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Annual Report
2018 | 2019
KWS in Figures
The KWS Group (in € millions)
2018/2019
2017/2018
2016/2017
2015/2016
2014/2015
Net sales and income
Net sales
R&D intensity in %
EBIT
as a % of net sales (EBIT margin)
Net financial income/expenses
Net income for the year
Key figures on the financial position and assets
Capital expenditure
Depreciation and amortization
Equity
Equity ratio in %
Return on equity in %
Return on assets in %
Net debt1
Total assets
Capital employed (avg.)2
ROCE (avg.) in %3
Cash flow from operating activities
Free cash flow
Employees
Number of employees (avg.)4
Personnel expenses
Key figures for the share
Earnings per share in €5
Dividend per share in € 5, 6
Segments (in € millions)
Corn
+0.7%
+0,7 %
734
739
1,113.3
1,068.0
1,075.2
1,036.8
18.5
150.0
13.5
–5.5
104.0
96.6
49.7
963.5
45.5
13.9
7.8
497.9
2,115.0
1,047.1
14.3
72.9
–22.4
4,126
280.7
3.15
0.67
18.5
132.6
12.4
5.4
99.7
71.7
50.1
881.8
58.1
13.3
7.1
37.4
17.7
131.6
12.2
16.6
97.7
63.3
49.4
836.9
56.0
13.1
7.3
48.5
17.6
112.8
10.9
14.8
85.3
99.6
48.2
767.9
53.5
11.9
6.5
87.9
986.0
17.7
113.4
11.5
16.7
84.0
132.5
45.9
738.7
55.2
13.6
7.8
105.9
1,517.7
1,495.2
1,436.6
1,337.1
981.1
13.8
98.1
30.0
3,852
253.9
3.02
0.64
990.1
13.3
122.4
57.6
3,705
247.0
2.96
0.64
906.9
12.4
125.9
33.7
3,693
232.2
2.58
0.60
851.0
13.3
48.1
–75.7
3,663
216.9
2.55
0.60
Sugarbeet
Cereals
Corporate
+1.3%
+1,3 %
455
461
+22.2%
+22,2 %
47
58
+11.9%
+11,9 %
161
180
+13.0%
+13,0 %
151
171
+25.0%
+25,0 %
18
23
Net sales
EBIT
Net sales
EBIT
Net sales
EBIT
2017/2018
2018/2019
Reconciliation (in € millions)
Net sales
EBIT
–7.1%
–7,1 %
4
4
Net sales
–25.6%
–27,6 %
EBIT
–77
–97
Segments Reconciliation
KWS Group
1,375.0
163.4
–261.7
–13.4
1,113.3
150.0
1 = Short-term + long-term borrowings – cash and cash equivalents – securities.
2 = Total capital employed at the end of the quarters ((intangible assets + property, plant and equipment + inventories + trade receivables – trade payables)/4).
3 = EBIT/capital employed (avg.).
4 FTE: Full time equivalents.
5 Earnings and dividend per share of previous periods adjusted due to share split.
6 The dividend for 2018/2019 is subject to the consent of the 2019 Annual Shareholders´ Meeting.
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Contents
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1. To Our Share holders
Foreword of the Executive Board
Report of the Supervisory Board
KWS on the Capital Market
Spotlight Topic
2. Combined Management Report
2.1 Fundamentals of the KWS Group
2.2 Research & Development Report
2.3 Economic Report
2.4 Environmental Report
2.5 Employee and Social Report
2.6 Corporate Governance
2.7 Opportunity and Risk Report
2.8 Forecast Report
2.9 Report on KWS SE & Co. KGaA and
Non-Financial Declaration (Declaration based on the
German Commercial Code (HGB))
90
3. Annual Financial Statements
Léon Broers Research & Breeding, Vegetables
Felix Büchting Cereals, Oilseed Rape/Special Crops & Organic Seed, Human Resources, Farming
Peter Hofmann Sugarbeet, Corn Europe, Marketing & Communications
Hagen Duenbostel (CEO) Corn North and South America, Corn China/Asia, Strategy, Compliance, and Governance & Risk Management
Eva Kienle Finance & Purchasing, Controlling, Global Services, IT, Legal
2
To Our Shareholders | Foreword of the Executive Board
Annual Report 2018/2019 | KWS Group
To Our
Share
holders
Foreword of the Executive Board
Global conditions and events, some of them with
a serious impact, exerted huge pressure on the
agricultural industry in the past fiscal year. Given
that context, I’m all the more delighted to report
that KWS had a strong year.
We can see further concentration among the
competition, and how some countries are becoming
increasingly isolationist and even not shying away
from international trade conflicts. We’re facing rulings
by the European Court of Justice that derail new
precision breeding methods which would deliver eco-
nomic as well as ecological benefits. And last but not
least – as we can observe literally on our own door-
step – farmers are battling with the second successive
summer of drought in Europe, while there is flooding
in the Midwest of the U.S. and we are suffering
weather extremes worldwide at an increasing rate.
Times are truly not easy – but KWS’ long-term
strategy is paying off yet again. Yet I’d not only say
it’s strategy – it’s also our company DNA which
enables us not just to stand firm, but also to keep
on developing further and adapt to circumstances.
Thinking in terms of generations has always defined
our day-to-day activities. Staying true to our values,
even in challenging times, and giving farmers the
assurance of having a reliable, independent partner
behind them – that’s what makes KWS what it is.
Foreword of the Executive Board | To Our Shareholders
3
KWS Group | Annual Report 2018/2019 We’re one of the major innovation drivers in the seed
Thinking long term and acting sustainably. Our com-
industry. And we advance research and breeding –
mitment to tradition and innovation, the way we work
after all, investments in research are investments
with farmers as equal partners, and how we act with
in the future. I’d like to mention our second Bio-
responsibility toward the ecology – that’s the solid
technology Center in Einbeck as an example. Over
platform for our success. It always has been and it
170 experts will start work there in early 2020 and
will always stay that way.
establish a further pillar that will drive our long-term
innovativeness.
I wish to thank all of you – our partners and share-
holders – for your trust. You are a key part of KWS.
We made a further crucial and seminal step this
My special thanks likewise go to all our employees.
summer by entering the growth market of vegetable
Because behind the many positive developments we
seed. Continual changes in consumer behavior, as
have the honor of presenting in this Annual Report is
well as the world’s growing population, mean we can
the passion and creativity of more than 5,500 dedi-
expect to see increasing demand for vegetables.
cated people worldwide. Backed by this invaluable
This market is already growing by 5% a year and
asset, I believe we can look to KWS’ future full of
has a volume of around €5 billion and is rising (let
optimism and motivation.
me take this opportunity to refer you to the Spot-
light Topic in this Annual Report, where you can find
I hope this Annual Report proves an informative and
further insightful facts and figures on the subject).
enjoyable read. With best regards from Einbeck on
In view of these promising prospects, we’ve laid a
behalf of the entire Executive Board,
stable foundation for our new business segment by
acquiring the Dutch company Pop Vriend Seeds,
the world market leader in spinach seed. Apart from
further suitable acquisitions in this field, we remain
committed in particular to boosting our own strength
Dr. Hagen Duenbostel
in research and our innovativeness. The focus here
Chief Executive Officer
is on establishing our own vegetable breeding pro-
grams – and once more we’re benefiting from far-
sighted investments in our research departments.
This new segment will help us press ahead with
diversifying KWS sensibly, and I feel sure that we’ll
gradually capture a strong position in the vegetable
seed market.
4
To Our Shareholders | Foreword of the Executive Board
Annual Report 2018/2019 | KWS Group Report of the Supervisory Board
In fiscal 2018/2019, KWS laid the foundations for
The Supervisory Board decided on all significant
continuing its growth strategy, while preserving
business transactions requiring its consent and
our identity as an independent family business.
carefully accompanied the Executive Board in
By acquiring the Dutch family-owned company
all fundamental decisions of importance to the
Pop Vriend Seeds, we are pursuing the strategic
company. In the year under review, the Supervisory
objective of positioning KWS long term in the
Board discussed the information and assessments
growth market for vegetable seed. To enable that,
that influenced its decisions together with the Execu-
the company will gradually make additional invest-
tive Board. Both boards continued their constructive
ments in the coming years and establish its own
and trusted cooperation as in the past. Among other
breeding programs.
things, this was demonstrated by the fact that, as is
customary, the Supervisory Board was involved in
The change in legal form to KWS SAAT SE &
all decisions of vital importance to the company at
Co. KGaA, which was adopted by the Annual
an early stage. The Supervisory Board was provided
Shareholders’ Meeting on December 14, 2018, was
with the necessary information in written and oral
completed upon its registration in the commercial
form regularly, promptly and comprehensively. This
register on July 2, 2019. As a partnership limited
included all key information on relevant questions of
by shares (KGaA), KWS will be able to leverage
strategy, planning, the business performance and
future growth opportunities with greater agility and
the situation of the company and the KWS Group,
flexibility and raise the equity required for that,
including the risk situation, risk management and
without losing the company’s character as a listed
compliance. Business transactions requiring consent
family business. In addition, the resolution adopted
were submitted to, and discussed and approved by,
by the Annual Shareholders’ Meeting to carry out a
the Supervisory Board in compliance with the bylaws
stock split at a ratio of 1:5 by increasing the capital
for the Executive Board.
stock to €99,000,000 using company funds was
implemented on March 22, 2019. Shareholders
The company’s business policy, corporate and
thus received an additional four new shares for
financial planning, profitability and situation, the
each existing one.
course of business, market trends and the com-
petitive environment, research & breeding and,
The company still had the legal form of an SE
along with important individual projects, risk
(Societas Europaea or European Company) at the
manage ment at the KWS Group were the subject
end of the period under review, fiscal year 2018/2019.
of detailed discussions in the year under review.
Where periods of time after July 2, 2019, are
discussed in this report, the report refers to the new
The Chairman of the Supervisory Board continued
legal form of a partnership limited by shares.
the bilateral discussions with the Chief Executive
The Supervisory Board discharged the duties
Board in regular talks outside the meetings of the
incumbent on it in accordance with the law, the
Supervisory Board in the year under review.
Officer and individual members of the Executive
company’s Articles of Association and the bylaws,
regularly advised and monitored the Executive
Board 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.
Report of the Supervisory Board | To Our Shareholders
5
KWS Group | Annual Report 2018/2019 The Supervisory Board and the Management Board continued their constructive and trusting cooperation
in the year under review.
In addition, there were monthly meetings between the
limited by shares. It also decided, as part of the
Chairman of the Supervisory Board and the Executive
change in legal form, that a stock split at a ratio of 1:5
Board as a whole, where the company’s current
by increasing the capital stock to €99,000,000
business development and, in particular, its strategy,
from company funds was to be prepared and
occurrences of special importance and individual
that there was to be an international merger
aspects were dealt with. The Chairman of the Super
of KWS Services West S.L.U., Barcelona, with
visory Board informed the Super visory Board of the
KWS SAAT SE & Co. KGaA.
results of these meetings. The Supervisory Board did
not make use of its right to conduct an examination
At the meeting to discuss the financial statements
granted by Section 111 (2) AktG (German Stock
on October 23, 2018, the Supervisory Board
Corporation Act) since the reporting by the Executive
examined and approved the financial statements
Board meant there was no reason to do so.
of KWS SAAT SE and approved the consolidated
Focal areas of deliberations
financial statements of the KWS Group as of
June 30, 2018. The Supervisory Board also
The full Supervisory Board of KWS SAAT SE held
resolved to propose conversion of KWS SAAT SE
six regular meetings in fiscal 2018/2019, each of which
to KWS SAAT SE & Co. KGaA and a stock split to the
was attended by all its members. The Supervisory
Annual Shareholders’ Meeting on December 14, 2018.
Board also held one telephone conference. After the
In preparation for the change in legal form, the
fiscal year had ended, the Supervisory Board – now of
Supervisory Board also adopted the nominations
KWS SAAT SE & Co. KGaA – convened its meeting to
for the shareholder representatives to be elected
discuss the financial statements on October 22, 2019.
to the Super visory Board of KWS SAAT SE &
Co. KGaA by the Annual Shareholders’ Meeting on
Following intensive discussion in the telephone
December 14, 2018, and the further resolutions it
conference on September 3, 2018, the Supervisory
wished to propose there. The Supervisory Board
Board resolved to take all the measures necessary
discussed prospects in the Chinese corn market
for the change in legal form to that of a partnership
as well.
6
To Our Shareholders | Report of the Supervisory Board
Annual Report 2018/2019 | KWS Group On December 13 and 14, 2018, the Supervisory
Annual and consolidated financial statements
Board also heard reports on the company’s strategic
and auditing
planning up to 2028/2029, the IT strategy and the
Ernst & Young GmbH Wirtschaftsprüfungs-
progress of the research projects. In its meeting on
gesellschaft, Hanover, the independent auditor who
March 26, 2019, the Supervisory Board discussed
was chosen at the Annual Shareholders’ Meeting on
the current status of the breeding programs and,
December 14, 2018, and commissioned by the Audit
assisted by an external expert, sounded out
Committee and whose appointment – pursuant to
options for entering the vegetable seed business.
the declaration by the personally liable partner of
At an extraordinary meeting on June 13, 2019, the
KWS SAAT SE & Co. KGaA – remains in force for the
Supervisory Board then approved the acquisition of
time after the change in legal form takes effect, has
the Dutch vegetable breeding company Pop Vriend
audited the financial statements of KWS SAAT SE
Seeds, pursuant to which the relevant agreements
& Co. KGaA (at the time KWS SAAT SE) that were
were able to be concluded on June 19, 2019. As
presented by the personally liable partner, KWS SE,
usual, the Supervisory Board adopted the annual
and prepared in accordance with the provisions
planning for fiscal 2019/2020 and the medium-term
of the German Commercial Code (HGB) for fiscal
planning on June 25, 2019. This planning will be
2018/2019 and the financial statements of the
retained after the completion of the change in legal
KWS Group (IFRS consolidated financial state-
form on July 2, 2019.
ments), as well as the Combined Manage ment
Report of KWS SAAT SE & Co. KGaA (at the time
Registration of the change in legal form meant
KWS SAAT SE) and the KWS Group Management
that the term of office of the existing members of
Report, including the accounting reports, and
the Supervisory Board of KWS SAAT SE expired
awarded them its unqualified audit certificate. In
shortly after the end of fiscal year 2018/2019. The
addition, the auditor concluded that the audit of the
at December 14, 2018 newly elected Supervisory
financial statements did not reveal any facts that
Board of KWS SAAT SE & Co. KGaA had already
might indicate a misstatement in the declaration of
held its constitutive meeting on March 26, 2019.
compliance issued by the personally liable partner
The resolutions adopted there were ratified in the
and the Supervisory Board in accordance with
meeting on October 22, 2019.
Section 161 AktG (German Stock Corporation Act)
with respect to the recommendations of the “German
Commission for the Corporate Governance Code.”
The Supervisory Board received and discussed the
financial statements of KWS SAAT SE & Co. KGaA (at
the time KWS SAAT SE) and the consolidated financial
statements and Combined Management Report of
KWS SAAT SE & Co. KGaA (at the time KWS SAAT SE)
and the KWS Group, along with the report by the inde-
pendent auditor of KWS SAAT SE & Co. KGaA (at the
time KWS SAAT SE) and the KWS Group and the pro-
posal on appropriation of the net retained profit for the
year made by KWS SAAT SE & Co. KGaA, in due time.
Comprehensive documents and drafts were submitted
to the members of the Supervisory Board as
preparation. For example, all of them were provided
with the annual financial statements, Combined
Manage ment Report, audit reports by the indepen-
dent auditors, corporate governance report, and
Report of the Supervisory Board | To Our Shareholders
7
KWS Group | Annual Report 2018/2019 the proposal by the personally liable partner on the
Corporate Governance
appropriation of the profits. In addition, the Super-
The Supervisory Board discussed compliance with
visory Board examined the separate non- financial
the recommendations of the “German Commission
report (Section 289b HGB (German Commercial
for the Corporate Governance Code” and – after
Code)) and the separate non-financial group report
the last compliance declaration in October 2018 –
( Section 315b HGB) with the audit report by the
issued a new declaration of compliance with the
independent auditor (Section 111 (2) Sentence 4 AktG
German Corporate Governance Code in accordance
(German Stock Corporation Act)). The Supervisory
with Section 161 AktG (German Stock Corporation
Board also held detailed discussions of questions
Act) together with the personally liable partner in
on the agenda at its meeting to discuss the financial
October 2019. It can be obtained on the company’s
statements on October 22, 2019. The auditor took
website at www.kws.com/corporate-governance.
part in the meeting. It reported on the main results of
the audit and was also available to answer additional
The Supervisory Board regularly addressed the
questions and provide further information for the
question of any conflicts of interest on the part of its
Super visory Board. According to the report of the
members and those of the Executive Board in the
independent auditor, there were no material weak-
year under review. In the year under review, there
nesses in the internal control and risk management
were no such conflicts of interests that had to be
system in relation to the accounting process. There
disclosed immediately to the Supervisory Board and
were also no circumstances that might indicate a lack
reported to the Annual Shareholders’ Meeting.
of impartiality on the part of the independent auditor.
The Supervisory Board also conducted its regular
In accordance with the final results of its own exami-
efficiency review in the year under review. Whereas
nation, the Supervisory Board endorsed the results
the efficiency review two years ago was conducted
of the audit, among other things as a result of the
in the form of a questionnaire, the members of the
preliminary examination by the Audit Committee, and
Executive Board and Supervisory Board held exten-
did not raise any objections. The Supervisory Board
sive discussions with the accounting firm Deloitte
gave its consent to the annual financial statements
GmbH this time. After inspecting the preparatory and
and management reports submitted by the personally
follow-up documents of the Supervisory Board, and
liable partner, and to the consolidated financial state-
on the basis of the discussions, Deloitte came to the
ments of the KWS Group, along with the Combined
conclusion that the Supervisory Board performs its
Management Report of KWS SAAT SE & Co. KGaA
work on the basis of sound, in-depth information and
(at the time KWS SAAT SE) and the KWS Group and
nurtures a culture of open discussion. All the recom-
recommended that the Annual Shareholders’ Meeting
mendations issued by Deloitte – in particular that to
on December 17, 2019, approve the annual financial
establish an online portal for all the necessary docu-
statements of KWS SAAT SE & Co. KGaA (at the time
ments – have been implemented in the meantime.
KWS SAAT SE) prepared by the personally liable
partner. The Super visory Board also endorsed the
proposal by the personally liable partner to the Annual
Shareholders’ Meeting on the appropriation of the net
retained profit of KWS SAAT SE & Co. KGaA after
having examined it.
8
To Our Shareholders | Report of the Supervisory Board
Annual Report 2018/2019 | KWS Group Andreas J. Büchting, Chairman of the Supervisory Board
Supervisory Board committees
defined and adopted. The Annual Compliance Report
The Supervisory Board of KWS SAAT SE had
was also presented and discussed. The quarterly
formed three committees in fiscal 2018/2019: The
reports and the semiannual report for fiscal 2018/2019
Audit Committee, the Nominating Committee and
were the main subject of and were discussed in detail
the Committee for Executive Board Affairs.
in three telephone conferences.
The Audit Committee convened for four joint
The Audit Committee convened on
meetings in fiscal 2018/2019. It also held three
September 24, 2019, to discuss the current annual
telephone conferences – on all occasions with
financial statements of KWS SAAT SE & Co. KGaA
all its members in attendance. In its meeting on
(at the time KWS SAAT SE) and KWS’ consolidated
September 25, 2018, the Audit Committee discussed
financial statements and accounting, along with the
the annual financial statements and accounting of
Combined Management Report. The independent
KWS SAAT SE and consolidated financial statements
auditor for fiscal 2018/2019 explained the results of
of the KWS Group for the fiscal year 2017/2018, along
its audit of the 2018/2019 financial statements and
with the Combined Management Report and the
pointed out that there were no grounds for assuming
proposal by the Executive Board on the appropriation
a lack of impartiality on the part of the independent
of the profits. The meeting of the Audit Committee on
auditor in its audit. The Audit Committee also dealt
March 26, 2019, discussed and defined the focus of
with the proposal by the personally liable partner
the audit for fiscal year 2018/2019 in the presence of
on the appropriation of the net retained profit of
the appointed independent auditor. In addition, the
KWS SAAT SE & Co. KGaA (at the time KWS SAAT SE)
report by Internal Auditing for fiscal 2018/2019 was
and recommended that the Super visory Board
discussed and the audit plan for fiscal 2018/2019 was
approve it.
Report of the Supervisory Board | To Our Shareholders
9
KWS Group | Annual Report 2018/2019 In addition, the Audit Committee obtained the state-
Shareholders’ Meeting that ratifies its acts for fiscal
ment of independence from the auditor in accordance
year 2021/2022. The Supervisory Board endorsed
with Clause 7.2.1 of the German Corporate Governance
the proposal and submitted it for approval to the
Code, ascertained and monitored the auditor’s inde-
Annual Shareholders’ Meeting on December 14,
pendence and examined its qualifications. The Audit
2018. In preparation for when the change in legal
Committee also satisfied itself that the regulations on
form took effect, the Annual Shareholders’ Meeting
internal rotation were observed by the independent
then elected the existing shareholder representatives
auditor and dealt with the issue of any additional
on the Super visory Board of KWS SAAT SE to the
services rendered by the independent auditor.
Supervisory Board of KWS SAAT SE & Co. KGaA.
As a result, the latter has the same members as the
Since the offices of all existing Supervisory Board
previous Supervisory Board of KWS SAAT SE. At
members of KWS SAAT SE ended by operation of
the constitutive meeting of the Supervisory Board
law when the change in legal form took effect, the
of KWS SAAT SE & Co. KGaA on March 26, 2019
Nominating Committee had to draw up a list of
Dr. Drs. h.c. Andreas J. Büchting was again
new candidates to be nominated by the Supervisory
elected as Chairman of the Supervisory Board,
Board for election as shareholder representatives at
Dr. Marie Th. Schnell as Deputy Chairwoman of the
the Annual Shareholders’ Meeting. In view of the fact
Super visory Board and Victor W. Balli as Chairman of
that all shareholder representatives had just recently
the Audit Committee. After the change in legal form
been elected by the 2017 Annual Share holders’
had been registered in the commercial register, these
Meeting, the Nominating Committee proposed that
elections were ratified by the resolution adopted
the Supervisory Board be put forward for election
on October 22, 2019. Dr. Arend Oetker remains an
without any changes; however, it would only be elect-
honorary member of the Super visory Board.
ed for a period of time up to the end of the Annual
Supervisory Board Committees
Committee
Audit Committee
Committee for Executive
Board Affairs
Nominating Committee
Marie Th. Schnell
Chairman/Chairwoman
Members
Victor W. Balli
Andreas J. Büchting
Andreas J. Büchting
Jürgen Bolduan
Marie Th. Schnell
Cathrina Claas-Mühlhäuser
Andreas J. Büchting
Cathrina Claas-Mühlhäuser
In accordance with the provisions of the German
Christine Coenen (Chairwoman of the European
Act on Employee Co-Determination in Cross-
Employees’ Committee) on the Supervisory Board
Border Mergers (MgVG), the Supervisory Board
of KWS SAAT SE were confirmed as employee
of KWS SAAT SE & Co. KGaA still consists of four
representatives on the Super visory Board of
shareholder representatives and two employee
KWS SAAT SE & Co. KGaA by a “Special Negotiating
represen tatives. The existing employee represen-
Body” of KWS’ European (EU) workforce on
tatives Jürgen Bolduan (Chairman of the Central
January 30, 2019.
Works Council of KWS SAAT SE & Co. KGaA) and
10
To Our Shareholders | Report of the Supervisory Board
Annual Report 2018/2019 | KWS Group At the proposal of the Committee for Executive
at present, since the Supervisory Board of
Board Affairs, Dr. Felix Büchting was appointed
KWS SAAT SE & Co. KGaA no longer holds
by the Supervisory Board as a full member of
personnel responsibility as regards manage ment
the Executive Board of KWS SAAT SE effective
and, accordingly, authority for issues relating to the
January 1, 2019. He was given a five-year contract
compensation of the Executive Board has therefore
and assumed responsibility for Cereals, Human
been in the hands of KWS SE’s Supervisory Board
Resources and Agriculture. Felix Büchting previously
since the change in legal form.
worked for the company from 2005 to 2007 before
gaining further professional experience outside KWS.
Under Section 7 (4) of the Articles of Association
Felix Büchting, who holds a doctorate in agrobiology,
of KWS SAAT SE & Co. KGaA, the personally lia-
returned to KWS in 2016, where he was previously
ble partner shall be compensated for all expens-
head of the successfully growing Cereals Segment.
es it incurs in connection with management of
On June 25, 2019, the Supervisory Board appointed
KWS SAAT SE & Co. KGaA’s business, including
Dr. Hagen Duenbostel as a member of the Executive
the compensation for the members of its manage-
Board and its CEO for a further five years effective
ment and supervisory bodies. In order to preserve
from January 1, 2020. Duenbostel holds a doctorate
transparency, the new compensation system for
in business management and has been a member of
the Executive Board of KWS SE will be submitted
KWS’ Executive Board since 2003. He is responsible
for approval to the Annual Shareholders’ Meeting of
for Corn North and South America, Corn China/
KWS SAAT SE & Co. KGaA on December 17, 2019.
Asia, Strategy, Compliance, and Governance & Risk
Management.
The mandates of the members of the Executive
Board of KWS SAAT SE also ended as a result
The Committee for Executive Board Affairs also
of the change in legal form. The business of
dealt in depth with revision of the compensation
KWS SAAT SE & Co. KGaA is managed by its
system for the Executive Board of KWS SE, which
personally liable partner, KWS SE. The latter is in
it implemented effective July 1, 2019, pursuant to
turn represented by its Executive Board, which
the resolution dated June 25, 2019. The resolution
has the same members as the previous Executive
on the new compen sation system was adopted by
Board of KWS SAAT SE.
the Supervisory Board of the then KWS SAAT SE
in view of the fact that the change in legal form
The Supervisory Board expresses its thanks to
had not yet been registered on June 25, 2019, and
the Executive Board and to all employees of the
was thus not yet effective, but it was necessary
KWS≈Group for their commitment and contribution
to ensure that the compen sation system would
to the successful performance and further develop-
also apply to KWS SAAT SE as from July 1, 2019,
ment of KWS in fiscal 2018/2019.
to when the change in legal form took effect. The
contents of the resolution were the same as that
Einbeck, October 22, 2019
adopted by the Supervisory Board of KWS SE
on the compensation system for the Executive
Board of KWS SE. KWS SE has conducted the
business of KWS SAAT SE & Co. KGaA since the
change in legal form took effect. The Supervisory
Dr. Drs. h. c. Andreas J. Büchting
Board of KWS SAAT SE & Co. KGaA no longer
Chairman of the Supervisory Board
has a Committee for Executive Board Affairs
Report of the Supervisory Board | To Our Shareholders
11
KWS Group | Annual Report 2018/2019 A plant shows its strength
when there is little rain.
Can you teach plants to be less thirsty? Definitely. The objective of the research of our
breeding department is to keep on creating new varieties that also withstand extensive
periods of drought and help you conserve water resources.
KWS on the Capital Market
Performance
Stock split
The global economy was again impacted by geo-
In order to increase the volume of trading in the
political conflicts and economic uncertainties in
share, the Annual Shareholders’ Meeting on
fiscal year 2018/2019 (July 1 to June 30). Interest
December 14, 2018, adopted a stock split at a
rates were still comparatively low and so shares
ratio of 1:5, and bonus shares were issued on
remained an attractive investment.
March 22, 2019. As a result, each shareholder now
holds five shares instead of one, namely one old
The DAX peaked at 12,860 points in July 2018, but
share and four new ones. KWS’ share price was
then fell sharply up to the end of the year, among other
accordingly adjusted to one-fifth on March 22, 2019.
things due to continuing geopolitical tensions, and
The percentage stake held by a shareholder in KWS’
ended the year at just over 10,500 points. Germany’s
capital and the pricing ratios of KWS’ share did not
benchmark index recovered in the first half of 2019
change as a result. So that the bonus shares could
to close at 12,399 points on June 30, 2019, and so
be issued, the capital stock had to be increased
roughly at the same level as the year before. The SDAX
from €19.8 million to €99.0 million by way of a capital
fell by around 4% over the same period. KWS’ share
increase from company funds. The capital increase
price fell up to the end of 2018, but then bounced back
was carried out by issuing 26,400,000 new bearer
sharply in the first half of 2019. It closed on June 30
shares. Issue of the bonus shares increased the total
at €64.20 (60.80)1 or around 6% up year on year.
number of KWS shares from 6,600,000 to 33,000,000.
The stock price of our larger competitors declined –
The new shares are entitled to a share in profits for the
sharply in some cases – in the same period of time.
past fiscal year 2018/2019.
The sector’s performance thus reflects the fact that the
environment for agriculture remains strained, as well
as the risks from legal disputes in pesticide business.
Looking at the past ten years, the price of KWS’ share
has increased by 152% and so more than doubled.
The KWS share’s performance over 10 years
+288%
+153%
+152%
July 1, 2009
KWS
SDAX
DAX
June 30, 2019
450%
400%
350%
300%
250%
200%
150%
100%
50%
1 If not otherwise specified, the figures in parentheses give the previous year`s figures.
14
To Our Shareholders | KWS on the Capital Market
Annual Report 2018/2019 | KWS Group Shareholder structure at June 30, 2019
Free float 30.2%
Tessner Beteiligungs GmbH 15.4%
54.4% Families Büchting, Arend Oetker
Employee Stock Purchase Plan
€97.7 million the year before, or an increase of 4.3%.
For more than 30 years KWS has offered its employees
The Executive and Supervisory Boards will therefore
the chance to become a shareholder in the company
propose a dividend of €0.67 (0.64) for fiscal year
and thus share in its success and identify more
2018/2019 to the Annual Shareholders’ Meeting on
strongly with it. The content of our Employee Stock
December 17, 2019, which is in line with the develop-
Purchase Plan remained unchanged in the year
ment in earnings. €22.1 (21.1) million would thus be
under review. After adjustment for the stock split, our
distributed to KWS SAAT SE & Co. KGaA’s share-
employees were able to buy up to 2,500 KWS shares
holders. That would correspond to a dividend payout
at a price of €44.16 (54.72), including a 20% discount,
ratio of 21.3% (21.2%), once again in line with the
which the individual employees must pay tax on.
KWS Group’s earnings-oriented policy of paying a
442 (407) employees in seven (eight) European
dividend of 20% to 25% of its net income.
Key figures for the KWS share (Xetra®)
countries took up this offer and purchased a total
of 54,095 (49,160) shares, corresponding to an
average stake per employee of 120 (120) shares.
The acquired shares are subject to a lock-up period
ISIN
Share class
of four years. They cannot be sold, transferred or
Number of shares
pledged during this period. As in previous years, the
shares used for the Employee Stock Purchase Plan
were acquired in accordance with Section 71 (1)
No. 2 of the German Stock Corporation Act (AktG).
A total of €3.1 (3.4) million was used to buy back the
company’s own shares, giving an average purchase
price per share (including fees) of €57.33 (68.93).
More details have been published in information
Closing price
June 30, 2019
June 30, 2018
High and low
High (December 11, 2018)
Low (September 4, 2018)
DE0007074007
Non-par
33,000,000
in €
64.20
60.80
in €
69.40
50.50
released for the capital market and can be viewed on
Trading volume
in shares/day
our website at www.kws.com/ir.
Planned appropriation of profits
2018/2019
2017/2018
8,189
10,430
Continuing to grow profitably is one of KWS’ core
Market capitalization
in € million
corporate goals. We were able to surpass the net
sales and good after-tax profitability of the previous
June 30, 2019
June 30, 2018
year in the year under review. Operating income
rose to €150.0 (132.6) million, although that figure
included a non-recurring effect of €11.0 million from
the sale of shares in KWS Potato B.V. Excluding
that, EBIT would have increased by 4.8%. The KWS
Group’s net income was €104.0 million following
Earnings per share
June 30, 2019
June 30, 2018
2,119
2,006
in €
3.15
3.02
KWS on the Capital Market | To Our Shareholders
15
KWS Group | Annual Report 2018/2019
Spotlight
Topic
Big Appetite for Vegetables
By establishing a new business segment for vege-
Global consumption of vegetables is on the rise
table seed, KWS is positioning itself in a market that
The health benefits of this nutrient-rich food have
is attractive long term and is in line with the trend
been known for a long time, but now there is increasing
toward a healthy and sustainable diet. As a result, the
awareness of how important a balanced diet is. Plant-
company is complementing its existing portfolio and
based forms of nutrition, such as a vegetarian, vegan,
laying the foundation for further growth.
raw food or paleo diet, are gaining in importance. The
food that one consumes is becoming an expression
Vegetables – a versatile food
of a health-conscious lifestyle. The world’s growing
Vegetables are regarded as a true all-rounder
population and rising incomes mean there is also in
among foods: They supply many vital vitamins, trace
general greater demand for vegetables. Moreover,
elements, minerals and dietary fibers and are usually
storage and transportation conditions have improved
low in calories. They also have a relatively large
further and so consumers have a broad range of
volume and so have a satiating effect when eaten.
high-quality products to choose from.
A diet that is rich in vegetables can prevent over-
weight and reduce the risk of high blood pressure,
Vegetable seed is a growth market. Market revenue
strokes or coronary artery disease, for example.
is currently around €5 billion, following the crops corn
All in all, eating enough vegetables is important as
(€15 billion) and soybean (€8 billion). Experts antici-
part of a healthy diet and to prevent malnutrition,
pate the market to grow long term by some 5% per
both in emerging and developing countries, where
annum.
there is a narrower range of food available, and in
affluent industrialized countries where overweight
and obesity are growing problems. The World Health
Organization (WHO) recommends eating at least
400 grams of fruit and vegetables a day, for instance.
16
To Our Shareholders | Spotlight Topic
Annual Report 2018/2019 | KWS Group
Vegetables are in vogue
Vegetable seed
is the
THIRD-
LARGEST
segment in
the global
seed market.
AROUND
1BILLION TONS
of vegetables
are harvested
every year.
MORE THAN
10,000
varieties
are offered
commercially.
The clear favorite among
vegetable crops:
THE TOMATO
THE VEGETABLE
MARKET IS
BOOMING:
annual
growth
rate
One pepper supplies
> 100%
of our daily
vitamin C
needs.
KWS’ GOAL is to build
a significant position
in the vegetable seed
market long term.
It takes
at least
7 YEARS
to develop a new variety.
The five most important crops – tomatoes, peppers,
KWS’ strategy in building the business segment is
cucumbers, watermelons and melons – account for
based on a three-pronged approach: organic growth,
approximately half of the global vegetable market.
selective acquisitions, and the sale of licensed
There is strong segmentation in vegetable farming,
commercial varieties. It aims to establish its own
which is attributable to the broad diversity of types of
breeding programs with stations in the world’s most
vegetable, product requirements specific to regions
important vegetable cultivation regions in Southern
and usage, and different methods of cultivation. This
Europe, Asia and Latin America. To create the infra-
broad diversification and the high potential for further
structure for that, a team of highly qualified experts
breeding progress offer KWS good prospects for
is first being assembled and the business segment’s
being successful in this market.
future headquarters is being set up in Wageningen in
the Netherlands. The location boasts close ties with
A further attractive crop at KWS
prestigious universities and research institutes and
KWS has taken a major strategic step by entering
offers access to skilled workers, experts and potential
the vegetable seed business. The newly founded
cooperation partners in the field of vegetable breeding.
business segment expands the existing portfolio
of corn, sugarbeet, cereal, rapeseed and sunflower
Acquisition of Pop Vriend Seeds: the market
seed and positions the company in a market that is
leader in spinach
growing sustainably and is also highly profitable.
As with its other crops, KWS is thinking long term
when it comes to development of the new business
segment: It takes an average of seven years from the
start of a breeding program for a new variety to be
launched. The vegetable seed producer Pop Vriend
What is important in vegetable breeding
Seeds, which was acquired by KWS on July 1, 2019,
A key objective in breeding vegetables is to equip plants
has already embarked on this path very successfully.
with high tolerance to abiotic stress and minimize the use
of resources such as water and chemicals in growing them.
The company, which is headquartered in Andijk in
Breeding resistant varieties is a vital task, since new dis-
the Netherlands, produces seeds for spinach, beans,
eases keep on emerging in vegetable cultivation and often
Swiss chard and red beet. Pop Vriend Seeds is
spread at a fast rate.
the world’s market leader in spinach seed. In fiscal
2017/2018, its 80 employees generated revenue of
Unlike with crops such as cereals, there is greater emphasis
around €75 million and above- average earnings. Like
on quality over yield in vegetable breeding. Most of the
KWS, Pop Vriend Seeds is a family-run company
vegetable harvest is supplied to the retail sector as raw goods
that operates internationally. It supplies customers
via a small number of stages in the distribution channel. The
in more than 100 countries, including China,
consumer then expects to be able to buy goods that are
the U.S. and Russia.
impeccable in terms of taste, freshness and appearance. That
is why transportability and storability are also a firm focus in
The acquisition of Pop Vriend Seeds gives KWS broad
vegetable breeding. New trends in consumer behavior are
access to genetic material, an inter national infra-
also influencing the work of breeders: Higher demand for
structure and expert staff and is already making a
convenience products is spurring production of salads that
positive contribution to net sales and income targets.
can be plucked into leaves of a uniform size, for example.
The company is thus a key foundation for developing
the new business segment and establishing breeding
programs for further vegetable crops and regions.
18
To Our Shareholders | Spotlight Topic
Annual Report 2018/2019 | KWS Group 2. Combined
Management Report
22
22
25
25
27
28
29
2.1 Fundamentals of the KWS Group
2.1.1 Business Model
2.1.2 Branches
2.1.3 Objectives and Strategy
2.1.4 Control System
2.1.5 Responsible Business Activity
2.1.6 Fundamentals of Research & Development
32
2.2 Research & Development Report
35
35
37
41
49
49
50
50
54
54
54
56
57
60
60
60
60
62
68
74
74
75
80
80
80
81
2.3 Economic Report
2.3.1 Business Performance
2.3.2 Earnings, Financial Position and Assets
2.3.3 Segment Reports
2.4 Environmental Report
2.4.1 Product Innovations
2.4.2 Use of Genetic Resources
2.4.3 Plant and Process Safety
2.5 Employee and Social Report
2.5.1 Employment Trends
2.5.2 Recruitment & Qualification
2.5.3 Good Working Conditions
2.5.4 Social Commitment
2.6 Corporate Governance
2.6.1 Corporate Governance Report and Declaration on Corporate Governance
2.6.2 Compliance Declaration in Accordance with Section 161 AktG
(German Stock Corporation Act)
2.6.3 Business Ethics and Compliance
2.6.4 Compensation Report
2.6.5 Explanatory Report of the Personally Liable Partner (KWS SE) of
KWS SAAT SE & Co. KGaA in Accordance with Section 176 (1) Sentence 1 AktG
(German Stock Corporation Act) on the Disclosures in Accordance with
Section 289a (1) and Section 315a (1) HGB (German Commercial Code)
2.7 Opportunity and Risk Report
2.7.1 Opportunities
2.7.2 Risks
2.8 Forecast Report
2.8.1 Changes in the KWS Group’s Composition that Are Significant for the Forecast
2.8.2 Forecast for the KWS Group’s Statement of Comprehensive Income
2.8.3 Forecast for the Segments
82
2.9 Report on KWS SAAT SE & Co. KGaA and Non-Financial Declaration
82
84
(Declaration based on the German Commercial Code (HGB))
2.9.1 KWS SAAT SE & Co. KGaA
2.9.2 Combined Non-Financial Declaration for the KWS Group
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
d
e
n
b
m
o
C
i
Healthy growth is
important for us.
That’s why we’re setting
store by vegetables.
We not only aspire to diversity in traditional crops. Our overriding goal – to make a sensible
contribution to feeding a growing world population – means ensuring not only a supply of food,
but also of vitamins. We are taking an important step in the right direction by establishing our
business segment for vegetable seed.
2. Combined Management Report
The Combined Management Report also comprises aspects of sustainability reporting in addition to content related to
financial reporting. Our objective is to illustrate the relationship between ecological, social and financial factors and highlight
their impact on our longterm commercial success. We refer to the report aspects required under Sections 289b et seq. and
Sections 315b et seq. of the German Commercial Code (HGB) in our “NonFinancial Declaration” on page 84. The contents
of the NonFinancial Declaration were not audited as part of the audit of the annual and consolidated financial statements,
but underwent a voluntary external audit. They are indicated by the acronym
. The Combined Management Report also
includes voluntary components that are not audited separately. These are indicated by footnotes.
2.1 Fundamentals of the KWS Group
2.1.1 Business Model
healthy and sustainable diet. The acquisition of Pop
Since it was founded in 1856, KWS has specialized
Vriend Seeds, which is based in Andijk, the Nether
in breeding, producing and distributing highquality
lands, and is the market leader in spinach seed as well
varieties and seed for agriculture. From our beginnings
as a vendor of seed for other vegetable crops, means
in sugarbeet breeding, we have evolved into an inno
we have taken a major step as part of our strategic
vative, international supplier with a broad portfolio of
orientation and are strengthening our commercial
crops. We cover the complete value chain of a modern
independence long term. You can find more informa
seed producer – from developing new varieties, multi
tion on this subject on page 149.
plication and processing, to marketing of the seed
and consulting for farmers. KWS’ core competence
The Corn Segment is the KWS Group’s largest
is in breeding new, highperformance varieties that
segment in terms of net sales. It covers production
are adapted to regional needs, such as climatic and
and distribution of seed for corn, soybeans and sun
soil conditions. Every new variety delivers added
flowers. Its operating performance depends largely
value for the farmer. Our business model is based on
on the spring sowing season in the northern hemi
this added value – which is ultimately attributable to
sphere. That means most of the segment’s net sales
breeding progress, optimization of seed quality and
are generated in the second half of the fiscal year
pinpointed consulting.
( January to June). The segment generates a lower
share of its revenue in the first two quarters, mainly
Organization and segments of the KWS Group
from corn and soybean varieties in South America.
In fiscal 2018/2019, the KWS Group’s operational
KWS is the market leader for silage corn in Europe.
business consisted of four Business Units, which were
grouped in the three product segments Corn, Sugar
The Sugarbeet Segment comprises sugarbeet
beet and Cereals. The Business Units Sugarbeet and
seed production and distribution, as well as the
Cereals are identical to the segments of the same
develop ment of diploid hybrid potatoes. Our high
name. There are the Business Units Corn Europe/
quality sugarbeet varieties are consistently some
Asia and the Business Unit Corn Americas in the
of the highestyielding in the industry. That, and
Corn Segment. The newly founded Vegetables Seg
the topquality seed we deliver, makes us the clear
ment has also been part of the Group’s operational
leader in the sugarbeet seed market. Our main sales
business since July 1, 2019. The annual market vol
markets are the EU, Eastern Europe, North America
ume for vegetable seed worldwide is put at around
and Turkey, where our breeding work with locally
€5 billion and growing. KWS’ strategic objective is to
adapted, multipleresistant varieties allows us to
establish a significant and lasting position in vegeta
provide farmers with efficient solutions for growing
ble seed. We intend to position ourselves in a market
sugarbeet. With CONVISO® SMART, our innovative
that is attractive and is in line with the trend toward a
system for controlling weeds, we are the innovation
22 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2018/2019 | KWS Group Apart from delivering high-quality seed, a focus of KWS is on proximity to farmers and also offering extensive
consulting on the ground and value-added services – whether in North and South America, Asia or Europe.
leader in sugarbeet cultivation in many markets.
More details on the net sales and income contributed
Sugarbeet is sown in the spring, which means that
by the segments, including our joint ventures, can be
net sales in this segment are largely generated in the
found in our segment reports starting on page 41.
second half of our fiscal year (January to June).
Main business processes
The Cereals Segment includes production and
KWS’ breeding processes are geared toward
distribution of seed for rye, wheat, barley and rape
exploiting plants’ potential as much as possible
seed. Rye accounts for the largest share of revenue
and leveraging it to tackle the major challenges of
from cereals (around 39%), followed by rapeseed,
modern sustainable agriculture. Whether it is plants
wheat and barley (a combined total of around 55%).
for producing food, fodder or energy, conventional,
We generate the remainder from other crops such
organic or genetically modified: We offer farmers the
as sorghum, peas, catch crops (e. g. mustard), oats
ideal variety for their purposes. It takes on average
and triticales. In our core markets for cereals seed
ten years to breed a new variety. Thanks to our large
(Germany, Poland, the UK, France and Scandina
network of breeding and trial stations in all the world’s
via), farmers predominantly sow the crops in the fall.
key markets, we can test the individual candidates
Consequently, we generate most of our revenue in
under a wide range of climatic and local conditions to
this segment in the first half of our fiscal year (July to
determine whether the varieties are suitable for culti
December).
vation. In most markets, variety development ends in
an official approval process in which candidates have
Apart from the operating segments, there is also
to meet high quality standards, usually in threeyear
Corporate, a segment which by and large does not
field trials. Seed multiplication in our selected cultiva
conduct any operational activities. Its relatively low
tion regions also takes up to two years in a process
net sales come from the revenue from our own farms
that is sometimes begun alongside the approval pro
in Germany. Since the KWS Group’s basic research
cess. Only then can the varieties be marketed to our
expenditure and costs for administrative functions
customers via the various distri bution channels.
are charged to the Corporate Segment, its income is
usually negative.
2.1 Fundamentals of the KWS Group | Combined Management Report
23
KWS Group | Annual Report 2018/2019 Breeding and distribution activities of the KWS Group in over 70 countries
Breeding stations
Test locations for trial cultivation
Products, markets and external factors
Our breeding and seed multiplication activities are
We offer our customers – farmers – a broad range of
subject to weather influences that cannot always
varieties of agricultural crops that have been adapted
be quickly compensated for with countermeasures.
by breeding to the conditions of their specific location.
Economic policy decisions in the agricultural
These crops include corn, sugarbeet, the cereals
industry, which is strongly regulated worldwide, may
rye, wheat and barley, oil plants such as sunflower,
also impact our business. You can find more details
soybeans and rapeseed, and catch crops. Spinach
on these external factors in our opportunity and risk
seed and other vegetable crops have also been part
report on pages 74 to 79.
of our portfolio since July 1, 2019. In addition to selling
seed, our field staff is also on hand to offer farmers
Changes to the composition and organization
consulting on choosing and cultivating varieties. We
of the KWS Group
also offer consulting via our digital services as well as
There were no significant changes in the KWS Group’s
on our website.
composition and organization in fiscal 2018/2019.
You can find more information in the explanations
on the companies consolidated in the KWS Group in
the Notes to the consolidated financial statements
starting on page 108.
24 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2018/2019 | KWS Group We are gradually gearing our global administrative
and is home to a number of central functions.
organization more strongly toward functional respon
There are also currently 74 subsidiaries and
sibility, as well as harmonizing and standardizing
associated companies in 33 countries. You can
processes, to underpin our profitable and sustainable
find a detailed breakdown of net sales by region
growth with efficient administration. The new model
on page 38. An overview of our subsidiaries and
will replace our previously regionbased organization.
associated companies can be found in the Notes
The core objective is to bundle administrative services
on pages 110 to 112.
and control business processes for 70 countries
more efficiently. The project, which was launched in
2.1.3 Objectives and Strategy
2016, is going according to plan: Implementation was
Our strategic planning is the foundation for the
begun following successful creation of the concept
KWS Group’s further development. It defines stra
for a crossfunction target structure and conclusion
tegic objectives, initiatives and core measures for
of the negotiations on an accommodation of inter
existing activities and for potential new fields of
ests in Germany. We moved into our location for
business. The planning is based on a longterm
shared services in Berlin in the year under review.
horizon (ten years) and includes an analysis and
Around 200 people now work there. The goals include
assessment of market trends, competitors and
expanding the location in Berlin, establishing Expert
the KWS Group’s position. Strategic planning is
Hub structures throughout the Group and providing
carried out regularly on a rolling basis. We believe
a global business partner organization in the coming
that strategic success factors are in particular our
years. Our objective is not to make any job cuts as
intensive research, breeding of new, highyielding
part of the reorganization.
2.1.2 Branches
varieties and continuous expansion of our global
footprint so that we can further enhance our know
how in regional markets with their special climatic
KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE)
conditions.
is the parent company of the KWS Group. Strategic
management of all of KWS’ global activities is
Corporate objectives of the KWS Group
pooled under its roof. It is headquartered in Einbeck,
Our corporate objectives are divided into the four
Germany, and controls breeding of the KWS Group’s
core topics of profitable growth, innovation, sustain
range of varieties. It conducts basic research, pro
ability and independence:
duces and distributes sugarbeet and corn seed,
The KWS Group’s medium- and long-term objectives
Objectives
Profitable
growth
Objective
achieved?
Explanation
of the course
of the year
Increase in consolidated net sales by an average of
No
Page 37
at least 5% p. a.
EBIT margin ≥10%
Yes
Expansion of the portfolio of varieties for new markets Yes
A dividend payout ratio of 20% to 25% of the
Yes
KWS Group’s net income for the year
Page 37
Page 32
Page 148
(Notes)
Innovation
1% to 2% progress in yields p. a. for our customers
Yes
Pages 29 to 34
and development of tolerances and resistances
R&D intensity of around 17% of consolidated
net sales
Independence
Retention of a control structure shaped by the
family owners
Sustainability
Integration of international subsidiaries in
KWS’ sustainability reporting
Yes
Yes
Yes
Page 32
Page 70
Page 84 (NFD)
2.1 Fundamentals of the KWS Group | Combined Management Report
25
KWS Group | Annual Report 2018/2019 Profitable growth is vital for our future develop-
Sustainability means long-term economic success
ment. Long-term profit able growth ensures we can
for us. When KWS’ founders established the com-
retain our commercial independence. Key compo-
pany in 1856, they created the basis for its sustain-
nents are the good performance of our seed and a
able develop ment that has now lasted more than
relationship of trust with farmers. We aim to increase
160 years. Our success factors include principles of
net sales, in particular in our growth regions, both
business ethics, a compliance management system,
in moderate and in tropical or subtropical climatic
internal Rules, Guidelines & Procedures to ensure
zones.
operational excellence in our processes, extensive
financial and non-financial risk management, respon-
Innovation drives our business model. The need for
sible supply chain management, open communication
innovative technology in plant breeding continues
with our stakeholders, and transparent sustainability
to increase. Climate change, significant population
reporting in accordance with the Global Reporting
growth and changes in eating habits pose challenges
Initiative (GRI) and other relevant standards.
for us. We invested more than €200 million in
Research & Development, and thus once again a
significant share of our net sales, in the year under
review. That is an investment in our future growth.
Artificial intelligence in plant breeding: A robot collects data on the development of ears of wheat on a trial field in
the U.S. state of Illinois and transfers it to self-learning software. The latter is continuously trained by breeders and
helps them make decisions on selection.
Independence has always been a key corporate
sheet data, along with the financial budget. In prin-
objective for KWS, but it is gaining greater strategic
ciple, part of the planning documentation is also an
relevance in view of the process of consolidation
opportunity/risk assessment which every manager
in our industry. It is part of the joint value system
must conduct for his or her unit.
with our customers, suppliers and employees. Our
independence and long-term orientation enable us
The planning is compared every quarter with the
in particular to invest in research & breeding projects
company’s actual business performance and the
with an eye to the future.
underlying general conditions. If necessary, we
initiate suitable countermeasures and make adjust-
Our business developed largely in line with our
ments. We update the forecast for the current fiscal
strategic objectives in the year under review. Only
year at the end of every quarter. At the end of each
our net sales failed to reach the envisaged growth
fiscal year, all the units conduct a detailed variance
target of at least 5%. We deal with that and other
analysis of the planned and actual results. That
details of achievement of our objectives in the
serves to optimize our internal processes.
respective sections, which are referred to in the table
on the corporate objectives.
2.1.4 Control System
Controlling is responsible for coordinating and
documenting all planning processes and our
current expectations. It reports on compliance
Detailed annual and medium-term operational plans
with adopted budgets and analyzes the efficiency
are used to control the Group and our Business
and cost-effectiveness of business processes
Units. The medium-term plan covers the time frame
and measures. Controlling also advises decision-
of the annual plan and planning for the three sub-
makers on economic optimization measures. In
sequent fiscal years. It is derived from the strategic
particular the heads of the product segments, the
planning, which covers a timescale of ten years.
regional directors and the heads of research &
The targets set in the annual and medium-term
responsible for the content of the planning and
breeding activities and the central functions are
planning are arrived at on the basis of the strategic
current forecasts.
planning, regional economic and legal situation,
anticipated market trends and assessments of the
The Executive Board uses various indicators for
company’s position in the market and the potential
planning, controlling and monitoring the business
product performance. In a subsequent bottom-up
performance of the KWS Group and its operating
process, which also includes the development of
units. The main indicators for the KWS Group are
our joint ventures, we use these premises to define
net sales, operating profitability (EBIT margin) and
figures for sales volumes and net sales, breeding
R&D intensity. KWS’ product segments, which
activities, production capacities and quantities, the
are divided into Business Units, are in turn geared
allocation of resources (including capital spending
toward the main indicators of net sales and EBIT
and personnel), the level of material costs and
margin.
internal charge allocation and the resultant balance
2.1 Fundamentals of the KWS Group | Combined Management Report
27
KWS Group | Annual Report 2018/2019 Management and control
2.1.5 Responsible Business Activity
Our company (formerly KWS SAAT SE) has been a
Mission and principles
partnership limited by shares (KGaA) since its change
As a family business, we think across generations.
in legal form became effective on July 2, 2019. The
Apart from our corporate objectives, responsible
personally liable partner is responsible for the
business activity with regard to people and the
tasks of running the business of a partnership
environ ment (corporate social responsibility) is
limited by shares. The company’s sole personally
therefore a firmly entrenched principle of how we
liable partner is KWS SE, whose Executive Board
run our company. As a profitable, independent
is therefore responsible for management of the
family business, we have the necessary entrepre
company’s business.
neurial stability and freedom to operate largely
independently of shortterm interests.
The rights and obligations of the Supervisory Board
at a partnership limited by shares are limited com
Guidelines for the company’s day-to-day work
pared to those at a stock corporation or European
Our guiding principles define the framework for our
Company (Societas Europaea or SE). In particular,
everyday work, so that we are able to create sus
the Supervisory Board at a partnership limited by
tainable and profitable growth for our customers,
shares does not have personnelrelated powers
employees and investors. Our strategic decisions
as regards management, i. e. does not have the
and daytoday actions in operational business are
authority to appoint personally liable partners and
guided by the following company principles:
define the contractual terms and conditions for them,
enact bylaws for management, or define business
Essence:
transactions requiring its consent.
Make yourself grow.
The Annual Shareholders’ Meeting of a partnership
Vision:
limited by shares basically has the same rights as
To be a trusted seed specialist – for generations of
the Annual Shareholders’ Meeting of a stock corpo
farmers
ration or SE. It also adopts resolutions on whether
to approve the company’s annual financial state
Mission:
ments and ratify the acts of the personally liable
We increase genetic potential through outstanding
partner. Certain resolutions adopted by the Annual
research and topclass breeding programs.
Shareholders’ Meeting of a partnership limited by
We supply our farmers with seed of the very best
shares also require the approval of the person
quality.
ally liable partner. The declaration on corporate
We aim to be a strong partner who earns the trust
governance in accordance with Section 289f of the
of our customers.
German Commercial Code (HGB) contains detailed
We create entrepreneurial freedom and help
information on the extensive and close cooperation
people unfold their talents.
between the Executive Board and the Supervisory
Board and has been published at www.kws.com.
28 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2018/2019 | KWS Group We also have a central policy framework (Group
Plant breeding is a very researchintensive and
Standards) with which we create a common under
longterm business. The average time to develop
standing of the freedoms and decisionmaking
a new, highperformance variety for our inter
processes within the KWS Group. The Group
national markets is up to ten years. As part of that,
Standards are continuously improved by means
our varieties are adapted to the specific environ
of constant monitoring and feedback. They com
mental conditions of their target markets. Breeders
plement our existing guiding principles, with the
are assisted in that by a global network of various
objective of preserving KWS’ unmistakable profile,
breeding and trial stations. That means candidate
also against the backdrop of the Group’s increasing
varieties can be tested under the locationspecific
internationalization.
conditions of their target markets over several years.
Stakeholder management
By applying leadingedge breeding methods, which
The key stakeholder groups include not only our
are continually optimized by the use of molecular
direct customers, i. e. farmers, our shareholders and
biology, IT or technical approaches, we have created
employees, but also other players along the food
sustainable annual progress in yields of 1% to 2%
value chain (sugar companies, food processors,
for decades. We also create genetic diversity by new
retailers and end consumers), as well as policy
crossings, which is vital to improving crop varieties.
makers, public authorities, nongovernmental
That is why KWS has supported various gene banks
organi zations, science, academia and the media.
in different projects for years. By continuously
We learn of our stakeholders’ requirements through
make a contribution to resource conserving, sustain
various channels – from daily business, in our work for
able agriculture. Only by doing so can we tackle the
associations or through dialogue with stake holders
challenges of climate change and increased demand
on specific subjects. All information and insights
as a result of global population growth.
improving yield and delivering new plant traits, we can
from our dialogue with stakeholders are gathered
and evaluated in a structured process.
2.1.6 Fundamentals of Research & Development
The objective of our research and development
work is to create highperformance varieties
that meet various environmental and application
requirements and deliver continuous value added
to farmers. They include absolute yield, as well
as issues such as yield stability, resistance to
diseases, cultivation characteristics or constituent
properties. We accordingly continue to invest in
expanding our research & breeding capacities.
2.1 Fundamentals of the KWS Group | Combined Management Report
29
KWS Group | Annual Report 2018/2019 The only thing that
should be hidden in
your soil: potential
As a family company, we’ve always stayed grounded. And that’s maybe why we have
such a good understanding of how to keep soil healthy for coming generations: Backed
by all our diversity and experience, we help farmers choose the ideal crop rotation.
2.2 Research & Development Report
Key figures for Research & Development
R&D employees1
Ratio of R&D employees
R&D expenditure
R&D intensity2
Marketing approvals for new varieties
1 Average number of employees
2 In % of net sales
in %
in € millions
in %
2018/2019
2017/2018
2,053
37.0
205.6
18.5
464
1,920
37.3
197.7
18.5
402
+/–
6.9%
–
4.0%
–
15.4%
In fiscal 2018/2019, our R&D expenditure totaled
Successful launch of the first CONVISO®
€205.6 (197.7) million. New KWS varieties were
SMART sugarbeet
awarded 464 (402) marketing approvals worldwide.
The first KWS CONVISO® SMART sugarbeet have
been awarded market approval or have been
Progress in corn breeding
submitted for approval in all countries where the
We significantly increased the competitiveness of
herbicide will be available.
our corn seed in the year under review. For the first
time, three dent x dent hybrids were among the ten
CONVISO® SMART offers an efficient and sustain
mostproduced KWS varieties. Whereas our pro
able means of controlling weeds in sugarbeet culti
fessional breeding expertise and significant market
vation: conventionally bred sugarbeet varieties that
share with dent x flint corn is longestablished, we
are tolerant to a modern herbicide. The system has a
had to build the competency for dent x dent hybrids
broad spectrum of activity against weeds and helps
first. We began establishing our own European dent
slash the quantity of herbicides required compared
x dent breeding program back in the mid1990s
to current standards.
and have succeeded in making it competitive in
many years of intensive work. We achieved multiple
The new generations of varieties combine all key
major milestones in the year under review. First, we
traits: In addition to CONVISO® SMART herbicide
sharply increased the genetic diversity of our basic
resistance, they also boast resistance to pests and
material and so attained a level of diversity matching
plant diseases, such as nematodes, Cercospora,
that of the market leaders. Second, we now have
rhizomania and Rhizoctonia. The performance of the
nine successful breeding programs covering all the
CONVISO® SMART varieties has also been boosted.
maturity regions of relevance to us in Europe. Last,
To enable that, we significantly sped up the breeding
but not least, that success is reflected in excellent
program by developing and using suitable molecular
products: KWS has competitive varieties in this
markers. This technology allows us to equip a large
market for the first time, and the results of the new
number of highperformance sugarbeet lines with the
hybrids it has submitted for approval are highly
CONVISO® SMART trait quickly thanks to marker
promising. We aim to capture a significant market
assisted backcrossing. As a result, we have built up a
position in the dent x dent regions of Europe, the
product pipeline that addresses the specific require
Americas and China.
ments of the various markets.
32 Combined Management Report | 2.2 Research & Development Report
Annual Report 2018/2019 | KWS Group Innovations in breeding resistance in sugarbeet
For Russia, we are devoting greater attention to the
The ban on neonicotinoids in EU Member States
topic of winter hardiness, coupled with frost tolerance
imposed at the end of 2018 means that breeding
and resistance to snow mold, as well as adaptation
resistance to viruses is growing in importance. Viral
to shorter summers and longer winters. We com
diseases transmitted by insects cause significant
menced initial activities to develop winterhardy rye
losses of yield in various crops. Neonicotinoids have
hybrids for Russia in 2013. We have since made large
been used to date on sugarbeet in order to combat
advances. We have successfully established a pro
aphids, which transmit various yellowing viruses and
gram that helps us develop varieties faster, meaning
have helped curb the negative effect of these plant
that initial competitive hybrids will be available in the
diseases. We responded to the ban immediately by
new fiscal year and that we can launch the exclusive
developing virusresistant sugarbeet varieties. We
variety KWS PROMMO for the country’s moderately
have already been able to submit initial varieties for
cold regions. We have the variety KWS AVIATOR in
approval in Germany, the UK and a number of other
our portfolio for regions where winter hardiness is
countries.
required. Both products exhibited very good yields
in the assessments and also boast excellent winter
Highly promising results in development of
hardiness. We expect that our breeding program for
winter-hardy rye hybrids
developing winterhardy rye hybrids will likewise pro
Rye is an exceptionally adaptable crop. That is why
duce suitable varieties for regions in North America in
rye hybrids tested in Germany and Poland have been
the medium term.
able to be marketed in various regions to date – from
Spain to Sweden, from North America to Western
Russia. Our strategy is to continue to tap our main
markets – Germany, Poland and Denmark – as well as
develop new regions with a large potential in terms of
cultivation area, such as Russia and North America.
These regions pose new requirements for us in our
breeding work.
Under the slogan #RYEVOLUTION, we are committed to cultivation of hybrid rye and are working intensively to develop new varieties.
This crop is not only very adaptable and rugged, but also delivers valuable, long-lasting energy as a food.
rows can be transferred to systems on the trac
tors to enable their satellitecontrolled, automated
guidance during sowing. The digital field plans also
serve as the basis for automatic methods of trait
identi fication, such as analysis of images captured
by drones.
KWS’ geodata management platform is con
ceived as a growing system and is to be gradually
expanded with additional applications. The long
term goal is to fully link all relevant data with the
trial fields and plots.
Yield forecasts – predictive breeding at KWS
Progress in the field of breeding methods has been
sped up in the past years, in particular thanks to
genomic analyses. Genomic data is now used by
KWS to determine a plant’s potential for further
breeding on the basis of statistical calculations.
With the aid of genomic selection, the genomes of
entire plant populations are analyzed with mole
cular markers and, using specially developed com
puter models, correlated with field data collected at
the same time. That correlation ultimately enables
predictions on the yield of possible progeny with
out the need to assess them in the field. We will be
able to increase the accuracy of these forecasts
Sights firmly set on progress: More than one-third of our employees work in R&D and
directly in developing new, high-performance varieties.
Digitization of R&D work – rollout of KWS’
significantly in the future by integrating further
geodata management platform
data, such as on the plants’ metabolism or protein
Digitization is penetrating the various breeding
profile.
processes at KWS and making development of
new varieties easier and more efficient. In order
Genomic selection is now an established method for
to tap its diverse potentials, we work constantly
just about all of KWS’ crops and is used success fully
to digitize various research & breeding process
for developing new varieties. The genetic makeup of
es. Over the past years, for example, we have
the breeding material and efficiency in breeding have
developed and now successfully launched a
been able to be improved significantly as a result. In
crosscrop platform for geodata management.
particular, the development of corn varieties that are
Based on geoinformation and navigation satellite
tolerant to drought stress has been complemented
systems, it is the foundation for fully digitized field
by the use of predictive breeding methods and has
planning. The platform can be used to create and
helped KWS produce tolerant hybrids under our label
document field plans for commercial seed pro
“ClimaControl³.”
duction and planning of field trials with the aid of
software we have developed inhouse. Moreover,
details of the arrangement of the trial plots and
34 Combined Management Report | 2.2 Research & Development Report
Annual Report 2018/2019 | KWS Group 2.3 Economic Report
2.3.1 Business Performance
On June 19, 2019, KWS announced that it has
signed a binding agreement to acquire Pop Vriend
General developments and business
Seeds, a company headquartered in Andijk in the
performance of the KWS Group
Netherlands, and aims to position itself long term
KWS faced an economic environment similar to that
in the growth market of vegetable seed. Pop Vriend
of the previous year. The global economy grew only
Seeds is the market leader for spinach seed and
at a slow rate. Whereas the U.S. economy picked up
has a highly promising portfolio of other vegetable
steam, also thanks to fiscal stimuli, the pace of expan
crops. The company, which was founded in 1956
sion in the eurozone, Japan and China declined. Parts
and is showing strong growth, generated revenue of
of South America and Turkey were in recession. There
around €75 million and aboveaverage earnings in
were again new barriers and sanctions in international
fiscal 2017/2018. The acquisition will bolster KWS’
trade in the year under review, and they affected our
future sales and earnings growth and help it achieve
business in part. The weakness of a number of local
its strategic corporate objectives. The transaction
currencies in regions where KWS operates, such
was completed on July 1, 2019.
as South America and Turkey, also had a negative
impact.
Guidance versus actual business performance
of the KWS Group
The agricultural sector again had to contend with
Despite the abovementioned industryspecific
challenging general conditions. High inventories due
and geopolitical challenges, the KWS Group was
to good harvests in most cultivation regions, regula
able to increase EBIT significantly and fulfill or
tory intervention and increasing weather anomalies
surpass its forecasts.
are concerns for many farmers. The slight price
increases in the year under review were not sufficient
In the course of the year, there were hardly any
to cause a turnaround in the conditions for growing
changes to our assessment for the year as a
agricultural crops – in some cases, arable farming
whole. The only correction was in the 9M Quarterly
remained a lossmaking business as a result of
Report for 2018/2019, when we put a more precise
relatively low prices for agricultural raw materials.
figure on our earnings guidance by stating that we
While there was a slight increase in global cultiva
expected an EBIT margin at the upper end of the
tion area for wheat, there was a slight decline in the
forecast range of 10.0% to 12.0%.
amount of soybean and corn sown, in particular due
to extremely damp weather conditions in the U.S.
While our sales and R&D intensity fully matched
Sugarbeet cultivation area remained largely con
our most recently published expectations, the
stant as a whole, despite the continuing low level of
EBIT margin was 13.5% and thus even above the
sugar prices. However, there were sharp differences
predicted range. Apart from our positive operating
among the individual regions: While regulatory
performance, earnings were also increased by
changes relating to the use of insecticides meant
€11 million as a result of a nonrecurring effect
that cultivation conditions in the EU grew more
from the sale of shares in KWS Potato B.V.
difficult, more sugarbeet was grown in the U.S. in
the fiscal year.
2.3 Economic Report | Combined Management Report
35
KWS Group | Annual Report 2018/2019
Summary of the segments’ course of business
The segment’s net sales were better than expected
and comparison with the guidance 1
and were slightly above the figure for the previous
Most of the net sales in the Corn Segment is
year. The EBIT margin in the Sugarbeet Segment
generated in the second half of our fiscal year
improved sharply year over year thanks to non
( January to June) during the spring sowing season in
recurring income from sale of 50% of the shares in
the northern hemisphere. A lesser share of revenue
KWS Potato B.V. That was the main reason why we
is earned in South America in the first two quarters.
raised our guidance during the year.
Our business performance in South America was
very positive, while our business in the U.S. suffered
Every year, the fall sowing season determines the
significant declines due to weatherrelated factors.
main business trends of the Cereals Segment. The
In Europe and China, our business was stable as a
key crop in that is hybrid rye, which accounts for
whole in the year under review.
a very significant share of the segment’s net sales
Net sales and the EBIT margin in the Corn Segment
in the year under review, mainly as a result of the
were, as expected, up slightly over the previous year.
strong growth in hybrid rye seed. The EBIT margin
and earnings. As expected, net sales rose sharply
was 13.5%, better than originally anticipated and
The main sales season for the Sugarbeet
above the figure for the previous year.
Segment is in the second half of our fiscal year
(January to June). The strong performance of our
Net sales at the Corporate Segment were as
sugarbeet varieties was again a mainstay in the
expected. We lowered our EBIT guidance during
segment’s success in the year under review. The seg
the year due to extra expenditures as part of our
ment also benefited in particular from the successful
change in legal form, M&A activities, reorganization
launch of our CONVISO® SMART portfolio of varieties.
of administration (ONEGLOBE), and on information
Cultivation area as a whole remained at the high level
technology. The segment’s EBIT was €–97.1 million
of the previous year. The measures to cut capaci
and so in line with the guidance revised in the
ties announced by the European sugar industry had
course of the year.
only little impact on the segment’s performance in
the fiscal year. We posted an increase in net sales in
particular in Eastern Europe and North America.
Guidance versus actual business performance of the KWS Group
Results
2017/2018
Guidance for
2018/2019
Adjustments to the guidance
during the year
Results
2018/2019
2017/2018
Annual Report
Q1 Report
Semiannual
Report
9M Report
Net sales
R&D
intensity
€1,068 million Slight increase
in net sales
18.5% Around 19.0%
EBIT margin
12.4%
10.0 –12.0%
–
–
–
–
–
–
–
–
At the upper
end of the
guidance
€1,113 million;
4.2%
18.5%
13.5%
1 Including equityaccounted companies. Details on the segments’ business perfor
mance and their economic environment can be found in the segment reports.
36 Combined Management Report | 2.3 Economic Report
Annual Report 2018/2019 | KWS Group 2.3.2 Earnings, Financial Position and Assets
Earnings
Condensed income statement
in € millions
Net sales
Operating income
Net financial income/expenses
Result of ordinary activities
Income taxes
Net income for the year
Earnings per share
EBIT margin
2018/2019
2017/2018
1,113.3
1,068.0
150.0
–5.5
144.5
40.4
104.0
132.6
5.4
138.0
38.3
99.7
+/–
4.2%
13.1%
–
4.7%
5.5%
4.3%
in €
in %
3.15
3.02
4.3%
13.5
12.4
–
Net sales increase despite strained
EBIT improves again
general conditions
The KWS Group’s operating income (EBIT)
Net sales in the year under review were again
improved in fiscal 2018/2019 by 13.1% to
impacted by significant exchange rate effects and a
€150.0 (132.6) million, despite the challenges
difficult market environment characterized by low
described above. Apart from the growth in net sales,
producer prices, regulatory intervention and extreme
earnings were also increased by €11.0 million as
weather events. Nevertheless, the KWS Group was
a result of a non-recurring effect from the sale of
able to grow its net sales slightly to €1,113.3 million
shares in KWS Potato B.V. The EBIT margin was
compared to €1,068.0 million in the previous fiscal
13.5% following 12.4% in the previous year.
year, an increase of 4.2%. In the Corn Segment,
expanding seed business in South America had a
The KWS Group’s cost of sales rose in the year
particularly positive impact on net sales. The Sugar-
under review by 2.8% to €458.5 (446.1) million, giving
beet Segment posted a slight increase in net sales;
a cost of sales ratio of 41.2% (41.8%). The year-on-
there were appreciable gains in Eastern Europe in
year improvement in that ratio is partly attributable to
particular. Net sales in the Cereals Segment rose
lower royalty payments to third parties. In particular,
sharply due to higher sales of rye and barley seed in
the successful launch of new hybrid corn varieties in
Europe. The Corn and Sugarbeet Segments each
Brazil with KWS’ genetics had an impact here.
accounted for a major share of total net sales, namely
42.9% and 41.4% respectively. The Cereals Segment
As planned, we again increased our research &
increased its share to 15.3% (previous year: 14.0%) on
development expenditure, which we see as an in-
the back of strong growth. The region where we
vestment in the future, to €205.6 (197.7) million; as
generated most of our business was Europe, which
in the previous year, the R&D intensity was 18.5%.
accounted for 66.6% of net sales (Germany: 21.2%),
Administrative expenses increased to €115.4 (95.8)
while net sales from North and South America con-
million due to work as part of the reorganization pro-
tributed 27.5% of the total. Revenues from our North
ject ONEGLOBE, costs for the change in our legal
American and Chinese equity- accounted companies
form, and higher IT expenses. The balance of other
are only included at the segment level (see our
operating income and other operating expenses in-
segment reporting starting on page 41).
creased to €38.0 (5.6) million, among other things due
2.3 Economic Report | Combined Management Report
37
KWS Group | Annual Report 2018/2019
to the nonrecurring effect from the sale of shares in
KWS Potato B.V. and income from reversal of allow
ances on receivables. The related individual items are
explained in detail in the Notes on pages 141 to 142.
Net sales by region
Total net sales €1,113.3 million1
Rest of world 5.9%
North and South America 27.5%
21.2% Germany
45.4% Europe (excluding Germany)
Net sales by segment
Total net sales €1,113.3 million1
Corporate 0.4%
Cereals 15.3%
42.9% Corn
41.4% Sugarbeet
1 Without net sales of our equity consolidated companies.
Net financial income/expenses negative –
in particular due to additional longterm borrowing in
Net income improves
South America. Net financial income/expenses was
Our net financial income/expenses is made up of the
thus €–5.5 (5.4) million. Earnings before taxes (EBT)
net income from equity investments and the interest
rose by 4.7% to €144.5 (138.0) million. Income taxes
result. One component of income from equity invest
consequently increased to €40.4 (38.3) million, giving
ments is the income from equityaccounted financial
a tax rate of 28.0% (27.8%). Overall, the KWS Group
assets, which fell to €9.4 (13.4) million due to the drop
generated net income of €104.0 (99.7) million in the
in earnings (see page 42) from our joint ventures in
year under review, an increase of 4.3%. Given that
North America and was not able to be fully offset by
the number of shares is now 33,000,000 (following
the improvement in profitability at our Chinese joint
the stock split at a ratio of 1:5 on March 22, 2019),
venture. The interest result fell to €–15.0 (–8.0) million,
earnings per share were €3.15 (3.02).
Financial situation
Selected key figures on the financial position
in € millions
Cash and cash equivalents
Net cash from operating activities
Net cash from investing activities
Free cash flow
2018/2019
2017/2018
159.8
72.9
–95.2
–22.4
192.6
98.1
–68.1
30.0
Net cash from financing activities
404.5
–25.3
+/–
–17.0%
–25.7%
39.8%
–
–
38 Combined Management Report | 2.3 Economic Report
Annual Report 2018/2019 | KWS Group Securing the KWS Group’s financial flexibility,
Higher net income year on year, before allowing for
enabling its profitable growth and preserving its
noncash expenses and income, coupled with higher
independence are the core tasks of our financial
income taxes and an increase in trade receivables,
management. Among other things, we ensure that by
resulted in a decline in net cash from operating
extensive liquidity planning, monitoring of cash flows,
activities to €72.9 (98.1) million.
and hedging the risk of interest rate changes and
currency risks. The main financial instruments used
The net cash from investing activities totaled
by the Group in the fiscal year, apart from a syndi
€–95.2 (–68.1) million in fiscal 2018/2019. Our capital
cated credit line, were borrower’s notes and bilateral
spending in the year under review was consistent with
loan agreements (commercial papers) with different
our longterm growth plans and focused on erecting
loan periods and terms. The maturity profile of the
and expanding production and research & develop
Group’s borrowings has a broad spread, with a high
ment capacities. Expansion of sugarbeet seed pro
proportion of medium and longterm financing.
duction in Einbeck was continued as planned. The
project, which has a total investment volume of around
As part of the acquisition of the vegetable seed pro
€40 million, is expected to be completed by the end
ducer Pop Vriend Seeds, KWS temporarily utilized
of 2020. The focus of our capital spending in the Corn
bridge funding from various banks in June 2019. It
Segment was on expanding production and processing
was already replaced at the end of August 2019 by
plants in Brazil and Argentina, whereas in the Cereals
the issue of medium and longterm borrower’s notes
Segment it was mainly centered on expanding
with a total volume of €400 million at very favorable
and modernizing breeding stations and production
conditions. In order to secure KWS’ growth, we also
plants at Wohlde and in Eastern Europe. Total capital
consider the option of a capital increase in exceptional
spending in fiscal 2018/2019 was €96.6 (71.7) million.
cases, for example to fund a further large acquisition.
This rise was mainly attributable to the fact that some
investments planned for the previous year were not
carried out until the year under review. Depreciation
and amortization remained virtually constant at
€49.7 (50.1) million.
Capital expenditure by segments
Total capital expenditure €96.6 million1
Corporate 33.2%
Cereals 7.3%
23.4% Corn
36.1% Sugarbeet
Capital expenditure by region
Total capital expenditure €96.6 million1
Rest of world 1.3%
North and South America 23.4%
58.6% Germany
16.7% Europe (excluding Germany)
1 Without capital expenditures of our equity consolidated companies.
2.3 Economic Report | Combined Management Report
39
KWS Group | Annual Report 2018/2019 The net cash from financing activities was
The KWS Group’s cash and cash equivalents at the
€404.5 (–25.3) million, essentially due to the cap
end of fiscal 2018/2019 fell to €159.8 (192.6) million.
ital raised for the takeover of Pop Vriend Seeds.
Assets
Condensed balance sheet
in € millions
Assets
Noncurrent assets
Current assets
Assets held for sale
Equity and liabilities
Equity
Noncurrent liabilities
Current liabilities
Liabilities held for sale
Total assets
06/30/2019
06/30/2018
+/–
760.5
1,346.8
7.6
963.5
364.4
785.3
1.8
691.3
826.4
0.0
881.8
334.3
301.6
0.0
10.0 %
63.0 %
–
9.3 %
9.0 %
160.4 %
–
2,115.0
1,517.7
39.4 %
The KWS Group’s balance sheet is impacted by the
The company’s capital stock increased from €19.8 mil
seasonal nature of our business. In the course of the
lion to €99.0 million by way of a capital increase from
year, there are usually balance sheet items that differ
company funds (stock split). Higher net income and the
significantly from the corresponding figures at the
allocation to the revenue reserves meant that equity
balance sheet date, in particular in relation to working
rose to €963.5 (881.8) million. As a result, noncurrent
capital.
assets were again fully covered by equity. Noncurrent
liabilities rose to €364.4 (334.3) million, mainly due to
Total assets at June 30, 2019, were
the raising of multiyear loans in South America. On
€2,115.0 (1,517.7) million. Noncurrent assets rose to
the other hand, borrower’s note loans were repaid.
€760.5 (691.3) million, mainly due to planned invest
All in all, the equity ratio fell sharply to 45.5% (58.1%).
ments in new production plants and the expansion of
We aim to keep on our profitable growth trajectory
research & development capacities. Trade receivables
by entering vegetable seed business and with the
rose sharply to €402.1 million from €310.1 million in
acquisition of Pop Vriend Seeds. For that reason, we
the previous year, in particular as a result of business
are willing to accept a temporary decline in our equity
expansion in South America and Eastern Europe.
ratio. Nevertheless, we continue to operate on the back
However, inventories fell slightly to €177.3 (181.0) mil
of a solid balance sheet.
lion. Current assets at the balance sheet date totaled
€1,346.8 (826.4) million. The increase is mainly due
to shorttime borrowings as part of bridge funding
for the acquisition of the Dutch vegetable seed pro
ducer Pop Vriend Seeds, which was completed on
July 1, 2019. As a result, net debt rose sharply to
€497.9 (37.4) million.
40 Combined Management Report | 2.3 Economic Report
Annual Report 2018/2019 | KWS Group 2.3.3 Segment Reports
Reconciliation with the KWS Group
The KWS Group’s consolidated financial statements
are prepared in accordance with the International
Financial Reporting Standards (IFRS). The segments
are presented in the Management Report in line
with our internal corporate controlling structure in
accordance with GAS 20. The main difference is
that we do not carry the revenues and costs of our
equity accounted companies in the statement of
comprehensive income (in accordance with IFRS 11).
The KWS Group’s net sales and EBIT are therefore
lower than the total for the segments. The earnings
contributed by the equityaccounted companies are
instead included under net financial income/expenses.
In addition, their assets are included separately in the
KWS Group’s balance sheet. Our equity accounted
companies are included proportionately in the
segment reports in line with our internal corporate
controlling structure.
The difference from the KWS Group’s statement of
comprehensive income is summarized for a number
of key indicators in the reconciliation table:
We boosted our competitiveness in the corn seed arena in the year under
review by successfully establishing and expanding our breeding program.
Reconciliation table
in € millions
Net sales
EBIT
Number of employees
Capital expenditure
Total assets
avg.
Segments Reconciliation
KWS Group
1,375.0
–261.7
1,113.3
163.4
5,543
101.1
–13.4
–745
–4.5
150.0
4,798
96.6
2,276.3
–161.3
2,115.0
The reconciliation between the KWS Group’s
EBIT were lower there in the year under review, which
statement of comprehensive income and the reporting
therefore had an impact on the reconciliation. The
by segments in fiscal 2018/2019 is impacted by our
Chinese company KENFENG – KWS SEEDS CO., LTD.
equityaccounted companies in the North American
increased its contribution to net sales and income in
and Chinese corn markets. That applies to all key
the year under review, although that still had a minor
figures in the table above, with the main influences
effect on the reconciliation.
coming from North America. Net sales from corn and
2.3 Economic Report | Combined Management Report
41
KWS Group | Annual Report 2018/2019 Corn Segment
Key figures
in € millions
Net sales
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2018/2019
2017/2018
739.0
57.9
7.8
27.2
750.2
7.7
734.2
47.4
6.5
64.1
695.5
7.0
+/–
0.7%
22.2%
–
–57.6%
7.9%
–
in %
in %
Economic environment: Stable general
our soybean seed sales. Volumes in Argentina
conditions in Europe – declines due to weather
increased in the high single-digit range. However,
factors in North America
the continued devaluation of the Argentinean peso
The general economic conditions for corn varied
had a negative impact. Argentina was classified as a
greatly in the year under review: While there were
hyperinflationary economy in the year under review.
largely stable cultivation conditions and a slight
We therefore applied IAS 29 “Financial Reporting in
increase in cultivation area in the EU 28, an important
Hyperinflationary Economies” to KWS Argentina S.A.
region for KWS, our business in the U.S. suffered
for the first time in order to compensate for the effects
significant declines due to weather-related factors.
of inflation.
Long periods of rain during the sowing season,
especially in the Midwest, the most important
In North America – and in particular in the Midwest of
corn-growing region in the United States, meant
the U.S. – damp weather conditions during the sowing
that corn cultivation area fell sharply.
season meant that corn cultivation area fell sharply
and so resulted in significant declines in net sales at
In China, the outbreak of swine fever, the trade war
our 50:50 joint venture AgReliant. On the other hand,
with the U.S. and government subsidies for extended
there were positive exchange rate effects from the
crop rotation meant that soybean cultivation increased
increase in the US dollar’s value against the euro.
at the expense of corn. The business environment
AgReliant completed the renewal of its brand strategy
in South America was characterized by strong
in the year under review and has now established
competitive pressure and devaluation of currencies
three national brands. This new strategy is the basis
( especially in Argentina).
for our planned growth in the coming years.
The segment’s performance: Increase in
In Europe, our business was stable as a whole. Net
net sales and earnings
sales were very pleasing in Eastern and Southeastern
The Corn Segment grew its net sales by 0.7% to
Europe, whereas we suffered slight drops in net sales
€739.0 (734.2) million in the year under review. That
in Western and Northern Europe due to intensified
increase is mainly attributable to positive business
competition. We aim to keep on launching new hybrid
performance in South America. We significantly
varieties and so strengthen our market position in
expanded our business volume and won market
Europe. We see the greatest growth potential as being
share in Brazil following successful launch of our
in Eastern and Southeastern Europe.
high- performance hybrid corn varieties. We also grew
42 Combined Management Report | 2.3 Economic Report
Annual Report 2018/2019 | KWS Group
Corn
Our business in China was stable against the back-
drop of a challenging environment. While net sales at
our Chinese joint venture KENFENG rose, we posted a
fall in revenue from licensing business.
In addition, sorghum and catch crop seed business
was transferred to the Cereals Segment.
The segment’s income rose by 22% to €57.9 (47.4)
million. That was aided in particular by the sharp
improvement in operating business in South America.
Moreover, application of IAS 29 for Argentina contrib-
uted to the segment’s positive earnings performance.
Our earnings in Europe were stable in the year under
review, whereas falling sales volumes resulted in a
decline in North America. The EBIT margin rose from
6.5% to 7.8%.
Investments focus on South America
The segment’s capital spending was €27.2 (64.1) mil-
lion in the year under review. The focus was on
expanding production and processing plants in Brazil
and Argentina so as to establish sufficient capacities
for the anticipated rise in demand for seed in these
important markets. After the projects have been
completed in the current fiscal year, we will have
roughly doubled our processing capacities in the two
countries.
KWS Group | Annual Report 2018/2019 Sugarbeet Segment
Key figures
in € millions
Net sales
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2018/2019
2017/2018
461.2
179.6
38.9
34.9
300.0
59.9
455.1
160.5
35.3
16.8
282.0
56.9
+/–
1.3%
11.9%
–
107.7%
6.4%
–
in %
in %
Economic environment: Tougher cultivation
The segment’s performance: Slight increase
conditions along with still low sugar prices
in net sales, CONVISO® SMART very successful
The Sugarbeet Segment faced a tougher market
in Eastern Europe
environ ment in the year under review. Two years
We grew the Sugarbeet Segment’s operating busi-
after the end of the Sugar Market Regime, European
ness slightly in the year under review, mainly thanks
farmers and sugar companies were impacted by
to the successful launch of our SMART portfolio of
the continuing low level of sugar prices. As a con-
varieties and due to positive exchange rate effects.
sequence, individual sugar companies announced
Net sales were €461.2 million following €455.1 million
that they would review the profitability of their
the year before. While net sales in the EU declined
production sites and remove capacities from the
due to the difficult cultivation conditions, the fall in
market. Restrictions on the use of insecticides also
sugar prices and the removal of surplus capacities in
made cultivation conditions in the EU more difficult.
the sugar industry, net sales grew sharply in Eastern
Sugarbeet cultivation area in this important region
Europe (Ukraine, Belarus and Moldava) thanks to the
for us dropped overall by around 5%, although it
introduction of CONVISO® SMART. It has now been
rose slightly in North America by about 1%. There
launched in 17 countries and has generated net sales
were further increases in cultivation area in China
in the double-digit million range. In North America
and Egypt.
we benefited from a slight increase in cultivation area
and a stronger US dollar. Net sales in Turkey and the
Middle East were likewise up over the previous year,
despite the fact that the Turkish lira fell in value year
on year.
44 Combined Management Report | 2.3 Economic Report
Annual Report 2018/2019 | KWS Group
Sugarbeet
The launch of the CONVISO® SMART system and
related activities to establish it on the market contrib-
uted to the increase in selling expenses in the year
under review. We expanded our research & develop-
ment activities in line with our planning. In view of
the further restrictions on pesticides in the EU, we
believe in particular that the development of natural
resistances will grow in importance in the medium to
long term. Administrative expenses were at the level
of the previous year. The segment increased its EBIT
overall to €179.6 (160.5) million, mainly due to busi-
ness with CONVISO® SMART, a stronger US dollar
and a non-recurring effect (€11.0 million) from the
sale of shares in its potato business.
Continued investment in seed production
We continued our multi-year capital spending
projects as planned in the year under review. The
PIA ( Production Extension and Innovation Einbeck)
project, with which we are expanding our seed pro-
duction plant in Einbeck, is expected to be completed
by the end of 2020. The first section of the new pro-
duction plant (packaging/active substance application)
came into operation recently. Further investments
were made in expanding capacities in France and
Italy, as well as in developing biologicals, useful micro-
organisms that improve seed’s stress tolerance to
pests and abiotic factors such as drought.
KWS Group | Annual Report 2018/2019 Cereals Segment
Key figures
in € millions
Net sales
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2018/2019
2017/2018
170.8
23.0
13.5
7.0
133.0
17.3
151.1
18.4
12.2
7.0
127.8
14.4
+/–
13.0%
25.0%
–
0.0%
4.1%
–
in %
in %
Economic environment: Cereal commodity
contributed to growth in the year under review.
prices remain stable at a low level
Hybrid rye seed was still the main sales driver in the
The economic situation for European cereal farmers
Cereals Segment, contributing around 39%, followed
remained strained in the year under review. Predom-
by rapeseed, wheat and barley.
inantly low cereal commodity prices and dry weather
conditions in the sowing season posed big challenges
Our domestic net sales rose sharply by 23% in
for farmers in large parts of Europe. Increasing restric-
the year under review. Germany therefore remains
tions on the availability of seed treatment appli cations
the most important single market for our Cereals
in the EU and drought during the sowing season
Segment – we generated around 31% of our net
resulted in a sharp drop in rapeseed cultivation area.
cereal sales there, mainly from rye, barley, wheat
In contrast, there was a strong increase in the amount
and rapeseed seed. The main driver here was rye
of rye grown. The main reasons for that were better
seed business. We were able to increase our market
prices for rye than for wheat and rye’s acknow ledged
share to approximately 68% and so consolidate our
high yield stability in dry years.
position as market leader in Germany thanks to the
improved performance of our hybrid rye varieties.
The segment’s performance: Increase in
net sales and income
We again turned in a positive business performance
Net sales at the Cereals Segment rose by 13.0% to
in our other key markets – the UK, France, Poland
€170.8 (151.1) million. We increased our net sales
and Scandinavia – where we generated almost 43%
from rye seed by 24% thanks to the rise in cultiva-
of the segment’s net sales. Net sales in our strategic
tion area and higher market share. Revenue from
growth markets (Russia, Ukraine, Belarus and North
wheat seed and rapeseed remained stable in the
America) rose by around 32%. We posted sharp
year under review, while barley business increased
growth in particular in future markets for rye cultiva-
sharply. The organizational restructuring of busi-
tion in North America. The strategic growth markets
ness with seed for sorghum and catch crops (which
contributed 7.2% (6.1%) to total net sales in the year
was transferred from the Corn Segment) likewise
under review.
46 Combined Management Report | 2.3 Economic Report
Annual Report 2018/2019 | KWS Group
Cereals
The increase in net sales and an improved product
mix resulted in a higher gross profit at the segment.
Expenditure on distribution, Research & Develop-
ment and administration was likewise higher due to
expansion of our business activities. EBIT increased
by 25% to €23.0 (18.4) million, giving an EBIT margin
of 13.5% (12.2%).
Forward-looking investment continued
The segment’s capital spending in the year under
review was €7.0 (7.0) million. The main focus was on
expanding and modernizing breeding stations and
production plants. Investments to renew and replace
plant and equipment help ensure that we live up
to our high-quality standards in our breeding and
production processes. Another goal is to ensure we
provide sufficient capacities so that we can achieve
our strategic objectives.
KWS Group | Annual Report 2018/2019 Corporate
Corporate Segment
Key figures
in € millions
Net sales
EBIT
Capital expenditure
2018/2019
2017/2018
3.9
–97.1
32.1
4.2
–77.3
29.8
+/–
–7.1%
25.6%
7.7%
Net sales in the Corporate Segment in the fiscal
usually negative. The costs consolidated in this
year just ended totaled €3.9 (4.2) million. They
segment rose in the year under review, among
are mainly generated from our farms. Since all
other things due to the reorganization project
cross-segment costs for the KWS Group’s central
ONEGLOBE, costs for the change in legal form,
functions and basic research expenditure are
and higher IT expenditure. The segment’s income
charged to the Corporate Segment, its income is
was €–97.1 (–77.3) million.
48 Combined Management Report | 2.3 Economic Report
Annual Report 2018/2019 | KWS Group
2.4 Environmental Report
2.4.1 Product Innovations
by 1% to 2% per annum; however, as presented in
KWS has developed new varieties for a wide range
the chart below, our research & breeding activities
of agricultural crops for more than 160 years. Thanks
also aim to improve usability, resource efficiency, and
to our portfolio of sugarbeet, corn, various cereals,
resistance to various diseases and extreme environ-
sorghum, rapeseed, peas and catch crops, we can
mental influences. These crop-specific development
offer farmers a broad range of high-performance
objectives are agreed annually between Research,
varieties, both conventional and organic.
the respective breeding departments, Production
and Sales and submitted for the Executive Board and
We continuously work to further develop our varieties
Supervisory Board to decide on. The progress made
and thus enable greater yield with the same or fewer
over the past years is also examined and reported on
resources. Our strategic focus is to increase yield
regularly as part of that.
Focus of research apart from increasing yield
Improve usability
Biotic resilience
Resource efficiency
Abiotic resilience
Higher sugar content (sugarbeet)
Improved biogas production
Improved digestibility
Higher carbon dioxide fixation
Improved resistance
and tolerance
Crop rotation
Increased biodiversity
Less pesticide usage
Less fertilizer usage
Less water usage
Enhanced resistance to extreme
environmental conditions
Increased resource efficiency
One indicator of progress in breeding is marketing
fungus. We have also achieved further progress in
approvals for new varieties. For example, only vari-
the fields of biologicals and organic seed. An alterna-
eties that have what is termed a “value for cultivation
tive or complement to chemical means of seed treat-
and use” can be marketed in the EU. They must
ment, biologicals comprise microorganisms such
therefore differ significantly from already approved
as fungi and bacteria, but also various substances
varieties and offer a clear improvement in cultivation
that can be obtained from plants or microorganisms.
or further processing. We obtained 464 marketing
They have already been successfully incorporated in
approvals in the year under review.
coatings for sugarbeet and rapeseed seed. We are
One specific example is the approval of two
KWS also continuously works to further develop its
high-yielding winter rapeseed varieties in France.
organic seed, focusing on protecting the environ-
They are equipped with completely new resistance
ment and on the advantages of catch crops as part
to infection caused by Phoma and offer effective
of its activities in this segment.
planning to use them for corn and rye next season.
protection against new strains of this pathogenic
2.4 Environmental Report | Combined Management Report
49
KWS Group | Annual Report 2018/2019
2.4.2 Use of Genetic Resources
2.4.3 Plant and Process Safety
KWS runs a broad network of stations and trial fields
Running our locations and our operational processes
for seed breeding worldwide. We test our own or
have an impact on the environment. To minimize
externally procured genetic material for the respec-
that impact at all locations, we are committed
tive application areas there.
to using innovative processes and eco-friendly
Where external genetic material is used, the rights
technologies.
of the indigenous peoples from whose regions the
Core objectives of our global EHS (environment,
material originates must be respected. KWS is aware
health and safety) management activities are to
of its obligations in this regard and supports the
avoid negative environmental influences and ensure
various international frameworks. Of prime mention
resource-conserving operation of our locations,
in this regard is the international Convention on Bio-
health and occupational safety, and protection of
logical Diversity and the "International Treaty on
business assets.
Plant Genetic Resources for Food and Agriculture".
The latter is particularly relevant to regulating transfer
In general, a location at the individual KWS compa-
of genetic resources.
nies is run in compliance with the applicable local
statutory requirements. We defined fundamental
We have implemented a due diligence process
requirements relating to the three pillars of environ-
to ensure compliance with these regulations. All
mental protection, work safety, and emergency pre-
employees who work with genetic material are
paredness and risk prevention by introducing new
required to digitally register all materials used,
group-wide EHS guidelines in July 2019.
whereupon our Intellectual Property department
instigates an examination of where the genetic
Prime examples in relation to the subject area
material has come from. Colleagues from our Legal
of environmental protection are stipulations on
department also provide assistance in more complex
resource-conserving operation of our locations,
cases. If an examination should find that the origin of
the handling of environmentally harmful chemicals
the genetic material or the process by which it was
and waste, and the use of exhaust air filters.
obtained is unclear, we refrain from using it.
There was also such an instance in the year under
use of rainwater for sanitary facilities at selected
review. A routine examination of registered materials
German locations and optimization of the central
uncovered that the origins of one set of organisms
cooling plant at our location in Einbeck in the year
The measures already implemented include the
were not clear and that the necessary documentation
under review.
was incomplete. Further investigations revealed that
the costs of subsequently revising and updating
We also defined a new global EHS organizational
the documentation were greater than the potential
structure for the KWS Group in the period under
benefits of the organisms and so we decided to stop
review. To enable that, unit managers named con-
using them in our research. With the exception of this
tact persons at management level to act as multi-
examination, which led to the genetic material being
pliers at their units, support local introduction and
rejected, there were otherwise no further anomalies
achievement of the EHS requirements, and establish
in the due diligence processes.
and maintain appropriate EHS structures in all areas
of the company.
50 Combined Management Report | 2.4 Environmental Report
Annual Report 2018/2019 | KWS Group Greenhouses and climatic chambers not only need heat, but cold too. The recently completed new central cooling
plant in Einbeck ensures that energy is produced more efficiently and distributed better across the campus.
In the future, all relevant locations in the KWS Group
Further key aspects in plant and process safety are
are to undergo regular auditing so that the EHS
the responsible use of modern breeding methods
manage ment system and its stipulations can be
and the safe use of genetically modified organisms
continuously developed and improved.
in the production process. To document the fact that
we use genetically modified organisms responsibly
Alongside the global EHS management system,
throughout the lifecycle of our products, our entire
we are also focusing on the issue of environmental
group is still certified in accordance with the industry
protection in relation to certification of treatment
standard “Excellence Through Stewardship” (ETS). All
facilities in accordance with SeedGuard. Internal
the audits held, records and measures are adminis-
audits to review compliance with processes were
tered in a central database. The results are reported
successfully held at several certified locations in the
to the Executive Board as and when required.
year under review.
2.4 Environmental Report | Combined Management Report
51
KWS Group | Annual Report 2018/2019 Watching what you eat is
a good thing. And that
also goes for our animals.
All’s peaceful and quiet. Our hybrid rye varieties guarantee better satiation, which ensures animals
feel calmer and also have a balanced diet.
2.5 Employee and Social Report
Over six generations, our employees have made
2.5.1 Employment Trends
KWS what it is today: an innovative, world-leading
We employed an average of 5,543 (5,147) people world-
plant breeding company. That is due in great mea-
wide in the year under review, an increase of 7.7%.
sure to their skills, mindsets, ideas and their satis-
2,141 (1,952), or around 39% (38%) of the workforce,
faction. As a company with a tradition of family
were employed in Germany. While the headcount
ownership, we attach importance to a work culture
in Europe (excluding Germany) remained virtually
of respect, a high degree of personal initiative, and
unchanged, it rose noticeably in the North and
personal and professional development. Open-
South America regions and in the rest of the world.
ness, trust and team spirit define our culture.
Once again, the area that accounted for the most
employees was research and development: The
number of employees here increased and made up
37.0% of the total workforce.
KWS’ working environment is diverse. Our employees work in greenhouses, labs,
in the field or in the office – in more than 70 countries around the world.
2.5.2 Recruitment & Qualification
growth and our work to enhance our quality are
Employer branding: Projecting our employee
geared to the KWS Group’s strategic objectives.
brand outside the company
The status of recruiting measures and filling of new
As an international company that continues to
posts is reviewed regularly in consultation with the
grow, the KWS Group endeavors to win and keep
Executive Board and the first management level.
the employees best suited to it. Our quantitative
54 Combined Management Report | 2.5 Employee and Social Report
Annual Report 2018/2019 | KWS Group Employees by region1
Number of employees 5,543
Rest of world 4.3%
North and South America 31.2%
38.6% Germany
25.9% Europe (excluding Germany)
Employees by function
Number of employees 5,543
Administration 14.6%
Distribution 21.4%
37.0% Research & Development
27.0% Production
1 Average number of employees.
We continue to use digital and traditional channels
All the measures presented by way of example
to reach out to potential applicants. That enables
ultimately help KWS enhance its attractiveness as
us to address each target group specifically, for
an employer. In the annual independent rankings
example on social networks such as LinkedIn and
by the consulting firm Universum, KWS now comes
Facebook.
in 47th in the area of sciences in the list of the
100 most popular employers in Germany among
To strengthen our position in science, we have
students.
created the post of Global Lead of Scientific Affairs
at the Research & Development department so as
Qualification, further training and development
to enable direct dialogue with universities, students
KWS’ continuing commercial success is founded not
and graduates as peers.
only on its employees’ commitment, entrepreneurial
freedom and satisfaction, but also on their personal
We continue to award scholarships at universities
skills and professional qualifications. We support our
and offer talents without a university degree induction
employees with tailored education and further training
programs. As a result, we at the KWS Group again
measures to help them build on their expertise and
accompanied many young people success fully on their
abilities.
path to gaining vocational qualifications in the past
fiscal year. Our 92 trainees in Germany were employed
In regular development meetings, which are part of
in vocational training at KWS or enrolled in dual
the annual performance and career development
courses of study. In recog nition of our commitment
reviews, our employees formulate perspectives for
in this area, we were presented with the “2019 Lower
their further development together with their managers.
Saxony Award for Particularly Reliable Training” in the
They jointly define concrete continuing education
year under review.
and development measures aimed at enhancing their
personal skills and professional competence.
2.5 Employee and Social Report | Combined Management Report
55
KWS Group | Annual Report 2018/2019 Our range of education and development offerings
2.5.3 Good Working Conditions*
is diverse and supports various learning objectives.
As an international, innovation-oriented company, we
Language courses and intercultural training, as well
need qualified employees. Good working conditions
as knowledge transfer in various subject areas and
are a key foundation so that we continue to be seen
international development of (junior) executive staff,
as an attractive employer in the battle for the best
are gaining in importance.
employees.
We regularly hold “Orientation Centers” with partici-
Contracts and compensation
pants from various countries in the KWS Group. Skills
Every employee of the KWS Group has a written
and development options are identified and a personal
contract of employment that complies with labor and
development plan is created as part of such an analysis
social insurance legislation. The overall compensa-
for high potentials. In the International Development
tion package for KWS employees takes into account
Program, we offer talents from all departments the
their individual expertise and local market circum-
chance, among other things, to gain experience in an
stances. It consists of a basic salary, social benefits,
international team in project work and to develop their
performance-related payments (if applicable) and,
management and leadership skills. Each participant is
locally, Employee Stock Purchase Plans where staff
supported by an experienced internal mentor as part
can buy shares in the company. Equal pay for the
of that.
same activities is a principle of our compensation
Since we are particularly committed to having all
employees receive qualified leadership and support
Work-life balance
policy.
from their supervisors, we developed a competence
The lives our employees lead differ greatly and are
model defining the core competencies of managers
highly individual – and so they also have different
at KWS a number of years ago. In the second half
needs as regards work and the workplace. Our
of 2018, we also introduced “Leading Individuals,”
different working time models enable employees to
the first module of our newly designed manage-
strike a good life-work balance. Employees can also
ment development program, in which more than
work from home, if that can be reconciled with their
100 executives have taken part so far.
activity. We also offer part-time models. Employees
We intend to continue focusing on qualifying and
or reduce their working hours, with an adjustment
developing our employees and managers in the future
to their salary, if they would like to look after depen-
and will expand our training portfolio nationally and
dents who need caring for.
in Germany also have the opportunity to take leave
internationally.
Key figures for employees (in Germany)
Number of employees1
of which part-time employees
Ratio of men
Ratio of women
Number of apprentices
Apprentice ratio
Average age (in years)
Length of service (in years)
1 Average number of employees
* Not an audited part of the Combined Management Report
56 Combined Management Report | 2.5 Employee and Social Report
in %
in %
in %
2018/2019
2017/2018
2,141
1,952
440
53.3
46.7
92
4.3
41.0
12.9
443
52.7
47.3
93
4.8
39.1
13.8
+/–
9.7%
–0.7%
–
–
–1.1%
–
4.9%
–6.5%
Annual Report 2018/2019 | KWS Group Equal opportunity and diversity
KWS is committed to equal opportunities and rights
for its employees, regardless of gender, religion
or belief, ethnic origin, age, handicap, skin color,
language or sexual orientation. We have enshrined
that in our Code of Business Ethics, which is binding
on all employees. We believe that diversity of our
employees, as displayed in their individual attitudes,
knowledge, skills and ideas, is a key value and a
competitive advantage. It encourages creativity and
innovativeness and strengthens our understanding
of markets and different cultures by fostering inter-
cultural skills.
We aim to further increase the ratio of women in the
top two management levels at KWS. The targets for
that can be found in our declaration on corporate
governance, which is published on our website at
www.kws.com.
People who contribute their skills and knowledge, develop ideas and
pursue them passionately are what make KWS successful.
KWS’ international support includes our capacity
develop ment programs in Peru and Ethiopia. A sustain-
Employee representative bodies
able harvest in both countries depends in particular on
Employees’ interests are represented collectively
robust plant varieties that offer high resistance, as well
toward management by the elected Works Councils
as the know-how required to cultivate them efficiently.
and the persons entrusted with representing young
Many farmers there cannot afford fertilizer, pesti-
people and trainees. We also have a European
cides and the machinery they need. Despite intensive
Employees’ Committee (EEC), a body that
research, there are still not sufficient varieties adapted
represents the interests of European employees
to the demanding cultivation conditions there.
and is respon sible for cross-border matters within
the EU. The working relationship between the
The projects specifically aim to conserve domestic
employee representative bodies and management
plant genetic resources and breed high-performance
is close and based on trust. In regions where there
crop varieties that are adapted to local conditions so as
is no collective employee representative body, we
to give farmers there access to quality seed. The focus
attach importance to mutual respect and dialogue
is on corn and quinoa in Peru and on barley and wheat
between regional management and employees.
in Ethiopia. Our projects aim to help the local popu-
lation to help themselves. In cooperation with other
2.5.4 Social Commitment*
partners, KWS is training young scientists and plant
As an international, strongly innovation-driven com-
breeders in Peru and Ethiopia. The aim is for farmers
pany, the issues of education and science are partic-
there to be able to work efficiently and independently
ularly dear to our heart. Our focus in the area of social
using varieties adapted to local requirements.
commitment is therefore to promote young scientific
and artistic talents, school and university projects, and
In fiscal 2018/2019, we spent around €1.0 (1.1) million –
educational institutions. We also support social and
or approximately 0.7% of our operating income (EBIT) –
cultural initiatives at the regional level.
on social projects worldwide.
* Not an audited part of the Combined Management Report
2.5 Employee and Social Report | Combined Management Report
57
KWS Group | Annual Report 2018/2019 The best way to
keep an overview:
a drone
Going beyond the field boundaries – with our digital analysis tools for
Precision Farming: A drone and an app enable the system to pinpoint where
crops are ready to be harvested. After all, ideal visibility means an ideal yield.
2.6 Corporate Governance
2.6.1 Corporate Governance Report and
2.6.3 Business Ethics and Compliance
Declaration on Corporate Governance*
The basis of our compliance concept is the
Responsible corporate governance has always been
implementation of our corporate culture: KWS’
of great importance at KWS SAAT SE & Co. KGaA.
values are practiced when the compliance rules are
Since it was founded more than 160 years ago, our
applied. Compliance with basic principles of busi-
company’s successful development has been based
ness ethics is vital to our license to operate. Accord-
on thinking in the long term and acting in terms of
ingly, the compliance rules apply to all employees in
sustainability. The Executive Board (or, since the
the KWS Group.
company’s change in legal form after the end of
the year under review, the personally liable partner
That is the foundation for KWS’ compliance
KWS SE, whose Executive Board is since responsible
objectives, namely to gain and retain customers’
for management of the company’s business) and the
trust through ethical conduct and to protect the
Supervisory Board run and accompany KWS with the
company’s employees, reputation and assets.
goal of ensuring it creates sustainable value added.
They once again examined in the year under review
Information, training and continuous intensive con-
whether the company complies with the stipulations
sulting help integrate compliance in business pro-
of the German Corporate Governance Code and issue
cesses and enable management to make business
the following declaration of compliance to the effect
decisions rooted in our corporate culture.
that the company complies almost fully with the
code’s recommendations.
Our Code of Business Ethics gives our employees
crucial guidance in their day-to-day work and con-
You can find detailed information on corporate
tains stipulations on compliance with the law, fair
governance, also with the contents in accordance with
competition, prevention of corruption, safety at work,
Clause 3.10 of the German Corporate Governance
protection of the environment, and the need to treat
Code, in our Corporate Governance Report (which
each other, customers, business partners, other
is also the declaration on corporate gover nance in
third parties and public authorities with respect. All
accordance with Section 289f of the German Com-
employees must undertake to comply with the code.
mercial Code (HGB)), which is available in full on our
website at www.kws.com. You can find the Com-
Our Code of Business Ethics also covers the issue
pensation Report starting on page 62 of this Annual
of international anti-corruption management as
Report.
an integral part of our compliance management
work. On the basis of the regulations in the code,
2.6.2 Compliance Declaration in
there is a policy of zero tolerance toward any form
Accordance with Section 161 AktG
of corruption at the KWS Group and that principle
(German Stock Corporation Act)*
is stipulated as a group-wide standard in the Anti-
The compliance declaration in accordance with
Corruption Policy. This standard applies regardless
section 161 AktG (German Stock Corporation Act)
of whether bribery is prohibited by law, tolerated or
in its recent version can be found under
permitted in the country in question. The group-wide
www.kws.com/corp/en/company/investor-relations/
Anti- Corruption Policy defines the responsibilities,
declaration-of-compliance/.
processes and regulations in relation to preventing
corruption and bribery at the KWS Group.
* Not an audited part of the Combined Management Report
60 Combined Management Report | 2.6 Corporate Governance
Annual Report 2018/2019 | KWS Group
Clear structures create room for success: High standards of corporate governance, compliance and
business ethics are firmly entrenched in KWS’ corporate culture.
The Compliance department is the central point of
Implementation of individual compliance aspects is
contact for questions on our Code of Business Ethics
reviewed as part of audits. The Compliance depart-
and other related issues. It advises all divisions of the
ment also conducts regular compliance risk analyses
KWS Group in complying with laws, regulations and
for all units and regions and derives measures
internal rules of conduct and controlling their obser-
for improve ment from the results. No incidents of
vance. The focus is on the subjects of antitrust law,
corruption were reported to head quarters in fiscal
anti-corruption, data protection and capital market law.
2018/2019. No violations of anti trust and data protec-
tion legislation and thus no related fines were reported
The Chief Compliance Officer regularly provides
to headquarters, either.
information about the compliance system and its
principles, as well as about the latest issues and
If an examination or report reveals indications of
develop ments, in training courses, information events
suspected violations, the investigation is conducted
and workshops. Apart from this information, a broad
in accordance with KWS’ regulations “Procedures
range of aids is also available to our employees.
of Internal Compliance Notification.” Our employees
Checklists, instructional leaflets and other guides
are obligated to report suspected violations; the open
provide practical tips on observing compliance rules
door principle applies to that. Employees can supply
in everyday work. All information and rules of conduct
information on them to their supervisor, to the Chief
can be accessed by employees worldwide in the
Compliance Officer or to the external compliance hot-
Compliance Portal on KWS’ intranet. In addition, all
line. The hotline can be contacted, including by e-mail,
supervisors are obliged to inform their employees
free of charge around the clock and in the language
about compliance issues.
of the country in question. Reports of suspected
violations are treated anonymously if requested. The
reported cases are investigated by KWS. Whistle-
blowers do not suffer any disadvantages, unless they
2.6 Corporate Governance | Combined Management Report
61
KWS Group | Annual Report 2018/2019 have obviously abused their right to report violations.
2.6.4 Compensation Report
After the investigation has been completed, the
The compensation report contains explanations
whistle blowers are informed of the results, as long
regarding the salient features, structure and
as there are no legal reasons or legitimate interests
level of the compensation paid to members of
against doing so or other disadvantages are to be
the Executive Board and the Supervisory Board
feared.
of the former KWS SAAT SE. It is based on the
relevant statutory provisions and oriented toward
If suspected cases prove to be violations, the system of
the pertinent recommen dations of the German
sanctions is applied. In general, it can be applied to all
Corporate Governance Code.
types of compliance violations and is also accessible
to employees. The system of sanctions defines various
Compensation for members of the
criteria governing the measures to be taken, such as
Executive Board
the gravity of the violations, the degree of the person’s
The compensation system for the Executive Board
breach of duty, the functional level, behavior after the
was set by the Supervisory Board in 2010 and
violation – help in investigating it or attempts to cover
approved by the Annual Shareholders’ Meeting.
it up – as well as consequences of the violation, such
The Executive Board’s compensation is based on
as the threat of damage or actually incurred damage,
the size and activity of the company, its economic
among other things. The sanctions consequently range
and financial situation and the level and structure
from cautions, warnings and reductions in bonuses to
of compensation for managing board members at
immediate dismissal and filing of charges.
comparable companies.
The Executive Board and the Supervisory Board’s
The total compensation of the Executive Board
Audit Committee are informed once a year about
comprises the following components:
the current status and latest developments of the
Compliance Management System.
A basic fixed annual salary
(if applicable with a CEO bonus)
In addition to our internal compliance regulations,
Fringe benefits
we also want to involve our suppliers in ensuring
A variable payment in the form of a
they adopt and practice our business ethics. KWS
performance-related bonus
also expects its suppliers, service providers, their
A variable payment in the form of a long-term
employees and subcontractors (jointly termed
incentive (LTI) based on the KWS stock price
“ suppliers”) to act ethically, responsibility and in a
Any special payments and
spirit of sustainability. The conduct expected of our
Pension arrangements
suppliers is specified in our Code of Business Ethics
for Suppliers; one particularly important criterion
The performance-related bonus (including fringe
is that they respect human rights as fundamental
benefits), the LTI payment and the total compensation
and universal. The code specifies, for example, that
of every member of the Executive Board is limited
our suppliers must not permit forced labor or child
individually to a maximum amount.
labor and must comply with the regulations on the
minimum age for admission to employment defined
The basic annual salary in the year under review for
in the latest version of ILO Convention No. 138. The
the Executive Board members Dr. Hagen Duenbostel,
code contains provisions on safety at work, product
Dr. Léon Broers, Dr. Peter Hofmann, and Eva Kienle
safety, protection of the environment and avoidance
was €300 thousand. Dr. Felix Büchting (since
of corruption, as well as on the requirement to ensure
January 1, 2019) received a partial basic salary of
fair competition and protection of personal data and
€125 thousand in the year under review. The Chief
third-party know-how.
Executive Officer receives an extra “CEO bonus”
of 25% on top of the basic annual salary. The basic
compensation is paid as a monthly salary.
62 Combined Management Report | 2.6 Corporate Governance
Annual Report 2018/2019 | KWS Group
Apart from these fixed salaries, there is also
performance-related bonus payment in shares
non-monetary compensation in the form of fringe
of KWS SAAT SE & Co. KGaA. In addition to the
benefits (such as a company car and a mobile
shares that are no longer locked in, the Executive
phone), contributions to health and nursing care
Board receives the long-term incentive (LTI) in the
insurance, and accident insurance in favor of
form of cash compensation after a holding period of
members of the Executive Board.
five years. This payment is calculated on the basis
of the share’s performance over the holding period
The variable payment for Executive Board mem-
and on the average return on sales (ROS, based
bers (performance-related bonus) is calculated on
on segment reporting), measured as the ratio of
the basis of a fixed percentage and depends on the
operating income to net sales.
average net income of the KWS Group for the past
three years (“sustained net income”). The object of
The LTI payment is limited to a maximum
that is for the compensation to reflect the company’s
of one-and-a-half times (two times for
performance, positive or negative. Additional pay-
Dr. Hagen Duenbostel) of the capital used to
ments for any duties performed in subsidiaries
acquire the shares.
and associated companies are offset against the
variable payment (performance-related bonus).
Additional special payments were not granted to the
This – including the fringe benefits – is limited to an
members of the Executive Board in the fiscal year.
amount of €500 thousand for each Executive Board
member per fiscal year. If sustainable consolidated
Pension obligations are granted in the form of a
net incomes of more than €100 million in each
direct obligation to provide benefits, with the annual
year are generated in two successive years, the
anticipated pensions ranging between €13 thousand
upper limit for the bonus is increased to €600 thou-
and €130 thousand, and a defined contribution
sand for each Executive Board member as of the
plan. In fiscal 2018/2019, €342 (306) thousand was
following fiscal year.
paid to a provident fund backed by a guarantee for
pension commitments to members of the Executive
Since fiscal year 2010/2011, there has also been
Board. A further €275 (111) thousand was allocated
a stock-based bonus system (the first reference
to the pension provisions in accordance with IAS 19
point for which was in January 2012). It is intended
(of which €21 thousand was interest expenses and
to act as a long-term incentive and thus support
€254 thousand from revaluation effects due to adjusted
the company’s sustainable development. Every
Heubeck mortality tables). There were thus pension
member of the Executive Board is obligated to
provisions totaling €1,566 (1,291) thousand for the
invest a freely selectable amount ranging between
members of the Executive Board of KWS SAAT SE (in
at least 20% and at most 50% of the gross
future: of KWS SAAT SE & Co. KGaA).
Pension commitments
in €
Dr. Hagen Duenbostel
Dr. Peter Hofmann
Total
06/30/2019
06/30/2018
Interest
expenses
Revaluation
effects
1,157,263.00
938,928.00
15,492.00
202,843.00
408,776.00
352,134.00
5,810.00
50,832.00
1,566,039.00 1,291,062.00
21,302.00
253,675.00
2.6 Corporate Governance | Combined Management Report
63
KWS Group | Annual Report 2018/2019 The total compensation to be reported for the
the basic annual salary, including fringe benefits,
Executive Board in accordance with Section 314 (1)
47.1% (47.3%) by annual variable components and
No. 6a of the German Commercial Code (HGB) in
15.7% (18.5%) by multi-year variable components.
conjunction with German Accounting Standard
The tables below provide an overview of the to-
No. 17 (DRS 17) was €4,316 (4,016) thousand in fis-
tal compensation granted in the fiscal year on an
cal 2018/2019. 35.2% (34.3%) was accounted for by
individualized basis (excluding pension costs):
Total compensation for the Executive Board 2018/2019
in €
Cash compensation
LTI FV 1
Total
LTI
Basic
compensation
Fringe
benefits
Performance-
related bonus
Total
Grant
Cost
Dr. Hagen Duenbostel
375,000.00
23,303.72
476,696.28
875,000.00 226,736.74 1,101,736.74 250,522.81
Dr. Léon Broers
300,000.00
25,719.43
474,280.57
800,000.00 225,966.40 1,025,966.40 244,459.95
Dr. Felix Büchting
(since 01/01/2019)
125,000.04
12,113.77
137,886.23
275,000.04
0.00
275,000.04
0.00
Dr. Peter Hofmann
300,000.00
25,804.65
474,195.35
800,000.00 158,176.48
958,176.48
82,668.83
Eva Kienle
Total
300,000.00
31,234.81
468,765.19
800,000.00 155,608.68
955,608.68 100,860.20
1,400,000.04 118,176.38 2,031,823.62 3,550,000.04 766,488.30 4,316,488.34 678,511.79
Total compensation for the Executive Board 2017/2018
in €
Cash compensation
LTI FV 1
Total
LTI
Basic
compensation
Fringe
benefits
Performance-
related bonus
Total
Grant
Cost
Dr. Hagen Duenbostel
375,000.00
21,686.48
478,313.52
875,000.00 214,116.10 1,089,116.10 231,635.44
Dr. Léon Broers
300,000.00
23,724.44
476,275.56
800,000.00 214,116.10 1,014,116.10 217,245.89
Dr. Peter Hofmann
300,000.00
23,792.93
476,207.07
800,000.00 162,741.00
962,741.00
44,122.41
Eva Kienle
Total
1 Long-Term-Incentive Fair Value.
300,000.00
31,282.37
468,717.63
800,000.00 149,977.00
949,977.00
60,986.87
1,275,000.00 100,486.22 1,899,513.78 3,275,000.00 740,950.20 4,015,950.20 553,990.61
Compensation of former members of the Executive
The target compensation, including the agreed
Board and their surviving dependents amounted to
lower and upper limits, is shown under “Grant.” The
€1,479 (1,575) thousand. Pension commitments in
LTI grants are assessed at the present value at the
accordance with IAS 19 (2011) recognized for this
time of acquisition of the last tranche of shares. The
group of persons amounted to €6,674 (7,315) thou-
details on the receipts show the same figures as
sand as of June 30, 2019. The pension commit-
under “Grant” for the fixed compensation and fringe
ments for three former members of the Executive
benefits. The receipt for fiscal years 2018/2019 and
Board are backed by a guarantee. No loans were
2017/2018 (amounts paid) is stated for the one-year
granted to members of the Executive Board and the
variable payment (performance-related bonus), as
Supervisory Board in the year under review.
is the amount for the multi-year variable payments
In the following tables, we present the individual
review. In turn, the benefit expense is presented in
grants and receipts separately for each member of
accordance with IAS 19 and does not constitute a
the Executive Board, as incurred in the year under
receipt in the narrower sense, but serves to illus-
review and in the previous year in accordance with
trate the overall compensation.
(LTI), whose planned term ends in the year under
the recommendations in Clause 4.2.5 (3) of the
German Corporate Governance Code (DCGK) in the
version dated February 7, 2017.
64 Combined Management Report | 2.6 Corporate Governance
Annual Report 2018/2019 | KWS Group Executive Board compensation in keeping with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Grant
Receipt
2018/2019
2017/2018
2018/2019
2017/2018
Min.
Max.
Dr. Hagen Duenbostel (Chief Executive Officer)
Fixed payment
Fringe benefits
Subtotal
375,000.00
375,000.00
375,000.00
375,000.00
375,000.00
375,000.00
23,303.72
23,303.72
23,303.72
21,686.48
23,303.72
21,686.48
398,303.72
398,303.72
398,303.72
396,686.48
398,303.72
396,686.48
Performance-related bonus
476,696.28
0.00
476,696.28
470,827.23
476,696.28
478,313.52
Total cash compensation
875,000.00
398,303.72
875,000.00
867,513.71
875,000.00
875,000.00
Multiyear variable payment
LTI 2011/2012
LTI 2012/2013
LTI 2016/2017
LTI 2017/2018
Subtotal
Pension costs1
297,479.52
240,018.58
214,116.10
226,736.74
0.00
477,806.31
1,101,736.74
398,303.72 1,352,806.31 1,081,629.81 1,115,018.58 1,172,479.52
105,492.00
105,492.00
105,492.00
106,190.00
105,492.00
106,190.00
Total compensation
1,207,228.74
503,795.72 1,458,298.31 1,187,819.81 1,220,510.58 1,278,669.52
Maximum compensation2
1,765,000.00
Executive Board compensation in keeping with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Dr. Léon Broers
Fixed payment
Fringe benefits
Subtotal
Grant
Receipt
2018/2019
2017/2018
2018/2019
2017/2018
Min.
Max.
300,000.00
300,000.00
300,000.00
300,000.00
300,000.00
300,000.00
25,719.43
25,719.43
25,719.43
23,724.44
25,719.43
23,724.44
325,719.43
325,719.43
325,719.43
323,724.44
325,719.43
323,724.44
Performance-related bonus
474,280.57
0.00
474,280.57
470,827.83
474,280.57
476,275.56
Total cash compensation
800,000.00
325,719.43
800,000.00
794,552.27
800,000.00
800,000.00
Multiyear variable payment
LTI 2011/2012
LTI 2012/2013
LTI 2016/2017
LTI 2017/2018
Subtotal
Pension costs1
229,805.09
238,837.67
214,116.10
225,966.40
0.00
357,137.22
1,025,966.40
325,719.43 1,157,137.22 1,008,668.37 1,038,837.67 1,029,805.09
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
Total compensation
1,097,966.40
397,719.43 1,229,137.22 1,080,668.37 1,110,837.67 1,101,805.09
Maximum compensation2
1,547,000.00
1 In accordance with IAS 19R from commitments for pensions and other pension benefits; this relates to costs for the company, not the actual entitlement or payment.
2 The total compensation is limited individually to a maximum overall amount per fiscal year.
2.6 Corporate Governance | Combined Management Report
65
KWS Group | Annual Report 2018/2019 Executive Board compensation in keeping with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Grant
Receipt
2018/2019
2017/2018
2018/2019
2017/2018
Min.
Max.
Dr. Felix Büchting (since 01/01/2019)
Fixed payment
Fringe benefits
Subtotal
125,000.04
125,000.04
125,000.04
12,113.77
12,113.77
12,113.77
137,113.81
137,113.81
137,113.81
Performance-related bonus
137,886.23
0.00
137,886.23
Total cash compensation
275,000.04
137,113.81
275,000.04
Multiyear variable payment
LTI 2011/2012
LTI 2012/2013
LTI 2016/2017
LTI 2017/2018
Subtotal
Pension costs1
0.00
0.00
0.00
275,000.04
137,113.81
275,000.04
36,000.00
36,000.00
36,000.00
Total compensation
311,000.04
173,113.81
311,000.04
Maximum compensation2
423,500.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
125,000.04
12,113.77
137,113.81
137,886.23
275,000.04
0.00
275,000.04
36,000.00
311,000.04
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Executive Board compensation in keeping with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Dr. Peter Hofmann
Fixed payment
Fringe benefits
Subtotal
Grant
Receipt
2018/2019
2017/2018
2018/2019
2017/2018
Min.
Max.
300,000.00
300,000.00
300,000.00
300,000.00
300,000.00
300,000.00
25,804.65
25,804.65
25,804.65
23,792.93
25,804.65
23,792.93
325,804.65
325,804.65
325,804.65
323,792.93
325,804.65
323,792.93
Performance-related bonus
474,195.35
0.00
474,195.35
470,827.83
474,195.35
476,207.07
Total cash compensation
800,000.00
325,804.65
800,000.00
794,620.76
800,000.00
800,000.00
Multiyear variable payment
LTI 2011/2012
LTI 2012/2013
LTI 2016/2017
LTI 2017/2018
Subtotal
Pension costs1
0.00
0.00
158,176.48
0.00
249,996.05
162,741.00
958,176.48
325,804.65 1,049,996.05
957,361.76
800,000.00
800,000.00
77,810.00
77,810.00
77,810.00
78,224.00
77,810.00
78,224.00
Total compensation
1,035,986.48
403,614.65 1,127,806.05 1,035,585.76
877,810.00
878,224.00
Maximum compensation2
1,247,000.00
1 In accordance with IAS 19R from commitments for pensions and other pension benefits; this relates to costs for the company, not the actual entitlement or payment.
2 The total compensation is limited individually to a maximum overall amount per fiscal year.
66 Combined Management Report | 2.6 Corporate Governance
Annual Report 2018/2019 | KWS Group Executive Board compensation in keeping with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Eva Kienle
Fixed payment
Fringe benefits
Subtotal
Grant
Receipt
2018/2019
2017/2018
2018/2019
2017/2018
Min.
Max.
300,000.00
300,000.00
300,000.00
300,000.00
300,000.00
300,000.00
31,234.81
31,234.81
31,234.81
31,282.37
31,234.81
31,282.37
331,234.81
331,234.81
331,234.81
331,282.37
331,234.81
331,282.37
Performance-related bonus
468,765.19
0.00
468,765.19
468,717.63
468,765.19
468,717.63
Total cash compensation
800,000.00
331,234.81
800,000.00
800,000.00
800,000.00
800,000.00
Multiyear variable payment
LTI 2011/2012
LTI 2012/2013
LTI 2016/2017
LTI 2017/2018
Subtotal
Pension costs1
0.00
0.00
155,608.68
0.00
245,937.68
149,977.00
955,608.68
331,234.81 1,045,937.68
949,977.00
800,000.00
800,000.00
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
Total compensation
1,027,608.68
403,234.81 1,117,937.68 1,021,977.00
872,000.00
872,000.00
Maximum compensation2
1,247,000.00
1 In accordance with IAS 19R from commitments for pensions and other pension benefits; this relates to costs for the company, not the actual entitlement or payment.
2 The total compensation is limited individually to a maximum overall amount per fiscal year.
Total compensation for the Supervisory Board
in €
Dr. Andreas J. Büchting1
Dr. Marie Theres Schnell2
Hubertus von Baumbach3
Victor W. Balli4
Jürgen Bolduan
Cathrina Claas-Mühlhäuser
Christine Coenen5
Dr. Berthold Niehoff6
Fixed
180,000.00
90,000.00
0.00
60,000.00
60,000.00
60,000.00
60,000.00
0.00
Work on
committees
0.00
20,000.00
0.00
60,000.00
20,000.00
10,000.00
0.00
0.00
Total
2018/2019
180,000.00
110,000.00
0.00
120,000.00
80,000.00
70,000.00
60,000.00
0.00
Total
2017/2018
180,000.00
85,000.00
75,000.00
60,000.00
80,000.00
70,000.00
30,000.00
30,000.00
510,000.00
110,000.00
620,000.00
610,000.00
1 Chairman.
2 Deputy Chairwoman since 12/14/2017.
3 Deputy Chairman and Chairman of the Audit Committee until 12/14/2017.
4 Chairman of the Audit Committee since 12/14/2017.
5 Since 12/14/2017.
6 Until 12/14/2017.
2.6 Corporate Governance | Combined Management Report
67
KWS Group | Annual Report 2018/2019
Compensation for members of the
2.6.5 Explanatory Report of the Personally Liable
Supervisory Board
Partner (KWS SE) of KWS SAAT SE & Co. KGaA in
The compensation is based on the size of the
Accordance with Section 176 (1) Sentence 1 AktG
company and the duties and responsibilities of the
(German Stock Corporation Act) on the Disclo-
members of the Supervisory Board. The company
sures in Accordance with Section 289a (1) and
believes that the fixed compensation structure,
Section 315a (1) HGB (German Commercial Code)
which is therefore no longer linked to the company’s
business performance, means that the Supervisory
The change in KWS SAAT SE’s legal form to that of
Board can better exercise its control function. The
a partnership limited by shares (KWS SAAT SE &
compensation system for the Supervisory Board
Co. KGaA) took effect upon its entry in the commer-
complies with the recommendations of the German
cial register on July 2, 2019. The company therefore
Corporate Governance Code.
still had the legal form of a European Company
The members of the Supervisory Board receive a
in fiscal 2018/2019. The personally liable partner of
fixed annual payment of €60,000 for their work. The
KWS SAAT SE & Co. KGaA provides the following
Chairperson receives three times and the Deputy
explanation on the disclosures in accordance with
Chairperson one-and-a-half times said amount.
Section 289a (1) and Section 315a (1) HGB (German
(SE) and operated under the name KWS SAAT SE
Members of the Supervisory Board receive separate
Commercial Code):
payment for their work on committees; the Chair-
person of the Supervisory Board does not receive
Composition of the subscribed capital
additional compensation for his or her work on com-
At the end of the fiscal year on June 30, 2019, the
mittees. Members of the Supervisory Board who
subscribed capital of KWS SAAT SE (as the com-
are members of a committee receive an additional
pany was then named) was €99,000,000.00 and
payment of €10,000 therefor. The Chairperson of
was divided into 33,000,000 bearer shares. The change
a committee receives two times said amount. The
in the company’s legal form to that of a partner-
additional compensation for members of the Audit
ship limited by shares (KWS SAAT SE & Co. KGaA)
Committee is € 20,000. The Chairperson of the Audit
took effect upon its entry in the commercial
Committee receives three times said amount. Addi-
register on July 2, 2019. Pursuant to the resolution
tional compensation is owed only for participation
adopted by the Annual Shareholders’ Meeting of
in one committee, namely at the amount that is the
KWS SAAT SE, the shareholders received one
highest to which the member in question is entitled
share in KWS SAAT SE & Co. KGaA for each
for his or her work on a committee. If a person is a
share they held in KWS SAAT SE. The company’s
member of the Supervisory Board or a committee
capital stock remained unchanged, so the sub-
or holds the office of Chairperson or Deputy Chair-
scribed capital of KWS SAAT SE & Co. KGaA is still
person of the Supervisory Board or Chairperson of a
€99,000,000.00. It is divided into 33,000,000 bearer
committee for only part of the fiscal year or if a fiscal
shares. Each share grants the holder the right to
year is shorter than the calendar year, the payment is
cast one vote at the Annual Shareholders’ Meeting.
granted only on a pro rata temporis basis. Members
The rights of share holders are governed by the
of the Supervisory Board also receive reimbursement
German Stock Corporation Act (AktG) and the
of their expenses incurred in connection with exer-
Articles of Association.
cise of their office and the value-added tax due on
their payment and on their expenses.
Total compensation was €620 (610) thousand exclu-
sive of value-added tax.
68 Combined Management Report | 2.6 Corporate Governance
Annual Report 2018/2019 | KWS Group Restrictions relating to voting rights or the
of shares. If there are no restrictions to voting rights,
transfer of shares
all shareholders who register for the Annual Share-
There may be restrictions relating to voting rights or
holders’ Meeting in time and have submitted proof of
the transfer of shares as a result of statutory or con-
their authorization to participate in the Annual Share-
tractual provisions. For example, shareholders are
holders’ Meeting and exercise their voting rights are
barred from voting under certain conditions pursuant
authorized to exercise the voting rights conferred by
to Section 136 of the German Stock Corporation Act
all the shares they hold and have registered. If mem-
(AktG) or Section 44 of the German Securities Trading
bers of the Executive Board of the personally liable
Act (WpHG); the bars on voting pursuant to Section 285
partner or executive employees of the company have
of the German Stock Corporation Act (AktG) must
acquired shares as part of the long-term incentive
also be observed for personally liable partners at a
programs, these shares are subject to a lock-up period
partnership limited by shares (KGaA). In addition, no
until the end of the fifth year after the end of the quarter
voting rights accrue to the company on the basis of
in which they were acquired. The lock-up period for
the shares it holds (Section 71b AktG).
shares that employees have acquired as part of the
The personally liable partner is not aware of any con-
of the fourth year as of when they are posted to the
tractual restrictions relating to voting rights or transfer
employee’s securities account.
Employee Stock Purchase Plans runs until the end
Thinking long term bears fruit: Our stable ownership structure gives us
the freedom to act largely independently of short-term interests.
2.6 Corporate Governance | Combined Management Report
69
KWS Group | Annual Report 2018/2019 Direct and indirect participating interests in
The voting shares, including mutual allocations, of
excess of 10% of the voting rights
the members, companies and foundations of the
The company has been informed by shareholders of
families Büchting and Arend Oetker listed above
the following direct or indirect participating interests
exceed 10% and total 55.3% for:
in the capital of KWS SAAT SE & Co. KGaA in
excess of 10% of the voting rights in accordance
Dr. Arend Oetker, Germany
with Section 33 and Section 34 of the German
Securities Trading Act (WpHG) or elsewhere.
The voting shares, including mutual allocations, of the
shareholders stated below each exceed 10% and total
The voting shares, including mutual allocations,
15.4%.
of the members and companies of the families
Büchting and Arend Oetker listed below each
Hans-Joachim Tessner, Germany
exceed 10% and total 54.4%:
Tessner Beteiligungs GmbH, Goslar
Tessner Holding KG, Goslar
Dr. Drs. h. c. Andreas J. Büchting, Germany
Christiane Stratmann, Germany
Dorothea Schuppert, Germany
Shares with special rights and voting control
Shares with special rights that grant powers of control
Michael C.-E. Büchting, Germany
have not been issued by the company. There is no
Annette Büchting, Germany
Stephan O. Büchting, Germany
Christa Nagel, Germany
special type of voting control for the participating
interests of employees. Employees who have an
interest in the company’s capital exercise their control
Matthias Sohnemann, Germany
rights in the same way as other shareholders.
Malte Sohnemann, Germany
Arne Sohnemann, Germany
AKB Stiftung, Hanover
Appointment and removal of management
The personally liable partner, KWS SE, is responsible
Büchting Beteiligungsgesellschaft mbH, Hanover
for managing the business of KWS SAAT SE &
Zukunftsstiftung Jugend, Umwelt und Kultur,
Co. KGaA under Section 7.2 of the Articles of
Einbeck
Association of KWS SAAT SE & Co. KGaA. In
RETOKE Holding Vermögensverwaltungs-
accordance with Section 6 (3) of the Articles of
gesellschaft mbH & Co. KG, Bad Schwartau
Association of KWS SAAT SE & Co. KGaA, the
Dr. Marie Th. Schnell, Germany
Johanna Sophie Oetker, Germany
personally liable partner shall leave the Company
Leopold Heinrich Oetker, Germany
if the majority of shares in the personally liable
Clara Christina Oetker, Germany
Ludwig August Oetker, Germany
partner can no longer be held directly and/or
indirectly for a time longer than 30 calendar days
by persons who hold a combined total of more
than 15% of the Company’s capital stock directly
or indirectly through a company that is dependent
in accordance with Section 17 (1) of the German
Stock Corporation Act (AktG) or is controlled in
accordance with Section 290 (2) of the German
Commercial Code (HGB). This shall not apply if all
shares in the personally liable partner are held by
the Company; or
70 Combined Management Report | 2.6 Corporate Governance
Annual Report 2018/2019 | KWS Group if a person who is not a family shareholder
Section 18 of the Articles of Association of
( acquiring party) obtains control over the personally
KWS SAAT SE & Co. KGaA stipulates that, unless
liable partner directly or indirectly (acquisition of
obligatory statutory regulations or the Articles of
control) and does not submit to the Company’s
Association otherwise compel, resolutions by the
limited partners a takeover or mandatory offer in
Annual Shareholders’ Meeting must be adopted by
accordance with this provision and otherwise in
a simple majority of the votes cast and, if the law
accordance with the provisions in the German
also stipulates a majority of the capital in addition to
Securities Acquisition and Takeover Act (WpÜG)
the majority of votes (as in the case of amendment
within three months of acquisition of control.
of the Articles of Association in accordance with
Section 179 (2) of the German Stock Corporation Act
Under Section 6.5 of the Articles of Association of
(AktG)), with the simple majority of the capital stock
KWS SAAT SE & Co. KGaA, the personally liable
represented in adoption of the resolution. The power
partner shall also leave the Company by means of
to make amendments to the Articles of Association
termination. Notice of termination shall be given to
that only affect the wording (Section 179 (1)
all the limited partners at the Annual Shareholders’
Sentence 2 AktG) has been conferred on the Super-
Meeting. Outside of the Annual Shareholders’
visory Board in accordance with Section 22 of the
Meeting, notice of termination shall be given to the
Articles of Association of KWS SAAT SE & Co. KGaA.
Chairperson of the Supervisory Board or his or her
deputy. The notice of termination shall be at least
Powers of the Executive Board, in particular
six months before the end of and effective the end of
in relation to issuing or buying back shares
a fiscal year.
The Executive Board of the personally liable partner
is not currently authorized to issue or buy back
The other statutory grounds for the personally liable
shares.
partner leaving the Company shall remain unaffected.
Significant agreements in the event of a change
The members of the Executive Board of the personally
of control, compensation agreements
liable partner, which is responsible for managing the
Significant agreements subject to the condition of
company’s business, are appointed and removed by
a change in control pursuant to a takeover bid have
the Supervisory Board of the personally liable partner,
not been concluded. The compensation agreements
KWS SE. Pursuant to Section 6 of the Articles of
between the company and members of the Executive
Association of KWS SE, members of the Executive
Board of the personally liable partner and governing
Board are appointed for a maximum period of
the case of a change in control stipulate that any
six years. Members may be reappointed.
such compensation will be limited to the applicable
maximum amounts specified by the German Corpo-
Amendments to the Articles of Association
rate Governance Code.
Amendments to the company’s Articles of
Association are made in accordance with Section
278 (3) and Section 179 in conjunction with Section
133 of the German Stock Corporation Act (AktG)
and in accordance with Section 18 of the Articles of
Association of KWS SAAT SE & Co. KGaA. Section
285 (2) Sentence 1 of the German Stock Corporation
Act (AktG) stipulates that amendments to the Articles
of Association require the approval of the personally
liable partner.
2.6 Corporate Governance | Combined Management Report
71
KWS Group | Annual Report 2018/2019
We can’t make
the world bigger.
But we can
increase yields.
Humankind is growing – and so is our creativity: KWS develops
varieties that deliver the best-possible yield and meet the challenge of
growing demand for food despite the limited amount of arable land.
2.7 Opportunity and Risk Report
As an international plant breeding company, the
We see diverse opportunities for the KWS Group to
KWS Group operates in a dynamically changing
develop the company further in line with our strategy.
environment. That results in risks as well as oppor-
To succeed in achieving sustainable, profitable growth
tunities, which we have to weigh as the foundation
in the future as well, our prime goal must be to retain
for our entrepreneurial decisions.
and increase our innovativeness. The plants’ yield
2.7.1 Opportunities
potential can be increased, resource efficiency can be
enhanced or their resistance to detrimental influences,
We understand an opportunity as a development that
of whatever type, can be improved.
might have a positive impact on our earnings, financial
position and assets. At the KWS Group, opportunity
There are also market opportunities as a result of
management is an integral component of the estab-
our activities in tropical regions. Our corn activities
lished controlling system between the subsidiaries/
in Brazil and China will enable us to tap additional
associated companies and company management.
sales potential for the KWS Group in the medium
Strategic opportunities of major importance, such as
to long term, including in other tropical markets,
joint ventures and acquisitions, are jointly discussed
by developing varieties tailored to their climatic
by the KWS Group’s Executive Board. Even though
conditions.
the strategic orientation is mainly based on organic
growth, selective acquisitions may also round out
Investing in expansion of our production capacities
KWS’ portfolio.
and modernization of our seed processing offers
opportunities in existing and adjacent markets.
Operational opportunities are identified and exploited
Further development of our variety portfolio and
in the Business Units of the segments, since they have
expansion of capacities are accompanied by
the most extensive knowledge of their markets and
expansion of our international distribution structures
products. Targeted measures are formulated together
to enable tailored information and advice for our
with the Executive Board so that strengths can be
customers on the possible uses of our seed and
leveraged and strategic growth potentials tapped.
so allow us to leverage further sales potential. In
Extensive strategic planning covering a ten-year time
addition, continuous optimization of processes
frame is the basis for opportunity management. In
offers the KWS Group the opportunity to increase
keeping with our earnings-oriented growth strategy,
productivity and improve cost structures.
we exploit the industry-specific and strategic oppor-
tunities that arise by means of pinpointed investments
in production capacities, research & development
activities, and expansion of distribution.
74 Combined Management Report | 2.7 Opportunity and Risk Report
Annual Report 2018/2019 | KWS Group
2.7.2 Risks
begun developing new risk management standards
We define a risk as a potential future event with a
for the KWS Group. They will be applied for the first
negative impact on our earnings, financial position
time at the start of the new fiscal year 2019/2020.
and assets. Our definition of risks also includes
potential negative impacts of our business activities,
Organizational structure of the risk
products and supply chain on the environment and
management system
society so that they can be addressed adequately
The KWS Group’s Executive Board is responsible for
in our management processes.
group-wide risk management. The functions Group
Governance, Group Compliance, Global Finance &
Adjustments to the risk management system
Procurement and Global Controlling each assume
As part of the reorganization project ONEGLOBE,
specific operational tasks (see the table). The Global
we made organizational adjustments in risk manage-
Leadership Team (GLT), consisting of the Executive
ment in the year under review. The new distribution
Board and the first management tier below it, formed
of tasks is listed in the table below. We have also
the Risk Committee of KWS in the year under review.
Main players and bodies in risk management within the KWS Group
Global Finance & Procurement
Tasks
Interest and currency management
Insurance
Loan management
Risk prevention
Internal auditing
Global Controlling
Planning/budget
Group Governance & Risk Management
Central risk management with regular
Current expectations (early detection of risks)
Group Compliance
risk assessments
Early detection of risks
Risk reporting
Integrated Management System
(including Group standards)
Excellence Through Stewardship
Sustainability management and
Non-Financial Declaration
Compliance Management System
Compliance Risk Assessment
Compliance training
Ad-hoc examinations
Global Leadership Team
Risk Committee
2.7 Opportunity and Risk Report | Combined Management Report
75
KWS Group | Annual Report 2018/2019 KWS’ risk management system is based on the inter-
The persons responsible for the Group companies
nationally recognized COSO II model ( Committee
and specific functions within the Group are integrated
of Sponsoring Organizations of the Treadway Com-
in KWS’ risk management system. Risk Management
mission). The principles of risk management are
coordinates the process and supports the depart-
enshrined in our Group-wide “Rules, Guidelines &
ments. Risks are assessed by Risk Management and
Procedures.” Core contents of it define the scope
the Risk Committee.
of application, responsibilities and reporting lines.
Opportunity management is currently not part of the
Risk management process
risk management system.
The risk management process at KWS consists of
the phases of identification, assessment, control and
As part of its audit of the annual financial statements
monitoring of risks and risk reporting. As part of risk
for fiscal year 2018/2019, Ernst & Young GmbH
identification, the persons responsible for the Group
Wirtschaftsprüfungsgesellschaft confirmed the
companies and specific functions record individual
working order of our system for early detection of
risks in their sphere of responsibility on an electronic
risks in accordance with Section 91 (2) of the German
platform of the Integrated Management System
Stock Corporation Act (AktG).
(IMS). In doing so, they quantify the likelihood of
Brief description of the risk management system
measured by its gross effect on EBIT.
The objective of the risk management system is to
record and assess all the main risks and counter them
The individual risks are classified as below as part of
with suitable measures. With proactive measures, we
assessment:
the risk occurring and its potential financial impact
reduce or avoid negative impacts on our corporate
objectives so that we can survive and thrive on the
world market.
Scheme for assessing individual risks
Likelihood of occurrence
Low
< 20%
Moderate
20% – 60%
High
≥ 60%
Moderate
Moderate
Moderate
Moderate
Moderate
Substantial
Substantial
Substantial
Critical
Critical
Critical
Critical
Very low
< €3 million
1
k
s
i
r
T
B
E
I
Low
€3 million–€7 million
Moderate
€7 million–€13 million
High
≥ €13 million
1 Before measures.
Appropriate countermeasures are formulated and
and initiated. The individual risks are analyzed in
analyzed for all recorded risks where possible. They
aggregated form using the risk categories presented
may be measures to reduce risks, constant monitoring
in the following and assessed, taking the initiated
of them or taking out insurance. The measures
measures into account.
are weighed on the basis of economic aspects
76 Combined Management Report | 2.7 Opportunity and Risk Report
Annual Report 2018/2019 | KWS Group
Aggregated risk categories
Risk category
Extent of
damage
Ten-
dency
Likeli-
hood of
occur-
rence
Market risks
High
High
The functions Global Finance & Procurement and Global
Controlling are responsible for consolidated accounting
and corporate planning at KWS. A consistent system
tool that is subject to the Group’s regulations on
accounting makes it easier to ensure that the consoli-
dated financial statements comply with the rules.
Production
risks
Procurement
risks
Product risks
Environmental
and social risks
Liquidity risks
High
Moderate
Low
Low
Low
Low
Low
High
High
Low
Legal risks
Moderate High
Personnel risks High
Moderate
IT risks
Low
Moderate
In addition, the following deals with the risk categories
that we see as having a greater influence on our future
business performance.
Market risks
KWS faces political risks in many countries in the
strongly regulated international agricultural industry.
There are growing restrictions on established operating
resources and increasing regulation of important
research technologies in the EU. Geopolitical insecu-
rities in the Middle East and the still strained situation
in Eastern Europe may also have a negative impact on
Risks are controlled systematically by regular checks
our business activities. Important growth countries for
which review whether they are still applicable and
KWS, such as China, also face trade disputes or eco-
whether the measures and control activities are
nomic and political difficulties. As regards the United
effective. In addition, experienced independent
Kingdom’s decision to leave the EU, we expect at
auditors examine compliance with the measures
present that a hard Brexit would affect KWS’ business,
and controls using a risk-based approach. A report
but only to an insignificant extent.
on the status and the process is given to the Audit
Committee of the Supervisory Board every year.
Our business success depends, among other things, on
the type of market access, our own variety performance
Group Governance and Risk Management reports
and the competitive environment. However, the global
regularly to the Risk Committee on the current risk
economy has an indirect influence on our net sales and
situation at the KWS Group. On that basis, the Risk
income. We address these challenges with systematic
Committee discusses how to deal with the risks and
analyses of the market and the competition and by
provides stimuli on how to control them.
developing high-yielding varieties optimized for different
Risk management and the internal control system
climatic zones.
in the accounting process
Currency risks arise in particular from receivables and
The risk management and internal control system
liabilities denominated in foreign currency. There are
comprises structures and processes designed to
interest rate risks as a result of potential changes to
make sure that business transactions are included
market interest rates. The interest payable on financial
in accounting consistently, promptly and correctly.
obligations with a variable rate of interest may increase.
The following are examined regularly: the complete-
We address currency risks and the risk of interest rate
ness of financial reporting, the Group’s uniform
changes to a reasonable extent through the usual
accounting, measurement and account allocation
hedging instruments, to reduce the influence on the
stipulations, and the authorization and access regu-
KWS Group’s earnings and assets situation. In fiscal
lations for IT systems used in accounting. Intra-
2018/2019, we hedged our research & development
Group transactions are consolidated appropriately
expenditure and intra-group loans almost completely in
and in full.
order to avoid exchange rate risks.
2.7 Opportunity and Risk Report | Combined Management Report
77
KWS Group | Annual Report 2018/2019 Production risks
The acquisition or licensing of technologies is cus-
Seed production is dependent on the weather. We
tomary and necessary in the industry. We reduce the
reduce the risk of crop failures by multiplying seed –
related risks by developing our own innovations, which
depending on the crop – in separate locations
may also be attractive to competitors.
and regions in Europe, North and South America
and Asia. We can carry out contra- seasonal
Legal risks
multipli cation in the winter half-year in the southern
KWS faces risks from official proceedings and legal
hemisphere if there are bottlenecks in the volume of
disputes. Legal disputes are possible with suppliers,
seed produced.
licensors, customers, employees, lenders and inves-
tors and may result in payments or other obligations.
We counter the outage of seed processing plants by
There were no significant legal proceedings in fiscal
means of preventive maintenance, risk inspections
2018/2019.
and organizational and technical damage prevention
programs. To cover economic loss, we have Group-
Under our compliance policy and the Code of Busi-
wide property and business interruption insurance.
ness Ethics, we obligate our employees to undertake
to act in accordance with laws, contracts, internal
We have established detailed checks and tests
guidelines and our corporate values and raise their
to determine the performance and quality of our
awareness in this regard. In addition, we regularly hold
seed. Quality controls, such as germination and
international compliance training courses.
sprouting strength tests, are conducted at all stages
of production. The high quality of our seed should
Personnel risks
also reduce claims for damages under product
Our HR strategy aims to recruit and keep qualified
liability law. We also have product liability insurance
employees at KWS. KWS also faces the challenging
to defend against unjustified claims and to settle
task of competing for staff with companies from
justified claims.
Product risks
outside the industry as well. That may result in the
risk of not being able to fill vacancies promptly or
of losing employees. We counter this risk by contin-
Our quality controls of conventional seed include an
uously further developing our HR strategy. Among
examination to determine that it is free of GMOs. Very
other things, we are committed to growing our
strict requirements must be met regarding manage-
brand as an attractive employer, fostering talents,
ment of genetically modified products, in particular,
and expanding the KWS Group to new locations
to prevent GMOs becoming mixed with conventional
near to where appropriate resources are available
seed. In the absence of a standardized legal thresh-
(science clusters such as St. Louis and urban cen-
old value, a number of European countries practice
ters like Berlin). However, short-term compensatory
a policy of zero tolerance. KWS is a member of the
measures may be applied to counter personnel
“Excellence Through Stewardship” (ETS) initiative,
risks. KWS’ still high personnel requirements due
an internationally standardized quality management
to its growth resulted in a slight increase in per-
program. It defines how genetically modified plant
sonnel risks in the year under review due to delays
material is used throughout the product lifecycle. By
in recruitment processes. We also countered that
being a member, we signal our clear commitment to
risk by using interim personnel and external service
the responsible use of transgenic plant material.
providers.
78 Combined Management Report | 2.7 Opportunity and Risk Report
Annual Report 2018/2019 | KWS Group IT risks
The KWS Group’s business and production pro-
cesses, as well as its internal and external commu-
nications, are run on globally networked IT systems.
Any outages or attacks can sometimes result in
significant interruptions to business operations. In
addition, theft of sensitive data can entail a loss of
reputation for us.
On the basis of our IT security policies, our IT secu-
rity organization monitors access to company data.
Firewall, antivirus and other programs are kept up
to date to avoid losses and damage as a result of
hacking and malware. There is also an extensive
authorization concept. IT service providers con-
stantly examine our IT security and system autho-
rizations so that we can obtain recommendations
for optimization measures through an external risk
assessment.
Overall statement on the risk situation by the
Executive Board
Personnel risks increased slightly in fiscal
2018/2019. KWS’ planned growth meant it had high
Complete tracking of seed – from production to shipment – is our quality pledge
and part of our risk management system.
personnel requirements in the year under review.
We feel sure that, thanks to our global footprint,
Since the situation on the labor market remained
innovative strength and the quality of our products,
difficult, the result was delays in recruitment pro-
we can seize opportunities and successfully counter
cesses, although they were largely compensated
risks as they arise. However, we cannot rule out
for in the course of the year. On balance, there were
the possibility that other factors that are currently
no significant changes in the other risk categories.
unknown or which are not assessed as significant
may jeopardize the continued existence of the KWS
Our business in emerging countries and in foreign
Group in the future.
currency continues to grow and harbors additional,
yet calculable currency and political risks. The iden-
tified risks do not jeopardize the existence of the
KWS Group, neither individually nor in their entirety.
2.7 Opportunity and Risk Report | Combined Management Report
79
KWS Group | Annual Report 2018/2019 2.8 Forecast Report
The expectations of management outlined here are
2.8.2 Forecast for the KWS Group’s Statement
based on our corporate planning and the information
of Comprehensive Income
it takes into account, including market expecta-
Our forecast does not assume any fundamental
tions, strategic decisions, regulatory measures or
changes to the economic environment and agri-
exchange rate trends. They are subject to the same
cultural policy. We anticipate a slight reduction in
premises as the consolidated financial statements
sugarbeet cultivation area in the EU again and in
and forecast our business performance up to the
Eastern Europe. We expect largely stable cultivation
end of fiscal 2019/2020 on June 30, 2020. In our
area for our corn and cereals seed business. Due to
forecast for the KWS Group’s statement of compre-
the continued high level of supply for cereals, corn
hensive income in accordance with IFRS, we deal
and sugar, there will also probably be fierce compe-
with the KWS Group’s anticipated net sales, EBIT
tition and heavy pressure on prices for seed in most
and R&D intensity. Our forecast for the segments
markets. In view of the current geopolitical situation,
contains comments on our net sales and EBIT
we expect the strongest exchange rate effects to
expectations, including the contributions made by
come from the regions North and South America,
our equity- accounted companies, which are included
Eastern Europe and Turkey.
proportionately in the segment reports in line with
our internal corporate controlling structure.
We expect the KWS Group to grow its net sales
sharply by 8% to 12%. Acquisition of the vegetable
2.8.1 Changes in the KWS Group’s Composition
seed business of Pop Vriend Seeds and our corn
that are significant for the Forecast
seed business should make major contributions to
There have been changes in the KWS Group’s com-
that. As far as can be seen at present, the EBIT margin
position that are of significance for the forecast for
will be between 11% and 13%, while the R&D ratio
its business performance in fiscal 2019/2020 insofar
is expected to be in the range of 17% to 19%. Our
as a new segment has to be included as a result of
capital spending in fiscal 2019/2020 will again focus on
establishment of our vegetable seed business. Our
expanding our processing, production and research
forecast likewise contains comments on our related
capacities and is budgeted to be around €100 million.
net sales and EBIT expectations.
Due to the strongly seasonal nature of our business
as a result of the great importance of the spring
sowing season and external factors that are difficult
to anticipate, such as the weather and fluctuations in
cultivation area, more detailed statements on our net
sales and earnings performance cannot yet be made
with sufficient reliability.
80 Combined Management Report | 2.8 Forecast Report
Annual Report 2018/2019 | KWS Group
2.8.3 Forecast for the Segments
each year. We currently anticipate a slight increase
We anticipate that net sales in the Corn Segment
in net sales in the Cereals Segment as a result of
will increase slightly in fiscal 2019/2020. In most
growth in rye sales. We expect that net sales for
regions – in particular in South America but also in
rapeseed will remain stable or rise slightly and that
Europe – we will likely post higher sales volumes
net sales for wheat and barley seed will remain
for seed. In North America, we expect an environ-
stable or fall slightly. The segment’s earnings will
ment where competition remains fierce, but also
benefit from an increase in sales of rye seed; at
anticipate that net sales will rise slightly. As far as
the same time, however, we are planning to ex-
can be seen at present, the EBIT margin will be
pand our research & development and distribution
slightly above the previous year’s figure (7.8%),
activities. The segment’s EBIT margin will there-
even though there will be a planned increase in
fore probably be at the level of the previous year
our research and development and distribution
(13.5%).
expenditures.
The new Vegetables Segment comprises the net
In the Sugarbeet Segment, our high-yielding port-
sales and earnings contributed by the vegetable
folio of varieties will probably mean another success-
seed business acquired from Pop Vriend Seeds,
ful year for us. As far as can be seen at present, we
as well as costs for establishing the Business Unit
anticipate a slight decline in global cultivation area
Vegetables. They mainly include administrative
for sugarbeet and expect the segment will post net
and research and development expenditures. We
sales at the level of the previous year (€461.2 million).
expect & segment to generate net sales of about
As far as can be seen at present, the EBIT margin
€80 million and an EBIT margin of around 25%.
will be tangibly lower than in the year under review
(38.9%), mainly because there will not be the posi-
Revenue from our farms in Germany is grouped in the
tive non-recurring effect from the sale of shares in
Corporate Segment. It should be around €4 million
KWS Potato B.V. as there was in the year under review
and thus at the level of the previous year. Since all
and because research and development and distribu-
cross-segment costs for the KWS Group’s central
tion expenditures are budgeted to be higher.
functions and basic research expenditure are charged
The success of our cereals seed business depends
ative. In our corporate planning for fiscal 2019/2020,
very greatly on the fall sowing season in the northern
we anticipate an EBIT on a par with the previous year
hemisphere, which commences in September of
(€–97.1 million).
to the Corporate Segment, its income is usually neg-
Forecast for the 2019/2020 fiscal year
Statement of comprehensive
income of the KWS Group
Net sales growth
EBIT margin
R&D intensity
8–12%
11–13%
17–19%
2.8 Forecast Report | Combined Management Report
81
KWS Group | Annual Report 2018/2019 2.9 Report on KWS SAAT SE & Co. KGaA and Non-Financial Declaration
(Declaration based on the German Commercial Code (HGB))
2.9.1 KWS SAAT SE & Co. KGaA
with Section 289f of the German Commercial
Code (HGB), which also contains the compliance
References to KWS SAAT SE & Co. KGaA in the
declaration in accordance with Section 161 AktG
KWS Group’s Annual Report
( German Stock Corporation Act), has been published
The Management Reports of KWS SAAT SE &
in the Internet at www.kws.com/ir. The following
Co. KGaA and the KWS Group are combined. The
disclosures are identical to those of the KWS Group
declaration on corporate governance in accordance
and are printed in this Annual Report:
References to KWS SAAT SE & Co. KGaA in the KWS Group’s Annual Report
Disclosures
On the Compensation Report, in accordance with Section 289 of the German Commercial
Code (HGB) and explanatory report of the Executive Board
On business activity, corporate strategy, corporate controlling and management, as well as
explanations on business performance
On the dividend
On Research & Development
On the Supplementary Report
Page(s)
62 to 71
22 to 48
148 (Notes)
29 to 34
149 (Notes)
KWS SAAT SE was the parent company of the KWS
incurred at KWS SAAT SE & Co. KGaA – general and
Group in the year under review. It was responsible
administrative expenses in the year under review
for strategic management and, among other things,
totaled €91.3 (69.6) million. One reason for the
multiplied and distributed sugarbeet and corn seed.
increase is higher consulting and personnel costs
It financed basic research and breeding of the main
for M&A activities and as part of the process of
range of varieties at the KWS Group and provided
optimizing the organizational structure. The balance
its subsidiaries with new varieties every year for
of other operating income and other operating
the purpose of multiplication and distribution.
expenses was €13.2 (–2.3) million. Overall,
KWS SAAT SE & Co. KGaA has been the parent
KWS SAAT SE & Co. KGaA’s operating income was
company of the KWS Group since July 2, 2019.
thus €–33.1 (–12.1) million. Net financial income/
Earnings
expenses is made up of the net income from equity
investments and the interest result. Net income
Net sales at KWS SAAT SE & Co. KGaA in
from equity investments rose by €26.4 million
fiscal 2018/2019 remained virtually constant
to €65.6 (39.2) million. The interest result was
at €529.2 (532.0) million. Research and
€–6.1 (–4.2) million, slightly up over the previous
develop ment expenditure, which is pooled at
year. Taking into account tax expenditures, net
KWS SAAT SE & Co. KGaA, was increased
income for the year was €21.9 (22.1) million.
as planned to €180.9 (173.8) million. Selling
expenses rose to €72.9 (65.0) million. Most of
the administrative expenses at the KWS Group are
82 Combined Management Report | 2.9 Report on KWS SAAT SE & Co. KGaA and NFD
Annual Report 2018/2019 | KWS Group 2.9 Report on KWS SAAT SE & Co. KGaA and Non-Financial Declaration
(Declaration based on the German Commercial Code (HGB))
The parent company KWS SAAT SE & Co. KGaA funds the key basic research
and breeding work and provides the subsidiaries with new varieties.
2.9 Report on KWS SAAT SE & Co. KGaA and NFD | Combined Management Report
83
KWS Group | Annual Report 2018/2019 Financial position and assets
Forecast Report
KWS SAAT SE & Co. KGaA’s total assets
KWS SAAT SE & Co. KGaA generates the main
increased in fiscal 2018/2019 by €514.5 million to
part of its net sales from sugarbeet and corn seed
€1,450.4 (935.9) million. Fixed assets at the balance
business and royalties from basic corn seed. The
sheet date were €557.9 (525.8) million or 38.5% of
further development of sugarbeet seed business
total assets. The increase in fixed assets is mainly
depends, among other things, on the performance
due to new buildings, additions of new agricultural
of our varieties, cultivation areas in our key markets
machinery, and procurement of laboratory equipment.
and developments in our growth markets in Eastern
Current assets increased by €479.9 million. Inven-
Europe. We currently expect net sales at the level of
tories fell to €59.3 (68.5) million. Receivables and other
the previous year here. KWS SAAT SE & Co. KGaA’s
assets were €752.9 (213.4) million. The sharp increase
net sales from corn in Europe are likewise expected
in other assets is due to deposit in a trust account of
to be at the level of the previous year due to the still
the purchase price for the acquisition of all the shares
challenging market environment. All in all, we therefore
in Pop Vriend Seeds. Liabilities at the balance sheet
expect KWS SAAT SE & Co. KGaA to post constant
date rose sharply to €1,011.9 (508.6) million as a result
net sales. KWS SAAT SE & Co. KGaA’s operating
of the need to raise bridge funding for the acquisition.
income is mainly impacted by the costs of central
KWS SAAT SE & Co. KGaA’s equity increased by
functions of the KWS Group and cross-segment
€0.8 million to €283.1 (282.3) million, giving an equity
research and development activities. The planned
ratio of 19.5% (30.1%).
Employees
increase in spending on research and development
and on distribution activities and a decline in income
from sugarbeet will probably reduce KWS SAAT SE &
An average of 1,586 (1,484) people were employed
Co. KGaA’s EBIT slightly.
at KWS SAAT SE & Co. KGaA in the year under
review, of whom 98 (109) were trainees and interns.
2.9.2 Combined Non-Financial Declaration
for the KWS Group
Risks and opportunities
In accordance with Sections 289b et seq. and
The opportunities and risks at KWS SAAT SE &
Sections 315b et seq. of the German Commer-
Co. KGaA are essentially the same as at the
cial Code (HGB), KWS is obliged to prepare a
KWS Group. It shares the risks of its subsidiaries
Non-Financial Declaration for the parent company
and associated companies in accordance with its
KWS SAAT SE & Co. KGaA and the Group disclosing
respective stake in them. You can find a detailed
details of the business model and related material
description of the opportunities and risks and
corporate social responsibility (CSR) aspects (envi-
an explanation of the internal control and risk
ronmental issues, social issues, employee issues,
management system on pages 74 to 79.
human rights, and prevention of corruption and
84 Combined Management Report | 2.9 Report on KWS SAAT SE & Co. KGaA and NFD
Annual Report 2018/2019 | KWS Group bribery), where these are necessary for an under-
product innovations, plant and process safety,
standing of the course of business, business results,
recruitment and qualification, and business ethics
the situation of KWS SAAT SE & Co. KGaA and the
and compliance.
KWS Group, and the effects on said aspects. The
disclosures in the Combined Non-Financial Decla-
The table below gives an overview of the CSR
ration relate to both KWS SAAT SE & Co. KGaA and
report aspects stipulated by law in accordance
the KWS Group, unless otherwise specified.
with Section 289c of the German Commercial Code
(HGB) and other associated issues that require
In order to identify issues that need to be reported
reporting, as well as references to the sections in
in the Non-Financial Declaration, the relevant
which the required disclosures on concepts, results,
issues based on a GRI materiality analysis in the
risks and key performance indicators are made. We
past fiscal year were systematically reassessed
did not identify any issue that required reporting for
to determine their impact on the environment and
the aspect of social issues. We also did not identify
society and on the position of the KWS Group. On
any risks that exceeded the statutory materiality
the basis of this analysis, various individual issues
threshold defined in Section 289c (3) of the German
were identified as material within the meaning of
Commercial Code (HGB). In addition, the KWS Group
the statutory regulations. Although the individual
has not defined any non-financial performance indi-
issues have changed from the previous year as
cators relating to controlling at present.
a result of the current analysis, they can still be
grouped into the four issues used last year:
We were guided by the GRI standards in preparing
the Non-Financial Declaration.
Index for the Non-Financial Declaration
Required HGB disclosures
Material issues for KWS
Reference to sections
Business model
–
Environmental issues
Product innovations
2.1 Fundamentals of the KWS Group
2.4.1 Product Innovations
2.4.2 Use of genetic resources
Plant and process safety
2.4.3 Plant and Process Safety
Employee issues
Recruitment and qualification
2.5.2 Recruitment and Qualification
Corruption and bribery
Business ethics and compliance
2.6.3 Business Ethics and Compliance
Human rights
Social issues
Business ethics and compliance
2.6.3 Business Ethics and Compliance
After an internal analysis for fiscal 2018/2019, this issue was regarded as not
being material, so no disclosures have to be made on it.
2.9 Report on KWS SAAT SE & Co. KGaA and NFD | Combined Management Report
85
KWS Group | Annual Report 2018/2019 We grow by tackling
the challenges of
climate change.
Just like our seed.
We counter climate change with a change of attitude. And conduct intensive
research on innovative varieties that equip farmers to deal with all eventualities
and extremes.
3. Annual Financial Statements for
the KWS Group 2018/2019
90 Statement of Comprehensive Income
91 Balance Sheet
92 Statement of Changes in Equity
94 Cash Flow Statement
95 Notes for the KWS Group 2018/2019
100
108
113
118
141
147
148
1. General Disclosures
2. Disclosures on the Annual Financial Report
3. Segment Reporting for the KWS Group
4. Notes to the Balance Sheet
5. Notes to the Income Statement
6. Notes to the Cash Flow Statement
7. Other Notes
152
Independent Auditor’s Report
157
Independent Auditor’s Limited Assurance Report
159 Declaration by Legal Representatives
160 Additional Information
s
t
n
e
m
e
t
a
t
S
l
i
a
c
n
a
n
F
i
l
a
u
n
n
A
Statement of Comprehensive Income
July 1 to June 30
in € thousand
I. Income statement
Net sales
Cost of sales
Gross profit on sales
Selling expenses
Research & development expenses
General and administrative expenses
Other operating income
Other operating expenses
Operating income
Interest and similar income
Interest and similar expenses
Income from equity-accounted financial assets
Net financial income/expenses
Results of ordinary activities
Taxes
Net income for the year
II. Other comprehensive income
Revaluation of available-for-sale financial assets
Currency translation difference for economically
independent foreign units
Currency translation difference from equity-accounted financial assets
Items that may have to be subsequently reclassified as profit or loss
Net gain/(loss) on equity instruments designated at fair value
through other comprehensive income
Remeasurement gain/(loss) in defined benefit plans
Items not reclassified as profit or loss
Other comprehensive income after tax
III. Comprehensive income (total of I. and II.)
Net income after shares of minority interests
Share of minority interests
Net income for the year
Comprehensive income after shares of minority interests
Share of minority interests
Comprehensive income
Earnings per share (in €)1
1 Earnings per share of previous periods adjusted after share split.
90 Annual Financial Statements | Statement of Comprehensive Income
Note no.
2018/2019
2017/2018
5.1
1,113,339
1,068,012
5.2
5.3
5.4
5.5
5.8
4.11
5.8
458,534
654,805
221,915
205,557
115,379
96,260
58,221
149,993
4,074
19,055
9,447
–5,534
144,459
40,439
104,020
446,063
621,949
201,537
197,696
95,793
65,668
60,035
132,556
4,046
12,026
13,414
5,434
137,990
38,333
99,657
0
261
1,592
2,753
4,345
632
–7,948
–7,316
–2,971
101,049
104,134
–114
104,020
101,160
–111
101,049
–28,913
–2,650
–31,302
0
–2,442
–2,442
–33,744
65,913
99,521
136
99,657
65,776
137
65,913
3.15
3.02
Annual Report 2018/2019 | KWS Group Balance Sheet
Assets
in € thousand
Intangible assets
Property, plant and equipment
Equity-accounted financial assets
Financial assets
Noncurrent tax assets
Other noncurrent financial assets
Deferred tax assets
Noncurrent assets
Inventories
Biological assets
Trade receivables
Securities
Cash and cash equivalents
Current tax assets
Other current financial assets
Contract assets IFRS 15
Other current assets
Current assets
Assets held for sale
Total assets
Equity and liabilities
in € thousand
Subscribed capital
Capital reserve
Retained earnings
Minority interest
Equity
Long-term provisions
Long-term borrowings
Trade payables
Deferred tax liabilities
Other noncurrent financial liabilities
Other noncurrent liabilities
Noncurrent liabilities
Short-term provisions
Short-term borrowings
Trade payables
Current tax liabilities
Other current financial liabilities
Contract liabilities IFRS 15
Other current liabilities
Current liabilities
Liabilities held for sale
Liabilities
Total equity and liabilities
Note no.
06/30/2019
06/30/2018
4.2
4.3
4.4
4.6
5.5
4.7
4.7
4.8
4.9
4.10
4.8
4.8
4.8
4.8
2.1
92,075
444,514
154,027
5,146
1,357
0
63,408
760,527
177,316
16,087
402,129
19,944
139,813
81,010
487,121
2,733
20,671
1,346,824
7,602
85,465
401,687
150,424
3,605
822
1
49,247
691,251
180,980
14,339
310,141
18,282
174,300
56,772
52,922
0
18,694
826,430
0
2,114,953
1,517,681
Note no.
06/30/2019
06/30/2018
4.12
4.11
5.5
4.13
4.14
2.1
99,000
5,530
856,315
2,702
963,547
145,446
182,270
782
16,416
258
19,206
364,378
50,192
475,425
88,495
48,927
17,392
18,804
86,035
785,270
1,758
1,151,406
2,114,953
19,800
5,530
853,640
2,813
881,783
127,833
168,698
968
19,342
288
17,194
334,323
42,311
61,287
75,721
39,171
11,288
0
71,797
301,575
0
635,898
1,517,681
Balance Sheet | Annual Financial Statements
91
KWS Group | Annual Report 2018/2019 Statement of Changes in Equity
July 1 to June 30
in € thousand
Subscribed
capital
Capital
reserve
Accumulated
Group equity
from
earnings
Parent company
Parent company
Minority interest
Group
equity
Comprehensive other
Group income
Comprehensive other
Group income
Total
Minority
interest
Comprehensive other
Group income
Total
Adjustments
from currency
translation
of equity-
accounted
financial
assets
Reserve for
available-
for-sale
financial
assets
Adjustments
from currency
translation
Net gain/
(loss) on
equity
instru ments
designated
at fair value
through
other com-
prehensive
income
Revalua-
tion
of defined
benefit
plans
Other
trans-
actions
19,800
5,530
871,749
– 21,120
99,521
– 27,356
5,644
– 20
0
– 42,341
1,456
834,462
3,485
– 94
07/01/2017
Dividends paid
Net income for the year
Other comprehensive income
after tax
Total consolidated gains
(losses)
Change in shares of
minority interests
Other changes
06/30/2018
Adjustment due to
introduction of IFRS 9
(after tax)
Adjustment due to IAS 29
(hyperinflation)
0
0
0
0
– 28,914
– 2,650
99,521
– 28,914
– 2,650
0
– 148
0
0
0
2,994
19,800
5,530
950,002
– 56,270
– 4,755
6,590
07/01/2018 adjusted
19,800
5,530
951,837
– 56,270
2,994
– 21,120
104,134
1,589
2,753
104,134
1,589
2,753
0
0
0
0
– 79,200
0
0
0
5,530
955,651
– 54,681
0
5,747
Dividends paid
Net income for the year
Other comprehensive income
after tax
Total consolidated gains
(losses)
Change in shares of
minority interests
Capital increase from
company funds
Other changes
06/30/2019
0
79,200
0
99,000
92 Annual Financial Statements | Statement of Changes in Equity
261
261
0
241
– 241
0
0
0
0
0
Adjust-
ments
Revaluation
from
of defined
currency
translation
benefit
plans
Other
trans-
actions
– 857
– 44,783
1,456
878,970
3,763
– 93
– 857
2,813
881,783
– 2,442
– 2,442
0
0
0
0
0
241
0
136
136
142
0
– 21,120
99,521
– 33,745
65,776
0
– 148
– 4,755
6,590
– 21,120
104,134
0
– 114
632
– 7,948
– 2,974
632
– 7,948
101,160
– 114
0
0
0
0
0
0
0
0
0
0
0
1
1
0
0
3
3
0
0
0
0
0
0
0
0
0
2,534
836,996
0
– 21,120
136
99,657
1
– 33,744
137
65,913
142
0
142
– 148
– 4,755
6,590
0
– 21,120
– 114
104,020
3
– 2,971
– 111
101,049
0
0
0
0
0
0
0
0
0
0
0
0
0
0
873
0
– 52,731
1,456
960,845
3,649
– 90
– 857
2,702
963,547
241
– 44,783
1,456
880,805
3,763
– 93
0
– 857
2,813
883,618
Annual Report 2018/2019 | KWS Group
Parent company
Parent company
Minority interest
Group
equity
Comprehensive other
Group income
Comprehensive other
Group income
Minority
interest
Total
Comprehensive other
Group income
Total
Net gain/
(loss) on
equity
instru ments
designated
at fair value
through
other com-
prehensive
income
Revalua-
tion
of defined
benefit
plans
Other
trans-
actions
Adjust-
ments
from
currency
translation
Revaluation
of defined
benefit
plans
19,800
5,530
0
– 42,341
1,456
834,462
3,485
– 94
– 21,120
99,521
– 33,745
65,776
0
– 148
0
0
0
0
136
136
142
0
– 2,442
– 2,442
0
1
1
0
0
– 44,783
1,456
878,970
3,763
– 93
– 4,755
6,590
0
0
0
0
241
0
0
0
0
Other
trans-
actions
– 857
0
0
0
2,534
836,996
0
– 21,120
136
99,657
1
– 33,744
137
65,913
142
0
142
– 148
– 857
2,813
881,783
0
0
– 4,755
6,590
07/01/2018 adjusted
19,800
5,530
951,837
– 56,270
2,994
241
– 44,783
1,456
880,805
3,763
– 93
0
– 857
2,813
883,618
Statement of Changes in Equity
July 1 to June 30
in € thousand
Subscribed
capital
Capital
reserve
Accumulated
Group equity
from
earnings
Adjustments
from currency
translation
of equity-
accounted
financial
assets
5,644
Reserve for
available-
for-sale
financial
assets
– 20
Adjustments
from currency
translation
– 27,356
07/01/2017
Dividends paid
Net income for the year
Other comprehensive income
after tax
(losses)
Total consolidated gains
Change in shares of
minority interests
Other changes
06/30/2018
Adjustment due to
introduction of IFRS 9
(after tax)
Adjustment due to IAS 29
(hyperinflation)
Dividends paid
Net income for the year
Other comprehensive income
after tax
(losses)
Total consolidated gains
Change in shares of
minority interests
Capital increase from
company funds
Other changes
06/30/2019
– 28,914
– 2,650
99,521
– 28,914
– 2,650
19,800
5,530
950,002
– 56,270
0
2,994
871,749
– 21,120
99,521
0
– 148
– 4,755
6,590
– 21,120
104,134
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
261
261
0
241
– 241
0
0
0
0
0
0
– 21,120
– 114
104,020
3
– 2,971
– 111
101,049
0
0
0
0
0
0
0
0
– 857
2,702
963,547
0
0
0
0
– 114
– 21,120
104,134
– 2,974
101,160
– 114
0
0
0
0
0
0
0
0
3
3
0
0
79,200
– 79,200
99,000
5,530
955,651
– 54,681
0
5,747
0
873
1,589
2,753
104,134
1,589
2,753
632
– 7,948
632
– 7,948
– 52,731
1,456
960,845
3,649
– 90
0
Statement of Changes in Equity | Annual Financial Statements
93
KWS Group | Annual Report 2018/2019
Cash Flow Statement
July 1 to June 30
in € thousand
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 (–)
Increase/decrease (–) in short-term provisions
Net gain (–)/loss from the disposal of assets
Income tax expense (+)/-income (–)
Income tax payments (–)/-refunds (+)
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
Proceeds and payments (+) from/for equity-accounted companies
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
Receipts from the disposal of consolidated subsidiaries and other
business units
Net cash from investing activities
Dividend payments (–) to owners and minority shareholders
Proceeds from long-term borrowings
Repayment of long-term borrowings
Changes from proceeds (+)/repayments (–) of short-term borrowings
Net cash from financing activities
Net cash changes in cash and cash eqivalents and restricted cash
Changes in cash and cash equivalents and restricted cash due to
exchange rate, consolidated group and measurement changes
Cash and cash equivalents, including restricted cash,
at beginning of year
Cash and cash equivalents, including restricted cash, at end of year
Reclassification of cash and cash equivalents due to IFRS 5
Less cash deposited in a trust account for the acquisition of
Pop Vriend Seeds Group
Cash and cash equivalents at end of year
Thereof restricted cash and cash equivalents at end of year
Note no.
2018/2019
2017/2018
104,020
99,657
48,723
17,480
– 43,232
21,253
200
54,127
– 63,074
49,864
2,421
– 4,740
– 44,290
34
34,250
– 16,451
– 145,506
– 55,500
70,293
8,566
72,850
2,733
– 86,728
166
– 9,735
168
– 711
– 1,128
– 95,235
– 21,120
405,763
– 27,000
46,859
404,502
382,117
20,708
12,110
98,062
1,592
– 55,133
1
– 12,535
227
– 744
– 1,479
– 68,071
– 21,120
4,431
– 30,816
22,221
– 25,284
4,707
109
– 3,494
192,582
574,808
– 379
– 414,672
159,757
125
191,369
192,582
0
0
192,582
65
6.1
6.2
6.3
6.4
94 Annual Financial Statements | Cash Flow Statement
Annual Report 2018/2019 | KWS Group Notes for the KWS Group 2018/2019
The consolidated financial statements of KWS SAAT SE &
Where appropriate, this report always refers to the company
Co. KGaA (until July 2, 2019: KWS SAAT SE) and its sub-
using the new name that has been in effect since the change in
sidiaries were prepared on a going concern basis applying
legal form on July 2, 2019, namely KWS SAAT SE & Co. KGaA.
Section 315e of the German Commercial Code (HGB). They
comply with the International Financial Reporting Standards
Standards and interpretations applied for the first time
(IFRS) as applicable in the European Union (EU).
The following standards and interpretations had to be
KWS SAAT SE & Co. KGaA, the ultimate parent company
of the KWS Group, is an international company based
Standards and interpretations applied for the first time
applied for the first time in fiscal year 2018/2019.
in Germany, has its headquarters at Grimsehlstraße 31,
37574 Einbeck, Germany, and is registered at Göttingen
Local Court under the number HRB 205722. Since it was
founded in 1856, KWS has specialized in developing,
producing and distributing high-quality seed for agriculture.
KWS covers the complete value chain of a modern seed
producer – from breeding of new varieties, multiplication
and processing, to marketing of the seed and consulting
for farmers. KWS’ core competence is in breeding new,
high-performance varieties that are adapted to regional
needs, such as climatic and soil conditions.
Change in KWS SAAT SE’s legal form to that of a
Financial reporting standards and interpretations
Amendments to IFRS 2 – Classification and Measurement
of Share-based Payment Transactions
Amendments to IFRS 4 – Applying IFRS 9, Financial
Instruments with IFRS 4, Insurance Contracts
Annual Improvements to the International Financial
Reporting Standards (2014–2016 cycle)
Amendments to IAS 40 – Transfers of Investment Property
IFRIC 22 – Foreign Currency Transactions and Advance
Consideration
IFRS 15 – Revenue from Contracts with Customers
IFRS 9 – Financial Instruments
partnership limited by shares
The nature and effects of first-time application of the
The Annual Shareholders’ Meeting of KWS SAAT SE
new standards IFRS 15 “Revenue from Contracts with
on December 14, 2018, adopted a resolution to convert
Customers” and IFRS 9 “Financial Instruments” are
KWS SAAT SE into a partnership limited by shares (KGaA) of
presented in the following. The other standards and inter-
the firm KWS SAAT SE & Co. KGaA. The change in legal form
pretations to be applied for the first time did not result in any
became effective on July 2, 2019, when it was registered in
significant impact on the consolidated financial statements.
the commercial register of Göttingen Local Court. This did
not result in liquidation of the company or formation of a new
IFRS 15: Revenue from Contracts with Customers
legal entity. The company’s legal and economic identity was
IFRS 15 supersedes IAS 11 “Construction Contracts,”
retained.
IAS 18 “Revenue” and all related interpretations. The
new standard provides a five-step model for recognizing
The change in legal form enables the KWS Group to safe-
revenues from contracts with customers. The standard
guard its independence and keep control of the company in
requires that revenues are recognized at the amount of
the hands of the family owners. As part of the change in legal
expected consideration from the customer for the assumed
form, the newly founded KWS SE, a European Company
performance obligation (delivery of goods or provision of
(Societas Europaea), joined the company as the general
services) as soon as the company has transferred control
partner. 80% of it is owned by associated companies of the
over goods or services to a customer either over time or
shareholder families C.-E. Büchting and Arend Oetker. The
at a point in time. IFRS 15 also deals with the recognition
shareholders received one share in KWS SAAT SE & Co. KGaA
of costs to obtain or fulfill a contract and expands the
for each share they held in KWS SAAT SE. As a result, the
disclosure requirements in the Notes.
stake of 55.3% held by the shareholder families C.-E. Büchting
and Arend Oetker is preserved. There were no changes to the
composition of the Executive Board of KWS SE and Super-
visory Board of KWS SAAT SE& Co. KGaA.
Notes for the KWS Group 2018/2019 | Annual Financial Statements
95
KWS Group | Annual Report 2018/2019 The KWS Group has adopted IFRS 15 using the modified
Obligations from loyalty programs
retrospective method. Adoption of IFRS 15 merely resulted
The KWS Group offers various loyalty programs its
in changes in presentation within the current assets and
customers can participate in. They can exchange the
current liabilities. In accordance with the modified retro-
points they collect for various incentives (goods). Under
spective method, the comparative information has not
IFRS 15, such a loyalty program represents an option
been adjusted and is still presented on the basis of the
which is granted to customers to acquire additional goods
accounting regulations that applied in the previous year.
and services and which must in general be measured as a
separate performance obligation at a stand-alone selling
The KWS Group has applied IFRS 15 to all contracts that
price. The pro-rata transaction price must be separated
had not been fulfilled at July 1, 2018.
from revenue and recognized if the points are redeemed
The new balance sheet items “Contract assets” and “ Contract
selling price will be recognized as a contract liability.
liabilities” have been introduced to reflect the changes in
There was solely a reclassification within the current
presentation as a result of the adoption of IFRS 15.
liabilities as part of first-time application of IFRS 15.
by customers or forfeited. This allocated stand-alone
The changes resulting from first-time application of IFRS 15
Obligations from granting of rebates
relate to the following:
The KWS Group grants rebates (early order discount,
volume discount, pickup discount, etc.) to its customers
Claims and obligations from expected returns of
as part of various campaigns. They constitute a variable
products
consideration under IFRS 15. Variable rebates are
In accordance with IFRS 15, a right of return to which
estimated at their probable level. The obligations from
customers are entitled represents a separate perfor-
rebates are recognized as contract liabilities. First-time
mance obligation under the sales contract and has to
application of IFRS 15 resulted in a change in presentation
be assessed separately. In addition, the new standard
of the obligations as contract liabilities.
requires presentation on a gross basis of the claims and
obligations from rights of return to which customers are
The impact of first-time application of IFRS 15 on the
entitled. It results into a presentation of a contract asset
individual balance sheet items is presented below.
from the legal claim to receipt of the returned goods and
a contract liability from the obligation to take back the
goods supplied to the customer. Due to the existing right
of the customer to return goods, revenue is reduced,
and the corresponding performance obligation is recog-
nized as a contract liability. The expected returns mean
that KWS has a claim to receipt of the goods, which is
recognized as a contract asset at the production costs.
The rights of return were previously accounted for on
a net basis through recognition of a provision. There is
thus a reclassification within the current liabilities and a
balance sheet extension due to first-time recognition of
the contract assets.
Adjustments to the balance sheet values from adoption
of IFRS 15
in € thousand
Carrying
amount at
06/30/2019
Adjust-
ment due
to IFRS 15
Contract assets1
2,733
2,733
Contract liabilities
18,804
18,804
Carrying
amount
without
applica-
tion of
IFRS 15
0
0
Short-term
provisions
Other current
liabilities
0
0
–15,125
15,125
–946
946
1 The carrying amount for the contract assets results from the obligations from rights of return
carried previously in the short-term provisions on a gross basis.
96 Annual Financial Statements | Notes for the KWS Group 2018/2019
Annual Report 2018/2019 | KWS Group
IFRS 9: Financial Instruments
Classification and measurement
IFRS 9 “Financial Instruments” supersedes IAS 39
Financial assets are classified in accordance with IFRS 9 on
“ Financial Instruments: Recognition and Measurement.”
the basis of the Group’s business model for their managing
The standard includes new regulations on classifying and
and the characteristics of the related contractual cash
measuring financial assets and their impairment losses,
flows from the financial assets. Under KWS’ business
and financial liabilities. The standard also amends the
model, financial assets are generally held to maturity. Since
regulations on hedge accounting.
the cash flows received usually constitute interest and
repayment of the receivable, the assets are still measured at
The KWS Group has introduced the standard on the basis
amortized cost in the vast majority of cases, especially for
of the modified retrospective method, meaning any effects
trade receivables and other financial assets.
from the change have been recognized cumulatively through
adjustment of the retained earnings at July 1, 2018. The
The effects of the change in requirements for classifying
comparative amounts of the prior period were not adjusted.
financial assets at July 1, 2018, are presented below:
Reclassifications as a result of adoption of IFRS 9 at July 1, 2018
in € thousand
Measurement category in accordance with IFRS 9 at 07/01/2018
Carrying
amounts at
06/30/2018
Amortized cost
Fair value through
other comprehen-
sive income
Fair value through
profit or loss
Measurement categories in
accordance with IAS 39
Loans and receivables
Trade receivables1
Cash and cash equivalents1
Other financial assets
Financial assets held for trading
310,141
174,300
47,618
304,150
174,115
47,618
Derivatives with a positive market value
5,304
Available-for-sale financial assets
Financial assets
Securities
Financial liabilities measured at
amortized cost
Financial liabilities
Trade payables
3,605
18,282
239,164
76,689
Financial liabilities held for trading
Derivatives with a negative market value
2,397
1 The change in the carrying amount is due to the inclusion of additional impairment losses in
accordance with IFRS 9.
The classification and measurement of financial
liabilities in the consolidated financial statements of
KWS SAAT SE & Co. KGaA remain unchanged.
3,605
18,282
239,164
76,689
5,304
2,397
Notes for the KWS Group 2018/2019 | Annual Financial Statements
97
KWS Group | Annual Report 2018/2019
Impairment losses
The adjustment for expected credit risks from trade receiv-
The new regulations in IFRS 9 on recognizing of allowance
ables at the transition date amounted to €5,991 thousand. After
for credit losses relating to financial assets, including trade
recognition of deferred tax assets totaling €1,237 thousand,
receivables, are based on expected losses (expected loss
the net effect amounted to €4,754 thousand. The latter figure
model). Impairments were previously recognized only if
includes a small effect from measurement of other financial
losses had already been incurred (incurred loss model).
assets, mainly cash and cash equivalents at banks. That is
At July 1, 2018 the credit default rates amounting from
payable on demand) and the good ratings of investment grade
due to the short times in which they are due (usually balances
0.55% to 4.11% for not overdue trade receivables and
banks.
amounting from 2.18% to 11.39% for trade receivables
overdue up to 180 days were applied.
The following table presents a reconciliation of the closing
balance of the allowance for credit losses at June 30, 2018,
to the opening balance at July 1, 2018.
Reconciliation of the final balance for impairment losses in accordance with IAS 39 to the opening balance of the
impairment losses in accordance with IFRS 9
in € thousand
Loans and receivables in accordance with IAS 39/
financial assets measured at amortized cost in
accordance with IFRS 9
Cumulative
impairment losses
at 06/30/2018
(IAS 39)
Remeasurement
(IFRS 9 impairment
model)
Cumulative
impairment losses
at 07/01/2018
(IFRS 9)
31,996
5,991
37,987
Hedge accounting
Standards and interpretations to be applied in future
The modified regulations on hedge accounting are more
The following standards and interpretations, or revisions
strongly geared toward the Group’s risk management
of standards or interpretations, were not applied in the
strategy. The new regulations do not have any impact, since
reporting year, since their application for the fiscal year
the KWS Group does not currently report any transactions
2018/2019 was not yet mandatory or they have not yet been
that qualify for hedge accounting.
adopted by the EU:
Standards and Interpretations to be applied in future
Financial reporting standards and interpretations
Mandatory first-time application
IFRS 16 – “Leases”
IFRIC 23 – “Uncertainty over Income Tax Treatments”
Amendments to IFRS 9 – “Prepayment Features with Negative Compensation”
Amendments to IAS 19 – “Plan Amendment, Curtailment or Settlement”
Fiscal year 2019/20
Fiscal year 2019/20
Fiscal year 2019/20
Fiscal year 2019/20
Amendments to IAS 28 – “Long-term Interests in Associates and Joint Ventures”
Fiscal year 2019/20
Annual Improvements to the International Financial Reporting Standards
(2015–2017 cycle)
Amendments to IFRS 3 – “Business Combinations”
Amendments to IAS 1 “Presentation of Financial Statements” and IAS 8 “Accounting
Policies, Changes in Accounting Estimates and Errors”
Conceptual Framework for Financial Reporting and Amendments to References
to the Conceptual Framework in IFRS Standards
IFRS 17 – “Insurance Contracts”
Fiscal year 2019/20
Fiscal year 2020/21
Fiscal year 2020/21
Fiscal year 2020/21
Fiscal year 2021/22
98 Annual Financial Statements | Notes for the KWS Group 2018/2019
Annual Report 2018/2019 | KWS Group In January 2016, the IASB published the standard IFRS 16
As part of first-time application of IFRS 16, KWS
“Leases”, which will replace the current standard IAS 17
anticipates that recognition of the rights of use will result
“Leases” and the related interpretations. It was adopted
in an increase in fixed assets along with a corresponding
into European law in October 2017.
increase in financial liabilities due to the fact that lease
liabilities probably totaling around €40 million will be
IFRS 16 introduces a single lease accounting model,
carried. That will result in a rise in net financial debt and a
requiring lessees to recognize assets and liabilities for
decline in the equity ratio by one percentage point.
all leases. The previously required distinction between
finance and operating leases no longer applies to the
The operating lease expenses, which have been carried
lessee. In the future, all rights and obligations from leases
under operating result up to now, will be carried in the
are to be recognized as right-of-use assets (right-of-use
future as depreciation of the rights of use and interest
approach) and lease liabilities in the balance sheet. The only
expenses from unwinding of discount from the lease
exceptions are for short-term leases of one year or less and
liabilities. This shift within the statement of comprehensive
for “small ticket leases.” KWS will exercise these exemptions
income means there will be an anticipated improvement
permitted under IFRS 16. The approach to lessor accounting
in operating income of €5 million in total over the
adopted in IFRS 16 is substantially unchanged from that in
remaining term of the lease obligations to be recognized
IAS 17, meaning the lessor still has to distinguish between
at July 1, 2019. In the cash flow statement, adoption of
finance and operating leases. Companies in the KWS Group
IFRS 16 will decrease operating cash outflows, as a result
mainly act as lessees.
of which the net cash from operating activities will improve.
At the same time, payments of principal and interest will be
KWS will apply IFRS 16 for the first time at July 1, 2019,
included in the net cash flows from financing activities and
using the modified retrospective method. Accordingly, the
so will reduce it.
comparative amounts are not adjusted and the cumulative
effects from the change are recognized directly in equity
In addition, IFRS 16 entails new obligations to disclose
through adjustment of retained earnings.
qualitative and quantitative information.
All contracts that have been classified as an operating
As far as can be ascertained at present, the other changes
lease to date and are not covered by the exemptions
to the financial reporting standards and interpretations will
permitted by IFRS 16, will be carried in the balance sheet
not have a significant impact on the consolidated financial
by recognition of a right of use and a lease liability. The
statements of the KWS Group.
level of the lease obligation is ascertained using the
present value of lease payments that have not yet been
made. The relevant incremental borrowing rate is applied in
discounting. The amount for the right of use will comprise
in general the value of the corresponding lease liability
after adjustment for the lease payments up to the time of
adoption.
Notes for the KWS Group 2018/2019 | Annual Financial Statements
99
KWS Group | Annual Report 2018/2019 1. General Disclosures
Joint ventures are accounted for using the equity method in
application of IFRS 11 and IAS 28. The basis for a joint venture
1.1 Companies consolidated in the KWS Group
is a contractual agreement with a third party to manage a joint
The consolidated financial statements of the KWS Group
venture together. In the case of joint ventures, the parties who
include the single-entity financial statements of
exercise joint management have rights to the net assets of the
KWS SAAT SE & Co. KGaA and its subsidiaries in
agreement.
Germany and other countries, as well as joint ventures and
associated companies, which are carried using the equity
In the case of joint ventures carried in accordance with the
method, and joint operations. A company is a subsidiary,
equity method, the carrying amount is increased or reduced
if KWS SAAT SE & Co. KGaA has existing rights that
annually by the equity capital changes corresponding to
give it the current ability to control its relevant activities.
the KWS Group’s share. In the case of first-time recognition
Relevant activities are the activities that significantly affect
of equity investments using the equity method, differences
the company’s returns. Control therefore only exists if
from first-time consolidation are treated in accordance
KWS SAAT SE & Co. KGaA has the ability to use its power
with the principles of full consolidation. The changes in the
to affect the amount of the variable returns. Control can
proportionate equity that are recognized in profit or loss are
usually be derived from holding a majority of the voting
included, along with impairment of goodwill, under the item
rights directly or indirectly. Details on the changes in the
“Income from equity-accounted financial assets” in the net
consolidated group are provided in the section Disclosures
financial income/expenses. Associated companies in which
on the Consolidated Financial Statements – Consolidated
a stake between 20% and 50% is held are likewise measured
group and changes in the consolidated group.
using the equity method.
1.2 Consolidation methods
As part of the elimination of intra-Group balances, borrowings,
The single-entity financial statements of the individual sub-
receivables, liabilities, and provisions are netted between the
sidiaries included in the consolidated financial statements
consolidated companies. Intercompany profits not realized
and the single-entity financial statements of the joint ventures
at Group level are eliminated from intra-Group transactions.
and associated companies included using the equity method
Sales, income, and expenses are netted between
and of the proportionately consolidated joint operations
consolidated companies, and intra-Group distributions of
were uniformly prepared on the basis of the accounting and
profit are eliminated.
measurement policies applied at KWS SAAT SE & Co. KGaA;
they were audited by independent auditors. For company
Deferred taxes on consolidation transactions recognized
acquisitions, capital consolidation follows the purchase
in income are calculated at the tax rate applicable to the
method by allocating the cost of acquisition to the Group’s
company concerned. These deferred taxes are aggregated
interest in the subsidiary’s remeasured equity at the time
with the deferred taxes recognized in the separate financial
of acquisition. Any excess of interest in equity over cost is
statements.
recognized as an asset, up to the amount by which fair value
exceeds the carrying amount. Any goodwill remaining after
Minority interests are recognized in the amount of the imputed
first-time consolidation is recognized under intangible assets.
percentage of equity in the consolidated companies.
According to IAS 36, goodwill is not amortized, but tested
for impairment at least once a year at the end of the year
(impairment- only approach). Investments in unconsolidated
subsidiaries are carried at cost.
100 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 1. General Disclosures
Annual Report 2018/2019 | KWS Group 1.3 Currency translation
Under IAS 21, the financial statements of the consolidated
foreign group companies that conduct their business as
financially, economically, and organizationally indepen-
dent 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 following exchange rates were applied in the consoli-
dated financial statements for the main foreign currencies
relative to the euro:
Exchange rates for main currencies
1 EUR/
ARS¹
BRL
GBP
RUB
UAH
USD
Argentina
Brazil
UK
Russia
Ukraine
USA
Rate on balance sheet date
Average rate
06/30/2019
06/30/2018
2018/2019
2017/2018
48.60240
32.66250
48.60240
23.91751
4.34750
0.89720
71.81790
29.73024
1.13830
4.49640
0.88590
72.99210
30.56800
1.16410
4.41256
0.88235
74.91476
31.27778
1.14186
3.98728
0.88563
70.25821
31.85345
1.19399
1 The average rate corresponds to the rate at balance sheet date due to application of IAS 29 for KWS ARGENTINA S.A.
The difference resulting from the application of annual
The IPC was 144.81 points at July 1, 2018 and rose
average rates to the net profit for the period in the income
by 55.7% in the current fiscal year to 225.54 points at
statement is taken directly to equity. According to IAS 21,
June 30, 2019.
exchange differences resulting from loans to foreign
subsidiaries are reported in the Other comprehensive
1.4 Classification of the statement of
income and are not recognized in profit or loss.
comprehensive income
Argentina was classified as a hyperinflationary economy
the cost-of-sales method. The costs for the functions
for the first time this fiscal year, as a result of which IAS 29
include all directly attributable costs, including other taxes.
“Financial Reporting in Hyperinflationary Economies” was
Research & development expenses are reported separately
applied to KWS ARGENTINA S.A. First-time application
for reasons of transparency.
The KWS Group has prepared the income statement using
of the standard resulted in an adjustment to the carrying
amounts for non-monetary assets and liabilities using the
general consumer price index IPC (Índice de precios al
consumidor). The effects from the first-time application
of IAS 29 are recognized in equity. Gains and losses from
current inflation of non-monetary assets and liabilities and
of equity are recognized in the income statement.
1. General Disclosures | Notes for the KWS Group 2018/2019 | Annual Financial Statements 101
KWS Group | Annual Report 2018/2019
1.5 Accounting policies
The level of the promised consideration is not adjusted by
the effects of a financing component because the period for
1.5.1 Consistency of accounting policies
payment is usually less than 12 months.
Consistent accounting policies are used in the annual
financial statements of the companies included in the con-
The incremental costs of obtaining a contract are recognized
solidated financial statements. They remained the same as
as a current expense in the period.
in the previous year, with the exception of the IFRS 9 and
IFRS 15 standards, which had to be adopted, and first-time
Income from service transactions is recognized over the
application of IAS 29 for KWS ARGENTINA S.A.
period of time in which the service is provided and so
carried on an output-oriented basis using the percentage of
All estimates and assessments as part of accounting and
completion method. Other income, such as interest, royalties
measurement are continually reviewed; they are based
and dividends, is recognized in the period in which it accrues
on historical patterns and expectations about the future
as soon as there is a contractual or legal entitlement to it.
regarded as reasonable in the particular circumstances.
Performance-based public grants are recognized as part of
1.5.2 Recognition of income and expenses
other operating income.
Revenue from contracts with customers is mainly generated
from the sale of seed. It is recognized when KWS transfers
Operating expenses are recognized in the income statement
control over products to the customer. That is usually the time
upon the service being used or as of the date on which they
when risk passes to the customer. The income is recognized
are being incurred.
at the amount of the consideration promised in the contract.
1.5.3 Intangible assets
The KWS Group’s contracts with customers do not usually
Purchased intangible assets are carried at cost less
have any significant separable performance obligations
straight-line amortization and impairment losses. It is
apart from the delivery of seed. Consequently, splitting of the
necessary to examine whether the useful life of intangible
transaction price is not required for most of the KWS Group’s
assets is finite or indefinite. Goodwill has an indefinite
contracts with customers. Accordingly, the total purchase
useful life. Goodwill and intangible assets with an
price must be recognized at a point in time.
indefinite useful life are not amortized, but tested for
impairment at least once a year.
If the contracts specify further performance obligations, such
as granting of rebates, rights of return and bonus points, in
Intangible assets acquired as part of business combi-
addition to seed delivery, they must be measured separately.
nations are carried separately from goodwill if they are
The KWS Group uses empirical country-specific and
separable according to the definition in IAS 38 or result
seasonal rates and information on already announced returns
from a contractual or legal right.
to estimate the anticipated returns.
102 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 1. General Disclosures
Annual Report 2018/2019 | KWS Group The service life of intangible assets is as follows:
Low-value assets are fully expensed in the year of purchase;
Useful life of intangible assets
Breeding material, proprietary rights
to varieties and trademarks
Other rights
Software
Distribution rights
Trait licensing agreements
Useful life
10 years
5 – 10 years
3 – 8 years
5 – 20 years
15 years
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 fair value less costs to
sell or the value in use. If the reason for an earlier impairment
loss on property, plant, and equipment no longer applies,
its value is increased to up to the amount that would have
resulted if the impairment loss had not occurred, taking
1.5.4 Property, plant, and equipment
depreciation into account. In accordance with IAS 20,
Property, plant, and equipment is measured at cost less
government grants for assets are deducted from the costs
straight-line depreciation and impairment losses. Depreciation
of the asset. Any deferred income is not recognized.
of an asset commences when the asset is at its location and is
in the condition necessary for it to be capable of operating in
The residual values, useful economic lives and methods
the manner intended by management. Depreciation of an asset
of depreciation for property, plant, and equipment are
ends when the asset has been fully expensed or is classified
reviewed at the end of each fiscal year and adjusted
as held for sale in accordance with IFRS 5 or at the latest when
prospectively if necessary.
it is derecognized.
1.5.5 Leases
If property, plant, and equipment is sold or scrapped, the profit
A lease is an agreement whereby the lessor conveys the
or loss from the difference between the proceeds and residual
right to use an asset for an agreed period of time to the
carrying amount is recognized under the other operating
lessee in exchange for a payment or a series of payments.
income or other operating expenses.
A distinction is made between finance leases and operating
In addition to directly attributable costs, the cost of self-
which all the risks and rewards incidental to ownership of
produced plant or equipment also includes a proportion of the
an asset are transferred to the lessee. Otherwise a lease
overheads and depreciation/amortization.
is classified as an operating lease. An assessment as to
leases. A finance lease relates to leasing transactions in
Useful life of property, plant and equipment
lease is made when the contract is concluded.
whether the agreement is a lease or an agreement involves a
Buildings
Operating equipment and
other facilities
Technical equipment and machinery
Laboratory and research facilities
Other equipment, operating and
office equipment
Useful life
10 – 50 years
5 – 25 years
5 –15 years
5 –13 years
3 –15 years
1. General Disclosures | Notes for the KWS Group 2018/2019 | Annual Financial Statements 103
KWS Group | Annual Report 2018/2019
If the KWS Group is the lessee in a finance lease, the lower
value through other comprehensive income. All the other
of the asset’s fair value and the present value of the minimum
financial instruments are classified in the category “at fair
lease payments at the start of the lease is capitalized in
value through profit or loss.” There is also the option of
the balance sheet and simultaneously recognized under
designating the debt instrument at the initial recognition as
the financial liabilities. The minimum lease payments are
being measured at fair value through other comprehensive
divided into a repayment component of the residual debt
income under certain conditions.
and financing costs, which are determined in accordance
with the effective interest method. The leased asset is written
The financial assets consist of bank balances and cash
down using the straight-line method of depreciation over its
on hand, trade receivables, loans, fund shares, securities,
estimated useful life or the term of the contract, whichever is
derivatives and other financial assets. Regular-way
shorter. An operating lease is a lease that does not involve a
purchases and sales of financial assets are recognized
finance lease. Lease payments under an operating lease are
or derecognized in general using the settlement date
recognized as operating expense in the income statement on
accounting. Fund shares and securities are measured
a straight-line basis over the lease’s term.
at fair value through other comprehensive income. The
1.5.6 Financial instruments
recognized as unrealized gains and losses directly in other
changes to fair value in subsequent measurement are
Classification and measurement
Apart from equity instruments, financial instruments are
The other financial assets are measured at amortized
financial assets and financial liabilities.
cost. The carrying amount of receivables, fixed-income
securities and cash is assumed as the fair value due to
When financial assets are recognized for the first time,
their short term and the fixed-interest structure of the
comprehensive income.
they are assigned to one of the following three categories
investments.
for the purpose of subsequent measurement: at amortized
cost, at fair value through other comprehensive income, or
Impairment losses
at fair value through profit or loss.
The credit risk is the risk that a contractual partner does
not fulfill its payment obligations as part of a financial
Equity instruments are generally measured at fair value
instrument. The credit risks are monitored and controlled
through profit or loss, unless an option to irrevocably
constantly and reflected by means of impairment losses.
classify them at the initial recognition as being measured
The KWS Group ascertains the need to recognize an
at fair value through other comprehensive income is
impairment loss for all financial assets not classified in
exercised. Such option is available if the equity instrument
the category “at fair value through profit or loss.” That
is neither held for trading nor contingent consider-
is calculated on the basis of the expected losses. The
ation recognized in a business combination. The debt
expected losses are in general the present value resulting
instruments are classified taking into account KWS’ busi-
from the difference between the cash flows defined in the
ness model for managing these financial assets and
contract and the cash flows KWS expects to receive.
their contractual cash flow characteristics. A financial
asset is measured at amortized cost if it is held with the
objective of collecting contractual cash flows and the latter
comprise solely payments of interest and principal. If the
financial assets are held as part of the business model
to collect contractual cash flows and sell the financial
instruments, these are classified as being measured at fair
104 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 1. General Disclosures
Annual Report 2018/2019 | KWS Group In general, a two-stage model must be applied in calcu-
Changes to the level of the risk provision must be carried in
lating the expected losses. If the credit risk on financial
the income statement as a reversal of an impairment loss
instruments has not increased significantly, the allowance
or as an impairment loss.
is recognized only on the basis of losses resulting from
default events within the next 12 months. In the case of
The financial liabilities mainly comprise trade payables,
financial instruments whose credit risk has increased
loans from banks, derivatives and other financial liabilities.
significantly since initial recognition, the entire remaining
At the initial recognition financial liabilities are classified
lifetime is used to calculate the expected losses.
as being measured at fair value through profit or loss
KWS uses a simplified approach under IFRS 9 to determine
value. The fair value of financial liabilities with a long-term
the expected losses because the financial assets mainly
fixed interest rate is determined as present values of the
consist of short-term trade receivables. For initial and
payments related to the liabilities, using a yield curve
subsequent measurement of receivables, entire lifetime
applicable on the balance sheet date.
expected credit losses therefore, are taken into account.
or at amortized cost. They are measured initially at fair
All financial liabilities at the KWS Group, with the exception
The KWS Group determines the expected counterparty
of derivative financial instruments, are measured at
default on the basis of the probability of default and the
amortized cost using the effective interest method. The
loss rate in the event of default.
liabilities are derecognized at the time they are settled,
cancelled or expired.
The probability of default is in general determined on
the basis of customer-specific ratings. The probability of
Financial instruments in level 1 are measured using quoted
default relates to a year, which is usually the maximum
prices in active markets for identical assets or liabilities. In
lifetime of receivables at the KWS Group. Since specific
level 2, they are measured by directly observable market
ratings are not available for all customers, an average
inputs or derived indirectly on the basis of prices for similar
rating based on all rated customers is calculated for each
instruments. Finally, input factors not based on observable
country, regardless of the receivable balance per customer.
market data are used to calculate the value of level 3
This rating is then applied accordingly to the total amount
financial instruments.
of receivables in the country. If that information is not
available for a country, the average rating of a country with
a comparable risk is applied.
The loss rate is the percentage loss in the event of default
and corresponds to the amount of the unpaid receivables
less an expected recovery rate. KWS applies a uniform
recovery rate determined regardless of customer group,
due date and country over a long period of time and over a
broad total number of company insolvencies.
1. General Disclosures | Notes for the KWS Group 2018/2019 | Annual Financial Statements 105
KWS Group | Annual Report 2018/2019 1.5.7 Derivatives
same tax creditor and have the same due date. Deferred
The KWS Group has not designated any existing derivatives
tax assets are recognized if it can be assumed that they
as a hedging instrument.
will be used in the future. Deferred tax liabilities must be
set up for all taxable temporary differences. All deferred
Derivative instruments are measured at fair value; they
taxes must be assessed individually at each balance sheet
can be assets or liabilities. Common derivative financial
date. Under IAS 12, deferred taxes are calculated on the
instruments are essentially used to hedge interest rate
basis of the applicable local income tax anticipated at the
and foreign currency risks. The fair value of the derivative
time of reversal. No discounting is carried out.
financial instruments is measured on the basis of the market
information available on the balance sheet date and using
1.5.10 Provisions for income taxes
recognized mathematical models, such as present value
The provisions for income taxes comprise obligations from
or Black-Scholes, to calculate option values, taking their
current income taxes. They are measured on the basis of a
volatility, remaining maturity and capital market interest
best-possible assessment of the future amount to be paid.
rates into account. The instruments must also be classified
Deferred taxes are carried in a separate balance sheet
in a level of the fair value hierarchy.
item.
The changes in their market value are recognized in the
1.5.11 Provisions for pensions and other employee
income statement. Derivatives are derecognized on their day
benefits
of settlement.
The provisions for pensions and other employee benefits
are calculated using actuarial principles in accordance
1.5.8 Inventories and biological assets
with the projected unit credit method. Actuarial gains
Inventories are measured at the lower of cost or net realiz-
and losses must be recognized directly in equity in Other
able value less an allowance for obsolescent or slow-moving
comprehensive income. The service costs, including the
items. In addition to directly attributable costs, the cost of
past service costs, are recognized in operating income
sales also includes indirect labor and materials including
in accordance with the employees’ assignment to the
depreciation under IAS 2. Under IAS 41, biological assets
functions. If there are planned assets, they are netted off
are measured at fair value less the estimated costs to sell.
against the associated obligations.
Immature biological assets are carried as inventories as of the
time they are harvested. The measurement procedure used is
The provisions for semi-retirement include obligations from
based on standard industry value tables.
concluded semi-retirement agreements. Payment arrears
1.5.9 Deferred taxes
and top-up amounts for semi-retirement pay and for the
contributions to the statutory pension insurance program
Deferred taxes are calculated in accordance with IAS 12.
are recognized in measuring them.
Deferred taxes are calculated on differences between the
carrying amounts of assets and liabilities in the consoli-
1.5.12 Other provisions
dated balance sheet and their tax base, and on carried
Provisions are set up if current obligations have accrued from
forward tax losses. Deferred tax assets are netted off
past events and it is likely that they will be utilized. In addition,
against deferred tax liabilities, provided they relate to the
it must be possible to estimate the amount of the anticipated
obligation reliably.
106 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 1. General Disclosures
Annual Report 2018/2019 | KWS Group Provisions are measured at their expected amount or most
1.5.15 Discretionary decisions and estimates
likely amount, depending on whether they comprise a large
The measurement approaches and amounts to be carried in
number of items or constitute a single obligation. Provisions
these IFRS financial statements are partly based on estimates
are reviewed regularly and adjusted to reflect new findings
and specifically defined specifications. This relates in
or changes in circumstances. If it is no longer likely that a
particular to the following discretionary decisions:
provision will be utilized or the conditions for why it was set
up no longer apply, expense-related provisions are reversed
Determination of the useful life of the depreciable asset
against the original expense item and revenue- related
Definition of measurement assumptions and future
provisions are reversed against revenue. If the reversal
results in connection with impairment tests, above all for
amount is material and so the effect not related to the
capitalized goodwill
period must be classified as material, the reversal is
Assessment whether write-down of inventories is required
carried as income from the reversal of provisions under
Definition of the parameters required for measuring
other operating income not related to the period.
pension provisions
Long-term provisions are discounted taking into account
ment of derivatives
future cost increases and using a market interest rate that
Determination whether tax losses carried forward can be
adequately reflects the risk, insofar as the interest effect is
used
Selection of parameters for the model-based measure-
material.
1.5.13 Contingent liabilities
Determination of the fair value of intangible assets,
tangible assets and liabilities acquired as part of a busi-
ness combination and determination of the service lives of
The contingent liabilities result from debt obligations where
the purchased intangible assets and tangible assets
outflow of the resource is not probable, or the level of the
Measurement of other provisions
obligation cannot be estimated with sufficient reliability
Calculation of the expected returns from customers at the
or from obligations for loan amounts drawn down by third
balance sheet date
parties as of the balance sheet date.
1.5.14 Borrowing costs
from the assumptions.
In accordance with IAS 23, borrowing costs are capitalized if
they can be classified as qualifying assets.
The Executive Board of KWS Group prepared the consolidated
Despite careful estimates, the actual development may deviate
financial statements on September 24, 2019, and released
them for distribution to the Supervisory Board. The Super visory
Board has the task of examining the consolidated financial
statements and declaring whether it approves them.
1. General Disclosures | Notes for the KWS Group 2018/2019 | Annual Financial Statements 107
KWS Group | Annual Report 2018/2019
2. Disclosures on the Annual Financial Statements
Number of companies including KWS SAAT SE & Co. KGaA
Germany
Abroad
Total
Germany
Abroad
Total
06/30/2019
06/30/2018
Fully consolidated
Equity method
Joint operation
Total
14
0
0
14
50
3
8
61
64
3
8
75
14
0
0
14
48
3
6
57
62
3
6
71
2.1 Consolidated group and changes in the
in the consolidated financial statements, to J.R. Simplot
consolidated group
Company, U.S. The KWS Group has since held a 50% stake
The merger of KWS SERVICES WEST S.L.U., Barcelona,
in the newly founded company Aardevo B.V., which consti-
Spain, with the transferee KWS SAAT SE & Co. KGaA
tutes a joint arrangement with J.R. Simplot Company and
took effect when KWS SAAT SE changed its legal form to
was included in the KWS Group’s consolidated financial
KWS SAAT SE & Co. KGaA and that change was registered
statements as a joint operation effective February 1, 2019.
in the commercial register. The related resolution was
Consequently, the previously fully consolidated subsidiary
adopted by the Shareholders’ Meeting of KWS SERVICES
KWS Potato B.V. was deconsolidated and the new joint
WEST S.L.U. on January 25, 2019. Thereafter, the require-
operation Aardevo B.V. was consolidated proportionately. The
ments for a merger in accordance with the merger certificate
two shareholders have since conducted research & develop-
dated March 14, 2019 were fulfilled. Accordingly, the merger
ment activities under joint management with the aim of
was carried out retroactively effective July 1, 2018.
creating extremely high-performing potato varieties by means
of hybrid breeding. The development costs are born equally
KWS INTERNATIONAL HOLDING B.V., Emmeloord, the
by the partners.
Nether lands, was established in August 2018. The sub-
sidiary was fully consolidated in the consolidated financial
Intangible assets with a fair value of €5,932 thousand at the
statements.
time of acquisition were identified as part of purchase price
allocation. Allowing for deferred tax liabilities (€1,216 thou-
O.O.O. KWS KUBAN, Krasnodar, Russia, and
sand) and other assets (€13 thousand), net assets totaled
O.O.O. KWS SEED PLANT, Lipetsk, Russia, were estab-
€4,729 thousand. The transferred consideration from the
lished in September 2018. The two subsidiaries were fully
KWS Group’s perspective is the fair value of the stake it
consolidated in the consolidated financial statements.
surrendered in the joint arrangement (€5,284 thousand). That
resulted in goodwill totaling €555 thousand, which relates to
At January 31, 2019, the KWS Group sold 50% of its shares
the additional economic benefit as a result of joint research &
in KWS POTATO B.V. (in future AARDEVO B.V.), Nagele,
development.
Netherlands, which had previously been fully consolidated
108 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 2. Disclosures on the Annual Financial Statements
Annual Report 2018/2019 | KWS Group AARDEVO NORTH AMERICA LLC, Boise, U.S., was
The table below presents the main groups of assets and
established as a wholly-owned subsidiary of Aardevo B.V. in
liabilities:
February 2019. The company is included as a joint operation
in the KWS Group’s consolidated financial statements
proportionately at 50%.
Assets and liabilities classified as held for sale
in € thousand
06/30/2019 06/30/2018
KWS VEGETABLES B.V., Heythuysen, the Netherlands, was
established in May 2019 and included as a fully consolidated
subsidiary.
Disposal group
In mid-January 2019, the KWS Group decided to sell its 51%
stake in RAZES HYBRIDES S.A.R.L., Alzonne, France. The
sale to the second shareholder Agricole Arterris SCA was
Intangible assets and property,
plant, and equipment
Inventories and trade
receivables
Cash and cash equivalents
Current tax assets and other
assets
Assets held for sale
Long-term provisions and non-
current financial liabilities
completed on July 3, 2019, i.e. after the balance sheet date.
Deferred tax liabilities
All the assets of RAZES HYBRIDES S.A.R.L. were classified
Short-term provisions and
current financial liabilities
as held for sale. They were still measured at their carrying
Trade payables
amount, since it is lower than the fair value of the equity
Other current liabilities
6,496
6,692
176
379
551
7,602
263
175
244
740
336
175
848
587
8,302
291
271
287
941
395
share. The fair value was determined on the basis of the
sales price less costs to sell.
Liabilities classified as held
for sale
1,758
2,185
The accumulated loss recognized directly in the other
comprehensive income at June 30, 2019, was €38 thousand.
2. Disclosures on the Annual Financial Statements | Notes for the KWS Group 2018/2019 | Annual Financial Statements
109
KWS Group | Annual Report 2018/2019 List of shareholdings in accordance with Section 313 (2) HGB (German Commercial Code)
Fiscal year 2018/2019
Name and Company’s registered office
Currency
Interest held
Total in %
Footnote
1
1
1
1
1
1
1
1
Fully consolidated subsidiaries (direct)
Germany
KWS LOCHOW GMBH, Bergen
KWS INTERSAAT GMBH, Einbeck
AGROMAIS GMBH, Everswinkel
KWS KLOSTERGUT WIEBRECHTSHAUSEN GMBH,
Northeim-Wiebrechtshausen
KWS LANDWIRTSCHAFT GMBH, Einbeck
RAGIS KARTOFFELZUCHT- UND
HANDELSGESELLSCHAFT MBH, Einbeck
KWS SAATFINANZ GMBH, Einbeck
DELITZSCH Pflanzenzucht GmbH, Einbeck
EURO-HYBRID GMBH, Einbeck
KWS SERVICES DEUTSCHLAND GMBH, Einbeck
BETASEED DEUTSCHLAND GMBH, Frankfurt
KANT-HARTWIG & VOGEL GMBH, Einbeck
KWS BERLIN GMBH, Berlin
Foreign
KWS SRBIJA D.O.O., New Belgrade/Serbia
KWS CHILE LTDA., Rancagua/Chile
KWS MAGYARORSZÁG KFT., Gyo˝ r/Hungary
KWS FRANCE S.A.R.L., Roye/France
KWS SEMENA S.R.O., Bratislava/Slovakia
KWS SUISSE SA, Basel/Switzerland
KWS ITALIA S.P.A., Forlì/Italy
KWS POLSKA SP.Z O.O., Poznan´ /Poland
KWS OSIVA SRO, Velké Mezirici/Czech Republic
KWS SJEME D.O.O., Pozega/Croatia
KWS BULGARIA E.O.O.D., Sofia/Bulgaria
KWS BENELUX B.V., Amsterdam/Netherlands
KWS ARGENTINA S.A., Balcarce/Argentina
KWS AUSTRIA SAAT GMBH, Vienna/Austria
KWS MAIS FRANCE S.A.R.L., Champol/France
KWS SERVICES EAST GMBH, Vienna/Austria
KWS R&D INVEST B.V., Emmeloord/Netherlands
€
€
€
€
€
€
€
€
€
€
€
€
€
RSD
CLP
HUF
€
€
CHF
€
PLN
CZK
HRK
BGN
€
ARS
€
€
€
€
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
110 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 2. Disclosures on the Annual Financial Statements
Annual Report 2018/2019 | KWS Group Fiscal year 2018/2019
Name and Company’s registered office
Currency
Interest held
Total in %
Footnote
Fully consolidated subsidiaries (indirect)
Foreign
BETASEED INC., Bloomington/U.S.
BETASEED FRANCE S.A.R.L., Bethune/France
GLH SEEDS Inc., Bloomington/U.S.
KWS CEREALS USA LLC., Champagne/U.S.
KWS UK LTD., Thriplow/UK
KWS PERU S.A.C., Lima/Peru
KWS SEMINTE S.R.L., Bukarest/Romania
KWS SCANDINAVIA A/S, Guldborgsund/Denmark
O.O.O. KWS RUS, Lipezk/Russia
O.O.O. KWS R&D RUS, Lipezk/Russia
KWS SEMILLAS IBÉRICA S.L., Zaratán/Spain
KWS SEEDS INC., Bloomington/U.S.
KWS TÜRK TARIM TICARET A.S., Eskisehir/Turkey
KWS UKRAINE T.O.W., Kiew/Ukraine
KWS LOCHOW POLSKA SP.Z O.O.,
Kondratowice/Poland
RAZES HYBRIDES S.A.R.L., Alzonne/France
KWS GATEWAY RESEARCH CENTER LLC., St. Louis/U.S.
KWS AGRICULTURE SCIENCE AND TECHNOLOGY
RESEARCH AND DEVELOPMENT
(Anhui) Co. Ltd., Hefei/China
KWS International Holding B.V., Emmeloord/Netherlands
KWS Vegetables B.V., Heythuysen/Netherlands
KLEIN WANZLEBENER SAATZUCHT MAROC S.A.R.L.A.U.
Casablanca/Morocco
RIBER KWS SEMENTES LTDA., Curitiba/Brazil
KWS SERVICOS E PARTICIPACOES
SOUTH AMERICA LTDA., São Paulo/Brazil
KWS SERVICES NORTH AMERICA LLC.,
Bloomington/U.S.
KWS PODILLYA T.O.W., Kiew/Ukraine
BEIJING KWS AGRICULTURE TECHNOLOGY CO., LTD.,
Beijing/China
KWS MOMONT RECHERCHE S.A.R.L.,
Mons-en-Pévèle/France
KWS MOMONT S.A.S., Mons-en-Pévèle/France
KWS SEEDS THAILAND CO., Ltd., Chiang Mai/Thailand
KWS PARAGUAY S.R.L., Asunción/Paraguay
IMPETUS AGRICULTURE INC., Lewes/U.S.
O.O.O. KWS Kuban, Krasnodar/Russia
O.O.O. KWS Seed Plant, Lipetsk/Russla
USD
€
USD
USD
GBP
PEN
RON
DKK
RUB
RUB
€
USD
TRY
UAH
PLN
€
USD
CNY
€
€
MAD
BRL
BRL
USD
UAH
CNY
€
€
THB
PYG
USD
RUB
RUB
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
70.00
100.00
100.00
6
7
6
6
8
9
3
10
11
12
10
4
4
11
8
5
6
13
10
14
15
16
17
6
18
13
19
8
13
20
21
12
12
2. Disclosures on the Annual Financial Statements | Notes for the KWS Group 2018/2019 | Annual Financial Statements
111
KWS Group | Annual Report 2018/2019 Fiscal year 2018/2019
Name and Company’s registered office
Currency
Interest held
Total in %
Footnote
50.00
50.00
49.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
100.00
50.00
22
23
24
2
2
Equity-accounted joint ventures
AGRELIANT GENETICS INC., Chatham/Canada
AGRELIANT GENETICS LLC., Westfield/U.S.
Equity-accounted associated companies
KENFENG - KWS SEEDS CO., LTD., Beijing/China
Joint operations (proportionately consolidated)
GENECTIVE S.A., Chappes/France
GENECTIVE CANADA INC., Montreal/Canada
GENECTIVE TAIWAN LTD., Taipeh City/Taiwan
GENECTIVE USA Corp., Weldon/U.S.
GENECTIVE Japan K.K., Chiba/Japan
GENECTIVE KOREA, Sangdaewon-dong/Korea
Aardevo B.V., Nagele/Netherlands
Aardevo North America LLC, Boise/U.S.
Unconsolidated subsidiaries
KWS R&D PRIVATE LIMITED, Hyderabad/India
VAN RIJN BALCAN S.R.L., Vulcan/Romania
CAD
USD
CNY
€
CAD
TWD
USD
JPY
KRW
USD
USD
INR
RON
1 Profit and loss transfer agreement.
2 In Liquidation
3 Subsidiary of KWS SAAT and KWS SAATFINANZ GMBH
4 Subsidiary of KWS SAAT and KWS INTERSAAT GMBH
5 Subsidiary of KWS FRANCE S.A.R.L.
6 Subsidiary of KWS SEEDS INC.
7 Subsidiary of BETASEED GMBH
8 Subsidiary of KWS LOCHOW GMBH
9 Subsidiary of KWS CHILE LTDA. and KWS SERVICOS E PARTICIPACOES SOUTH AMERICA LTDA.
10 Subsidiary of KWS INTERSAAT GMBH
11 Subsidiary of EURO-HYBRID GMBH and KWS SAATFINANZ GMBH
12 Subsidiary of O.O.O. KWS RUS
13 Subsidiary of EURO-HYBRID GMBH
14 Subsidiary of KWS International Holding B.V.
15 Subsidiary of KWS Benelux B.V.
16 Subsidiary of KWS SERVICOS E PARTICIPACOES SOUTH AMERICA LTDA. and KWS INTERSAAT GMBH
17 Subsidiary of KWS INTERSAAT GMBH and KWS SAATFINANZ GMBH
18 Subsidiary of KWS UKRAINE T.O.V.
19 Subsidiary of KWS MOMONT S.A.S.
20 Subsidiary of KWS SERVICOS E PARTICIPACOES SOUTH AMERICA LTDA. and RIBER-KWS SEMENTES LTDA.
21 Subsidiary of KWS R&D Invest B.V.
22 Investee of GLH SEEDS INC.
23 Investee of RAGIS RAGIS KARTOFFELZUCHT- UND HANDELSGESELLSCHAFT MBH
24 Subsidiary of Aardevo B.V.
25 Subsidiary of KWS FRANCE S.A.R.L.
112 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 2. Disclosures on the Annual Financial Statements
Annual Report 2018/2019 | KWS Group 3. Segment Reporting for the KWS Group
In accordance with its internal reporting and controlling
The Executive Board as the main decision-making body
system, the KWS Group is primarily organized according to
is responsible for allocating resources and assessing
the following business segments:
the earnings strength of the business segments. The
Corn
Sugarbeet
Cereals
Corporate
segments and regions are defined in compliance with the
internal controlling and reporting systems (management
approach). The accounting policies used to determine
the information for the segments are basically the same
as those used for the KWS Group. The only exception
relates to consolidation of the equity-accounted joint
Considered a core competency for the KWS Group’s
ventures that are assigned to the Corn Segment, namely
entire product range, plant breeding, including the related
AGRELIANT GENETICS LLC., AGRELIANT GENETICS INC.
biotechnology research, is essentially concentrated
and KENFENG – KWS SEEDS CO., LTD. In accordance
at the parent company KWS SAAT SE & Co. KGaA in
with internal controlling practices, they are included pro-
Einbeck. The breeding material, including the relevant
portionately as part of segment reporting.
information and expertise about how to use it, is owned
by KWS SAAT SE & Co. KGaA with respect to sugarbeet
The segment net sales, segment income, depreciation
and corn and by KWS LOCHOW GMBH with respect to
and amortization, other noncash items, operating assets,
cereals. Product-related R&D costs are carried directly
operating liabilities and capital expenditure on noncurrent
in the product segments Corn, Sugarbeet and Cereals.
assets by segment have been determined in accordance
Centrally controlled corporate functions are grouped in
with the internal operational controlling structure, with
the Corporate Segment. The distribution and production
the joint ventures and associated company consolidated
of oil and field seed are reported in the Cereals and
proportionately (management approach). In order to permit
Corn Segments, in keeping with the legal entities currently
better comparability, they have been reconciled with the
involved.
Sales per segment
in € thousand
Corn
Sugarbeet
Cereals
Corporate
Segments acc. to
management approach
Elimination of equity-accounted
financial assets
Segments acc. to consolidated
financial statements
figures in the IFRS consolidated financial statements.
Segment sales
Internal sales
External sales
2018/2019
2017/2018
2018/2019
2017/2018
2018/2019
2017/2018
739,031
461,257
734,204
455,444
170,990
151,410
5
26
197
26
351
300
739,026
461,231
734,178
455,094
170,794
151,109
17,474
16,672
13,580
12,456
3,893
4,216
1,388,752
1,357,730
13,808
13,133
1,374,944
1,344,597
–261,605
–276,585
1,113,339
1,068,012
3. Segment Reporting for the KWS Group | Notes for the KWS Group 2018/2019 | Annual Financial Statements 113
KWS Group | Annual Report 2018/2019
Segment sales contain both net sales from third parties
(external sales) and net sales between the segments (inter-
segment 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 revenues 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.
Earnings, depreciation and amortization and other noncash items per segment
in € thousand
Segment earnings
Depreciation and
amortization
Other noncash items
Corn
Sugarbeet
Cereals
Corporate
Segments acc. to management
approach
Elimination of equity-accounted
financial assets
Segments acc. to consolidated
financial statements
Net financial income/expenses
Earnings before taxes
2018/2019
2017/2018
2018/2019
2017/2018
2018/2019
2017/2018
57,916
179,599
22,988
–97,110
47,374
160,473
18,395
–77,277
28,703
12,762
9,200
11,868
29,239
12,480
8,855
11,629
–670
–18,260
287
–8,250
–10,936
–21,072
4,639
1,058
163,393
148,965
62,533
62,203
–26,893
–26,311
–13,400
–16,409
330,088
–12,062
21,578
19,339
149,993
132,556
392,621
50,141
–5,315
–6,972
–5,534
5,434
144,459
137,990
0
0
0
0
0
0
0
0
The income statements of the consolidated companies
Items that are not directly attributable are allocated to
are assigned to the segments by means of profit center
the segments on the basis of an appropriate formula.
allocation. Operating income, an important internal
Depreciation and amortization charges allocated to
parameter and an indicator of the earnings strength in the
the segments relate exclusively to intangible assets and
KWS Group, is used as the segment result. The operating
property, plant, and equipment.
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.
114 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 3. Segment Reporting for the KWS Group
Annual Report 2018/2019 | KWS Group
The other noncash items recognized in the income
statement relate to noncash changes in the allowances on
inventories and receivables, and in provisions.
Operating assets and operating liabilities per segment
in € thousand
Corn
Sugarbeet
Cereals
Corporate
Segments acc. to management approach
Elimination of equity-accounted financial assets
Segments acc. to consolidated financial statements
Others
Operating assets
Operating liabilities
06/30/2019
06/30/2018 06/30/2019
06/30/2018
122,249
137,572
800,334
335,630
122,159
152,029
729,126
277,936
120,731
114,705
1,410,152
1,242,498
–278,034
–251,774
1,132,118
982,835
990,724
526,957
67,459
30,260
106,540
326,508
–49,210
277,298
874,108
32,549
28,383
96,428
294,932
–49,808
245,124
390,774
635,898
KWS Group acc. to consolidated financial statements
2,114,953
1,517,681
1,151,406
The operating assets of the segments are composed of
intangible assets, property, plant, and equipment, inven-
tories, biological assets and trade receivables that can be
charged directly to the segments or indirectly allocated to
them by means of an appropriate formula.
The operating liabilities attributable to the segments
include the borrowings reported on the balance sheet, less
provisions 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.
3. Segment Reporting for the KWS Group | Notes for the KWS Group 2018/2019 | Annual Financial Statements 115
KWS Group | Annual Report 2018/2019 Capital expenditure on assets fell to €101,123 thousand
( previous year: €117,696 thousand). Capital expenditure
in the Corn Segment (€27,151 thousand; previous
year: €64,147 thousand) relates mainly to drying and
production capacities in South America. The Sugarbeet
Segment’s capital expenditure totaled €34,874 thousand
following €16,741 thousand in the previous year and
relates mainly to continued expansion of sugarbeet seed
production in Einbeck. In addition, expansion of our
laboratory capacities was also launched there.
Investments in long-term assets by segment
in € thousand
Corn
Sugarbeet
Cereals
Corporate
Segments acc. to management approach
Elimination of equity-accounted financial assets
Segments acc. to consolidated financial statements
Disclosures by region
The disclosures on the regional composition of net sales,
capital expenditure and operating assets have been made in
accordance with the accounting policies to be applied to the
consolidated financial statements of the KWS Group and thus
without proportionate consolidation of the equity-accounted
financial investments.
The external net sales by sales region are broken down on
the basis of the country where the customer is based. No
individual customer accounted for more than 10% of total net
sales in the current and the previous fiscal years.
2018/2019
2017/2018
27,151
34,874
7,037
32,061
101,123
–4,552
96,571
64,147
16,741
7,027
29,781
117,696
–45,994
71,702
116 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 3. Segment Reporting for the KWS Group
Annual Report 2018/2019 | KWS Group
External sales by region
in € thousand
Germany
Europe (excluding Germany)
Thereof in France
North and South America
Thereof in Brazil
Thereof in the U.S.
Rest of world
KWS Group
Investments in long-term assets by region
in € thousand
Germany
Europe (excluding Germany)
Thereof in France
North and South America
Thereof in Brazil
Thereof in the U.S.
Rest of world
KWS Group
Long-term assets by region
in € thousand
Germany
Europe (excluding Germany)
Thereof in France
North and South America
Thereof in Brazil
Thereof in the U.S.
Rest of world
KWS Group
2018/2019
2017/2018
236,226
505,867
235,303
504,985
(100,982)
(117,592)
305,749
(97,989)
269,553
(82,168)
(167,547)
(155,357)
65,497
58,171
1,113,339
1,068,012
2018/2019
2017/2018
56,609
16,146
(5,058)
22,581
(8,678)
(8,712)
1,235
96,571
39,478
18,026
(5,297)
13,269
(1,187)
(5,528)
929
71,702
2018/2019
2017/2018
267,309
169,579
(55,706)
252,477
(36,312)
235,994
166,600
(66,430)
230,125
(28,602)
(192,042)
(185,842)
6,397
695,762
8,460
641,179
3. Segment Reporting for the KWS Group | Notes for the KWS Group 2018/2019 | Annual Financial Statements 117
KWS Group | Annual Report 2018/2019 4. Notes to the Balance Sheet
Statement of changes in fixed assets
in € thousand
First-time
adjustment
for inflation
(IAS 29) at
07/01/2018
Currency
translation
Adjustment
for inflation
(IAS 29)
Change in
consolidated
companies
Additions
assets
Disposals
assets
Transfers
Additions of
equity-
accounted
Disposals of
equity-
accounted
Patents, industrial
property rights and
software
Goodwill
Intangible assets
Land and
buildings
Technical
equipment and machinery
Operating and office
equipment
Payments on account
Property, plant and
equipment
Equity-accounted
financial assets
Financial assets
Assets
in € thousand
Patents, industrial
property rights and
software
Goodwill
Intangible assets
Land and
buildings
Technical
equipment and machinery
Operating and office
equipment
Payments on account
Property, plant and
equipment
Equity-accounted
financial assets
Financial assets
Assets
07/01/2018
123,885
25,115
149,000
320,754
251,271
111,217
36,581
0
0
0
4,075
1,470
779
115
719,823
6,439
158,817
4,220
0
0
1,031,860
6,439
First-time
adjustment
for inflation
(IAS 29) at
07/01/2018
0
0
0
698
796
448
0
07/01/2018
63,535
0
63,535
96,170
152,810
69,156
0
318,136
1,942
8,393
615
0
0
390,679
1,942
608
520
1,128
–275
–487
132
–13
–643
2,752
94
3,331
0
0
0
824
510
692
601
2,627
0
0
5,932
555
6,487
0
0
0
0
0
0
0
9,368
0
9,368
13,933
10,296
13,192
49,073
86,494
0
709
2,627
6,487
96,571
9,417
11,975
8,566
–19,882
1,116,310
Currency
translation
Adjustment
for inflation
(IAS 29)
Change in
consolidated
companies1
Planned
additions
Adjustment
not affecting
profit and
Value impair-
ment
loss
Disposals
Transfers
Reclassifi ca-
tion in hold
for sale
(IFRS 5)
534
0
534
49
–102
148
0
95
0
6
635
0
0
0
220
281
160
0
661
0
0
661
0
0
0
0
0
0
0
0
0
0
0
9,720
0
9,720
9,768
18,030
11,359
0
39,157
0
32
48,909
Gross book values
Reclassifi ca-
tion in hold
for sale
(IFRS 5)
06/30/2019
–94
0
–94
139,200
26,190
165,390
12,348
–7,659
343,058
5,814
–11,836
253,941
4,594
–22,822
–174
–118
124,332
62,318
–66
–19,787
783,649
0
–1
162,420
4,851
Amortization/depreciation
Net book values
06/30/2019
06/30/2019
06/30/2018
–74
0
–74
73,315
0
73,315
65,885
26,190
92,075
60,350
25,115
85,465
–11
–3,848
102,746
240,312
224,584
–9,325
160,950
92,991
98,461
–137
75,439
48,893
62,318
42,061
36,581
0
–13,310
339,135
444,514
401,687
8,393
–295
154,027
150,424
5,146
3,605
–13,384
420,548
695,762
641,181
0
0
0
9,417
8,566
0
0
0
0
0
0
0
0
0
0
0
0
45
635
77
0
757
0
0
757
566
0
566
942
3,097
6,100
1,099
11,238
0
171
0
0
0
0
0
0
0
0
0
938
938
0
0
0
0
0
0
0
0
0
400
0
400
345
2,171
5,788
0
8,304
0
10
8,714
67
0
67
0
0
1
0
0
0
0
1
0
0
1
–4
16
118 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group 4. Notes to the Balance Sheet
Statement of changes in fixed assets
in € thousand
equipment and machinery
251,271
Patents, industrial
property rights and
Intangible assets
software
Goodwill
Land and
buildings
Technical
Operating and office
equipment
Payments on account
Property, plant and
equipment
Equity-accounted
financial assets
Financial assets
Assets
in € thousand
Patents, industrial
property rights and
Intangible assets
software
Goodwill
Land and
buildings
Technical
Operating and office
equipment
Payments on account
Property, plant and
equipment
Equity-accounted
financial assets
Financial assets
Assets
07/01/2018
123,885
25,115
149,000
320,754
111,217
36,581
158,817
4,220
4,075
1,470
779
115
0
0
0
0
0
0
0
0
698
796
448
0
0
0
719,823
6,439
First-time
adjustment
for inflation
(IAS 29) at
07/01/2018
07/01/2018
63,535
0
63,535
96,170
69,156
0
8,393
615
318,136
1,942
390,679
1,942
equipment and machinery
152,810
608
520
1,128
–275
–487
132
–13
–643
2,752
94
3,331
534
0
534
49
–102
148
0
95
0
6
635
0
0
0
824
510
692
601
2,627
0
0
0
0
0
220
281
160
0
661
0
0
661
5,932
555
6,487
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
9,368
0
9,368
13,933
10,296
13,192
49,073
86,494
0
709
9,720
0
9,720
9,768
18,030
11,359
0
39,157
0
32
48,909
1,031,860
6,439
2,627
6,487
96,571
First-time
adjustment
for inflation
(IAS 29) at
07/01/2018
Adjustment
Change in
Currency
for inflation
consolidated
translation
(IAS 29)
companies
Additions
Additions of
equity-
accounted
assets
Disposals of
equity-
accounted
assets
Reclassifi ca-
tion in hold
for sale
(IFRS 5)
Transfers
Disposals
Gross book values
0
0
0
0
0
0
0
0
9,417
0
9,417
566
0
566
942
3,097
6,100
1,099
11,238
0
171
11,975
0
0
0
0
0
0
0
0
8,566
0
8,566
06/30/2019
67
0
67
–94
0
–94
139,200
26,190
165,390
12,348
–7,659
343,058
5,814
–11,836
253,941
4,594
–22,822
–174
–118
124,332
62,318
–66
–19,787
783,649
0
0
1
0
–1
162,420
4,851
–19,882
1,116,310
Adjustment
Change in
Currency
for inflation
consolidated
translation
(IAS 29)
companies1
Planned
additions
Value impair-
ment
Adjustment
not affecting
profit and
loss
Disposals
Transfers
Reclassifi ca-
tion in hold
for sale
(IFRS 5)
Amortization/depreciation
Net book values
0
0
0
45
635
77
0
757
0
0
757
0
0
0
0
0
0
0
0
0
938
938
400
0
400
345
2,171
5,788
0
8,304
0
10
8,714
06/30/2019
06/30/2019
06/30/2018
0
0
0
–74
0
–74
73,315
0
73,315
65,885
26,190
92,075
60,350
25,115
85,465
–11
–3,848
102,746
240,312
224,584
–4
16
0
1
0
0
1
–9,325
160,950
92,991
98,461
–137
0
75,439
0
48,893
62,318
42,061
36,581
–13,310
339,135
444,514
401,687
0
0
8,393
–295
154,027
150,424
5,146
3,605
–13,384
420,548
695,762
641,181
4. Notes to the Balance Sheet | Notes for the KWS Group 2018/2019 | Annual Financial Statements 119
KWS Group | Annual Report 2018/2019 Statement of changes in fixed assets
in € thousand
Patents, industrial
property rights and
software
Goodwill
Intangible assets
Land and
buildings
Technical
equipment and machinery
Operating and office
equipment
Payments on account
Property, plant and
equipment
Equity-accounted
financial assets
Financial assets
Assets
in € thousand
Patents, industrial
property rights and
software
Goodwill
Intangible assets
Land and
buildings
Technical
equipment and machinery
Operating and office
equipment
Payments on account
Property, plant and
equipment
Equity-accounted
financial assets
Financial assets
Assets
07/01/2017
114,883
28,000
142,883
309,195
241,187
102,018
31,893
684,293
160,162
3,941
991,279
07/01/2017
55,451
0
55,451
89,072
141,769
64,106
1
294,948
8,393
873
359,665
First-time
adjustment
for inflation
(IAS 29) at
07/01/2018
Currency
translation
Adjustment
for inflation
(IAS 29)
Change in
consolidated
companies
Additions
assets
Disposals
assets
Transfers
Additions of
equity-
accounted
Disposals of
equity-
accounted
–2,970
–2,898
–5,868
–4,161
–4,340
–1,797
–968
–11,266
–2,649
–55
–19,838
0
0
0
0
0
2,052
0
12,164
13
12,177
9,842
11,226
12,230
25,483
2,052
58,781
0
–10
0
745
2,042
71,703
13,414
14,458
12,110
1,031,860
Amortization/depreciation
Net book values
First-time
adjustment
for inflation
(IAS 29) at
07/01/2018
Currency
translation
Adjustment
for inflation
(IAS 29)
Change in
consolidated
companies1
Planned
additions
Adjustment
not affecting
profit and
Value impair-
ment
loss
Disposals
Transfers
Reclassifi ca-
tion in hold
for sale
(IFRS 5)
–2,519
0
–2,519
–741
–2,311
–994
0
–4,046
0
–5
–6,570
0
0
0
0
0
323
0
323
0
0
323
11,019
0
11,019
9,533
18,303
11,286
0
39,122
0
0
50,141
Gross book values
Reclassifi ca-
tion in hold
for sale
(IFRS 5)
06/30/2018
123,885
25,115
149,000
320,754
251,271
111,217
36,581
719,823
158,817
4,220
13,414
12,110
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
418
0
418
2,044
5,746
5,964
57
13,811
0
229
27
0
0
0
0
0
0
27
0
253
280
0
0
0
0
0
0
0
0
0
226
0
226
7,922
8,944
2,678
–19,770
–226
0
–172
–172
416
0
416
1,667
4,995
5,521
1
0
0
12,184
12,600
44
–44
0
0
0
0
0
0
0
0
0
06/30/2018
06/30/2018
06/30/2017
63,535
0
63,535
60,350
25,115
85,465
59,432
28,000
87,432
96,170
224,584
220,123
152,810
98,461
99,418
69,156
0
42,061
36,581
37,912
31,892
318,136
401,687
389,345
8,393
615
150,424
151,769
3,605
3,069
390,679
641,181
631,615
120 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group Statement of changes in fixed assets
in € thousand
equipment and machinery
241,187
Patents, industrial
property rights and
Intangible assets
software
Goodwill
Land and
buildings
Technical
Operating and office
equipment
Payments on account
Property, plant and
equipment
Equity-accounted
financial assets
Financial assets
Assets
in € thousand
Patents, industrial
property rights and
Intangible assets
software
Goodwill
Land and
buildings
Technical
Operating and office
equipment
Payments on account
Property, plant and
equipment
Equity-accounted
financial assets
Financial assets
Assets
07/01/2017
114,883
28,000
142,883
309,195
102,018
31,893
684,293
160,162
3,941
991,279
07/01/2017
55,451
0
55,451
89,072
64,106
1
294,948
8,393
873
359,665
equipment and machinery
141,769
–2,970
–2,898
–5,868
–4,161
–4,340
–1,797
–968
–11,266
–2,649
–55
–19,838
–2,519
0
–2,519
–741
–2,311
–994
0
–4,046
0
–5
–6,570
0
0
0
0
0
0
0
0
0
0
0
0
0
0
12,164
13
12,177
9,842
11,226
12,230
25,483
2,052
2,052
58,781
0
–10
0
745
11,019
0
11,019
9,533
18,303
0
0
0
323
11,286
323
39,122
323
50,141
First-time
adjustment
for inflation
(IAS 29) at
07/01/2018
Adjustment
Change in
Currency
for inflation
consolidated
translation
(IAS 29)
companies
Additions
Additions of
equity-
accounted
assets
Disposals of
equity-
accounted
assets
Reclassifi ca-
tion in hold
for sale
(IFRS 5)
Transfers
Disposals
Gross book values
0
0
0
0
0
0
0
0
13,414
0
418
0
418
2,044
5,746
5,964
57
13,811
0
229
0
0
0
0
0
0
0
0
12,110
0
2,042
71,703
13,414
14,458
12,110
226
0
226
7,922
8,944
2,678
–19,770
–226
0
–172
–172
06/30/2018
123,885
25,115
149,000
320,754
251,271
111,217
36,581
719,823
158,817
4,220
1,031,860
First-time
adjustment
for inflation
(IAS 29) at
07/01/2018
Adjustment
Change in
Currency
for inflation
consolidated
translation
(IAS 29)
companies1
Planned
additions
Value impair-
ment
Adjustment
not affecting
profit and
loss
Disposals
Transfers
Reclassifi ca-
tion in hold
for sale
(IFRS 5)
Amortization/depreciation
Net book values
0
0
0
0
0
0
0
0
0
0
0
0
0
0
27
0
0
0
27
0
253
280
416
0
416
1,667
4,995
5,521
1
12,184
0
0
12,600
0
0
0
0
44
–44
0
0
0
0
0
06/30/2018
06/30/2018
06/30/2017
63,535
0
63,535
60,350
25,115
85,465
59,432
28,000
87,432
96,170
224,584
220,123
152,810
98,461
99,418
69,156
0
42,061
36,581
37,912
31,892
318,136
401,687
389,345
8,393
615
150,424
151,769
3,605
3,069
390,679
641,181
631,615
4. Notes to the Balance Sheet | Notes for the KWS Group 2018/2019 | Annual Financial Statements 121
KWS Group | Annual Report 2018/2019 4.1 Assets
For the European and American markets, the key
The statement of changes in fixed assets contains a break-
assump tions on which corporate planning is based include
down of assets summarized in the balance sheet and shows
assumptions about price trends for seed, in addition to the
how they changed in fiscal year 2018/2019.
development of market shares and the regulatory frame-
4.2 Intangible assets
work. Company-internal projections take the assumptions
of industry-specific market analyses and company-related
This item includes purchased varieties, rights to varieties
growth perspectives into account.
and distribution rights, software licenses for electronic
data processing, and goodwill. The current additions of
The discount rate at the KWS Group has been derived as
€9,368 (12,177) thousand related to software licenses and
the weighted average cost of capital (WACC). The WACC
patents. Amortization of intangible assets amounted to
before taxes is calculated using the iterative procedure and
€9,720 (11,019) thousand.
was 6.23% (6.61%) for the cash-generating unit Sugarbeet,
6.54% (6.67%) for Corn Europe/Asia, 6.49% (6.74%) for Corn
One major intangible asset is the trait licensing agree-
America and 6.91% (6.94%) for Cereals. A growth rate of
ment. Its carrying amount at the balance sheet date was
1.5% (1.5%) has been assumed here beyond the detailed
€18,896 thousand. Its remaining useful life is 11 years.
planning horizon in order to allow for extrapolation in line
with the expected inflation rate.
In order to meet the requirements of IFRS 3 in combination
with IAS 36 and to determine any impairment of goodwill,
The impairment tests conducted at the end of
cash-generating units have been defined in line with internal
fiscal year 2018/2019 confirmed that the existing good-
budgeting and reporting processes. In the KWS Group,
will is not impaired. The Business Unit Corn America
these are the Business Units. To test for impairment, the
carries goodwill totaling €15,462 (14,903) thousand. The
carrying amount of each Business Unit is determined by
Business Unit Corn Europe/Asia carries goodwill totaling
allocating the assets and liabilities, including attributable
€6,308 (6,306) thousand. €3,889 (3,906) thousand of the
goodwill and intangible assets. An impairment loss is
goodwill is carried by the Business Unit Cereals. Sensitivity
recognized if the recoverable amount of a Business Unit is
analyses were also carried out for all cash-generating
less than its carrying amount. The recoverable amount is the
units to which goodwill is allocated. As part of that, it was
higher of the fair value less costs to sell and the value in use
assumed that the future cash flows would fall by 10%, the
of a cash-generating unit. The impairment tests to be carried
weighted average cost of capital would increase by 10%
out for fiscal year 2018/2019 determine the recoverable
and the long-term growth rate would fall by 1 percentage
amount on the basis of the value in use of the respective
point. The sensitivity analyses did not reveal the need to
cash-generating unit.
recognize an impairment loss for any cash-generating unit.
The impairment test is based on the expected future cash
flows on which the medium-term plans of the companies,
which are grouped in segments, are based; these plans,
which cover a period of 4 years, have been approved by the
Executive Board. They are based on historical patterns and
expectations about future market development.
122 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group 4.3 Property, plant, and equipment
Capital expenditure amounted to €86,494 (58,781) thousand
and depreciation amounted to €39,157 (39,122) thousand.
Disclosures on equity-accounted joint ventures
(with the partner Vilmorin)
in € thousand
06/30/2019 06/30/2018
There were also impairment losses of €757 (0) thousand
Stake in the joint venture
in France. The main focus of our capital spending in
Current assets
the reporting year remained on erecting and expanding
production and research & development capacities. Among
other things, expansion of sugarbeet seed production and
of our laboratory capacities was continued in Germany.
The KWS Group invested in a new seed processing plant in
France. Drying and production capacities for corn seed were
increased further in Argentina and Brazil. Property, plant, and
equipment to an amount of €1,216 (1,926) thousand are held
as security for liabilities.
4.4 At-Equity accounted financial assets
At-equity accounted joint ventures
The joint ventures AGRELIANT GENETICS LLC. and
Thereof cash and cash
equivalents1
Noncurrent assets
Current liabilities
Thereof current financial
liabilities (excluding trade
payables and other
liabilities and provisions)
Noncurrent liabilities
Net assets (100%)
Group share of net assets (50%)
Goodwill
Carrying amount for the
stake in the joint ventures
AGRELIANT GENETICS INC., which KWS operates together
Net sales
with its joint venture partner Vilmorin, are recognized at
equity. In the reporting year, AGRELIANT GENETICS LLC.
was classified as a significant joint venture. From the group
perspective, AGRELIANT GENETICS INC. was classified as
an insignificant joint venture.
Both joint ventures are operating units. The main business
activity of both joint ventures is the production and sale of
corn and soybean seed in North America.
Depreciation and amortization
Net income for the year
Comprehensive income (100%)
Comprehensive income (50%)
Group share of
comprehensive income
Dividend payment
50%
50%
367,892
302,250
(31,696)
243,626
345,058
(26,144)
254,586
296,704
(133,564)
(156,730)
1,294
265,166
132,583
8,802
141,385
512,748
24,523
12,886
12,886
6,443
6,443
12,224
1,656
258,476
129,238
8,802
138,040
545,536
22,867
21,696
21,696
10,848
10,848
22,006
1 Thereof AGRELIANT GENETICS LLC. €13,873 (9,256) thousand.
At-Equity accounted associated companies
The following disclosures on the joint ventures are only
The disclosures on insignificant associated companies
slightly influenced by the insignificant joint venture. If
in accordance with IFRS 12.21 (c) in conjunction with
individual items of the information presented are materially
IFRS 12.B16 are as follows:
influenced by the insignificant joint venture, this information
is presented separately.
Disclosures on insignificant associated companies
accounted for using the equity method
in € thousand
06/30/2019 06/30/2018
Carrying amount for the
stake in insignificant
associated companies
( aggregated)
Net income for the year
Other comprehensive income
Comprehensive income (100%)
12,601
6,069
0
6,069
12,344
5,236
0
5,236
In the reporting year, this relates to our Chinese joint venture
KENFENG – KWS SEED CO., LTD., which is carried in the
KWS Group’s consolidated financial statements as an asso-
ciated company in accordance with the equity method.
4. Notes to the Balance Sheet | Notes for the KWS Group 2018/2019 | Annual Financial Statements 123
KWS Group | Annual Report 2018/2019 4.5 Proportionately consolidated joint operations
Inventories and biological assets decreased by
Joint operations are based on joint arrangements that
€1,916 thousand, or 1.0%, a figure that includes
always exist when the KWS Group jointly conducts
cumulative write-down to the net realizable value totaling
operations managed together with a third party pursuant
€63,091 (63,992) thousand. Immature biological assets relate
to a contractual agreement. The operation is jointly
to living plants in the process of growing (before harvest). The
managed only if decisions on significant activities require
field inventories of the previous year have been harvested
the unanimous consent of the parties involved. The assets
in full and the fields have been newly tilled in the reporting
and liabilities and revenue and expenses from the joint
year. Government grants of €1,594 (€1,289) thousand, for
operations are included proportionately (at 50%) in the
which all the requirements were met at the balance sheet
consolidated financial statements. The main activity of the
date, were granted for the total area under cultivation of
proportionately consolidated GENECTIVE S.A. is develop-
4,444 (4,387) ha. Future government grants depend on the
ment of its own traits for genetically improving crops.
further development of European agricultural policy.
AARDEVO B.V. (formerly: KWS POTATO B.V.) has been
consolidated proportionately as a joint operation since
4.8 Current receivables and other assets
February 1, 2019.
4.6 Financial assets
This item mainly comprises the investments in the capital
investment fund MLS Capital Fund II (project financing
and access to biotechnological developments) totaling
€4,209 thousand, which are measured at fair value through
other comprehensive income due to long-term irrevocable
investment. The remainder relates to a large number of
financial investments that – taken individually – are insig-
nificant, such as other interest-bearing loans, shares in
Current receivables
in € thousand
Trade receivables
Current tax assets
Other current financial assets
Other current assets
Contractual assets
06/30/2019 06/30/2018
402,129
310,141
81,010
487,121
20,671
2,733
56,772
52,922
18,694
0
993,664
438,529
cooperatives, and other securities.
The net carrying amount of the trade receivables was
€402,129 thousand following €310,141 thousand in the
4.7 Inventories and biological assets
pre vious year. This amount includes €7,318 (5,757) thou sand
Inventories and biological assets
in € thousand
Raw materials and
consumables
Work in progress
Immature biological assets
Finished goods
06/30/2019 06/30/2018
26,642
62,528
16,087
88,146
193,403
20,524
58,979
14,339
101,477
195,319
in receivables from joint ventures and joint operations.
The exposure to the risk of default at June 30, 2019, was
determined using the provision matrix on the basis of the
expected losses. To enable that, the receivables are grouped
by the length of time they are overdue. Expected default rates
of 0.33% to 2.53% are applied to receivables that are not
overdue (approx. 89% of the total gross amount) and default
rates of 1.01% to 15.58% to receivables that are overdue
by up to 180 days (approx. 7% of the total gross amount).
Receivables that are overdue by more than 360 days have
been classified as uncollectible and written off in full.
124 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group The maximum exposure to the risk of default from trade
receivables corresponds to the reported carrying amount and
at June 30, 2019 is as follows:
Credit risks
in € thousand
Of which: neither
written down nor
overdue on the
balance sheet date
Carrying
amount
Of which: not written down on the
balance sheet date and overdue in
the following time frames
1–90
days
91–180
days
181–360
days
>360
days
Of which:
written down and not
overdue on the
balance sheet date
06/30/2019
Trade receivables
402,129
313,724
11,327
578
1,888
Other current
financial assets
06/30/2018
487,121
889,250
437,819
0
751,543
11,327
0
578
0
1,888
Trade receivables
310,141
272,111
22,720
1,146
1,947
Other current
financial assets
52,922
363,063
37,786
0
0
0
309,897
22,720
1,146
1,947
1
0
1
1
0
1
1,887
0
1,887
3,454
0
3,454
The credit risks were reflected by the following allowances
at June 30, 2019 and in the prior year:
Change in allowances on receivables
in € thousand
2018/2019 (IFRS 9)1
2017/2018 (IAS 39)
Change in
consolida-
tion scope
–1,608
0
07/01
37,987
26,543
1 The opening balance was changed due to first-time adoption of IFRS 9.
Addition
Disposal
Reversal
6,856
11,165
68
206
10,258
5,506
06/30
32,909
31,996
The clearly higher reversal of allowances in the current fiscal
The receivables include an amount of €422 (606) thousand
year is partly attributable to the change in customer-specific
due after more than one year.
probabilities of default for the purpose of the calculation of
expected losses (expected-loss-model).
4.9 Securities
The increase in other current financial assets is mainly due
primarily to debt securities and fund shares. For details of
to deposit of the purchase price of €414.7 million for the
how securities are measured, please refer to section 4.16
acquisition of all the shares in the Pop Vriend Seeds Group
“Financial instruments” of the Notes starting on page 134.
Securities amounting to €19,944 (18,282) thousand relate
in a trust account.
4. Notes to the Balance Sheet | Notes for the KWS Group 2018/2019 | Annual Financial Statements 125
KWS Group | Annual Report 2018/2019
4.10 Cash and cash equivalents
The other reserves and net retained profit essentially
Cash and cash equivalents comprise cash on hand, checks,
comprise the net income generated in the past by the
and immediately available balances at banks.
companies included in the consolidated financial state-
Cash and cash equivalents of €139,813 (174,300) thousand
retained profit. The differences from currency translation,
consists of balances with banks and cash on hand. The cash
the reserve for available-for-sale financial assets and
flow statement explains the change in this item compared
the reserve for revaluation of net liabilities/assets from
with the previous year, together with the change in securities.
defined benefit plans, the reserve for currency trans-
ments, minus dividends paid to shareholders, and the net
4.11 Equity
lation for at-equity accounted financial assets, as well
as, the reserve for remeasurement gain/loss on equity
Pursuant to the resolution adopted by the Annual Share-
instruments (with value changes in other comprehensive
holders’ Meeting on December 14, 2018, the then
income), are also presented here.
KWS SAAT SE carried out a stock split at a ratio of 1:5 by
issuing bonus shares on March 22, 2019. As a result, the total
Differences from translation of the functional currency
number of shares increased from 6,600,000 to 33,000,000.
of foreign business operations into the reporting
To enable the stock split, the capital stock had to be
currency of the group in reporting (euro) are carried in
increased from €19,800 thousand to €99,000 thousand using
the item Adjustments from currency translation. The
company funds. That was done by means of reclassification
item Revaluation of net liabilities/assets from defined
of the revenue reserves to an amount of €79,200 thousand.
benefit plans and associated planned assets includes
The earnings per share for the previous year were adjusted
the actuarial gains and losses from pensions and other
accordingly.
employee benefits. Differences from translation of the
functional currency of at-equity accounted companies
The capital reserves essentially comprise the premium
into the reporting currency of the group are carried in the
obtained as part of share issues.
reserve for currency translation for at-equity accounted
financial assets.
The tax effects on other comprehensive income are as
follows:
Other comprehensive income
in € thousand
Items that may have to be subsequently
reclassified as profit or loss
Revaluation of available-for-sale
financial assets
Currency translation difference for
economically independent foreign
units
Currency translation difference from
equity-accounted financial assets
Items not reclassified as profit or loss
Net gain/(loss) on equity instruments
designated at fair value through
other comprehensive income
Revaluation of net liabilities/assets
from defined benefit plans
Other comprehensive income
2018/2019
2017/2018
Before
taxes
Tax
effect
After
taxes
Before
taxes
Tax
effect
After
taxes
4,345
0
1,592
2,753
–11,319
0
0
0
0
4,003
4,345
–31,238
–64
–31,302
0
325
–64
261
1,592
–28,913
2,753
–7,316
–2,650
–3,712
0
0
1,270
–28,913
–2,650
–2,442
787
–155
632
0
0
0
–12,106
–6,974
4,158
4,003
–7,948
–2,971
–3,712
–34,950
1,270
1,206
–2,442
–33,744
126 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group The objective of KWS’ capital management activities is
First-time application of IAS 29 at KWS ARGENTINA S.A.
to pursue the interests of shareholders and employees in
increased the opening balance by €6,590 thousand.
accordance with the corporate strategy and earn a reason-
Conversely, the revenue reserves at June 1, 2018, were
able return on investment. One main goal is to retain the
adjusted by €4,755 thousand as a result of first-time
trust of investors, lenders and the market so as to strengthen
application of IFRS 9. Please refer to the statement of
the company’s future business development. KWS’ capital
changes in equity for further effects not recognized in the
management activities intend to optimize the average cost
income statement.
of capital. Another goal is a balanced mix of equity and
debt capital. Consolidated income (after taxes and minority
An important indicator in capital management is the equity
interests) is €104,134 (99,521) thousand. However, there
ratio. It was 45.5% (58.1%) at June 30, 2019, and thus at a
was a total dividend payout of €21,120 (21,120) thousand
good and solid level. The significant decrease in comparison
in December 2018. This ensures the adequate financing of
to the prior year is due to taking a bridge loan for the
further operating business expansion in the long term. Equity
acquisition of Pop Vriend Seeds. The capital structure is as
increased by €81,764 thousand due to annual net profit to
follows:
€963,547 (881,783) thousand. The increase in subscribed
capital from company funds amounting to €79,200 thousand
led to the issue of new shares as part of the stock split.
Capital structure
in € thousand
Equity
Long-term financial borrowings
Other noncurrent liabilities
Short-term borrowings
Other noncurrent liabilities
Liabilities classified as hold for sale
Total capital
06/30/2019
963,547
182,270
182,108
475,425
309,845
1,758
2,114,953
Share of
total capital
45.5%
Share of
total capital
58.1%
06/30/2018
881,783
168,698
165,625
61,287
240,288
0
1,517,681
The focus in selecting financial instruments is on
financing with matching maturities, which is achieved by
controlling the maturities. Long-term financial borrowings
increased by €13,572 thousand (previous year: decrease
of €32,130 thousand). This is mainly due to the increase in
long-term financial loans from banks. The significant increase
of the current financial liabilities mainly results from taking a
bridge loan for the acquisition of Pop Vriend Seeds.
4.12 Minority interest
The KWS Group does not have any minority interests that
are assessed as being significant.
4. Notes to the Balance Sheet | Notes for the KWS Group 2018/2019 | Annual Financial Statements 127
KWS Group | Annual Report 2018/2019 4.13 Noncurrent liabilities
Noncurrent liabilities
Non-current liabilities rose by €30,055 thousand ( previous
year: decrease of €24,562 thousand). This is due in particular
to the increase in long-term financial loans from banks in
Brazil. The long-term financial borrowings include loans from
banks amounting to €182,270 (168,698) thousand. They have
remaining maturities through 2028.
The liabilities from the borrower’s note loan agreement
at June 30, 2019, were €140,451 thousand (thereof,
€36,500 thousand with remaining maturity of less than
in € thousand
06/30/2019 06/30/2018
Long-term provisions
Long-term borrowings
Trade payables
145,446
182,270
782
127,833
168,698
968
Deferred tax liabilities
16,416
19,342
Other noncurrent financial
liabilities
258
288
Other noncurrent liabilities
19,206
17,194
364,378
334,323
one year).
Long-term provisions
in € thousand
06/30/
2018
Changes
in the
consolida-
ted group,
currency
Interest
ex penses
from
com-
pounding
Pension
provisions
114,121
–1,032
2,805
Tax provisions
1,545
17
0
Addi-
tion
2,306
7,590
Other
provisions
12,167
127,833
–607
–1,622
82
1,823
2,887
11,719
13,757
Adjust-
ment not
affecting
profit or
loss
13,757
0
0
06/30/
2019
Con-
sump-
tion
Rever-
sal
Reclassification
in liabilities hold
for sale
6,050
1,536
1,383
8,969
0
0
0
0
–159
125,748
0
0
7,616
12,082
–159
145,446
The other provisions mainly comprise provisions by the
The following mortality tables were used at June 30, 2019:
German companies for semi-retirement and loyalty bonuses.
In Germany: The 2018 G mortality table of Klaus Heubeck
The pension provisions are based on defined benefit
Abroad: Mainly RP-2014 Mortality Table Projection Scale
obligations, determined by years of service and
MP-2018 and INSEE TD/TV 14-16
pensionable compensation. They are measured using
the projected unit credit method under IAS 19 (2011), on
A retirement age of 63 years is imputed for Germany,
the basis of assumptions about future developments.
a retirement age of 65 years is imputed for the U.S., and
The assumptions in detail are that wages and salaries
a retirement age of 66 years is imputed for France.
in Germany will increase by 3.00% (3.00%) annually, in
the U.S. by 3.75% (3.75%) annually and in the rest of the
world by 1.80% to 2.63% (2.00% to 3.00%) annually. An
annual increase in pensions of 2.00% (2.00%) is assumed
in Germany. The discount rate in Germany was 0.95%
compared with 1.65% the year before, 3.65% in the U.S.
compared with 4.15% the year before, and between
0.35% and 2.35% (1.45% and 3.15%) in the rest of the world.
128 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group Nature and scope of the pension benefits
The pension plans are mainly subject to the following risks:
In Germany
Investment and return
The following benefits are provided under a company agree-
The present value of the defined benefit obligation from the
ment relating to the company retirement pension program:
pension plan is calculated using a discount rate defined on
the basis of the returns on high-quality fixed-income corpo-
An old-age pension at the age of 65
rate bonds. If the income from the planned assets is below
An early retirement pension before the age of 65, coupled
this rate of interest, the result is a shortfall in the plan. The
with benefits from the early retirement pension from the
corporate bonds and share funds are chosen to ensure risk
statutory pension insurance program
diversification and managed by an external fund manager.
An invalidity pension for persons who suffer from occu-
pational disability or incapacity to work as defined by the
Change in interest rates
statutory pension insurance program
The fall in the returns on corporate bonds and thus the
A widow’s or widower’s pension
discount rate will result in an increase in the obligations,
which is only partly compensated for by a change in the
For benefit obligations backed by a guarantee by an insurance
value of the planned assets.
company toward three former members of the Executive
Board, the planned assets of €10,061 (9,428) thousand
Life expectancy
correspond to the present value of the obligation. In
The present value of the defined benefit obligation from the
accordance with IAS 19 (2011), the pension commitments are
plan is calculated on the basis of the best-possible estimate
netted off against the corresponding assets (planned assets).
using mortality tables. An increase in the life expectancy
of the entitled employees results in an increase in the plan
Abroad
liabilities.
The defined benefit obligations abroad mainly relate to
pension commitments in the U.S. Share funds and bonds
Salary and pension trends
were mainly invested as planned assets to cover them. All
The present value of the defined benefit obligation from the
employees who have reached the age of 21 are entitled to
plan is calculated on the basis of future salaries/pensions.
benefits. In addition, each employee must have worked at
Consequently, increases in the salary and pension of the
least one year and at least 1,000 working hours to earn an
entitled employees results in an increase in the plan liabilities.
entitlement.
In previous years, KWS countered the usual risks of direct
The following benefits are granted from the pension plan:
obligations by converting the pension obligations from
defined benefit to defined contribution plans. As a result,
An old-age pension at the age of 65
subsequent benefits will be provided by a provident fund
An early retirement pension before the age of 65 – to
backed by a guarantee. The existing obligations, which
be eligible, the employee must be at least 55 and the
are partly covered by planned assets, are funded from the
minimum vesting period is 5 years
operating cash flow and are subject to the familiar measure-
A pro-rata pension if the employee reaches the minimum
ment risks.
vesting period of 5 years, but is below 55
4. Notes to the Balance Sheet | Notes for the KWS Group 2018/2019 | Annual Financial Statements 129
KWS Group | Annual Report 2018/2019 The tables below show the changes in the accrued benefit
and planned assets:
Changes in accrued benefit entitlements
in € thousand
2018/2019
2017/2018
Germany
Abroad
Total
Germany
Abroad
Total
Accrued benefit entitlements from
retirement obligations on July 1
Service cost
Interest expense
Actuarial gains (–)/losses (+)
of which due to a change in financial
assumptions used for calculation
of which due to experience
adjustments
Pension payments made
Exchange rate changes
Other changes in value
117,928
23,642
141,570
113,345
23,680
137,025
784
1,900
11,674
1,283
905
1,541
2,067
2,805
13,215
809
2,105
6,656
1,359
800
–1,180
2,168
2,905
5,476
12,947
2,296
15,243
6,116
–1,201
4,915
–1,273
–4,885
–755
–690
465
–63
–159
–2,028
–5,575
465
–63
–159
540
–4,987
0
0
0
21
–589
–428
0
0
561
–5,576
–428
0
0
Reclassification in liabilities hold for sale
0
Accrued benefit entitlements from
retirement obligations on June 30
Change in planned assets
in € thousand
Fair value of the planned assets
on July 1
Interest income
Income from planned assets excluding
amounts already recognized as interest
income
Pension payments made
Exchange rate changes
Other changes in value
Fair value of the planned assets
on June 30
127,401
26,924
154,325
117,928
23,642
141,570
Germany
Abroad
Total
Germany
Abroad
Total
2018/2019
2017/2018
10,061
17,388
27,449
161
703
864
614
–645
494
–561
–16
377
1,108
–1,205
–16
377
9,428
173
1,086
–626
15,700
25,128
552
725
678
–511
–305
1,274
1,764
–1,137
–305
1,274
10,191
18,386
28,577
10,061
17,388
27,449
In order to allow reconciliation with the figures in the
balance sheet, the accrued benefit must be netted off with
the planned assets.
Reconciliation with the balance sheet values for pensions
in € thousand
2018/2019
2017/2018
Germany
Abroad
Total
Germany
Abroad
Total
Accrued benefit entitlements from
retirement obligations on June 30
Fair value of the planned assets
on June 30
Balance sheet values on June 30
127,401
26,924
154,325
117,928
23,642
141,570
10,191
117,210
18,386
8,538
28,577
125,748
10,061
107,867
17,388
27,449
6,254
114,121
130 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group The following amounts were recognized in the statement of
comprehensive income:
Effects on the statement of comprehensive income
in € thousand
Service cost
Net interest expense (+)/income (–)
Amounts recognized in the income
statement
Gains (–)/losses (+) from revaluation of
the planned assets (excluding amounts
already recognized as interest income)
Actuarial gains (–)/losses (+) due to a
change in financial assumptions used
for calculation
Actuarial gains (–)/losses (+) due to
experience adjustments
Amounts recognized in other
comprehensive income
Total (amounts recognized in the
statement of comprehensive income)
2018/2019
Germany
Abroad
784
1,739
1,283
202
Total
2,067
1,941
Germany
Abroad
809
2,105
1,359
800
2017/2018
Total
2,168
2,905
2,523
1,485
4,008
2,914
2,159
5,073
–614
–494
–1,108
–1,086
–678
–1,764
12,947
2,296
15,243
6,116
–1,201
4,915
–1,273
–755
–2,028
540
21
561
11,060
1,047
12,107
5,570
–1,858
3,712
13,583
2,532
16,115
8,484
301
8,785
The service cost is recognized in operating income in the
The fair value of the planned assets was split over the
respective functional areas by means of an appropriate
following investment categories:
formula. Net interest expenses and income are carried in the
interest result.
Breakdown of the planned assets by investment category
Germany
Abroad
Germany
Abroad
in € thousand
Corporate bonds
Equity funds
Consumer industry
Finance
Industry
Technology
Health care
Other
2018/2019
Total
4,655
12,906
4,655
12,906
2,356
1,731
1,681
2,531
1,458
3,149
825
18,386
2017/2018
Total
4,755
11,456
1,177
10,061
27,449
4,755
11,456
1,964
1,475
1,393
2,346
1,297
2,981
1,177
17,388
Cash and cash equivalents
Reinsurance policies
Planned assets on June 30
10,191
10,191
825
10,191
28,577
10,061
10,061
The planned assets abroad relate mainly to the U.S.
The following sensitivity analysis at June 30, 2019, shows
There is no active market for the reinsurance policies
given a change in the actuarial assumptions. No correla-
in Germany. There is an active market for the other
tions between the individual assumptions were taken
planned assets; the fair value can be derived from their
into account in this, i.e. if an assumption varies, the other
stock market prices. 78.2% (previous year: 83.8%) of the
assumptions were kept constant. The projected unit
corporate bonds have an AAA rating.
credit method used to calculate the balance sheet values
how the present value of the obligation would change
was also used in the sensitivity analysis.
4. Notes to the Balance Sheet | Notes for the KWS Group 2018/2019 | Annual Financial Statements 131
KWS Group | Annual Report 2018/2019 Sensitivity analysis
in € thousand
Discount rate
Anticipated annual pay increases
Anticipated annual pension increase
Life expectancy
Effect on obligation in
2018/2019
Effect on obligation in
2017/2018
Change in
assumption
+/– 100
basis points
+/– 50
basis points
+/– 25
basis points
+/– 1 year
Decrease
Increase
28,064
–22,111
–1,236
1,407
–3,734
–5,665
3,914
5,808
Change in
assumption
+/– 100
basis points
+/– 50
basis points
+/– 25
basis points
+/– 1 year
Decrease
Increase
26,184
–20,535
–1,229
1,327
–4,264
–5,945
4,434
6,049
The following undiscounted payments for pensions (with
their due dates) are expected in the following years:
Anticipated payments for pensions
Anticipated payments for pensions
in € thou-
sand
2019/2020
2020/2021
2021/2022
2022/2023
2023/2024
2024/2025–
2028/2029
2018/2019
in € thou-
sand
Germany
5,106
4,996
4,942
4,956
4,994
Abroad
1,020
822
925
1,124
1,088
Total
6,126
5,818
5,867
6,080
6,082
24,581
6,362
30,943
2018/2019
2019/2020
2020/2021
2021/2022
2022/2023
2023/2024–
2027/2028
Germany
Abroad
5,233
5,273
5,138
5,057
5,031
798
774
1,008
947
1,086
2017/2018
Total
6,031
6,047
6,145
6,004
6,116
24,640
6,175
30,814
The weighted average time at which the pension obligations
obligations above and beyond payment of the contributions
are due is 16.2 (15.5) years in Germany and abroad
(defined contribution plans). These comprise benefits that
18.7 (17.3) years.
are funded solely by the employer and allowances for
conversion of earnings by employees.
Defined contribution plans
Apart from the above-described pension obligations, there
The total pension costs for fiscal year 2018/2019 were as
are other old-age pension systems. However, no provisions
follows:
have to be set up for them, since there are no further
Pension costs
in € thousand
Germany
Abroad
Cost for defined contribution plans
3,618
891
Service cost for the defined benefit
obligations
Pension costs
784
4,402
1,283
2,174
2018/2019
2017/2018
Total
4,509
2,067
6,576
Germany
Abroad
3,189
1,870
809
3,998
1,359
3,229
Total
5,059
2,168
7,227
132 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group In addition, contributions of €14,786 (14,417) thousand were
€2,249 (2,201) thousand. The return and income from the
paid to statutory pension insurance institutions.
planned assets depend on the reinsurance policy, which
The costs for defined contribution plans in Germany
addition, the benefit obligation from salary conversion was
mainly related to the provident fund backed by a
backed by a guarantee that exactly matches the present
guarantee. The contributions to this pension plan were
value of the obligation of €4,462 (4,322) thousand.
yields guaranteed interest of between 0.9% and 2.25%. In
4.14 Current liabilities
Current liabilities
in € thousand
Short-term provisions
Current liabilities to banks
Current financial liabilities to affiliates
Other current financial liabilities
Short-term borrowings
Trade payables to affiliates
Trade payables to joint ventures
Trade payables
Trade payables
Tax liabilities
Other current financial liabilities
Other current liabilities
Contract liabilities according to IFRS 15
06/30/2019
06/30/2018
50,192
473,789
66
1,570
42,311
60,536
65
686
475,425
61,287
2,248
0
86,247
88,495
48,927
17,392
86,035
18,804
2,903
56
72,762
75,721
39,171
11,288
71,797
0
785,270
301,575
In June 2019, the KWS Group replaced its undrawn
The tax liabilities of €48,927 (39,171) thousand include
syndicated credit line of €200 million, which originally ran
amounts for the reporting year and the period for which the
until October 2021. Ahead of the acquisition of the vegetable
external tax audit has not yet been concluded.
seed company Pop Vriend Seeds, it utilized bridge funding
totaling €400 million from various banks for a short period of
The contract liabilities amounting to €18,804 thousand are
time.
Short-term provisions
carried for the first time in fiscal year 2018/2019 as a result
of adoption of IFRS 15. This balance sheet item mainly
comprises liabilities for expected returns and discounts.
in € thousand
06/30/2018
06/30/2019
Obligations from sales transactions
33,826
Obligations from purchase
transactions
Other obligations
1,007
7,478
42,311
Changes in
the consoli-
dated group,
currency
244
–1
–84
159
Addition
Consump-
tion
Reversal
24,800
20,555
4,110
34,205
2,870
9,470
926
3,229
37,140
24,710
1
597
4,708
2,949
13,038
50,192
4. Notes to the Balance Sheet | Notes for the KWS Group 2018/2019 | Annual Financial Statements 133
KWS Group | Annual Report 2018/2019 The obligations from sales transactions essentially relate
to provisions for licenses. The obligations from purchase
transactions include provisions for procurement transac-
tions, such as compensation for breeding areas. The other
obligations relate to litigation risks and other provisions
that cannot be assigned to the group of sales transactions
or the group of purchase transactions.
4.15 Derivative financial instruments
Hedging transactions
in € thousand
Currency hedges
Interest-rate hedges
06/30/2019
06/30/2018
Nominal
volume
Carrying
amounts
Fair value
Nominal
volume
Carrying
amounts
Fair value
156,172
34,000
190,172
–621
–73
–694
–621
–73
–694
199,505
34,000
233,505
3,129
–223
2,906
3,129
–223
2,906
As in the previous year, all currency hedges have a remaining
that would be paid to transfer the liability, after taking into
maturity of less than one year. Of the interest-rate derivatives,
account transaction costs, is used. These are active and
hedges with a nominal volume of €19,000 (0) thousand
accessible markets for identical assets and liabilities, where
have a remaining maturity of less than one year and hedges
the fair value results from quoted prices that are observable
with a nominal volume of €15,000 (34,000) thousand have a
(level 1 input factors). At the KWS Group, this relates to
remaining maturity of between one and 5 years.
securities in the category measured at fair value through
4.16 Financial instruments
other comprehensive income, as well as fund shares at
banks and other financial assets whose price is likewise
In general, the fair values of financial assets and liabilities
quoted in active markets.
are calculated on the basis of the market data available on
the balance sheet date and are assigned to one of the three
The level 2 input factors relate to derivative financial instru-
hierarchy levels in accordance with IFRS 13. The principal
ments that have been concluded between KWS companies
market, i . e. the market with the largest volume of trading and
and banks. The prices can thus be derived indirectly from
the greatest business activity, is used to calculate the fair
active market prices for similar assets and liabilities. The
value. If this market does not exist for the asset or liabilities
level 3 input factors cannot be derived from observable
in question, the market that maximizes the amount that
market information.
would be received to sell the asset or minimizes the amount
134 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group The carrying amounts and fair values of the financial
assets (financial instruments), split into the measurement
categories in accordance with IFRS 9 (2018/2019) and
IAS 39 (2017/2018), are as follows:
Total
1,054,153
1,028,425
25,090
06/30/2019
in € thousand
Financial assets
Financial assets
Other noncurrent
financial assets
of which derivative
financial instruments
Trade receivables
Securities
Cash and cash equivalents
Other current financial assets
of which derivative
financial instruments
Fair values
5,146
0
(0)
402,129
19,944
139,813
487,121
(638)
06/30/2018
in € thousand
Financial assets
Financial assets
Other noncurrent
financial assets
of which derivative
financial instruments
Trade receivables
Securities
Cash and cash equivalents
Other current financial assets
of which derivative
financial instruments
Total
Fair values
3,605
1
(1)
310,141
18,282
174,300
52,922
(5,303)
559,251
Financial assets
Carrying amounts
At amortized
cost
At fair value
through other
comprehensive
income
At fair value
through profit and
loss
Total
carrying
amount
0
0
(0)
402,129
0
139,813
486,483
(0)
5,146
0
(0)
0
19,944
0
0
(0)
0
0
(0)
0
0
0
638
(638)
638
5,146
0
(0)
402,129
19,944
139,813
487,121
(638)
1,054,153
Financial assets
Carrying amounts
Loans and
receivables
Financial assets
held for trading
Available-for-sale
financial assets
Total
carrying
amount
0
0
(0)
310,141
0
174,300
47,619
(0)
532,060
0
1
(1)
0
0
0
5,303
(5,303)
5,304
3,605
3,605
0
(0)
0
18,282
0
0
(0)
21,887
1
(1)
310,141
18,282
174,300
52,922
(5,303)
559,251
4. Notes to the Balance Sheet | Notes for the KWS Group 2018/2019 | Annual Financial Statements 135
KWS Group | Annual Report 2018/2019 It is assumed that the carrying amounts are the same as
The fair value of derivative financial instruments is the
the fair values. The fair value of the long-term fund shares
present values of the payments related to these balance
and short-term securities contained in the financial assets is
sheet items. These instruments are mainly forward exchange
measured on the basis of the price for them quoted in their
deals. They are measured on the basis of quoted exchange
respective main market (level 1).
rates and yield curves available from the market data and
allowing for counterparty risks (level 2).
The fair value of trade receivables, other current financial
assets and cash and cash equivalents is the same as the
The carrying amounts and fair values of the financial
carrying amounts as a result of the short time in which these
liabilities (financial instruments), split into the measurement
instruments are due.
categories in accordance with IFRS 9 (2018/2019) and IAS 39
(2017/2018), are as follows:
06/30/2019
in € thousand
Financial liabilities
Long-term borrowings
Long-term trade payables
Other noncurrent financial liabilities
Of which derivative financial instruments
Short-term borrowings
Short-term trade payables
Other current financial liabilities
Of which derivative financial instruments
Total
Fair values
Financial liabilities
Carrying amounts
At amortized
cost
At fair value
through other
comprehensive
income
182,270
182,270
782
258
(0)
475,425
88,495
17,392
(1,333)
764,622
782
258
(0)
475,425
88,495
16,059
(0)
763,289
0
0
0
(0)
0
0
1,333
(1,333)
1,333
Total
carrying
amount
182,270
782
258
(0)
475,425
88,495
17,392
(1,333)
764,622
136 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group 06/30/2018
in € thousand
Fair values
Financial liabilities
Carrying amounts
Financial
liabilities
measured at
amortized cost
Financial
liabilities held
for trading
Total
carrying
amount
Financial liabilities
Long-term borrowings
Long-term trade payables
Other noncurrent financial liabilities
Of which derivative financial instruments
Short-term borrowings
Short-term trade payables
Other current financial liabilities
Of which derivative financial instruments
171,032
168,698
968
288
(223)
61,287
75,721
11,288
(2,174)
968
65
(0)
61,287
75,721
9,114
(0)
Total
320,584
315,853
0
0
223
(223)
0
0
2,174
(2,174)
2,397
168,698
968
288
(223)
61,287
75,721
11,288
(2,174)
318,250
The fair value of long-term borrowings was calculated on the
Due to the generally short times by which trade payables and
basis of discounted cash flows. To enable that, interest rates
other current financial liabilities (excluding derivatives) are
for comparable transactions and yield curves were used
due, it is assumed that their carrying amounts are equal to
(level 2).
the fair value.
The table below shows the financial assets and liabilities
measured at fair value:
Assets and liabilities measured at fair value
in € thousand
06/30/2019
06/30/2018
Level 1 Level 2 Level 3
Total Level 1 Level 2 Level 3
Total
Derivative financial instruments not part
of a hedge under IFRS 9 (prior year IAS 39)
Securities and other financial assets
Financial assets
Derivative financial instruments not part
of a hedge under IFRS 9 (prior year IAS 39)
Financial liabilities
0
25,090
25,090
638
0
638
0
0
1,333
1,333
0
0
0
0
0
638
0
5,304
25,090
21,863
0
25,728
21,863
5,304
1,333
1,333
0
0
2,397
2,397
0
0
0
0
0
5,304
21,863
27,167
2,397
2,397
4. Notes to the Balance Sheet | Notes for the KWS Group 2018/2019 | Annual Financial Statements 137
KWS Group | Annual Report 2018/2019
The table below presents the net gains/losses carried in
The net losses from financial assets and net gains in
the income statement for financial instruments in each
financial liabilities measured at fair value through profit
measurement category:
or loss solely comprise changes in the market value of
Net gain/losses of financial instruments
in € thousand
Financial assets measured at fair value
through other comprehensive income
Financial assets measured at fair value
through profit or loss
Financial assets measured at amortized cost
Financial liabilities measured at amortized
cost
Financial liabilities measured at fair value
through profit or loss
Net gain/losses of financial instruments
in € thousand
Available-for-sale financial assets
Financial assets held for trading
Loans and receivables
Financial liabilities measured
at amortized cost
Financial liabilities held
for trading
derivative financial instruments.
2018/2019
The net gains from financial assets measured at cost
mainly include effects from changes in the allowances for
impairment.
The net losses from financial liabilities measured at
amortized cost result mainly from interest expense.
68
–4,665
8,438
–18,425
Interest income from financial assets that are not measured
1,065
at fair value through profit or loss was €68 (3,852) thousand.
Interest expenses for financial borrowings were
€18,425 (11,763) thousand.
2017/2018
103
3,532
–2,829
In order to control the credit risk resulting from receivables
from customers, a regular creditworthiness analysis is
conducted by the responsible credit manager in accor-
dance with the credit volume. Security is available for some
–11,763
of these receivables and is used depending on the local
circumstances. This includes, in particular, credit insurance,
1,355
down payments and guarantees. In general, reservation of
ownership of goods is agreed with our customers. Credit
limits are defined for all customers. Credit risks from
The net gains from assets measured at fair value through
financial transactions are controlled centrally by Corporate
other comprehensive income include income from an
Finance/Treasury. In order to minimize risks, financial trans-
investment fund and securities.
actions are exclusively conducted within defined limits with
banks and partners who always have an investment grade.
Compliance with the risk limits is constantly monitored. The
limits are adjusted depending on the credit volume only
subject to the approval of the regional or divisional manage-
ment and the Executive Board.
138 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group Liquidity is managed in the euro zone by the central
Treasury unit using a cash pooling system. Liquidity require-
ments are generally determined by means of cash planning
and are covered by cash and promised credit lines.
The table below shows the KWS Group’s liquidity analysis
for non-derivative and derivative financial liabilities. The
table is based on contractually agreed, undiscounted pay-
ment flows:
Fiscal year 2018/2019
in € thousand
Book value
Liquidity analysis of financial liabilities
06/30/2019
06/30/2019
Total
Financial liabilities
Trade payables
Other financial liabilities
657,695
657,695
89,277
17,650
89,277
17,650
Due in
> 1 year and
< 5 years
Cash flows
Due in
> 5 years
180,820
1,450
782
258
0
0
Due in
< 1 year
475,425
88,495
17,392
Nonderivative financial liabilities
764,622
764,622
581,312
181,860
1,450
Payment claim
Payment obligation
Derivative financial liabilities
1,333
Fiscal year 2017/2018
in € thousand
Book value
Liquidity analysis of financial liabilities
06/30/2018
06/30/2018
Total
Financial liabilities
Trade payables
Other financial liabilities
262,115
226,921
76,938
14,227
76,689
14,227
91,981
93,189
1,208
91,981
93,189
1,208
0
0
0
0
0
0
Due in
< 1 year
57,279
75,721
14,227
Due in
> 1 year and
< 5 years
166,302
968
0
Cash flows
Due in
> 5 years
3,340
0
0
Nonderivative financial liabilities
353,280
317,837
147,227
167,270
3,340
Payment claim
Payment obligation
Derivative financial liabilities
2,397
77,383
80,490
3,107
77,383
80,490
3,107
0
0
0
0
0
0
4. Notes to the Balance Sheet | Notes for the KWS Group 2018/2019 | Annual Financial Statements 139
KWS Group | Annual Report 2018/2019 The cash flows of the derivative financial liabilities mainly
by €2.0 million (previous year: a fall of €0.1 million) in the
relate to forward exchange deals and include both interest
event of such a change in the rate of interest. A reduction
payments and redemption payments. These derivative
in the rate of interest of 1 percentage point would add a
financial instruments are settled in gross.
further €3.0 (0.2) million in income. Equity would increase
The following sensitivity analysis shows the impact on
the event of such a change in the rate of interest.
income and equity. The calculated figures relate to the
portfolio at the balance sheet date and show the hypo-
4.17 Contingent liabilities
thetical effect for one year.
As in the previous year, there are no contingent liabilities to
by €2.0 million (previous year: an increase of €0.1 million) in
report at the balance sheet date.
In order to assess the risk of exchange rate changes, the
sensitivity of a currency to fluctuations was determined.
4.18 Other financial obligations
After the euro, the US dollar is the most important currency
The obligations from uncompleted capital expenditure
in the KWS Group. All other currencies are of minor impor-
projects, mainly relating to property, plant, and
tance. The average exchange rate in the fiscal year was
equipment, and other capital commitments amount to
1.14 (1.19) USD/EUR. If the US dollar depreciated by 10%,
€20,636 (45,296) thousand.
the additional expense would be €10,482 (8,695) thousand.
If the US dollar appreciated by 10%, the additional income
Obligations under rental agreements and leases
would be €10,482 (8,695) thousand. The net income for the
year and equity would change accordingly.
Interest rate sensitivity is a measure for showing the
interest rate risk. The variable-interest components of
the KWS Group’s interest expenses and interest income
were determined to calculate it. An average rate of interest
in € thousand
Due within one year
Due between 1 and 5 years
Due after 5 years
06/30/2019 06/30/2018
13,411
17,696
14,474
45,581
14,071
16,516
9,007
39,594
per group company for the past fiscal year was then
The KWS Group’s leases relate mainly to agreements for
formed for all relevant investments and loans. This aver-
fleet vehicles and rental contracts for office space. The main
age rate of interest was then used in a scenario analysis
leasehold obligations relate to land under cultivation.
to calculate the effects on the interest result and equity
if the interest rate increased by one percentage point
Other guarantees with respect to third parties amount
(100 base points) or decreased by the same amount.
to €111,956 (48,808) thousand. The likelihood that these
That yielded the following results in the past fiscal year.
guarantees will be utilized is seen as slight, based on the
An increase in the rate of interest of 1 percentage point
experience of previous years. No claims have yet been made.
would result in additional interest expense of €3.0 million
(previous year: expense of €0.2 million); equity would fall
140 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 4. Notes to the Balance Sheet
Annual Report 2018/2019 | KWS Group
5. Notes to the Income Statement
5.1 Net sales and function costs
The write-downs relate mainly to unsold seed. They are
Net sales were mainly generated from the sale of certified
based on, among other things, historical information and
seed. A breakdown by segments and regions is provided in
expectations as to their substitution by new varieties.
the segment reporting in section 3 of the Notes starting on
page 113 et seq.
The cost of sales increased by 2.8% to
Selling expenses increased by €20,378 thousand to
€221,915 (201,537) thousand, or 19.9% (18.9%) of sales.
€458,534 (446,063) thousand, or 41.2% (41.8%) of sales.
Research & development is recognized as an expense in
The key factors in this development were lower license
the year it is incurred; in the reporting year, this amounted
payments and higher net sales shares from products with
to €205,557 (197,696) thousand. Development costs for
a relatively low cost of sales. The total material costs were
new varieties are not recognized as an asset because
€294,401 (275,388) thousand.
evidence of future economic benefit can only be provided
The write-down of inventories and the reversal of write-
down, which are recognized as a reduction in the cost of
General and administrative expenses increased by
materials in the period, are as follows:
€19,586 thousand to €115,379 thousand, representing
after the variety has been officially certified.
July 1 to June 30
in € thousand
Impairment losses
Decreases in
impairment loss
2018/2019
2017/2018
9,543
3,889
14,268
2,907
10.4% of sales, after 9.0% the year before. They rose
in particular due to optimization of our organizational
structure and our entry into vegetable seed business.
5.2 Other operating income
July 1 to June 30
in € thousand
Income from sales of fixed assets
Income from the reversal of provisions
Exchange rate gains and gains from currency and interest rate hedges
Income from reversal of valuation allowance for trade receivables and
recovery of written off receivables
Performance-based public grants
Income relating to previous periods
Income from loss compensation received
Income from deconsolidation of KWS Potato B.V.
Miscellaneous other operating income
The other operating income mainly comprises foreign
exchange gains and income from interest rate hedges, as well
as income from the reversal of allowances on receivables,
and government grants. The performance-based govern-
ment grants mainly relate to breeding allowances and farm
payments.
2018/2019
2017/2018
201
4,238
30,753
11,317
6,797
3,240
493
15,958
23,263
96,260
52
1,915
31,418
6,007
7,121
2,602
1,329
0
15,224
65,668
5. Notes to the Income Statement | Notes for the KWS Group 2018/2019 | Annual Financial Statements 141
KWS Group | Annual Report 2018/2019 The other operating income also includes the deconsolidation
The gain from the net monetary position from current
gains of €15,958 thousand from disposal of the shares in
application of IAS 29 at KWS ARGENTINA S.A. is
the subsidiary KWS POTATO B.V (now AARDEVO B.V.), which
€1,400 thousand.
was fully consolidated up to January 31 (see section 2.1 in
the Notes).
5.3 Other operating expenses
July 1 to June 30
in € thousand
Expenses for change of the legal form
Allowances on receivables
Exchange rate losses and losses on currency and interest rate hedges
Expenses relating to previous periods
Other expenses
2018/2019
2017/2018
1,383
6,662
30,266
1,106
18,804
58,221
1,090
13,811
35,144
2,797
7,193
60,035
The other operating expenses mainly comprises foreign
The other expenses comprise in particular the setup of
exchange losses and expenses from exchange rate hedges,
provisions, including a provision of €5,000 thousand in
as well as allowances on receivables. In the reporting year,
connection with the development of diploid hybrid potatoes
allowances for receivables and counter party defaults of
in the Sugarbeet Segment.
€6,662 (13,811) thousand were recognized as an expense.
5.4 Net financial income/expenses
July 1 to June 30
in € thousand
Interest income
Interest expenses
Income from other financial assets
Interest effects from pension provisions
Interest expense for other long-term provisions
Financial lease interest expense
Interest result
Result from equity-accounted financial assets
Net income from equity investments
Net financial income/expenses
2018/2019
2017/2018
4,006
17,016
68
1,956
82
1
–14,981
9,447
9,447
–5,534
3,943
9,749
103
2,154
122
1
–7,980
13,414
13,414
5,434
142 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 5. Notes to the Income Statement
Annual Report 2018/2019 | KWS Group
Net income from equity investments decreased in
comparison to prior year by €3,967 thousand. Income
from at-equity accounted financial assets decreased from
€13,414 thousand to €9,447 thousand. Together with an
interest result of €–14,981 (–7,980) thousand, net financial
income/expenses decreased by €10,968 thousand to
€–5,534 (5,434) thousand. Apart from much lower earnings
from the at-equity accounted joint venture AGRELIANT
GENETICS LLC., net financial income/expenses was
negatively impacted in particular by higher interest expenses
at the companies RIBER-KWS SEMENTES LTDA. and
KWS ARGENTINA S.A. The interest effects from pension
provisions comprise interest expenses (compounding) and
the planned income.
5.5 Taxes
Income tax expense is computed as follows:
Income tax expenses
in € thousand
Actual income taxes
In Germany
Abroad
Thereof from previous years
Deferred taxes
In Germany
Abroad
Income taxes
2018/2019
2017/2018
54,196
5,182
49,014
7,545
–13,757
–5,855
–7,902
40,439
34,248
1,178
33,070
–4,275
4,085
5,677
–1,592
38,333
KWS pays tax in Germany at a rate of 29.8% (29.1%).
The profits generated by group companies outside Germany
Corporate income tax of 15.0% (15.0%) and solidarity tax
are taxed at the rates applicable in the country in which they
of 5.5% (5.5%) are applied uniformly to distributed and
are based. The tax rates in foreign countries vary between
retained profits. In addition, trade tax is payable on profits
9.0% (9.0%) and 35.0% (35.0%). The allocation to interest
generated in Germany. Trade income tax is applied at a
on tax liabilities is carried in the interest expense for the first
weighted average tax rate of 14.0% (13.3%), resulting in a
time this fiscal year.
total tax rate of 29.8% (29.1%).
5. Notes to the Income Statement | Notes for the KWS Group 2018/2019 | Annual Financial Statements 143
KWS Group | Annual Report 2018/2019 The deferred taxes that are recognized relate to the
following balance sheet items and tax loss carryforwards:
Deferred taxes
in € thousand
Intangible assets
Property, plant and equipment
Biological assets
Financial assets
Inventories
Current assets
Noncurrent liabilities
Of which pension provisions
Current liabilities
Deferred taxes recognized (gross)
Tax loss carryforward
Setting off
Deferred taxes recognized (net)
Deferred tax assets
Deferred tax liabilities
2018/2019
2017/2018
2018/2019
2017/2018
0
740
0
1,350
25,920
8,214
23,941
480
366
0
1,383
15,971
1,785
20,344
(23,156)
(19,035)
10,289
70,454
7,213
19,308
59,637
8,397
2,876
18,683
4
1,180
2,003
2,016
9
(0)
3,903
30,675
0
2,476
16,756
4
6,549
1,088
10,326
271
(92)
658
38,128
0
–14,259
–18,787
–14,259
–18,787
63,408
49,247
16,416
19,341
Due to the use of tax loss carryforwards and temporary
No deferred taxes were recognized for temporary differ-
differences on which no deferred taxes were recognized in
ences amounting to €37.654 (35,633) thousand related to
the past, the actual tax expense fell by €809 (13) thousand.
shares in subsidiaries in keeping with IAS 12.39.
There is a deferred tax expense of €802 (684) thousand
In the year under review, there were surpluses of deferred tax
from the allowance for deferred taxes on tax loss carry-
assets from temporary differences and loss carry forwards
forwards and temporary differences in the year under
totaling €21.088 (20,913) thousand at group companies that
review. The first-time recognition of deferred taxes and
made losses in the past period or the previous period. These
use of deferred taxes on loss carryforwards that had not
were considered recoverable, since it is assumed that the
previously been recognized result in deferred tax income
companies in question will post taxable profits in the future.
of €584 (320) thousand.
The fact is taken into account here that the KWS Group may
realize income with a delay due to the long-term nature of
No deferred taxes were formed for tax loss carryforwards
research & development spending.
totaling €13,893 (17,704) thousand that have not yet been
utilized. Of these, €0 (4,053) thousand must be utilized
The reconciliation of the expected income tax expense to
within a period of 5 years. Loss carryforwards totaling
the reported income tax expense is derived on the basis of
€13,893 (13,650) thousand can be utilized without any time
the consolidated income before taxes and the nominal tax
limit.
rate for the Group of 29.8% (29.1%), taking into account the
Deferred taxes were formed for all deductible differences.
following effects.
144 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 5. Notes to the Income Statement
Annual Report 2018/2019 | KWS Group 2018/2019
2017/2018
144,459
43,092
–7,246
797
4,238
–12,719
497
–283
–535
12,500
99
40,439
28.0%
137,990
40,190
460
–4,183
6,100
–7,895
365
7,938
–374
–4,275
7
38,333
27.8%
Reconciliation of income taxes
in € thousand
Earnings before income taxes
Expected income tax expense1
Reconciliation with the reported income tax expense
Differences from the Group’s tax rate
Effects of changes in the tax rate
Tax effects from:
Expenses not deductible for tax purposes and other additions
Tax-free income
Other permanent deviations
Reassessment of the recognition and measurement of deferred tax assets
Tax credits
Taxes relating to previous years
Other effects
Reported income tax expense
Effective tax rate
1 Tax rate in Germany: 29.8 % (29.1 %)
The increase in tax-free income is mainly due to realization
of income from sale of the shares in KWS POTATO B.V.
Income taxes relating to other periods include in particular
effects from field tax audits that have been completed
worldwide and future field tax audits.
Other taxes, primarily real estate tax, are allocated to the
relevant functions.
5. Notes to the Income Statement | Notes for the KWS Group 2018/2019 | Annual Financial Statements 145
KWS Group | Annual Report 2018/2019
5.6 Personnel costs/employees
5.7 Share-based payment
July 1 to June 30
in € thousand
Wages and salaries
Social security contributions,
expenses for pension plans
and benefits
2018/2019
2017/2018
223,298
202,912
57,358
51,017
280,656
253,929
Employee Stock Purchase Plan
KWS has established an Employee Stock Purchase Plan. All
employees who have been with the company for at least one
year without interruption and have a permanent employment
relationship that has not been terminated at a KWS Group
company that participates in the program are eligible to take
part. That also includes employees who are on maternity
leave or parental leave or who are in semi-retirement.
Personnel costs went up by €26,727 thousand to
After the stock split each employee can acquire up to
€280,656 thousand, an increase of 10.5%. The number of
2,500 shares. A bonus of 20% is deducted from the purchase
employees increased from 3,852 to 4,126, or by 7.1%. Of
price, which depends on the price applicable on the key
the 4,126 (3,852) employees, 3,791 (3,533) are permanent
date. The shares are subject to a lock-up period of 4 years
employees, 236 (213) are temporary employees and
beginning when they are posted to the employee’s securities
98 (105) are trainees.
account. The right to a dividend, if KWS SAAT SE & Co. KGaA
pays one out, exists during the lock-up period. Holders can
Compensation increased by 10.0% from €202,912 thou-
also exercise their right to participate in the Annual Share-
sand in the previous year to €223,298 thousand. Social
holders’ Meeting during the lock-up period. They can dispose
security contributions, expenses for pension plans and
freely of the shares after the lock-up period.
benefits were €6,341 thousand higher than in the previous
year.
Employees by region1
54,094 (49,160) shares were repurchased for the Employee
Stock Purchase Plan at a total price of €3,101 (3,388) thou-
sand in the reporting year. The total cost for issuing shares
2018/2019
2017/2018
at a reduced price was €715 thousand in the past fiscal year
Germany
Europe (excluding Germany)
North and South America
Rest of world
Total
1,800
1,315
832
179
4,126
1,624
1,291
773
164
3,852
1 At the beginning of the 2018/2019 financial year, the KWS Group changed to FTE according to
its internal reporting and adjusted the previous year's figures.
(previous year: €699 thousand).
Long-term incentive (LTI)
The stock-based compensation plans awarded at the KWS
Group are recognized in accordance with IFRS 2 “Share-
based Payment.” The incentive program, which was launched
in fiscal 2009/2010, involves stock-based payment trans-
actions with cash compensation, which are measured at fair
With our joint ventures and associated company
value at every balance sheet date. Members of the Executive
consolidated proportionately, the number of employees
Board are obligated to acquire shares in KWS SAAT SE &
was 4,592 (4,328). The reported number of employees is
Co. KGaA every year in a freely selectable amount ranging
greatly influenced by seasonal labor.
between 20% and 50% of the gross performance- related
bonus. Along with that, members of the first management
level below the Executive Board likewise take part in an
146 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 5. Notes to the Income Statement
Annual Report 2018/2019 | KWS Group
LTI program. As part of this program, they are obligated to
invest in shares in KWS SAAT SE & Co. KGaA every year in a
6. Notes to the Cash Flow Statement
freely selectable amount ranging between 10% and 40% of
The cash flow statement shows the changes in cash and
the gross performance-related bonus. The shares acquired
cash equivalents of the KWS Group in the three categories
within the LTI-Program may be sold at the earliest after a
of operating activities, investing activities and financing
regular holding period of 5 years beginning at the time they
activities. The effects of exchange rate changes and changes
are acquired (end of the quarter in which the shares were
in the consolidated group have been eliminated from the
acquired). In addition to the unblocking of the share package
respective balance sheet items, except those affecting cash
the entitled persons are paid a long-term incentive (LTI) in
and cash equivalents.
the form of cash compensation after the holding period for
the tranche in question. Its level is calculated on the basis of
6.1 Net cash from operating activities
KWS SAAT SE & Co. KGaA’s share performance and on the
The net cash from operating activities was
KWS Group’s return on sales (ROS), measured as the ratio of
€72,850 (98,062) thousand, a year-on-year reduction
operating income to net sales, over the holding period. For
of 25.7%.
persons with contracts as of July 1, 2014, the cash compen-
sation for members of the Executive Board is a maximum
The cash proceeds from operating activities also include
of one-and-half times (for the Chief Executive Officer two
interest income of €3,964 (3,943) thousand and interest
times), and for members of the first management level below
expense of €15,686 (8,418) thousand. Income tax pay-
the Executive Board a maximum of two times their own
ments amounted to €63,074 (16,451) thousand. The
investment (LTI cap). The costs of this compensation are
dividends received from the joint ventures are also carried
recognized in the income statement over the period and,
here and total €8,566 (12,110) thousand.
taking the cash compensation in January 2019 into account,
were €1,037 (1,038) thousand in the period under review. The
6.2 Net cash from investing activities
provision for it at June 30, 2019, was €2,490 (2,440) thousand.
A net total of €95,235 (68,071) thousand was required to
The LTI fair values are calculated by an external expert.
finance investing activities.
5.8 Net income for the year
6.3 Net cash from financing activities
The KWS Group’s net income for the year was
Financing activities resulted in cash proceeds of
€104,020 (99,657) thousand on operating result of
€404.502 (–25,284) thousand.
€149,993 (132,556) thousand and negative (in prior year –
positive) net financial result of €5,534 (5,434) thousand.
6.4 Supplementary information on the cash flow
The return on sales was thus 9.3% and so virtually at the
statement
same level as the previous year (9.3%). Net income for the
Of the changes in cash and cash equivalents caused by
year after minority interest was €104,134 (99,521) thousand.
exchange rate, consolidation scope and measurement
Earnings per share in the year under review were €3.15
changes, a total of €109 (–3,494) thousand results from
(after adjustment to reflect the stock split: €3.02).
exchange rate-related adjustments.
The €415 million deposited in a trust account for acquisition
of the Pop Vriend Seeds Group are deducted from the cash
and cash equivalents and carried under the other financial
assets.
As in previous years, cash and cash equivalents are
composed of cash (on hand and balances with banks) and
current securities.
6. Notes to the Cash Flow Statement | Notes for the KWS Group 2018/2019 | Annual Financial Statements
147
KWS Group | Annual Report 2018/2019
7. Other Notes
7.1 Proposal for the appropriation of net retained profits
7.3 Related party disclosures
A proposal will be made to the Annual Shareholders’
Transactions with related parties in accordance with IAS 24
Meeting that, of KWS SAAT SE & Co. KGaA’s net
are all business dealings that are conducted with the
retained profit of €22,912 (22,172) thousand, an amount
reporting entity by entities or natural persons or their close
of €22,110 (21,120) thousand should be distributed as a
family members, if the party or person in question controls
dividend of €0.67 (3.20 before the stock split) for each of
the reporting entity or is a member of its key management
the 33,000,000 shares.
personnel, for example. There were no business trans-
actions or legal transactions that required reporting for
The balance of €802 (1,052) thousand is to be carried
this group of persons in fiscal 2018/2019. As part of its
forward to the new account.
operations, KWS procures goods and services world-
wide from a large number of business partners. They also
7.2 Total remuneration of the Supervisory Board
include companies in which KWS has an interest and on
and the Executive Board and of former members of
which representatives of KWS’ Supervisory Board exert
the Super visory Board and the Executive Board of
a significant influence. Business dealings with these
KWS SAAT SE & Co. KGaA
companies are always conducted on an arm’s length basis
The compensation of the members of the Super visory Board
and are not material in terms of volume. As part of Group
was converted to a purely fixed compensation pursuant to
financing, short- and medium-term term loans are taken out
the resolution adopted by the Annual Shareholders’ Meeting
from and granted to subsidiaries at market interest rates.
in December 2017. Members of the Supervisory Board who
The compensation of members of the Executive Board
are members of a committee – with the exception of the
comprises short-term employee benefits, share-based pay-
Chairman of the Supervisory Board – receive an additional
ment benefits and post-employment benefits.
fixed payment therefor. The total compensation for members
of the Supervisory Board amounts to €620 (610) thousand,
Individualized disclosures on the compensation of members
excluding value-added tax.
of the Executive Board and the Supervisory Board are
presented in the Compensation Report, which is part of the
In fiscal year 2018/2019, total Executive Board compensation
audited Combined Management Report.
amounted to €4,316 (4,016) thousand. The variable compen-
sation, which is calculated on the basis of the net profit for the
No other related parties have been identified for whom there
period of the KWS Group, is made up of a bonus and a long-
is a special reporting requirement under IAS 24.
term incentive. The bonus totals €2,032 (1,899) thousand;
there are contributions from the long-term incentive
tranche for 2018/2019 totaling €766 thousand (tranche for
2017/2018: €741 thousand). Pension provisions totaling
€1,566 (1,291) thousand were formed for two members of the
Executive Board at KWS SAAT SE & Co. KGaA.
Compensation of former members of the Executive Board and
their surviving dependents amounted to €1,479 (1,575) thou-
sand. Pension provisions recognized for this group of persons
amounted to €6,674 (7,315) thousand as of June 30, 2019,
before being netted off with the relevant planned assets.
148 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 7. Other Notes
Annual Report 2018/2019 | KWS Group
Related parties
in € thousand
Unconsolidated
subsidiaries
Equity-accounted
joint ventures
Joint operation
Other related parties
Deliveries and
services provided
Received deliveries
and services
Receivables
Payables
2018/2019 2017/2018 2018/2019 2017/2018 2018/2019 2017/2018 2018/2019 2017/2018
0
0
0
0
0
0
1,991
1,664
11,640
14,736
22,579
11,364
0
0
0
0
4,920
111
7,461
111
695
0
487
0
0
0
23
0
0
0
223
0
7.4 Disclosure
The non-audit services in the fiscal year comprised the
The following subsidiaries with the legal form of a corpo-
voluntary audit of the Non-Financial Declaration and the
ration within the meaning of Section 264 (3) of the German
company formation audit of KWS SAAT SE & Co. KGaA.
Commercial Code (HGB) have utilized the exemption pro-
vided in Section 264 (3) of the German Commercial Code
7.6 Report on events after the balance sheet date
(HGB) as regards preparation of financial statements and
The KWS Group completed acquisition of the shares in
their publication:
the Pop Vriend Seeds Group on July 1, 2019, taking over
all of the shares of Birika B.V, Andijk, the Netherlands,
KWS LOCHOW GMBH, Bergen
the parent company of the POP VRIEND SEEDS Group.
KWS LANDWIRTSCHAFT GMBH, Einbeck
Pop Vriend Seeds is a leading company in the production
BETASEED GMBH, Frankfurt
and distribution of vegetable seed and supplies customers
DELITZSCH PFLANZENZUCHT GMBH, Einbeck
in more than 100 countries, including the U.S., China
KANT-HARTWIG & VOGEL GMBH, Einbeck
and Russia. Pop Vriend Seeds is the world market leader
AGROMAIS GMBH, Everswinkel
in spinach seed as well as a leading vendor of seed for
KWS SERVICES DEUTSCHLAND GMBH, Einbeck
various other vegetable crops. The purchase price for all
KWS BERLIN GMBH, Berlin
the shares was €414.7 million. The €400 million in bridge
KWS SAAT SE & Co. KGaA prepares the consolidated
by the issue of medium- and long-term borrower’s notes
financial statements for the largest and smallest group of
with a total volume of €400 million. With the acquisition of
companies.
Pop Vriend Seeds, the KWS Group has entered the new
funding utilized in June was replaced at the end of August
business segment of vegetable seed.
7.5 Audit of the annual financial statements
On December 14, 2018, the Annual Shareholders’ Meeting
The Pop Vriend Seeds Group was not acquired until after
of KWS SAAT SE & Co. KGaA elected the accounting firm
the period under review and its recognition on the balance
Ernst & Young GmbH, Hanover, to be the Group’s auditors
sheet was not completed by the time the consolidated
for fiscal year 2018/2019.
Fee paid to the external auditors under
Section 314 (1) No. 9 HGB
financial statements were published. Persuant to IFRS 3.B66,
the disclosures in accordance with IFRS 3.B64 €, (g) to (l)
and (q) are omitted for the acquisition of Pop Vriend Seeds.
in € thousand
2018/2019 2017/2018
7.7 Declaration of compliance with the German
a) Audit of the consolidated
financial statements
b) Other certification services
c) Tax consulting
d) Other services
Total fee paid
1,488
69
0
0
669
63
0
0
Corporate Governance Code
KWS SAAT SE & Co. KGaA has issued the declaration of
compliance with the German Corporate Governance Code
required by Section 161 of the Aktiengesetz (AktG – German
Stock Corporation Act) and made it accessible to its share-
1,557
732
holders on the company’s home page at www.kws.com.
7. Other Notes | Notes for the KWS Group 2018/2019 | Annual Financial Statements 149
KWS Group | Annual Report 2018/2019
7.8 Supervisory and Executive Boards of KWS SAAT SE & Co. KGaA in fiscal 2018/2019
Other seats
Membership of comparable German and foreign
oversight boards:
DR. SCHNELL Chemie GmbH, Munich
(member of the Advisory Board)
Membership of comparable German and foreign
oversight boards:
Givaudan SA (member of the Board of Directors, the Audit
Committee and the Compensation Committee)
CEVA Logistics AG, Baar, Switzerland (member of the
Executive Board and Chairman of the Audit Committee –
until April 2019)
Medacta International SA, Switzerland (member of the
Board of Directors and Chairman of the Audit Committee –
since April 2019)
Hemro AG, Switzerland (member of the Management Board)
Sika AG, Switzerland (member of the Board
of Directors and Chairman of the Audit Committee –
since March 2019)
Louis Dreyfus Holding B.V., Amsterdam
(member of the Supervisory Board and Audit Committee)
Swiss Federal Audit Supervision Authority, Switzerland
(member of the Board of Directors)
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)
Supervisory Board
Members
Dr. Drs. h. c. Andreas J. Büchting
Einbeck
Agricultural Biologist
Chairman of the Supervisory Board
of KWS SAAT SE & Co. KGaA
Dr. Marie Theres Schnell
Munich
Graduate in Communications
Deputy Chairman of the Supervisory Board
of KWS SAAT SE & Co. KGaA
Victor W. Balli
Zurich (Switzerland)
Chemical Engineer
Chairman of the Audit Committee
of KWS SAAT SE & Co. KGaA
Jürgen Bolduan
Einbeck
Seed Breeding Employee
Chairman of the Central Works Council
of KWS SAAT SE & Co. KGaA
Cathrina Claas-Mühlhäuser
Frankfurt am Main
Businesswoman
Chairwoman of the Supervisory Board
of CLAAS KGaA mbH, Harsewinkel
Christine Coenen
Einbeck
Interpreter
Chairwoman of the European Employees’
Committee (EEC) of KWS SAAT SE & Co. KGaA
Dr. Arend Oetker
Berlin
Honorary member of the Supervisory Board
of KWS SAAT SE & Co. KGaA
150 Annual Financial Statements | Notes for the KWS Group 2018/2019 | 7. Other Notes
Annual Report 2018/2019 | KWS Group Supervisory Board Committees
Committee
Audit Committee
Chairman/Chairwoman
Members
Victor W. Balli
Andreas J. Büchting
Jürgen Bolduan
Marie Theres Schnell
Cathrina Claas-Mühlhäuser
Andreas J. Büchting
Cathrina Claas-Mühlhäuser
Other seats
Membership of comparable German and foreign
oversight boards:
Hero AG, Lenzburg (Switzerland)
(member of the Board of Administration)
Committee for Executive Board Affairs
Andreas J. Büchting
Nominating Committee
Marie Theres Schnell
Executive Board
Members
Dr. Hagen Duenbostel
Einbeck
Chief Executive Officer
Corn, Strategy, Compliance
Governance & Risk Management
Dr. Léon Broers
Einbeck
Research & Breeding
Dr. Peter Hofmann
Einbeck
Sugarbeet, Corn, Cereals (until 12/31/2018), Marketing
Eva Kienle
Göttingen
Finance, Controlling, Global Services, IT, Legal,
Human Resources (until 12/31/2018)
Dr. Felix Büchting
Einbeck
Cereals, Oilseed Rape/Special Crops & Organic Seed,
Human Resources, Farming (since 01/01/2019)
7. Other Notes | Notes for the KWS Group 2018/2019 | Annual Financial Statements 151
KWS Group | Annual Report 2018/2019 Independent auditor’s report
To KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE)
Basis for the opinions
Report on the audit of the consolidated financial
ments and of the group management report in accordance
statements and of the group management report
with Sec. 317 HGB and the EU Audit Regulation (No 537/2014,
We conducted our audit of the consolidated financial state-
Opinions
referred to subsequently as “EU Audit Regulation”) and in
compliance with German Generally Accepted Standards for
We have audited the consolidated financial statements
Financial Statement Audits promulgated by the Institut der
of KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE),
Wirtschaftsprüfer [Institute of Public Auditors in Germany]
Einbeck, and its subsidiaries (the Group), which comprise
(IDW). Our responsibilities under those requirements and
the consolidated statement of comprehensive income
principles are further described in the “Auditor’s responsi-
for the fiscal year from 1 July 2018 to 30 June 2019, and
bilities for the audit of the consolidated financial statements
the consolidated statement of financial position as at
and of the group management report” section of our auditor’s
30 June 2019, consolidated statement of changes in equity
report. We are independent of the group entities in accor-
and consolidated statement of cash flows for the fiscal
dance with the requirements of European law and German
year from 1 July 2018 to 30 June 2019, and notes to the
commercial and professional law, and we have fulfilled our
consolidated financial statements, including a summary of
other German professional responsibilities in accordance
significant accounting policies. In addition, we have audited
with these requirements. In addition, in accordance with
the group management report of KWS SAAT SE & Co. KGaA
Art. 10 (2) f) of the EU Audit Regulation, we declare that
(formerly KWS SAAT SE), which was combined with the
we have not provided non-audit services prohibited under
management report of the Company, for the fiscal year from
Art. 5 (1) of the EU Audit Regulation. We believe that the audit
1 July 2018 to 30 June 2019. In accordance with the German
evidence we have obtained is sufficient and appropriate to
legal requirements, we have not audited the content of the
provide a basis for our opinions on the consolidated financial
parts of the group management report listed in the appendix
statements and on the group management report.
to the auditor’s report.
Key audit matters in the audit of the consolidated
In our opinion, on the basis of the knowledge obtained in the
financial statements
audit,
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
the accompanying consolidated financial statements
consolidated financial statements for the fiscal year from
comply, in all material respects, with the IFRSs as
1 July 2018 to 30 June 2019. These matters were addressed
adopted by the EU, and the additional requirements of
in the context of our audit of the consolidated financial state-
German commercial law pursuant to Sec. 315e (1) HGB
ments as a whole, and in forming our opinion thereon; we do
[“Handelsgesetzbuch”: German Commercial Code] and, in
not provide a separate opinion on these matters.
compliance with these requirements, give a true and fair
view of the assets, liabilities and financial position of the
Below, we describe what we consider to be the key audit
Group as at 30 June 2019 and of its financial performance
matters:
for the fiscal year from 1 July 2018 to 30 June 2019, and
the accompanying group management report as a whole
(1) Revenue recognition from the sale of seeds
provides an appropriate view of the Group’s position. In
all material respects, this group management report is
Reasons why the matter was determined to be a key
consistent with the consolidated financial statements,
audit matter
complies with German legal requirements and appropriately
In the consolidated financial statements of KWS SAAT SE &
presents the opportunities and risks of future development.
Co. KGaA (formerly KWS SAAT SE), revenue from the sale of
Our opinion on the group management report does not
seeds is recognized when risk passes, taking contractually
cover the content of the parts of the group management
agreed return deliveries into consideration. In light of the
report listed in the appendix to the auditor’s report.
large number of different contractual agreements and
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that
return deliveries, we consider revenue recognition to be
our audit has not led to any reservations relating to the legal
complex and therefore to pose an elevated risk of incorrect
the resulting judgment exercised in assessing expected
compliance of the consolidated financial statements and of
recognition.
the group management report.
152 Annual Financial Statements | Notes for the KWS Group 2018/2019 | Independant Auditor's Report
Annual Report 2018/2019 | KWS Group
Auditor’s response
(2) Impairment testing of goodwill
During our audit, we considered, based on the criteria defined
in IFRS 15, the accounting policies applied in accordance
Reasons why the matter was determined to be a key
with the internal accounting instructions in the consolidated
audit matter
financial statements of KWS SAAT SE & Co. KGaA ( formerly
Pursuant to IAS 36, the internal management and reporting
KWS SAAT SE) for the recognition of revenue. Our response
structure serves as the basis for designating cash-generating
included an examination of whether control passed to
units to which the respective items of goodwill are allocated.
the b uyers upon the sale of the seeds. We analyzed
the process implemented by the management board of
At KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE),
KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE) and the
goodwill is monitored and managed at divisional level.
accounting and valuation requirements for the recognition
of seed sales, in particular taking into account the findings
Goodwill is tested for impairment as of 30 June each year.
from actual return deliveries. Based on analytical procedures
The result of these tests is highly dependent on the Executive
defined group-wide, we examined whether the significant
Directors’ estimate of future cash flows and the respective
revenue items for fiscal year 2018/2019 correlate with the
discount rates used.
corresponding trade receivables to identify any irregularities
in the development of revenue. With a view to the recognition
In light of the definition of the cash-generating units, the
of revenue on an accrual basis, we also obtained balance
complexity of the valuation and the judgment exercised
confirmations from customers and performed data analyses to
during valuation, the goodwill impairment test was a key
identify any irregularities in comparison with the prior year. We
audit matter.
analyzed the recognition of revenue based on the contractual
arrangements on a sample basis with regard to the require-
Auditor’s response
ments of IFRS 15. Based on analytical procedures carried out
During our audit, among other things, we obtained an
on historical data and the analysis of the underlying contracts,
understanding of the methods used to carry out the impair-
we examined the calculation of expected return deliveries of
ment tests including an examination of the suitability of the
seeds and their deduction from revenue. Overall, our proce-
procedure for performing an impairment test in accordance
dures relating to the recognition of revenue from the sale of
with IAS 36. In doing so, we analyzed the planning process
seeds did not lead to any reservations.
and the operating effectiveness of the controls implemented
therein. We discussed the significant planning assumptions
Reference to related disclosures
with the Executive Directors and compared these with the
With regard to the recognition and measurement policies
results and cash inflows realized in the past. Our assess-
applied for the recognition of revenue from the sale of
ment of the results of the impairment tests as of 30 June was
seeds, refer to the disclosure on the recording of income
based among other things on a comparison with general and
and expenses in section 1.5 “Accounting policies” in the
industry-specific market expectations underlying the expected
notes to the consolidated financial statements.
cash inflows. Based on our understanding that even relatively
small changes in the discount rates used can at times have
significant effects on the amount of the business value calcu-
lated, we analyzed the inputs used to determine the discount
rates and reperformed the calculation with regard to the
relevant requirements of IAS 36. In addition, we analyzed the
sensitivity analyses performed by the Executive Directors of
KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE) in order
to estimate any potential impairment risk associated with a
reasonably possible change in one of the significant assump-
tions used in the valuation.
Independant Auditor's Report | Notes for the KWS Group 2018/2019 | Annual Financial Statements
153
KWS Group | Annual Report 2018/2019 We obtained evidence that the divisions represent the lowest
In connection with our audit, our responsibility is to read the
level within the Group at which independent cash inflows are
other information and, in so doing, to consider whether the
generated and goodwill is monitored for internal management
other information
purposes.
Our procedures did not lead to any reservations relating to
statements, with the group management report or our
is materially inconsistent with the consolidated financial
the valuation of goodwill.
Reference to related disclosures
knowledge obtained in the audit, or
otherwise appears to be materially misstated.
With regard to the recognition and measurement policies
Responsibilities of the Executive Directors and the
applied for goodwill, refer to the disclosure on intangible
Supervisory Board for the consolidated financial
assets in section 1.5 “Accounting policies” in the notes
statements and the group management report
to the consolidated financial statements. For the related
The Executive Directors are responsible for the preparation
disclosures on judgments by the Executive Directors and
of the consolidated financial statements that comply, in all
sources of estimation uncertainty as well as the disclosures
material respects, with IFRSs as adopted by the EU and the
on goodwill, refer to note 2 “Intangible assets” in section 4
additional requirements of German commercial law pursuant
“Notes to the statement of financial position” in the notes to
to Sec. 315e (1) HGB, and that the consolidated financial
the consolidated financial statements.
statements, in compliance with these requirements, give a
Other information
true and fair view of the assets, liabilities, financial position,
and financial performance of the Group. In addition, the
The Supervisory Board is responsible for the Supervisory
Executive Directors are responsible for such internal control
Board report. In all other respects, the Executive Directors
as they have determined necessary to enable the preparation
are responsible for the other information. The other informa-
of consolidated financial statements that are free from
tion comprises the parts of the group management report
mate rial misstatement, whether due to fraud or error.
listed in the appendix to the auditor’s report as well as the
other parts of the annual report, except for the audited
In preparing the consolidated financial statements, the
consolidated financial statements and group management
Executive Directors are responsible for assessing the Group’s
report and our auditor’s report, in particular the responsi-
ability to continue as a going concern. They also have the
bility statement pursuant to Sec. 297 (2) Sentence 4 HGB, the
responsibility for disclosing, as applicable, matters related to
“Foreword by the management board” section of the annual
going concern. In addition, they are responsible for financial
report and the Supervisory Board’s report pursuant to Sec.
reporting based on the going concern basis of accounting
171 (2) AktG [“Aktiengesetz”: German Stock Corporation
unless there is an intention to liquidate the Group or to cease
Act]. We obtained a version of this other information prior to
operations, or there is no realistic alternative but to do so.
issuing our auditor’s report.
Our opinions on the consolidated financial statements and on
preparation of the group management report that, as a whole,
the group management report do not cover the other informa-
provides an appropriate view of the Group’s position and
tion, and consequently we do not express an opinion or any
is, in all material respects, consistent with the consolidated
other form of assurance conclusion thereon.
financial statements, complies with German legal require-
Furthermore, the Executive Directors are responsible for the
ments, and appropriately presents the opportunities and risks
of future development. In addition, the Executive Directors are
responsible for such arrangements and measures (systems)
as they have considered necessary to enable the preparation
of a group management report that is in accordance with
the applicable German legal requirements, and to be able to
provide sufficient appropriate evidence for the assertions in
the group management report.
154 Annual Financial Statements | Notes for the KWS Group 2018/2019 | Independant Auditor's Report
Annual Report 2018/2019 | KWS Group The Supervisory Board is responsible for overseeing the
Obtain an understanding of internal control relevant
Group’s financial reporting process for the preparation of the
to the audit of the consolidated financial statements
consolidated financial statements and of the group manage-
and of arrangements and measures (systems) relevant
ment report.
to the audit of the group management report in order
to design audit procedures that are appropriate in the
Auditor’s responsibilities for the audit of the
circumstances, but not for the purpose of expressing an
consolidated financial statements and of the group
opinion on the effectiveness of these systems.
management report
Evaluate the appropriateness of accounting policies used
Our objectives are to obtain reasonable assurance about
by the Executive Directors and the reasonableness of
whether the consolidated financial statements as a whole
estimates made by the Executive Directors and related
are free from material misstatement, whether due to fraud
disclosures.
or error, and whether the group management report as a
Conclude on the appropriateness of the Executive
whole provides an appropriate view of the Group’s position
Directors’ use of the going concern basis of accounting
and, in all material respects, is consistent with the consoli-
and, based on the audit evidence obtained, whether a
dated financial statements and the knowledge obtained in
material uncertainty exists related to events or conditions
the audit, complies with the German legal requirements and
that may cast signifi cant doubt on the Group’s ability to
appropriately presents the opportunities and risks of future
continue as a going concern. If we conclude that a material
development, as well as to issue an auditor’s report that
uncertainty exists, we are required to draw attention in the
includes our opinions on the consolidated financial state-
auditor’s report to the related disclosures in the consolidated
ments and on the group management report.
financial statements and in the group management report or,
if such disclosures are inadequate, to modify our respective
Reasonable assurance is a high level of assurance, but is
opinions. Our conclusions are based on the audit evidence
not a guarantee that an audit conducted in accordance
obtained up to the date of our auditor’s report. However,
with Sec. 317 HGB and the EU Audit Regulation and in
future events or conditions may cause the Group to cease to
compliance with German Generally Accepted Standards
be able to continue as a going concern.
for Financial Statement Audits promulgated by the Institut
Evaluate the overall presentation, structure and content
der Wirtschaftsprüfer (IDW) will always detect a material
of the consolidated financial statements, including the
misstatement. Misstatements can arise from fraud or error
disclosures, and whether the consolidated financial state-
and are considered material if, individually or in the aggre-
ments present the underlying transactions and events in a
gate, they could reasonably be expected to influence the
manner that the consolidated financial statements give a
economic decisions of users taken on the basis of these
true and fair view of the assets, liabilities, financial position
consolidated financial statements and this group manage-
and financial performance of the Group in compliance
ment report.
with IFRSs as adopted by the EU and the additional
requirements of German commercial law pursuant to
We exercise professional judgment and maintain
Sec. 315e (1) HGB.
professional skepticism throughout the audit. We also:
Obtain sufficient appropriate audit evidence regarding the
Identify and assess the risks of material misstatement of
within the Group to express opinions on the consolidated
the consolidated financial statements and of the group
financial statements and on the group management
management report, whether due to fraud or error, design
report. We are responsible for the direction, supervision
and perform audit procedures responsive to those risks,
and performance of the group audit. We remain solely
and obtain audit evidence that is sufficient and appro-
responsible for our audit opinions.
financial information of the entities or business activities
priate to provide a basis for our opinions. The risk of not
detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepre-
sentations, or the override of internal control.
Independant Auditor's Report | Notes for the KWS Group 2018/2019 | Annual Financial Statements
155
KWS Group | Annual Report 2018/2019 Evaluate the consistency of the group management report
We declare that the opinions expressed in this auditor’s
with the consolidated financial statements, its conformity
report are consistent with the additional report to the audit
with [German] law, and the view of the Group’s position it
committee pursuant to Art. 11 of the EU Audit Regulation
provides.
(long-form audit report).
Perform audit procedures on the prospective information
presented by the Executive Directors in the group
German Public Auditor responsible for the engagement
manage ment report. On the basis of sufficient appropriate
The German Public Auditor responsible for the engagement
audit evidence we evaluate, in particular, the significant
is Dr. Christian Janze.
assumptions used by the Executive Directors as a basis
for the prospective information, and evaluate the proper
Appendix to the auditor’s report:
derivation of the prospective information from these
Parts of the group management report whose content is
assumptions. We do not express a separate opinion on
unaudited
the prospective information and on the assumptions used
as a basis. There is a substantial unavoidable risk that
We have not audited the content of the following parts of the
future events will differ materially from the prospective
group management report:
information.
We communicate with those charged with governance
KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE) and
regarding, among other matters, the planned scope and
the KWS Group contained in section 2.9.2 “Combined
timing of the audit and significant audit findings, including
non-financial statement for the KWS Group” of the group
any significant deficiencies in internal control that we
management report, including any information in other
identify during our audit.
sections referred to in this statement. The respective
The combined non-financial statement for
sections are marked “NFD” in the margin.
We also provide those charged with governance with a
The information in section 2.6.1 “Corporate governance
statement that we have complied with the relevant inde-
report and statement on corporate governance.”
pendence requirements, and communicate with them all
The information in section 2.6.2 “Declaration of conformity
relationships and other matters that may reasonably be
in accordance with Sec. 161 AktG.”
thought to bear on our independence and where applicable,
the related safeguards.
Neither have we audited the content of the following
information that is not typical or required for a group manage-
From the matters communicated with those charged with
ment report. This relates to any information whose disclosure
governance, we determine those matters that were of most
in the group management report is not required pursuant to
significance in the audit of the consolidated financial state-
Secs. 315, 315a HGB or Secs. 315b to 315d HGB.
ments of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report
Section 2.5.3 “Good working conditions” and
unless law or regulation precludes public disclosure about
Section 2.5.4 “Social commitment.”
the matter.
Other legal and regulatory requirements
Further information pursuant to Art. 10 of the EU Audit
Regulation
We were elected as group auditor by the annual general
Hanover, 24 September 2019
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft
meeting on 14 December 2018. We were engaged by the
Ludwig
Dr. Janze
Supervisory Board on 14 July 2019. We have been the
Wirtschaftsprüfer
Wirtschaftsprüfer
group auditor of KWS SAAT SE & Co. KGaA ( formerly
[German Public Auditor]
[German Public Auditor]
KWS SAAT SE) without interruption since fiscal year
2016/2017.
156 Annual Financial Statements | Notes for the KWS Group 2018/2019 | Independant Auditor's Report
Annual Report 2018/2019 | KWS Group
Independent Auditor’s Limited Assurance Report
The assurance engagement performed by Ernst & Young (EY) relates exclusively to the German PDF version of the combined
non-financial statement 2018/2019 of KWS SAAT SE & Co. KGaA. The following text is a translation of the original German
Independent Assurance Report.
To KWS SAAT SE & Co. KGaA, Einbeck
We have performed a limited assurance engagement on the
Auditor’s declaration relating to independence and
group non-financial statement of KWS SAAT SE & Co. KGaA
quality control
according to § 315b HGB (“Handelsgesetzbuch”: German
We are independent from the Company in accordance
Commercial Code), which is combined with the non- financial
with the provisions under German commercial law and
statement of the parent company according to § 289b HGB,
professional requirements, and we have fulfilled our other
consisting of the chapter “2.9.2 Combined Non-Financial
professional responsibilities in accordance with these
Declaration for the KWS Group” in the combined manage-
requirements.
ment report and the chapters “2.1 Fundamentals of the
KWS Group”, “2.4.1 Product Innovations”, “2.4.2 Manage-
Our audit firm applies the national statutory regulations
ment of Genetic Resources”, “2.4.3 Plant and Process Safety”,
and professional pronouncements for quality control, in
“2.5.2 Recruitment and Qualification” and “2.6.3 Business
particular the by-laws regulating the rights and duties of
Ethics and Compliance” in the combined management report
Wirtschaftsprüfer and vereidigte Buchprüfer in the exercise
being incorporated by reference (hereafter combined non-
of their profession [Berufssatzung für Wirtschaftsprüfer
financial statement), for the reporting period from 1 July 2018
und vereidigte Buchprüfer] as well as the IDW Standard on
to 30 June 2019.
Quality Control 1: Requirements for Quality Control in audit
firms [IDW Qualitätssicherungsstandard 1: Anforderungen
Management’s responsibility
an die Qualitätssicherung in der Wirtschaftsprüferpraxis
The legal representatives of the Company are responsible
(IDW QS 1)].
for the preparation of the combined non-financial state-
ment in accordance with §§ 315c in conjunction with
Auditor’s responsibility
289c to 289e HGB.
Our responsibility is to express a limited assurance
conclusion on the combined non-financial statement based
This responsibility includes the selection and application of
on the assurance engagement we have performed.
appropriate methods to prepare the combined non-financial
statement as well as making assumptions and estimates
We conducted our assurance engagement in accordance
related to individual disclosures, which are reasonable in the
with the International Standard on Assurance Engagements
circumstances. Furthermore, the legal representatives are
(ISAE) 3000 (Revised): Assurance Engagements other than
responsible for such internal controls that they have con-
Audits or Reviews of Historical Financial Information, issued
sidered necessary to enable the preparation of a combined
by the International Auditing and Assurance Standards Board
non-financial statement that is free from material misstate-
(IAASB). This Standard requires that we plan and perform
ment, whether due to fraud or error.
the assurance engagement to obtain limited assurance
about whether the combined non-financial statement of
the Company has been prepared, in all material respects,
in accordance with §§ 315c in conjunction with 289c to
289e HGB. In a limited assurance engagement the assurance
procedures are less in extent than for a reasonable assurance
engagement and therefore a substantially lower level of
assurance is obtained. The assurance procedures selected
depend on the auditor's professional judgment.
Independant Auditor's Report | Notes for the KWS Group 2018/2019 | Annual Financial Statements
157
KWS Group | Annual Report 2018/2019
Within the scope of our assurance engagement, which has
Intended use of the assurance report
been conducted between July and September 2019, we
We issue this report on the basis of the engagement agreed
performed amongst others the following assurance and
with KWS SAAT SE & Co. KGaA. The assurance engage-
other procedures:
ment has been performed for the purposes of the Company
and the report is solely intended to inform the Company as
Inquiries of employees and inspection of documents
to the results of the assurance engagement and must not be
regarding the selection of topics for the combined non-
used for purposes other than those intended. The report is
financial statement, the risk assessment and the concepts
not intended to provide third parties with support in making
of the parent company and the group for the topics that
(financial) decisions.
have been identified as material,
Inquiries of employees responsible for data capture and
Engagement terms and liability
consolidation as well as the preparation of the combined
The “General Engagement Terms for Wirtschaftsprüfer
non-financial statement, to evaluate the reporting
and Wirtschaftsprüfungsgesellschaften [German Public
processes, the data capture and compilation methods
Auditors and Public Audit Firms]” dated 1 January 2017 are
as well as internal controls to the extent relevant for the
applicable to this engagement and also govern our relations
assurance of the combined non-financial statement,
with third parties in the context of this engagement
Identification of likely risks of material misstatement in the
(www.de.ey.com/general-engagement-terms). In addition,
combined non-financial statement,
please refer to the liability provisions contained there in
Inspection of relevant documentation of the systems
no. 9 and to the exclusion of liability towards third parties.
and processes for compiling, analyzing and aggregating
We assume no responsibility, liability or other obligations
relevant data in the reporting period and testing such
towards third parties unless we have concluded a written
documentation on a sample basis,
agreement to the contrary with the respective third party or
Analytical evaluation of disclosures in the combined
liability cannot effectively be precluded.
non-financial statement,
Inquiries and inspection of documents on a sample basis
We make express reference to the fact that we do not update
relating to the collection and reporting of selected state-
the assurance report to reflect events or circumstances
ments and data,
arising after it was issued unless required to do so by law. It
Evaluation of the presentation of disclosures in the
is the sole responsibility of anyone taking note of the result
combined non-financial statement.
of our assurance engagement summarized in this assurance
Assurance conclusion
report to decide whether and in what way this result is useful
or suitable for their purposes and to supplement, verify or
Based on our assurance procedures performed and
update it by means of their own review procedures.
assurance evidence obtained, nothing has come to our
attention that causes us to believe that the combined
Munich, 24 September 2019
non- financial statement of KWS SAAT SE & Co. KGaA for
the period from 1 July 2018 to 30 June 2019 has not been
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft
prepared, in all material respects, in accordance with
§§ 315c in conjunction with 289c to 289e HGB.
Nicole Richter
Annette Johne
Wirtschaftsprüferin
Wirtschaftsprüferin
(German Public Auditor)
(German Public Auditor)
158 Annual Financial Statements | Notes for the KWS Group 2018/2019 | Independant Auditor's Report
Annual Report 2018/2019 | KWS Group
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 applicable group accounting principles, 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, which is combined with the
Management Report of KWS SAAT SE & Co. KGaA, and that
it describes the main opportunities and risks of the Group’s
anticipated development.
Einbeck, September 24, 2019
KWS SAAT SE & Co. KGaA
THE EXECUTIVE BOARD
Hagen Duenbostel
Felix Büchting
Léon Broers
Eva Kienle
Peter Hofmann
KWS Group | Annual Report 2018/2019
Declaration by Legal Representatives
159
Additional Information
Financial calendar
Date
November 26, 2019
December 17, 2019
February 25, 2020
May 19, 2020
October 23, 2020
November 24, 2020
December 16, 2020
KWS share
Key data of KWS SAAT SE & Co. KGaA
Securities identification number
ISIN
Stock exchange identifier
Transparency level
Index
Share class
Number of shares
Dividend
Dividend payment and dividend ratios of the past 10 years
0.60
0.60
0.60
0.60
0.56
0.46
Quarterly Report Q1 2019/2020
Annual Shareholders’ Meeting in Einbeck
Semiannual Report 2019/2020
Quarterly Report 9M 2019/2020
Publication of 2019/2020 financial statements,
annual press and analyst conference in Frankfurt
Quarterly Report Q1 2019/2020
Annual Shareholders’ Meeting in Einbeck
707400
DE0007074007
KWS
Prime Standard
SDAX
Individual share certificates
33,000,000
0.64
0.64
0.67
Dividend proposal 2019
Dividend payment in €
Dividend ratio (total
dividends/net income) in %
0.38
24.3
25%
20%
20.8
19.6
21.7
24.7
23.6
23.2
21.6
21.2
21.3
09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18
18/19
160 Additional Information
Annual Report 2018/2019 | KWS Group
About this report
The Annual Report can be downloaded on our Internet sites at www.kws.de and www.kws.com. The KWS Group´s fiscal year
begins on July 1 and ends on June 30. Unless otherwise specified, figures in parentheses relate to the same period or date in
the previous year. There may be rounding differences for percentages and numbers.
Contact
Investor Relations and
Press
Financial Press
Peter Vogt
Stephan Krings
press@kws.com
Sustainability
Marcel Meyer
Editor
KWS SAAT SE & Co. KGaA
sustainability@kws.com
Grimsehlstrasse 31
investor.relations@kws.com
Phone: +49 5561 311 1540
Phone: +49 5561 311 393
P.O. Box 1463
Phone: +49 30 209136 217
Safe harbor statement
37555 Einbeck
Germany
This Annual Report includes forward-looking statements based on the assumptions and estimates of
KWS SAAT SE & Co. KGaA’s management. These forward-looking statements may be identified by words such as
“forecast,” “assume,” “believe,” “ assess,” “expect,” “intend,” “can/may/might,” “plan,” “should” or similar expressions.
These statements are based on current assessments and forecasts of the Executive Board and the information currently
available to it and are subject to certain elements of uncertainty, risks and other factors that may result in significant
deviations between expectations and actual circumstances. These factors may be, for example, changes in the overall
economic situation, the general statutory and regulatory framework, and the industry.
KWS SAAT SE & Co. KGaA does not warrant that the future development and actual results achieved in the future match
the assumptions and estimates expressed in this Annual Report and shall not assume any liability if they do not. Forward-
looking statements must therefore not be regarded as a guarantee or pledge that the developments or events they describe
will actually occur. KWS SAAT SE & Co. KGaA does not intend, nor does it assume any obligation, to update forward-looking
statements in order to adapt them to events or developments after the date of this report.
Photos/illustrations
Jens Anders Florian Gahre Christian Bruch Marcelo Coelho Jan Eric Euler Frank Stefan Kimmel Julia Lormis
Pat Nabong Roman Pawlowski Thorsten Schmidtkord Jens Scholz Spieker & Woschek Alex Telfer Roman Thomas
Karsten Türnau Frank Tusch Sascha Voges Sebastian Vollmert Fotos by Pop Vriend
Date of publication: October 23, 2019
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.
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KWS SAAT SE & Co. KGaA
Grimsehlstrasse 31
P.O. Box 1463
37555 Einbeck/Germany
www.kws.com