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KWS Sa at a G
Key figures of the KWS Group
Figures in € millions. unless otherwise specified (IFRS)
KWS has bred crops for
more than 150 years.
The company is now one
of the world’s leading
seed producers.
Fiscal year
Net sales
2012/13
2011/12
2010/11
2009/10
2008/09
1,147.2
986.3
855.4
754.1
717.2
Operating income (= EBIT)
150.7
140.9
116.6
as a % of net sales (= ROS)
Net income
as a % of net sales
Operative cash flow
13.1
91.3
8.0
84.6
14.3
94.4
9.6
97.9
Net cash from investing activities
–88.9
–56.6
13.6
72.9
8.5
101.2
–52.4
Equity
667.5
603.1
530.3
Equity ratio in %
55.0
55.2
58.8
82.4
10.9
51.5
6.8
27.4
–55.4
492.9
57.5
77.9
10.9
50.1
7.0
82.0
–59.4
434.5
57.5
Balance sheet total
1,213.3
1,092.3
902.0
857.4
756.0
Return on equity in %
Return on assets in %
15.6
9.0
18.3
10.7
15.2
8.8
12.2
7.1
13.0
7.8
Fixed assets
399.2
378.2
290.1
275.2
231.9
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
65.2
38.4
4,443
211.4
3.00
13.32
12.82
101.14
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
1.90
7.51
4.15
61.1
23.3
3,215
135.0
1.80
6.98
12.42
80.35
74.68
65.83
Thinking and acting
sustainably – for generation
after generation.
The goal of our breeding
work is to support every
individual farmer with
custom solutions.
Behind all of KWS’ activities
and ideas are people
whose dedication is vital to
our company’s success.
Financial calendar
November 28, 2013
December 19, 2013
February 25, 2014
May 27, 2014
October 16, 2014
December 18, 2014
Report on the 1st quarter of 2013/2014
Annual Shareholders’ Meeting in Einbeck
Report on the 2nd quarter of 2013/2014
Report on the 3rd quarter of 2013/2014
Publication of 2013/2014 financial statements
Annual press and analyst conference in Frankfurt
Annual Shareholders’ Meeting in Einbeck
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, 2013
Share price high February 25, 2013 (Xetra)
Share price low August 24, 2012 (Xetra)
Average number of shares traded
– in Xetra
– in floor trading in Frankfurt
707400
DE0007074007
KWS
Prime Standard
SDAX
Individual share certificates
6,600,000
€19,800,000
€297.10
€200.10
3,755
250
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:
Tomasz Ciesielski • Eberhard Franke • Frank Stefan Kimmel • Michael Löwa • Dominik Obertreis • Dieter Sieg • KWS Group archive
Key figures of the KWS Group
Figures in € millions. unless otherwise specified (IFRS)
KWS has bred crops for
more than 150 years.
The company is now one
of the world’s leading
seed producers.
Fiscal year
Net sales
2012/13
2011/12
2010/11
2009/10
2008/09
1,147.2
986.3
855.4
754.1
717.2
Operating income (= EBIT)
150.7
140.9
116.6
as a % of net sales (= ROS)
Net income
as a % of net sales
Operative cash flow
13.1
91.3
8.0
84.6
14.3
94.4
9.6
97.9
Net cash from investing activities
–88.9
–56.6
13.6
72.9
8.5
101.2
–52.4
Equity
667.5
603.1
530.3
Equity ratio in %
55.0
55.2
58.8
82.4
10.9
51.5
6.8
27.4
–55.4
492.9
57.5
77.9
10.9
50.1
7.0
82.0
–59.4
434.5
57.5
Balance sheet total
1,213.3
1,092.3
902.0
857.4
756.0
Return on equity in %
Return on assets in %
15.6
9.0
18.3
10.7
15.2
8.8
12.2
7.1
13.0
7.8
Fixed assets
399.2
378.2
290.1
275.2
231.9
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
65.2
38.4
4,443
211.4
3.00
13.32
12.82
101.14
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
1.90
7.51
4.15
61.1
23.3
3,215
135.0
1.80
6.98
12.42
80.35
74.68
65.83
Thinking and acting
sustainably – for generation
after generation.
The goal of our breeding
work is to support every
individual farmer with
custom solutions.
Behind all of KWS’ activities
and ideas are people
whose dedication is vital to
our company’s success.
Financial calendar
November 28, 2013
December 19, 2013
February 25, 2014
May 27, 2014
October 16, 2014
December 18, 2014
Report on the 1st quarter of 2013/2014
Annual Shareholders’ Meeting in Einbeck
Report on the 2nd quarter of 2013/2014
Report on the 3rd quarter of 2013/2014
Publication of 2013/2014 financial statements
Annual press and analyst conference in Frankfurt
Annual Shareholders’ Meeting in Einbeck
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, 2013
Share price high February 25, 2013 (Xetra)
Share price low August 24, 2012 (Xetra)
Average number of shares traded
– in Xetra
– in floor trading in Frankfurt
707400
DE0007074007
KWS
Prime Standard
SDAX
Individual share certificates
6,600,000
€19,800,000
€297.10
€200.10
3,755
250
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:
Tomasz Ciesielski • Eberhard Franke • Frank Stefan Kimmel • Michael Löwa • Dominik Obertreis • Dieter Sieg • KWS Group archive
Table of contents
7
8
12
15
15
16
17
20
23
28
30
32
36
37
42
46
46
48
49
Foreword of the Executive Board
Spotlight topic: How valuable is plant breeding to society?
Report of the Supervisory Board
Declaration regarding Corporate Governance
Compliance declaration in accordance with Section 161 AktG
(German Stock Corporation Act)
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 2013/2014
• Employees
• Risks for future development
Report on events after the balance sheet date
Compensation Report
Disclosures in accordance with Section 315 (4) HGB
(German Commercial Code)
Annual Financial Statements of the KWS Group 2012/2013
Foreword of the Executive Board
KWS remains successful. In fiscal 2012/2013 we were able
to achieve a new milestone in the company’s history by
breaking the one billion euro mark for net sales for the first
time. Our impressive development in recent years is largely
attributable to organic growth. The right foundation for this
success was mainly laid decades ago – for example by in-
tensifying our corn breeding. Corn now accounts for more
than 60% of the KWS Group’s net sales. That makes it all
the more gratifying that the Sugarbeet and Cereals Seg-
ments have continued to grow at the same time and were
likewise able to turn in top-class performance in terms of net
sales in the year under review.
and from AGRELIANT, our North American joint venture
with the major French seed company Vilmorin (part of the
Limagrain Group). We were also able to increase our reve-
nue from corn again in the EU 28, especially in France. The
Cereals Segment increased its net sales thanks to good
business performance in Germany, Poland and the UK,
surpassing the €100 million mark for the first time. Despite
sharp reductions in cultivation area in Europe, the Sugar-
beet Segment was also able to grow its net sales, as it man-
aged to increase its market share from 60% to over 70%
in North America thanks to the outstanding performance
of its products.
The global seed market is growing as a whole, and to serve
its needs in the future we have to strengthen our innova-
tiveness. That is why we are systematically expanding our
research and breeding activities year after year. We spent
€141 million on developing products in the year under re-
view, some €14 million more than the year before. Yet large
budgets are no guarantee of success. Even more impor-
tant are motivated, creative employees who are enthusiastic
about what they do for our KWS.
The values that guide our global company with its traditi-
on of family ownership are a major competitive factor in re-
cruiting and keeping the best employees. A spirit of mutual
respect, solution-oriented decision-making processes and
life-long learning play a key part in that. 4,443 employees
in 70 countries helped make us successful with their excel-
lent achievements in the year under review. KWS expects to
have a global workforce of 5,000 by the end of the current
fiscal year. The Executive Board thanks all our colleagues
for their great commitment. They have enabled us to pres-
ent yet another set of very successful annual figures in this
2012/2013 Annual Report.
The KWS Group’s net sales rose by just over 16% to
€1,147 million. Our operating income (EBIT) in the period
under review was €151 million, giving an EBIT margin of
13%. All three product segments – Corn, Sugarbeet and
Cereals – contributed to this success. Corn and Cereals
posted especially strong, double-digit growth. The Corn
Segment, which makes the largest contribution to our net
sales, benefited from our new activities in South America
In fiscal 2012/2013, there was a higher tax rate of 35% (30%),
resulting in lower net income of €91.3 (94.4) million. This
was primarily due to tax expenses from previous periods.
Nevertheless, we intend to continue our long-term policy of
paying out an earnings-oriented dividend. We believe our
operational growth in the past fiscal year justifies a higher divi-
dend. Accordingly, the Executive and Supervisory Boards
will propose to the Annual Shareholders’ Meeting the pay-
ment of a dividend of €3.00 (€2.80). That is in line with the
increase in our operating income.
Since April 1, a new member of the Executive Board has
been helping KWS tackle the challenge of maintaining its
successful performance above the one billion net sales
mark. Following Christoph Amberger’s retirement from the
Executive Board effective June 30, 2013, Eva Kienle took
charge of Finance, Controlling and IT, with the Chief Finan-
cial Officer Hagen Duenbostel assuming responsibility for
Corn and Marketing. Christoph Amberger will assist us for
a transitional period, accompanying our activities he helped
initiate in Brazil.
With best regards from Einbeck on behalf of the entire
Executive Board,
Philip von dem Bussche
Chief Executive Officer
Foreword of the Executive Board I 7
from left: Dr. Hagen Duenbostel – Corn, Marketing (since July 1, 2013)
Eva Kienle – Finance, Controlling, Information Technology, Legal (since July 1, 2013)
Dr. Léon Broers – Research & Breeding
Philip von dem Bussche (CEO) – Corporate Affairs, Sugarbeet, Cereals, Human Resources
Dr. Christoph Amberger – Corn, Marketing (until June 30, 2013)
How valuable is plant breeding to society?
How does our society benefit from the systematic and selective work that plant breeders have done
for 150 years to steadily increase the yield, performance and resistance of crops? That was the ques-
tion at the center of a new study by the Humboldt Forum for Food and Agriculture (HFFA) in 2013.
It comes to remarkable conclusions about food security, social welfare and protection of the climate and
natural resources.
It is not just recently that farmers worldwide have had to
deal with the challenge of producing the crops needed to
feed more and more people on less and less available land.
They have done that for many years, primarily by continuously
improving yields per unit area. While it now seems that the
possibilities of increasing efficiency by means of production
technology and farming methods have largely been exhaust-
ed, constant progress in plant breeding has made consider-
able contributions to ensuring global food security and can
achieve even more in the future.
What would things be like without the advances made in
plant breeding in Germany alone over the past 20 years?
• Yield per unit area would be 20 percent lower in Germany.
• To compensate for that, the amount of arable land in Ger-
many would have to be increased by more than 1 million
hectares to around 13 million – so an additional area
equal to half the size of the federal state of Hesse would
be needed.
Breeding progress for sugarbeet
Yield in t/ha
Beet yield
Sugar yield
70
50
35
25
3
5
20
1
14
10
1850
1900
1950
2000
2011
Securing the supply of food and prosperity
The residents of industrialized countries have benefited
from steadily falling prices for agricultural raw materials
over the past 50 years. The proportion of their income
Germans have to spend on food, for example, has shrunk
continuously (1950: 44%, 2011: 14%). The resultant savings
represent a welfare gain that is available for society to in-
vest elsewhere.
Growth of world population and per-capita cropland
(Source: FAO)
2.5 billion
6.1 billion
9.2 billion
0.5 ha per capita
0.3 ha per capita
0.2 ha per capita
1950
2000
2050
However, food prices are gradually on the rise again, indicat-
ing that this “golden age” is drawing to a close, since com-
petition and demand for agricultural raw materials on world
markets are steadily increasing: First, the world’s population
is expected to grow to nine billion by 2050. At the same time
there is growing demand for secondary food commodities
and processed food, such as meat and dairy products, and
the use of plants is rising in the diverse field of regenerative
raw materials. Second, experts predict that the land used
for farming – currently at around 1.5 billion hectares world-
wide – can hardly be increased, if only for ecological rea-
sons. Consequently available per-capita cropland will fall by
a third by 2050.
It is here that modern plant breeding can deliver continuous
progress – with more and more higher-yielding, robust and
resistant seed at the beginning of the food chain – and thus
make a crucial contribution to ensuring that food is available
in sufficient quantities and at affordable prices. Yields per
unit area need to be increased and can be, thanks to mod-
ern biotechnology methods, and breeders are aiming to do
that especially by focusing on breeding resistance. This is
The essence of plant breeding is specifically to increase di-
versity within our crops by means of more and more new
crossings. This is seen not least in the impressive number
of 1,905 corn, sugarbeet, cereal, oil seed and fodder crop
varieties approved in Germany. These are in fact 1,905 in-
dividual genotypes with individual traits. In Germany, the
Federal Plant Variety Office is responsible for supervising and
approving new varieties. At the beginning of the 20th century,
it was still very common for one and the same variety to be
marketed under different names.
Variety approvals in Germany in 2012
(Source: BDP)
Breeders produce seed that keeps on delivering higher yields and
greater resistance. At the start of the food chain, plant breeding
makes a valuable contribution to current and future food security
and the sparing use of natural resources.
especially crucial for organic farming operations, since they
do not use chemical pesticides. Even now, 42% of the po-
tential global harvest is destroyed every year by weeds and
insects as well as fungal and viral diseases.
Corn
Sugarbeet
Cereals
Agricultural crops
Oil seed and fodder crops
Total
Previously
approved
varieties
Newly
approved
varieties
260
304
423
918
1,905
30
41
49
53
173
Harvest losses worldwide
(Source: DBV)
e
g
a
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o
t
s
g
n
i
r
u
d
e
g
a
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a
D
%
0
1
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e
s
a
e
s
d
i
l
a
g
n
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F
%
3
1
s
t
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e
s
n
I
%
5
1
s
d
e
e
W
%
4
1
t
s
e
v
r
a
h
l
e
b
a
s
U
%
8
4
42%
Pre-harvest losses
10%
Post-harvest losses
Biodiversity and rights to our plants
The results of plant breeding – rising yields per unit area cou-
pled with reduced use of fertilizers and pesticides – enable
more sparing use of our land and water resources and thus help
protect the climate and preserve biodiversity. That is because
breeding progress can help avoid the need to clear forests
and grasslands, such as in Brazil’s rainforests or Argentina’s
savannas, with their natural habitats for flora and fauna. In par-
ticular, the conversion of forests and grassland into cropland
releases considerable amounts of greenhouse gases – even
more than industrial production and transport. For instance,
the study’s authors found that the slower expansion of land
used for farming in Germany alone in the past 20 years has
avoided CO2 emissions of between 160 and 230 million tons.
Farmers still have the choice between modern varieties and
old plant varieties whose seed they can produce them-
selves on their farm. However, fewer and fewer are making
use of this farmer’s privilege, since they want to share in
the progress made in breeding. In addition, there is what is
called the breeder’s exemption in Europe. This allows other
breeders to use legally protected varieties for breeding new
ones. There is consequently free access to the available ge-
netic resources, and that in turn promotes diversity.
Economically beneficial and future-oriented
Given the above-described socio-economic benefits and
global challenges in connection with ensuring food security
and protecting the climate, it is in the vital interest of our
society to invest in the high-tech field of plant breeding. So
that society as a whole can continue to share in the benefits
produced in the plant breeding value creation, appropriate
general conditions should be created sooner rather than lat-
er. That includes public funding of government and private
projects relating to plant breeding and agricultural research,
as well as the safeguarding of innovations by means of ef-
fective regulations to protect industrial property rights. If the
competitiveness of German plant breeding is strengthened
and the high investment costs spread over many shoulders,
we could succeed in satisfying the differing needs inherent
in supplying food and regenerative raw materials while also
ensuring species and climate protection. That would be a
truly future-oriented policy.
8
Spotlight topic I 9
›› Potatoes are the world’s fourth
most important food crop, after
wheat, corn and rice.
The demands made of potatoes keep on increasing, both as a
fresh product and industrially processed. That’s why I find it an
exciting job to improve the qualities of this plant.
Dr. Susanne Kohls, Potato Breeder, KWS POTATO B.V.
‹‹
Report of the Supervisory Board
business performance and situation of the
company and the KWS Group, including
the risk situation, risk management and
compliance. Business transactions requir-
ing consent were submitted to and dis-
cussed and approved by the Supervisory
Board in compliance with the bylaws for
the Executive Board. The company’s busi-
ness policy, corporate and financial plan-
ning, profitability and the business situa-
tion, the general development of the var-
ious businesses, market trends and the
competitive environment, research and
product development and, along with im-
portant individual projects, risk manage-
ment at the KWS Group were also the sub-
ject of detailed discussions. The Chairman
of the Supervisory Board continued the
bilateral discussions with the Chief Execu-
tive 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 cur-
rent 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 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.
Focal areas of deliberations
The full Supervisory Board held five regular meetings in fis-
cal 2012/2013, each of which was attended by all its mem-
bers. The meeting of the Supervisory Board to discuss the
financial statements on October 17, 2012, was devoted to
examining and approving the financial statements of KWS
SAAT AG and the consolidated financial statements of the
KWS Group as of June 30, 2012. The meeting on Decem-
ber 12, 2012, focused on KWS’ HR strategy, in particular
recruitment and personnel development, and customer
relationship management. The next one on December 13,
2012, then discussed further expansion of the seed potato
unit. The Supervisory Board’s March meeting is traditionally
devoted to research and development activities. On March 13,
2013, the Supervisory Board was given an overview of the
variety performance of all product categories. In addition,
it discussed the progress and prospects relating to the
Andreas J. Büchting, Chairman of the Supervisory Board
KWS can look back at yet another successful fiscal year,
one that turned out to be markedly better than the Executive
Board had initially expected. On the back of strong growth,
KWS was able to further expand its market position. This
success grew primarily from the dedication and creativity of
the company’s 4,443 employees.
In the period under review, the Supervisory Board dis-
charged the duties incumbent on it in accordance with the
law, the company’s Articles of Association and the bylaws,
regularly advised and monitored the Executive Board of
KWS SAAT AG in its activities and satisfied itself that the
company was run properly and in compliance with the law
and that it was organized efficiently and cost-effectively. The
Supervisory Board decided on all significant business trans-
actions requiring its consent and carefully accompanied the
Executive Board in all fundamental decisions of importance
to the company. The Supervisory Board discussed the in-
formation and assessments that influenced its decisions to-
gether with the Executive Board. Both boards successfully
continued their constructive cooperation based on mutual
trust. Among other things, this was demonstrated by the
fact that, as is customary, the Supervisory Board was in-
volved in all decisions of vital importance to the company at
an early stage. The Supervisory Board was provided with
the necessary information in written and oral form regular-
ly, promptly and comprehensively. This included all key in-
formation on relevant questions of strategy, planning, the
12
development of genetically modified traits. At this meeting
the Supervisory Board also approved construction of a larg-
er corn production plant in Southeastern Europe. On June 26,
2013, the agenda as usual included adoption of the corpo-
rate planning for fiscal 2013/2014, including medium-term
planning up to 2016/2017. This comprises many individual
projects requiring the Supervisory Board’s consent, such
as construction measures at the Einbeck location, the main
goal of which is to provide suitable facilities for our growing
number of employees working in R&D. The survey of the
Supervisory Board with the aim of avoiding and identifying
fraud was also conducted at the end of the fiscal year. The
members of the Supervisory Board are not aware of any
infringements, i.e. embezzlement, misappropriation and
fraudulent acts in connection with personal enrichment at
the expense of the company, involving the violation of finan-
cial reporting principles or misrepresentations in the KWS
Group’s annual financial statements.
Annual and consolidated financial statements
and auditing
Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft,
Hanover, the auditor chosen at the Shareholders’ Meeting
on December 13, 2012, and commissioned by the Audit
Committee, has audited the financial statements of KWS
SAAT AG that were presented by the Executive Board and
prepared in accordance with the provisions of the German
Commercial Code (HGB) for fiscal 2012/2013 and the fi-
nancial statements of the KWS Group (IFRS consolidated
financial statements), as well as the Management Report
of KWS SAAT AG and the KWS Group Management Re-
port, including the accounting reports, and awarded them
its unqualified audit certificate. In addition, the auditor con-
cluded that the audit of the financial statements did not
reveal any facts that might indicate a misstatement in the
declaration of compliance in accordance with section 161
AktG (German Stock Corporation Act) 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 finan-
cial statements and Management Reports of KWS SAAT AG
and the KWS Group, along with the report by the indepen-
dent auditor 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. Comprehensive documents
and drafts were submitted to the members of the Super-
visory Board as preparation; for example, all of them were
provided with the annual financial statements, Management
Reports, audit reports by the independent auditors, Cor-
porate Governance Report, Compensation Report and the
proposal by the Executive Board on the appropriation of the
profits. The Supervisory Board also held detailed discus-
sions of questions on the agenda at its meeting to discuss
the financial statements on October 23, 2013. The auditor
took part in the meeting and reported on the main results of
the audit and was also available to answer additional ques-
tions and provide further information for the Supervisory
Board. According to the report of the independent auditor,
there were no material weaknesses in the internal control
and risk management system in relation to the accounting
process. There were also no circumstances that might in-
dicate a lack of impartiality on the part of the independent
auditor. The small extent of services additionally provided by
the independent auditor can be seen from the Notes.
In accordance with the final results of its own examina-
tion, 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, which were 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 Share-
holders’ Meeting on the appropriation of the net retained
profit of KWS SAAT AG after having examined it.
Supervisory Board Committees
The Audit Committee convened for three joint meetings in
fiscal 2012/2013 and also held three telephone conferences.
In its meeting on September 24, 2012, the Audit Committee
discussed the 2011/2012 annual financial statements and
accounting of KWS SAAT AG and consolidated financial
statements of the KWS Group. The Annual Compliance Re-
port and the results of the auditing projects were on the
agenda at its second meeting on March 13, 2013. The audit
plan for fiscal 2013/2014 was also discussed and adopted.
On June 26, 2013, the Audit Committee discussed the re-
sults of the audit relating to the progress made in imple-
menting potato activities. The report on the first quarter and
the semiannual report for fiscal 2012/2013 were discussed
in detail in three telephone conferences and their publica-
tion was approved.
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, monitored
Report of the Supervisory Board I 13
the auditor’s independence and examined its qualifications.
The Audit Committee also satisfied itself that the regulations
on internal rotation pursuant to Section 319 a (1) No. 4 HGB
were observed by the independent auditor. The Audit Com-
mittee convened on September 30, 2013, to discuss the
annual financial statements of KWS SAAT AG and the KWS
Group’s consolidated financial statements and accounting.
The independent auditor explained the results of its audit
of the 2012/2013 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 proposal by the Executive
Board on the appropriation of the net retained profit of KWS
SAAT AG and recommended that the Supervisory Board
approve it.
In the year under review, the Committee for Executive
Board Affairs was closely involved in the question of who
should be appointed as the new CFO. It gained an opinion
of the candidates for the position of CFO in individual inter-
views and presented a proposal to the Supervisory Board.
This process also involved the Chairman of the Audit Com-
mittee. The proposal included key points regarding com-
pensation for this function. The Supervisory Board appoint-
ed Ms. Eva Kienle as a deputy member of the Executive
Board of KWS SAAT AG effective April 1, 2013. Following a
period of familiarization, she took charge of Finance, Con-
trolling and IT effective July 1, 2013, succeeding the Execu-
tive Board member Dr. Hagen Duenbostel, who in turn took
over responsibility for Corn from Dr. Christoph Amberger on
July 1, 2013. As a result, the previously announced changes
in the Executive Board were implemented.
The Supervisory Board said farewell to Dr. Christoph
Amberger from the Executive Board effective June 30,
2013. Christoph Amberger worked for KWS for a total of
22 years and in 2001 became the Executive Board mem-
ber responsible for the Corn and Cereals Segments after
holding the position of Managing Director at our cereals
company KWS LOCHOW. As the Management Report
for fiscal year 2012/2013 shows, Christoph Amberger is
handing over two segments that are positioned very well
and whose impressive growth has made a major contribution
to our company’s success over the past decade. The Super-
visory Board thanks Christoph Amberger for his successful,
value-oriented and analytical work and is also pleased that
he will continue to assist KWS in an advisory capacity as
part of establishment of our new corn activities in Brazil.
The Nominating Committee convened on July 10, 2012, to
draw up nominations for the Supervisory Board to be propo-
sed to the Annual Shareholders’ Meeting on December 13,
2012. All the shareholder representatives on the committee
were reelected by the Annual Shareholders’ Meeting. The
agricultural scientist Dr. Berthold Niehoff was newly elected
to it as an employee representative, replacing the biochem-
ist Dr. Dietmar Stahl. The Supervisory Board thanks Dietmar
Stahl for his commitment and many expert suggestions. He
displayed exceptional dedication at all times to maintaining
our innovativeness and securing the future of Einbeck as a
research location.
The newly elected Supervisory Board convened for its con-
stitutive meeting on December 13, 2012, where Dr. Andreas
J. Büchting was confirmed as its Chairman and Dr. Arend
Oetker as its Deputy Chairman. Hubertus von Baumbach
was also reelected as Chairman of the Audit Committee.
The members of the committees are shown below.
The Supervisory Board expresses its thanks to the Execu-
tive Board and all employees of KWS SAAT AG and its sub-
sidiaries for their exemplary commitment and the outstand-
ing work they again performed in fiscal 2012/2013.
Einbeck, October 23, 2013
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 (until December 13, 2012),
Jürgen Bolduan (since December 13, 2012)
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
KWS SAAT AG’s business policy has always been oriented
toward the long term and gives that long view precedence
over short-term profit. We invest sustainably in research and
development, thus securing our future growth and creating
new jobs. This policy is geared to sustainability and accords
with the requirements for responsible corporate governance
and control. Respect for the interests of our customers, em-
ployees, shareholders and lenders, business partners and
other stakeholders is of great importance to us. That is why
we comply with the relevant legal requirements regarding
management and supervision of listed German stock corpo-
rations and the internationally and nationally acknowledged
standards of good and responsible corporate governance
(German Corporate Governance Code).
The Government Commission for the German Corporate Gov-
ernance Code made amendments to the code in May 2013
and in doing so was guided by modifications proposed by
users of the code, academics and consultants from Germa-
ny and abroad. This year’s amendments related mainly to
the section on the composition and compensation of man-
aging boards. In addition to proposals for maximum limits
for variable compensation elements and pension awards,
recommendations were also made regarding the content of
the compensation report.
KWS’ Annual Shareholders’ Meeting on December 16, 2010,
approved the current compensation system for members of
the Executive Board. The salient features of the system are
explained in this year’s Compensation Report on page 46.
Our system includes the maximum limits for variable com-
pensation elements now called for by the German Corpo-
rate Governance Code. The demanded disclosures on pen-
sion awards are already a standard part of our reporting.
As to the appropriateness of compensation for members
of the Executive Board in relation to that of senior manage-
ment and the staff overall, KWS will comply with the new
recommendations of Clause 4.2.2 of the German Corporate
Governance Code when there are future changes on the
Executive Board. As required, we will comply with the rec-
ommendations of Clause 4.2.5 relating to presentation of
the benefits awarded by the company in the Compensation
Report for fiscal year 2014/2015. The relevant data is al-
ready being collected in the current fiscal year 2013/2014.
The complete declaration on corporate governance in accord-
ance with Section 289 a of the German Commercial Code
(HGB), which also contains the compliance declaration in ac-
cordance with Section 161 AktG (German Stock Corporation
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 Clause 7.1.2
sentence 4, namely the deadlines for publishing the consoli-
dated financial statements and interim reports – the compa-
ny has complied with the recommendations of the German
Corporate Governance Code in the version dated May 15,
2012, since the last compliance declaration in October 2012,
and has complied, does now comply, and will comply in the
future with the recommendations of the code in the version
dated May 13, 2013, since its publication in the official sec-
tion of the Federal Official Gazette.
KWS SAAT AG publishes its consolidated financial state-
ments and interim reports within the period of time defined
in the regulations for the Prime Standard of the German
Stock Exchange. It does not comply with the recommend-
ed deadlines of 90 and 45 days respectively in Clause 7.1.2
sentence 4 of the German Corporate Governance Code be-
cause of the seasonal course of its business.
Einbeck, October 2013
The Supervisory Board
The Executive Board
14
Report of the Supervisory Board I Corporate Governance I 15
The KWS share
KWS is a company with a long tradition: We have been
breeding crops for agricultural cultivation since 1856 and,
with our operations in more than 70 countries, now make a
major contribution to efficient farming. Our success factors
include the commitment and achievements of our employ-
ees, the high quality of our products, the great flexibility of
our decision-making processes and our long-term business
policy with its great emphasis on research and breeding.
A November 2012 study by the auditing firm Pricewater-
houseCoopers (PwC) on the future of family-led companies
analyzed their strengths compared with other organizational
forms in Germany, Austria and Switzerland. It identified the
biggest advantages of such companies as being the fact
that they think in terms of sustainability and are oriented to-
ward long-term goals.
It is also our conviction that sustainable business operations –
or, to put it another way, an orientation toward long-term ob-
jectives and values – has a positive impact on earnings and
thus on the performance of KWS’ stock and the dividend
that can be expected. Apart from a regular increase in the
dividend in past years, the continuous rise in the KWS share
price is also proof of the success of our strategy of sustain-
ability: Since the stock was admitted to the SDAX, the selec-
tive index for small and medium-sized enterprises, in June
2006, its price has increased steadily, with the result that
KWS now ranks among the leaders of the securities listed on
the index in terms of market capitalization and trading volume.
Looked at long-term over a period of ten years, KWS’s
share has grown in value from July 1, 2003, to June 30,
2013, by over 400%. In the same period, the SDAX rose
by just over 170%, while the blue chip index DAX went up
by around 150%. Over a five-year period, KWS’ stock also
outperformed the relevant comparative indexes by a clear
margin, rising by almost 88% compared with gains of just
under 40% on the SDAX and some 27% on the DAX.
Our very good business performance in 2012/2013, which
caused us to raise our targets for the year in February 2013, is
also reflected in the performance of KWS’ share over the fis-
cal year. Its price climbed by almost 36% from the beginning
of July 2012 to the end of June 2013, i.e. at a higher rate than
the SDAX (just over 19%) and the DAX (around 23%). KWS’
share also fared impressively in a comparison with other fa-
mily-led companies, outstripping by 12 percentage points the
DAXplus Family Index, which measures the performance of
listed family businesses in which the founding families are
co-owners and hold at least a 25% share of the voting rights.
Employee Share Program 2013
Under the KWS Employee Share Program, we enable our
employees to become shareholders, share in the com-
pany’s success and thus identify even more strongly with
KWS. 384 employees acquired a total of 12,725 shares (an
average of 33 per person) as part of the Employee Share
Program in 2013. That is the highest-ever figure since the
program was launched in fiscal 2008/2009, and was a-
chieved despite the sharp rise in the share price. The price
at which employees were able to buy share in KWS this
year was €247.00 per share. KWS grants a bonus on the
share price of 20%, which the individual employees must
pay tax on, with the result that the purchase price this year
was €197.60 a share. The acquired shares are subject to
a lock-up period of four years beginning when they are
posted to the employee’s securities account. They can-
not be sold, transferred or pledged during this period. As
of January 7, 2013, KWS SAAT AG acquired the neces-
sary number of its own shares for the Employee Share
Program in accordance with Section 71 (1) No. 2 of the
German Stock Corporation Act (AktG). The shares were
bought back in accordance with the safe harbor regula-
tions of Section 20a (3) of the German Securities Trad-
ing Act (WpHG) in conjunction with Regulation (EC)
No. 2273/2003 of the European Commission dated
December 22, 2003.
Net sales of the KWS Group (5 years)
in millions of €
EBIT of the KWS Group (5 years)
in millions of €
1 2 . 5 % p . a .
1,200
1,000
800
600
400
200
1 7 . 9 % p . a .
160
1140
120
100
80
60
40
20
9
0
/
8
0
0
2
0
1
/
9
0
0
2
1
1
/
0
1
0
2
2
1
/
1
1
0
2
3
1
/
2
1
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
3
1
/
2
1
0
2
Agenda of the Annual Shareholders’ Meeting
on December 19, 2013
The Company’s Executive Board hereby invites you to the
Annual Shareholders’ Meeting on Thursday, December 19, 2013, 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, 2012, to June 30, 2013, 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 external auditors of the financial statements of KWS SAAT AG and the consolidated financial
statements for the fiscal year 2013/2014
SHAREHOlDER STRuCTuRE
Families Büchting/
Arend Oetker/
Giesecke
56.1%
Tessner
Beteiligungs
GmbH
13.8%
Free float
30.1%
16
KWS share I Agenda of the Annual Shareholders’ Meeting I 17
›› A change of perspective
is also part and parcel of
training at KWS.
As tomorrow’s industrial mechanics, we provide support for all the
technical units at Einbeck. But during the main phase of sugarbeet
seed production we slip into our customers’ shoes and do four
weeks of shifts in seed processing.
Jannik Höttcher, Workshop Trainee, KWS SAAT AG
‹‹
Management Report of the KWS Group
The KWS Group again set new records in fiscal 2012/2013 – for net sales and operating income and at
the Corn and Cereals Segments. However, we believe it is more important that we were able to lay the
foundation for further growth while operating successfully. We entered the world’s third-largest corn market
by acquiring the Brazilian breeding companies SEMÍLIA and DELTA and with our partnership with the pro-
duction and distribution company RIBER KWS SEMENTES, for example, and thus expanded our activities
to subtropical regions for the first time. We can now look back on our first successful fiscal year in Brazil,
where we generated revenue of €37 million.
We took a further important step with our joint venture
GENECTIVE, which is tasked with developing genetically
modified (GM) traits in corn. This 50:50 joint venture with
the French seed company Vilmorin & Cie was also granted
its long-awaited approval from the Directorate-General for
Competition of the European Union at the end of June 2013.
In 2011 we decided to join forces with Vilmorin and jointly
develop first-generation GM traits (herbicide tolerance and
resistance to insects) for corn seed. The two companies
have cooperated very successfully in North America since
2000. AGRELIANT, our 50:50 joint venture for breeding,
production and distribution of corn seed, is now the third-
largest corn seed supplier on the North American market.
Our longer-term objective with GENECTIVE is to develop
second-generation traits. They are intended to help improve
drought stress tolerance and reduce the use of nitrogen-
based fertilizers, for example.
Operating performance
Following excellent cereals business as part of the 2012 fall
sowing season, it soon became apparent at the beginning
of 2013 that corn and sugarbeet sales would also exceed
our expectations. Growing demand for grain corn remained
unbroken worldwide. We benefited from that in just about all
regions thanks to our impressive varieties. We also record-
ed far higher sugarbeet seed orders in North America than
initially forecast.
KWS in figures
The KWS Group was again able to grow its net sales in fiscal
2012/2013. That figure increased by 16.3% over the previ-
ous year to €1,147.2 (986.3) million and was thus above the
growth rate for the past five years (average of 12.5%). This
rise mainly came from outside Germany, with the largest
growth recorded in North and South America. Net foreign
sales accounted for 80.5% of the total figure.
The increase in net sales was achieved in all three product
segments: Corn, Sugarbeet and Cereals. The largest net
sales were posted in the Corn Segment and were €701.7
million compared with €571.5 million in the previous year or
an increase of almost 23%. As a result, the Corn Segment
contributes 61.2% of total net sales. Net cereal sales also
increased sharply thanks to our high-yielding varieties. They
rose by almost 20% to €111.7 (93.3) million, breaking the
€100 million mark for the first time, and now account for
around 10% of total revenue. Net external sales in the Sugar-
beet Segment were €328.6 (313.4) million, around the level
of the previous year. Its share of total net sales at the KWS
Group is 28.6%.
Research and development costs increased
The KWS Group’s gross profit rose by 16.1% in the fiscal
year to €539.8 (465.0) million. The cost of sales rose to
€607.4 (521.3) million on the back of higher license and
material costs, an increase of 16.5%. The planned expan-
sion of our distribution channels meant that selling expenses
rose by 18.2% to €190.7 (161.4) million. The ratio of selling
expenses to net sales thus increased to 16.6% (16.4%).
The KWS Group’s research and development activities
safeguard its innovativeness and competitiveness and
are systematically expanded. R&D expenditure in the year
under review was €140.8 (126.6) million, corresponding
to an increase of 11.2%, or 12.3% (12.8%) of net sales.
Emmeloord by the Ijsselmeer is the new base station for our potato
breeding and the headquarters of KWS POTATO B.V.
Administrative expenses were €69.4 (59.5) million and were
mainly impacted by extensive IT support services as part of
a group-wide software update. However, they were unchanged
at 6.0% relative to net sales.
The balance of other operating income and other operating
expenses fell to €11.8 (23.4) million, mainly due to additional
costs from our commitment in Brazil.
Operating income increases again
The KWS Group’s higher net sales resulted in an increase in
operating income of 7.0% to €150.7 (140.9) million. Above
all, our Cereals Segment grew its income by 41.8% to
€26.8 (18.9) million, accounting for 17.8% (13.4%) of group
income. The Corn Segment contributed €92.0 (77.8) mil-
lion or 61.0% (55.2%) of the group’s operating icome.
The Sugarbeet Segment’s income fell slightly to €73.5 (79.9)
million or 48.8% (56.7%) of group income. We pool our
cross-segment expenses, the costs of central administra-
tive functions and the costs of long-term research projects
whose products are not yet ready for the market in our
Corporate Segment. Its income was € –41.6 (–35.7) million
at the end of the fiscal year.
Higher interest and tax relating to previous periods
reduce net income for the year
Despite higher financing costs of €5.1 million for our Bra-
zilian business, the result from ordinary activities rose to€
€140.4 (135.7) million. The KWS Group’s net income
for the year was impacted positively in the previous year
by its low tax rate of 30%. In fiscal 2012/2013, this rate
increased to 35.0%, resulting in lower net income of
€91.3 (94.4) million. This increase in the tax rate was due
to tax expenses from previous periods following field
audits and strong income growth in countries with higher
tax rates.
Capital expenditure
The KWS Group’s capital expenditure mainly relates to addi-
tions to its production plant. The focus this year was on North
America, where we expanded our corn production capaci-
ties and extensively modernized sugarbeet seed production.
The KWS Group invested a total of €65.2 (111.5) million in
the year under review. Depreciation and amortization was
€38.4 (28.4) million, meaning that investments exceeded
them by a significant margin. Of the total investments by
the KWS Group, 26.8% (13.4%) went to Germany, 28.0%
(18.6%) to the rest of Europe, 37.3% (67.7%) to North and
South America and 7.9% (0.3%) to other countries. Around
40% was invested in the Corn Segment and just under 38%
in the Sugarbeet Segment.
Total assets increased further
Total assets increased in fiscal 2012/2013 by €121.0 mil-
lion to €1,213.3 (1,092.3) million. The equity ratio remained
constant compared with the previous year at 55.0% (55.2%),
meaning the KWS Group is still solidly financed.
The increase in net sales resulted in a rise in net working
capital to €238.0 (204.1) million in the year under review.
Inventories and trade receivables accounted for €504.3
(449.1) million or around 41.6% (41.1%) of total assets. On
the balance sheet date, cash and cash equivalents were
€202.4 (183.0) million and, after deduction of financial bor-
rowings, net liquidity was €70.6 (75.9) million.
Noncurrent assets and inventories are fully covered by equi-
ty, which increased to €667.5 (603.1) million. Debt capital
increased by €56.6 million to €545.8 (489.2) million, large-
ly as a result of placement of our borrower’s note loan in
October 2012.
20
Management Report I KWS Group I 21
Net cash from operating activities impacted by
increase in working capital
Cash earnings in the past fiscal year were €109.5 (117.8) mil-
lion. The net cash from operating activities fell to €84.6 (97.9)
million, mainly due to the increase in working capital. The
net cash from investing activities was € –88.9 (–56.6) mil-
lion. This figure also includes the purchase price paid in fiscal
2012/2013 for our subsidiary RIBER KWS SEMENTES S.A.
The net cash from financing activities includes not only the
dividend payments to shareholders, but also the issue of our
borrower’s note loan, and is €27.2 million compared with
€ –12.8 million in the previous year.
Cash and cash equivalents on the balance sheet date to-
taled €202.4 (183.0) million.
Single-entity financial statements of KWS SAAT AG
KWS SAAT AG was successful in fiscal 2012/2013 with its
sugarbeet business and its corn business. It also financed
expansion of its research and development activities. In ad-
dition it bears the group-wide central administrative costs,
which are reported in the Corporate Segment. KWS SAAT
AG’s operating income at the end of the fiscal year was
€11.8 (11.9) million and thus on a par with the previous year.
Net financial income/expenses improved sharply year on
year, mainly due to income from investments within the
group. Consequently, net income pursuant to the account-
ing regulations of the German Commercial Code (HGB)
was €35.7 (27.9) million. With the net profit of €0.2 (0.8)
million carried forward from the previous year and an allo-
cation of €16 (10) million to the revenue reserves, the net
retained profit was ultimately €20.0 (18.7) million.
Proposed appropriation of profits
The earnings-oriented dividend policy is to be continued in fis-
cal 2012/2013. Although our financing costs and taxes were
higher, the improvement in operational earnings strength re-
sulted in net income for the year of €91.3 million for the KWS
Group following €94.4 million in the previous year. In light of
the good operating performance, the Executive and Super-
visory Boards will therefore propose to the Annual Share-
holders’ Meeting the payment of a dividend of €3.00 (pre-
vious year: €2.80). A total of €19.8 million from KWS SAAT
AG’s net retained profit will thus be distributed to share-
holders in December 2013, subject to approval.
Distribution of value added
(around 30% of the total output)
Minority interest 1%
Company
19%
Shareholders
5%
Public sector
14%
Lenders
3%
Value added
€366.7 million
Employees
58%
Corporate
Net sales at the Corporate Segment come largely from revenue from our farms. They totaled €5.2 mil-
lion in the year under review. However, the operating income for this segment includes all cross-segment
expenses, including the costs of all central functions of the KWS Group and long-term research projects.
The segment’s income in the past fiscal year was € –41.6 (–35.7) million. It was impacted above all by the
increased research budget.
unrestricted cultivation of Roundup Ready® sugarbeet
in the u.S.
Roundup Ready® sugarbeet is one example of the KWS
Group’s commercial success with genetically modified traits
in the U.S. Just two years after being launched in 2007, the
varieties had gained broad acceptance in sugarbeet farm-
ing in North America. The U.S. Department of Agriculture
(USDA) again examined the environmental compatibility of
the herbicide-tolerant sugarbeet last year. Following thor-
ough scientific testing, the USDA came to the conclusion
that the genetically modified Roundup Ready® sugarbeet
is just as safe as conventionally bred varieties. As a result,
farmers in the U.S. can continue growing Roundup Ready®
sugarbeet without any restrictions.
KWS and Vilmorin: More intensive cooperation
GENECTIVE, a company we established together with our
French partner Vilmorin & Cie in the fall of 2011, was given
final approval by the EU Commission in June 2013. This ap-
proval enables KWS and Vilmorin to intensify their coopera-
tion and make advances in their common goal of creating
a technology platform for genetically modified varietal traits
in corn. The joint research work currently focuses on further
development of resistance to herbicides and insects. These
standard traits are to be joined by others that enable better
adaptation of corn plants to difficult local conditions.
Success in developing nematode-tolerant sugarbeet
Beet cyst nematodes are one of the major pests for sugar-
beet in Central Europe. In the case of what is known as
“beet fatigue,” the nematode larvae parasitize the beet’s
body and compete with the host plant for nutrients and wa-
ter. The upshot may be yield losses of more than 30%. KWS
has successfully developed new varieties that have greater
resistance to beet cyst nematodes. The gene responsible
for this resistance was crossed from a related wild beet into
Marketing approvals for new varieties
119
117
35
25
296
129
111
49
14
130
303
92
276
43
11
2010/2011
2011/2012
2012/2013
Sugarbeet
Corn
Cereals
Others
Total
22
Management Report I KWS Group I Corporate I 23
the sugarbeet with the aid of conventional breeding meth-
ods and integrated in the breeding process. To achieve
top performance, the trait of high nematode tolerance was
combined with above-average sugar yield using optimized
breeding methods.
Establishment of a subtropical corn breeding program
Brazil is one of the world’s most important markets for corn
cultivation, with a total area of 15.5 million hectares used
for growing this crop. It is also the third-largest corn market
after the U.S. and China. We therefore acquired the breed-
ing companies SEMÍLIA GENETICA E MELHORAMENTO
LTDA. and DELTA PESQUISA E SEMENTES LTDA. in June
2012. They were merged into the newly established KWS
MELHORAMENTO E SEMENTES LTDA. at the beginning of
fiscal 2012/2013. In the summer of 2012, we also launched
an extensive corn breeding program based on existing ones.
Apart from expanding testing capacities and extensive tech-
nological modernization, the focus in the first year was on in-
creasing the workforce and introducing new breeding meth-
ods. Three breeding stations and a test station have now
been successfully established in Brazil. Further stations are
being set up. Testing capacities are to be expanded further
in the coming year. From 2015 on we will complement our
existing variety portfolio with the first corn varieties from our
new breeding program. They will have traits that are specially
adapted to the Brazilian market.
New center for potato breeding established
We established a new breeding station near Emmeloord
in the year under review. The town in the Northeast Polder
in the Netherlands was chosen as the center for our seed
Patience and care are key virtues in sugarbeet breeding. Up to 1,000
tiny anthers on each single plant have to be removed from the mother
lines to enable selective crossing.
potato operations. Our Dutch subsidiary KWS POTATO B.V.
will control and develop our international potato activities
from there, which is why breeding, production and distributi-
on will be pooled at KWS POTATO. A 2,000 m² hall with cold
storage rooms, laboratories and an office building were built
on an area of 96 hectares in a construction period of almost
one-and-a-half years. A greenhouse with an area of around
2,200 square meters will supplement the infrastructure by
the spring of 2014. The total investment came to some €12
million. The new breeding station offers sufficient space for
demonstration and trial fields for all types of crops. Our fo-
cus is on developing potato varieties for the growing sector
of food processing and for traditional export markets.
Intensification of research at KWS
Research and breeding are the foundation of our company.
We develop crop varieties that are adapted to the wide range
of needs in agriculture. Research continuously supplies new
approaches for developing new and improved product traits
and for optimizing breeding methods. In this connection, we
regularly examine what fields of research we should work in
through our current research program.
By expanding its research program to include new, cutting-
edge topics, KWS aims to further strengthen its own com-
petitiveness regarding varietal traits and breeding methods
in the long term.
We aim to apply know-how from other crops to our potato
breeding work. Potato breeding is to be redefined and sys-
tematically implemented using state-of-the-art plant breed-
ing methods such as molecular technology, cell culture and
gene transfer.
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 the year under review, KWS was awarded 276 (303) mar-
keting approvals for new varieties internationally as part of
official testing: 130 (129) for sugarbeet, 92 (111) for corn, 43
(49) for cereals and 11 (14) for the product areas of oil seed
and potatoes.
A new KWS research project is the development of robust cereal
varieties that can survive the extremely cold winters typical of North
America and Eastern Europe.
24
Management Report I Corporate I 25
›› I like my work because it
benefits everyone.
Our mission is to make our plants resistant to fungal diseases
so as to avoid harvest losses and reduce the use of fungicides.
lydia Weimer, Technical Assistant at the New Genetic
Traits/Fungus Resistance unit, KWS SAAT AG
‹‹
Corn Segment
The Corn Segment generated more than 60% of the KWS Group’s net sales in the past fiscal year and
will also remain our strongest growth driver in the future. The performance of our variety products is highly
acknowledged in all of the world’s important corn markets. That is one reason why our joint venture
AGRELIANT has now become the third-largest corn breeder in North America. We were even able to be-
come the market leader in France for the first time in the past sowing period. We see growth potential above
all in China and Brazil, where corn is grown on a total of some 50 million hectares.
Boosted by the first-time inclusion of our business in Bra-
zil, the Corn Segment’s net sales rose by 22.8% to €701.7
(571.5) million in the year under review. In order to tap new
markets, we increased our budgets, above all for distribu-
tion and product development (by 20% and 15% respec-
tively). Despite these up-front costs, operating income rose
by 18.3% to €92.0 (77.8) million. The return on sales (EBIT
margin) is still at a high level of 13.1%.
The 2012 growing season was characterized by extreme
drought in many regions of the northern hemisphere, with
the U.S. experiencing its hottest summer in 50 years, for
example. Russia and Ukraine suffered a similar period of
dry weather as in the crisis year 2010. The countries of
Southeastern Europe were likewise impacted. As a result,
the United States Department of Agriculture lowered its
estimate for the global cereal harvest by around 150 mil-
lion tons, or some 10% of worldwide cereal production, in
September 2012.
These climatic conditions impacted seed production to the
same degree, resulting in a shortage of seed in the entire
sector. In order to be able to ensure our ability to supply
sufficient seed for the spring of 2013, we had to conduct
contra-seasonal multiplication operations on a larger scale
in South America, which resulted in higher production costs.
The regions
AGRELIANT, our North American joint venture with the
French breeding company Vilmorin & Cie, posted signifi-
cantly lower yields from seed multiplication in the sum-
mer of 2012. However, cultivation area in the U.S. in 2013
was 39 million hectares, i.e. remained at the record level
of the previous year. Demand was mainly for genetically
improved varieties with multiple tolerance. On the back of
a slight increase in sales volume overall, AGRELIANT was
able to increase its sales by 19.0% to about €537 million, of
which 50% is consolidated in the KWS Group. That means
AGRELIANT is now the third-largest supplier in the fiercely
competitive U.S. corn market. Construction of the new seed
production and logistics center in the state of Iowa proceed-
ed as planned in the past fiscal year, with the result that an
initial portion of the processing capacity will be available in
time for the seed harvest in September 2013.
Corn Segment sales in millions of €
132.5
439.0
123.6
353.9
477.5
571.5
123.9
577.8
701.7
The Corn Segment’s business volume has quadrupled in just ten years.
Today, it contributes over 60% of KWS’ net sales.
In Europe, above all the regions Southeastern and Eastern
Europe were hit by drought in 2012, necessitating large sup-
plies of seed from other regions and from contraseasonal
production. Despite these difficulties, we were able to im-
prove our market position in both of these regions and
in the Northern Europe region compared with the pre-
vious year. While maintaining our leading market position
in Germany, this year we also succeeded for the first
time in becoming the market leader in France. That was
mainly due to successful breeding work in the field of
early-maturing corn varieties. In order to cope with this
growth with further production capacities, we expanded
our seed processing plants in Southwest France and Turkey.
was able to increase sales volumes and win market share
in Brazil in the country’s two cultivation periods, namely
the summer and winter sowing seasons.
We are focusing on cooperating with our partner Kenfeng
in the likewise important growth market of China. Kenfeng,
which is headquartered in the province of Heilongjiang, is
one of the largest Chinese seed companies in the northeast
part of the country; it has had business ties with KWS for
almost 30 years. Sales of corn seed under the KWS brand
name were almost doubled year on year. KWS has already
become one of the leading western suppliers of hybrid corn
varieties in China.
We were able to expand our operations in Brazil successfully
in the very first fiscal year after we launched them on July 1,
2012. Net sales there rose by 60% to €37 million. RIBER
KWS SEMENTES – our production and distribution company –
The Corn Segment also includes oil seed, which mainly
comprises rapeseed and sunflower in Europe and soybean in
North and South America. Oilseed contributed €71.4 (62.8)
million to the segment’s net sales.
Domestic sales
Foreign sales
Total sales
28
2010/2011
2011/2012
2012/2013
Management Report I Corn Segment I 29
Sugarbeet Segment
High stockpiles of sugar and good harvests, coupled with falling world market prices, resulted in a re-
duction in sugarbeet cultivation area worldwide by 11% to 4.2 million hectares in the 2013 growing season.
Nevertheless, KWS generated net sales of almost €300 million in this product segment – a record in our
traditional field of activity. We were able to buck the trend by supplying innovative varieties that offer farmers
high value added.
The Sugarbeet Segment, which also includes our seed po-
tato business, recorded net sales of €328.6 (313.4) million
in fiscal 2012/2013, an increase of 4.9%. A key factor here
was our North American business, which now accounts for
more than 35% of the segment’s net sales. The segment’s
income was €73.5 million, not quite on a par with the high
level of the previous year (€79.9 million). The main causes
of this decline are our planned higher expenditure on prod-
uct development and distribution, with which we intend to
secure our market leadership in sugarbeet seed business.
We also made large investments to build up our seed potato
business. In addition, higher allowances on receivables and
inventories were necessary. Overall the return on sales (EBIT
margin) fell to 22.4% (25.5%).
The innovative strength of our Sugarbeet Segment was dem-
onstrated by the 130 (129) marketing approvals for new
sugarbeet varieties and the 6 (2) for new potato varieties in
a total of 24 countries in fiscal 2012/2013.
The regions
Sugarbeet accounted for €297.8 (280.6) million of the
segment’s net sales. The main growth regions in the past
fiscal year were North America and, to a lesser extent, Cen-
tral Europe. Net sales in the EU 28 were €127.7 (131.0) mil-
lion, not quite at the level of the previous year as a result of
reductions in cultivation area. Despite a sharp decline in cul-
tivation area of approximately 400,000 hectares in Ukraine
and Russia, KWS was still again able to increase revenue
from sugarbeet seed outside the EU 28 to €170.1 (149.6)
million in the year under review.
A key growth driver was the North American region, where
we were able to increase our market share from 60% to just
over 70%. Following the decision by the United States De-
partment of Agriculture on July 19, 2012, to permit cultivation
of herbicide-tolerant Roundup Ready® sugarbeet again with-
out restriction and with immediate effect, farmers in North
America decided to plant these varieties on just about all the
Sugarbeet Segment sales in millions of €
43.9
249.7
46.6
266.8
44.2
284.4
293.6
313.4
328.6
Domestic sales
Foreign sales
Total sales
30
That’s what beet should look like: The strong leaves soak up the last
rays of sunshine in the fall and convert them into sugar. Our goal by
2020: a yield of 20 tons of sugar per hectare.
area used to grow the crop. To secure its market position,
KWS is currently modernizing its existing production plants
in North America. The goal is to achieve further improve-
ments in quality and expand capacities. However, the sharp
drop in cultivation area means that net sales declined by
more than 20% in Eastern Europe.
Net sales also declined slightly in Germany on the back of a
10% reduction in area, while they were able to be maintained
at a stable level in France despite the reductions in area
there. In Central Europe, net sales and market share were
increased slightly in Poland above all. KWS succeeded in
further consolidating its leading market position in Northern
Europe. KWS is the market leader in particular in Belgium
and the Netherlands.
Reductions in area in China in the previous year resulted
in left-over stocks, which resulted correspondingly in lower
order volumes in fiscal 2012/2013. On the other hand,
timely establishment of local seed production in Turkey
meant we were able to increase net sales there despite an
import freeze.
Seed potatoes
We overhauled our seed potato operations in the year under
review. Establishment of a new potato breeding station at
Emmeloord in the Netherlands, the headquarters of KWS
POTATO B.V., was largely completed. This is also the head
office for distribution activities, which we intend to focus on
our core markets of Northwestern and Southeastern Eu-
ropa, Russia and the Middle East/North Africa region. Our
seed potato business will also focus in the future on varie-
ties for the processing industry, for example for producing
chips and French fries. These areas are to be expanded
systematically. Net sales from seed potato business in the
year under review were €30.8 (32.8) million. However, the
up-front costs are still too high to permit a positive contribu-
tion to earnings.
2010/2011
2011/2012
2012/2013
Management Report I Sugarbeet Segment I 31
Cereals Segment
All the activities of the KWS LOCHOW Group are bundled in the Cereals Segment. They include breeding,
production and distribution of hybrid rye, wheat and barley, with production of the latter largely being licensed
out to multipliers. The good prices for cereals for consumption induced many farmers in the 2012/2013 winter
sowing season to emphasize quality and ask for certified seed from breeders.
Rye posted the highest increases in net sales in our cereals
business. It boasts excellent winter hardiness. In addition,
hybrid rye varieties produce a 20% to 30% higher yield than
line varieties. These qualities persuaded our customers to
expand the area they used to grow rye. At the same time,
the share of hybrid rye varieties proportionate to total cul-
tivation area rose. In some markets our hybrid rye varieties
were completely sold out for the 2012 winter sowing season.
Sales volumes of wheat and barley were also gratifying in
Europe. In particular, there is large demand for our wheat va-
rieties in the UK, where our market share is an excellent 45%.
Net sales at the Cereals Segment rose overall by 19.7% to
€111.7 (93.3) million, mainly on the back of hybrid rye busi-
ness. However, wheat and barley also posted increases. Rye
is still the main contributor to net sales in the Cereals Seg-
ment, followed by wheat, barley and rapeseed. The segment’s
income also developed very positively. Despite the further
expansion of our breeding and distribution activities, income
at June 30, 2013, rose by 41.8% to €26.8 (18.9) million.
The segment’s return on sales (EBIT margin) increased from
20.3% to 24.0%.
The Cereals Segment continued its growth strategy in the
past year. As part of that, we increased our expenditure on
developing new cereal varieties nationally and internationally.
The breeding programs in the core markets of Germany, the
UK and France made good progress. However, the strategy
also includes very long-term projects. For example, the
company has expanded its rye and wheat breeding pro-
grams to Eastern Europe (Russia) and to the west (North
America). Our goal in Eastern Europe is to adapt our hybrid
rye varieties to continental weather conditions. The objec-
tive of that is to tap additional market potential there in the
medium term. Our focus in the U.S. is also on developing
special winter wheat varieties. In Central and Western Europe,
our varieties demonstrated their excellent winter hardiness
in the past years. In fiscal 2012/2013, a total of 43 (49) ap-
provals for new varieties were obtained in 7 (13) countries at
the Cereals Segment.
Cereals Segment sales in millions of €
50.0
45.9
39.5
38.3
77.8
47.4
93.3
61.7
111.7
2010/2011
2011/2012
2012/2013
Domestic sales
Foreign sales
Total sales
32
In addition to the high yield of wheat varieties, ensuring healthy ears is
a concern in many regions. A focus of our breeding is on lower suscep-
tibility to the fungal disease fusarium head blight.
The regions
The general conditions for using certified cereal seed were
very favorable, particularly in Germany. After the winterkill
of crops in the previous year, certified varieties were used
on 53% (51%) of the cultivation area. The QualityPlus® con-
cept, which was introduced by KWS LOCHOW to coincide
with the 2011 sowing season and stands for especially care-
ful and audited cereal seed multiplication and processing,
again proved its attractiveness. As a result, we further in-
creased our market share. The very good market climate
in Poland helped us grow hybrid rye sales by more than
50% year on year. There was particularly high demand for
KWS LOCHOW’s Pollen Plus® varieties, which are tolerant
to infection by the toxic ergot fungus. In unfavorable weather,
this fungus results in considerable crop losses in some re-
gions of Europe since infected cereal is not allowed to enter
the human food chain or be used as animal feed.
Management Report I Cereals Segment I 33
›› Enterprise 2.0 at KWS:
Sharing knowledge doubles
its potential benefits.
We don’t want good ideas to go unheard at our company.
That’s why we use social media in our teamwork – they are
important tools for expanding knowledge management and
supporting KWS’ innovativeness.
Thu-Trang Ho, Social Media Manager, KWS SAAT AG
‹‹
Outlook for the fiscal year 2013/2014
Employees
The prices for agricultural raw materials fell sharply in the course of 2013. This was attributable in part to
Apart from excellent products, our professional and highly motivated employees are the foundation for our
good harvest forecasts for 2013. However, global demand for agricultural products has probably hardly
gratifying performance over the past years. Our open, entrepreneurial way of working based on long-term
changed at all – it will rather tend to increase further. We still see growth opportunities for KWS in this en-
values defines KWS’ culture. The KWS Group continues to grow and is becoming more and more global.
vironment, mainly in the markets of South America and Asia and in Southeastern and Eastern Europe. In
Nevertheless, we still nurture a personal and professional working style shaped by the values of our inno-
North America and Western Europe, however, we need to follow up on the high levels of the previous year.
vative company with its history of family ownership.
After the years of rapid growth, we expect the KWS Group
to grow its net sales by just over 5% in fiscal 2013/2014, with
almost all of this increase coming from the Corn Segment.
In order to tap our growth markets even better, however, we
have increased our budgets for product development and
distribution by 10% each, which will be reflected not least in
a rise in the workforce of around 10%. 5,000 (4,443) people
are expected to be employed at KWS at the end of the cur-
rent fiscal year. However, the planned increases in function
costs will not be compensated for by increased net sales in
new growth markets, whose contribution margins are lower.
As far as can be seen at present, the KWS Group’s operat-
ing income (EBIT) will therefore fall by around €10 million.
At the same time, the EBIT margin will remain in the double
digits and thus in line with our general objective.
In the Corn Segment, we expect net sales to rise again
sharply by around 10% in fiscal 2013/2014. Above all, we
intend to grow in the regions of North and South America
and Southeastern and Eastern Europe. Net sales of the
joint venture we are aiming to establish in China will not
be able to be consolidated because KWS is only allowed
to hold a 49% stake according to law. Overall, we expect
the segment to increase its income by around 8%, despite
considerable additional expenditures on expanding our re-
search and development activities and our production and
distribution structures.
The Sugarbeet Segment benefited primarily from an un -
expected gain in market share in North America in fiscal
2012/2013. The current level will probably not be able to be
maintained. However, prospects in the EU 28 and Russia
have improved slightly. Following reductions in cultivation
area in these important regions, we anticipate stable and
in some cases increasing area there. Demand in the seed
potato business will likely increase as well due to the rise
in consumer prices, with the result that we assume that
annual net sales in the Sugarbeet Segment will remain
stable year on year as a whole. Lower U.S. business and
higher function costs will result overall in a 10% drop in the
segment’s income.
In the Cereals Segment, the signs are that there will be no
growth in the fall sowing season due to the decline in prices
for cereals for consumption. Instead, it will be a challenge
to maintain the exceptionally high net sales of the previ-
ous year. The Q1 report we will publish on November 28,
2013, will allow us to give you a very concrete overview of
how this segment is performing. As far as can be seen at
present, the segment’s income will be approximately 20%
down year on year as a result of rising expenditure on breed-
ing and distribution.
IFRS 11
As of fiscal year 2014/2015, a change to the International
Financial Reporting Standards (IFRS 11) means that the
net sales and costs of our 50:50 joint venture AGRELIANT
can no longer be proportionately consolidated in the KWS
Group, but instead will be netted off and carried as income
from equity investments.
We are committed to mutual respect, trust, fairness, freedom
of action, openness and team spirit. Our employees, new col-
leagues and outsiders live and experience this exceptional
atmosphere day after day. A spirit of friendliness, respect
and recognition of diversity, room for creativity and flexibility
and the feeling of being part of the international KWS family –
all those are qualities that are repeatedly attested to in talks
and surveys. They also shape how our customers see KWS.
Expansion of our position in the labor market
In view of our growth and the significantly changing dynam-
ics of the labor market, we have begun to adapt and boost
our activities in the international labor market in the areas
of employer branding and talent sourcing. The objective
is to position KWS as a preferred employer in the eyes of
the various target groups. By doing that, we can help KWS
maintain its leading position in the industry. Our prime goal
in this regard is to establish and strengthen cooperation with
selected universities and other sources of potential employ-
ees, as well as to keep on improving our entry programs for
people starting their careers.
Internships and programs for students
KWS welcomed far more groups of students to Einbeck last
fiscal year than ever before. In addition, a total of 115 stu-
dents completed internships in a wide range of areas of our
company. Addressed to students of biology, biotechnology,
biochemistry and related sciences, our internship program
offered five participants the chance to work together with
our scientists in various projects.
Demand for our offerings for dual courses of study in the
fields of biotechnology/plant biotechnology, agricultural man-
agement and computer sciences remains high. KWS also
continues to sponsor the Germany Scholarships, which give
financial and non-material assistance to high-performing
36
Management Report I Outlook I Employees I 37
The KWS EnergyScouts: 20 trainees on a mission to identify and
eliminate energy waste with their project “Be a kW/Saver.”
Average workforce growth over the last 5 years
(by regions)
Employees
2012/13
2008/09
Ø-Growth
Germany
1,676
1,357
5.4% p.a.
Europe (excluding
Germany)
America
Rest of the world
Total
1,139
1,505
123
4,443
782
9.9% p.a.
1,002
10.7% p.a.
74
13.6% p.a.
3,215
8.4% p.a.
and dedicated students from all over the world. We also
award other scholarships, such as to students who spe-
cialize in plant breeding. Last, but not least, we assist 40
students in preparing their doctoral theses.
Training
In fiscal year 2012/2013 the company had 92 (91) trainees
who were undergoing training in one of seven vocations. In
the course of the year, 32 young people from this group suc-
cessfully completed their two- or three-year apprenticeship
in Germany.
Induction programs
Our popular KWS International Trainee Program and the
KWS Breeders Academy have been expanded further. The
trainee program, which is open to university graduates from
anywhere in the world, is a springboard to working in vari-
ous areas of the company. It comprises a number of stays
and projects in different departments, which may be in Ger-
many or abroad. 43 (30) graduates took up this offer in fiscal
year 2012/2013. The German job platform Absolventa has
given our trainee program its seal of approval, calling it fair
and career-enhancing.
The KWS Breeders Academy has increased the number of
international openings. With its combination of on-the-job
training and further training measures selected individually
for each participant, the Breeders Academy is an approach
specific to KWS, one that enables every participant to pre-
pare in a very practical way for his or her later career at KWS
as a plant breeder.
Employee development
Our rapid growth means we have to keep on growing our skills
and focusing on the essentials. Continuous further develop-
ment of our employees is therefore of key importance. We con-
centrate on capabilities that address the company’s needs
for innovation, customer orientation and international char-
acter in our knowledge-based and increasingly globalized
and digitally networked organization. The aim is to strength-
en function-related content, knowledge of languages and
the ability to work virtually. Employees are offered such
options at their workplace and within their regional organi-
zational structure. We also encourage our employees to
collaborate on international projects and apply for interna-
tional posts within the KWS Group. The number of internal
unsolicited applications for jobs at subsidiaries and asso-
ciated companies abroad is increasing. Supporting such
international assignments is also one of the reasons we
have expanded the services offered by HR. Personnel de-
velopment dialogues are held at least once a year between
superiors and employees in order to promote the latters’
personal and professional growth. The annual performance
and career development review offers the opportunity to
address all aspects of the working relationship in an open
atmosphere. As part of this, current and anticipated
changes in the business environment and the employee’s
role are looked at and development measures are formulat-
ed and addressed.
New programs
This year we launched two new global programs, the KWS
On Board Program and the International Development Pro-
gram, for managers, executive experts and international
talents. Once again this year, employees from all over the
world took part in our “Orientation Center,” to explore their
personal strengths and development opportunities. The aim
of these programs is to lay the foundation to support the
future course of the company in good time.
The KWS On Board Program
In its first year, this three-day program was attended by 30
executive employees from all over the world who were new
in their function. Their visit to Einbeck gave them a com-
prehensive overview of our business strategies, values, cul-
ture, expectations and organization. The vital importance of
networks and knowledge sharing in their new function was
also emphasized.
The International Development Program (IDP)
Our twelve-month International Development Program (IDP),
which was designed and launched in close cooperation
with our management and Human Resources, recently ad-
mitted 15 participants. The IDP’s objective is to impart skills
that are essential in the global business environment of the
21st century. Residential seminars with internal and exter-
nal experts, webinars and virtual workshops with external
specialists, management mentors, project sponsors and
coaches ensure the professional and personal growth of
every participant.
Orientation Center
The Orientation Center was held for the eleventh time at the
KWS Group. During the three intensive days, the 10 partici-
pants faced a host of tasks and challenges that had to be
solved under the supervision of members of top management.
Detailed feedback sessions gave participants orientation re-
garding their personal and professional further development.
“Sparring” for executive employees
This year 80% of our German and international employees
who hold management responsibility in Germany took part
in small, focused internal sparring groups. These quarterly
circles give insights into other fields and activities. They also
stimulate knowledge transfer. In addition, they enable partici-
pants to jointly hone their coaching skills. Such sessions are
to be held in other regions as well. Our goal in this is to help
local executive employees adapt to changing conditions.
KWS as a family-friendly company
It goes without saying that KWS strives to create a working
environment that assists employees in every phase of their
life. In Germany there are comprehensive programs in this
regard. They include an array of flexible working models,
child care allowances and the possibility for employees to
78% percent of KWS employees view their prospects at KWS positively,
according to the last “Company Climate Index,” a survey KWS con-
ducts every two years.
look after dependents who need caring for. A new company
agreement offers financial assistance for looking after chil-
dren up to and including third year of primary school in the
afternoon or during vacations.
Employees in numbers
The KWS Group employed 4,443 (3,851) people worldwide
in fiscal 2012/2013. Personnel expenses at the KWS Group
rose by 15.8% to €211.4 (182.5) million.
KWS Group employees by functions
Administration
13%
Production
22%
Research &
development
40%
Sales & marketing
25%
38
Management Report I Employees I 39
›› Sugarbeet is a real multi-talent.
After being harvested, beets do not necessarily end up in a sugar
or ethanol plant. They can also be a valuable enrichment for biogas
production. My mission is to identify potential for cultivating beet for
operators of biogas plants and farmers and to develop customized
usage concepts.
ulrike Jeche, Biogas Consultant/Sugarbeet Sales, 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. KWS’ success also depends on how early we identify
potential risks and how proactively we develop strategies to
counter them. A responsible approach to risks is supported
at KWS by an extensive risk management system and inter-
nal control system. A risk is an incident or development at
or outside the company that jeopardizes its (lasting) com-
mercial success.
Identifying business opportunities and pursuing them
In principle, we look at risk and opportunity management sep-
arately. A separate reporting system documents and sup-
ports monitoring of the risks. By contrast, the recording and
communication of opportunities are integral components of
the established controlling system between the subsidiaries,
associated companies and company’s management. Man-
agement of the segments is responsible for identifying, ana-
lyzing and implementing operational opportunities. Target-
ed 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. In addition,
we underpin our growth strategy by exploiting opportunities
by means of pinpointed investments in production capaci-
ties, R&D and acquisitions.
Internal control and risk management system with
regard 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 suitable measures, structures
and processes designed to make sure that all business
events and transactions are included in accounting prompt-
ly, consistently and correctly. It ensures compliance with
the statutory standards, accounting regulations and internal
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.
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 effectiveness 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 docu-
mented and communicated internally. Identified weak-
nesses are eliminated promptly. The Executive Board and
the Audit Committee of the Supervisory Board are informed
regularly of the risk situation, the results of the controls and
the effectiveness of the risk management system and all its
control functions. The consolidated accounting process is
controlled at KWS SAAT AG by the corporate units Group
Accounting and Group Controlling.
The risk management system means advantages for
corporate controlling
An approach based on our corporate culture is also cho-
sen by KWS in risk management. Such an approach is
founded on trust in its employees and on the long expe-
rience that shows that they act responsibly toward them-
selves, their colleagues and the company as a whole.
The culture of trust practiced by our employees is under-
pinned by rules of conduct, training and control measures,
enabling our employees to assess risks on their own. In
addition, the established risk management system helps
Structure of risk management at the KWS Group
Corporate Finance
Corporate Controlling
Corporate Responsibility
Affairs
Corporate law &
Compliance
• Rules, Guidelines &
Procedures
• Integrated Management
System
• Internal audits
• CoRA – Compliance
Risk Assessment (self-
assessment approach)
• Compliance training
• External audits
• Examinations
• Risk control matrix
• Early detection of risks
• Early detection of risks
• Planning / budget
• Minimum requirements
• Current expectation
• Interest and currency
management
• Insurance
• External audits
• IT security
42
us identify potential risks in a timely fashion in order for
suitable countermeasures and controls to be implement-
ed so that the threat of damage to the company can be
averted and its existence safeguarded for the long term.
KWS’ risk management system is organized on the basis of
the internationally recognized COSO II Enterprise Risk Man-
agement Framework. In this connection, the issues of risk
management and internal control system have been united
in one management approach.
The risk management system thus meets legal requirements
by ensuring that all significant risks are systematically identi-
fied every year, examined, assessed as to the likelihood of
their occurrence and potential impact, documented, con-
trolled and monitored. KWS’ risk management system is
also based on strategic planning and investment controlling,
continuous operational controlling and the quality and pro-
cess monitoring systems. The internal control system also
includes documentation and central coordination of the indi-
vidual risks and associated controls. Several audits are held
each year, covering processes in the organizational units.
External auditing by experienced auditors is conducted at
KWS and is a key component of the risk management sys-
tem in ensuring that internal controls work. This process is
intended to ensure constant control and thus to support an
information-based decision-making process.
Responsibility for risk management lies with the Executive
Board, which is supported in that by Corporate Finance –
Treasury and Risk Management, Corporate Law & Compli-
ance, Corporate Responsibility Affairs and Corporate Con-
trolling. In addition, the risk report is discussed in a Risk
Committee every quarter and any important risks that are
missing are added if necessary. The Risk Committee (Cor-
porate Management Circle) represents the top two manage-
ment levels (Executive Board, Corporate Managers and divi-
sion heads). The principles of risk management at KWS are
enshrined in the “Rules, Guidelines & Procedures (RGPs),”
which apply throughout the Group, and are published on
the Group-wide intranet. These RGPs create a common un-
derstanding of the issue of risk management within KWS.
They include principles relating to early detection, communi-
cation and handling of risks.
The risk management process at KWS
The objective of the risk management process is to iden-
tify, analyze, assess and efficiently monitor significant risks.
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 using software are set up for the
identified risks. The workflows report on the controls to the
employees who conduct controls and are responsible for
them and on the results to the risk manager. If individual
points in the rules and regulations are not complied with,
this is registered and the situation is documented.
Explanation of the risk situation
In the following we describe the risks that might have a signifi-
cant detrimental impact on our business, assets, financial
position and earnings, our stock price and our reputation.
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 re-
garding forecasting future (market) developments and the
assumption that the envisaged measures can be achieved.
Significant individual risks
KWS is subject to the usual economic and political risks in the
countries and regions in which it and its subsidiaries operate.
In addition, the risks described below may lastingly impair
KWS’ net sales and earnings situation and its financial po-
sition. They are reported on regularly in the Risk Committee.
Market risks
In the internationally strongly regulated agricultural industry,
political risks have a significant impact on our business de-
velopment. The lack of statutory regulations may also repre-
sent a risk. One unavoidable risk for our corn business is
still the possibility of the adventitious presence of genetically
modified organisms (GMOs) in conventional seed. In the
absence of a standardized legal threshold value, a number
of European countries practice a policy of zero tolerance.
Thanks to an extensive quality assurance system, only two
suspicious seed samples from KWS were identified in inter-
national official tests in fiscal 2012/2013.
Management Report I Risks I 43
A further risk lies in the uncertain regulatory framework for
growing energy plants. Extensive government market incen-
tive 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 ag-
ricultural raw materials as of July 2008 in the wake of the in-
cipient economic and financial crisis. What is clearly needed
here is a careful analysis of what form of cultivation of energy
plants represents an economically sensible and sustainable
alternative form of producing energy. This must take into ac-
count increases in efficiency in energy plant cultivation and
the fact that the prices for fossil fuels will tend to rise.
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
• Corruption risks
• Capital market risks
• Infringement of patents / trade-
marks / know-how
• Pollution of the air, soil and water
by dusts, waste water and dan-
gerous waste
• Transport of hazardous goods
• Genetic mixing
• Recruitment / development
• Work safety
• Working time / old-age pensions
IT risks
• IT security
• Authorization concept
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.
Currency and interest rate risks are managed by the Treasury
and Risk Management department. Financial risks arise in
particular from existing receivables and liabilities denominat-
ed in foreign currency due to fluctuations in exchange rates.
There are interest rate risks as a result of potential changes
to market interest rates. Variable-interest financial instruments
may result in fluctuations in interest payments and thus have
a positive or negative impact on earnings. The risk of interest
rate changes and currency risks are addressed through the
usual standardized hedging instruments, which in turn can
have an influence on KWS’ earnings and assets situation.
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 and South America. Our pres-
ence in various markets around the world also means that we
can cope with fluctuations in demand in one region as part
of our global production network. Contra-seasonal multipli-
cation is carried out in the winter half-year in Chile and Argen-
tina if there are bottlenecks in seed availability, for example.
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
quality-related risks. In this way, KWS ensures the high
quality of its products through stringent internal quality
standards and monitoring.
Procurement risks
Procurement risks are minimized by international diversi-
fication of seed production locations and sufficient stockpil-
ing. Moreover, supply risks as a result of sources no longer
being able to deliver are largely reduced by means of con-
tinuous classification of risks. As part of that, we observe
the creditworthiness of important business partners – cus-
tomers and suppliers alike. In addition, the entire area of
purchasing is currently being improved by the Corporate
Procurement department so that supplies are optimized
and further risks reduced.
liquidity risks
KWS also addresses liquidity risks with professional cash
management and sufficient long-term, syndicated credit
lines, the full use of which was not made in the year under
review. Our loan agreements include financial covenants,
compliance with which has been ensured at all times to date.
KWS uses extensive trade credit insurance to minimize the
risk of losing receivables in risky regions and business seg-
ments. To enable this, KWS pursues an active receivables
management policy so that impending payment defaults
can be identified at an early stage.
legal risks
The KWS Group faces risks from legal disputes and official
processes both nationally and internationally as part of its
operations. Such legal disputes may arise in particular with
suppliers, dealers, customers, employees or investors. They
may result in payment obligations or other commitments. In
order to prevent any violations of the diverse tax, environ-
mental and competition and other regulations and laws, we
obligate all employees to abide by our compliance policies.
The Code of Business Ethics and the compliance policies
based on them state that all KWS employees must act in
accordance with KWS’ corporate values and comply with
the law, contracts and the company’s own rules.
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 targeted continuing
education and development programs. We counter the risk
of losing knowledge when people retire by means of intensive
The trust of farmers is vital to KWS. Tailored advice for customers
in agricultural matters plays an important role in winning and keep-
ing that trust.
and subject-specific qualification and timely succession
planning. In addition to our specific 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.
Overall statement on the risk situation
The overall risk situation for the KWS Group stems from the
above-described risks. There was no significant change in
the risk situation in fiscal 2012/2013 compared with the pre-
vious year. The main risks for us are still related to products
and the market. Overall, the KWS Group’s risk manage-
ment systems 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 significant may impact our continued existence
in the future.
44
Management Report I Risks I 45
Report on events after the balance sheet date
There were also no events after June 30, 2013, that can be
expected to have a significant impact on the KWS Group’s
earnings, assets and financial position.
Compensation Report
The Supervisory Board’s compensation was set by the
Annual Shareholders’ Meeting on December 17, 2009. It is
based on the size of the company, the duties and responsi-
bilities 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 commit-
tees, 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 deputy one-and-a-half times the total
compensation of an ordinary member. There is currently
no extra compensation for them for work on committees.
The Chairman of the Audit Committee receives €25 thousand.
Ordinary members of the Supervisory Board receive
€5 thousand for their work on the Committee for Executive
Board Affairs and €10 thousand for their work on the Au-
dit 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
amounts to €584 thousand (€509 thousand), excluding val-
ue-added tax. In all, 52.4% (45.4%) or €306 thousand (€231
thousand) of the total compensation is performance-related.
Supervisory Board compensation
2012/2013 in €
Dr. Drs. h. c. Andreas J. Büchting*
Dr. Arend Oetker**
Fixed
84,000.00
42,000.00
Work on
committees
Performance-
related
Total
Previous year
0.00
0.00
108,000.00
192,000.00
165,600.00
54,000.00
96,000.00
82,800.00
Hubertus v. Baumbach***
28,000.00
25,000.00
36,000.00
89,000.00
80,200.00
Jürgen Bolduan
28,000.00
5,000.00
36,000.00
69,000.00
55,200.00
Cathrina Claas-Mühlhäuser
28,000.00
10,000.00
36,000.00
74,000.00
70,200.00
Dr. Berthold Niehoff (since January 2013)
Dr. Dietmar Stahl (until December 2012)
14,000.00
14,000.00
0.00
0.00
18,000.00
32,000.00
0.00
18,000.00
32,000.00
55,200.00
238,000.00
40,000.00
306,000.00
584,000.00
509,200.00
* 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 acti-
vity of the company, its economic and financial situation and
the level and structure of compensation for managing board
members at comparable companies. The “total compen-
sation” of the Executive Board comprises five components:
1. A basic fixed annual salary,
2. A variable payment in the form of a performance-
related bonus,
3. A variable payment in the form of a long-term incentive
based on the KWS stock price,
4. Any special payments,
5. Other remuneration and pension awards.
46
The basic annual salary, bonus payment and other remu-
neration, including any special payments, are also jointly
termed “cash compensation” in the following. Payments
for duties performed in subsidiaries and associated com-
panies are offset against the performance-related payment.
The cash compensation is limited to an absolute amount of
€750,000 per fiscal year. If the company generates sustain-
able average net income of more than €70 million a year in
two successive fiscal years, this limit will be subsequently
increased to €800,000 and, in the case of sustainable aver-
age net income of more than €100 million a year in two
successive fiscal years, to €900,000.
The basic gross annual salary is €216,000. The Chief Execu-
tive Officer receives an extra “CEO bonus” of 25% on top of
the basic annual salary. The variable payment (performance-
related bonus) for our Executive Board members depends on
the Company’s performance over several years. It is calculated
on the basis of a percentage of the average net income of the
KWS Group for the past three fiscal years. This percentage is
reduced if net income for the year exceeds certain thresholds.
There is also a stock-based bonus system intended to act as
a long-term incentive. Every member of the Executive Board
is now obligated to invest a freely selectable amount ranging
between at least 20% and at most 50% of the gross perfor-
mance-related bonus payment in KWS shares. A long-term
incentive (LTI) is paid in the form of cash compensation after a
holding period of five years. This payment is calculated on the
basis of the share’s performance over the holding period and
on the average return on sales (ROS), measured as the ratio
of operating income to net sales. However, it is capped at a
maximum of two-and-a-half times the payments made by the
Executive Board member as part of his or her own investment.
One third of the LTI before taxes must be reinvested in KWS
shares after it is paid out.
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.
Executive Board
compensation
2012/2013 in €
Cash compensation
lTI
Total
Basic com-
pensation
Benefits
in kind
Performance-
related
Total
Fair Value
Philip von dem Bussche*
270,000.00
18,519.38
515,480.62
804,000.00
271,844.32
1,075,844.32
Dr. Christoph Amberger
216,000.00
22,882.03
511,117.97
750,000.00
135,128.84
885,128.84
Dr. Léon Broers
216,000.00
21,456.48
512,543.52
750,000.00
211,023.12
961,023.12
Dr. Hagen Duenbostel
216,000.00
19,244.95
514,755.05
750,000.00
273,166.52
1,023,166.52
Eva Kienle (since 04/01/2013)
50,000.00
6,483.24
70,000.00
126,483.24
0.00
126,483.24
968,000.00
88,586.08
2,123,897.16
3,180,483.24
891,162.80
4,071,646.04
*CEO
Executive Board
compensation
previous year in €
Cash compensation
lTI
Total
Basic com-
pensation
Benefits
in kind
Performance-
related
Total
Fair Value
Philip von dem Bussche*
270,000.00
18,998.21
515,001.79
804,000.00
300,769.07
1,104,769.07
Dr. Christoph Amberger
216,000.00
21,984.52
512,015.48
750,000.00
300,769.07
1,050,769.07
Dr. Léon Broers
216,000.00
20,597.34
513,402.66
750,000.00
180,423.30
930,423.30
Dr. Hagen Duenbostel
216,000.00
16,452.21
517,547.79
750,000.00
300,769.07
1,050,769.07
918,000.00
78,032.28
2,057,967.72
3,054,000.00
1,082,730.51
4,136,730.51
*CEO
Pension obligations are granted both in the form of a direct
obligation to provide benefits and a defined contribution
plan, with the annual anticipated pensions ranging between
€130 thousand and €140 thousand. In fiscal 2012/2013,
€72 thousand (€72 thousand) were paid to a provident fund
backed by a guarantee and €193 thousand (€146 thousand)
had to be allocated to the pension provisions in accor-
dance with IAS 19 for pension commitments to members
of the Executive Board. Pension provisions totaling €1,690
thousand (€1,496 thousand) were formed for the following
members of the Executive Board of KWS SAAT AG:
Pension commitments in €
Dr. Christoph Amberger
Dr. Hagen Duenbostel
07/01/2012
Personnel
expenses
Interest
expenses
06/30/2013
1,222,006.00
104,593.00
67,886.00
1,394,485.00
274,348.00
4,972.00
15,822.00
295,142.00
1,496,354.00
109,565.00
83,708.00
1,689,627.00
Compensation of former members of the Executive Board
and their surviving dependents amounted to €1,097 thou-
sand (€1,052 thousand). Pension provisions recognized for
this group of persons amounted to €1,032 thousand (€1,394
thousand) as of June 30, 2013. The pension commitments
for three former members of the Executive Board are backed
by a guarantee. No loans were granted or other guarantees
given to members of the Executive Board and Supervisory
Board in the year under review.
Report on events after the balance sheet date I Compensation Report I 47
Disclosures in accordance with Section 315 (4) HGB
(German Commercial Code)
Annual Financial Statements of the KWS Group
2012/2013
The Executive Board provides the following explanations of
the information in accordance with Section 315 (4) HGB (Ger-
man Commercial Code) in the Group Management 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 €19,800,000.00.
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.
Hans-Joachim Tessner, Germany
Tessner Beteiligungs GmbH, Goslar
Tessner Holding KG, Goslar
There may be limitations on the voting rights for the shares
under statutory or contractual provisions. For example, share-
holders are barred from voting under certain conditions pur-
suant to Section 136 of the German Stock Corporation Act
(AktG) or Section 28 of the German Securities Trading Act
(WpHG). In addition, no voting rights accrue to the company
on the basis of the shares it holds (Section 71b AktG). The
Executive Board is not aware of any contractual restrictions
relating to voting rights or transfer of shares.
The 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) or elsewhere:
• 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, 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
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, Section 6 of the company’s
Articles of Association also stipulates that members of the
Executive Board are appointed by the Supervisory Board.
In compliance with Section 179 (2) AktG and Section 18
of the company’s Articles of Association, amendments to
the Articles of Association of KWS SAAT AG require a reso-
lution to be adopted by the Annual Shareholders’ Meeting
by a simple majority of the capital stock represented in a-
dopting the resolution, unless obligatory statutory regula-
tions specify otherwise. The power to make amendments
to the Articles of Association that only affect the wording
(Section 179 (1) sentence 2 AktG) has been conferred on
the Supervisory Board in accordance with Section 22 of the
Articles of Association of KWS SAAT AG.
The Executive Board is not now authorized to issue or buy
back shares.
Significant agreements subject to the condition of a change
in control pursuant to a takeover bid have not been 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 7, 2013
KWS SAAT AG
THE EXECUTIVE BOARD
50
51
52
54
56
57
58
62
64
67
78
83
85
87
88
Balance sheet
Statement of comprehensive income
Statement of changes in fixed assets
Statement of changes in equity
Cash flow statement
Notes
1. General disclosures
2. Disclosures on the annual financial statements
3. Segment reporting
4. Notes to the balance sheet
5. Notes to the income statement
6. Notes to the cash flow statement
7. Other notes
8. Declaration by legal representatives
Auditors’ Report
Balance
sheet
of the KWS Group
at June 30, 2013,
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
Statement of comprehensive income
Note no. 06/30/2013
Previous
year
111,725
261,457
5,037
6,093
25,970
from July 1, 2012,
through June 30, 2013;
figures in € thousands,
unless otherwise
specified
101,866
287,623
9,760
5,719
37,134
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(8)
(8)
442,102
410,282
144,452
139,694
359,867
309,422
100,878
40,399
101,517
142,569
24,385
40,122
25,957
23,993
771,221
682,034
I. Income statement
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
Interest and similar income
Interest and other expenses
Net income from equity investments
Note no.
2012/2013
Previous
year
(18)
(18)
(18)
(18)
(18)
(19)
(20)
1,147,235
986,296
607,394
521,343
539,841
464,953
190,762
140,810
69,485
61,943
50,061
161,355
126,571
59,494
62,637
39,316
150,666
140,854
1,719
12,080
45
2,261
7,409
7
Total assets
1,213,323
1,092,316
Net financial income/expenses
(21)
–10,316
–5,141
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
19,800
5,530
19,800
5,530
610,029
553,258
32,167
24,508
(11)
667,526
603,096
67,148
98,460
1,697
29,695
9,075
66,603
48,717
1,914
36,043
8,207
(12)
206,075
161,484
131,350
121,633
33,259
82,746
31,929
60,438
58,419
74,373
24,053
49,258
(13)
339,722
327,736
Results of ordinary activities
Taxes
Net income for the year
ll. Other comprehensive income
140,350
135,713
(22)
(24)
49,102
91,248
41,317
94,396
Revaluation of financial instruments
86
1
Currency translation difference for economically
independent foreign units
Other comprehensive income after tax
–13,478
–13,392
18,760
18,761
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
77,856
2,606
113,157
2,960
75,250
110,197
91,248
3,363
87,885
94,396
2,752
91,644
13,32
13,89
Liabilities
545,797
489,220
Earnings per share (in €)
Total equity and liabilities
1,213,323
1,092,316
50
Annual financial statements I Balance sheet I Income statement I 51
Statement of changes in fixed assets of the
KWS Group 2012/2013 and 2011/2012
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
07/01/2012
Patents, industrial property
rights and software
Goodwill
82,622
–2,584
56,907
–458
Intangible assets
139,529
–3,042
Land and buildings
237,471
–3,703
Technical equipment
and machinery
Operating and office equip-
ment
Payments on account
170,233
–2,504
75,591
–1,096
8,707
–115
Property, plant and equipment
492,002
–7,418
Financial assets
5,203
–134
Assets
636,734
–10,594
0
0
0
0
0
0
0
0
0
0
4,406
0
4,406
9,991
16,899
10,107
18,046
55,043
5,746
65,195
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
Property, plant and equipment
438,742
9,582
7,588
47,454
Balance
06/30/2013
11
0
11
83,434
56,449
139,883
1,021
0
1,021
Balance
07/01/2012
21,014
6,790
27,804
–404
–40
–444
341
7,149
250,567
70,864
–804
5,109
3,569
183,088
109,373
–1,549
3,074
6,071
11
–11,656
87,599
14,971
8,535
5,133
536,225
50,308
0
–713
0
230,545
–3,066
890
0
9,926
166
0
10,446
5,144
686,034
258,515
–3,510
Balance
06/30/2012
11
0
11
82,622
56,907
139,529
214
0
214
Balance
07/01/2011
15,984
6,730
22,714
166
60
226
0
0
0
0
0
0
0
0
0
0
1
0
1
11,674
0
11,674
7,076
11,637
8,061
0
26,774
0
38,448
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
1
1
0
0
0
0
0
0
0
0
Financial assets
4,268
–5
279
610
12
278
317
5,203
167
–1
0
0
Assets
525,380
11,321
61,142
50,407
12
11,845
317
636,734
235,308
5,757
–173
28,376
Balance
06/30/2013
Balance
06/30/2013
Previous
year
0
0
0
5
31,267
52,167
61,608
6,750
49,699
50,117
38,017
101,866
111,725
76,958
173,609
166,607
1,017
0
1,017
183
4,340
–162
114,959
68,129
60,860
2,818
1,845
56,683
–2
0
2
30,916
14,969
25,283
8,707
7,339
1,688
248,602
287,623
261,457
0
0
166
9,760
5,037
8,356
1,688
286,785
399,249
378,219
Balance
06/30/2012
Balance
06/30/2012
Previous
year
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
214
0
214
562
4,363
10
109,373
60,860
54,472
5,614
0
10,539
0
10,753
–11
0
50,308
25,283
20,792
0
8,707
7,043
–1
230,545
261,457
226,315
0
0
166
5,037
4,101
258,515
378,219
290,072
0
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
Reserve for
financial assets
held for sale
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
503,330
–20,142
143
594
509,255
21,498
–488
–4
21,006
530,261
–15,180
–25,684
0
91,644
18,552
91,644
18,552
1
1
–15,180
–25,684
0
91,644
18,553
110,197
–476
1,018
0
2,752
2,752
208
208
19,800
5,530
554,110
–1,590
144
594
578,588
24,792
–280
–18,480
0
0
87,885
–12,720
87,885
–12,720
86
86
–18,480
0
0
87,885
–12,634
–664
0
5,716
3,363
75,251
3,363
–756
–756
19,800
5,530
623,515
–14,310
230
594
635,359
33,207
–1,036
–476
1,018
0
2,752
208
–15,656
–24,666
0
94,396
18,761
2,960
113,157
24,508
603,096
–664
0
5,716
3,363
–756
2,607
–19,144
0
5,716
91,248
–13,390
77,858
32,167
667,526
0
–4
0
–4
Balance as at
June 30, 2011
Dividends paid
Changes in the
consolidated group
Other changes
Net income for the year
Other comprehensive
income after tax
Total consolidated gains
(losses)
Balance as at
June 30, 2012
Dividends paid
Changes in the
consolidated group
Other changes
Net income for the year
Other comprehensive
income after tax
Total consolidated gains
(losses)
Balance as at
June 30, 2013
54
Annual financial statements I Statement of changes in equity I 55
Cash flow statement
Figures in € thousands, unless otherwise specified
Notes for the KWS Group 2012/2013
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
Cash receipts from issue of capital
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
2012/13
91,248
38,448
–1,292
Previous
year
94,396
28,364
1,471
–18,919
–6,399
109,485
117,832
24,062
10,425
–191
–528
–86,287
–34,588
37,509
84,578
4,720
97,861
(1)
1,554
1,343
–57,739
–46,213
3
0
–4,406
–2,343
361
–5,745
278
–610
–22,970
–9,033
(2)
–88,942
–56,578
5,716
0
–19,144
–15,656
40,650
2,880
(3)
27,222
–12,776
22,858
28,507
–3,431
7,562
182,968
146,899
(4)
202,395
182,968
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 interpre-
tations of the International Financial Reporting Interpre-
tations Committee (IFRIC) and in addition the commercial
law regulations to be applied pursuant to section 315 a (1)
of the HGB (German Commercial Code). The consolidated
financial statements of KWS SAAT AG, Einbeck, discharge
the obligations of KWS LOCHOW GMBH, Bergen, and
KWS MAIS GMBH, Einbeck, to produce their own financial
statements. The statements were prepared under the as-
sumption that the operations of the company will be contin-
ued. The KWS Group has applied the amendment to IAS 1
“Presentation of Items of Other Comprehensive Income” for
the first time in fiscal year 2012/2013. The following financial
reporting standards and interpretations were published by
the IASB by the balance sheet date, but must be applied by
the KWS Group only at a later date.
IAS 27 (2011): Separate Financial
Statements
In fiscal year 2014/2015
IAS 28 (2011): Investments in Asso-
ciates and Joint Ventures
In fiscal year 2014/2015
Amendments to IAS 32 – Financial
Instruments Disclosures: Offset-
ting Financial Assets and Financial
Liabilities
Amendment to IFRS 10, IFRS 11
and IFRS 12 – Consolidated Finan-
cial Statements, Joint Arrangements
and Disclosure of Interests in Other
Entities: Investment Entities
In fiscal year 2014/2015
At the earliest in fiscal
year 2014/2015
IFRS 9: Financial Instruments
At the earliest in fiscal
year 2015/2016
Amendments to IFRS 9 and IFRS 7
– Mandatory Effective Date of IFRS
9 and Transition Disclosures
At the earliest in fiscal
year 2015/2016
Financial reporting standards
and interpretations
Mandatory first-time
application
IAS 19 (2011): Employee Benefits
In fiscal year 2013/2014
Amendment to IFRS 1 – First-time
adoption of International Financial
Reporting Standards: Government
Loans
In fiscal year 2013/2014
IFRS 13: Fair Value Measurement
In fiscal year 2013/2014
Amendment to IFRS 7: Disclosures –
Offsetting Financial Assets and
Financial Liabilities
IFRIC 20: Stripping Costs in the
Production Phase of a Surface
Mine
In fiscal year 2013/2014
In fiscal year 2013/2014
Improvement Project 2009–2011
In fiscal year 2013/2014
IFRS 10: Consolidated Financial
Statements
In fiscal year 2014/2015
IFRS 11: Joint Arrangements
In fiscal year 2014/2015
IFRS 12: Disclosure of Interests in
Other Entities
In fiscal year 2014/2015
Amendment to IFRS 10, IFRS 11
and IFRS 12 – Consolidated Finan-
cial Statements, Joint Arrangements
and Disclosure of Interests in Other
Entities: Transition Guidance
In fiscal year 2014/2015
Application of the following financial reporting standards
and interpretations is likely to have a significant impact on
the consolidated financial statements:
IAS 19: Employee Benefits
The amendments to IAS 19 (2011) mainly relate to abolition of
the corridor approach, the immediate recognition of actuarial
gains and losses in the other comprehensive income, deter-
mination of the expected return on planned assets at the dis-
count rate used to measure the direct benefit obligation, and
more extensive note disclosures in the consolidated financial
statements. These amendments will have an effect on the
level of provisions for pensions and other employee benefits,
equity, deferred taxes and net interest expense from pen-
sion commitments. In addition, the definition of termination
benefits was amended by IAS 19 (2011), necessitating an
adjustment to the provision for semi-retirement obligations.
IAS 19 (2011) will be applied starting in fiscal year 2013/2014.
IAS 27 (2011), IAS 28 (2011), IFRS 10, IFRS 11 and
IFRS 12 – Consolidation
IFRS 10 introduces a new concept of control that influences
the methods and scope of consolidation. IFRS 11 governs
how joint arrangements are reported. IFRS 11 prescribes
only the equity method for consolidation of joint ventures.
56
Annual financial statements I Cash flow statement I Notes I 57
IFRS 12 contains more extensive disclosure requirements
in connection with subsidiaries, joint ventures, associated
companies and unconsolidated structured companies.
IAS 27 (2011) and IAS 28 (2011) are subsequent amend-
ments of the new IFRS 10, IFRS 11 and IFRS 12. KWS plans
to apply the new financial reporting standards relating to
consolidation for the first time in fiscal year 2014/2015.
There will be significant changes for the KWS Group in par-
ticular from application of IFRS 11. At June 30, 2013, seven
joint ventures were proportionately consolidated in the KWS
Group’s financial statements and will be consolidated using
the equity method in future in accordance with IFRS 11. For
the first time in fiscal 2014/2015, the balance sheet and in-
come statement will no longer include the proportionate rev-
enue, expenses, assets and liabilities of our joint ventures.
To the extent that these relate to supplementary disclosure
obligations, there will be no effects on the balance sheet or
statement of comprehensive income. The possible effects
of the other changes are currently being examined. As far as
can be seen at present, the other financial reporting stan-
dards and interpretations will not have a significant impact
on the consolidated financial statements of the KWS Group.
1. 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 in principle
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
in principle according to the percentage of equity held in the
companies concerned using IAS 31.
Subsidiaries and joint ventures are consolidated and associ-
ated companies measured at equity only if such recognition
is considered material for the fair presentation of the finan-
cial position and results of operations of the KWS Group. As
part of the elimination of intra-Group balances, borrowings,
receivables, liabilities, and provisions are netted between
the consolidated companies. Intercompany profits not re-
alized at Group level are eliminated from intra-Group trans-
actions. Sales, income, and expenses are netted between
consolidated companies, and intra-Group distributions of
profit are eliminated.
Deferred taxes on consolidation transactions recognized
in income are calculated at the tax rate applicable to the
company concerned. These deferred taxes are aggregated
with the deferred taxes recognized in the separate finan-
cial statements.
Minority interests are recognized in the amount of the im-
puted percentage of equity in the consolidated companies.
Currency translation
Under IAS 21, the financial statements of the consolidated
foreign subsidiaries and joint ventures that conduct their
business as financially, economically, and organizationally
independent entities are translated into euros using the
functional currency method and rounded in accordance
with standard commercial practice 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 state-
ment is taken directly to equity. Exchange differences result-
ing from loans to foreign subsidiaries and joint ventures 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 transparency. Re-
search grants are not deducted from the costs to which they
relate, but reported gross under other operating income.
Accounting policies
Consistency of accounting policies
The accounting policies are largely unchanged from the previ-
ous year. All estimates and assessments as part of account-
ing and measurement are continually reviewed; they are
based on historical patterns and expectations about the fu-
ture regarded as reasonable in the particular circumstances.
Intangible assets
Purchased intangible assets are carried at cost less straight-
line amortization over a useful life of three to 20 years. Im-
pairment losses on intangible assets with finite useful lives
are recognized according to IAS 36. Goodwill with an indefi-
nite useful life is not amortized, but tested for impairment at
least once a year. The procedure for the impairment test is
explained in the notes to the balance sheet. Intangible as-
sets acquired as part of business combinations are carried
separately from goodwill if they are separable according to
the definition in IAS 38 or result from a contractual or legal
right, and fair value can be reliably measured. Straight-line
amortization of these separated intangible assets is applied
over their individual useful life.
Property, plant, and equipment
Property, plant, and equipment is measured at cost less
straight-line depreciation. If the impairments exceed the
use-related depreciation that has already been applied, a
loss is recognized. In addition to directly attributable costs,
the cost of self-produced plant or equipment also includes a
proportion of the overheads and depreciation/amortization.
Depreciation of buildings is based on a useful life of up to
50 years. The useful lives of technical equipment and ma-
chinery 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. Impairment losses on
property, plant, and equipment are recognized according
to IAS 36 whenever the recoverable amount of the asset is
less than its carrying amount. The recoverable amount is
the higher of the asset’s net realizable 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 in-
come is not recognized.
Financial instruments
Financial instruments are in particular financial assets and
financial liabilities. The financial assets consist primarily
of bank balances and cash on hand, trade receivables,
other receivables, and securities. The credit risk mainly
comprises trade receivables. The amount recognized in
the balance sheet is net of allowances for receivables
expected to be uncollectible, estimated on the basis of
historical patterns and the current economic environ-
ment. 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 concentration of
credit risks, because the risks are spread over a large
number of contract partners and customers. The entire
credit risk is limited to the respective carrying amount.
Comments on the risk management system can be found
in the Management Report.
58
Annual financial statements I Notes I General disclosures I 59
Investments are measured for the first time 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 reserve for in-
tangible assets held for sale under equity. Impairment losses
are recognized immediately through the income statement.
Borrowings are carried at amortized cost.
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.
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 finan-
cial instruments that are used to hedge interest rate and
foreign currency risks. In particular, the derivative financial
instruments are measured using recognized mathematical
models, such as present value or Black-Scholes, to calcu-
late 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 measurement methods
and must be assigned to a level in the fair value hierarchy.
Financial instruments in level 1 are measured using quoted
prices in active markets for identical assets or liabilities. In
level 2, they are measured by directly observable market
inputs or derived indirectly on the basis of prices for similar
instruments. Finally, input factors not based on observable
market data are used to calculate the value of level 3 finan-
cial instruments.
Subsequent measurement of the financial instruments de-
pends on their classification in one of the following catego-
ries defined in IAS 39:
Loans and receivables
This category mainly comprises trade receivables, other
receivables, loans and cash, including fixed-income short-
term securities. Loans are measured at cost. Loans that
carry no interest or only low interest are measured at their
present value. Discernable risks are taken into account by
recognition of an impairment loss. After their initial recogni-
tion, the other financial assets in this category are measured
at amortized cost using the effective interest method, minus
impairments. Receivables that carry no interest or only low
interest and with a term of more than twelve months are
discounted. Necessary value impairments are based on the
expected credit risk and are carried in separate impairment
accounts. Receivables are derecognized if they are settled
or uncollectible. Other assets are derecognized at the time
they are disposed of or if they have no value.
Financial assets at fair value
Held-for-trading securities acquired with the intention of
being sold in the short term are assigned to this category.
Derivate financial instruments with a positive market value
are also categorized as held for trading, unless they are des-
ignated hedging instruments in accordance with IAS 39.
They are measured at fair value. Changes in value are recog-
nized in income. Securities are derecognized after being
sold on the settlement date.
Available-for-sale financial assets
This category covers all financial assets that have not been
assigned to one of the above categories. In principle, securi-
ties are classed as available for sale, unless a different clas-
sification is required due to the fact that they have an explicit
purpose. Equity instruments, such as shares in (unconsoli-
dated) affiliated companies and shares held in listed compa-
nies, are also included in this category. In principle, financial
instruments in this category are measured at their fair value
in subsequent recognition. The changes to their fair value in
subsequent recognition are recognized as unrealized gains
and losses directly in equity in the revaluation reserve. The re-
alized gains or losses are not recognized as profit or loss until
they are disposed of. If there is objective evidence of perma-
nent impairment on the balance sheet date, the instruments
are written down to the lower value. Any subsequent de-
creases in the impairment loss are recognized directly in equity.
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. This will be the last
year this is done. Only if the gains or losses exceed this
threshold will they be recognized as income 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.
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 bal-
ance 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 carried
in these IFRS financial statements are partly based on es-
timates and specifically defined specifications. This relates
in particular to:
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 obsoles-
cent 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.
60
Annual financial statements I Notes I General disclosures I 61
• 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
2. Disclosures on the annual financial statements
Consolidated group and changes in the consolidated group
Number of companies including KWS SAAT AG
Consolidated
Consolidated at quota
Equity method
Total
Domestic
Foreign
Total
Domestic
Foreign
Total
06/30/2013
Previous year
13
0
13
0
13
42
7
49
1
50
55
7
62
1
63
13
0
13
0
13
43
7
50
0
50
56
7
63
0
63
Delta Pesquisa e Sementes Ltda. / Brazil and Semilia Genetica
e Melhoramento Ltda. / Brazil, the breeding companies
we acquired in the previous year, were merged into KWS
MELHORAMENTO E SEMENTES LTDA. effective July 1, 2012.
We acquired further shares in our joint venture GENECTIVE
S.A. on June 28, 2013.
A total of 55 (56) companies were fully consolidated and
seven (seven) proportionately consolidated in the year under
review. A participating interest that was increased in fiscal
2012/2013 is consolidated using the equity method.
The financial position and results of operations of the seven
(seven) proportionately consolidated companies are as follows:
Proportionately consolidated companies
2012/13
Previous
year
Proportionately
consolidated companies
44,767
155,378
200,145
107,640
868
36,997
139,434
176,431
99,557
824
91,637
76,050
Noncurrent assets
Current assets
Total assets
Equity
Noncurrent liabilities
Current liabilities
Total equity and liabilities
200,145
176,431
Total income
Total expenses
281,396
238,494
257,758
217,857
Net profit for the year
23,638
20,637
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 GMBH**
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)
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/U.S.
49% SOCIETE DE MARTINVAL S.A.8) *
Mons-en-Pévèle/France
100% SA MOMONT HENNETTE14)
Mons-en-Pévèle/France
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
Velke Mezirici/Czech Rebublic
95% SARL LABOGERM14)
100% KWS KLOSTERGUT
100% KWS SEMENA BULGARIA
Mons-en-Pévèle/France
E.O.O.D.5)
Sofia/Bulgaria
100% AGROMAIS GMBH 5)
Everswinkel
100% SARL ADRIEN MOMONT14)
Mons-en-Pévèle/France
100% SCA HAMET14)
Mons-en-Pévèle/France
100% SEMILLAS KWS CHILE LTDA.
100% KWS MAGYARORSZÁG KFT.5)
Györ/Hungary
100% KWS SEMINTE S.R.L.13)
Bukarest/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, IND/U.S.
50% AGRELIANT GENETICS INC.*
Chatham, Ontario/Canada
100% KWS MELHORAMENTO E
SEMENTES LTDA.21)
Curitiba/Brazil
50% RIBER KWS SEMENTES S.A. 21)
Patos de Minas/Brazil
Rancagua/Chile
100% KWS SRBIJA D.O.O.
New Belgrad/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.9)
Eskisehir/Turkey
100% BETASEED GMBH
Frankfurt
100% KWS POTATO B.V.17)
Emmeloord/Netherlands
83% DYNAGRI S.A.R.L.16)
Casablanca/Morocco
WIEBRECHTSHAUSEN 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
50% GENECTIVE S.A.22)***
Chappes/France
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
*
**
***
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
Proportional consolidation
Profit transfer agreement
At Equity method
The percentages shown for each company relate to the share
in that company held within the KWS Group
Subsidiary of KWS SEEDS INC.
Subsidiary of KWS FRANCE S.A.R.L.
Subsidiary of BETASEED INC.
Subsidiary of KWS MAIS GMBH
Investee of GLH SEEDS INC.
Subsidiary of KWS LOCHOW GMBH
Investee of KWS LOCHOW GMBH
Subsidiary of KWS INTERSAAT GMBH and KWS SAAT AG
Subsidiary of KWS INTERSAAT GMBH
11)
12)
13)
14)
15)
16)
17)
18)
19)
20)
21)
22)
Subsidiary of O.O.O. KWS RUS
Subsidiary of EURO-HYBRID GMBH and KWS SAATFINANZ GMBH
Subsidiary of KWS MAIS GMBH and KWS SAATFINANZ GMBH
Subsidiary of SOCIETE DE MARTINVAL S.A.
Subsidiary of EURO-HYBRID GMBH
Subsidiary of KWS POTATO B.V.
Subsidiary of RAGIS GMBH
Subsidiary of BETASEED GMBH
Subsidiary of KWS INTERSAAT GMBH and KWS SAATFINANZ GMBH
Subsidiary of KWS SEMENTES BRASIL PARTICIPACOES LTDA.
and KWS INTERSAAT GMBH
Subsidiary of KWS BRASIL PARTICIPACOES LTDA.
Investee of KWS SAAT AG
June 30, 2013
62
Annual financial statements I Notes I Disclosures on the annual financial statements I 63
3. Segment reporting for the KWS Group
Figures in € thousands, unless otherwise specified; previous-year figures in parentheses
In accordance with its internal reporting system, the KWS
Group is primarily organized according to the following busi-
ness segments:
• Corn
• Sugarbeet
• Cereals
• Corporate
Considered a core competency for the KWS Group’s en-
tire product range, plant breeding, including the related
biotechnology research, is essentially concentrated at the
parent company KWS SAAT AG in Einbeck. All the breeding
material, including the relevant information and expertise
about how to use it, is owned by KWS SAAT AG with re-
spect to sugarbeet and corn and by KWS LOCHOW GMBH
with respect to cereals. Product-related R&D costs are
carried directly in the product segments Corn, Sugarbeet
and Cereals. Centrally controlled corporate functions are
grouped in the Corporate Segment. Because of their minor
importance within the KWS Group, the distribution and pro-
duction of oil and field seed are reported in the Cereals and
Corn Segments, in keeping with the legal entities involved.
Description of segments
Corn
KWS MAIS GMBH is the lead company for the Corn Seg-
ment. In addition to KWS MAIS GMBH, business activities
are conducted by one (one) German company and 15 (16)
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.
Sugarbeet
The results of the multiplication, processing and distribution
activities for sugarbeet seed, as well as our seed potato
business, are reported under the Sugarbeet Segment. Un-
der the leadership of KWS SAAT AG, 18 (18) foreign subsidi-
aries and affiliated companies and two (two) subsidiaries in
Germany are active in this segment.
Cereals
The lead company of this segment, which essentially con-
cerns the production and distribution of hybrid rye, wheat,
and barley, as well as oil and field seed, is KWS LOCHOW
GMBH, an 81%-owned subsidiary of KWS SAAT AG, with
its eight (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 are reported in this
segment. The segment 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 functions,
which are not directly charged to the product segments
or indirectly allocated to them by means of an appropriate
cost formula.
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 reve-
nues 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.
Corn
Sugarbeet
Cereals
Corporate
KWS Group
2012/13
Previous
year
2012/13
Previous
year
2012/13
Previous
year
Segment sales
Internal sales
External sales
701,743
329,288
113,482
14,873
571,765
313,692
95,095
15,998
35
713
1,828
9,575
290
264
1,840
7,860
701,708
328,575
111,654
5,298
571,475
313,428
93,255
8,138
1,159,386
996,550
12,151
10,254
1,147,235
986,296
The Corporate Segment generates 64.4% (49.1%) of its
sales with the other segments. The sales of this segment
represents 0.5% (0.8%) of the Group’s external sales.
External sales by region
The Corn Segment is the largest contributor of external
sales, accounting for 61.2% (57.9%) of external sales, fol-
lowed by Sugarbeet with 28.6% (31.8%) and Cereals with
9.7% (9.5%).
57.3% (62.8%) of total sales are recorded in Europe (includ-
ing Germany).
Germany
Europe (excluding Germany)
Americas
Rest of world
KWS Group
2012/13
223,384
433,524
435,787
54,540
Previous
year
228,328
390,720
325,633
41,615
1,147,235
986,296
2012/13
Previous
year
2012/13
Previous
year
2012/13
Previous
year
Corn
Sugarbeet
Cereals
Corporate
Segment earnings
91,998
73,475
26,767
77,764
79,891
18,941
–41,574
–35,742
Depreciation
and amortization
Other noncash items
14,978
11,740
3,928
7,802
8,449
9,345
3,489
7,093
9,885
6,818
1,284
–7,283
10,704
–10,637
–7,323
650
3,713
–13,597
Total segments
150,666
140,854
38,448
28,376
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 €38,448
thousand (€28,376 thousand) allocated to the segments
relate exclusively to intangible assets and property, plant,
and equipment.
64
Annual financial statements I Notes I Segment reporting I 65
Corn
Sugarbeet
Cereals
Corporate
Total segments
Others
KWS Group
2012/13
Previous year
2012/13
Previous year
Operating assets
Operating liabilities
484,560
253,973
64,910
90,365
893,808
319,515
426,729
242,404
60,796
92,241
822,170
270,146
1,213,323
1,092,316
158,621
55,244
17,033
50,390
281,288
264,509
545,797
147,146
52,767
14,342
74,278
288,533
200,687
489,220
The other noncash items recognized in the income state-
ment relate to noncash changes in the allowances on inven-
tories 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 allocat-
ed to them by means of an appropriate formula.
Corn
Sugarbeet
Cereals
Corporate
KWS Group
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.
Capital expenditure on assets was mainly attributable to
the Corn Segment, where it amounted to €23,626 thousand
(€77,379 thousand), and the Sugarbeet Segment, where
it amounted to €22,408 thousand (€20,327 thousand).
37.3% (67.8%) of the capital spending was made in North
and South America and 28.0% (18.6%) in Europe (exclud-
ing Germany).
Germany
Europe (excluding Germany)
North and South America
Rest of world
KWS Group
Investments in long-term assets by region
2012/13
23,626
22,408
7,333
6,082
Previous
year
77,379
20,327
6,987
5,967
59,449
110,660
2012/13
15,933
16,637
22,174
4,705
Previous
year
14,793
20,553
74,978
336
59,449
110,660
Operating assets by region
Germany
Europe (excluding Germany)
North and South America
Rest of world
KWS Group
2012/13
253,020
260,911
352,040
27,837
Previous
year
233,428
270,374
297,765
20,602
893,808
822,169
4. 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 2012/2013. Capital expenditure
on assets was €65,195 thousand (€111,549 thousand), of
which €0 thousand (€61,142 thousand) was attributable to
the changes in the consolidated group. The Management
Report describes the significant additions to assets. Depre-
ciation and amortization amounted to €38,448 thousand
(€28,376 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 €4,406
thousand (€55,618 thousand), of which €0 thousand
(€53,275 thousand) resulted from the changes in the consoli-
dated group, comprise the acquisition of software licenses
and patents. Amortization of intangible assets amounted
to €11,674 thousand (€5,076 thousand), of which €2,420
thousand (€450 thousand) were write-downs. This charge
is included in the relevant functional costs and the other
operating expenses, depending on the operational use of
the intangible assets.
The goodwill recognized as an asset relates mainly to
the Brazilian companies RIBER KWS SEMENTES S.A. –
€21,686 thousand (€21,686 thousand) – and KWS
MELHORAMENTO E SEMENTES LTDA. – €4,115 thousand
(€4,115 thousand), as well as AGRELIANT GENETICS LLC. –
€17,584 thousand (€17,973 thousand) – in the Corn Seg-
ment, 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 gener-
ally the legal entities, with the exception of our potato unit,
which as a whole represents the cash-generating units. 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 recoverable amount of an entity is
less than its carrying amount. The recoverable amount is
the higher of the entity’s net realizable value and its value in
use (value of future cash flows expected to be derived from
the entity). The impairment test uses the expected future
cash flows on which the medium-term plans of the com-
panies are based; these plans, which cover a period of four
years, have been approved by the Executive Board. They
are based on historical patterns and expectations about fu-
ture market development.
For the European and American markets, the key assump-
tions on which corporate planning is based include as-
sumptions about price trends for seed, in addition to the
development of market shares and the regulatory frame-
work. Company-internal projections take the assumptions
of industry-specific market analyses and company-related
growth perspectives into account.
A standard discount rate of 5.3% (5.4%) has been as-
sumed 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-generating units is not im-
paired. Possible changes in the figures reported in the bal-
ance sheet result from currency translation at the balance
sheet date.
Sensitivity analyses were carried out in the fiscal year for
all cash-generating units to which goodwill is allocated. A
5% reduction in the forecast cash flow or an increase in
the discount rate by 0.1 percentage points would not result
in the need to recognize an impairment loss at any cash-
generating unit whose goodwill is significant relative to the
total carrying amount of goodwill.
66
Annual financial statements I Notes I Notes to the balance sheet I 67
(7) Inventories and biological assets
Written-down and overdue receivables
(3) Property, plant, and equipment
Capital expenditure amounted to €55,043 thousand
(€55,042 thousand) and depreciation amounted to
€26,774 thousand (€23,300 thousand). €0 thousand
(€7,588 thousand) of the capital expenditure on property,
plant and equipment result from the changes in the con-
solidated group. The Management Report describes the
significant capital expenditure.
(4) Financial assets
Investments in non-consolidated subsidiaries and associat-
ed companies and shares in cooperatives and GmbHs that
are of minor significance, are reported in principle at their
amortized cost totaling €5,972 thousand (€948 thousand)
since a market value cannot be reliably determined. The ad-
ditions to the financial assets mainly relate to the acquisition
of further shares in our joint venture GENECTIVE S.A. and
total €5,746 thousand (€610 thousand). Listed shares are
carried at market value of €141 thousand (€162 thousand).
This account also includes interest-bearing homebuilding
loans to employees and other interest-bearing loans totaling
€118 thousand (€172 thousand). In addition, the balance of
€2,455 thousand (€3,099 thousand) after netting off rein-
surance claims and the corresponding benefit obligations
is carried. Amortization of financial assets amounted to €0
thousand (€0 thousand).
Raw materials and consumables
Work in process
Immature biological assets
Finished goods
06/30/2013
Previous
year
15,961
47,124
11,316
70,051
16,761
37,043
14,313
71,577
144,452
139,694
Inventories increased by €4,758 thousand, or +3.4%, net of im-
pairment losses totaling €53,556 thousand (€51,336 thou-
sand). Immature biological assets relate to living plants in the
process 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 sub-
sidies of €1,528 thousand (€1,749 thousand), for which all
the requirements were met at the balance sheet date, were
granted for the total area under cultivation of 4,434 (4,410) ha
and were recognized in income. Future subsidies depend
on the further development of European agricultural policy.
(8) Current receivables
(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.
Trade receivables
Current tax assets
Other current assets
06/30/2013
Previous
year
359,867
309,422
24,385
40,122
25,957
23,993
424,374
359,372
(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
reported on a gross basis and total €37,134 thousand
(€25,970 thousand), of which €2,887 thousand (€3,197 thou-
sand) will be carried forward for the future use of tax losses.
Trade receivables amounted to €359,867 thousand, an in-
crease of 16.3% over the figure of €309,422 thousand for
the previous year; this amount includes €2,618 thousand
(€2,137 thousand) in receivables from related parties. The
item “Other current assets” includes prepaid expenses total-
ing €5,580 thousand (€4,739 thousand) in addition to other
receivables of €34,542 thousand (€19,254 thousand). The
already overdue trade receivables that have been partly writ-
ten down amount to €4,843 thousand (€2,218 thousand).
06/30/2013
Carrying
amount
Trade receivables
Other receivables
Previous year
Trade receivables
Other receivables
359,867
34,542
394,409
309,422
19,254
328,676
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
311,686
29,405
3,987
2,251
1,435
34,103
0
0
0
0
345,789
29,405
3,987
2,251
1,435
276,231
17,686
5,678
2,584
18,908
2
0
0
1,135
0
295,139
17,688
5,678
2,584
1,135
6,260
343
6,603
3,890
343
4,233
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.
(9) Securities
Securities amounting to €100,878 thousand (€40,399
thousand) relate primarily to short-term liabilities securities
and fund shares.
The following allowances have mainly been made for pos-
sible risks of non-payment of trade receivables:
07/01 Addition Disposal Reversal
06/30
2012/13
29,098
7,865
1,779
6,542
28,642
2011/12
33,017
12,780
4,204
12,495
29,098
The receivables include an amount of €345 thousand (€79
thousand) due after more than one year.
(10) Cash and cash equivalents
Cash of €101,517 thousand (€142,569 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.
68
Annual financial statements I Notes I Notes to the balance sheet I 69
(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 capital reserves essentially comprise the premium ob-
tained as part of share issues.
The revenue reserves, the net retained profit, the differences
from currency translation and the reserve for intangible as-
sets held for sale are grouped in this item in the consolidated
balance sheet. The revenue reserves essentially comprise
the net income generated in the past by the companies in-
cluded in the consolidated financial statements, minus divi-
dends paid to shareholders. Differences from translation of the
functional currency of foreign business operations into the
currency used by the group in reporting (euro) are essentially
carried in the item “Adjustments from currency translation.”
Equity (including minority interest) increased by €64,430
thousand, from €603,096 thousand to €667,526 thousand.
For details, see the statement of changes in equity.
(12) Noncurrent liabilities
Long-term provisions
67,148
66,603
06/30/2013
Previous
year
Long-term financial
borrowings
Trade payables
Deferred tax liabilities
Other long-term liabilities
98,460
1,697
29,695
9,075
48,717
1,914
36,043
8,207
206,075
161,484
As in the previous year, the trade payables and other long-term
liabilities are due for payment in between one and five years.
The obligation of €25,684 thousand from a put/call option
as part of our Brazilian operations was carried under the
long-term provisions the year before, but was allocated to
the long-term financial borrowings in the past fiscal year.
The previous year’s figures have been adjusted accordingly.
The pension provisions are based on defined benefit obliga-
tions, determined by years of service and pensionable com-
pensation. They are measured using the accrued benefit
method under IAS 19, on the basis of assumptions about
future development. The assumptions in detail are that wag-
es and salaries will increase by 3.00% (3.00%) annually and
pensions by 2.00% (2.00%) annually.
The discount rate was 3.50%, compared with 3.80% the
year before. In the previous year, a discount rate of 5.10%
was erroneously stated; however, the calculations were
made using the correct rate of interest.
No income or expenses were recognized as a result of
changes in retirement obligations or benefits payable or
from the adjustment to assumptions. For benefit obligations
backed by a guarantee by an insurance company toward
three former members of the Executive Board, the planned
assets of €9,059 thousand (€8,599 thousand) correspond
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
07/01/2012
Changes in
the consol.
group,
currency
Addition Consumption
Reversal 06/30/2013
Pension provisions
Other provisions
57,212
9,391
66,603
–259
–581
–840
5,212
3,141
8,353
4,575
2,387
6,962
2
4
6
57,588
9,560
67,148
The accrued benefit is reconciled to the provisions reported
in the consolidated financial statements as follows:
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
2012/13
Previous
year
97,291
80,069
1,132
3,627
–1,308
3,714
1
4,897
99,560
916
4,842
718
15,571
1
4,826
97,291
–18,967
–18,031
2,455
–25,461
57,587
3,099
–25,147
57,212
2012/13
Previous
year
18,031
16,286
1,027
1,209
–944
–356
1,162
214
–943
1,312
Present value of planned assets at the end of the fiscal year
18,967
18,031
70
Annual financial statements I Notes I Notes to the balance sheet I 71
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
06/30/2013
06/30/2012
06/30/2011
06/30/2010 06/30/2009
99,560
18,967
80,593
378
943
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
201
–1,551
The table below shows a breakdown of the pension costs
for the defined benefit obligations:
Costs for additional benefit entitlements
Interest expense
Repayment of actuarial losses
Anticipated income from the planned assets
Pension costs
2012/13
Previous
year
1,132
3,627
1,062
–1,027
4,794
916
4,842
198
–1,162
4,794
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.
In addition, the benefit obligation from salary conversion
was backed by a guarantee that exactly matches the pres-
ent value of the obligation of €2,432 thousand (€3,514
thousand) (defined contribution plan).
As part of the company old-age pension program for
KWS SAAT AG and German subsidiaries, subsequent bene-
fits 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 program were €1,099 thousand
(€977 thousand).
The return and income from the planned assets depend on
the reinsurance policy, which yields guaranteed interest of
2.25%. For the next year, income totaling €474 thousand
(€506 thousand) is expected.
The long-term financial borrowings include loans from banks
amounting to €64,834 thousand (€21,228 thousand). They
have remaining maturities through 2017.
Under IAS 12, deferred tax liabilities are calculated as the
difference between the IFRS balance sheet amount and
the tax base. They are reported on a gross basis and total
€29,695 thousand (€36,043 thousand). The composition of
the deferred tax liabilities is explained in more detail under
(22) 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
06/30/2013
Previous
year
131,350
121,633
26,975
22,771
292
5,992
33,259
7
82,739
82,746
271
35,377
58,419
0
74,373
74,373
31,929
24,053
60,438
49,258
339,722
327,736
Short-term provisions
07/01/2012
Changes in
the consol.
group,
currency
Addition Consumption
Reversal 06/30/2013
Obligations from
sales transaction
Obligations from
purchase transaction
Other obligations
99,047
–2,540
106,497
90,512
4,877
107,615
13,221
9,365
–355
–766
15,631
2,603
5,945
4,140
5,693
186
16,859
6,876
121,633
–3,661
124,731
100,597
10,756
131,350
Obligations to an amount of €12,351 thousand reported
last year under the short-term provisions were subsequently
classified as debt due to the greater likelihood of their being
utilized and so are allocated to the current liabilities.
The tax liabilities of €31,929 thousand (€24,053 thousand)
include amounts for the year under review and the period
not yet concluded by the external tax audit.
72
Annual financial statements I Notes I Notes to the balance sheet I 73
(14) Derivative instruments
Nominal
volume
Carrying
amounts
Market
values
06/30/2013
Currency hedges
Interest-rate hedges
Commodity hedges
58,124
55,100
19,828
–207
–207
Currency hedges
73
0
73
0
Interest-rate hedges
Commodity hedges
133,052
–134
–134
Nominal
volume
Carrying
amounts
Market
values
06/30/2012
42,214
42,200
10,793
95,207
493
36
0
529
493
36
0
529
Of the currency hedges, €11,041 thousand (€112 thousand)
have remaining maturities of between one and five years.
Of the interest-rate derivatives, hedges with a nominal vol-
ume of €39,500 thousand (€21,200 thousand) will mature
within one to five years and hedges with a nominal value
of €15,000 thousand (€15,000 thousand) will mature in
more than five years. As in the previous year, the commod-
ity 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
2012 / 13
Previous
year
123
–250
–335
– 11,879
102
68
1,190
–7,189
–2,655
–4,608
The net income from financial assets includes income and
expenses from the measurement of financial assets. The net
gains/losses from loans and receivables mainly includes ef-
fects 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 other comprehensive income includes income of €104
thousand (€1 thousand) from the revaluation of financial
instruments. Deduction of taxes totaling of €18 thousand
(€0 thousand) gives a remaining amount of €86 thousand
(€1 thousand).
The net losses from financial liabilities measured at amor-
tized cost mainly consist of interest expense.
Interest income from financial assets that are not meas-
ured at fair value and recognized in the income statement
was €1,552 thousand (€2,096 thousand). Interest ex-
penses for financial borrowings were €11,879 thousand
(€7,189 thousand).
dollar appreciated by 10%, the financial instruments would
gain €225 thousand (€194 thousand) in value. The net in-
come 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 0.29% (0.93%).
A 1% increase in the rate of interest would reduce the in-
terest result by €0.5 million (€0.4 million); equity would
change by € –0.3 million (€ –0.3 million). A reduction in the
rate of interest to 0 percentage points would add a further
€1.3 million (€0.6 million) to the interest result. Equity would
increase by € +0.9 million (€ +0.4 million) in the event of
such a change in the rate of interest.
In order to assess the risk of exchange rate changes, the sen-
sitivity of a currency to fluctuations was determined. After the
euro, the US dollar is the most important currency in the KWS
Group. All other currencies are of minor importance. The aver-
age exchange rate in the fiscal year was 1.30 (1.34) USD/€. If
the US dollar depreciated by 10%, the financial instruments
would lose €184 thousand (€159 thousand) in value. If the US
In order to assess the risk of changes in commodity prices,
the sensitivity of commodity prices to fluctuations was deter-
mined. A 10% increase in commodity prices would increase
the cost of sales by around €2.0 million (€1.1 million); a de-
crease would reduce it by around €2.0 million (€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:
Loans and
receivables
Financial
assets at
fair value
Available-for-
sale financial
assets
Total
carrying
amount
Financial instruments
06/30/2013
Financial assets
Financial assets
Trade receivables
Securities
Cash and cash equivalents
Other current assets
- Other which derivative financial
instruments
Fair Values
Carrying amounts
7,660
359,867
100,878
101,517
40,122
(812)
0
359,867
100,878
101,517
39,310
(0)
0
0
0
0
812
(812)
812
7,660
7,660
0
0
0
0
359,867
100,878
101,517
40,122
(0)
(812)
7,660
610,044
Total
610,044
601,572
74
Annual financial statements I Notes I Notes to the balance sheet I 75
06/30/2013
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
98,460
1,697
9,075
33,259
82,746
60,438
(946)
98,460
1,697
9,075
33,259
82,746
59,492
(0)
0
0
0
0
0
946
(946)
98,460
1,697
9,075
33,259
82,746
60,438
(946)
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
48,717
1,914
8,207
58,419
74,373
49,258
(623)
48,717
1,914
8,207
58,419
74,373
48,635
(0)
0
0
0
0
0
623
(623)
48,717
1,914
8,207
58,419
74,373
49,258
(623)
Total
285,675
284,729
946
285,675
Total
240,888
240,265
623
240,888
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
1,938
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
0
0
0
0
1,938
309,422
40,399
142,569
23,993
(0)
(1,152)
1,938
518,321
Total
518,321
515,231
Securities classified within level 1 of the fair value hierarchy
totaled €100,878 thousand (€40,399 thousand) at June 30,
2013. Financial assets held for trading (€812 thousand; pre-
vious year: €1,152 thousand) and financial liabilities held for
trading (€946 thousand; previous year: €623 thousand) are
categorized in level 2. There are no financial instruments in
level 3.
None of the reported financial instruments will be held
to maturity.
(16) Contingent liabilities
As in the previous year, there are no contingent liabilities to
report apart from the employer’s statutory secondary liabil-
ity for direct pension commitments.
(17) Other financial obligations
There was a €5,588 thousand (€8,283 thousand) obligation
from uncompleted capital expenditure projects.
Obligations under rental
agreements and leases
06/30/2013
Previous
year
Due within one year
Due between 1 and 5 years
Due after 5 years
13,968
17,439
3,576
34,983
9,329
12,849
3,628
25,806
The leases relate primarily to full-service agreements for IT
equipment and fleet vehicles, which also include services
for which a total of €2,139 thousand (€2,858 thousand) was
paid in the year under review. The main leasehold obliga-
tions relate to land under cultivation.
76
Annual financial statements I Notes I Notes to the balance sheet I 77
5. Notes to the income statement
Figures in € thousands, unless otherwise specified; previous-year figures in parentheses
Income statement for the period July 1, 2012 through June 30, 2013
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
Taxes
Net income for the year
Shares of minority interest
Net income after minority interest
(18) Net sales and function costs
By product category
2012/13
Previous
year
Certified seed sales
1,047,039
908,990
Royalties income
Basic seed sales
Services fee income
Other sales
By region
Germany
Europe
America
Rest of world
57,806
16,931
5,637
19,822
41,217
13,247
4,935
17,907
1,147,235
986,296
2012/13
Previous
year
223,385
228,328
433,524
390,720
435,787
325,633
54,539
41,615
1,147,235
986,296
For further details of sales, see segment reporting.
i millions % of sales
i millions % of sales
2012/13
Previous year
1,147,2
100,0
607,4
539,8
190,7
140,8
69,4
61,9
50,1
150,7
–10,3
140,4
49,1
91,3
3,4
87,9
52,9
47,1
16,6
12,3
6,0
5,5
4,4
13,1
–0,9
12,2
4,3
8,0
0,3
7,7
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
Sales are recognized when the agreed goods or services
have been supplied and risk and title pass to the buyer. Any
rebates or discounts are taken into account.
The cost of sales increased by €86,051 thousand to €607,394
thousand, or 52.9% (52.9%) of sales. The total cost of goods
sold was €351,442 thousand (€301,209 thousand).
Allowances on inventories totaling €2,220 thousand more
(previous year: € –3,867 thousand less) were required. The
allowances were lower by €150 thousand (€7,973 thousand)
for the Sugarbeet Segment, lower by €553 thousand for the
Cereals Segment (previous year: €368 thousand) and lower
by €1,941 thousand for the Corporate Segment (previous
year: €1,072 thousand), while additional allowances totaling
€4,864 thousand (€2,666 thousand) were required in the
Corn Segment.
The €29,407 thousand increase in selling expenses to
€190,762 thousand is attributable to the creation and ex-
pansion of distribution structures. This is 16.6% of sales, up
from 16.4% the year before.
Research and development is recognized as an expense
in the year it is incurred; in the year under review, this amoun-
ted to €140,810 thousand (€126,571 thousand the year
before). Development costs for new varieties are not rec-
ognized as an asset because evidence of future econom-
ic benefit can only be provided after the variety has been
officially certified.
General and administrative expenses increased by
€9,991 thousand to €69,485 thousand and so still repre-
sent 6.0% of sales.
(19) Other operating income
Income from sales of fixed assets
836
576
2012/13
Previous
year
(20) Other operating expenses
Legal form expenses
Allowances on receivables
Counterparty default
Exchange rate losses
and losses on currency
and interest rate hedges
2012/13
Previous
year
1,263
7,865
352
1,112
12,780
87
16,428
13,021
Losses from sales of fixed assets
636
48
Expenses relating to previous
periods
Expense from remeasurement of
intangible assets
Other expenses
1,027
1,539
72
22,418
50,061
0
10,729
39,316
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
10,763
9,489
14,757
15,560
6,542
6,204
12,495
5,201
6,773
5,841
580
380
15,488
61,943
13,095
62,637
The other operating income mainly comprises foreign ex-
change gains and income from interest rate hedges, as well
as miscellaneous other operating income.
In the year under review, allowances for receivables of
€3,414 thousand (€6,722 thousand) were recognized as an
expense at the Corn Segment, €4,400 thousand (€5,647
thousand) at the Sugarbeet Segment, €48 thousand (€411
thousand) at the Cereals Segment and €3 thousand (€0
thousand) at the Corporate Segment.
The other expenses include expenses from the revaluation
of a put/call option of €6,087 thousand entered into last
year in connection with our Brazilian operations.
78
Annual financial statements I Notes I Notes to the income statement I 79
Deferred taxes, Germany
–5,805
–1,387
Property, plant and equipment
(21) Net financial income/expenses
(22) Taxes
Income tax expense is computed as follows:
Interest income
Interest expenses
Income from securities
Income from other financial
assets
Depreciation on securities
Interest expenses from
pension provisions
Interest expense for other
long-term provisions
Interest expense for finance
leasing
2012/13
1,641
8,203
Previous
year
2,165
3,398
0
78
1
1
95
0
2,600
3,681
1,252
24
173
157
Net interest expense
–10,361
–5,148
Net income from subsidiaries
and joint ventures
Net income from participations
Net income from write-ups on
subsidiaries, joint ventures and
participations
Net income from equity
investments
38
6
1
45
0
7
0
7
Net financial income/expenses
–10,316
–5,141
The net financial result fell by a total of €5,175 thousand to
€ –10,316 thousand as a result of the financing of our opera-
tions in Brazil. Net interest expense was € –10,361 thousand
(€ –5,148 thousand), while net income from equity invest-
ments increased by €38 thousand to €45 thousand. The
interest effects from pension provisions comprise interest ex-
penses (compounding) and the planned income.
Income taxes, Germany
Income taxes, other countries
Current expenses
from income taxes
Thereof from previous years
2012/13
26,453
39,967
66,420
(4,836)
Previous
year
17,010
16,248
33,258
(631)
Deferred taxes, other countries
Deferred tax income/expense
–11,513
–17,318
9,446
8,059
Reported income tax
expense
49,102
41,317
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, mu-
nicipal trade income tax is payable on profits generated in
Germany. Trade income tax is applied at a weighted aver-
age rate of 13.3% (13.3%), resulting in a total tax rate of
29.1% (29.1%).
The “Law on Tax Measures Accompanying Introduction of
the Societas Europaea and Amending Further Tax Regula-
tions” (SEStEG), which was passed at the end of 2006,
means that the corporate income tax credit balance at
December 31, 2006, can be realized. It will be paid out in
ten equal annual amounts from 2008 to 2017. The German
Group companies carried these claims as assets at their
present value totaling €6,123 thousand (€7,311 thousand)
at June 30, 2013. €1,235 thousand (€905 thousand) was
recovered in the year under review and recognized directly
in equity.
Under German tax law, both German and foreign dividends
are 95% tax exempt.
The profits generated by Group companies outside Germa-
ny are taxed at the rates applicable in the country in which
they are based.
For the German Group companies, deferred tax was calculat-
ed 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.
Deferred taxes result from the following:
Intangible assets
Financial assets
Inventories
Current assets
Noncurrent liabilities
Current liabilities
Tax loss carryforward
Other consolidation transactions
2012/13
Previous
year
Change
2012/13
Previous
year
Change
Deferred tax assets
Deferred tax liabilities
5
220
2,479
8,516
3,957
2,598
16,146
2,887
326
5
148
167
9,618
3,983
3,916
4,432
3,197
504
0
72
2,312
–1,102
–26
–1,318
11,714
–310
–178
12,754
14,083
662
201
428
1,042
521
0
4
16,211
13,973
972
177
3,366
1,300
38
0
6
–3,457
110
–310
24
–2,938
–258
483
0
–2
Deferred taxes recognized
37,134
25,970
11,164
29,695
36,043
–6,348
The other comprehensive income includes exchange rate-
related changes to deferred taxes of €194 thousand (€–6,503
thousand), which were directly credited to equity, without
recognition in profit or loss. Tax loss carryforwards of €5,359
thousand (€1,026 thousand) were regarded 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 antici-
pated 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:
2012/13
Previous
year
Earnings before income taxes
140,351
135,713
Expected income tax expense*)
40,842
39,492
Difference in income tax liability
outside Germany
1,562
693
Tax portion for:
Tax-free income
Expenses not deductible
for tax purposes
Temporary differences and
losses for which no deferred
taxes have been recognized
Tax credits
Taxes relating to previous years
Other tax effects
Reported income tax expense
Effective tax rate
* Tax rate in Germany: 29.1% (29.1)%
–517
–116
1,591
1,218
0
–279
4,836
1,067
49,102
35.0%
–44
–703
631
146
41,317
30.4%
80
Annual financial statements I Notes I Notes to the income statement I 81
This increase in the effective tax rate in fiscal 2012/2013 was
due to tax expenses from previous periods following field
audits and strong income growth in countries with higher
rates of tax.
Other taxes, primarily real estate tax, are allocated to the
relevant functions.
Employees*
Germany
Rest of Europe (without Germany)
America
Rest of world
Total
* Annual average
(23) Personnel costs/employees
2012/13
Previous
year
1,676
1,139
1,505
123
4,443
1,589
1,061
1,106
95
3,851
Wages and salaries
Social security contributions,
expenses for pension plans
and benefits
2012/13
Previous
year
167,433
145,644
43,964
36,844
211,397
182,488
Of the above number, 713 (668) employees are included
according to the percentage of equity held in the companies
that employ them. 59 (56) of them were in Europe and 654
(612) in America. 1,428 (1,339) employees are employed
by seven now proportionately consolidated investees. If
these persons are included in full, the workforce total is
5,158 (4,522). The reported number of employees is greatly
influenced by seasonal labor.
Personnel costs went up by €28,909 thousand to €211,397
thousand, an increase of 15.8%. The number of employees
(including trainees and interns) increased by 592 (or +15.4%)
to 4,443.
Compensation increased by 15.0% to €167,433 thousand.
Social security contributions, expenses for pension
plans and benefits were €7,120 thousand higher than in
the previous year. An amount of €14,030 thousand (€11,161
thousand) was recognized as an expense for defined contri-
bution plans, including state pension insurance, in the year
under review.
(24) Net income for the year
Net income for the year was reduced by net financial income/
expenses and a higher tax rate due to tax expenses from
previous periods following field audits and strong income
growth in countries with higher tax rates and fell by €3,148
thousand to €91,248 thousand, representing a return on
sales of 8.0%, down from 9.6% in the previous year. The
net profit for the period after minority interest is €87,885
thousand, and €13.32 (€13.89) for each of the 6,600,000
shares on issue. KWS’ long-term capital base reflects the
company’s strategy and accords with the interests of share-
holders, employees and other stakeholders. The dividend
distributed 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 55.0%, following 55.2% in the previous year.
6. Notes to the cash flow statement
Figures in € thousands, unless otherwise specified; previous-year figures in parentheses
The cash flow statement, which has been prepared accord-
ing to IAS 7 (indirect method), shows the changes in cash
and cash equivalents of the KWS Group in the three cate-
gories of operating activities, investing activities, and financ-
ing activities. The effects of exchange rate changes and
changes in the consolidated group have been eliminated
from the respective balance sheet items, except those af-
fecting cash and cash equivalents.
(1) Cash flows from operating activities
The cash proceeds from operating activities are substan-
tially determined by cash earnings. They were €109,485
thousand, €8,347 thousand lower than the previous year.
The proportion of cash earnings included in sales was 9.5%
(11.9%). Capital tie-up amounted to €24,907 thousand
(€19,971 thousand), mainly due to an increase in assets not
attributable to financing or investing activity. The cash pro-
ceeds from operating activities also include interest income
of €1,498 thousand (€2,158 thousand) and dividend income
of €45 thousand (€7 thousand) as well as interest expense
of €8,113 thousand (€3,398 thousand). €0 thousand (€0
thousand) was paid out for the external financing of pension
commitments. Income tax payments amounted to €56,972
thousand (€33,817 thousand).
(2) Cash flows from investing activities
A net total of €88,942 thousand (€56,578 thousand) was re-
quired to finance investing activities. An amount of €62,145
thousand (€48,556 thousand) was paid for intangible and
tangible assets and an amount of €5,745 thousand (€610
thousand) for financial assets. There were total cash re-
ceipts of €1,918 thousand (€1,621 thousand) for disposals
of assets. €22,970 thousand (€9,033 thousand) was paid
to acquire shares in 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
2012/13
0
0
0
0
0
0
Previous
year
32,002
0
32,002
0
45
0
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
2012/13
Previous year
Acquired
Sold
Acquired
Sold
0
0
0
0
0
0
0
0
35,498
16,150
5,218
38,816
0
0
0
0
82
Annual financial statements I Notes I Notes to the cash flow statement I 83
The assets and liabilities taken over as part of the acquisition of our Brazilian operations
last year were made up as follows:
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
2012 / 13
2011 / 12
0
0
0
0
0
0
0
0
0
0
0
0
27,436
7,873
188
4,451
9,254
2,491
51,693
1,950
6,800
25,755
9,529
44,034
(3) Cash flows from financing activities
Financing activities resulted in cash proceeds of €27,222 thou-
sand (previous year: cash payments of €12,776 thousand).
The dividend payments to parent shareholders and other share-
holders related to the dividends of €18,480 thousand (€15,180
thousand) paid to the shareholders of KWS SAAT AG, as well
as profit distributions paid to other shareholders of and at fully
consolidated subsidiaries of €664 thousand (€476 thousand).
In addition, net borrowings totaling €40,650 thousand (€2,880
thousand) were raised, mainly from our borrower’s note loan.
The increase in equity relates to the capital increase of €5,716
thousand (€0 thousand) at our production and distribution
company RIBER KWS SEMENTES S.A.
(4) Supplementary information on the cash flow statement
The changes in cash and cash equivalents due to exchange
rate, consolidated group, and measurement changes were
attributable to an amount of € –3,348 thousand (€7,659
thousand) to exchange rate-related adjustments. The remain-
der of € –83 thousand (€ –97 thousand) comes from other
changes. As in previous years, cash and cash equivalents
are composed of cash (on hand and balances with banks)
and current available-for-sale securities.
Cash and cash equivalents includes €46,582 thousand
(€55,452 thousand) from partially consolidated companies.
84
7. Other notes
Proposal for the appropriation of net retained profits
KWS SAAT AG posted operating income of €11,768
thousand compared with €11,870 thousand for the pre-
vious year. Allowing for net financial income/expenses of
€35,512 thousand (€13,952 thousand) and income taxes
totaling €11,549 thousand (€ –2,121 thousand), net income
in accordance with the German commercial law regulations
was €35,731 thousand (€27,943 thousand). Adding the net
profit of €223 thousand (760 thousand) brought forward
from the previous year and the allocation to the revenue re-
serves of €16,000 thousand (€10,000 thousand), a net re-
tained profit of €19,954 thousand is available for distribution.
A proposal will be made to the Annual Shareholders’ Meet-
ing that an amount of €19,800 thousand of KWS SAAT
AG’s net retained profit should be distributed as a dividend
of €3.00 (€2.80) for each of the 6,600,000 shares. The bal-
ance of €154 thousand (€223 thousand) is to be carried
forward to the new account.
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 amounts to
€584 thousand (€509 thousand), excluding value-added
tax. €306 thousand (€231 thousand) of the total compen-
sation is performance-related.
In fiscal year 2012/2013, total Executive Board compen-
sation amounted to €4,072 thousand (€4,137 thousand).
Variable compensation of €2,124 thousand (€2,058
thousand), calculated on the basis of the net profit for the
period of the KWS Group, includes compensation of €38
thousand (€38 thousand) for duties performed in subsidi-
aries. The fixed compensation includes not only the agreed
salaries, but also non-monetary compensation granted by
KWS SAAT AG.
Compensation of former members of the Executive Board
and their surviving dependents amounted to €1,097 thou-
sand (€1,052 thousand). Pension provisions recognized
for this group of persons amounted to €1,032 thousand
(€1,394 thousand) as of June 30, 2013.
Shareholdings of members of the Supervisory Board
and Executive Board (as of August 31, 2013)
Dr. Arend Oetker indirectly holds a total of 1,650,010
(1,650,010) shares and Dr. Andreas J. Büchting 108,030
(108,030) shares in KWS SAAT AG. All together, the members
of the Supervisory Board hold 1,758,718 (1,758,095) shares
in KWS SAAT AG.
The members of the Executive Board hold 12,059 (10,677)
shares in KWS SAAT AG.
Related party disclosures
As part of its operations, KWS procures goods and services
worldwide from a large number of business partners, includ-
ing companies in which KWS has an interest. Business
dealings with these companies are always conducted 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 allocations, 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 spe-
cial reporting requirement under IAS 24. A lease agreement
with an annual lease of €86 thousand was agreed between
Hans-Joachim Tessner and KWS SAAT AG on December 24,
2007 / January 8, 2008.
Audit of the annual financial statements
On December 13, 2012, 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 2012/2013.
Fee paid to the external auditors
under section 314 sentence 1 no. 9
of the HGB
2012/13
Previous
year
a) Audit of the consolidated
financial statements
b) Other certification services
c) Tax consulting
d) Other services
Total fee paid
683
5
0
54
742
678
18
0
9
705
For fiscal year 2013/2014, fees for consulting services (ex-
cluding auditing) of up to €75 thousand are expected.
Declaration of compliance with the German Corporate
Governance Code
KWS SAAT AG has issued the declaration of compliance
with the German Corporate Governance Code required by
section 161 of the Aktiengesetz (AktG – German Stock Cor-
poration Act) and made this accessible to its shareholders
on the company’s home page at www.kws.de.
Annual financial statements I Notes I Other notes I 85
8. Declaration by legal representatives
We declare to the best of our knowledge that the consoli-
dated financial statements give a true and fair view of the
assets, financial position and earnings of the Group in com-
pliance with the generally accepted standards of consolidat-
ed 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 7, 2013
KWS SAAT AG
THE EXECUTIVE BOARD
P. von dem Bussche
L. Broers
H. Duenbostel
E. Kienle
Supervisory and Executive Board of KWS SAAT AG
SUPERVISORY BOARD
Dr. Dr. h.c. mult. Andreas J. Büchting
Einbeck
Agricultural Biologist/Economist
Chairman of the Supervisory Board of KWS SAAT AG
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
of KWS SAAT AG
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:
• 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. Berthold Niehoff (since December 13, 2012)
Einbeck
Agricultural Scientist
Employee Representative
Dr. Dietmar Stahl (until December 13, 2012)
Einbeck
Biochemist
Employee Representative
EXECUTIVE BOARD
Philip von dem Bussche
Einbeck
CEO
Corporate Affairs, Sugarbeet, Cereals, Human Resources
Dr. Christoph Amberger (until June 30, 2013)
Northeim
Corn, Marketing
Dr. Léon Broers
Einbeck, D / Heythuysen, NL
Research and Breeding
Dr. Hagen Duenbostel
Einbeck
Finance, Controlling, Information Technology, Legal
(until June 30, 2013)
Corn, Marketing (since July 1, 2013)
Membership of comparable German and foreign
oversight boards:
• Hero AG, Lenzburg, CH
(Member of the Board of Administration)
Eva Kienle (since April 1, 2013)*
Göttingen
Finance, Controlling, Information Technology, Legal
(since July 1, 2013)
*Deputy member of the Executive Board
86
Annual financial statements I Notes I Declaration by legal representatives I 87
Auditors' Report
We have audited the annual financial statements of the
KWS Group – consisting of the Balance Sheet, the State-
ment of Comprehensive Income, the Notes, the Cash
Flow Statement, Segment Reporting and the Statement of
Changes in Equity – and the Group Management Report
for the fiscal year from July 1, 2012, to June 30, 2013, all
of which were prepared by KWS SAAT AG, Einbeck. The
preparation of the consolidated financial statements and
the Group Management Report according to the Interna-
tional Financial Reporting Standards (IFRS) as applicable
in the EU, and in addition according to the commercial law
regulations to be applied pursuant to Section 315a (1) of
the HGB (German Commercial Code), is the responsibility
of the Executive Board of the company. Our task is to give,
on the basis of the audit we have conducted, an opinion
on the consolidated financial statements and the Group
Management Report.
We conducted our audit of the annual financial statements
in accordance with Section 317 HGB (German Commercial
Code) and the generally accepted standards for the audit
of financial statements promulgated by the Institut der
Wirtschaftsprüfer (German Institute of Certified Public Ac-
countants). According to these standards, the audit must
be planned and executed in such a way that misstatements
and violations materially affecting the presentation of the view
of the assets, financial position and earnings conveyed by
the consolidated financial statements, taking into account
the applicable regulations on orderly accounting, and by
the Group Management Report are detected with reason-
able certainty. Knowledge of the business activities and
the economic and legal operating environment of the Group
and evaluations of possible errors are taken into account.
The effectiveness of the internal accounting control system
and the evidence supporting the disclosures in the consoli-
dated financial statements and the Group Management
Report are evaluated mainly on the basis of test samples
within the framework of the audit. The audit includes the
assessment of the annual financial statements of the
companies included in the consolidated financial state-
ments, the definition of the companies consolidated, the
accounting and consolidation principles used and any
significant estimates made by the Executive Board, as
well as the evaluation of the overall presentation of the
consolidated financial statements and the Group Manage-
ment Report. We believe that our audit provides a reason-
able 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 7, 2013
Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
(Kompenhans)
Auditor
(Bukowski)
Auditor
88
Key figures of the KWS Group
Figures in € millions. unless otherwise specified (IFRS)
KWS has bred crops for
more than 150 years.
The company is now one
of the world’s leading
seed producers.
Fiscal year
Net sales
2012/13
2011/12
2010/11
2009/10
2008/09
1,147.2
986.3
855.4
754.1
717.2
Operating income (= EBIT)
150.7
140.9
116.6
as a % of net sales (= ROS)
Net income
as a % of net sales
Operative cash flow
13.1
91.3
8.0
84.6
14.3
94.4
9.6
97.9
Net cash from investing activities
–88.9
–56.6
13.6
72.9
8.5
101.2
–52.4
Equity
667.5
603.1
530.3
Equity ratio in %
55.0
55.2
58.8
82.4
10.9
51.5
6.8
27.4
–55.4
492.9
57.5
77.9
10.9
50.1
7.0
82.0
–59.4
434.5
57.5
Balance sheet total
1,213.3
1,092.3
902.0
857.4
756.0
Return on equity in %
Return on assets in %
15.6
9.0
18.3
10.7
15.2
8.8
12.2
7.1
13.0
7.8
Fixed assets
399.2
378.2
290.1
275.2
231.9
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
65.2
38.4
4,443
211.4
3.00
13.32
12.82
101.14
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
1.90
7.51
4.15
61.1
23.3
3,215
135.0
1.80
6.98
12.42
80.35
74.68
65.83
Thinking and acting
sustainably – for generation
after generation.
The goal of our breeding
work is to support every
individual farmer with
custom solutions.
Behind all of KWS’ activities
and ideas are people
whose dedication is vital to
our company’s success.
Financial calendar
November 28, 2013
December 19, 2013
February 25, 2014
May 27, 2014
October 16, 2014
December 18, 2014
Report on the 1st quarter of 2013/2014
Annual Shareholders’ Meeting in Einbeck
Report on the 2nd quarter of 2013/2014
Report on the 3rd quarter of 2013/2014
Publication of 2013/2014 financial statements
Annual press and analyst conference in Frankfurt
Annual Shareholders’ Meeting in Einbeck
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, 2013
Share price high February 25, 2013 (Xetra)
Share price low August 24, 2012 (Xetra)
Average number of shares traded
– in Xetra
– in floor trading in Frankfurt
707400
DE0007074007
KWS
Prime Standard
SDAX
Individual share certificates
6,600,000
€19,800,000
€297.10
€200.10
3,755
250
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:
Tomasz Ciesielski • Eberhard Franke • Frank Stefan Kimmel • Michael Löwa • Dominik Obertreis • Dieter Sieg • KWS Group archive
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