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Annual Report
2019 | 2020
KWS in Figures
The KWS Group (in € millions)
2019/2020
2018/2019
2017/2018
2016/2017
2015/2016
2014/2015
Net sales and income
Net sales
EBITDA
EBIT
as a % of net sales (EBIT margin)
Net financial income/expenses
Net income for the year
Other figures on earnings
R&D intensity in %
1,282.6
1,113.3
1,068.0
1,075.2
1,036.8
225.5
137.4
10.7 1
–7.8
95.2
199.7
150.0
13.5
–5.5
104.0
182.7
132.6
12.4
5.4
99.7
181.0
131.6
12.2
16.6
97.7
161.0
112.8
10.9
14.8
85.3
986.0
159.3
113.4
11.5
16.7
84.0
18.4
18.5
18.5
17.7
17.6
17.7
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 debt 2
Total assets
Capital employed (avg.) 3
ROCE (avg.) in % 4
Cash flow from operating activities
Free cash flow 5
Employees
Number of employees (avg.) 6
Personnel expenses
Key figures for the share in €
Earnings per share in € 7
Dividend per share in € 7, 8
Segments (in € millions)
108.0
88.2
994.5
44.5
10.1
5.3
495.7
2,235.5
1,640.5
8.4
136.2
31.5
4,414
310.1
2.89
0.70
96.6
49.7
963.5
45.5
12.1
7.6
497.9
2,115.0
1,047.1
14.3
72.9
–5.6
4,126
280.7
3.15
0.67
71.7
50.1
881.8
58.1
12.3
7.1
37.4
63.3
49.4
836.9
56.0
13.1
7.3
48.5
99.6
48.2
767.9
53.5
11.9
7.0
87.9
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
Corn
Sugarbeet
Cereals
Vegetables
Corporate
+5.0%
776
739
+6.6%
461
492
+15.9%
58
67
–5.3%
180
170
+11.9%
171
191
+14.8%
23
26
Net sales
EBIT
Net sales
EBIT
Net sales
EBIT
2018/2019
2019/2020
Reconciliation (in € millions)
Net sales
EBIT
84
0
EBIT
Net sales
0
–8
+17.9%
4
5
Net sales
–7.7%
EBIT
–97
–105
Segments Reconciliation
KWS Group
1,546.8
151.3
–264.3
–14.0
1,282.6
137.4
1 13.3% excluding effects from acquisition of the Pop Vriend Seeds Group
2 Short-term + long-term borrowings – cash and cash equivalents – securities
3 Total capital employed at the end of the quarters ((intangible assets + property, plant and equipment + inventories + trade receivables – trade payables)/4)
4 EBIT/Capital Employed (avg.)
5 Adjusted for special effects from acquisition of the Pop Vriend Seeds Group
6 FTE: Full time equivalents
7 Earnings and dividend per share of previous periods adjusted due to share split
8 The dividend for 2019/2020 is subject to the consent of the 2020 Annual Shareholders‘ Meeting.
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Contents
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5
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14
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32
35
53
58
62
78
88
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1. To Our Shareholders
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))
96
3. Annual Financial Statements
Spinach makes us strong
Our title photo shows a spinach field in Azmoos in the canton of St. Gallen, Switzerland, shortly
before the harvest. By entering the vegetables business, KWS has become the world leader in
spinach seed, which accounts for around 70% of net sales in the Vegetables Segment.
Felix Büchting Cereals, Oilseed Rape/Special Crops & Organic Seed, Human Resources, Farming
Peter Hofmann Sugarbeet, Corn Europe, Marketing & Communications
Eva Kienle Finance & Purchasing, Controlling, Global Services, IT, Legal
Hagen Duenbostel (CEO) Corn North and South America, Corn China/Asia, Strategy, Compliance, and Governance & Risk Management
Léon Broers Research & Breeding, Vegetables
2
To Our Shareholders | Foreword of the Executive Board
Annual Report 2019/2020 | KWS Group To Our
Share
holders
Foreword of the Executive Board
It is an honor and pleasure to present you today with KWS’ latest Annual Report.
Our guiding principle of “thinking long term and acting sustainably” is proving to
be precisely the right recipe for success.
I am able to report a strong fiscal year in every respect, one in which all product
segments grew – in some cases sharply – despite the Covid-19 pandemic. We
took swift and farsighted action together with our partners in the agricultural
industry. We supplied farmers with seed in good time for the spring sowing season.
The food supply is vital to our economy and we live up to this responsibility – and
that has never been truer than now. Short-time work or even layoffs were not an
issue at KWS, not least thanks to our strong economic situation and indepen-
dence. With our current positioning and setup, we can also tackle the challenges
ahead of us with confidence and resolve.
Our responsibility also includes investing in the future of the global food supply.
Even though ground-breaking breeding methods like genome editing are ob-
structed by current legislation, it is essential for us to remain fully committed to
them and to fair access to state-of-the-art technologies and products.
We are one of the leading drivers of innovation in the industry, and digitization is
therefore a key element at our company, too. Whether in the shape of innovative
tools for agriculture or expansion of our own digital infrastructure – our know-
how in the field of forward-looking technologies is a big benefit for us, especially
in these times. I’d like to refer you in this regard to the Spotlight Topic on digital
solutions for sustainable agriculture at KWS on page 14 of this Annual Report.
Foreword of the Executive Board | To Our Shareholders
3
KWS Group | Annual Report 2019/2020 The issue of combating climate change seems to have slipped under the radar
a little due to events in the first half of 2020. And yet it remains one of our core
missions. KWS has not slackened in its efforts to find cutting-edge solutions and
approaches in the past months.
The European Union’s Green Deal and its Farm to Fork Strategy mean we now
have a roadmap, and implementing it is a key challenge facing the whole industry.
Given that plant breeding stands at the very beginning of the food value chain,
it bears a major responsibility in this context. The EU has now defined concrete
figures and targets for reducing the use of pesticide and fertilizer, cutting green-
house gas emissions and promoting organic farming and biodiversity. KWS will
continue to make a crucial contribution to attaining those goals. And it’s a mission
we did not just adopt overnight. Vital aspects of sustainability and environmental
protection have been a focus of our work for years.
We think and act in terms of generations. At the same time, we need to be
responsive. We have successfully demonstrated our adaptivity, in particular this
year. We will also continue to address our structural costs in a measured manner
and drive projects forward prudently, but purposefully.
I wish to express my sincere thanks to our more than 5,700 employees worldwide.
Your efforts and dedication are magnificent! You and your commitment are crucial
to KWS’ strength.
I also thank you, our customers and partners, for your trust and successful
working relationship. I hope you find this Annual Report both informative and
interesting.
Dr. Hagen Duenbostel
Chief Executive Officer
4
To Our Shareholders | Foreword of the Executive Board
Annual Report 2019/2020 | KWS Group Report of the Supervisory Board
Fiscal 2019/2020 was defined by the major challenges
The Supervisory Board of KWS SAAT SE & Co. KGaA
resulting from the outbreak of the Covid-19 pandemic
discharged the duties incumbent on it in accordance
immediately before the start of the spring sowing
with the law, the company’s Articles of Association
season, a time of the year that is important for KWS’
and the bylaws, regularly advised and monitored the
business. Thanks to their great efforts, our employees
personally liable partner, represented by its Executive
managed to ensure that farmers in all international
Board, in its activities and satisfied itself that the
markets were supplied with seed in time. That is a
company was run properly and in compliance with
key reason for our successful performance in fiscal
the law and that it was organized efficiently and
2019/2020, in which we grew in all product segments
cost-effectively. The Supervisory Board extensively
and achieved our main operational objectives. The
discussed all significant business transactions and
Supervisory Board wishes to express its particular
carefully accompanied the Executive Board in all fun-
thanks and recognition to all employees for that feat.
damental decisions of importance to the company.
The good working relationship with the Executive
In fiscal 2019/2020, the period under review, the
Board was continued. Among other things, this was
change of legal form to KWS SAAT SE & Co. KGaA
demonstrated by the fact that, as is customary, the
was completed upon its registration in the commer-
Supervisory Board was involved in all decisions of
cial register on July 2, 2019. The company therefore
vital importance to the company at an early stage.
existed as a partnership limited by shares (KGaA) for
The Supervisory Board was provided with the nec-
a large part of the year under review. The change in
essary information in written and oral form regularly,
legal form means that KWS SAAT SE & Co. KGaA
promptly and comprehensively. This included all key
and the personally liable partner, KWS SE, both have
information on relevant questions, in particular relat-
a separate Supervisory Board, each with the same
ing to strategy, planning, the business performance
shareholder representatives serving on them. In
and the situation of the company and the KWS Group,
principle, all decisions on business operations and
including the risk situation, risk management and
on all significant business transactions are made by
compliance. In the period under review, there were
the personally liable partner at a partnership limited
no transactions with related parties, which require
by shares. The Supervisory Board of a partnership
the Supervisory Board’s approval in accordance with
limited by shares, which at KWS has two employee
Section 111b of the German Stock Corporation Act
representatives in addition to the shareholder repre-
(AktG) in the version of the German Act Implementing
sentatives, must be informed about such business
the Second Shareholder Rights Directive (ARUG II)
transactions. The reporting requirements are defined
(Official Federal Gazette I 2019, page 2637).
by the German Stock Corporation Act (AktG) and
largely correspond to those under the Council Reg-
The company’s business policy, corporate and
ulation on the Statute for a European Company. The
financial planning, profitability and situation, market
cooperation between the shareholder and employee
trends and the competitive environment, research
representatives on the Supervisory Board of the
and breeding and, along with important individual
former KWS SAAT SE was always constructive and
projects, risk management at the KWS Group, in
characterized by a high degree of mutual trust, with
particular in relation to preventive healthcare in the
the result that the bodies also decided to mainly hold
wake of the Covid-19 pandemic, were the subject of
joint meetings as far as was legally permitted under
detailed discussions in the year under review.
the new legal form. The advantage of that is that the
employee representatives can discuss upcoming
The Chairman of the Supervisory Board continued
decisions in advance with the shareholder represen-
the direct discussions with the Chief Executive
tatives and be integrated in the process early on.
Officer of KWS SE and individual members of the
Report of the Supervisory Board | To Our Shareholders
5
KWS Group | Annual Report 2019/2020 The Supervisory Board and the Management Board continued their constructive and trusting cooperation in the year under review.
Executive Board in regular talks outside the meetings
potential acquisitions. The Supervisory Board held an
of the Supervisory Board in the year under review.
extraordinary meeting on December 3, 2019, at which
In addition, there were monthly meetings between
it discussed the Corn Segment’s strategic orienta-
the Chairman of the Supervisory Board and the
tion, and continued those deliberations on Decem-
Executive Board as a whole, where the company’s
ber 16 and 17, 2019. The Supervisory Board likewise
current business development and, in particular, its
heard reports on the status of the research projects
strategy, occurrences of special importance and
at KWS on December 16, 2019. The results of the
individual aspects were dealt with. The Chairman
breeding programs were then on the agenda on
of the Supervisory Board informed the Supervisory
March 16, 2020. In addition, the potential impacts of
Board of the results of these meetings. The Super-
the corona virus crisis on the current fiscal year were
visory Board did not make use of its right to con-
outlined, the biggest challenge at the time being
duct an examination granted by Section 111 (2) of
restrictions on cross- border trade. On June 25, 2020,
the German Stock Corporation Act (AktG) since the
the Executive Board then submitted a conservative
reporting by the Executive Board meant there was no
budget and medium-term planning to the Super visory
reason to do so.
Board. As part of them, many new projects and hires
were deferred until the macroeconomic trends, the
Focal areas of deliberations
level of economic activity in the agricultural sector, and
The full Supervisory Board of KWS SAAT SE &
their impact on seed business were more calculable.
Co. KGaA held five regular meetings and one extra-
ordinary meeting in fiscal 2019/2020, each of which
Corporate Governance
was attended by all its members either in person
The Supervisory Board discussed compliance with
or, due to the pandemic, via online media. At the
the recommendations of the “German Commission
beginning of the year under review, the Supervisory
for the Corporate Governance Code,” in particu-
Board – now of KWS SAAT SE & Co. KGaA – con-
lar the new aspects pursuant to the new version
vened its meeting to discuss the financial statements
of the German Corporate Governance Code dated
on October 22, 2019. At this meeting, which was
December 16, 2019, and – after the last Declaration
also attended by the independent auditor for fiscal
of Compliance in October 2019 – it and the per-
2018/2019, the Supervisory Board examined and
sonally liable partner issued a new Declaration of
pproved the financial statements of KWS SAAT SE &
Compliance with the German Corporate Governance
Co. KGaA ( formerly KWS SAAT SE) and approved the
Code in the version dated December 16, 2019,
consolidated financial statements of the KWS Group
or – for the period of time until this new version
as of June 30, 2019. It also addressed expansion
took effect on March 20, 2020 – in the version of
of the vegetables business and discussed further
the German Corporate Governance Code dated
6
To Our Shareholders | Report of the Supervisory Board
Annual Report 2019/2020 | KWS Group February 7, 2017, in accordance with Section 161 of
the Combined Management Report and the proposal
the German Stock Corporation Act (AktG). The Dec-
by the Executive Board on the appropriation of the
laration of Compliance can be obtained on the com-
profits. The Quarterly Report Q1 for 2019/2020 was
pany’s website at www.kws.com/corp/en/company/
mainly discussed during the telephone conference on
investor-relations/corporate-governance.
November 20, 2019. In particular, the KWS Group’s
tax situation and risk management system were dis-
The Supervisory Board regularly addressed the
cussed in detail at the meeting on December 16, 2019.
question of any conflicts of interest on the part of its
The meeting on February 19, 2020, discussed
members and those of the Executive Board in the
and defined the focus of the audit for fiscal year
year under review. In the year under review, there
2019/2020 in the presence of the appointed inde-
were no such conflicts of interests that had to be
pendent auditor. It also discussed the situation as
disclosed immediately to the Supervisory Board and
regards the KWS Group’s financing and the Semi-
reported to the Annual Shareholders’ Meeting.
annual Report 2019/2020 in detail. In addition, the
report by Internal Auditing for fiscal 2019/2020 was
The members of the Supervisory Board undertook
discussed and the audit plan for fiscal 2020/2021 was
the education and further training measures neces-
defined and adopted at the meeting on May 13, 2020.
sary for them to discharge their tasks. Events and
The risk situation – in particular against the backdrop
measures as part of the induction of new Supervisory
of the Covid-19 pandemic – and the 9M Quarterly
Board members (onboarding) were not necessary in
Report for 2019/2020 were also discussed.
the year under review since there were no changes to
the persons serving on it.
In addition, the Audit Committee obtained the state-
ment of independence from the auditor, ascertained
The Supervisory Board also conducted its regular
and monitored the auditor’s independence and ex-
efficiency review in the year under review. The review
amined its qualifications. The Audit Committee also
covered the fiscal years 2018/2019 and 2019/2020.
satisfied itself that the regulations on internal rotation
It was accompanied by the accounting firm Deloitte
were observed by the independent auditor and dealt
GmbH, which created a company-specific question-
with the issue of any additional services rendered by
naire after inspecting the minutes of the Supervisory
the independent auditor.
Board and Audit Committee meetings. After evaluat-
ing the responses from the members of the Super-
In view of the fact that all shareholder representa-
visory Board and Executive Board, Deloitte came to
tives had just recently been elected by the Annual
the conclusion that the Supervisory Board performs
Shareholders’ Meeting on December 14, 2018, for
its work on the basis of sound, in-depth information
a period of time up to the end of the Annual Share-
and nurtures a culture of open discussion.
holders’ Meeting that ratifies its acts for fiscal year
2021/2022, the Nominating Committee did not
Supervisory Board committees
need to convene in the year under review.
In the year under review, the Supervisory Board of
KWS SAAT SE & Co. KGaA had two committees: the
The Supervisory Board of KWS SAAT SE & Co. KGaA
Audit Committee and the Nominating Committee.
no longer has a Committee for Executive Board
Affairs since the change in legal form took effect,
The Audit Committee convened for four joint
because the Supervisory Board of KWS SAAT SE &
meetings in fiscal 2019/2020 and also held one
Co. KGaA does not hold personnel responsibility as
telephone conference – on all occasions with
regards management; authority for issues relating to
all its members in attendance. In its meeting on
the compensation of the Executive Board has been
September 24, 2019, the Audit Committee discussed
in the hands of KWS SE’s Supervisory Board since
the annual financial statements and accounting of
the change in legal form. It should be noted in this
KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE)
connection that the Supervisory Board of KWS SE
and the consolidated financial statements of the
endorsed the recommendation of its Committee
KWS Group for the fiscal year 2018/2019, along with
for Executive Board Affairs and appointed
Report of the Supervisory Board | To Our Shareholders
7
KWS Group | Annual Report 2019/2020 Dr. Peter Hofmann as a member of the Executive
recommendations of the “German Commission for
Board of KWS SE for a further three-and-a-half
the Corporate Governance Code.” The Non-Financial
years until June 30, 2024, with effect from January 1,
Declaration (Section 289b and Section 315b of the
2021. In addition, the Committee for Executive Board
German Commercial Code (HGB)) in the Combined
Affairs of KWS SE dealt with the new requirements
Management Report were likewise audited by the
of the German Act Implementing the Second Share-
independent auditor.
holder Rights Directive (ARUG II), which came into
force on January 1, 2020, as well as the principles
The Supervisory Board received and discussed the
defined in the latest version of the German Corporate
financial statements of KWS SAAT SE & Co. KGaA and
Governance Code relating to compensation for the
the consolidated financial statements and Combined
Executive Board and the Supervisory Board. The
Management Report of KWS SAAT SE & Co. KGaA
personally liable partner will submit a proposed res-
and the KWS Group, along with the report by the
olution on a compensation system for the Executive
independent auditor of KWS SAAT SE & Co. KGaA
Board adapted to the requirements of ARUG II at the
and the KWS Group and the proposal on appropri-
Annual Shareholders’ Meeting of KWS SAAT SE &
ation of the net retained profit for the year made by
Co. KGaA to be held in December 2021. If it is ap-
KWS SAAT SE & Co. KGaA, in due time. Compre-
proved, it will then apply to new contracts. Until
hensive documents and drafts were submitted to the
that time, a best practice for implementing the pro-
members of the Supervisory Board as preparation.
visions of the new ARUG II and the new version of
For example, all of them were provided with the
the German Corporate Governance Code will have
annual financial statements, consolidated financial
been established. The current compensation system
statements, Combined Management Report, audit
for Executive Board members was last submitted
reports by the independent auditor, and the proposal
for approval to the Annual Shareholders’ Meeting of
by the personally liable partner on the appropriation
KWS SAAT SE & Co. KGaA on December 17, 2019,
of the profits. The Supervisory Board likewise re-
and was ratified with a vote of 99.94% in its favor.
ceived and discussed the Non-Financial Declaration
(Section 289b and Section 315b of the German Com-
Annual and consolidated financial statements
mercial Code (HGB)), which is part of the Combined
and auditing
Management Report and contains disclosures on the
Ernst & Young GmbH Wirtschaftsprüfungs-
KWS Group and the parent company KWS SAAT SE
gesellschaft, Hanover, the independent auditor
& Co. KGaA, as well as the related audit report by the
chosen at the Annual Shareholders’ Meeting on
independent auditor (Section 111 (2) Sentence 4 of the
December 17, 2019, and commissioned by the Audit
German Stock Corporation Act (AktG)) as part of a
Committee, has audited the financial statements of
limited assurance engagement.
KWS SAAT SE & Co. KGaA that were presented by
the personally liable partner, KWS SE, and prepared
The Audit Committee convened on Septem-
in accordance with the provisions of the German
ber 23, 2020, to discuss the annual financial state-
Commercial Code (HGB) for fiscal 2019/2020 and the
ments of KWS SAAT SE & Co. KGaA and the
financial statements of the KWS Group (IFRS consol-
KWS Group’s consolidated financial statements for
idated financial statements), as well as the Combined
the 2019/2020 fiscal year and accounting, along with
Management Report of KWS SAAT SE & Co. KGaA
the Combined Management Report. The independent
and the KWS Group (Group Management Report),
auditor for fiscal 2019/2020 explained the results of its
including the accounting reports, and awarded them
audit of the annual financial statements and consoli-
its unqualified audit certificate. In addition, the au-
dated financial statements. It pointed out that there
ditor concluded that the audit of the financial state-
were no grounds for assuming a lack of impartiality
ments did not reveal any facts that might indicate a
on the part of the independent auditor in its audit.
misstatement in the declaration of compliance issued
The Audit Committee dealt with the proposal by the
by the personally liable partner and the Supervisory
personally liable partner on the appropriation of the
Board in accordance with section 161 of the German
net retained profit of KWS SAAT SE & Co. KGaA and
Stock Corporation Act (AktG) with respect to the
recommended that the Supervisory Board approve it.
8
To Our Shareholders | Report of the Supervisory Board
Annual Report 2019/2020 | KWS Group Andreas J. Büchting, Chairman of the Supervisory Board
The Supervisory Board also held detailed discussions
Board also endorsed the proposal by the personally
of questions on the agenda at its meeting to discuss
liable partner to the Annual Shareholders’ Meeting
the financial statements on October 22, 2020. The
on the appropriation of the net retained profit of
auditor took part in the meeting. It reported on the
KWS SAAT SE & Co. KGaA after having examined it.
main results of the audit and was also available to
answer additional questions and provide further
As stated earlier, KWS SAAT SE & Co. KGaA does not
information for the Supervisory Board. According to
have a Committee for Executive Board Affairs since
the report of the independent auditor, there were no
the change in legal form took effect. In addition,
material weaknesses in the internal control and risk
there were no changes to the persons serving on
management system in relation to the accounting
the Executive Board of the personally liable partner
process. There were also no circumstances that
KWS SE, the Supervisory Board of KWS SAAT SE &
might raise concerns about a lack of impartiality on
Co. KGaA and its committees in the year under
the part of the independent auditor. As can be seen
review.
from the Notes, the independent auditor did not pro-
vide any additional services.
The Supervisory Board thanks the Executive Board
and all employees of the KWS Group for their excep-
In accordance with the final results of its own exam-
tional efforts in the face of the additional difficulties
ination, the Supervisory Board endorsed the results
posed by the present pandemic. Thanks to their
of the audit and of the audit of the Non-Financial
great sense of personal responsibility, coupled with
Declaration, among other things as a result of the
their outstanding commitment, KWS has been able
preliminary examination by the Audit Committee,
to maintain its business activities unscathed even in
and did not raise any objections. The Supervisory
the time of the coronavirus, with the result that we
Board gave its consent to the annual financial state-
can look back on yet another successful fiscal year.
ments of KWS SAAT SE & Co. KGaA submitted by
the personally liable partner, and to the consolidated
financial statements of the KWS Group and the
Einbeck, October 22, 2020
Combined Management Report of KWS SAAT SE
& Co. KGaA and the KWS Group and recom-
mended that the Annual Shareholders’ Meeting on
December 16, 2020, approve the annual financial
statements of KWS SAAT SE & Co. KGaA prepared
Dr. Drs. h. c. Andreas J. Büchting
by the personally liable partner. The Supervisory
Chairman of the Supervisory Board
Report of the Supervisory Board | To Our Shareholders
9
KWS Group | Annual Report 2019/2020
Not everything in life
stays on track all the time.
Proximity sometimes means a greater risk, as we have learned all too painfully
from the coronavirus. But like our farmers, we give our all rather than give up.
KWS on the Capital Market
Performance
XETRA rose sharply from around 8,000 shares to
The stock markets were extremely turbulent in
more than 14,000. Two major international banks –
fiscal 2019/2020. The escalation in the trade conflict
Commerzbank and Exane BNP Paribas – com-
between the U.S. and China and uncertainty about
menced coverage of the KWS share. There was
the UK’s withdrawal from the EU weighed on mar-
also keen interest in the share during the market
kets, while the Covid-19 pandemic gripped the global
turbulence triggered by the Covid-19 pandemic: After
economy and capital markets from early 2020 on.
hitting its low at €39.80 in mid-March, it recovered
Central banks’ continuing expansionary monetary
much faster than the market as a whole and was
policy and support measures by governments, some
back at €66.70 at the end of June 2020. KWS’ share
of which were on a large scale, helped shore up the
price has increased by 183%, i.e. has almost tripled,
situation. Interest rates were still low and so shares
over the past ten years.
remained an attractive investment.
Employee Stock Purchase Plan
The DAX closed at 13,249 points at the end of 2019,
For more than 30 years KWS has offered its em-
but then plunged to a low of 8,441 in March 2020 as
ployees the chance to become shareholders in the
a result of the sell-off in the wake of the pandemic.
company and thus share in its success. The content
Germany’s benchmark index climbed back to 12,310
of our Employee Stock Purchase Plan remained un-
points, or roughly the same level as in the previous
changed in the year under review. Our employees
year, at the end of June 2020, in particular on the
were able to buy up to 2,500 KWS shares at a price
back of the extensive economic stimulus programs in
of €45.92 (44.16) 1, including a 20% discount, which
many countries and expectations of a rapid recovery
the individual employees must pay tax on. 476 (442)
in the economy. The SDAX fared much the same and
employees in six (seven) European countries took up
was likewise close to its level of the previous year at
this offer and purchased a total of 52,315 (54,095)
the balance sheet date.
shares. The acquired shares are subject to a lock-up
period of four years. They cannot be sold, transferred
KWS’ share performed positively as a whole in
or pledged during this period. As in previous years,
fiscal 2019/2020 and had risen by almost 6% by
the shares used for the Employee Stock Purchase
its end. The average trading volume per day on
Plan were acquired in accordance with Section 71 (1)
The KWS share’s performance over 10 years
400%
350%
300%
250%
200%
150%
100%
50%
July 1, 2010
KWS
SDAX
DAX
+200%
+183%
+105%
June 30, 2020
1 Unless otherwise specified, the figures in parentheses are those for the previous year.
12
To Our Shareholders | KWS on the Capital Market
Annual Report 2019/2020 | KWS Group
Shareholder structure at June 30, 2020
(33,000,000 shares)
Free float 30.2%
Tessner Beteiligungs GmbH 15.4%
54.4% Families Büchting, Arend Oetker
No. 2 of the German Stock Corporation Act (AktG).
A total of €3.0 (3.1) million was used to buy back the
company’s own shares, giving an average purchase
ISIN
Share class
price per share (including fees) of €57.40 (57.33).
Number of shares
Key figures for the KWS share (Xetra®)
More details have been published in information
released for the capital market and can be viewed on
our website at www.kws.com/ir.
Planned appropriation of profits
Continuing to grow profitably is one of KWS’ core
corporate goals. In the year under review, sales rose
by 15.2%, with all product segments contributing to
the growth. Earnings before interest, taxes, depreci-
ation and amortization (EBITDA) also increased sig-
nificantly by around 13%. Due to special effects from
the acquisition of Pop Vriend Seeds and a positive
Closing price
June 30, 2020
June 30, 2019
High and low
High (June 18, 2020)
Low (March 19, 2020)
Trading volume
in shares/day
2019/2020
2018/2019
14,354
8,189
DE0007074007
Non-par
33,000,000
in €
66.70
64.20
in €
68.30
39.80
one-off effect in the previous period, earnings before
Market capitalization
in € million
interest and taxes (EBIT) and net income declined.
June 30, 2020
June 30, 2019
Earnings per share
June 30, 2020
June 30, 2019
Against the background of the positive operational
business development, the Management Board and
the Supervisory Board will propose to the Annual
General Meeting on December 16, 2020 that a
dividend of €0.70 (0.67) per share be distributed
for the 2019/2020 financial year. This would dis-
tribute €23.1 (22.1) million to the shareholders of
KWS SAAT SE & Co. KGaA. This would correspond
to a payout ratio of 24.3 (21.3)%, with which KWS
would continue to pay dividends of 20 to 25% of the
KWS Group’s net income within the scope of its divi-
dend policy, which is geared towards the company’s
earnings power.
2,201
2,119
in €
2.89
3.12
KWS on the Capital Market | To Our Shareholders
13
KWS Group | Annual Report 2019/2020 Spotlight
Topic
Satellites in space, robots in the
field: What does digitization have
to do with farming?
Farmers all over the world now face major challenges:
In times of climate change, they need to ensure the
productivity of available cultivation areas, yet also
make an active contribution to climate protection,
reduce operating resources and use them as effi-
ciently as possible, and conserve natural resources.
The spread of digitization to the farming industry
opens up completely new possibilities to increase
yields, resource efficiency and sustainability.
„
New approaches in communicating with farmers
What’s more: Digitization creates new, personalized
ways of interacting. Farmers all over the world are
increasingly using digital channels to communicate
and find information, for example.
Two-thirds of all farmers in Germany
already use mobile apps for their work
and 80% are online every day.1 And
that trend is gaining in relevance as a
Tools such as computer-controlled dosing aids for
result of the coronavirus pandemic.
fertilizer and pesticides, models to determine the
best time for harvesting crops or to predict infesta-
Digital communication and distribution channels
tion by diseases or pests, and sensor-aided animal
also make the value chain more transparent and
monitoring and data capture enable processes that
bring producers and consumers closer together, for
are more ecological and animal-friendly. Drone and
example through forms of direct online marketing
satellite technology, weather apps and algorithms
or improved traceability of foods. To better leverage
help identify general conditions and their dynamic
this potential, we also need to deliver answers for the
changes better. Autonomous machine control or
issues of system and information security, infrastruc-
documentation and analysis from anywhere make
ture development and financing.
work processes simpler and more agile.
1 Kleffmann Group, now part of Kynetec, New Media Tracker 2019/2020
14
To Our Shareholders | Spotlight Topic
Annual Report 2019/2020 | KWS Group
Satellite images
supply data to support farmers in making
decisions that affect yields
Digital
communication
offers new approaches
for immediate and
customized dialogue
Precision
in plant protection
can be increased many
times over with the use
of autonomous robots
Image recognition
helps farmers
identify diseases
and pests in
the field
QR codes
protect customers
against imitations and
offer direct access to
important information
on varieties
Big data
enables
agronomic
and economic
optimization of
crop rotation, for example
myKWS
provides access
to all important applications
and sends real-time
information on
relevant events
A bird’seye view: Drones supply extensive data and enable
better controlling of the plant stand.
Digital solutions assist farmers in their
harvest them, which is when their dry matter con-
day-to-day decisions
tent is 30% to 35%. If the crops are harvested too
In order to address future requirements, KWS works
early or too late, their yield may be reduced by up to
constantly to further develop its portfolio of digital
10% – meaning lost income for farmers. Satellites
services. These services, which are bundled on the
record the sunlight reflected by the corn plants – in
online platform myKWS, embody decades of agri-
high-definition images down to an accuracy of a
cultural knowledge obtained from breeding work and
few meters, with the result that differences in spe-
link that knowledge with external information, such
cific areas within a field can be shown. An algorithm
as satellite images and weather and soil data.
determines the dry matter content for the fields
mapped in myKWS on the basis of the images and
On the customer’s personal homepage, a map appli-
the weather data, soil quality and variety information
cation and customized comments provide an over-
and also provides a forecast for the next six days.
view of all appropriate information for each particular
stage of the year. That includes stock market and
Satellite images are not only used in harvesting.
commodity price data, market analyses, fertilizer
With the aid of apps such as Vitality Check, they
recommendations tailored to the specific region,
supply information on the vitality of the plant stands
prompt notification about new satellite images or
throughout the growing season and identify irreg-
weather events, such as frost, or recommended
ularities – erosion, aridity or differences in soil, for
agricultural events and ways to obtain advice. The
example. That enables farmers to control their fields
offerings are tailored to the individual customer, the
and deduce potential measures. The principle behind
farm and its specific features, such as the regional
the solution: Plants have different reflectance prop-
situation, farm size, cultivation strategy and choice of
erties, depending on the wavelength of the radiation.
crop and variety.
The healthier a plant, the more radiation in the near-
infrared range it reflects. That is recorded by drones,
The individual applications are started from an over-
aircraft or satellites and evaluated in the form of
view map. SAT TS-Monitoring, for example, can be
vegetation indices, thus enabling conclusions to be
used to determine the maturity of silage corn plants
drawn about the plant’s vitality, density of vegetation
and obtain a recommendation on the best time to
or photosynthesis activity, among other things.
16
To Our Shareholders | Spotlight Topic
Annual Report 2019/2020 | KWS Group The Crop Manager complements agricultural advice
can then be used anywhere: Then, for instance, the
by delivering business management data and helping
Label Scanner will enable the seed packaging to be
farmers optimize their crop rotation cycle. Multi-year
read directly at the farm using a smartphone so that
economic and agronomic analyses can be carried
farmers obtain product-specific information, such as
out and various crop rotations compared in just a few
cultivation recommendations or relating to product
steps. Cultivation of crops in a balanced rotation is
authenticity.
gaining in importance as part of sustainable agricul-
ture: In the face of increasingly stringent restrictions
on fertilizer and pesticides, it helps combat diseases
and pests, reduces the operating resources required,
The objective of digital services is not to take
improves soil health and thus secures yields and
decisions on how to run their business out of
reduces risks long term.
farmers’ hands and supplant know-how that has
been acquired over generations. Instead, they
So far we have implemented myKWS in different
offer a means of quickly obtaining information
variants in more than 35 countries, and more are to
on current events, better analyzing complex
follow. The digital consulting solution has already
interconnections with more detailed sources of
won many accolades for its customer-centric
information and enabling data-driven decisions.
design, simple user guidance and content concept,
It will be exciting to see what further potential can
such as most recently the iF Award 2020 in the
be tapped by digital applications to enhance pro-
category “Service Design” and the RedDot Design
cesses in livestock farming and plant cultivation
Award 2020. In the next step, myKWS will also be
in a future-oriented way.
available as an app with enhanced functions and
1
The seeding rate is calibrated
precisely by means of satellite-
aided soil analyses
2
Vitality maps supply valuable
information on the plant stand
and its health
3
Regular forecasts indicate the
ideal time to harvest the plants
Spotlight Topic | To Our Shareholders
17
KWS Group | Annual Report 2019/2020 We know not just the
newest generation of tech
nology – but also the oldest
generation of farmers.
Proximity forges a strong team. And we didn’t just start nurturing
that proximity to our customers yesterday – we’ve done so for almost
as long as fields have been plowed.
20
Annual Report 2019/2020 | KWS Group 2. Combined Management Report
2019/2020 of the KWS Group
22
22
25
26
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
38
43
53
53
54
54
58
58
58
60
60
62
62
62
62
64
74
78
78
79
88
88
88
89
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 Cor-
poration Act) on the Disclo-sures in Accordance with Section 289a (1) and Section
315a (1) HGB (German Commercial Code)
2.7 Opportunity and Risk Report
2.7.1 Opportunity Management
2.7.2 Risk Management
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
90
2.9 Report on KWS SAAT SE & Co. KGaA and Non-Financial Declaration (Declaration
90
92
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
h
c
i
r
e
b
e
g
a
L
r
e
t
s
s
a
f
e
g
n
e
m
m
a
s
u
Z
2. Combined Management Report
The Combined Management Report 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 long-term 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 “Non-Financial Declaration” on page 92. The contents of the Non-
Financial Declaration were not audited as part of the audit of the annual and consolidated financial statements, but underwent a
voluntary external examination by an auditor. 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
The Corn Segment is the KWS Group’s largest
Since it was founded in 1856, KWS has specialized
segment in terms of net sales. It covers breeding,
in breeding, producing and distributing high- quality
production and distribution of seed for corn, soybeans
varieties for agriculture. From our beginnings
and sunflowers. Its operating performance depends
in sugarbeet breeding, we have evolved into an
largely on the spring sowing season in the northern
innovative, international supplier with a broad port-
hemisphere. That means most of the segment’s net
folio of crops. We cover the complete value chain
sales are generated in the second half of the fiscal
of a modern seed producer – from developing
year (January to June). The segment generates a
new varieties, multiplication and processing, to
lower share of its revenue in the first two quarters,
marketing of the seed and consulting for farmers.
mainly from corn and soybean seed in South America.
KWS’ core competence is in breeding new, high-
KWS is the market leader for silage corn in Europe.
performance varieties that are adapted to regional
needs, such as climatic and soil conditions. Every
The Sugarbeet Segment comprises sugarbeet seed
new variety delivers added value for the farmer. Our
breeding, production and distribution, as well as the
business model is based on this added value – which
development of diploid hybrid potatoes. Our high-
is ultimately attributable to breeding progress, opti-
quality sugarbeet varieties are consistently some of
mization of seed quality and pinpointed consulting.
the highest-yielding in the industry. KWS is the world
market leader in sugarbeet seed, not least thanks to
Organization and segments of the KWS Group
many innovations, such as CONVISO® SMART, an
In fiscal 2019/2020, the KWS Group’s operational
innovative system for controlling weeds. Our main
business consisted of five Business Units, which
sales markets are the EU, Eastern Europe, North
were grouped in the four product segments Corn,
America and Turkey, where we offer farmers efficient
Sugarbeet, Cereals and Vegetables. The Business
solutions for growing sugarbeet in the shape of locally
Units Sugarbeet, Cereals and Vegetables are identi-
adapted, multiple-resistant varieties. Sugarbeet is
cal to the segments of the same name. There are the
sown in the spring, which means that net sales in this
Business Unit Corn Europe/Asia and the Business
segment are largely generated in the second half of
Unit Corn Americas in the Corn Segment.
our fiscal year (January to June).
22 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2019/2020 | KWS Group The Cereals Segment includes breeding,
for beans, Swiss chard, red beet and carrots. We
production and distribution of seed for rye, wheat,
generate about half of our revenue in the U.S. KWS’
barley and rapeseed. Rye accounts for the largest
strategic objective is to establish a significant and
share of revenue from cereals (more than 40%),
lasting position in vegetable seed. Our focus apart
followed by rapeseed, wheat and barley (a combined
from spinach is on the world’s five most important
total of around 45%). We generate the remainder
crops in this segment: tomatoes, peppers, cucum-
from other crops such as sorghum, peas, catch
bers, watermelons and melons.
crops (e.g. mustard), and oats. In our core markets
for cereals seed (Germany, Poland, the UK, France
Apart from the operating segments, there is also
and Scandinavia), farmers predominantly sow the
Corporate, a segment which by and large does
crops in the fall. Consequently, we generate most
not conduct any operational activities. Its relatively
of our revenue in this segment in the first half of the
low net sales come from the revenue from our own
fiscal year (July to December).
farms in Germany, France and Poland. Since the
KWS Group’s basic research expenditure and costs
The Vegetables Segment comprises vegetable
for administrative functions are charged to the
seed breeding, production and distribution. Since
Corporate Segment, its income is usually negative.
taking over Pop Vriend Seeds, we have occupied
a leading position in the global market for spinach
More details on the net sales and income contributed
seed, which accounts for around 70% of the
by the segments, including our joint ventures, can be
segment’s net sales. Our portfolio also includes seed
found in our segment reports starting on page 43.
KWS is a researchintensive company. We spend more than €200 million a year to develop high
performance, resistant varieties.
Main business processes
in the agricultural industry, which is strongly regulated
KWS’ breeding processes are geared toward
worldwide, may also impact our business. You can
exploiting plants’ potential as much as possible
find more details on these external factors in our op-
and leveraging it to tackle the major challenges of
portunity and risk report on pages 78 to 87.
modern sustainable agriculture. Whether it is plants
for producing food, fodder or energy, conventional,
Changes to the composition and organization
organic or genetically modified: We offer farmers
of the KWS Group
a broad portfolio of high-performance varieties. It
The KWS Group acquired the Pop Vriend Seeds
takes an average of ten years to breed a new variety.
Group, Andijk, the Netherlands, effective July 1, 2019.
Thanks to our large network of breeding and trial
The number of companies consolidated in the
stations in all the world’s key markets, we can test the
KWS Group has thus been enlarged by the holding
individual candidates under a wide range of climatic
company Birika B.V., Amsterdam, the Netherlands,
and local conditions to determine whether the
and 11 subsidiaries in the Netherlands and Turkey.
varieties are suitable for cultivation. In most markets,
KWS acquired the group by taking over all of the
variety development ends in an official approval
shares in Birika B.V.
process in which candidates have to meet high qual-
ity standards, usually in three-year field trials. Seed
Pop Vriend Seeds is a leading company in the
multiplication in our selected cultivation regions also
breeding, production and distribution of vegetable
takes up to two years. Only then can the varieties be
seed. The company primarily specializes in seed
marketed via the various distribution channels.
for spinach, beans, Swiss chard and other vege-
table crops and supplies customers in more than
Products, markets and external factors
100 countries. Pop Vriend Seeds is part of the new
We offer our customers – farmers – a broad range of
Vegetables Segment.
varieties of agricultural crops that have been adapted
by breeding to the conditions of their specific location.
Apart from that, there were no significant changes
These crops include corn, sugarbeet, the cereals
in the KWS Group’s composition and organization
rye, wheat and barley, oil plants such as sunflower,
in fiscal 2019/2020. You can find more information
soybeans and rapeseed, and catch crops. Spinach
in the explanations on the companies consolidated
seed and other vegetable crops have also been part
in the KWS Group in the Notes to the consolidated
of our portfolio since the beginning of the year under
financial statements starting on page 114.
review. In addition to selling seed, our consultants are
also on hand to offer farmers advice on choosing and
KWS is reorganizing its global administrative orga-
cultivating varieties. We also offer consulting with our
nization to underpin its profitable and sustainable
digital services and on our website. Our breeding and
growth with efficient administration. It will be geared
seed multiplication activities are subject to weather in-
more strongly toward functions, while processes
fluences that cannot always be quickly compensated
are to be harmonized and standardized worldwide.
for with countermeasures. Economic policy decisions
To enable that, we intend to replace our regionally
24 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2019/2020 | KWS Group Breeding and test activities of the KWS Group in over 70 countries
Breeding stations
Trial stations
pooled administrative structures with a global
2.1.2 Branches
organization. A change project launched in 2016
KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE)
will gradually merge administrative services and
is the parent company of the KWS Group. Strategic
business processes for 70 countries by 2022. 31 of
management of all of KWS’ global activities is
the 58 envisaged parts of the company and sub-
pooled under its roof. It is headquartered in Einbeck,
sidiaries, including all of KWS’ activities in Germany,
Germany, and controls breeding of the KWS Group’s
have now adopted the new structures. At the same
range of varieties. It conducts basic research, pro-
time, more than 80% of the planned jobs in the new
duces and distributes sugarbeet and corn seed, and
organization, mainly at Einbeck and Berlin, have
is home to a number of central functions. There are
been filled. In the year under review, the new Global
also currently 87 subsidiaries and associated com-
Transaction Center and the Global Functions HR
panies in 33 countries. You can find a detailed break-
and Finance & Procurement moved into their per-
down of net sales by region on page 39. An overview
manent location in Berlin. 275 employees now work
of our subsidiaries and associated companies can
at KWS Berlin GmbH (Berlin).
be found in the Notes on pages 151 to 153.
2.1 Fundamentals of the KWS Group | Combined Management Report
25
KWS Group | Annual Report 2019/2020 2.1.3 Objectives and Strategy
Profitable growth is vital for our future development.
Our strategic planning is the foundation for the
Long-term profitable growth ensures we can retain
KWS Group’s further development. It defines stra-
our commercial independence. Key components are
tegic objectives, initiatives and core measures for
the good performance of our seed and a relationship
existing activities and for potential new fields of
of trust with farmers. We aim to increase net sales,
business. The planning is based on a long-term
in particular in our growth regions, both in moderate
horizon (ten years) and includes an analysis and
and in tropical or subtropical climatic zones.
assessment of market trends, competitors and the
KWS Group’s position. Strategic planning is carried
Innovation drives our business model. The need for
out regularly on a rolling basis. We believe that stra-
innovative technology in plant breeding continues
tegic success factors are in particular our intensive
to increase. Climate change, significant population
research, breeding of new, high-yielding varieties
growth and changes in eating habits pose challenges
and continuous expansion of our global footprint so
for us. We devoted more than €200 million to
that we can further enhance our know-how in regional
research and development, and thus once again a
markets with their special climatic conditions.
significant share of our net sales, in the year under
review. That is an investment in our future growth.
Corporate objectives of the KWS Group
Our corporate objectives are divided into the four
core topics of profitable growth, innovation, indepen-
dence and sustainability:
The KWS Group’s medium- and long-term objectives
Main strategic subject areas
Objective
achieved?
Explanation
of the course
of the year
Profitable
growth
An average increase in consolidated net sales of at
Yes
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
KWS Group’s net income for the year
Innovation
1% to 2% progress in yields p.a. for our customers
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
Yes
Yes
Page 35 et
seqq.
Page 35 et
seqq.
Page 32 et
seqq.
Page 149
(Notes)
Page 35 et
seqq.
Page 35 et
seqq.
Page 26 et
seqq.
Page 92 et
seq.
26 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2019/2020 | KWS Group Independence has always been a key corporate ob-
production capacities and quantities, the allocation
jective for KWS, but it is gaining greater relevance in
of resources (including capital spending and person-
view of the process of consolidation in our industry.
nel), the level of material costs and internal charge
It is part of the shared values held by our employees.
allocation and the resultant balance sheet data,
Our independence and long-term orientation enable
along with the financial budget. In principle, part of
us in particular to invest in research and breeding
the planning documentation is also an opportunity/
projects with an eye to the future.
risk assessment which every manager must conduct
for his or her unit.
Sustainability means long-term economic success
for us. When KWS’ founders established the company
The planning is compared every quarter with the
in 1856, they created the basis for its sustainable
company’s actual business performance and the
development that has now lasted more than 160
under lying general conditions. If necessary, we
years. Principles of business ethics, a compliance
initiate suitable countermeasures and make adjust-
management system, internal rules, guidelines and
ments. We update the forecast for the current fiscal
procedures to ensure operational excellence in our
year at the end of every quarter. At the end of each
processes, extensive financial and non-financial risk
fiscal year, all the units conduct a detailed variance
management, responsible supply chain management,
analysis of the planned and actual results. That
open communication with our stakeholders, and
serves to optimize our internal processes.
transparent sustainability reporting in accordance
with the Global Reporting Initiative (GRI) are now the
Controlling is responsible for coordinating and docu-
foundation for KWS’ sustainable development.
menting all planning processes and our current
expectations. It reports on compliance with adopted
2.1.4 Control System
budgets and analyzes the efficiency and cost-
Detailed annual and medium-term operational plans
effective ness of business processes and measures.
are used to control the Group and our Business
Controlling also advises decision-makers on eco-
Units. The medium-term plan covers the time frame
nomic optimization measures. In particular the heads
of the annual plan and the three subsequent fiscal
of the product segments, the regional directors and
years. It is derived from the strategic planning, which
the heads of research and breeding activities and the
covers a timescale of ten years.
central functions are responsible for the content of
the planning and current forecasts.
The targets set in the annual and medium-term
planning are arrived at on the basis of the strategic
The Executive Board uses various indicators for
planning, regional economic and legal situation,
planning, controlling and monitoring the business
anticipated market trends and assessments of the
performance of the KWS Group and its operating
company’s position in the market and the potential
units. The main indicators for the KWS Group are net
product performance. In a subsequent bottom-up
sales, operating profitability (EBIT margin) and R&D
process, which also includes the development of our
intensity. KWS’ product segments, which are divided
joint ventures, we use these premises to plan figures
into Business Units, are in turn geared toward the
for sales volumes and net sales, breeding activities,
main indicators of net sales and EBIT margin.
2.1 Fundamentals of the KWS Group | Combined Management Report
27
KWS Group | Annual Report 2019/2020 As a plant breeder, we act with vision. The decisions we make today must meet tomorrow’s challenges in agriculture.
Management and control
Annual Shareholders’ Meeting of a stock corporation
Our company (formerly KWS SAAT SE) has been a
or SE. It also adopts resolutions on whether to ap-
partnership limited by shares (KGaA) since its change
prove the company’s annual financial statements and
in legal form became effective on July 2, 2019. The
ratify the acts of the personally liable partner. Certain
personally liable partner is responsible for the tasks
resolutions adopted by the Annual Shareholders’
of running the business of a partnership limited by
Meeting of a partnership limited by shares also
shares. The company’s sole personally liable part-
require the approval of the personally liable partner.
ner is KWS SE, whose Executive Board is therefore
The declaration on corporate governance in accor-
responsible for management of the company’s
dance with Section 289f of the German Commercial
business.
Code (HGB) contains detailed information on the
extensive and close cooperation between the Execu-
The rights and obligations of the Supervisory Board
tive Board and the Supervisory Board and has been
at a partnership limited by shares (KGaA) differ
published at www.kws.com/corporate governance.
greatly from those at a stock corporation (AG) or a
European Company (Societas Europaea or SE). In
2.1.5 Responsible Business Activity*
particular, the Supervisory Board at a partnership
limited by shares does not hold personnel respon-
Mission and principles
sibility as regards management; moreover, it cannot
As a family business, we think across generations.
appoint any further personally liable partners and
Apart from our corporate objectives, responsible
define the contractual terms and conditions for them,
business activity with regard to people and the
enact bylaws for the Executive Board, or define
environment (corporate social responsibility) is
business transactions requiring its consent.
therefore a firmly entrenched principle of how we run
The Annual Shareholders’ Meeting of a partnership
that is growing profitably, we are able to operate
limited by shares basically has the same rights as the
largely without being swayed by short-term interests.
our company. As an independent family business
*Not an audited part of the Combined Management Report
28 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2019/2020 | KWS Group
Guidelines
2.1.6 Fundamentals of Research & Development
Our guiding principles define the framework for
The objective of our research and development work
our everyday work, so that we are able to create
is to create high-performance varieties that meet
sustainable and profitable growth for our customers,
various environmental and application requirements
employees and investors. Our strategic decisions
and deliver continuous value added to farmers. They
and day-to-day actions in operational business are
include absolute yield, as well as issues such as yield
guided by the following company principles:
stability, resistance to diseases, cultivation charac-
We leverage genetic potential through outstanding
continue to invest in expanding our research and
teristics or constituent properties. We accordingly
research and top-class breeding programs.
breeding capacities.
We supply our farmers with seed of the very best
quality.
Plant breeding is a very research-intensive and
We aim to be a strong partner who earns the trust
long-term business. The average time to develop a
of our customers.
new, high-performance variety for our international
We create entrepreneurial freedom and help
markets is up to ten years. As part of that, our
people unfold their talents.
varieties are adapted to the specific environmental
conditions of their target markets. Breeders are
We also have a central policy framework (Group
assisted in that by a global network of various breed-
Standards) with which we create a common under-
ing and trial stations. That means candidate varieties
standing of the freedoms and decision-making pro-
can be tested under the location-specific conditions
cesses within the KWS Group. The Group Standards
of their target markets over several years.
are continuously improved by means of monitoring
and feedback. They complement our existing guiding
By applying leading-edge breeding methods, which
principles, with the objective of preserving KWS’
are continually optimized by the use of molecular
unmistakable profile, also against the backdrop of
biology, IT or technical approaches, we have created
the Group’s increasing internationalization.
sustainable annual progress in yields of 1% to 2%
for decades. We also create genetic diversity by new
Stakeholder management
crossings, which is vital to improving crops. That is
KWS’ key stakeholder groups include our employees,
why KWS has supported various gene banks in differ-
our shareholders and farmers, as well as other players
ent projects for years. By continuously improving yield
along the food value chain (sugar companies, food
and delivering new plant traits, we make a contribution
processors, retailers and end consumers), as well as
to resource-conserving, sustainable agriculture.
policymakers, public authorities, non- governmental
organizations, science, academia and the media.
We address our stakeholders’ requirements not only in
daily business, but also through our work in associa-
tions or dialog with stakeholders on specific subjects.
2.1 Fundamentals of the KWS Group | Combined Management Report
29
KWS Group | Annual Report 2019/2020 Working with us not
only means you achieve
your yield targets.
Proximity forges strong partnerships. That means for us that we are
not only on site to help our farmers, but can be reached at all times by
app, e-mail, phone or a video chat.
2.2 Research & Development Report
Key research & development figures
R&D employees 1
avg.
Share of R&D employees relative to the total workforce in %
R&D expenditure
R&D intensity 2
Variety approvals
1 Average headcount
2 As a % of net sales
in %
2019/2020
2018/2019
2,073
36.3
236.1
18.4
484
2,053
37.0
205.6
18.5
464
+/–
1.0%
–
14.8%
–
4.3%
In fiscal 2019/2020, our R&D expenditure totaled
company’s mission is to develop its own genetically
€236.1 (205.6) million. The number of variety approv-
engineered traits for corn varieties. To boost efforts to
als worldwide rose to 484 (464) – compelling proof of
achieve that goal, we and Limagrain decided to move
KWS’ innovativeness. The new Vegetables Segment
the joint venture fully to the U.S. and strengthen it with
was awarded 18 variety approvals in the year under
its own research capacities. The company and its
review.
main management functions were previously located
in Paris. GENECTIVE’s activities have thus been bun-
New research building in Einbeck
dled centrally at its new headquarters in Champaign,
After around three years of planning and construc-
Illinois, since the year under review.
tion, we completed our new laboratory building at
Einbeck in June 2020. Our plans to expand R&D
We also acquired the U.S. biotech company AgBiome
activities mean that additional laboratory capacities
as a partner. AgBiome is one of the world’s leading
are required, with the result that a new building was
developers of resistance traits and offers biological
needed. The three-story laboratory and office build-
as well as genetically engineered solutions for crop
ing has 2,350 square meters of laboratory space
protection. The aim of the strategic partnership is to
and offers cutting-edge workplaces for around
pool the forces of both companies and to accelerate
200 employees. The volume of investment for the
identification, development and commercialization of
new building was around €20 million.
pest control solutions.
The building is particularly energy-efficient: It needs
Next-generation sugarbeet varieties effective
just 55% of the energy of a reference building and
against Cercospora
thus complies with the KFW 55 standard, which is far
Leaf health is a key factor in sugarbeet cultivation.
more stringent than the statutory requirements.
Only a healthy foliage can convert all the sun’s energy
Strategic decision for our joint venture
the most widespread leaf disease and can cause the
GENECTIVE
highest yield losses. Cercospora has become a grow-
GENECTIVE is a joint venture between KWS and
ing threat in recent years, even as the use of effective
the French plant breeding company Limagrain. The
fungicides has been increasingly constrained.
into a higher yield and sugar content. Cercospora is
32 Combined Management Report | 2.2 Research & Development Report
Annual Report 2019/2020 | KWS Group Existing varieties with conventional Cercospora
the more northern regions, but also forges a bridge
tolerance displayed adequate resistance to Cer-
between our breeding programs for the tropical
cospora, but their yield was often disappointing.
and moderate climatic zones. Under the program,
KWS’ breeders have discovered and tapped new
the more disease-resistant breeding material for
sources of resistance to Cercospora and conse-
the tropical zone will be incorporated in our non-
quently succeeded for the first time in developing
tropical breeding programs in the coming years. By
next- generation sugarbeet varieties that are highly
doing that, we aim to strengthen the diversity of our
resistant to Cercospora, yet also deliver better
global breeding material and thereby increase our
yields. Greater and more stable yields, higher sugar
competitiveness.
content and, in many cases, the potential to reduce
the amount of fungicide used enable sustainable,
The breeding program for the second sowing season
eco-friendly and cost-effective sugarbeet produc-
was launched two years ago with a test station in the
tion in regions affected by Cercospora. Two of the
province of Córdoba in central Argentina. Since then,
new sugarbeet varieties were cultivated in trials in
we have selected several promising disease-resistant
Italy, the country with the highest Cercospora pres-
lines, and the first hybrids are undergoing perfor-
sure in Europe, in the past season. They are now
mance tests. We expect the first competitive varieties
undergoing official tests in many other countries
for this important segment to be available starting
and are expected to be available there next season.
from the 2021 sales season.
New corn breeding program in Argentina
Cereal breeding in North America –
With a cultivation area of some six million hectares,
A success story
Argentina is one of the world’s major corn- producing
We decided around ten years ago to expand our
regions alongside North America, China, Brazil and
cereals activities to the North American market.
Europe. However, the country’s cultivation areas differ
Now we have our own breeding program in the U.S.
greatly as regards breeding requirements. The areas
for soft red winter wheat, which has comparatively
in northern Argentina’s corn belt need to be sown
low protein and is mainly used to make biscuits and
much later and have far higher disease pressure
cakes. We have focused our activities on the Mid-
than the more southeastern regions in Buenos Aires
west, despite the fact that it is the largest cultivation
Province, for example. Up to two years ago, material
region for soybean and corn in the U.S. By offering
development in KWS’ breeding program focused
wheat, we can provide farmers with an important
solely on conditions in the market for early sowing.
crop in their rotation cycle. The first varieties are al-
We now have a new breeding program in Argentina
ready on the market and we are working intensively
that not only addresses the specific requirements of
to expand our product pipeline.
2.2 Research & Development Report | Combined Management Report
33
KWS Group | Annual Report 2019/2020 Plants must be adapted as well as possible to their specific environment. In our greenhouses we examine the development
of the breeding material in different weather and climatic conditions – such as here at our location in Thriplow in the UK.
Our efforts in Canada are focused on rye breeding.
important types of vegetable worldwide: tomatoes,
The cultivation regions there demand particular
peppers, cucumbers, melons and watermelons. That
winter hardiness, as well as adaptation to short
includes hiring initial research and development em-
summers. Our European seed has proven to be very
ployees and commissioning a breeding station in the
adaptive to these conditions. We launched the first
Spanish province of Almería, one of Europe’s largest
competitive hybrid varieties on the Canadian market
vegetable production regions. Further breeding sta-
in 2015 and now have a broad product pipeline. As
tions in Spain, Mexico and Brazil are being planned.
part of our further steps, we are developing special
hybrids that not only boast good adaptivity to the
We have begun testing licensed-in genetic material
climatic conditions, but also effective resistance to
in Almeria. In order to expand our access to genetic
ergot and Fusarium.
material for breeding purposes, we joined the Interna-
tional Licensing Platform Vegetable (ILP), an associa-
Launch of vegetable breeding at KWS
tion comprising companies from the field of vegetable
Following the acquisition of Pop Vriend Seeds
breeding, in the year under review. The members of
effective July 1, 2019, initial collaboration projects
the ILP give each other access to genetic material
between the two companies’ breeding teams were
and related patents at fair conditions and costs.
initiated in fiscal 2019/2020. The focus is on crops
from Pop Vriend Seeds’ portfolio, such as spinach,
As a result, we have achieved important initial mile-
red beet and Swiss chard. At the same time, we laid
stones in implementing our strategy in the first year
the groundwork in the year under review for estab-
since the new Business Unit Vegetables was estab-
lishing an international breeding program for the most
lished – and more are to follow.
34 Combined Management Report | 2.2 Research & Development Report
Annual Report 2019/2020 | KWS Group 2.3 Economic Report
2.3.1 Business Performance
directives of the national and international health
authorities. At the same time we maintained all key
General developments and business
production and logistics processes so as to ensure
performance of the KWS Group
that farmers were supplied with seed during this crit-
Up to the New Year, the general macroeconomic con-
ical phase.
ditions for the KWS Group remained similar to those
in the same period of the previous year. The global
Even without the coronavirus pandemic, the agricul-
economy continued to grow only at a slow rate. There
tural sector again had to contend with challenging
was hardly any change in the U.S. economy’s buoy-
general conditions in fiscal 2019/2020. Many farm-
ancy in the second half of 2019. The pace of expan-
ers faced the problems of continued high inventory
sion in the eurozone was dampened by, among other
levels, regulatory intervention and further weather
things, uncertainty about the UK’s withdrawal from
anomalies. In some cases, arable farming remained
the EU. Economic growth also slowed in emerging
a loss-making business as a result of relatively low
countries, albeit to different degrees. While there was
prices for agricultural raw materials. While sugar
a pickup in Brazil, Russia and many Asian countries,
prices rose moderately year over year, the prices for
the recession in Argentina and Turkey continued to
some crops, such as corn and wheat, were down
deepen. KWS’ net sales were negatively impacted by
from the previous year, in some cases sharply.
the weakness of the local currencies there.
Guidance versus actual business performance of
The outbreak of the coronavirus pandemic gripped
the KWS Group
the global economy in the first half of 2020. Asia in
In the course of the year, there were no significant
particular was hit by it first of all. Overall economic
changes to our assessment for the year as a whole.
activity in China fell sharply. From the end of Feb-
We only gave a more precise guidance in the Semi-
ruary on, the coronavirus also spread throughout
annual Report 2019/2020 to the effect that the fore-
Europe and the U.S., as a result of which measures,
cast EBIT margin of 11.0% to 13.0% did not include
in some cases drastic ones, were taken to contain
effects as part of the completed purchase price allo-
the pandemic. Many countries closed their borders,
cation for the acquisition of Pop Vriend Seeds. In the
preventing the free movement of persons, and sus-
9M Quarterly Report for 2019/2020, we put a more
pended air travel. That significantly impeded eco-
precise figure on our earnings guidance by stating
nomic activity. Policymakers subsequently launched
that we expected an EBIT margin at the upper end of
economic stimulus programs to support the affected
the forecast range.
companies and sectors. Central banks responded
with expansionary measures.
The KWS Group’s consolidated net sales rose by
around 15% to €1,282.6 million and were thus above
In spite of these general conditions, the KWS Group
the forecast range of 8% to 12%. The deviation
managed to supply farmers with seed in good time
from the guidance is mainly attributable to a better-
for the spring sowing season. KWS’ top priority is
than-expected course of business in the fourth
to protect its employees’ health. We therefore took
quarter, in particular in the Sugarbeet Segment. The
prompt measures at all our global locations based
R&D intensity was 18.4%, within the forecast range
on or even exceeding the recommendations and
of 17% to 19%.
2.3 Economic Report | Combined Management Report
35
KWS Group | Annual Report 2019/2020
Guidance versus actual business performance of the KWS Group
Results in
2018/2019
Guidance for
2019/2020
Adjustments to the guidance
during the year
Results in
2019/2020
Annual Report
2018/2019
8–12%
€1,113
million
18.5%
17–19%
Net sales
R&D
intensity
EBIT margin
13.5%
11–13%
Q1 Report
Semiannual
Report
–
–
–
–
– More precise
guidance
(excluding
the effects of
the purchase
price alloca-
tion for Pop
Vriend Seeds)
9M Report
im oberen
Bereich der
Prognose
€1,283 million
15.2%
–
18.4%
13.3%
At the upper
end of the
more precise
guidance
The EBIT margin (excluding the effects as part of the
successful launch of our CONVISO® SMART port-
completed purchase price allocation for the acquisi-
folio of varieties. Cultivation area declined slightly
tion of Pop Vriend Seeds) was 13.3%, at the top end
as a whole. Nevertheless, we posted an increase in
of the more precise guidance given in the Semian-
net sales in particular in Eastern Europe and North
nual Report 2019/2020 and 9M Quarterly Report for
America. The segment performed positively with an
2019/2020.
increase in net sales of 6.6% in line with the guid-
ance (“slight increase in net sales”). The EBIT margin
Summary of the segments’ course of business
in the Sugarbeet Segment was 34.6% and was as
and comparison with the guidance 1
expected below the figure of the previous year, which
Most of the net sales in the Corn Segment is gener-
was impacted by the positive special effect from the
ated in the second half of our fiscal year (January to
sale of our potato business.
June) during the spring sowing season in the north-
ern hemisphere. A lesser share of revenue is earned
Every year, the fall sowing season determines the
in South America in the first two quarters.
main business trends of the Cereals Segment. The
key crop there is hybrid rye, which accounts for a
Net sales and the EBIT margin in the Corn Segment
very substantial share of the segment’s net sales and
were, as forecast, up slightly over the previous year.
earnings. As forecast in the 9M Quarterly Report for
2019/2020, net sales rose sharply by 11.9% in the year
The main sales season for the Sugarbeet Segment
under review, mainly as a result of the strong growth
is in the second half of our fiscal year (January to
in hybrid rye seed. Slight growth in the segment’s net
June). Our high-quality sugarbeet varieties were
sales was originally anticipated. The EBIT margin was
again some of the highest-yielding in the industry.
13.8%, a little better than originally anticipated and
The segment also benefited in particular from the
slightly above the figure for the previous year.
1 Including equity-accounted 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 2019/2020 | KWS Group
The Vegetables Segment, in which the activities of
the sale of inventories that were taken over and
Pop Vriend Seeds, the vegetable seed producer we
remeasured at fair value (€–11.1 million) and from
acquired effective July 1, 2019, are consolidated, is
amortization of intangible assets (€–21.9 million), the
impacted by seasonal factors only to a small degree.
segment’s income was €–7.5 million.
Its business in the year under review benefited from
large demand for spinach seed in North America.
Net sales at the Corporate Segment were as
Moreover, sales of spinach and bean seed were
expected. The segment’s EBIT was €–104.6 million
increasingly buoyant in Europe. The segment’s net
and was below the previous year’s figure and
sales were in line with expectations at €83.5 million.
the guidance for the segment (“at the level of the
The segment’s income (before acquisition-related
previous year”) due to extra expenditure as part
effects) was €25.5 million, while the EBIT margin of
of our reorganization project ONEGLOBE, higher
30.5% was within the more precise guidance given
expenses for central R&D activities, and lower
in the Semiannual Report 2019/2020. Including the
income from instruments for hedging foreign
effects as part of the purchase price allocation from
currency risks.
Balanced crop rotation is vital in arable farming: It improves yield, reduces disease pressure and has a positive impact on the
nutrient ratio in the soil.
2.3.2 Earnings, Financial Position
and Assets
Earnings
The new Vegetables Segment accounted for 6.5% of
Sharp increase in net sales
total net sales.
The KWS Group’s net sales rose sharply from
The region where we generated most of our busi-
€1,113.3 million in the previous fiscal year to
ness was Europe, which accounted for 63.4% of net
€1,282.6 million in the year under review, an increase
sales (Germany: 18.7%), while net sales from North
of 15.2%. Negative exchange rate effects, mainly
and South America contributed 29.5% of the total.
due to the depreciation of the Brazilian real and the
Revenues from our North American and Chinese
Argen tinian peso against the euro, caused net sales
equity-accounted companies are only included at the
to be 2.4% lower than they otherwise would have been.
segment level (see our segment reporting starting on
In the Corn Segment, expanding seed business in
page 43).
South America and Europe had a particularly pos-
EBIT declines due to special effects, while
itive impact on net sales. The Sugarbeet Segment
EBITDA increases by around 13%
posted an increase in net sales, in particular as a
The KWS Group’s operating income before depre-
result of growth in Eastern Europe. Net sales in the
ciation and amortization (EBITDA) increased in
Cereals Segment rose sharply due to higher sales
fiscal 2019/2020 by 12.9% to €225.5 (199.7) million.
of rye seed. The Vegetables Segment generated
Operating income (EBIT) declined to €137.4 (150.0) mil-
net sales of €83.5 million, mainly from spinach and
lion, mainly due to special effects. In the previous
bean seed.
year, there was a positive effect on income from
the sale of shares in KWS Potato B.V. and from
The Corn and Sugarbeet Segments accounted
receivables management activities. At the same
for a major share of total net sales, namely 39.9%
time, amortization of intangible assets as part of the
and 38.3% respectively. The Cereals Segment was
purchase price allocation for the acquisition of Pop
almost able to maintain its share, contributing 14.9%
Vriend Seeds reduced EBIT by €21.9 million in the
(previous year: 15.3%) on the back of strong growth.
year under review.
Abridged income statement
in € millions
Net sales
EBITDA
EBIT
Net financial income/expenses
Result of ordinary activities
Income taxes
Net income for the year
Earnings per share
EBIT margin
2019/2020
2018/2019
1,282.6
1,113.3
225.5
137.4
–7.8
129.5
34.3
95.2
199.7
150.0
–5.5
144.5
40.4
104.0
+/–
15.2%
12.9%
–8.4%
–
–10.4%
–15.1%
–8.4%
in €
in %
2.89
3.15
–8.4%
10.7
13.5
–
38 Combined Management Report | 2.3 Economic Report
Annual Report 2019/2020 | KWS Group
Net sales by region
Total net sales €1,282.6 million 1
Rest of world 7.1%
North and South America 29.5%
18.7% Germany
44.7% Europe (excluding Germany)
Net sales by segment
Total net sales €1,282.6 million 1
Corporate 0.4%
Vegetables 6.5%
Cereals 14.9%
39.9% Corn
38.3% Sugarbeet
1 Without capital expenditures of our at equity accounted consolidated companies
The EBIT margin was 10.7% following 13.5% in
fell sharply to €19.1 (38.0) million, among other things
the previous year. Excluding the effects as part of
due to positive non-recurring effects in the previous
the purchase price allocation for the acquisition
year (sale of shares in KWS Potato B.V. and income
of Pop Vriend Seeds from the sale of inventories
from reversal of allowances on receivables). The
that were taken over and remeasured at fair value
related individual items are explained in detail in the
(€–11.1 million) and from amortization of intangible
Notes on page 121.
assets (€–21.9 million), the EBIT margin was 13.3%.
The KWS Group’s cost of sales rose in the year under
Net financial income/expense on a par with the
review by around 20% to €549.9 (458.5) million, giving
previous year – Lower net income for the year
a cost of sales ratio of 42.9% (41.2%). The year-on-
Our net financial income/expenses is made up of the
year increase in this ratio is mainly attributable to
net income from equity investments and the interest
higher cost of sales ratios in the Vegetables Segment
result. One component of income from equity invest-
(including effects from the purchase price allocation
ments is the income from equity-accounted financial
for Pop Vriend Seeds) and in the Sugarbeet Segment.
assets, which rose slightly to €10.8 (9.4) million. The
As planned, we again increased our research and
interest result fell to €–18.6 (–15.0) million, in particular
development expenditure, which we see as an
due to a higher gearing ratio. Net financial income/ex-
investment in the future, to €236.1 (205.6) million; as
penses was thus €–7.8 (–5.5) million. Earnings before
in the previous year, the R&D intensity was virtually
taxes (EBT) fell by around 10% to €129.5 (144.5) mil-
unchanged at 18.4% (18.5%). Administrative expenses
lion. Income taxes consequently decreased to
increased to €129.5 (115.4) million, mainly due to extra
€34.3 (40.4) million, giving a tax rate of 26.5% (28.0%).
expenditure as part of our reorgani zation project
Overall, the KWS Group generated net income of
ONEGLOBE and higher IT expenses (an increase in
€95.2 (104.0) million in the year under review, a
costs for cloud-based IT applications). The balance of
decrease of 8.4%. Given that the number of shares is
other operating income and other operating expenses
33,000,000, earnings per share were €2.89 (3.15).
2.3 Economic Report | Combined Management Report
39
KWS Group | Annual Report 2019/2020
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
2019/2020
2018/20191
119.7
136.2
–499.9
–363.7
159.8
85.6
–91.3
–5.6
Net cash from financing activities
–82.5
387.8
1 Previous year adjusted
+/–
–25.1%
59.1%
447.5%
–
–
Securing the KWS Group’s financial strength,
The net cash from operating activities rose to
enabling its profitable growth and preserving its
€136.2 (85.6) million, in particular due to the increase
independence are the core tasks of our financial
in earnings before depreciation and amortization and
management. Among other things, we ensure that by
a much lower increase in trade receivables.
extensive liquidity planning, monitoring of cash flows,
and hedging the risk of interest rate changes and
Due to adoption of IFRS 16 “Leases” and the
currency risks. The main financial instruments used
KWS Group’s increased financing activities over
by the Group in fiscal 2019/2020, apart from a syndi-
recent years, the presentation of the cash flow state-
cated credit line, were borrower’s notes and bilateral
ment has changed in terms of interest income and
loan agreements (commercial papers) with different
interest expense. Interest income is reported under
loan periods and terms.
the net cash from investing activities and interest
On June 26, 2020, the European Investment Bank
disclosures for the previous year have been adjusted
expense under net cash from financing activities. The
(EIB) gave KWS an undertaking to extend a loan of
accordingly.
€200 million with a term of twelve years. KWS utilized
€50 million of it with the same term on July 13, 2020.
The net cash from investing activities totaled
The funding from the EIB is specifically intended for
€–499.9 (–91.3) million in fiscal 2019/2020. This
research and development work by KWS in the EU. It
sharp increase over the previous year was mainly
ensures financing of research & development costs
attributable (to an amount of almost €400 million)
in the coming years and will further strengthen KWS’
to the acquisition of Pop Vriend Seeds. Our capital
commitment to innovative and climate-smart agri-
spending in the year under review was again con-
culture. The maturity profile of the Group’s borrow-
sistent with our long-term growth plans and focused
ings has a broad spread, with a high proportion of
on erecting and expanding production and research
medium- and long-term financing. In order to secure
and development capacities. Expansion of sugar-
KWS’ growth, we also consider the option of a capi-
beet seed production in Einbeck was continued as
tal increase in exceptional cases.
planned. The project, which has a total investment
40 Combined Management Report | 2.3 Economic Report
Annual Report 2019/2020 | KWS Group
volume of around €40 million, will be completed in the
under review to €88.2 (49.7) million, mainly due to
current fiscal year. The focus of our capital spending
amortization as part of the purchase price allocation
in the Corn Segment was on expanding production
for the acquisition of Pop Vriend Seeds. In addition,
and processing plants in Brazil and Argentina, which
adoption of IFRS 16 impacted the amount of depre-
we were able to complete in August 2019 with com-
ciation and amortization.
missioning of the new plants. The main focus in
the Cereals Segment remained on expanding and
The net cash from financing activities was €–82.5 mil-
modernizing breeding stations and production plants.
lion, well below the figure for the previous year
Our cross-segment investments included completion
(€387.8 million), and included the capital raised
of the new research building in Einbeck and fitting
as bridge funding for the takeover of Pop Vriend
out our new Berlin location. Total capital spending in
Seeds. The KWS Group’s cash and cash equiv-
fiscal 2019/2020 was €108.0 (96.6) million. Depreci-
alents at the end of fiscal 2019/2020 fell to
ation and amortization increased sharply in the year
€119.7 (159.8) million.
Capital expenditure by segment
Total capital expenditure €108.0 million 1
Corporate 35.7%
Vegetables 1.5%
Cereals 9.3%
Capital expenditure by region
Total capital expenditure €108.0 million 1
23.6% Corn
29.9% Sugarbeet
Rest of world 1.3%
North and South America 11.6%
62.4% Germany
24.7% Europe (excluding Germany)
1 Without capital expenditures of our at equity accounted consolidated companies
2.3 Economic Report | Combined Management Report
41
KWS Group | Annual Report 2019/2020
Assets
Abridged 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
6/30/2020
6/30/2019
+/–
1,273.7
961.3
0.4
994.5
795.5
445.5
0.0
760.5
1,346.8
7.6
963.5
364.4
785.3
1.8
2,235.5
2,115.0
67.5%
–28.6%
–
3.2%
118.3%
–43.3%
–
5.7%
The KWS Group’s balance sheet is impacted by the
and due to business expansion in South America
seasonal nature of our business. In the course of the
and Eastern Europe. Inventories likewise increased
year, there are usually balance sheet items that differ
sharply to €214.0 (177.3) million, mainly due to the
significantly from the corresponding figures at the
acquisition and a large harvest as part of seed
balance sheet date, in particular in relation to work-
multiplication. Current assets at the balance sheet
ing capital.
date totaled €961.3 (1,346.8) million. Last year’s
figure included current liabilities relating to the bridge
Total assets at June 30, 2019, were €2,235.5
funding for the acquisition of Pop Vriend Seeds. Net
(2,115.0) mil lion. Noncurrent assets rose to
debt was €495.5 million, on a par with the previous
€1,273.7 (760.5) million, mainly due to the acquisition
year’s figure of €497.9 million.
of the Dutch vegetable seed producer Pop Vriend
Seeds, planned investments in new production
Equity increased to €994.5 (963.5) million, mainly due
plants and the expansion of research and develop-
to the net income for the year. Noncurrent liabilities
ment capacities. Trade receivables rose sharply to
rose to €795.5 (364.4) million due to the issue of bor-
€432.6 million from €402.1 in the previous year, in
rower’s notes to finance the acquisition of Pop Vriend
particular as a result of acquisition-related effects
Seeds. The equity ratio was virtually unchanged at
44.5% (45.5%).
42 Combined Management Report | 2.3 Economic Report
Annual Report 2019/2020 | 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 equity-accounted companies
are instead included under net financial income/
expenses. 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:
Reconciliation table
in € millions
Net sales
EBIT
Number of employees
Capital expenditure
Total assets
avg.
Segments Recon ciliation
KWS Group
1,546.8
151.3
6,179
113.4
2,348.9
–264.3
–14.0
–470
–5.4
–113.4
1,282.6
137.4
5,709
108.0
2,235.5
The reconciliation between the KWS Group’s
the North American and Chinese corn markets. That
statement of comprehensive income and the
applies to all key figures in the table above, with the
reporting by segments in fiscal 2019/2020 is
main influences coming from North America.
impacted by our equity-accounted companies in
2.3 Economic Report | Combined Management Report
43
KWS Group | Annual Report 2019/2020 Corn Segment
Key figures
in € millions
Net sales
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2019/2020
2018/2019
775.7
67.1
8.6
30.9
744.2
9.0
739.0
57.9
7.8
27.2
750.2
7.7
+/–
5.0%
15.9%
–
13.6%
–0.8%
–
in %
in %
General industry-specific conditions: Stable
The segment’s performance: Increase in net
cultivation conditions in Europe, pressure on
sales and earnings
corn prices in the U.S., high demand in Brazil
The Corn Segment grew its net sales by 5.0% to
The general economic conditions in the Corn Segment
€775.7 (739.0) million in the year under review. That
varied greatly in the main cultivation regions. While
increase is mainly attributable to positive business
there were largely stable cultivation conditions in
performance in Europe and South America. In
KWS’ important regions of Europe and the Middle
Europe, we posted a sharp increase in net sales. Our
East/Africa, the U.S. market was hit by the negative
net sales performance in France and Eastern, South-
impacts of the Covid-19 pandemic. The sharp fall
eastern and Southern Europe was positive, while we
in oil prices and lower fuel consumption reduced in
posted lower net sales in Germany and a number of
particular the economic attractiveness of growing
Northern European markets due to intensified com-
corn for the production of the biofuel ethanol. In this
petition. We aim to keep on launching new hybrid
context, the price for U.S. corn fell to a multi-year low.
varieties and thereby strengthen our market position
in Europe. We see the greatest growth potential as
In Brazil, rising domestic demand for feed and high
being in Eastern and Southeastern Europe.
sales prices for corn offered advantageous market
conditions. Government incentives to invest in agri-
We significantly expanded our business volume and
culture also helped create a positive business climate.
won market share in Brazil following the successful
In Argentina, however, higher export taxes and strin-
launch of our high-performance hybrid corn varieties.
gent restrictions to combat the Covid-19 pandemic
We also grew our soybean seed sales sharply. How-
weighed on the market environment.
ever, the continuing depreciation of the Brazilian real
against the euro reduced net sales growth. In Argen-
In China, an extensive lockdown in response to the
tina we recorded sharp growth in volume, which partly
pandemic at the beginning of 2020 led to significant
compensated for the depreciation of the Argentinean
temporary constraints on economic activity. However,
peso against the euro. Argentina was once more clas-
gradual easing of the measures in March 2020 meant
sified as a hyperinflationary economy in the year under
that our joint venture KENFENG/KWS was able to
review and we therefore applied IAS 29 “ Financial
resume business operations in Heilongjiang province
Reporting in Hyperinflationary Economies” again in
in time for the start of the season.
order to compensate for the effects of inflation.
44 Combined Management Report | 2.3 Economic Report
Annual Report 2019/2020 | KWS Group
Corn
In North America, net sales at our 50 : 50 joint venture
AgReliant were on a par with the previous year, while
corn and soybean seed business declined slightly as
a result of turbulence on the commodity markets due
to the pandemic. On the other hand, there were pos-
itive exchange rate effects from the increase in the
US dollar’s value against the euro.
Our business in China performed positively against
the backdrop of a challenging environment. While
net sales at our Chinese joint venture KENFENG/ KWS
rose sharply, we posted a fall in revenue from licensing
business with third parties.
The segment’s income rose by 15.9% to
€67.1 (57.9) mil lion. That was aided in particular by
the sharp improvement in operations in South Amer-
ica. Our earnings situation in North America and
Europe remained stable. The segment’s EBIT margin
rose from 7.8% to 8.6%.
Important capital spending projects
completed in South America
The segment’s capital spending was €30.9 (27.2) 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. Completion of these plants means
we have roughly doubled processing capacities in the
two countries.
KWS Group | Annual Report 2019/2020 Sugarbeet Segment
Key figures
in € millions
Net sales
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2019/2020
2018/2019
491.8
170.1
34.6
32.3
349.5
48.7
461.2
179.6
38.9
34.9
300.0
59.9
+/–
6.6%
–5.3%
–
–7.4%
16.5%
–
in %
in %
General industry-specific conditions: Slight
The segment’s performance: Increase in net
decline in cultivation area, volatile sugar prices
sales, no losses due to the coronavirus crisis
Whereas sugarbeet cultivation area in the U.S.
The above-described effects in the wake of the
grew again slightly, they declined a bit in Europe,
global Covid-19 pandemic did not have an apprecia-
in particular due to a reduction in sugar production
ble impact on the Sugarbeet Segment’s operational
capacities and restrictions on the use of insecti-
business in fiscal 2019/2020. Net sales rose by 6.6%
cides. Total global cultivation area fell by around 5%
to €491.8 (461.2) million. The successful launch of
year on year. Prices for raw and white sugar were
CONVISO® SMART, an innovative system for con-
volatile in the course of the fiscal year. After a sharp
trolling weeds that is now available in 24 countries,
increase at the beginning of 2020, sugar prices fell
and exchange rate effects related to translation to
back to the level of the previous year by the balance
the US dollar had a positive impact in the period
sheet date, mainly due to the coronavirus crisis.
under review. On the other hand, there was a neg-
The Covid-19 pandemic impacted the industry in
vation area in the EU 27 and in Eastern Europe. Net
diverse ways. On the one hand, there was a notice-
sales in Turkey and the Middle East were again up
ative impact from the reduction in sugarbeet culti-
able increase in demand for sugar to manufacture
over the previous year.
ready-made products, such as frozen pizzas. On
the other hand, sugar consumption in the catering
The segment’s income was €170.1 million, slightly
sector fell. In addition, the drop in oil prices resulted
down from the high level of the previous year
in far lower demand for ethanol, which is also
(€179.6 million), in which there was the positive
obtained from sugar cane in Brazil, for example. That
non-recurring effect from the sale of shares in our
had the implicit effect of dampening sugar prices.
potato business. While our net sales performance
46 Combined Management Report | 2.3 Economic Report
Annual Report 2019/2020 | KWS Group
Sugarbeet
was positive, there was an increase in the cost of
sales, in particular due to changes in the regulatory
framework. While selling expenses declined slightly
due to the pandemic, our research & development
expenditure was higher as planned. In view of the
further restrictions on pesticides in the EU, we
believe that the develop ment of natural resistances
will continue to grow in importance. The EBIT
margin was 34.6%, as expected well down from the
previous year’s figure, mainly due to the non-recurring
effect last fiscal year.
Continued investment in seed production
We continued our multi-year capital spending
projects as planned in fiscal 2019/2020. The PIA
( Production Extension and Innovation Einbeck)
project, which is our most important one at present
and with which we are expanding our seed pro-
duction plant in Einbeck, continues to make good
progress. A large section of the new production plant
(packaging) started operating in 2019. The plants for
pelleting seed will be completed in the current fiscal
year. Further investments were made in a new seed
treatment plant in France, in establishment of a new
seed treatment plant in Russia, and in developing
biologicals, useful microorganisms that improve
seed’s stress tolerance to pests and abiotic factors
such as drought.
KWS Group | Annual Report 2019/2020 Cereals Segment
Key figures
in € millions
Net sales
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2019/2020
2018/2019
191.2
26.4
13.8
10.1
145.6
18.1
170.8
23.0
13.5
7.0
133.0
17.3
+/–
11.9%
14.8%
–
44.3%
9.5%
–
in %
in %
General industry-specific conditions: Situation
business made a major contribution to that, largely
for European cereal farmers remains strained
on the back of good market conditions, rye’s
The continuing low level of cereal commodity prices
relatively stable yield in dry years and much higher
again posed major challenges for farmers in Europe.
demand for it as feed. While revenue from wheat
The situation has not improved due to the restric-
and barley seed was at the level of the previous year,
tions on logistics and personnel in the wake of the
rapeseed seed was down slightly from the previous
Covid-19 pandemic that has prevailed since the
year, in particular due to adverse weather conditions
spring of 2020, despite the fact that the main share
at the time of sowing. On the other hand, royalties
of cereal seed business in the northern hemisphere
from wheat were higher. Net sales from sorghum
was transacted during the fall sowing season.
seed also increased; in particular, sales in Brazil rose
appreciably. Peas and oats also performed well as a
Increasing regulation of the use of pesticides in the
result of growing demand for protein from plants and
EU and dry conditions at the time of sowing resulted
their advantages in crop rotation.
in a decline in rapeseed cultivation area. However,
cultivation of rye continued to increase in the year
The increase in net sales and an improved product
under review, too. The main reasons for that were
mix resulted in a higher gross profit. The higher
better prices for rye than for wheat, rye’s acknowl-
expenditure for research & development and
edged high yield stability under drought stress, and
distribution activities planned in line with our
the increasing use of rye in feed.
strategic growth objectives, as well as negative
The segment’s performance: Sharp increase in
receivables and inventories, resulted in an EBIT
net sales, EBIT margin at the previous year’s level
margin of 13.8%, just slightly above the figure for the
Net sales at the Cereals Segment rose sharply by
previous year (13.5%). EBIT increased in absolute
11.9% to €191.2 (170.8) million. Hybrid rye seed
terms by around 15% to €26.4 (23.0) million.
exchange rate effects and higher write-downs of
48 Combined Management Report | 2.3 Economic Report
Annual Report 2019/2020 | KWS Group
Cereals
Investment activity focuses on breeding
The segment’s capital spending in the year under
review was €10.1 (7.0) million, well up from the previ-
ous year. That is mainly attributable to the postpone-
ment of some investments that had been planned for
the 2018/2019 fiscal year.
The main focus of our investment activity was again
on expanding and modernizing breeding stations and
production plants. Along with conventional breeding,
long-term breeding and development projects are
vital to the segment’s future. Our focus is on breeding
high-performance varieties and preserving and
enhancing their resource efficiency. So that we can
tap further market potential in the medium term, our
breeding and development projects are also aimed
at tailored rye varieties for Eastern Europe and North
America. The goal of the initiative aimed at promoting
greater use of rye as feed and the related positive
effects on animal welfare is to provide additional
incentives to grow rye in Germany. Another long-term
goal is to expand hybrid breeding activities for wheat
and barley.
Investments to renew and replace plant and equip-
ment help ensure that we live up to our high stan-
dards of quality 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 2019/2020 Vegetables Segment
Key figures
in € millions
Net sales
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2019/2020
2018/2019
+/–
83.5
–7.5
–9.0
1.6
479.5
–1.6
–
–
–
–
–
–
–
–
–
–
–
–
in %
in %
General industry-specific conditions: Positive
The outbreak of the Covid-19 pandemic initially had
market environment strained by the Covid-19
only a slight impact on the segment’s net sales in
pandemic
the year under review. Its business in the year under
The general conditions for spinach seed – the main
review benefited from large demand for spinach
sales driver in the segment, contributing around
seed in North America. Moreover, sales of spinach
70% – were positive in the first half of the fiscal year.
and bean seed were increasingly buoyant in Europe.
Following low harvests in the two previous years, a
China is the second-largest single market, account-
far higher volume of spinach seed was produced in
ing for around 12% of total net sales.
2019, enabling market demand to be satisfied.
The segment’s income (before acquisition-related
However, the outbreak of the Covid-19 pandemic
effects) was €25.5 million, while the EBIT margin of
resulted in significant adverse effects on our inter-
30.5% was within the more precise guidance given
national supply chains in the second half of the fiscal
in the Semiannual Report 2019/2020. Including the
year. At the same time, demand in our important mar-
effects as part of the purchase price allocation from
ket segment of food service slumped, in particular in
the sale of inventories that were taken over and
the U.S. Still, the lockdown measures in many coun-
remeasured at fair value (€–11.1 million) and from
tries increased demand from the processing industry
amortization of intangible assets (€–21.9 million), the
for spinach and beans for the food retailing sector.
segment’s income was €–7.5 million. The segment’s
The segment’s performance: Net sales and
for establishing the Business Unit and for initial
income includes expenses of around €2.0 million
income in line with expectations – profitability
breeding activities.
(before acquisition-related effects) remains high
The Vegetables Segment, which includes the busi-
Establishment of the Business Unit moves
ness activities of the vegetable seed producer Pop
forward
Vriend Seeds acquired effective July 1, 2019, made
Important milestones in establishing the Business
a significant contribution of €83.5 million to the
Unit were achieved in the course of the year under
KWS Group’s increase in net sales. The most import-
review. They include rounding out the management
ant single market was the U.S., which accounted for
team, commissioning of a new breeding station
around 50% of the segment’s net sales.
for tomatoes, peppers, cucumbers, melons and
50 Combined Management Report | 2.3 Economic Report
Annual Report 2019/2020 | KWS Group
Vegetables
watermelons in Almería, Spain, and licensing in of
the relevant genetic material. In addition, we pressed
ahead with activities to establish the Business Unit’s
headquarters in Wageningen, the Netherlands, which
are scheduled for completion in the first quarter of
fiscal 2020/2021.
Launch of vegetable breeding at KWS
Following the acquisition of Pop Vriend Seeds
effective July 1, 2019, initial collaboration projects
between the two companies’ breeding teams were
initiated in fiscal 2019/2020. The focus is on crops
from Pop Vriend Seeds’ portfolio, such as spin-
ach, red beet and Swiss chard. At the same time,
we laid the groundwork in the year under review
for establishing an international breeding program
for the most important types of vegetable world-
wide: tomatoes, peppers, cucumbers, melons and
watermelons. That includes hiring initial research &
development employees and commissioning a
breeding station in the Spanish province of Almería,
one of Europe’s largest vegetable production
regions. Further breeding stations in Spain and
Brazil are being planned.
We have begun testing licensed-in genetic material
in Almería. In order to expand our access to genetic
material for breeding purposes, we joined the Inter-
national Licensing Platform Vegetable (ILP), an
association comprising companies from the field
of vegetable breeding, in the year under review.
The members of the ILP give each other access to
genetic material and related patents at fair conditions
and costs.
As a result, we have achieved important initial mile-
stones in implementing our strategy in the first year
since the new Business Unit Vegetables was estab-
lished – and more are to follow.
KWS Group | Annual Report 2019/2020 Corporate
We moved into the KWS branch office in BerlinSchöneberg at
the beginning of 2020. It will offer space for around 350 employ
ees in the future.
Corporate Segment
Key figures
in € millions
Net sales
EBIT
Capital expenditure
2019/2020
2018/2019
4.6
–104.6
38.6
3.9
–97.1
32.1
+/–
17.9%
–7.7%
20.2%
Net sales in the Corporate Segment in the fiscal
The segment’s EBIT was €–104.6 million and so
year just ended totaled €4.6 (3.9) million. They are
below the previous year’s figure (€–97.1 million) due
mainly generated from our farms. Since all cross-
to extra expenditure as part of our reorganization
segment costs for the KWS Group’s central functions
project ONEGLOBE, higher expenses for central R&D
and basic research expenditure are charged to the
activities, and lower income from instruments for
Corporate Segment, its income is usually negative.
hedging foreign currency risks.
52 Combined Management Report | 2.3 Economic Report
Annual Report 2019/2020 | 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 and 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-
and vegetables, sorghum, rapeseed, peas and catch
mental influences. These crop-specific development
crops, we can offer farmers a broad range of high-
objectives are agreed annually between Research,
performance 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 crops
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
Improved usability
Biotic resilience
Resource efficiency
Abiotic resilience
Higher sugar content (sugarbeet)
Improved digestibility
Improved processing attributes
(such as baking or brewing quality)
Improved resistance and
tolerance to pathogens and pests
Strengthening of plants by means
of crop rotation and biostimulants
Less pesticide usage
Less fertilizer usage
Lower water usage
Regionally adapted crops
Enhanced resistance to extreme
environmental conditions
One indicator of our breeding progress is annual
many other countries. In Eastern and Southeastern
variety approvals. Only varieties that differ signifi-
Europe, we also obtained approval for ten new hybrid
cantly from already approved ones and offer a clear
corn varieties under our label “ClimaControl3.” They
improvement in cultivation or further processing can
are distinguished by increased drought tolerance. We
be marketed in the EU, for example. We obtained
are also in the process of registering further drought-
484 variety approvals worldwide in the year under
tolerant varieties. We have also reviewed our catch
review compared to 464 in the previous year.
crop mixtures and adapted them further to agricul-
tural requirements. We offer specific seed mixtures
We launched a new sugarbeet variety on the Italian
under the umbrella brand “KWS Fit4Next” that
market, for example. It is a great aid for farmers in
enable combating of nematodes (threadworms) or
combating the fungal pathogen Cercospora since it
can also be put to secondary use as a feed reserve,
is equipped with highly effective resistance to this
for example. In addition, we have achieved further
leaf spot disease. Infestation by the disease has
progress in the fields of biologicals and organic
increased sharply in the past years due to environ-
seed. Biologicals are an alternative or complement to
mental factors, such as extreme changes in the
chemical means of seed treatment. They comprise
weather resulting from climate change. Approval
microorganisms such as fungi and bacteria, but also
processes for further varieties that have this resis-
various substances that can be obtained from plants
tance to Cercospora have already been initiated in
or microorganisms. Seed treatment with biologicals
2.4 Environmental Report | Combined Management Report
53
KWS Group | Annual Report 2019/2020
has now been used successfully for corn and rye
annual update meeting on the issue is held. If an
seed in addition to sugarbeet and rapeseed seed.
examination should find that the origin of the genetic
For organic farming, KWS has been able to include
material or the process by which it was obtained is
the seed mixture of corn and beans in its product
unclear, we refrain from using it. No deviations were
portfolio for the corn sector. Sowing bean and corn
identified as part of the above due diligence process
plants in the same field offers organic farmers a new
in fiscal 2019/2020.
option for coordinated intercropping.
There is regular dialogue during the year with the
2.4.2 Use of Genetic Resources
Executive Board member responsible for research &
KWS runs a broad network of worldwide stations and
breeding both in the context of the semiannual meet-
trial fields for seed breeding. We test different genetic
ings of the ISF and also if required. An annual report
material for the respective application areas there.
to the Executive Board is only drawn up if specific
issues or incidents have been identified as part of
Where this genetic material is used, the rights of the
the due diligence process. No such incidents were
peoples in all regions the material originates from
reported in the year under review.
must be respected. KWS is aware of its obligations
in this regard and supports the various international
2.4.3 Plant and Process Safety
access and benefit-sharing frameworks. Of prime
Running our locations and our operational processes
mention in this respect are the Convention on
have an impact on the environment. To minimize that
Biological Diversity, the Nagoya Protocol and the
impact at all locations, we are committed to using
International Treaty on Plant Genetic Resources
innovative processes and eco-friendly technologies.
for Food and Agriculture (ITPGRFA). The latter is
Core objectives of our global HSE (health, safety
particularly relevant to regulating transfer of genetic
and environment) management activities are to
resources. KWS maintains dialogue with governments
avoid negative environmental influences and ensure
through industrial associations, such as Euroseeds
resource-conserving operation of our locations,
and the International Seed Federation (ISF).
health and occupational safety, and protection of
business assets. In general, a location at the indi-
We have implemented a due diligence process to
vidual KWS companies is run in compliance with the
ensure compliance with these guidelines. All employ-
applicable local statutory requirements. We defined
ees who work with genetic material are obligated to
fundamental requirements relating to the three pillars
digitally register all materials used, whereupon our
of environmental protection, work safety, and emer-
Intellectual Property department instigates an exam-
gency preparedness and risk prevention by intro-
ination of where the genetic material has come from.
ducing group guidelines in fiscal 2018/2019. In the
Colleagues from our Legal department also provide
future, all relevant locations in the KWS Group are
assistance in more complex cases. In addition, new
to undergo regular health, safety and environment
employees are offered training modules, and an
auditing to achieve continuous improvements.
54 Combined Management Report | 2.4 Environmental Report
Annual Report 2019/2020 | KWS Group Alongside the global HSE management system,
between the specialist functions and first manage-
we are also focusing on the issue of environmental
ment level (N-1) on the basis of an annual Manage-
protection in relation to Europe-wide certification of
ment Review Report. Incidents are also reported to
treatment facilities in accordance with SeedGuard.
the Executive Board if necessary.
Internal audits to review compliance of processes
with SeedGuard were successfully held at two cer-
The second half of the fiscal year was overshadowed
tified locations in the year under review. Examples
by the Covid-19 pandemic. HSE management has
in relation to the subject area of environmental pro-
collaborated with an Incident Team to implement a
tection include stipulations on resource-conserving
global pandemic network and draw up a guide con-
operation of our locations, the handling of environ-
taining consistent regulations on how to deal with
mentally harmful chemicals and waste, and the use
the coronavirus at the company. These regulations
of exhaust air filters.
are developed and communicated on an ongoing
basis, also because of the large differences in the
Further key aspects in plant and process safety are
pandemic’s progression in the various regions. Exam-
the responsible use of modern breeding methods
ples that can be cited here are measures to increase
and the safe use of genetically modified organisms
separation among research and production employ-
in the production process. To document the fact that
ees (ensuring they work apart and at different times),
we use genetically modified organisms responsibly
mobile working arrangements, and company quaran-
throughout the lifecycle of our products, our entire
tine regulations. HSE management is the central point
group is still certified in accordance with the industry
of contact here for the KWS Group. KWS was able to
standard “Excellence Through Stewardship” (ETS).
maintain all core processes in the remainder of the
All the audits held, records and measures are admin-
fiscal year, with the result that there was no negative
istered in a central database. There is also dialogue
impact on its plant and process safety.
As part of the expansion and modernization of our sugarbeet seed processing plant in Einbeck, KWS is setting new
standards in terms of quality, flexibility and efficiency. A new packaging plant is part of the capital spending project.
What do our high
yielding varieties and
our employees have
in common?
Both routinely excel and
grow to new heights.
Proximity is important for us. But because proximity was impossible in this
out-of-the-ordinary year, our colleagues toiled away with enormous dedication
so that life could go on everywhere. For that: thank you!
2.5 Employee and Social Report*
Over the generations, our employees have made
2.5.2 Recruitment and Qualification
KWS what it is today: an innovative, world-leading
plant breeding company. That is due in great mea-
Employer branding: Projecting our employee
sure to their skills, mindsets, ideas and commitment.
brand outside the company
As a company with a tradition of family ownership,
As an international company that continues to grow,
we attach importance to a high degree of personal
the KWS Group endeavors to win and keep suitable
initiative, personal and professional development,
employees. Apart from growing our workforce num-
and a work culture marked by respect, openness,
bers through recruitment, KWS is also guided by
trust and team spirit.
strategic objectives and aims to secure qualitative
growth by enhancing the loyalty of and developing
2.5.1 Employment Trends
existing staff. The status of recruiting measures and
In the year under review, the KWS Group employed
filling of new posts is reviewed regularly in consulta-
an average of 5,709 (5,543) people, a year-on-year
tion with members of the Executive Board, the first
increase of around 3%. A large part of that increase
management level and the Works Councils involved.
is attributable to the acquisition of Pop Vriend Seeds,
Andijk, the Netherlands, at the beginning of the year
We continue to use digital and traditional channels
under review.
to reach out to potential applicants. That enables
us to address each target group specifically, for
2,236 (2,141), or around 39% (39%) of the work-
example on social networks such as LinkedIn, XING
force, were employed in Germany. Once again, the
and Facebook. Apart from using common digital
area that accounted for the most employees was
channels, we took part for the first time in a virtual
research & development, who made up 36.3% of
career fair in June 2020 due to the pandemic. It gave
the total workforce.
students the opportunity to listen to an online talk by
us and chat directly to employees.
Thanks to the position of Global Lead of Scientific
Affairs we created in 2018/2019 at the Research &
Development department, we were able to deepen
Employees by region
Number of employees 5,709 (corresponds 4.414 FTE)
Rest of world 175
North- and South America 1,789
2,236 Germany
1,509 Europe (excluding Germany)
Employees by function
Number of employees 5,709 (corresponds 4.414 FTE)
Administration 889
Distribution 1,230
2,073 Research & Development
1,517 Production
* Not an audited part of the NFD or Combined Management Report
58 Combined Management Report | 2.5 Employee and Social Report
Annual Report 2019/2020 | KWS Group
our cooperation with universities and research insti-
enhancing their personal and professional skills and
tutes even further in fiscal 2019/2020. This coop-
competence. The meetings were not held exclusively
eration is organized in such a way that there are
in person in the year under review, as is usually the
various research & development colleagues who
case, but instead in part virtually.
act as main contact persons for the Global Lead
of Scientific Affairs and so promote dialogue with
Our range of education and development offerings
universities and research institutes.
is diverse and supports various learning objectives.
We continue to award scholarships at universities
as knowledge transfer in various subject areas and
and offer talents without a university degree induc-
international development of (junior) executive staff,
Language courses and intercultural training, as well
tion programs. As a result, we at the KWS Group
are gaining in importance.
again accompanied many young people successfully
on their path to gaining vocational qualifications in
We regularly hold “Orientation Centers” with
the past fiscal year. Our 97 (90) trainees in Germany
participants from various countries in the KWS Group.
were employed in vocational training at KWS or
In the International Development Program, we also
enrolled in dual courses of study.
give talents from all departments the chance, among
other things, to gain experience in an international
All the measures presented by way of example ulti-
team in cross-functional project work and to develop
mately help KWS enhance its attractiveness as an
their management and leadership skills. The develop-
employer. In the annual independent rankings by
ment meetings accompanying the two programs were
the consulting firm Universum, KWS came in 59th in
all held virtually for the first time this fiscal year for
the area of sciences in 2020 (2019: 47th) in the list of
colleagues at our German locations, too.
the 100 most popular employers in Germany among
students and captured 36th spot among profession-
We are particularly committed to having all employ-
als in 2019.
ees receive qualified leadership and support from
their supervisors. That is why we have developed a
Qualification, further training and development
competence model defining the core competencies of
KWS’ long-term commercial success is founded not
managers at KWS and are developing it further. The
only on its employees’ commitment, entrepreneurial
objective is to support continuous development of the
freedom and satisfaction, but also on their personal
organization against the backdrop of an increasingly
skills and professional qualifications. We support our
agile and dynamic working world. In the second half
employees with tailored education and further train-
of 2018, we had also introduced “Leading Individuals,”
ing measures to help them build on their expertise
the first module of our newly designed management
and abilities. They are held as conventional in-person
development program, in which more than 200 exec-
events or online. Training was suspended from mid-
utives have taken part so far. On the basis of that,
March 2020 due to the pandemic. In its place, we
we have developed a further module called “Leading
developed an online offering that has been gradually
Self” to enable employees to develop their manage-
made available to employees starting in May 2020.
ment and leadership skills. It will be rolled out in the
coming months. Alongside that, we are already work-
In regular development meetings, which are part of
ing on a further module for experienced managers.
the annual performance and career development
reviews, our employees formulate perspectives
We intend to continue focusing on qualifying and
for their further development together with their
developing our employees and managers in the
managers. They jointly define concrete continuing
future and will expand our training portfolio nationally
education and development measures aimed at
and internationally.
2.5 Employee and Social Report | Combined Management Report
59
KWS Group | Annual Report 2019/2020 2.5.3 Good Working Conditions*
We aim to further increase the ratio of women in
We are an international, innovation-oriented com-
the top two management levels at KWS. We believe
pany that aims to keep on growing – and qualified
we are making good progress in our efforts, as evi-
and committed employees are the key to our suc-
denced by the award we won in the 2020 Career
cess. In order to recruit them and keep them at KWS,
Atlas of Focus Money, attesting that KWS offers
we position ourselves as an attractive family busi-
some of the best career opportunities for women in
ness that offers good working conditions.
the industry. The targets for the ratio of women can
be found in our declaration on corporate governance,
Contracts and compensation
which is published on our website at www.kws.com/ir.
All employees of the KWS Group have a written con-
tract of employment that complies with labor and
Employee representative bodies
social insurance legislation. The overall compensa-
Employees’ interests are represented collectively to
tion package for KWS employees takes into account
management by the elected Works Councils and the
their individual expertise, professional experience
persons entrusted with representing young people
and local market circumstances. It consists of a
and trainees. We also have a European Employees’
basic salary, social benefits, performance-related
Committee (EEC), a body that represents European
payments (if applicable) and, locally, Employee Stock
employees and is responsible for cross-border
Purchase Plans where staff can buy shares in the
matters within the EU. The working relationship
company. Equal pay for the same activities is a fun-
between the employee representative bodies and
damental principle of our basic compensation policy.
management is cooperative and based on trust. In
Work-life balance
regions where there is no collective employee rep-
resentative body, we attach importance to mutual
The lives our employees lead differ greatly and are
respect and dialogue between regional manage-
highly individual – and so they also have different
ment and employees.
needs as regards work and the workplace. Our dif-
ferent working time models enable employees to
2.5.4 Social Commitment*
strike a good life-work balance. Employees can also
As an international, strongly innovation-driven com-
work from home, if that can be reconciled with their
pany, the issues of research and education, and
activity. We also offer part-time models. Employees
well as a culture founded on diversity, creativity and
in Germany also have the opportunity to take leave
openness, are particularly dear to our heart. Our
or reduce their working hours, with an adjustment
focus in the area of social commitment is therefore
to their salary, if they would like to look after depen-
to promote educational institutions and young scien-
dents who need caring for.
tific and artistic talents. We sponsor culture at the
regional level, support associations, cultural institu-
Equal opportunity and diversity
tions and social initiatives and thereby help develop
KWS is committed to equal opportunities and rights
the socio-cultural infrastructure at our locations.
for its employees, regardless of gender, religion or
belief, ethnic origin, age, handicap, skin color, lan-
We aim to support regional socio-economic develop-
guage or sexual orientation. We have enshrined that
ment by means of targeted initiatives and measures,
in our Code of Business Ethics, which is binding
such as our involvement in the German 5G Innovation
on all employees. We believe that diversity of our
Program with the project “5G NortNet – Optimization
employees, as displayed in their individual experi-
of the value chain in plant cultivation.” In cooperation
ence, knowledge, skills and ideas, is a key value and
with public- and private-sector partners and with
a competitive advantage. It encourages creativity
initial funding from the German Federal Ministry
and innovativeness and strengthens our understand-
of Transport and Digital Infrastructure (BMVI), a
ing of markets and different cultures by fostering
pilot network is to be established on the basis of
intercultural skills.
the 5G mobile standard in order to research and
* Not an audited part of the Combined Management Report
60 Combined Management Report | 2.5 Employee and Social Report
Annual Report 2019/2020 | KWS Group We want to create a working environment where our employees can develop their potential, including their personal and
professional skills, to the fullest – whether in research & breeding, production, administration or sales.
improve traceability in and the efficiency of produc-
This program in Ethiopia is to be transitioned to
tion chains. The common overriding objective is to
a self-supporting, sustainable project in fiscal
strengthen the innovativeness and future viability of
2020/2021 in cooperation with local partners and the
rural regions.
German Society for International Cooperation (GIZ).
KWS’ international support includes our capacity
Good progress has likewise been made in our
development programs in Peru and Ethiopia. In
capacity development activities in the Peru project:
just over seven years of our activities as part of our
capacity development program in Ethiopia, we have
The quinoa breeding program at the University of
made sustained progress in achieving the objectives
the Altiplano in Puno will soon obtain approval for
defined in 2012:
new varieties that are early-maturing and deliver a
good yield.
The initiative has made a major contribution to
A Peruvian doctoral student is being trained in qui-
improving the conservation and documentation of
noa breeding and diversity analysis at the Univer-
genetic resources at Ethiopia’s national gene bank
sity of Hohenheim thanks to a KWS scholarship.
and is therefore regarded as a model project for
We continue to support the gene bank at National
bilateral benefit sharing as part of the International
Agrarian University in Lima in its efforts to improve
Treaty on Plant Genetic Resources for Food and
documentation and understanding of genetic
Agriculture (ITPGRFA).
diversity in a collection of national corn genetic
Substantial training and the provision of urgently
resources. Cutting-edge genotyping and image
needed equipment at the Ethiopian Institute of
analysis technologies are used in that, likewise
Agricultural Research has created the basic condi-
with the support of the University of Hohenheim.
tions for ensuring more efficient breeding of barley
for food uses and malting barley.
In fiscal 2019/2020, KWS spent around €1.5 (1.0) mil-
Smallholders’ access to quality seed of improved
lion – or approximately 1.1% of our operating income
wheat and barley varieties has been significantly
(EBIT) – on its social commitment worldwide. Of that,
improved through direct support of nine smallholder
approximately €0.75 million was donations and €0.75
seed cooperatives.
million was spent on sponsorship activities.
2.5 Employee and Social Report | Combined Management Report
61
KWS Group | Annual Report 2019/2020
At our headquarters in Einbeck and at all locations worldwide: The outstanding effort by all our employees
ensured that KWS achieved its objectives, even in the face of added challenges.
2.6 Corporate Governance
2.6.1 Corporate Governance Report and
You can find detailed information on corporate gov-
Declaration on Corporate Governance*
ernance in our declaration on corporate governance
Responsible corporate governance has always been
in accordance with Section 289f of the German
of great importance at KWS SAAT SE & Co. KGaA.
Commercial Code (HGB), which is available in full
Since it was founded more than 160 years ago, our
on our website at www.kws.com. You can find the
company’s successful development has been based
Compensation Report starting on page 64.
on thinking in the long term and acting in terms of
sustainability. The Executive Board (or, since the com-
2.6.2 Declaration of Compliance in Accordance
pany’s change in legal form in 2019/2020, the person-
with Section 161 AktG (German Stock
ally liable partner KWS SE, whose Executive Board is
Corporation Act)
since responsible for management of the company’s
The final version of the Declaration of Compliance in
business) and the Supervisory Board run and accom-
accordance with Section 161 AktG (German Stock
pany KWS with the goal of ensuring it creates sustain-
Corporation Act) is available to shareholders on the
able value added. They once again examined in the
website https://www.kws.com/corp/en/ company/
year under review whether the company complies with
investor-relations/declaration-of-corporate-
the stipulations of the German Corporate Governance
governance.html.
Code and issued the Declaration of Compliance in
Accordance with Section 161 AktG (German Stock
2.6.3 Business Ethics and Compliance
Corporation Act) to the effect that the company com-
The basis of our compliance concept is the imple-
plies almost fully with the code’s recommendations.
mentation of our corporate culture: KWS’ values are
* Not an audited part of the Combined Management Report
62 Combined Management Report | 2.6 Corporate Governance
Annual Report 2019/2020 | KWS Group practiced when the compliance rules are applied.
observance. The focus is on the subjects of antitrust
Compliance with basic principles of business ethics
law, anti-corruption, prevention of money laundering,
is vital to our license to operate. Accordingly, the
data protection and capital market law.
compliance rules apply to all employees in the
KWS Group.
The Compliance Officers regularly provide informa-
tion about the compliance system and its principles,
That is the foundation for KWS’ compliance
as well as about the latest issues and developments,
objectives, namely to gain and retain customers’
in training courses, information events and work-
trust through ethical conduct and to protect the
shops. Apart from this information, a broad range
company’s employees, reputation and assets.
of aids is also available to our employees. Check-
Information, training and continuous intensive
lists, instructional leaflets and other guides provide
consulting help integrate compliance in business
practical tips on observing compliance rules in
processes and enable management to make busi-
everyday work. All information and rules of conduct
ness decisions rooted in our corporate culture.
can be accessed by employees worldwide in the
Compliance Portal on KWS’ intranet. Around 80%
Our Code of Business Ethics gives our employees
of the total workforce has access to the Compliance
crucial guidance in their day-to-day work and con-
Portal. In addition, all supervisors are obliged to
tains stipulations on compliance with the law, fair
inform their employees about compliance issues.
competition, prevention of corruption, safety at work,
Supervisors can also enroll their employees directly
protection of the environment, and the need to treat
in compliance training courses. In the final quarter of
each other, customers, business partners, other
2019/2020, KWS began global rollout of a software
third parties and public authorities with respect. All
solution that gives employees access to e-learning
employees undertake to comply with the code by
offerings on the subject of compliance. 407 employ-
signing a commitment to do so when they are hired
ees have enrolled for the training to date and 216 of
and are provided with generally applicable informa-
them have completed it.
tion on compliance, as well as related information
specific to their function.
Implementation and observance of individual
compliance aspects is reviewed as part of audits.
Our Code of Business Ethics also covers the issue
In addition, the Compliance Officers conduct an
of international anti-corruption management as an
assessment termed risk scoring together with the
integral part of our compliance management work.
Risk Management and Finance functions, the results
On the basis of the regulations in the code, there is a
of which are used as the basis to make decisions for
policy of zero tolerance toward any form of corruption
the companies under analysis and derive measures
at the KWS Group and that principle is stipulated as
for improvement. Two violations of the International
a group-wide standard in the Anti- Corruption Policy.
Anti-Corruption Policy were reported to headquar-
This standard applies regardless of whether bribery
ters in fiscal 2019/2020. No compliance violations of
is prohibited by law, tolerated or permitted in the
antitrust protection legislation and money laundering
country in question. The group-wide Anti- Corruption
regulations and thus no related fines were reported
Policy defines the responsibilities, processes and
to headquarters.
regulations in relation to preventing corruption and
bribery at the KWS Group.
If an examination or report reveals indications of
suspected violations, the investigation is conducted
The Compliance department is the central point of
in accordance with KWS’ regulations “Procedures
contact for questions on our Code of Business Ethics
of Internal Compliance Notification.” KWS’ employ-
and other related issues. It advises all divisions of
ees are obligated to report suspected violations; the
the KWS Group in complying with laws, regulations
open door principle applies to that. Employees can
and internal rules of conduct and controlling their
supply information on them to their supervisor, to the
2.6 Corporate Governance | Combined Management Report
63
KWS Group | Annual Report 2019/2020 Chief Compliance Officer or to the external compli-
labor and must comply with the regulations on the
ance hotline. The hotline can be contacted, including
minimum age for admission to employment defined
by e-mail, free of charge around the clock and in
in the latest version of ILO Convention No. 138. The
the language of the country in question. Reports
code contains provisions on safety at work, product
of suspected violations are treated anonymously if
safety, protection of the environment and avoidance
requested. The reported cases are investigated by
of corruption, as well as on the requirement to ensure
KWS. Whistleblowers do not suffer any disadvan-
fair competition and protection of personal data and
tages unless they have obviously abused their right
third-party know-how.
to report violations. After the investigation has been
completed, the whistleblowers are informed of the
2.6.4 Compensation Report
results, as long as there are no legal reasons or legit-
The Compensation Report outlines the principles
imate interests against doing so or other disadvan-
and salient features of the compensation systems
tages are to be feared.
for the Executive Board of KWS SE, the manag-
ing partner of KWS SAAT SE & Co. KGaA, and its
If suspected cases prove to be violations, the system
Supervisory Board. It also explains the level and
of sanctions is applied. In general, it can be applied
structure of their compensation.
to all types of compliance violations and is also
accessible to employees. The system of sanctions
The Compensation Report largely takes into account
defines various criteria governing the measures to
the recommendations of the applicable version of
be taken, such as the gravity of the violations, the
the German Corporate Governance Code dated
degree of the person’s breach of duty, the func-
December 16, 2019. Deviations from recommen-
tional level, behavior after the violation – help in
dations are indicated in the Compensation Report
investigating it or attempts to cover it up – as well as
and in the Declaration of Compliance in Accordance
consequences of the violation, such as the threat of
with Section 161 AktG (German Stock Corporation
damage or actually incurred damage, among other
Act) dated October 22, 2020. The Compensation
things. The sanctions consequently range from cau-
Report also contains all the disclosures and explana-
tions, warnings and reductions in bonuses to imme-
tions required under the German Commercial Code
diate dismissal and filing of charges.
(HGB), including the relevant principles of German
Accounting Standard No. 17 (GAS 17), and under the
The Executive Board and the Supervisory Board’s
International Financial Reporting Standards (IFRS).
Audit Committee are informed once a year about
In addition, it largely takes into account the require-
the current status and latest developments of the
ments stipulated in the German Act Implementing
Compliance Management System.
the Second Shareholder Rights Directive (SRD II),
which would need to be applied for the first time
In addition to our internal compliance regulations,
to fiscal years starting on or after January 1, 2020.
we also want to involve our suppliers in ensuring
The Compensation Report is part of the Combined
they adopt and practice our business ethics. KWS
Management Report for KWS SAAT SE & KGaA and
also expects its suppliers, service providers, their
the Group that has been audited by the independent
employees and subcontractors (jointly termed
auditor; these disclosures are not additionally pre-
“ suppliers”) to act ethically, responsibility and in a
sented in the Notes (Section 289a (2) and Section
spirit of sustainability. The conduct expected of our
315a (2) of the German Commercial Code (HGB)).
suppliers is specified in our Code of Business Ethics
for Suppliers; one particularly important criterion
New compensation system since July 1, 2019
is that they respect human rights as fundamental
The Annual Shareholders’ Meeting of KWS SAAT SE
and universal. The code specifies, for example, that
on December 14, 2018, adopted a resolution to
our suppliers must not permit forced labor or child
change the company’s legal form to a partnership
64 Combined Management Report | 2.6 Corporate Governance
Annual Report 2019/2020 | KWS Group limited by shares bearing the name KWS SAAT SE
total compensation of Executive Board members
& Co. KGaA. The change in legal form became
is in line with usual levels compared to other enter-
effective on July 2, 2019, when it was registered in
prises, the following peer group of other third-party
the commercial register of Göttingen Local Court.
entities was used as a benchmark. The peer group
It also necessitated amendment of the contracts of
was chosen based on the enterprise’s size and its
employment with the Executive Board members,
international orientation.
since they left KWS SAAT SE and were appointed
members of the Executive Board at the general
partner, KWS SE.
Peer group
Implementation of the EU’s Shareholder Rights
No.
Enterprise
Directive II in German law and the new version of
the German Corporate Governance Code were still
being discussed by the German parliament and the
Government Commission for the German Corporate
Governance Code, respectively, at that time. Nev-
ertheless, the Supervisory Board of KWS SAAT SE
largely took into account the requirements of SRD II
and the new German Corporate Governance Code
that were known at the time in drafting the new
Executive Board compensation system.
At the proposal of the Committee for Executive
Board Affairs, the Supervisory Board of
KWS SAAT SE and the Supervisory Board of KWS SE
adopted the Executive Board compensation system,
1
2
3
4
5
6
7
8
9
10
11
12
Symrise AG
Deutz AG
Qiagen NV
Sartorius AG
Hamburger Hafen und Logistik AG
Koenig & Bauer AG
Carl Zeiss Meditec AG
Cancom SE
Vossloh AG
SMA Solar Technology AG
Software AG
SGL Carbon SE
which applies to all Executive Board members, at its
The further development of the compensation
meeting on June 25, 2019, effective July 1, 2019, i.e.
system was also accompanied by an independent
before the change in legal form came into force.
compensation consultant and approximates existing
market levels. In view of that, there was an increase
The new compensation system for the Executive
in fixed compensation, coupled with a change in the
Board aimed to promote the company’s sustainable
weighting of the individual components toward a
development and largely comply with the anticipated
long-term system, and in particular a clear separation
objectives of SRD II and the German Corporate
between short-term and long-term oriented com-
Governance Code. The system also takes into
pensation and the removal of fringe benefits from the
account the fact that the Executive Board has overall
variable compensation. A reinvestment of at least
responsibility for managing the company’s business
35% (previously 20%) of its short-term variable com-
and that the Executive Board compensation was last
pensation in shares of KWS SAAT SE & Co. KGaA
adjusted effective July 1, 2014. To ascertain whether
is intended to ensure that the Executive Board is
remuneration is in line with usual levels within the
measured to a greater extent by, and has a greater
company itself, the Supervisory Board took into
financial stake in, the Company’s development
account the relationship between the Executive
geared toward long-term earnings.
Board’s compensation and the compensation of
senior managers and the workforce in Germany as
KWS SE has conducted the business of
a whole, and how compensation has developed
SAAT SE & Co. KGaA since July 2, 2019. Under
over time. In order to assess whether the specific
Section 7 (4) of the Articles of Association of
2.6 Corporate Governance | Combined Management Report
65
KWS Group | Annual Report 2019/2020
KWS SAAT SE & Co. KGaA, the personally liable
the KWS Group’s average net income for the year
partner shall be compensated for all expenses
in the assessment period, but at most €500,000.
it incurs in connection with management of
If the KWS Group’s sustained net income exceeds
KWS SAAT SE & Co. KGaA’s business, including
€100 million per annum in two successive years,
the compensation for the members of its manage-
the maximum one-year variable payment will be
ment and supervisory bodies. In order to preserve
increased to €600,000 as from the subsequent
transparency, the new compensation system for
fiscal year. The one-year variable payment is made
the Executive Board of KWS SE was submitted for
after submission of the consolidated financial state-
approval to the Annual Shareholders’ Meeting of
ments of KWS SAAT SE & Co. KGaA to the Annual
KWS SAAT SE & Co. KGaA on December 17, 2019.
Shareholders’ Meeting, i.e. usually in January. An
The Annual Shareholders’ Meeting approved the
individually determined amount for the multi-year
new compensation system with a vote of 99.94% in
variable payment is deducted from the total calcu-
its favor.
lated one-year variable payment; the remainder is
paid out in cash.
Salient features of the compensation system for
members of the Executive Board of KWS SE, the
Members of the Executive Board are obligated to
managing partner of KWS SAAT SE & Co. KGaA
acquire shares in KWS SAAT SE & Co. KGaA every
The compensation system for Executive Board
year in a freely selectable amount ranging between
members is geared toward strategic planning and is
35% and 50% of their gross one-year variable pay-
intended to support the company’s successful and
ment (reinvestment). The acquired shares are subject
sustainable development.
to a holding period of five years as of when they are
acquired (usually on the first stock market trading
It comprises the following components:
days of each January).
A basic fixed annual salary
A one-year variable payment
The amount of this reinvestment by the Executive
Board members forms the basis for the multi-year
A multi-year variable payment in the form of an
variable payment. When the holding period ends, the
incentive based on the stock price
members of the Executive Board receive a multi-year
Fringe benefits (in particular pension benefits and
variable payment calculated on the basis of the perfor-
benefits in kind)
mance of KWS SAAT SE & Co. KGaA’s stock and the
KWS Group’s return on sales over the holding period.
The gross basic annual salary is €375,000. The
Chief Executive Officer receives an extra “CEO
The following formula is used to calculate the multi-
bonus” of 25% on top of the basic annual salary.
year variable payment: average applicable share
price of KWS SAAT SE & Co. KGaA multiplied by the
The one-year variable payment is dependent on
number of acquired shares, minus any markdowns
the KWS Group’s earnings performance (“sustained
based on the trend for average return on sales (ROS).
net income”). The assessment period for that is the
The goal of that is in particular to gear compensa-
last three fiscal years before payment of the com-
tion toward strategic planning and to support the
ponent. The one-year variable payment is 0.5% of
company’s successful and sustainable development.
66 Combined Management Report | 2.6 Corporate Governance
Annual Report 2019/2020 | KWS Group
The share price to be applied is determined
on the basis of the average closing prices of
KWS SAAT SE & Co. KGaA’s share in electronic
trading on the Frankfurt Stock Exchange (Xetra) at
the end of each quarter during the holding period.
Maximum compensation
in €
Dr. Hagen Duenbostel
Dr. Léon Broers
Dr. Felix Büchting
There is a markdown on the multi-year variable pay-
Dr. Peter Hofmann
ment if the average return on sales (ROS), i.e. the
KWS Group’s operating income divided by net sales,
Eva Kienle
Total
falls below 10% in the holding period. The segment
reporting of the KWS Group (including the equity-
1,809,940.00
1,532,000.00
1,532,000.00
1,538,224.00
1,532,000.00
7,944,164.00
accounted companies) is the basis for determining
Any payments made to an Executive Board member
that. The markdown is 25% if the average ROS is
due to early termination of their Executive Board
less than 10%, 50% if the average ROS is less than
activity will not exceed twice the annual compen-
9%, and 100% if the average ROS is less than 8%.
sation (severance cap) and shall not constitute
The multi-year variable payment is at most 150%
the employment contract. If post-contractual non-
of the reinvestment made by each Executive Board
compete clauses apply, the severance payment will
member and at most 200% in the case of the reinvest-
not be taken into account in the calculation of any
remuneration for more than the remaining term of
ment made by the Chief Executive Officer. KWS SE
compensation payments.
can claim back the one-year variable payment and/or
multi-year variable payment (clawback option).
Significant agreements subject to the condition of
a change in control pursuant to a takeover bid have
Fringe benefits, such as means of transport and
not been concluded. The compensation agreements
communication, premiums for accident and D&O
between the company and members of the Executive
insurance, payments to discharge the employer’s con-
Board of the personally liable partner and governing
tribution to social insurance as well as various pension
the case of a change in control stipulate that any
commitments are granted without any modification.
such compensation will be limited to the applicable
maximum amounts specified by the German
Applying the compensation system currently in force,
Corporate Governance Code. An Executive Board
the following maximum annual compensation is
member is not entitled to severance payment if his or
set for members of the Executive Board (given a one-
her activity on the Executive Board ends by mutual
year variable payment cap of €600,000). Apart from
agreement at the request of the Executive Board or
the basic salary and any CEO bonus, it consists of
there are special grounds for the company to termi-
the one-year variable payment, the multi-year variable
nate the employment relationship.
payment, fringe benefits and pension costs.
If the contract with an Executive Board member
Executive Board of KWS SE in fiscal 2019/2020
is terminated, the outstanding multi-year variable
The total compensation to be reported for the
payment components are calculated and disbursed
Executive Board in accordance with Section 314 (1)
immediately.
No. 6a of the German Commercial Code (HGB) in
Compensation for serving members of the
2.6 Corporate Governance | Combined Management Report
67
KWS Group | Annual Report 2019/2020 conjunction with German Accounting Standard
15.6% (15.7%) by multi-year variable components.
No. 17 (GAS 17) was €5,428 (4,316) thousand in fis-
The tables below provide an overview of the total
cal 2019/2020. 38.3% (35.2%) was accounted for
compensation granted in the fiscal year on an indi-
by the basic annual salary, including fringe benefits,
vidualized basis (excluding pension costs) and in the
46.1% (47.1%) by one-year variable components and
previous year by way of comparison:
Total compensation for the Executive Board 2019/2020
in €
Cash compensation
LTI FV 1
Total
LTI
Basic
compensation
Fringe
benefits
Performance-
related bonus
Total
Grant
Cost
Dr. Hagen Duenbostel
468,750.00
13,349.76
500,000.00
982,099.76 234,016.87 1,216,116.63 257,633.00
Dr. Léon Broers
375,000.00
25,801.42
500,000.00
900,801.42 235,209.96 1,136,011.38 253,567.66
Dr. Felix Büchting
375,000.00
21,923.70
500,000.00
896,923.70
47,610.13
944,533.83
5,084.50
Dr. Peter Hofmann
375,000.00
25,710.36
500,000.00
900,710.36 168,453.51 1,069,163.87 124,622.63
Eva Kienle
Total
375,000.00
25,186.80
500,000.00
900,186.80 161,863.09 1,062,049.89 137,503.93
1,968,750.00 111,972.04
2,500,000.00 4,580,722.04 847,153.55 5,427,875.59 778,411.71
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
1 Long-Term-Incentive Fair Value
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
Since 2006, KWS has had a defined contribution
Pension commitments
plan for pensions for Executive Board members,
in €
which takes the form of an annual fixed contribution
to a provident fund backed by a guarantee. In fiscal
2019/2020, €378 (342) thousand was paid for pension
commitments to members of the Executive Board.
Dr. Hagen Duenbostel
Dr. Léon Broers
Dr. Felix Büchting
Dr. Peter Hofmann
Eva Kienle
Total
06/30/2020
90,000.00
72,000.00
72,000.00
72,000.00
72,000.00
378,000.00
68 Combined Management Report | 2.6 Corporate Governance
Annual Report 2019/2020 | KWS Group
Pension commitments
in €
Dr. Hagen Duenbostel
Dr. Peter Hofmann
Total
06/30/2020
06/30/2019
Interest
expenses
Revaluation
effects
1,198,941.00 1,157,263.00
10,994.00
30,684.00
420,383.00
408,776.00
3,883.00
7,724.00
1,619,324.00 1,566,039.00
14,877.00
38,408.00
From when they began working for KWS, the
Due to the transitional period (before mandatory
Executive Board members Dr. Hagen Duenbos-
application of the new SRD II for fiscal years start-
tel and Dr. Peter Hofmann have also been given
ing after December 31, 2020), we still refer for the
a defined benefit pension commitment, which
time being in the tables below to the recommenda-
was concluded before 2006. The funds to cover
tions in Clause 4.2.5 (3) of the German Corporate
this commitment are allocated in the form of
Governance Code (DCGK) in the version dated
a pension provision on the basis of an expert
February 7, 2017, and present the individual awards
report. A further €53 (275) thousand was thus allo-
and receipts for each member of the Executive Board.
cated to the pension provisions in accordance
with IAS 19 (of which €15 thousand was interest
The target compensation, including the agreed
expenses and €38 thousand from revaluation
lower and upper limits, is shown under “Grant.” The
effects). There were thus pension provisions totaling
LTI grants are assessed at the present value at the
€1,619 (1,566) thousand for active members of the
time of acquisition of the last tranche of shares. The
Executive Board of KWS SAAT SE & Co. KGaA.
details on the receipts show the same figures as
under “Grant” for the fixed compensation and fringe
Compensation of former members of the Executive
benefits. The receipt for fiscal years 2019/2020 and
Board and their surviving dependents amounted
2018/2019 (amounts paid) is stated for the one-year
to €1,419 (1,479) thousand. Pension commitments
variable payment (performance-related bonus), as is
in accordance with IAS 19 (2011) recognized for
the amount for the multi-year variable payments (LTI),
this group of persons amounted to €7,140 (6,674)
whose planned term ends in the year under review. In
thousand as of June 30, 2020. The pension commit-
turn, the pension costs are presented in accordance
ments for three former members of the Executive
with IAS 19 and does not constitute a receipt in the
Board are backed by a guarantee. No loans were
narrower sense, but serves to illustrate the overall
granted to members of the Executive Board and the
compensation.
Supervisory Board in the year under review.
2.6 Corporate Governance | Combined Management Report
69
KWS Group | Annual Report 2019/2020 Executive Board compensation in accordance with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Grant
Receipt
2019/2020
2018/2019
2019/2020
2018/2019
Min.
Max.
Dr. Hagen Duenbostel (Chief Executive Office)
Fixed payment
Fringe benefits
Subtotal
468,750.00
468,750.00
468,750.00
375,000.00
468,750.00
375,000.00
13,349.76
13,349.76
13,349.76
23,303.72
13,349.76
23,303.72
482,099.76
482,099.76
482,099.76
398,303.72
482,099.76
398,303.72
Performance-related bonus
500,000.00
0.00
500,000.00
476,696.28
500,000.00
476,696.28
Total cash compensation
982,099.76
482,099.76
982,099.76
875,000.00
982,099.76
875,000.00
Multi-year variable payment
LTI 2012/2013
LTI 2013/2014
LTI 2017/2018
LTI 2018/2019
Subtotal
Pension costs 1
240,018.58
286,808.20
226,736.74
234,016.87
0.00
474,245.18
1,216,116.63
482,099.76 1,456,344.94 1,101,736.74 1,268,907.96 1,115,018.58
100,994.00
100,994.00
100,994.00
105,492.00
100,994.00
105,492.00
Total compensation
1,317,110.63
583,093.76 1,557,338.94 1,207,228.74 1,369,901.96 1,220,510.58
Maximum compensation 2
1,609,940.00 1,765,000.00
Executive Board compensation in accordance with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Dr. Léon Broers
Fixed payment
Fringe benefits
Subtotal
Grant
Receipt
2019/2020
2018/2019
2019/2020
2018/2019
Min.
Max.
375,000.00
375,000.00
375,000.00
300,000.00
375,000.00
300,000.00
25,801.42
25,801.42
25,801.42
25,719.43
25,801.42
25,719.43
400,801.42
400,801.42
400,801.42
325,719.43
400,801.42
325,719.43
Performance-related bonus
500,000.00
0.00
500,000.00
474,280.57
500,000.00
474,280.57
Total cash compensation
900,801.42
400,801.42
900,801.42
800,000.00
900,801.42
800,000.00
Multi-year variable payment
LTI 2012/2013
LTI 2013/2014
LTI 2017/2018
LTI 2018/2019
Subtotal
Pension costs 1
238,837.67
257,461.80
225,966.40
235,209.96
0.00
357,497.28
1,136,011.38
400,801.42 1,258,298.70 1,025,966.40 1,158,263.22 1,038,837.67
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
Total compensation
1,208,011.38
472,801.42 1,330,298.70 1,097,966.40 1,230,263.22 1,110,837.67
Maximum compensation 2
1,357,000.00 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.
70 Combined Management Report | 2.6 Corporate Governance
Annual Report 2019/2020 | KWS Group
Executive Board compensation in accordance with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Grant
Receipt
2019/2020
2018/2019
2019/2020
2018/2019
Min.
Max.
Dr. Felix Büchting (since 01/01/2019)
Fixed payment
Fringe benefits
Subtotal
375,000.00
375,000.00
375,000.00
125,000.04
375,000.00
125,000.04
21,923.70
21,923.70
21,923.70
12,113.77
21,923.70
12,113.77
396,923.70
396,923.70
396,923.70
137,113.81
396,923.70
137,113.81
Performance-related bonus
500,000.00
0.00
500,000.00
137,886.23
500,000.00
137,886.23
Total cash compensation
896,923.70
396,923.70
896,923.70
275,000.04
896,923.70
275,000.04
Multi-year variable payment
LTI 2012/2013
LTI 2013/2014
LTI 2017/2018
LTI 2018/2019
Subtotal
Pension costs 1
0.00
0.00
0.00
47,610.13
0.00
72,362.98
944,533.83
396,923.70
969,286.68
275,000.04
896,923.70
275,000.04
72,000.00
72,000.00
72,000.00
36,000.00
72,000.00
36,000.00
Total compensation
1,016,533.83
468,923.70 1,041,286.68
311,000.04
968,923.70
311,000.04
Maximum compensation 2
1,357,000.00
423,500.00
Executive Board compensation in accordance with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Dr. Peter Hofmann
Fixed payment
Fringe benefits
Subtotal
Grant
Receipt
2019/2020
2018/2019
2019/2020
2018/2019
Min.
Max.
375,000.00
375,000.00
375,000.00
300,000.00
375,000.00
300,000.00
25,710.36
25,710.36
25,710.36
25,804.65
25,710.36
25,804.65
400,710.36
400,710.36
400,710.36
325,804.65
400,710.36
325,804.65
Performance-related bonus
500,000.00
0.00
500,000.00
474,195.35
500,000.00
474,195.35
Total cash compensation
900,710.36
400,710.36
900,710.36
800,000.00
900,710.36
800,000.00
Multi-year variable payment
LTI 2012/2013
LTI 2013/2014
LTI 2017/2018
LTI 2018/2019
Subtotal
Pension costs 1
168,453.51
0.00
256,033.68
158,176.48
1,069,163.87
400,710.36 1,156,744.04
958,176.48
900,710.36
800,000.00
75,883.00
75,883.00
75,883.00
77,810.00
75,883.00
77,810.00
0.00
0.00
Total compensation
1,145,046.87
476,593.36 1,232,627.04 1,035,986.48
976,593.36
877,810.00
Maximum compensation 2
1,363,224.00 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.
2.6 Corporate Governance | Combined Management Report
71
KWS Group | Annual Report 2019/2020
Executive Board compensation in accordance with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Eva Kienle
Fixed payment
Fringe benefits
Subtotal
Grant
Receipt
2019/2020
2018/2019
2019/2020
2018/2019
Min.
Max.
375,000.00
375,000.00
375,000.00
300,000.00
375,000.00
300,000.00
25,186.80
25,186.80
25,186.80
31,234.81
25,186.80
31,234.81
400,186.80
400,186.80
400,186.80
331,234.81
400,186.80
331,234.81
Performance-related bonus
500,000.00
0.00
500,000.00
468,765.19
500,000.00
468,765.19
Total cash compensation
900,186.80
400,186.80
900,186.80
800,000.00
900,186.80
800,000.00
Multi-year variable payment
LTI 2012/2013
LTI 2013/2014
LTI 2017/2018
LTI 2018/2019
Subtotal
Pension costs 1
64,743.62
155,608.68
0.00
161,863.09
0.00
246,016.85
1,062,049.89
400,186.80 1,146,203.65
955,608.68
964,930.42
800,000.00
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
Total compensation
1,134,049.89
472,186.80 1,218,203.65 1,027,608.68 1,036,930.42
872,000.00
Maximum compensation t 2
1,357,000.00 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.
The table below shows the percentage change in
for employees in Germany (per full-time equivalent
the total compensation of Executive Board mem-
(FTE)) over the past five fiscal years (2015/2016 to
bers relative to EBIT and the average compensation
2019/2020).
Development of compensation
in €
2015/2016
2016/2017
2017/2018
2018/2019
2019/2020
Dr. Hagen Duenbostel
1,023,755
1,055,597
1,089,116
1,101,737
1,216,117
Change from the previous year in %
3.1%
3.2%
1.2%
10.4%
Dr. Léon Broers
950,359
975,083
1,014,116
1,025,966
1,136,011
Change from the previous year in %
2.6%
4.0%
Dr. Felix Büchting (from January 1, 2019)
–
Change from the previous year in %
–
–
–
–
1.2%
275,000
–
10.7%
944,534
243.5%
Dr. Peter Hofmann
724,740
857,072
962,741
958,176
1,069,164
Change from the previous year in %
18.3%
12.3%
–0.5%
11.6%
Eva Kienle
831,862
884,198
949,977
955,609
1,062,050
Change from the previous year in %
6.3%
7.4%
0.6%
11.1%
EBIT in € millions
Change from the previous year in %
Average employee compensation
per FTE (Germany) 1
112.8
64,526
131.6
16.7%
67,448
132.6
0.8%
68,413
150.0
13.1%
69,039
137.4
–8.4%
72,733
Change from the previous year in %
4.5%
1.4%
0.9%
5.4%
1 Without Executive Board
72 Combined Management Report | 2.6 Corporate Governance
Annual Report 2019/2020 | KWS Group
Overall target compensation for the Executive
performance, means that the Supervisory Board can
Board in fiscal 2020/2021
better exercise its control function. The compen-
The Supervisory Board has defined a specific overall
sation system for the Supervisory Board complies
target compensation for each member of the Executive
with the recommendations of the German Corporate
Board in fiscal 2020/2021. It is in reasonable propor-
Governance Code.
tion to the tasks and performance of the Executive
Board member and the company’s situation. The
The members of the Supervisory Board receive a
overall target compensation includes the gross
fixed annual payment of €60,000 for their work. The
basic annual salary of €375,000. The Chief Executive
Chairperson receives three times and the Deputy
Officer receives an extra “CEO bonus” of 25% on
Chairperson one-and-a-half times said amount.
top of the basic annual salary. In addition, the over-
Members of the Supervisory Board receive separate
all compensation is to include a one-year variable
payment for their work on committees; the Chair-
payment of 0.5% of the KWS Group’s average net
person of the Supervisory Board does not receive
income for the past two fiscal years and take into
additional compensation for his or her work on com-
account the net income budgeted for the current
mittees. Members of the Supervisory Board who are
fiscal year – but at most €500,000 – if the targets
members of a committee receive an additional pay-
are fully achieved. The one-year variable payment
ment of €10,000 therefor. The Chairperson of a com-
for fiscal 2020/2021 will be limited by this maximum
mittee receives two times said amount. The additional
amount, taking into account the budget assump-
compensation for members of the Audit Committee
tions. As regards the multi-year variable payment,
is €20,000. The Chairperson of the Audit Committee
members of the Executive Board are obligated
receives three times said amount. Additional com-
to reinvest a percentage of their (gross) one-year
pensation is owed only for participation in one com-
variable payment in shares in KWS SAAT SE & Co.
mittee, namely at the amount that is the highest to
KGaA. That can be between 35% and 50% of their
which the member in question is entitled for his or her
(gross) one-year variable payment, which means that
work on a committee. If a person is a member of the
a concrete target cannot be defined here. However,
Supervisory Board or a committee or holds the office
the multi-year variable payment is at most 150% of
of Chairperson or Deputy Chairperson of the Super-
the reinvestment made by each Executive Board
visory Board or Chairperson of a committee for only
member and at most 200% in the case of the rein-
part of the fiscal year or if a fiscal year is shorter than
vestment made by the Chief Executive Officer.
the calendar year, the payment is granted only on a
pro rata temporis basis. Members of the Supervisory
Compensation for members of the Supervisory
Board also receive reimbursement of their expenses
Board of KWS SAAT SE & Co. KGaA
incurred in connection with exercise of their office
The compensation for members of the Supervisory
and, up to the end of 2019, the value-added tax due
Board is governed by the Articles of Association
on their payment and on their expenses.
and is based on the size of the company and their
duties and responsibilities. The company believes
The total compensation for members of the Super-
that the fixed compensation structure, which is
visory Board of KWS SAAT SE & Co. KGaA in the
therefore no longer linked to the company’s business
year under review was €620 (620) thousand.
2.6 Corporate Governance | Combined Management Report
73
KWS Group | Annual Report 2019/2020 Total compensation of the Supervisory Board of KWS SAAT SE & Co. KGaA
in €
Dr. Andreas J. Büchting 1
Dr. Marie Theres Schnell 2
Victor W. Balli 3
Jürgen Bolduan
Cathrina Claas-Mühlhäuser
Christine Coenen
1 Chairman
2 Deputy Chairwoman
3 Chairman of the Audit Committee
Fixed
180,000.00
90,000.00
60,000.00
60,000.00
60,000.00
60,000.00
Work on
committees
0.00
20,000.00
60,000.00
20,000.00
10,000.00
0.00
Total
2019/2020
180,000.00
110,000.00
120,000.00
80,000.00
70,000.00
60,000.00
Total
2018/2019
180,000.00
110,000.00
120,000.00
80,000.00
70,000.00
60,000.00
510,000.00
110,000.00
620,000.00
620,000.00
Total compensation of the Supervisory Board of KWS SE
in €
Dr. Andreas J. Büchting 1
Dr. Marie Theres Schnell 2
Victor W. Balli
Cathrina Claas-Mühlhäuser
1 Chairman
2 Deputy Chairwoman
Fixed
Attendance fee
60,000.00
45,000.00
30,000.00
30,000.00
0.00
0.00
20,000.00
0.00
Total
2019/2020
60,000.00
45,000.00
50,000.00
30,000.00
165,000.00
20,000.00
185,000.00
The total compensation for members of the Super-
33,000,000 bearer shares. The change in the legal
visory Board of KWS SE in the year under review
form of KWS SAAT SE (as the company was then
was €185 thousand.
named) to that of a partnership limited by shares
(KWS SAAT SE & Co. KGaA) took effect upon its
2.6.5 Explanatory Report of the
entry in the commercial register on July 2, 2019.
Personally Liable Partner (KWS SE)
Pursuant to the resolution adopted by the Annual
of KWS SAAT SE & Co. KGaA in Accordance
Shareholders’ Meeting of KWS SAAT SE (as the
with Section 176 (1) Sentence 1 AktG (Ger-
company was then named), the shareholders
man Stock Corporation Act) on the Disclo-
received one share in KWS SAAT SE & Co. KGaA for
sures in Accordance with Section 289a (1)
each share they held in KWS SAAT SE. The com-
and Section 315a (1) HGB (German Commer-
pany’s capital stock remained unchanged, so the
cial Code)
subscribed capital of KWS SAAT SE & Co. KGaA
The change in KWS SAAT SE’s legal form to that
is still €99,000,000.00 at present. It is divided into
of a partnership limited by shares (KWS SAAT SE
33,000,000 bearer shares. The pro-rata share of
& Co. KGaA) took effect upon its entry in the com-
each share in the capital stock is €3.00. Each share
mercial register on July 2, 2019. The personally
grants the holder the right to cast one vote at the
liable partner of KWS SAAT SE & Co. KGaA pro-
Annual Shareholders’ Meeting. The rights of share-
vides the following explanation on the disclosures
holders are governed by the German Stock Corpora-
in accordance with Section 289a (1) and Section
tion Act (AktG) and the Articles of Association.
315a (1) HGB (German Commercial Code):
Composition of the subscribed capital
transfer of shares
At July 1, 2019, the subscribed capital of
There may be restrictions relating to voting rights or
KWS SAAT SE (as the company was then named)
the transfer of shares as a result of statutory or con-
was €99,000,000.00 and was divided into
tractual provisions. For example, shareholders are
Restrictions relating to voting rights or the
74 Combined Management Report | 2.6 Corporate Governance
Annual Report 2019/2020 | KWS Group barred from voting under certain conditions pursuant
Annette Büchting, Germany
to Section 136 of the German Stock Corporation
Stephan O. Büchting, Germany
Act (AktG) in conjunction with Section 278 (3) of the
Christa Nagel, Germany
German Stock Corporation Act (AktG) or Section 44
Matthias Sohnemann, Germany
of the German Securities Trading Act (WpHG); the
Malte Sohnemann, Germany
bars on voting pursuant to Section 285 of the German
Arne Sohnemann, Germany
Stock Corporation Act (AktG) must also be observed
AKB Stiftung, Hanover
for personally liable partners at a partnership limited
Büchting Beteiligungsgesellschaft mbH, Hanover
by shares (KGaA). In addition, no voting rights accrue
Zukunftsstiftung Jugend, Umwelt und Kultur, Einbeck
to the company on the basis of the shares it holds
RETOKE Holding Vermögensverwaltungs-
(Section 71b AktG).
gesellschaft mbH & Co. KG, Bad Schwartau
Dr. Marie Th. Schnell, Germany
The personally liable partner is not aware of any con-
Johanna Sophie Oetker, Germany
tractual restrictions relating to voting rights or transfer
Leopold Heinrich Oetker, Germany
of shares. If there are no restrictions on voting rights,
Clara Christina Oetker, Germany
all shareholders who register for the Annual Share-
Ludwig August Oetker, Germany
holders’ Meeting in time and have submitted proof
of their authorization to participate in the Annual
The voting shares of the shareholder named below,
Shareholders’ Meeting and exercise their voting rights
including mutual allocations, of the members, com-
are authorized to exercise the voting rights conferred
panies and foundations of the families Büchting and
by all the shares they hold and have registered. If
Arend Oetker listed above exceed 10% and total
members of the Executive Board of the personally
55.3% for:
liable partner or executive employees of the company
have acquired shares as part of the long-term incen-
Dr. Arend Oetker, Germany
tive programs, these shares are subject to a lock-up
period until the end of the fifth year after the end of
The voting shares, including mutual allocations, of
the quarter in which they were acquired. The lock-up
the shareholders stated below each exceed 10% and
period for shares that employees have acquired as
total 15.4%.
part of the Employee Stock Purchase Plans runs until
the end of the fourth year as of when they are posted
Hans-Joachim Tessner, Germany
to the employee’s securities account.
Tessner Beteiligungs GmbH, Goslar
Tessner Holding KG, Goslar
Direct and indirect participating interests in
excess of 10% of the voting rights
Shares with special rights and voting control
The company has been informed by shareholders of
Shares with special rights that grant powers of con-
the following direct or indirect participating interests
trol have not been issued by the company. There is
in the capital of KWS SAAT SE & Co. KGaA in excess
no special type of voting control for the participating
of 10% of the voting rights in accordance with
interests of employees. Employees who have an
Section 33 and Section 34 of the German Securities
interest in the company’s capital exercise their con-
Trading Act (WpHG) or elsewhere.
trol rights in the same way as other shareholders.
The voting shares, including mutual allocations, of
Appointment and removal of management
the members, companies and foundations of the
The personally liable partner, KWS SE, is responsi-
families Büchting and Arend Oetker listed below
ble for managing the business of KWS SAAT SE &
each exceed 10% and total 54.4%:
Co. KGaA under Section 7.2 of the Articles of Associ-
Dr. Drs. h. c. Andreas J. Büchting, Germany
Christiane Stratmann, Germany
Dorothea Schuppert, Germany
ation of KWS SAAT SE & Co. KGaA.
In accordance with Section 6 (3) of the Articles of
Association of KWS SAAT SE & Co. KGaA, the per-
Michael C.-E. Büchting, Germany
sonally liable partner shall leave the Company if the
2.6 Corporate Governance | Combined Management Report
75
KWS Group | Annual Report 2019/2020 majority of shares in the personally liable partner can
Amendments to the Articles of Association
no longer be held directly and/or indirectly for a time
Amendments to the company’s Articles of Associ-
longer than 30 calendar days by persons who hold a
ation are made pursuant to a resolution adopted by
combined total of more than 15% of the Company’s
the Annual Shareholders’ Meeting in accordance
capital stock directly and/or indirectly through a
with Section 278 (3) in conjunction with Section 179
company that is dependent in accordance with
of the German Stock Corporation Act (AktG) Section
Section 17 (1) of the German Stock Corporation Act
285 (2) Sentence 1 of the German Stock Corporation
(AktG) or is controlled in accordance with Section
Act (AktG) stipulates that amendments to the Articles
290 (2) of the German Commercial Code (HGB). This
of Association require the approval of the personally
shall not apply if all shares in the personally liable
liable partner.
partner are held by the Company.
In accordance with Section 133 and Section 179 (2)
Furthermore, Section 6 (4) of the Articles of Associa-
of the German Stock Corporation Act (AktG) and
tion of KWS SAAT SE & Co. KGaA stipulate that the
Section 18 (1) of the Articles of Association of
personally liable partner shall leave the Company if
KWS SAAT SE & Co. KGaA, a resolution by the
a person who is not a family shareholder (acquiring
Annual Shareholders’ Meeting to amend the Articles
party) obtains control over the personally liable partner
of Association must be adopted by a simple majority
directly or indirectly (acquisition of control) and does
of the votes cast and a simple majority of the capital
not submit to the Company’s limited partners a take-
stock represented in adoption of the resolution.
over or mandatory offer in accordance with this provi-
sion and otherwise in accordance with the provisions
The power to make amendments to the Articles of
in the German Securities Acquisition and Takeover Act
Association that only affect the wording (Section 179 (1)
(WpÜG) within three months of acquisition of control.
Sentence 2 AktG) has been conferred on the Supervi-
sory Board in accordance with Section 22 of the Arti-
Under Section 6.5 of the Articles of Association of
cles of Association of KWS SAAT SE & Co. KGaA.
KWS SAAT SE & Co. KGaA, the personally liable part-
ner shall also leave the Company by means of termi-
Powers of the Executive Board, in particular in
nation. Notice of termination shall be given to all the
relation to issuing or buying back shares
limited partners at the Annual Shareholders’ Meeting.
The Executive Board of the personally liable partner
Outside of the Annual Shareholders’ Meeting, notice
does not currently have any powers within the mean-
of termination shall be given to the Chairperson of the
ing of Section 289a (1) Sentence 1 No. 7 and Section
Supervisory Board or his or her deputy. The notice
315a (1) Sentence 1 No. 7 of the German Commercial
of termination shall be at least six months before the
Code (HGB) in the version currently applicable pur-
end of and effective the end of a fiscal year.
suant to Article 83 (1) of the Introductory Act to the
German Commercial Code (EGHGB), in particular
The other statutory grounds for the personally liable
any authorization to issue or buy back shares.
partner leaving the Company shall remain unaffected.
Significant agreements in the event of a change
The members of the Executive Board of the per-
of control, compensation agreements
sonally liable partner, which is responsible for man-
Significant agreements subject to the condition of
aging the company’s business, are appointed and
a change in control pursuant to a takeover bid have
removed by the Supervisory Board of the personally
not been concluded. The compensation agreements
liable partner, KWS SE. Pursuant to Article 46 (1)
between the company and members of the Executive
of Council Regulation (EC) 2157/2001 in conjunction
Board of the personally liable partner and govern-
with Section 6 of the Articles of Association of
ing the case of a change in control stipulate that
KWS SE, members of the Executive Board are
any such compensation will be limited to the maxi-
appointed for a maximum period of six years. Mem-
mum amounts specified by the German Corporate
bers may be reappointed.
Governance Code (DCGK).
76 Combined Management Report | 2.6 Corporate Governance
Annual Report 2019/2020 | KWS Group Hybrid rye is one of the strategic growth areas in the Cereals Segment. Our research and breeding activities focus on markets
in Eastern Europe and North America.
2.6 Corporate Governance | Combined Management Report
77
KWS Group | Annual Report 2019/2020 2.7 Opportunity and Risk Report
As an international plant breeding company, the
production capacities, research & development
KWS Group operates in a dynamically changing
activities, and expansion of distribution.
environment. That results in risks as well as opportu-
nities, which we have to weigh as the foundation for
We see diverse opportunities for the KWS Group to
our entrepreneurial decisions.
develop the company further in line with our strategy.
To succeed in achieving sustainable, profitable
2.7.1 Opportunity Management
growth in the future as well, our prime goal must be
We understand an opportunity as a development
to retain and increase our innovativeness. The plants’
that might have a positive impact on our earnings,
yield potential can be increased, resource efficiency
financial position and assets and has not yet been
can be enhanced or their resistance to detrimental
reflected fully or at all in the company’s financial
influences, of whatever type, can be improved.
planning. At the KWS Group, opportunity man-
agement is an integral component of the estab-
There are also market opportunities as a result of our
lished controlling system between the subsidiaries/
activities in tropical regions. Our corn activities in
associated companies and company management.
Brazil and China will enable us to tap additional sales
Strategic opportunities of major importance, such as
potential for the KWS Group in the medium to long
joint ventures and acquisitions, are jointly discussed
term, including in other tropical markets, by develop-
by the KWS Group’s Executive Board.
ing varieties tailored to their climatic conditions.
Operational opportunities are identified and
Investing in expansion of our production capacities
exploited in the Business Units of the segments,
and modernization of our seed processing offers
since they have the most extensive knowledge of
opportunities in existing and adjacent markets. Fur-
their markets and products. Targeted measures
ther development of our variety portfolio and expan-
are formulated together with the Executive Board
sion of capacities are accompanied by expansion
so that strengths can be leveraged and strategic
of our international distribution structures to enable
growth potentials tapped. Extensive strategic plan-
tailored information and advice for our customers
ning covering a ten-year time frame is the basis
on the possible uses of our seed and so allow us to
for opportunity management. In keeping with our
leverage further sales potential. In addition, continu-
earnings -oriented growth strategy, we exploit
ous optimization of processes offers the KWS Group
the industry-specific and strategic opportunities
the opportunity to increase productivity, improve
that arise by means of pinpointed investments in
cost structures and drive digitization.
78 Combined Management Report | 2.7 Opportunity and Risk Report
Annual Report 2019/2020 | KWS Group
2.7.2 Risk Management
and outside the Group, that may have a negative
impact on achievement of our corporate objectives
Adjustments to the risk management system
and have not yet been reflected fully or at all in the
As announced in the previous year, we made orga-
company’s financial planning. Deliberate risks can
nizational adjustments to and further developed our
be taken if that offers opportunities to achieve the
risk management system and related processes in
company’s objectives. If there are risks that do not
the year under review. We now report our risks taking
harbor opportunities in return, they must be avoided
into account countermeasures (i.e. in terms of net
or their impact must be mitigated as best possible
risk) and using new risk types and categories.
from the cost-benefit perspective. Our definition
of risks also includes potential negative impacts
The main aspects and players in risk
of our business activities, products and supply
management at KWS
chain on the environment and society so that they
Weighing up opportunities and risks is an integral
can be addressed adequately in our management
part of all decision-making at our company. We
processes. The departments assess opportunities
strive to address risks openly and proactively.
as part of their everyday operations or strategic
We understand the term “risks” as denoting all
planning. These opportunities are not part of our
events and potential developments, both inside
risk management.
Players and systems in managing risks at KWS
Supervisory Board
Executive Board
Risk Committee
Central Risk Management
Business areas
Controls and monitoring
Independent controls
Business Units
Controlling
Internal Audits
Research & Development
(incl. early risk warning)
Global and Group functions incl.
Control system
Transaction Center
Financial Reporting
Compliance Management
Risk Management
Other systems (e.g. Quality
Management, Stewardship, etc.)
KWS Governance (vision, mission, cornerstones, group standards, etc.)
2.7 Opportunity and Risk Report | Combined Management Report
79
KWS Group | Annual Report 2019/2020 The Executive Board is responsible for group-
Our risk management system is based on the
wide risk management. The Supervisory Board or
internationally recognized COSO II model (Commit-
the Audit Committee review the risk management
tee of Sponsoring Organizations of the Treadway
system at least once a year to assess its suitabil-
Commission). Its objective is to implement a consis-
ity and effectiveness. It is assisted in that by the
tent, continuous and group-wide risk management
independent auditor of the financial statements as
process in which all divisions (Business Units, Group
part of the latter’s statutory audit assignment. The
Functions, Global Functions, R&D, and the Managing
Risk Committee consists of representatives from all
Directors of significant subsidiaries) are integrated.
divisions who have a good knowledge of the issue
Our risk management process consists of the phases
of risks. It convenes at least twice a year, discusses
of identification, assessment, control, documen-
and reviews the risks maintained in the risk manage-
tation, monitoring of risks and risk reporting. It is
ment system and measures to control them, and for-
conducted regularly, but at least twice a year. As part
mulates recommendations for the Executive Board,
of risk identification, we record individual risks on an
if necessary. Responsibility for identifying, assessing
electronic platform and assess them qualitatively or
and controlling risks lies with the divisions, while
quantitatively on the basis of group-wide standards,
central risk management coordinates the processes
taking into account countermeasures. As part of that,
and ensures reporting to the Executive Board.
we calculate expected monetary values where pos-
Other roles in our risk management are specified in
sible and classify them as “moderate”, “relevant” and
the chart “Players and systems in managing risks
“significant.” We take into account linkages between
at KWS.”
risks in assessing the likelihood of their occurrence.
The individual risks are classified as below as part of
assessment:
Scheme for assessing individual risks
Likelihood of occurrence
Unlikely
< 10%
Possible
10% – 50%
Likely
50% – 90%
Almost certain
≥ 90%
) Very low
T
B
E
> €0.1 million – €3.0 million
(
t
c
a
p
m
i
l
i
a
c
n
a
n
F
i
Low
€3 million – €7.5 million
Medium
€7.5 million – €15 million
High
≥ €15 million
80 Combined Management Report | 2.7 Opportunity and Risk Report
Annual Report 2019/2020 | KWS Group
Risk classification for single risks
Risk classes
Expected loss value
Moderate
< €1 million
The internal control and risk management system
in relation to the accounting process is the respon-
sibility of Global Finance and comprises structures and
processes that enable proper and effective accounting
Relevant
> €1 million – ≤ €5 million
and financial reporting. That includes the ensuring that
Significant
≥ €5 million and/or
critical health risks
business transactions are included in accounting con-
sistently, promptly and correctly and that all statutory
accounting regulations, standards and internal guidelines
are implemented throughout the Group. A consistent
We decide systematically on what appropriate
system that is subject to the Group’s regulations on
countermeasures to take to manage risks. They may
accounting makes it easier to ensure that the consoli-
be measures to reduce risks, constant monitoring
dated financial statements comply with the rules. The
of them or taking out insurance, for example. The
following are examined regularly: the completeness of
KWS Group’s current risk situation is aggregated by
financial reporting, the Group’s uniform accounting, mea-
central risk management into risk types and cate-
surement and account allocation stipulations, and the
gories and reported first to the Risk Committee. On
authorization and access regulations for IT systems used
that basis, the Risk Committee discusses how to
in accounting. Intra-Group transactions are consolidated
deal with the risks and submits recommendations
appropriately and in full.
to the Executive Board. Central risk management
coordinates the entire risk management process and
The KWS Compliance Management System is used to
supports the departments in their tasks.
control all aspects and areas of compliance work that are
the responsibility of the Group Compliance Office. The
Control and monitoring systems (includes the
system is based on seven criteria in accordance with IDW
report in accordance with Section 315 (4) of the
PS 980: culture, objectives, risks, program, organization,
German Commercial Code (HGB))
communication and monitoring. In order to continuously
We meet the statutory requirements for
develop the system further, we primarily use findings from
early detection of risks with our controlling and risk
compliance risk assessments and auditing projects.
management processes. As part of its audit of the
annual financial statements for fiscal year 2019/2020,
Internal auditing is the responsibility of Global Finance
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft
and is carried out by an external service provider. The
confirmed the working order of our system for early
topics in an audit are defined annually on a risk- oriented
detection of risks in accordance with Section 91 (2) of
and process-independent basis. Their status is
the German Stock Corporation Act (AktG).
reported – likewise annually – to the Audit Committee.
2.7 Opportunity and Risk Report | Combined Management Report
81
KWS Group | Annual Report 2019/2020
Risk types and categories for aggregating risks
Risk type
Risk category
Operational risks
IT
Product quality
Production,
business interruption
Health, safety,
environment
Projects,
corporate organization,
process management
Human resources
Tax risks
Liquidity risks
Currency risks
Receivables risks
Finance and
capital markts
Politics and legal
Compliance
Markets and
competition
IP
General legal risks
Political instability
Regulatory risks
Acreage and
price developments
Competition and
business partners
Current Risk
Classification 1
Tendency
Substantial
Substantial
Substantial
Substantial
Medium
Medium
Noticeable
Medium
Medium
Low
Noticeable
Medium
Low
Low
Low
Medium
Medium
Strategic risks
Innovation
Noticeable
1 The current risk classification is no longer comparable with that of the previous year, see paragraph on the adjustment of the risk management system.
The changes in the trends of the risk categories are mainly determined by the impact of the Covid-19 pandemic.
Risk situation at the KWS Group
Risk classification for aggregated risk categories
In this section, we give a summary of significant
and relevant individual risks – by type and cate-
Risk classes
Total expected loss values
single risks
gory and after mitigation measures – with at least
moderate net financial damage. The sequence of
Low
Medium
≤ €3 million
> €3 million – €8 million
the risk types is based on the aggregated expected
Noticeable
> €8 million – €15 million
monetary values of the identified risks. There are
currently no non-financial risks whose occurrence
Substantial
≥ €15 million and/or
critical health risks
is very likely and entail serious impacts on aspects
that require reporting in accordance with the German
Commercial Code.
The adaptations mean that the risk categories can no
longer be compared directly with those of the previ-
ous year. The changes in the risk situation from the
previous year are addressed in the overall statement
on the risk situation by the Executive Board.
82 Combined Management Report | 2.7 Opportunity and Risk Report
Annual Report 2019/2020 | KWS Group Reconciliation risk categories
Risk categories
2018/2019
Included potential risks
2018/2019 (examples)
Risk types 2019/2020
Risk categories 2019/2020
Market risks
Geo- and agricultural policy,
Politics and law
Regulatory risks
Regulatory risks,
Political instability
Variety performance
Strategic risks
Innovation
Competitive environment
Markets and competition
Markets and competition
Currency risks
Finance and capital market
Currency risks
Production risks
Seed production
Operational risks
Production,
Business interruption
Operational risks
Production,
business interruptions
Product risks
Purity of the flows of goods
Operational risks
Seed quality
Operational risks
business interruptions
Product quality
Product qualityt
Legal risks
Official proceedings,
Politics and law
General legal risks
Access to technology
Markets and competition
Competition and business partners
legal disputes
Breach of compliance
Politics and law
Compliance
requirements
Personnel risks
Qualified and timely filling
Operational risks
Human resources
of vacancies
IT risks
IT system failures/breakdown
Operational risks
Access control
Operational risks
IT
IT
Liquidity risks
Liquidity risks
Finance and capital market Liquidity risks
Environmental and
social risks
Environmental risks
Operational risks
Health, safety, environment
Procurement risks
Procurement risks
Operational risks
Procurement (currently moderate)
The effects of the Covid-19 pandemic are explained
for optimization measures on the basis of their risk
separately in the overall statement on the risk situa-
assessment. Uncontrolled and/or undetected loss
tion by the Executive Board.
and damage as a result of hacking and malware are
Operational risks
IT
still possible even if very good precautionary mea-
sures are in place.
The KWS Group’s business and production pro-
Product quality
cesses, as well as its internal and external commu-
We have established detailed checks and tests to
nications, are run on globally networked IT systems.
determine the performance and quality of our seed.
Attacks or outages can lead to a loss of confidenti-
Quality controls, such as germination and sprouting
ality, availability, integrity and/or authenticity of data,
strength tests, are conducted at all stages of pro-
information and systems. That harbors significant
duction. These checks and tests are also intended
risks, such as loss of know-how, data manipulation,
to reduce risks such as claims for damages due to
loss of personal data and loss of image, which we
product liability, which may be significant, espe-
reduce by means of organizational and technical
cially in Anglo-American jurisdictions. We also have
measures. IT service providers constantly examine
product liability insurance to defend against unjus-
our IT security so as to issue recommendations
tified claims and to settle justified claims. Very strict
2.7 Opportunity and Risk Report | Combined Management Report
83
KWS Group | Annual Report 2019/2020 requirements must be met regarding management
Projects, company organization,
of genetically modified products, in particular, to
process management
prevent GMOs becoming mixed with conventional
So that we can continue to grow profitably and sus-
seed. KWS is a member of the “Excellence Through
tainably with the support of an efficient organization
Stewardship” (ETS) initiative, an internationally stan-
and harmonized processes, we regularly review
dardized quality management program.
their adequacy and realign them where necessary. A
realignment may entail integration risks (M&As), for
Production, interruptions to business operations
example, or temporarily result in process inefficiencies
KWS uses technically complex seed processing
or unplanned costs. Our measures to counter these
plants. Interruptions to business operations may
risks include the establishment of specialized func-
have a negative impact on the volumes that are
tions (such as M&A experts) or a new standard pro-
available for sale and represent significant risks,
cess model for the transformed administrative units.
especially if they occur in our sales season. In
order to reduce these risks, we conduct regular risk
Human Resources
inspections, carry out preventive maintenance, and
Our HR strategy aims to recruit and keep qualified
have Group-wide property and business interruption
employees at KWS long term, as well as to offer
insurance.
them further development opportunities that reflect
our and their needs. That may result in the risk of
Seed multiplication is dependent on the weather.
not being able to fill vacancies promptly or of losing
We reduce the risk of crop failures by multiplying
employees. We counter this risk by continuously
seed – depending on the crop – in separate locations
further developing our HR strategy. Among other
and regions in Europe, North and South America
things, we are committed to growing our brand as an
and Asia. We can carry out contra-seasonal multi-
attractive employer, fostering talents, and expanding
plication in the winter half-year in the southern hemi-
the KWS Group to new locations near where appro-
sphere if there are bottlenecks in the volume of seed
priate resources are available (science clusters such
produced.
as St. Louis and urban centers like Berlin). However,
short-term compensatory measures may be applied
Health, safety and environment
to counter personnel risks.
Accidents, technical problems or misconduct in our
business processes may result in injury to persons
Finance and capital markets
and environmental damage and are significant risks.
Tax risks
One measure we have taken to reduce these risks is to
KWS operates in about 70 countries and is therefore
implement a new global health, safety and environment
subject to an array of complex national tax require-
standard, which a newly created Central Function will
ments and laws. Changes that are not detected in
keep on developing.
time and/or incomplete implementation of tax law,
court rulings and interpretations by the fiscal author-
The health effects of the Covid-19 pandemic are
ities may have an effect on tax assets and liabilities,
explained separately in the overall statement on the risk
as well as on deferred tax liabilities. That can result
situation by the Executive Board.
in significant risks, which we counter by continuously
84 Combined Management Report | 2.7 Opportunity and Risk Report
Annual Report 2019/2020 | KWS Group identifying and assessing the tax framework and by
could suffer losses. We reduce such credit risks
central coordination through our Finance depart-
through conservative receivables management and,
ment. If necessary, tax provisions are formed on the
where possible and expedient, by means of credit
basis of estimates.
insurance.
Liquidity
Politics and the law
The overriding goal of our liquidity management is
Compliance
to ensure we meet our payment obligations on time.
We are exposed to potential compliance risks, for
External factors, such as global crises, may restrict
example under antitrust, competition and anti-
the availability of credit lines and/or mean we can
corruption law and data protection requirements.
only obtain economically disadvantageous terms
Violations of statutory requirements may have con-
and conditions. Our central Treasury department
sequences under criminal and civil law, including
determines what funding we require in its liquidity
fines and other financial disadvantages. Under our
planning and covers those needs by providing cash,
compliance policy, the Code of Business Ethics and
promised credit lines and other financial instruments.
our Group Standards, we obligate our managers
We have agreed customary financial covenants for
and employees to undertake to act in accordance
part of these promised credit lines. If these cove-
with laws, contracts, internal guidelines and our
nants are breached, the lender has the right to termi-
corporate values and raise their awareness in this
nate the agreement.
Currency risks
regard. We rigorously investigate and prosecute
fraudulent activities inside and outside the company.
Our Group Standards define general security stan-
Currency risks arise in particular from receivables
dards and enable a prophylactic approach. Regular
and liabilities denominated in foreign currency.
communication, instruction and training are intended
We address currency risks to a reasonable extent
to ensure compliance. As is expressly pointed out,
through the usual hedging instruments, to reduce
sanctions are imposed if our compliance regulations
the influence on the KWS Group’s earnings and
are violated.
assets situation. In fiscal 2019/2020, we hedged our
research & development expenditure and intra-group
IP
loans to a large part in order to avoid currency risks.
Protecting intellectual property is vital to companies
We also reduce our transaction risks by means of
that conduct research if they wish to preserve their
natural hedging, incurring expenses in the same
freedom of action and keep on generating value. The
currency in which we generate revenue.
seed-specific property rights under “variety protec-
tion” ensure they are compensated for the years-long
Risk of counterparty defaults
process of research, breeding and development of
We have extensive business relationships with var-
new varieties and that third parties cannot market the
ious customer groups – from the sugar industry,
same variety at no costs to themselves. KWS uses
agricultural wholesalers to individual farmers. If,
patents to protect certain plant traits, in particular
in particular, large customers are not able to meet
if they have been developed or produced by means
their contractual payment obligations to us, we
of technical methods. In order to secure its freedom
2.7 Opportunity and Risk Report | Combined Management Report
85
KWS Group | Annual Report 2019/2020 of action and avoid infringing third-party proprietary
internationalization of our research – without reducing
rights, KWS has implemented far-reaching due dili-
our commitment in the EU.
gence processes throughout the company.
General legal risks
Markets and competition
Cultivation areas and price trends
KWS faces risks from official proceedings and legal
Slight declines and shifts in cultivation area are
disputes. Legal disputes are possible with suppliers,
commonplace in agriculture and usually have no
licensors, customers, employees, lenders and inves-
significant net impact on our business success.
tors and may result in payments or other obligations.
Extreme changes in cultivation area – in particular
There were no legal proceedings involving significant
where they affect strategically important crops and
amounts in fiscal 2019/2020.
markets – have the potential to impact our market
Political instability
success significantly. They may be caused by fac-
tors such as a sudden drop in agricultural prices
KWS faces political risks in many countries in the
due to global crises or extreme weather events,
strongly regulated international agricultural industry.
or may be the consequence of high inventories
Geopolitical insecurities in the Middle East and the still
as a result of good harvests. We counter such
strained situation in Eastern Europe may also have a
risks in the medium and long term by diversifying
negative impact on our business activities. Important
our product portfolio and expanding our market
growth countries such as China are confronted with
footprint. Risks from changes in cultivation area are
trade disputes. As things stand at present, the United
impossible or difficult to reduce in the short term,
Kingdom’s withdrawal from the EU will not have any
but usually impact all market players alike. More-
significant impact on our business, even if an agree-
over, weather risks can often be insured against
ment on the details for Brexit is not reached.
only at economically unfavorable terms and condi-
Regulatory risks
tions, if at all.
As part of modern agriculture and as an innovative
Competition and business partners
plant breeding company, KWS also uses state-
Strong competitive pressure, such as that due
of-the-art breeding technologies to develop new,
to aggressive pricing strategies by other market
resource-conserving varieties. There is still a negative
players, may have a negative impact on our business
perception of new breeding technologies among the
success. In particular, good local variety perfor-
general public, despite the high standards in force
mance is the most effective means of protecting
and scientific facts to the contrary. New breeding
against that. Acquisition or licensing of technol-
technologies could speed up variety develop and
ogies – such as genetically modified traits – is
improve its precision. The EU continues to impose
customary in the industry and necessary in markets
tougher regulations on important research technol-
such as North or South America. We strive to reduce
ogies and restrict the use of established operating
the related risks by developing our own innovations,
resources. We conduct an intensive dialog with all
which may also be attractive to competitors, and
stakeholders on this issue and are increasing the
through long-term license agreements.
86 Combined Management Report | 2.7 Opportunity and Risk Report
Annual Report 2019/2020 | KWS Group Strategic risks
Innovation
educational work through the provision of concise
information. Apart from the health risks, KWS’ busi-
We pursue our key strategic objective – profitable
ness could be impacted in particular in the following
growth – by offering tailored, innovative products –
areas: the absence of staff due to infection or quar-
new plant varieties that cope with local cultivation
antine measures, seed multiplication and logistics,
conditions, and deliver high yields, yet help conserve
demand, cultivation area and market prices, credit-
resources. Our complex research and breeding
worthiness of customers and suppliers, capital mar-
processes are subject to risks that may result in
kets and exchange rates. We assess the risks from
local weakness in our portfolio. They include internal
official lockdowns as being low due to the fact that
factors, such as technical problems and process
we operate in the food industry.
delays, and external factors such as climate change,
new diseases or restrictions on the use of operating
The areas of the company that may potentially be
resources. The varieties we develop must meet high
affected are continuously monitored by the respon-
quality requirements. The performance of our variet-
sible functions. All developments are assessed
ies is reassessed every year by management and the
and reported in combined form to the Executive
Supervisory Board so that we can respond immedi-
Board every month. Where possible, existing risks
ately to weaknesses in our portfolio if necessary.
have been minimized by local and global counter-
measures. Infections can still continue spreading
Our strategy processes are oriented toward iden-
dynamically and we have also taken prophylactic
tifying future opportunities in good time and trans-
measures to counter that by drawing up a conserva-
lating them into innovative company processes. We
tive budget for fiscal 2020/2021.
conduct strategic planning regularly and across the
whole group. Future trends harbor opportunities and
Apart from these risks, the risk situation has not
risks for KWS and we gear our activities to them.
changed significantly from the previous year.
We take new findings into account by adapting our
administration or opening new lines of business,
In view of the available assessments and counter-
for example.
measures we have initiated, risks that jeopardize the
company’s existence are not discernible at present.
Overall statement on the risk situation by the
Moreover, we see at present no indications that inter-
Executive Board
dependencies might result in risks that could jeop-
The risk situation for the KWS Group increased in
ardize the company’s existence. We feel sure that,
fiscal 2019/2020 as a result of the global Covid-19
thanks to our global footprint, innovative strength
pandemic. We saw a sharp increase in the risks
and the quality of our products, we can seize oppor-
to the health of our employees and have tackled
tunities and successfully counter risks as they arise.
these risks with an array of measures since January
However, we cannot rule out the possibility that other
2020. They include implementation of a worldwide
factors that are currently unknown or which are not
pandemic organization with diverse precautionary
assessed as significant may jeopardize the continued
measures and global standards, as well as regular
existence of the KWS Group in the future.
2.7 Opportunity and Risk Report | Combined Management Report
87
KWS Group | Annual Report 2019/2020 Catch crops, such as phacelia, are gaining in importance as part of sustainable farming. They improve soil quality, help
suppress weeds and offer insects and soildwelling organisms a rich source of nutrients.
2.8 Forecast Report
The expectations of management outlined here are
2.8.1 Changes in the KWS Group’s Composition
based on our corporate planning and the information
that are Significant for the Forecast
it takes into account, including market expecta-
There have not been any significant changes in the
tions, strategic decisions, regulatory measures or
KWS Group’s composition that are of significance
exchange rate trends. They are subject to the same
for the forecast for its business performance in fiscal
premises as the consolidated financial statements
2020/2021.
and forecast our business performance up to the end
of fiscal 2020/2021 on June 30, 2021. In our forecast
2.8.2 Forecast for the KWS Group’s Statement of
for the KWS Group’s statement of comprehensive
Comprehensive Income
income in accordance with IFRS, we deal with the
The KWS Group’s economic performance will be
KWS Group’s anticipated net sales, EBIT and R&D
impacted by the effects of the global coronavirus pan-
intensity. Our forecast for the segments contains
demic in fiscal 2020/2021. High inventories worldwide
comments on our net sales and EBIT expectations,
and low prices for agricultural raw materials are also
including the contributions made by our equity-
weighing on the economic prospects for the farming
accounted companies, which are included pro-
sector. We also face considerable currency fluctua-
portionately in the segment reports in line with our
tions in important markets. Assuming that cultivation
internal corporate controlling structure.
area remains stable or declines slightly, we therefore
expect subdued growth in fiscal 2020/2021.
88 Combined Management Report | 2.8 Forecast Report
Annual Report 2019/2020 | KWS Group
We nevertheless anticipate that the KWS Group will
We assume that net sales in the Cereals Segment
generate net sales at the level of the previous year
will be at the same level as the previous year
(€1,282.6 million). Assuming that net sales are stable,
(€191.2 million). While our hybrid rye business should
we forecast that the EBIT margin will range between
continue to expand, we anticipate net sales on a
11% and 13% (after adjustment for the effects as
par with the previous year for rapeseed, wheat and
part of the purchase price allocation for the acqui-
barley seed. The segment’s earnings will benefit from
sition of Pop Vriend Seeds). Our R&D intensity is
an increase in sales of rye seed; at the same time, we
expected to be between 17% and 19%. Due to the
are planning to expand our research & development
strongly seasonal nature of our business as a result
and distribution activities further. The segment’s
of the great importance of the spring sowing season,
EBIT margin will therefore probably be slightly down
external factors that are difficult to anticipate, such
from the previous year (13.8%).
as the weather and fluctuations in cultivation area,
and the prevailing uncertainties, we are as usual
The Vegetables Segment essentially comprises
providing ranges in our forecasts here, since more
the net sales and earnings contributed by the veg-
detailed statements on our net sales and earnings
etable seed business acquired from Pop Vriend
performance cannot yet be made with sufficient
Seeds. Due to the impact we expect from the
reliability.
Covid-19 pandemic, we assume that the segment’s
net sales will be slightly lower than in the previous
2.8.3 Forecast for the Segments
year (€83.5 million). There are also costs for estab-
In fiscal 2020/2021, we anticipate that the Corn
lishing an international breeding program in the seg-
Segment with grow its net sales slightly over the
ment. Consequently, the number of employees will
previous year (€775.7 million), in particular on the
probably increase further. After adjustment for the
back of rising sales volumes in South America and
effects as part of the purchase price allocation for
Southeastern Europe. We assume that competition
the acquisition of Pop Vriend Seeds, we expect the
will remain intense and cultivation area will decline
EBIT margin to be in the range of 20% to 25%.
slightly in North America. As far as can be seen at
present, the EBIT margin is expected to be slightly
Revenue (albeit slight) from our farms in Germany,
up over the previous year (8.6%).
France and Poland is grouped in the Corporate
Segment. Since all cross-segment costs for the KWS
In the Sugarbeet Segment, we assume that culti-
Group’s central functions and basic research expen-
vation area will remain stable or decline slightly, but
diture are still charged to the Corporate Segment, its
that we will grow sales of our CONVISO® SMART
income is usually negative. Given the usual cost infla-
seed further. The segment’s net sales will probably
tion and planned efficiencies from the reorganization
be on a par with the previous year (€491.8 million), as
project ONEGLOBE, we expect the segment’s EBIT to
will the EBIT margin (34.6%).
improve over the previous year (€–104.6 million).
Forecast for the 2020/2021 fiscal year
Net sales
EBIT margin 1
R&D intensity
Statement of
comprehensive income
of the KWS Group
At the level of the
previous year
1 Adjusted for the effects as part of the purchase price allocation for the acquisition of Pop Vriend Seedss
11–13%
17–19%
2.8 Forecast Report | Combined Management Report
89
KWS Group | Annual Report 2019/2020 2.9 Report on KWS SAAT SE & Co. KGaA and NonFinancial Declara
tion (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 declara-
References to KWS SAAT SE & Co. KGaA in the
tion in accordance with Section 161 AktG (German
KWS Group’s Annual Report
Stock Corporation Act), has been published in the
The Management Reports of KWS SAAT SE &
Internet at www.kws.com/ir. The following disclo-
Co. KGaA and the KWS Group are combined. The
sures are identical to those of the KWS Group and
declaration on corporate governance in accordance
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 (4) 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
Page(s)
64 to 77
22 to 52
149 (Notes)
32 to 34
KWS SAAT SE & Co. KGaA has been the parent
to extra expenditure as part of our reorganization
company of the KWS Group since July 2, 2019. It is
project ONEGLOBE, higher expenses for central
responsible for strategic management and, among
R&D activities, and higher IT expenses. The bal-
other things, multiplies and distributes sugarbeet and
ance of other operating income and other operating
corn seed. It finances basic research and breeding
expenses fell sharply to €4.4 (13.2) million, among
of the main range of varieties at the KWS Group and
other things due to positive non-recurring effects
provides its subsidiaries with new varieties every year
in the previous year (sale of shares in KWS Potato
for the purpose of multiplication and distribution.
B.V. and income from reversal of allowances on
Earnings
receivables). Overall, KWS SAAT SE & Co. KGaA’s
operating income was €–42.1 (–33.1) million. Net
Net sales at KWS SAAT SE & Co. KGaA in fiscal
financial income/expenses is made up of the net
2019/2020 increased to €571.2 (529.2) million.
income from equity investments and the interest
Research and development expenditure, which is
result. Net income from equity investments declined
pooled at KWS SAAT SE & Co. KGaA, was increased
to €30.8 (65.6) million due to higher dividend payouts
as planned to €194.4 (180.9) million. Selling expenses
by subsidiaries in the previous year. The interest
rose to €75.1 (72.9) million. Most of the adminis-
result was €–8.5 million, down from the previous year
trative expenses at the KWS Group are incurred at
(€–6.1 million). Taking into account tax expenditures,
KWS SAAT SE & Co. KGaA. General and adminis-
the net loss for the year was €–27.9 million (previous
trative expenses in the year under review totaled
year: net income of €21.9 million).
€121.0 (91.3) million. That was mainly attributable
90 Combined Management Report | 2.9 Report on KWS SAAT SE & Co. KGaA and NFD
Annual Report 2019/2020 | KWS Group With highperformance seed, sound, indepth advice and supplementary services, we help farmers reap a good harvest.
2.9 Report on KWS SAAT SE & Co. KGaA and NFD | Combined Management Report
91
KWS Group | Annual Report 2019/2020 Financial position and assets
Forecast Report
KWS SAAT SE & Co. KGaA’s total assets in fiscal
KWS SAAT SE & Co. KGaA generates the main
2019/2020 increased to €1,554.5 (1,450.4) million.
part of its net sales from sugarbeet and corn seed
Fixed assets at the balance sheet date were
business. The further development of sugarbeet
€1,014.8 (557.9) million or 65.3% of total assets. The
seed business depends, among other things,
increase is mainly due to capital increases at affili-
on the performance of our varieties, cultivation
ated companies to increase their financial strength,
areas in our key markets and developments in our
new buildings and plants for sugarbeet seed pro-
growth markets in Eastern Europe. In addition,
duction, and research activities in Einbeck. Inven-
KWS SAAT SE & Co. KGaA’s economic performance
tories rose to €66.3 (59.3) million. Receivables and
in fiscal 2020/2021 will probably be affected by the
other assets were €462.4 (752.9) million. The high
global coronavirus pandemic. We currently expect
level of other current financial assets in the previ-
its net sales to be at the level of the previous year.
ous year was mainly due to deposit of the purchase
KWS SAAT SE & Co. KGaA’s operating income is
price for the acquisition of all the shares in the Pop
mainly impacted by the costs of central functions
Vriend Seeds Group in a trust account. Liabilities
of the KWS Group and cross-segment research
at the balance sheet date rose to €1,121.2 (1,011.9)
and development activities. We anticipate that
million, in particular due to an increase in liabilities
KWS SAAT SE & Co. KGaA’s EBIT will be on a par
to affiliated companies. KWS SAAT SE & Co. KGaA’s
with that of the previous year.
equity decreased to €233.0 (283.1) million due to
the net loss for the year, giving an equity ratio of
2.9.2 Combined Non-Financial Declaration for
15.0% (19.5%).
Employees
the KWS Group
In accordance with Sections 289b et seq. and Sec-
tions 315b et seq. of the German Commercial Code
An average of 1,641 (1,586) people were employed at
(HGB), KWS is obliged to prepare a Non-Financial
KWS SAAT SE & Co. KGaA in the year under review,
Declaration for the parent company KWS SAAT SE
of whom 97 (98) were trainees and interns.
& Co. KGaA and the Group disclosing details of
Risks and opportunities
The opportunities and risks at
the business model and related material corporate
social responsibility (CSR) aspects (environmental
issues, social issues, employee issues, human rights,
KWS SAAT SE & Co. KGaA are essentially the same
and prevention of corruption and bribery), where
as at the KWS Group. It shares the risks of its sub-
these are necessary for an understanding of the
sidiaries and associated companies in accordance
course of business, business results, the situation of
with its respective stake in them. You can find a
KWS SAAT SE & Co. KGaA and the KWS Group, and
detailed description of the opportunities and risks
the effects on said aspects. The disclosures in the
and an explanation of the internal control and risk
Combined Non-Financial Declaration relate to both
management system (Section 289 (4) of the German
KWS SAAT SE & Co. KGaA and the KWS Group,
Commercial Code (HGB)) on pages 78 to 87.
unless otherwise specified.
92 Combined Management Report | 2.9 Report on KWS SAAT SE & Co. KGaA and NFD
Annual Report 2019/2020 | KWS Group In order to identify issues that need to be reported
The table below gives an overview of the CSR report
in the Non-Financial Declaration, the relevant issues
aspects stipulated by law in accordance with Sec-
based on a GRI materiality analysis in fiscal year
tion 289c of the German Commercial Code (HGB)
2018/2019 were systematically reassessed to deter-
and other associated issues that require reporting,
mine their impact on the environment and society
as well as references to the sections in which the
and on the position of the KWS Group. On the basis
required disclosures on concepts, results, risks and
of this analysis, the individual issues of product
key performance indicators are made. We did not
innovations, plant and process safety, recruitment
identify any issue that required reporting for the
and qualification, and business ethics and compli-
aspect of social issues. We also did not identify any
ance were identified as material within the meaning
risks that exceeded the statutory materiality thresh-
of the statutory regulations. Since no adaptations
old defined in Section 289c (3) of the German Com-
were identified as being necessary after a review of
mercial Code (HGB). In addition, the KWS Group has
the materiality analysis in fiscal 2019/2020, the four
not defined any non-financial performance indicators
issues remained unchanged from the previous year.
relating to controlling at present.
Material effects of the Covid-19 pandemic on the
non-financial issues are reported in the respective
As part of preparation of the non-financial declaration,
sections, where necessary. Given that we aim to
we were guided by the GRI standards in conducting
conduct the GRI materiality analysis every two years,
the materiality analysis. We did not use any other
the next one is scheduled for fiscal 2020/21.
framework apart from that.
Index for the Non-Financial Declaration
Required
HGB disclosures
Business model
–
Environmental issues
Product innovations
Material issues for KWS
Reference to sections
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 2019/2020, this issue was regarded as
not being material, so no disclosures have to be made on it.
Einbeck, September 23, 2020
KWS SE
Dr. Hagen Duenbostel | Dr. Léon Broers | Dr. Felix Büchting | Dr. Peter Hofmann | Eva Kienle
2.9 Report on KWS SAAT SE & Co. KGaA and NFD | Combined Management Report
93
KWS Group | Annual Report 2019/2020
Our work only yields
rewards if our seed
delivers yields.
Thanks to our proximity to farmers and their regional needs,
our seed grows everywhere – whether in Chile, Italy or Russia.
3. Annual Financial Statements for
the KWS Group 2019/2020
98 Statement of Comprehensive Income
99 Balance Sheet
100 Statement of Changes in Equity
102 Cash Flow Statement
104 Notes for the KWS Group 2019/2020
104
104
106
114
116
120
126
148
149
1. General Disclosures
2. Standards and Interpretations Applied for the First Time
3. Accounting Policies
4. Consolidated Group and Changes in the Consolidated Group
5. Segment Reporting for the KWS Group
6. Notes to the Income Statement
7. Notes to the Balance Sheet
8. Notes to the Cash Flow Statement
9. Other Notes
156
Independent Auditor’s Report
162
Independent Auditor’s Limited Assurance Report
163 Declaration by Legal Representatives
164 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
Changes in reserve for currency translation differences on foreign
operations
Changes on reserve for currency translation differences on at 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 €)
Note no.
2019/2020
2018/2019
6.1
6.1
6.1
6.1
6.1
6.2
6.3
6.4
6.5
6.8
7.10
7.10
7.10
7.10
7.10
6.8
1,282,552
1,113,339
549,899
732,653
248,821
236,102
129,451
81,250
62,163
137,366
5,482
24,097
10,773
–7,842
129,524
34,305
95,220
–39,596
1,469
–38,127
1,313
–5,148
–3,835
–41,962
53,258
95,331
–111
95,220
53,333
–75
53,258
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
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
2.89
3.15
98 Annual Financial Statements | Statement of Comprehensive Income
Annual Report 2019/2020 | KWS Group Balance Sheet
Assets
in € thousand
Goodwill
Intangible assets
Right-of-use assets
Property, plant and equipment
Equity-accounted financial assets
Financial assets
Noncurrent tax assets
Other non-current receivables
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
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.
06/30/2020
06/30/2019
7.1
7.1
7.16
7.2
7.3
7.5
7.17
6.5
7.6
7.6
7.7
7.8
7.9
7.7
7.7
7.7
7.7
4
7.10
7.10
7.10
7.11
7.10
7.12
7.12
7.15
6.5
7.12
7.12
7.12
7.13
7.13
7.15
7.13
7.13
7.13
4
117,290
368,361
46,349
494,179
161,960
6,230
674
8,072
70,590
1,273,705
214,053
15,869
432,569
28,266
91,472
83,409
63,391
2,553
29,741
26,190
65,885
0
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
961,321
1,346,824
441
7,602
2,235,467
2,114,953
99,000
5,530
889,830
139
994,498
140,074
521,744
264
92,265
40,103
1,014
795,465
52,467
93,663
109,747
41,840
28,536
19,191
100,059
445,504
0
1,240,969
2,235,467
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
Balance Sheet | Annual Financial Statements
99
KWS Group | Annual Report 2019/2020 Statement of Changes in Equity
July 1 to June 30
in € thousand
Parent company
Parent company
Minority interest
Group
equity
Subscribed
capital
Capital
reserve
Accumulated
Group equity
from
earnings
Comprehensive other
Group income
Comprehensive other
Group income
Total
Minority
interest
Comprehensive other
Group income
Total
Reserve for
currency
translation
differences
on foreign
operations
Reserve for
currency
translation
differences on at
equity accounted
financial assets
Net gain/
(loss) on
Revalua-
equity
tion of net
instru ments
liabilities/
designated
at fair value
through other
comprehen-
sive income
assets
from
defined
benefit
plans
Other
trans-
actions
19,800
5,530
950,002
–56,270
2,994
0
–44,783
1,456
878,970
3,763
–93
2,813
881,783
0
0
0
0
19,800
5,530
79,200
0
99,000
0
0
5,530
–4,755
6,590
951,837
–21,120
104,134
104,134
0
–79,200
0
955,651
–22,110
95,331
0
0
0
0
–56,270
2,994
241
–44,783
1,456
880,805
3,763
–93
–857
2,813
883,618
0
0
1,589
1,589
0
0
0
0
0
2,753
2,753
0
0
0
–54,681
5,747
873
–52,731
1,456
960,845
3,649
–90
–857
2,702
963,547
–39,596
95,331
–39,596
0
0
2,256
0
0
0
1,469
1,469
0
0
0
99,000
5,530
1,031,127
–94,277
7,216
2,186
–57,879
1,456
994,360
1,050
–54
0
–857
139
994,498
Adjust-
ments
Revalua-
tion
from
of defined
currency
translation
benefit
plans
Other
transac-
tions
–857
632
–7,948
632
–7,948
101,160
–114
241
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
–4,755
6,590
–21,120
104,134
–2,974
0
0
0
0
0
2,256
–114
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3
3
0
0
0
36
36
0
–22,110
95,331
–41,962
–111
1,313
–5,148
1,313
–5,148
53,369
–111
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
–4,755
6,590
–21,120
–114
104,020
–2,971
–111
101,049
–22,110
–111
95,220
36
–41,926
–75
53,293
0
0
0
0
2,256
0
0
0
3
0
0
0
0
0
0
–2,488
–2,488
–2,488
06/30/2018
Adjustment due to
introduction of IFRS 9
(after tax)
Adjustment due to IAS 29
(hyperinflation)
07/01/2018 adjusted
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
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
06/30/2020
100 Annual Financial Statements | Statement of Changes in Equity
Annual Report 2019/2020 | KWS Group Statement of Changes in Equity
July 1 to June 30
in € thousand
Subscribed
capital
Capital
reserve
Comprehensive other
Group income
Comprehensive other
Group income
Total
Minority
interest
Comprehensive other
Group income
Total
Accumulated
Group equity
from
earnings
Parent company
Parent company
Minority interest
Group
equity
Reserve for
currency
translation
Reserve for
currency
translation
differences
differences on at
on foreign
equity accounted
operations
financial assets
Net gain/
(loss) on
equity
instru ments
designated
at fair value
through other
comprehen-
sive income
Revalua-
tion of net
liabilities/
assets
from
defined
benefit
plans
Other
trans-
actions
Adjust-
ments
from
currency
translation
Revalua-
tion
of defined
benefit
plans
Other
transac-
tions
19,800
5,530
950,002
–56,270
2,994
0
–44,783
1,456
878,970
3,763
–93
06/30/2018
Adjustment due to
introduction of IFRS 9
(after tax)
Adjustment due to IAS 29
(hyperinflation)
07/01/2018 adjusted
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
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
06/30/2020
79,200
0
99,000
0
0
5,530
–4,755
6,590
951,837
–21,120
104,134
104,134
–79,200
955,651
–22,110
95,331
0
0
0
0
2,256
1,589
1,589
2,753
2,753
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
241
0
0
0
0
0
–4,755
6,590
19,800
5,530
–56,270
2,994
241
–44,783
1,456
880,805
0
0
0
0
632
–7,948
632
–7,948
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3,763
0
–114
0
0
0
3,649
0
–111
–2,974
0
101,160
–114
–21,120
104,134
0
0
0
–22,110
95,331
–41,962
0
0
–93
0
0
3
3
0
0
0
–90
36
36
0
–54,681
5,747
873
–52,731
1,456
960,845
–39,596
95,331
–39,596
1,469
1,469
1,313
–5,148
1,313
–5,148
0
0
0
0
0
0
0
0
0
0
0
53,369
–111
0
0
2,256
–2,488
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
–857
2,813
881,783
0
0
0
0
–4,755
6,590
–857
2,813
883,618
0
0
0
0
0
0
0
0
–21,120
–114
104,020
3
–2,971
–111
101,049
0
0
0
0
0
0
–857
2,702
963,547
0
0
0
0
–22,110
–111
95,220
36
–41,926
–75
53,293
–2,488
–2,488
0
0
0
2,256
99,000
5,530
1,031,127
–94,277
7,216
2,186
–57,879
1,456
994,360
1,050
–54
0
–857
139
994,498
Statement of Changes in Equity | Annual Financial Statements
101
KWS Group | Annual Report 2019/2020 Cash Flow Statement
July 1 to June 30
in € thousand
Net income for the year
Depreciation/amortization and impairment on fixed assets
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 (+)
Interest expense (+)/Interest income (–)
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 disposal of fixed assets
Payments (–) for capital expenditures for fixed assets
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
Cash outflows (–) for the acquisition of additional interests in subsidiaries
Interest received (+)
Net cash from investing activities
Note no.
2019/2020
2018/2019 1
95,220
88,429
–3,596
–16,949
750
–563
34,305
–33,526
17,093
104,020
48,723
17,480
–43,232
21,253
200
54,127
–63,074
12,785
–77,879
–145,506
27,464
5,408
136,157
1,852
–99,001
12
–14,939
152
–492
3,075
–395,254
4,733
–499,863
70,293
8,566
85,634
2,733
–86,728
166
–9,735
168
–711
0
–1,128
3,964
–91,270
102 Annual Financial Statements | Cash Flow Statement
Annual Report 2019/2020 | KWS Group July 1 to June 30
in € thousand
Dividend payments (–) to owners and minority shareholders
Payment (–) of principal portion of lease liabilities
Payment (–) of interest portion of lease liabilities
Interest paid (–) incl. transaction costs on issuance of promissory notes
and borrowings
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
Plus/Minus cash deposited in a trust account for the acquisition of
Pop Vriend Seeds Group
Cash and cash equivalents at end of year
(incl. short-term securities)
Thereof restricted cash and cash equivalents at end of year
Note no.
2019/2020
2018/2019 1
–22,110
–14,376
–1,184
–16,619
0
–36,500
8,304
–82,484
–446,190
–21,120
–
–
–15,686
405,763
–27,000
45,796
387,753
382,117
–8,501
109
159,757
–294,935
0
192,582
574,808
–379
414,672
–414,672
8
119,737
159,757
91
125
1 Previous year information changed (allocation of interest paid to cash flow from financing activities; allocation of interest received to cash flow from investing activities).
Cash Flow Statement | Annual Financial Statements
103
KWS Group | Annual Report 2019/2020 Notes for the KWS Group 2019/2020
1. General Disclosures
2. Standards and Interpretations
Applied for the First Time
The consolidated financial statements of KWS SAAT SE &
Co. KGaA (until July 2, 2019: KWS SAAT SE) and its
The following standards and interpretations have been ad-
subsidiaries were prepared under the assumption that the
opted and applied for the first time in fiscal year 2019/2020:
operations of the companies will be continued and applying
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).
Financial reporting standards and interpretations
KWS SAAT SE & Co. KGaA, the ultimate parent company
of the KWS Group, is an international company based 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
IFRS 16 – Leases
Amendments to IFRS 9 – Financial Instruments:
Prepayment Features with Negative Compensation
Amendments to IAS 19 – Employee Benefits: Plan
Amendment, Curtailment or Settlement
Amendments to IAS 28 – Investments in Associates and
joint Ventures: Long-term Interests in Associates and
Joint Ventures
IFRIC 23 – Uncertainty over Income Tax Treatments
Annual Improvements to the International Financial
Reporting Standards (2015–2017 cycle)
that are adapted to regional needs, such as climatic and
The nature and effects of first-time application of the new
soil conditions.
standard IFRS 16 “Leases” are presented in this note. The
other standards and interpretations to be applied for the first
Change in KWS SAAT SE’s legal form to that of
time did not result in any significant impact on the consoli-
a partnership limited by shares
dated financial statements.
The Annual Shareholders’ Meeting of KWS SAAT SE
on December 14, 2018, adopted a resolution to convert
IFRS 16 “Leases”
KWS SAAT SE into a partnership limited by shares (KGaA)
The KWS Group applied the regulations of the newly
bearing the name KWS SAAT SE & Co. KGaA. The change
published IASB standard IFRS 16 “Leases” for the first time
in legal form became effective on July 2, 2019, when it was
effective July 1, 2019. It superseded IAS 17 “Leases” and
registered in the commercial register of Göttingen Local Court.
the related interpretations.
This did not result in liquidation of the company or formation of
a new legal entity. The company’s legal and economic identity
The KWS Group has applied IFRS 16 using the modified
was retained.
retrospective method, under which effects from adoption
of the standard are recognized cumulatively in the revenue
The Executive Board of KWS SE, the personally liable partner
reserves at July 1, 2019. The comparative information for
of KWS SAAT SE & Co. KGaA, prepared the consolidated
2018/2019 has therefore not been adjusted.
financial statements on September 23, 2020, and released
them for distribution to the Supervisory Board. The Supervisory
Under the new regulation, lessees no longer have to distin-
Board has the task of examining the consolidated financial
guish between finance and operating leases. Consequently,
statements and declaring whether it approves them.
the lessee must recognize leases as right-of-use assets and
104 Annual Financial Statements | Notes for the KWS Group | 1. General Disclosures
Annual Report 2019/2020 | KWS Group
lease liabilities in the balance sheet. In subsequent periods,
The KWS Group’s leases primarily relate to lease agree-
the right-of-use asset is depreciated over the lease’s term.
ments for office space, land and vehicles.
This depreciation is recognized in the respective function
costs. Interest expense is accrued on the lease liability in
The material impacts from adoption of IFRS 16 at
the course of the lease and the liability is reduced by the
July 1, 2019, are presented in the table below:
lease payments that have been made. The effect from the
accrued interest is recognized in the interest expense under
net financial income/expenses.
Adjustments from adoption of IFRS 16
in € thousands
07/01/2019
There will be no significant changes for lessors as a result
of IFRS 16, with the exception of subleases, which must
be classified in the future as a finance or operating lease in
relation to the main lease agreement.
The standard was applied for the first time at the KWS Group
retrospectively without any adjustment to the comparative
Net operating lease commitments on
06/30/2019 (discounted)
Gross operating lease commitments on
06/30/2019 (undiscounted)
Application of practical expedient for
short-term leases
Application of practical expedient for
leases of low-value assets
information. In application of the practical expedient per-
Others
mitted under IFRS 16, the KWS Group has not reviewed
Gross lease liability as of 07/01/2019
the agreements recognized in accordance with IAS 17 to
Discounting
determine whether a lease exists. The lease payments for
Lease liability as of 07/01/2019
short-term leases and leases of low value assets are still
recognized as operating expenses in accordance with the
30,889
33,541
–1,767
–124
1,009
32,660
2,368
30,293
available exemption. In addition, leases whose terms end
At the date of signing, KWS Group considers all other
within twelve months of the time of adoption of the standard
amendments to the financial reporting standards and inter-
were treated as short-term leases.
pretations, applied as of 1 July 2019, will not have a signifi-
cant impact on the consolidated financial statements of the
At the time of adoption of the standard, the KWS Group
KWS Group. In addition, early application of the “Amend-
recognized the lease liabilities at the present value of
ments to IFRS 16 – Covid-19-Related Rent Concessions”
the outstanding lease payments using the applicable
would not have an impact on the consolidated financial
incremental borrowing rate. The weighted average rate of
statements of the KWS Group.
interest at July 1, 2019, was 2.9%. The lease liabilities are
carried under the item “Other financial liabilities” depending
Standards and interpretations to be applied in future
on when they are due. The right-of-use assets were recog-
The IASB has issued the following standards and amend-
nized to the amount of the corresponding lease liabilities,
ments to standards whose application was not yet man-
adjusted for any prepaid or accrued lease payments if appli-
datory for the 2020 fiscal year and for some of which the
cable. The right-of-use assets were reported in the balance
European Union had not yet completed the endorsement
sheet under a separate item. Initial direct costs were not
process. The following standards have not yet been applied
included in measuring the right-of-use asset at the time of
by KWS Group:
adoption of the standard.
2. Standards and Interpretations Applied for the First Time | Notes for the KWS Group | Annual Financial Statements
105
KWS Group | Annual Report 2019/2020 Standards and Interpretations to be applied in future
Financial reporting standards and interpretations
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 9, IAS 39, IFRS 7 – Amendments to IFSR 9, IAS 39 and IFRS 7
Amendments to IFRS 16 Leases “Covid-19-Related Rent Concessions”
Amendments to IFRS 4 “Insurance Contracts”
Amendments to IAS 1 “Presentation of Financial Statements: Classification of Liabilities
as Current or Non-current”
Annual Improvements to IFRSs 2018-2020 Cycle
Amendments to IFRS 3 “Business Combinations”
Amendments to IAS 16 “Property, Plant and Equipment”
Mandatory first-time
application
Fiscal year 2020/2021
Fiscal year 2020/2021
Fiscal year 2020/2021
Fiscal year 2020/2021
Fiscal year 2021/2022
Fiscal year 2022/2023
Fiscal year 2022/2023
Fiscal year 2022/2023
Fiscal year 2022/2023
Amendments to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”
Fiscal year 2022/2023
IFRS 17 “Insurance Contracts” and amendments to IFRS 17 “Insurance Contracts”
Fiscal year 2023/2024
3. Accounting Policies
KWS SAAT SE & Co. KGaA has the ability to use its power
to affect the amount of the variable returns. Control can
3.1 Consistency of accounting policies
usually be derived from holding a majority of the voting
Consistent accounting policies are applied in the annu-
rights directly or indirectly. Details on the changes in the
al financial statements of the companies included in the
consolidated group are provided in section 4. Consolidated
consolidated financial statements. There were no changes
Group and Changes in the Consolidated Group.
to accounting policies from the previous financial year, with
the exception of the IFRS 16 standard, which was applied
3.3 Consolidation methods
for the first time.
The single-entity financial statements of the individual
subsidiaries included in the consolidated financial state-
All estimates and assessments as part of accounting and
ments and the single-entity financial statements of the
measurement are continually reviewed; they are based
joint ventures and associated companies included using
on historical patterns and expectations about the future
the equity method and of the proportionately consolidated
regarded as reasonable in the particular circumstances.
joint operations were uniformly prepared on the basis
of the accounting and measurement policies applied at
3.2 Companies consolidated in the KWS Group
KWS SAAT SE & Co. KGaA. For business combinations,
The consolidated financial statements of the KWS Group
capital consolidation is performed according to the acqui-
include the single-entity financial statements of
sition method by allocating the cost of acquisition to the
KWS SAAT SE & Co. KGaA and its subsidiaries in Germany
Group’s interest in the subsidiary’s remeasured equity at the
and other countries, as well as joint ventures and
time of acquisition. Any excess of interest in equity over cost
associated companies, which are carried using the equity
is recognized as an asset, up to the amount by which fair
method, and joint operations. A company is a subsidiary
value exceeds the carrying amount. Any goodwill remaining
if KWS SAAT SE & Co. KGaA currently has existing rights
after first-time consolidation is recognized under intangible
that give it the ability to control its relevant activities.
assets. Costs incurred as part of the business combination
Relevant activities are the activities that significantly affect
are recognized as an expense and carried as administrative
the company’s returns. Control therefore only exists if
expenses.
106 Annual Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2019/2020 | KWS Group According to IAS 36, goodwill is not amortized, but tested
As part of the elimination of intra-Group balances,
for impairment at least once a year at the end of the year
borrowings, receivables, liabilities, and provisions are
(impairment-only approach). Investments in affiliated
netted between the consolidated companies. Intercompany
companies which are not consolidated are carried at cost.
profits not realized at Group level are eliminated from
intra-Group transactions. Sales, income, and expenses are
Joint ventures are consolidated using the equity method
netted between consolidated companies, and intra-Group
in application of IFRS 11 and IAS 28. The basis for a joint
distributions of profit are eliminated.
venture is a contractual agreement with a third party to
control and manage a venture collectively. In the case of
Deferred taxes on consolidation transactions recognized
joint ventures, the parties who exercise joint management
in income are calculated at the tax rate applicable to the
have rights to the net assets of the agreement.
company concerned. These deferred taxes are aggregated
with the deferred taxes recognized in the separate financial
In the case of joint ventures carried in accordance with the
statements.
equity method, the carrying amount is increased or reduced
annually by the equity capital changes corresponding to the
Non-controlling interests are recognized in the amount
KWS Group’s share. In the case of first-time consolidation
of the imputed percentage of equity in the consolidated
of equity investments using the equity method, differences
companies.
from first-time consolidation are treated in accordance
with the principles of full consolidation. The changes in the
3.4 Currency translation
proportionate equity that are recognized in profit or loss
Under IAS 21, the financial statements of the consolidated
are included, along with impairment of goodwill, under the
foreign group companies that conduct their business as
item “Income from equity-accounted financial assets” in
financially, economically, and organizationally independent
the net financial income/expenses. Associated companies
entities are translated into euros using the functional
in which a stake between 20% and 50% is held are likewise
currency method and rounded in accordance with standard
measured using the equity method.
commercial practice as follows:
The basis for a joint operation is likewise a contractual
Income statement items at the average exchange rate for
agreement with a third party to manage the company’s
the year;
activities jointly. In this case, the parties have rights to the
Balance sheet items at the exchange rate on the balance
assets that can be ascribed to the agreement and obliga-
sheet date.
tions in respect of the liabilities. The assets and liabilities
and revenue and expenses are included in the consolidated
The following exchange rates were applied in the consoli-
financial statements proportionately in accordance with the
dated financial statements for the main foreign currencies
KWS Group’s stake (50%).
relative to the euro:
Exchange rates for main currencies
1 EUR/
ARS ¹
BRL
GBP
RUB
UAH
USD
Argentina
Brazil
UK
Russia
Ukraine
USA
Rate on balance
sheet date
Average rate
06/30/2020
06/30/2019
2019/2020
2018/2019
78.85460
48.60240
78.85460
48.60240
6.05730
0.91360
4.34750
0.89720
5.01039
0.87829
4.41256
0.88235
78.68120
71.81790
74.32688
74.91476
29.95000
29.73024
28.08884
31.27778
1.12100
1.13830
1.10569
1.14186
1 The average rate corresponds to the rate at balance sheet date due to application of IAS 29 for KWS Argentina S.A.
3. Accounting Policies | Notes for the KWS Group | Annual Financial Statements
107
KWS Group | Annual Report 2019/2020
The difference resulting from the application of annual
If the contracts specify further performance obligations,
average rates to the net profit for the period in the income
such as granting of discount coupons, credit memos for
statement is taken directly to equity. According to IAS
returned goods and bonus points, in addition to seed
21, exchange differences resulting from loans to foreign
delivery, they must be measured separately. The KWS Group
subsidiaries are recognized in the Other comprehen-
uses empirical country-specific and seasonal figures and
sive income and are not reclassified to profit or loss until
information on already announced returns to estimate the
disposal of the net investment. The accumulated amount
anticipated returns.
is recognized in the income statement only when the net
investment is disposed of.
The level of the promised consideration is not adjusted by
the effects of a financing component because the period for
Argentina was still classified as a hyperinflationary economy
payment is usually less than twelve months.
this fiscal year, as a result of which IAS 29 “Financial
Reporting in Hyperinflationary Economies” was applied
The incremental costs of obtaining a contract are recognized
to KWS ARGENTINA S.A. Gains and losses from current
as a current expense in the period.
inflation of non-monetary assets and liabilities and of equity
are recognized in the income statement.
Revenue from service transactions is recognized over the
The IPC was 225.54 points at July 1, 2019, and rose
on an output-oriented basis using the percentage of
by 42.76% in the current fiscal year to 321.97 points at
completion method. Other income, such as interest, royalties
period of time in which the service is provided and measured
June 30, 2020.
and dividends, is recognized in the period in which it accrues
as soon as there is a contractual or legal entitlement to it.
3.5 Classification of the statement of comprehensive
income
Performance-based public grants are carried under the other
The KWS Group has prepared the income statement using
operating income as part of profit/loss.
the cost-of-sales method. The costs for the functions
include all directly attributable costs, including other taxes.
Operating expenses are recognized in the income statement
upon the service in question being used or as of the date on
3.6 Recognition of income and expenses
which they occur.
Revenue from contracts with customers is primarily
generated from the sale of seed. It is recognized when
3.7 Intangible assets
KWS Group transfers control over products to the customer.
Purchased intangible assets are carried at cost less straight-
That is usually the time when risk passes to the customer.
line amortization and impairment losses. It is necessary to
The revenue is recognized at the amount of the consideration
examine whether the useful life of intangible assets is finite
promised in the contract.
or indefinite. Goodwill has an indefinite useful life. Goodwill
and intangible assets with an indefinite useful life are not
The KWS Group’s contracts with customers do not usually
amortized, but tested for impairment at least once a year.
have any significant separable performance obligations
apart from the delivery of seed. Consequently, splitting of the
Intangible assets acquired as part of business combina-
transaction price is not required for most of the KWS Group’s
tions are carried separately from goodwill if they are sepa-
contracts with customers. Accordingly, the total purchase
rable according to the definition in IAS 38 or result from a
price must be recognized at a point in time.
contractual or legal right.
108 Annual Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2019/2020 | KWS Group The useful 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
Customer relationships
Useful life
10 – 30 years
3 – 10 years
3 – 8 years
5 – 20 years
15 years
1– 5 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 recover-
able 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 depreciation into account. In accordance
with IAS 20, government grants for assets are deducted
3.8 Property, plant, and equipment
from the costs of the asset. Any deferred income is not
Property, plant, and equipment is measured at cost less
recognized.
straight-line depreciation over its expected useful life and
impairment losses. Depreciation of an asset commences
The residual values, useful economic lives and methods
when the asset is at its location and is in the condition
of depreciation for property, plant, and equipment are
necessary for it to be capable of operating in the manner
r eviewed at the end of each fiscal year and adjusted
intended by management. Depreciation of an asset ends
prospectively if necessary.
when the asset has been fully expensed or is classified as
held for sale in accordance with IFRS 5 or at the latest when
In accordance with IAS 23, borrowing costs are capitalized if
it is derecognized.
they can be classified as qualifying assets.
If property, plant, and equipment is sold or scrapped, the
3.9 Leases
profit or loss from the difference between the proceeds
Refer to section 2 of the Notes for details of the principles
and residual carrying amount is recognized under the other
and methods used in lease accounting.
operating income or other operating expenses.
In addition to directly attributable costs, the cost of self-
3.10 Financial instruments
produced plant or equipment also includes a proportion of
Classification and measurement
the overheads and depreciation/amortization.
Apart from equity instruments, financial instruments are
Useful life of property, plant and equipment
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
financial assets and financial liabilities.
When financial assets are initially recognized, they are
assigned to one of the following three categories for the
purpose of subsequent measurement: at amortized cost,
at fair value through other comprehensive income, or at fair
value through profit or loss.
3. Accounting Policies | Notes for the KWS Group | Annual Financial Statements
109
KWS Group | Annual Report 2019/2020 Equity instruments are generally measured at fair value
Impairment losses
through profit or loss, unless an option to classify them
The credit risk is the risk that a contractual partner does
irrevocably as being measured at fair value through other
not fulfill its payment obligations as part of a financial
comprehensive income is exercised when they are initially
instrument. The risks of default are monitored and con-
recognized. Such an option is available if the financial
trolled constantly and reflected by means of impairment
investments in equity instruments are neither held for
losses. The KWS Group ascertains the need to recognize
trading nor constitute a contingent consideration as part
an impairment loss for all financial assets not classified in
of a company acquisition. The debt instruments are classi-
the category “at fair value through profit or loss.” That is
fied taking into account KWS Group’s business model for
calculated on the basis of the expected losses. The expected
controlling these financial assets and the contractual cash
losses are in general the present value resulting from the
flow characteristics for the financial instrument. A finan-
difference between the cash flows defined in the contract
cial asset is measured at amortized cost if it is held with
and the cash flows KWS Group expects to receive.
the objective of collecting contractual cash flows and the
latter comprise solely payments of interest and principal. If
In general, a two-stage model must be applied in calculating
the financial assets are held as part of the business mod-
the expected losses. If the credit risk for financial instru-
el to collect contractual cash flows and sell the financial
ments has not increased significantly, the risk provision is
instruments, these are classified as being measured at fair
recognized only on the basis of losses resulting from default
value through other comprehensive income. All the other
events within the next 12 months. In the case of financial
financial instruments are classified in the category “at fair
instruments whose credit risk has increased significantly
value through profit or loss.” There is also the option of
since first-time recognition, the entire remaining lifetime is
designating the debt instrument as being measured at fair
used to calculate the expected losses.
value through profit or loss under certain conditions when it
is carried for the first time.
KWS Group uses a simplified approach under IFRS 9 to deter-
mine the expected losses because the financial assets mainly
The financial assets consist of bank balances and cash
consist of short-term trade receivables. Measurement and
on hand, trade receivables, loans, fund shares, securities,
first-time recognition of the receivables and also their subse-
derivatives and other financial assets. Regular-way purchas-
quent measurement therefore take into account expectations
es and sales of financial assets are recognized or derecog-
of default on the item in question over its entire lifetime.
nized in general at the settlement date. Because fund
shares have the characteristics of equity, they are classified
The KWS Group determines the expected counterparty
irrevocably as being measured at fair value through other
default on the basis of the probability of default and the loss
comprehensive income. The changes to fair value in sub-
rate in the event of default.
sequent measurement are recognized as unrealized gains
and losses directly in other comprehensive income. Such
The probability of default is generally determined on the
equity instruments are not tested for impairment.
basis of customer-specific ratings. The probability of default
relates to a year, which is usually the maximum lifetime of
The other financial assets are measured at amortized cost.
receivables at the KWS Group. Since specific ratings are not
The carrying amount of receivables, money market accounts
available for all customers, an average rating based on all
and cash is assumed as the fair value.
classified customers is calculated for each country, regard-
less of the receivables per customer. It is then applied to the
total amount for all the receivables in the country in question.
If that information is not available for a country, the average
rating of a country with a comparable risk is applied.
110 Annual Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2019/2020 | KWS Group The loss rate is the percentage loss in the event of default
market data are used to calculate the value of level 3
and corresponds to the amount of the unpaid receivables
financial instruments.
less an expected recovery rate. KWS Group applies a
uniform recovery rate determined regardless of customer
3.11 Derivates
group, due date and country over a long period of time and
The KWS Group has not designated any existing derivatives
over a broad total number of company insolvencies.
as a hedging instrument.
Changes to the level of the risk provision must be carried in
Derivative instruments are measured at fair value; they can
the income statement as a reversal of an impairment loss or
be assets or liabilities. Common derivative financial instru-
as an impairment loss.
ments are essentially used to hedge interest rate and foreign
currency risks. The fair value of the financial instruments is
The financial liabilities mainly comprise trade payables,
measured on the basis of the market information available
loans from banks, derivatives and other financial liabilities.
on the balance sheet date and using recognized mathe-
When financial liabilities are initially recognized, they are
matical models, such as present value or Black-Scholes,
classified as being measured at fair value through profit
to calculate option values, taking their volatility, remaining
or loss or at amortized cost. KWS Group adopts first
maturity and capital market interest rates into account. The
time measurement at fair value. The fair value of financial
instruments must also be classified in a level of the fair value
liabilities with a long-term fixed interest rate is determined
hierarchy.
as present values of the payments related to the liabilities,
using a yield curve applicable on the balance sheet date.
The changes in their market value are recognized in the
income statement. Derivatives are derecognized on their
All financial liabilities at the KWS Group, with the exception
day of settlement.
of derivative financial instruments, are measured at amortized
cost using the effective interest method. The liabilities
3.12 Inventories and biological assets
are derecognized at the time they are settled or when the
Inventories are measured at the lower of cost or net realiz-
reason why they were formed no longer exists.
able value less an allowance for obsolescent or slow-moving
Financial instruments in level 1 are measured using quoted
sales also includes indirect labor and materials including
prices in active markets for identical assets or liabilities. In
depreciation under IAS 2. Under IAS 41, biological assets
level 2, they are measured by directly observable market
are measured at fair value less the estimated costs to sell.
inputs or derived indirectly on the basis of prices for similar
Immature biological assets are carried as inventories as of
instruments. Finally, input factors not based on observable
the time they are harvested.
items. In addition to directly attributable costs, the cost of
3. Accounting Policies | Notes for the KWS Group | Annual Financial Statements
111
KWS Group | Annual Report 2019/2020 3.13 Deferred taxes
The provisions for semi-retirement include obligations from
Deferred taxes are calculated in accordance with IAS 12.
concluded semi-retirement agreements. Payment arrears
Deferred taxes are calculated on differences between the
and top-up amounts for semi-retirement pay and for the
carrying amounts of assets and liabilities in the consolidated
contributions to the statutory pension insurance program
balance sheet and their tax base, and on carried forward
are recognized in measuring them.
tax losses. Deferred tax assets are netted off against
deferred tax liabilities, provided they relate to the same
3.16 Other provisions
tax creditor and have the same due date. Deferred tax
Provisions are recognized for present legal and constructive
assets are recognized if it can be assumed that they will
obligations arising from past events that will likely give rise
be recoverable in the future. Deferred tax liabilities must be
to a future outflow of resources, provided that a reliable
accounted for all taxable temporary differences. All deferred
estimate can be made of the amount of the obligations.
taxes must be assessed individually at each balance sheet
date. Under IAS 12, deferred taxes are calculated on the
Provisions are measured at their expected amount or most
basis of the applicable local income tax anticipated at the
likely amount, depending on whether they comprise a large
time of reversal and no discounting is carried out. Deferred
number of items or constitute a single obligation. Provisions
taxes and current taxes are generally recognized as an
are reviewed regularly and adjusted to reflect new findings
expense, unless they relate to transactions or events that
or changes in circumstances. If it is no longer likely that
are recognized outside of profit or loss. These are likewise
economic outflow of a provision will occur, or the conditions
recognized in the Other comprehensive income or directly
for why it was recognized no longer apply, the provision is
in equity.
reversed by the corresponding amount and the resulting
income recognized in the operating expense item(s) in which
3.14 Provisions for income taxes
the original charge was recognized . If the reversal amount
The provisions for income taxes comprise obligations from
is material and so the effect not related to the period must
current income taxes. They are measured on the basis of a
be classified as material, the reversal is carried as income
best-possible assessment of the future amount to be paid.
from the reversal of provisions under other operating income
not related to the period.
3.15 Provisions for pensions and other
employee benefits
Long-term provisions are discounted taking into account
The provisions for pensions and other employee benefits
future cost increases and using a market interest rate that ade-
are calculated using actuarial principles in accordance
quately reflects the risk, provided the interest effect is material.
with the projected unit credit method. Actuarial gains
and losses must be recognized directly in equity in Other
3.17 Contingent liabilities
comprehensive income. The service costs, including past
The contingent liabilities result from debt obligations where
service costs, are recognized in operating income in ac-
outflow of the resource is not probable or the level of the
cordance with the employees’ assignment to the functions.
obligation cannot be estimated with sufficient reliability or
If there are plan assets, they are netted off against the
from obligations for loan amounts drawn down by third parties
associated obligations.
as of the balance sheet date.
112 Annual Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2019/2020 | KWS Group 3.18 Significant accounting judgements,
3.19 Effects of the coronavirus pandemic
estimates and assumptions
The coronavirus pandemic had a significant impact on the
The measurement approaches and amounts to be carried
global economy in 2020, curtailing economic activity. In spite
in these IFRS financial statements are partly based on
of these challenging general conditions, the KWS Group
estimates and specifically defined specifications. This
ensured that farmers were supplied with seed. The general
relates in particular to the following discretionary decisions:
macroeconomic conditions were taken into consideration in
the measurement policies applied at June 30, 2020.
Determination of the useful life of the depreciable asset
(sections 3.7 and 3.8 of the Notes)
Goodwill and intangible assets with an indefinite useful life
Definition of measurement assumptions and future
underwent an annual impairment test at June 30, 2020,
results in connection with impairment tests, above all for
while the changes in the market situation due to the
capitalized goodwill (section 7.1 of the Notes)
coronavirus pandemic were reflected in the adopted budget
Determination of the need to recognize impairment losses
and medium-term planning. All in all, there were no impair-
on inventories (section 7.6 of the Notes)
ments for the cash-generating units and intangible assets
Definition of the parameters required for measuring
with an indefinite useful life.
pension provisions (section 7.12 of the Notes)
Determination whether there is reasonable certainty as
The effect on other assets, such as trade receivables and
to whether extension or termination options as a part of a
inventories, was continually examined with regard to the
lease will be exercised or not (section 7.16 of the Notes)
impact of coronavirus on the economic environment. The
Determination whether tax losses carried forward can be
KWS Group’s business model is seasonal in nature, which is
used (section 6.5 of the Notes)
why it generates most of its net sales by the end of the third
Determination of the fair value of intangible assets,
quarter and collects a large proportion of the receivables
tangible assets and liabilities acquired as part of a
owed to it in the fourth quarter. As regards customers’ solven-
business combination and determination of the service
cy, no circumstances justifying impairment of the receivables
lives of the purchased intangible assets and tangible
above and beyond the existing approach were identified.
assets (section 4 of the Notes)
Potential industry and country specific risks were, and will
Measurement of other provisions (section 7.13 of the
continue to be, taken into account in assessing the potential
Notes)
impact of the coronavirus pandemic on trade receivables.
Calculation of the expected returns from customers at the
balance sheet date (section 3.6 of the Notes)
Estimates are based on historical experience and other
assumptions that are considered reasonable under given
circumstances. They are continually reviewed but may vary
from the actual values.
3. Accounting Policies | Notes for the KWS Group | Annual Financial Statements
113
KWS Group | Annual Report 2019/2020
4. Consolidated Group and Changes
in the Consolidated Group
The number of companies consolidated in the KWS Group
increased from 75 at June 30, 2019, to 88 at June 30, 2020.
Number of companies including KWS SAAT SE & Co. KGaA
Germany
Abroad
Total
Germany
Abroad
Total
06/30/2020
06/30/2019
Fully consolidated
Equity method
Joint operation
Total
13
0
0
13
63
4
8
75
76
4
8
88
14
0
0
14
50
3
8
61
64
3
8
75
Acquisition of the POP VRIEND SEEDS Group
The KWS Group acquired the POP VRIEND SEEDS
Fair Value of the identifiable assets and liabilities
as at the date of acquisition
Group, Andijk, the Netherlands, effective July 1, 2019. The
number of companies consolidated in the KWS Group
has thus been enlarged by the holding company BIRIKA
in € thousands
Assets
Intangible assets
B.V., Amsterdam, the Netherlands (since July 2020: POP
Right-of-use assets (IFRS 16)
VRIEND SEEDS HOLDING B.V.), and eleven subsidiaries
Property, plant and equipment
in the Netherlands and Turkey. KWS Group acquired the
Financial assets
group by taking over all the shares in BIRIKA B.V.
POP VRIEND SEEDS is a leading company in the breeding,
production and distribution of vegetable seed. It primarily
specializes in seed for spinach, beans, carrots, Swiss
chard and other vegetable crops and supplies customers
in more than 100 countries. POP VRIEND SEEDS has thus
become part of the new Vegetables Segment.
The transferred consideration less acquired cash and
cash equivalents was just under €400 million and was
paid in cash. The KWS Group raised bridge funding of
€400 million in fiscal 2018/2019 to finance the purchase
price. It was replaced at the end of August by the issue
of borrower’s notes to the same amount with a term of
between five and ten years. Apart from transaction costs,
there was no cash outflow or inflow.
Deferred tax assets
Inventories
Trade receivables 1
Cash and cash equivalents
Other assets
Liabilities
Long-term financial liabilities
Short-term financial liabilities
Trade payables
Short-term provisions
Other short-term liabilities
Deferred tax liabilities
Total identifiable net assets at fair
value
Goodwill arising on acquisition
1 Gross carrying amount of trade receivables amounts to €24.499 thousand.
07/01/2019
407,300
320,276
173
10,751
160
410
30,901
23,302
19,918
1,409
87,754
111
1,353
2,793
7,062
26
76,409
319,546
95,126
114 Annual Financial Statements | Notes for the KWS Group | 4. Consolidated Group and Changes in the Consolidated Group
Annual Report 2019/2020 | KWS Group The acquired intangible assets identified as part of the
KWS Group’s pro-rata loss for the fiscal year (on the basis
purchase price allocation relate to approved varieties,
of its 50% stake) was €9 thousand.
technology, customer relationships, and the “Pop Vriend”
brand. The brand is regarded as having an indefinite useful
Other changes in the consolidated group
life, since the KWS Group intends to keep on using it and
KWS SEMILLAS CANARIAS S.L.U., Gran Canaria, Spain,
the period of time in which the brand yields an economic
benefit can therefore not be determined. The carrying
amount is €20,752 thousand.
The goodwill of €95,126 thousand from acquisition of the
was established in July 2019 and BTS TURKEY TARIM
TICARET LIMITED ŞIRKETI, Eskisehir, Turkey, in October
2019. Both companies are included in the consolidated
financial statements at a stake of 100%.
company essentially reflects the KWS Group’s entry into the
In addition, KWS INTERNATIONAL HOLDING II B.V. was
strongly growing and profitable vegetable seed market. The
established as a wholly-owned subsidiary of KWS INTER-
goodwill is not tax-deductible.
NATIONAL HOLDING B.V. in January 2020 and is included in
The POP VRIEND SEEDS Group currently generates
company is headquartered in Emmeloord, the Netherlands.
almost all the net sales and income at the new Vegetables
Segment. Please refer to the segment reporting for details.
KWS SERVICES DEUTSCHLAND GMBH was merged with
the consolidated financial statements at a stake of 100%. The
KWS LOCHOW GMBH on April 22, 2020, retroactively
The deferred tax liabilities incurred as part of the acquisition
effective July 1, 2019
relate almost wholly to intangible assets and inventories.
The tax liability on intangible assets at the time of the
The 51% stake in the French subsidiary RAZES HYBRIDES
acquisition totaled €70,735 thousand and was included at
S.A.R.L. was sold on July 3, 2019. The stake’s fair value
tax rates of 21.8% to 25%. The tax liability on inventories is
was the same as the sales price of €3,500 thousand.
€3,811 thousand and was included at a tax rate of 25%.
Assets totaling €7,730 thousand (of which property, plant,
and equipment accounted for €6,475 thousand) and
Acquisition of a 50% stake in FARMDESK B.V.
liabilities totaling €2,380 thousand) were disposed of. After
The KWS Group completed the acquisition of a 50%
the disposal of minority interests totaling €2,652 thousand
stake in AGRIN B.V. (thereafter called FARMDESK B.V.) on
and reclassification of losses of €38 thousand recog-
April 15, 2020. FARMDESK B.V. is an existing limited liability
nized in the Other comprehensive income, a profit of
company that has been duly established under Belgian
€764 thousand was made on the sales transaction and is
law and is headquartered in Antwerp. The company has
carried under the other operating income.
developed an online/mobile application of the same name.
The KWS Group sold its stake of 100% in KWS SEEDS
FARMDESK B.V. is included as a joint venture in the
THAILAND CO., LTD. on November 22, 2019. The sales price
KWS Group’s consolidated financial statements and car-
was €1. After the disposal of assets totaling €31 thousand
ried using the equity method. In accordance with IAS 28,
and liabilities totaling €340 thousand and reclassification
the investment is initially carried at cost and adjusted in
of currency losses of €169 thousand recognized in the
subsequent periods to reflect the changes in KWS Group’s
Other comprehensive income, a deconsolidation gain of
stake in the assets of FARMDESK B.V. after the acquisi-
€140 thousand resulted from sale of the shares and is
tion. The acquisition costs were €1,100 thousand and the
carried under the other operating income.
4. Consolidated Group and Changes in the Consolidated Group | Notes for the KWS Group | Annual Financial Statements
115
KWS Group | Annual Report 2019/2020 5. Segment Reporting for
the KWS Group
In accordance with its internal reporting and controlling
The Executive Board is the main decision-making body and
system, the KWS Group is primarily organized according to
is responsible for allocating resources and assessing the
the following business segments:
earnings strength of the business segments. The segments
Corn
Sugarbeet
Cereals
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 adopted in line with those used for
Vegetables (since July 1, 2019)
the KWS Group. The only exception relates to consolida-
Corporate
tion of the equity-accounted joint ventures and associated
companies that are assigned to the Corn Segment, namely
The new Vegetables Segment essentially comprises the
AGRELIANT GENETICS LLC., AGRELIANT GENETICS INC.,
business activities of the POP VRIEND SEEDS Group
FARMDESK B.V. and KENFENG – KWS SEEDS CO., LTD.
acquired effective July 1, 2019. The core competency for the
In accordance with internal controlling practices, they are
KWS Group’s entire product range, plant breeding, including
included proportionately as part of segment reporting.
the related biotechnology research, is essentially concen-
trated at the parent company KWS SAAT SE & Co. KGaA
The presentation of net sales, income, depreciation and
in Einbeck. The breeding material for Sugarbeet and Corn,
amortization, other noncash items, operating assets, oper-
including the relevant information and expertise about how
ating liabilities and capital expenditure on noncurrent assets
to use it, is owned by KWS SAAT SE & Co. KGaA, and for
by segment have been determined in accordance with the
Cereals it is owned by KWS LOCHOW GMBH. Product-
internal operational controlling structure. The allocation of
related R&D costs are carried directly in the product
joint ventures and associated companies are consolidated
segments Corn, Sugarbeet and Cereals. Centrally controlled
proportionately (management approach) on the same basis.
corporate functions are grouped in the Corporate Segment.
In order to permit better comparability, they have been
The distribution and production of oil and field seed are
reconciled with the figures in the consolidated financial
reported in the Cereals and Corn Segments, in keeping with
statements.
the legal entities currently involved.
116 Annual Financial Statements | Notes for the KWS Group | 5. Segment Reporting for the KWS Group
Annual Report 2019/2020 | KWS Group Sales per segment
in € thousand
Corn
Sugarbeet
Cereals
Vegetables
Corporate
Segments acc. to
management approach
Elimination of equity-accounted
financial assets
Segments acc. to consolidated
financial statements
Segment sales
Internal sales
External sales
2019/2020
2018/2019
2019/2020
2018/2019
2019/2020
2018/2019
776,093
491,898
739,031
461,257
191,348
170,990
–
83,523
18,207
423
52
185
0
5
26
197
–
775,669
491,846
739,026
461,231
191,163
170,794
83,523
4,615
–
3,893
17,474
13,593
13,580
1,561,069
1,388,752
14,253
13,808
1,546,816
1,374,944
–264,264
–261,605
1,282,552
1,113,339
Segment sales contain both net sales from third parties
Technology revenues from genetically modified properties
(external sales) and net sales between the segments
(“tech fees”) are paid as a per-unit royalty on the basis of
( intersegment sales). The prices for intersegment sales are
the number of units sold, due to their growing competitive
determined on an arm’s-length basis. Uniform royalty rates
importance.
per segment for breeding genetics are used as the basis.
Earnings, depreciation and amortization and other non-cash items per segment
in € thousand
Segment earnings
Depreciation and
amortization
Other noncash items
Corn
Sugarbeet
Cereals
Vegetables
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
2019/2020
2018/2019
2019/2020
2018/2019
2019/2020
2018/2019
67,072
170,062
26,357
–7,543
57,916
179,599
22,988
–
–104,626
–97,110
36,143
16,897
9,917
23,083
17,489
28,703
12,762
9,200
–
–36,047
1,254
–6,169
–1,135
–670
–18,260
287
–
11,868
–11,133
–8,250
151,323
163,393
103,528
62,533
–53,230
–26,893
–13,957
–13,400
–15,377
–12,238
47,922
21,578
137,366
149,993
88,151
50,295
–5,308
–5,315
–7,842
–5,534
129,524
144,459
The income statements of the consolidated companies are
all directly attributable income and expenses. Items that
assigned to the segments by means of profit center alloca-
are not directly attributable are allocated to the segments
tion. Operating income, an important internal parameter and
on the basis of an appropriate formula. Depreciation and
an indicator of the earnings strength in the KWS Group, is
amortization charges allocated to the segments relate
used as the segment result. The operating income of each
exclusively to intangible assets and property, plant, and
segment is reported as the segment result. The segment
equipment.
results are presented on a consolidated basis and include
5. Segment Reporting for the KWS Group | Notes for the KWS Group | Annual Financial Statements
117
KWS Group | Annual Report 2019/2020 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
Vegetables
Corporate
Segments acc. to management approach
Elimination of equity-accounted financial assets
Segments acc. to consolidated financial statements
Others
Operating assets
Operating liabilities
2019/2020
2018/2019
2019/2020
2018/2019
759,323
371,019
137,992
454,552
207,211
800,334
335,630
122,159
–
152,029
1,930,096
1,410,152
–232,576
–278,034
1,697,521
1,132,118
537,946
982,835
149,741
122,249
71,612
33,498
8,223
117,770
380,845
–58,066
322,779
918,190
67,459
30,260
–
106,540
326,508
–49,210
277,298
874,108
KWS Group acc. to consolidated financial statements
2,235,467
2,114,953
1,240,969
1,151,406
The operating assets of the segments are composed of
In accordance with the management approach, the operating
intangible assets, property, plant, and equipment, inventories,
liabilities attributable to the segments include the borrow-
biological assets and trade receivables that can be charged
ings reported on the balance sheet, less financial liabilities,
directly to the segments or indirectly allocated to them by
provisions for taxes and the portion of other liabilities that
means of an appropriate formula.
cannot be charged directly to the segments or indirectly
allocated to them by means of an appropriate formula.
Investments in long-term assets by segment 1
in € thousand
Corn
Sugarbeet
Cereals
Vegetables
Corporate
Segments acc. to management approach
Elimination of equity-accounted financial assets
Segments acc. to consolidated financial statements
1 Excluding Right-of-Use assets according to IFRS 16
2019/2020
2018/2019
30,901
32,308
10,088
1,568
38,583
113,449
–5,415
108,034
27,151
34,874
7,037
–
32,061
101,123
–4,552
96,571
Capital expenditure in the Corn Segment relates mainly to
location and in France. KWS Group continue to expand the
drying and production capacities in South America. The
laboratory capacities in these locations. Further investments
Sugarbeet Segment’s capital expenditure relates to contin-
have been made in the Cereals segment with additional
ued expansion of sugarbeet seed production at the Einbeck
greenhouse and breeding stations.
118 Annual Financial Statements | Notes for the KWS Group | 5. Segment Reporting for the KWS Group
Annual Report 2019/2020 | KWS Group
Disclosures by region
The disclosures on the regional composition of net sales and
The external net sales by sales region are broken down on the
noncurrent operating assets have been made in accordance
basis of the country where the customer is based. No individ-
with the accounting policies to be applied to the consolidat-
ual customer accounted for more than 10% of total net sales
ed financial statements of the KWS Group and thus, without
in the current and the previous fiscal years.
proportionate consolidation of the equity-accounted financial
investments.
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
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
2019/2020
2018/2019
239,835
573,205
112,449
378,527
110,187
222,410
90,985
236,226
505,867
100,982
305,749
97,989
167,547
65,497
1,282,552
1,113,339
2019/2020
2018/2019
313,829
621,712
63,820
252,110
29,921
199,521
6,719
1,194,370
267,309
169,579
55,706
252,477
36,312
192,042
6,397
695,762
5. Segment Reporting for the KWS Group | Notes for the KWS Group | Annual Financial Statements
119
KWS Group | Annual Report 2019/2020 6. Notes to the Income Statement
6.1 Net sales and function costs
The impairment losses relate mainly to unsold seed. They
Net sales are primarily generated from the sale of certified
are based on, among other things, empirical values and
seed. A breakdown by segments and regions is provided in
expectations as to their substitution by new varieties.
the segment reporting in section 5 of the Notes.
Selling expenses increased by €26,906 thousand
The cost of sales increased by 19.9% to €549,899
to €248,821 (221,915) thousand, or 19.4% (19.9%) of
(458,534) thousand, or 42.9% (41.2%) of sales. The key
sales. The selling expenses include amortization of
factors in this development were higher cost of sales in
€13,047 thousand from the purchase price allocation for
the Sugarbeet Segment and non-recurring effects from
the POP VRIEND SEEDS Group.
the purchase price allocation for the POP VRIEND SEEDS
Group (€11,116 thousand). The total cost of goods sold was
Research & development is recognized as an expense in
€357,408 (294,401) thousand.
the year it is incurred; in the year under review, this amount-
ed to €236,102 (205,557) thousand. Development costs for
The impairment losses on inventories and the decreases in
new varieties are not recognized as an asset because evi-
the impairment loss, which are carried as a reduction in the
dence of future economic benefit can only be provided after
cost of materials in the period, are as follows:
the variety has been officially certified. The research and
July 1 to June 30
in € thousand
Impairment losses
Decreases in
impairment loss
2019/2020
2018/2019
8,666
5,441
9,543
3,889
development costs include amortization of €8,820 thousand
from the purchase price allocation for the POP VRIEND
SEEDS Group.
General and administrative expenses increased
by €14,072 thousand to €129,451 (115,379) thousand,
representing 10.1% of sales, after 10.4% the year before.
They rose in particular due to the process of optimizing
the organizational structure and our entry into vegetable
seed business, including first-time consolidation of the
POP VRIEND SEEDS Group.
120 Annual Financial Statements | Notes for the KWS Group | 6. Notes to the Income Statement
KWS Group | Annual Report 2019/2020 6.2 Other operating income
July 1 to June 30
in € thousand
Income from sales of fixed assets
Income from the reversal of provisions
Foreign exchange gains
Unrealised gain on derivatives measured at fair value through profit or loss
Income from reversal of valuation allowance for trade receivables and
recovery of written off receivables
Performance-based public grants
Other income related to previous periods
Income from loss compensation received
Gain on net monetary position (hyperinflation)
Income from deconsolidation of KWS Potato B.V.
Miscellaneous other operating income
Total
2019/2020
2018/2019
846
1,560
42,355
1,289
6,591
8,200
2,742
400
651
0
16,615
81,250
201
4,238
30,753
–
11,317
6,797
3,240
493
1,400
15,958
21,863
96,260
The other operating income mainly comprises
performance-based government grants mainly relate to
foreign exchange gains, income from the reversal of
breeding allowances and farm payments.
allowances on receivables, and government grants. The
6.3 Other operating expenses
July 1 to June 30
in € thousand
Valuation allowance on receivables
Foreign exchange losses
Unrelaised loss on derivatives measured at fair value through profit or loss
Expenses relating to previous periods
Other expenses
Total
The other operating expenses mainly comprise foreign
exchange losses and valuation allowances on receivables.
2019/2020
2018/2019
11,870
42,310
2,810
38
5,135
62,163
6,662
30,266
–
1,106
20,187
58,221
6. Notes to the Income Statement | Notes for the KWS Group | Annual Financial Statements 121
KWS Group | Annual Report 2019/2020
6.4 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
Interest expenses for lease liabilities
Interest result
Result from equity-accounted financial assets
Net income from equity investments
Net financial income/expenses
2019/2020
2018/2019
5,462
21,514
20
1,294
105
1,184
4,006
17,016
68
1,956
82
1
–18,615
–14,981
10,773
10,773
–7,842
9,447
9,447
–5,534
Net financial income/expenses was mainly reduced by
income. The increase in interest expenses for lease liabilities
higher interest expenses in Germany and Brazil. Factors that
is attributable to adoption of IFRS 16.
resulted in an increase in financial expenses included the
issue of borrower’s notes in connection with the acquisition
Net financial income/expenses from the equity-accounted
of the POP VRIEND SEEDS Group at the beginning of the
joint ventures improved slightly year on year due to higher
fiscal year. The interest effects from pension provisions
earnings by KENFENG – KWS SEEDS CO., LTD.
comprise interest expenses (compounding) and the planned
6.5 Taxes
Income tax expenses
in € thousand
Actual income taxes
in Germany
abroad
thereof from previous years
Deferred taxes
in Germany
abroad
Income taxes
2019/2020
2018/2019
45,101
9,048
36,053
6,102
54,196
5,182
49,014
7,545
–10,797
–13,758
–1,981
–8,817
34,304
–5,855
–7,903
40,439
KWS Group pays tax in Germany at a rate of 29.8% (29.8%).
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
6.0% (9.0%) and 34.4% (35.0%).
generated in Germany. Trade income tax is applied at a
weighted average rate of 14.0% (14.0%), resulting in a total
tax rate of 29.8% (29.8%).
122 Annual Financial Statements | Notes for the KWS Group | 6. Notes to the Income Statement
KWS Group | Annual Report 2019/2020
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
2019/2020
2018/2019
2019/2020
2018/2019
438
826
0
2,242
11,602
19,143
47,259
23,782
22,030
103,540
10,656
0
740
0
1,350
25,920
8,215
23,941
23,156
10,289
70,454
7,213
78,452
19,254
4
3,211
4,978
20,768
6,939
0
2,265
135,871
0
2,876
18,683
4
1,180
2,003
2,016
9
0
3,903
30,675
0
–43,606
–14,259
–43,606
–14,259
70,590
63,407
92,264
16,416
Due to the use of tax loss carryforwards and temporary
No deferred taxes were recognized for temporary
differences on which no deferred taxes were recognized in
differences amounting to €41,806 (35,633) thousand related
the past, the actual tax expense fell by €332 (809) thousand.
to shares in subsidiaries in keeping with IAS 12.39.
There is a deferred tax expense of €3,413 (802) 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 carryforwards
forwards and temporary differences in the year under
totaling €46,198 (21,088) 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 of
companies in question will post taxable profits in the future.
€602 (584) 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 to-
research & development spending.
taling €5,561 (13,893) thousand that have not yet been utilized.
Of these, €923 (0) thousand must be utilized within a period of
The reconciliation of the expected income tax expense to
five years. Loss carryforwards totaling €4,638 (13,893) thou-
the reported income tax expense is derived on the basis of
sand can be utilized without any time limit.
the consolidated income before taxes and the nominal tax
rate for the Group of 29.8% (29.8%), taking into account the
Deferred taxes were formed for all deductible differences.
following effects:
6. Notes to the Income Statement | Notes for the KWS Group | Annual Financial Statements 123
KWS Group | Annual Report 2019/2020
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% (29.8%)
2019/2020
2018/2019
129,524
38,637
–6,613
–73
4,203
–8,391
–435
–162
–568
7,757
–51
34,304
26.5%
144,459
43,092
–7,246
797
4,238
–12,719
497
–283
–535
12,500
99
40,439
28.0%
Income taxes relating to other periods include in particu-
Other taxes, primarily real estate tax, are allocated to the
lar effects from field tax audits that have been completed
relevant functions.
worldwide and future field tax audits.
6.6 Personnel costs/employees
July 1 to June 30
in € thousand
Wages and salaries
Social security contributions,
expenses for pension plans
and benefits
Total
Employees by region
2019/2020
2018/2019
2019/2020
2018/2019
246,215
223,298
Germany
63,858
57,358
310,073
280,656
Europe (excluding Germany)
North and South America
Rest of world
Total
1,954
1,417
879
164
4,414
1,800
1,315
832
179
4,126
Personnel costs went up by 10.5%. The number of
With our joint ventures and associated company
employees increased from 4,126 to 4,414, or by 7%. Of
consolidated proportionately, the number of employees was
the 4,414 (4,126) employees, 4,052 (3,791) are permanent
4,877 (4,592). The reported number of employees is greatly
employees, 265 (236) are temporary employees and
influenced by seasonal labor.
97 (98) are trainees.
124 Annual Financial Statements | Notes for the KWS Group | 6. Notes to the Income Statement
KWS Group | Annual Report 2019/2020
6.7 Share-based payment
performance-related bonus. Along with that, members
of the first management level below the Executive Board
Employee Stock Purchase Plan
likewise take part in an LTI program. As part of this program,
KWS Group has established an Employee Stock Purchase
they are obligated to invest in shares in KWS SAAT SE &
Plan. All employees who have been with the company for
Co. KGaA every year in a freely selectable amount ranging
at least one year without interruption and have a permanent
between 10% and 40% of the gross performance-related
employment relationship that has not been terminated at a
bonus. The shares acquired under the LTI program may
KWS Group company that participates in the program are
be sold at the earliest after a regular holding period of five
eligible to take part. That also includes employees who are on
years beginning at the time they are acquired (end of the
maternity leave or parental leave or who are in semi-retirement.
quarter in which the shares were acquired). In addition to
the shares being unlocked, the entitled persons are paid a
Each employee can acquire up to 2,500 shares. A bonus of
long-term incentive (LTI) in the form of cash compensation
20% is deducted from the purchase price, which depends
after the holding period for the tranche in question. Its level
on the price applicable on the key date. The shares are
is calculated on the basis of KWS SAAT SE & Co. KGaA’s
subject to a lock-up period of four years beginning when
share performance and on the KWS Group’s return on sales
they are posted to the employee’s securities account.
(ROS), measured as the ratio of operating income to net
The right to a dividend, if declared by KWS SAAT SE &
sales, over the holding period. For persons with contracts
Co. KGaA, exists during the lock-up period. Holders can
as of July 1, 2014, the cash compensation for members of
also exercise their right to participate in the Annual Share-
the Executive Board is a maximum of one-and-half times
holders’ Meeting during the lock-up period. They can dis-
(for the Chief Executive Officer two times), and for members
pose freely of the shares after the lock-up period.
of the first management level below the Executive Board a
52,315 (54,095) shares were repurchased for the Employee
costs of this compensation are recognized in the income
Stock Purchase Plan at a total price of €2,957 (3,101) thou-
statement over the period and, taking the cash compensa-
sand in the year under review. The total cost for issuing
tion in January 2020 into account, were €1,163 (1,037) thou-
shares at a reduced price was €555 thousand in the past
sand in the period under review. The provision for it at June
fiscal year (previous year: €715 thousand).
30, 2020, was €2,560 (2,490) thousand. The LTI fair values
maximum of two times their own investment (LTI cap). The
are calculated by an external expert.
Long-term incentive (LTI)
The stock-based compensation plans awarded at the
6.8 Net income for the year
KWS Group are recognized in accordance with IFRS 2
The KWS Group’s net income for the year was
“Share-based Payment.” The incentive program, which was
€95,220 (104,020) thousand on operating income of
launched in fiscal 2009/2010, involves stock-based payment
€137,366 (149,993) thousand and net financial income/
transactions with cash compensation, which are measured
expenses of €–7,842 (–5,534) thousand. The return on
at fair value at every balance sheet date. Members of
sales was 7.4% and so below that of the previous year
the Executive Board are obligated to acquire shares in
(9.3%). Net income for the year after minority interest was
KWS SAAT SE & Co. KGaA every year in a freely select-
€95,331 (104,134) thousand. Earnings per share in the
able amount ranging between 35% and 50% of the gross
year under review were €2.89.
6. Notes to the Income Statement | Notes for the KWS Group | Annual Financial Statements 125
KWS Group | Annual Report 2019/2020 7. Notes to the Balance Sheet
7.1 Intangible assets
Reconciliation of carrying amount of intangible assets
in € thousand
Gross book values: 07/01/2019
Currency translation
Change in consolidation scope
Additions
Disposals
Transfers
Reclassification in held for sale (IFRS 5)
At 06/30/2020
Amortization and impairment: 07/01/2019
Currency translation
Change in consolidation scope
Amortization
Impairment
Disposals
Transfers
Reclassification in held for sale (IFRS 5)
Gross book values: 06/30/2020
Net book values: 06/30/2020
Net book values: 06/30/2019
in € thousand
Gross book values: 07/01/2018
Currency translation
Change in consolidation scope
Additions
Disposals
Transfers
Reclassification in held for sale (IFRS 5)
At 06/30/2019
Amortization and impairment: 07/01/2019
Currency translation
Change in consolidation scope
Amortization
Impairment
Disposals
Transfers
Reclassification in held for sale (IFRS 5)
Gross book values: 06/30/2019
Net book values: 06/30/2019
Net book values: 06/30/2018
Patents, indus-
trial property
rights and
software
139,200
–4,594
320,277
14,080
8,683
47
0
460,327
73,315
–4,306
0
31,626
0
8,671
2
0
91,966
368,361
65,885
Patents, indus-
trial property
rights and
software
123,885
608
5,932
9,368
566
67
–94
139,200
63,535
534
0
9,720
0
400
0
–74
73,315
65,885
60,350
Goodwill
26,190
–4,027
95,126
0
0
0
0
117,289
0
–1
0
0
0
0
0
0
–1
117,290
26,190
Goodwill
25,115
520
555
0
0
0
0
26,190
0
0
0
0
0
0
0
0
0
26,190
25,115
Intangible
Assets
165,390
–8,620
415,403
14,080
8,683
47
0
577,616
73,315
–4,307
0
31,626
0
8,671
2
0
91,965
485,651
92,075
Intangible
assets
149,000
1,128
6,487
9,368
566
67
–94
165,390
63,535
534
0
9,720
0
400
0
–74
73,315
92,075
85,465
126 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
KWS Group | Annual Report 2019/2020
Intangible assets include purchased varieties, rights to
of industry-specific market analyses and company-related
varieties and distribution rights, brands, customer relation-
growth perspectives into account.
ships, software licenses for electronic data processing, and
goodwill. The current additions of €14,080 (9,368) thousand
The discount rate at the KWS Group has been derived as
related to software licenses and patents. Amortization of
the weighted average cost of capital (WACC).
intangible assets amounted to €31,626 (9,720) thousand.
The additions attributable to changes in the consolidated
group related to acquisition of the POP VRIEND SEEDS
Group. Further explanations can be found in section 4.
One major intangible asset is the trait licensing agreement.
Its carrying amount at the balance sheet date was
Corn America
Corn Europe/Asia
Sugarbeet
€17,178 (18,896) thousand. Its remaining useful life is ten years.
Cereals
Vegetables
In order to meet the requirements of IFRS 3 in combination
with IAS 36 and to determine any impairment of goodwill,
WACC before taxes
Business Unit in %
2019/2020
2018/2019
6.10
6.29
6.28
6.30
7.72
6.49
6.54
6.23
6.91
–
cash-generating units have been defined in line with internal
A growth rate of 1.5% (1.5%) has been assumed here
budgeting and reporting processes. In the KWS Group,
beyond the detailed planning horizon in order to allow for
these are the Business Units. To test for impairment, the
extrapolation in line with the expected inflation rate.
carrying amount of each Business Unit is determined by
allocating the assets and liabilities, including attributable
The impairment tests conducted at the end of fiscal year
goodwill and intangible assets. An impairment loss is
2019/2020 confirmed that the existing goodwill is not
recognized if the recoverable amount of a Business Unit is
impaired.
less than its carrying amount. The recoverable amount is
the higher of the fair value less costs to sell and the value in
use of a cash-generating unit. The recoverable amount in
fiscal 2019/2020 was determined on the basis of the value
in use of the respective cash-generating unit excluding the
Business Unit Vegetables.
The impairment test uses 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 four years, have been approved by the Executive
Goodwill
in € thousand
Vegetables
Corn America
Cereals
Others
Total
06/30/2020 06/30/2019
95,126
15,966
3,866
2,333
–
20,350
3,925
1,915
117,290
26,190
Board. They are based on historical patterns and expecta-
Sensitivity analyses were also carried out for all cash-
tions about future market development.
generating units to which goodwill is allocated. As part
For the European and American markets, the key
fall by 10%, the weighted average cost of capital would
assumptions on which corporate planning is based include
increase by 10% and the long-term growth rate would fall
assumptions about price trends for seed, in addition to the
by 1 percentage point. The sensitivity analyses did not
development of market shares and the regulatory frame-
reveal the need to recognize an impairment loss for any
work. Company-internal projections take the assumptions
cash-generating unit.
of that, it was assumed that the future cash flows would
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements 127
KWS Group | Annual Report 2019/2020 7.2 Property, plant, and equipment
Reconciliation of carrying amount of property, plant and equipment
in € thousand
Gross book values: 07/01/2019
Currency translation
Adjustment for hyperinflation IAS 29
Change in consolidation scope
Additions
Disposals
Transfers
Reclassification in held for sale (IFRS 5)
Technical
equip-
ment and
machinery
Operating
and office
equipment
Prepayments
and assets
under
construction
Property,
plant and
equipment
253,941
–5,969
1,281
2,136
25,594
4,429
26,787
0
124,332
–4,064
739
172
12,181
4,892
1,710
0
62,318
–3,120
–806
0
36,267
7,594
–50,176
0
783,649
–18,703
4,389
10,750
93,934
18,204
–47
0
Land and
buildings
343,058
–5,550
3,174
8,442
19,893
1,289
21,633
0
At 06/30/2020
389,360
299,341
130,179
36,889
855,769
Depreciation and impairment:
07/01/2019
Currency translation
Adjustment for hyperinflation IAS 29
Change in consolidation scope
Additions
Impairment
Disposals
Transfers
Reclassification in held for sale (IFRS 5)
Status: 06/30/2020
Net book values: 06/30/2020
Net book values: 06/30/2019
102,746
–1,296
446
0
11,589
0
8,468
104
0
105,120
284,240
240,312
160,950
–3,429
541
0
20,216
0
4,060
341
0
174,559
124,782
92,991
75,439
–1,790
382
0
12,714
0
4,387
–447
0
81,912
48,267
48,893
0
0
0
0
0
0
0
0
0
0
36,889
62,318
339,135
–6,516
1,370
0
44,519
0
16,915
–2
0
361,591
494,178
444,514
128 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
KWS Group | Annual Report 2019/2020 in € thousand
Technical
equip-
ment and
machinery
Operating
and office
equipment
Prepayments
and assets
under
construction
Property,
plant and
equipment
Land and
buildings
Gross book values: 07/01/2018
320,754
251,271
111,217
36,581
719,823
First-time adjustment for hyperinflation
(IAS29) at 07/01/2018
Currency translation
Adjustment for hyperinflation IAS 29
Change in consolidation scope
Depreciation
Disposals
Transfers
Reclassification in held for sale (IFRS 5)
At 06/30/2019
Depreciation and impairment:
07/01/2019
First-time adjustment for hyperinflation
(IAS29) at 07/01/2018
Currency translation
Adjustment for hyperinflation IAS 29
Change in consolidation scope
Depreciation
Impairment
Adjustment not affecting profit and loss
Disposals
Transfers
Reclassification in held for sale (IFRS 5)
At 06/30/2019
Net book values: 06/30/2019
Net book values: 06/30/2018
4,075
–275
824
0
13,933
942
12,348
–7,659
343,058
1,470
–487
510
0
10,296
3,097
5,814
–11,836
253,941
779
132
692
0
13,192
6,100
4,594
–174
124,332
96,170
152,810
69,156
698
49
220
0
796
–102
281
0
448
148
160
0
9,768
18,030
11,359
45
0
345
–11
–3,848
102,746
240,312
224,584
635
0
2,171
–4
–9,325
160,950
92,991
98,461
77
0
5,788
16
–137
75,439
48,893
42,061
115
–13
601
0
49,073
1,099
–22,822
–118
62,318
0
0
0
0
0
0
0
0
0
0
0
0
62,318
36,581
6,439
–643
2,627
0
86,494
11,238
–66
–19,787
783,649
318,136
1,942
95
661
0
39,157
757
0
8,304
1
–13,310
339,135
444,514
401,687
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements 129
KWS Group | Annual Report 2019/2020 The main focus of the KWS Group’s capital spending in
the year under review remained on erecting and expanding
production and research and development capacities. There
Disclosures on equity-accounted joint ventures
(with the partner Vilmorin)
in € thousand
06/30/2020 06/30/2019
was an expansion of the plants for sugarbeet seed produc-
Stake in the joint venture
tion in Germany as well as investment in the completion of
Current assets
the new research building in Einbeck and breeding stations.
KWS Group moved into new office premises at our Berlin
location and accordingly recognized the related tenant fix-
tures as assets. In France, additional purchases occurred in
sugarbeet harvesting technology with integrated laboratory
equipment and drying and production capacities for corn
seed were increased further in South America, in particular
in Brazil.
7.3 Equity-accounted financial assets
Equity-accounted joint ventures
The joint ventures AGRELIANT GENETICS LLC. and
Thereof cash and cash
equivalents
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 Group operates
Net sales
together with its joint venture partner Vilmorin, are recog-
nized at equity. In the year under review, AGRELIANT
GENETICS LLC. was classified as a significant joint venture.
From the group perspective, AGRELIANT GENETICS INC.
and FARMDESK B.V. were classified as insignificant joint
ventures.
The joint ventures AGRELIANT GENETICS LLC. and
AGRELIANT GENETICS INC. are operating units. The main
Depreciation and amortization
Net income for the year
Comprehensive income (100%)
Comprehensive income (50%)
Group share of
comprehensive income
Dividend payment
50%
50%
286,724
367,892
34,605
241,357
247,475
31,696
243,626
345,058
123,398
133,564
3,971
276,634
138,317
8,802
147,119
510,621
28,707
12,664
12,664
6,332
6,332
5,936
1,294
265,166
132,583
8,802
141,385
512,748
24,523
12,886
12,886
6,443
6,443
12,224
business activity of the two joint ventures is the production
Equity-accounted associated companies
and sale of corn and soybean seed in North America.
The following disclosures on the joint ventures are only
slightly influenced by the insignificant joint venture. If
individual items of the information presented are materially
influenced by the insignificant joint venture, this information
is presented separately.
Disclosures on insignificant associated companies
accounted for using the equity method
in € thousand
06/30/2020 06/30/2019
Carrying amount for the
stake in insignificant
associated companies
( aggregated)
Net income for the year
Other comprehensive income
Comprehensive income (100%)
13,750
9,081
0
9,081
12,601
6,069
0
6,069
In the year under review, the Chinese joint venture
KENFENG – KWS SEED CO., LTD. was carried in the
KWS Group’s consolidated financial statements as an asso-
ciated company in accordance with the equity method.
130 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
KWS Group | Annual Report 2019/2020 7.4 Proportionately consolidated joint operations
Inventories and biological assets increased by
Joint operations are based on joint arrangements that
€36,519 thousand, or 18.9%, a figure that includes cumu-
always exist when the KWS Group jointly conducts
lative impairment losses on the net realizable value totaling
operations managed together with a third party pursuant
€51,559 (63,091) thousand. Immature biological assets relate
to a contractual agreement. The operation is jointly
to living plants in the process of growing (before harvest).
managed only if decisions on significant activities require
The field inventories of the previous year have been harvest-
the unanimous consent of the parties involved. The assets
ed in full and the fields have been newly tilled in the year
and liabilities and revenue and expenses from the joint
under review. Public subsidies of €1,872 (€1,594) thousand,
operations are included proportionately (at 50%) in the
for which all the requirements were met at the balance sheet
consolidated financial statements. The main activity of the
date, were granted for agricultural activity in the fiscal year.
proportionately consolidated GENECTIVE S.A., including its
Future public subsidies depend on the further development
subsidiaries, is development of its own traits for genetically
of European agricultural policy.
improving crops. The proportionately consolidated joint
operation AARDEVO B.V., including its subsidiaries, special-
7.7 Current receivables and other assets
izes in developing potato seed.
7.5 Financial assets
This item mainly comprises the investments in the capital
investment fund MLS Capital Fund II (financing of
projects/ access to biotechnology developments) totaling
€5,450 (4,209) thousand, which are measured irrevocably at
fair value through other comprehensive income due to the
long-term nature of the investment. The remainder relates
to a large number of financial investments that – taken
individually – are insignificant, such as other interest-bearing
Current receivables
in € thousand
Trade receivables
Current tax assets
Other current financial assets
Other current assets
Contractual assets IFRS 15
06/30/2020 06/30/2019
432,569
402,129
83,409
63,391
29,741
2,553
81,010
487,121
20,671
2,733
Total
611,662
993,664
loans, shares in cooperatives, and other securities.
The high level of other current financial assets in the previ-
ous year is mainly due to deposit of the purchase price of
7.6 Inventories and biological assets
around €400 million for the acquisition of all the shares in the
POP VRIEND SEEDS Group in a notary’s escrow account.
Inventories and biological assets
in € thousand
Raw materials and
consumables
Work in progress
Immature biological assets
Finished goods
Total
06/30/2020 06/30/2019
The trade receivables include €10,331 (7,318) thousand in
receivables from joint ventures and joint operations.
32,990
70,843
15,869
110,219
229,922
26,642
62,528
16,087
88,146
193,403
The need to recognize impairment losses at June 30, 2020,
was analyzed using the provision matrix on the basis of
the expected losses. To enable that, the receivables were
grouped by geographical region and the length of time they
were overdue and multiplied by appropriate default rates.
Receivables that are overdue by more than 360 days and
are no longer subject to an enforcement measure have been
classified as uncollectible and written off in full.
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements 131
KWS Group | Annual Report 2019/2020 The maximum exposure to the risk of default from trade
receivables is the carrying amount reported on the balance
sheet and is as follows at June 30, 2020:
Credit risk exposure on trade receivables
in € thousand
06/30/2020
Expected credit loss rate
Total gross amount at default
Expected credit loss
06/30/2019
Expected default rate
Total gross amount at default
Expected credit loss
not overdue
1–180 days
181–360 days
>360 days
Total
Overdue in days
0.83%
391,315
–3,258
1.09%
371,343
–4,039
5.15%
42,066
–2,168
4.25%
33,486
–1,422
44.86%
6,518
–2,924
50.08%
4,505
–2,256
96.15%
26,517
–25,497
98.01%
25,703
–25,192
466,417
–33,848
435,038
–32,909
The credit risks were reflected by the following allowances
at June 30, 2020, and in the previous year:
Change in allowances on receivables
in € thousand
2019/2020
2018/2019
07/01
32,909
37,987
Changes in
consolidation
scope and
exchange
rates
Addition
Disposal
Reversal
–3,900
–1,608
12,193
6,856
1,101
68
6,252
10,258
06/30
33,848
32,909
7.8 Securities
7.9 Cash and cash equivalents
Securities amounting to €28,266 (€19,944) thou-
Cash and cash equivalents comprise cash on hand, checks,
sand relate primarily to money market accounts of
and immediately available balances at banks.
our U.S. subsidiaries. For details of how securities
are measured, please refer to section 7.15 “Finan-
Cash and cash equivalents of €91,472 (139,813) thousand
cial instruments” of the Notes.
consists of balances with banks and cash on hand. The
cash flow statement explains the change in this item
compared with the previous year, together with the change
in securities.
132 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
KWS Group | Annual Report 2019/2020 7.10 Equity
benefit plans, the reserve for currency translation for
The fully paid-up capital of KWS is still €99,000 thousand.
equity-accounted financial assets, and the reserve for
The no-par bearer shares are certificated by a global
revaluation of at equity instruments (with changes in value in
certificate for 33,000,000 shares. The company does not
the other comprehensive income) are also carried here.
hold any shares of its own.
Differences from translation of the functional currency of for-
The capital reserves essentially comprise the premium
eign business operations into the currency used by the group
obtained as part of share issues.
in reporting (euro) are carried in the item Reserve from cur-
rency translation differences on foreign operations. The item
The other reserves and net retained profit essentially
Revaluation of net liabilities/assets from defined benefit plans
comprise the net income generated in the past by the
includes the actuarial gains and losses on defined benefit
companies included in the consolidated financial state-
plans. Differences from translation of the functional currency
ments, minus dividends paid to shareholders, and the net
of equity-accounted foreign business units into the currency
retained profit. The reserve for currency translation, the
used by the group in reporting (euro) are carried in the reserve
reserve for remeasurement gains and losses on defined
for currency translation for equity-accounted financial assets.
Other comprehensive income
in € thousand
Items that may have to be
subsequently reclassified as
profit or loss
Changes in reserve for currency
translation differences on foreign
operations
Changes on reserve for currency
translation differences on at 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
2019/2020
2018/2019
Before
taxes
Tax
effect
After
taxes
Before
taxes
Tax
effect
After
taxes
–38,127
–39,596
1,469
–5,630
0
0
0
825
–38,127
4,345
–39,596
1,592
1,469
–3,835
2,753
–11,319
0
0
0
4,003
4,345
1,592
2,753
–7,316
1,891
–354
1,313
787
–155
632
–7,521
–43,757
1,179
825
–5,148
–12,106
–41,962
–6,974
4,158
4,003
–7,948
–2,971
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements 133
KWS Group | Annual Report 2019/2020 The objective of the KWS Group’s capital management
activities intend to optimize the average cost of capital.
activities is to pursue the interests of shareholders and
Another goal is a balanced mix of equity and debt capital.
employees in accordance with the corporate strategy
Consolidated income (after taxes and minority interests)
and earn a reasonable return on investment. One main
is €95,331 (104,134) thousand. However, there was a total
goal is to retain the trust of investors, lenders and the
dividend payout of €22,110 (21,120) thousand in December
market so as to strengthen the company’s future business
2019. This ensures the adequate financing of further operat-
development. The KWS Group’s capital management
ing business expansion in the long term.
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
Equity ratio
06/30/2020
06/30/2019
994,498
521,744
273,721
93,663
351,841
0
963,547
182,270
182,108
475,425
309,845
1,758
2,235,467
2,114,953
44.5%
45.5%
The focus in selecting financial instruments is on financing
of medium- and long-term borrower’s notes with a total
with matching maturities, which is achieved by controlling
volume of €400,000 thousand. The borrower’s note loans
the maturities. Long-term financial borrowings increased
were raised in August 2019 to replace the bridge funding for
by €339,474 thousand (previous year: increase of
acquisition of the POP VRIEND SEEDS Group. The liabilities
€13,572 thousand). This is mainly due to the increase in
from these borrower’s note loans, using the effective interest
long-term loans from banks in connection with financing
method, were €399,287 thousand at June 30, 2020, and
of the acquisition of the POP VRIEND SEEDS Group at
have remaining maturities through 2029.
the beginning of the fiscal year. Raising of these long-term
borrower’s note loans replaced the bridge funding and
therefore resulted in a sharp fall in short-term financial
Noncurrent liabilities
in € thousand
06/30/2020 06/30/2019
liabilities.
7.11 Minority interests
Long-term provisions
Long-term borrowings
140,074
521,744
264
145,446
182,270
782
The KWS Group does not have any minority interests that
Trade payables
are assessed as being significant.
Deferred tax liabilities
92,265
16,416
7.12 Noncurrent liabilities
Noncurrent liabilities increased by €431,087 thousand
(previous year: increase of €30,055 thousand). This is due
Other noncurrent financial
liabilities
thereof lease liabilities
Other noncurrent liabilities
in particular to the increase in long-term financial bor-
Total
rowings from banks in Germany as a result of the issue
40,103
39,896
1,014
258
0
19,206
795,465
364,378
134 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
KWS Group | Annual Report 2019/2020
Long-term provisions
in € thousand
06/30/
2019
06/30/
2020
Changes
in the
consoli-
da ted
group,
currency
Interest
ex penses
from
com-
pounding
Pension
provisions
Tax provisions
Other
provisions
Total
125,748
7,616
12,082
145,446
–295
117
–22
–200
1,345
0
148
1,493
Adjust-
ment not
affecting
profit or
loss
Con-
sumption
Reclassi-
fication Reversal
6,808
0
0
9,231
7,407
254
6,808
16,892
159
0
–4,449
–4,290
0
0
0
0
129,098
1,412
9,564
140,075
Addition
4,564
1,086
2,059
7,710
The other provisions mainly comprise provisions by
0.85% compared with 0.95% the year before, 2.85% in the
the German companies for semi-retirement and loyalty
U.S. compared with 3.65% the year before, and between
bonuses.
0.30% and 1.40% (0.35% and 2.35%) in the rest of the
world.
The pension provisions are based on defined benefit
The following mortality tables were used at June 30, 2020:
obligations, determined by years of service and pension-
able compensation. They are measured using the accrued
In Germany: The 2018 G mortality table of Klaus Heubeck
benefit method under IAS 19, on the basis of assumptions
Abroad: Mainly Pri-2012 Private Retirement Plans
about future development. The assumptions in detail are
Mortality Table Projection Scale MP-2019 and INSEE TD/
that wages and salaries in Germany will increase by 3.00%
TV 15-17.
(3.00%) annually, in the U.S. by 3.50% (3.75%) annually and
in the rest of the world by 2.00% to 2.40% (1.80% to 2.63%)
A retirement age of 63 years is imputed for Germany, a
annually. An annual increase in pensions of 2.00% (2.00%)
retirement age of 65 years is imputed for the U.S., and a
is assumed in Germany. The discount rate in Germany was
retirement age of 66 years is imputed for France.
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements 135
KWS Group | Annual Report 2019/2020
Nature and scope of the pension benefits
The pension plans are mainly subject to the following risks:
In Germany
The following benefits are provided under a company
Investment and return
agreement relating to the company retirement pension
The present value of the defined benefit obligation from the
program:
pension plan is calculated using a discount rate defined
on the basis of the returns on high-quality fixed-income
An old-age pension at the age of 65
corporate bonds. If the income from the plan assets is
An early retirement pension before the age of 65, coupled
below this rate of interest, the result is a shortfall in the
with benefits from the early retirement pension from the
plan. The corporate bonds and share funds are chosen to
statutory pension insurance program
ensure risk diversification and managed by an external fund
An invalidity pension for persons who suffer from occu-
manager.
pational disability or incapacity to work as defined by the
statutory pension insurance program
Change in interest rates
A widow’s or widower’s pension
The fall in the returns on corporate bonds and thus the
For benefit obligations backed by a guarantee
which is only partly compensated for by a change in the
discount rate will result in an increase in the obligations,
by an insurance company toward three former
value of the plan assets.
members of the Executive Board, the plan assets of
€10,361 (10,061) thousand correspond to the present value
Life expectancy
of the obligation. In accordance with IAS 19, the pension
The present value of the defined benefit obligation from the
commitments are netted off against the corresponding
plan is calculated on the basis of the best-possible estimate
assets (plan assets).
Abroad
using mortality tables. An increase in the life expectancy
of the entitled employees results in an increase in the plan
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 plan 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
least one year and at least 1,000 working hours to earn an
the entitled employees results in an increase in the plan
entitlement.
liabilities.
The following benefits are granted from the pension plan:
In previous years, KWS Group countered the usual risks of
An old-age pension at the age of 65
defined benefit to defined contribution plans. As a result,
An early retirement pension before the age of 65 – to
subsequent benefits will be provided by a provident fund
be eligible, the employee must be at least 55 and the
backed by a guarantee. The existing obligations, which are
minimum vesting period is five years
partly covered by plan assets, are funded from the operating
A pro-rata pension if the employee reaches the minimum
cash flow and are subject to the familiar measurement risks.
direct obligations by converting the pension obligations from
vesting period of five years, but is below 55.
136 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
KWS Group | Annual Report 2019/2020
Changes in accrued benefit entitlements
in € thousand
2019/2020
2018/2019
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
demographic assumptions
of which due to experience
adjustments
Pension payments made
Exchange rate changes
Other changes in value
Reclassification in liabilities hold for sale
Accrued benefit entitlements from
retirement obligations on June 30
Change in planned assets
in € thousand
Fair value of the planned assets
on July 1
127,401
26,924
154,325
117,928
23,642
141,570
881
1,138
3,335
1,516
895
3,473
2,396
2,034
6,808
784
1,900
11,674
1,283
905
1,541
2,067
2,805
13,215
1,970
3,502
5,472
12,947
2,296
15,243
0
1,365
–4,994
0
0
–363
334
–778
340
–52
0
–363
0
1,700
–5,772
340
–52
0
–1,273
–4,885
0
0
–755
–690
465
–63
–159
0
–2,028
–5,575
465
–63
–159
127,760
32,318
160,078
127,401
26,924
154,325
Germany
Abroad
Total
Germany
Abroad
Total
2019/2020
2018/2019
10,191
18,386
28,577
10,061
17,388
27,449
Interest income
94
646
740
161
703
864
Income from planned assets excluding
amounts already recognized as interest
income
Pension payments made
Contributions to plan assets
Exchange rate changes
Other changes in value
Fair value of the planned assets
on June 30
743
–667
0
68
–608
1,873
272
–17
811
–1,276
1,873
272
–17
614
–645
0
494
–561
0
–16
377
1,108
–1,205
0
–16
377
10,361
20,620
30,981
10,191
18,386
28,577
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements 137
KWS Group | Annual Report 2019/2020 In order to allow reconciliation with the figures in the bal-
ance sheet, the accrued benefit must be netted off with the
plan assets.
Reconciliation with the balance sheet values for pensions
in € thousand
2019/2020
2018/2019
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
127,760
32,318
160,078
127,401
26,924
154,325
10,361
117,399
20,619
11,699
30,980
129,098
10,191
117,210
18,386
28,577
8,538
125,748
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 a
change in demographic assumptions
Actuarial gains (–)/losses (+) due to
experience adjustments
Amounts recognized in other
comprehensive income
Total (amounts recognized in the
statement of comprehensive income)
2019/2020
Germany
Abroad
881
1,045
1,516
249
Total
2,396
1,294
Germany
Abroad
784
1,739
1,283
202
2018/2019
Total
2,067
1,941
1,925
1,765
3,690
2,523
1,485
4,008
–743
–68
–811
–614
–494
–1,108
1,970
3,502
5,472
12,947
2,296
15,243
0
–363
–363
0
0
0
1,365
334
1,700
–1,273
–755
–2,028
2,592
3,405
5,997
11,060
1,047
12,107
4,517
5,170
9,687
13,583
2,532
16,115
The service cost is recognized in operating income in the
respective functional areas by means of an appropriate
formula. Net interest expenses and income are carried in the
interest result.
138 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
KWS Group | Annual Report 2019/2020 The fair value of the plan assets was split over the following
investment categories:
Breakdown of the planned assets by investment category
in € thousand
2019/2020
Germany
Abroad
Corporate bonds
Equity funds
Consumer industry
Finance
Industry
Technology
Health care
Other
Cash and cash equivalents
Reinsurance policies
Planned assets on June 30
10,361
10,361
5,496
13,751
2,546
2,010
1,525
2,288
1,988
3,394
1,373
20,620
Total
5,496
13,751
2,546
2,010
1,525
2,288
1,988
3,394
1,373
10,361
30,981
Germany
Abroad
4,655
12,906
2,356
1,731
1,681
2,531
1,458
3,149
825
18,386
10,191
10,191
2018/2019
Total
4,655
12,906
825
10,191
28,577
The plan assets abroad relate mainly to the U.S.
The following sensitivity analysis at June 30, 2020, shows
There is no active market for the reinsurance policies in
a change in the actuarial assumptions. No correlations
Germany. There is an active market for the other plan
between the individual assumptions were taken into account
assets: the fair value can be derived from their stock market
in this, i.e. if an assumption varies, the other assumptions
prices. 62.8% (previous year: 78.2%) of the corporate bonds
were kept constant. The projected unit credit method used
have an AAA rating.
to calculate the balance sheet values was also used in the
how the present value of the obligation would change given
sensitivity analysis.
Sensitivity analysis
in € thousand
Discount rate
Anticipated annual pay increases
Anticipated annual pension increase
Life expectancy
1 lower limit 0%
Effect on obligation in
2019/2020
Effect on obligation in
2018/2019
Change in
assumption
Decrease
Increase
Change in
assumption
Decrease
Increase
+/– 100
bps 1
+/– 50
bps
+/– 25
bps
+/– 1 Jahr
29,169
–22,682
–1,333
1,467
–3,762
–5,754
3,941
5,908
+/– 100
bps 1
+/– 50
bps
+/– 25
bps
+/– 1 Jahr
28,064
–22,111
–1,236
1,407
–3,734
–5,665
3,914
5,808
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements 139
KWS Group | Annual Report 2019/2020
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
2020/2021
2021/2022
2022/2023
2023/2024
2024/2025
2025/2026 -
2029/2030
2019/2020
in € thou-
sand
Germany
Abroad
5,070
5,038
5,070
5,110
5,079
937
917
1,050
1,050
1,229
Total
6,007
5,955
6,120
6,160
6,308
24,935
6,997
31,932
2019/2020
2020/2021
2021/2022
2022/2023
2023/2024
2024/2025 -
2028/2029
Germany
5,106
4,996
4,942
4,956
4,994
Abroad
1,020
822
925
1,124
1,088
2018/2019
Total
6,126
5,818
5,867
6,080
6,082
24,581
6,362
30,943
The weighted average time at which the pension obligations
have to be recognized for them, since there are no further
are due is 15.8 (16.2) years in Germany and 19.8 (18.7) years
obligations above and beyond payment of the contri butions
abroad.
(defined contribution plans). These comprise benefits that
are funded solely by the employer and allowances for
Defined contribution plans
conversion of earnings by employees.
Apart from the above-described pension obligations, there
are other old-age pension systems. However, no provisions
The total pension costs for fiscal 2019/2020 were as follows:
Pension costs
in € thousand
Germany
Abroad
Cost for defined contribution plans
2,925
1,011
Service cost for the defined benefit
obligations
Pension costs
881
3,806
1,516
2,527
2019/2020
2018/2019
Total
3,936
2,396
6,333
Germany
Abroad
3,618
891
784
4,402
1,283
2,174
Total
4,509
2,067
6,576
In addition, contributions of €15,965 (14,786) thousand
contributions to this pension plan were €2,718 (2,249) thou-
were paid to statutory pension insurance institutions.
sand. In addition, the benefit obligation from salary conver-
The costs for defined contribution plans in Germany mainly
present value of the obligation of €4,885 (4,462) thousand.
sion was backed by a guarantee that exactly matches the
related to the provident fund backed by a guarantee. The
140 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
KWS Group | Annual Report 2019/2020
7.13 Current liabilities
Current liabilities
in € thousand
Short-term provisions
Current liabilities to banks
Other current financial liabilities
Short-term borrowings
Trade payables
Tax liabilities
Other current financial liabilities
thereof lease liabilities
Other current liabilities
Contract liabilities according to IFRS 15
Total
The tax liabilities of €41,840 (48,927) thousand include
amounts for the year under review and the period for which
the external tax audit has not yet been concluded.
06/30/2020
06/30/2019
52,467
63,074
30,589
93,663
50,192
473,789
1,636
475,425
109,747
88,495
41,840
28,536
11,404
100,059
19,191
445,504
48,927
17,392
0
86,035
18,804
785,270
Short-term provisions
in € thousand
06/30/2019
Changes in
the consoli-
dated group,
currency
Addition
Consump-
tion
Reclassifi-
cation
Reversal
06/30/2020
Obligations from sales
transactions
Obligations from
purchase
transactions
Other obligations
Total
34,205
–4,771
6,095
5,144
2,949
13,038
50,192
2,301
950
–1,520
7
4,337
10,439
2,073
2,517
9,734
0
0
4,652
4,652
1,345
29,040
3
213
1,560
3,182
20,246
52,468
The obligations from sales transactions essentially relate to
relate to litigation risks and other provisions that cannot be
provisions for licenses. The obligations from purchase trans-
assigned to the group of sales transactions or the group of
actions include provisions for procurement transactions, such
purchase transactions.
as compensation for breeding areas. The other obligations
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements 141
KWS Group | Annual Report 2019/2020
7.14 Derivate finanical instruments
Hedging transactions
in € thousand
Currency hedges
Interest-rate hedges
Total
06/30/2020
06/30/2019
Nominal
volume
Net book
values
Fair value
Nominal
volume
Net book
values
Fair value
218,341
31,000
249,341
–2,616
–197
–2,812
–2,616
156,172
–197
34,000
–2,812
190,172
–621
–73
–694
–621
–73
–694
As in the previous year, all currency hedges have a remaining
account transaction costs, is used. These are active and
maturity of less than one year. Of the interest-rate derivatives,
accessible markets for identical assets and liabilities, where
hedges with a nominal volume of €10,000 (19,000) thousand
the fair value results from quoted prices that are observable
have a remaining maturity of less than one year and hedges
(level 1 input factors). The KWS Group did not hold any
with a nominal volume of €21,000 (15,000) thousand have a
financial instruments that can be assigned to level 1 in the
remaining maturity of between one and five years.
year under review.
7.15 Financial instruments
The level 2 input factors relate to derivative financial
In general, the fair values of financial assets and liabilities
instruments that have been concluded between KWS Group
are calculated on the basis of the market data available on
companies and banks. The prices can thus be derived
the balance sheet date and are assigned to one of the three
indirectly from active market prices for similar assets and
hierarchy levels in accordance with IFRS 13. The principal
liabilities. The level 3 input factors cannot be derived from
market, i.e. the market with the largest volume of trading
observable market information.
and the greatest business activity, is used to calculate the
fair value. If this market does not exist for the asset or liabil-
The carrying amounts and fair values of the financial assets
ities in question, the market that maximizes the amount that
(financial instruments), split into the measurement cate-
would be received to sell the asset or minimizes the amount
gories in accordance with IFRS 9, are as follows:
that would be paid to transfer the liability, after taking into
06/30/2020
in € thousand
Fair values
Financial assets
Carrying amounts
At amortized
cost
At fair value
through other
comprehensive
income
At fair value
through profit and
loss
Total
carrying
amount
Financial assets
Financial assets
Other non-current receivables
Trade receivables
Securities 1
Cash and cash equivalents
Other current financial assets
of which derivative
financial instruments
Total
6,230
8,072
432,569
28,266
91,472
63,391
849
629,999
0
8,072
432,569
28,266
91,472
62,542
0
622,921
6,230
0
0
0
0
0
0
6,230
0
0
0
0
0
849
849
849
6,230
8,072
432,569
28,266
91,472
63,391
849
629,999
142 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2019/2020 | KWS Group 06/30/2019
in € thousand
Financial assets
Financial assets
Other non-current financial
assets
Of which derivative
financial instruments
Trade receivables
Securities 1
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
At amortized cost
At fair value
through other
comprehensive
income
At fair value
through profit and
loss
Total
carrying
amount
Financial assets
Carrying amounts
0
0
0
402,129
19,944
139,813
486,483
0
5,146
0
0
0
0
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
Total
1,054,153
1,048,369
5,146
1 The classification has been adjusted: The deposits on money market accounts are now presented in the category "at amortized cost".
The financial assets and derivative financial instruments
The fair value of derivative financial instruments is the
are measured and carried at fair value. The fair value of
present values of the payments related to these bal-
trade receivables, other current financial assets, cash and
ance sheet items. These instruments are mainly forward
cash equivalents, and securities is the same as the carrying
exchange deals. They are measured on the basis of quoted
amounts as a result of the short time in which these instru-
exchange rates and yield curves available from the market
ments are due.
data and allowing for counterparty risks (level 2).
The fair value of the long-term fund shares contained in the
The carrying amounts and fair values of the financial
financial assets is measured using the methods based on
liabilities (financial instruments), split into the measurement
directly and indirectly observable market inputs (level 2).
categories in accordance with IFRS 9, are as follows:
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
143
KWS Group | Annual Report 2019/2020 06/30/2020
in € thousand
Financial liabilities
Long-term borrowings
Long-term trade payables
Other noncurrent financial liabilities
of which derivative financial instruments
thereof lease liabilities
Short-term borrowings
Short-term trade payables
Other current financial liabilities
of which derivative financial instruments
thereof lease liabilities
Total
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
527,379
264
40,103
207
39,896
93,663
109,747
28,536
3,661
11,404
799,693
521,745
264
39.896
0
39,896
93,663
109,747
24,875
0
11,404
790,191
0
0
207
207
0
0
0
3,661
3,661
0
3,868
Total
carrying
amount
521,745
264
40,103
207
39,896
93,663
109,747
28,536
3,661
11,404
794,059
Fair values
Financial liabilities
Carrying amounts
Financial
liabilities
measured at
amortized cost
Financial
liabilities held
for trading
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
The fair value of long-term borrowings was calculated on the
are due, it is assumed that their carrying amounts are equal
basis of discounted cash flows. To enable that, interest rates
to the fair value.
for comparable transactions and yield curves were used.
The following table shows the financial assets and liabilities
Due to the generally short times by which trade payables
measured at fair value:
and other current financial liabilities (excluding derivatives)
144 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2019/2020 | KWS Group
Assets and liabilities measured at fair value
in € thousand
06/30/2020
06/30/2019
Level 1 Level 2 Level 3
Total Level 1 Level 2 Level 3
Total
Derivative financial instruments without
application of hedge accounting under IFRS 9
Financial assets 1
Financial assets
Derivative financial instruments without
application of hedge accounting under IFRS 9
Financial liabilities
1 Prior year figures have been adjusted:
0
0
0
0
0
849
6,230
7,078
3,868
3,868
0
0
0
0
0
849
6,230
7,078
3,868
3,868
0
1,211
1,211
0
0
638
5,145
5,783
1,333
1,333
0
0
0
0
0
638
6,357
6,995
1,333
1,333
- Deposits on money market accounts were reclassified to the category at “amortized cost” and therefore no longer measured at fair value (Level 1).
- The investment in a closed investment fund was reclassified from Level 1 to Level 2.
The table below presents the net gains/losses carried in the
The net losses from financial liabilities measured at
income statement for financial instruments in each measure-
amortized cost result mainly from interest expense.
ment category:
Net gain/losses of financial instruments
in € thousand
2019/2020
2018/2019
Financial assets measured at
fair value through other com-
prehensive 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
Credit risks
The credit risk is the risk that a business partner does not
fulfill its obligations as part of a financial instrument or
contract with a customer, resulting in a financial loss. The
KWS Group is exposed to credit risks in its operational
1,313
68
activities mainly in relation to trade receivables.
–1,289
–4,665
In order to control the credit risks resulting from receivables
182
8,438
ducted in accordance with the credit volume. If a customer’s
from customers, a regular creditworthiness analysis is con-
–21,391
–18,425
2,810
1,065
credit risk is classified as high, it is reduced by means of
security. This includes, in particular, credit insurance, prepay-
ments, down payments, promissory notes and guarantees.
Depending on the contract’s design, reservation of owner-
ship of goods is agreed with our customers. Credit limits are
The net gains for assets measured at fair value through
defined for all customers. Credit limits, outstanding claims
other comprehensive income include income from
and the collection of receivables are analyzed in regular
non- terminable interests in investment funds.
meetings of the Credit Committee. For details of the exposure
to the risk of default at June 30, 2020, please refer to section
The net losses from financial assets and net gains in finan-
7.7 “Current receivables and other assets” of the Notes.
cial liabilities measured at fair value through profit or loss
solely comprise changes in the market value of derivative
Credit risks from financial transactions are controlled
financial instruments.
centrally by the Treasury department. In order to minimize
risks, financial transactions are exclusively conducted
The net gains from financial assets measured at cost
within defined limits with banks and partners who always
mainly include effects from changes in the allowances for
have an investment grade. Compliance with the risk limits is
impairment.
constantly monitored. The limits are adjusted depending on
the credit volume only subject to the approval of the regional
or divisional management and the Executive Board.
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
145
KWS Group | Annual Report 2019/2020 Liquidity risks
The table below shows the KWS Group’s liquidity analysis
Liquidity risk is the risk that funds to settle due payment
for non-derivative and derivative financial liabilities. The
obligations cannot be obtained on time or at all.
table is based on contractually agreed, undiscounted
payment flows (interest and payments of principal):
Liquidity is managed in the Eurozone by the central Treasury
unit using a cash pooling system. Liquidity requirements are
generally determined by means of cash planning and are
covered by cash and promised credit lines.
Fiscal year 2019/2020
in € thousand
Book
value
Liquidity analysis of financial liabilities
06/30/2020
06/30/2020
total
Financial liabilities
Trade payables
Other financial liabilities
thereof lease liabilities
Nonderivative financial liabilities
Payment claim
Payment obligation
615,407
625,390
110,012
110,012
68,640
51,300
794,058
71,139
54,010
806,540
165,981
172,115
Derivative financial liabilities
3,868
6,135
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
306,584
233,639
264
24,018
23,811
0
18,585
18,585
330,866
252,224
0
126
126
0
18
18
Due in
< 1 year
85,166
109,747
28,536
11,614
223,450
165,981
171,971
5,991
Due in
< 1 year
475,425
88,495
17,392
Due in
> 1 year and
< 5 years
180,820
782
258
Cash flows
Due in
> 5 years
1,450
0
0
Nonderivative financial liabilities
764,622
764,622
581,312
181,860
1,450
Payment claim
Payment obligation
Derivative financial liabilities
1,333
91,981
93,189
1,208
91,981
93,189
1,208
0
0
0
0
0
0
The cash flows of the derivative financial liabilities mainly
relate to forward exchange deals and include both interest
payments and redemption payments. These derivative
financial instruments are settled in gross.
146 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2019/2020 | KWS Group Currency risks
Interest rate sensitivity is a measure for showing the
Currency risks are where the fair value or future cash flows
interest rate risk. The interest rate sensitivity analysis
of a financial instrument are subject to fluctuations due to
was conducted for the portfolio of financial instruments
exchange rate changes. The KWS Group is mainly exposed
with a variable interest rate at the balance sheet date and
to currency risks as part of its financing activities with foreign
shows the hypothetical effect on income for one year. The
subsidiaries. Derivative transactions (forward exchange
variable-interest components of the KWS Group’s interest
deals and currency swaps) are concluded to secure the net
expenses and interest income were determined to calcu-
investment in subsidiaries. The company ensures that the
late it. In a scenario analysis, the effects of an increase/
derivative financial instrument is commensurate with the risk
reduction of one percentage point (100 base points) in
to be hedged.
the relevant underlying capital market interest rate on the
interest result were calculated. An increase in the rate of
In order to assess the currency risk, the sensitivity of a
interest of 1 percentage point would result in additional
currency to fluctuations was determined. The analysis shows
interest expense of €0.7 million (previous year: expense of
the impact on income and equity. The calculated figures
€3.0 million). A reduction in the rate of interest of 1 percent-
relate to the portfolio of financial instruments at the balance
age point would add a further €0.3 (3.0) million in income.
sheet date and show the hypothetical effect for one year.
7.16 Leases
After the euro, the US dollar is the most important currency
The effects from the change in lease accounting at the time
in the KWS Group. All other currencies are of minor impor-
of adoption of IFRS 16 are presented in section 2 of the
tance. The currency risk mainly results from intra-Group
Notes.
receivables and liabilities from financing activity. The average
USD/EUR exchange rate in the fiscal year was 1.11 (1.14). If
Book values of right-of-use assets
the US dollar depreciated by 10%, the extra expense would
be €23,562 (10,482) thousand. If the US dollar appreciated by
10%, the extra income would be €23,562 (10,482) thousand.
The net income for the year would change accordingly.
Risk of changes in interest rates
The risk of changes in interest rates is where the fair value
in € thousands
Land and buildings
Technical equipment and machinery
Operating and office equipment
Total
06/30/2020
37,678
689
7,982
46,349
or future cash flows of a financial instrument are subject to
Additions to rights of use for leased assets totaling €30,590
fluctuations due to changes in market interest rates.
thousand were recognized in fiscal 2019/20 and the amorti-
The risk of changes in interest rates is controlled by means
of a balanced portfolio of fixed-interest and variable- interest
loans. Interest rate swaps are concluded if there is a high
risk of interest rate variability in the portfolio. As part of
them, the KWS Group exchanges the difference between
zation on them was as follows:
Depreciation of right-of-use assets
in € thousands
Land and buildings
fixed-interest and variable-interest amounts determined
Technical equipment and machinery
with reference to a previously agreed nominal amount with a
Operating and office equipment
contractual partner at defined intervals of time.
Total
2019/2020
5,194
384
5,059
10,637
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
147
KWS Group | Annual Report 2019/2020
Expenses for short-term leases and for leases relating to
low-value assets totaled €12,437 thousand in the period
under review.
8. Notes to the Cash Flow Statement
The cash flow statement shows the changes in cash and
cash equivalents of the KWS Group in the three categories
Short-term lease liabilities totaled €11,404 thousand and long-
of operating activities, investing activities and financing
term lease liabilities €39,896 thousand at June 30, 2020. The
activities. The effects of exchange rate changes and
maturity analysis of the lease liabilities is presented in section
changes in the consolidated group have been eliminated
7.15 of the Notes. Lease payments totaled €14,376 thousand
from the respective balance sheet items, except those
in fiscal 2019/2020. Interest expenses from interest accrued
affecting cash and cash equivalents.
on the lease liabilities were €1,184 thousand.
Due to adoption of IFRS 16 “Leases” and the KWS Group’s
In general, lease agreements are concluded without
increased financing activities over recent years, the pre-
extension or termination options. Possible cash outflows of
sentation of the cash flow statement has changed in terms
€20,683 thousand for existing options to extend a property
of interest income and interest expense. Interest income is
rental agreement were not included in determining the lease
reported under the net cash from investing activities and
liabilities since there is no reasonable certainty as to whether
interest expense under net cash from financing activities.
the options will be exercised.
The disclosures for the previous year have been changed
accordingly.
The KWS Group also acts as a lessor. A long-term sublease
agreement was concluded in the fiscal year and has been
classified as a financial lease in relation to the main lease
agreement. The interest income was €25 thousand.
The sublease is reported under the noncurrent receivables
(€4,682 thousand) and other current receivables
(€586 thousand). The annual income from the sublease is
€589 thousand. The lease agreement contains a clause
permitting annual adjustment of the lease payment depend-
ing on market circumstances.
7.17 Contingent liabilities and other financial obligations
The obligations from uncompleted capital expenditure
projects, mainly relating to property, plant, and equip-
Adjustment of presentation in cash flow statement
in € thousands
Net cashflow
from operating
activities
Net cashflow
from investing
activities
Net cashflow
from financing
activities
2018/2019
reported
Adjust-
ment
2018/2019
adjusted
72,850
12,784
85,634
–95,235
3,965
–91,270
404,502
–16,749
387,753
ment, and other capital commitments amount to
In the previous year, the €414.7 million deposited in a notary’s
€29,439 (20,636) thousand.
escrow account for acquisition of the POP VRIEND SEEDS
Group was deducted from the cash and cash equivalents and
Other guarantees with respect to third parties amount to
carried under the other financial assets.
€95,537 (111,956) thousand. The likelihood that these guar-
antees will be utilized is seen as slight, based on the experi-
As in previous years, cash and cash equivalents are
ence of previous years. No claims have yet been made.
composed of cash (on hand and balances with banks) and
As in the previous year, there are no contingent liabilities
to report at the balance sheet date.
current securities.
148 Annual Financial Statements | Notes for the KWS Group | 8. Notes to the Cash Flow Statement
Annual Report 2019/2020 | KWS Group 9. Other Notes
9.1 Proposal for the appropriation of net retained profits
In fiscal year 2019/2020, total Executive Board compensa-
The net retained profits of KWS SAAT SE & Co. KGaA are
tion amounted to €5,428 (€4,316) thousand. The variable
€23,100 thousand (previous year: net retained profits of
compensation, which is calculated on the basis of the net
€22,912 thousand).
profit for the period of the KWS Group, is made up of a bonus
and a long-term incentive. The bonus totals €2,500 (2,032)
A proposal will be made to the Annual Shareholders’ Meet-
thousand; there are contributions from the long-term incen-
ing that an amount of €23,100 thousand should be used to
tive tranche for 2019/2020 totaling €847 thousand (tranche
pay a dividend of €0.70 (previous year: €0.67) for each of the
for 2018/2019: €766 thousand). Pension provisions totaling
33,000,000 shares.
€1,619 (1,566) thousand were formed for two members of the
Executive Board at KWS SAAT SE & Co. KGaA.
9.2 Total remuneration of the Supervisory Board and
the Executive Board and of former members of
Compensation of former members of the Executive Board and
the Supervisory Board and the Executive Board of
their surviving dependents amounted to €1,419 (1,479) thou-
KWS SAAT SE & Co. KGaA
sand. Pension provisions recognized for this group of persons
The compensation of the members of the Supervisory Board
amounted to €7,140 (6,674) thousand as of June 30, 2020,
was converted to a purely fixed compensation pursuant to
before being netted off with the relevant plan assets.
the resolution adopted by the Annual Shareholders’ Meet-
ing in December 2017. Members of the Supervisory Board
9.3 Related party disclosures
who are members of a committee – with the exception of
Transactions with related parties in accordance with IAS
the Chairman of the Supervisory Board – receive an addi-
24 are all business dealings that are conducted with the
tional fixed payment therefor. The total compensation for
reporting entity by entities or natural persons or their close
members of the Supervisory Board amounts to €620 (620)
family members, if the party or person in question controls
thousand, excluding value-added tax. The total compensa-
the reporting entity or is a member of its key management
tion for members of the Supervisory Board of KWS SE, the
personnel, for example.
personally liable partner of KWS SAAT SE & Co. KGaA, in the
year under review amounted to €185 (0) thousand, excluding
Pursuant to the change in legal form to a partnership limited
value- added tax.
Related parties
in € thousand
KWS SE
At equity accounted
joint ventures
Joint operations
Other related parties
by shares on July 2, 2019, the personally liable partner KWS
SE provides business management services on behalf of
KWS SAAT SE & Co. KGaA.
Deliveries and
services provided
Received deliveries
and services
Receivables
Payables
2019/2020 2018/2019 2019/2020 2018/2019 2019/2020 2018/2019 2019/2020 2018/2019
0
0
5,330
0
556
0
0
9,243
4,832
18
1,991
12,059
11,640
0
0
7,708
117
4,920
111
31,354
11,964
0
22,579
695
0
1,897
1,786
1,058
0
0
23
0
9. Other Notes | Notes for the KWS Group | Annual Financial Statements 149
KWS Group | Annual Report 2019/2020 There were also no business transactions or legal trans-
9.5 Audit of the annual financial statements
actions that required reporting for related parties in fiscal
On December 17, 2019, the Annual Shareholders’ Meeting
2019/20. As part of its operations, KWS Group procures
of KWS SAAT SE & Co. KGaA elected the accounting firm
goods and services worldwide from a large number of
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft,
business partners. They also include companies in which
Hanover, to be the Group’s auditors for fiscal year 2019/20.
KWS Group has an interest and on which representatives of
KWS Group’s Supervisory Board exert a significant influence.
Business dealings with these companies are always conduct-
ed on an arm’s length basis and are not material in terms of
volume. As part of Group financing, short- and medium-term
term loans are taken out from and granted to subsidiaries at
market interest rates. The compensation of members of the
Executive Board comprises short-term employee benefits,
share-based payment benefits and post-employment
benefits.
Individualized disclosures on the compensation of members
Fee paid to the external auditors under
Section 314 (1) No. 9 HGB
in € thousand
2019/2020 2018/2019
a) Audit of the consolidated
financial statements
b) Other certification services
c) Tax consulting
d) Other services
Total fee paid
1,370
1,488
50
0
0
69
0
0
1,420
1,557
of the Executive Board and the Supervisory Board are
The non-audit services in fiscal year 2019/2020 comprised the
presen ted in the Compensation Report, which is part of the
voluntary audit of the Non-Financial Declaration.
audited Combined Management Report.
9.4 Disclosure
9.6 Report on events after the balance sheet date
There have been no events of particular significance
The following subsidiaries with the legal form of a corpora-
that might have an impact on the presentation of the
tion within the meaning of Section 264 (3) and 264b of the
KWS Group’s earnings, financial position and assets since
German Commercial Code (HGB) have utilized the exemp-
the end of the fiscal year.
tion provided in Section 264 (3) of the German Commercial
Code (HGB) as regards preparation of financial statements
9.7 Declaration of compliance with the German
and their publication:
Corporate Governance Code
KWS SAAT SE & Co. KGaA has issued the declaration
KWS LOCHOW GMBH, Bergen
of compliance with the German Corporate Governance
KWS LANDWIRTSCHAFT GMBH, Einbeck
Code required by Section 161 of the Aktiengesetz (AktG –
BETASEED GMBH, Frankfurt am Main
German Stock Corporation Act) and made it accessible
KWS SAATFINANZ GMBH, Einbeck
to its shareholders on the company’s home page at
DELITZSCH PFLANZENZUCHT GMBH, Einbeck
www.kws.com.
KANT-HARTWIG & VOGEL GMBH, Einbeck
AGROMAIS GMBH, Everswinkel
KWS BERLIN GMBH, Berlin
KWS INTERSAAT GmbH, Einbeck
EURO-HYBRID GESELLSCHAFT FÜR
GETREIDEZÜCHTUNG MBH, Einbeck
KWS KLOSTERGUT WIEBRECHTSHAUSEN GMBH,
Northeim-Wiebrechtshausen
RAGIS KARTOFFELZUCHT- UND
HANDELSGESELLSCHAFT MBH, Einbeck
KWS SAAT SE & Co. KGaA prepares the consolidated
financial statements for the largest and smallest group of
companies.
150 Annual Financial Statements | Notes for the KWS Group | 9. Other Notes
Annual Report 2019/2020 | KWS Group 9.8 List of shareholdings
List of shareholdings in accordance with Section 313 (2) HGB (German Commercial Code)
Fiscal year 2019/2020
Name and Company’s registered office
Currency
Interest held
Total in %
Footnote
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 GESELLSCHAFT FÜR
GETREIDEZÜCHTUNG MBH, Einbeck
BETASEED GMBH, Frankfurt am Main
KANT-HARTWIG & VOGEL GMBH, Einbeck
KWS BERLIN GMBH, Berlin
Foreign
KWS SRBIJA D.O.O., Neu Belgrad/Serbia
SEMILLAS KWS CHILE LTDA., Rancagua/Chile
KWS SEMENA S.R.O., Bratislava/Slovakia
KWS BULGARIA EOOD., Sofia/Bulgaria
KWS ARGENTINA S.A., Balcarce/Argentina
Fully consolidated subsidiaries (indirect)
Foreign
KWS MAGYARORSZÁG KFT., Gyo˝ r/Hungary
KWS FRANCE S.A.R.L., Roye/France
KWS SUISSE S.A., Basel/Switzerland
KWS ITALIA S.P.A., Forlì/Italy
KWS POLSKA SP.Z O.O., Poznan´/Poland
KWS OSIVA S.R.O, Velké Mezirici/Czech Republic
KWS SJEME D.O.O., Osijek/Croatia
KWS BENELUX B.V., Amsterdam/Netherlands
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
BETASEED FRANCE S.A.R.L., Bethune/France
€
€
€
€
€
€
€
€
€
€
€
€
RSD
CLP
€
BGN
ARS
HUF
€
CHF
€
PLN
CZK
HRK
€
€
€
€
€
€
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
1
1
1
1
1
1
1
27
28
3
3
3
3
3
3
3
3
3
3
3
3
3
9. Other Notes | Notes for the KWS Group | Annual Financial Statements 151
KWS Group | Annual Report 2019/2020 Currency
Interest held
Total in %
Footnote
USD
USD
USD
GBP
PEN
RON
DKK
RUB
RUB
€
USD
TRY
UAH
PLN
USD
€
€
€
€
€
€
€
€
€
€
TRY
TRY
€
TRY
CNY
€
€
MAD
BRL
BRL
USD
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
100.00
100.00
100.00
100.00
100.00
100.00
24
4
4
3
5
25
3
23
7
3
3
3
23
3
4
16
17
18
18
18
18
18
18
18
18
19
20
3
3
8
6
3
9
29
30
4
Fiscal year 2019/2020
Name and Company’s registered office
BETASEED INC., Bloomington/U.S.
GLH SEEDS INC., Bloomington/U.S.
KWS CEREALS USA LLC, Champagne/U.S.
KWS UK LTD., Thriplow/United Kingdom
KWS PERU S.A.C., Lima/Peru
KWS SEMINTE S.R.L., Bukarest/Romania
KWS SCANDINAVIA A/S, Guldborgsund/Denmark
KWS RUS O.O.O., Lipezk/Russia
KWS R&D RUS LLC, Lipezk/Russia
KWS SEMILLAS IBÉRICA S.L., Zaratán/Spain
KWS SEEDS INC., Bloomington/U.S.
KWS TÜRK TARIM TICARET A.S., Eskisehir/Turkey
KWS UKRAINA T.O.V., Kiev/Ukraine
KWS LOCHOW POLSKA SP.Z O.O., Kondratowice/Poland
KWS GATEWAY RESEARCH CENTER LLC, St. Louis/U.S.
BIRIKA B.V., Amsterdam/Netherlands
CHURA B.V., Amsterdam/Netherlands
POP VRIEND RESEARCH B.V., Andijk/Netherlands
POP VRIEND SEEDS B.V., Andijk/Netherlands
BELAMI B.V., Andijk/Netherlands
POP VRIEND VEGETABLES SEEDS B.V.,
Andijk/Netherlands
EUROPSEEDS B.V., Enkhuizen/Netherlands
POP VRIEND PRODUCTION B.V., Andijk/Netherlands
POP VRIEND SEEDS USA B.V., Andijk/Netherlands
POP VRIEND INTERNATIONAAL B.V., Andijk/Netherlands
POP VRIEND TOHUMCULUK VE TARIM ÜRÜNLERI SAN-
AYI VE TICARET LIMITED ŞIRKETI , Istanbul/Turkey
PV TOHUMCULUK TARIM ÜRÜNLERI SANAYI VE
TICARET LIMITED ŞIRKETI, Izmir/Turkey
KWS SEMILLAS CANARIAS S.L.U., Gran Canaria/Spain
BTS TURKEY TARIM TICARET LIMITED ŞIRKETI,
Eskisehir/Turkey
KWS AGRICULTURE RESEARCH &
DEVELOPMENT CENTER, 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
KWS SEMENTES LTDA., Curitiba/Brazil
KWS SERVICOS E PARTICIPACOES SOUTH AMERICA
LTDA., São Paulo/Brazil
KWS SERVICES NORTH AMERICA LLC,
Bloomington/U.S.
152 Annual Financial Statements | Notes for the KWS Group | 9. Other Notes
Annual Report 2019/2020 | KWS Group Fiscal year 2019/2020
Name and Company’s registered office
Currency
Interest held
Total in %
Footnote
KWS PODILLYA T.O.V., Kiev/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 PARAGUAY SRL, Asunción/Paraguay
IMPETUS AGRICULTURE INC., Lewes/U.S.
KWS KUBAN O.O.O., Krasnodar/ Russia
SEED PLANT KWS O.O.O., Lipetsk/Russia
KWS INTERNATIONAL HOLDING II B.V.,
Emmeloord/Netherlands
Equity-accounted joint ventures
AGRELIANT GENETICS INC., Chatham/Canada
AGRELIANT GENETICS LLC, Westfield/U.S.
FARMDESK B.V., Antwerpen/Belgium
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
UAH
CNY
€
€
PYG
USD
RUB
RUB
€
CAD
USD
€
CNY
€
CAD
TWD
USD
JPY
KRW
USD
USD
RS
RON
100.00
100.00
100.00
100.00
100.00
70.00
100.00
100.00
100.00
50.00
50.00
50.00
49.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
100.00
100.00
10
8
11
3
12
21
7
7
3
13
22
26
26
26
26
26
14
15
2
2
1 Profit and loss transfer agreement
2 In liquidation
3 Subsidiary of KWS INTERNATIONAL HOLDING B.V.
4 Subsidiary of KWS SEEDS INC.
5 Subsidiary of SEMILLAS KWS CHILE LTDA. and KWS SERVICOS E PARTICIPACOES
SOUTH AMERICA LTDA.
6 Subsidiary of KWS INTERSAAT GMBH
7 Subsidiary of KWS RUS O.O.O.
8 Subsidiary of EURO-HYBRID GMBH
9 Subsidiary of KWS BENELUX B.V.
10 Subsidiary of KWS UKRAINA T.O.V.
11 Subsidiary of KWS MOMONT S.A.S.
12 Subsidiary of KWS SERVICOS E PARTICIPACOES SOUTH AMERICA LTDA. and
KWS SEMENTES LTDA.
13 Participation of GLH SEEDS INC.
14 Participation of RAGIS RAGIS KARTOFFELZUCHT- UND HANDELSGESELLSCHAFT MBH
15 Subsidiary of AARDEVO B.V.
16 Subsidiary of KWS VEGETABLES B.V.
17 Subsidiary of BIRIKA B.V. and KWS VEGETABLES B.V.
18 Subsidiary of BIRIKA B.V. and CHURA B.V.
19 Subsidiary of POP VRIEND INTERNATIONAL B.V.
20 Subsidiary of POP VRIEND TOHUMCULUK VE TARIM ÜRÜNLERI SANAYI VE TICARET
LIMITED SIRKETI
21 Subsidiary of KWS R&D INVEST B.V.
22 Participation of KWS INTERNATIONAL HOLDING B.V.
23 Subsidiary of EURO-HYBRID GMBH and KWS SAATFINANZ GMBH
24 Subsidiary of KWS SEEDS INC., from 07/01/2020 renamed as KWS SEEDS LLC
25 Subsidiary of KWS INTERSAAT GMBH and of KWS SAATFINANZ GMBH
26 Subsidiary of GENECTIVE S.A.
27 Subsidiary of KWS KLOSTERGUT WIEBRECHTSHAUSEN GMBH
28 Subsidiary of KWS SERVICOS E PARTICIPACOES SOUTH AMERICA LTDA.
29 Subsidiary of KWS SERVICOS E PARTICIPACOES SOUTH AMERICA LTDA. and
KWS INTERSAAT GMBH
30 Participation of KWS INTERNATIONAL HOLDING B.V. and KWS SAATFINANZ GMBH
9. Other Notes | Notes for the KWS Group | Annual Financial Statements 153
KWS Group | Annual Report 2019/2020 9.9 Supervisory and Executive Boards of KWS SAAT SE & Co. KGaA in fiscal 2019/2020
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, Vernier (Switzerland)
(member of the Board of Directors, the Audit Committee
and the Compensation Committee)
Medacta International SA, Frauenfeld (Switzerland)
(member of the Board of Directors and Chairman of the
Audit Committee – since April 2019)
Hemro AG, Bachenbülach (Switzerland)
(member of the Management Board)
Sika AG, Baar (Switzerland)
(member of the Board of Directors and Chairman of the
Audit Committee – since March 2019)
Louis Dreyfus Holding B.V., Amsterdam (Netherlands)
(member of the Supervisory Board and Audit Committee)
Membership of other legally mandated
supervisory boards:
CLAAS KGaA mbH, Harsewinkel (Chairwoman)
Membership of comparable German and foreign
oversight boards:
CLAAS KGaA mbH, Harsewinkel
(Chairwoman of the Shareholder's Committee)
9.9.1 Supervisory Board
Members
Dr. Drs. h. c. Andreas J. Büchting
Göttingen
Agricultural Biologist
Chairman of the Supervisory Board
of KWS SAAT SE & Co. KGaA and KWS SE
Dr. Marie Theres Schnell
Munich
Graduate in Communications
Deputy Chairman of the Supervisory Board
of KWS SAAT SE & Co. KGaA and KWS SE
Victor W. Balli
Zurich (Switzerland)
Chemical Engineer
Chairman of the Audit Committee
of KWS SAAT SE & Co. KGaA and KWS SE
Jürgen Bolduan
Einbeck
Seed Breeding Employee
Member of the Supervisory Board
of KWS SAAT SE & Co. KGaA
Chairman of the Central Works Council
of KWS SAAT SE & Co. KGaA
Cathrina Claas-Mühlhäuser
Frankfurt am Main
Businesswoman
Member of the Supervisory Board
of KWS SAAT SE & Co. KGaA and KWS SE
Christine Coenen
Einbeck
Interpreter
Member of the supervisory board
of KWS SAAT SE & Co. KGaA
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 and KWS SE
154 Annual Financial Statements | Notes for the KWS Group | 9. Other Notes
Annual Report 2019/2020 | KWS Group 9.9.2 Supervisory Board Committees
Committee
Audit Committee
Chairman/Chairwoman
Members
Victor W. Balli
Nominating Committee
Dr. Marie Theres Schnell
Dr. Drs. h. c. Andreas J. Büchting
Jürgen Bolduan
Dr. Drs. h. c. Andreas J. Büchting
Cathrina Claas-Mühlhäuser
9.9.3 Executive Board
Members
Dr. Hagen Duenbostel
Einbeck
Chief Executive Officer
Corn North-/Southamerica and China/Asia, Group Compliance,
Group Strategy, Group Governance & Risk Management
Dr. Léon Broers
Einbeck
Research & Breeding, Vegetables
Dr. Felix Büchting
Einbeck
Cereals, Oilseed Rape/Special Crops & Organic Seed,
Human Resources, Farming
Dr. Peter Hofmann
Einbeck
Sugarbeet, Corn Europe, Cereals,
Marketing & Communications
Eva Kienle
Göttingen
Global Finance & Procurement, Global Controlling,
Global Transaction Center
Global Legal Services & IP, IT, KWS Digital
Innovation Accelerator
Other seats
Membership in other legally required supervisory boards:
Hero AG, Lenzburg (Switzerland)
(member of the Board of Administration)
Membership in other legally required supervisory boards:
Zumtobel Group AG, Dornbirn (Austria)
(member of the Supervisory Board and Chairwoman of
the Audit Committee)
9. Other Notes | Notes for the KWS Group | Annual Financial Statements 155
KWS Group | Annual Report 2019/2020 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 state-
statements and of the group management report in ac-
ments and of the group management report
cordance with Sec. 317 HGB and the EU Audit Regulation
We conducted our audit of the consolidated financial
Opinions
(No 537/2014, referred to subsequently as “EU Audit Regu-
lation”) and in compliance with German Generally Accepted
We have audited the consolidated financial statements
Standards for Financial Statement Audits promulgated by
of KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE),
the Institut der Wirtschaftsprüfer [Institute of Public Auditors
Einbeck, and its subsidiaries (the Group), which comprise
in Germany] (IDW). Our responsibilities under those require-
the consolidated statement of comprehensive income
ments and principles are further described in the “Auditor’s
for the fiscal year from 1 July 2019 to 30 June 2020, and
responsibilities for the audit of the consolidated financial
the consolidated statement of financial position as at
statements and of the group management report” section
30 June 2020, consolidated statement of changes in equity
of our auditor’s report. We are independent of the group
and consolidated statement of cash flows for the fiscal
entities in accordance with the requirements of European
year from 1 July 2019 to 30 June 2020, and notes to the
law and German commercial and professional law, and we
consolidated financial statements, including a summary of
have fulfilled our other German professional responsibili-
significant accounting policies. In addition, we have audited
ties in accordance with these requirements. In addition, in
the group management report of KWS SAAT SE & Co. KGaA
accordance with Art. 10 (2) f) of the EU Audit Regulation,
(formerly KWS SAAT SE), which was combined with the
we declare that we have not provided non-audit services
management report of the Company, for the fiscal year from
prohibited under Art. 5 (1) of the EU Audit Regulation. We
1 July 2019 to 30 June 2020. In accordance with the German
believe that the audit evidence we have obtained is suffi-
legal requirements, we have not audited the content of the
cient and appropriate to provide a basis for our opinions
parts of the group management report listed in the appendix
on the consolidated financial statements and on the group
to the auditor’s report.
management report.
In our opinion, on the basis of the knowledge obtained in the
Key audit matters in the audit of the consolidated
audit,
financial statements
Key audit matters are those matters that, in our profession-
the accompanying consolidated financial statements
al judgment, were of most significance in our audit of the
comply, in all material respects, with the IFRSs as adopt-
consolidated financial statements for the fiscal year from 1
ed by the EU, and the additional requirements of German
July 2019 to 30 June 2020. These matters were addressed
commercial law pursuant to Sec. 315e (1) HGB [“Handels-
in the context of our audit of the consolidated financial
gesetzbuch”: German Commercial Code] and, in compli-
statements as a whole, and in forming our opinion thereon;
ance with these requirements, give a true and fair view of
we do not provide a separate opinion on these matters.
the assets, liabilities and financial position of the Group as
at 30 June 2020 and of its financial performance for the
Below, we describe what we consider to be the key audit
fiscal year from 1 July 2019 to 30 June 2020, and
matters:
the accompanying group management report as a whole
provides an appropriate view of the Group’s position. In all
(1) Revenue recognition from the sale of seeds
material respects, this group management report is con-
sistent with the consolidated financial statements, com-
Reasons why the matter was determined to be a key
plies with German legal requirements and appropriately
audit matter
presents the opportunities and risks of future develop-
In the consolidated financial statements of KWS SAAT SE &
ment. Our opinion on the group management report does
Co. KGaA (formerly KWS SAAT SE), revenue from the sale
not cover the content of the parts of the group manage-
of seeds is recognized when risk passes, taking contrac-
ment report listed in the appendix to the auditor’s report.
tually agreed return deliveries into consideration. In light of
the large number of different contractual agreements and
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that
the resulting judgment exercised in assessing expected
our audit has not led to any reservations relating to the legal
return deliveries, we consider revenue recognition to be
compliance of the consolidated financial statements and of
complex and therefore to pose an elevated risk of incorrect
the group management report.
recognition.
156 Annual Financial Statements | Independent Auditor’s Report
Annual Report 2019/2020 | KWS Group Auditor’s response
(2) Purchase price allocation from the acquisition of the
During our audit, we considered, based on the criteria de-
Pop Vriend Group
fined in IFRS 15, the accounting policies applied in accor-
dance with the internal accounting instructions in the con-
Reasons why the matter was determined to be a key
solidated financial statements of KWS SAAT SE & Co. KGaA
audit matter
(formerly KWS SAAT SE) for the recognition of revenue.
In fiscal year 2019/2020, KWS SAAT SE & Co. KGaA (former-
Our response included an examination of whether control
ly KWS SAAT SE) acquired Birika B.V., Andjik, Netherlands,
passed to the buyers upon the sale of the seeds. We ana-
for a price of EUR 414.7m.
lyzed the process implemented by the management board
of KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE) and
The assets and liabilities acquired are recognized at fair val-
the accounting and valuation requirements for the recog-
ue as of the acquisition date. The remaining purchase price
nition of seed sales, in particular taking into account the
amount that is not allocated to the acquired assets and lia-
findings from actual return deliveries. Based on analytical
bilities as part of the purchase price allocation is recognized
procedures defined group-wide, we examined whether the
as goodwill.
significant revenue items for fiscal year 2019/2020 correlate
with the corresponding trade receivables to identify any
No observable market values are available for some of the
irregularities in the development of revenue. With a view
acquired assets, especially brands, technology and custom-
to the recognition of revenue on an accrual basis, we also
er relationships. Consequently, complex valuation models
obtained balance confirmations from customers and per-
based on assumptions are used to determine the relevant
formed data analyses to identify any irregularities in com-
fair values. The outcome of the valuation is highly dependent
parison with the prior year. We analyzed the recognition of
on the estimate of future cash flows and the discount rates
revenue based on the contractual arrangements on a sam-
used and is subject to uncertainty due to the considerable
ple basis with regard to the requirements of IFRS 15. Based
judgment exercised. Given the complexity of the valuation,
on analytical procedures carried out on historical data and
the inherent assumptions subject to judgment and the
the analysis of the underlying contracts, we examined the
significance of the acquisition for the consolidated financial
calculation of expected return deliveries of seeds and their
statements, we consider the purchase price allocation to be
deduction from revenue.
a key audit matter.
Overall, our procedures relating to the recognition of reve-
Auditor’s response
nue from the sale of seeds did not lead to any reservations.
With the aid of our valuation specialists, we considered the
appropriateness of the valuation model and the business
Reference to related disclosures
plans on which the valuation was based. This included an
With regard to the recognition and measurement poli-
assessment of the clerical accuracy of the valuation model
cies applied for the recognition of revenue from the sale
and consideration of the expectations regarding future
of seeds, refer to the disclosure in note 3.6 “Recording of
short, medium and long-term revenue and cost develop-
income and expenses” in section 3 “Accounting policies” in
ments, also on the basis of external market data and inter-
the notes to the consolidated financial statements.
views with management.
In the course of our audit, we also focused on the identifica-
tion of value drivers for the identified intangible assets being
valued. We analyzed whether the assumptions used to
determine the value are appropriate, especially in the areas
of technology, brands and customer relationships.
We also focused on the assumptions and parameters used
to determine the weighted cost of capital (discount rates),
especially the proper determination of peer groups to derive
the cost of capital, and considered the calculation method.
We also considered the technical and factual appropriate-
ness of the method used to account for the outcome of the
purchase price allocation.
Independent Auditor’s Report | Annual Financial Statements
157
KWS Group | Annual Report 2019/2020 Furthermore, we considered the allocation of goodwill to the
can at times have significant effects on the amount of the
vegetables cash-generating unit and the completeness and
business value calculated, we analyzed the inputs used to
factual accuracy of the disclosures in the notes.
determine the discount rates and reperformed the calcula-
tion with regard to the relevant requirements of IAS 36. In
Our procedures did not lead to any reservations relating to
addition, we analyzed the sensitivity analyses performed by
the purchase price allocation and the disclosures thereon in
the executive directors of KWS SAAT SE & Co. KGaA (for-
the notes to the consolidated financial statements.
merly KWS SAAT SE) in order to estimate any potential im-
Reference to related disclosures
in one of the significant assumptions used in the valuation.
With regard to the recognition and measurement policies
applied for the acquisition, refer to the disclosures in section
We obtained evidence that the divisions represent the low-
4. “Basis of consolidation and changes” in the notes to the
est level within the Group at which independent cash inflows
consolidated financial statements.
are generated and goodwill and brands are monitored for
pairment risk associated with a reasonably possible change
(3) Impairment testing of goodwill and brands
internal management purposes.
Our procedures did not lead to any reservations relating to
Reasons why the matter was determined to be a key
the valuation of goodwill and brands.
audit matter
Pursuant to IAS 36, the internal management and reporting
structure serves as the basis for designating cash-gener-
Reference to related disclosures
ating units to which the respective items of goodwill are
With regard to the recognition and measurement policies
allocated.
applied for goodwill and brands, refer to the disclosure on
intangible assets in section 3 “Accounting policies” in the
At KWS SAAT SE & Co. KGaA (formerly KWS SAAT SE),
notes to the consolidated financial statements. For the relat-
goodwill and brands are monitored and managed at divi-
ed disclosures on judgments by the executive directors and
sional level.
sources of estimation uncertainty as well as the disclosures
on goodwill, refer to note 7.1 “Intangible assets” in section 7
Goodwill and brands are tested for impairment as of 30 June
“Notes to the statement of financial position” in the notes to
each year. The result of these tests is highly dependent on
the consolidated financial statements.
the executive directors’ estimate of future cash flows and
the respective discount rates used.
Other information
In light of the definition of the cash-generating units, the
board report. In all other respects, the executive directors
complexity of the valuation and the judgment exercised
are responsible for the other information. The other informa-
during valuation, the impairment tests for goodwill and
tion comprises the parts of the group management report
brands were a key audit matter.
listed in the appendix to the auditor’s report as well as the
The supervisory board is responsible for the supervisory
Auditor’s response
other parts of the annual report, except for the audited
consolidated financial statements and group management
report and our auditor’s report, in particular the responsi-
During our audit, among other things, we obtained an
bility statement pursuant to Sec. 297 (2) Sentence 4 HGB,
understanding of the methods used to carry out the impair-
the “Foreword by the management board” section of the
ment tests including an examination of the suitability of the
annual report and the supervisory board’s report pursuant
procedure for performing an impairment test in accordance
to Sec. 171 (2) AktG [“Aktiengesetz”: German Stock Corpo-
with IAS 36. In doing so, we analyzed the planning process
ration Act]. We obtained a version of this other information
and the operating effectiveness of the controls implemented
prior to issuing our auditor’s report.
therein. We discussed the significant planning assumptions
with the executive directors and compared these with the
Our opinions on the consolidated financial statements and
results and cash inflows realized in the past. Our assess-
on the group management report do not cover the other
ment of the results of the impairment tests as of 30 June
information, and consequently we do not express an opinion
was based among other things on a comparison with
or any other form of assurance conclusion thereon.
general and industry-specific market expectations underly-
ing the expected cash inflows. Based on our understanding
that even relatively small changes in the discount rates used
158 Annual Financial Statements | Independent Auditor’s Report
Annual Report 2019/2020 | KWS Group In connection with our audit, our responsibility is to read the
Auditor’s responsibilities for the audit of the consolidat-
other information and, in so doing, to consider whether the
ed financial statements and of the group management
other information
report
Our objectives are to obtain reasonable assurance about
is materially inconsistent with the consolidated financial
whether the consolidated financial statements as a whole
statements, with the group management report or our
are free from material misstatement, whether due to fraud or
knowledge obtained in the audit, or
error, and whether the group management report as a whole
otherwise appears to be materially misstated.
provides an appropriate view of the Group’s position and, in
all material respects, is consistent with the consolidated fi-
Responsibilities of the executive directors and the
nancial statements and the knowledge obtained in the audit,
supervisory board for the consolidated financial state-
complies with the German legal requirements and appropri-
ments and the group management report
ately presents the opportunities and risks of future develop-
The executive directors are responsible for the preparation
ment, as well as to issue an auditor’s report that includes
of the consolidated financial statements that comply, in all
our opinions on the consolidated financial statements and
material respects, with IFRSs as adopted by the EU and the
on the group management report.
additional requirements of German commercial law pursu-
ant to Sec. 315e (1) HGB, and that the consolidated financial
Reasonable assurance is a high level of assurance, but is
statements, in compliance with these requirements, give a
not a guarantee that an audit conducted in accordance
true and fair view of the assets, liabilities, financial position,
with Sec. 317 HGB and the EU Audit Regulation and in
and financial performance of the Group. In addition, the
compliance with German Generally Accepted Standards
executive directors are responsible for such internal control
for Financial Statement Audits promulgated by the Institut
as they have determined necessary to enable the prepara-
der Wirtschaftsprüfer (IDW) will always detect a material
tion of consolidated financial statements that are free from
misstatement. Misstatements can arise from fraud or error
material misstatement, whether due to fraud or error.
and are considered material if, individually or in the aggre-
In preparing the consolidated financial statements, the ex-
economic decisions of users taken on the basis of these
ecutive directors are responsible for assessing the Group’s
consolidated financial statements and this group manage-
gate, they could reasonably be expected to influence the
ability to continue as a going concern. They also have the
ment report.
responsibility for disclosing, as applicable, matters related to
going concern. In addition, they are responsible for financial
We exercise professional judgment and maintain profession-
reporting based on the going concern basis of accounting
al skepticism throughout the audit. We also:
unless there is an intention to liquidate the Group or to cease
operations, or there is no realistic alternative but to do so.
Identify and assess the risks of material misstatement of
the consolidated financial statements and of the group
Furthermore, the executive directors are responsible for
management report, whether due to fraud or error, design
the preparation of the group management report that, as a
and perform audit procedures responsive to those risks,
whole, provides an appropriate view of the Group’s position
and obtain audit evidence that is sufficient and appro-
and is, in all material respects, consistent with the consol-
priate to provide a basis for our opinions. The risk of not
idated financial statements, complies with German legal
detecting a material misstatement resulting from fraud
requirements, and appropriately presents the opportunities
is higher than for one resulting from error, as fraud may
and risks of future development. In addition, the executive
involve collusion, forgery, intentional omissions, misrepre-
directors are responsible for such arrangements and mea-
sentations, or the override of internal control.
sures (systems) as they have considered necessary to en-
able 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.
The supervisory board is responsible for overseeing the
Group’s financial reporting process for the preparation of
the consolidated financial statements and of the group man-
agement report.
Independent Auditor’s Report | Annual Financial Statements
159
KWS Group | Annual Report 2019/2020
Obtain an understanding of internal control relevant to the
Obtain sufficient appropriate audit evidence regarding the
audit of the consolidated financial statements and of ar-
financial information of the entities or business activities
rangements and measures (systems) relevant to the audit
within the Group to express opinions on the consolidated
of the group management report in order to design audit
financial statements and on the group management re-
procedures that are appropriate in the circumstances, but
port. We are responsible for the direction, supervision and
not for the purpose of expressing an opinion on the effec-
performance of the group audit. We remain solely respon-
tiveness of these systems.
sible for our audit opinions.
Evaluate the appropriateness of accounting policies used
Evaluate the consistency of the group management report
by the executive directors and the reasonableness of
with the consolidated financial statements, its conformity
estimates made by the executive directors and related
with [German] law, and the view of the Group’s position it
disclosures.
provides.
Conclude on the appropriateness of the executive direc-
Perform audit procedures on the prospective information
tors’ use of the going concern basis of accounting and,
presented by the executive directors in the group man-
based on the audit evidence obtained, whether a material
agement report. On the basis of sufficient appropriate
uncertainty exists related to events or conditions that may
audit evidence we evaluate, in particular, the significant
cast significant doubt on the Group’s ability to continue
assumptions used by the executive directors as a basis
as a going concern. If we conclude that a material un-
for the prospective information, and evaluate the proper
certainty exists, we are required to draw attention in the
derivation of the prospective information from these as-
auditor’s report to the related disclosures in the consoli-
sumptions. We do not express a separate opinion on the
dated financial statements and in the group management
prospective information and on the assumptions used
report or, if such disclosures are inadequate, to modify
as a basis. There is a substantial unavoidable risk that
our respective opinions. Our conclusions are based on the
future events will differ materially from the prospective
audit evidence obtained up to the date of our auditor’s re-
information.
port. However, future events or conditions may cause the
Group to cease to be able to continue as a going concern.
We communicate with those charged with governance
Evaluate the overall presentation, structure and content
regarding, among other matters, the planned scope and
of the consolidated financial statements, including the
timing of the audit and significant audit findings, including
disclosures, and whether the consolidated financial state-
any significant deficiencies in internal control that we identi-
ments present the underlying transactions and events in
fy during our audit.
a manner that the consolidated financial statements give
a true and fair view of the assets, liabilities, financial po-
sition and financial performance of the Group in compli-
ance with IFRSs as adopted by the EU and the additional
requirements of German commercial law pursuant to
Sec. 315e (1) HGB.
160 Annual Financial Statements | Independent Auditor’s Report
Annual Report 2019/2020 | KWS Group We also provide those charged with governance with a
The combined non-financial statement for KWS SAAT SE
statement that we have complied with the relevant inde-
& Co. KGaA (formerly KWS SAAT SE) and the KWS Group
pendence requirements, and communicate with them all
contained in section 2.9.2 “Combined non-financial state-
relationships and other matters that may reasonably be
ment for the KWS Group” of the group management re-
thought to bear on our independence and where applicable,
port, including any information in other sections referred
the related safeguards.
to in this statement. The respective sections are marked
“NFE” in the margin.
From the matters communicated with those charged with
The information in section 2.6.1 “Corporate governance
governance, we determine those matters that were of most
report and statement on corporate governance.”
significance in the audit of the consolidated financial state-
ments of the current period and are therefore the key audit
Neither have we audited the content of the following in-
matters. We describe these matters in our auditor’s report
formation that is not typical or required for a group man-
unless law or regulation precludes public disclosure about
agement report. This relates to any information whose
the matter.
disclosure in the group management report is not required
pursuant to Secs. 315, 315a HGB or Secs. 315b to 315d
Other legal and regulatory requirements
HGB.
Further information pursuant to Art. 10 of the EU Audit
Section 2.1.5 “Responsible Business Activity,”
Regulation
Section 2.5 “Employee and Social Report,”
We were elected as group auditor by the annual gener-
Section 2.5.3 “Good working conditions,”
al meeting on 17 December 2019. We were engaged by
Section 2.5.4 “Social commitment.”
the supervisory board on 15 June 2020. We have been
the group auditor of KWS SAAT SE & Co. KGaA (former-
Hanover, 23 September 2020
ly KWS SAAT SE) without interruption since fiscal year
2016/2017.
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft
We declare that the opinions expressed in this auditor’s
report are consistent with the additional report to the audit
committee pursuant to Art. 11 of the EU Audit Regulation
(long-form audit report).
Ludwig
Dr. Janze
Wirtschaftsprüfer
Wirtschaftsprüfer
German Public Auditor responsible for the engagement
[German Public Auditor]
[German Public Auditor]
The German Public Auditor responsible for the engagement
is Dr. Christian Janze.
Appendix to the auditor’s report:
Parts of the group management report whose content is
unaudited
We have not audited the content of the following parts of the
group management report:
Independent Auditor’s Report | Annual Financial Statements
161
KWS Group | Annual Report 2019/2020
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 2019/2020 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
und vereidigte Buchprüfer] as well as the IDW Standard on
Quality Control 1: Requirements for Quality Control in audit
We have performed a limited assurance engagement on
firms [IDW Qualitätssicherungsstandard 1: Anforderungen
the group non-financial statement of KWS SAAT SE &
an die Qualitätssicherung in der Wirtschaftsprüferpraxis
Co. KGaA according to § 315b HGB (“Handelsgesetzbuch”:
(IDW QS 1)].
German Commercial Code), which is combined with the
non- financial statement of the parent company according
Auditor’s responsibility
to § 289b HGB, consisting of the chapter “2.9.2 Combined
Our responsibility is to express a limited assurance
Non- Financial Declaration for the KWS Group” in the com-
conclusion on the combined non-financial statement based
bined management report and the chapters “2.1 Funda-
on the assurance engagement we have performed.
mentals of the KWS Group”, “2.4.1 Product Innovations”,
“2.4.2 Management of Genetic Resources”, “2.4.3 Plant
We conducted our assurance engagement in accordance
and Process Safety”, “2.5.2 Recruitment and Qualification”
with the International Standard on Assurance Engagements
and “2.6.3 Business Ethics and Compliance” in the com-
(ISAE) 3000 (Revised): Assurance Engagements other than
bined management report being incorporated by reference
Audits or Reviews of Historical Financial Information, issued
( hereafter combined non-financial statement), for the report-
by the International Auditing and Assurance Standards
ing period from 1 July 2019 to 30 June 2020.
Board (IAASB). This Standard requires that we plan and
Management’s responsibility
perform the assurance engagement to obtain limited
assurance about whether the combined non-financial
The legal representatives of the Company are responsible
statement of the Company has been prepared, in all material
for the preparation of the combined non-financial
respects, in accordance with §§ 315c in conjunction with
statement in accordance with §§ 315c in conjunction with
289c to 289e HGB. In a limited assurance engagement
289c to 289e HGB.
the assurance procedures are less in extent than for a
reasonable assurance engagement and therefore a substan-
This responsibility includes the selection and application of
tially lower level of assurance is obtained. The assurance
appropriate methods to prepare the combined non-financial
procedures selected depend on the auditor's professional
statement as well as making assumptions and estimates
judgment.
related to individual disclosures, which are reasonable in the
circumstances. Furthermore, the legal representatives are
Within the scope of our assurance engagement, which has
responsible for such internal controls that they have con-
been conducted between June and September 2020, we
sidered necessary to enable the preparation of a combined
performed amongst others the following assurance and
non-financial statement that is free from material misstate-
other procedures:
ment, whether due to fraud or error.
Inquiries of employees and inspection of documents
Auditor’s declaration relating to independence and
regarding the selection of topics for the combined non-
quality control
financial statement, the risk assessment and the concepts
We are independent from the Company in accordance
of the parent company and the group for the topics that
with the provisions under German commercial law and
have been identified as material,
professional requirements, and we have fulfilled our other
Inquiries of employees responsible for data capture and
professional responsibilities in accordance with these
consolidation as well as the preparation of the combined
requirements.
non-financial statement, to evaluate the reporting
processes, the data capture and compilation methods
Our audit firm applies the national statutory regulations
as well as internal controls to the extent relevant for the
and professional pronouncements for quality control, in
assurance of the combined non-financial statement,
particular the by-laws regulating the rights and duties of
Identification of likely risks of material misstatement in the
Wirtschaftsprüfer and vereidigte Buchprüfer in the exercise
combined non-financial statement,
of their profession [Berufssatzung für Wirtschaftsprüfer
162 Annual Financial Statements | Independent Auditor’s Report
Annual Report 2019/2020 | KWS Group
Inspection of relevant documentation of the systems and
Engagement terms and liability
processes for compiling, analyzing and aggregating rele-
The “General Engagement Terms for Wirtschaftsprüfer
vant data in the reporting period and testing such docu-
and Wirtschaftsprüfungsgesellschaften [German Public
mentation on a sample basis,
Auditors and Public Audit Firms]” dated 1 January 2017 are
Analytical evaluation of disclosures in the combined
applicable to this engagement and also govern our rela-
non-financial statement,
tions with third parties in the context of this engagement
Inquiries and inspection of documents on a sample basis
(www.de.ey.com/general-engagement-terms). In addition,
relating to the collection and reporting of selected statem-
please refer to the liability provisions contained there in
ents and data,
no. 9 and to the exclusion of liability towards third parties.
Evaluation of the presentation of disclosures in the com-
We assume no responsibility, liability or other obligations
bined non-financial statement.
towards third parties unless we have concluded a written
agreement to the contrary with the respective third party or
Assurance conclusion
liability cannot effectively be precluded.
Based on our assurance procedures performed and
assurance evidence obtained, nothing has come to our
We make express reference to the fact that we do not
attention that causes us to believe that the combined non-
update the assurance report to reflect events or circum-
financial statement of KWS SAAT SE & Co. KGaA for the
stances arising after it was issued unless required to do
period from 1 July 2019 to 30 June 2020 has not been pre-
so by law. It is the sole responsibility of anyone taking note
pared, in all material respects, in accordance with §§ 315c in
of the result of our assurance engagement summarized
conjunction with 289c to 289e HGB.
in this assurance report to decide whether and in what
Intended use of the assurance report
to supplement, verify or update it by means of their own
way this result is useful or suitable for their purposes and
We issue this report on the basis of the engagement agreed
review procedures.
with KWS SAAT SE & Co. KGaA. The assurance engage-
ment has been performed for the purposes of the Company
Munich, 23 September 2020
and the report is solely intended to inform the Company as
to the results of the assurance engagement and must not be
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft
used for purposes other than those intended. The report is
not intended to provide third parties with support in making
(financial) decisions.
Nicole Richter
Annette Johne
Wirtschaftsprüferin
Wirtschaftsprüferin
(German Public Auditor)
(German Public Auditor)
Declaration by Legal Representatives
We declare to the best of our knowledge that the consolidated financial statements give a true and fair view of the assets,
financial position and earnings of the Group in compliance with the generally accepted standards of consolidated accoun-
ting, 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, 23 September 2020
KWS SE
Hagen Duenbostel Léon Broers Felix Büchting Peter Hofmann Eva Kienle
KWS Group | Annual Report 2019/2020
Declaration by Legal Representatives
163
Additional Information
Financial calendar
Date
November 24, 2020
December 16, 2020
February 18, 2021
May 12, 2021
October 20, 2021
November 18, 2021
December 2, 2021
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
Quarterly Report Q1 2020/2021
Annual Shareholders’ Meeting in Einbeck
Semiannual Report 2020/2021
Quarterly Report 9M 2020/2021
Publication of 2020/2021 financial statements,
annual press and analyst conference
Quarterly Report Q1 2021/2022
Annual Shareholders’ Meeting in Einbeck
707400
DE0007074007
KWS
Prime Standard
SDAX
Non-par
33,000,000
0.60
0.60
0.60
0.60
0.56
0.46
0.64
0.64
0.70
0.67
Dividend proposal 2020
Dividend payment in €
Dividend ratio (total
dividends/net income)
in %
25%
20%
20.8
19.6
21.7
24.7
23.6
23.2
24.3
21.6
21.2
21.3
10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
19/20
164
Additional Information
Annual Report 2019/2020 | 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
Gina Wied
press@kws.com
Sustainability
Marcel Agena
Editor
KWS SAAT SE & Co. KGaA
sustainability@kws.com
Grimsehlstrasse 31
investor.relations@kws.com
Phone: +49 5561 311-1427
Phone: +49 5561 311-1393
P.O. Box 1463
Phone: +49 (0) 30 816914-490
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
Marcel Bloemendaal Paul Epp Peter Heller Frank Stefan Kimmel Karsten Koch Julia Lormis Arnoud Michelet
Dominik Obertreis Sang-Kyun Park Roman Pawlowski Florian Spieker Roman Thomas Sebastian Vollmert
Date of publication: October 23, 2020
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