced from genetically modified bacteria cultures are cur-
rently approved for the European market.
The buzzword “pharming,” a neologism formed from “phar-
maceutical” and “farming,” denotes the use of genetically
modified plants and animals to produce active substances for
drugs. Compared with traditional cell cultures, production in
plants can offer considerable advantages. In particular, trials
are underway on corn, rice, tobacco, potatoes, safflower and
duckweed. The potato’s genome was completely sequenced
in July 2011 – a further important step toward the pharmaceu-
tical and industrial use of solanum.
8
Specialists for further processing
The cultivation of potatoes is often governed by contracts
between growers and processors so as to ensure that qua-
lity requirements are met. The varieties are also defined. The
increasing complexity of the value chain offers new oppor-
tunities for potato breeding: While in the first stages of the
processing chain the adaptation of potatoes to the require-
ments of technical processes – e.g. storability and size – is
important, their color, consistency, the effects of freezing
and their taste are what count for the completed products.
There are also demands regarding particular nutritional cri-
teria and composition of the constituents – requirements
that can only be met through plant breeding.
Strong brands for the consumer’s plate
The traditional fresh table potato is still an important part
of the diet in industrialized countries – just over 50% of
per-capita potato consumption in Germany is fresh pro-
duce. In this segment, too, special properties of the good
old spud, as well as its packaging, are growing in impor-
tance: Small and particularly thin-skinned potatoes, for in-
stance, are suitable for quick preparation in the microwave.
With a minimum of work, healthy food can be prepared and
put quickly on the table. Above all, marketing of table po-
tatoes focuses on the variety. Potato breeders specifically
target consumers with regional specialties or varieties
“tailored” for individual target groups.
Networking also provides processing companies with ben-
efits. Supermarkets, fast food chains and makers of ready-
to-serve meals all make the individual stages in the pro-
cess chain transparent to customers and are increasingly
integrating the origin and quality of the processed pota-
toes in their promotional concepts.
Diversity still harbors many treasures
Potatoes are not only diverse in shape and genetics – they
also have a peculiar ability to adapt to their environment.
Originating in the Andes in South America, an area known
for its extreme weather conditions, potatoes thrive in
moderate, subtropical and tropical climates and are
not choosy about the soil conditions they grow in. Pota-
toes are now grown almost everywhere in the world. The
biggest producers – after China and India – are Rus-
sia, Ukraine, the U.S., Germany and Poland. Yields in
the U.S. and Germany are more than three times those
of the rapidly growing emerging countries. That is be-
cause, despite the fact that the potato can adapt very
well to the climate, growing it requires intensive care. Un-
like with sugarbeet, it is not seed that is planted but
entire tubers, which then multiply in the earth. This form
of cultivation makes the potato prone to a wide range
of diseases, such as fungi, viruses and other soil-borne
organisms. Many resistances and tolerances can be
found in the numerous original forms of potatoes, which
are still preserved to this day, but have been lost in
the cultivated types of crop over the course of time.
This diversity is a valuable source for advances in plant
breeding, above all in conjunction with modern breeding
methods and biotechnology.
Focus on quality
The structure of the seed potato market differs very gre-
atly from other seed markets. Many small and medium-
sized breeders operate here. The life cycle for successful
varieties is significantly longer than for other crops. Multi-
plication and logistics play key roles. Those are fields
where the Netherlands leads the way – Dutch companies
account for more than 70% of international trade.
The biggest potato producers in the EU 27 are Belgium,
Germany, France, the Netherlands, the UK and Poland.
KWS’ focus is on these and the other specialized markets
of the industrialized nations as well as the large markets
Where does our food come from, and how high is its quality? These
questions are of growing importance for consumers. Successful potato
breeding requires good networking with processing companies, farmers
and end customers.
of Russia, other Eastern Europe countries and North Africa.
In order to establish ourselves as a potato specialist, in fiscal
2010/2011 we took over the whole stake of our partner Van
Rijn in the existing potato joint venture. As a result, we can op-
timally leverage our experience in plant breeding, access to
state-of-the-art technologies and our existing consulting and
distribution network. That means KWS will intensify its potato
research and development activities. Van Rijn, a specialist in
multiplication and distribution logistics, will remain our part-
ner in these fields. The central location for the new company
KWS POTATO B.V. will be Emmeloord in the Netherlands.
Global Acreage
(Source: Faostat. org, October 2011)
America
8%
Africa
10%
Russia
12%
around 19 mn. ha
Asia
(excluding China)
21%
China
27%
Europe
(excluding Russia)
22%
Spotlight topic I 9
›› The potato needs intensive
care in practical cultivation.
It‘s well worth the effort: With two to three tons of certified
‹‹
seed potatoes, top-class yields of a good 70 tons per
hectare are possible.
Remko Koeman, potato breeder, KWS POTATO B.V.
Report of the Supervisory Board
information in written and oral form regularly, promptly
and comprehensively. This included all key information on
relevant matters regarding planning, the business perform-
ance and situation of the company and the KWS Group,
including the risk situation, risk management and compli-
ance. Business transactions requiring consent were submit-
ted to and discussed and approved by the Supervisory
Board in compliance with the bylaws for the Executive Board.
Other matters that were discussed in detail included busi-
ness policy, corporate and financial planning, the profitabil-
ity and the status of the company as well as business
developments, market trends and the competitive environ-
ment, research and product development and, along with
important individual projects, on risk management at the
KWS Group. The Chairman of the Supervisory Board con-
tinued the bilateral discussions with the Chief Executive
Officer and individual members of the Executive Board in
regular talks outside the meetings of the Supervisory Board.
In addition, there were monthly meetings between the Chair-
man of the Supervisory Board and the Executive Board as
a whole, where the company’s current business develop-
ment and, in particular, strategy, occurrences of special im-
portance and corporate risk management were dealt with.
The full Supervisory Board held five regular meetings in
fiscal 2010/2011. Its members participated in all meetings,
with the exception of one member who was unable to
attend one meeting due to illness and another member
who was on parental leave and was thus prevented from
attending three meetings.
Focal areas of deliberations
The meeting of the Supervisory Board to discuss the finan-
cial statements on October 27, 2010, was devoted to ex-
amining and approving the financial statements of KWS
SAAT AG and the consolidated financial statements as of
June 30, 2010. In the discussion of current business devel-
opments, the progress of the lawsuit in the U.S. relating to
cultivation of genetically modified herbicide-tolerant sugar-
beet was also dealt with. Following detailed discussion, the
compensation system with a long-term incentive (LTI) was
also adopted for second-tier management in line with the pro-
gram for the Executive Board. In addition, the deductible for
Supervisory Board members relating to liability was increased
from its previous lump sum of €20 thousand to 1.5 times the
fixed compensation. The bylaws for the Supervisory Board
had to be amended accordingly.
The focus of the Supervisory Board’s meeting on Decem-
ber 15, 2010, was the company’s strategy for the growth
markets of Russia and Ukraine. Moreover, important
basic technologies were discussed. In addition, the Super-
visory Board welcomed and adopted the decision to
move to a method of segment accounting that gives an in-
tegrated presentation of the segments’ success, including
all function costs and research and development expen-
diture, as of fiscal 2011/2012. On December 16, 2010, fur-
ther expansion of the company’s commitment in China
was presented and dealt with. Expansion of the commer-
cial base by means of joint venture partnerships is re-
flected in a second joint venture in Northeastern China.
The Supervisory Board gave its consent to related nego-
tiations and to the conclusion of the relevant agreements.
As in previous years, the March meeting, which was held
on the 17th of the month, was used to obtain a broad
picture of the KWS Group’s research and development
activities. The current performance of the varieties in the
main cultivation regions was discussed in detail. Since
the use of biotechnology methods and technologies in
plant breeding is growing in importance, their possible
uses for KWS was also discussed in depth. Expansion
of the breeding program to the Chinese corn market and
acquisition of all the shares in the existing potato breeding
joint venture were also agreed on.
In its final meeting in fiscal year 2010/2011 on June 21, 2011,
the Supervisory Board held detailed discussions regarding
the planning for fiscal 2011/2012 with medium-term planning
up to 2014/2015 and approved it. As in previous years, the
survey of the Supervisory Board aimed at avoiding and iden-
tifying fraud was also conducted. The Supervisory Board
was not aware of any such acts.
Annual and consolidated financial statements
and auditing
Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft,
Hanover, the auditor chosen at the Shareholders’ Mee-
ting on December 16, 2010, and commissioned by the
Audit Committee, has audited the financial statements
of KWS SAAT AG that were presented by the Executive
Board and prepared in accordance with the provisions of
the German Commercial Code (HGB) for fiscal 2010/2011
and the financial statements of the KWS Group (IFRS
consolidated financial statements), as well as the Manage-
ment Report of KWS SAAT AG and the KWS Group
Management Report, including the accounting reports,
and awarded them its unqualified audit certificate. In ad-
dition, the auditor concluded that the audit of the financial
statements did not reveal any facts that might indicate
a misstatement in the declaration of compliance with
the German Corporate Governance Code issued by the
Executive Board and Supervisory Board (cf. Clause 7.2.3 of
the German Corporate Governance Code).
The Supervisory Board received and discussed the financial
statements of KWS SAAT AG and the consolidated financial
statements of the KWS Group as well as the Management
Reports of KWS SAAT AG and the KWS Group, along with
the report by the independent auditor of KWS SAAT AG and
the KWS Group and the proposal on utilization of the net pro-
fit for the year made by KWS SAAT AG, in due time. The fi-
nancial statements, Management Reports and audit reports
by the independent auditors were submitted to all members
of the Supervisory Board. It also held detailed discussions
of questions on the agenda at its meeting to discuss the
financial statements on October 26, 2011. The auditor took
part in the meeting and reported on the main results of the
audit and was also available to answer additional questions
and provide further information for the Supervisory Board.
According to the report of the independent auditor, there
were no material weaknesses in the internal control and risk
management system in relation to the accounting process.
There were also no circumstances that might indicate a lack
of impartiality on the part of the independent auditor. The
small extent of services additionally provided by the inde-
pendent auditor can be seen from the Notes.
In accordance with the final results of its own examination,
the Supervisory Board endorsed the results of the audit with
no objections, among other things as a result of the vote
by the Audit Committee. It approved the annual financial
statements of KWS SAAT AG and the consolidated financial
statements of the KWS Group. It also endorses the pro-
posal by the Executive Board to the Annual Shareholders’
Meeting on the appropriation of the net retained profit of
KWS SAAT AG after having examined it.
Corporate Governance
The efficiency review of the Supervisory Board’s work was
conducted for fiscal 2010/2011 in the form of a question-
naire following detailed interviews in the previous year. The
written survey was implemented and monitored by the
Deutsche Agentur für Aufsichtsräte, a company that advises
supervisory boards. It also gave its overall assessment of
the results in a final report dated August 29, 2011. There
was no criticism of the quality and efficiency of the work
in all segments of relevance to the Supervisory Board. It
complied with good professional practices in all cases. The
results and recommendations were discussed at the mee-
ting of the Supervisory Board on October 26, 2011. There
were no conflicts of interest on the part of members of the
Supervisory Board in the period under review.
Report of the Supervisory Board I 13
Dr. Dr. h. c. mult. Andreas J. Büchting,
Chairman of the Supervisory Board
The KWS Group’s growth has gained in dynamic strength.
Our efforts in research, development, production and distri-
bution are bearing fruit and are acknowledged by our cus-
tomers, the farmers. In fiscal 2010/2011, even more farmers
chose seed from KWS and thus helped increase our market
share and net sales in all segments. Demand for KWS
varieties in some European markets even surpassed our
expectations. In North America, sugarbeet seed business
performed well after the courts approved cultivation of our
genetically modified herbicide-tolerant sugarbeet. These
increasingly complex technologies and their use to create
innovations in plant breeding demand a high degree of
responsibility and foresight. The Supervisory Board worked
closely with the Executive Board to support it in this process.
In the past fiscal year, the Supervisory Board advised and
monitored the Executive Board of KWS SAAT AG in its ac-
tivities and carefully supported it in all fundamental deci-
sions that were vital to the company, in accordance with
the law and the company’s Articles of Association. Both
boards successfully continued their constructive coopera-
tion based on mutual trust. Among other things, this was de-
monstrated by the fact that, as is customary, the Executive
Board involved the Supervisory Board at an early stage in all
key decisions of fundamental importance to the company.
The Supervisory Board was provided with the necessary
12
Supervisory Board
Dr. Dr. h. c. mult. Andreas J. Büchting
Einbeck
Agricultural Biologist
Chairman
Dr. Arend Oetker
Berlin
Businessman
Deputy Chairman
Hubertus von Baumbach
Ingelheim am Rhein
Businessman
Cathrina Claas-Mühlhäuser
Frankfurt am Main
Businesswoman
Jürgen Bolduan
Einbeck
Seed Breeding Employee
Chairman of the Central Works
Committee of KWS SAAT AG
Dr. Dietmar Stahl
Einbeck
Biochemist
Employee Representative
statements and pointed out that there were no grounds for
assuming a lack of impartiality on the part of the indepen-
dent auditor in its audit. The Audit Committee also dealt with
the proposal by the Executive Board on the appropriation of
the net retained profit of KWS SAAT AG and recommended
that the Supervisory Board consent to it. The results of the
efficiency review with relevance to the bylaws of the Audit
Committee were of an editorial character and were incorpo-
rated in the bylaws and submitted to the Supervisory Board
for a resolution to be taken.
The Committee for Executive Board Affairs convened on
October 26, 2011, for its regular review of the quality of the
Executive Board’s work. The Nominating Committee had
no reason to convene in the past fiscal year.
The Supervisory Board expresses its thanks to the Execu-
tive Board and all employees of KWS SAAT AG and its
subsidiaries in the KWS Group for their commitment and
contribution to the especially successful performance of
KWS in fiscal 2010/2011.
Einbeck, October 26, 2011
Dr. Dr. h. c. mult. Andreas J. Büchting
Chairman of the Supervisory Board
Supervisory Board Committees
The committees of the Supervisory Board of KWS include
the Audit Committee, the Committee for Executive Board
Affairs and the Nominating Committee. These bodies dealt
in fiscal 2010/2011 with matters as described below.
The Audit Committee convened for two joint meetings in
fiscal 2010/2011 and also held three telephone conferences.
In its meeting on October 7, 2010, the Audit Committee
discussed the 2009/2010 annual financial statements and
accounting of KWS SAAT AG and the consolidated finan-
cial statements of the KWS Group. The Annual Compli-
ance Report and the results of the auditing projects were
on the agenda on March 17, 2011. The audit plan for fiscal
2011/2012 was also discussed and adopted. As a result of
the greater requirements demanded of the risk manage-
ment system pursuant to the German Accounting Law
Modernization Act (BilMoG), there was a detailed presenta-
tion and critical examination of the system’s organizational
fundamentals. The organizational structure and associated
control procedures, as well as adaptation of IT systems to
account for security aspects, were discussed and under-
stood by the members of the Audit Committee. The quar-
terly reports and the semiannual report for fiscal 2010/2011
were discussed in detail in the telephone conferences on
November 23, 2010, February 22 and May 24, 2011. All re-
ports were approved for publication.
In addition, the Audit Committee obtained the statement of
independence from the auditor in accordance with Clause
7.2.1 of the German Corporate Governance Code and moni-
tored the auditor’s independence. The Audit Committee
also satisfied itself that the regulations on internal rotation
pursuant to Section 319 a (1) No. 4 HGB were observed
by the independent auditor. The Audit Committee convened
on October 18, 2011, to discuss the annual financial state-
ments of KWS SAAT AG and KWS’ consolidated financial
statements as well as accounting. The independent auditor
explained the results of its audit of the 2010/2011 financial
14
Corporate Governance Report
Good corporate governance and control and a sustainable
corporate policy are the focus of KWS’ everyday business.
Respecting the interests of our stakeholders – customers,
business partners, shareholders, employees and fellow hu-
man beings – is of particular importance. Our actions are
guided by the values of an international agricultural company
with a tradition of family ownership. For KWS, these values
are reliability, team spirit, independence and foresight. We
also comply with the relevant legal requirements regarding
managing and supervising German stock corporations and
the internationally and nationally acknowledged standards
of good and responsible corporate governance (German
Corporate Governance Code).
The reason given for this decision was that there was no need
or special urgency for any changes because the current high
standards stood comparison with international rules and re-
gulations. In addition, companies would now have more time
to take up a recommendation that was stressed in the past
year, namely to have more women on supervisory boards
of German listed companies, for example. Since men and
women have the same career opportunities at KWS and a
quarter of the Supervisory Board members elected by the
Annual Shareholders’ Meeting is already female, we have is-
sued the declaration on corporate governance with virtually
no change to its wording from last year.
In 2011, the Government Commission for the German Cor-
porate Governance Code made no changes to the existing
regulations, which have been in effect since May 26, 2010.
The complete declaration on corporate governance in
accordance with Section 289 a of the German Commer-
cial Code (HGB) has been published in the Internet at
www.kws.com > Investor Relations > Corporate Governance.
Compliance declaration in accordance with
Section 161 AktG (German Stock Corporation Act)
The Executive Board and Supervisory Board of KWS SAAT
AG declare in compliance with Section 161 AktG (German
Stock Corporation Act) that – with the exception of the
points described below – the company has complied with
the recommendations of the German Corporate Gover-
nance Code in the version dated May 26, 2010, since the
last compliance declaration in October 2010, and does now
comply and will comply in the future with them.
KWS SAAT AG publishes its consolidated financial state-
ments and interim reports within the period of time de-
fined in the regulations for the Prime Standard of the
German Stock Exchange. It does not comply with the recom-
mended deadlines of 90 and 45 days respectively in Clause
7.1.2 of the German Corporate Governance Code because
of the seasonal course of its business.
KWS SAAT AG’s Articles of Association do not foresee
shareholders casting postal ballots for the Annual Share-
holders’ Meeting (postal ballot, Clause 2.3 of the German
Corporate Governance Code). To exercise their voting rights
at the Annual Shareholders’ Meeting on December 14, 2011,
shareholders who will not attend in person can have their
votes cast by a proxy of the company.
Einbeck, October 2011
The Supervisory Board
The Executive Board
Report of the Supervisory Board I Corporate Governance Report I 15
Compensation Report
The Supervisory Board’s compensation was set by the An-
nual Shareholders’ Meeting at the proposal of the Executive
Board and Supervisory Board. It is based on the size of the
company, the duties and responsibilities of the members of
the Supervisory Board and the company’s economic situa-
tion. The remuneration includes not only a fixed payment
and payment for work on committees, but also a perfor-
mance-related component. The Chairman of the Supervisory
Board receives three times and his or her deputy one-and-
a-half times the total compensation of an ordinary member.
There is currently no extra compensation for them for work on
committees. The Chairman of the Audit Committee receives
€25 thousand. Ordinary members of the Supervisory Board
receive €5 thousand for their work on the Committee for Ex-
ecutive Board Affairs and €10 thousand for their work on the
Audit Committee. The members of the Supervisory Board are
reimbursed for all expenses – including value-added tax – that
they incur while carrying out the duties of their position.
The total compensation for members of Supervisory Board
therefore amounts to €438 thousand (€407 thousand), ex-
cluding value-added tax. In all, 37% (32%) or €160 thou-
sand (€129 thousand) of the total compensation is perfor-
mance-related.
Supervisory Board compensation 2010/11 in €
Dr. Dr. h. c. mult. Andreas J. Büchting*
Dr. Arend Oetker**
Hubertus v. Baumbach***
Jürgen Bolduan
Cathrina Claas-Mühlhäuser
Dr. Dietmar Stahl
Fixed
84,000.00
42,000.00
Work on
committees
Performance-
related
0.00
0.00
56,400.00
28,200.00
28,000.00
25,000.00
18,800.00
28,000.00
0.00
18,800.00
28,000.00
15,000.00
18,800.00
28,000.00
0.00
18,800.00
Total
140,400.00
70,200.00
71,800.00
46,800.00
61,800.00
46,800.00
238,000.00
40,000.00
159,800.00
437,800.00
* Chairman ** Deputy Chairman *** Chairman of the Audit Committee
The compensation of members of the Executive Board
was set by the Supervisory Board and approved by the
Annual Shareholders’ Meeting. It is based on the size and
activity of the company, its economic and financial situa-
tion and the level and structure of compensation for man-
aging board members at comparable companies. The
total compensation is made up of a fixed and a perform-
ance-related component. The performance-related com-
pensation is calculated on the basis of a percentage of the
sustainable net income for the year for the KWS Group.
Payments for duties performed in subsidiaries and asso-
ciated companies were €29 thousand (€24 thousand)
and are offset against the performance-related payment.
Every member of the Executive Board must individually
Executive Board compensation 2010/11 in €
Philip von dem Bussche*
Dr. Christoph Amberger
Dr. Léon Broers
Dr. Hagen Duenbostel
* Chief Executive Officer
Basic com-
pensation
Benefits
in kind
Performance-
related
Total
270,000.00
18,192.84
492,317.57
780,510.41
216,000.00
21,893.08
492,317.57
730,210.65
216,000.00
20,240.05
492,317.57
728,557.62
216,000.00
15,710.80
492,317.57
724,028.37
918,000.00
76,036.77
1,969,270.28
2,963,307.05
invest between 20% and 50% of the gross performance-
related bonus payment for fiscal year 2010/2011 in KWS
shares. A long-term incentive (LTI) is paid in the form of
cash compensation after a holding period of 5 years. In
turn, one third of the LTI before taxes must be reinvested
in KWS shares.
The basic compensation is paid as a monthly salary. Apart
from these salaries, there is also non-monetary compensation,
such as a company car or a phone. There are also accident
insurance policies for the members of the Executive Board.
There is an absolute upper limit for the total compensation.
Pension obligations are granted both in the form of a
direct obligation to provide benefits and a defined con-
tribution plan, with the annual anticipated pensions rang-
ing between €130 thousand and €140 thousand. In fiscal
2010/2011, €72 thousand (€0 thousand) were paid to a
provident fund backed by a guarantee and €147 thou-
sand (€64 thousand) were allocated to the pension pro-
visions in accordance with IAS 19 for pension commit-
ments to members of the Executive Board. Pension pro-
visions totaling €1,351 thousand (€1,203 thousand) were
formed for the following members of the Executive Board
of KWS SAAT AG:
Pension commitments in €
Dr. Christoph Amberger
Dr. Hagen Duenbostel
07/01/2010
Personnel
expenses
Interest
expenses
06/30/2011
956,819.00
64,897.00
68,055.00
1,089,771.00
246,353.00
0.00
14,490.00
260,843.00
1,203,172.00
64,897.00
82,545.00
1,350,614.00
Compensation of former members of the Executive Board
and their surviving dependents amounted to €1,055 thou-
sand (€1,003 thousand). Pension provisions recognized
for this group of persons amounted to €1,726 thousand
(€2,100 thousand) as of June 30, 2011.
The pension commitments for three former members of the
Executive Board are backed by a guarantee.
No loans were granted to members of the Executive Board
and Supervisory Board in the year under review.
16
Compensation Report I 17
5-year price trend of the KWS share compared to SDAX
July 1, 2006, to June 30, 2011
Agenda of the Annual Shareholders’ Meeting
on December 14, 2011
KWS
SDAX
The Company’s Executive Board hereby invites you to the
Annual Shareholders’ Meeting on Wednesday, December 14, 2011, at 11 a.m.,
at the Company’s premises in 37574 Einbeck, Grimsehlstraße 31, Germany.
AGENDA
1. Presentation of the approved financial statements of KWS SAAT AG, the financial statements of the KWS Group
(Consolidated financial statements) approved by the Supervisory Board, the Management Reports for KWS SAAT AG
and the KWS Group for the fiscal year from July 1, 2010, to June 30, 2011, the Report of the Supervisory Board and
the explanatory report by the Executive Board on the disclosures in accordance with Section 289 (4) and (5) and
Section 315 (4) HGB (German Commercial Code)
2. Resolution on the appropriation of the net retained profit
3. Resolution on the ratification of the acts of the Executive Board
4. Resolution on the ratification of the acts of the Supervisory Board
5. Appointment of the independent auditor of the financial statements of KWS SAAT AG and the consolidated financial
statements for fiscal year 2011/2012
Shareholder structure
on October 2011
Families Büchting/
Arend Oetker/
Giesecke
56.1%
Tessner
Beteiligungs
GmbH
13.8%
Free float
30.1%
240
190
140
90
40
The KWS share
KWS SAAT AG is a company with a more than 150-year
tradition. The company has always geared its activities
to the long term – and it will continue to do so. The KWS
Group’s success worldwide is built on the commitment
and achievement of our employees and the outstanding
performance of our products. This quality is the result
of state-of-the-art research and breeding. Every year,
we spend between 10% and 15% of our net sales on
product development, for example. That figure rose to
some €114 million in fiscal 2010/2011. With this signifi-
cant R&D expenditure, we secure the KWS Group’s long-
term growth and create new jobs.
A study by the global business consulting firm Roland
Berger Strategy Consultants shows that there is a cor-
relation between sustained investment in research and
development and the high quality of results achieved by
family-owned enterprises. It shows that industrial enter-
prises owned by families or foundations turned in a far
better earnings performance after the recent financial cri-
sis than industrial companies listed on the MDAX. The
reasons given for this are their solid financial resources,
a forward-looking corporate strategy, continuous invest-
ments in R&D and strong employee loyalty.
KWS’ long-term growth strategy is reflected in the ove-
rall rise in its market capitalization. In the past five years,
KWS’ share price has more than doubled, while the com-
parative German index SDAX only rose by just under 13%
in the same period, and the German blue chip index DAX
went up by around 28%. Apart from this positive per-
formance, shareholders have also participated in the
6
0
0
2
/
7
0
7
0
0
2
/
1
0
7
0
0
2
/
7
0
8
0
0
2
/
1
0
8
0
0
2
/
7
0
9
0
0
2
/
1
0
9
0
0
2
/
7
0
0
1
0
2
/
1
0
0
1
0
2
/
7
0
1
1
0
2
/
1
0
KWS Group’s growth in the form of a steadily increasing
dividend. The company was able to continue this devel-
opment even in an environment marked by economic
uncertainty worldwide.
In the period under review – July 1, 2010, to June 30,
2011 – KWS’ share increased in value by almost 32%,
slightly below the rise in the SDAX of 39%. The share is
also represented in the DAXplus Family, an index which
tracks the performance of listed companies whose
founding families are co-owners and hold at least 25%
of the voting rights. This barometer rose by just over
30% in fiscal 2010/2011. Once again, the KWS share
proved itself to be an attractive investment, in particular
for the medium to long term.
Net sales of the KWS Group (5 years)
in millions of €
EBIT of the KWS Group (5 years)
in millions of €
2 . 3 % p . a .
1
800
600
400
200
6 . 2 % p . a .
1
100
75
50
25
7
0
/
6
0
0
2
8
0
/
7
0
0
2
9
0
/
8
0
0
2
0
1
/
9
0
0
2
1
1
/
0
1
0
2
7
0
/
6
0
0
2
8
0
/
7
0
0
2
9
0
/
8
0
0
2
0
1
/
9
0
0
2
1
1
/
0
1
0
2
18
KWS share I Agenda of the Annual Shareholders’ Meeting I 19
international every year.
›› The KWS family is getting more
‹‹
Our online media help ensure that all our colleagues in more
than 70 countries throughout the world are kept up-to-date.
Irina-Lavinia Antonescu, online media trainee, KWS SAAT AG
Management Report of the KWS Group
KWS has more than doubled its net sales in the past 10 years. A lot has changed against the backdrop
of growing internationalization, and the KWS Group now comprises, along with KWS SAAT AG, 59 sub-
sidiaries and associated companies with 3,560 employees. Yet one thing has stayed the same over this
time: KWS is the independent seed specialist for farmers in the 21st century, and we intend to remain that
in the future as we continue to drive innovation, expand our agricultural consulting activities and set high
targets for the quality of our products. Only in this way can we develop varieties for over 70 countries in
the moderate climatic zone, tailored to their different climates, soil conditions, diseases and pests. To that
end, we adapt every variety through many years of breeding work so that our customers can leverage
high-yielding seed optimized for their location. The result of this work is an annual average of almost 300
new sales approvals for products worldwide.
KWS has a global network of more than 30 breeding
stations and around 130 testing locations for testing and
developing products. Seed multiplication – one of the main
steps in producing the seed we sell – focuses on selected
regions and contractual partners, which makes it easier
for us to live up to our standards of quality. The high per-
formance of our products has been the key factor that
has enabled KWS’ primarily organic growth in just about
all its markets over the past years. In the past fiscal year,
2010/2011, we were again able to expand our business
activities in all product segments.
Further expansion of business activity
The KWS Group increased its net sales sharply in fiscal
2010/2011 by 13.4% to €855.4 (754.1) million and thus
above the growth rate of the past five years (averaging
around 12% per year). Net foreign sales rose in the past
fiscal year by 14.0% to €644.5 (565.3) million and now
make up 75.3% (75.0%) of total revenue. Apart from
growth in Northern Europe and North America, Eastern
Europe and France made a particular contribution to
this success. Net sales in Germany likewise increased
strongly by 11.6% to €210.9 (188.9) million.
All product segments played their part in this business
success. Net sales in the Corn Segment rose by 14.0% to
€471.1 (413.4) million, so that it now accounts for 55.1%
(54.8%) of the total figure. Our potato activities were inte-
grated in the Sugarbeet Segment when we took over their
operation: In previous years, the joint venture was consoli-
dated in the Breeding & Services Segments. A correspon-
ding adjustment of the previous years’ numbers shows
that net sales in the Sugarbeet Segment increased by
12.6% to €293.5 million or 34.3% (34.6%) of the Group’s
volume. (You can find more details on our potato business
in the report on the Sugarbeet Segment on page 29). The
Cereals Segment benefited from good hybrid rye sales in
Germany and wheat business in the UK, despite difficult
sowing conditions in the fall of 2010. Net sales were €77.4
(70.0) million or 9.0% (9.3%) of the total figure for the KWS
Group. Net foreign sales in the Breeding & Services Seg-
ment increased (after adjustment for net potato sales) by
34.0% and were €13.4 million compared with €10.0 million
in the previous year.
Research and development costs exceed
€100 million as planned
Economies of scale had a positive impact on the cost of
sales, which rose below-proportionately relative to net sales
by 6.7% to €433.4 (406.1) million, resulting in a higher gross
profit of €422.0 (348.0) million. Expansion of our sales activi-
ties resulted in a 7.7% increase in selling expenses to €138.5
(128.6) million. The ratio of selling expenses to net sales fell
to 16.2% (17.1%). To enable the future development of high-
yielding varieties, research and development expenditure
rose as planned by 16.4% to €113.5 (97.5) million or 13.3%
(12.9%) of net sales. We also intend to expand our research
and breeding activities continuously to safeguard the KWS
Group’s high level of innovation. The greater degree of inter-
nationalization at the KWS Group made it necessary for us
to reorganize our administration through the future-oriented
project Fit4Growth. The establishment of four Service Cen-
ters, which bundle administrative work, will reduce the work-
load on our operating units and created a more efficient
The headquarters of our cereals specialist KWS LOCHOW in Bergen
near Celle, Lower Saxony: The No. 2 European cereal breeder now
generates 50% of its sales outside Germany.
administrative structure. Administrative expenses rose to
€60.0 (49.6) million, mainly due to project costs.
The balance of other operating income and other operating
expenses fell from €10.1 million to €6.6 million in the year
under review.
(10.5) million or 12.3% (12.7%) of group income. The Breed-
ing & Services Segment traditionally incurs all research and
development expenses at the KWS Group. The planned
increase in these expenses was not able to be offset by
internal royalties and income from our farms, with the result
that the segment’s income fell to € –1.8 (6.3) million.
Sharp increase in operating income
The KWS Group’s operating income rose above-proportion-
ately by 41.5% to €116.6 (82.4) million thanks to growth in
net sales of products that make a strong contribution to
profits. Our expectations were surpassed in the Corn Seg-
ment, whose operating income improved to €62.0 (31.7) mil-
lion, or 53.2% (38.5%) of group income, primarily as a re-
sult of the growth of net sales in high-margin markets and
the reversal of allowances made in the previous year. The
Sugarbeet Segment grew its income by 24.2% to €42.1
(33.9) million, accounting for 36.1% (41.1%) of group income.
The Cereals Segment posted operating income of €14.3
Net income grows sharply
Net financial income/expense fell by €2.1 million to € –7.0
(–4.9) million. Apart from an increase in interest expense
for financing our business activity during the year, this was
also attributable to the conclusion of hedges against in-
terest rate risks and interest on back payments pursuant
to a tax audit in Germany. The result from ordinary acti-
vities rose to €109.6 (77.5) million. Total tax expenditures
were higher at €36.7 (26.0) million, giving a tax rate for the
Group of 33.5% (33.6%). Net income was €72.9 million,
well up over the previous year (€51.5 million). The return
on sales after tax was 8.5% (6.8%).
22
Management Report I KWS Group I 23
Forward-looking investment in potato business
We decided to strategically expand our potato activi-
ties in the past fiscal year in order to further diversify the
company’s product portfolio. We therefore took advantage
of our purchase option and acquired all of the joint venture
with Van Rijn effective April 1. Expansion and integration
costs resulted, as planned, in lower earnings. The reval-
uation of the acquired intangible assets reduced income by
€5.7 million. The KWS Group invested a total of €49.3 (58.4)
million in the year under review. Depreciation and amor-
tization was €27.60 (22.0) million, meaning that, once again,
investments exceeded it by a significant margin. Of the
total investments by the KWS Group, 39.9% went to
Germany, 46.0% to the rest of Europe, 13.8% to North and
South America and 0.3% to other countries. Almost half of
the investments were made in the Breeding & Services Seg-
ment and just over a quarter in the Sugarbeet Segment.
Each customer target group has its own quality requirements – our
malting barley varieties, for example, are now highly specialized
products.
Assets remain solidly financed
Total assets increased in fiscal 2010/2011 by €44.6 million
to €902.0 (857.4) million. Equity rose by €37.4 million on the
back of good consolidated income. The KWS Group still
has solid financing, with an equity ratio of 58.8% (57.5%).
Despite the strong increase in net sales, the Group’s net
working capital fell in the past fiscal year by 1.1% to €177.7
(€179.7) million. Inventories in the Corn Segment decreased
by €6.8 million. Despite the increase in net sales, accounts
receivable dropped by €3.6 million thanks to effective re-
ceivables management. The Sugarbeet Segment posted a
€1.7 million reduction in inventories and a €12.1 increase in
receivables due to the growth in net sales. In the Cereals
Segment, inventories decreased slightly by €0.8 million and
receivables increased by €0.6 million.
Totaling €397.2 (398.9) million, inventories and trade recei-
vables accounted for around 44.0% (46.5%) of total assets.
On the balance sheet date, cash and cash equivalents,
including securities, amounted to €146.9 (113.7) million.
Since financial borrowings were hardly increased, the KWS
Group was able to improve its strong liquidity even further
at the balance sheet date: Net liquidity (cash plus securities
minus financial borrowings) rose well above the €100 million
mark to €113.3 (81.4) million.
Equity rose to €530.3 (492.9) million and fully covered non-
current assets and inventories. Debt capital increased by
€7.2 million to €371.7 (364.5) million.
Reduction in working capital improves
net cash from operating activities
The good income for the period and reduction in wor-
king capital meant that net cash from operating activities
rose from €27.4 million to €101.2 million. €52.4 (55.4) mil-
lion were used for investments, and the KWS Group used
€10.2 (–11.2) million in financing activities.
Single-entity financial statements of KWS SAAT AG
KWS SAAT AG was able to further improve its sugarbeet
business and expand its R&D activities as planned in fiscal
2010/2011. KWS SAAT AG’s operating income was €24.2
(12.7) million, almost double the previous year, so that ex-
penses resulting from first-time application of the new
provisions of the German Accounting Law Modernization
Since KWS was established more than 150 years ago, its success has
been founded on developing high-yielding plants through innovative
breeding methods.
Distribution of value added
(around 32% of the total output)
Minority interest 1%
Company
19%
Shareholders
5%
Public sector
14%
Lenders
3%
Value added
€285.2 million
Employees
58%
Act (BilMoG) were able to be cushioned in full without
being spread over several years. A slight improvement in
net financial income/expenses and a non-recurring extra-
ordinary result of € –9.4 million due to the German Ac-
counting Law Modernization Act resulted in post-tax net in-
come for the year of €15.9 (12.2) million under German
commercial law. Including the profit of €0.04 million
carried forward from the previous year, the net retained
profit was €15.9 million.
Proposed appropriation of profits
The KWS Group’s earnings-oriented dividend policy is to be
continued for fiscal 2010/2011. Its net income for the year
increased by 41.7% to €72.9 (51.5) million and its operating
income by 41.5% to €116.6 (82.4) million in the year under
review. The Executive and Supervisory Boards will there-
fore propose payment of a dividend of €2.10 (€1.90) and a
bonus dividend of €0.20 to reflect the additional earnings
stemming from our good market success and the resultant
need for fewer allowances on our working capital. Subject
to approval, €2.30 for each of the 6,600,000 shares, i.e.
a total of €15.2 (12.5) million from KWS SAAT AG’s net
retained profit, will then be distributed to shareholders in
December 2011.
24
Management Report I KWS Group I 25
›› Breeding means to keep on
recombining nature’s genetic
building blocks.
For example, we’re working on transferring the resistance
of old wheat landraces to modern elite varieties.
‹‹
Dr. Viktor Korzun, Head of Cereal Biotechnology, KWS LOCHOW GMBH
Sugarbeet Segment
We added our seed potato business to the Sugarbeet Segment in fiscal 2010/2011 after acquiring all the
shares in VAn Rijn – KWS B.V., our 50:50 seed potato breeding and production joint venture. We intend to
leverage the existing synergies in distribution of both crops to expand our potato business faster in markets
where we see growth opportunities. Since we already have established structures for the distribution of
sugarbeet seed in these markets, it was a logical move to pool these two crops in one segment.
Due particularly to strong operating growth in our core su-
garbeet markets, the segment’s net sales in the year un-
der review rose to €293.5 million, almost 10% of which
came from our potato activities. Net sales grew by 7.8%
to €266.8 (247.4) million, an all-time high in our traditional
sugarbeet product segment.
The continuing high level of sugar prices on the world market
made it more attractive to grow sugarbeet than many other
crops. Consequently, global cultivation area for sugarbeet
rose by 4% to around 4.8 million ha. In the EU 27 we were
able to significantly increase our market share. Net sales
in the EU 27 rose to €131.8 (112.7) million and to €135.0
(134.7) million outside the EU 27.
The growth in net sales in the core regions for our sugar-
beet seed business resulted accordingly in a rise in contri-
bution margins. Expenditure on breeding, production and
distribution in the seed potato sector increased as planned
with the takeover of all the shares in our potato joint venture.
These activities will reduce earnings from potato business
in the medium term. As a consequence, goodwill has been
amortized. The segment’s income nevertheless increased
to a total of €42.1 (33.9) million.
The regions
In North America, the sugar industry had to wait almost until
the sowing season and hope that the courts would again
approve the practice-proven cultivation of herbicide-tolerant
sugarbeet. These genetically improved products help sugar-
beet farmers in the U.S. secure high yields. Opponents of
this technology had tried on several occasions to prevent
large-scale cultivation through legal action. Ultimately, the
environmental compatibility and advantages for practical
agriculture and the sugar industry were factors that helped
this beet gain acceptance.
The courts gave their approval for the cultivation of Round-
up Ready® sugarbeet very late in the 2011 campaign and
only subject to conditions, but U.S. farmers remained
loyal to this innovative technology. KWS had also pro-
vided conventional seed for the entire American market so
that American farmers would be able to plant it if Round-
up Ready® sugarbeet seed were prohibited. However, the
share of KWS Roundup Ready® varieties fell only slightly
to 94% (97%).
The trend in the EU 27 was also unexpectedly positive. On
the back of an increase in cultivation area – in particular in
Sugarbeet Segment sales in millions of €
39.1
188.9
38.7
208.7
43.9
249.6
228.0
247.4
293.5
2008/2009
2009/2010
2010/2011*
Domestic sales
Foreign sales
Total sales
* including potato sales
(for the first time)
28
Germany and France – we were able to increase our share in
many markets and our revenue by a total of 17%. Business
was especially strong in France and Spain as well as Scan-
dinavia, the UK, Belgium, the Netherlands and Germany.
Cultivation area in the Russian Federation and Ukraine
grew for the second year in a row. The area there is closely
coupled to the world market price for sugar. We also in-
creased net sales in this region by approximately 15%. The
picture varied in the other markets. While we expanded our
business in Chile and China, Egypt and Turkey were two
of the handful of markets where we experienced a decline.
Seed potatoes
The now wholly-owned subsidiary KWS POTATO B.V. will
be headquartered in the new fiscal year at Emmeloord in
the Netherlands. We intend to expand this location and
make it the center of our potato business and breeding
operations. As part of this, the intensity of our breeding
work will be increased within our international network of
breeding and testing locations. In this way, we want to
satisfy the higher requirements farmers, the processing
A special source of bioenergy: Biogas processed from one hectare of
energy beet can drive our CFO’s gas-powered car some 80,000 km –
or twice around the world.
industry and consumers demand of our varieties and build
on our positions in regional and segment-specific markets.
Our business performance in the past fiscal year was grat-
ifying. Net sales were consolidated for the first time in the
Sugarbeet Segment and rose to €26.7 (13.3) million on the
back of higher sales volumes and prices. Seed potato pri-
ces generally fluctuate sharply, but trended positively in the
period under review – in line with the strong level of prices
for potatoes for consumption in the past year.
Greater use of KWS’ international network for producing
and distributing seed potatoes is also intended to help us
maintain this positive business development.
Management Report I Sugarbeet Segment I 29
Corn Segment
Our Corn Segment was able to achieve a long-cherished goal in fiscal year 2010/2011: a double-digit EBiT
margin. The segment’s organic growth is based on the broad and high-performing product portfolio that
has enabled us to advance into many new markets in the past decade.
Corn is the world’s most important crop, which is why it
is a particular focus of international cereal markets. In view
of the positive market environment for corn for consump-
tion, growing demand for corn seed was anticipated for
the 2011 sowing season. The business performance of our
Corn Segment was positive, too. Net sales rose by around
14% to €471.1 (413.4) million, while operating income almost
doubled to €62.0 (31.7) million. The EBIT margin grew from
7.7% to 13.2%, mainly as a result of positive developments
in business in high-margin markets.
In addition, special effects added to the segment’s income
in fiscal 2010/2011. They include belated royalty payments
from the 2010 sales season, lower returns from the previous
year and reversals of allowances on inventories. There were
also hedging gains relating to seed production in America.
The regions
In the U.S., despite difficult sowing conditions, there was an-
other increase in cultivation area of 4% to about 37 million ha.
AGRELIANT, our North American joint venture (50:50) with the
French breeding company Vilmorin, grew its sales by just over
10% and its market share in all the main cultivation regions in
the Midwest. With a market share of about 7%, AGRELIANT is
the fourth-largest vendor of corn seed in North America. The
total net sales of the company, 50% of which is consolidated
in the Corn Segment, rose to €358 (318) million. Particularly
the new high-performance, high-yielding corn hybrids from
AGRELIANT’S breeding program, in conjunction with multiple
stacked genetic traits, contributed to this success.
In the past fiscal year, AGRELIANT successfully launched
new corn varieties with innovative mechanisms. These pro-
ducts enable better resistance management and ensure sus-
tained genetically engineered resistance to insects in corn.
Cultivation area using certified corn seed in the EU 27 grew
as well, from 11.7 to 12.6 million ha due to high prices, above
all for grain corn. KWS was able to increase its sales com-
pared with the previous year – in some cases sharply – in all
regions of Europe. KWS posted particularly strong gains in
sales in Germany, Central and Southeastern Europe, Russia
and Ukraine.
KWS is still the breeder with the biggest market share – 35% –
in Germany, the second-largest market for corn seed in
Corn Segment sales in millions of €
94.8
286.7
108.7
304.7
123.1
348.0
381.5
413.4
471.1
Every silk of the female corn flower must be fertilized by wind-borne
pollen so that a grain can develop later.
Europe after France in terms of value. A latent risk for our
corn business in Germany is the adventitious presence
of genetically modified organisms in conventional seed.
German authorities take random samples to monitor this
and ban sales of seed and, if necessary, order already sown
areas to be plowed up if there are even the slightest traces
of genetic modifications, even if they have already been ap-
proved for human consumption and animal feed in the
EU 27. There is still no tolerance limit and second exami-
nations are not permitted.
In Argentina, we continue to work on expanding our local
distribution and production capacities. Sales doubled year-
on-year and helped us capture a market share of just under
5%. The first corn varieties from the still young Argentinean
breeding program have confirmed their performance poten-
tial. Like in the U.S., it is anticipated that genetically modified
varieties will be mainly used in Argentina (current corn culti-
vation area: around 3.6 million ha) in the medium term.
Oil seed accounted for 12.0% (12.2%) of the Corn Segment’s
net sales. The main contributors to net sales in Europe are
rapeseed and sunflowers. In the year under review, KWS
decided to increase R&D expenditure on these two crops
significantly so as to improve its competitiveness. The main-
stay in oil seed net sales in North America was soybean.
Domestic sales
Foreign sales
Total sales
30
2008/2009
2009/2010
2010/2011
Management Report I Corn Segment I 31
Cereals Segment
Our cereals specialist, the KWS LOCHOW Group, was able to grow its business. in view of the sharp
rise in cereal prices, farmers increasingly used certified seed in the fall 2010 sowing season. in Germany,
KWS LOCHOW launched QualityPlus®, a brand that sets a new standard of quality for cereal seed far
exceeding the applicable legal requirements. QualityPlus® seed is processed in specially certified plants
in close cooperation with selected production partners.
The 2010 cereals harvest was better and higher yielding
than expected, but did not match the high level of 2008.
There were favorable, but not excellent growing and
harvesting conditions in large parts of Europe. Significant
crop failures, in Australia and Eastern Europe for example,
and the export ban imposed by Russia resulted in short-
ages and price increases. The price of wheat on the com-
modity futures exchanges rose in May 2011 to more than
€250 a ton before falling back to around €200. The rise in
cereal prices over the previous year meant better earnings
prospects for European farmers. In Germany, sales of cer-
tified cereal seed in 2010 grew by around 5% year-on-year
to more than 500,000 tons, due to the weather-related low
quality of farm-saved seed, among other factors.
hybrid rye contributed to this development. Our wheat
and barley business, which is mainly licensed-based,
also improved. Net sales in the Cereals Segment totaled
€77.4 (70.0) million.
The segment posted better income than anticipated in the
course of the year. Despite continued strong expansion of
distribution, income at June 30, 2011, was above the high
level of 2008/2009 and totaled €14.3 (10.5) million, an
above-proportionate increase relative to net sales. Apart
from the strong level of direct business with hybrid rye, this
was also attributable to higher royalties. The segment’s
EBIT margin increased sharply to 18.5% (15.0%).
In this economic climate, KWS’ cereals business per-
formed very well in fiscal 2010/2011. The KWS LOCHOW
Group, in which KWS’ cereals activities are combined,
was able to increase its net sales and earnings year-on-
year. Above all, the positive trend in direct business with
The regions
As in the previous year, rye remained the mainstay, con-
tributing some 50% of KWS LOCHOW’s net sales.
Hybrid rye business developed very positively in the
past fiscal year in Germany. Our hybrid rye sales also
rose in Poland.
Cereals Segment sales in millions of €
36.1
44.3
40.0
39.4
38.0
84.3
33.9
70.0
77.4
2008/2009
2009/2010
2010/2011
Domestic sales
Foreign sales
Total sales
32
Hybrid rye also produces good yields in nutrient-poor and dry soils –
around 20% more than conventional rye under normal conditions.
KWS LOCHOW grew its net sales in its other important
markets – the UK, France and Denmark and increased its
share of the UK wheat market to more than 40%.
To coincide with the 2011 sowing season in Germany, KWS
LOCHOW launched QualityPlus®, a new quality brand for
cereal seed that exceeds the already high quality require-
ments demanded by law. At the same time, further invest-
ments were made in cereal breeding in Germany and inter-
nationally. Both these moves will mean greater production
reliability and improve the long-term competitiveness of
cereal farmers. With this initiative, KWS LOCHOW has un-
derscored its clear commitment to higher seed quality in the
German market. Combined with the development of varie-
ties offering top performance, we expect positive effects on
sales in the medium to long term.
Management Report I Cereals Segment I 33
›› Fascinating: Every single cell
of a plant contains all its
genetic information.
We use this fact in many ways: to enable molecular
diagnosis of plant traits, to produce homozygous plants
and to regenerate whole plants.
‹‹
Vitalina Karfik, agricultural technical lab assistant, KWS SAAT AG
Breeding & Services Segment
KWS’ positive growth is mainly attributable to our research and development activities, which have
been continuously expanded. We will keep focusing on breeding and research in order to continue
supplying our customers with the best-performing products in the future. The growing complexity of
interaction between traditional plant breeding and our research company PLAnTA led us to merge both
of them again under the roof of KWS SAAT AG in the past fiscal year.
In fiscal year 2010/2011, we merged various research and
service departments that have identical or similar tasks in
order to simplify structures, standardize processes, make
communication more effective and enhance overall effi-
ciency. After 25 years of successful work, PLANTA ANGE-
WANDTE PFLANzENGENETIK UND BIOTECHNOLOGIE
GMBH is now part of the new general unit “Research and
Development” together with the Institute for Plant Breeding
of KWS SAAT AG.
In addition, a separate department for breeding oil seed
and for new breeding activities was created, while our in-
tensified seed potato activities were integrated in the Sugar-
beet Segment.
The Breeding & Services Segment’s external net sales,
which in fiscal 2010/2011 consisted only of breeding services
for third parties and net sales from our farms, totaled
€13.4 million (previous year excluding potato activities:
€10.0 million). We increased our research and development
expenditure in the year under review by 16.4% to €113.5
(97.5) million. Additional royalties due to greater sales
volumes for the KWS Group were not able to offset the
planned increase in the money we spent on R&D. Overall,
the segment’s income fell to € –1.8 (€6.3) million.
The success of the breeding expenditures in the past years
is reflected every year in the number of approvals for new
varieties. In fiscal 2010/2011, we were granted 296 (274)
new sales approvals worldwide.
Marketing approval from new varieties
137
115
50
16
120
109
119
117
318
274
296
35
10
35
25
2008/2009
2009/2010
2010/2011
Sugarbeet
Corn
Cereals
Others
Total
36
Around 10,000 different fertilizations are required for a new variety.
It must always be clear who the father is, so precise pollination is a
must in plant breeding.
Yield needs reliability: Progress in
breeding resistance in sugarbeet
When sugarbeet is infected by rhizomania, a loss in sugar
content of up to 60% can result. This “virus disease” is thus
one of the most menacing sugarbeet diseases worldwide.
The virus is transmitted by fungi living in the soil.
In the past fiscal year, we made significant progress in
breeding rhizomania-tolerant sugarbeet. A combination of
various resistances provides stronger protection against
the disease and thus safeguards yield performance even
in crops severely infected by rhizomania. KWS is also
working on a means of genetically engineering particularly
high resistance to rhizomania in sugarbeet.
Corn breeding program for China
The corn breeding program for China has been expanded
further. An increase in capacities created a good founda-
tion for conducting the planned field trials. We were able
to increase our testing more than threefold between 2010
and 2011. A further doubling of the number of performance
tests is planned for 2012. Initial competitive products for
the Chinese market are undergoing performance and
approval tests.
Wheat breeding program in the U.S.
In January 2011, we were able to acquire the wheat
genetic material of the two American companies Great
Lakes Cereal Grains in Loveland, Colorado, and Sunbeam
Extract Co. in Wooster, Ohio, thus gaining broader access
to the U.S. wheat seed market and new opportunities for
cooperation with technology leaders in the field of cereal
breeding. Wheat breeding and commercial cereal activities
in the U.S. will be merged in the newly established company
KWS CEREALS USA, LLC, based at the headquarters
of KWS SEEDS in Shakopee, Minnesota. We assume that
the North American market will be the first where gene-
tically modified wheat is marketed. In view of this, we have
decided to build up our own wheat breeding activities in
the U.S. in order to round out our own existing and exten-
sive development work, for example on broad, genetically
engineered resistance to fungi.
Management Report I Breeding & Services Segment I 37
Resumption of sunflower breeding
Sunflowers and sunflower oil are used in a wide range of
different ways in the food and feed industry and numerous
other areas of industry. Years ago we postponed breeding
activities for this hybrid – despite having a basic stock of
breeding material – in order to focus initially on rapeseed in
our oil seed breeding work. Global sunflower cultivation area
is put at around 17 million ha, with Europe accounting for
70% of it. The most important regions are Russia, Ukraine
and Southeastern Europe. In the past fiscal year, we con-
sequently resumed and significantly strengthened our sun-
flower breeding program. Initial variety applications from
this program can be expected toward the end of the
medium-term horizon.
sequences that can be used to determine the genetic make-
up for specific traits of plants. Complete DNA sequencing of
the sugarbeet and corn genome has led to identification of a
large number of such molecular markers. Identification of as
many markers as possible in a genome enables a specific
marker profile of the individual plant to be created – com-
parable to a genetic fingerprint. With the high-throughput
marker analyses used at KWS, molecular marker profiles of
plant populations can be created quickly and at low cost. In
extensive mathematical processes, the data obtained are
used to derive forecasts in order to examine whether the
breeding objectives for the plants in question are achieved.
As a result, plant types with complex traits can be selected
more efficiently and breeding progress sped up.
Genomic selection: New application of
marker technology to increase breeding progress
Genomic selection, a special application in molecular mark-
er technology, allows individual plants to be analyzed at the
DNA level for complex traits, such as high yield or resistance
to diseases, and selected. Molecular markers are DNA
Are the crossed traits actually active in the plant? That is revealed
by an analysis of its constituents. The leaf tissue is first crushed
with a pestle and mortar.
KWS has conducted intensive testing of genomic selec-
tion, in particular in corn, for two years. In particular, bio-
statistical methods are being developed and tested in the
research project “SYNBREED,” a cooperative linkup be-
tween leading institutional research institutions and KWS
and sponsored by the German Ministry of Education and
Research and the Ministry of Food, Agriculture and Con-
sumer Protection. Initial insightful results indicate that
breeding progress is likely to be accelerated. We have
also intensified genomic selection in sugarbeet as a re-
sult of our good experience. Initial steps have been under-
taken for cereals.
Continuation of GABI:
“Plant Biotechnology of the Future”
Plant genome research in Germany has been funded for 12
years by the German Ministry of Education and Research
in the national research program GABI (Genome Analy-
sis in the Biological System of the Plant). From the outset,
KWS has been involved in many projects and in steering the
overall program. These research partnerships have yielded
extensive knowledge in the area of molecular biology re-lating
to sugarbeet, corn, wheat and barley – an important foun-
dation for developing marker-based selection and genetic
engineering approaches.
KWS is involved in 16 of the total of 28 research projects
in the initiative “Plant Biotechnology of the Future,” which
is based on ”GABI” and was launched in 2011. It will help
KWS expand and strengthen its cooperation network with
academic institutions and promote technology transfer to
the plant breeding community.
Outlook for the fiscal year 2011/2012
We established three service companies outside Germany, in addition to a German one, effective july 1,
2011. They are responsible for the administrative tasks of our operating subsidiaries in more than 50 coun-
tries. After 25 years of successful work, our research company PLAnTA AnGEWAndTE PfLAnzEnGE-
nETiK und BiOTECHnOLOGiE GMBH was reintegrated in KWS SAAT AG, likewise effective july 1, since
biotechnology methods are now a firm part of plant breeding. As of fiscal 2011/2012, we will also disclose
breeding costs directly in the product segments and thus create even greater transparency. As a result,
intra-segment offsetting of product development costs will no longer be a part of future reporting. Only the
costs for long-term research projects whose results are not ready for the market will be grouped together
with the other cross-segment administrative costs as group function costs.
be compensated for by moderate growth in the energy beet
sector. The high cereal prices will also probably cause many
farmers in Russia and Ukraine to change their crop rotation.
We therefore anticipate that areas will decline by an average
of around 5%. Despite an increase in R&D expenditure, the
segment’s income will not be strained as a result of the elim-
ination of intersegment product royalties. We expect our
Sugarbeet Segment, including seed potatoes, to record net
sales of approximately €300 million and an EBIT margin of
just over 20%.
The prospects for our cereals business in the current fiscal
year appear positive. Areas for the fall 2011 sowing season
should increase given the rise in prices for cereals for con-
sumption. In particular, we expect successful implemen-
tation of the QualityPlus® concept in Germany and higher
hybrid rye sales in Poland. Given a slight increase in sales
and rising expenses for breeding, we expect the segment’s
income to remain stable in the current year.
Demand for seed remains high at present, although the level
of dynamic development and further growth as in the past
fiscal year 2010/2011 is not anticipated. In view of that and
on the basis of our good product performance, we currently
expect the KWS Group to grow its net sales by approxi-
mately 5%. We have firmly planned another increase in our
research and development budget by 10%. Our breeders
will focus on creating new products for new markets. Our
sales and marketing expenses will rise to a comparable ex-
tent. Due to cost increases and lower income from the valu-
ation of working capital, we expect the KWS Group to post
total operating income (EBIT) of just over €100 million. As a
result, we would adhere to our general goal of a sustainable
double-digit EBIT margin.
The individual segments
In the Corn Segment, we expect net sales to rise by up
to 10% in fiscal 2011/2012. We assume that the main con-
tributors to this increase will be the regions North America,
France and Southeastern Europe. The Corn Segment will
not match the income it posted in fiscal 2010/2011 due to
further expansion of our R&D activities for developing corn,
rapeseed and sunflower products and an upward trend in
the cost of sales. However, we anticipate it will still generate
a double-digit EBIT margin.
In fiscal 2011/2012, seed potato business will likely
contribute net sales of approximately €40 million to the
Sugarbeet Segment. However, we plan further up-front
costs to expand our potato business, which will reduce the
segment’s income in the medium term. The development of
our sugarbeet seed business in the EU 27 depends on this
year’s sugar production levels. If the production quota is ex-
ceeded, this could lead to a reduction in areas that cannot
38
Management Report I Breeding & Services Segment I Outlook I 39
›› We produce corn seed in about
20 countries around the world.
‹‹
When spring comes, we often have to be quick. It’s always
a logistical challenge to make the right seed available to
our customers at the right time.
Andreas Römmert, Head of Logistics, KWS SAAT AG
Employees
Seeding the future – to do that, we need innovative seed with proven qualities, since new challenges
call for new approaches and solutions. That goes for our products and for us a company. That is why
we believe it to be important to be aware of the proven fundamentals of our identity as a company with a
long tradition of family ownership and nurture positive characteristics. We also want to create freedom to
innovate within the company – and stimulate our employees to think outside the box.
The increasing internationalization and complexity of agri-
cultural markets pose diverse new challenges for us and our
customers alike. We can overcome these challenges with the
commitment and personal motivation of our employees – and
their courage to come up with new ideas. We therefore en-
deavor to offer all employees a working environment that en-
courages continuous progress. We foster a corporate culture
that is characterized by trust and cooperation and the com-
mon goal of keeping KWS on its path to success.
We use proven approaches and try out new ways of en-
abling the personal and professional further development
of every single person and adapt our organizational struc-
tures to changing market requirements.
Skill building and personnel development
We attach importance to comprehensive training and de-
velopment concepts that help our employees to retain and
enhance their personal and professional abilities in diffe-
rent phases of their career. Many further training offerings
enable them to expand their expertise and to ideally meet
the demands of a constantly changing working environ-
ment. Particularly in light of the company’s growth, the
associated workforce diversity and greater networking, it
is especially important to support international exchange
through intercultural training measures. Virtual collabora-
tion now plays an increasingly major role in KWS’ work
today and will continue to do so in the future. Our focus
here is on building intercultural skills and the optimal use
of cutting-edge networking technology.
Breeders Academy
The KWS Breeders Academy plays an important role in help-
ing us obtain highly qualified young experts. The combination
of theory and practice as a result of rotation through different
breeding stations, coupled with various university courses,
prepares university graduates for their specific career in plant
breeding. This program is an interesting opportunity for bud-
ding plant breeders to get to know their profession.
Dual study
In fiscal 2010/2011, a practical partnership as part of a dual
course of studies (business administration, with a major in
agricultural management) was established in cooperation
with the Vocational Training Academy of Saxony in Dresden.
It offers junior staffers the chance to get to know their com-
pany early on, to define their goals and gear their training
toward them.
Training
KWS is currently training 89 (84) young people in seven
vocations in Germany. The high quality of training is en-
sured by more than 100 instructors at KWS. 43 young col-
leagues successfully completed their training at KWS in
fiscal 2010/2011.
12 of the 27 current business administration apprentices train-
ees have decided to gain extra qualification as an “European
business administrator,” which prepares them specifically for
working in an international company. They can gather valuable
international experience in an internship at KWS subsidiaries.
Development of junior staff/Trainee Program
At KWS, continuity means questioning, improving and
implementing new ideas. The KWS Trainee Program was
evaluated by current and former participants in this spirit.
One key result of the survey is that 87% of trainees would
recommend the KWS Trainee Program. Suggestions for
optimization were taken up in order to further increase the
attractiveness of the introductory program, for example
by interdisciplinary and international assignments.
YOUnior Professional Program
The YOUnior Professional Program, which aims to develop
junior staffers in an interdisciplinary way, was expanded at
the international level. Former trainees and university gradu-
ates are brought together in international, interdisciplinary
teams. In five modules spread over two years, they address
issues relating to business, project and change manage-
ment and personality development. They also work on solu-
tions in current projects from top management.
Around 6,000 customers and other guests visit KWS in Einbeck every
year. That calls for experience, good organization and teamwork from
our Visitor Service staff.
KWS Group employees by functions
Administration
16%
Research & development
34%
Production
19%
Sales & marketing
31%
Integration of all employees in strategic reorganization
KWS’ future is shaped to a large extent by its employees’
engagement. They have inestimable potential in the form
of their know-how, knowledge of the market, experience
and ideas. Our subsidiary BETASEED has successfully
integrated this valuable resource in an unusual approach
for strategic realignment of the company: On the basis of
the core objectives for the next five years, all employees
worked together in mixed teams at a large event – irrespec-
tive of their location, functional area and level. Apart from
the valuable results generated by this cooperation, the new
approach also provided employees with new and more
detailed contacts as a result of the exchange of ideas.
New collective bargaining agreement promotes a
family-friendly spirit
KWS endeavors to create a working environment that pro-
vides current and future employees with the best possible
support in all phases of their life, and it does that in part by
giving them flexibility.
42
Management Report I Employees I 43
A new collective bargaining agreement was concluded in
Germany for KWS SAAT AG, KWS MAIS GMBH and KWS
SERVICES DEUTSCHLAND GMBH effective July 1, 2011,
and it will help employees reconcile work and family above
and beyond the existing benefits offered by the company.
The maximum child care allowance permitted by law will
continue to be paid for the next two years, for example. In
addition, an agreement to support employees with depen-
dents who need caring for was concluded: In addition to
their usual flexitime models these employees can decide to
reduce their working hours to up to 50% so that they can
look after their family member. During this time, they receive
up to 75% of their previous compensation.
Internationalization of HR work
The company’s continuing positive business performance
and strong internationalization also pose new challenges for
human resources work: To maintain the high standard of HR
support and development for every employee worldwide,
this work was reorganized between our HR corporate func-
tion and the regional Service Centers.
as with the operating units. That ensures a service portfolio
derived from the needs of our core business.
As regional centers with responsibility for several Local Com-
panies, the Service Centers and their employees enable ex-
tensive and expert service for the units in all matters relating
to HR support. In addition, the HR experts provide assistance
regarding change processes, continuing education, person-
nel marketing and the promotion of diversity. The regional
centers offer an ideal platform for leveraging synergies and
networking to encourage new ideas and approaches.
Employees in numbers
In the fiscal year 2010/2011, the KWS Group employed 3,560
(3,492) employees worldwide. Personnel expenses at the
KWS Group rose to €165.0 (147.2) million. In the fiscal year
2010/2011, 89 (84) trainees were employed in Germany.
Average workforce growth over the last 5 years
(by regions)
The HR corporate function develops the strategic frame-
work for HR work at KWS. It is primarily responsible for
strategic HR issues, including basic personnel questions,
compensation policy, international personnel development,
talent management, employer branding, cultural manage-
ment and support for key functions at KWS. There is also
a continuous dialogue and close cooperation between the
HR Service Centers and the HR corporate function as well
Germany
1,179
1,481
6% p.a.
2006/07
2010/11 Ø Growth
Europe (excluding
Germany)
America
Rest of the world
633
884
43
922
10% p.a.
1,020
4% p.a.
137
34% p.a.
Total
2,739
3,560
7% p.a.
Risks and chances for future development
KWS’ strategic objective is to strengthen and build on its lead-
ing market position as an earnings-oriented seed company.
To do that, we have to identify, assess and exploit opportuni-
ties. Planning, implementation and control are the key com-
mercial measures for ensuring successful business opera-
tions. Nevertheless, we also take certain risks as part of our
business activity. To deal systematically with these risks, KWS
has established an effective risk management system.
Identifying commercial opportunities
and pursuing them with energy
The individual business segments are also responsible for
identifying and leveraging commercial opportunities. These
potentials are recorded in the operational plan and tracked
by means of regular reporting. Longer-term strategic objec-
tives and measures are also included in the decision-making
process. You can find detailed explanations of the anticipated
course of business in the “Outlook” Section on page 39.
The risk management system means
advantages for corporate controlling
A pragmatic risk management approach that reflects KWS’
organization was chosen and is used to monitor, control and
document the main risks. KWS’ efforts to improve transpar-
ency are also aimed at creating benefits for managing the
company. KWS has firmly established the risk management
system in its corporate planning and controlling and in its
reporting system. The efficiency of the risk management
system is ensured by a clear assignment of responsibilities
and internal control. The operation of the early-warning
system for risks was examined as part of the audit of the
annual financial statements.
We practice a culture of trust
KWS’ risk management system is founded on trust in its
employees and on the long experience that shows that
they act responsibly toward themselves, their colleagues
and the company as a whole. Rules of conduct, training
and control measures help our employee assess risks
on their own. The risk management system is based on
strategic planning and investment controlling, continuous
operational controlling and the quality and process moni-
toring systems. External auditing by experienced audi-
tors is conducted at KWS and is a key component of risk
management in ensuring that internal controls work. The
internal control system also includes documentation and
central coordination of the individual risks and associated
controls. Several audits are held each year, covering pro-
cesses in the organizational units. The Executive Board is
responsible for the risk management system, which meets
legal requirements by ensuring that all significant risks are
systematically identified each year, examined, assessed as
to their likelihood of occurrence and potential impact, doc-
umented, controlled and monitored.
More than 100 significant risks and ways of controlling
them are described in the system implemented at KWS.
They are assessed with their individual likelihood of oc-
currence and potential level of damage. Their significance
is evaluated on the basis of their effect on operating income
(EBIT) or specific qualitative indicators. The individual risks
or process sections are assigned to employees who con-
duct controls and employees responsible for controls. In
addition, manual and automated controls are set up for the
identified risks. The employees who conduct controls and
are responsible for them use these workflows to report to
the risk manager on the controls and their results. If indi-
vidual points in the rules and regulations are not complied
with, this is registered and the situation is documented.
The control and risk management system
in the accounting process
KWS’ risk management system also extends to the accoun-
ting process, with the same systematic approach, objec-
tives and features. It comprises all the measures, structures
and processes designed to make sure that all business
events and transactions are included in accounting prompt-
ly, consistently and correctly. It ensures compliance with the
statutory standards, accounting regulations and internal ac-
counting control policies that are binding on all consolidated
companies. The system consists of principles, procedures
and controls to reveal irregularities. There are also policies
for accounting and reporting, a standardized IT system and
a uniform chart of accounts.
Among other things, we regularly examine the complete-
ness of financial reporting, the Group’s uniform accoun-
ting, measurement and account allocation stipulations, the
authorization and access regulations for IT systems used
in accounting, and proper, complete elimination of intra-
Group transactions as part of consolidation. The effective-
ness of the controls is assessed by means of regular tests
using random samples. They form the basis for assessing
whether our controls are adequate and effective. The re-
sults are documented and communicated internally. Iden-
tified weaknesses are eliminated. The Executive Board and
the Audit Committee of the Supervisory Board are informed
regularly of the risk situation, the results of the controls and
the effectiveness of the risk management system and all its
control functions.
44
Management Report I Employees I Risks and chances I 45
Significant risks
The KWS Group is subject to the usual economic and polit-
ical risks in the countries in which it and its subsidiaries ope-
rate. In addition, the risks described below may significantly
impair KWS’ net sales, financial position and performance.
These are the currently identified and relevant risks. Other
risks may also influence our business. No risks that pose
a threat to the company’s existence have been identified to
date. There was no significant change in the risk situation in
fiscal 2010/2011 compared with the previous year.
Operational risks
The medium-term sales risk depends on product perform-
ance and the competitive situation. KWS addresses this
challenge with systematic analyses of the market and the
competition and by constantly developing higher-quality
seed for innovative, high-yielding plants. Procurement risks
are minimized by international diversification of seed pro-
duction locations and sufficient stockpiling. KWS counters
the risk of a decline in cultivation areas for agricultural pro-
ducts with its efforts to win market share and grow sales in
other markets or with new products. A wide-ranging product
portfolio contributes to commercially useful diversification of
risks. The company ensures the high quality of its products
through strict internal quality standards and monitoring.
KWS tackles the risks involved in investing in research and
construction projects by means of efficient controlling and
professional project management. It also addresses the li-
quidity risk with professional cash management, sufficient
long-term, syndicated credit lines – full use of which was not
made in the year under review – and an equity ratio of 58.8%.
Our loan agreements include financial covenants, compliance
with which has been ensured at all times to date. KWS uses
extensive trade credit insurance to minimize the risk of losing
receivables in risky regions and business segments. To en-
able this, KWS pursues an active receivables management
policy so that impending payment defaults can be identified
at an early stage. The risk of interest rate changes and
currency risks are addressed through the usual standardized
hedging instruments, which in turn do not have an incalcula-
ble influence on KWS’ earnings and assets situation.
Political risks
In the strongly regulated agricultural industry, political
risks have a significant impact on business development.
The lack of statutory regulations may also represent a
risk. One unavoidable latent risk for our corn business is
the possibility of the adventitious presence of genetically
modified organisms (GMOs) in conventional seed. In the
absence of a standardized legal threshold value, German
authorities in particular practice a policy of zero tolerance
in this matter. In the spring of 2011, for example, one in 13
seed samples from corn breeding companies in Germa-
ny was objected to. The German authorities take random
samples to test for the presence of GMOs, and they pro-
hibit the sale of seed and order already sown areas to be
plowed up even if there are the slightest traces of them.
There is no tolerance, and second examinations are not
permitted. There are also similar developments outside
Germany: There was greater sampling of corn seed in
Hungary in the past year as well.
In view of the simultaneous imports of millions of tons
of genetically modified feed and food from transatlantic
markets, this administrative practice is inappropriate. Ul-
timately, the resultant damage is to be borne by the seed
industry, despite the fact that the seed breeders have their
seed tested for freedom from GMOs by an independent
laboratory before it is supplied to customers. German
plant breeders therefore urge lawmakers to define the
long overdue thresholds for seed so as to create legal
security for all parties involved.
It is not only direct legislative procedures or official actions
that impact our commercial operations. Reservations on
the part of the populace can also influence opportunities
for business development. In the United States, the use
of genetic engineering has become standard procedure.
Genetically improved varieties have been in use there for
more than 10 years, and they are planted today on an
area of more than 60 million ha. The acceptance of ge-
netically improved products is high, and misgivings exist
only in a few states, such as California. No particular risks
for the environment or animal or human organism have
been scientifically identified.
Nevertheless, legal action by opponents of genetic en-
gineering against the cultivation of stecklings of genet-
ically modified sugarbeet continue to cause uncertainty
among breeding companies. In 2010, opponents were
able to obtain a temporary revocation of approval for
such products before a Californian district court. Al-
though the United States Department of Agriculture
(USDA) has since permitted commercial cultivation and
Inside the fermenter: Regular checks are an essential part of avoiding a
drop in the performance of a biogas plant.
Weather-related risks
The agricultural production process of breeding and multi-
plying seed depends to a large extent on the weather. KWS
counteracts the risk of production losses stemming from
bad weather by distributing seed multiplication over various
locations in Europe and North America. Contra-seasonal
multiplication is carried out in the winter half-year in Chile
and Argentina if there are bottlenecks in seed availability.
Overall, the KWS Group’s risk management systems did not
reveal any risks that jeopardized the company’s existence in
the year under review.
seed production for herbicide-tolerant, genetically mod-
ified sugarbeet varieties (Roundup Ready® varieties) sub-
ject to conditions, it can be assumed that this ruling will
be appealed. Worldwide, genetically modified crops are
cultivated on around 150 million hectares a year, with
remarkable economic and ecological advantages.
In Germany, radical opponents of genetic engineering – lack-
ing any sense of the illegality of their actions – have recent-
ly committed attacks on plant breeders’ field trials with in-
novative biotechnological products. The breeders suffered
considerable financial losses. If lawmakers were to initiate
an unprejudiced, objective policy regarding the application
of plant technology, that would be useful in limiting this risk.
Demand for high-yielding energy plants is dependent on
other external factors, such as the price of fossil fuels, general
regulatory conditions, such as government market incentive
programs for startup financing for the investments needed for
bioenergy production and admixture ratios for biofuels.
46
Management Report I Risks and chances I 47
Disclosures in accordance with Section 315 (4) HGB
(German Commercial Code)
Annual Financial Statements of the KWS Group
2010/2011
The Executive Board provides the following explanations
of the information in accordance with Section 315 (4)
HGB (German Commercial Code) in the Group Manage-
ment Report:
• The voting shares, including mutual allocations, of
the shareholders stated below each exceed 10%
and total 13.8%.
The subscribed capital of KWS SAAT AG is €19,800,000.
It is divided into 6,600,000 no-par bearer shares. Each
share grants the holder the right to cast one vote at the
Annual Shareholders’ Meeting.
There may be limitations on the voting rights for the shares
under the provisions of the German Stock Corporation Act
(AktG). For example, shareholders are barred from voting
under certain conditions (Section 136 AktG). In addition, no
voting rights accrue to the company on the basis of the
shares it holds (Section 71b AktG). The Executive Board is
not aware of any contractual restrictions relating to voting
rights or transfer of shares.
The following direct or indirect participating interests in the
capital of KWS SAAT AG in excess of 10% of the voting
rights have been reported to the company in keeping with
Sections 21 and 22 of the German Securities Trading Law
(WpHG) or elsewhere:
• The voting shares, including mutual allocations, of the
members, foundations and companies of the families
Büchting/Giesecke and Arend Oetker listed below each
exceed 10% and total 56.1%.
Dr. Dr. h. c. mult. Andreas J. Büchting, Einbeck
Christiane Stratmann, Meerbusch
Dorothea Schuppert, Berlin
Michael C.-E. Büchting, Einbeck
Annette Büchting, Bremen
Stephan O. Büchting-Hansing, Ammerbuch-Entringen
Elke Giesecke, Altenberge
Christa Nagel, Hannover
AKB Stiftung, Hannover
zukunftsstiftung Jugend, Umwelt und Kultur, Einbeck
Büchting Beteiligungsgesellschaft mbH, Hannover
Dr. Arend Oetker, Berlin
Kommanditgesellschaft Dr. Arend Oetker Vermögens-
verwaltungsgesellschaft mbH & Co., Berlin
Hans-Joachim Tessner, Goslar
Tessner Holding KG, Goslar
Tessner Beteiligungs GmbH, Goslar
Shares with special rights that grant powers of control have
not been issued by the company.
There is no special type of voting control for the partici-
pating interests of employees. Employees who have an in-
terest in the company’s capital exercise their control rights
in the same way as other shareholders.
At KWS SAAT AG, members of the Executive Board are ap-
pointed and removed as provided for in Section 84 AktG;
analogously to Section 84 AktG, the company’s Articles of
Association also stipulate that members of the Executive
Board are appointed by the Supervisory Board. In compli-
ance with Sections 179 ff. AktG, amendments to the Articles
of Association of KWS SAAT AG require a resolution to be
adopted by the Annual Shareholders’ Meeting, by a majority
of at least three quarters of the capital stock represented in
adopting the resolution. The power to make amendments
to the Articles of Association that only affect the wording
(Section 179 (1) Sentence 2 AktG), has been conferred on
the Supervisory Board in accordance with Section 22 of the
Articles of Association of KWS SAAT AG.
The Executive Board is not now authorized to issue or buy
back shares.
Significant agreements subject to the condition of a change
in control pursuant to a takeover bid have not been con-
cluded. The compensation agreements between the com-
pany and members of the Executive Board and governing
the case of a change in control stipulate that any such com-
pensation will be limited to the applicable maximum amounts
specified by the German Corporate Governance Code.
Einbeck, October 20, 2011
KWS SAAT AG
THE EXECUTIVE BOARD
48
50
51
52
54
56
57
59
62
84
Balance sheet
Statement of comprehensive income
Statement of changes in fixed assets
Statement of changes in equity
Cash flow statement
Notes to the cash flow statement
Segment reporting
Notes
Auditors’ Report
Balance
sheet
of the KWS Group
at June 30, 2011,
figures in € thou-
sands, unless other-
wise specified
ASSETS
Intangible assets
Property, plant, and equipment
Financial assets
Noncurrent tax assets
Deferred tax assets
Noncurrent assets
Inventories and biological assets
Trade receivables
Securities
Cash and cash equivalents
Current tax assets
Other current assets
Current assets
Total assets
EQUITY AND LIABILITIES
Subscribed capital
Capital reserve
Retained earnings
Minority interest
Equity
Long-term provisions
Long-term borrowings
Trade payables
Deferred tax liabilities
Other long-term liabilities
Noncurrent liabilities
Short-term provisions
Short-term borrowings
Trade payables
Current tax liabilities
Other liabilities
Current liabilities
Note no. 06/30/2011
Previous
year
Statement of comprehensive income
from July 1, 2010, through June 30, 2011; figures in € thousands,
unless otherwise specified
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(8)
(8)
59,656
49,616
226,315
220,591
4,101
5,144
4,987
5,920
29,147
26,056
324,363
307,170
128,998
136,786
268,209
262,176
36,621
13,077
110,278
100,593
14,322
19,173
16,925
20,654
577,601
550,211
901,964
857,381
19,800
5,530
19,800
5,530
483,925
448,849
21,006
18,768
(11)
530,261
492,947
63,028
19,421
2,308
24,657
9,311
61,464
21,556
2,265
18,638
10,209
(12)
118,725
114,132
107,396
129,546
14,205
69,349
25,513
36,515
10,730
57,472
22,785
29,769
(13)
252,978
250,302
I. Income statement
Net sales
Cost of sale
Gross profit on sale
Selling expenses
Research and development expenses
General and administrative expenses
Other operating income
Other operating expenses
Operating income
Interest and similar income
Interest and other expenses
Net income from equity investments
Net financial income/expenses
Results of ordinary activities
Income taxes
Net income for the year
ll. Other comprehensive income
Financial instruments
Currency translation difference for economically independent foreign units
Other comprehensive income after tax
lll. Comprehensive income
Comprehensive income
Share of other minority interests
Comprehensive income after shares of minority interests
Net income for the year
Shares of other minority interests
Liabilities
371,703
364,434
Net income after shares of other minority interests
Total equity and liabilities
901,964
857,381
Earnings per share (in €)
Note no.
2010/11
Previous
year
(18)
855,375
754,154
433,365
406,143
422,010
348,011
138,501
128,621
(19)
(20)
113,539
59,997
43,755
37,091
116,637
1,719
8,598
–95
97,510
49,598
44,589
34,440
82,431
1,602
6,582
3
(21)
–6,974
–4,977
109,663
36,741
72,922
77,454
25,997
51,457
(22)
(24)
80
–22,845
–22,765
18
19,435
19,453
50,157
2,541
47,616
72,922
2,669
70,253
70,910
2,019
68,891
51,457
1,898
49,559
10.64
7.51
50
Annual Financial Statements I Balance sheet I Income statement I 51
Statement of changes in fixed assets of the
KWS Group 2010/2011 and 2009/2010
Figures in € thousands, unless otherwise specified
Currency
translation
Changes in
the consol.
group
Additions Disposals
Transfers
Gross values
Currency
translation
Changes in
the consol.
group
Additions
Disposals
Transfers
Amortization/depreciation
Net book values
Balance
07/01/2010
Balance
06/30/2011
Balance
07/01/2010
Balance
06/30/2011
Balance
06/30/2011
Previous
year
Patents, industrial property
rights and software
Goodwill
Intangible assets
40,373
30,218
70,591
–347
–1,704
–2,051
9,204
1,097
10,301
4,723
12
4,735
1,175
0
1,175
–31
0
–31
52,747
29,623
82,370
16,472
4,503
20,975
–173
–63
–236
–2,715
0
–2,715
3,540
2,290
5,830
1,140
0
1,140
0
0
0
15,984
6,730
22,714
36,763
22,893
59,656
23,901
25,715
49,616
Land and buildings
196,940
–5,703
8
9,117
351
7,428
207,439
59,439
–1,741
5,921
187
–3
63,431
144,008
137,501
Technical equipment
and machinery
Operating and office equip-
ment
Payments on account
146,517
–4,364
280
10,927
1,528
3,900
155,732
96,148
–3,008
Property, plant and equipment
422,955
–12,554
33,640
5,772
31
438,742
202,364
–6,493
132
21,631
5,207
67,329
12,169
–2,453
–34
6,418
7,178
3,893
973
68,528
0
–12,270
7,043
46,777
–1,744
0
0
154
0
442
2
75
55
0
9,466
1,424
6,244
3,596
0
0
Financial assets
5,054
0
32
112
160
–770
4,268
67
0
0
100
0
Assets
498,600
–14,605
10,775
38,487
7,107
–770
525,380
223,406
–6,729
–2,583
27,561
6,347
Balance
07/01/2009
Patents, industrial property
rights and software
Goodwill
Intangible assets
37,621
28,298
65,919
260
1,572
1,832
Land and buildings
164,003
4,545
Technical equipment
and machinery
Operating and office equip-
ment
Payments on account
129,978
4,170
57,433
14,741
2,028
340
Property, plant and equipment
366,155
11,083
Financial assets
3,418
2
Assets
435,492
12,917
2,866
358
3,224
378
10
388
Balance
06/30/2010
4
0
4
40,373
30,218
70,591
Balance
07/01/2009
13,666
4,372
18,038
168
140
308
20,092
403
8,703
196,940
53,356
1,588
10,870
5,797
7,296
146,517
90,040
2,971
9,899
14,270
55,131
2,683
652
527
–16,655
67,329
12,169
9,410
–4
422,955
42,028
0
185,424
1,574
0
6,133
9
273
1,898
5,054
170
0
58,364
10,071
1,898
498,600
203,632
6,441
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3,006
1
3,007
368
10
378
4,815
311
8,232
5,122
5,988
0
2,795
0
19,035
8,228
0
103
22,042
8,709
3
0
0
0
0
0
0
0
0
–9
27
101,260
54,472
50,369
47,736
0
20,792
7,043
20,552
12,169
212,427
226,315
220,591
167
4,101
4,987
235,308
290,072
275,194
Balance
06/30/2010
Balance
06/30/2010
Previous
year
16,472
4,503
20,975
23,901
25,715
49,616
23,955
23,926
47,881
59,439
137,501
110,647
96,148
50,369
39,938
–18
46,777
20,552
12,169
15,405
14,741
0
202,364
220,591
180,731
67
4,987
3,248
223,406
275,194
231,860
0
0
0
0
52
Annual Financial Statements I Statement of changes in fixed assets I 53
Statement of changes in equity
Figures in € thousands, unless otherwise specified
Subscribed
capital
Capital
reserve
Accumulated
group equity
from earnings
Adjustments
from currency
translation
Revaluation
reserve
Other
transactions
Equity Minority interests
Adjustments
from currency
translation
Other
transactions
Equity
Parent company
Parent company
Comprehensive
other group income
Minority interest
Comprehensive
other group income
Group equity
19,800
5,530
407,938
–16,739
45
594
417,168
17,803
–481
–4
17,318
434,486
–11,880
49,559
19,314
49,559
19,314
19,800
5,530
445,617
2,575
–12,540
70,253
–22,717
70,253
–22,717
18
18
63
80
80
–11,880
–569
0
49,559
19,332
68,891
1,898
1,898
121
121
–569
0
1,898
121
2,019
–12,449
0
51,457
19,453
70,910
594
474,179
19,132
–360
–4
18,768
492,947
–12,540
70,253
–22,637
–549
246
2,669
47,616
2,669
–128
–128
–549
246
2,669
–128
2,541
–13,089
246
72,922
–22,765
50,157
19,800
5,530
503,330
–20,142
143
594
509,255
21,498
–488
–4
21,006
530,261
Balance as at
June 30, 2009
Dividends paid
Changes in the
consolidated group
Net income for the year
Other comprehensive
income after tax
Total consolidated gains
(losses)
Balance as at
June 30, 2010
Dividends paid
Changes in the
consolidated group
Net income for the year
Other comprehensive
income after tax
Total consolidated gains
(losses)
Balance as at
June 30, 2011
54
Annual Financial Statements I Statement of changes in equity I 55
Cash flow statement
Figures in € thousands, unless otherwise specified
Notes to the cash flow statement for the KWS Group
Figures in € thousands, unless otherwise specified; previous-year figures in parentheses
Net income for the year
Depreciation/reversal of impairment losses (–) on property, plant, and equipment
Increase/decrease (–) in long-term provisions
Other noncash expenses/income (–)
Cash Earnings
Increase/decrease (–) in short-term provisions
Net gain (–)/loss from the disposal of assets
Note
2010/11 Prev. year
72,922
27,561
1,776
1,867
104,126
–213
–293
51,457
22,042
–677
–7,213
65,609
15,501
–71
Increase (–)/decrease in inventories, trade receivables, and other assets not
attributable to investing or financing activities
Increase/decrease (–) in trade payables and other liabilities not attributable to investing
or financing activities
Net cash from operating activities
–16,649
–49,343
14,242
(A)
101,213
–4,315
27,381
Proceeds from disposals of property, plant, and equipment
Payments (–) for capital expenditure on property, plant, and equipment
Proceeds from disposals of intangible assets
Payments (–) for capital expenditure on intangible assets
Proceeds from disposals of financial assets
Payments (–) for capital expenditure on financial assets
Payments (–) for purchase of shares in consolidated subsidiaries
and other business units
Net cash from investing activities
Dividend payments (–) to shareholders parent and minority
Cash proceeds from issuance of bonds and from short- or long-term borrowings
Net cash from financing activities
859
1,253
–33,661
–52,147
35
10
–4,735
–3,225
931
–113
171
–1,445
–15,670
0
(B)
–52,354
–55,383
–13,089
–12,449
2,852
(C)
–10,237
23,669
11,220
Net cash changes in cash and cash equivalents
38,622
–16,782
Changes in cash and cash equivalents due to exchange rate, consolidated group,
and measurement changes
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
–5,393
4,821
(D)
113,670
125,631
146,899
113,670
The cash flow statement, which has been prepared accor-
ding to IAS 7 (indirect method), shows the changes in cash
and cash equivalents of the KWS Group in the three cate-
gories of operating activities, investing activities, and financ-
ing activities. The effects of exchange rate changes and
changes in the consolidated group have been eliminated
from the respective balance sheet items, except those
affecting cash and cash equivalents.
(A) Cash flows from operating activities
The cash proceeds from operating activities are primarily
determined by cash earnings. At €104,126 thousand, they
significantly rose by €38,517 thousand over previous year.
The proportion of cash earnings included in sales was
12.2% (8.7%). Slightly higher receivables, lower inventories
and current provisions and higher trade payables resulted
in cash outflows of €2,913 thousand (€38,228 thousand).
The net funds used in operating activities also include in-
terest income of €1,686 thousand (€1,208 thousand) and
dividend income of €5 thousand (€3 thousand) as well as
interest expense of €4,960 thousand (€2,967 thousand).
€769 thousand (€682 thousand) was paid out for the ex-
ternal financing of pension commitments. Income tax pay-
ments amounted to €35,057 thousand (€28,175 thousand).
(B) Cash flows from investing activities
A net total of €52,354 thousand (€55,383 thousand)
was required to finance investing activities. An amount of
€38,396 thousand (€55,372 thousand) was paid for intan-
gible and tangible assets and an amount of €113 thousand
(€1,445 thousand) for financial assets. There were total
cash receipts of €1,825 thousand (€1,434 thousand) for
disposals of assets. €15,670 thousand (€0 thousand) was
paid to acquire shares in consolidated companies.
(C) Cash flows from financing activities
Financing activities resulted in cash payments of €10,237
thousand, compared with cash proceeds of €11,220 thou-
sand in the previous year. The dividend payments to share-
holders parent and minority related to the dividends of
€12,540 thousand (€11,880 thousand) paid to the sharehol-
ders of KWS SAAT AG, as well as profit distributions paid to
other shareholders of and at fully consolidated subsidiaries of
€549 thousand (€569 thousand). In addition, borrowings of
€2,852 thousand (€23,669 thousand) were raised.
(D) Supplementary information on the cash flow
statement
As in previous years, cash and cash equivalents are com-
posed of cash (on hand and balances with banks) and cur-
rent available-for-sale securities.
Cash and cash equivalents includes €36,541 thousand
(€28,906 thousand) from partially consolidated companies.
Disclosures on the acquisition and sale of companies
and other business units
Total for all purchase prices
Total for all sales prices
Total for purchase price components that are cash and cash equivalents
Total for sales price components that are cash and cash equivalents
Total cash and cash equivalents acquired with the companies
Total cash and cash equivalents sold with the companies
2010/11
16,500
0
16,500
0
830
0
Previous
year
0
0
0
0
0
0
56
Annual Financial Statements I Cash flow statement I Notes to the cash flow statement I 57
Amounts of other assets and liabilities acquired or
sold with the companies
Fixed assets
Current assets incl. prepaid expenses
(excl. cash and cash equivalents)
Provisions
Liabilities incl. deferred income
2010/11
Previous year
Acquired
Sold
Acquired
Sold
12,214
10,120
42
10,906
0
0
0
0
0
0
0
0
0
0
0
0
The acquisition relates to the remaining shares in the former
joint venture VAN RIJN – KWS B.V., the objective of which
was to gain commercial control of the potato business. The
fair value of the stake at the time of acquisition was €12,216
thousand and resulted in an expense from revaluation of
€3,572 thousand. Apart from acquired goodwill of €4,284
thousand, in particular the protected potato varieties and
the customer base also had to be recognized.
Intangible assets
Tangible assets
Inventories
Trade receivables
Other assets
Total assets
Other provisions
Financial borrowings
Trade payables
Deferred taxes
Total liabilities
2010/11
11,860
354
1,147
8,639
1,165
23,165
42
2,450
4,755
3,455
10,702
Because of the seasonal course of our business, there
were no significant sales in the year under review after the
time of acquisition. The acquired receivables were carried
at their fair value.
Segment reporting for the KWS Group
Figures in € thousands, unless otherwise specified; previous-year figures in parentheses
In accordance with its internal reporting system, the
KWS Group is primarily organized according to the fol-
lowing business segments:
• Sugarbeet
• Corn
• Cereals
• Breeding & Services
Cereals
The lead company of this segment, which essentially con-
cerns the production and distribution of hybrid rye, wheat,
and barley, as well as oil and field seed, is KWS LOCHOW
GMBH, an 81%-owned subsidiary of KWS SAAT AG, with
its eight (seven) foreign subsidiaries and affiliated compa-
nies in France, Great Britain, the U.S. and Poland.
The research and development function is contained in the
Breeding & Services Segment. Because of their minor im-
portance within the KWS Group, the distribution and pro-
duction of oil and field seed are reported in the Cereals and
Corn Segments, in keeping with the legal entities involved.
Breeding & Services
This segment includes the centrally controlled corporate
functions of research and breeding, as well as services for
the KWS product segments of Sugarbeet, Corn and Cere-
als, as well as consulting services for the KWS Group and
other customers.
Description of segments
Sugarbeet
The results of the multiplication, processing and distribution
activities for sugarbeet seed and, for the first time, seed po-
tatoes are reported under the Sugarbeet Segment. Under
the leadership of KWS SAAT AG, 20 (15) foreign subsidia-
ries and affiliated companies and one (one) subsidiary in
Germany are now active in this segment. In the previous year,
the potato activities of our joint venture VAN RIJN – KWS
B.V. were still included in the Breeding & Services Segment.
After all the shares in this potato business were acquired
effective April 1, 2011, the subsidiary was renamed KWS
POTATO B.V.; its four foreign subsidiaries and the other
potato activities have been fully consolidated in this seg-
ment since then. The previous year’s figures were adjusted
accordingly to permit comparison.
Considered a core competency for the KWS Group’s en-
tire product range, plant breeding, including the related
biotechnology research, is essentially concentrated at
the parent company KWS SAAT AG and PLANTA ANGE-
WANDTE PFLANZENGENETIK UND BIOTECHNOLOGIE
GMBH in Einbeck. All the breeding material, including the
relevant information and expertise about how to use it, is
owned by KWS SAAT AG with respect to sugarbeet and
corn and by KWS LOCHOW GMBH with respect to cereals.
As part of research and breeding, breeding activities are
also conducted by other German and foreign subsidiaries
and affiliated companies.
Consulting services include the systems business of KWS
SAAT AG and its agricultural operations, KWS KLOSTERGUT
WIEBRECHTSHAUSEN GMBH, KWS SAATFINANZ GMBH,
which mainly handles insurance for KWS, and EURO-HYBRID
GESELLSCHAFT FÜR GETREIDEZÜCHTUNG MBH.
Corn
KWS MAIS GMBH is the lead company for the Corn Segment.
In addition to KWS MAIS GMBH, business activities are (as in
the previous year) conducted by one German company and
13 foreign companies of the KWS Group. The production and
distribution activities of this segment relate to corn for grain
and silage corn, and to oil and field seed.
The other services performed for the KWS product seg-
ments essentially include all the management services of
KWS SAAT AG, such as holding company and administrative
functions, including strategic development projects, which
are not directly charged to the product segments or indirectly
allocated to them by means of an appropriate cost formula.
58
Annual Financial Statements I Notes to the cash flow statement I Segment reporting I 59
Segment information
Segment sales contains both sales to third parties (exter-
nal sales) and sales between the segments (intersegment
sales). The prices for intersegment sales are determined on
an arm’s-length basis. Uniform royalty rates per segment for
breeding genetics are used as the basis. Technology reve-
nue from genetically modified properties (“tech fees”) are
paid as a per-unit royalty on the basis of the number of units
sold, due to their growing competitive importance.
Sugarbeet
Corn
Cereals
Breeding & Services
KWS Group
2010/11
Previous
year
2010/11
Previous
year
2010/11
Previous
year
Segment sales
Internal sales
External sales
293,499
471,845
78,675
261,020
414,485
72,126
1
767
1,238
333
1,050
2,131
152,226
138,728
138,864
128,691
293,498
260,687
471,078
413,435
77,437
13,362
69,995
10,037
996,245
886,359
140,870
132,205
855,375
754,154
The Breeding & Services Segment generates 91.2% (92.8%) of
its sales from the other segments. The sales figure of this seg-
ment represents 1.6% (1.3%) of the Group’s external sales.
The Corn Segment is the largest contributor of external sales,
accounting for 55.1% (54.8%) of external sales, followed by
sugarbeet with 34.3% (34.6%) and cereals with 9.1% (9.3%).
64.8% (63.7%) of total sales are recorded in Europe (inclu-
ding Germany).
External sales by region
Germany
2010/11
Previous
year
210,860
188,891
Europe (excluding Germany)
343,376
291,114
Americas
Rest of world
KWS Group
265,064
236,381
36,075
37,768
855,375
754,154
Sugarbeet
Corn
Cereals
Breeding & Services
Total segments
Others
KWS Group
2010/11
Previous
year
2010/11
Previous
year
2010/11
Previous
year
Segment earnings
Depreciation
and amortization
Other noncash items
42,139
62,003
14,337
–1,842
116,637
0
33,879
31,668
10,543
6,341
82,431
0
8,013
5,101
2,208
12,139
27,461
0
4,770
4,312
2,406
10,554
22,042
0
2,348
–11,861
214
3,755
20,973
30,687
2,077
2,901
–5,544
56,638
0
0
116,637
82,431
27,461
22,042
–5,544
56,638
The operating income of each segment is reported as
the segment result. The segment results are presented
on a consolidated basis and include all directly attributa-
ble income expenses. Items that are not directly attrib-
utable are allocated to the segments by means of an
appropriate formula.
Depreciation and amortization charges of €27,461 thou-
sand (€22,042 thousand) allocated to the segments relate
exclusively to intangible assets and property, plant, and
equipment. Goodwill had to be amortized this fiscal year
at the Sugarbeet Segment (€2,134 thousand), at the Corn
Segment (€153 thousand) and at the Breeding & Services
Segment (€3 thousand).
Sugarbeet
Corn
Cereals
Breeding & Services
Total segments
Others
KWS Group
2010/11
Previous year
2010/11
Previous year
Operating assets
Operating liabilities
198,925
288,595
39,565
207,643
734,728
167,236
901,964
183,510
300.833
40,104
188,520
712,967
144,414
857,381
43,670
160,556
9,172
74,844
288,242
83,461
371,703
50,029
165,082
9,436
65,873
290,420
74,014
364,434
The other noncash items recognized in the income
statement relate to noncash changes in the allowances on
inventories and receivables, and in provisions.
Investments in long-term assets by segment
The operating assets of the segments are composed
of intangible assets, property, plant, and equipment, in-
ventories and all receivables, other assets, and prepaid
expenses that can be charged directly to the segments
or indirectly allo-cated to them by means of an appro-
priate formula.
Sugarbeet
Corn
Cereals
Breeding & Services
KWS Group
2010/11
Previous
year
14,092
8,153
2,599
24,274
49,118
8,414
15,018
3,074
31,849
58,355
Cash and cash equivalents and/or current available-for-
sale securities are allocated to the segments only to the
extent that the allocation of operating liabilities makes
it necessary to increase operating assets by a corre-
sponding amount.
The operating liabilities attributable to the segments in-
clude the borrowings reported on the balance sheet,
less provisions for taxes and the portion of other lia-
bilities that cannot be charged directly to the segments
or indirectly allocated to them by means of an appro-
priate formula. Borrowings are added to operating lia-
bilities only when they exceed the available cash. Assets
or liabilities that have not been allocated to the segments
are reported as “Others.”
Capital expenditure on assets was mainly attributable
to the Breeding & Services Segment, where it amounted
to €24,274 thousand (€31,849 thousand), and the Sugar-
beet Segment, where it amounted to €14,092 thousand
(€8,414 thousand). 46% (28%) of capital expenditure was
made in Europe (excluding Germany) and 40% (58%) in
Germany, mainly in Einbeck.
Investments in long-term assets by region
Germany
Europe (excluding Germany)
North and South America
Rest of world
KWS Group
2010/11
19,579
22,609
6,796
134
Previous
year
33,565
16,292
7,560
938
49,118
58,355
Operating assets by region
Germany
2010/11
Previous
year
324,993
268,281
Europe (excluding Germany)
208,748
215,365
North and South America
185,240
212,212
Rest of world
KWS Group
15,747
17,109
734,728
712,967
60
Annual Financial Statements I Segment reporting I 61
Notes for the KWS Group 2010/2011
Figures in € thousands, unless otherwise specified; previous-year figures in parentheses
The KWS Group (KWS Konzern) is a consolidated group as
defined in the International Financial Reporting Stan-
dards (IFRS) published by the International Accounting
Standards Board (IASB), London, taking into account the
interpretations of the International Financial Reporting
Interpretations Committee (IFRIC) and in addition the
commercial law regulations to be applied pursuant to
section 315 a (1) of the HGB (German Commercial Code).
The consolidated financial statements discharge the ob-
ligations of KWS LOCHOW GMBH, Bergen, and KWS
MAIS GMBH, Einbeck, to produce their own financial
statements. The following standards and interpretations
have already been published, but have not yet been ap-
plied: Amendments to IAS 1, 12, 19, 24, 28, 34, IFRS
1, 7, 9, 10, 11, 12, 13 and IFRIC 13, 14, and the Improvement
Project 2010. To the extent that these relate to supplemen-
tary disclosure obligations, there will be no effects on the
balance sheet or statement of comprehensive income. The
possible effects of the other changes are currently being ex-
amined. The statements were prepared under the assump-
tion that the operations of the company will be continued.
General disclosures
Companies consolidated in the KWS Group
The consolidated financial statements of the KWS Group
include the single-entity financial statements of KWS SAAT
AG and its subsidiaries in Germany and other countries in
which it directly or indirectly controls more than 50% of the
voting rights. In addition, joint ventures are proportionately
consolidated according to the percentage of equity held in
those companies. Subsidiaries and joint ventures that are
considered immaterial for the presentation and evaluation
of the financial position and performance of the Group are
not included.
Consolidation methods
The single-entity financial statements of the individual sub-
sidiaries and joint ventures included in the consolidated
financial statements were uniformly prepared on the basis
of the accounting and measurement methods applied at
KWS SAAT AG; they were audited by independent auditors.
For fully or proportionately consolidated units acquired be-
fore July 1, 2003, the Group exercised the option allowed
by IFRS 1 to maintain the consolidation procedures cho-
sen to date. The goodwill reported in the HGB financial
statements as of June 30, 2003, was therefore transfer-
red unchanged at its carrying amount to the opening IFRS
balance sheet. For acquisitions made after June 30, 2003,
capital consolidation follows the purchase method by allo-
cating the cost of acquisition to the Group’s interest in the
subsidiary’s equity at the time of acquisition. Any excess
of interest in equity over cost is recognized as an asset,
up to the amount by which fair value exceeds the carrying
amount. Any goodwill remaining after first-time consoli-
dation is recognized under intangible assets.
According to IAS 36, goodwill is not amortized, but tested
for impairment at least once a year (impairment-only ap-
proach). Investments in non-consolidated companies are
carried at cost. Goodwill is reported under intangible assets.
Joint ventures are carried according to the percentage of
equity held in the companies concerned using IAS 31.
Subsidiaries and joint ventures are consolidated and asso-
ciated companies measured at equity only if such recog-
nition is considered material for the fair presentation of
the financial position and results of operations of the
KWS Group. As part of the elimination of intra-Group
balances, borrowings, receivables, liabilities, and provi-
sions are netted between the consolidated companies.
Intercompany profits not realized at Group level are elimi-
nated from intra-Group transactions. Sales, income, and
expenses are netted between consolidated companies,
and intra-Group distributions of profit are eliminated.
Deferred taxes on consolidation transactions recognized
in income are calculated at the tax rate applicable to the
company concerned. These deferred taxes are aggregated
with the deferred taxes recognized in the separate financial
statements.
Minority interests are recognized in the amount of the im-
puted percentage of equity in the consolidated companies.
Currency translation
Under IAS 21, the financial statements of the consolidated
foreign subsidiaries and joint ventures that conduct their
business as financially, economically, and organizationally
independent entities are translated into euros using the
functional currency method as follows:
•
Income statement items at the average exchange rate
for the year.
• Balance sheet items at the exchange rate on the balance
sheet date.
The difference resulting from the application of annual ave-
rage rates to the net profit for the period in the income
statement is taken directly to equity. Exchange differences
resulting from loans to foreign subsidiaries and joint ven-
tures are reported in the other result and are not recognized
in profit or loss.
Classification of the statement of comprehensive income
The costs for the functions include all directly attributable
costs, including other taxes. Research and development ex-
penses are reported separately for reasons of transparency.
Research grants are not deducted from the costs to which
they relate, but reported gross under other operating income.
Accounting policies
Consistency of accounting policies
The accounting policies are largely unchanged from the pre-
vious year. All estimates and assessments as part of accoun-
ting and measurement are continually reviewed; they are
based on historical patterns and expectations about the fu-
ture regarded as reasonable in the particular circumstances.
Intangible assets
Purchased intangible assets are carried at cost less straight-
line amortization over a useful life of three to 20 years. Im-
pairment losses on intangible assets with finite useful lives
are recognized according to IAS 36. Goodwill with an indef-
inite useful life is not amortized, but tested for impairment at
least once a year. The procedure for the impairment test is
explained in the notes to the balance sheet. Intangible as-
sets acquired as part of business combinations are carried
separately from goodwill if they are separable according to
the definition in IAS 38 or result from a contractual or legal
right and fair value can be reliably measured. Straight-line
amortization of these separated intangible assets is applied
over their individual useful life.
Property, plant, and equipment
Property, plant, and equipment is measured at cost less
straight-line depreciation. A loss is recognized for an impair-
ment expected to be permanent. In addition to directly attrib-
utable costs, the cost of self-produced plant or equipment
also includes a proportion of the overheads and depreci-
ation/amortization. Depreciation of buildings is based on a
useful life up to 50 years. The useful lives of technical
equipment and machinery range from five to 15 years,
and for operating and office equipment from three to ten
years. Low-value assets are fully expensed in the year of
purchase; they are reported as additions and disposals in
the year of purchase in the statement of changes in fixed as-
sets. Impairment losses on property, plant, and equipment
are recognized according to IAS 36 whenever the recovera-
ble amount of the asset is less than its carrying amount. The
recoverable amount is the higher of the asset’s net realiz-
able value and its value in use (value of future cash flows
expected to be derived from the asset). In accordance with
IAS 20, government grants are deducted from the costs of
the asset. Any deferred income is not recognized.
Financial instruments
Financial instruments are in particular financial assets and
financial liabilities. The financial assets consist primarily
of bank balances and cash on hand, trade receivables,
other receivables, and securities. The credit risk mainly
comprises trade receivables. The amount recognized in
the balance sheet is net of allowances for receivables
expected to be uncollectible, estimated on the basis of
historical patterns and the current economic environment.
The credit risk on cash and derivative financial instru-
ments is limited because they are kept with banks that
have been given a good credit rating by international
62
Annual Financial Statements I Notes I 63
rating agencies. There is no significant concentration of
credit risks, because the risks are spread over a large
number of contract partners and customers. The entire
credit risk is limited to the respective carrying amount.
Comments on the risk management system can be found
in the Management Report. Investments are measured
at cost. Assets available for sale are carried at market
value if that can be reliably measured. Unrealized gains
and losses, including deferred taxes, are recognized
directly in the revaluation reserve under equity. Perma-
nent impairment losses are recognized immediately
through the income statement. Borrowings are carried at
amortized cost.
The financial liabilities comprise in particular trade payables,
borrowings and other liabilities.
The fair value of financial instruments is determined on the
basis of the market information available on the balance
sheet date and in accordance with the recognized measure-
ment methods.
The other noncurrent financial assets are essentially availa-
ble for sale and are carried at market value where possible.
If a market value cannot be determined, the amortized costs
are carried as an alternative.
The carrying amount of receivables, fixed-income securities
and cash is assumed as the fair value due to their short term
and the fixed-interest structure of the investments.
Derivative instruments are carried at market values in ac-
cordance with IAS 39 and may have a positive or negative
value. This relates essentially to common derivative financial
instruments that are used to hedge interest rate and foreign
currency risks. In particular, the derivative financial instru-
ments are measured using recognized mathematical mod-
els, such as present value or Black-Scholes, to calculate
option values, taking their volatility, remaining maturity, and
capital market interest rates into account.
The fair value of financial liabilities with a long-term fixed in-
terest rate is determined as present values of the payments
related to the liabilities, using a yield curve applicable on the
balance sheet date.
The fair values of the financial instruments are generally de-
termined on the basis of the market information available on
the balance sheet date and must be assigned to a level in
the fair value hierarchy.
Financial instruments in level 1 are measured using quoted
prices in active markets for identical assets or liabilities.
In level 2, they are measured by directly observable market
inputs or derived indirectly on the basis of prices for simi-
lar instruments. Finally, input factors not based on observa-
ble market data are used to calculate the value of level 3
financial instruments.
Subsequent measurement of the financial instruments de-
pends on their classification in one of the following cate-
gories defined in IAS 39:
Loans and receivables
This category mainly comprises trade receivables, other
receivables, loans and cash, including fixed-income short-
term securities. Loans are measured at cost. Loans that
carry no interest or only low interest are measured at their
present value. Discernable risks are taken into account by
recognition of an impairment loss. After their initial recogni-
tion, the other financial assets in this category are measured
at amortized cost using the effective interest method, minus
impairments. Receivables that carry no interest or only low
interest and with a term of more than twelve months are
discounted. Necessary value impairments are based on the
expected credit risk and are carried in separate impairment
accounts. Receivables are derecognized if they are settled
or uncollectible. Other assets are derecognized at the time
they are disposed of or if they have no value.
Financial assets at fair value
Held-for-trading securities acquired with the intention of
being sold in the short term are assigned to this category.
Derivate financial instruments with a positive market value
are also categorized as held for trading, unless they are des-
ignated hedging instruments in accordance with IAS 39.
They are measured at fair value. Changes in value are
recognized in income. Securities are derecognized after
being sold on the settlement date.
Available-for-sale financial assets
This category covers all financial assets that have not been
assigned to one of the above categories. In principle, securi-
ties are classed as available for sale, unless a different clas-
sification is required due to the fact that they have an explicit
purpose. Equity instruments, such as shares in (unconsoli-
dated) affiliated companies and shares held in listed compa-
nies, are also included in this category. In principle, financial
instruments in this category are measured at their fair value
in subsequent recognition. The changes to their fair value
in subsequent recognition are recognized as unrealized
gains and losses directly in equity in the revaluation reserve.
The realized gains or losses are not recognized as profit or
loss until they are disposed of. If there is objective evidence
of permanent impairment on the balance sheet date, the
instruments are written down to the lower value. Any sub-
sequent decreases in the impairment loss are recognized
directly in equity.
Financial liabilities measured at amortized cost
All financial liabilities, with the exception of derivative finan-
cial instruments, are measured at amortized cost using the
effective interest method. The liabilities are derecognized at
the time they are settled or when the reason why they were
formed no longer exists.
Financial liabilities at fair value
This category covers derivative financial instruments that
have a negative market value and are categorized in prin-
ciple as held for trading. They are measured at fair value.
Changes in value are recognized in income. Derivatives that
are designated hedging instruments in accordance with IAS
39 are excluded from this provision.
Derivatives
Derivatives cannot be designated as hedging instruments
pursuant to the regulations of IAS 39. They are measured
at their market value. The changes in their market value are
recognized in the income statement. Derivatives are derec-
ognized on their day of settlement.
Inventories and biological assets
Inventories are carried at cost less an allowance for obso-
lescent or slow-moving items. In addition to directly attribu-
table costs, the cost of sales also includes indirect labor and
materials including depreciation under IAS 2. Under IAS 41,
biological assets are measured at the expected sales pro-
ceeds, less costs to sell. The measurement procedure used
is based on standard industry value tables.
Deferred taxes
Deferred taxes are calculated on differences between the
IFRS carrying amounts of assets and liabilities and their tax
base, and on loss carryforwards; they are reported on a
gross basis. Under IAS 12, deferred taxes are calculated on
the basis of the applicable local income tax.
Provisions for pensions and other employee benefits
Under IAS 19, obligations from direct pension commitments
are measured using actuarial principles under the accrued
benefit valuation method. Gains or losses from unplanned
changes inaccrued benefits and from changes in actuarial
assumptions are disregarded if the change moves within
a 10% corridor of the accrued benefits. Only if the gains or
losses exceed this threshold will they be recognized as in-
come and distributed over the remaining working lives and
included in the provision.
Securities are generally classified as available for sale,
which is why changes in their fair values that require re-
porting are taken directly to equity. If securities are carried
at their fair value and have to be recognized in income,
changes to the fair values are direct included in the net in-
come for the period.
Other provisions
Tax and other provisions account for all discernible risks
and contingent liabilities. Depending on circumstances,
they are measured at the most probable amount or at the
expected value.
Contingent liabilities
The contingent liabilities result from debt obligations
where outflow of the resource is not probable or from ob-
ligations for loan amounts drawn down by third parties as
of the balance sheet date.
64
Annual Financial Statements I Notes I 65
Borrowing costs
In accordance with IAS 23, borrowing costs are capitalized
if they can be classified as qualifying assets.
Discretionary decisions and estimates
The measurement approaches and amounts to be carried
in these IFRS financial statements are partly based on es-
timates and specifically defined specifications. This relates
in particular to:
• Determination of the net selling price for inventories
• Definition of the parameters required for measuring
pension provisions
• Selection of parameters for the model-based
measurement of derivatives
• Determination whether tax losses carried forward
can be used
• Determination of the fair value of intangible assets,
tangible assets and liabilities acquired as part of a
• Determination of the useful life of the depreciable asset
• Definition of measurement assumptions and future
business combination and determination of the
service lives of the purchased intangible assets
results in connection with impairment tests, above all
for goodwill that is carried
and tangible assets
• Measurement of other provisions
Consolidated group and changes in the
consolidated group
Number of companies including KWS SAAT AG
Domestic
Foreign
Total
Domestic
Foreign
Total
06/30/2011
Previous year
Consolidated
Consolidated at quota
Total
12
0
12
41
7
48
53
7
60
11
0
11
32
12
44
43
12
55
The companies are listed under item number (31).
In the past fiscal year, the companies KWS SERVICES
DEUTSCHLAND GMBH and KWS CEREALS USA, LLC. were
established effective July 1, 2010, and KWS SERVICES
NORTH B.V., KWS SERVICES EAST GMBH and KWS SER-
VICES MEDITERRANEAN S.A.S. effective January 1, 2011.
Effective April 1, 2011, the remaining 50% stake in the former
proportionately consolidated joint venture VAN RIJN-KWS
B.V. was acquired and the company renamed KWS POTA-
TO B.V., since which time it has been fully consolidated. The
existing shares were measured at fair value at the time of
acquisition; a detailed presentation of this can be found in
the section “Cash flow statement.”
A total of 53 companies were fully consolidated and seven
proportionately consolidated in the year under review.
The financial position and results of operations of the
seven (twelve) proportionately consolidated companies
are as follows:
2010/11
Previous
year
Proportionately
consolidated companies
31,812
52,495
109,417
125,798
141,229
178,293
78,066
94,693
881
4,346
62,282
79,254
Noncurrent assets
Current assets
Total assets
Equity
Noncurrent liabilities
Current liabilities
Total equity and liabilities
141,229
178,293
Net sales
203,320
180,756
Net profit for the year
18,759
11,126
Notes to the Balance sheet
Figures in € thousands, unless otherwise specified; previous-year figures in parentheses
(1) Assets
The statement of changes in fixed assets contains a
breakdown of assets summarized in the balance sheet
and shows how they changed in 2010/11. Capital expen-
diture on assets was €49,262 thousand (€58,364 thou-
sand), of which €10,775 thousand (€0 thousand) were
attributable to the changes in the consolidated group.
The Management Report describes the significant addi-
tions to assets. Depreciation and amortization amounted
to €27,561 thousand (€22,042 thousand).
(2) Intangible assets
This item includes purchased varieties, rights to varieties
and distribution rights, software licenses for electronic
data processing, and goodwill. Additions amounting to
€15,036 thousand (€3,224 thousand), of which €10,301
thousand (€0 thousand) resulted from the changes in
the consolidated group, comprise the acquisition of soft-
ware licenses and patents, as well as goodwill to be re-
cognized. Amortization of intangible assets amounted
to €5,830 thousand (€3,007 thousand); this charge is
included in the relevant functional costs and the other
operating expenses, depending on the operational use of
the intangible assets. This includes write-downs of good-
will at KWS POTATO B.V. to an amount of €2,134 thou-
sand and at KWS MAGYAROSZAG KFT. to an amount of
€156 thousand.
The goodwill recognized as an asset relates mainly to the
company AGRELIANT GENETICS LLC. – €16,619 thousand
(€18,222 thousand) – in the Corn Segment, the company
KWS UK LTD. – €1,693 thousand (€1,693 thousand) – in the
Cereals Segment and KWS POTATO B.V. – €2,150 thousand
(€3,187 thousand) – in the Sugarbeet Segment.
In order to meet the requirements of IFRS 3 in combi-
nation with IAS 36 and to determine any impairment of
goodwill, cash-generating units have been defined in line
with internal reporting guidelines. In the KWS Group, these
units are the legal entities. To test for impairment, the car-
rying amount of each entity is determined by allocating the
assets and liabilities, including attributable goodwill and
intangible assets. An impairment loss is recognized if the
recoverable amount of an entity is less than its carrying
amount. The recoverable amount is the higher of the
entity’s net realizable value and its value in use (value of
future cash flows expected to be derived from the entity).
In principle, the impairment test uses the expected future
cash flows on which the medium-term plans of the com-
panies are based; these plans, which cover a period of
four years, have been approved by the Executive Board.
They are based on historical patterns and expectations
about future market development.
For the European and American markets, the key as-
sumptions on which corporate planning is based include
assumptions about price trends for seed, in addition to the
development of market shares and the regulatory frame-
work. Company-internal projections take the assump-
tions of industry-specific market analyses and company-
related growth perspectives into account.
A standard discount rate of 6.4% (6.1%) has been assumed
to calculate present values. A growth rate of 1.5% (1.5%)
has been assumed beyond the detailed planning horizon
in order to allow for extrapolation in line with the expected
inflation rate. Tests provided evidence that the goodwill
recognized in the consolidated balance sheet and deter-
mined for the cash-generating units is not impaired.
(3) Property, plant, and equipment
Capital expenditure amounted to €34,082 thousand (€55,131
thousand) and depreciation amounted to €21,631 thousand
(€19,035 thousand). The Management Report describes the
significant capital expenditure.
(4) Financial assets
Investments in non-consolidated subsidiaries and shares
in cooperatives and GmbHs that are of minor significance,
with an amortized cost totaling €768 thousand (€884
thousand), are reported in this account since a market
value cannot be reliably determined. Listed shares are
carried at market value of €144 thousand (€88 thou-
sand). This account also includes interest-bearing home-
building loans to employees and other interest-bearing
loans totaling €396 thousand (€463 thousand). In addi-
tion, the balance of €2,782 thousand (€3,553 thousand)
66
Annual Financial Statements I Notes to the balance sheet I 67
after netting off reinsurance claims and the correspon-
ding benefit obligations is carried. Amortization of finan-
cial assets amounted to €100 thousand (0 thousand) and
relates to the category “available for sale.”
(5) Noncurrent tax assets
This relates to the present value of the corporate income
tax credit balance, which was last determined at De-
cember 31, 2006, and has been paid in ten equal annual
amounts since September 30, 2008.
(6) Deferred tax assets
Under IAS 12, deferred tax assets are calculated as the
difference between the IFRS balance sheet amount and
the tax base and on the basis of loss carryforwards. They
are reported on a gross basis and total €29,147 thou-
sand (€26,056 thousand), of which €2,287 thousand
(€2,491 thousand) will be carried forward for the future
use of tax losses.
(7) Inventories and biological assets
Inventories fell by €7,788 thousand, or 5.7%, net of write-
downs totaling €55,204 thousand (€63,251 thousand). Im-
mature biological assets relate to living plants in the process
of growing (before harvest). The field inventories of the pre-
vious year have been harvested in full and the fields have
been newly tilled in the year under review. Public subsidies
of €1,575 thousand (€1,492 thousand), for which all the re-
quirements were met at the balance sheet date, were grant-
ed for the total area under cultivation of 4,456 (4,116) ha and
were recognized in income. Future subsidies depend on the
further development of European agricultural policy.
(8) Current receivables
Trade receivables
Current tax assets
Other current assets
06/30/2011
Previous
year
268,209
262,176
14,322
19,173
16,925
20,654
301,704
299,755
Raw materials and consumables
Work in process
Immature biological assets
Finished goods
06/30/2011
Previous
year
15,091
33,223
10,293
70,391
20,539
35,979
6,670
73,598
128,998
136,786
Trade receivables amounted to €268,209 thousand, an
increase of 2.3% over the figure of €262,176 thousand
for the previous year; this amount includes €1,294 thou-
sand (€1,596 thousand) in receivables from related par-
ties. The item “Other current assets” includes prepaid
expenses totaling €3,426 thousand (€4,577 thousand)
in addition to other receivables of €15,747 thousand
(€16,077) thousand.
Written-down and overdue receivables
06/30/2011
Carrying
amount
Trade receivables
Other receivables
Previous year
Trade receivables
Other receivables
268,209
15,747
283,956
262,176
16,077
278,253
Of which:
neither written
down nor
overdue on the
balance sheet
date
Of which: not written down on the
balance sheet date and overdue in the
following time frames
Of which:
written down
and not
overdue on the
balance sheet
date
≤60
days
61–120
days
121–180
days
>180
days
234,532
16,499
8,015
2,622
3,197
15,392
10
0
0
0
249,924
16,509
8,015
2,622
3,197
227,243
18,317
5,602
14,617
200
0
241,860
18,517
5,602
738
0
738
4,206
915
5,121
1,868
343
2,211
3,577
343
3,920
The already overdue trade receivables that have not
been written down fully and the receivables that are not
overdue from joint ventures amount to €1,478 thousand
(€2,493 thousand). There are trade receivables that had
to be prolonged in the year under review in particular in
Eastern and Southeastern Europe, as a result of the eco-
nomic situation.
There are no indications on the balance sheet date that
customers who owe trade receivables that have not been
written down and are not overdue will not meet their pay-
ment obligations.
The following allowances have mainly been made for possi-
ble risks of non-payment of trade receivables:
by a global certificate for 6,600,000 shares. The company
does not hold any shares of its own.
Equity (including minority interest) increased by €37,314
thousand, from €492,947 thousand to €530,261 thousand.
For details, see the statement of changes in equity.
(12) Noncurrent liabilities
The trade payables are due for payment in between one
and five years and the due dates for the other long-term
liabilities extend through 2017.
Long-term provisions
63,028
61,464
06/30/2011
Previous
year
Allowances for receivables
07/01
Additi-
on
Dispo-
sal
Rever-
sal
06/30
2010/11
30,004
8,721
2,456
3,252
33,017
2009/10
21,312
16,149
2,472
4,985
30,004
The receivables include an amount of €1,374 thousand
(€1,009 thousand) due after more than one year.
(9) Securities
Securities amounting to €36,621 thousand (€13,077 thou-
sand) relate primarily to short-term liabilities securities and
fund shares.
(10) Cash and cash equivalents
Cash and cash equivalents of €110,278
thousand
(€100,593 thousand) consists of balances with banks and
cash on hand. The cash flow statement explains the change
in this item compared with the previous year, together with
the change in securities.
(11) Equity
The fully paid-up subscribed capital of KWS SAAT AG is still
€19,800,000.00. The no-par bearer shares are certificated
Long-term financial
borrowings
Trade payables
Deferred tax liabilities
Other long-term liabilities
19,421
2,308
24,657
9,311
21,556
2,265
18,638
10,209
118,725
114,132
The pension provisions are based on defined benefit obliga-
tions, determined by years of service and pensionable com-
pensation. They are measured using the accrued benefit
method under IAS 19, on the basis of assumptions about
future development. The assumptions in detail are that
wages and salaries will increase by 3.00% (2.80%) annually
and pensions by 2.00% (2.00%) annually.
The discount rate was 5.13%, compared with 4.75% the
year before.
No income or expenses were recognized as a result of
changes in retirement obligations or benefits payable or
from the adjustment to assumptions. For benefit obligations
backed by a guarantee by an insurance company, the plan-
ned assets of €7,570 thousand (€7,932 thousand) corre-
spond to the present value of the obligation. In accordance
with IAS 19, the pension provisions are netted off against
the corresponding assets. Pension funds were invested in
to cover foreign pension commitments.
Long-term provisions
07/01/2010
Changes in
the consol.
group,
currency
Addition Consumption
Reversal
06/30/2011
Pension provisions
Other provisions
56,192
5,272
61,464
–188
–1,403
–1,591
5,093
2,338
7,431
3,989
212
4,201
59
16
75
57,049
5,979
63,028
68
Annual Financial Statements I Notes to the balance sheet I 69
The accrued benefit is reconciled to the provisions reported in the consolidated
financial statements as follows:
The table below shows a breakdown of the pension costs for the
defined benefit obligations:
Accrued benefit entitlements at beginning of fiscal year
Cost of additional benefit entitlements
Interest expenses on benefit entitlements acquired in previous years
Changes in consolidated group and currency
Changes in actuarial gains/losses
Other changes not recognized in profit or loss
Pension payments
Accrued benefit entitlements at end of fiscal year
Present value of planned assets
Planned assets carried as assets
Actuarial gains/losses not included
Pension provisions at end of fiscal year
The planned assets changed as follows during the fiscal year:
Present value of planned assets at the start of the fiscal year
Expected gains from planned assets
Changes in actuarial gains / losses
Employer‘s contribution to external social security bodies
Payments from external social security bodies
Currency difference from foreign planned assets
Present value of planned assets at the end of the fiscal year
2010/11
Previous
year
83,740
71,100
1,371
4,435
–1,813
–3,286
344
4,723
80,069
698
4,142
2,879
9,804
0
4,883
83,740
–16,286
–16,721
2,793
–9,528
57,049
3,553
–14,380
56,192
2010/11
Previous
year
16,721
12,948
948
815
0
–869
–1,329
16,286
900
936
2,035
–878
780
16,721
The pension obligations and planned assets have changed over time as follows:
Accrued benefit entitlements on 06/30
Planned assets on 06/30
Shortage (+) / surplus (-)
Empirical gains (+) / losses (-) from
pension commitments
Empirical gains (+) / losses (-) from
planned assets
06/30/2011
06/30/2010
06/30/2009
06/30/2008
06/30/2007
80,069
16,286
63,783
91
–229
83,740
16,721
67,019
990
161
71,100
12,948
58,152
68,372 61,718
13,577 8,174
54,795 53,544
201
1,042 682
–1,551
–1,028 0
Costs for additional benefit entitlements
Interest expense
Repayment of actuarial losses
Anticipated income from the planned assets
Pension costs
2010/11
Previous
year
1,371
4,435
461
–948
5,319
698
4,142
154
–885
4,109
The pension costs are included in the functional costs with the exception of the interest expense and the anticipated income
from planned assets which are reported under the net financial income/expenses.
As part of the company old-age pension program for KWS
SAAT AG and German subsidiaries, subsequent benefits
will be provided by a provident fund backed by a guaran-
tee and based on a defined contribution plan. The costs for
contributions to this pension scheme were €769 thousand
(€682 thousand).
The return and income from the planned assets depend on the
reinsurance policy, which yields guaranteed interest of 2.25%.
For the next year, income totaling €516 thousand is expected.
The long-term financial borrowings include loans from banks
amounting to €19,421 thousand (€21,556 thousand). They
have remaining maturities through 2017.
Under IAS 12, deferred tax liabilities are calculated as the
difference between the IFRS balance sheet amount and
the tax base. They are reported on a gross basis and total
€24,657 thousand (€18,638 thousand). The composition of
the deferred tax liabilities is explained in more detail under
(22) Income taxes.
In addition, the benefit obligation from salary conversion
was backed by a guarantee that exactly matches the pre-
sent value of the obligation of €4,165 thousand (€4,796
thousand) (defined contribution plan).
(13) Current liabilities
Short-term provisions
Current liabilities to banks
Current liabilities to affiliates
Other current financial liabilities
Short-term borrowings
Trade payables to affiliates
Other trade payables
Trade payables
Tax liabilities
Other liabilities
06/30/2011
107,396
13,673
275
257
Previous
year
129,546
10,345
119
266
14,205
10,730
8
69,341
69,349
0
57,472
57,472
25,513
22,785
36,515
29,769
252,978
250,302
70
Annual Financial Statements I Notes to the balance sheet I 71
Short-term provisions
07/01/2010
Changes in
the consol.
group,
currency
Addition
Consump-
tion
Reversal
06/30/2011
Obligations from
sales transaction
Obligations from
purchase transaction
Other obligations
99,729
–11,413
58,889
60,956
7,130
79,119
3,339
26,478
–81
–164
129,546
–11,658
7,263
15,429
81,581
1,878
19,273
82,107
63
2,774
9,967
8,580
19,696
107,395
The tax liabilities of €25,513 thousand (€22,785 thousand) include amounts for the year under review and the period not yet
concluded by the external tax audit.
(14) Derivative financial instruments
Currency hedges
Interest-rate hedges
Commodity hedges
Nominal
volume
Carrying
amounts
Market
values
06/30/2011
54,593
42,800
7,233
104,626
60
85
0
145
60
85
0
145
Of the currency hedges, €2,925 thousand have remaining
maturities of more than one year. Of the interest-rate deriva-
tives, hedges with a nominal volume of €27,800 thousand
will mature within one to five years and hedges with a nomi-
nal value of €15,000 thousand will mature in more than five
years. The commodity hedges have remaining maturities of
less than one year.
(15) Financial instruments
The table below presents the net gains/losses carried in the income statement for
financial instruments in each measurement category
Available-for-sale financial assets
Financial assets at fair value
Loans and receivables
Financial liabilities measured at amortized cost
Financial liabilities at fair value
2010/11
Previous
year
–69
–17
–4,311
–4,546
4,352
47
690
–9,606
–2,933
–2,464
The net income from financial assets includes income and
expenses from the measurement of financial assets. The net
gain/loss from loans and receivables mainly includes effects
from changes in the allowances for impairment.
The net gains/losses from financial assets at fair value and
financial liabilities at fair value mainly include changes in the
market value of derivative financial instruments.
The net losses from financial liabilities measured at amor-
tized cost mainly consist of interest expense.
Interest income from financial assets that are not mea-
sured at fair value and recognized in the income state-
ment was €1,719 thousand (€1,558 thousand). Interest
expenses for financial borrowings were €4,546 thousand
(€2,933 thousand).
In order to assess the risk of exchange rate changes, the
sensitivity of a currency to fluctuations was determined.
After the euro, the US dollar is the most important cur-
rency in the KWS Group. All other currencies are of minor
importance. The average exchange rate in the fiscal year
was 1.38 USD/€. If the US dollar depreciated by 10%, the
financial instruments would lose 4.8% in value. If the US
dollar appreciated by 10%, the financial instruments would
gain 4.8% in value. The net income for the year and equity
would change accordingly.
percentage point increase in the rate of interest would add a
further €0.2 million to the interest result; a reduction to zero
percentage points would reduce it by €0.2 million. Equity
would change by €0.2 million in the event of such a change
in the rate of interest.
In order to assess the risk of changes in commodity
prices, the sensitivity of commodity prices to fluctuations
was determined. A 10% increase in commodity prices
would increase the cost of sales by around €0.7 million; a
decrease would reduce it by around €0.7 million.
In order to assess the risk of interest rate changes, the sen-
sitivity of interest rates to fluctuations was determined. The
average rate of interest in the fiscal year was 0.78%. A one
In the Management Report possible risks resulting from agree-
ments regarding financial dependencies are addressed.
The carrying amounts and fair values of the financial instruments are as follows:
06/30/2011
Financial assets
Financial assets
Trade receivables
Securities
Cash and cash equivalents
Other current assets
- Other which derivative financial
instruments
Loans and
receivables
Financial
assets at
fair value
Available-for-
sale financial
assets
Total
carrying
amount
Financial instruments
Fair Values
Carrying amounts
1,308
268,209
36,621
110,278
19,173
(1,265)
0
268,209
36,621
110,278
17,908
(0)
0
0
0
0
1,265
(1,265)
1,265
1,308
1,308
0
0
0
0
268,209
36,621
110,278
19,173
(0)
(1,265)
1,308
435,589
Total
435,589
433,016
06/30/2011
Financial liabilities
Long-term borrowings
Long-term trade payables
Other noncurrent liabilities
Short-term borrowings
Short-term trade payables
Other noncurrent liabilities
- Other which derivative financial
instruments
Financial liabilities
measured at
amortized cost
Financial liabilities
at fair value
Total
carrying
amount
Financial instruments
Fair Values
Carrying amounts
19,421
2,308
9,311
14,205
69,349
36,515
(1,120)
19,421
2,308
9,311
14,205
69,349
35,395
(0)
0
0
0
0
0
1,120
19,421
2,308
9,311
14,205
69,349
36,515
(1,120)
(1,120)
Total
151,109
149,989
1,120
151,109
72
Annual Financial Statements I Notes to the balance sheet I 73
Previous year
Financial assets
Financial assets
Trade receivables
Securities
Cash and cash equivalents
Other current assets
- Other which derivative financial
instruments
Loans and
receivables
Financial
assets at
fair value
Available-for-
sale financial
assets
Total
carrying
amount
Financial instruments
Fair Values
Carrying amounts
1,435
262,176
13,077
100,593
20,654
(1,366)
0
262,176
13,077
100,593
19,288
(0)
0
0
0
0
1,366
(1,366)
1,366
1,435
1,435
0
0
0
0
262,176
13,077
100,593
20,654
(0)
(1,366)
1,435
397,935
Total
397,935
395,134
Securities classified within level 1 of the fair value hierarchy
totaled €36,621 thousand at June 30, 2011. Financial assets
held for trading (€1,139 thousand) and financial liabilities
held for trading (€1,120 thousand) are categorized in level 2.
There are no financial instruments in level 3. None of the
reported financial instruments will be held to maturity.
(16) Contingent liabilities
As in the previous year, there are no contingent liabilities
to report apart from the employer’s statutory secondary
liability for direct pension commitments.
(17) Other financial obligations
There was a €7.042 thousand (€7,064 thousand) obligation
from uncompleted capital expenditure projects.
Obligations under rental
agreements and leases
06/30/2011
Previous
year
Due within one year
Due between 1 and 5 years
Due after 5 years
8,456
7,913
2,446
8,983
9,220
2,701
18,815
20,904
The leases relate primarily to full-service agreements for IT
equipment and fleet vehicles, which also include services
for which a total of €2,737 thousand (€2,222 thousand) was
paid in the year under review. The main leasehold obliga-
tions relate to land under cultivation.
Previous year
Financial liabilities
Long-term borrowings
Long-term trade payables
Other noncurrent liabilities
Short-term borrowings
Short-term trade payables
Other noncurrent liabilities
- Other which derivative financial
instruments
Financial liabilities
measured at
amortized cost
Financial liabilities
at fair value
Total
carrying
amount
Financial instruments
Fair Values
Carrying amounts
22,826
2,265
10,209
10,730
57,472
29,769
(1,188)
21,556
2,265
10,209
10,730
57,472
28,581
(0)
0
0
0
0
0
1,188
21,556
2,265
10,209
10,730
57,472
29,769
(1,188)
(1,188)
Total
133,271
130,813
1,188
132,001
74
Annual Financial Statements I Notes to the balance sheet I 75
Notes to the income statement
Figures in € thousands, unless otherwise specified; previous-year figures in parentheses
Income statement for the period July 1, 2010 through June 30, 2011
Net sales
Cost of sales
Gross profit on sales
Selling expenses
Research and development expenses
General and administrative expenses
Other operating income
Other operating expenses
Operating income
Net financial income / expenses
Result of ordinary activities
Income taxes
Net income for the year
Shares of minority interest
Net income after minority interest
(18) Net sales
By product category
Certified seed sales
Royalties income
Basic seed sales
Services fee income
Other sales
By region
Germany
Europe
America
Rest of world
2010/11
Previous
year
785,154
687,273
38,198
13,225
4,404
14,394
34,852
11,875
4,281
15,873
855,375
754,154
210,860
188,890
343,375
291,114
265,064
236,382
36,076
37,768
855,375
754,154
For further details of sales, see segment reporting.
i millions % of sales
i millions % of sales
2010/11
Previous year
855,4
433,4
422,0
138,5
113,5
60,0
43,7
37,1
116,6
–7,0
109,6
36,7
72,9
2,6
70,3
100,0
50,7
49,3
16,2
13,3
7,0
5,1
4,3
13,6
–0,8
12,8
4,3
8,5
0,3
8,2
754,1
406,1
348,0
128,6
97,5
49,6
44,5
34,4
82,4
–4,9
77,5
26,0
51,5
1,9
49,6
100,0
53,9
46,1
17,1
12,9
6,6
6,0
4,6
10,9
–0,6
10,3
3,5
6,8
0,2
6,6
Sales are recognized when the agreed goods or services
have been supplied and risk and title pass to the buyer. Any
rebates or discounts are taken into account.
The cost of sales increased by €27,222 thousand to
€433,365 thousand, or 50.7% (53.9%) of sales. The total
cost of goods sold was €232,605 thousand (€212,040
thousand).
Allowances on inventories totaling €8.048 thousand less
than the previous year’s € –19,156 thousand were re-
quired. They were charged to segment results as follows:
Sugarbeet €968 thousand (€ –5,657 thousand), to Corn
€6,315 thousand (€ –13,801 thousand), to Cereals € 810
thousand (€188 thousand) and to Breeding & Services
€ –45 thousand (€114 thousand).
The €9,880 thousand increase in selling expenses to
€138,501 thousand is mainly due to the expansion of
distribution structures in the Corn Segment in North
America and Europe. This is 16.2% of sales, down from
17.1% the year before.
Research and development is recognized as an expense in
the year it is incurred; in the year under review, this amounted
to €113,539 thousand (€97,510 thousand the year before).
Development costs for new varieties are not recognized as an
asset because evidence of future economic benefit can only
be provided after the variety has been officially certified.
General and administrative expenses increased by
€10,399 thousand to €59,997 thousand, representing
7.0% of sales, after 6.6% the year before.
(19) Other operating income
Income from sales of fixed assets
494
272
2010/11
Previous
year
10,103
9,806
6,228
13,843
3,252
5,278
4,985
5,074
Income from the reversal
of provisions
Exchange rate gains and
gains from currency and
interest rate hedges
Income from reversal
of allowances on receivables
Grants
Income relating to previous
periods
Income from loss compensation
received
Miscellaneous other
operating income
In the year under review, allowances for receivables of €5,742
thousand (€8,300 thousand) were recognized as an expense
at the Corn Segment, €2,816 thousand (€7,622 thousand) at
the Sugarbeet Segment, €139 thousand (€107 thousand) at
the Cereals Segment and €24 thousand (€120 thousand) at
the Breeding & Services Segment. The other expenses mainly
include allowances for foreign value-added tax claims.
(21) Net financial income/expenses
Interest income
Interest expenses
Income from other financial
assets
Interest expenses from
pension provisions
Interest expense for other
long-term provisions
Interest expense for finance
leasing
2010/11
1,693
4,960
Previous
year
1,558
3,148
26
44
3,487
3,257
135
16
165
12
Net interest expense
–6,879
–4,980
Net income from participations
3,286
3,156
Write-downs of financial assets
234
162
Net income from equity
investments
5
100
–95
3
0
3
Net financial income/expenses
–6,974
–4,977
14,880
43,755
7,291
44,589
The net financial result fell by a total €1,997 thousand to
€ –6,974 thousand. Net interest expense was € –6,879
thousand (€ –4,980 thousand), while net income from
equity investments fell by €98 thousand to € –95 thou-
sand. The interest effects from pension provisions comprise
interest expenses (compounding) and the planned income.
The increase in interest expense is mainly due to interest on
tax back payments, the conclusion of hedges against in-
terest rate risks and an increase in interest expense for
financing our business activity during the year.
The increase in other operating income is mainly attribu-
table to income from commodity hedges measured at the
market price.
(20) Other operating expenses
Legal form expenses
Allowances on receivables
Counterparty default
Exchange rate losses
and losses on currency
and interest rate hedges
Losses from sales of fixed assets
Expenses relating to previous
periods
Expense from remeasurement of
intangible assets
Other expenses
2010/11
Previous
year
981
8,721
908
976
16,149
499
10,950
10,646
201
277
5,862
9,191
201
356
0
5,613
37,091
34,440
76
Annual Financial Statements I Notes to the income statement I 77
The “Law on Tax Measures Accompanying Introduction of
the Societas Europaea and Amending Further Tax Regu-
lations” (SEStEG), which was passed at the end of 2006,
means that the corporate income tax credit balance at
December 31, 2006, can be realized. It will be paid out in
ten equal annual amounts from 2008 to 2017. The German
Group companies carried these claims as assets at their
present value totaling €5,866 thousand (€6,812 thousand)
at June 30, 2011. €901 thousand was recovered in the year
under review and recognized directly in equity.
Under German tax law, both German and foreign dividends
are 95% tax exempt.
The profits generated by Group companies outside Germany
are taxed at the rates applicable in the country in which they
are based.
For the German Group companies, deferred tax was calcu-
lated at 29.1% (29.1%). For foreign Group companies, defer-
red tax was calculated using the tax rates applicable in the
country in which they are based.
(22) Income taxes
Income tax expense is computed as follows:
Income taxes, Germany
Income taxes, other countries
Current expenses
from income taxes
Thereof from previous years
2010/11
17,875
20,811
38,686
(–557)
Previous
year
18,452
15,158
33,610
(–228)
Deferred taxes, Germany
–426
–4,052
Deferred taxes, other countries
Deferred tax income/expense
–1,519
–1,945
–3,561
–7,613
Reported income tax
expense
36,741
25,997
Adjusted for tax relating to previous periods, KWS pays
tax in Germany at a rate of 29.1%. Corporate income tax
of 15.0% (15.0%) and solidarity tax of 5.5% (5.5%) are ap-
plied uniformly to distributed and retained profits. In addi-
tion, municipal trade income tax is payable on profits
generated in Germany. Trade income tax is applied at a
weighted average rate of 13.3% (13.3%), resulting in a total
tax rate of 29.1% (29.1%).
Deferred taxes result from the following:
Intangible assets
Property, plant and equipment
Financial assets
Inventories
Current assets
Noncurrent liabilities
Current liabilities
Tax loss carryforward
Other consolidation transactions
Deferred taxes recognized
Previous
Previous
2010/11
year Change
2010/11
year Change
Deferred tax assets
Deferred tax liabilities
3
114
3,767
9,607
5,774
1,124
5,787
2,287
684
4
118
–1
–4
6,076
–2,309
11,144
–1,537
3,636
404
1,780
2,491
403
2,138
720
4,007
–204
281
7,532
3,896
3,636
13,089
12,277
0
231
2,543
1,181
77
0
4
1
149
1,042
1,254
15
0
4
812
–1
82
1,501
–73
62
0
0
29,147
26,056
3,091
24,657
18,638
6,019
In the year under review, deferred taxes of € –4,873 thou-
sand (€958 thousand), mainly resulting from currency trans-
lation, were directly credited to equity, without recognition in
profit or loss. Of the deferred tax liabilities, €6,790 thousand
(€3,211 thousand) relate to KWS POTATO B.V. Tax loss car-
ryforwards of €1,185 thousand (€3,251 thousand) were re-
garded as not being able to be utilized, with the result that
no deferred tax assets were able to be recognized as an
asset for them. The anticipated taxable profits projected in
the medium-term plans of the companies were used for this
in principle; these plans, which cover a period of four years,
have been approved by the Executive Board. They are
based on historical patterns and expectations about future
market development.
The following schedule reconciles the expected income tax
expense to the reported income tax expense. The calcula-
tion assumes an expected tax expense, applying the
German tax rate to the profit before tax of the entire Group:
Earnings before income taxes
Expected income tax expense*)
Difference in income tax liability
outside Germany
Tax portion for:
Tax-free income
Expenses not deductible
for tax purposes
Temporary differences and
losses for which no deferred
taxes have been recognized
Tax credits
Taxes relating to previous years
Other tax effects
2010/11
109,662
31,912
Previous
year
77,454
22,539
2,764
1,356
2,851
1,947
–19
–255
–557
274
848
–330
–228
215
Reported income tax expense
Effective tax rate
36,741
33,5 %
25,997
33,6 %
*) Tax rate in Germany: 29.1% (29.1)%
Other taxes, primarily real estate tax, are allocated to the
relevant functions.
(23) Personnel costs/employees
Wages and salaries
Social security contributions,
expenses for pension plans
and benefits
2010/11
Previous
year
131,193
117,150
33,780
30,041
164,973
147,191
Personnel costs went up by €17,782 thousand to €164,973
thousand, an increase of 12.1%. The number of employees
(including trainees and interns) increased by 68 (or 1.9%)
to 3,560.
Compensation increased by 12.0% to €131,193 thousand.
Social security contributions, expenses for pension plans
and benefits were €3,739 thousand higher than in the pre-
vious year. An amount of €10,094 thousand (€8,282 thou-
sand) was recognized as an expense for defined contribu-
tion plans, including state pension insurance, in the year
under review.
Employees*
Germany
America
Rest of world
Total
* Annual average
2010/11
Previous
year
1,481
922
1,020
137
3,560
1,426
888
1,070
108
3,492
Of the above number, 634 (662) employees are included
according to the percentage of equity held in the com-
panies that employ them. 1,269 (1,325) employees are
employed by now seven proportionately consolidated in-
vestees. If these persons are included in full, the workforce
total is 4,195 (4,155). The reported number of employees is
greatly influenced by seasonal labor.
–229
–350
Rest of Europe (without Germany)
78
Annual Financial Statements I Notes to the income statement I 79
(24) Net income for the year
Net income for the year increased by €21,465 thousand to
€72,922 thousand, representing a return on sales of 8.5%,
up from 6.8 % in the previous year. The net profit for the pe-
riod after minority interest is €70,253 thousand, and €10.64
(€7.51) for each of the 6,600,000 shares on issue. The ob-
jective of KWS’ capital management activities is to pursue
the interests of shareholders, employees and other stake-
holders in accordance with the corporate strategy. The di-
vidend distributed is geared to the earnings strength of the
KWS Group in order to ensure adequate internal financing of
further business expansion in the long term. The equity ratio is
currently 58.8%, following 57.5% in the previous year.
(25) Total remuneration of the Supervisory Board and
Executive Board and of former members of the Super-
visory Board and Executive Board of KWS SAAT AG
The members of the Supervisory Board receive fixed com-
pensation and variable compensation. The total compen-
sation for members of Supervisory Board amounts to
€438 thousand (€407 thousand), excluding value-added
tax. €160 thousand (€129 thousand) of the total compen-
sation is performance-related.
In fiscal year 2010/2011, total Executive Board compensation
amounted to €2,963 thousand (€2,811 thousand). Variable
compensation of €1,969 thousand (€1,967 thousand), calcu-
lated on the basis of the net profit for the period of the KWS
Group, includes compensation of €29 thousand (€24 thou-
sand) for duties performed in subsidiaries. The fixed com-
pensation includes not only the agreed salaries, but also
non-monetary compensation granted by KWS SAAT AG.
Compensation of former members of the Executive Board
and their surviving dependents amounted to €1,055 thou-
sand (€1,003 thousand). Pension provisions recognized
for this group of persons amounted to €1,726 thousand
(€2,100 thousand) as of June 30, 2011.
(26) Shareholdings of members of the Supervisory
Board and Executive Board
Dr. Arend Oetker indirectly holds a total of 1,650,010 shares
and Dr. Dr. h. c. mult. Andreas J. Büchting 100,020 shares
in KWS SAAT AG. All together, the members of the Super-
visory Board hold 1,750,065 shares in KWS SAAT AG.
All together, the members of the Executive Board hold 5,000
shares in KWS SAAT AG.
(27) Audit of the annual financial statements
On December 16, 2010, the Annual Shareholders’ Meeting
of KWS SAAT AG elected the accounting firm DELOITTE &
TOUCHE GMBH, Hanover, to be the Group’s auditors for
fiscal year 2010/2011.
Fee paid to the external auditors under
section 314 sentence 1 no. 9 of the HGB
2010/11
a) Audit of the consolidated
financial statements
b) Other certification services
c) Tax consulting
d) Other services
Total fee paid
643
8
7
36
694
For fiscal year 2011/2012, fees for consulting services (exclu-
ding auditing) of up to €60 thousand are expected.
(28) Declaration of compliance with the German Cor-
porate Governance Code
KWS SAAT AG has issued the declaration of compliance
with the German Corporate Governance Code required by
section 161 of the Aktiengesetz (AktG – German Stock Cor-
poration Act) and made this accessible to its shareholders
on the company’s home page at www.kws.com.
(29) Related party disclosures
As part of its operations, KWS procures goods and ser-
vices worldwide from a large number of business part-
ners, including companies in which KWS has an interest.
Business dealings with these companies are always con-
ducted on an arm’s length basis; from the KWS Group’s
perspective, these dealings have not been material. As
part of Group financing, short- and medium-term term
loans are taken out from and granted to subsidiaries at
market interest rates. A total of 14 shareholders declared
to KWS SAAT AG in 2002 that as a result of mutual allo-
cations, they respectively hold a total of more than 50%
of the voting rights. No other related parties have been
identified for whom there is a special reporting require-
ment under IAS 24.
(30) Supervisory and Executive Board of KWS SAAT AG
SUPERVISORY BOARD
Dr. Dr. h. c. mult. Andreas J. Büchting
Einbeck
Agricultural Biologist
Chairman of the Supervisory Board
Membership of comparable German and
foreign oversight boards:
•
Ball Horticultural Company, West Chicago,
Illinois (U.S.)*
*since June 17, 2011
Dr. Arend Oetker
Berlin
Businessman
Deputy Chairman of the Supervisory Board
Membership of other legally mandated
Supervisory Boards:
• Schwartauer Werke GmbH & Co. KGaA,
Bad Schwartau (Chairman)
• Cognos AG, Hamburg (Chairman)
Membership of comparable German and
foreign oversight boards:
Cathrina Claas-Mühlhäuser
Frankfurt am Main
Businesswoman
Membership of other legally mandated
Supervisory Boards:
• CLAAS KGaA mbH, Harsewinkel (Chairwoman)
Membership of comparable German and
foreign oversight boards:
• CLAAS KGaA mbH, Harsewinkel
(Deputy Chairwoman of the Shareholders’ Committee)
Dr. Dietmar Stahl
Einbeck
Biochemist
Employee Representative
EXECUTIVE BOARD
Philip von dem Bussche
Philip von dem Bussche
Einbeck
(CEO)
Corporate Affairs, Sugarbeet, Human Resources
• Hero AG, Lenzburg (President)
• E. Gundlach GmbH & Co. KG, Bielefeld
• Leipziger Messe GmbH, Leipzig
• Berliner Philharmonie GmbH, Berlin (Chairman)
Dr. Christoph Amberger
Northeim
Corn, Cereals, Marketing
Hubertus von Baumbach
Ingelheim am Rhein
Businessman
Jürgen Bolduan
Einbeck
Seed Breeding Employee
Chairman of the Central Works Committee
of KWS SAAT AG
Dr. Léon Broers
Einbeck, D/Heythuysen, NL
Research and Breeding, Energy plants
Dr. Hagen Duenbostel
Einbeck
Finance, Controlling, Legal, Information Technology
Membership of legally mandated Supervisory Boards:
• Sievert AG, Osnabrück
SUPERVISORY BOARD
COMMITTEES
Chairman
Members
Audit Committee
Hubertus von Baumbach
Andreas J. Büchting, Cathrina Claas-Mühlhäuser
Committee for Executive
Board Affairs
Andreas J. Büchting
Arend Oetker, Cathrina Claas-Mühlhäuser
Nominating Committee
Andreas J. Büchting
Arend Oetker, Cathrina Claas-Mühlhäuser
80
Annual Financial Statements I Notes I 81
(31) Significant subsidiaries and affiliated companies
The following list of shareholdings of KWS SAAT AG is published in the Electronic Federal Gazette:
Subsidiaries and associated companies, which were included in the consolidated group1)
Sugarbeet
Corn
Cereals
Breeding & Services
100% BETASEED INC.2)
100% KWS MAIS GMBH
81% KWS LOCHOW GMBH
100% PLANTA ANGEWANDTE
Shakopee, MN/U.S.
Einbeck
100% KWS FRANCE S.A.R.L.
100% KWS BENELUX B.V.5)
Bergen
100% KWS UK LTD.7)
Amsterdam/Netherlands
Thriplow/UK
PFLANZENGENETIK UND
BIOTECHNOLOGIE GMBH**
Einbeck
100% KWS LOCHOW
100% KWS INTERSAAT GMBH
100% KWS SEMENA S.R.O.5)
Zahorska Ves/Slovakia
100% KWS MAIS FRANCE S.A.R.L.5)
Sarreguemines/France
100% KWS AUSTRIA SAAT GMBH5)
Vienna/Austria
100% KWS SJEME D.O.O.5)
POLSKA SP.Z O.O.7)
Kondratowice/Poland
100% KWS CEREALS USA LLC.7)
Shakopee, MN/U.S.
49% SOCIETE DE MARTINVAL S.A.8)*
Mons-en-Pévèle/France
Pozega/Croatia
100% SA MOMONT HENNETTE14)
100% KWS OSIVA S.R.O.5)
Mons-en-Pévèle/France
Velke Mezirici/Czech Republic
95% SARL LABOGERM14)
100% KWS SEMENA BULGARIA
Mons-en-Pévèle/France
100% SARL ADRIEN MOMONT14)
Mons-en-Pévèle/France
100% SCA HAMET14)
Mons-en-Pévèle/France
E.O.O.D.5)
Sofia/Bulgaria
100% AGROMAIS GMBH5)
Everswinkel
100% KWS MAGYARORSZÁG KFT.5)
Györ/Hungary
100% KWS SEMINTE S.R.L.13)
Bucharest/Romania
98% KWS ARGENTINA S.A.5)
Balcarce/Argentina
51% RAZES HYBRIDES S.A.R.L.3)
Alzonne/France
50% AGRELIANT GENETICS LLC.6)*
Westfield, IN/U.S.
50% AGRELIANT GENETICS INC.*
Chatham, Ontario/Canada
Einbeck
100% KWS SEEDS INC.9)
Shakopee, MN/U.S.
100% GLH SEEDS INC.2)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Shakopee, MN/U.S.
KWS SAATFINANZ GMBH
Einbeck
KWS KLOSTERGUT
WIEBRECHTSHAUSEN GMBH
Northeim-Wiebrechtshausen
EURO-HYBRID GESELLSCHAFT
FÜR GETREIDEZÜCHTUNG MBH
Einbeck
O.O.O. KWS R&D RUS11)
Lipezk/Russia
RAGIS KARTOFFELZUCHT- UND
HANDELSGESELLSCHAFT MBH
Einbeck
KWS R&D CHINA LTD.15)
Hefei/China
KWS SERVICES DEUTSCHLAND
GMBH
Einbeck
KWS SERVICES EAST GMBH
Vienna/Austria
KWS SERVICES NORTH B.V.
Amsterdam/Netherlands
KWS SERVICES
MEDITERRANEAN S.A.S.
Roye/France
Roye/France
100% DELITZSCH
PFLANZENZUCHT GMBH10)
Einbeck
100% O.O.O. KWS RUS12)
Lipezk/Russia
100% KWS ITALIA S.P.A.
Forli/Italy
100% KWS POLSKA SP.Z O.O.
Poznan/Poland
100% KWS SCANDINAVIA A/S10)
Guldborgsund/Denmark
100% KWS SEMILLAS IBERICA S.L.10)
Zaratán/Spain
100% SEMILLAS KWS CHILE LTDA.
Rancagua/Chile
100% KWS SEME YU D.O.O.
New Belgrade/Serbia
100% KWS SUISSE SA
Basle/Switzerland
100% ACH SEEDS INC.4)
Eden Prairie, MN/U.S.
100% BETASEED FRANCE S.A.R.L.4)
Sarreguemines/France
100% BETASEED Ltd.4)
Rothwell/UK
100% KWS UKRAINE T.O.W.4)
Kiev/Ukraine
100% KWS TÜRK TARIM TICARET A.S.10)
Eskisehir/Turkey
100% KWS POTATO B.V.17)
Emmeloord/Netherlands
85% VAN RIJN UK LTD.16)
Donington/UK
70% VAN RIJN FRANCE S.A.R.L.16)
Bazemont/France
67% VAN RIJN BALCAN S.R.L.16)
Vulcan/Romania
83% DYNAGRI S.A.R.L.16)
Casablanca/Morocco
(32) Proposal for the appropriation of net retained profits
KWS SAAT AG posted operating income of €24,170 thou-
sand compared with €12,671 thousand for the previous year.
Allowing for net financial income/expenses of €6,166 thou-
sand and income taxes totaling €4,982 thousand, net in-
come in accordance with the German commercial law regu-
lations was €15,900 thousand (€12,150 thousand). Adding
the net profit of €40 thousand brought forward from the
previous year, a net retained profit of €15,940 thousand is
available for distribution.
A proposal will be made to the Annual Shareholders’ Meeting
that an amount of €15,180,000 of KWS SAAT AG’s net retained
profit should be distributed as a dividend of €2.10 (€1.90), plus
a bonus dividend of €0.20, for each of the 6,600,000 shares.
The balance of €760,000 is to be carried forward to the
new account.
Declaration by legal representatives
We declare to the best of our knowledge that the con-
solidated financial statements give a true and fair view of
the assets, financial position and earnings of the Group
in compliance with the generally accepted standards of
consolidated accounting, and that an accurate picture
of the course of business, including business results, and
the Group’s situation is conveyed by the Group Manage-
ment Report, and that it describes the main opportunities
and risks of the Group’s anticipated development.
Einbeck, October 20, 2011
KWS SAAT AG
THE EXECUTIVE BOARD
P. von dem Bussche
Ch. Amberger
L. Broers
H. Duenbostel
* Proportional consolidation
** Profit transfer agreement
1) The percentages stated relate to the interest held by the parent
2) Subsidiary of KWS SEEDS INC.
3) Subsidiary of KWS FRANCE S.A.R.L.
4) Subsidiary of BETASEED INC.
5) Subsidiary of KWS MAIS GMBH
6) Investee of GLH SEEDS INC.
Subsidiary of KWS LOCHOW GMBH
Investee of KWS LOCHOW GMBH
Subsidiary of KWS INTERSAAT GMBH und KWS SAAT AG SAAT AG
7)
8)
9)
10) Subsidiary of KWS INTERSAAT GMBH
11) Subsidiary of O.O.O. KWS RUS
12) Subsidiary of EURO HYBRID GMBH und KWS SAATFINANZ GMBH
13) Subsidiary of KWS MAIS GMBH und KWS SAATFINANZ GMBH
14) Subsidiary of SOCIETE DE MARTINVAL S.A.
15) Subsidiary of EURO HYBRID GMBH
16) Subsidiary of KWS POTATO B.V.
17) Subsidiary of RAGIS GMBH
June 30, 2011
82
Annual Financial Statements I Notes I 83
Auditors’ Report
We have audited the annual financial statements of the KWS
Group – consisting of the Balance sheet, the Statement of
comprehensive income, the Notes, the Cash flow state-
ment, Segment reporting and the Statement of changes in
equity – and the Group Management Report for the fiscal
year from July 1, 2010, to June 30, 2011, all of which were
prepared by KWS SAAT AG, Einbeck. The preparation of
the consolidated financial statements and the Group Ma-
nagement Report according to the International Financial
Reporting Standards (IFRS) as applicable in the EU, and in
addition according to the commercial law regulations to be
applied pursuant to Section 315a (1) of the HGB (German
Commercial Code), is the responsibility of the Executive
Board of the company. Our task is to give, on the basis of the
audit we have conducted, an opinion on the consolidated
financial statements and the Group Management Report.
We conducted our audit of the annual financial statements
in accordance with Section 317 HGB and the generally ac-
cepted standards for the audit of financial statements pro-
mulgated by the Institut der Wirtschaftsprüfer (German In-
stitute of Certified Public Accountants). According to these
standards, the audit must be planned and executed in such
a way that misstatements and violations materially affecting
the presentation of the view of the assets, financial position
and earnings conveyed by the consolidated financial state-
ments, taking into account the applicable regulations on
orderly accounting, and by the Group Management Report
are detected with reasonable certainty. Knowledge of the
business activities and the economic and legal operating
environment of the Group and evaluations of possible er-
rors are taken into account. The effectiveness of the inter-
nal accounting control system and the evidence supporting
the disclosures in the consolidated financial statements and
the Group Management Report are evaluated mainly on
the basis of test samples within the framework of the audit.
The audit includes the assessment of the annual financial
statements of the companies included in the consolidated
financial statements, the definition of the companies con-
solidated, the accounting and consolidation principles used
and any significant estimates made by the Executive Board,
as well as the evaluation of the overall presentation of the
consolidated financial statements and the Group Manage-
ment Report. We believe that our audit provides a reasona-
ble basis for our opinion.
On the basis of our audit, we have no reservations to note.
In our opinion pursuant to the findings gained during the
audit, the consolidated financial statements of KWS SAAT
AG, Einbeck, comply with the IFRS as applicable in the EU,
and in addition with the commercial law regulations to be
applied pursuant to Section 315a (1) of the HGB (German
Commercial Code), and give a true and fair view of the as-
sets, financial position and earnings of the Group, taking
into account these regulations. The Group Management
Report accords with the consolidated financial statements,
conveys overall an accurate view of the Group’s position
and accurately presents the opportunities and risks of fu-
ture development.
Hanover, October 20, 2011
Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
(Kompenhans)
Auditor
(Bukowski)
Auditor
84
Key figures of the KWS Group
Figures in € millions. unless otherwise specified (IFRS)
KWS worldwide
Fiscal year
Net sales
Operating income (= EBIT)
as a % of net sales (= ROS)
Net income
as a % of net sales
Operative cash flow
Net cash from investing activities
Equity
Equity ratio in %
2010/11
2009/10
2008/09
2007/08
2006/07
855.4
754.1
717.2
599.1
537.9
116.6
13.6
72.9
8.5
101.2
–52.4
530.3
58.8
82.4
10.9
51.5
6.8
27.4
–55.4
492.9
57.5
77.9
10.9
50.1
7.0
82.0
70.1
11.7
54.6
9.1
74.6
–59.4
–18.1
434.5
398.0
57.5
59.3
671.1
15.3
9.2
63.9
11.9
38.2
7.1
51.1
–26.7
366.1
60.0
609.8
11.6
6.8
Balance sheet total
902.0
857.4
756.0
Return on equity in %
Return on assets in %
15.2
8.8
12.2
7.1
13.0
7.8
Fixed assets
290.1
275.2
231.9
197.1
189.4
Capital expenditure
Depreciation
49.3
27.6
58.4
22.0
Average number of employees
3,560
3,492
Personnel costs
165.0
147.2
Performance of KWS shares in €
Dividend per share
Earnings per share
Operative cash flow per share
Equity per share
2.30*
10.64
15.33
80.35
1.90
7.51
4.15
74.68
61.1
23.3
3,215
135.0
1.80
6.98
12.42
65.83
30.4
17.0
2,856
119.0
1.70
7.74
11.30
60.31
27.2
16.1
2,739
111.3
1.40
5.61
7.74
55.47
* €2.10 dividend plus €0.20 bonus dividend
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Financial calendar
November 25, 2011
December 14, 2011
February 24, 2012
May 24, 2012
October 18, 2012
November 29, 2012
December 13, 2012
Key data of KWS SAAT AG
Securities identification number
ISIN
Stock exchange identifier
Transparency level
Index
Share class
Number of shares
Capital stock at June 30, 2011
Share price high June 13, 2011 (Xetra)
Share price low July 20, 2010 (Xetra)
Average number of shares traded
– in Xetra
– in floor trading in Frankfurt
Report on the 1st quarter of 2011/2012
Annual Shareholders’ Meeting in Einbeck
Report on the 2nd quarter of 2011/2012
Report on the 3rd quarter of 2011/2012
Publication of 2011/2012 financial statements
Annual press conference in Frankfurt;
Analyst conference in Frankfurt
Report on the 1st quarter of 2012/2013
Annual Shareholders’ Meeting in Einbeck
707400
DE0007074007
KWS
Prime Standard
SDAX
Individual share certificates
6,600,000
€19,800,000
€166.95
€116.00
4,021
307
• Breeding stations
• Trial locations
Seeding the Future
Working at the highest levels of quality, we breed new varieties for the moderate climatic zone to produce
seed for sugarbeet, corn, cereals, oil seed and potatoes. In doing so, we make a significant contribution to
high-yield agriculture. Our varieties are precisely tailored to the needs and requirements of our customers in
over 70 countries around the world. That demands a global network of breeding and trial stations so that
our seed can be adapted to the local conditions typical of our markets. As part of this process, we are
committed to careful use of natural resources at all times.
KWS Saat aG
Grimsehlstrasse 31 • 37555 Einbeck • P.O. Box 1463
Phone +49 (0) 5561/311-0 • Fax +49 (0) 5561/311-322
www.kws.com • E-mail: info@kws.com
This translation of the original German version of the Annual Report has
been prepared for the convenience of our English-speaking shareholders.
The German version is legally binding.
Photos/Illustrations:
Eberhard Franke • Michael Löwa • Stefan Blume • KWS Group archive
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2010 I 2011
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