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Key figures of the KWS Group
Figures in € millions. unless otherwise specified (IFRS)
KWS is the independent
seed company for farmers
in the 21st century.
Fiscal year
Net sales
2011/12
2010/11
2009/10
2008/09
2007/08
986.3
855.4
754.1
717.2
599.1
Operating income (= EBIT)
140.9
116.6
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 %
14.3
94.4
9.6
104.2
–56.6
13.6
72.9
8.5
101.2
–52.4
603.1
530.3
55.2
58.8
82.4
10.9
51.5
6.8
27.4
–55.4
492.9
57.5
Balance sheet total
1,092.3
902.0
857.4
756.0
Return on equity in %
Return on assets in %
18.3
10.7
15.2
8.8
12.2
7.1
13.0
7.8
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
Fixed assets
378.2
290.1
275.2
231.9
197.1
Capital expenditure
Depreciation
Average number of employees
Personnel costs
Performance of KWS shares in €
Dividend per share
Earnings per share
Operative cash flow per share
Equity per share
111.5
28.4
3,851
182.5
2.80
13.89
15.79
91.38
49.3
27.6
58.4
22.0
3,560
3,492
165.0
147.2
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
We are committed to
sustainable agriculture
and the responsible use
of natural resources.
We concentrate on develop-
ing top-quality seed for the
diverse needs of farmers and
society as a whole.
We see ourselves as a
reliable partner, specialist
and expert adviser dedicated
to the sustainable success
of farmers.
Financial calendar
November 29, 2012
December 13, 2012
February 26, 2013
May 28, 2013
October 23, 2013
December 19, 2013
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, 2012
Share price high June 29, 2012 (Xetra)
Share price low August 22, 2011 (Xetra)
Average number of shares traded
– in Xetra
– in floor trading in Frankfurt
Report on the 1st quarter of 2012/2013
Annual Shareholders’ Meeting in Einbeck
Report on the 2nd quarter of 2012/2013
Report on the 3rd quarter of 2012/2013
Publication of 2012/2013 financial statements
Annual press conference in Frankfurt;
Analyst conference in Frankfurt
Annual Shareholders’ Meeting in Einbeck
707400
DE0007074007
KWS
Prime Standard
SDAX
Individual share certificates
6,600,000
€19,800,000
€205.00
€131.40
3,735
246
KWS Saat aG
Grimsehlstrasse 31 • 37555 Einbeck/Germany • 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 • Dominik Obertreis • Kevin Zhang • Corinna Lerch • Corbis Images • KWS Group archive
Key figures of the KWS Group
Figures in € millions. unless otherwise specified (IFRS)
KWS is the independent
seed company for farmers
in the 21st century.
Fiscal year
Net sales
2011/12
2010/11
2009/10
2008/09
2007/08
986.3
855.4
754.1
717.2
599.1
Operating income (= EBIT)
140.9
116.6
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 %
14.3
94.4
9.6
104.2
–56.6
13.6
72.9
8.5
101.2
–52.4
603.1
530.3
55.2
58.8
82.4
10.9
51.5
6.8
27.4
–55.4
492.9
57.5
Balance sheet total
1,092.3
902.0
857.4
756.0
Return on equity in %
Return on assets in %
18.3
10.7
15.2
8.8
12.2
7.1
13.0
7.8
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
Fixed assets
378.2
290.1
275.2
231.9
197.1
Capital expenditure
Depreciation
Average number of employees
Personnel costs
Performance of KWS shares in €
Dividend per share
Earnings per share
Operative cash flow per share
Equity per share
111.5
28.4
3,851
182.5
2.80
13.89
15.79
91.38
49.3
27.6
58.4
22.0
3,560
3,492
165.0
147.2
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
We are committed to
sustainable agriculture
and the responsible use
of natural resources.
We concentrate on develop-
ing top-quality seed for the
diverse needs of farmers and
society as a whole.
We see ourselves as a
reliable partner, specialist
and expert adviser dedicated
to the sustainable success
of farmers.
Financial calendar
November 29, 2012
December 13, 2012
February 26, 2013
May 28, 2013
October 23, 2013
December 19, 2013
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, 2012
Share price high June 29, 2012 (Xetra)
Share price low August 22, 2011 (Xetra)
Average number of shares traded
– in Xetra
– in floor trading in Frankfurt
Report on the 1st quarter of 2012/2013
Annual Shareholders’ Meeting in Einbeck
Report on the 2nd quarter of 2012/2013
Report on the 3rd quarter of 2012/2013
Publication of 2012/2013 financial statements
Annual press conference in Frankfurt;
Analyst conference in Frankfurt
Annual Shareholders’ Meeting in Einbeck
707400
DE0007074007
KWS
Prime Standard
SDAX
Individual share certificates
6,600,000
€19,800,000
€205.00
€131.40
3,735
246
KWS Saat aG
Grimsehlstrasse 31 • 37555 Einbeck/Germany • 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 • Dominik Obertreis • Kevin Zhang • Corinna Lerch • Corbis Images • KWS Group archive
Table of contents
7
8
12
15
15
16
18
19
22
25
30
32
34
38
39
44
48
49
Foreword of the Executive Board
Spotlight topic: Where corn grows fastest – KWS in Brazil
Report of the Supervisory Board
Declaration regarding Corporate Governance
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
• Corporate
• Corn Segment
• Sugarbeet Segment
• Cereals Segment
• Outlook for the fiscal year 2012/2013
• Employees
• Risks for future development
• Disclosures in accordance with Section 315 (4) HGB
(German Commercial Code)
Annual Financial Statements of the KWS Group 2011/2012
Foreword of the Executive Board
Our company is continuing on its impressive path to suc-
cess. As the world’s population grows, so does the demand
for food. Agriculture must deliver the answers to that de-
mand. KWS’ solution is to continuously improve the per-
formance of its plant varieties and the technical quality of
its seed, enabling its customers – the world’s farmers – to
steadily increase their productivity per unit area and their
yield. For fiscal 2011/2012, we are again able to report
strong growth in all segments. The KWS Group with its 62
subsidiaries and associated companies and a workforce
totaling 3,850 people generated net sales of €986 million,
a year-on-year rise of 15%. Operating income grew by 21%
to €141 million, giving an EBIT margin of just over 14%. The
key factor in this success is our outstanding and excep-
tionally committed colleagues throughout the world. Our
thanks go out to them for their exemplary dedication.
All three product segments – Corn, Sugarbeet and Cereals –
again contributed to this above-average success for the
Group. Apart from our strong position in our home market
of Germany, we were able to increase sales volumes signifi-
cantly in North America, France, Southeastern Europe, Rus-
sia and Ukraine in particular.
These good results mean that we are continuing to consoli-
date our position among the world’s top seed companies.
Every year we offer improved solutions for the vital future
market of food and for the bioenergy sector to the bene-
fit of our customers worldwide. Our portfolio comprises a
broad range of sugarbeet, corn and cereal seed, as well as
oil seed and seed potatoes.
We have a presence in around 70 countries throughout the
world. We have strengthened the KWS brand in all impor-
tant growth regions, for instance in China, where we have
operated for more than 30 years and which, with 31 mil-
lion hectares, is the second-largest corn market in terms of
area after the U.S. In 2011, we expanded cooperation with
our longstanding partners Kenfeng in Heilongjiang Province
and Condy in Xinjiang and thus boosted our market posi-
tion in the north and northwest of the country. In addition to
our wholly owned research subsidiary in Hefei, we intend to
keep on expanding our cooperation with Chinese partners
in the form of joint ventures and license agreements.
In June 2012 we broke new ground in the Corn Segment
by launching business activities in Brazil, where we were
able to acquire two corn breeding companies. We have also
taken a majority stake in the production and distribution
company Riber Sementes Ltda. as part of a partnership
in order to quickly gain a foothold in what is still a largely
unfamiliar market for us in South America. As a result, KWS
now has a presence with its own subsidiaries in Brazil, the
world’s third-largest corn market, with a cultivation area of
some 15 million hectares.
Modern plant breeding is high-tech work in which we steadily
improve our seed. Every year, we invest between 10% and
15% of our revenue in research & development. In the year
under review, we again increased our expenditure on product
development by just over 11% to €127 million in order to keep
on improving our competitiveness. We see this as the most
vital strategy in safeguarding our sustainability.
A sustainable corporate policy also means offering you, our
shareholders, as continuous as possible a return on your
investment. Our share performance and dividend are key
measures of this. In the past ten years, our share price has
increased by more than 400%, while the comparative index
SDAX rose by 97% and the DAX by around 41% in the same
period of time. The Executive Board will propose to the next
Annual Shareholders’ Meeting a dividend of €2.80 a share
for fiscal year 2011/2012.
This Annual Report once again proves: We are on the
right track.
On behalf of the entire Executive Board, I offer my best
regards from Einbeck.
Philip von dem Bussche,
Chief Executive Officer
Foreword of the Executive Board I 7
from left: Philip von dem Bussche (CEO) – Corporate Affairs, Sugarbeet, Human Resources
Dr. Christoph Amberger – Corn, Cereals, Marketing
Dr. Hagen Duenbostel – Finance, Controlling, Information Technology, Legal
Dr. Léon Broers – Research & Breeding, Energy plants
Where corn grows fastest – KWS in Brazil
Corn is now the most important crop in terms of productivity per unit area. This versatile crop is cultivated
worldwide on 162 million hectares. North America, China and Europe are the largest corn seed markets
in the moderate climatic zone. By systematically expanding our grain corn breeding operations, we have
become the third-largest corn breeder in these markets in the past ten years. We keep on working to
secure and build on this position. By moving into Brazil, KWS is now extending its activities to the world’s
third-largest corn market – one that also has the strongest growth potential.
Brazil is a huge country, making up almost 50% of South
America’s area and almost as big as the U.S. Its strength
has always been based mainly on agriculture, which ac-
counts for 35% of exports – as much as the country’s en-
tire industrial segment. Compared to German agriculture,
which accounts for less than 1% of exports, it is therefore
an immensely important sector. But if you associate Brazil
primarily with cane sugar and coffee, you are still living in
the 1970s: The main export of the agricultural sector is now
soybeans – followed by meat. In the past 20 years, beef
production has risen by around 100%, pork production
by 200% and poultry production by 350%, turning Brazil
into the world’s third-largest meat exporter and the largest
beef exporter. That’s why Brazil’s most important crop after
soybeans is corn. Some 90% of the annual corn harvest is
needed as feed for Brazilian production – and that figure
is increasing. More than 10 million tons of corn are still im-
ported each year to cover needs.
Safra and safrinha – harvest after harvest
Reflecting the world rankings for meat production, Brazil
is the country with the largest corn cultivation area after
the U.S. and China. Yet it has the greatest potential for in-
creasing productivity further in the near future. Corn was
sown on 15 million hectares of farmland in Brazil in 2011 –
and corn production is forecast to increase by 26% by 2025
if the cultivation area remains the same. Mechanization of
agriculture is well advanced compared to other dynamically
KWS locations in Brazil
Corn growing areas
Primary corn growing areas
Brasilia
Petrolina: Breeding station
Magalhaes: Breeding station
Formosa: Trial location
Patos de Minas: Headquarters RIBER-KWS
growing markets such as China and India. The farms have
a very large-scale structure, especially in the main corn
cultivation region in the south of the country, and have
an average size of 150 to 200 hectares. However, farms
with several hundred thousand hectares are not unusu-
al. That not only has a positive impact on efficiency and
thus on investment in technology, but also indirectly on
yields. Around 4 tons of corn per hectare are achieved
today, compared with just 2 tons in India. The U.S. shows
what is possible if innovations in the sector are leveraged
optimally: An average of 10 tons of corn per hectare are
harvested in the U.S. There is no doubt that Brazil is
aiming to exploit its existing potential. The general condi-
tions for highly productive farming exist.
Plant breeding will make a key contribution to achieving
the forecast increases in productivity. The increased use
of hybrid corn results in a progress in yields in absolute
terms, while genetically modified varieties help protect the
harvest. Since 2007, use of this technology has increased
to about 60%. While farm-saved seed is used on just over
half of the cultivation area in India, the figure in Brazil is
Londrina: Breeding station
Campo Largo: Breeding station
Rio de Janeiro
São Paulo
Passo Fundo: Trial location
Thanks to the constant and warm climate, corn can be planted at any
time of the year in some regions of Brazil provided it is watered. Our
seed production is therefore independent of the rainy season.
In 20 years’ time, Brazil could feed 40% of the world’s population – and
not at the expense of its precious rainforest, but through more efficient
and improved agricultural technologies, such as here on a large farm
in Mato Grosso.
only 2% – farmers put their money on quality seed. A fur-
ther dynamic boost to the corn seed market comes from
the growing importance of the winter harvest. In some re-
gions of Brazil’s lowlands, there are two harvests a year –
“safra” and “safrinha.” The lion’s share of corn is produced
as a summer crop in the first harvest. Safrinha, the win-
ter harvest, is sown between January and April after the
early-maturing soybean varieties. It is expected to increase
by more than 50% by 2015.
Breeding in best company – Riber and KWS
As can be expected, the process of consolidation is well
advanced in this attractive and dynamically growing seed
market. We are therefore delighted to have found excellent
partners for our business activities in Brazil. By acquiring
the breeding companies Semília and Delta, KWS now has
a diverse gene pool of Brazilian corn and a total of four
breeding stations in the states of Bahia and Paraná – excel-
lent prerequisites for developing varieties for its own dis-
tribution. Corn is grown largely in Central and Southern
Brazil, above all in the states of São Paulo, Rio Grande
do Sul, Paraná, Mato Grosso and Minas Gerais, where
the production and distribution company Riber, in which
we have acquired a stake, is headquartered. Our partner
and co-owner Cláudio Nasser de Carvalho will manage
RIBER-KWS and contribute his outstanding knowledge of
products and the market, as well as a broad distribution
network in all of Brazil’s major corn regions.
Thanks to this partnership, we cover the whole seed value
chain, from breeding to production to distribution – in line
with KWS’ proven model. Our experience with the prin-
ciple of integration has been a good one. The continuing
cooperation with the previous owners, breeders and em-
ployees of Delta, Semília and Riber will be of particular
benefit. As a result, we can unite Brazilian product know-
how, our global breeding network, cutting-edge technol-
ogy and direct access to key customers under one roof.
8
Spotlight topic I 9
››
The most important resource for
the future is our biodiversity.
Exotic corn lines sometimes have valuable traits we can use for our
agricultural varieties. That means DNA detective work on my part.
Dr. Helena Sofia Pereira da Silva, corn breeder, KWS SAAT AG ‹‹
H / Orange Box Head 65 Medium 20 pt white I / Orange Box Copy 55 Roman 9 pt white I / Orange Box Copy 55 Roman 9 pt white I / Orange Box Copy 55 Roman 9 pt white Report of the Supervisory Board
company was run properly and in compliance with the law
and that it was organized efficiently and cost-effectively. Both
boards successfully continued their constructive coopera-
tion based on mutual trust. Among other things, this was
demonstrated by the fact that, as is customary, the Supervi-
sory Board was involved in all decisions of fundamental im-
portance to the company at an early stage. The Supervisory
Board was provided with the necessary information in writ-
ten and oral form regularly, promptly and comprehensively.
This included all key information on relevant questions of
strategy, planning, the business performance and situation
of the company and the KWS Group, including the risk sit-
uation, risk management and compliance. Business trans-
actions requiring consent were submitted to and discussed
and approved by the Supervisory Board in compliance with
the bylaws for the Executive Board. The company’s busi-
ness policy, corporate and financial planning, profitability
and situation, the general development of the various busi-
nesses, market trends and the competitive environment, re-
search and product development and, along with important
individual projects, risk management at the KWS Group
were also the subject of detailed discussions. The Chairman
of the Supervisory Board continued his 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 Chairman of the Supervisory Board
and the Executive Board as a whole, where the company’s
current business development and, in particular, its strategy,
occurrences of special importance and risk management
were dealt with. The Chairman of the Supervisory Board
informed the Supervisory Board of the results of these
meetings. The Supervisory Board did not make use of its right
to conduct an examination as granted by Section 111 (2) AktG
(German Stock Corporation Act), since the reporting by the
Executive Board meant there was no reason to do so.
The full Supervisory Board held five regular meetings in
fiscal 2011/2012. Its members participated in all of the
meetings, with the exception of two members who were
each unable to attend one meeting.
Focal areas of deliberations
The meeting of the Supervisory Board to discuss the finan-
cial statements on October 26, 2011, was devoted to exam-
ining and approving the financial statements of KWS SAAT
AG and the consolidated financial statements of the KWS
Group as of June 30, 2011. In addition, the Supervisory Board
discussed the details of the cooperation between KWS and
Vilmorin in the development of genetically improved traits
for corn. The results of the 2010/2011 efficiency review were
also discussed. The focus of the meetings on December 13
and 14, 2011, was on the KWS Group’s strategic planning,
which covers a ten-year period, and on the expansion of ac-
tivities in Eastern Europe. The current performance of cereal
and rapeseed breeding compared with the competition was
also presented. This was followed on April 25, 2012, by ex-
tensive information on the progress of sugarbeet and corn
breeding and the status of all important research projects.
In addition, the Supervisory Board gave its consent to KWS’
investment in the Brazilian corn market and the related
acquisitions at this meeting.
In the final meeting of the Supervisory Board in fiscal year
2011/2012, on June 20, 2012, the Supervisory Board ap-
proved the planning for fiscal 2012/2013 and relevant medi-
um-term planning up to 2015/2016, including extensive proj-
ects to expand our production capacities for sugarbeet and
corn seed. In addition, the survey of the Supervisory Board
aimed at avoiding and identifying fraud was also conducted.
No fraudulent acts are known to the Supervisory Board.
Annual and consolidated financial statements
and auditing
Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft,
Hanover, the auditor chosen at the Annual Shareholders’
Meeting on December 14, 2011, 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 Ger-
man Commercial Code (HGB) for fiscal 2011/2012 and the
financial statements of the KWS Group (IFRS consolidated
financial statements), as well as the Management Report of
KWS SAAT AG and the KWS Group Management Report,
including the accounting reports, and awarded them its un-
qualified audit certificate. In addition, 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 (2) of the German Corporate Governance Code).
The Supervisory Board received and discussed the financial
statements of KWS SAAT AG and the consolidated financial
statements and Management Reports of KWS SAAT AG and
the KWS Group, along with the report of the independent au-
ditor of KWS SAAT AG and the KWS Group and the proposal
on utilization of the net profit for the year made by KWS SAAT
AG, in due time. The financial statements, Management Re-
ports and audit reports of 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 17,
2012. The auditors took part in the meeting and reported
on the main results of the audit and were 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 rela-
tion to the accounting process. There were also no circum-
stances that might indicate a lack of impartiality on the part
of the independent auditor. The small extent of services ad-
ditionally provided by the independent 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,
among other things as a result of the vote by the Audit Com-
mittee and did not raise any objections. The Supervisory
Board gave its consent to the annual financial statements of
KWS SAAT AG prepared by the Executive Board and to the
consolidated financial statements of the KWS Group, along
with the Management Reports of KWS SAAT AG and the
KWS Group. The financial statements are thereby approved.
The Supervisory Board also endorses the proposal 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 Supervisory Board’s efficiency review was conducted
for fiscal 2011/2012 in the form of a questionnaire that was
to be completed anonymously and was created and eval-
uated by Deutsche Agentur für Aufsichtsräte, a company
that advises supervisory boards. It found that the efficiency
and quality of the work performed by the Supervisory Board
of KWS SAAT AG as a monitoring and control body com-
plies with best practices. As in the previous year, the re-
commendations of the Deutsche Agentur für Aufsichts-
räte were adopted and implemented without exception.
At their meeting on October 17, 2012, the Executive Board
and Supervisory Board discussed updating the declara-
tion of compliance from October 2011 and issued a new
declaration in accordance with section 161 AktG (German
Stock Corporation Act). Like previous declarations, it is al-
ways available to the public on the company’s Internet site.
The Supervisory Board regularly addressed the question
of any conflicts of interest on the part of its members and
those of the Executive Board. In the year under review, such
conflicts of interests, which are to be disclosed immediately
to the Supervisory Board or reported to the Annual Share-
holders’ Meeting, did not occur.
Report of the Supervisory Board I 13
Dr. Dr. h.c. mult. Andreas J. Büchting,
Chairman of the Supervisory Board
Fiscal 2011/2012 was a year of further operational growth
and important decisions about our strategic direction. Af-
ter adjustment for all special effects, the KWS Group was
able to post solid growth in net sales and income. At the
same time, we expanded our distribution structures and
production capacities and increased our research budget –
and as a whole initiated extensive measures to secure the
company’s future. This is reflected in our capital expenditure
of around €110 million (previous year: €49.3 million), which
also included our new commitment in Brazil. New markets
like Brazil and China will make a significant contribution to
the KWS Group’s net sales as early as the current fiscal
year. However, organic growth is founded on our innovative
strength. Given the long development cycles in our industry,
we have to make decisions that have a long-term impact
and thus need to be discussed intensively by the Supervi-
sory Board. This includes, for example, the decision to es-
tablish a breeding program for tropical corn in Brazil or for
winter wheat in North America.
In the past fiscal year, the Supervisory Board advised and
monitored the Executive Board of KWS SAAT AG in its
activities and carefully supported it in all fundamental de-
cisions of vital importance for the company, in accordance
with the law, the company’s Articles of Association and the
bylaws. The Supervisory Board satisfied itself that the
12
Supervisory Board Committees
The Supervisory Board of KWS has an Audit Committee, a
Committee for Executive Board Affairs and a Nominating
Committee. In fiscal year 2011/2012, the committees dealt
with the following subjects.
extensive network. The Nominating Committee did not
therefore follow the general suggestion in the bylaws for
the Supervisory Board of KWS SAAT AG (Section 6 (2))
to the effect that a candidate should not be 70 or older
when nominated.
The Audit Committee convened for two joint meetings
in fiscal 2011/2012 and also held three telephone con-
ferences. In its meeting on October 18, 2011, the Audit
Committee discussed the 2010/2011 annual financial
statements and accounting of KWS SAAT AG and con-
solidated financial statements of the KWS Group. The
Annual Compliance Report and the results of the audit-
ing projects were on the agenda on April 25, 2012. The
audit plan for fiscal 2012/2013 was also discussed and
adopted. In addition, there was an exchange of informa-
tion and ideas with an acknowledged expert in the field
of international accounting at the meeting. The quarterly
reports and the semiannual report for fiscal 2011/2012
were discussed in detail in the telephone conferences
on November 21, 2011, February 22, 2012, and May 21,
2012. All reports 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 monitored the auditor’s independence. The Audit
Committee also satisfied itself that the regulations on in-
ternal rotation pursuant to Section 319 a (1) No. 4 HGB
were observed by the independent auditor. The Audit
Committee convened on September 24, 2012, to discuss
the annual financial statements of KWS SAAT AG and
KWS’ consolidated financial statements and account-
ing. The independent auditor explained the results of its
audit of the 2011/2012 financial statements and pointed
out that there were no grounds for assuming a lack of
impartiality on the part of the independent auditor in its
audit. The Audit Committee also dealt with the propos-
al by the Executive Board on the appropriation of the
net retained profit of KWS SAAT AG and recommended
that the Supervisory Board approve it. The Supervisory
Board of KWS SAAT AG is to be elected on December 13,
2012. On July 10, 2012, the Nominating Committee
proposed all the current shareholder representatives for
reelection as the Supervisory Board’s nominations to the
Annual Shareholders’ Meeting. The Supervisory Board un-
animously welcomed this proposal and in particular the
willingness of Dr. Arend Oetker to stand for reelection,
noting that his involvement is of special importance to
KWS given his business experience, strategic vision and
The deliberations of the Committee for Executive Board
Affairs in the year under review focused on the future as-
signment of responsibilities on the Executive Board and
creation of the profile for the Chief Financial Officer, a
function that is to be filled by a new person. Dr. Hagen
Duenbostel will take charge of the Corn Segment and
relinquish his previous functions effective July 1, 2013,
at the proposal of the Committee for Executive Board
Affairs and pursuant to the decision by the Supervisory
Board on March 14, 2012. He will therefore succeed
Dr. Christoph Amberger, who will not extend his contract
when it expires on June 30, 2013, for personal reasons.
The Supervisory Board respects the personal decision
of Christoph Amberger while also regretting it in view of
the excellent contributions he has made to KWS’ business
development. Responsibility for the Cereals Segment will
be assumed by Philip von dem Bussche, whose contract
has been extended until the Annual Shareholders’ Meeting
in December 2014, and thus to when he turns 65, at the
proposal of the Committee for Executive Board Affairs and
pursuant to the decision by the Supervisory Board on
March 14, 2012. The Committee for Executive Board
Affairs conducted its regular review of the quality of the
Executive Board’s work on July 10, 2012.
The Supervisory Board expresses its great appreciation and
special thanks to the Executive Board and all employees of
the KWS Group for their work and outstanding performance
as reflected in the annual financial statements.
Einbeck, October 17, 2012
Dr. Dr. h.c. mult. Andreas J. Büchting
Chairman of the Supervisory Board
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
Declaration regarding Corporate Governance
Good corporate governance and control and a sustain-
able corporate policy are vital in KWS’ everyday busi-
ness. Respecting the interests of our customers, busi-
ness partners, shareholders, employees and society is
of fundamental importance. Our actions are guided by
the values of an international agricultural company with
a tradition of family ownership. These values include, in
particular, reliability, team spirit, sustainability, foresight
and independence. We of course comply with the rele-
vant legal requirements regarding managing and super-
vising German stock corporations and the internationally
and nationally acknowledged standards of good and re-
sponsible corporate governance (German Corporate Gover-
nance Code). In May 2012 the Government Commission for
the German Corporate Governance Code again made
amendments to the code after not making any changes
in the previous year. In its modifications, the Commission
paid special attention to the issues of the work, indepen-
dence, qualifications, composition and compensation
of the Supervisory Board. The amendments it formu-
lated have already been fulfilled by KWS. The Com-
mission also expressly stated that deviations from the
code’s recommendations may well be in the interests of
good corporate governance. The only such deviation at
KWS is in relation to the recommended deadlines for
publishing the consolidated financial statements and
quarterly reports.
The complete declaration on corporate governance in accor-
dance with Section 289 a of the German Commercial Code
(HGB), which also contains the compliance declaration in
accordance with Section 161 AktG (German Stock Corpora-
tion Act), has been published in the Internet at www.kws.com
> Company > 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 dead-
lines for publishing the consolidated financial statements and
interim reports – the company has complied with the recom-
mendations of the German Corporate Governance Code in
the version dated May 26, 2010, since the last compliance
declaration in October 2011; that it has complied with the re-
commendations of the German Corporate Governance Code
in the version dated May 15, 2012, since that date; and that
it does now comply and will comply in the future with these
latter recommendations. KWS SAAT AG publishes its con-
solidated financial statements and interim reports within the
period of time defined in the regulations for the Prime Stan-
dard of the German Stock Exchange. It does not comply with
the recommended 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.
Einbeck, October 1, 2012
The Supervisory Board
The Executive Board
14
Report of the Supervisory Board I Corporate Governance I 15
Compensation Report
The Supervisory Board’s compensation was set by the An-
nual Shareholders’ Meeting on December 17, 2009. 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 situation. The remuneration includes not only a
fixed payment and payment for work on committees, but also
a performance-related component, which is oriented toward
the company’s sustainable development. The Chairman of the
Supervisory Board receives three times and his or her depu-
ty 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 Executive 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 the Supervisory
Board therefore amounts to €509 thousand (€438 thou-
sand), excluding value-added tax. In all, 45% (37%) or €231
thousand (€160 thousand) of the total compensation is
performance-related.
Supervisory Board compensation
2011/12 in €
Fixed
Work on
committees
Performance-
related
Total
Previous year
Dr. Dr. h. c. mult. Andreas J. Büchting*
84,000.00
Dr. Arend Oetker**
42,000.00
0.00
0.00
81,600.00
165,600.00
140,400.00
40,800.00
82,800.00
70,200.00
Hubertus v. Baumbach***
28,000.00
25,000.00
27,200.00
80,200.00
71,800.00
Jürgen Bolduan
28,000.00
0.00
27,200.00
55,200.00
46,800.00
Cathrina Claas-Mühlhäuser
28,000.00
15,000.00
27,200.00
70,200.00
61,800.00
Dr. Dietmar Stahl
28,000.00
0.00
27,200.00
55,200.00
46,800.00
238,000.00
40,000.00
231,200.00
509,200.00
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 An-
nual Shareholders’ Meeting. It is based on the size and ac-
tivity of the company, its economic and financial situation
and the level and structure of compensation for managing
board members at comparable companies. The total com-
pensation is made up of a fixed and a performance-related
component. The performance-related compensation is cal-
culated on the basis of a declining scale as a percentage of
the sustainable net income for the year for the KWS Group.
Payments for duties performed in subsidiaries and associ-
ated companies were €38 thousand (€29 thousand) and
are offset against the performance-related payment. Ev-
ery member of the Executive Board must acquire shares in
KWS to an amount of between 20% and 50% of the gross
performance-related bonus payment. After five years, the
members of the Executive Board receive a long-term in-
centive payment (LTI) calculated on the basis of the per-
formance of KWS SAAT AG’s stock and the KWS Group’s
return on sales over this holding period. In the year under
review, €119 thousand were allocated to the provisions for
this for the first time. One third of the LTI before taxes must
be reinvested in KWS shares after it has been paid out.
Executive Board compensation
2011/12 in €
Basic com-
pensation
Benefits
in kind
Performance-
related
Total
Previous year
Philip von dem Bussche*
Dr. Christoph Amberger
Dr. Léon Broers
Dr. Hagen Duenbostel
* Chief Executive Officer
270,000.00
18,998.21
515,001.79
804,000.00
780,510.41
216,000.00
21,984.52
512,015.48
750,000.00
730,210.65
216,000.00
20,597.34
513,402.66
750,000.00
728,557.62
216,000.00
16,452.21
517,547.79
750,000.00
724,028.37
918,000.00
78,032.28
2,057,967.72
3,054,000.00
2,963,307.05
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 grant-
ed both in the form of a direct obligation to provide ben-
efits and a defined contribution plan, with the annual
anticipated pensions ranging between €130 thousand
and €140 thousand. In fiscal 2011/2012, €72 thousand
(€72 thousand) were paid to a provident fund backed
by a guarantee and €146 thousand (€147 thousand)
had to be allocated to the pension provisions in ac-
cordance with IAS 19 for pension commitments to mem-
bers of the Executive Board. Pension provisions total-
ing €1,496 thousand (€1,351 thousand) were formed
for the following members of the Executive Board of
KWS SAAT AG:
Pension commitments in €
Dr. Christoph Amberger
Dr. Hagen Duenbostel
07/01/2011
Personnel
expenses
Interest
expenses
06/30/2012
1,089,771.00
67,313.00
64,922.00
1,222,006.00
260,843.00
26.00
13,479.00
274,348.00
1,350,614.00
67,339.00
78,401.00
1,496,354.00
Compensation of former members of the Executive Board
and their surviving dependents amounted to €1,052 thou-
sand (€1,055 thousand). Pension provisions recognized
for this group of persons amounted to €1,394 thousand
(€1,726 thousand) as of June 30, 2012.
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
The KWS share
The length of product development cycles in plant breeding
means that our business model is essentially long-term
in nature. KWS’ business policy is therefore not aimed at
achieving short-term profit. Instead, we invest continu-
ously in research & development and thus secure our future
growth and create new jobs. This strategy has helped us
become one of the world’s top plant breeders. In this regard,
we were delighted to be awarded first prize in the contest
“Germany’s Best” – one could also say “Germany’s Most
Sustainable” – from PricewaterhouseCoopers and the news-
paper DIE WELT on September 13, 2012. This prize acknowl-
edged German companies that orient their business strategy
to long-term success and economic sustainability.
Since June 2006, KWS’ shares have been listed on the
SDAX, the selective index for small and medium-sized
enterprises. In terms of market capitalization and trading
volumes, it is now among the upper ranks of the securities
listed in the index. The performance of KWS’ share is par-
ticularly impressive when looked at in comparison with the
SDAX and DAX over a ten-year period. While KWS’ share
price more than quadrupled from July 1, 2002, to June 30,
2012, the SDAX rose by 97%. In the same period, the blue
chip index DAX increased by just 41%.
KWS’ share has also turned in an impressive above-average
performance when looked at over a five-year period. Its
price rose by 57% from July 1, 2007, to June 30, 2012, while
the SDAX fell in value by 28% and the DAX by 23%.
5-year price trend of the KWS share compared to SDAX
July 1, 2007, to June 30, 2012
KWS
SDAX
The Company’s Executive Board hereby invites you to the
Agenda of the Annual Shareholders’ Meeting
on December 13, 2012
160
140
120
100
80
60
40
7
0
0
2
/
7
0
8
0
0
2
/
7
0
9
0
0
2
/
7
0
0
1
0
2
/
7
0
1
1
0
2
/
7
0
2
1
0
2
/
7
0
twice revised our original net sales and earnings guidance
upward. With this boost from operational business, KWS’
share climbed by more than 30% between July 1, 2011, and
June 30, 2012 – while the SDAX dropped by more than 11%
and the DAX by 13%.
KWS SAAT AG is also represented in the DAXplus Family
Index, which tracks the performance of listed family busi-
nesses in which the founding families are co-owners and
hold at least a 25 percent share of the voting rights. In
2011/2012, the DAXplus Family Index fell by almost 19%.
Annual Shareholders’ Meeting on Thursday, December 13, 2012, 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, 2011, to June 30, 2012, 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) German Commercial Code (HGB)
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. Election of the Supervisory Board
6. Election of the independent auditor of the financial statements of KWS SAAT AG and the independent auditor
of the consolidated financial statements for the fiscal year 2012/2013
Although our focus is on our share’s long-term performance
on the stock market, outstanding fiscal years are also reflected
in its price in the short term. In the year under review, we
Our dividend policy is also geared to the long term. For
that reason, our company has raised the dividend in
each of the past eight years to reflect the KWS Group’s
earnings performance.
SHAREHolDER STRuCTuRE
Net sales of the KWS Group (5 years)
in millions of €
EBIT of the KWS Group (5 years)
in millions of €
3 . 3 % p . a .
1
1000
800
600
400
200
9 . 1 % p . a .
1
140
120
100
80
60
40
20
8
0
/
7
0
0
2
9
0
/
8
0
0
2
0
1
/
9
0
0
2
1
1
/
0
1
0
2
2
1
/
1
1
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
2
1
/
1
1
0
2
Families Büchting/
Arend Oetker/
Giesecke
56.1%
Tessner
Beteiligungs
GmbH
13.8%
Free float
30.1%
18
KWS share I Agenda of the Annual Shareholders’ Meeting I 19
›› The focus of my training: Getting
››
me ready to take on responsibility.
We trainees learn much more here than just the fundamentals of
electrical engineering and mechanics – for example, how to take
responsibility for our projects together. That forges us into a team.
André Dillgart, workshop trainee, KWS SAAT AG
‹‹
H / Orange Box Head 65 Medium 20 pt white I / Orange Box Copy 55 Roman 9 pt white I / Orange Box Copy 55 Roman 9 pt white I / Orange Box Copy 55 Roman 9 pt white Management Report of the KWS Group
Prospering agricultural markets, innovative products and creative employees were key in making this fiscal
year the most successful to date in KWS’ history. The company entered new markets, launched forward-
looking partnerships and made its administrative structures more efficient. At the same time, our mission
was to preserve the spirit of our family business and KWS’ values. We were able to leverage our strengths
and opportunities in fiscal 2011/2012. That is also reflected in KWS’ performance on the stock market.
The KWS Group’s earnings again received a positive boost
from special factors. However, we also posted solid oper-
ational growth. We expanded our distribution structures
and our efforts in the research and development of new
varieties. In addition, we have not slackened in our invest-
ment activities, but instead laid new foundations for future
growth: The vast majority of our investments this year were
not on maintenance measures, but rather on increasing ca-
pacities at our 62 subsidiaries worldwide.
Regional weather extremes not only hit our customers but
also our seed production. Considerable funds are tied up in
ensuring we can make sufficient seed available to our cus-
tomers. As a result, we were able to compensate for the
damage caused by frost in some regions of Europe in early
2012 by delivering new seed.
A further challenge relates to the agricultural policy agenda.
At one time, the cultivation of energy plants was regarded
as a cornerstone of the energy shift in Germany. Now, corn
grown for producing energy is a particular focus of public
criticism. Careful and differentiated analysis is required
here. KWS has always advocated the most efficient way of
obtaining energy from plants. We still believe this to be bio-
gas production. We provide a broad portfolio of products
for this, one that enables rotation of energy crops.
KWS in figures
The KWS Group grew its net sales again in fiscal 2011/2012
by 15.3% over the outstanding previous year to €986.3
(855.4) million and was thus above the growth rates for the
past 5 years (average of 13%). Net foreign sales rose by
€113.5 million to €758.0 (644.5) million and now make up
76.8% (75.3%) of total revenue. The largest growth was re-
corded in North America. Net sales in Germany likewise
increased strongly by 8.3% to €228.3 (210.9) million.
As in the previous year, all product segments contributed to
this growth. Net sales in the Corn Segment were bolstered
by higher demand for high-quality corn varieties and in-
creased by 19.7% to €571.5 (477.5) million or 57.9%
(55.8%) of total net sales. The Sugarbeet Segment like-
wise grew its net sales by 6.7% to €313.4 (293.6) million,
accounting for 31.8% (34.3%) of our total business volume.
Net sales at the Cereals Segment grew by 19.9% to €93.3
(77.8) million or 9.5% (9.1%) of the KWS Group’s total.
Function costs focused on growth
The cost of sales increased by 20.3% to €521.3 (433.4)
million due to a sharp rise in the cost of seed multiplication
and higher license costs, but we nevertheless improved
our gross profit to €465.0 (422.0) million. Intensified market
cultivation and diversification of sales channels resulted in
further selling expenses, which rose by 16.5% to €161.4
(138.5) million. The share of selling expenses relative to net
sales consequently increased to 16.4% (16.2%). To enable
the future development of high-yielding varieties, research
and development expenditure rose as planned by 11.5%
to €126.6 (113.5) million or 12.8% (13.3%) of net sales.
We also intend to expand our breeding activities continu-
ously to safeguard the KWS Group’s high level of innova-
tion. Administrative expenses were reduced year on year
by 0.8% to €59.5 (60.0) million and are now 6.0% (7.0%)
of net sales.
The balance of other operating income and other operating
expenses is €23.4 (6.6) million and was impacted in the
year under review by foreign exchange gains and the rever-
sal of allowances for receivables.
Sharp increase in operating income
The KWS Group’s operating income rose by 20.8% to
€140.9 (116.6) million on the back of its positive business
performance. Operating income in the Sugarbeet Segment
improved to €79.9 (65.9) million or 56.7% of the Group’s
total income. The Corn Segment grew its operating income
to €77.8 (63.6) million and thus contributed 55.2% of the
Group’s income. The Cereals Segment achieved income
of €18.9 (€14.5) million or 13.4% of the KWS Group’s to-
tal. The Corporate Segment’s operating income includes
all cross-segment expenses. That includes administrative
costs for all central functions at the KWS Group as well
as costs for long-term research projects whose results are
not yet ready for the market. The segment’s income fell to
€ –35.7 (–27.4) million.
Net income for the year grows sharply again
The result from ordinary activities rose to €135.7 (109.6)
million, while net financial income/expenses also improved
by €1.8 million to € –5.2 (–7.0) million. Low tax rates in our
growth regions led to total tax expenditures of €41.3 (36.7)
million. That represented a tax rate for the Group of just
over 30%, well below the previous year’s figure of approx-
imately 34%. Consequently, net income for the year im-
proved to €94.4 (72.9) million, giving a return on sales after
tax of 9.6% (8.5%).
KWS specializes in high-performance hybrid seed. In the market
for winter rapeseed as well, the quality of these varieties has proved
a winner.
Expansion of the product portfolio and safeguarding of
future competitiveness
The acquisition of two breeding companies and the ma-
jority stake in a production and distribution company in
Brazil was a key element of our investment strategy last
fiscal year and will allow us to expand our corn business
to tropical cultivation regions. We also made investments
in the expansion of our corn seed production capacities
in Argentina and purchased new breeding areas for our
potato business in the Netherlands in the year under re-
view. In fiscal 2011/2012, the KWS Group invested a total
of €111.5 (49.3) million, of which around €61.1 million was
spent on acquiring the Brazilian companies. Investments
again exceeded depreciation and amortization, which
amounted to €28.4 (27.6) million. Of the total investments
by the KWS Group, 13.4% went to Germany, 18.6% to
the rest of Europe, 67.7% to North and South America
and 0.3% to other countries. Just over two-thirds were
invested in the Corn Segment and some 20% in the
Sugarbeet Segment.
22
Management Report I KWS Group I 23
Company‘s growth backed by solid financing
Total assets increased in fiscal 2011/2012 by €190.3 million
to €1,092.3 (902.0) million. Equity increased by €72.8 mil-
lion. The main factors in this were the 29.5% increase in net
income for the year to €94.4 million and currency translation
effects of €18.8 million that are not recognized in the income
statement. However, the inclusion of our Brazilian activities
led to a reduction of €25.7 million, which is likewise not rec-
ognized in the income statement. The KWS Group still has
solid financing, with an equity ratio of 55.2% (58.8%).
Net working capital rose to €197.4 (177.7) thousand despite
the company’s significant growth last fiscal year.
Totaling €449.1 (397.2) million, inventories and trade receiv-
ables accounted for around 41.1% (44.0%) of total assets.
On the balance sheet date, cash and cash equivalents were
€183.0 (146.9) million and, after deduction of financial bor-
rowings, net liquidity was €107.9 (113.3) million.
Equity rose to €603.1 (530.3) million and, as in the previous
year, fully covered noncurrent assets and inventories. Debt
capital increased by €117.5 million to €489.2 (371.7) million,
above all as a result of the increase in short-term borrowings
and short-term and long-term provisions. This increase in
noncurrent liabilities includes €44.1 million due to our in-
vestments in the Brazilian corn market.
Distribution of value added
(around 31% of the total output)
Minority interest 1%
Company
22%
Shareholders
6%
Public sector
13%
Lenders
2%
Value added
€327.5 million
Employees
56%
Higher cash earnings improve cash flow from
operating activities
The KWS Group’s cash earnings increased to €117.8 (104.1)
million in the year under review. The cash flow from oper-
ating activities was €104.2 (101.2) million on the back of an
increase in receivables and inventories and higher short-
term provisions.
€56.6 (52.4) million were used for investments. €9.0 million
of this was spent on the acquisition of two Brazilian breed-
ing companies. The investment in the Brazilian production
and distribution company RIBER-KWS S.A. will not result
in a cash outflow until the fiscal year 2012/2013. The net
cash used in financing activities by the KWS Group was
€19.1 (10.2) million.
Single-entity financial statements of KWS SAAT AG
KWS SAAT AG again benefited from its growing sugar-
beet and corn business in fiscal 2011/2012 and must
finance the further expansion of all its research and de-
velopment activities. As part of this, Group-wide adminis-
trative expenses reported in the Corporate Segment are
borne at the level of KWS SAAT AG. Net income was
therefore slightly down from the previous year at €11.9
(24.2) million. Aided by improved net financial income/
expense, mainly resulting from the receipt of profits from
subsidiaries, net income pursuant to the accounting reg-
ulations of the German Commercial Code (HGB) was
€27.9 (15.9) million. With the net profit of €0.8 million
carried forward from the previous year and an allocation
of €10.0 million to the revenue reserves, the net retained
profit was ultimately €18.7 million.
Proposed appropriation of profits
The Executive and Supervisory Boards will propose pay-
ment of a dividend of €2.80 for each of the 6,600,000
shares to the Annual Shareholders’ Meeting, an increase
of 21.7% over the previous year’s €2.30. This reflects the
continuation of our earnings-oriented dividend policy in fis-
cal 2011/2012. The KWS Group’s operating income rose
by 20.8% to €140.9 (116.6) million in the year under review.
This reflects KWS’ good success in the market. Net income
for the year increased by 29.5% to €94.4 (72.9) million due
to the lower tax rate for the Group, which resulted from tax
income from other periods and higher earnings in low-tax
countries. A total of €18.5 (15.2) million from KWS SAAT
AG’s net retained profit is thus expected to be distributed to
shareholders in December 2012.
Corporate
We restructured our segments effective July 1, 2011. Since then, product-related expenses for breeding
activities have been carried directly in the product segments and the former Breeding & Services has been
disbanded. Revenue from our farms, services for third parties and net sales from strategic projects, such
as our corn activities in China, will be consolidated under the remaining segment, which is now called Cor-
porate. Its net sales in the year under review totaled q8.1 (6.5) million. The operating income for Corporate
also includes our cross-segment expenses. That includes administrative costs for all central functions at the
KWS Group, as well as costs for long-term research projects whose results are not yet ready for the market.
The segment’s income in the past fiscal year was q –35.7 (–27.4) million. This above all reflects the further
intensification of our research activities.
Focused crop breeding work is KWS’ core competence.
And a key indicator of our innovativeness is the official sales
approvals for our new varieties. Breeding progress means
enhanced crop performance and higher yields for farmers.
In fiscal 2011/2012, KWS obtained 303 (296) sales approv-
als for new varieties worldwide.
KWS and Vilmorin: Establishment of the joint venture
GENECTIVE
In 2011, KWS founded the joint venture GENECTIvE together
with the French breeding company Vilmorin. The shared
objective is to establish our own technology platform for
producing genetically modified varietal traits in corn. The
cooperation will focus initially on further developing resis-
tance to herbicides and insects. These standard charac-
teristics – also termed gatekeeper traits – will be added to
later. In North America, applications for approval to grow
corn crops with a new herbicide resistance and to use
them for food and feed have already been submitted to
the authorities. The approvals are expected to be granted
by 2014. Alongside this, applications for their use in food
and feed in the main export markets are being prepared.
If the development work continues to proceed success-
fully, we expect to market corn hybrids with combined
herbicide and insect resistance as of 2019.
Marketing approval from new varieties
120
109
274
35
10
119
117
35
25
296
129
111
49
14
303
2009/2010
2010/2011
2011/2012
Sugarbeet
Corn
Cereals
Others
Total
24
Management Report I KWS Group I Corporate I 25
Innovation in sugarbeet: Development of an alternative
herbicide concept
Together with Bayer CropScience, KWS has developed a
herbicide concept for conventional sugarbeet cultivation.
This herbicide tolerance is based on a very rarely occurring
natural change in the sugarbeet’s genetic makeup. Out of
1.5 billion individual cells, a sugarbeet cell was identified as
having tolerance against herbicides from the class of ALS
inhibitors. Tolerant sugarbeet plants were created from
this individual cell using in-vitro multiplication. While KWS
pushes ahead with developing the tolerant varieties, Bayer
CropScience is conducting the process for registering the
relevant herbicide in all European target markets. Pinpoint-
ed use of molecular markers helps to significantly speed
up the breeding process, with the result that initial varieties
will be able to be launched in the market in the medium term.
Plant phenotyping has made enormous progress. There is,
for example, the rapid development of sensor technologies
to enable automated, more robust and precise assessment
of plant traits in the lab, greenhouse and field using high-
throughput processes. Many of a plant’s traits can be de-
termined using non-invasive methods, in which the plant
is not destroyed. The technologies comprise, for instance,
radar sensor systems, hyperspectral image analyses and
fluorescence measurements. For many years now, KWS
has invested in the development of its own techniques to
assess plant traits. The near-infrared spectroscopy (NIRS)
analysis method, in which light is measured in the near-in-
frared range, is already used as standard in determining
the constituents of KWS’ crops. Installed on special har-
vesting machines, the NIRS technology makes it possible
to determine sugar content while harvesting the trial plots,
for example.
The importance of phenotyping in plant breeding
Phenotyping, one of the key competencies in plant breed-
ing, covers the precise assessment of traits of the individual
plants in the field to their analysis at the molecular level in
the lab.
Launched in 2009, the research project “CropSense.net”
aims to further develop quantitative and qualitative analysis
methods for traits in crops. KWS is involved in the “Sug-
arbeet” subproject of this initiative, which is sponsored by
One of the most important tasks at our lab for biotechnology and
breeding is the molecular analysis of plants’ constituents.
Expansion of sunflower breeding in Southeastern
Europe
In the past year we broadened the basis for an efficient
breeding program by establishing a breeding team in Boly
in Southwestern Hungary. Construction of a new, state-of-
the-art breeding station is to begin before the end of 2012.
This is to complement the existing corn breeding station in
Eastern Hungary. Establishment of the infrastructure was
accompanied in the past three years by development of the
breeding material. The first tests on new hybrids from the
program are scheduled for the summer of 2014.
the German Federal Ministry for Education and Research
and is supported by institutional research facilities and
business enterprises.
Expansion of the corn breeding program in China
In line with the growing importance of high-performance hy-
brids in commercial corn cultivation in China, KWS also ex-
panded its breeding program there in the past year, doubling
its testing capacities and increasing the number of individu-
al trial regions. KWS varieties are now undergoing approval
tests in all major cultivation regions, with the exception of
the tropics. Consequently, the focus in the coming year will
be on expanding testing capacities through greater mecha-
nization of sowing and harvesting and a further increase in
the accuracy of testing by training new employees. We have
also begun establishing a team to produce basic seed and
experimental hybrids.
Plant breeding is high tech combined with a fine touch.
26
Management Report I Corporate I 27
››
The genetic pool is what counts.
In cell biology, we regenerate complete plants from individual cells
or pieces of tissue and select them according to their traits. The
genotypes characterized in this way then form the basis of our
breeding programs.
Clemens Springmann, Head of Cell Service, KWS SAAT AG ‹‹
Corn Segment
The Corn Segment’s dynamic growth continued without interruption in the year under review. We were
again able to build on our position in the highly competitive corn seed business, thanks to our portfolio of
high-performance varieties and the availability of sufficient seed. The foundation for this success was our
customer-centric, regionally differentiated distribution systems.
Net sales in the Corn Segment rose by 19.7% to €571.5
(477.5) million in the year under review. Operating income
increased by 22.3% to €77.8 (63.6) million. The segment’s
profitability therefore remains at a gratifyingly high level of
13.6% (EBIT margin). The high prices for agricultural raw
materials worldwide induced many farmers to use quality
seed only and further expand the cultivation area for grain
corn. Farmers also grew more corn in Germany, especially
as this was the best alternative following the regional failure
of the winter wheat harvest. That resulted overall in unex-
pectedly high demand for seed in the spring 2012 sowing
season, which more than compensated for the increase in
selling and development costs. The segment’s income was
improved by the reversal of allowances set up in previous
years for receivables, in particular from Eastern Europe.
We also made advances in breeding. In the coming year,
we will be able to market 111 (119) new corn varieties in 27
countries and 12 (25) new rapeseed and sunflower varieties
in six countries.
The markets
High prices for corn for consumption caused an increase
in cultivation area in the U.S. by some 2 million hectares
to 39 million, the largest figure since 1937. Seed compa-
nies were nevertheless able to satisfy the high demand,
despite the fact that the multiplication conditions in the
summer of 2011 had resulted in a significantly lower pro-
duction volume. Seed inventories at the end of the 2012
season are now well below the long-term average. Thanks
to good product performance and sufficient availability of
important varieties, AGRELIANT – our North American joint
venture with the French breeding company Vilmorin – was
able to grow its market share further in the highly com-
petitive U.S. corn market.
In the past fiscal year, AGRELIANT also made significant
investments aimed at further expanding its market posi-
tion. All production sites are now able to make seed using
the new “refuge in the bag” system, which makes it easier
for our customers to implement resistance management as
prescribed by law. Seed with genetically engineered resis-
tance to insects is mixed with a proportion of seed without
this resistance so as to ensure sustained and long-term ef-
fectiveness against insect pests. Start of construction of a
seed production and logistics center in Iowa is scheduled
for the coming fiscal year to enable AGRELIANT to increase
its own seed processing capacities.
Corn Segment sales in millions of €
108.7
304.7
123.6
353.9
413.4
477.5
132.5
439.0
571.5
Domestic sales
Foreign sales
Total sales
30
2009/2010
2010/2011
2011/2012
Corn is a true photosynthetic powerhouse. As a result, it grows up
to 10 cm a day in early summer.
There was a sharp increase in cultivation area in some
regions of Europe. This was attributable to the reduced
sowing of winter cereals due to weather conditions (e.g.
in Romania), as well as damage by frost, which resulted
in winter cereals and rapeseed having to be plowed un-
der in Ukraine, Poland and partly in Germany. Total corn
cultivation area in Europe rose by around 10% to just over
22 million hectares.
In Europe, KWS recorded increases in sales volumes above
the general rate of market growth and thus further expand-
ed its market share. The company posted above-average
growth in sales volumes in France, Central and Eastern Eu-
rope and Southeastern Europe. We were also able to not
only defend, but even grow our market position in Germany
and Northern Europe, where KWS traditionally has the larg-
est market share. In these regions, biogas produced from
corn is an efficient source of alternative energy; all the same,
of the 2.7 million hectares on which corn is cultivated in Ger-
many, just 810,000 are used for growing corn for energy.
That is around 7% of the country’s arable land. However,
this figure is perceived to be far higher by policymakers and
the general public.
Our oil seed and protein crops accounted for 11.0% (12.0%)
of the segment’s net sales. This figure is accounted for
mainly by winter and summer rapeseed and sunflowers
in Europe and by soybeans in North America. The largest
rapeseed markets in Europe are France and Germany,
while sunflowers are cultivated mainly in Russia and Ukraine.
The most important market for soybeans is the U.S. Soy-
bean is the major supplier of vegetable protein in global
feed production. Around 35 million tons of (predominantly
genetically modified) soybean meal are imported to Europe
every year.
One major challenge is seed traceability. In this regard,
we have taken a large step toward rolling out a new bar-
code system throughout the Group. The goal is to make
it easier to identify and locate every seed unit – from mul-
tiplication, seed processing and the stages of marketing,
right to the individual farmer.
Management Report I Corn Segment I 31
Sugarbeet Segment
Our seed potato business was consolidated fully in the Sugarbeet Segment for the first time in fiscal 2011/2012.
Net sales in the segment surpassed the q300 million mark for the first time. This was mainly due to our North
American business, which now contributes more than 30% to the segment’s net sales. Our success there is
based on our genetically improved sugarbeet varieties.
The segment’s sales were €313.4 (293.6) million, a rise
of 6.7%. Its income rose above-proportionately by 21.2%
to €79.9 (65.9) million. Apart from large contribution mar-
gins – in particular from North America – reversals of allow-
ances for receivables also had a positive impact on the
segment’s income.
As announced in last year’s Annual Report, a new struc-
ture was also introduced within the segments of the KWS
Group. As a result, research and development expenditure
on sugarbeets and potatoes is now charged directly to this
segment. However, there are no longer any internal royalty
payments by the product segments to the former Breeding
& Services Segment. In addition, the Sugarbeet Segment
now also obtains value added from herbicide tolerance
technology in North America. We continue to increase our
R&D expenditures, a strategy that is paying off. In 2012,
KWS obtained 129 (117) sales approvals for new varieties in
27 countries. In addition, two potato varieties bred by KWS
were given approval for the first time.
The regions
The Sugarbeet Segment accounted for €280.6 (266.9) mil-
lion of total net sales. The main growth regions in the past
fiscal year were North America and Eastern Europe. Net
sales in the EU 27 were €126.2 (131.8) million, not quite at
the level of the previous year. However, net sugarbeet sales
outside the EU increased considerably to €154.4 (135.1)
million. Total cultivation area fell by approximately 50,000
hectares to just over 4.7 million since, as stated in the last
Annual Report, some farmers had decided to switch crops
due to the high prices for cereals.
KWS was able to grow its net sales again in North Amer-
ica. Despite the fact that legal action relating to the ap-
proval of Roundup Ready® sugarbeet was still ongoing
at the beginning of the sowing season, farmers in North
America decided in favor of this technology on 97% of
the cultivation area for the crop. Moreover, net sales in
North America were positively impacted by exchange
rate movements.
Sugarbeet Segment sales in millions of €
43.9
249.7
46.6
266.8
293.6
313.4
38.7
208.7
247.4
Domestic sales
Foreign sales
Total sales
* including potato sales
2009/2010
2010/2011*
2011/2012*
We were also able to expand our market position in East-
ern Europe significantly. Despite subsidization of locally
produced seed in Russia, KWS managed to increase sales
volumes and net sales year on year by linking up with a
new distribution partner. Sales in Ukraine were grown by
50%, albeit from a relatively low base. Net sales in Germany
also rose slightly, while we suffered losses in market share
in France as a result of unfavorable variety performance.
We were not quite able to maintain the extremely high mar-
ket share in Northern Europe that we achieved in fiscal
2010/2011. In Southern Europe, however, we significantly
expanded our market share, despite a further decline in
cultivation area.
Another positive aspect is the trend in China, where net
sales soared again. By contrast, net sales declined in Tur-
key, since many dealers still had large stocks of seed from
the previous year.
The key to success – even in small sugarbeets – is how they develop
when young. The sooner the leaves are fully developed, the sooner
sugar can be stored in the roots, and the better the yield.
Seed potatoes
The very good potato harvest in 2011 led to an excess sup-
ply of ware potatoes throughout Europe. Consequently, con-
sumer prices fell to an extremely low level, causing far lower
demand for certified seed. Low prices and quantities that
could not be sold, above all in Central and Eastern Europe,
strained KWS’ potato business. However, sales of seed po-
tato varieties for use in making French fries or chips had a
stabilizing effect. Prices in this segment are less volatile and
sales quantities are agreed to over a period of several years.
We therefore plan to expand this segment gradually.
Following the complete acquisition of the shares in the for-
mer joint venture in fiscal 2010/2011, KWS POTATO B.v.
faced extensive consolidation and integration activities. We
also began to establish our own potato breeding station at
Emmeloord in the Netherlands. The infrastructure required
for successful product development will be created there
over an area of 96 hectares; completion is scheduled for
June 2013. Net sales in our seed potato business totaled
€32.8 million. In the previous year, the joint venture net sales
of €41.2 million.
32
Management Report I Sugarbeet Segment I 33
Cereals Segment
KWS’ cereals business, which is bundled in the KWS LOCHOW Group, posted record sales and income
in fiscal 2011/2012. This was due in part to positive price trends for cereals for consumption on the com-
modity futures exchanges but also to the fact that KWS LOCHOW successfully established QualityPlus® in
Germany, a brand that sets a new standard of quality for cereal seed. We recorded our biggest increase
in net sales – just over 25% – for our hybrid rye varieties, since rye is now being used more and more fre-
quently as feed.
Net sales in the Cereals Segment totaled €93.3 (77.8) million,
a rise of 19.9%. The segment also posted better income than
anticipated in the course of the year. On the back of a fur-
ther expansion of our breeding and distribution activities, in-
come at June 30, 2012, rose by 30.3% to €18.9 (14.5) million.
Apart from good direct business with hybrid rye, there was
also an increase in our wheat and barley business, which is
mainly license-based. Rye is still the main contributor to net
sales in the Cereals Segment, accounting for around 50% of
the total figure, followed by wheat, barley and rapeseed. The
segment’s EBIT margin increased to 20.3% (18.6%).
In the past year, KWS LOCHOW again invested a large
20% of its net sales in the national and international devel-
opment of cereal varieties. It also undertook great efforts
in strategic projects aimed at increasing its long-term com-
petitiveness, in particular a new wheat breeding program in
the U.S., where all the preparations to establish KWS’ first
cereal breeding station of its own – in the Champaign, Illinois,
region – were made in the year under review. Another ex-
ample that should be mentioned is our special breeding
program for winter malting barley, in which KWS is already
the market leader. We are conducting a trend-setting proj-
ect for adapting our hybrid rye varieties to the continental
weather conditions of Eastern Europe. The objective is to tap
additional market potential there in the medium term. In Cen-
tral and Western Europe, our varieties demonstrated their
excellent winter hardiness in the severe conditions of the last
winter. KWS was awarded 49 (35) sales approvals for new
varieties in 13 countries in the Cereals Segment and can look
to the future with optimism.
The regions
Sales volumes of certified cereals seed in Germany fell by
around 3% year on year to below 505,000 tons due to low-
er availability as a result of the weather. Nevertheless, KWS
LOCHOW was able to increase its net sales in its home
market by some 13% and thus to expand its market share.
The QualityPlus® concept launched to coincide with the 2011
sowing season was implemented successfully. QualityPlus®
is the new quality brand for cereal seed from KWS LOCHOW.
It exceeds the already high quality requirements demanded
Cereals Segment sales in millions of €
45.9
39.5
36.1
33.9
70.0
38.3
77.8
47.4
93.3
The quality of winter barley is shown in severe winters like 2011/2012.
Our top varieties produced good results and survived the periods of
black frost well.
by law. With this initiative, KWS LOCHOW is clearly under-
scoring its commitment to higher seed quality in the Ger-
man market. The goal is to ensure greater production re-
liability and improve the competitiveness of cereal farmers.
Hybrid rye sales volumes in Poland more than doubled due
to the very good market climate compared with the pre-
vious year, with higher prices being paid in some cases for
rye for consumption than for wheat. There was particularly
high demand for the ergot-tolerant Pollen Plus varieties from
KWS LOCHOW. The ergot is a fungus that grows on the
ears of rye and, because of its toxicity, must not be allowed
to enter the food chain.
KWS LOCHOW also grew its net sales in its other impor-
tant markets of the UK, France and Denmark. Our market
share for wheat seed in the UK increased to 45%.
Domestic sales
Foreign sales
Total sales
34
2009/2010
2010/2011
2011/2012
Management Report I Cereals Segment I 35
››
The sun rises in the east.
I’m delighted that the friendly brand with the sun shining
on the fields is also gaining in importance in my country.
Xu Ning, office assistant, KWS Representative office Beijing, China‹‹
Outlook for the fiscal year 2012/2013
Employees
The KWS Group will likely continue its path of operational growth in fiscal 2012/2013. However, special
Deep and well-developed roots give a plant a solid footing and enable it to flourish. The positive inter-
factors like those that had an extremely positive impact in the previous year are not anticipated. Once again,
working of all elements generates sustainable growth and yield. This image can also be applied to KWS’
we see growth potential for our corn business, in particular in North America, Brazil and China. We intend
workforce. The roots of a family business and the culture shaped by them are vital to KWS’ sustainable
to maintain our sugarbeet business at its high level and expand seed potato business after a year that
growth as a company and the development of every single employee.
was impacted by tough market conditions. The prospects for cereals look good as a result of the positive
price situation in agricultural raw material markets. Consequently, sales opportunities have probably not
deteriorated over the previous year.
Overall, we expect to be able to increase the KWS Group’s
net sales by up to 10%. As always, this forecast is pred-
icated on the performance of our varieties, which again
demonstrated our innovativeness in official approval tests
in 2012. Consequently, we intend to increase expenditure
on product development by around €10 million in the cur-
rent year. At the same time, we plan to significantly expand
our distribution and production activities, especially in North
and South America. After the particularly high return on
sales of 14.3% in fiscal 2011/2012, we aim to increase the
RoS in the KWS Group by just over 11% in the current year,
despite the cost increases. That is a level which, excluding
special factors, accords with our general objective of achiev-
ing a double-digit EBIT margin.
We again expect a double-digit increase in net sales in
the Corn Segment in fiscal 2012/2013. This will be help-
ed for the first time by net sales from our new production
and distribution activities in Brazil. In addition, we assign-
ed our China operations to the Corn Segment effective
July 1, 2012. In its establishment phase, the activities in
this strategic project were initially assigned to the Corpo-
rate Segment. We plan to increase sales volumes in all
regions apart from our home market of Germany, where
we intend to secure our leading position in the market.
Due to considerable additional research & development
expenditure and expansion of our production and distri-
bution structure, we expect the segment’s income to fall
by just over 10% in fiscal 2012/2013. An EBIT margin of
over 10% is still planned.
There are signs that the sugarbeet cultivation area in the
EU 27 will decline as a result of the large harvests in pre-
vious years. However, we see growth potential in Eastern
Europe and the Middle East. On July 19, 2012, the United
States Department of Agriculture (USDA) decided to again
permit cultivation of Roundup Ready® sugarbeet – which
are herbicide-tolerant varieties – without conditions and
with immediate effect. We therefore expect no further re-
strictions in our North American business.
We plan to slightly expand the volume of our seed potato
business. This is subject to the proviso that potato prices
will recover this year, which the market data currently in-
dicates to be the case. For the Sugarbeet Segment as a
whole, we expect net sales at the level of the previous year,
with revenue for sugarbeet falling slightly and that for seed
potatoes rising. The segment’s income will be some 15%
down year on year following cost increases in product devel-
opment, distribution and production and the fact that there
will be no special effects.
Hybrid rye sales volumes are crucial to how the Cereals Seg-
ment develops, since they contribute approximately 50% to
its net sales. On the basis of good prices for cereals for con-
sumption, we assume that our hybrid rye business will grow
in the 2012 fall sowing season, particularly in Poland. Culti-
vation areas for wheat, barley and rapeseed should remain
stable or increase slightly this year. We expect the segment’s
income to be slightly weaker on the back of a slight increase
in net sales and higher costs for breeding and distribution.
The results of a survey of KWS’ employees confirm that this
creates a positive climate at the company and satisfied em-
ployees: A Company Climate Monitor was again conducted
in the spring of 2012. It asks all colleagues in Germany
about their current level of satisfaction at the company and
their personal outlook at KWS and has been carried out
every two years since 2006. The very good result of the
last survey was even surpassed slightly this time around.
There was again a high and constant participation rate of
72%, with 82% stating that they are satisfied with their cur-
rent situation at KWS and 78% saying that they optimistic
about their prospects at KWS. That is a very good showing,
especially given the significant reshaping measures of the
past two years.
In addition, cross-unit areas were identified in which further
work can improve personnel leadership.
Growing internationality and complexity
The internationally and regionally operating Service Centers
were established with the goal of offering extensive and ex-
pert service for the segments in all areas of administration.
At the same time, internationalization of the regional centers
has created new challenges for KWS: Closer networking,
working in international teams and the cross-border use of
communications technology and media are now common-
place in many areas of KWS’ work. The Human Resources
(HR) department has established a personnel development
environment to offer suitable measures for the KWS Group
at the local level and internationally.
Trainee Program, Breeders Academy and dual course
of study
Our proven Trainee Program was optimized further and
expanded. The KWS Breeders Academy is running suc-
cessfully and arouses great interest among university
graduates. Dual courses of study are firm components
38
Management Report I Outlook I Employees I 39
Trained at KWS – that not only means looking happily upward, but also
at good career prospects.
of our recruitment and development activities. In the mean-
time, there is now a practical partnership with Anhalt Uni-
versity of Applied Sciences in the field of biotechnology/plant
biotechnology, with Dresden vocational Training Academy in
the Agricultural Management course of studies, and with the
Department of Computer Science at the Business University
of Applied Sciences in Hanover.
Interns
KWS has offered internships in research and development
since 2011, in particular to students of biology, biotech-
nology, biochemistry or related disciplines. Young people
studying for their bachelor’s or master’s degree are thus
given the opportunity to work at KWS alongside their uni-
versity education. The tasks vary greatly, depending on the
project and the needs and interests of the students – from
creation of dossiers to work in the field of cell biology. The
students thus have the chance to gain practical experience
in the industry during their study (at reasonable pay) and so
perhaps forge initial contacts with their future employer.
Training
KWS trained 91 (89) young people in seven vocations in
Germany in fiscal 2011/2012. The high quality of training
is ensured by around 120 instructors at KWS. 36 young
Crossing plants is and will always be manual work demanding
the very greatest care.
colleagues successfully completed their training at KWS in
the year under review.
21 of the 25 current business administration trainees have
decided to gain extra qualification as a “European business
administrator,” which prepares them specifically for work-
ing in an international company. Through internships at
KWS subsidiaries, they can also gather valuable interna-
tional experience.
Germany Scholarships
Since the 2011 Winter Semester, KWS has awarded five
Germany Scholarships at the University of Göttingen. This
assistance was extended for the 2011/2012 Summer Se-
mester due to the positive experience. This national schol-
arship program was set up to support talented and high-
performing students at universities in Germany, regardless
of their or their family’s income. Beneficiaries obtain a
scholarship of €300 a month, of which €150 is funded by
the government and €150 by private donors. KWS made
the conscious decision to cooperate with the University of
Göttingen so as to specifically encourage young talents in
the field of agricultural sciences in KWS’ region.
Younior Professional Program
The YOUnior Professional Program, which aims to develop
junior staffers in an interdisciplinary way, also continues to
run at the international level. In accordance with the spec-
ifications of top management, the participants formulate con-
cepts on the internal positioning of a unit and on the sub-
ject of the “Workplace of the Future.” The project’s results
have been taken up by managers, discussed and put on the
agenda for implementation of further measures.
Developing HR issues in dialogue
Establishment of HR functions at the Service Centers gives
us proximity to our internal customers all over the world. As
a result, local needs can be ascertained better and translat-
ed into tailored services. Networking between international
HR managers was enabled and intensified with the creation
of an HR Circle. HR managers from around the world meet
in this body to ensure a common strategy, discuss challeng-
es in HR work, harmonize processes and share notes on
exemplary projects. Further regular discussion forums with
managers were created to jointly promote innovations in
the field of human resources and drive their implementation.
That ensures that HR measures are aligned with needs and
precisely fit those needs.
Employees in numbers
The KWS Group employed 3,851 (3,560) people worldwide
in fiscal 2011/2012. Personnel expenses at the KWS Group
rose by 10.6% to €182.5 (165.0) million.
Average workforce growth over the last 5 years
(by regions)
2007/08
2011/12
Ø Growth
Germany
1,260
1,589
6% p.a.
Europe (excluding
Germany)
America
Rest of the world
670
872
54
1,061
1,106
95
Total
2,856
3,851
12% p.a.
6% p.a.
15% p.a.
8% p.a.
Committed, open and listening – we go together with KWS.
KWS Group employees by functions
Administration
14%
Production
19%
Research &
development
41%
Sales & marketing
26%
40
Management Report I Employees I 41
››
We make sure that progress in
yield really makes it to the field.
We control our seed processing operations with the help of
700 parameters and sort out rigorously: At the end, just about a
fifth of the original quantity of seed is left over – and almost all
of it germinates!
Helmut Böttcher, sugarbeet production – seed processing,
KWS SAAT AG
‹‹
Risks for future development
KWS’ strategic objective is to strengthen and build on its
leading market position as an earnings-oriented seed com-
pany. To achieve that, we have to systematically identify po-
tential risks for the company as a whole as well as for its in-
dividual parts, assess their extent and, if necessary, initiate
measures to eliminate them. To enable systematic handling
of these risks, we have set up an internal control system and
an extensive risk management system.
Identifying business opportunities and pursuing them
In principle, we look at risk and opportunity management
separately. A separate reporting system documents and
supports monitoring of the risks. By contrast, the recording
and communication of opportunities are integral compo-
nents of the established controlling system between the
subsidiaries, associated companies and company’s man-
agement. Management of the segments is responsible for
identifying, analyzing and implementing operational oppor-
tunities. Targeted measures are formulated together with
the Executive Board so that strengths can be leveraged and
strategic growth potentials tapped. As part of this, we use
extensive strategic planning covering a 10-year time frame.
Internal control and risk management system with re-
gard to the accounting process
The internal accounting control and risk management sys-
tem for the financial statements of KWS SAAT AG and the
KWS Group comprises all the measures, structures and
processes designed to make sure that all business events
and transactions are included in accounting promptly,
consistently and correctly. It ensures compliance with the
statutory standards, accounting regulations and internal
accounting control policies that are binding on all consoli-
dated companies. The system also 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 account-
ing, 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 results
are documented and communicated internally. Identified
weaknesses are eliminated promptly. The Executive Board
and the Audit Committee of the Supervisory Board are in-
formed regularly of the risk situation, the results of the con-
trols and the effectiveness of the risk management system
and all its control functions.
The risk management system means advantages for
corporate controlling
An approach based on our corporate culture is also chosen
in risk management. At KWS, such an approach 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. The culture of trust
practiced by our employees is underpinned by rules of con-
duct, training and control measures, enabling our employ-
ees to assess risks on their own. The Corporate Finance –
Treasury and Risk Management department is in charge
of central risk management at the KWS Group and is sup-
ported by the Corporate Law & Compliance, Corporate Re-
sponsibility Affairs and Corporate Controlling departments:
Structure of risk management at the KWS Group
Corporate Finance:
Corporate Controlling:
Corporate Responsibility
Affairs:
Corporate law &
Compliance:
• Risk control matrix
• Early detection of risks
• Rules & Guidelines
• Compliance training
• Planning/budget
• Management system
• Policies
• Current expectation
• Internal audits
• Data protection
• Minimum requirements
• Interest and currency
management
• Insurance
• External audits
44
The risk management system is based on strategic plan-
ning and investment controlling, continuous operational
controlling and the quality and process monitoring systems.
External auditing by experienced auditors 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 coordi-
nation of the individual risks and associated controls.
Several audits are held each year, covering processes in
the organizational units. The Executive Board is respon-
sible for the risk management system, which meets legal
requirements by ensuring that all significant risks are sys-
tematically identified every year, examined, assessed as
to the likelihood of their occurrence and potential impact,
documented, controlled and monitored.
The risk management process at KWS
The objective of the risk management process is to identify,
analyze, assess and efficiently monitor significant risks. This
process is intended to ensure constant control and thus to
support a decision-making process based on information.
More than 100 key risks and ways of controlling them are
described in the system implemented at KWS. They are as-
sessed with their “individual likelihood of occurrence” and
“potential level of damage.” Their significance is evaluated on
the basis of their effect on operating income (EBIT) or spe-
cific qualitative indicators. The individual risks or process
sections are assigned to employees who conduct 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 man-
ager on the controls and their results. If individual points
in the rules and regulations are not complied with, this is
registered and the situation is documented.
Strategic risks
We press ahead constantly with the Group’s strategic fur-
ther development. That comprises continuous optimization
of efficiency, strengthening our core areas, product portfolio
management and investment in research and development.
The success of the related decisions is subject to a risk as
regards forecasting future (market) developments and the
assumption that the envisaged measures can be achieved.
For example, entry into or withdrawal from a business
segment might be based on profit and growth expectations
that turn out to be unrealistic. We counter that risk by pre-
paring the information of relevance to decision-making in a
careful and structured manner.
Significant individual risks
KWS is subject to the usual economic and political risks in
the countries in which it and its subsidiaries operate. In ad-
dition, the risks described below may lastingly impair KWS’
net sales, financial position and performance. They are re-
ported on regularly in a Risk Committee.
overview of significant risks
Risk
Examples
Market risks
Production risks
Procurement risks
liquidity risks
legal risks
Environmental risks
Personnel risks
• Political risks
• Sales volumes and prices
• Macroeconomic risks
• Currency risks
• Risk of changes in interest rates
• Weather-related risks
• Outage of production systems
• Quality risks
• Investment risks
• Dependence on suppliers
• Diversification
• Access to technologies
• Cash/cash flow
• Credit lines (with banks)
• Receivables management
• Antitrust risks
• Mergers & takeovers
• Corruption
• Patents and licenses
• Pollution of the air, soil and
water by dusts, waste water
and dangerous waste
• Transport of hazardous goods
• Genetic contamination
• Recruitment/development
• Work safety
• Working time/old-age pensions
IT risks
• IT security
• Authorization concept
Management Report I Risks I 45
Market risks
In the strongly regulated agricultural industry, political risks
have a significant impact on our business development. The
lack of statutory regulations may also represent a risk. One
unavoidable risk for our corn business is still the possibility
of the adventitious presence of genetically modified organ-
isms (GMOs) in conventional seed. In the absence of a
standardized legal threshold value, a number of European
countries practice a policy of zero tolerance. That means
that the sale of seed can be stopped and already sown
areas ordered to be plowed up – even on the basis of un-
verifiable measurement results. There is no tolerance limit,
and second examinations are not permitted. Thanks to its
extensive quality assurance system, only one suspicious
seed sample from KWS was identified in international offi-
cial tests in fiscal 2011/2012.
Production 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.
KWS counters the risks of outages of production facilities
with regular maintenance and Group-wide business inter-
ruption insurance. In addition, our products are subjected to
regular and extensive quality checks on the fields used for
multiplication and during processing so as to reduce quali-
ty-related risks. In this way, KWS ensures the high quality
of its products through stringent internal quality standards
and monitoring.
A further risk lies in the uncertain regulatory framework for
growing energy plants. False allocation of funding, including
that as a part of government market incentive programs,
and speculation on the agricultural commodity markets
have meant that this sector of agricultural production as a
whole is currently being called into question. Criticism of the
production of energy from plants peaked for the first time in
2008. At that time, the cultivation of plants for energy was
also blamed for the in some cases significant increase in
food prices, before there was a sudden drop in the prices
of agricultural raw materials as of July 2008 in the wake of
the incipient economic and financial crisis. What is clearly
needed here is a careful analysis of what form of cultiva-
tion of energy plants represents an economically sensible
and sustainable alternative form of producing energy. This
must take into account increases in efficiency in energy
plant cultivation and the fact that the prices for fossil fuels
will tend to rise.
The medium-term sales risk depends on product perfor-
mance 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.
The risk of interest rate changes and currency risks are
addressed through the usual standardized hedging instru-
ments, which in turn do not have an incalculable influence
on KWS’ earnings and assets situation. We refer to the
notes to the consolidated financial statements on page 72f
for information on the related sensitivity analyses.
Procurement risks
Procurement risks are minimized by international diversifica-
tion of seed production locations and sufficient stockpiling.
Moreover, supply risks as a result of sources no longer being
able to deliver are reduced by means of continuous classifi-
cation and observation of risks. In addition, the entire area of
purchasing is currently being improved by the restructuring
and creation of the Corporate Procurement department so
that supplies are ensured and further risks reduced.
liquidity risks
KWS addresses liquidity risks with professional cash man-
agement, sufficient long-term, syndicated credit lines – full
use of which was not made in the year under review – and a
high equity ratio, which currently stands at 55.2%. Our loan
agreements include financial covenants, compliance with
which has been ensured at all times to date. KWS uses ex-
tensive 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.
legal risks
In order to rule out potential risks from any violations of the
diverse tax, environmental and competition regulations and
laws, we obligate all employees to abide by our compli-
ance policies. The Code of Business Ethics states that all
KWS employees must act in accordance with KWS’ cor-
porate values and comply with the law, contracts and the
company’s own rules.
Plant breeding means minimizing risks and strengthening innovation.
We live from continuous progress in the yields of our new varieties.
Environmental risks
The Integrated Management System and environmental
policies, which employees are obligated to implement un-
der our internal regulations, in conjunction with the require-
ments defined by environmental protection law, form the
foundation for all our strategic and operational measures in
protecting the environment. The organization of processes
and operation of plants and systems, including documen-
tation, in the various areas of the company is regulated in
the management system, which complies with the DIN EN
ISO 9001:2008 (quality) and DIN EN ISO 14001:2004 (en-
vironment) standards. The working order and effectiveness
of this system is examined regularly by internal audits and
reviews and confirmed by an external certifier. As a result,
possible risks of pollution of the air, soil and water by dusts,
waste water and hazardous waste are minimized.
Personnel risks
Our success is founded on the individual skills and knowl-
edge of our employees. We encourage the workforce to ex-
pand and transfer knowledge through attractive continuing
education and development programs. We counter the risk
of losing knowledge when people retire by means of inten-
sive and subject-specific qualification. In addition to our spe-
cific vocational training and trainee programs, we initiated
the “Breeders Academy” with the aim of training young
people specifically in the field of research and breeding.
IT risks
We address IT risks, such as unauthorized access to sensi-
tive electronic company data and information as a result of
hacking or computer viruses, with an IT security organiza-
tion, IT security policies and the use of state-of-the-art fire-
wall and antivirus programs. Due to the rapid pace of tech-
nological development, there is a residual risk to IT security
which cannot be completely controlled.
other risks
KWS counters the risk of a decline in cultivation areas for
agricultural products with its efforts to win market share and
grow sales in other markets or with new products. A wide-
ranging product portfolio contributes to the commercially
useful diversification of risks.
overall statement on the risk situation
The overall risk situation for KWS SAAT AG stems from the
above-described risks. There was no significant change in
the risk situation in fiscal 2011/2012 compared with the previ-
ous year. The main risks for us are still related to products and
the market. Overall, the KWS Group’s risk management sys-
tems did not reveal any risks that jeopardized the company’s
existence in the year under review. However, we cannot rule
out the possibility that further factors of which we are not
currently aware or which we do not at present assess as sig-
nificant may impact our continued existence in the future.
46
Management Report I Risks I 47
Disclosures in accordance with Section 315 (4) HGB
(German Commercial Code)
Annual Financial Statements of the KWS Group
2011/2012
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 the transfer of shares.
The company has been informed of the following direct or
indirect participating interests in the capital of KWS SAAT
AG in excess of 10% of the voting rights in accordance with
Section 21 and Section 22 of the German Securities Trading
Act (WpHG):
• The voting shares, including mutual allocations, of the
members and companies of the families Büchting,
Arend Oetker and Giesecke listed below each
exceed 10% and total 56.1%.
Dr. Dr. h.c. mult. Andreas J. Büchting, Germany
Christiane Stratmann, Germany
Dorothea Schuppert, Germany
Michael C.-E. Büchting, Germany
Annette Büchting, Germany
Stephan O. Büchting-Hansing, Germany
Elke Giesecke, Germany
Christa Nagel, Germany
Bodo Sohnemann, Germany
Matthias Sohnemann, Germany
Malte Sohnemann, Germany
Arne Sohnemann, Germany
AKB Stiftung, Hanover
Zukunftsstiftung Jugend, Umwelt und Kultur, Einbeck
Büchting Beteiligungsgesellschaft mbH, Hanover
Dr. Arend Oetker, Germany
Kommanditgesellschaft Dr. Arend Oetker vermögens-
verwaltungsgesellschaft mbH & Co., Berlin
48
Hans-Joachim Tessner, Germany
Tessner Beteiligungs GmbH, Goslar
Tessner Holding KG, 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 participat-
ing interests of employees. Employees who have an interest
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 Section 18 of the Articles of Association of KWS
SAAT AG, changes to the Articles of Association require a
resolution to be adopted by the Annual Shareholders’
Meeting by a simple majority of the votes cast, unless oblig-
atory statutory regulations specify otherwise. The power to
make amendments to the Articles of Association that only af-
fect 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 conclud-
ed. The compensation agreements between the company
and members of the Executive Board and governing the
case of a change in control stipulate that any such compen-
sation will be limited to the applicable maximum amounts
specified by the German Corporate Governance Code.
Einbeck, October 1, 2012
KWS SAAT AG
THE EXECUTIvE BOARD
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, 2012,
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. 06/30/2012
Previous
year
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(8)
(8)
111,725
59,656
261,457
226,315
5,037
6,093
4,101
5,144
25,970
29,147
410,282
324,363
139,694
128,998
309,422
268,209
40,399
36,621
142,569
110,278
25,957
23,993
14,322
19,173
682,034
577,601
1,092,316
901,964
19,800
19,800
5,530
5,530
553,258
483,925
24,508
21,006
(11)
603,096
530,261
92,287
23,033
1,914
63,028
19,421
2,308
36,043
24,657
8,207
9,311
(12)
161,484
118,725
133,984
107,396
52,119
74,073
24,053
43,507
14,205
69,349
25,513
36,515
(13)
327,736
252,978
Liabilities
489,220
371,703
Total equity and liabilities
1,092,316
901,964
Statement of comprehensive income
from July 1, 2011,
through June 30, 2012;
figures in € thousands,
unless otherwise
specified
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
Note no. 06/30/2012
Previous
year
(18)
986,296
855,375
521,343
433,365
464,953
422,010
(19)
(20)
161,355
138,501
126,571
113,539
59,494
62,637
39,316
59,997
43,755
37,091
140,854
116,637
2,261
7,409
7
1,719
8,598
– 95
(21)
– 5,141
– 6,974
135,713
109,663
41,317
36,741
94,396
72,922
(22)
(24)
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
Net income after shares of other minority interests
Earnings per share (in €)
1
80
18,760
– 22,845
18,761
– 22,765
113,157
50,157
2,960
110,197
2,541
47,616
94,396
72,922
2,752
2,669
91,644
70,253
13,89
10,64
50
Annual Financial Statements I Balance sheet I Income statement I 51
Statement of changes in fixed assets of the
KWS Group 2011/2012 and 2010/2011
Figures in € thousands, unless otherwise specified
Currency
translation
Changes in
the consol.
group
Additions Write-ups Disposals Transfers
Gross values
Currency
translation
Changes in
the consol.
group
Additions Write-ups Disposals Transfers
Amortization/depreciation
Net book values
Balance
07/01/2011
Balance
06/30/2012
Balance
06/30/2012
Previous
year
Balance
07/01/2011
Patents, industrial property
rights and software
Goodwill
Intangible assets
52,747
29,623
82,370
292
27,445
2,341
1,452
1,744
25,830
53,275
2
2,343
Land and buildings
207,439
4,607
4,051
17,850
Technical equipment
and machinery
Operating and office equip-
ment
Payments on account
155,732
2,948
2,633
10,062
68,528
7,043
1,777
250
739
165
8,593
10,949
47,454
Property, plant and equipment
438,742
9,582
7,588
Balance
06/30/2012
11
0
11
82,622
56,907
139,529
214
0
214
15,984
6,730
22,714
166
60
226
1
0
1
5,076
0
5,076
616
4,140
237,471
63,431
1,660
–5
6,340
4,705
3,563
170,233
101,260
2,472
–119
10,113
5,939
1,893
93
–9,607
75,591
8,707
11,353
–11
492,002
47,736
1,400
0
0
–50
0
6,847
0
212,427
5,532
–174
23,300
0
0
0
0
0
0
0
0
214
0
214
562
1
0
1
0
21,014
6,790
61,608
50,117
27,804
111,725
36,763
22,893
59,656
70,864
166,607
144,008
4,363
10
109,373
60,860
54,472
5,614
0
10,539
–11
0
–1
50,308
0
25,283
8,707
20,792
7,043
230,545
261,457
226,315
Financial assets
4,268
–5
279
610
12
278
317
5,203
167
–1
0
0
0
0
Assets
525,380
11,321
61,142
50,407
12
11,845
317
636,734
235,308
5,757
–173
28,376
0
10,753
Balance
07/01/2010
Balance
06/30/2011
Balance
07/01/2011
Patents, industrial property
rights and software
Goodwill
40,373
–347
30,218
–1,704
9,204
1,097
4,723
12
Intangible assets
70,591
–2,051
10,301
4,735
Land and buildings
196,940
–5,703
8
9,117
1,175
0
1,175
–31
0
–31
52,747
29,623
82,370
16,472
4,503
20,975
–173
–63
–2,715
0
– 236
–2,715
1,140
0
1,140
351
7,428
207,439
59,439
–1,741
0
0
0
0
0
166
5,037
4,101
285,515
378,219
290,072
Balance
06/30/2011
Balance
06/30/2011
Previous
year
15,984
6,730
22,714
36,763
22,893
59,656
23,901
25,715
49,616
Technical equipment
and machinery
Operating and office equip-
ment
Payments on account
146,517
–4,364
280
10,927
67,329
–2,453
12,169
–34
154
0
442
6,418
7,178
33,640
1,528
3,900
155,732
3,893
973
68,528
0
–12,270
7,043
5,772
31
438,742
Property, plant and equipment
422,955
–12,554
202,364
–6,493
132
21,631
Financial assets
5,054
0
32
112
Assets
498,600
–14,605
10,775
38,487
160
–770
4,268
67
0
0
100
7,107
–770
525,380
223,406
–6,729
–2,583
27,561
3,540
2,290
5,830
5,921
9,466
6,244
0
2
75
55
0
96,148
–3,008
46,777
–1,744
0
0
0
0
0
0
0
0
0
0
0
187
–3
63,431
144,008
137,501
1,424
3,596
0
5,207
0
6,347
3
0
0
0
0
0
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
0
0
0
0
0
0
0
0
0
0
0
0
0
0
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
445,617
2,575
63
594
474,179
19,132
–360
–4
18,768
492,947
–12,540
70,253
–22,717
70,253
–22,717
80
80
–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
–15,180
–25,684
91,644
18,552
91,644
18,552
1
1
–15,180
–25,684
91,644
18,553
110,197
–476
1,018
2,752
2,752
208
208
–476
1,018
2,752
208
2,960
–15,656
–24,666
94,396
18,761
113,157
19,800
5,530
554,110
–1,590
144
594
578,588
24,792
–280
–4
24,508
603,096
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
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, 2012
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
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
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
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
Net cash changes in cash and cash equivalents
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
Note
2011/12 Prev. year
94,396
28,364
1,471
–6,399
72,922
27,561
1,776
1,867
117,832
104,126
22,776
–528
–213
–293
–34,588
–16,649
–1,331
14,242
(A)
104,161
101,213
1,343
859
–46,213
–33,661
0
35
–2,343
–4,735
278
–610
931
–113
–9,033
–15,670
(B)
–56,578
–52,354
–15,656
–13,089
–3,420
2,852
(C)
–19,076
–10,237
28,507
38,622
7,562
–5,393
146,899
113,670
(D)
182,968
146,899
The cash flow statement, which has been prepared ac-
cording to IAS 7 (indirect method), shows the changes in
cash and cash equivalents of the KWS Group in the three
categories of operating activities, investing activities, and
financing activities. The effects of exchange rate changes
and changes in the consolidated group have been elimi-
nated 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 substan-
tially determined by cash earnings. They were €117,832
thousand, €13,706 thousand higher than the previous
year. The proportion of cash earnings included in sales was
11.9% (12.2%). Higher receivables and inventories and the
increase in current provisions resulted in cash outflows of
€13,671 thousand (€2,913 thousand). The cash proceeds
from operating activities also include interest income of
€2,158 thousand (€1,686 thousand) and dividend income
of €7 thousand (€5 thousand) as well as interest expense of
€3,398 thousand (€4,960 thousand). €0 thousand (€769
thousand) was paid out for the external financing of pension
commitments. Income tax payments amounted to €33,817
thousand (€35,057 thousand).
(B) Cash flows from investing activities
A net total of €56,578 thousand (€52,354 thousand) was re-
quired to finance investing activities. An amount of €48,556
thousand (€38,396 thousand) was paid for intangible and tan-
gible assets and an amount of €610 thousand (€113 thousand)
for financial assets. There were total cash receipts of €1,621
thousand (€1,825 thousand) for disposals of assets. €9,033
thousand (15,670 thousand) was paid to acquire shares in con-
solidated companies.
(C) Cash flows from financing activities
Financing activities resulted in cash payments of €19,076
thousand (€10,237 thousand). The dividend payments to par-
ent shareholders and other shareholders related to the divi-
dends of €15,180 thousand (€12,540 thousand) paid to the
shareholders of KWS SAAT AG, as well as profit distributions
paid to other shareholders at fully consolidated subsidiaries
of €476 thousand (€549 thousand). In addition, borrowings
of €3,420 thousand were paid, compared with the € –2,852
raised in the previous year.
(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
include €55,452 thousand (€36,541 thousand) from par-
tially 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
2011/12
Previous
year
32,002
16,500
0
0
32,002
16,500
0
45
0
0
830
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
2011/12
Previous year
Acquired
35,498
16,150
5,218
38,816
Sold
Acquired
Sold
0
0
0
0
12,214
10,120
42
10,906
0
0
0
0
All the shares in the Brazilian breeding companies DELTA
PESqUISA E SEMENTES LDTA., Cambé, and SEMILIA
GENETICA E MELHORAMENTO LDTA., Curitiba, were ac-
quired effective June 1, 2012, and a 50% stake in the pro-
duction and distribution company RIBER KWS S.A., Patos
de Minas, effective June 30, 2012.
These breeding and production companies expand our
product portfolio and enable us to enter the Brazilian corn
market. Apart from acquired goodwill of €25,801 thousand,
particularly the customer base, brand names and other in-
tangible assets also had to be recognized.
Intangible assets
Property, plant and equipment
Financial assets
Inventories
Trade receivables
Other assets
Total assets
Other provisions
Financial borrowings
Trade payables
Deferred taxes
Total liabilities
2011/12
27,436
7,873
188
4,451
9,254
2,491
51,693
1,950
6,800
25,755
9,529
44,034
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 of €6,789 thousand.
Minority interests in equity rose by €1,284 thousand as a
result of the acquisition. The provisions include €320 thou-
sand for obligations under an earn-out clause.
Segment reporting
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 follow-
ing business segments:
• Sugarbeet
• Corn
• Cereals
• Corporate
A core competency for the KWS Group’s entire product
range, plant breeding, including the related biotechnology
research, is largely concentrated at the parent company
KWS SAAT AG in Einbeck. All breeding material, as well
as the relevant information and expertise about how to
use it, is owned by KWS SAAT AG with respect to sugar-
beet and corn and by KWS LOCHOW GMBH with respect
to cereals. Since the beginning of this fiscal year, product-
related R&D costs have been carried directly in the prod-
uct segments Sugarbeet, Corn and Cereals. Centrally
controlled, Group-wide corporate functions are grouped
in the Corporate Segment. The previous year’s figures
have been adjusted accordingly, with the result that there
is higher income for the previous year of €23,743 thou-
sand at the Sugarbeet product segment, €1,636 thou-
sand at Corn and €128 thousand at Cereals, while
€25,507 thousand was charged to the Corporate Seg-
ment. Because of their minor importance within the KWS
Group, the distribution and production of oil and field
seed are reported in the Cereals and Corn Segments, in
keeping with the legal entities involved.
Description of segments
Sugarbeet
The results of the multiplication, processing and distri-
bution activities for sugarbeet seed, as well as our seed
potato business, are reported under the Sugarbeet Seg-
ment. Under the leadership of KWS SAAT AG, 18 (20)
foreign subsidiaries and affiliated companies and two
(one) subsidiaries in Germany are active in this segment.
Corn
KWS MAIS GMBH is the lead company for the Corn
Segment. In addition to KWS MAIS GMBH, business
activities are conducted by one German company (as in
the previous year) and 16 (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.
Cereals
The lead company of this segment, which essentially deals
with 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 (eight) foreign subsidiaries and affiliated companies
in France, Great Britain, the U.S. and Poland.
Corporate
Apart from revenue from our farms and services for third
parties, net sales from strategic projects, such as our corn
activities in China, are reported in this segment. The seg-
ment also assumes the costs of all central functions and
expenses for long-term research projects that have not yet
reached market maturity.
It also includes all management services of KWS SAAT
AG, such as holding company and administrative func-
tions, that are not directly charged to the product seg-
ments or indirectly allocated to them by means of an ap-
propriate 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 from third parties (ex-
ternal 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 revenue
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
Corporate
KWS Group
2011/12
Previous
year
2011/12
Previous
year
2011/12
Previous
year
Segment sales
Internal sales
External sales
313,692
293,565
571,765
477,609
95,095
15,998
79,537
18,546
264
290
1,840
7,860
996,550
869,257
10,254
0
49
1,775
12,058
13,882
313,428
571,475
93,255
8,138
293,565
477,560
77,762
6,488
986,296
855,375
The Corporate Segment generates 49.1% (65.0%) of its sales
from the other segments. The sales of this segment repre-
sents 0.8% (0.8%) of the Group’s external sales.
External sales by region
The Corn Segment is the largest contributor of external sales,
accounting for 57.9% (55.8%) of external sales, followed by
Sugarbeet with 31.8% (34.3%) and Cereals with 9.5% (9.1%).
62.8% (64.8%) of total sales are recorded in Europe
(including Germany).
Germany
Europe (excluding Germany)
390,720
343,376
Americas
Rest of world
KWS Group
325,633
265,064
41,615
36,075
986,296
855,375
2011/12
Previous
year
228,328
210,860
Sugarbeet
Corn
Cereals
Corporate
Total segments
2011/12
Previous
year
2011/12
Previous
year
2011/12
Previous
year
Segment earnings
Depreciation
and amortization
Other noncash items
79,891
77,764
18,941
–35,742
140,854
65,882
63,639
14,465
–27,349
116,637
9,345
8,449
3,489
7,093
9,334
8,441
3,489
6,197
–7,323
–10,637
650
3,713
2,646
–11,743
–372
3,925
28,376
27,461
–13,597
–5,544
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 attributable income
and expenses. Items that are not directly attributable are al-
located to the segments by means of an appropriate formula.
Depreciation and amortization charges of €28,376 thou-
sand (€27,461 thousand) allocated to the segments relate
exclusively to intangible assets and property, plant and
equipment. No goodwill had to be amortized in the seg-
ments this fiscal year.
Sugarbeet
Corn
Cereals
Corporate
Total segments
Others
KWS Group
2011/12
Previous year
2011/12
Previous year
Operating assets
Operating liabilities
242,404
426,729
60,796
92,241
822,170
270,146
1,092,316
217,879
313,596
59,210
93,635
684,320
217,644
901,964
54,437
157,527
14,341
74,278
300,583
188,637
489,220
59,882
126,721
15,675
35,751
238,029
133,674
371,703
The other noncash items recognized in the income state-
ment relate to noncash changes in the allowances on in-
ventories and receivables, and in provisions.
Investments in long-term assets by segment
The operating assets of the segments are composed of in-
tangible assets, property, plant and equipment, inventories
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 appropriate formula.
Sugarbeet
Corn
Cereals
Corporate
KWS Group
2011/12
20,327
77,379
6,987
5,967
110,660
Previous
year
17,755
12,522
7,991
10,850
49,118
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 in-
crease operating assets by a corresponding amount.
The operating liabilities attributable to the segments include
the borrowings reported on the balance sheet, less provi-
sions for taxes and the portion of other liabilities that cannot
be charged directly to the segments or indirectly allocated
to them by means of an appropriate formula. Borrowings
are added to operating liabilities only when they exceed the
available cash. Assets or liabilities that have not been allo-
cated to the segments are reported as “Others.”
Capital expenditure on assets was mainly attributable to
the Corn Segment, where it amounted to €77,379 thousand
(€12,522 thousand), and the Sugarbeet Segment, where it
amounted to €20,327 thousand (€17,755 thousand). 68%
(14%) of the capital spending was made in North and South
America and 19% (46%) in Europe (excluding Germany).
Investments in long-term assets by region
2011/12
14,793
20,553
74,978
336
Previous
year
19,579
22,609
6,796
134
110,660
49,118
Germany
Europe (excluding Germany)
North and South America
Rest of world
KWS Group
Operating assets by region
Germany
2011/12
Previous
year
233,428
324,993
Europe (excluding Germany)
270,374
208,748
North and South America
297,765
185,240
Rest of world
KWS Group
20,602
15,747
822,169
734,728
60
Annual Financial Statements I Segment reporting I 61
Notes for the KWS Group 2011/2012
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 Standards
(IFRS) published by the International Accounting Standards
Board (IASB), London, taking into account the interpreta-
tions of the International Financial Reporting Interpretations
Committee (IFRIC) and in addition the commercial law reg-
ulations to be applied pursuant to section 315 a (1) of the
HGB (German Commercial Code). The consolidated finan-
cial statements discharge the obligations 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 applied: Amendments to IAS 1, 12, 19, 24, 27,
28, 32, 34, IFRS 1, 7, 9, 10, 11, 12, 13, and the Improve-
ment Project 2009–2011. To the extent that these relate
to supplementary disclosure obligations, there will be no
effects on the balance sheet or statement of comprehen-
sive income. The possible effects of the other changes are
currently being examined. The statements were prepared
under the assumption 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 chosen to
date. The goodwill reported in the HGB financial statements
as of June 30, 2003, was therefore transferred unchanged
at its carrying amount to the opening IFRS balance sheet.
For acquisitions made after June 30, 2003, capital consoli-
dation follows the purchase method by allocating 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 consolidation is recognized un-
der intangible assets. According to IAS 36, goodwill is not
amortized, but tested for impairment at least once a year
(impairment-only approach). Investments in non-consolidat-
ed companies are carried at cost. 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 as-
sociated companies measured at equity only if such rec-
ognition 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 provisions are net-
ted between the consolidated companies. Intercompany
profits not realized at Group level are eliminated from in-
tra-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 aggre-
gated 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.
lives are recognized according to IAS 36. Goodwill with
an indefinite 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 assets 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 attri-
butable 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 of 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 assets. Im-
pairment losses on property, plant and equipment are rec-
ognized according to IAS 36 whenever the recoverable
amount of the assets 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.
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 func-
tional 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 aver-
age 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
expenses are reported separately for reasons of transpar-
ency. Research grants are not deducted from the costs
to which they relate, but reported gross under other oper-
ating income.
Accounting policies
Consistency of accounting policies
The accounting policies are largely unchanged from the previ-
ous year. All estimates and assessments as part of accounting
and measurement are continually reviewed; they are based on
historical patterns and expectations about the future 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 twenty years.
Impairment losses on intangible assets with finite useful
62
Annual Financial Statements I Notes I 63
Financial instruments
Financial instruments are in particular financial assets
and financial liabilities. The financial assets consist pri-
marily of bank balances and cash on hand, trade recei-
vables, other receivables, and securities. The credit risk
mainly comprises trade receivables. The amount reco-
gnized in the balance sheet is net of allowances for re-
ceivables expected to be uncollectible, estimated on the
basis of historical patterns and the current economic
environment. The credit risk on cash and derivative
financial instruments is limited because they are kept
with banks that have been given a good credit rating by
international rating agencies. There is no significant con-
centration 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.
Permanent impairment losses are recognized immediately
through the income statement. Borrowings are carried at
amortized cost.
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 instruments is determined on the
basis of the market information available on the balance
sheet date and in accordance with the recognized mea-
surement methods and must be assigned to a level in the
fair value hierarchy.
Financial instruments in level 1 are measured using quoted pri-
ces 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 similar instruments.
Finally, input factors not based on observable 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 catego-
ries defined in IAS 39:
The other noncurrent financial assets are essentially avail-
able 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.
The financial liabilities comprise in particular trade payables,
borrowings and other liabilities.
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.
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. Discernible 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
designated hedging instruments in accordance with IAS 39.
They are measured at fair value. Changes in value are rec-
ognized 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, secu-
rities 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 in-
struments are written down to the lower value. Any subse-
quent decreases in the impairment loss are recognized di-
rectly 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.
Securities are generally classified as available for sale, which
is why changes in their fair values that require reporting 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 income for the period.
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 attribut-
able 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 in accrued 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.
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.
64
Annual Financial Statements I Notes I 65
Contingent liabilities
The contingent liabilities result from debt obligations where
outflow of the resource is not probable or from obligations
for loan amounts drawn down by third parties as of the
balance sheet date.
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 car-
ried in these IFRS financial statements are partly based
on estimates and specifically defined specifications. This
relates in particular to:
• Determination of the useful life of the depreciable asset
• Definition of measurement assumptions and future
results in connection with impairment tests, above all
for goodwill that is carried
• Determination of the net selling price for inventories
• Definition of the parameters required for measuring
pension provisions
• Selection of parameters for the model-based measure-
ment of derivatives
• Determination whether tax losses carried forward can
be used
• Determination of the fair value of intangible assets, tan-
gible assets and liabilities acquired as part of a business
combination and determination of the service lives of
the purchased intangible assets 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
06/30/2012
Previous year
Consolidated
Consolidated at quota
Total
13
0
13
43
7
50
56
7
63
12
0
12
41
7
48
53
7
60
The companies are listed under item number (31).
BETASEED GMBH, Frankfurt, was established effective
October 1, 2011. In addition, the newly founded KWS
SEMENTES BRASIL PARTICIPACOES LDTA., São Paulo/
Brazil, and KWS BRASIL PARTICIPACOES LDTA., São Paulo/
Brazil, acquired all the shares in DELTA PESqUISA E
SEMENTES LDTA., Cambé/Brazil, and SEMILIA GENETICA
E MELHORAMENTO LDTA., Curitiba/Brazil, effective June 1,
2012. A 50% stake in the likewise fully consolidated RIBER
KWS S.A., Patos de Minas/Brazil, was also acquired effec-
tive June 30, 2012.
A total of 56 companies were fully consolidated and seven
proportionately consolidated in the year under review.
The financial position and results of operations of the
seven (seven) proportionately consolidated companies
are as follows:
2011/12
Previous
year
Proportionately
consolidated companies
36,997
31,812
139,434
109,417
176,431
141,229
99,557
78,066
824
881
76,050
62,282
Noncurrent assets
Current assets
Total assets
Equity
Noncurrent liabilities
Current liabilities
Total equity and liabilities
176,431
141,229
Total income
Total expenses
238,494
195,689
217,857
176,930
Net profit for the year
20,637
18,759
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 break-
down of assets summarized in the balance sheet and
shows how they changed in 2011/2012. Capital expenditure
on assets was €111,549 thousand (€49,262 thousand), of
which €61,142 thousand resulted largely from first-time con-
solidation of the Brazilian corn operations. The Management
Report describes the significant additions to assets. Depre-
ciation and amortization amounted to €28,376 thousand
(€27,561 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 €55,618
thousand (€15,036 thousand), of which €53,275 thousand
(€10,301 thousand) resulted from the changes in the consoli-
dated group, comprise the acquisition of software licenses and
patents, as well as goodwill to be recognized. Amortization
of intangible assets amounted to €5,076 thousand (€5,830
thousand); this charge is included in the relevant functional
costs and the other operating expenses, depending on the
operational use of the intangible assets.
realizable value and its value in use (value of future cash flows
expected to be derived from the entity). In principle, the impair-
ment test uses the expected future cash flows on which the
medium-term plans of the companies 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 assumptions
on which corporate planning is based include assumptions
about price trends for seed, in addition to the development
of market shares and the regulatory framework. Company-
internal projections take the assumptions of industry-specific
market analyses and company-related growth perspectives
into account.
A standard discount rate of 5.4% (6.4%) 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 determined for the cash-gen-
erating units is not impaired.
The goodwill recognized as an asset relates mainly to the Bra-
zilian companies RIBER KWS S.A. – €21,686 thousand (€0
thousand), SEMILIA GENETICA E MELHORAMENTO LDTA. –
€2,471 thousand (€0 thousand), and DELTA PESqUISA E
SEMENTES LDTA. – €1,644 thousand (€0 thousand), and to
AGRELIANT GENETICS LLC. – €17,973 thousand (€16,619
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 (€2,150
thousand) – in the Sugarbeet Segment.
In order to meet the requirements of IFRS 3 in combination
with IAS 36 and to determine any impairment of goodwill,
cash-generating units have been defined in line with internal
reporting guidelines. At the KWS Group, these are generally
the legal entities, with the exception of our potato unit, which
as a whole is the cash-generating unit. To test for impairment,
the carrying 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 re-
coverable amount of an entity is less than its carrying amount.
The recoverable amount is the higher of the entity’s net
(3) Property, plant and equipment
Capital expenditure amounted to €55,042 thousand (€34,082
thousand) and depreciation amounted to €23,300 thousand
(€21,631 thousand). €7,588 thousand (€442 thousand) of the
capital expenditure on property, plant and equipment result
from the changes in the consolidated group. The Manage-
ment 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 €948 thousand (€768 thousand),
are reported in this account since a market value cannot be
reliably determined. Listed shares are carried at market value
of €162 thousand (€144 thousand). This account also includ-
es interest-bearing homebuilding loans to employees and
other interest-bearing loans totaling €172 thousand (€396
thousand). In addition, the balance of €3,099 thousand
(€2,794 thousand) after netting off reinsurance claims and
the corresponding benefit obligations is carried. Amortization
of financial assets amounted to €0 thousand (€100 thou-
sand) and relates to the category “available for sale.”
66
Annual Financial Statements I Notes to the balance sheet I 67
(5) Noncurrent tax assets
This relates to the present value of the corporate income
tax credit balance, which was last determined at December
31, 2006, and has been paid in ten equal annual amounts
since September 30, 2008. This credit balance was in-
creased by €1,955 thousand pursuant to an external tax
audit for the years 2001 to 2005 and accordingly carried
as tax proceeds relating to previous periods.
(6) Deferred tax assets
Under IAS 12, deferred tax assets are calculated as the dif-
ference between the IFRS balance sheet amount and the tax
base and on the basis of loss carryforwards. They are re-
ported on a gross basis and total €25,970 thousand (€29,147
thousand), of which €3,197 thousand (€2,287 thousand) will
be carried forward for the future use of tax losses.
(7) Inventories and biological assets
Raw materials and consumables
Work in process
Immature biological assets
Finished goods
06/30/2012
Previous
year
16,761
37,043
14,313
71,577
15,091
33,223
10,293
70,391
139,694
128,998
Inventories increased by €10,696 thousand, or 8.3%, net of
writedowns totaling €51,336 thousand (€55,204 thousand).
Immature biological assets relate to living plants in the pro-
cess of growing (before harvest). The field inventories of the
previous year have been harvested in full and the fields have
been newly tilled in the year under review. Public subsidies
of €1,749 thousand (€1,575 thousand), for which all the
requirements were met at the balance sheet date, were
granted for the total area under cultivation of 4,410 (4,456)
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
06/30/2012
Previous
year
309,422
268,209
25,957
23,993
14,322
19,173
359,372
301,704
Trade receivables amounted to €309,422 thousand, an in-
crease of 15.4% over the figure of €268,209 thousand for
the previous year; this amount includes €2,137 thousand
(€1,294 thousand) in receivables from related parties.
Written-down and overdue receivables
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
1 – 90
days
91 – 180
days
181 – 360
days
> 360 days
276,231
17,686
5,678
2,584
1,135
18,908
2
0
0
0
295,139
17,688
5,678
2,584
1,135
234,532
18,669
5,745
2,824
3,095
15,392
10
0
0
0
249,924
18,679
5,745
2,824
3,095
3,890
343
4,233
1,868
343
2,211
Carrying
amount
309,422
19,254
328,676
268,209
15,747
283,956
06/30/2012
Trade receivables
Other receivables
Previous year
Trade receivables
Other receivables
68
The item “Other current assets” includes prepaid expenses
total-ing 4,739 thousand (€3,426 thousand) in addition to
other receivables of €19,254 thousand (€15,747 thousand).
The already overdue trade receivables that have been partly
written down amount to €2,219 thousand (€1,478 thousand).
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:
07/01 Addition Disposal Reversal
06/30
2011/12
33,017
12,780
4,204
12,495 29,098
2010/11
30,004
8,721
2,456
3,252
33,017
Equity (including minority interest) increased by €72,835
thousand, from €530,261 thousand to €603,096 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
92,287
63,028
06/30/2012
Previous
year
Long-term financial
borrowings
Trade payables
Deferred tax liabilities
Other long-term liabilities
23,033
1,914
36,043
8,207
19,421
2,308
24,657
9,311
161,484
118,725
The receivables include an amount of €79 thousand (€1,374
thousand) due after more than one year.
(9) Securities
Securities amounting to €40,399 thousand (€36,621 thou-
sand) relate primarily to short-term liabilities securities and
fund shares.
(10) Cash and cash equivalents
Cash of €142,569 thousand (€110,278 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
by a global certificate for 6,600,000 shares. The company
does not hold any shares of its own.
The pension provisions are based on defined benefit obli-
gations, determined by years of service and pensionable
compensation. They are measured using the accrued ben-
efit 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% (3.00%) an-
nually and pensions by 2.00% (2.00%) annually.
The discount rate was 5.10%, compared with 5.13% 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
toward three former members of the Executive Board and
backed by a guarantee by an insurance company, the plan-
ned assets of €8,599 thousand (€7,570 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
07/01/2011
Changes in
the consol.
group,
currency
Addition Consumption
Reversal 06/30/2012
Pension provisions
Other provisions
57,049
5,979
63,028
–3,234
1,867
–1,367
4,266
29,523
33,789
869
2,288
3,157
0
6
6
57,212
35,075
92,287
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 the end of the 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
Payments from external social security bodies
Currency difference from foreign planned assets
Present value of planned assets at the end of the fiscal year
2011/12
Previous
year
80,069
83,740
916
4,842
718
15,571
1
4,826
97,291
1,371
4,435
–1,813
–3,286
344
4,722
80,069
–18,031
–16,286
3,099
–25,147
57,212
2,794
–9,528
57,049
2011/12
Previous
year
16,286
16,721
1,162
214
–943
1,312
18,031
948
815
–869
–1,329
16,286
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
06/30/2012
06/30/2011
06/30/2010
06/30/2009
06/30/2008
97,291
18,031
79,260
80,069
16,286
63,783
2,538
91
–832
–229
83,740
16,721
67,019
990
161
71,100
12,948
58,152
68,372
13,577
54,795
201
1,042
–1,551
–1,028
Costs for additional benefit entitlements
Interest expense
Repayment of actuarial losses
Anticipated income from the planned assets
Pension costs
2011/12
Previous
year
916
4,842
197
–1,161
4,794
1,371
4,435
461
–948
5,319
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 contribution to this pension plan were €977 thousand
(€769 thousand).
value of the obligation of €3,514 thousand (€4,165 thou-
sand) (defined contribution plan).
The long-term financial borrowings include loans from banks
amounting to €21,228 thousand (€19,421 thousand). They
have remaining maturities through 2017.
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 €506 thousand
(€516 thousand) is expected.
In addition, the benefit obligation from salary conversion was
backed by a guarantee that exactly matches the present
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
€36,043 thousand (€24,657 thousand), The composition
of the deferred tax liabilities is explained in more detail un-
der (22) Income taxes.
(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
06/30/2012
Previous
year
133,984
107,396
22,771
271
29,077
52,119
0
74,073
74,073
13,673
275
257
14,205
8
69,341
69,349
24,053
25,513
43,507
36,515
327,736
252,978
70
Annual Financial Statements I Notes to the balance sheet I 71
Short-term provisions
07/01/2011
Changes in
the consol.
group,
currency
Addition Consumption
Reversal 06/30/2012
Obligations from
sales transaction
Obligations from
purchase transaction
Other obligations
79,119
11,783
95,232
82,012
5,075
99,047
8,580
19,697
107,396
135
1,465
11,615
17,038
3,061
16,113
4,048
371
13,221
21,716
13,383
123,885
101,186
9,494
133,984
The tax liabilities of €24,053 thousand (€25,513 thousand) include amounts for the year under review and the period not yet
concluded by the external tax audit.
(14) Derivative financial instruments
Nominal
volume
Carrying
amounts
Market
values
06/30/2012
Currency hedges
Interest-rate hedges
Commodity hedges
42,214
42,200
10,793
95,207
493
36
0
529
493
Currency hedges
Interest-rate hedges
Commodity hedges
36
0
529
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, €112 thousand have remaining maturities of more than one year. Of the interest-rate derivatives,
hedges with a nominal volume of €21,200 thousand will mature within one to five years and hedges with a nominal
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
2011/12
102
68
1,190
–7,189
–4,608
Previous
year
–69
–17
–4,311
–4,546
4,352
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 €2,096 thousand (€1,719 thousand). Interest
expenses for financial borrowings were €7,189 thousand
(€4,546 thousand).
In order to assess the risk of exchange rate changes, the
sensitivity of a currency to fluctuations was determined. Af-
ter the euro, the US dollar is the most important currency in
the KWS Group. All other currencies are of minor importance.
The average exchange rate in the fiscal year was 1.34 USD/€.
If the US dollar depreciated by 10%, the financial instruments
would lose 7.5% in value. If the US dollar appreciated by 10%,
the financial instruments would gain 7.5% in value. The net
income for the year and equity would change accordingly.
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 0.93%. A 1%
increase in the rate of interest would reduce the interest
result by €0.4 million; equity would change by € –0.3 mil-
lion. A reduction in the rate of interest to 0 percentage points
would add a further €0.6 million to the interest result. Equity
would increase by €0.4 million in the event of such a change
in the rate of interest.
In order to assess the risk of changes in commodity pri-
ces, the sensitivity of commodity prices to fluctuations was
determined. A 10% increase in commodity prices would in-
crease the cost of sales by around €1.1 million; a decrease
would reduce it by around €1.1 million.
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:
06/30/2012
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
1,938
309,422
40,399
142,569
23,993
(1,152)
0
309,422
40,399
142,569
22,841
(0)
0
0
0
0
1,152
(1,152)
1,152
1,938
1,938
0
0
0
0
309,422
40,399
142,569
23,993
(0)
(1,152)
1,938
518,321
Total
518,321
515,231
06/30/2012
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
23,033
1,914
8,207
52,119
74,073
43,507
(623)
23,033
1,914
8,207
52,119
74,073
42,884
(0)
0
0
0
0
0
623
(623)
23,033
1,914
8,207
52,119
74,073
43,507
(623)
Total
202,853
202,230
623
202,853
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
1,308
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
Securities classified within level 1 of the fair value hierarchy
totaled €40,399 thousand at June 30, 2012. Financial as-
sets held for trading (€1,152 thousand) and financial liabili-
ties held for trading (€623 thousand) are categorized in level
2. There are no financial instruments in level 3.
(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 €8,283 thousand (€7,042 thousand) obligation
from uncompleted capital expenditure projects.
Obligations under rental
agreements and leases
06/30/2012
Previous
year
Due within one year
Due between 1 and 5 years
Due after 5 years
9,329
12,849
3,628
8,456
7,913
2,446
25,806
18,815
The leases relate primarily to full-service agreements for IT
equipment and fleet vehicles, which also include services, for
which a total of €2,858 thousand (€2,737 thousand) was paid
in the year under review. The main leasehold obligations 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
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
None of the reported financial instruments will be held to maturity.
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, 2011 through June 30, 2012
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
i millions
% of sales
i millions % of sales
2011/12
Previous year
986.3
521.3
465.0
161.4
126.6
59.5
62.6
39.2
140.9
–5.2
135.7
41.3
94.4
2.8
91.6
100.0
52.9
47.1
16.4
12.8
6.0
6.4
4.0
14.3
–0.5
13.8
4.2
9.6
0.3
9.3
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
2011/12
Previous
year
908,990
785,154
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.
41,217
13,247
4,935
17,907
38,198
13,225
4,404
14,394
986,296
855,375
228,328
210,860
390,720
343,375
325,633
265,064
41,615
36,076
986,296
855,375
The cost of sales increased by €87,978 thousand
to €521,343 thousand, or 52.9% (50.7%) of sales. The
total cost of goods sold was €301,209 thousand
(€232,605 thousand).
Allowances on inventories totaling €3,867 thousand less
(previous year: €8,048 less) were required. The Sugar-
beet Segment’s allowances were lower by €7,973 thou-
sand (€968 thousand), while additional allowances totaling
€2,666 thousand (previous year: reduction by 6,315 thou-
sand) in the Corn Segment, €368 thousand (previous year:
reduction by 810 thousand) in the Cereals Segment and
€1,072 thousand (€45 thousand) in the Corporate Segment
were required.
The €22,854 thousand increase in selling expenses to
€161,355 thousand is attributable to intensified market
cultivation and diversification of sales channels. This is
16.4% of sales, up from 16.2% the year before.
For further details of sales, see segment reporting.
In the year under review, allowances for receivables of
€6,722 thousand (€5,742 thousand) were recognized
as an expense at the Corn Segment, €5,647 thousand
(€2,816 thousand) at the Sugarbeet Segment, €411
thousand (€139 thousand) at the Cereals Segment and
€0 thousand (€24 thousand) at the Corporate Segment.
(21) Net financial income/expenses
Interest income
Interest expenses
Income from securities
Income from other financial
assets
Interest expenses from
pension provisions
Interest expense for other
long-term provisions
Interest expense for finance
leasing
2011/12
2,165
3,398
1
95
Previous
year
1,693
4,960
0
26
3,681
3,487
173
157
135
16
Net interest expense
–5,148
–6,879
Net income from participations
Write-downs of financial assets
Net income from equity
investments
7
0
7
5
100
–95
The net financial result increased by a total of €1,833
thousand to € –5,141 thousand. Net interest expense was
€ –5,148 thousand (€ –6,879 thousand), while net income
from equity investments increased by €102 thousand
to €7 thousand. The interest effects from pension provi-
sions comprise interest expenses (compounding) and the
planned income.
380
234
Net financial income/expenses
–5.141
–6.974
Research and development is recognized as an ex-
pense in the year it is incurred; in the year under review,
this amounted to €126,571 thousand (€113,539 thou-
sand the year before). Development costs for new varie-
ties 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 fell by €503 thou-
sand to €59,494 thousand, representing 6.0% of sales, af-
ter 7.0% the year before.
(19) Other operating income
Income from sales of fixed assets
576
494
2011/12
Previous
year
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
9,489
10,103
15,560
6,228
12,495
5,201
3,252
5,278
5,841
3,286
13,095
62,637
14,880
43,755
The increase in other operating income is mainly attribut-
able to income from currency and interest rate hedges and
income from reversal of accounts receivable for which al-
lowances had been formed.
(20) Other operating expenses
Legal form expenses
Allowances on receivables
Counterparty default
Exchange rate losses
and losses on currency
and interest rate hedges
2011/12
1,112
12,780
87
Previous
year
981
8,721
908
13,021
10,950
Losses from sales of fixed assets
48
Expenses relating to previous
periods
Expense from remeasurement of
intangible assets
Other expenses
1,539
0
10,729
39,316
201
277
5,862
9,191
37,091
76
Annual Financial Statements I Notes to the income statement I 77
(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
Deferred taxes, Germany
Deferred taxes, other countries
Deferred tax income/expense
Reported income tax
expense
2011/12
17,010
16,248
Previous
year
17,875
20,811
33,258
38,686
(631)
–1,387
9,446
8,059
(–557)
–426
–1,519
–1,945
41,317
36,741
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
applied uniformly to distributed and retained profits. In
addition, 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 to-
tal tax rate of 29.1% (29.1%).
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 Ger-
man Group companies carried these claims as assets
at their present value totaling €7,311 thousand (€5,866
thousand) at June 30, 2012. €905 thousand (€901 thou-
sand) was recovered in the year under review and recog-
nized directly in equity.
Under German tax law, both German and foreign dividends
are 95% tax exempt.
The profits generated by Group companies outside Ger-
many are taxed at the rates applicable in the country in
which they are based.
For the German Group companies, deferred tax was cal-
culated at 29.1% (29.1%). For foreign Group companies,
deferred tax was calculated using the tax rates applicable
in the country in which they are based.
In the year under review, deferred taxes of € –6,503 thou-
sand (€ –4,873 thousand), mainly resulting from currency
translation, were directly credited to equity, without recog-
nition in profit or loss. €9,529 thousand of the deferred tax
liabilities relate to our Brazilian operations. Tax loss carry-
forwards of €1,026 thousand (€1,185 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 Ger-
man tax rate to the profit before tax of the entire Group:
2011/12
Previous
year
Earnings before income taxes
135,713
109,662
Expected income tax expense*)
39,492
31,912
Difference in income tax liability
outside Germany
693
2,764
(23) Personnel costs/employees
Wages and salaries
Social security contributions,
expenses for pension plans
and benefits
2011/12
Previous
year
145,644
131,193
36,844
33,780
182,488
164,973
Personnel costs went up by €17,515 thousand to €182,488
thousand, an increase of 10.6%. The number of employ-
ees (including trainees and interns) increased by 291 (or
8.2%) to 3,851.
Compensation increased by 11.0% to €145,644 thou-
sand. Social security contributions, expenses for pen-
sion plans and benefits were €3,064 thousand higher
than in the previous year. An amount of €11,161 thousand
(€10,094 thousand) was recognized as an expense for
defined contribution plans, including state pension insur-
ance, in the year under review.
Previous
Previous
2011/12
year Change
2011/12
year Change
Deferred tax assets
Deferred tax liabilities
Tax portion for:
Tax-free income
Expenses not deductible
for tax purposes
Temporary differences and
losses for which no deferred
taxes have been recognized
16,211
7,532
8,679
Tax credits
–116
–229
Rest of Europe (without Germany)
Employees*
Germany
America
Rest of world
Total
* Annual average
2011/12
Previous
year
1,589
1,061
1,106
95
3,851
1,481
982
1,020
77
3,560
5
148
167
9,618
3,983
3,916
4,432
3,197
504
3
114
2
34
3,767
–3,600
9,607
5,774
1,124
5,787
2,287
684
11
–1,791
2,792
–1,355
910
–180
13,973
13,089
972
177
3,366
1,300
38
0
6
0
231
2,543
1,181
77
0
4
884
972
–54
823
119
–39
0
2
25,970
29,147
–3,177
36,043
24,657
11,386
1,218
2,851
–44
–703
631
146
41,317
30.4 %
–19
–255
–557
274
36,741
33.5 %
Taxes relating to previous years
Other tax effects
Reported income tax expense
Effective tax rate
* Tax rate in Germany: 29.1% (29.1)%
Other taxes, primarily real estate tax, are allocated to the
relevant functions.
Of the above number, 668 (634) employees are included
according to the percentage of equity held in the compa-
nies that employ them. 1,339 (1,269) employees are em-
ployed by now seven proportionately consolidated inve-
stees. If these persons are included in full, the workforce
total is 4,522 (4,195). The reported number of employees
is greatly influenced by seasonal labor.
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
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 €21,474 thousand to
€94,396 thousand, representing a return on sales of 9.6%,
up from 8.5% in the previous year. The net profit for the pe-
riod after minority interest is €91,644 thousand, and €13.89
(€10.64) for each of the 6,600,000 shares on issue. The
long-term capitalization of KWS takes the interests of share-
holders, employees and other stakeholders into account, in
accordance with the corporate strategy. The dividend dis-
tributed is therefore 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 55.2%, following 58.8% 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 the Supervisory Board therefore
amounts to €509 thousand (€438 thousand), excluding
value-added tax. €231 thousand (€160 thousand) of the
total compensation is performance-related.
In fiscal year 2011/2012, total Executive Board compen-
sation amounted to €3,054 thousand (€2,963 thousand).
Variable compensation of €2,058 thousand (€1,969 thou-
sand), calculated on the basis of the net profit for the period
of the KWS Group, includes compensation of €38 thou-
sand (€29 thousand) for duties performed in subsidiaries.
The fixed compensation includes not only the agreed sal-
aries, but also non-monetary compensation granted by
KWS SAAT AG.
Compensation of former members of the Executive Board
and their surviving dependents amounted to €1,052 thou-
sand (€1,055 thousand). Pension provisions recognized
for this group of persons amounted to €1,394 thousand
(€1,726 thousand) as of June 30, 2012.
(26) Shareholdings of members of the Supervisory
Board and Executive Board (as of August 31, 2012)
Dr. Arend Oetker indirectly holds a total of 1,650,010 shares
and Dr. Dr. h.c. mult. Andreas J. Büchting 108,030 shares
in KWS SAAT AG. All together, the members of the Super-
visory Board hold 1,758,095 shares in KWS SAAT AG.
All together, the members of the Executive Board hold
10,677 shares in KWS SAAT AG.
(27) Audit of the annual financial statements
On December 14, 2011, the Annual Shareholders’ Meeting
of KWS SAAT AG elected the accounting firm Deloitte &
Touche GmbH, Hanover, to be the Group’s auditors for fis-
cal year 2011/2012.
Fee paid to the external auditors under
section 314 sentence 1 no. 9 of the HGB
2011/12
a) Audit of the consolidated
financial statements
b) Other certification services
c) Tax consulting
d) Other services
Total fee paid
678
18
0
9
705
For fiscal year 2012/2013, fees for consulting services (ex-
cluding auditing) of up to €50 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 it 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:
• Member of the Board of Directors of Ball
Horticultural Company, West Chicago,
Illinois (U.S.)
Dr. Arend Oetker
Berlin
Businessman
Managing Partner of
Kommanditgesellschaft Dr. Arend Oetker
Vermögensverwaltungsgesellschaft mbH & Co, Berlin
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:
• Hero AG, Lenzburg (President)
• E. Gundlach GmbH & Co. KG, Bielefeld
• Leipziger Messe GmbH, Leipzig
• Berliner Philharmonie GmbH, Berlin (Chairman)
Hubertus von Baumbach
Ingelheim am Rhein
Businessman
Member of Management of Boehringer
Ingelheim GmbH, Ingelheim am Rhein
Jürgen Bolduan
Einbeck
Seed Breeding Employee
Chairman of the Central Works Committee of KWS SAAT AG
Cathrina Claas-Mühlhäuser
Frankfurt am Main
Businesswoman
Chairwoman of the Supervisory Board of
CLAAS KGaA mbH, Harsewinkel
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
Einbeck
CEO
Corporate Affairs, Sugarbeet, Human Resources
Dr. Christoph Amberger
Northeim
Corn, Cereals, Marketing
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 (until July 4, 2012)
Membership of comparable German and
foreign oversight boards:
• Hero AG, Lenzburg (member of the Board
of Administration, since January 1, 2012)
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 Federal Gazette:
Subsidiaries and associated companies, which were included in the consolidated group1)
Sugarbeet
Corn
Cereals
Corporate
100% BETASEED INC.2)
100% KWS MAIS GMBH
81% KWS LOCHOW GMBH
100% KWS LANDWIRTSCHAFT
Shakopee, MN/U.S.
Einbeck
100% KWS FRANCE S.A.R.L.
100% KWS BENELUX B.V.5)
Roye/France
100% DELITZSCH
PFLANZENZUCHT GMBH10)
Einbeck
100% O.O.O. KWS RUS12)
Lipezk/Russia
100% O.O.O. KWS R&D RUS11)
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
Amsterdam/Netherlands
100% KWS SEMENA S.R.O.5)
Bratislava/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)
Pozega/Croatia
100% KWS OSIVA S.R.O.5)
Velke Mezirici/Czech Republic
100% KWS SEMENA BULGARIA
E.O.O.D.5)
Sofia/Bulgaria
100% AGROMAIS GMBH5)
Everswinkel
100% SEMILLAS KWS CHILE LTDA.
100% KWS MAGYARORSZÁG KFT.5)
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.18)
Sarreguemines/France
100% BETASEED LTD.4)
Rothwell/UK
100% KWS UKRAINE T.O.W.12)
Kiev/Ukraine
100% KWS TÜRK TARIM TICARET A.S.10)
Eskisehir/Turkey
100% BETASEED GMBH
Frankfurt
100% KWS POTATO B.V.17)
Emmeloord/Netherlands
83% DYNAGRI S.A.R.L.16)
Casablanca/Morocco
Györ/Hungary
100% KWS SEMINTE S.R.L.13)
Bucharest/Romania
99% 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
100% DELTA PESqUISA E
SEMENTES LTDA.21)
Cambé/Brazil
100% SEMILIA GENETICA E
MELHORAMENTO LTDA.21)
Curitiba/Brazil
50% RIBER KWS S.A.21)
Patos de Minas/Brazil
Bergen
100% KWS UK LTD.7)
Thriplow/UK
100% KWS LOCHOW
POLSKA SP.Z O.O.7)
Kondratowice/Poland
100% KWS CEREALS USA LLC.7)
Shakopee, MN/USA
49% SOCIETE DE MARTINVAL S.A.8) *
Mons-en-Pévèle/France
100% SA MOMONT HENNETTE14)
Mons-en-Pévèle/France
95% SARL LABOGERM14)
Mons-en-Pévèle/France
100% SARL ADRIEN MOMONT14)
Mons-en-Pévèle/France
100% SCA HAMET14)
Mons-en-Pévèle/France
GMBH**
Einbeck
100% KWS INTERSAAT GMBH
Einbeck
100% KWS SEEDS INC.9)
Shakopee, MN/U.S.
100% GLH SEEDS INC.2)
Shakopee, MN/U.S.
100% KWS SAATFINANZ GMBH
Einbeck
100% RAGIS KARTOFFELZUCHT- UND
HANDELSGESELLSCHAFT MBH
Einbeck
100% KWS KLOSTERGUT
WIEBRECHTS HAUSEN GMBH
Northeim-Wiebrechtshausen
100% EURO-HYBRID GESELLSCHAFT
FÜR GETREIDEZÜCHTUNG MBH
Einbeck
100% KWS SEMENTES BRASIL
PARTICIPACOES LTDA.19)
São Paulo/Brazil
100% KWS BRASIL PARTICIPACOES
LTDA.20)
São Paulo/Brazil
100% KWS R&D CHINA LTD.15)
Hefei/China
100% KWS SERVICES DEUTSCHLAND
GMBH
Einbeck
100% KWS SERVICES EAST GMBH
Vienna/Austria
100% KWS SERVICES NORTH B.V.
Rotterdam/Netherlands
100% KWS SERVICES
MEDITERRANEAN S.A.S.
Roye/France
* Proportional consolidation
** Profit transfer agreement
1) The percentages shown for each company relate to the share
in that company held within the KWS Group
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.
7) Subsidiary of KWS LOCHOW GMBH
8) Investee of KWS LOCHOW GMBH
9) Subsidiary of KWS INTERSAAT GMBH and KWS SAAT AG
10) Subsidiary of KWS INTERSAAT GMBH
11) Subsidiary of O.O.O. KWS RUS
12) Subsidiary of EURO-HYBRID GMBH and KWS SAATFINANZ GMBH
13) Subsidiary of KWS MAIS GMBH and 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
18) Subsidiary of BETASEED GMBH
19) Subsidiary of KWS INTERSAAT GMBH and KWS SAATFINANZ GMBH
20) Subsidiary of KWS SEMENTES BRASIL PARTICIPACOES LTDA.
and KWS INTERSAAT GMBH
21) Subsidiary of KWS BRASIL PARTICIPACOES LTDA.
June 30, 2012
(32) Proposal for the appropriation of net retained profits
KWS SAAT AG posted operating income of €11,870
thousand compared with €24,170 thousand for the pre-
vious year. Allowing for net financial income/expenses
of €13,952 thousand and income taxes totaling € –2,121
thousand, net income in accordance with the German
commercial law regulations was €27,943 thousand
(€15,900 thousand). Adding the net profit of €760 thou-
sand brought forward from the previous year and the
allocation to the revenue reserves of €10,000 thousand,
a net retained profit of €18,703 thousand is available
for distribution.
A proposal will be made to the Annual Shareholders’
Meeting that an amount of €18,480 thousand of KWS
SAAT AG’s net retained profit should be distributed as
a dividend of €2.80 (€2.30) for each of the 6,600,000
shares. The balance of €223 thousand 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 con-
solidated accounting, and that an accurate picture of the
course of business, including business results, and the
Group’s situation is conveyed by the Group Management
Report, and that it describes the main opportunities and
risks of the Group’s anticipated development.
Einbeck, October 1, 2012
KWS SAAT AG
THE EXECUTIVE BOARD
P. von dem Bussche
Ch. Amberger
L. Broers
H. Duenbostel
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, 2011, to June 30, 2012, all of which were
prepared by KWS SAAT AG, Einbeck. The preparation of
the consolidated financial statements and the Group Man-
agement 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 (Ger-
man 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 posi-
tion and earnings conveyed by the consolidated financial
statements, taking into account the applicable regulations
on orderly accounting, and by the Group Management Re-
port are detected with reasonable certainty. Knowledge
of the business activities and the economic and legal oper-
ating environment of the Group and evaluations of possible
errors 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 annu-
al financial statements of the companies included in the
consolidated financial statements, the definition of the
companies consolidated, the accounting and consolida-
tion 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 Management Report. We believe that our audit
provides a reasonable 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 1, 2012
Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
(Kompenhans)
Auditor
(Bukowski)
Auditor
84
Key figures of the KWS Group
Figures in € millions. unless otherwise specified (IFRS)
KWS is the independent
seed company for farmers
in the 21st century.
Fiscal year
Net sales
2011/12
2010/11
2009/10
2008/09
2007/08
986.3
855.4
754.1
717.2
599.1
Operating income (= EBIT)
140.9
116.6
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 %
14.3
94.4
9.6
104.2
–56.6
13.6
72.9
8.5
101.2
–52.4
603.1
530.3
55.2
58.8
82.4
10.9
51.5
6.8
27.4
–55.4
492.9
57.5
Balance sheet total
1,092.3
902.0
857.4
756.0
Return on equity in %
Return on assets in %
18.3
10.7
15.2
8.8
12.2
7.1
13.0
7.8
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
Fixed assets
378.2
290.1
275.2
231.9
197.1
Capital expenditure
Depreciation
Average number of employees
Personnel costs
Performance of KWS shares in €
Dividend per share
Earnings per share
Operative cash flow per share
Equity per share
111.5
28.4
3,851
182.5
2.80
13.89
15.79
91.38
49.3
27.6
58.4
22.0
3,560
3,492
165.0
147.2
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
We are committed to
sustainable agriculture
and the responsible use
of natural resources.
We concentrate on develop-
ing top-quality seed for the
diverse needs of farmers and
society as a whole.
We see ourselves as a
reliable partner, specialist
and expert adviser dedicated
to the sustainable success
of farmers.
Financial calendar
November 29, 2012
December 13, 2012
February 26, 2013
May 28, 2013
October 23, 2013
December 19, 2013
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, 2012
Share price high June 29, 2012 (Xetra)
Share price low August 22, 2011 (Xetra)
Average number of shares traded
– in Xetra
– in floor trading in Frankfurt
Report on the 1st quarter of 2012/2013
Annual Shareholders’ Meeting in Einbeck
Report on the 2nd quarter of 2012/2013
Report on the 3rd quarter of 2012/2013
Publication of 2012/2013 financial statements
Annual press conference in Frankfurt;
Analyst conference in Frankfurt
Annual Shareholders’ Meeting in Einbeck
707400
DE0007074007
KWS
Prime Standard
SDAX
Individual share certificates
6,600,000
€19,800,000
€205.00
€131.40
3,735
246
KWS Saat aG
Grimsehlstrasse 31 • 37555 Einbeck/Germany • 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 • Dominik Obertreis • Kevin Zhang • Corinna Lerch • Corbis Images • KWS Group archive
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