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Annual Report
2020 | 2021
KWS in Figures
The KWS Group (in € millions)
2020/2021
2019/2020
2018/2019
2017/2018
2016/2017
2015/2016
Net sales and income
Net sales
EBITDA
EBIT
as a % of net sales (EBIT margin) 1
Net financial income/expenses
Net income for the year
Other figures on earnings
R&D intensity in %
1,310.2
1,282.6
1,113.3
1,068.0
1,075.2
1,036.8
230.9
137.0
10.5
5.2
110.6
225.5
137.4
10.7
–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
19.3
18.4
18.5
18.5
17.7
17.6
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 1
Employees
Number of employees (avg.) 5
Personnel expenses
Key figures for the share in €
Earnings per share in € 6
Dividend per share in € 6, 7
Segments (in € millions)
81.3
93.8
1,053.7
44.3
10.9
5.7
475.6
2,376.7
1,604.7
8.5
168.3
84.2
4,549
326.3
3.35
0.80
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
4,317
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
1,517.7
1,495.2
1,436.6
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
Corn
Sugarbeet
Cereals
Vegetables
Corporate
– 0.2%
776
774
+6.6%
492
524
+6.3%
67
71
+2.8%
0.0%
170
175
191
191
–19.3%
26
21
– 30.3%
84 58
Net sales
EBIT
Net sales
EBIT
Net sales
EBIT
Net sales
–8
–18
2019/2020
2020/2021
Reconciliation (in € millions)
Net sales
EBIT
> –100.0%
+29.8%
+12.1%
EBIT
5
6
Net sales
EBIT
–105
–92
Segments Reconciliation
KWS Group
1,553.8
157.2
–243.6
–20.2
1,310.2
137.0
1 Adjusted for special effects from acquisition of the Pop Vriend Seeds Group. Information on interest paid changed.
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 FTE: Full time equivalents
6 Earnings and dividend per share of previous periods adjusted due to share split
7 The dividend for 2020/2021 is subject to the consent of the 2021 Annual Shareholders‘ Meeting.
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Contents
1. To Our Shareholders
Foreword of the Executive Board
Report of the Supervisory Board
KWS on the Capital Market
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 Report
2.6 Corporate Governance
2.7 Social Report
2.8 Opportunity and Risk Report
2.9 Forecast Report
2.10 Report on KWS SAAT SE & Co. KGaA and
Non-Financial Declaration (Declaration based
on the German Commercial Code (HGB))
3. Annual Financial Statements
2
2
5
12
14
16
23
26
43
47
52
67
69
79
81
84
The cover photo shows a blooming oil radish from a catch crop in November in Brandenburg,
Germany. Thanks to intensive breeding, this late-blooming catch crop is part of an
effective strategy for preventing nematode infestation in sugarbeet. In connection with
a nematode-tolerant sugarbeet variety, significant yield losses can be avoided in a
natural way.
Executive Board
Felix Büchting Cereals, Oilseed Rape/Special Crops & Organic Seed, Human Resources, Farming
Peter Hofmann Sugarbeet, Corn Europe, Marketing & Communications
Eva Kienle Finance & Procurement, Controlling, Global Transaction Center, Legal Services & IP, IT, KWS Innovation Accelerator
Hagen Duenbostel (CEO) Corn North and South America, Corn China, Strategy, Compliance, and Governance & Risk Management
Léon Broers Research & Breeding, Vegetables
2
To Our Shareholders | Forword of the Executive Board
Annual Report 2020/2021 | KWS Group To Our
Share-
holders
Foreword of the Executive Board
The past months have been challenging and often strenuous for all of us.
I’m therefore all the more delighted to be able to present a good and successful
year for KWS in this year’s Annual Report.
The agricultural sector faces enormous challenges: It needs to create food
security for the world’s growing population, yet also tackle climate change,
preserve biodiversity and conserve natural resources. Plant breeding can and will
play a key part in addressing those challenges. As exemplified in the HFFA study
published in the spring of 2021, plant breeding helps increase yields by almost
70% as an average across all the main crops grown in the EU. Moreover, without
the continuous innovations by plant breeders, global cultivation area for these
crops would have had to be increased by more than 21.5 million hectares since
the year 2000 – an area roughly five times the size of Switzerland.
Throughout our 165-year history, we have always regarded seed as the
starting point for progress in agriculture. Continuous further development is
necessary to grow more food on less area and use fewer resources, as well as
to enable production tailored to regional conditions. With the KWS Sustainability
Ambition 2030, we are now setting a forward-looking yardstick for that very task
and will constantly measure ourselves against its concrete specifications. This
plan’s guiding principle, sustainability begins with the seed, formulates our role
and mission in developing solutions for efficient, yet sustainable agriculture.
Foreword of the Executive Board | To Our Shareholders
3
KWS Group | Annual Report 2020/2021 New and adapted varieties help reduce the use of pesticides, fertilizer and other
agricultural resources on fields, while delivering high and stable yields. Moreover,
KWS’ broad and growing portfolio makes an important contribution to promoting
balanced crop rotations and biodiversity on fields – and providing a varied range
of food on our plates.
We remain convinced that modern and new breeding methods are a key tool
moving ahead in enabling sustainable agriculture, a secure supply of food and
achievement of the targets laid out in the European Union’s Farm to Fork Strategy.
We therefore spent 19.3% of our net sales on research & development last year –
expenditure that allows us to test new approaches independently and tackle
projects proactively. That is our contribution to sustainability and agriculture with
a viable future – and thus to ensuring KWS’ future growth.
Thanks to our long-term strategy and independence, we as a company are able
to keep on developing further and adapting to new conditions and circum stances.
In view of the complex situation after the coronavirus pandemic broke out, we
very swiftly established new ways to maintain dialogue with our employees,
partners and customers. We will benefit long term from these creative solutions,
which would have been inconceivable were it not for the exceptional dedication
and commitment of our around 6,000 employees worldwide. That goes for our
research & development as well as for our working relationship with farmers,
customers and partners. We have kept our proximity to them and come even
closer together thanks to new, digital technologies. After all, digitization is not new
ground for us – it has been an important, forward-looking topic at KWS for years.
We can therefore look ahead full of optimism and at the same time take a look back
at 165 years of KWS! My heartfelt thanks go out to all employees of KWS for their
magnificent desire to achieve and their flexibility, whether they work under tougher
conditions in the field, in our labs or from home. I also thank you – our customers,
partners and shareholders – for the excellent working relationship and for your trust
in KWS. 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 2020/2021 | KWS Group Report of the Supervisory Board
Political responses to climate change have a particu-
with the law, the company’s Articles of Association
larly influential impact on KWS’ business model. One
and the bylaws, regularly advised and monitored the
example in this context is the EU’s launch of its stra-
personally liable partner, represented by its Executive
tegic Green Deal initiative, which envisages reducing
Board, in its activities and satisfied itself that the com-
the use of chemical pesticides by 50% and fertilizers
pany was run properly and in compliance with the law
by 20% by 2030. By the same year, 25% of arable
and that it was organized efficiently and cost-effec-
land in Europe is to be converted to organic farming
tively. The Supervisory Board extensively discussed
and a further 10% is to be rewilded. The resultant
all significant business transactions and carefully
loss in productivity is an enormous challenge, but
accompanied the Executive Board in all fundamental
also offers us as a plant breeder opportunities and
decisions of importance to the company. As is cus-
new potential to create value added. It is more im-
tomary, the Executive Board involved the Supervisory
portant than ever to compensate for that loss by
Board in all key decisions. The Supervisory Board was
means of innovative, resistant and nutrient-efficient
provided with the necessary information in written and
varieties, as well as to align the product portfolio
oral form regularly, promptly and comprehensively.
more strongly toward the food sector, a move KWS
This included all key information on relevant ques-
has already instigated by establishing the Vegetables
tions, in particular relating to strategy, planning, the
Segment.
business performance and the situation of the com-
pany and the KWS Group, including the risk situation,
As an independent seed specialist with a long-term
risk management and compliance. In the year under
focus, KWS makes substantial investments in research &
review, there were no transactions with related parties
development (R&D) so that it can remain a reliable
which require the Supervisory Board’s approval in
provider of innovative varieties for its customers, i.e.
accordance with Section 111b of the German Stock
farmers, in the future. We provide you with an insight
Corporation Act (AktG).
into the improvements we are working on and how
new technologies are contributing to advances in plant
The company’s business policy, corporate and fi-
breeding on page 23 et seqq. of the Annual Report.
nancial planning, profitability and situation, market
trends and the competitive environment, research &
KWS SAAT SE & Co. KGaA and the personally liable
breeding and, along with important individual proj-
partner, KWS SE, both have a separate Supervisory
ects, risk management at the KWS Group, in particu-
Board, each with the same shareholder represen-
lar in relation to preventive healthcare in the wake of
tatives serving on them. The Supervisory Board
the COVID-19 pandemic, were the subject of detailed
of KWS SAAT SE & Co. KGaA has two employee
discussions in the year under review.
representatives in addition to the shareholder rep-
resentatives. Both boards predominantly hold joint
The Chairman of the Supervisory Board continued
meetings, with the result that the employee represen-
the direct discussions with the Chief Executive
tatives are integrated at an early stage in upcoming
Officer of KWS SE and individual members of the
decisions by the personally liable partner.
Executive Board in regular talks outside the meetings
The Supervisory Board of KWS SAAT SE & Co. KGaA
In addition, there were monthly meetings between
discharged the duties incumbent on it in accordance
the Chairman of the Supervisory Board and the
of the Supervisory Board in the year under review.
Report of the Supervisory Board | To Our Shareholders
5
KWS Group | Annual Report 2020/2021 The Supervisory Board and the Management Board continued their constructive and trusting cooperation in the year under review.
Executive Board as a whole, where the company’s
the Supervisory Board examined and approved the
current business development and, in particular, its
financial statements of KWS SAAT SE & Co. KGaA
strategy, occurrences of special importance and
and approved the consolidated financial statements
individual aspects were dealt with. The Chairman
of the KWS Group as of June 30, 2020. This meeting
of the Supervisory Board informed the Supervisory
was followed by a joint meeting of the two boards,
Board of the results of these meetings. The Super-
at which the Supervisory Board heard reports on
visory Board did not make use of its right to conduct
the company’s anticipated business performance
an examination granted by Section 111 (2) of the
against the backdrop of the ongoing pandemic.
German Stock Corporation Act (AktG) since the
reporting by the Executive Board meant there was
On December 15, 2020, the Supervisory Board dealt
no reason to do so.
with strategic adjustments at the Corn Segment and
with the “Strategic Planning 2031,” which had just
Focal areas of deliberations
been commenced and is to be adopted in December
The full Supervisory Board of KWS SAAT SE
2021. It also evaluated potential acquisitions in KWS’
& Co. KGaA held five regular meetings in fiscal
still young Vegetables Segment, after which the Italian
2020/2021, each of which was attended by all its
vegetable breeding company GENEPLANTA, which
members either in person or, due to the pandemic,
mainly breeds tomatoes, was acquired in the spring
via online media; the attendance rate for all Super-
of 2021. The results of the breeding programs and
visory Board meetings was therefore 100%. At the
opportunities for expansion in the Chinese corn market
beginning of the year under review, the Supervisory
were on the agenda of the meeting on March 16, 2021.
Board of KWS SAAT SE & Co. KGaA convened its
On June 22, 2021, the Executive Board submitted as
meeting to discuss the financial statements on Octo-
usual the budget and medium-term planning to the
ber 22, 2020. At this meeting, which was also attended
Supervisory Board, which was then adopted by the
by the independent auditor for fiscal 2019/2020,
Supervisory Board of KWS SE.
6
To Our Shareholders | Report of the Supervisory Board
Annual Report 2020/2021 | KWS Group Corporate governance
addition, the Audit Committee dealt with the results
The Supervisory Board discussed compliance with
of the self-assessment, which was conducted using
the recommendations of the “German Commission
a questionnaire. The members of the Audit Commit-
for the Corporate Governance Code” and issued
tee discussed in detail the quality and effectiveness
a new declaration of compliance with the German
of and future challenges facing the committee’s
Corporate Governance Code in the version dated
work. In addition, the report by Internal Auditing for
December 16, 2019, in accordance with Section 161
fiscal 2020/2021 was discussed and the audit plan
of the German Stock Corporation Act (AktG) togeth-
for fiscal 2021/2022 was defined and adopted at the
er with the personally liable partner in October 2021.
meeting on May 11, 2021. The risk situation, the
The Declaration of Compliance can be obtained on
9M Quarterly Report for 2020/2021 and the KWS
the company’s website at www.kws.com/corp/en/
Group’s insurance program were also discussed.
company/investor-relations/corporate-governance.
In addition, the Audit Committee obtained the state-
The Supervisory Board regularly addressed the
ment of independence from the auditor, ascertained
question of any conflicts of interest on the part of its
and monitored the auditor’s independence and ex-
members and those of the Executive Board in the
amined its qualifications. The Audit Committee also
year under review. In the year under review, there
satisfied itself that the regulations on internal rotation
were no such conflicts of interests that had to be
were observed by the independent auditor and dealt
disclosed immediately to the Supervisory Board
with the issue of any additional services rendered by
and reported to the Annual Shareholders’ Meeting.
the independent auditor.
Supervisory Board committees
The Supervisory Board of KWS SAAT SE & Co. KGaA
In the year under review, the Supervisory Board
has no personnel responsibility for the management,
of KWS SAAT SE & Co. KGaA had two commit-
in particular for the Executive Board of KWS SE.
tees: the Audit Committee and the Nominating
Nevertheless, we would like to take this opportunity
Committee.
to inform you about the upcoming changes at the
The Audit Committee convened for four joint
general partner.
meetings in fiscal 2020/2021, each of which was
Dr. Léon Broers will leave the Executive Board of
attended by all members either in person or online;
KWS SE when his contract of employment ends on
the attendance rate for all meetings of the Audit
December 31, 2021. In view of that, the responsi-
Committee was therefore 100%. In its meeting on
bilities on the Executive Board, in particular those
September 23, 2020, the Audit Committee discussed
for Research & Development and for our young
the annual financial statements and accounting
Vegetables Segment, had to be reorganized. The
of KWS SAAT SE & Co. KGaA and the consolidat-
Committee for Executive Board Affairs of KWS SE
ed financial statements of the KWS Group for the
therefore dealt intensively with the issues of successor
fiscal year 2019/2020, along with the Combined
planning and assignment of responsibilities on the
Management Report and the proposal by the Exec-
Executive Board in the period under review and
utive Board on the appropriation of the profits. The
submitted the following proposals to the Supervisory
Compliance Report and the 1st Quarterly Report
Board.
for 2020/2021 were discussed in particular at the
meeting on November 19, 2020. The meeting on Feb-
As announced at the Annual Shareholders’ Meeting
ruary 17, 2021, discussed and defined the focus of
on December 16, 2020, the Supervisory Board
the audit for fiscal year 2020/2021 in the presence of
of KWS SE decided on December 15, 2020, to
the appointed independent auditor. It also discussed
assign responsibility for Research & Development
the situation as regards the KWS Group’s financing
to Dr. Felix Büchting effective January 1, 2022.
and the Semiannual Report 2020/2021 in detail. In
Felix Büchting studied agrobiology at the University
Report of the Supervisory Board | To Our Shareholders
7
KWS Group | Annual Report 2020/2021 of Hohenheim in Stuttgart and agricultural sciences
to propose that Dr. Hagen Duenbostel be elected to
and molecular biology at Oregon State University
the Supervisory Board of each company when his
in Corvallis, where he gained his doctorate in the
Executive Board contract ends in December 2024.
field of plant breeding. Felix Büchting will also
Hagen Duenbostel, who has been a member of
remain in charge of Human Resources, but will
KWS’ Executive Board since 2003, will not renew
hand over responsibility for cereals business to
his contract, but has indicated that he would be
Dr. Peter Hofmann. At the same time, Peter Hofmann
prepared to serve on the Supervisory Boards of
will take over the Vegetables Segment from
KWS SAAT SE & Co. KGaA and KWS SE. In order to
Léon Broers. Léon Broers will assist him in his
ensure the two-year cooling-off period required by
capacity as Head of the Business Unit Vegetables
the German Corporate Governance Code, it is envis-
for further years from the Netherlands.
aged that Hagen Duenbostel will be relieved of his
duties on the Executive Board at the Annual Share-
At its meeting on October 19, 2021, the Super visory
holders’ Meeting of KWS SAAT SE & Co. KGaA in
Board of KWS SE appointed Nicolás Wielandt as
December 2022 and thus leave the management
the fifth member of the Executive Board with effect
team of KWS SAAT SE & Co. KGaA. However, he
from January 1, 2022. Nicolás Wielandt was born in
is to continue working on the boards of our joint
Chile, studied agricultural sciences and has worked
ventures in China and North America.
at the KWS Group for 15 years, initially as a con-
troller, then as Managing Director at KWS Chile,
The Nominating Committees are thus making prepa-
subsequently as Head of Sugarbeet Middle East/
rations for a successor to Dr. Drs. h.c. Andreas J.
Africa and Eastern Europe, followed by five years
Büchting, the longstanding Chairman of the Super-
as Head of the Business Unit Sugarbeet. Nicolás
visory Boards of KWS SAAT SE & Co. KGaA and
Wielandt has been Head of the Business Unit Corn
KWS SE. He has been a member and Chairman of
Europe/Asia since July 1, 2019. He has been able to
both since 2007 and has reached the age limit stip-
deepen and broaden his expertise in corn business
ulated in their bylaws. He will therefore not stand
in this post and therefore has the credentials for the
in the new elections for the Supervisory Boards
challenging task of managing the strongly growing
scheduled in December 2022. That means that an
segment and ensuring its profitability. He will take
interim member has to be appointed to serve during
over Corn Europe from Peter Hofmann and corn
the cooling- off period for Hagen Duenbostel. The
business in South America from Hagen Duenbostel.
Nominating Committees therefore propose that
Hagen Duenbostel will remain in charge of KWS’
Philip Freiherr von dem Bussche be elected to the
joint ventures in China and North America for the
Super visory Boards of KWS SAAT SE & Co. KGaA
time being.
and KWS SE for a period of two years. Philip von
dem Bussche was a member of the Supervisory
In addition, the Supervisory Board of KWS SE decided
Board of the then KWS SAAT AG from 2000 to
that the subject areas of corporate governance, com-
2005 and moved to the Executive Board in 2005. In
pliance and risk management are to be pooled under
2007, he took over as Chief Executive Officer from
the responsibility of the CFO. Eva Kienle will take
Andreas J. Büchting and retired from that post in
them over in the current fiscal year 2021/2022.
2014. As a holder of a degree in business manage-
ment, entrepreneur and farmer, Philip von dem
The Nominating Committees of the Supervisory
Bussche has intimate knowledge of the agricultural
Boards of KWS SAAT SE & Co. KGaA and KWS SE
industry in general and KWS specifically. He is a
convened to discuss medium-term successor
member of the Supervisory Boards of K+S Aktien-
planning on both boards. Both committees intend
gesellschaft and Bernhard Krone Holding SE & Co. KG.
8
To Our Shareholders | Report of the Supervisory Board
Annual Report 2020/2021 | KWS Group Andreas J. Büchting, Chairman of the Supervisory Board
In addition, the Committee for Executive Board
The Corn Segment’s further development in the
Affairs of KWS SE has proposed to the Super-
U.S. is exceptionally important in terms of the KWS
visory Board that Dr. Felix Büchting be appointed
Group’s earnings in the next few years. Our joint
Chief Executive Officer when Hagen Duenbostel’s
venture AgReliant Genetics, LLC (AgR) has made
cooling- off period commences in December 2022
significant progress in renewing its product portfo-
and, in view of that, that his contract be extend-
lio, which will enable it to grow significantly in the
ed until December 31, 2026, prior to the end of its
coming years. In particular, Hagen Duenbostel was
term. The Supervisory Board of KWS SE endorsed
and is responsible for reorganizing the portfolio
this proposal at its meeting on October 19, 2021.
and for the resultant positive economic impact for
With the early nomination of Felix Büchting to
the KWS Group. At the proposal of the Committee
succeed Hagen Duenbostel, the appointment of
for Executive Board Affairs, the Supervisory Board
Nicolás Wielandt to the Executive Board of KWS SE,
therefore decided to grant Hagen Duenbostel an
and the above- described changes in responsibilities,
additional one-year variable payment (“one-year
the Super visory Board is ensuring – as required by
variable payment 2”), dependent on AgR’s busi-
the German Corporate Governance Code – long-term
ness performance, from fiscal year 2021/2022. We
succession planning for the Executive Board of the
will report on that in the Compensation Report for
personally liable partner of KWS SAAT SE & Co. KGaA.
fiscal 2021/2022.
Report of the Supervisory Board | To Our Shareholders
9
KWS Group | Annual Report 2020/2021 In addition, the Committee for Executive Board Affairs
315b of the German Commercial Code (HGB)) in the
dealt with the necessary adaptations to the Executive
Combined Management Report were likewise audited
Board compensation system pursuant to the German
by the independent auditor.
Act Implementing the Second Shareholders’ Rights
Directive (ARUG II). The proposed adaptations were
The Supervisory Board received and discussed the
adopted by the Supervisory Board of KWS SE at
financial statements of KWS SAAT SE & Co. KGaA
its meeting on October 19, 2021, and, in agreement
and the consolidated financial statements of the
with the Supervisory Board of KWS SAAT SE &
KWS Group and Combined Management Report
Co. KGaA, were submitted for approval to the Annual
of KWS SAAT SE & Co. KGaA and the KWS Group,
Shareholders’ Meeting of KWS SAAT SE & Co. KGaA
along with the report by the independent auditor of
on December 2, 2021. We refer you to the Notice of
KWS SAAT SE & Co. KGaA and the KWS Group and
the Annual Shareholders’ Meeting for the content of
the proposal on appropriation of the net retained
the compensation system. We would only point out
profit for the year made by KWS SAAT SE & Co. KGaA,
here that the future Executive Board compensation
in due time. Comprehensive documents and drafts
system, if approved by the Annual Shareholders’
were submitted to the members of the Super visory
Meeting, will apply for the first time to Executive
Board as preparation. For example, all of them
Board contracts concluded or extended after
were provided with the annual financial statements,
December 2, 2021.
consolidated financial statements, Combined Man-
agement Report, audit reports by the independent
Annual and consolidated financial statements
auditor, and the proposal by the personally liable
and auditing
partner on the appropriation of the profits. The
Ernst & Young GmbH Wirtschaftsprüfungs-
Super visory Board likewise received and discussed
gesellschaft, Hanover, the independent auditor
the Non-Financial Declaration (Section 289b and
chosen at the Annual Shareholders’ Meeting on
Section 315b of the German Commercial Code
December 16, 2020, and commissioned by the Audit
(HGB)), which is part of the Combined Management
Committee, has audited the financial statements of
Report and contains disclosures on the KWS Group
KWS SAAT SE & Co. KGaA that were presented by
and the parent company KWS SAAT SE & Co. KGaA,
the personally liable partner, KWS SE, and prepared
as well as the related audit report by the independent
in accordance with the provisions of the German
auditor (Section 111 (2) Sentence 4 of the German
Commercial Code (HGB) for fiscal 2020/2021 and the
Stock Corporation Act (AktG)) as part of a limited
financial statements of the KWS Group (IFRS consol-
assurance engagement.
idated financial statements), as well as the Combined
Management Report of KWS SAAT SE & Co. KGaA
The Audit Committee convened on Septem-
and the KWS Group (Group Management Report),
ber 23, 2021, to discuss the annual financial state-
including the accounting reports, and awarded them
ments of KWS SAAT SE & Co. KGaA and the KWS
its unqualified audit certificate. In addition, the au-
Group’s consolidated financial statements for the
ditor concluded that the audit of the financial state-
2020/2021 fiscal year and accounting, along with
ments did not reveal any facts that might indicate a
the Combined Management Report. The indepen-
misstatement in the declaration of compliance issued
dent auditor for fiscal 2020/2021 explained the re-
by the personally liable partner and the Supervisory
sults of its audit of the annual financial statements
Board in accordance with section 161 of the German
and consolidated financial statements. It pointed
Stock Corporation Act (AktG) with respect to the
out that there were no grounds for assuming a
recommendations of the “Government Commission
lack of impartiality on the part of the independent
for the German Corporate Governance Code.” The
auditor in its audit. The Audit Committee also dealt
Non-Financial Declaration (Section 289b and Section
with the proposal by the personally liable partner
10
To Our Shareholders | Report of the Supervisory Board
Annual Report 2020/2021 | KWS Group on the appropriation of the net retained profit of
personally liable partner, and to the consolidated
KWS SAAT SE & Co. KGaA and recommended that
financial statements of the KWS Group and the
the Supervisory Board approve it.
Combined Management Report of KWS SAAT SE &
Co. KGaA and the KWS Group and recommended
The Supervisory Board also held detailed discussions
that the Annual Shareholders’ Meeting on Decem-
of questions on the agenda at its meeting to discuss
ber 2, 2021, approve the annual financial statements
the financial statements on October 19, 2021. The
of KWS SAAT SE & Co. KGaA prepared by the per-
auditor took part in the meeting. It reported on the
sonally liable partner. The Supervisory Board also
main results of the audit and was also available to
endorsed the proposal by the personally liable partner
answer additional questions and provide further
to the Annual Shareholders’ Meeting on the appro-
information for the Supervisory Board. According to
priation of the net retained profit of KWS SAAT SE &
the report of the independent auditor, there were no
Co. KGaA after having examined it.
material weaknesses in the internal control and risk
management system in relation to the accounting
The Supervisory Board expresses its thanks to
process. There were also no circumstances that might
the Executive Board and all employees of the
raise concerns about a lack of impartiality on the part
KWS Group for their commitment despite the difficult
of the independent auditor. The independent auditor
conditions still prevailing as a result of the COVID-19
did not provide any additional services.
pandemic, and for their contribution to the successful
further development of KWS in fiscal 2020/2021.
In accordance with the final results of its own exam-
ination, the Supervisory Board endorsed the results
Einbeck, October 19, 2021
of the audit and of the audit of the Non-Financial
Declaration, among other things as a result of the
preliminary examination by the Audit Committee, and
did not raise any objections. The Supervisory Board
gave its consent to the annual financial statements
Dr. Drs. h. c. Andreas J. Büchting
of KWS SAAT SE & Co. KGaA submitted by the
Chairman of the Supervisory Board
Report of the Supervisory Board | To Our Shareholders
11
KWS Group | Annual Report 2020/2021
KWS on the Capital Market
Performance
Employee Stock Purchase Plan
The COVID-19 pandemic remained the dominant issue
For more than 30 years KWS has offered its
impacting stock exchanges in fiscal year 2020/2021.
employees the chance to become shareholders in
Massive economic stimulus programs ensured that
the company and thus share in its success. The
the major economies recovered quickly, thus improv-
content of our Employee Stock Purchase Plan
ing stock market sentiment. Central banks’ continuing
remained unchanged in the year under review.
expansionary monetary policy also helped shore up the
Our employees were able to buy up to 2,000 KWS
situation. Interest rates were still low and shares there-
shares at a price of €53.04 (45.92), including a
fore remained an attractive investment, with the result
20% discount, which the individual employees
that the leading stock indexes climbed to new peaks.
must pay tax on. 592 (476) employees in eight
(six) European countries took up this offer and
The DAX recorded a new all-time high of 15,730 points
purchased a total of 76,120 (52,315) shares, The
on June 15, 2021, before closing at 15,531 points on
acquired shares are subject to a lock-up period
June 30, 2021 (June 30, 2020: 12,310) 1. The SDAX, in
of four years. They cannot be sold, transferred or
which the KWS share is listed, turned in a similar perfor-
pledged during this period. As in previous years,
mance and stood at 16,021 points on the balance sheet
the shares used for the Employee Stock Purchase
date, likewise well above the level of the previous year
Plan were acquired in accordance with Section 71 (1)
(11,536).
No. 2 of the German Stock Corporation Act (AktG).
A total of €5.6 (3.0) million was used to buy back
KWS’ share posted a slightly positive performance as a
the company’s own shares, giving an average
whole in fiscal year 2020/2021 and had risen by just over
purchase price per share (including fees) of
4% by its end. After a low of €61.10 at the end of October
€73.02 (57.40). More details have been published
2020, it rose sharply to around €80 in May 2021 on the
in information released for the capital market and
back of increases in prices for agricultural raw materials.
can be viewed on our website at www.kws.com/
KWS’ share ended June 2021 at €69.40. The average
corp/en/company/investor-relations/.
trading volume per day on XETRA fell from around
14,000 shares to approximately 9,000. The price of KWS’
share has more than doubled in the past ten years.
The KWS share’s performance over ten years
300%
250%
200%
150%
100%
50%
+210%
+193%
+125%
+109%
July 1, 2011
June 30, 2021
KWS
DAX
MDAX
SDAX
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 2020/2021 | KWS Group
Shareholder structure at June 30, 2021
(33,000,000 shares)
Free float 30.9%
69.1% Families Büchting, Arend Oetker, Tessner
(thereof 15.4% Tessner Beteiligungs GmbH)
Planned appropriation of profits
Key figures for the KWS share (Xetra®)
In view of the company’s pleasing performance
and the sharp increase in net income for the year,
ISIN
Share class
the Executive and Supervisory Boards will propose
Number of shares
a dividend of €0.80 (0.70) per share for fiscal year
Index
2020/2021 to the Annual Shareholders’ Meeting
on December 2, 2021. €26,4 (23.1) million would
thus be distributed to KWS SAAT SE & Co. KGaA’s
shareholders. That corresponds to a dividend payout
ratio of 23.9% (24.3%), once again in line with the
KWS Group’s earnings-oriented policy of paying a
dividend of 20% to 25% of its net income.
Closing price
June 30, 2021
June 30, 2020
High and low
High (May 19, 2021)
Low (October 29, 2020)
DE0007074007
Non-par
33,000,000
SDAX
in €
69.40
66.70
in €
80.90
61.10
Average trading volume
in shares/day
2020/2021
2019/2020
9,203
14,354
Market capitalization
in € million
June 30, 2021
June 30, 2020
Earnings per share
June 30, 2021
June 30, 2020
2,290
2,201
in €
3.35
2.89
KWS on the Capital Market | To Our Shareholders
13
KWS Group | Annual Report 2020/2021 14
Annual Report 2020/2021 | KWS Group
2. Combined Management Report
2020/2021 of the KWS Group
2.1 Fundamentals of the KWS Group
2.1.1 Business Model
2.1.2 Branches
2.1.3 Responsible Business Activity
2.1.4 Objectives and Strategy
2.1.5 Control System
2.1.6 Fundamentals of
Research & Development
2.2 Research & Development Report
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 Product Quality and Safety
2.4.3 Emissions & Water
2.5 Employee Report
2.5.1 Employment Trends
2.5.2 Occupational Health and Safety
2.5.3 Recruitment & Employee Loyalty
2.5.4 Qualification, Further Training and
Development
2.5.5 Labor and Social Standards
16
16
18
18
19
21
22
23
26
26
29
33
43
43
44
45
47
47
47
48
49
51
2.6 Corporate Governance
2.6.1 Corporate Governance and Declaration on
Corporate Governance
2.6.2 Declaration of Compliance in Accordance
with Section 161 AktG (German Stock
Corporation Act)
2.6.3 Business Ethics and Compliance
2.6.4 Responsibility in the Supply Chain
2.6.5 Compensation Report
2.6.6 Explanatory Report of the Personally Liable
Partner (KWS SE) of KWS SAAT SE & Co.
KGaA in Accordance with Section 176 (1)
Sentence 1 AktG (German Stock Corporation
Act) on the Disclosures in Accordance with
Section 289a (1) and Section 315a (1) HGB
(German Commercial Code)
2.7 Social Report
2.7.1 Use of Genetic Resources
2.7.2 Social Commitment
2.8 Opportunity and Risk Report
2.8.1 Opportunity Management
2.8.2 Risk Management
2.9 Forecast Report
2.9.1 Changes in the KWS Group’s Composition
that are Significant for the Forecast
52
52
52
52
54
55
64
67
67
68
69
69
70
79
79
2.9.2 Forecast for the KWS Group’s Statement of
79
Comprehensive Income
2.9.3 Forecast for the Segments
2.10 Report on KWS SAAT SE & Co. KGaA and
Non-Financial Declaration (Declaration based
on the German Commercial Code (HGB))
2.10.1 KWS SAAT SE & Co. KGaA
2.10.2 Combined Non-Financial Declaration for
the KWS Group
79
81
81
82
t
r
o
p
e
R
t
n
e
m
e
g
a
n
a
M
d
e
n
b
m
o
C
i
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 82. 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 and
seed for agriculture. From its beginnings in sugarbeet
sunflowers, as well as production and distribution
breeding, KWS has evolved into an innovative,
of soybeans. Its operating performance depends
international supplier with a broad portfolio of
largely on the spring sowing season in the northern
crops. The company covers the complete value
hemisphere. That means most of the segment’s net
chain of a modern seed producer – from developing
sales are generated in the second half of the fiscal
new varieties, multiplication and processing, to
year (January to June). The segment generates a
marketing of the seed and consulting for farmers.
lower share of its revenue in the first two quarters,
KWS’ core competence lies in breeding new, high-
mainly from corn and soybean seed in South
performance varieties that are adapted to regional
America. KWS is the market leader for silage corn in
needs, such as climatic and soil conditions. Targeted
Europe.
breeding of resistances against fungi or viruses,
for example, also enables a significant reduction in
The Sugarbeet Segment comprises sugarbeet seed
the use of chemical pesticides in agriculture. Every
breeding, production and distribution, as well as
new variety delivers added value for the farmer.
the development of diploid hybrid potatoes. KWS’
KWS’ business model is based on this added
high-quality sugarbeet varieties are consistently
value – which is ultimately attributable to breeding
some of the highest-yielding in the industry. KWS
progress, optimization of seed quality and pinpointed
is the world market leader in sugarbeet seed, not
consulting.
least thanks to many innovations. Its main sales
markets are the European Union, Eastern Europe,
Organization and segments of the KWS Group
North America and Turkey, where the company offers
In fiscal 2020/2021, the KWS Group’s operational
farmers efficient solutions for growing sugarbeet
business consisted of five Business Units, which
in the shape of locally adapted, multiple-resistant
were grouped in the four product segments Corn,
varieties. Sugarbeet is sown in the spring, which
Sugarbeet, Cereals and Vegetables. The Business
means that net sales in this segment are likewise
Units Sugarbeet, Cereals and Vegetables are
largely generated in the second half of the fiscal year
identical to the segments of the same name. The
(January to June).
Corn Segment contains the Business Unit Corn
Europe/Asia and the Business Unit Corn Americas.
16 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2020/2021 | KWS Group The Cereals Segment includes breeding,
Main business processes
production and distribution of seed for rye, wheat,
KWS’ breeding processes are geared toward
barley and rapeseed. Rye accounts for the largest
exploiting plants’ potential as much as possible
share of revenue from cereals (more than 40%),
and leveraging that potential to tackle the major
followed by rapeseed, wheat and barley (a combined
challenges of modern sustainable agriculture.
total of around 50%). KWS generates the remainder
Whether it is plants for producing food, fodder
from other crops such as sorghum, peas, catch
or energy, conventional, organic or genetically
crops (e.g. mustard), and oats. Farmers in KWS’
modified: KWS offers farmers a broad portfolio of
core markets (Germany, Poland, the UK, France and
high-performance varieties. It takes an average of
Scandinavia) predominantly sow cereals seed in the
eight to ten years to breed a new variety. Thanks
fall. Consequently, the segment generates most of
to its large network of breeding and trial stations in
its revenue in the first half of the fiscal year (July to
all the world’s key markets, the company can test
December).
the individual candidates under a wide range of
climatic and local conditions to determine whether
The Vegetables Segment comprises vegetable
the varieties are suitable for cultivation. In most
seed breeding, production and distribution. KWS is
markets, variety development ends in an official
the world leader in spinach seed, which accounts for
approval process in which candidates have to meet
around 60% of the segment’s net sales. Its portfolio
high quality standards, usually in three-year field
also includes seed for beans, carrots and tomatoes.
trials. Seed multiplication in selected cultivation
The segment generates just over one-third of its
regions also takes up to two years. Only then can
revenue in the U.S. KWS’ strategic objective is to
the varieties be marketed via the various distribution
build a significant position in the vegetable seed
channels.
market long term. Its focus is on the world’s five most
important crops in this segment: tomatoes, peppers,
Products, markets and external factors
cucumbers, watermelons and melons.
KWS offers its customers – farmers – a broad
range of agricultural crops that have been adapted
Apart from the operating segments, there is also
by breeding to the conditions of their specific
Corporate, a segment which by and large does
location. They include corn, sugarbeet, the cereals
not conduct any operational activities. Its relatively
rye, wheat and barley, oil plants such as sunflower
low net sales come from the revenue from our own
and rapeseed, catch crops, and alternative protein
farms in Germany, France and Poland. Since the
sources with a highly promising future, such as
KWS Group’s basic research expenditure and costs
soybeans, peas and oats. Since KWS entered the
for administrative functions are charged to the
vegetable business, its portfolio has also included
Corporate Segment, its income is usually negative.
spinach, tomato and bean seed. In addition to
distributing seed, its consultants are also on hand
There were no significant changes in the
to offer farmers advice on choosing and cultivating
KWS Group’s composition and organization in
varieties. Moreover, we offer expert consulting with
fiscal 2020/2021. More details on the net sales and
our digital services and on our website.
income contributed by the segments, including our
joint ventures, can be found in our segment reports
Our breeding and seed multiplication activities are
starting on page 33.
subject to weather influences that cannot always
be quickly compensated for with countermeasures.
Economic policy decisions in the agricultural
industry, which is strongly regulated worldwide, may
also impact our business. You can find more details
on these external factors in our Opportunity and Risk
Report on pages 69 to 78.
2.1 Fundamentals of the KWS Group | Combined Management Report
17
KWS Group | Annual Report 2020/2021 Breeding and distribution activities of the KWS Group in over 70 countries
Breeding stations
Test locations for trial cultivation
2.1.2 Branches
2.1.3 Responsible Business Activity *
KWS SAAT SE & Co. KGaA is the parent company
Mission and principles
of the KWS Group. Strategic management of all
As a family-run, listed company, we think across
of KWS’ global activities is pooled under its roof.
generations. Apart from our corporate objectives,
It is headquartered in Einbeck, Germany, and
responsible business activity with regard to people
controls breeding of the KWS Group’s range of
and the environment is therefore a firmly entrenched
varieties. It conducts basic research, produces and
principle of how we run our company. As a profitable
distributes sugarbeet and corn seed, and is home
family-run company that acts sustainably, we have
to a number of central functions. There are also
the necessary entrepreneurial stability and freedom
currently 85 subsidiaries and associated companies
to operate largely independently of short-term
in 34 countries. You can find a detailed breakdown
interests.
of net sales by region on page 30. An overview of our
subsidiaries and associated companies can be found
Guidelines
in the Notes on pages 139 to 141.
Our guiding principles define the framework for
our everyday work, so that we are able to create
sustainable and profitable growth for our customers,
employees and investors. Our strategic decisions
and day-to-day actions in operational business are
guided by the following company principles:
* Not an audited part of the Combined Management Report
18 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2020/2021 | KWS Group We leverage genetic potential through outstanding
2.1.4 Objectives and Strategy
research and top-class breeding programs.
Our strategic planning is the foundation for the
We supply our farmers with seed of the very best
KWS Group’s further development. It defines
quality.
strategic objectives, initiatives and core measures
We aim to be a strong partner who earns the trust
for existing activities and for potential new fields
of our customers.
of business. The planning is based on a long-term
We create entrepreneurial freedom and help peo-
horizon (ten years) and includes an analysis and
ple unfold their talents.
assessment of market trends, competitors and
the KWS Group’s position. Strategic planning is
We also have a central policy framework (Group
carried out regularly on a rolling basis. We believe
Standards) with which we create a common
that strategic success factors are in particular our
understanding of the freedoms and decision-
intensive research & breeding of new, high-yielding
making processes within the KWS Group. The
varieties.
Group Standards are continuously improved by
means of constant monitoring and feedback. They
Corporate objectives of the KWS Group
complement our existing guiding principles, with
Our corporate objectives are divided into four core
the objective of preserving KWS’ unmistakable
topics: profitable growth, innovation, independence
profile, also against the backdrop of the Group’s
and sustainability:
increasing internationalization.
The KWS Group’s medium- and long-term objectives
Main strategic subject areas
Explanation
Profitable
growth
An average increase in consolidated net
Page 26 et seqq.
sales of at least 5% p. a.
EBIT-margin
≥ 10%
Page 26 et seqq.
A dividend payout ratio of 20% to 25% of
the KWS Group’s net income for the year
Page 137 et seqq. (Notes)
Innovation
R&D intensity of at least 17% of
Page 23 et seqq.
consolidated net sales
Independence
Retention of a control structure shaped by
Page 64 et seqq.
the family owners
Sustainability
Implementation of KWS’ Sustainability
Ambition 2030
Page 43 et seqq. (NFD) and Sustainability
Report 2020/2021
Profitable growth
is vital for our future development. Long-term
profitable growth ensures we can retain our
commercial independence. Key components are the
good performance of our seed and a relationship of
trust with farmers. We strive to increase net sales by
an average of at least 5% p.a. and achieve an EBIT
margin of at least 10%.
2.1 Fundamentals of the KWS Group | Combined Management Report
19
KWS Group | Annual Report 2020/2021 Innovation
Sustainability
drives our business model. The need for innovative
Agriculture faces huge challenges globally. They
technology in plant breeding continues to increase.
include the world’s growing population, increasingly
Climate change, significant population growth and
severe consequences of climate change, and the
changes in eating habits, where alternative protein
preservation of biodiversity and natural resources.
sources are growing in importance, pose challenges
We believe that innovations in plant breeding play a
for us. In addition, digitization is playing a greater
key role in tackling these challenges.
and greater role in agriculture. In the year under
review, we devoted around €250 million to research &
Throughout our 165-year history, we have always
development, and thus once again a significant share
regarded seed as the central starting point for
of our net sales. We are tackling these challenges
improvements in agriculture. Proximity to farmers
with this spending and regard it as an investment in
and continuous expansion of our research &
future growth.
Independence
development activities have helped us become
established as a leading seed specialist. New
varieties now help reduce the use of pesticides,
has always been a key corporate objective for KWS.
fertilizer and other agriculture resources on fields,
It is part of the shared values held by our employees.
yet deliver higher and higher yields.
Our independence and long-term orientation enable
us in particular to invest in research and breeding
With our “KWS Sustainability Ambition 2030,” we
projects with an eye to the future.
now define the framework for KWS’ sustainable
development – economically, ecologically and
socially – in the coming years.
Guided by the principle that “sustainability in
agriculture begins with seed,” we pursue these
concrete goals:
KWS Sustainability Ambition 2030
Safeguard food production
Enhance crop diversity
Improve operational footprint
1.5% annual yield gain for farmers
through
progress in plant breeding and
digital farming solutions on
> 6 million hectares
Increase number of crops with
dedicated breeding programs
from 24 to 27
Reduce scope 1 and 2 emissions by
50% until 2030 and to net-zero by 2050
Establish score cards to provide
transparency on ecological footprint of
all seed production sites
Minimize input required
Support sustainable diets
Foster social engagement
Enable > 50% reduction of chemical
crop protection (in line with European
Farm to Fork Strategy).
Invest > 30% p.a. of R&D budget
into reduction of inputs
> 25% of KWS varieties are
suitable for low input cultivation
> 40% of KWS varieties are suitable
for predominantly direct use in human
nutrition
Min. 1% EBIT p.a. into social projects
Measurement and continuous
improvement of employee engagement
Continuous decline in the number of
occupational accidents/illness ratio
1 Farm-to-Fork-Strategie
20 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2020/2021 | KWS Group We refer you to the 2020/2021 Sustainability Report
The planning is compared every quarter with the
and to our homepage www.kws.com for details of
company’s actual business performance and
our sustainability program.
the underlying general conditions. If necessary,
we initiate suitable countermeasures and make
Our business developed largely in line with our
adjustments. We update the forecast for the current
strategic objectives in the year under review. We
fiscal year at the end of every quarter. At the end
deal with that and other details of achievement of
of each fiscal year, all the units conduct a detailed
our objectives in the respective sections, which are
variance analysis of the planned and actual results.
referred to in the table on the corporate objectives.
That serves to optimize our internal processes.
2.1.5 Control System
Controlling is responsible for coordinating and
Detailed annual and medium-term operational plans
documenting all planning processes and our current
are used to control the Group and our Business
expectations. It reports on compliance with adopted
Units. The medium-term plan covers the time frame
budgets and analyzes the efficiency and cost-
of the annual plan and the three subsequent fiscal
effectiveness of business processes and measures.
years. It is derived from the strategic planning, which
Controlling and the Finance Business Partners also
covers a timescale of ten years.
advise decision-makers on economic optimization
measures. In particular the heads of the product
The targets set in the annual and medium-term
segments, the regional directors and the heads of
planning are arrived at on the basis of the strategic
research and breeding activities and the central
planning, regional economic and legal situation,
functions are responsible for the content of the
anticipated market trends and assessments of the
planning and current forecasts.
company’s position in the market and the potential
product performance. In a subsequent bottom-up
The Executive Board uses various indicators for
process, which also includes the development of our
planning, controlling and monitoring the business
joint ventures, we use these premises to plan figures
performance of the KWS Group and its operating
for sales volumes and net sales, breeding activities,
units. The main indicators for the KWS Group are net
production capacities and quantities, the allocation
sales, operating profitability (EBIT margin), adjusted
of resources (including capital spending and
EBIT margin (when appropriate), and R&D intensity.
personnel), the level of material costs and internal
KWS’ product segments, which are divided into
charge allocation and the resultant balance sheet
Business Units, are in turn geared toward the main
data, along with the financial budget. In principle,
indicators of net sales and EBIT margin.
part of the planning documentation is also an
opportunity/risk assessment which every manager
must conduct for his or her unit.
2.1 Fundamentals of the KWS Group | Combined Management Report
21
KWS Group | Annual Report 2020/2021 Management and control
2.1.6 Fundamentals of Research & Development
The company is a partnership limited by shares
The objective of KWS’ research & development work
(KGaA). The personally liable partner is responsible
is to create high-performance varieties that meet
for the tasks of running the business of a partnership
various environmental and application requirements
limited by shares. The company’s sole personally
and deliver continuous value added to farmers. They
liable partner is KWS SE, whose Executive Board
include absolute yield, as well as issues such as yield
is therefore responsible for management of the
stability, resistance to diseases, resource efficiency,
company’s business.
cultivation characteristics or constituent properties.
We accordingly continue to invest in expanding our
The rights and obligations of the Supervisory Board
research and breeding capacities.
at a partnership limited by shares differ greatly from
those at a stock corporation (AG) or a European
Plant breeding is a very research-intensive and long-
Company (Societas Europaea or SE). In particular, the
term business. It takes an average of eight to ten
Supervisory Board at a partnership limited by shares
years to develop a new, high-performance variety.
does not hold personnel responsibility as regards
As part of that, the new varieties are adapted to the
management; moreover, it cannot appoint any further
specific environmental conditions of their target
personally liable partners and define the contractual
markets. Our breeders are assisted in that by a
terms and conditions for them, enact bylaws for the
global network of various breeding and trial stations.
Executive Board, or define business transactions
That means candidate varieties can be tested
requiring its consent.
under the location-specific conditions of their target
markets over several years.
The Annual Shareholders’ Meeting of a partnership
limited by shares basically has the same rights
By applying leading-edge breeding methods, which
as the Annual Shareholders’ Meeting of a stock
are continually optimized by the use of molecular
corporation or SE. It also adopts resolutions on
biology, IT or technical approaches, KWS has
whether to approve the company’s annual financial
created sustainable annual progress in yields
statements and ratify the acts of the personally
of around 1.5% for decades. The company also
liable partner. Certain resolutions adopted by the
increases genetic diversity by new crossings, which
Annual Shareholders’ Meeting of a partnership
is vital to improving crops. That is why KWS has
limited by shares also require the approval of
supported various gene banks in different projects
the personally liable partner. The declaration on
for years. By continuously improving yield and
corporate governance in accordance with Section
delivering new plant traits, we make a contribution to
289f of the German Commercial Code (HGB)
resource-conserving, sustainable agriculture.
contains detailed information on the extensive and
close cooperation between the Executive Board and
the Supervisory Board and has been published at
www.kws.com/corp/en/company/investor-relations/
corporate-governance.
22 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2020/2021 | KWS Group 2.2. Research & Development Report
Key research & development figures
R&D employees ¹
Share of R&D employees relative
to the total workforce
R&D expenditure
R&D intensity ²
Variety approvals
1 Average headcount
2 As a % of net sales
ø
in %
in %
2020/2021
2019/2020
2,122
35.4
252.2
19.3
492
2,073
36.3
236.1
18.4
484
+/–
2.4%
–
6.8%
–
1.7%
In fiscal 2020/2021, our R&D expenditure increased
Our product pipeline means we are also well
by around 7% to €252.2 (236.1) million. We obtained
positioned in the Brazilian market moving ahead.
492 variety approvals worldwide, surpassing the
A further new and highly promising corn variety,
high figure of the previous year (484) and thus once
K7510VIP3, gained approval in the year under review
more demonstrating KWS’ innovativeness.
and is about to be launched on the market. It is
likewise high-yielding, is resistant to fungal diseases
Success on the Brazilian market with our own
and has important traits for the Brazilian market.
breeding material
KWS has operated in the important corn market
New winter wheat varieties for Germany
of Brazil since 2012 and so is a relatively young
Germany is one of our core markets for winter wheat
company in that country. We were initially
in Europe. We maintain a separate breeding program
represented there only with licensed breeding
for this market due to climatic conditions, market-
material, but in fiscal 2018/2019 we began selling
specific quality criteria and specific requirements for
the first hybrid corn variety with KWS’ own genetic
agronomic properties and resistances. We were able
material. K9606VIP3 is now one of the best-selling
to significantly increase our success in registering
corn varieties on the Brazilian market. In particular,
varieties bred under the program in the year under
it boasts high yield stability. Moreover, it is not only
review. We obtained approval for six new varieties
resistant to corn stunt, one of the main bacterial corn
in the past two years alone. Four of the varieties are
diseases in South America, but is also distinguished
particularly high-yielding, have good resistance to
by very high drought tolerance.
diseases and deliver important qualities for use in
baking bread. We anticipate that these new varieties
will help us increase our market share in Germany
sharply in the coming years.
2.2. Research & Development Report | Combined Management Report
23
KWS Group | Annual Report 2020/2021 Strong hybrid rapeseed varieties gain
In order to reduce the losses caused by yellowing
approval in France
viruses, KWS launched its first tolerant variety under
Hybrid rapeseed varieties have become increasingly
the integrated approach “Virus Yellow Protect” in the
established in the past years. They offer the same
year under review. The variety MARUSCHA KWS has
or a better yield, as well as greater stability in the
gained approval in the UK and Germany and all in all
face of environmental factors and diseases. KWS
has good tolerance to yellowing viruses, in particular
has therefore geared its rapeseed program to hybrid
to beet mild yellowing virus. It also impresses with far
breeding. Approval of six new hybrid varieties in
better yields in situations where plants are infected
France last year vindicates this strategy. A KWS
by viruses. Further varieties are currently undergoing
variety achieved the highest yield in the official
testing in official trials in France, Belgium, the
variety tests.
Netherlands and Switzerland. We are working long
term on developing varieties that exhibit very good
The variety HOSTINE not only has improved pod
resistance to all yellowing viruses, yet still ensure a
shatter resistance, but is also certified as having
high sugar yield on fields that are not infected.
greater tolerance to turnip yellows viruses and also
boasts a high oil content. Our portfolio also includes
Further expansion of vegetable breeding
HODYSSEE, a hybrid variety with a particularly high
KWS continues to expand its new business unit
protein content. The results from France mean we
for vegetable seed. Last fiscal year, it took over the
can also expect to obtain approvals for competitive
vegetable seed company Geneplanta S.r.l., Noceto/
hybrid rapeseed varieties in other markets in the
Parma, Italy. The company, which was established
future.
in 2011, focuses on breeding tomatoes and on
producing and distributing tomato seed. The main
New solution for combating yellowing viruses
sales regions currently include Italy and Mexico.
in sugarbeet cultivation
By integrating Geneplanta we gain access to high-
KWS resumed its research into yellowing viruses
performance genetic material and can significantly
in 2015, in anticipation of changes in the law
speed up development of our own tomato breeding
relating to the application of pesticides containing
programs.
neonicotinoids. Since then, we have been working
at full pace on a breeding approach to combat
We are also focused on building our own tomato,
viruses that cause yellowing in sugarbeet. Yellowing
cucumber, melon, watermelon and pepper breeding
viruses are transmitted by aphids and can result
activities in Spain, Mexico, Brazil and Turkey.
in harvest losses of up to 50%. These aphids
have been proliferating in Europe for years due to
We have also achieved progress in breeding as part
climatic changes and a lack of ways to combat
of the vegetable activities of Pop Vriend Seeds,
them. Plant viruses themselves cannot be controlled
which we acquired in 2019. By crossing in a new
by pesticides. This problem, which is of existential
resistance to mildew, we will be able to underpin
importance in sugarbeet production, can therefore
our leading market position worldwide in spinach
be tackled only by developing resistant and tolerant
breeding.
varieties.
24 Combined Management Report | 2.2. Research & Development Report
Annual Report 2020/2021 | KWS Group Innovativeness in research enhanced
Digitization and automation at KWS
by genome editing
Digitization is penetrating more and more areas
One of the core tasks in our research work is
of our research & development work. We can
to gain a better understanding of the molecular
increasingly make breeding decisions on the basis
fundamentals of complex plant traits and leverage
of big data and using algorithms. Elsewhere, we
that knowledge to develop new varieties. Innovative
are transferring important processes to technical
technologies are vital in that. Genome editing
systems so as to automate and increase the
technology has injected fresh impetus here in the
efficiency of workflows in the lab, greenhouse and
past years. This technology allows us to identify
field.
genes far more quickly and test them directly
in our high-performance material. Results from
KWS’ global testing and trials are benefiting
research can thus be incorporated sooner in product
more and more from “FieldExplorer,” a geodata
development. Moreover, analyses can be conducted
management platform we have developed in-house.
with a lower number of plants, meaning we need
Around 700 KWS staffers worldwide now use the
fewer greenhouse tests and field trials. We currently
system and the possibility of fully digitized field
use genome editing technology in KWS’ research
planning and field management it offers. Further
work on the crops corn, sugarbeet, wheat, rye and
application modules were added to the platform in
potatoes.
fiscal 2020/2021. Two newly developed apps also
allow it to be used on mobile devices. Our users
In addition, KWS is campaigning for innovative
in the field thus have access to various trial and
methods like genome editing to be able to be used
production data and can enter their results and
in European agriculture, too. For example, we are
observations on the spot. We have already been
participating in the demonstration and research
able to increase efficiency in our testing and trials
project PILTON (which stands for “fungal tolerance
significantly by using this platform.
in wheat through new breeding methods”) that is
funded and supported by the German Plant Breeders
Digital solutions are also taking root in our
Association (BDP) and 60 plant breeding companies.
greenhouses. Since last fiscal year, autonomous
As part of this joint project, we aim to highlight the
transportation vehicles and artificial intelligence
benefits of these breeding methods for resource-
have helped our research into drought stress in
conserving and productive agriculture with reference
corn and sugarbeet plants. The self-driving vehicles
to a concrete example. The aim is to develop wheat
automatically take the plants to various analysis
plants with improved, multiple and durable fungal
stations so that their growth can be documented. We
tolerance using new breeding methods. Wheat
also gain insights into the water balance of plants
is one of the world’s most important crops – but
with the aid of hyperspectral imaging and smart
without protective measures up to one-third of the
image processing software.
annual harvest would be lost due to fungal diseases.
Multiple fungal tolerance could reduce crop failures
In addition, KWS is investigating and promoting new
and use of chemical pesticides.
methods for precise, non-chemical weed control
with the “FutureLive: Robotic weeding in the field”
project, where it is testing innovative robot systems
that remove weeds in a pinpointed manner thanks
to artificial intelligence and high-precision GPS
systems. The goal is to reduce use of pesticides long
term and make organic sugarbeet cultivation more
profitable.
2.2. Research & Development Report | Combined Management Report
25
KWS Group | Annual Report 2020/2021
2.3 Economic Report
2.3.1 Business Performance
In spite of tougher conditions in the wake of the
COVID-19 pandemic, the KWS Group again managed
General developments and business
in the year under review to supply farmers with seed
performance of the KWS Group
in good time for the spring sowing season. Guided
The general macroeconomic conditions in the year
by the precept of ensuring the health and safety of
under review were still impacted by the COVID-19
our employees, we adapted business processes and
pandemic. Following the pandemic’s outbreak
rolled out new, digital formats for communicating
at the beginning of 2020 and the sharp slump in
with our customers. We also continued our extensive
economic output, the global economy showed initial
measures at our global locations based on or even
signs of recovery as of the second half of the year.
exceeding the recommendations and directives of
The fall in infections in the course of the first half of
the national and international health authorities.
2021 resulted in a sharp pickup in overall economic
activity, in particular in the developed economies.
Guidance versus actual business performance
This trend was accompanied by higher inflation in
of the KWS Group
industrialized countries like Germany and the U.S.
In the course of the year, there were no significant
changes to our assessment for the year as a whole.
The pandemic exacerbated general economic
In our 9M Quarterly Report for 2020/2021, we put
conditions in some emerging countries. That led
a more precise figure on our earnings guidance by
in some cases to a sharp devaluation in local
stating that we expected an EBIT margin (excluding
currencies, such as in Brazil, Argentina and Turkey,
the noncash effects as part of the completed
which had a negative impact on KWS.
purchase price allocation for the acquisition of Pop
Vriend Seeds) at the top end of the forecast of 11.0%
After a lengthy spell of low prices, the agricultural
to 13.0%.
sector recorded price increases, in some cases on
a significant scale, for agricultural commodities like
The KWS Group’s consolidated net sales rose by
corn and soybean in the year under review. This
around 2% to €1,310.2 million and were thus in line
trend helped fuel an increase in cultivation area and
with the forecast, namely net sales at the level as the
so was supportive to KWS’ business performance.
previous year. The R&D intensity was 19.3%, slightly
The rise in prices for agricultural commodities
above the forecast range of 17% to 19%.
was accompanied in some cases by higher seed
multiplication costs.
The EBIT margin was 10.5%. Excluding the noncash
effects as part of the completed purchase price
allocation for the acquisition of Pop Vriend Seeds,
it was 12.5% and thus in line with the more precise
guidance given in the 9M Quarterly Report for
2020/2021.
26 Combined Management Report | 2.3 Economic Report
Annual Report 2020/2021 | KWS Group
Guidance versus actual business performance of the KWS Group
Results in
2019/2020
Guidance for
2020/2021
Adjustments to the guidance
during the year
Results in
2020/2021
Annual Report
2019/2020
Q1 Report
Semiannual
Report
9M Report
Net sales
€1,283
million
At the previous
year’s level
R&D intensity
EBIT margin ¹
18.4%
13.3%
17 – 19%
11 – 13%
–
–
–
1 Excluding the effects of the purchase price allocation for Pop Vriend Seeds
€1,310 million;
+2.2%
19.3%
12.5%
–
–
–
–
–
At the upper
end of the
more precise
guidance
Summary of the segments’ course of business
The EBIT margin was 9.2% (8.6%) and, as forecast in
and comparison with the guidance¹
the updated guidance in the 9M Quarterly Report for
Most of the net sales in the Corn Segment is
2020/2021, was at the level of the previous year.
generated in the second half of our fiscal year
(January to June) during the spring sowing season
The main sales season for the Sugarbeet Segment
in the northern hemisphere. A lesser share of
is in the second half of our fiscal year (January to
revenue is earned in South America in the first
June). Our high-quality sugarbeet varieties were
two quarters. Net sales at the Corn Segment were
again some of the highest-yielding in the industry.
€774.0 (775.7) million, i.e. at the level of the previous
The segment also benefited from the success of our
year and thus in line with the more precise guidance
CONVISO® SMART portfolio of varieties and initial
given in the 9M Quarterly Report for 2020/2021.
net sales from varieties based on a new Cercospora
tolerance (CR+). Cultivation area declined slightly as
Exchange rate effects (in particular in relation to
a whole.
the Brazilian real) reduced net sales sharply by
8.5%; after adjustment for exchange rate effects,
The segment’s net sales rose by 6.6% to
the segment’s net sales rose by 8.3%. The main
€524.3 (491.8) million, a figure that was much better
contributors to this growth were the Europe region
than anticipated in the more precise guidance given
(in particular Southeastern and Eastern Europe)
in the 9M Quarterly Report for 2020/2021 (“slight
and the South American markets Argentina and
increase in net sales”; previously “at the level of the
Brazil. However, our U.S. joint venture AgReliant
previous year”). Exchange rate effects reduced net
posted lower net sales in the face of a challenging
sales by 6.4%; after adjustment for exchange rate
competitive environment.
effects, the segment’s net sales rose by 13.0%. The
EBIT margin in the Sugarbeet Segment was 33.3%
and was slightly below the level of the previous
year (34.6%).
1 Including equity-accounted companies. Details on the segments’ business perfor-
mance and their economic environment can be found in the segment reports.
2.3 Economic Report | Combined Management Report
27
KWS Group | Annual Report 2020/2021
Every year, the fall sowing season determines the
The segment’s income (adjusted for effects as part
main business trends of the Cereals Segment.
of the purchase price allocation for the acquisition
Net sales were €191.2 (191.2) million and were thus,
of Pop Vriend Seeds) fell to €7.9 (18.1) million due to
as expected, at the level of the previous year. In
the decline in net sales; the EBIT margin of 13.6%
particular, there was an appreciable increase in
was thus well below the more precise guidance
net sales for wheat and rapeseed seed. Business
given in the Semiannual Report 2020/2021 (“around
operations with hybrid rye seed were stable,
20%”). Including noncash effects from the purchase
although exchange rate effects resulted in a fall in
price allocation of inventories measured at fair value
net sales in nominal terms. All in all, exchange rate
(€–4.1 million) and from amortization of acquired
effects reduced the segment’s net sales slightly by
intangible assets (€–21.9 million), the segment’s
around 3%. In the year under review, net sales from
income was €–18.1 million.
farms totaling €1.6 million were also reassigned from
the Cereals Segment to the Corporate Segment.
Revenue (albeit slight) from our farms in Germany,
The segment’s EBIT margin was 11.1% (13.8%), as
France and Poland is grouped in the Corporate
forecast slightly below the level of the previous year.
Segment. Since all cross-segment costs for
the KWS Group’s central functions and basic
The Vegetables Segment, in which the activities
research expenditure are still charged to the
of Pop Vriend Seeds, the vegetable seed producer
Corporate Segment, its income is usually negative.
we acquired effective July 1, 2019, are consolidated,
The segment’s income improved sharply to
is impacted by seasonal factors only to a small
€–92.0 (–104.6) million, mainly due to positive
degree. Net sales at the Vegetables Segment fell
exchange rate effects from financial instruments and
sharply to €58.2 (83.5) million, in particular due to
lower costs as a result of the pandemic, and was
lower demand for spinach seed in the wake of the
thus in line with the guidance (“improvement over the
COVID-19 pandemic. The segment’s net sales were
previous year”).
thus – also due to exchange rate effects – slightly
below the updated guidance in the Semiannual
Report 2020/2021 (“between €60 and €65 million”).
Net sales in the food service market segment in the
U.S., our key sales market, declined in particular.
28 Combined Management Report | 2.3 Economic Report
Annual Report 2020/2021 | KWS Group 2.3.2 Earnings, Financial Position and Assets
Earnings
Condensed 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
2020/2021
2019/2020
1,310.2
1,282.6
230.9
137.0
5.2
142.2
31.6
110.6
225.5
137.4
–7.8
129.5
34.3
95.2
+/–
2.2%
2.4%
–0.3%
–
9.8%
–7.9%
16.2%
in €
in %
3.35
2.89
16.1%
10.5
10.7
–
Slight increase in net sales despite significant
EBIT at the previous year’s level, sharp increase
negative exchange rate effects
in R&D expenditure
The KWS Group’s net sales rose by 2.2% from
The KWS Group’s operating income before
€1,282.6 million in the previous fiscal year to
depreciation and amortization (EBITDA)
€1,310.2 million in the year under review. Negative
increased in fiscal 2020/2021 by 2.4% to
exchange rate effects reduced that figure sharply by
€230.9 (225.5) million, while operating income
6.7%, in particular as a result of depreciation of the
(EBIT) was €137.0 (137.4) million and so at the level
local currencies in Brazil, Argentina, Russia, the U.S.
of the previous year.
and Turkey against the euro. After adjustment for
exchange rate effects, net sales rose by 8.8%.
The EBIT margin was 10.5% following 10.7% in the
previous year. Excluding noncash effects from the
The Corn and Sugarbeet Segments accounted
purchase price allocation of inventories measured
for a major share of total net sales, namely 40.3%
at fair value (€–4.1 million) and from amortization of
and 40.0% respectively. The share of the Cereals
acquired intangible assets (€–21.9 million), the EBIT
Segment in the year under review was virtually
margin was 12.5%.
constant at 14.6% (previous year: 14.9%). The
Vegetables Segment accounted for 4.4% (previous
The KWS Group’s cost of sales rose in the year
year: 6.5%) of total net sales.
under review by 3.8% to €570.7 (549.9) million,
giving a cost of sales ratio of 43.6% (42.9%). The
The region where we generated most of our business
slight year-on-year increase in the ratio is mainly
was Europe, which accounted for 65.9% of net
attributable to the higher cost of sales in the Corn
sales (Germany: 18.5%), while net sales from North
and Sugarbeet Segments.
and South America contributed 27.3% of the total.
Revenues from our North American and Chinese
Selling expenses declined by 1.9% to
equity-accounted companies are only included at the
€244.2 (248.8) million, mainly due to positive
segment level (see our segment reporting starting on
exchange rate effects.
page 33).
2.3 Economic Report | Combined Management Report
29
KWS Group | Annual Report 2020/2021 Net sales by region
Total net sales €1,310.2 million 1
Rest of world 7%
North and South America 27%
19% Germany
47% Europe (excluding Germany)
Net sales by segment
Total net sales €1,310.2 million 1
Corporate 1%
Vegetables 4%
Cereals 15%
40% Corn
40% Sugarbeet
1 Without sales of our at equity accounted consolidated companies
Research & development expenditure rose
Sharp increase in net income for the year and
sharply by 6.8% in the year under review to
earnings per share
€252.2 (236.1) million; the R&D intensity increased
Our net financial income/expenses is made up of the
accordingly to 19.3% (18.5%).
net income from equity investments and the interest
result. One component of income from equity
Administrative expenses declined slightly due
investments is the income from equity-accounted
to lower costs for the transformation project
joint ventures, which rose to €17.4 (10.8) million. The
ONEGLOBE (optimization of the administrative
interest result improved to €–12.2 (–18.6) million, in
functions and processes) and due to lower
particular due to advantageous financing terms and
costs as a result of the pandemic and were
the fact that there were higher interest expenses
€127.1 (129.5) million.
in the previous year for interim financing as part
of the company acquisition in the Vegetables
At €21.1 (19.1) million, the balance of other operating
Segment. Net financial income/expenses was thus
income and other operating expenses was at the level
€5.2 (–7.8) million. Earnings before taxes (EBT) rose
of the previous year. The related individual items are
by around 10% to €142.2 (129.5) million. Income
explained in detail in the Notes on pages 108 to 109.
taxes declined to €31.6 (34.3) million, in particular
due to a non-recurring effect from adjustment
of the anticipated rate of tax, giving a tax rate of
22.2% (26.5%). Overall, the KWS Group generated
net income of €110.6 (95.2) million in the year
under review. Given that the number of shares is
33,000,000, earnings per share were €3.35 (2.89).
30 Combined Management Report | 2.3 Economic Report
Annual Report 2020/2021 | KWS Group
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
2020/2021
2019/2020
222.7
168.3
–84.2
84.2
119.7
136.2
–499.9
–363.7
Net cash from financing activities
34.9
–82.5
+/–
86.0%
23.6%
–
–
–
Securing the KWS Group’s financial flexibility,
(to an amount of almost €400 million) to the
enabling its profitable growth and preserving its
acquisition of Pop Vriend Seeds. Our capital spending
independence are the core tasks of our financial
in the year under review was consistent with our
management. Among other things, we ensure that
long-term growth plans and focused on erecting and
by extensive liquidity planning, monitoring of cash
expanding production and research & development
flows, and hedging the risk of interest rate changes
capacities. Expansion of sugarbeet seed production
and currency risks. The main financial instruments
in Einbeck was continued and will be completed at
used by the Group in the fiscal year, apart from a
the end of 2021. The focus of our capital spending
syndicated credit line, were borrower’s notes and
in the Corn Segment was on expanding production
bilateral loan agreements (commercial papers) with
and processing plants in Romania, Brazil and the
different loan periods and terms. Further tranches
U.S. The main emphasis in the Cereals Segment
of the loan from the European Investment Bank (EIB)
was again on expanding and modernizing breeding
to fund research & development were also utilized.
stations and production plants. Our cross-segment
The maturity profile of the Group’s borrowings has a
investments included new laboratory buildings in
broad spread, with a high proportion of medium- and
Einbeck. Total capital spending in fiscal 2020/2021
long-term financing.
(excluding acquisitions, interest received and noncash
additions) totaled €81.3 (108.0) million. Against the
In order to secure KWS’ growth, we also consider the
backdrop of the COVID-19 pandemic, the KWS Group
option of a capital increase in exceptional cases, for
pursued a cautious capital expenditure policy in the
example to fund a further large acquisition.
year under review. Depreciation and amortization
increased as planned in the year under review to
The net cash from operating activities rose to
€93.8 (88.2) million.
€168.3 (136.2) million, in particular due to the
increase in earnings before depreciation and
The net cash from financing activities was
amortization. The net cash from investing activities
€34.9 million, well above the figure for the previous
totaled €–84.2 (–499.9) million in fiscal 2020/2021.
year (€–82.5 million); that was mainly attributable to
This high figure of the previous year was attributable
cash proceeds from raised loans.
2.3 Economic Report | Combined Management Report
3131
KWS Group | Annual Report 2020/2021
Capital expenditure by segment
Total capital expenditure €81.3 million 1
Corporate 28%
Vegetables 2%
Cereals 9%
29% Corn
32% Sugarbeet
Capital expenditure by region
Total capital expenditure €81.3 million 1
Rest of world 2%
North and South America 14%
45% Germany
39% Europe (excluding Germany)
1 Without capital expenditures of our at equity accounted consolidated companies
Assets
€222.7 (119.7) million as a result of the change in
The KWS Group’s balance sheet is impacted by the
cash flows. Inventories likewise increased sharply
seasonal nature of its business. In the course of
to €266.6 (216.6) million, mainly due to higher
the year, there are usually balance sheet items that
prime costs in seed multiplication.
differ significantly from the corresponding figures
at the balance sheet date, in particular in relation to
Equity increased to €1,053.7 (994.5) million, in
working capital.
particular due to the net income for the year.
The equity ratio was virtually unchanged at
Total assets at June 30, 2021, were
44.3% (44.5%). Noncurrent liabilities rose to
€2,376.7 (2,235.5) million. The rise is mainly
€839.0 (795.5) million due to further financial
due to an increase in current assets, which
borrowings aimed at ensuring KWS continues
totaled €1,111.0 (961.3) million. In particular,
on its growth trajectory. Net debt fell to
cash and cash equivalents increased sharply to
€475.6 (495.7) million.
Condensed balance sheet
in € millions
Assets
Noncurrent assets
Current assets
Assets held for sale
Equity and liabilities
Equity
Noncurrent liabilities
Current liabilities
Total assets
06/30/2021
06/30/2020
+/–
1,265.0
1,111.0
0.7
1,053.7
839.0
484.0
1,273.7
961.3
0.4
994.5
795.5
445.5
2,376.7
2,235.5
–0.7%
15.6%
75.0%
6.0%
5.5%
8.6%
6.3%
32 Combined Management Report | 2.3 Economic Report
Annual Report 2020/2021 | KWS Group
2.3.3 Segment Reports
Reconciliation with the KWS Group
The KWS Group’s consolidated financial statements
lower than the total for the segments. The earnings
are prepared in accordance with the International
contributed by the equity-accounted companies
Financial Reporting Standards (IFRS). The segments
are instead included under net financial income/
are presented in the Management Report in line
expenses. Our equity-accounted companies are
with our internal corporate controlling structure in
included proportionately in the segment reports in
accordance with GAS 20. The main difference is
line with our internal corporate controlling structure.
that we do not carry the revenues and costs of our
equity-accounted companies in the statement of
The difference from the KWS Group’s statement of
comprehensive income (in accordance with IFRS 11).
comprehensive income is summarized for a number
The KWS Group’s net sales and EBIT are therefore
of key indicators in the reconciliation table:
Reconciliation table
in € millions
Net sales
EBIT
Number of employees Ø
Capital expenditure
Total assets
Segments Recon ciliation
KWS Group
1,553.8
–243.6
1,310.2
157.2
6,422
86.6
2,472.2
–20.2
–422
–5.2
–95.5
137.0
6,000
81.3
2,376.7
The reconciliation between the KWS Group’s
statement of comprehensive income and the
reporting by segments in fiscal 2020/2021 is
impacted by our equity-accounted companies in
the North American and Chinese corn markets. That
applies to all key figures in the table above, with the
main influences coming from North America.
2.3 Economic Report | Combined Management Report
33
KWS Group | Annual Report 2020/2021 Corn
Corn Segment
General industry-specific conditions: Sharp
and foreign demand for fodder. Corn cultivation area
recovery in corn prices, high demand in Brazil
there rose by around 16% year over year. Cultivation
The general economic conditions for the Corn
area in Argentina remained unchanged, despite
Segment improved sharply as a result of higher
higher prices.
sales prices for agricultural raw materials and,
related to that, greater demand for seed compared
The segment’s performance: Exchange rate
to the previous year. On the other hand, the market
effects reduce net sales, income increases
environment was hit only insignificantly by the
The Corn Segment generated net sales of
impacts of the COVID-19 pandemic.
€774.0 million in the year under review, i.e. around
the level of the previous year (€775.7 million); after
Cultivation area in the U.S., the world’s largest
adjustment for exchange rate effects, the segment’s
corn producer, rose slightly as a result of higher
net sales increased by 8.3%. The main contributors
sales prices, which reached a multi-year high in the
to this growth after adjustment for exchange rate
course of the fiscal year. The agricultural industry
effects were the South American markets Argentina
in Brazil expanded sharply due to strong domestic
and Brazil and the Europe region (Southeastern and
34 Combined Management Report | 2.3 Economic Report
Annual Report 2020/2021 | KWS Group Eastern Europe). In Europe, the high-yielding hybrid
In North America, net sales of our 50 : 50 joint venture
varieties for grain corn we have launched in the past
AgReliant declined slightly. Exchange rate effects
years performed very pleasingly in particular, with
from the depreciation of the US dollar against the
the result that we were able to strengthen our market
euro also reduced net sales sharply. In China, net
position in this area significantly. Exchange rate
sales at our joint venture KENFENG/KWS increased
influences in the Europe region, especially in Russia,
by around 6% after adjustment for exchange rate
Ukraine and Turkey, reduced net sales.
effects.
We significantly expanded our business volume and
The segment’s income rose by 6.3% to
won market share in Brazil as a result of successful
€71.3 (67.1) million, in particular on the back of higher
commercial launch of our high-performance hybrid
contributions to earnings in North America and
corn varieties. However, the continuing depreciation
Brazil. The segment’s EBIT margin rose slightly from
of the Brazilian real against the euro reduced net
8.6% to 9.2%.
sales growth by 28%. In Argentina, too, we recorded
sharp growth in terms of local currency, but net
Continued investment in production plant
sales were reduced in part by the depreciation of the
The segment’s capital spending was
Argentinean peso against the euro. Argentina was
€28.7 (30.9) million in the year under review. The main
once more classified as a hyperinflationary economy
capital spending projects included expansion and
in the year under review and we therefore applied
modernization of production and processing plants,
IAS 29 “Financial Reporting in Hyperinflationary
such as in Romania, Brazil and the U.S.
Economies” again in order to compensate for the
effects of inflation.
Key figures
in € millions
Net sales
EBITDA
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)¹
ROCE (avg.) ²
2020/2021
2019/2020
774.0
106.1
71.3
9.2
28.7
694.6
10.3
775.7
103.2
67.1
8.6
30.9
744.2
9.0
+/–
–0.2%
2.8%
6.3%
–
–7.4%
–6.7%
–
in %
in %
1 Capital employed (average capital employed) = (quarterly figures at the reporting date for intangible assets + property, plant, and equipment +
inventories + trade receivables – trade payables) / 4
2 ROCE = EBIT/capital employed (avg.)
2.3 Economic Report | Combined Management Report
35
KWS Group | Annual Report 2020/2021 Sugarbeet
Sugarbeet Segment
General industry-specific conditions: Sharp
in Thailand and restrictions on exports from India. In
increase in sugar prices, slight decline in
addition, production of ethanol from sugar cane in
cultivation area
Brazil increased as a result of higher crude oil prices.
Sugarbeet cultivation area in our core markets of the
U.S. and Germany remained stable, while it declined
The segment’s performance: Increase
in some EU markets and the UK. Total global
in net sales and EBIT
cultivation area fell by around 3% year on year.
The segment’s net sales increased by 6.6% to
However, the continuing COVID-19 pandemic only
€524.3 (491.8) million due to the growing success
had a limited impact on the industry environment
of innovative KWS varieties. Demand for
in the year under review. Global prices for raw
CONVISO® SMART, an innovative system for
and white sugar rose sharply in the course of the
controlling weeds, continued in the year under
fiscal year, mainly due to low availability. Factors
review, and these varieties are now available in
influencing that included a below-average harvest
25 countries. In addition, initial net sales were
36 Combined Management Report | 2.3 Economic Report
Annual Report 2020/2021 | KWS Group generated from the newly launched varieties based
The main focus here was on breeding natural
on a new Cercospora tolerance (CR+). The need
resistances, given the increasing restrictions on the
to resow seed due to wintry weather conditions
use of pesticides in the European Union. The EBIT
in the spring of 2021 had a positive impact on net
margin was 33.3% and thus slightly below the level
sales, especially in France, Germany and the U.S.
of the previous year (34.6%).
Exchange rate effects, mainly from the price of
the euro relative to the US dollar and the Turkish
Focus on investments in seed production
lira, reduced net sales by 6.4%; after adjustment
and biologicals
for exchange rate effects, the segment’s net sales
We continued our multi-year capital spending
rose by 13.0%. However, the continuing COVID-19
projects as planned in fiscal 2020/2021. The PIA
pandemic did not have any significant impact on
(Production Extension and Innovation Einbeck)
sugarbeet seed business.
project, in which we are expanding our seed
production plant in Einbeck, will be completed at
The segment’s income rose to €174.7 (170.1) million.
the end of 2021. Further investments were made in
This positive trend was offset by an increase in the
a new production plant in Russia and in developing
cost of sales, in particular due to changes in the
biologicals. These useful microorganisms are applied
regulatory framework, as well as higher prime costs
to the seed as a protective cover, with the aim of
in seed multiplication due to weather conditions.
improving its stress tolerance to pests and abiotic
There was also a negative impact from currency
factors such as drought. The segment invested a
translation here. While selling expenses declined
total of €26.5 million compared to €32.3 million in the
slightly due to the pandemic, our research &
previous year.
development expenditure was higher as planned.
Key figures
in € millions
Net sales
EBITDA
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2020/2021
2019/2020
524.3
192.8
174.7
33.3
26.5
357.9
48.8
491.8
187.0
170.1
34.6
32.3
349.5
48.7
+/–
6.6%
3.1%
2.7%
–
–18.0%
2.4%
–
in %
in %
2.3 Economic Report | Combined Management Report
37
KWS Group | Annual Report 2020/2021 Cereals
Cereals Segment
General industry-specific conditions:
The segment’s performance: Net sales stable,
Sharp increase in cereal prices
income lower year on year
Despite the prevailing COVID-19 pandemic, the
Net sales in the Cereals Segment were
industry environment was robust in the period under
€191.2 (191.2) million and so at the same level of the
review. Stronger global demand for agricultural
previous year; after adjustment for exchange rate
products caused prices to rise, in some cases
effects, they increased by around 3%. While barley
sharply. For example, the price of wheat, one of the
seed business declined slightly by 5%, mainly due
world’s most important cereals, increased from €180
to the weather, net sales for rapeseed seed grew
to almost €210 a ton on the Euronext in the course
by 10% in the wake of rising prices. Wheat seed
of the year under review. That led to an increase
business likewise increased by around 10%, with
in cultivation area for wheat, barley and rapeseed.
the biggest growth being recorded in France and
However, cultivation area for rye in the EU fell by
Eastern Europe. Net sales from hybrid rye seed
around 9%, since the prices paid for wheat were
were slightly down (by 4%) as a result of declining
better.
cultivation area in the EU and adverse exchange
38 Combined Management Report | 2.3 Economic Report
Annual Report 2020/2021 | KWS Group rate effects. Nevertheless, we were able to increase
here was on breeding high-performance varieties
sales volumes sharply in operations in our growth
and their resource efficiency. KWS aims to continue
regions Russia and Ukraine; after adjustment for
growing, especially on the back of hybrid rye. In
exchange rate effects, net sales remained stable. In
particular, the Eastern Europe and North America
the year under review, net sales from farms totaling
regions offer additional potential here. The company
€1.6 million were reassigned from the Cereals
also pressed ahead with its breeding programs
Segment to the Corporate Segment.
for sorghum, wheat in the U.S., new rapeseed
varieties in Europe and alternative protein sources
However, the medium-term growth prospects for
with a highly promising future, such as peas and
hybrid rye remain as before due to its high yields,
oats. Overall, EBIT fell to €21.3 (26.4) million. The
even in arid conditions, and greater animal welfare
EBIT margin was 11.1% and was thus below the level
from use of rye in fodder. In addition, there was still
of the previous year (13.8%).
high demand for seed for peas and oats, crops that
are particularly rich in protein.
Investment in breeding and production continued
The segment’s capital spending in the year under
While net sales were at the level of the previous year,
review was €7.3 (10.1) million, slightly below the figure
there were higher material and production costs
for the previous year. The main focus of investment
and, as planned, higher selling expenses due to
activity was again on expanding and modernizing
numerous growth initiatives. In addition, research &
production plants, in particular in Germany and
development expenditure rose sharply. The focus
France, and modernizing breeding stations.
Key figures
in € millions
Net sales
EBITDA
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2020/2021
2019/2020
191.2
191.2
30.7
21.3
11.1
7.3
147.3
14.5
36.3
26.4
13.8
10.1
145.6
18.1
+/–
0.0%
–15.4%
–19.3%
–
–27.7%
1.2%
–
in %
in %
2.3 Economic Report | Combined Management Report
39
KWS Group | Annual Report 2020/2021
Vegetables
Vegetables Segment
General industry-specific conditions: COVID-19
The segment’s performance: Sharp decline
pandemic weighs on the market environment
in net sales and income
The general conditions for spinach seed – the main
Net sales in the Vegetables Segment, in which
sales driver in the segment, contributing around
the activities of Pop Vriend Seeds, the vegetable
57% – were very challenging in the year under
seed company acquired effective July 1, 2019, are
review. Demand, especially for fresh spinach, in
consolidated, were €58.2 million, well below the
restaurants and the food service market segment
previous year’s figure (€83.5 million).
slumped strongly in the main market of the U.S. as
a consequence of the COVID-19 pandemic. Sales of
The decline is largely attributable to lower sales of
spinach seed also fell sharply against that backdrop.
spinach seed due to the COVID-19 pandemic and
negative exchange rate effects. However, business
with bean seed increased by around 13% due to
stronger demand for heat-tolerant beans in the
U.S. market. The most important single market was
the U.S., which accounted for around 37% of the
segment’s net sales.
40 Combined Management Report | 2.3 Economic Report
Annual Report 2020/2021 | KWS Group The segment’s income (adjusted for effects as part
Parma, Italy. The company, which was established
of the purchase price allocation for the acquisition of
in 2011, focuses on breeding tomatoes and on
Pop Vriend Seeds) was €7.9 million; the EBIT margin
producing and distributing tomato seed. The main
of 13.6% was thus below the more precise guidance
sales regions currently include Italy and Mexico.
given in the Semiannual Report 2020/2021
By integrating Geneplanta we gain access to high-
(“around 20%”). Including noncash effects from the
performance genetic material and can significantly
purchase price allocation of inventories measured
speed up development of our own tomato breeding
at fair value (€–4.1 million) and from amortization
programs.
of acquired intangible assets (€–21.9 million), the
segment’s income was €–18.1 million.
We are also focused on building our own tomato,
Further expansion of vegetable breeding
activities in Spain, Mexico, Brazil and Turkey. As
KWS continues to expand its new business unit
part of that, we pressed ahead with preparations for
for vegetable seed. Last fiscal year, it took over the
establishing breeding stations in these countries in
vegetable seed company Geneplanta S.r.l., Noceto/
the year under review.
cucumber, melon, watermelon and pepper breeding
Key figures
in € millions
Net sales
EBITDA
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2020/2021
2019/2020
58.2
5.5
–18.1
–31.1
1.3
437.6
–4.1
83.5
15.5
–7.5
–9.0
1.6
479.5
–1.6
+/–
–30.3%
–64.5%
> –100%
–
–18.8%
–8.7%
–
in %
in %
2.3 Economic Report | Combined Management Report
41
KWS Group | Annual Report 2020/2021 Corporate
Corporate Segment
Key figures
in € millions
Net sales
EBITDA
EBIT
Capital expenditure
2020/2021
2019/2020
6.0
–72.5
–92.0
23.0
4.6
–87.1
–104.6
38.6
+/–
30.4%
16.8%
12.1%
–40.4%
Net sales in the Corporate Segment totaled
the Corporate Segment, its income is usually
€6.0 (4.6) million. They are mainly generated from
negative. The segment’s income improved sharply
our farms in Germany, France and Poland. In the
to €–92.0 (–104.6) million, mainly due to positive
fiscal year, net sales from farms totaling €1.6 million
exchange rate effects from financial instruments
were reassigned from the Cereals Segment to
and lower costs as a result of the pandemic. Capital
the Corporate Segment. Since all cross-segment
spending was €23.0 (38.6) million and thus well
costs for the KWS Group’s central functions and
below the previous year; the investments included
basic research expenditure are still charged to
new laboratory buildings in Einbeck.
42 Combined Management Report | 2.3 Economic Report
Annual Report 2020/2021 | KWS Group 2.4 Environmental Report
2.4.1 Product Innovations
the potential that offers for reducing use of necessary
Every year KWS develops new varieties that are
agricultural resources, such as fertilizers and
intended to meet the differing requirements of
pesticides. We also strive to constantly improve the
farmers and reflect the conditions at the particular
resilience of our crops and varieties so as to further
location and the regional climate. With our seed for
reduce potential losses due to diseases or extreme
sugarbeet, corn, various cereals and vegetables,
environmental influences. These crop-specific
rapeseed and catch crops, we offer a broad range of
development objectives are agreed annually between
products for conventional and organic farming.
Research, the respective breeding departments,
We continuously work to further develop our crops
Board to decide on and reported to the Supervisory
as part of our breeding programs. In fiscal 2020/2021
Board. The progress made over the past years is also
we revised our breeding objectives and, as shown
examined and reported on regularly as part of that.
Production and Sales, submitted for the Executive
in the graphic below, geared them more strongly
to sustainability aspects. We aim to increase the
One indicator of our breeding progress is the official
share of our varieties that are suitable for human
variety approvals granted every year. Only varieties
consumption and expand our breeding programs
that offer a clear improvement in cultivation or
from 24 to 27 crops, for example. In addition, our
further processing over already approved ones can
focus is on increasing yields by an average of 1.5%
be marketed in the EU, for example. We obtained
a year, as well as on enhancing the diversity of our
492 variety approvals worldwide in the fiscal year
portfolio and our varieties’ resource efficiency, with
compared to 484 in the previous year.
Sustainability starts with the seed
Safeguard food production
Enhance crop diversity
1.5% annual yield gain for farmers through
progress in plant breeding and
digital farming solutions on
> 6 million hectares
Increase number of crops with dedicated breeding
programs from 24 to 27
Minimize input required
Support sustainable diets
Enable > 50% reduction of chemical crop protection
(in line with European Farm to Fork Strategy).
Invest > 30% p.a. of R&D budget into reduction
of inputs
> 25% of KWS varieties are suitable for low
input cultivation
> 40% of KWS varieties are suitable for predominantly
direct use in human nutrition
2.4 Environmental Report | Combined Management Report
43
KWS Group | Annual Report 2020/2021
KWS varieties with our highly effective Cercospora
Our focus in the organic farming arena in the year
tolerance, which have been developed to combat
under review was on variety development. As part of
this leaf spot disease in sugarbeet, were awarded
that, we hired new personnel with specific expertise
approvals in further countries, including Germany,
in organic farming for our breeding activities and for
France, the UK, Spain and Poland, in the fiscal year.
our trial technology. KWS has its own location for
These varieties mean farmers can safeguard sugar
organic farming in Germany, the Wiebrechtshausen
yields even in cases of severe infection, yet do not
monastery estate. In addition, we expanded our trial
suffer losses in yield even when their crops are not
areas and improved the quality of trials by means
infected. The varieties also have the potential to
of statistical analyses, enabling even more precise
reduce the use of fungicides.
selection of candidate varieties under ecological
We are currently working on the issue of nitrogen
conditions.
use efficiency in relation to corn. At the beginning of
2.4.2 Product Quality and Safety
2021, the plants in the series of trials at four locations
We want to offer our farmers top-quality seed.
in Germany were tested under conditions where their
So that we live up to that corporate principle, the
supply of nitrogen was reduced (by 30–40%). That
entire process from breeding to seed processing
allows us to characterize our current hybrid varieties
is accompanied by extensive quality testing.
in terms of their nitrogen use efficiency and stress
KWS keeps on developing and establishing new
tolerance and improve these traits through breeding.
technologies, processes and methods for improving
product quality and safety. They include X-raying
As part of our KWS FIT4NEXT range of catch crop
untreated sugarbeet seed so as to obtain information
mixtures, we offer solutions for common crop
on the seedling’s development or the use of image
rotations in Europe and offer farmers the possibility
analysis methods in examining germination speed.
of adopting other agricultural approaches or ones
demanded by society, such as reducing nematodes
We aim to set internal standards of quality exceeding
in the soil or greening between cultivation phases.
those required by law, for example with the aid of
These products can also be used to prevent erosion,
increase CO2 binding, assist humus formation or
promote biodiversity.
programs like QualityPlus for cereals. These quality
assurance measures are flanked by our Group-wide
Integrated Management System (IMS), in which the
various quality management systems are combined.
In addition, we have worked for years on biologicals
The IMS not only comprises our internal rules and
as an alternative or complement to chemical means
regulations and extensive process descriptions, but
of seed treatment. They comprise microorganisms
also audit management for controlling our internal and
such as fungi and bacteria, but also various
external audits. Apart from the fact that the majority of
substances that can be obtained from plants or
its German locations hold ISO 9001 certification, KWS
microorganisms. We have treated sugarbeet,
is also certified in accordance with various standards.
rapeseed, corn and rye seed with biologicals since
One of them is SeedGuard, an industry-specific
fiscal 2019/2020. We started developing biological
standard relating to proper use of seed treatments.
applications for further crops, such as sorghum, in
Six treatment facilities in Germany currently hold
the year under review.
SeedGuard certification; others are to follow.
44 Combined Management Report | 2.4 Environmental Report
Annual Report 2020/2021 | KWS Group Responsible use of genetically modified organisms
We have recorded key consumption indicators for
has always been an important issue. KWS works in
all German locations since fiscal 2008/2009. That
compliance with the international “ETS – Excellence
process was internationalized in fiscal 2017/2018
through Stewardship” industry standard, which is
and continuously expanded since. In the past fiscal
tailored specifically to this field. Here, too, we apply
year, we adopted a new materiality analysis focusing
our quality management maxim: “plan-do-check-
on emissions and water consumption, among other
act”: Documented processes throughout the life-
things. We have also set ourselves the goal of rolling
cycle, training, defined quality controls, a network of
out scorecards for evaluating internal production
local contact persons, internal and external audits,
sites, including the processing plants and internal
and a standardized approach to handling unforeseen
seed multiplication areas. We can leverage greater
events are key pillars of the system. The whole KWS
transparency on our production sites in the future in
Group has also been certified in accordance with this
order to support the choice of sustainable locations
standard since 2015.
and investment planning.
2.4.3 Emissions & Water
Production-related reasons mean that most of the
In order to minimize the ecological impacts of
water and energy is consumed internally at KWS
its locations and operations, KWS strives to
in the first phases of the agricultural value chain.
continuously improve internal processes, the
Cold storage cells are used in sugarbeet research &
technologies it uses and internal company standards.
development to simulate cold weather dormancy,
The locations themselves are responsible for the
while an important factor in seed multiplication is
concrete application and operational implementation
to supply plants with enough water, for example.
of resource-conserving measures. Concrete minimum
Moreover, energy and water are used in drying
requirements in our global HSE (health, safety and
and treating seed in the pre-cleaning and further
environment) management activities ensure that
processing stages.
all KWS locations are governed by comparable
regulations.
Agricultural value chain
Seed
Cultivation
Improvement/
processing
Trade
Consumer
industry
R&D
Multiplication Cleaning
Processing
Packaging
Sales &
administration
Distribution
Farming
Consumer
KWS activities with high water and energy consumption
2.4 Environmental Report | Combined Management Report
45
45
KWS Group | Annual Report 2020/2021 Emissions
Water
We concretized our sustainability goals last fiscal
Water is an important business resource for us as a
year as part of our strategic planning. In addition
seed specialist and plant breeder. It is vital in every
to objectives for research & development and
phase of seed production – from research to the
social aspects, we defined quantitative targets for
finished product that is ready for sale. We believe
continuously reducing the emissions caused by KWS:
it is our obligation to maximize efficiency and eco-
KWS aims to reduce all Scope 1 and 2 emissions it
friendliness in consuming water. Apart from our HSE
causes by 50% by 2030. Scope 1 and 2 emissions are
Guidelines, the HSE Manual specifies that we aim to
produced either directly through our own combustion
work in a way that conserves resources and to avoid
or indirectly by purchasing energy. The base year for
process-related effluents as far as possible. In fiscal
that is the past fiscal year 2020/2021. In addition, the
2019/2020 KWS also adopted guidelines stating
emissions caused by KWS (Scope 1 and 2) are to be
that the use of renewable resources in construction
cut to net zero by 2050 in accordance with current,
projects must be examined so that, for example, use
science-based standards. So that we can track
of groundwater can be reduced further. We also use
our progress here, the current status of emissions
rainwater for the sanitary facilities at our Einbeck
reduction is to be reported annually to the Executive
location.
Board starting from the current year under review.
Alongside water consumption in offices and research
Recording of the emissions caused by KWS was
buildings, the highest levels of fresh water are used
further expanded in the period under review and
in watering the fields at our trial and multiplication
consolidated worldwide with the aid of a new online
locations. That is necessary so as to create the best
platform. That covered all companies in which KWS
possible conditions for healthy seed and ensure a
owns a stake of more than 50%, with the exception of
high yield in multiplication. The water we need is
holding companies. Moving ahead, we aim to expand
taken from local water supply networks or, if possible
recording of emissions to include suppliers and
in a region, we use groundwater, surface water or
service providers (Scope 3), for example.
rainwater.
Total emissions in the fiscal year were 64,455 tons of
CO2e 1, of which the parent company KWS SAAT SE &
Co. KGaA produced 22,897 tons.
Emissions of
the KWS Group
Emissions of
KWS SAAT
SE & Co. KGaA
36,914
15,198
Emissions 1
(in tons
of CO2e) 2
Scope 1
emissions –
direct 3
Scope 2
emissions –
indirect
27,541
7,699
the future.
It is unlikely that we can minimize absolute water
consumption long term, given our growing business
activity and the strong variable influences of external
factors (such as the temperature or precipitation). We
are currently recording and consolidating our global
water consumption. Development of a normative key
performance indicator and suitable auditing systems
was discussed by the Executive Board in fiscal
2020/2021 and we are striving to implement them in
1 Calculated in accordance with the Greenhouse Gas Protocol guidelines and using
the location-based method
2 According to IPCC 2013-climate change-GWP 100a-(kg CO2-Eq) per 1 unit
of reference product
3 Does not include emissions from our own use of fertilizers. Fertilizer is mainly
applied by external service providers (Scope 3).
1 The total emissions also include emissions from biomass
46 Combined Management Report | 2.4 Environmental Report
Annual Report 2020/2021 | KWS Group
2.5 Employee Report
2.5.2 Occupational Health and Safety
We as a family business believe it is one of our
Over the generations, our employees have made
core duties to ensure the health and safety of
KWS what it is today: an innovative, world-
our employees at all locations. To enable that,
leading plant breeding company. That is due in
we have internal stipulations that define local and
great measure to their skills, mindsets, ideas and
international standards and present statutory
commitment. As a company with a tradition of family
requirements transparently. One key component is
ownership, we attach importance to a high degree
our HSE (health, safety and environment) Guideline.
of personal initiative, personal and professional
It contains consistent regulations on the issues
development, and a work culture marked by respect,
of occupational health and safety, emergency
openness, trust and team spirit.
preparedness, risk prevention and protection of
2.5.1 Employment Trends
the environment. Examples that can be cited here
include regulations on what to do in the event of an
The KWS Group employed an average of
emergency, prevention of explosions or procedures
6,000 (5,709) people in the fiscal year, a year-on-
relating to emission-producing facilities.
year increase of around 5%.
Under the HSE Guidelines, a workplace risk
2,323 (2,236), or around 39% (39%) of the
assessment must be created as the foundation for all
workforce, were employed in Germany. Once again,
technical, organizational and personal measures. That
the area that accounted for the most employees
can be used as the basis for training and instruction
was research & development, who made up
required by law or appropriate to employees’ functions.
35.4% (36.2%) of the total workforce.
In Germany, employees must take and regularly retake
examinations testing their expert knowledge on the
Even in the coronavirus crisis, KWS was able to
subject of handling pesticides, for example. Apart from
offer reliable employment conditions worldwide:
efficient process engineering, employees’ occupational
It did not resort to short-time work or layoffs due
health and safety is a subject of continuous dialogue
to COVID, nor did it stop hiring employees for key
between internal specialists and external partners. Our
projects.
Employees by region
Number of employees 6,000
non-life insurer conducts multiple risks assessments a
year at the KWS Group’s locations in order to examine
fire and explosion prevention measures, for example,
and issues appropriate recommendations if necessary.
Rest of world 183
North- and South America 1,934
2,323 Germany
1,560 Europe (excluding Germany)
Employees by function
Number of employees 6,000
Administration 860
Distribution 1,310
2,122 Research & Development
1,708 Production
2.5 Employee Report | Combined Management Report
47
KWS Group | Annual Report 2020/2021
The main internal stipulations are reviewed regularly
We also revised the globally applicable HSE Guidelines
and developed further. The Global HSE Manager
and specified in more detail the role of managers in
is responsible for developing the HSE standards
relation to occupational health and safety. That will also
further. The currently applicable HSE stipulations and
involve new regulations on the issue of entrepreneurs’
updates to them are mostly communicated to the
and operators’ duties as part of the applicable
local companies through the local HSE Managers.
procedures for the location of Germany.
The location’s management is responsible for
implementing them.
2.5.3 Recruitment & Employee Loyalty
All in all, our global and local HSE activities were
the KWS Group endeavors to win and keep suitable
As an international company that continues to grow,
significantly impacted by the COVID-19 pandemic in
employees.
the year under review. In cooperation with an incident
team, HSE management used a global pandemic
We use digital and traditional channels to reach out
network that had been established the previous year in
to potential applicants. That enables us to address
order to ensure efficient implementation of consistent
each target group specifically, for example on social
internal and statutory requirements governing how
networks such as LinkedIn, XING and Facebook.
to deal with coronavirus at the company. These
As a result, we were able to increase the number of
stipulations are developed and communicated on an
our direct followers (e.g. on LinkedIn from around
ongoing basis, also because of the large differences
57,000 in June 2020 to around 84,000 in June 2021)
in the pandemic’s progression and regulations relating
by publishing targeted campaigns and job advertise-
to it in the various regions. HSE management is the
ments on these networks. Apart from using common
central point of contact at the KWS Group during
digital channels, we took part in virtual career fairs
the pandemic. As in the previous year, KWS has
in fiscal 2020/2021. That gave students the chance
been able to maintain all core processes during the
to participate in online presentations and workshops
ongoing pandemic.
and chat directly with employees.
The first internationally planned HSE audits in fiscal
Through the post of Global Lead of Scientific
2020/2021 had to be canceled due to the COVID-19
Affairs, we are also committed to direct dialogue
pandemic. Initial locations will now undergo such
with universities and research institutes in the field
auditing in the coming fiscal year. Several audits
of research & development in order to deepen our
examining implementation of the HSE Guidelines were
cooperation with them, with the goal of recruiting
held in Germany in the second half of the fiscal year.
employees. We also award scholarships at
universities and offer induction programs. As a
We also revised and expanded central recording of
result, we again accompanied many young people
occupational accidents at the KWS Group. As part of
successfully on their path to gaining vocational
that, we rolled out an adapted process relating to a
qualifications in the past fiscal year. In Germany,
recording system, with the objective of gaining greater
79 (82) trainees were employed in vocational training
transparency globally on the number of accidents and
and nine (ten) students were on dual courses of
days lost in all areas of the company. Moving forward,
study in the period under review.¹
KWS aims to leverage this transparency to measure
annual accident rates and thus keep on improving
employees’ health and safety at the workplace.
48 Combined Management Report | 2.5 Employee Report
1 The figures for the 2019/2020 financial year were subsequently corrected.
Annual Report 2020/2021 | KWS Group Keeping employees with the company is
2.5.4 Qualification, Further Training
very important for us. Our goal is therefore to
and Development
continuously measure employee engagement in the
KWS’ long-term commercial success is founded
future in order to identify areas of action based on
not only on its employees’ commitment and
the results and to develop measures that contribute
satisfaction, but also on their personal skills and
to further strengthening employee engagement.
professional qualifications. KWS’ range of education
Our aim is to create the appropriate framework
and development offerings is diverse and supports
conditions for every phase of the employment
various learning objectives. In particular, intercultural
relationship. As part of onboarding, for example, we
training, as well as knowledge transfer in various
attach great importance not only to introducing new
subject areas and international development of
employees to their field of work and assignments,
(junior) executive staff, are gaining in importance.
but also integrating them culturally and socially.
Parts of our onboarding process, such as the
We support our employees with tailored education
monthly induction event in Berlin, were held virtually
and further training measures to help them build on
during the pandemic. We continue to believe that
their expertise and abilities. They are generally held
it is important to take the changing individual life
as in-person or online events, although in-person
circumstances of employees into account, especially
training was largely suspended in the period under
as regards organization of their working time, as far
review given the restrictions imposed as a result
as business operations allow. Depending on their
of the pandemic. To compensate for that, we
field of activity, we therefore offer various working
continuously expanded our range of online training
time models, which also allows them to strike a
from May 2020 on and concluded an additional
good life-work balance. Where compatible with
cooperation agreement with a large online learning
their specific activity and in compliance with local
platform. As a result, we can give our employees free
legislation, employees who work at a computer can
digital access to various learning contents during the
also work remotely, an option that an increasing
pandemic and beyond.
number of employees took up during the pandemic.
Where legally and operationally feasible, we also
In regular development meetings, which are part of
offer various part-time models on a temporary
the annual performance and career development
or permanent basis, as well as the possibility of
reviews, our employees formulate perspectives for
taking leave in order to care for family members,
their further development at KWS together with their
for example.
managers. The meetings are to be used not only
to jointly agree on future goals, but also to define
We enhance KWS’ attractiveness as an employer
concrete continuing education and development
with these measures. That is evidenced by the fact
measures aimed at enhancing employees’ personal
that in the 2021 annual independent rankings by the
and professional skills and competence. The
consulting firm Universum, KWS came in 43rd (2020:
restrictions due to the pandemic meant that the
59th) in the area of sciences in the list of the 100
meetings were not held exclusively in person, as is
most popular employers in Germany.
usually the case, but instead in part virtually.
2.5 Employee Report | Combined Management Report
49
KWS Group | Annual Report 2020/2021 In addition to the individual performance and career
for experienced managers will be rolled out this
development reviews between employees and their
fiscal year. More than 100 participants completed
managers, we initiated a global talent and successor
either the basic module “Leading Self” or the module
management process in the year under review. As
“Leading Individuals” in the current period under
part of that, we identified talents up to the fourth
review.
tier and critical posts up to the third tier below the
Executive Board in order to ensure that functions that
In October 2020, we also launched a management
are critical to KWS’ success are (re)filled. The annual
development program specifically for managers in our
Orientation Center (OC), an intensive evaluation of
research & development organization. It allows them
potential successors for senior management posts,
to acquire management skills that promote innovation
was suspended in the period under review due to
and flexibility in developing solutions. Around 200
the pandemic.
managers are to take part in the program over a
period of three years. Its contents include issues such
In the International Development Program (IDP) we
as feedback and innovation culture, leadership in
give identified high potentials the opportunity to
uncertain times and conflict management.
gain experience through cross-functional project
work in an international team and to develop
To support the further transition to our GLOBE
their management and leadership skills. The
(Global Business Excellence) target structure
accompanying events were held virtually for the first
for administrative functions and the related
time in the past fiscal year due to the restrictions
implementation of the role of Business Partner, we
entailed by the pandemic.
have initiated a Business Partner Academy for KWS
Business Partners in all functions. The Business
We are particularly committed to having all
Partner Academy comprises development measures
employees receive qualified leadership and support
aimed at the role of Business Partner and required
from their managers. That is why we are further
key competencies, and focuses on imparting
developing the existing competence model defining
more in-depth knowledge of KWS’ business
the core competencies of managers at KWS. Its
activities. Approximately 50 Business Partners have
objective is to support continuous development
participated in the Academy’s initial modules since
of the whole organization against the backdrop of
October 2020.
an increasingly agile and dynamic working world
and also to reflect the skills that are additionally
We intend to continue focusing on qualifying and
required. We are also continuously expanding the
developing our employees and managers in the
management development program we launched at
future and will expand our training portfolio nationally
the end of 2018. The next module “Leading Leaders”
and internationally to enable that.
50 Combined Management Report | 2.5 Employee Report
Annual Report 2020/2021 | KWS Group 2.5.5 Labor and Social Standards
KWS is committed to the principle of non-
As an international, innovation-oriented company that
discrimination and to equal opportunities and rights
aims to keep on growing, our mission is to provide
for its employees, regardless of gender, religion
good working conditions for our employees. Our goal
or belief, ethnic origin, age, handicap, skin color,
is to uphold labor and social standards at KWS and in
language or sexual orientation. We have enshrined
our supply chain.
that in our Code of Business Ethics, which is binding
on all employees. We believe that diversity of our
Our global internal labor standards comprise
employees, as displayed in their individual experience,
technical, organizational and occupational health
knowledge, skills and ideas, is a key value and a
measures to prevent accidents and diseases at work.
competitive advantage. In this connection, KWS aims
KWS is committed to internationally recognized
to increase the ratio of female managers further. The
human rights standards, such as those of the
envisaged targets of 15% in the first management tier
International Labour Organization (ILO) proscribing
and 10% in the second management tier have already
child, forced and compulsory labor. As part of that, we
been achieved.
launched a project aimed at laying down new internal
standards, measures and controls in the fiscal year.
Employees’ interests are represented collectively to
management by the locally elected Works Councils
Employees of the KWS Group have a written contract
and the persons entrusted with representing young
of employment that complies with local labor and
people and trainees. We also have a European
social insurance legislation. The overall compensation
Employees’ Committee (EEC), a body that represents
package for KWS employees takes into account their
European employees and is responsible for cross-
individual expertise, professional experience and
border matters within the EU. In regions where there
local market circumstances. Depending on general
is no collective employee representative body, we also
local conditions, it consists of a basic salary, social
attach importance to mutual respect and dialogue
benefits, performance-related payment components
between regional management and employees.
(if applicable) and Employee Stock Purchase Plans
where staff can buy shares in the company. Equal pay
for the same activities is a fundamental principle of
our basic compensation policy.
2.5 Employee Report | Combined Management Report
51
KWS Group | Annual Report 2020/2021 2.6 Corporate Governance
That is the foundation for KWS’ compliance
objectives, namely to gain and retain customers’
2.6.1 Corporate Governance and Declaration on
trust through ethical conduct and to protect the
Corporate Governance*
company’s employees, reputation and assets.
Responsible corporate governance has always been
Information, training and continuous intensive
of great importance at KWS SAAT SE & Co. KGaA.
consulting help integrate compliance in business
Since it was founded 165 years ago, our company’s
processes and support management in making
successful development has been based on thinking
business decisions rooted in our corporate culture.
long term and acting in terms of sustainability.
The Executive Board (the personally liable partner
Our Code of Business Ethics, with its accompanying
KWS SE, whose Executive Board is responsible for
guidelines defining the basic regulations relating
management of the company’s business) and the
to compliance with the law, fair competition,
Supervisory Board run and accompany KWS with the
prevention of corruption, safety at work, protection
goal of ensuring it creates sustainable value added.
of the environment, and the need to treat each
They once again examined in the year under review
other, customers, business partners, other third
whether the company complies with the stipulations
parties and public authorities with respect, gives
of the German Corporate Governance Code and
our employees crucial guidance in their day-to-day
issued the Declaration of Compliance in Accordance
work. All employees undertake to comply with the
with Section 161 AktG (German Stock Corporation
code by signing a commitment to do so when they
Act) to the effect that the company complies almost
are hired and are provided with generally applicable
fully with the code’s recommendations.
information on compliance, as well as related
information specific to their function.
You can find detailed information on corporate
governance in our declaration on corporate governance
Our Code of Business Ethics also covers the issue
in accordance with Section 289f of the German
of international anti-corruption management as an
Commercial Code (HGB), which is available in full
integral part of our compliance system. On the basis
on our website at www.kws.com/corp/en/company/
of the regulations in the code, there is a policy of
investor-relations/corporate-governance. You can find
zero tolerance toward any form of corruption at the
the Compensation Report starting on page 55.
KWS Group, and that principle is stipulated as a
Group-wide standard in the Anti-Corruption Policy.
2.6.2 Declaration of Compliance in Accordance
This standard applies regardless of whether bribery
with Section 161 AktG (German Stock
is prohibited by law, tolerated or permitted in the
Corporation Act)*
country in question. The Group-wide Anti-Corruption
The final version of the Declaration of Compliance in
Policy defines the responsibilities, processes and
accordance with Section 161 AktG (German Stock
regulations in relation to preventing corruption and
Corporation Act) is available to shareholders on the
bribery at the KWS Group.
website www.kws.com/corp/en/company/investor-
relations/declaration-of-corporate-governance.html.
The Compliance department is the central point of
contact for questions on our Code of Business Ethics
2.6.3 Business Ethics & Compliance
and other related issues. It advises all divisions of
The basis of our compliance concept is the
the KWS Group in complying with laws, regulations
implementation of our corporate culture: KWS’
and internal rules of conduct and controlling their
values are practiced when the compliance rules
observance. The focus is on the subjects of antitrust
are applied. Compliance with basic principles of
law, prevention of corruption and money-laundering,
business ethics is vital to our license to operate.
data protection and capital market law.
Accordingly, the compliance rules apply to all
employees in the KWS Group.
* Not an audited part of the Combined Management Report
52 Combined Management Report | 2.6 Corporate Governance
Annual Report 2020/2021 | KWS Group The Compliance Officers regularly provide
regulations resulting in disciplinary consequences
information about the compliance system and its
or official measures such as fines were reported to
principles, as well as about the latest issues and
headquarters in fiscal 2020/2021.
developments, in training courses, information events
and workshops. Apart from this information, a broad
If an examination or report reveals indications of a
range of aids is also available to our employees.
compliance violation, the investigation is conducted
Checklists, instructional leaflets and other guides
in accordance with KWS’ regulations “Procedures of
provide practical tips on observing compliance
Internal Compliance Notification.” KWS’ employees
rules in everyday work. All information and rules of
are obligated to report suspected violations; the
conduct can be accessed by employees worldwide
open door principle applies to that. Employees can
in the Compliance Portal on KWS’ intranet. Around
supply information on suspected violations to their
81% of the total workforce has access to the
supervisor, to the Chief Compliance Officer or to the
Compliance Portal. In addition, all supervisors are
Compliance Reporting Platform. Information can
obliged to inform their employees about compliance
be sent to the platform in any required language.
issues. Supervisors can also enroll their employees
Reports of suspected violations can also be
directly in compliance training courses. In the
submitted anonymously. The reported cases are
year under review, the Compliance department
investigated by KWS. Whistleblowers do not suffer
implemented a software solution that allows
any disadvantages unless they have obviously
e-learning offerings on the subject of compliance to
abused their right to report violations. They receive
be held online. About 1,700 employees registered
confirmation that their report has been received
for the anti-corruption and antitrust law training from
and may be contacted via the portal and asked to
when the software was rolled out up to the end of
provide further information. Finally, whistleblowers
the fiscal year, and about 1,300, or 73%, of them
are informed when the investigation has been
completed it. Further e-learning offerings are being
completed.
prepared and will soon be rolled out. This system
has proven its value, especially during the COVID-19
If suspected cases prove to be violations, the system
pandemic. In addition, the entire system for
of sanctions is applied. In general, it can be applied
compliance training and workshops was reorganized
to all types of compliance violations and is also
to enable the events to be held online due to global
accessible to employees. The system of sanctions
travel restrictions and home office regulations. Large
defines various criteria governing the measures
on-site workshops were replaced by numerous
to be taken, such as the gravity of the violations,
smaller online events in order to maintain the
the degree of the person’s breach of duty, the
intensity of training.
functional level, behavior after the violation – help in
investigating it or attempts to cover it up – as well as
Implementation and observance of individual
consequences of the violation, such as the threat of
compliance aspects is reviewed as part of audits.
damage or actually incurred damage, among other
An internal compliance audit was also held in the
things. The sanctions consequently range from
fiscal year; no critical deviations were identified in
cautions, warnings to immediate dismissal and filing
it. In addition, the Compliance Officers conduct an
of charges.
assessment termed risk scoring together with the
Risk Management and Finance functions, the results
The Executive Board and the Supervisory Board’s
of which are used as the basis to make and derive
Audit Committee are informed once a year about
decisions for the companies under analysis. No
the current status and latest developments of the
violations of the international Anti-Corruption Policy
Compliance Management System.
or antitrust, data protection or money laundering
2.6 Corporate Governance | Combined Management Report
53
KWS Group | Annual Report 2020/2021 2.6.4 Responsibility in the Supply Chain
Our Sourcing Policy, which defines fundamental
KWS has a global sourcing and production structure
principles in the procurement process and was
and, like any other international company, has to
updated in the period under review, and a largely
deal with a wide range of different social legislation
centralized process landscape are the basis for
frameworks. As stated in the previous section “2.5.5
making sure that our purchasing transactions
Labor and Social Standards,” observance of human
worldwide can be conducted in accordance with
rights is a fundamental and universal principle for
our internal regulations. Standardized templates for
KWS. Apart from responsibility for our internal
purchase agreements relating to the supply of goods
process standards, compliance with the applicable
and services have been introduced and specify
labor standards in the global supply chain is also an
the general conditions, including application of the
integral part of our corporate culture. We also aim to
Code of Business Ethics for Suppliers. A central
ensure that our suppliers and other service providers
Seed Purchasing Policy is also being prepared. It is
(termed “suppliers” in the following) also comply with
expected to come into force at the beginning of the
current and future standards
current fiscal year.
We expect our suppliers to commit to our Code
KWS has further centralized its supplier data
of Business Ethics for Suppliers and abide by its
management over the past few years. As part of
principles on ethics and socially responsible conduct.
supplier onboarding, a cross-unit preliminary check
The code details, for example, that our suppliers
on the individual suppliers, such as whether they
must not permit forced labor or child labor and must
are blacklisted and what their credit score is, is
comply with the regulations on the minimum age
carried out so that KWS can centrally monitor and
for admission to employment defined in the latest
track compliance with its standards before any
version of ILO Convention No. 138. They are also to
substantial business is concluded with a supplier.
comply with the provisions on safety at work, product
All existing suppliers are screened twice a week to
safety, protection of the environment and avoidance
ascertain whether they appear in sanctions lists.
of corruption, as well as on the requirement to ensure
These processes are being expanded into a more
fair competition and protection of personal data and
extensive means of supplier validation (Know Your
third-party know-how.
Supplier Program). It was prepared in the period
under review and is expected to be activated in the
The organization and future review of compliance
opening quarters of the next fiscal year 2021/2022.
with our standards and processes is currently being
The audits KWS had planned for the first time to
revised. In the future, our central procurement
monitor compliance with the Code of Business Ethics
concept will aim at cost-efficient cooperation with
for Suppliers could not be conducted during the
external partners as well as maintaining specific
COVID-19 pandemic.
social or environmental standards such as those from
the Supply Chain Act.
54 Combined Management Report | 2.6 Corporate Governance
Annual Report 2020/2021 | KWS Group As part of corporate governance, KWS employees
Salient features of the compensation system for
are given an overview of compliance training relating
members of the Executive Board of KWS SE, the
to the company’s Code of Business Ethics during
managing partner of KWS SAAT SE & Co. KGaA
the onboarding process. In addition, procurement
The compensation system for members of the
staffers are provided with training on those subjects
Executive Board is geared toward the KWS
and kept up-to-date on changes to the law. Several
Group’s strategic planning and aims to promote the
training courses for the procurement workforce were
company’s successful and sustainable development
held by the Global Compliance department in fiscal
and largely comply with the objectives of the new
2020/2021, including on identifying and avoiding
version of the German Stock Corporation Act (AktG)
human rights violations and unethical labor practices.
and the German Corporate Governance Code.
The system also takes into account the fact that
2.6.5 Compensation Report
the Executive Board has overall responsibility for
The Compensation Report outlines the principles and
managing the company’s business. To ascertain
salient features of the compensation systems for the
whether remuneration is in line with usual levels
Executive Board of KWS SE, the managing partner
within the company itself, the Supervisory Board
of KWS SAAT SE & Co. KGaA, and its Supervisory
took into account the relationship between
Board. It also explains the level and structure of their
the Executive Board’s compensation and the
compensation. The Executive Board’s compensation
compensation of senior managers and the workforce
was approved by the Annual Shareholders’ Meeting
in Germany as a whole, and how compensation has
on December 17, 2019, and that of the Supervisory
developed over time. In order to assess whether
Board on December 14, 2018.
the specific total compensation of Executive Board
The Compensation Report takes into account the
other enterprises, the following peer group of other
recommendations of the applicable version of
third-party entities was used as a benchmark. The
the German Corporate Governance Code dated
peer group was chosen based on the enterprise’s
December 16, 2019. The Compensation Report
size and its international orientation.
members is in line with usual levels compared to
also contains all the disclosures and explanations
required under the German Commercial Code
(HGB), including the relevant principles of German
Peer group
Accounting Standard No. 17 (GAS 17), and under
the International Financial Reporting Standards
No.
Enterprise
(IFRS). In addition, it partly takes into account the
requirements stipulated in the new version of the
German Stock Corporation Act (AktG), which would
need to be applied for the first time to fiscal years
starting after December 31, 2020. The Compensation
Report is part of the Combined Management Report
for KWS SAAT SE & Co. KGaA and the Group that
has been audited by the independent auditor; these
disclosures are not additionally presented in the
Notes (Section 289a (2) and Section 315a (2) of the
German Commercial Code (HGB)).
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
2.6 Corporate Governance | Combined Management Report
55
KWS Group | Annual Report 2020/2021 Development of the compensation system was
Members of the Executive Board are obligated to
accompanied by an independent compensation
define a freely selectable amount ranging from 35%
consultant.
to 50% of each gross one-year variable payment
for acquiring shares in KWS SAAT SE & Co. KGaA
It comprises the following components:
(reinvestment). The acquired shares are subject to
A basic fixed annual salary
A one-year variable payment
a holding period of five years as of when they are
acquired (usually on the first stock market trading
days after the one-year variable payment has
A multi-year variable payment (LTI) in the form of
been made).
an incentive based on the stock price
Fringe benefits (in particular pension benefits and
These share acquisitions by the Executive Board
benefits in kind)
members form the basis for the multi-year variable
payment. When the holding period ends, the
The gross basic annual salary is €375,000. The
members of the Executive Board receive a one-off
Chief Executive Officer receives an extra “CEO
payment calculated on the basis of the performance
bonus” of 25% on top of the basic annual salary.
of KWS SAAT SE & Co. KGaA’s stock and the
KWS Group’s return on sales over the holding period.
The one-year variable payment is dependent on
the KWS Group’s sustained earnings performance
The following formula is used to calculate the multi-
(“sustained net income”). The assessment period for
year variable payment: average applicable share
that is the last three fiscal years before payment of
price of KWS SAAT SE & Co. KGaA multiplied by the
the component, with the latter being adjusted for the
number of acquired shares, minus any markdowns
provision currently set up for the one-year variable
based on the trend for average return on sales (ROS).
payment. The one-year variable payment is 0.5% of
The goal of that is in particular to gear compensation
the KWS Group’s average net income for the year
toward strategic planning and to support the
in the assessment period, but at most €600,000.
company’s successful and sustainable development.
The maximum amount increased from €500,000
to €600,000 as of fiscal 2020/2021 because the
The share price to be applied is determined on the
KWS Group’s sustained net income exceeded
basis of the average closing prices of KWS SAAT SE &
€100 million in each of the two fiscal years 2018/2019
Co. KGaA’s share in electronic trading on the
and 2019/2020. The one-year variable payment
Frankfurt Stock Exchange (Xetra) at the end of each
is made after submission of the consolidated
quarter during the holding period.
financial statements of KWS SAAT SE & Co. KGaA
to the Annual Shareholders’ Meeting, i.e. usually in
There is a markdown on the multi-year variable
December. An individually determined amount for
payment if the average return on sales (ROS), i.e. the
the multi-year variable payment is deducted from
KWS Group’s operating income divided by net sales,
the total calculated one-year variable payment; the
falls below 10% in the holding period. The segment
remainder is paid out in cash.
reporting of the KWS Group (including the equity-
accounted companies) is the basis for determining
that. The markdown is 25% if the average ROS is less
than 10%, 50% if the average ROS is less than 9%,
and 100% if the average ROS is less than 8%.
56 Combined Management Report | 2.6 Corporate Governance
Annual Report 2020/2021 | KWS Group The multi-year variable payment is at most 150%
of the reinvestment made by each Executive Board
member and at most 200% in the case of the
reinvestment made by the Chief Executive Officer.
KWS SE can claim back the one-year variable
payment and/or multi-year variable payment
(clawback option). The Supervisory Board can also
take exceptional developments into account to a
reasonable extent.
Maximum compensation
in €
Dr. Hagen Duenbostel
Dr. Léon Broers
Dr. Felix Büchting
Dr. Peter Hofmann
Eva Kienle
Total
1,809,940.00
1,532,000.00
1,532,000.00
1,538,224.00
1,532,000.00
7,944,164.00
Fringe benefits, such as means of transport and
communication, premiums for accident and D&O
Any payments made to an Executive Board
insurance, payments to discharge the employer’s
member due to early termination of their Executive
contribution to social insurance as well as various
Board activity will not exceed twice the annual
pension commitments are granted without any
compensation (severance cap) and shall not
modification.
constitute remuneration for more than the remaining
term of the employment contract. If post-contractual
Applying the compensation system currently in force,
non-compete clauses apply, the severance payment
the following maximum annual compensation
will not be taken into account in the calculation of
is set for members of the Executive Board (given
any compensation payments.
a one-year variable payment cap of €600,000).
Apart from the basic salary and any CEO bonus, it
Significant agreements subject to the condition of
consists of the one-year variable payment, the multi-
a change in control pursuant to a takeover bid have
year variable payment, fringe benefits and pension
not been concluded. The compensation agreements
costs. If Executive Board members also serve on
between the company and members of the Executive
Supervisory Boards within the Group, their payment
Board of the personally liable partner and governing
for that is offset. If they serve on Supervisory Boards
the case of a change in control stipulate that any
outside the Group, their payment for that is not
such compensation will be limited to the applicable
offset.
maximum amounts specified by the German
Corporate Governance Code. An Executive Board
If the contract with an Executive Board member
member is not entitled to severance payment if his or
is terminated, the outstanding multi-year variable
her activity on the Executive Board ends by mutual
payment components are usually calculated and
agreement at the request of the Executive Board
disbursed immediately.
or there are special grounds for the company to
terminate the employment relationship.
2.6 Corporate Governance | Combined Management Report
57
KWS Group | Annual Report 2020/2021 Compensation for serving members of the
by the basic annual salary, including fringe benefits,
Executive Board of KWS SE in fiscal 2020/2021
44.0% (46.1%) by one-year variable components and
The total compensation to be reported for the
20.2% (15.6%) by multi-year variable components.
Executive Board in accordance with Section 314 (1)
The tables below provide an overview of the total
No. 6a of the German Commercial Code (HGB) in
compensation granted in the fiscal year on an
conjunction with German Accounting Standard
individualized basis (excluding pension costs) and in
No. 17 (GAS 17) was €5,898 (5,428) thousand in
the previous year by way of comparison:
fiscal 2020/2021. 35.8% (38.3%) was accounted for
Total compensation 2020/2021
in €
Cash compensation
LTI FV 2
Total
LTI
Basic
compensation
Fringe
benefits
Performance-
related bonus 1
Total
Grant
Cost
Dr. Hagen Duenbostel
468,750.00
13,664.28
528,773.63 1,011,187.91
244,713.69 1,255,901.60 312,406.46
Dr. Léon Broers
375,000.00
25,953.78
528,773.63
929,727.41
244,713.69 1,174,441.10 298,953.62
Dr. Felix Büchting
375,000.00
22,413.30
528,773.63
926,186.93
244,713.69 1,170,900.62
35,862.47
Dr. Peter Hofmann
375,000.00
26,189.68
528,773.63
929,963.31
195,730.47 1,125,693.78 136,141.53
Eva Kienle
Total
375,000.00
25,882.98
528,773.63
929,656.61
244,713.69 1,174,370.30 153,769.59
1,968,750.00 114,104.02
2,643,868.15 4,726,722.17 1,174,585.23 5,901,307.40 937,133.67
Total compensation 2019/2020
in €
Cash compensation
LTI FV 2
Total
LTI
Basic
compensation
Fringe
benefits
Performance-
related bonus 1
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
(since 01/01/2019)
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
1 A maximum of 65% of this is paid out, at least 35% must be reinvested (MVV).
2 Actuarial assessment by an external third party
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
2020/2021, €378 (378) 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
06/30/2021
90,000.00
72,000.00
72,000.00
72,000.00
72,000.00
378,000.00
58 Combined Management Report | 2.6 Corporate Governance
Annual Report 2020/2021 | KWS Group
From when they began working for KWS, the
provisions in accordance with IAS 19 thus changed
Executive Board members Dr. Hagen Duenbostel and
by €–7 (53) thousand (of which €14 thousand
Dr. Peter Hofmann have also been given a defined
was interest expenses and €–21 thousand from
benefit pension commitment, which was concluded
revaluation effects). There were thus pension
before 2006. The funds to cover this commitment
provisions totaling €1,612 (1,619) thousand for active
are allocated in the form of a pension provision
members of the Executive Board of KWS SAAT SE &
on the basis of an expert report. The pension
Co. KGaA.
Pension commitments
in €
Dr. Hagen Duenbostel
Dr. Peter Hofmann
Total
06/30/2021
06/30/2020
Interest
expenses
Revaluation
effects
1,191,519.00 1,198,941.00
10,191.00
–17,613.00
420,761.00
420,383.00
3,573.00
–3,195.00
1,612,280.00 1,619,324.00
13,764.00
–20,808.00
The compensation of former members of the
The target compensation, including the agreed
Executive Board and their surviving dependents
lower and upper limits, is shown under “Grant.” The
amounted to €1,238 (1,419) thousand. Pension
LTI grants are assessed at the present value at the
commitments in accordance with IAS 19 (2011)
time of acquisition of the last tranche of shares. The
recognized for this group of persons amounted to
details on the receipts show the same figures as
€6,780 (7,140) thousand as of June 30, 2021. The
under “Grant” for the fixed compensation and fringe
pension commitments for three former members of
benefits. The receipt for fiscal years 2020/2021 and
the Executive Board are backed by a guarantee.
2019/2020 (amounts in each case before deduction
of the reinvestment in shares) is stated for the one-
No loans were granted to members of the Executive
year variable payment (performance-related bonus),
Board and the Supervisory Board in the year
as is the amount for the multi-year variable payments
under review.
(LTI), whose planned term ends in the year under
review. In turn, the pension costs are presented in
Due to the transitional period (before mandatory
accordance with IAS 19 and do not constitute a
application of the new SRD II for fiscal years
receipt in the narrower sense, but serve to illustrate
starting after December 31, 2020), we still refer
the overall compensation.
for the time being in the tables below to the
recommendations in Clause 4.2.5 (3) of the German
Corporate Governance Code (DCGK) in the version
dated February 7, 2017, and present the individual
awards and receipts for each member of the
Executive Board.
2.6 Corporate Governance | Combined Management Report
59
KWS Group | Annual Report 2020/2021 Executive Board compensation in accordance with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Grant
Receipt
2020/2021
2019/2020
2020/2021
2019/2020
Min.
Max.
Dr. Hagen Duenbostel (Chief Executive Officer)
Fixed payment
Fringe benefits
Subtotal
468,750.00
468,750.00
468,750.00
468,750.00
468,750.00
468,750.00
13,664.28
13,664.28
13,664.28
13,349.76
13,664.28
13,349.76
482,414.28
482,414.28
482,414.28
482,099.76
482,414.28
482,099.76
Performance-related bonus
516,707.10
0.00
600,000.00
500,000.00
528,773.63
500,000.00
Total cash compensation
999,121.38
482,414.28 1,082,414.28
982,099.76 1,011,187.91
982,099.76
Multi-year variable payment
LTI 2013/2014
LTI 2014/2015
LTI 2018/2019
LTI 2019/2020
Subtotal
Pension costs ¹
286,808.20
239,629.88
234,016.87
244,713.69
0.00
500,018.22
1,243,835.07
482,414.28 1,582,432.50 1,216,116.63 1,250,817.79 1,268,907.96
100,191.00
100,191.00
100,191.00
100,994.00
100,191.00
100,994.00
Total compensation
1,344,026.07
582,605.28 1,682,623.50 1,317,110.63 1,351,008.79 1,369,901.96
Maximum compensation ²
1,809,940.00 1,609,940.00
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
2020/2021
2019/2020
2020/2021
2019/2020
Min.
Max.
375,000.00
375,000.00
375,000.00
375,000.00
375,000.00
375,000.00
25,953.78
25,953.78
25,953.78
25,801.42
25,953.78
25,801.42
400,953.78
400,953.78
400,953.78
400,801.42
400,953.78
400,801.42
Performance-related bonus
516,707.10
0.00
600,000.00
500,000.00
528,773.63
500,000.00
Total cash compensation
917,660.88
400,953.78 1,000,953.78
900,801.42
929,727.41
900,801.42
Multi-year variable payment
LTI 2013/2014
LTI 2014/2015
LTI 2018/2019
LTI 2019/2020
Subtotal
Pension costs ¹
257,461.80
239,629.88
235,209.96
244,713.69
0.00
375,013.67
1,162,374.57
400,953.78 1,375,967.45 1,136,011.38 1,169,357.29 1,158,263.22
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
Total compensation
1,234,374.57
472,953.78 1,447,967.45 1,208,011.38 1,241,357.29 1,230,263.22
Maximum compensation ²
1,532,000.00 1,357,000.00
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.
60 Combined Management Report | 2.6 Corporate Governance
Annual Report 2020/2021 | KWS Group Executive Board compensation in accordance with Clause 4.2.5 of the German Corporate Governance Code (DCGK)
in €
Dr. Felix Büchting
Fixed payment
Fringe benefits
Subtotal
Grant
Receipt
2020/2021
2019/2020
2020/2021
2019/2020
Min.
Max.
375,000.00
375,000.00
375,000.00
375,000.00
375,000.00
375,000.00
22,413.30
22,413.30
22,413.30
21,923.70
22,413.30
21,923.70
397,413.30
397,413.30
397,413.30
396,923.70
397,413.30
396,923.70
Performance-related bonus
516,707.10
0.00
600,000.00
500,000.00
528,773.63
500,000.00
Total cash compensation
914,120.40
397,413.30
997,413.30
896,923.70
926,186.93
896,923.70
Multi-year variable payment
LTI 2013/2014
LTI 2014/2015
LTI 2018/2019
LTI 2019/2020
Subtotal
Pension costs ¹
244,713.69
0.00
375,013.67
47,610.13
1,158,834.09
397,413.30 1,372,426.97
944,533.83
926,186.93
896,923.70
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
0.00
0.00
Total compensation
1,230,834.09
469,413.30 1,444,426.97 1,016,533.83
998,186.93
968,923.70
Maximum compensation ²
1,532,000.00 1,357,000.00
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
2020/2021
2019/2020
2020/2021
2019/2020
Min.
Max.
375,000.00
375,000.00
375,000.00
375,000.00
375,000.00
375,000.00
26,189.68
26,189.68
26,189.68
25,710.36
26,189.68
25,710.36
401,189.68
401,189.68
401,189.68
400,710.36
401,189.68
400,710.36
Performance-related bonus
516,707.10
0.00
600,000.00
500,000.00
528,773.63
500,000.00
Total cash compensation
917,896.78
401,189.68 1,001,189.68
900,710.36
929,963.31
900,710.36
Multi-year variable payment
LTI 2013/2014
LTI 2014/2015
LTI 2018/2019
LTI 2019/2020
Subtotal
Pension costs ¹
75,268.36
168,453.51
0.00
195,730.47
0.00
299,948.90
1,113,627.25
401,189.68 1,301,138.58 1,069,163.87 1,005,231.67
900,710.36
75,573.00
75,573.00
75,573.00
75,883.00
75,573.00
75,883.00
Total compensation
1,189,200.25
476,762.68 1,376,711.58 1,145,046.87 1,080,804.67
976,593.36
Maximum compensation ²
1,538,224.00 1,363,224.00
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
61
KWS Group | Annual Report 2020/2021 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
2020/2021
2019/2020
2020/2021
2019/2020
Min.
Max.
375,000.00
375,000.00
375,000.00
375,000.00
375,000.00
375,000.00
25,882.98
25,882.98
25,882.98
25,186.80
25,882.98
25,186.80
400,882.98
400,882.98
400,882.98
400,186.80
400,882.98
400,186.80
Performance-related bonus
516,707.10
0.00
600,000.00
500,000.00
528,773.63
500,000.00
Total cash compensation
917,590.08
400,882.98 1,000,882.98
900,186.80
929,656.61
900,186.80
Multi-year variable payment
LTI 2013/2014
LTI 2014/2015
LTI 2018/2019
LTI 2019/2020
Subtotal
Pension costs ¹
64,743.62
95,851.95
244,713.69
0.00
375,013.67
161,863.09
1,162,303.77
400,882.98 1,375,896.65 1,062,049.89 1,025,508.56
964,930.42
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
72,000.00
Total compensation
1,234,303.77
472,882.98 1,447,896.65 1,134,049.89 1,097,508.56 1,036,930.42
Maximum compensation ²
1,532,000.00 1,357,000.00
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
employees in Germany (per full-time equivalent
the total compensation of Executive Board members
(FTE)) over the past five fiscal years (2016/2017 to
relative to EBIT and the average compensation for
2020/2021).
Development of compensation
in €
2016/2017
2017/2018
2018/2019
2019/2020
2020/2021
Dr. Hagen Duenbostel
1,055,597
1,089,116
1,101,737
1,216,117
1,255,902
Change from the previous year in %
3.2%
1.2%
10.4%
3.3%
Dr. Léon Broers
975,083
1,014,116
1,025,966
1,136,011
1,174,441
Change from the previous year in %
Dr. Felix Büchting (since 01/01/2019)
Change from the previous year in %
4.0%
1.2%
10.7%
3.4%
275,000
944,534
1,170,901
243.5%
24.0%
Dr. Peter Hofmann
857,072
962,741
958,176
1,069,164
1,125,694
Change from the previous year in %
12.3%
–0.5%
11.6%
5.3%
Eva Kienle
884,198
949,977
955,609
1,062,050
1,174,370
Change from the previous year in %
7.4%
0.6%
11.1%
10.6%
EBIT in € millions
131.6
Change from the previous year in %
Average employee compensation
per FTE (Germany) ¹
132.6
0.8%
150.0
13.1%
69,039
137.4
–8.4%
72,733
137.0
–0.3%
74,636
67,448
68,413
Change from the previous year in %
1.4%
0.9%
5.4%
2.6%
1 Without Executive Board
62 Combined Management Report | 2.6 Corporate Governance
Annual Report 2020/2021 | KWS Group Overall target compensation for the Executive
is therefore no longer linked to the company’s
Board in fiscal 2021/2022
business performance, means that the Supervisory
The Supervisory Board has defined a specific
Board can better exercise its control function. The
overall target compensation for each member
compensation system for the Supervisory Board
of the Executive Board in fiscal 2021/2022. The
complies with the recommendations of the German
Supervisory Board believes it is in reasonable
Corporate Governance Code.
proportion to the tasks and performance of the
Executive Board members and the company’s
The members of the Supervisory Board receive
situation. The overall target compensation includes
a fixed annual payment of €60,000 for their work.
the gross basic annual salary of €375,000. The
The Chairperson receives three times and the
Chief Executive Officer receives an extra “CEO
Deputy Chairperson one-and-a-half times said
bonus” of 25% on top of the basic annual salary.
amount. Members of the Supervisory Board receive
In addition, the overall compensation is to include
separate payment for their work on committees;
a one-year variable payment of 0.5% of the KWS
the Chairperson of the Supervisory Board does
Group’s average net income for the past two
not receive additional compensation for his or her
fiscal years and take into account the net income
work on committees. Members of the Supervisory
budgeted for the current fiscal year – but at most
Board who are members of a committee receive
€600,000 – if the targets are fully achieved. The one-
an additional payment of €10,000 therefor. The
year variable payment for fiscal 2021/2022 will be
Chairperson of a committee receives two times said
limited by this maximum amount, taking into account
amount. The additional compensation for members
the budget assumptions. As regards the multi-
of the Audit Committee is €20,000. The Chairperson
year variable payment, members of the Executive
of the Audit Committee receives three times said
Board are obligated to reinvest a percentage of
amount. Additional compensation is owed only for
their (gross) one-year variable payment in shares in
participation in one committee, namely at the amount
KWS SAAT SE & Co. KGaA. That can be between
that is the highest to which the member in question
35% and 50% of their (gross) one-year variable
is entitled for his or her work on a committee. If a
payment, which means that a concrete target cannot
person is a member of the Supervisory Board or
be defined here. However, the multi-year variable
a committee or holds the office of Chairperson or
payment is at most 150% of the reinvestment made
Deputy Chairperson of the Supervisory Board or
by each Executive Board member and at most 200%
Chairperson of a committee for only part of the
in the case of the reinvestment made by the Chief
fiscal year or if a fiscal year is shorter than the
Executive Officer. Due to the reinvestment, the multi-
calendar year, the payment is granted only on a pro
year variable payment exceeds the one-year variable
rata temporis basis. Members of the Supervisory
payment less the reinvestment in percentage terms.
Board also receive reimbursement of their expenses
Compensation of the Supervisory Board of
and, up to the end of 2019, the value-added tax due
incurred in connection with exercise of their office
KWS SAAT SE & Co. KGaA
on their payment.
The compensation for members of the Supervisory
Board is governed by the Articles of Association
The total compensation for members of the
and is based on the size of the company and their
Supervisory Board of KWS SAAT SE & Co. KGaA in
duties and responsibilities. The company believes
the year under review was €620 (620) thousand.
that the fixed compensation structure, which
2.6 Corporate Governance | Combined Management Report
63
KWS Group | Annual Report 2020/2021 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
2020/2021
180,000.00
110,000.00
120,000.00
80,000.00
70,000.00
60,000.00
Total
2019/2020
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
30,000.00
0.00
Total
2020/2021
60,000.00
45,000.00
60,000.00
30,000.00
165,000.00
30,000.00
195,000.00
The total compensation for members of the
in the capital stock is €3.00. Each share grants
Supervisory Board of KWS SE in the year under
the holder the right to cast one vote at the Annual
review was €195 thousand.
Shareholders’ Meeting. The rights of shareholders
are governed by the German Stock Corporation Act
2.6.5 Explanatory Report of the Personally
(AktG) and the Articles of Association.
Liable Partner (KWS SE) of KWS SAAT SE &
Co. KGaA in Accordance with Section
Restrictions relating to voting rights
176 (1) Sentence 1 AktG (German Stock
or the transfer of shares
Corporation Act) on the Disclosures in
There may be restrictions relating to voting rights
Accordance with Section 289a (1) and
or the transfer of shares as a result of statutory or
Section 315a (1) HGB (German Commercial
contractual provisions. For example, shareholders are
Code)
barred from voting under certain conditions pursuant
The personally liable partner of KWS SAAT SE &
to Section 136 of the German Stock Corporation
Co. KGaA provides the following explanation on the
Act (AktG) in conjunction with Section 278 (3) of the
following disclosures in accordance with Section
German Stock Corporation Act (AktG) or Section 44
289a and Section 315a HGB (German Commercial
of the German Securities Trading Act (WpHG); the
Code):
bars on voting pursuant to Section 285 of the German
Stock Corporation Act (AktG) must also be observed
Composition of the subscribed capital
for personally liable partners at a partnership limited
The subscribed capital of KWS SAAT SE & Co. KGaA
by shares (KGaA). In addition, no voting rights accrue
is €99,000,000.00 and is divided into 33,000,000
to the company on the basis of the shares it holds
bearer shares. The pro-rata share of each share
(Section 71b AktG).
64 Combined Management Report | 2.6 Corporate Governance
Annual Report 2020/2021 | KWS Group The personally liable partner is not aware of any
2. The voting shares of the persons stated
contractual restrictions relating to voting rights or
below, including mutual allocations and
transfer of shares. If there are no restrictions on
allocations of voting shares of Dr. Drs. h.c.
voting rights, all shareholders who register for the
Andreas J. Büchting, Germany, AKB Stiftung,
Annual Shareholders’ Meeting in time and have
Hanover, Büchting Beteiligungsgesellschaft mbH,
submitted proof of their authorization to participate
Hanover, Zukunftsstiftung Jugend, Umwelt
in the Annual Shareholders’ Meeting and exercise
und Kultur, Einbeck, and RETOKE Holding
their voting rights are authorized to exercise the
Vermögensverwaltungsgesellschaft mbH & Co. KG,
voting rights conferred by all the shares they hold
Bad Schwartau, each exceed 10% and total 54.7%:
and have registered. If members of the Executive
Board of the personally liable partner or executive
Christiane Stratmann, Germany
employees of the company have acquired shares
Dorothea Schuppert, Germany
as part of the long-term incentive programs, these
Michael C.-E. Büchting, Germany
shares are subject to a lock-up period until the end of
Annette Büchting, Germany
the fifth year after the end of the quarter in which they
Stephan O. Büchting, Germany
were acquired. The lock-up period for shares that
Christa Nagel, Germany
employees have acquired as part of the Employee
Matthias Sohnemann, Germany
Stock Purchase Plans runs until the end of the fourth
Malte Sohnemann, Germany
year as of when they are posted to the employee’s
Arne Sohnemann, Germany
securities account.
Direct and indirect participating interests in
below, including allocations of the persons,
excess of 10% of the voting rights
companies and foundations named in 1. above,
The company has been informed by shareholders of
exceed 10% and total 69.2%:
3. The voting shares of the shareholder named
the following direct or indirect participating interests
in the capital of KWS SAAT SE & Co. KGaA in excess
Hans-Joachim Tessner, Germany
of 10% of the voting rights in accordance with
Section 33 and Section 34 of the German Securities
4. The voting shares of the shareholder named below,
Trading Act (WpHG) or elsewhere:
including allocations of all the persons, companies
and foundations named in 2. above, exceed 10%
1. The voting shares, including mutual allocations, of
and total 55.9%:
the persons, companies and foundations stated
below each exceed 10% and total 69.1%:
Dr. Arend Oetker, Germany
AKB Stiftung, Hanover
5. The voting shares of the shareholder named below,
Büchting Beteiligungsgesellschaft mbH, Hanover
including allocations of all the persons, companies
Zukunftsstiftung Jugend, Umwelt und Kultur,
and foundations named in 2. above, exceed 10%
Einbeck
and total 54.8%:
Dr. Drs. h.c. Andreas J. Büchting, Germany
RETOKE Holding Vermögensverwaltungs-
Dr. Marie Th. Schnell, Germany
gesellschaft mbH & Co. KG, Bad Schwartau
Johanna Sophie Oetker, Germany
Tessner Beteiligungs GmbH, Goslar
Leopold Heinrich Oetker, Germany
Tessner Holding KG, Goslar
Clara Christina Oetker, Germany
Ludwig August Oetker, Germany
2.6 Corporate Governance | Combined Management Report
65
KWS Group | Annual Report 2020/2021 Shares with special rights and voting control
Under Section 6.5 of the Articles of Association of
Shares with special rights that grant powers of control
KWS SAAT SE & Co. KGaA, the personally liable
have not been issued by the company. There is no
partner shall also leave the Company by means of
special type of voting control for the participating
termination. Notice of termination shall be given to
interests of employees. Employees who have an
all the limited partners at the Annual Shareholders’
interest in the company’s capital exercise their control
Meeting. Outside of the Annual Shareholders’ Meeting,
rights in the same way as other shareholders.
notice of termination shall be given to the Chairperson
of the Supervisory Board or his or her deputy. The
Appointment and removal of management
notice of termination shall be at least six months
The personally liable partner, KWS SE, is responsible
before the end of and effective the end of a fiscal year.
for managing the business of KWS SAAT SE & Co.
KGaA under Section 7.2 of the Articles of Association
The other statutory grounds for the personally liable
of KWS SAAT SE & Co. KGaA.
partner leaving the Company shall remain unaffected.
In accordance with Section 6 (3) of the Articles of
The members of the Executive Board of the personally
Association of KWS SAAT SE & Co. KGaA, the
liable partner, which is responsible for managing the
personally liable partner shall leave the Company if
company’s business, are appointed and removed
the majority of shares in the personally liable partner
by the Supervisory Board of the personally liable
can no longer be held directly and/or indirectly for
partner, KWS SE. Pursuant to Article 46 (1) of Council
a time longer than 30 calendar days by persons
Regulation (EC) 2157/2001 in conjunction with
who hold a combined total of more than 15% of the
Section 6 of the Articles of Association of KWS SE,
Company’s capital stock directly and/or indirectly
members of the Executive Board are appointed for
through a company that is dependent in accordance
a maximum period of six years. Members may be
with Section 17 (1) of the German Stock Corporation
reappointed.
Act (AktG) or is controlled in accordance with Section
290 (2) of the German Commercial Code (HGB). This
Amendments to the Articles of Association
shall not apply if all shares in the personally liable
Amendments to the company’s Articles of Association
partner are held by the Company.
are made pursuant to a resolution adopted by the
Annual Shareholders’ Meeting in accordance with
Furthermore, Section 6 (4) of the Articles of
Section 278 (3) in conjunction with Section 179 of
Association of KWS SAAT SE & Co. KGaA stipulates
the German Stock Corporation Act (AktG). Section
that the personally liable partner shall leave the
285 (2) Sentence 1 of the German Stock Corporation
Company if a person who is not a family shareholder
Act (AktG) stipulates that amendments to the Articles
(acquiring party) obtains control over the personally
of Association require the approval of the personally
liable partner directly or indirectly (acquisition of
liable partner.
control) and does not submit to the Company’s limited
partners a takeover or mandatory offer in accordance
In accordance with Section 133 and Section 179 (2) of
with this provision and otherwise in accordance with
the German Stock Corporation Act (AktG) and Section
the provisions in the German Securities Acquisition
18 (1) of the Articles of Association of KWS SAAT SE &
and Takeover Act (WpÜG) within three months of
Co. KGaA, a resolution by the Annual Shareholders’
acquisition of control.
Meeting to amend the Articles of Association must
be adopted by a simple majority of the votes cast and
a simple majority of the capital stock represented in
adoption of the resolution, unless obligatory statutory
regulations or the Articles of Association otherwise
compel.
66 Combined Management Report | 2.6 Corporate Governance
Annual Report 2020/2021 | KWS Group The power to make amendments to the Articles
of Association that only affect the wording
2.7 Social Report
(Section 179 (1) Sentence 2 AktG) has been
2.7.1 Use of Genetic Resources
conferred on the Supervisory Board in accordance
KWS runs a broad network of worldwide stations
with Section 22 of the Articles of Association of
and trial fields for seed breeding. We test different
KWS SAAT SE & Co. KGaA.
genetic material for the respective application areas
Powers of the personally liable partner, in partic-
there.
ular in relation to issuing or buying back shares
Where this genetic material is used, the rights of
The personally liable partner is authorized, with
the indigenous peoples in all regions the material
the consent of the Supervisory Board, to increase
originates from must be respected. KWS is aware
the capital stock of the Company in the period
of its obligations in this regard and supports the
up to midnight on December 15, 2025, once or in
various international access and benefit-sharing
installments by a total of up to €9,900,000.00 by
frameworks. Of prime mention in this respect are
issuing new shares in exchange for cash contributions
the Convention on Biological Diversity with the
and/or contributions in kind (Authorized Capital
Nagoya Protocol and the International Treaty on
2020). As a matter of principle, shareholders have
Plant Genetic Resources for Food and Agriculture
a subscription right to the shares. The shares can
(ITPGRFA). The latter is particularly relevant to
also be assumed by one or more credit institutions
regulating transfer of genetic resources. KWS works
or enterprises within the meaning of Section 186 (5)
through industrial associations, such as Euroseeds
Sentence 1 of the German Stock Corporation Act
and the International Seed Federation (ISF), to
(AktG) appointed by the personally liable partner, with
ensure practicable means of securing sustainable
the obligation to offer them for subscription solely to
access to genetic resources and preserving them
the shareholders (indirect subscription right). However,
now and in the future. Unfortunately, the meeting
shareholders’ subscription right can be excluded
of the ITPGRFA’s Governing Body was delayed
with the consent of the Supervisory Board, subject to
considerably due to the COVID-19 pandemic, with
certain conditions defined in the authorization.
the result that the preparatory working groups and
Significant agreements in the event of a change
Secretariat were significantly reduced compared to
dialogue with government advisors and the ITPGRFA
of control, compensation agreements
previous years.
Significant agreements subject to the condition of a
change in control pursuant to a takeover bid have not
We have implemented a due diligence process
been concluded. The agreements with members of
to ensure compliance with these guidelines. All
the Executive Board of the personally liable partner
employees who work with genetic material are
stipulate that any commitments in the case of a
obligated to digitally register all materials used,
change in control are limited to the maximum amounts
whereupon our Intellectual Property department
specified by the German Corporate Governance Code.
instigates an examination of where the genetic
material has come from. Colleagues from our Legal
department also provide assistance in more complex
cases. In addition, new employees are offered
training modules, and an annual update meeting on
2.6 Corporate Governance | 2.7 Social Report | Combined Management Report
67
KWS Group | Annual Report 2020/2021
the issue is held for all the employees involved. If an
We sustained our social commitment without
examination should find that the origin of the genetic
restriction in fiscal 2020/2021, a year that was
material or the process by which it was obtained
overshadowed by the COVID-19 pandemic. We
is unclear, we refrain from using it. No deviations
maintained our involvement in cultural events,
were identified as part of the above due diligence
continued to sponsor and support artists,
process in fiscal 2020/2021. As part of the Breeding
and adapted events and our sponsorship as
Information Circle, KWS has begun to further
required. In addition, we supported social and
optimize IT processes relating to the documentation
educational institutions. We also provided funding
and approval of access to new genetic resources.
to help address requirements arising due to
The Breeding Information Circle, which is currently
the pandemic, such as digitization of schools
being developed, is a digital platform for integrating
in Northeim District so as to lastingly improve
research information on all of KWS’ crops. It enables
means of remote teaching and learning. At the
information currently stored and used in individual
initiative of the still young non-profit organization
tools to be linked and aggregated.
MyGatekeeper from Hanover, with the backing of
KWS and in cooperation with Einbeck Council,
There is regular dialogue during the year with the
Northeim District Council and the association
Executive Board member responsible for research
Bildungsregion Südniedersachsen e.V., the project
& breeding both in the context of the semiannual
“#vernetzteLernregion – Gemeinschaft(lich)
meetings of the ISF and also as and when required.
gestalten!” (#connectedLearningRegion – Shaping
An annual report to the Executive Board is only
our community together!”) was launched, with the
drawn up if specific issues or incidents have been
common goal of enhancing media competence at
identified as part of the due diligence process. No
schools long term and creating a modern learning
such incidents were reported in the fiscal year.
environment for students.
2.7.2 Social Commitment*
Through its locations, KWS is also involved in
As a forward-looking international company, we are
ongoing development cooperation activities in
committed to living up to our responsibility toward
Peru and Ethiopia, in particular with the aim of
society. The content of our activity in this area is
supporting young researchers in the conservation
geared toward the United Nations’ Sustainable
of plant genetic resources, plant breeding and the
Development Goals.
establishment of seed systems. KWS implements the
regulations stipulated in the International Treaty on
Our social engagement focuses on developing the
Plant Genetic Resources for Food and Agriculture as
regions around our locations, which are mostly
part of that. The focus is on corn and quinoa in Peru
of a rural character, at the cultural, social and
and on barley and wheat in Ethiopia.
socioeconomic level in order to foster the general
welfare of residents and increase the locations’
In fiscal 2020/2021, KWS spent around €1.4 million –
attractiveness as a whole. Children and young
or approximately 1% of its operating income (EBIT)
people are particularly dear to our heart. A further
– on its social commitment worldwide. Of that sum,
focus is on promoting education and science, in
approximately €0.6 million was spent on donations
particular in the field of natural and agricultural
and development cooperation in Peru and Ethiopia
sciences.
and €0.8 million on sponsorship activities. We have
set ourselves the goal of using 1% of our operating
income (EBIT) for our social commitment and social
projects in the future, too.
* Not an audited part of the Combined Management Report
68 Combined Management Report | 2.7 Social Report
Annual Report 2020/2021 | KWS Group 2.8 Opportunity and Risk Report
The opportunities and risks as part of our business
that arise, our complex research and breeding
activity as an international plant breeding company,
processes are subject to risks that may result in local
as well as the processes for identifying them, are
weaknesses in our portfolio. They include internal
described in the following.
factors, such as technical problems and process
2.8.1 Opportunity Management
new diseases or restrictions on the use of operating
delays, and external factors such as climate change,
Strategic opportunities
resources. The varieties we develop must meet
high quality requirements. The performance of our
By strategic opportunities, we mean developments
varieties is reassessed every year by management
that are of major importance for the KWS Group
and the Supervisory Board so that we can respond
and may have a lasting positive impact on our
immediately to weaknesses in our portfolio if
commercial success. They are identified as part
necessary.
of our strategic planning. The strategic planning
covers a ten-year time frame and is jointly formulated
Plant breeding has great potential to keep on
on a rolling basis, discussed and adopted by the
making agricultural processes more and more
Executive Board. Vice versa, we regard not being
sustainable. The development and use of innovative
able to seize strategic opportunities efficiently, in
crop rotations, new cultivation systems, new
good time or in full as a strategic risk. Consequently,
resistances and tolerances or nutrient efficiencies
the results of the strategic planning are also
have the potential to stabilize yields, reduce the use
incorporated in risk management. Our strategy
of resources such as fertilizer, pesticide or water,
processes are oriented toward identifying future
and increase biodiversity. Higher yields can result
trends in good time, analyzing them and translating
in less cultivation area being required. In addition,
them into innovative company processes by means
the carbon footprint per unit yield can be reduced
of strategic initiatives. We take new findings into
with more efficient plant varieties. KWS is working to
account by adapting our administration or opening
develop new products, crop rotations and cultivation
new lines of business, for example.
systems to leverage this potential.
We currently see diverse strategic opportunities for
New data analysis methods increase efficiency in
the KWS Group arising from external megatrends.
plant breeding and agriculture. Agricultural areas
We describe some of them by way of example in the
can be farmed in a tailored way thanks to automated
following.
communication, big data analytics, robotics or
artificial intelligence. Drones and satellites, for
To succeed in achieving sustainable, profitable
example, supply information that helps improve
growth in the future as well, our prime goal must
analysis of plant stands in the field. As a result,
be to retain and increase our innovativeness. In
infestation by pests or infection by diseases can
particular, it is vital to increase plants’ yield potential,
be detected quickly, pinpointed and combated
enhance resource efficiency or develop their
in a targeted manner. Pinpointing where crops
resistance to detrimental influences, of whatever
are infested or infected helps reduce the use of
type. That requires continuous and intensive
pesticides and the number of time machines have
research work. It takes up to ten years for a new
to run over the field. These technologies will gain
variety to gain approval and be put on the market.
in practical relevance in the future. We already use
We therefore invest a large proportion of our net
them in our research & breeding processes. We
sales in research & development projects every
need to develop and establish new, highly promising
year, with the goal of achieving an average yield
technologies in order to avoid risks such as
progress of 1.5% p.a. Alongside the opportunities
competitive disadvantages.
2.8 Opportunity and Risk Report | Combined Management Report
69
KWS Group | Annual Report 2020/2021
New, permanent customer needs – differing from
Investing in expansion of our production capacities
region to region – are emerging and that entails
and modernization of our seed processing offers
long-term opportunities and risks. While meat
opportunities in existing and adjacent markets.
consumption is declining in Europe, for example, it
Further development of our variety portfolio and
is steadily increasing in other countries. The product
expansion of capacities are accompanied by
portfolio for agriculture must therefore be broad so
expansion of our international distribution structures
that opportunities that arise can be seized and one-
to enable tailored information and advice for our
sided dependencies can be reduced. We take into
customers on the possible uses of our seed and
account relevant long-term trends by establishing
so allow us to leverage further sales potential. In
and expanding new product lines. We are also
addition, continuous optimization of processes
committed to expanding our direct contact with
offers the KWS Group opportunities to increase
customers on a lasting basis so that we can sell our
productivity and digitization and improve cost
products successfully. We already have a presence
structures.
in global sales networks and so can be reached
directly by our customers.
Unlike strategic opportunity management,
operational opportunity management is not fully
Operational opportunities
integrated in risk management at present.
By an operational opportunity, we understand a
development that is consistent with our strategic
2.8.2 Risk Management
planning and might have a positive short-term
impact on our earnings, financial position and
The main aspects and players in
assets and has not yet been reflected fully or at all
risk management at KWS
in the company’s financial planning. Operational
Weighing up opportunities and risks is an integral
opportunities are identified and assessed by our
part of all decision-making at our company. We
Business Units. We leverage them by pinpointed
strive to address risks openly and proactively. We
investment in production capacities, research &
understand the term “risks” as denoting events and
development activities and expansion of distribution,
potential developments, both inside and outside the
for example.
Group, that have a negative impact on achievement
of our corporate objectives or principles. That
We have opportunities as a result of our still young
also includes events that impair our value chain
activities in the vegetables market or expansion of
and harm the environment and which we can
our portfolio of corn varieties in tropical regions. Our
influence. Deliberate risks can be taken if that offers
corn activities in Brazil and China will enable us to
opportunities that are consistent with the KWS
tap additional sales potential for the KWS Group in
Group’s strategic planning. If there are risks that do
the medium to long term, including in other tropical
not harbor relevant opportunities in return or they
markets, by developing varieties tailored to their
jeopardize achievement of the Group’s key financial
climatic conditions.
indicators, they must be avoided or their impact
must be mitigated as best possible from the cost-
benefit perspective. Any violation of key corporate
principles, such as observance of human rights,
cannot be tolerated in any shape or form.
70 Combined Management Report | 2.8 Opportunity and Risk Report
Annual Report 2020/2021 | KWS Group The departments assess and document short-term
The Risk Committee consists of representatives
operational risks in monthly risk reports submitted
from all divisions who have a good knowledge
to company management. Medium-term risks are
of the issue of risks. It convenes at least twice a
ascertained as part of global risk identification at
year, discusses and reviews the risks maintained
least twice a year.
in the risk management system and measures to
control them, and formulates recommendations for
The Executive Board is responsible for Group-
the Executive Board, if necessary. Responsibility
wide risk management. The Supervisory Board or
for identifying, assessing and controlling risks lies
the Audit Committee review the risk management
with the divisions, while central risk management
system at least once a year to assess its suitability
coordinates the processes and ensures reporting
and effectiveness. It is assisted in that by the
to company management. Other roles in our risk
independent auditor of the financial statements
management are specified in the chart “Players and
as part of the latter’s statutory audit assignment.
systems in managing risks at KWS.”
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.)
Our risk management system is based on
control, documentation, monitoring of risks and
the internationally recognized COSO II model
risk reporting. It is conducted regularly, usually
(Committee of Sponsoring Organizations of the
twice a year. As part of risk identification, we record
Treadway Commission). Its objective is to implement
individual risks on an electronic platform and assess
a consistent, continuous and Group-wide risk
them qualitatively or quantitatively on the basis of
management process in which all divisions (Business
Group-wide standards, in each case before (gross
Units, Group Functions, Global Functions, R&D, and
risk) and after (net risk) any countermeasures. As
the Managing Directors of significant subsidiaries)
part of that, we calculate expected monetary values
are integrated. Our risk management process
where possible and classify them as “moderate,”
consists of the phases of identification, assessment,
“medium” and “significant.” We take into account
2.8 Opportunity and Risk Report | Combined Management Report
71
KWS Group | Annual Report 2020/2021
linkages between risks in assessing the likelihood of
their occurrence. The individual risks are classified
as below as part of assessment:
Scheme for assessing individual risks
) Very low
T
B
E
> €0.1 million – €3.0 million
Likelihood of occurrence
Unlikely
< 10 %
Possible
10% – 50%
Likely
50% – 90%
Almost certain
≥ 90%
(
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
Risk classification for single risks
Risk classes
Expected loss value
Moderate
Relevant
Significant
< €1 million
> €1 million – ≤ €5 million
≥ €5 million and/or
critical health risks
Control and monitoring systems
We meet the statutory requirements for early
detection of risks with our controlling and risk
management processes.
The internal control and risk management
system in relation to the accounting process
(Section 315 (4) of the German Commercial
We decide systematically on what appropriate
Code (HGB)) is the responsibility of Global
countermeasures to take to manage risks. They may
Finance and comprises structures and processes
be measures to reduce risks, constant monitoring
that enable proper and effective accounting and
of them or taking out insurance, for example. The
financial reporting. That includes ensuring that
KWS Group’s current risk situation is aggregated
business transactions are included in accounting
by central risk management into risk types and
consistently, promptly and correctly and that all
categories and reported first to the Risk Committee.
statutory accounting regulations, standards and
On that basis, the Risk Committee discusses how
internal guidelines are implemented throughout the
to deal with the risks and submits recommendations
Group. A consistent system that is subject to the
to company management if required. Central
Group’s regulations on accounting makes it easier
risk management coordinates the entire risk
to ensure that the consolidated financial statements
management process and supports the departments
comply with the rules. The following are examined
in their tasks.
regularly: the completeness of financial reporting,
the Group’s uniform accounting, measurement
and account allocation stipulations, and the
authorization and access regulations for IT systems
used in accounting. Intra-Group transactions are
consolidated appropriately and in full.
72 Combined Management Report | 2.8 Opportunity and Risk Report
Annual Report 2020/2021 | KWS Group
All subject areas that are the responsibility of the
Operational risks
central Compliance department are controlled by
IT
the KWS Compliance Management System. The
The KWS Group’s business and production
system is based on seven criteria in accordance
processes, as well as its internal and external
with IDW PS 980: culture, objectives, risks, program,
communications, are run on globally networked
organization, communication and monitoring.
IT systems. Attacks or outages can lead to a
Its goal is to prevent violations of the law and
loss of confidentiality, availability, integrity and/or
internal compliance regulations. The Compliance
authenticity of data, information and systems. That
Management System is continuously developed
harbors significant risks, such as loss of know-how,
further on the basis of risk analyses and findings
data manipulation, loss of personal data and loss of
from auditing projects, as well as to reflect new
image, which we reduce by means of organizational
statutory requirements. Apart from that, there are
and technical measures. IT service providers
other compliance topics that are controlled directly
constantly examine our IT security so as to issue
by the departments in question.
recommendations for optimization measures on the
Internal auditing is the responsibility of Global
undetected loss and damage as a result of hacking
Finance and is carried out by an external service
and malware are still possible even if very good
provider. The topics in an audit are defined annually
precautionary measures are in place.
basis of their risk assessment. Uncontrolled and/or
on a risk-oriented and process-independent basis.
Their status is reported – likewise annually – to the
Product quality
Audit Committee.
We have established detailed checks and tests
to determine the performance and quality of our
Risk situation at the KWS Group
seed. Quality controls, such as germination and
Here we provide a summarized report on the
sprouting strength tests, are conducted at all stages
medium or high individual risks involving net
of production. These checks and tests are also
financial damage of at least €7.5 million, taking into
intended to reduce risks such as claims for damages
account the medium-term effects we are aware
due to product liability, which may be significant,
of. We group the individual risks by their type and
especially in Anglo-American jurisdictions. We also
category. The sequence of the risk types is based
have product liability insurance to defend against
on the aggregated expected monetary values of the
unjustified claims and to settle justified claims.
identified risks. If the risk classes of the categories
Very strict requirements must be met regarding
have changed compared to the previous year, we
management of genetically modified products,
explain that in the respective sections. Strategic
in particular, to prevent GMOs becoming mixed
opportunity and risk categories are derived from
with conventional seed. KWS is a member of the
our strategic planning and cover a ten-year time
“Excellence Through Stewardship” (ETS) initiative,
frame. Because of the longer time frame over which
an internationally standardized quality management
they are analyzed, they are not comparable to the
program.
other categories. Strategic opportunities and risks
are therefore explained separately in the section
Production, interruptions to business operations
“Opportunity Management.” The changes in the
KWS uses technically complex seed processing
medium-term risk situation as a whole are addressed
plants. Interruptions to business operations may
in the overall statement on the risk situation by the
have a negative impact on the volumes that are
Executive Board.
available for sale and represent significant risks,
especially if they occur in our sales season. In
There are currently no non-financial risks whose
order to reduce these risks, we conduct regular
occurrence is very likely and entail serious impacts
risk inspections, carry out preventive maintenance,
on aspects that require reporting in accordance with
and have Group-wide property and business
Section 289c of the German Commercial Code (HGB).
interruption insurance.
2.8 Opportunity and Risk Report | Combined Management Report
73
KWS Group | Annual Report 2020/2021 Seed multiplication is dependent on the weather.
Health, safety and environment
We reduce the risk of crop failures by multiplying
Accidents, technical problems or misconduct in our
seed – depending on the crop – in separate
business processes may result in injury to persons
locations and regions in Europe, North and South
and environmental damage and are high risks. One
America and Asia. We can carry out contra-
measure we have taken to reduce these risks is to
seasonal multiplication in the winter half-year in the
implement a global health, safety and environment
southern hemisphere if there are bottlenecks in the
standard, which the central HSE Manager function
volume of seed produced.
will keep on developing. Despite the many protective
All in all, the category’s risk situation fell slightly
remains a significant threat to our employees. The
year on year. That was mainly attributable to our
category’s risk situation therefore remains high.
measures we have taken worldwide, the pandemic
measures to prevent production losses due to the
pandemic and the elimination of short-term capacity
Procurement
bottlenecks in production.
As part of our global sourcing processes, we are
subject to price fluctuations. That may present
Projects, company organization,
opportunities as well as risks. We counter these
process management
risks by pooling our purchasing power in a
So that we can continue to grow profitably and
centralized Procurement Management unit and,
sustainably with the support of an efficient
in particular, we adopt a structured approach in
organization and harmonized processes that also
relation to the organization, management and long-
reflect the increasing complexity of the requirements
term development of supplier relationships. There
demanded of our workforce, we regularly review
were above-average increases in relevant price
their adequacy and realign them where necessary.
indexes toward the end of the year under review,
Without appropriate realignment, there may be
and they were the reason why this category’s risk
organizational risks, such as an excessive workload
situation rose.
on individual departments. In turn, a realignment
may entail integration risks (M&As), for example,
Human Resources
or temporarily result in process inefficiencies or
Our HR strategy aims to recruit and keep qualified
unplanned costs. Our measures to counter these
employees at KWS long term, as well as to offer
risks include the establishment of specialized
them further development opportunities that reflect
functions (such as M&A experts), rollout of a
our and their needs. That may result in the risk of
new standard process model and automation,
not being able to fill vacancies promptly or of losing
complemented by our globally applicable company
employees. We counter this risk by continuously
standards. There was an increase in this category’s
further developing our HR strategy. Among other
risk situation in the year under review due to
things, we are committed to growing our brand as an
temporary process inefficiencies and a greater
attractive employer, fostering talents, and expanding
workload.
the KWS Group to new locations near where
appropriate resources are available (science clusters
such as St. Louis and urban centers like Berlin). In
addition, short-term compensatory measures may be
applied to counter personnel risks.
74 Combined Management Report | 2.8 Opportunity and Risk Report
Annual Report 2020/2021 | KWS Group Politics and the law
Compliance
and scientific facts to the contrary. New breeding
technologies could speed up our variety development
We are exposed to potential compliance risks,
and improve its precision. The EU continues to
for example under antitrust, competition, anti-
impose tougher regulations on important research
corruption and money laundering law and data
technologies and restrict the use of established
protection requirements. Violations of statutory
operating resources. We conduct an intensive
requirements may have consequences under
dialogue with all stakeholders on this issue and are
criminal and civil law, including fines and other
increasing the internationalization of our research –
financial disadvantages. Under our compliance
without reducing our commitment in the EU.
policy, the Code of Business Ethics and our
Group Standards, we obligate our managers and
Political instability
employees to undertake to act in accordance
KWS faces political risks in many countries in the
with laws, contracts, internal guidelines and our
strongly regulated international agricultural industry.
corporate values and raise their awareness in
Geopolitical insecurities in the Middle East and the
this regard. Regular communication, instruction
still strained situation in Eastern Europe may also
and training are intended to ensure compliance.
have a negative impact on our business activities
We rigorously investigate reports of compliance
and growth plans. Although the situation as regards
violations. As is expressly pointed out, sanctions are
the individual political risks was very dynamic in the
imposed if our compliance regulations are violated.
year under review, the category’s aggregated risk
situation remained largely unchanged.
Intellectual property (IP)
Protecting intellectual property is vital to companies
General legal risks
that conduct research if they wish to preserve their
KWS faces risks from official proceedings and
freedom of action and keep on generating value.
legal disputes. Legal disputes are possible with
The seed-specific property rights under “variety
suppliers, licensors, customers, employees, lenders
protection” ensure they are compensated for the
and investors and may result in payments or other
years-long process of research, breeding and
obligations. There were no legal proceedings
development of new varieties and that third parties
involving significant amounts in fiscal 2020/2021.
cannot market the same variety at no costs to
themselves. KWS uses patents to protect certain
Finance and capital markets
plant traits, in particular if they have been developed
Tax risks
or produced by means of technical methods. In order
KWS operates in about 70 countries and is
to secure its freedom of action and avoid infringing
therefore subject to an array of complex national
third-party proprietary rights, KWS has implemented
tax requirements and laws. Changes that are not
far-reaching due diligence processes throughout the
detected in time and/or incomplete implementation
company.
Regulatory risks
of tax law, court rulings and interpretations by the
fiscal authorities may have an effect on tax assets
and liabilities, as well as on deferred tax assets and
As part of modern agriculture and as an innovative
deferred tax liabilities. That can result in significant
plant breeding company, KWS also uses state-of
risks, which we counter by continuously identifying
the-art breeding technologies to develop new,
and assessing the tax frameworks and by central
resource-conserving varieties. There is still a negative
coordination through our Finance department. If
perception of new breeding technologies among the
necessary, tax provisions are formed on the basis of
general public, despite the high standards in force
estimates.
2.8 Opportunity and Risk Report | Combined Management Report
75
KWS Group | Annual Report 2020/2021 Currency risks
changes in cultivation area – in particular where they
Currency risks arise in particular from receivables
affect strategically important crops and markets –
and liabilities denominated in foreign currency. We
have the potential to impact our market success
address currency risks to a reasonable extent through
significantly. They may be caused by factors such
the usual hedging instruments and internal standards
as a sudden drop in agricultural prices due to global
in order to reduce the influence on the KWS Group’s
crises or extreme weather events, or may be the
earnings and assets situation. In fiscal 2020/2021,
consequence of high inventories as a result of good
we hedged our intra-Group loans to a large part
harvests. We counter such risks in the medium and
in order to reduce currency risks. We also reduce
long term by diversifying our product portfolio and
our transaction risks by means of natural hedging,
expanding our market footprint. Risks from changes
incurring expenses in the same currency in which we
in cultivation area are impossible or difficult to reduce
generate revenue.
Liquidity
in the short term, but usually impact all market
players alike. Moreover, weather risks can often be
insured against only at economically unfavorable
The overriding goal of our liquidity management is
terms and conditions, if at all.
to ensure we meet our payment obligations on time.
External factors, such as global crises, may restrict
Market trends
the availability of credit lines and/or mean we can
This covers in particular local external risks that are
only obtain economically disadvantageous terms
closely linked to our business model and over whose
and conditions. Our central Treasury department
emergence we have no or currently only limited
determines what funding we require in its liquidity
direct influence. They include changes in demand,
planning and covers those needs by providing cash,
fluctuations in cultivation area, or extreme, locally
promised credit lines and other financial instruments.
confined weather events. We examine whether
We have agreed customary financial covenants for
insurance cover makes economic sense in order to
part of these promised credit lines. If these covenants
reduce such risks. Potential supply chain risks are
are breached, the lender has the right to terminate
also maintained in this category. We are currently
the agreement. A short-term increase in the cost of
revising how supply chain risks are controlled. The
borrowing on the capital market was observed last
increase in extreme weather events and growing
year; however, the situation eased in the year under
relevance of supply chain standards resulted in a
review despite the ongoing pandemic, resulting in a
slight rise in this category’s risk situation.
slight reduction in the category’s risk situation.
Competition and business partners
Risk of counterparty defaults
Strong competitive pressure, such as that due to
We nurture extensive business relationships with
aggressive pricing strategies by other market players,
various customer groups – from the sugar industry
may have a negative impact on our business success.
and agricultural wholesalers to individual farmers. If,
In particular, good local variety performance is the
in particular, large customers are not able to meet
most effective means of protecting against that.
their contractual payment obligations to us, we could
Acquisition or licensing of technologies – such as
suffer losses. We reduce such credit risks through
genetically modified traits – is customary in the
our receivables management and, where possible
industry and necessary in markets such as North or
and expedient, by means of credit insurance.
South America. We strive to reduce the related risks
Markets and competition
by developing our own innovations, which may also
be attractive to competitors, and through long-term
Cultivation areas and price trends
license agreements.
Slight declines and shifts in cultivation area are
typical in agriculture and usually have no significant
net impact on our business success. Extreme
76 Combined Management Report | 2.8 Opportunity and Risk Report
Annual Report 2020/2021 | KWS Group Category, aggregated, ten year horizon
Risk opportunity
type
Risk opportunity category
Strategically
Innovation
New customer requirements
Sustainability in the
Agriculture
Digital farming
You can find a more detailed explanation in the
“Opportunity Management” section.
Category, aggregated, four year horizon
Risk type
Risk category
Operational risks
IT
Product quality
Current risk
classification
Substantial
Substantial
Production, interruptions to
Noticeable
business operations
Previous year
Tendency
Substantial
Substantial
Substantial
Projects, company
Noticeable
Medium
organization, process
management
Health, safety and environment
Substantial
Substantial
Procurement
Human Resources
Politics and legal
Compliance
Intellectual property (IP)
Finance and
capital markts
Regulatory risks
Political instability
General legal risks
Tax risks
Currency risks
Liquidity
Risk of counterparty defaults
Markets and
competition
Market trends
Cultivation areas and price
Medium
Medium
Noticeable
Medium
Low
Low
Low
Noticeable
Medium
Low
Low
Medium
Medium
Not listed
Medium
Noticeable
Medium
Low
Low
Low
Noticeable
Medium
Medium
Low
Medium
Not listed
trends
Competition and
business partners
Medium
Medium
You can find a more detailed explanation in the “Risk
situation at the KWS Group” section above.
2.8 Opportunity and Risk Report | Combined Management Report
77
KWS Group | Annual Report 2020/2021 Risk classification for aggregated risk categories
years, we believe we have established an effective
Risk classes
Low
Medium
Total expected loss values
single risks
system of protection that is adequately designed to
reflect the local situation as regards infections. In the
≤ €3 million
year under review, we did not suffer any significant
> €3 million – €8 million
restrictions to our operations as a result.
Noticeable
> €8 million – €15 million
Substantial
≥ €15 million and/or
critical health risks
Other changes to risks are described in the
categories above. Since the effects mostly balance
each other out as a whole, the risk situation for the
KWS Group is unchanged by and large following the
Overall statement on the risk situation
increase last year.
by the Executive Board
We have tackled the COVID-19 pandemic since
In view of the available assessments and counter-
January 2020 with a wide range of measures. We
measures we have initiated, risks that jeopardize
have developed them further and adapted them to
the company’s existence are not discernible at
the situation at hand over that time. Developments
present. Moreover, we see at present no indications
at the KWS Group continue to be monitored locally,
that interdependencies might result in risks that
with details on them being pooled centrally and
could jeopardize the company’s existence. We feel
reported every month to our global managers. The
sure that, thanks to our global footprint, innovative
worldwide situation as regards infections remains
strength and the quality of our products, we can
uneasy in view of new mutations of the virus and very
seize opportunities and successfully manage
large local differences in incidence and vaccination
risks as they arise. However, we cannot rule out
rates. Consequently, there are still health risks for our
the possibility that other factors that are currently
employees despite the many protective measures.
unknown or which are not assessed as significant
Restrictions to KWS’ business operations are still
may jeopardize the continued existence of the
possible, although we assess their likelihood as
KWS Group in the future.
being low at present. They still include the absence
of staff due to infection or quarantine measures,
Announcement
restrictions in seed multiplication and logistics
In view of new external requirements defined in the
processes, fluctuations in demand, cultivation
auditing standard PS 340 and relating to measures
area and market prices, the creditworthiness of
by the Executive Board in accordance with
customers and suppliers, uncertainties on the capital
Section 91 (2) of the German Stock Corporation
markets, and strong fluctuations in exchange rates.
Act (AktG), we are planning to adapt our risk
Aided by the measures we have implemented and the
management system in fiscal year 2021/2022 and
experience we have gained in the past one-and-half
will explain the changes in the next Risk Report.
78 Combined Management Report | 2.8 Opportunity and Risk Report
Annual Report 2020/2021 | KWS Group
2.9 Forecast Report
The expectations of management outlined here are
In view of the brightening mood in the agriculture
based on our corporate planning and the information
sector and (in some cases sharp) increases in the
it takes into account, including market expectations,
prices of agricultural raw materials, we assume
strategic decisions, regulatory measures or
that there will be growing demand for seed in fiscal
ex change rate trends. They are subject to the same
2021/2022.
premises as the consolidated financial statements
and forecast our business performance up to the end
We expect the KWS Group to grow its net
of fiscal 2021/2022 on June 30, 2022. In our forecast
sales by 5% to 7% over the previous fiscal year
for the KWS Group’s statement of comprehensive
(€1,310.2 million). We anticipate an EBIT margin of
income in accordance with IFRS, we deal with
around 10% and that it will be in a range from 11%
the KWS Group’s anticipated net sales, EBIT and
to 12% after adjustment for the noncash effects
R&D intensity. Our forecast for the segments
from purchase price allocations as part of company
contains comments on our net sales and EBIT
acquisitions. Our R&D intensity is expected to be
expectations, including the contributions made by
in the range of 18% to 20%. Due to the strongly
our equity-accounted companies, which are included
seasonal nature of our business as a result of the
proportionately in the segment reports in line with
great importance of the spring sowing season and
our internal corporate controlling structure.
external factors that are difficult to anticipate, such
2.9.1 Changes in the KWS Group’s Composition
are providing ranges in our forecasts here, since more
that are Significant for the Forecast
detailed statements on our net sales and earnings
There have not been any significant changes in the
performance cannot yet be made with sufficient
as the weather and fluctuations in cultivation area, we
KWS Group’s composition that are of significance
reliability.
for the forecast for its business performance in fiscal
2021/2022.
2.9.3 Forecast for the Segments
In fiscal 2021/2022, we anticipate that the Corn
2.9.2 Forecast for the KWS Group’s Statement of
Segment with grow its net sales sharply over the
Comprehensive Income
previous year (€774.0 million), in particular on the
The KWS Group’s economic performance will likely
back of rising sales volumes in South America and
not be impacted significantly by the effects of the
Europe due to the launch of new, high-performance
global COVID-19 pandemic in fiscal 2021/2022.
varieties. We assume that competition will remain
However, sharp increases in the prices of agricultural
intense in North America. As far as can be seen at
raw materials will raise the costs of multiplying seed.
present, the EBIT margin is expected to be at the
We also anticipate above-average price rises in a
level of the previous year (9.2%).
number of procurement categories. There are still
significant currency risks in important markets, in
particular in South America and Eastern Europe.
2.9 Forecast Report | Combined Management Report
79
KWS Group | Annual Report 2020/2021
In the Sugarbeet Segment, our high-yielding
vegetable seed businesses. Assuming a recovery
portfolio of varieties will likely mean another
in the market environment, in particular in the food
successful fiscal year for us. We assume that
services segment, we expect the segment’s net
sugarbeet cultivation area will remain stable all in all.
sales to rise sharply compared to the previous year
The segment’s business performance will benefit
(€58.2 million). There are also costs for establishing
from further growth due to CONVISO® SMART seed
an international breeding program and the Business
and the launch of new, Cercospora-tolerant (CR+)
Unit in the segment. Consequently, the number
varieties. We expect the segment’s net sales to be on
of employees will probably increase further. We
a par with the previous year (€524.3 million), as will the
anticipate that the EBIT margin and the EBIT margin
EBIT margin (33.3%).
after adjustment for the noncash effects from
the purchase price allocation as part of company
We assume that net sales in the Cereals Segment
acquisitions will be well above those of the previous
will rise slightly compared to the previous year
year.
(€191.2 million). In particular, we expect rapeseed and
hybrid rye seed business to boost growth here. The
Revenue (albeit slight) from our farms in Germany,
segment’s earnings will benefit from an increase in
France and Poland is grouped in the Corporate
sales of rye seed; at the same time, we are planning to
Segment. Since all cross-segment costs for the
expand our research & development and distribution
KWS Group’s central functions and research
activities further. All in all, we anticipate that the EBIT
expenditure are still charged to the Corporate
margin will rise slightly compared to the previous
Segment, its income is usually negative. In view of
year (11.1%).
the planned cost developments and continuation
of the transformation project ONEGLOBE,
The Vegetables Segment essentially comprises
we expect the segment’s EBIT to be around
the net sales and earnings contributed by acquired
€–100.0 (–92.0) million.
Forecast for the 2021/2022 fiscal year
Statement of
comprehensive income
of the KWS Group
Net sales
EBIT margin 1
R&D intensity
5 – 7%
11–12%
18 – 20%
1 Adjusted for non-cash effects from purchase price allocation in the context of company acquisitions
80 Combined Management Report | 2.9 Forecast Report
2.10 Report on KWS SAAT SE & Co. KGaA and Non-Financial Declaration | Combined Management Report
Annual Report 2020/2021 | KWS Group 2.10 Report on KWS SAAT SE & Co. KGaA and Non-Financial
Declaration (Declaration based on the German Commercial
Code (HGB))
2.10.1 KWS SAAT SE & Co. KGaA
Code (HGB), which also contains the compliance
declaration in accordance with Section 161 AktG
References to KWS SAAT SE & Co. KGaA in the
(German Stock Corporation Act), has been published
KWS Group’s Annual Report
in the Internet at www.kws.com/corp/en/company/
The Management Reports of KWS SAAT SE &
investor-relations/. The following disclosures are
Co. KGaA and the KWS Group are combined. The
identical to those of the KWS Group and are printed
declaration on corporate governance in accordance
in this Annual Report:
with Section 289f of the German Commercial
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
On the report on events after the balance sheet date
Page(s)
55 to 67
16 to 42
137 (Notes)
23 to 25
138 (Notes)
KWS SAAT SE & Co. KGaA is the parent company
operating income was €–46.5 million compared
of the KWS Group. It is responsible for strategic
to the previous year’s figure of €–42.1 million,
management and, among other things, multiplies
a reduction that was attributable in particular to
and distributes sugarbeet and corn seed. It finances
higher costs of sales as a result of crop failures due
basic research & breeding of the main range
to the weather in our seed multiplication activities.
of varieties at the KWS Group and provides its
Net financial income/expenses is made up of
subsidiaries with new varieties every year for the
the net income from equity investments and the
purpose of multiplication and distribution.
interest result. Net income from equity investments
Earnings
rose sharply to €378.1 (30.8) million. The year-on-
year change was mainly due to dividend payouts
Net sales at KWS SAAT SE & Co. KGaA in fiscal
from retained profits of foreign subsidiaries in
2020/2021 rose to €618.0 (571.2) million, in particular
connection with intra-Group financing. The interest
on the back of an increase in the Sugarbeet
result improved to €–4.1 (–8.5) million, in particular
Segment. Research & development expenditure,
as a result of lower interest expenses payable to
which is pooled at KWS SAAT SE & Co. KGaA,
affiliated companies due to refinancing. Taking into
was increased as planned to €204.5 (194.4) million.
account tax expenditures, the net income for the
Selling expenses fell to €73.1 (75.1) million. Most of
year was €321.4 million (previous year: a net loss of
the administrative expenses at the KWS Group are
€27.9 million).
incurred at KWS SAAT SE & Co. KGaA. General and
administrative expenses in the year under review
Financial position and assets
totaled €120.3 (121.0) million. The balance of other
KWS SAAT SE & Co. KGaA’s total assets in fiscal
operating income and other operating expenses
2020/2021 increased to €1,623.1 (1,554.5) million.
was €8.2 (4.4) million. KWS SAAT SE & Co. KGaA’s
Fixed assets at the balance sheet date were
2.10 Report on KWS SAAT SE & Co. KGaA and Non-Financial Declaration | Combined Management Report
81
KWS Group | Annual Report 2020/2021
€1,016.3 (1,014.8) million. Inventories rose
2.10.2 Combined Non-Financial Declaration
to €79.8 (66.3) million on the back of higher
for the KWS Group
production, Receivables and other assets were
In accordance with Sections 289b et seq. and
€495.7 (462.4) million. Liabilities to affiliated
Sections 315b et seq. of the German Commercial
companies at the balance sheet date fell to
Code (HGB), KWS is obliged to prepare a Non-
€914.3 (1,121.2) million. KWS SAAT SE & Co. KGaA’s
Financial Declaration for the parent company
equity increased to €531.3 (233.0) million due to
KWS SAAT SE & Co. KGaA and the Group disclosing
the net income for the year, giving an equity ratio of
details of the business model and related material
32.7% (15.0%).
Employees
corporate social responsibility (CSR) aspects
(environmental issues, social issues, employee
issues, human rights, and prevention of corruption
An average of 1,633 (1,544) people were employed
and bribery), where these are necessary for an
at KWS SAAT SE & Co. KGaA in the year under
understanding of the course of business, business
review.
results, the situation of KWS SAAT SE & Co. KGaA
and the KWS Group, and the effects on said aspects.
Risks and opportunities
The disclosures in the Combined Non-Financial
The opportunities and risks at KWS SAAT SE &
Declaration relate to both KWS SAAT SE & Co. KGaA
Co. KGaA are essentially the same as at the KWS
and the KWS Group, unless otherwise specified.
Group. It shares the risks of its subsidiaries and
associated companies in accordance with its
In order to identify issues that need to be reported
respective stake in them. You can find a detailed
in the Non-Financial Declaration, the relevant
description of the opportunities and risks and
issues based on a GRI materiality analysis in fiscal
an explanation of the internal control and risk
year 2020/2021 were systematically reassessed
management system (Section 289 (4) of the German
to determine their impact on the environment and
Commercial Code (HGB)) on pages 69 to 78.
society and on the position of the KWS Group. On
Forecast Report
the basis of this analysis, the individual issues of
innovative and sustainable product development,
KWS SAAT SE & Co. KGaA generates the main
product quality and safety, emissions, water,
part of its net sales from sugarbeet and corn seed
occupational health and safety, recruitment and
business and royalties from basic corn seed. Its
employee loyalty, qualification, further training
further development depends, among other things,
and development, employee engagement, human
on the performance of our varieties, cultivation
and labor rights, business ethics and compliance,
areas in our key markets and developments in our
responsibility in the supply chain, and use of
growth markets in Eastern Europe. We currently
genetic resources were identified as material
anticipate a slight increase in net sales, mainly
within the meaning of the statutory regulations.
from corn business. KWS SAAT SE & Co. KGaA’s
Material effects of the COVID-19 pandemic on the
operating income is mainly impacted by the costs
non-financial issues are reported in the respective
of central functions of the KWS Group and cross-
sections, where necessary. Given that we aim to
segment research & development activities. As a
conduct the GRI materiality analysis every two years,
result of the anticipated higher spending on research
the next one is scheduled for fiscal 2022/2023.
& development and on distribution activities,
In the year under review, the Executive Board
KWS SAAT SE & Co. KGaA’s EBIT will likely be well
adopted a comprehensive sustainability program
below that of the year under review.
with corresponding goals and KPIs. They are
explained in the Management Report (page 20 in
section 2.1.4 Objectives and Strategy; Sustainability).
They are to be implemented at the company in
coming reporting periods, and their relevance for
controlling is to be examined.
82 Combined Management Report | 2.10 Report on KWS SAAT SE & Co. KGaA and Non-Financial Declaration
Annual Report 2020/2021 | KWS Group The table below gives an overview of the CSR report
aspects stipulated by law in accordance with Section
289c of the German Commercial Code (HGB) and
other associated issues that require reporting, as well
as references to the sections in which the required
disclosures on concepts, results, risks and key
performance indicators are made. We did not identify
any risks that exceeded the statutory materiality
threshold defined in Section 289c (3) of the German
Commercial Code (HGB). In addition, the KWS Group
has not defined any non-financial performance
indicators relating to controlling at present.
As part of preparation of the Non-Financial
Declaration, we were guided by the GRI standards in
conducting the materiality analysis. We did not use
any other framework apart from that.
Index for the Non-Financial Declaration
Required
HGB disclosures
Business model
Environmental issues
Employee issues
Material issues for KWS
Reference to sections
–
Innovative & Sustainable
Product Design
Product Quality and Safety
Emissions
Water
Occupational Health and Safety
Recruitment & Employee
Loyalty
Qualification, Further Training and
Development
Employee Engagement
Human and Labor Rights
2.1 Fundamentals of the KWS Group
2.4.1 Product Innovations
2.4.2 Product Quality and Safety
2.4.3 Emissions & Water
2.5.2 Occupational Health and Safety
2.5.3 Recruitment and Employee
Loyalty
2.5.4 Qualification, Further Training
and Development
2.5.5 Labor and Social Standards
Corruption and bribery
Business Ethics & Compliance
2.6.3 Business Ethics & Compliance
Human rights
Responsibility in the Supply Chain
Human and Labor Rights
2.6.4 Responsibility in the Supply
Chain
Social issues
Use of Genetic Resources
2.7.1 Use of Genetic Resources
Einbeck, September 23, 2021
KWS SE
Dr. Hagen Duenbostel | Dr. Léon Broers | Dr. Felix Büchting | Dr. Peter Hofmann | Eva Kienle
2.10 Report on KWS SAAT SE & Co. KGaA and Non-Financial Declaration | Combined Management Report
83
KWS Group | Annual Report 2020/2021 3. Annual Financial Statements for
the KWS Group 2020/2021
Statement of Comprehensive Income
Balance Sheet
Statement of Changes in Equity
Cash Flow Statement
Notes for the KWS Group 2020/2021
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
Independent Auditor’s Report
Independent Auditor’s Limited Assurance Report
Declaration by Legal Representatives
Additional Information
86
87
88
90
92
92
92
93
102
104
107
114
136
137
144
151
153
154
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
Earnings before taxes
Taxes
Net income for the year
II. Other comprehensive income
Changes in reserve for currency translation differences on foreign
operations
Income from equity-accounted financial assets
Items that may have to be subsequently reclassified as profit or loss
Net gain/(loss) on equity instruments designated at fair value
through other comprehensive income
Remeasurement gain/(loss) in defined benefit plans
Items not reclassified as profit or loss
Other comprehensive income after tax
III. Comprehensive income (total of I. and II.)
Net income after shares of minority interests
Share of minority interests
Net income for the year
Comprehensive income after shares of minority interests
Share of minority interests
Comprehensive income
Note no.
2020/2021
2019/2020
6.1
6.1
6.1
6.1
6.1
6.2
6.3
6.4
6.5
6.8
7.9
7.9
7.9
7.9
7.9
6.8
1,310,232
1,282,552
570,690
739,542
244,218
252,226
127,142
71,446
50,369
137,032
6,145
18,338
17,374
5,181
142,214
31,624
110,590
–38,993
–912
–39,905
2,666
4,073
6,738
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
–33,167
–41,962
77,423
110,609
–19
110,590
77,442
–19
77,423
53,258
95,331
–111
95,220
53,333
–75
53,258
Diluted and basic earnings per share (in €)
6.8
3.35
2.89
86 Annual Financial Statements | Statement of Comprehensive Income
Annual Report 2020/2021 | 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
Cash and cash equivalents
Current tax assets
Other current financial assets
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
Noncurrent lease liabilities
Trade payables
Deferred tax liabilities
Other noncurrent financial liabilities
Other noncurrent liabilities
Noncurrent liabilities
Short-term provisions
Short-term borrowings
Current lease liabilities
Trade payables
Current tax liabilities
Other current financial liabilities
Contract liabilities
Other current liabilities
Current liabilities
Liabilities
Total equity and liabilities
Note no.
06/30/2021
06/30/2020
7.1
7.1
7.15
7.2
7.3
7.5
7.15
6.5
7.6
7.6
7.7
7.8
7.7
7.7
7.7
4
7.9
7.9
7.9
7.10
7.9
7.11
7.11
7.15; 7.11
7.11
6.5
7.11
7.11
7.11
7.12
7.12
7.15; 7.12
7.12
7.12
7.12
7.12
7.12
7.12
122,643
353,701
43,671
506,267
173,736
9,436
606
7,330
47,642
117,290
368,361
46,349
494,179
161,960
6,230
674
8,072
70,590
1,265,033
1,273,705
266,606
5,546
449,501
222,745
91,546
40,592
34,488
216,606
15,869
432,569
119,737
83,409
63,391
29,741
1,111,024
961,321
686
441
2,376,743
2,235,467
99,000
5,530
949,188
0
1,053,718
132,500
601,080
37,465
242
66,359
62
1,301
99,000
5,530
889,830
139
994,498
140,074
521,744
39,896
264
92,265
207
1,014
839,009
795,465
39,455
97,225
10,961
52,467
93,663
11,404
153,748
109,747
31,503
14,203
25,234
111,687
484,016
1,323,025
2,376,743
41,840
17,133
19,191
100,059
445,504
1,240,969
2,235,467
Balance Sheet | Annual Financial Statements
87
KWS Group | Annual Report 2020/2021 Statement of Changes in Equity
July 1 to June 30
in € thousand
Subscribed
capital
Capital
reserve
Accumulated
Group equity
from
earnings
Parent company
Comprehensive other
Group income
Reserve for
currency
translation
differences
on foreign
operations
–53,225
Reserve for
currency
trans lation
differences
on at equity
accounted
financial assets
5,747
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
07/01/2020
Dividends paid
Net income for the year
Other comprehensive income
after tax
Total consolidated gains
(losses)
Change in shares of
minority interests
Other changes
06/30/2021
99,000
5,530
955,651
–22,110
95,331
99,000
99,000
5,530
5,530
–39,596
95,331
–39,596
0
0
2,256
1,031,127
1,031,127
–23,100
110,609
0
0
0
–92,821
–92,821
–38,993
110,609
–38,993
0
5,016
0
0
99,000
5,530
1,123,652
–131,814
1,469
1,469
0
0
0
7,216
7,216
–6,635
–6,635
0
0
581
Parent company
Group equity
Minority
interest
Comprehensive other
Group income
Total
Net gain/
(loss) on equity
instruments
designated
at fair value
Reserve for
cash flow
hedge on
at equity
financial assets
through other
Revaluation of
accounted
comprehensive
defined benefit
income
873
plans
–52,731
0
0
0
0
0
0
0
0
0
0
2,186
2,186
–57,879
–57,879
5,723
5,723
2,666
2,666
4,073
4,073
0
0
0
0
0
960,845
–22,110
95,331
0
0
2,256
994,360
994,360
–23,100
110,609
–33,167
77,442
0
5,016
0
0
0
0
0
2,702
0
–111
36
–75
0
0
0
0
139
139
–19
–19
–120
0
0
963,547
–22,110
95,220
–41,926
53,294
0
2,256
994,498
994,498
–23,100
110,590
–33,167
77,423
–120
5,016
1,313
1,313
–5,148
–41,962
–5,148
53,369
–2,488
–2,488
5,723
4,852
–53,806
1,053,718
1,053,718
88 Annual Financial Statements | Statement of Changes in Equity
Annual Report 2020/2021 | KWS Group Statement of Changes in Equity
July 1 to June 30
in € thousand
Subscribed
capital
Capital
reserve
Accumulated
Group equity
from
earnings
Parent company
Comprehensive other
Group income
Reserve for
currency
translation
differences
on foreign
operations
–53,225
Reserve for
currency
trans lation
differences
on at equity
accounted
financial assets
5,747
–39,596
95,331
–39,596
955,651
–22,110
95,331
0
0
2,256
1,031,127
1,031,127
–23,100
110,609
0
5,016
–92,821
–92,821
–38,993
0
0
0
0
0
110,609
–38,993
1,469
1,469
0
0
0
7,216
7,216
–6,635
–6,635
0
0
581
99,000
5,530
99,000
99,000
5,530
5,530
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
07/01/2020
Dividends paid
Net income for the year
Other comprehensive income
after tax
(losses)
Total consolidated gains
Change in shares of
minority interests
Other changes
06/30/2021
Parent company
Minority
interest
Group equity
Comprehensive other
Group income
Total
Reserve for
cash flow
hedge on
at equity
accounted
financial assets
Net gain/
(loss) on equity
instruments
designated
at fair value
through other
comprehensive
income
Revaluation of
defined benefit
plans
0
0
0
0
0
0
0
0
873
–52,731
960,845
–22,110
95,331
–5,148
–41,962
–5,148
53,369
1,313
1,313
0
0
0
0
0
0
2,186
2,186
–57,879
–57,879
5,723
5,723
0
0
2,666
2,666
0
0
4,073
4,073
0
0
0
0
2,256
994,360
994,360
–23,100
110,609
–33,167
77,442
0
5,016
99,000
5,530
1,123,652
–131,814
5,723
4,852
–53,806
1,053,718
2,702
0
–111
36
–75
963,547
–22,110
95,220
–41,926
53,294
–2,488
–2,488
0
0
139
139
0
–19
0
–19
–120
0
0
0
2,256
994,498
994,498
–23,100
110,590
–33,167
77,423
–120
5,016
1,053,718
Statement of Changes in Equity | Annual Financial Statements
89
KWS Group | Annual Report 2020/2021 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
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
Other noncash expenses/income (–)
Net cash from operating activities
Proceeds from disposals of intangible assets
Payments (–) for capital expenditure on intangible assets
Proceeds from disposal of fixed assets
Payments (–) for capital expenditures for fixed 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.
2020/2021
2019/2020
110,590
93,828
–1,660
–12,430
–465
31,382
–37,347
10,885
95,220
88,429
–3,596
750
–563
34,305
–33,526
17,093
–75,173
–77,879
50,402
5,609
–7,298
168,322
154
–12,269
1,876
–68,644
–518
0
0
–8,285
3,524
27,464
5,408
–16,949
136,157
12
–14,939
1,852
–99,001
152
–492
3,075
–395,254
4,733
–84,161
–499,863
90 Annual Financial Statements | Cash Flow Statement
Annual Report 2020/2021 | KWS Group July 1 to June 30
in € thousand
Note no.
2020/2021
2019/2020
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
7.9
7.15
7.15
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
Plus/Minus cash deposited in a trust account for the acquisition of
Pop Vriend Seeds Group
Cash and cash equivalents at end of year
thereof restricted cash and cash equivalents at end of year
–23,100
–11,905
–876
–11,572
206,201
–116,695
–7,123
34,930
119,091
–22,110
–14,376
–1,184
–16,619
0
–36,500
8,304
–82,484
–446,190
–16,083
–8,501
119,737
222,745
0
8
222,745
46
159,757
–294,935
414,672
119,737
91
Cash Flow Statement | Annual Financial Statements
91
KWS Group | Annual Report 2020/2021 Notes for the KWS Group 2020/2021
1. General Disclosures
2. Standards and Interpretations
Applied for the First Time
The consolidated financial statements of KWS SAAT SE &
Co. KGaA and its subsidiaries were prepared under the
The following standards and interpretations have been
assumption that the operations of the companies will
adopted and applied for the first time in fiscal year
be continued and applying Section 315e of the German
2020/2021:
Commercial Code (HGB). They comply with the International
Financial Reporting Standards (IFRS) as applicable in the
European Union (EU).
Standards and interpretations applied for the first time
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 that are adapted to regional needs,
Financial reporting standards and interpretations
Amendments to References to the Conceptual
Framework in IFRS Standards
IFRS 3 – Amendments to Business Combinations:
Definition of a Business
IFRS 9, IAS 39, IFRS 7 – Amendments to IFRS 9, IAS 39
and IFRS 7: Interest Rate Benchmark Reform (Phase 1)
Amendments to IFRS 16 “COVID-19-Related Rent
Concessions”
Amendments to IAS 1 “Presentation of Financial State-
ments” and IAS 8 “Accounting Policies, Changes in
Accounting Estimates and Errors”: Definition of Material
such as climatic and soil conditions.
At the date of signing, all amendments to the financial
reporting standards and interpretations, applied as of
The Executive Board of KWS SE, the personally liable
July 1, 2020, do not have a significant impact on the
partner of KWS SAAT SE & Co. KGaA, prepared the
consolidated financial statements of the KWS Group.
consolidated financial statements on September 23, 2021,
and released them for distribution to the Supervisory Board.
Standards and interpretations to be applied in future
The Supervisory Board has the task of examining the
The IASB has issued the following standards and
consolidated financial statements and declaring whether
amendments to standards whose application was not
it approves them.
yet mandatory for the 2020/2021 fiscal year and for some
of which the European Union had not yet completed the
endorsement process. The following standards have not
yet been applied by KWS Group:
92 Annual Financial Statements | Notes for the KWS Group | 1. General Disclosures
Annual Report 2020/2021 | KWS Group
Standards and Interpretations to be applied in future
Financial reporting standards and interpretations
Amendments to IFRS 4 “Insurance Contracts”
IFRS 9, IAS 39, IFRS 7, IFRS 4, IFRS 16 – Amendments to IFRS 9, IAS 39, IFRS 7,
IFRS 4 and IFRS 16: Interest Rate Benchmark Reform (Phase 2)
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 2021/2022
Fiscal year 2021/2022
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
Amendments to IAS 1 “Presentation of Financial Statements”: Classification of Liabilities
as Current or Non-current – Deferral of Effective Date
Fiscal year 2023/2024
Amendments to IAS 1 “Presentation of Financial Statements” and IAS 8 “Accounting
Policies, Changes in Accounting Estimates and Errors”
Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a
Single Transaction”
Fiscal year 2023/2024
Fiscal year 2023/2024
Based on an analysis, the standards and interpretations to
the two items that make up cash and cash equivalents
be applied in future are not expected to have a significant
(cash and cash equivalents, and securities) have been
impact on the consolidated financial statements of the KWS
grouped together in fiscal 2020/2021 to better facilitate the
Group.
3. Accounting Policies
reconciliation between the balance sheet and cash flow
statement. In addition, the presentation of the statement
of changes in equity was revised in the year under review
in order to ensure a more understandable presentation.
3.1 Consistency of accounting policies
The disclosures for the previous year have been adjusted
Consistent accounting policies are applied in the annual
accordingly.
financial statements of the companies included in the
consolidated financial statements. There were no changes
3.2 Companies consolidated in the KWS Group
to accounting policies from the previous financial year, with
The consolidated financial statements of the KWS Group
the exception of the standards to be applied for the first
include the single-entity financial statements of
time.
KWS SAAT SE & Co. KGaA and its subsidiaries in
Germany and other countries, as well as joint ventures and
All estimates and assessments as part of accounting and
associated companies, which are carried using the equity
measurement are continually reviewed; they are based
method, and joint operations. A company is a subsidiary
on historical patterns and expectations about the future
if KWS SAAT SE & Co. KGaA currently has existing rights
regarded as reasonable in the particular circumstances.
that give it the ability to control its relevant activities.
Relevant activities are the activities that significantly affect
Starting with this fiscal year, the short-term and long-term
the company’s returns. Control therefore only exists if
lease liabilities are disclosed separately in the balance
KWS SAAT SE & Co. KGaA has the ability to use its power
sheet in order to enhance transparency and consistency in
to affect the amount of the variable returns. Control can
how the right-of-use assets are presented. The disclosures
usually be derived from holding a majority of the voting
for the previous year have been changed accordingly.
rights directly or indirectly. Details on the changes in the
In the previous year, these amounts were carried under
consolidated group are provided in section 4, Consolidated
the other short-term and long-term liabilities. In addition,
Group and Changes in the Consolidated Group.
KWS Group | Annual Report 2020/2021
2. Standards and Interpretations Applied for the First Time | Notes for the KWS Group | Annual Financial Statements
93
3.3 Consolidation methods
The basis for a joint operation is likewise a contractual
The single-entity financial statements of the individual
agreement with a third party to manage the company’s
subsidiaries included in the consolidated financial
activities jointly. In this case, the parties have rights to
statements and the single-entity financial statements of the
the assets that can be ascribed to the agreement and
joint ventures and associated companies included using
obligations in respect of the liabilities. The assets and
the equity method and of the proportionately consolidated
liabilities and revenue and expenses are included in the
joint operations were uniformly prepared on the basis
consolidated financial statements proportionately in
of the accounting and measurement policies applied at
accordance with the KWS Group’s stake (50%).
KWS SAAT SE & Co. KGaA. For business combinations,
capital consolidation is performed according to the
Deferred taxes on consolidation transactions recognized
acquisition method by allocating the cost of acquisition to
in income are calculated at the tax rate applicable to the
the Group’s interest in the subsidiary’s remeasured equity
company concerned. These deferred taxes are aggregated
at the time of acquisition. Any excess of interest in equity
with the deferred taxes recognized in the separate
over cost is recognized as an asset, up to the amount by
financial statements.
which fair value exceeds the carrying amount. Any goodwill
remaining after first-time consolidation is recognized as
As part of the elimination of intra-Group balances,
an intangible asset. Costs incurred as part of the business
borrowings, receivables, liabilities, and provisions are
combination are recognized as an expense and carried as
netted between the consolidated companies. Intercompany
administrative expenses.
profits not realized at Group level are eliminated from
intra-Group transactions. Sales, income, and expenses are
According to IAS 36, goodwill is not amortized, but tested
netted between consolidated companies, and intra-Group
for impairment at least once a year at the end of the year
distributions of profit are eliminated.
(impairment-only approach). Investments in insignificant
unconsolidated subsidiaries are carried at fair value.
Non-controlling interests are recognized in the amount
of the imputed percentage of equity in the consolidated
Joint ventures are consolidated using the equity method
companies.
in application of IFRS 11 and IAS 28. The basis for a joint
venture is a contractual agreement with a third party to
3.4 Currency translation
control and manage a venture collectively. In the case of
Under IAS 21, the financial statements of the consolidated
joint ventures, the parties who exercise joint management
foreign group companies that conduct their business as
have rights to the net assets of the agreement.
financially, economically, and organizationally independent
entities are translated into euros using the functional
In the case of joint ventures carried in accordance with the
currency method and rounded in accordance with standard
equity method, the carrying amount is increased or reduced
commercial practice as follows:
annually by the equity capital changes corresponding to the
KWS Group’s share. In the case of first-time consolidation
Income statement items at the average exchange rate for
of equity investments using the equity method, differences
the year on a monthly basis;
from first-time consolidation are treated in accordance
Balance sheet items at the exchange rate on the balance
with the principles of full consolidation. The changes in the
sheet date.
proportionate equity that are recognized in profit or loss
are included, along with impairment of goodwill, under the
The following exchange rates were applied in the
item “Income from equity-accounted financial assets” in the
consolidated financial statements for the main foreign
net financial income/expenses. Associated companies in
currencies relative to the euro:
which the KWS Group exerts a significant influence because
it holds a stake of between 20% and 50% are likewise
measured using the equity method.
94 Annual Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2020/2021 | KWS Group
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
06/30/2021
06/30/2020
2020/2021
2019/2020
113.68300
78.85460
113.68300
78.85460
5.89340
0.85775
6.05730
0.91360
6.42570
0.88650
5.01039
0.87829
86.20260
78.68120
89.03760
74.32688
32.30180
29.95000
33.22300
28.08884
1.18900
1.12100
1.19280
1.10569
1 The average rate corresponds to the rate at balance sheet date due to application of IAS 29 for KWS ARGENTINA S.A.
The difference resulting from the application of annual
The KWS Group’s contracts with customers do not usually
average rates on a monthly basis to the net profit for the
have any significant separable performance obligations
period in the income statement at the rate on balance
apart from the delivery of seed. Consequently, splitting
sheet date is taken directly to equity. According to IAS 21,
of the transaction price is not required for most of the
exchange differences resulting from loans to foreign
KWS Group’s contracts with customers. The total purchase
subsidiaries are recognized in the Other comprehensive
price must be recognized at a point in time.
income and are not reclassified to profit or loss until
disposal of the net investment. The accumulated amount
If the contracts specify further performance obligations,
is recognized in the income statement only when the net
such as granting of discount coupons, credit memos for
investment is disposed of.
returned goods and bonus points, in addition to seed
delivery, they must be measured separately. The KWS
Argentina was still classified as a hyperinflationary economy
Group uses empirical country-specific and seasonal figures
this fiscal year, as a result of which IAS 29 “Financial
and information on already announced returns to estimate
Reporting in Hyperinflationary Economies” was applied
the anticipated returns.
to KWS ARGENTINA S.A. Gains and losses from current
inflation of non-monetary assets and liabilities and of equity
The level of the promised consideration is not adjusted by
are recognized in the income statement.
the effects of a financing component because the period for
The IPC was 321.97 points on July 1, 2020, and rose
by 50.2% in the current fiscal year to 483.60 points on
The incremental costs of obtaining a contract are
June 30, 2021.
recognized as a current expense in the period.
payment is usually less than twelve months.
3.5 Classification of the statement of comprehensive
Revenue from service transactions is recognized over the
income
period of time in which the service is provided and measured
The KWS Group has prepared the income statement using
on an output-oriented basis using the percentage of
the cost-of-sales method. The costs for the functions
completion method. Other income, such as interest, royalties
include all directly attributable costs, including other taxes.
and dividends, is recognized in the period in which it accrues
as soon as there is a contractual or legal entitlement to it.
3.6 Recognition of income and expenses
Revenue from contracts with customers is primarily
Performance-based public grants are carried under the
generated from the sale of seed. It is recognized when
other operating income as part of profit/loss.
the KWS Group transfers control over products to the
customer. That is usually the time when risk passes to the
Operating expenses are recognized in the income statement
customer. The revenue is recognized at the amount of the
upon the service in question being used or as of the date on
consideration promised in the contract.
which they occur.
3. Accounting Policies | Notes for the KWS Group | Annual Financial Statements
95
KWS Group | Annual Report 2020/2021 3.7 Intangible assets
In addition to directly attributable costs, the cost of self-
Purchased intangible assets are carried at cost less
produced plant or equipment also includes a proportion of
straight-line amortization and impairment losses. It is
the overheads and depreciation/amortization.
necessary to examine whether the useful life of intangible
assets is finite or indefinite. Goodwill has an indefinite useful
Useful life of property, plant and equipment
life. Goodwill and intangible assets with an indefinite useful
life are not amortized, but tested for impairment at least
once a year.
Buildings
Operating equipment and
other facilities
Intangible assets acquired as part of business combinations
Technical equipment and machinery
are carried separately from goodwill if they are separable
Laboratory and research facilities
according to the definition in IAS 38 or result from a
contractual or legal right.
Other equipment, operating and
office equipment
Useful life
10 – 50 years
5 – 25 years
5 –15 years
5 –13 years
3 –15 years
The useful life of intangible assets is as follows:
Useful life of intangible assets
Breeding material, proprietary rights
to varieties and trademarks
Other rights
Software
Distribution rights
Customer relationships
Low-value assets are fully expensed in the year of purchase;
they are reported as additions and disposals in the year
Useful life
of purchase in the statement of changes in fixed assets. If
there is evidence of a possible impairment, an impairment
10–30 years
test on the property, plant, and equipment or at a cash-
3–10 years
generating unit is carried out in accordance with IAS 36.
3–8 years
An impairment is recognized if the recoverable amount for
5–20 years
1–5 years
the asset/cash-generating unit has fallen below the residual
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,
3.8 Property, plant, and equipment
and equipment no longer applies, its value is increased to
Property, plant, and equipment is measured at cost less
up to the amount that would have resulted if the impairment
straight-line depreciation over its expected useful life and
loss had not occurred, taking depreciation into account. In
impairment losses. Depreciation of an asset commences
accordance with IAS 20, government grants for assets are
when the asset is at its location and is in the condition
deducted from the costs of the asset. Any deferred income
necessary for it to be capable of operating in the manner
is not recognized.
intended by management. Depreciation of an asset ends
when the asset has been fully expensed or is classified as
The residual values, useful economic lives and methods
held for sale in accordance with IFRS 5 or at the latest when
of depreciation for property, plant, and equipment are
it is derecognized.
reviewed at the end of each fiscal year and adjusted
prospectively if necessary.
If property, plant, and equipment is sold or scrapped, the
profit or loss from the difference between the proceeds
In accordance with IAS 23, borrowing costs are capitalized if
and residual carrying amount is recognized under the other
they can be classified as qualifying assets.
operating income or other operating expenses.
96 Annual Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2020/2021 | KWS Group
3.9 Leases
When financial assets are initially recognized, they are
A lease is an agreement whereby the lessor conveys the
assigned to one of the following three categories for the
right to use an asset for an agreed period of time to the
purpose of subsequent measurement: at amortized cost,
lessee in exchange for a payment or a series of payments.
at fair value through other comprehensive income, or at fair
value through profit or loss.
If the KWS Group is the lessee, leases are recognized
as a right-of-use asset and lease liability in the balance
Equity instruments are generally measured at fair value
sheet in accordance with the regulations of IFRS 16. In
through profit or loss, unless an option to classify them
subsequent periods, the right-of-use asset is depreciated
irrevocably as being measured at fair value through other
over the lease’s term. This depreciation is recognized in the
comprehensive income is exercised when they are initially
respective function costs. Interest expense is accrued on
recognized. Such an option is available if the financial
the lease liability in the course of the lease and the liability is
investments in equity instruments are neither held for
reduced by the lease payments that have been made. The
trading nor constitute a contingent consideration as part of
effect from the accrued interest is recognized in the interest
a company acquisition. The debt instruments are classified
expense under net financial income/expenses.
taking into account the KWS Group’s business model for
The lease payments for short-term leases and leases of
flow characteristics for the financial instrument. A financial
low-value assets are recognized as operating expenses in
asset is measured at amortized cost if it is held with the
accordance with the available exemption.
objective of collecting contractual cash flows and the latter
controlling these financial assets and the contractual cash
The right-of-use assets are recognized to the amount of
financial assets are held as part of the business model
the corresponding lease liabilities, adjusted for any prepaid
to collect contractual cash flows and sell the financial
or accrued lease payments if applicable. The right-of-use
instruments, these are classified as being measured at fair
assets are reported in the balance sheet under a separate
value through other comprehensive income. All the other
comprise solely payments of interest and principal. If the
item.
financial instruments are classified in the category “at fair
value through profit or loss.” There is also the option of
If the KWS Group is the lessor and the main risks and
designating the debt instrument as being measured at fair
rewards from use of the leased object are transferred to the
value through profit or loss under certain conditions when it
contractual partner, the lease is deemed to be a financial
is carried for the first time.
lease. The net investment in the lease is recognized as a
receivable.
The financial assets consist of bank balances and cash
on hand, trade receivables, loans, fund shares, securities,
If the KWS Group acts as a lessor as part of an operating
derivatives and other financial assets. Regular-way
lease, the lease payments are recognized as operating
purchases and sales of financial assets are recognized or
income in the income statement on a straight-line basis
derecognized in general at the settlement date. Because
over the lease’s term.
fund shares have the characteristics of equity, they are
classified irrevocably as being measured at fair value
The KWS Group’s leases primarily relate to lease
through other comprehensive income. The changes to
agreements for office space, land and vehicles.
fair value in subsequent measurement are recognized as
unrealized gains and losses directly in other comprehensive
3.10 Financial instruments
income.
Classification and measurement
The other financial assets are measured at amortized cost.
Apart from equity instruments, financial instruments are
The carrying amount of receivables, money market accounts
financial assets and financial liabilities.
and cash are assumed as the fair value.
3. Accounting Policies | Notes for the KWS Group | Annual Financial Statements
97
KWS Group | Annual Report 2020/2021
Impairment losses
The loss rate is the percentage loss in the event of default
The credit risk is the risk that a contractual partner does
and corresponds to the amount of the unpaid receivables
not fulfill its payment obligations as part of a financial
less an expected recovery rate. The KWS Group applies a
instrument. The risks of default are monitored and controlled
uniform recovery rate determined regardless of customer
constantly and reflected by means of impairment losses.
group, due date and country over a long period of time and
The KWS Group ascertains the need to recognize an
over a broad total number of company insolvencies.
impairment loss for all financial assets not classified in
the category “at fair value through profit or loss.” That
Changes to the level of the risk provision must be carried in
is calculated on the basis of the expected losses. The
the income statement as a reversal of an impairment loss or
expected losses are in general the present value resulting
as an impairment loss.
from the difference between the cash flows defined in the
contract and the cash flows the KWS Group expects to
Cash and cash equivalents are exposed only to an
receive.
insignificant risk of fluctuations in their value. The seasonal
nature of the KWS Group’s liquidity situation over the fiscal
In general, a two-stage model must be applied in
year only permits short-term cash deposits in the period
calculating the expected losses. If the credit risk for
from May to August. The bank balances and short-term
financial instruments has not increased significantly, the
cash deposits are mainly with banks that have high and
risk provision is recognized only on the basis of losses
stable creditworthiness. Given the external credit rating for
resulting from default events within the next twelve months.
these banks, the KWS Group’s cash and cash equivalents
In the case of financial instruments whose credit risk has
are regarded as low-risk. Moreover, bank balances
increased significantly since first-time recognition, the entire
are spread over multiple banks in order to avoid any
remaining lifetime is used to calculate the expected losses.
concentration of them.
The KWS Group uses a simplified approach under IFRS 9
Financial assets are mainly derecognized once the
to determine the expected losses because the financial
contractual rights to obtain cash flows from financial assets
assets mainly consist of short-term trade receivables.
have expired or the financial assets with all their risks
Measurement and first-time recognition of the receivables
and rewards have been transferred to a third party. When
and also their subsequent measurement therefore take into
the contractual rights are transferred, the KWS Group
account expectations of default on the item in question over
assesses whether and to what extent risks and rewards
its entire lifetime.
associated with ownership of them remain with the Group.
If the risks and rewards are not transferred in full, the KWS
The KWS Group determines the expected counterparty
Group continues to recognize the asset to the extent of its
default on the basis of the probability of default and the loss
continuing involvement. In that case, a related liability is also
rate in the event of default.
recognized.
The probability of default is generally determined on the
The financial liabilities mainly comprise trade payables,
basis of customer-specific ratings. The probability of default
loans from banks, derivatives and other financial liabilities.
relates to a year, which is usually the maximum lifetime of
When financial liabilities are initially recognized, they are
receivables at the KWS Group. Since specific ratings are
classified as being measured at fair value through profit
not available for all customers, an average rating based
or loss or at amortized cost. KWS Group adopts first
on all classified customers is calculated for each country,
time measurement at fair value. The fair value of financial
regardless of the receivables per customer. It is then applied
liabilities with a long-term fixed interest rate is determined
to the total amount for all the receivables in the country in
as present values of the payments related to the liabilities,
question. If that information is not available for a country,
using a yield curve applicable on the balance sheet date.
the average rating of a country with a comparable risk is
applied.
98 Annual Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2020/2021 | KWS Group All financial liabilities at the KWS Group, with the exception
3.13 Deferred taxes
of derivative financial instruments, are measured at
Deferred taxes are calculated in accordance with IAS 12.
amortized cost using the effective interest method. The
Deferred taxes are calculated on differences between the
liabilities are derecognized at the time they are settled or
carrying amounts of assets and liabilities between the IFRS
when the reason why they were formed no longer exists.
and their tax base, including differences from consolidation
Financial instruments in level 1 are measured using quoted
and interest carryforwards. Since it is not permissible
prices in active markets for identical assets or liabilities. In
to recognize deferred tax liabilities arising from initial
level 2, they are measured by directly observable market
recognition of goodwill, the KWS Group does not calculate
measures, and on tax loss carryforwards, tax credits
inputs or derived indirectly on the basis of prices for similar
any deferred taxes on them.
instruments. Finally, input factors not based on observable
market data are used to calculate the value of level 3
Deferred taxes are measured on the basis of the applicable
financial instruments.
3.11 Derivatives
local income tax rates anticipated at the time the asset is
realized or the liability is settled. Deferred tax assets and
liabilities are measured based on the tax rates/laws that
The KWS Group (with the exception of the equity-accounted
apply or have been enacted or substantively enacted by the
joint venture AGRELIANT GENETICS LLC.) has not
balance sheet date. No discounting is carried out. Deferred
designated any existing derivatives as a hedging instrument.
taxes and actual taxes are generally recognized as an
expense, unless they relate to transactions or events that
Derivative instruments are measured at fair value; they
are recognized outside of profit or loss.
can be assets or liabilities. Common derivative financial
instruments are essentially used to hedge interest rate
Deferred tax assets are netted off against deferred tax
and foreign currency risks. The fair value of the financial
liabilities if there is a legally enforceable right to set off
instruments is measured on the basis of the market
actual tax refund claims against actual tax liabilities and if
information available on the balance sheet date and using
the deferred taxes relate to income taxes levied by the same
recognized mathematical models, such as present value
taxing authority.
or Black-Scholes, to calculate option values, taking their
volatility, remaining maturity and capital market interest
Deferred tax assets are recognized if it is considered
rates into account. The instruments must also be classified
probable that there will be sufficient future taxable profit
in a level of the fair value hierarchy.
against which the deductible temporary differences, tax loss
The changes in their market value are recognized in the
be offset. Deferred tax liabilities must be recognized for all
income statement. Derivatives are derecognized on their
taxable temporary differences. All deferred taxes must be
day of settlement.
assessed individually at each balance sheet date.
carryforwards, tax credits and interest carryforwards can
3.12 Inventories and biological assets
Deferred tax liabilities on taxable temporary differences
Inventories are measured at the lower of cost or net realizable
associated with investments in subsidiaries, branches and
value less an allowance for obsolescent or slow-moving
associated companies, and interests in joint arrangements,
items. In addition to directly attributable costs, the cost of
are not recognized if the entity is able to control the timing of
sales also includes indirect labor and materials including
the reversal of the temporary differences and it is probable
depreciation under IAS 2. Biological assets mainly result
that the reversal will not occur in the foreseeable future.
from the KWS Group’s farming activities at its locations in
Germany, France and Poland. Under IAS 41, biological assets
are measured at fair value less the estimated costs to sell.
If their fair value cannot be reliably determined, they are
measured at cost. Immature biological assets are carried as
inventories as of the time they are harvested.
3. Accounting Policies | Notes for the KWS Group | Annual Financial Statements
99
KWS Group | Annual Report 2020/2021 3.14 Income tax liabilities
3.15 Provisions for pensions and other employee
The income tax liabilities comprise obligations from actual
benefits
income taxes. The actual income taxes are calculated
The provisions for pensions and other employee benefits
on the basis of the respective national taxable profit
are calculated using actuarial principles in accordance
and regulations for the year. In addition, the actual taxes
with the projected unit credit method. Actuarial gains
recognized in the fiscal year also include adjustments for
and losses must be recognized directly in equity in Other
any tax payments or refunds in respect of years that have
comprehensive income. The service costs (including
not yet been definitively assessed, but excluding interest
past service costs) are recognized in operating income
payments, interest refunds and penalties on payments of
in accordance with the employees’ assignment to the
tax arrears.
functions. If there are plan assets and the relevant
requirements for netting them off are met, they are netted
If there is uncertainty over the income tax treatment, the
off against the associated obligations.
KWS Group measures actual or deferred tax claims or
liabilities in accordance with the regulations of IAS 12 and
The provisions for semi-retirement include obligations from
IFRIC 23. The KWS Group decides on a case-by-case basis
concluded semi-retirement agreements. Payment arrears
whether the uncertain tax treatment should be considered
and top-up amounts for semi-retirement pay and for the
independently or collectively together with one or more
contributions to the statutory pension insurance program
other uncertain tax treatments, depending on which
are recognized in measuring them.
approach provides better predictions of the resolution of the
uncertainty.
3.16 Other provisions
Provisions are recognized for present legal and constructive
If it is considered improbable that the tax authority will
obligations arising from past events that will likely give rise
accept an uncertain tax treatment, the KWS Group
to a future outflow of resources, provided that a reliable
recognizes the effects of the uncertainty at the amount
estimate can be made of the amount of the obligations.
of the anticipated tax payment (the expected value or
most likely amount of the tax treatment). Tax assets from
Provisions are measured at their expected amount or most
uncertain tax positions are recognized if it is probable
likely amount, depending on whether they comprise a large
that they can be realized. No tax liability is recognized
number of items or constitute a single obligation. Provisions
for these uncertain tax positions only if there is a tax loss
are reviewed regularly and adjusted to reflect new findings
carryforward or an unused tax credit; instead, the deferred
or changes in circumstances. If it is no longer likely that
asset is adjusted for the unused tax loss carryforwards and
economic outflow of a provision will occur, or the conditions
tax credits.
for why it was recognized no longer apply, the provision is
reversed by the corresponding amount and the resulting
In assessing whether and how an uncertain tax treatment
income recognized in the operating expense item(s) in which
affects determination of the taxable profits/taxable losses,
the original charge was recognized If the reversal amount is
tax bases, unused loss carryforwards, unused tax credits
material and so the effect not related to the period must be
and tax rates, the KWS Group assumes that a tax authority
classified as material, the reversal is carried as income from
will examine the amounts it is authorized to examine and
the reversal of provisions under other operating income not
has full knowledge of all related information as part of such
related to the period.
examinations.
The KWS Group operates in a large number of countries and
future cost increases and using a market interest rate that
is therefore subject to various tax jurisdictions. Determining
adequately reflects the risk, provided the interest effect is
the tax liabilities requires a number of assessments by
material.
Long-term provisions are discounted taking into account
management. Management has conducted an extensive
assessment of tax-related uncertainties; however, it is not
possible to rule out a deviation from the results of that and
the actual outcome of the uncertainties.
Any deviations may impact the amount of tax liabilities or
deferred taxes in the year the decision is made.
100 Annual Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2020/2021 | KWS Group 3.17 Contingent liabilities
Estimates are based on historical experience and other
The contingent liabilities result from debt obligations where
assumptions that are considered reasonable under given
outflow of the resource is not probable or the level of the
circumstances. They are continually reviewed but may vary
obligation cannot be estimated with sufficient reliability
from the actual values.
or from obligations for loan amounts drawn down by third
parties as of the balance sheet date.
3.19 Impact of the coronavirus pandemic
The coronavirus pandemic impacted the global economy
3.18 Significant accounting judgments, estimates and
in 2020/2021. In view of its influence on the KWS Group’s
assumptions
activities, the potential impacts on assets, financial position
In preparing the consolidated financial statements,
and earnings are continuously assessed. A more detailed
management has to make certain assumptions and
explanation of the effects can be found in the Group
estimates that may substantially impact the presentation of
Management Report.
the Group’s financial position and/or results of operations.
Essential estimates and assumptions that may affect
The general macroeconomic conditions were taken into
reporting in the various item categories of the financial
consideration in the measurement policies applied at
statements are described in the following:
June 30, 2021.
Calculation of the expected returns from customers at the
Goodwill and intangible assets with an indefinite useful life
balance sheet date (section 3.6 of the Notes)
underwent an annual impairment test at June 30, 2021, while
Determination of the useful life of the depreciable asset
the changes in the market situation due to the coronavirus
(sections 3.7 and 3.8 of the Notes)
pandemic were reflected in the adopted budget and
Determination of the fair value of intangible assets,
medium-term planning. All in all, there were no impairments
tangible assets and liabilities acquired as part of a
for the cash-generating units and intangible assets with an
business combination and determination of the service
indefinite useful life.
lives of the purchased intangible assets and tangible
assets (section 4 of the Notes)
The effect on other assets, such as trade receivables and
Assessment by management of whether deferred tax
inventories, was continually examined with regard to the
assets can be realized, taking into account the time
impact of coronavirus on the economic environment. The
at which deferred tax liabilities are reversed and the
KWS Group’s business model is seasonal in nature, which is
anticipated future taxable income in the period under
why it generates most of its net sales by the end of the third
review (section 6.5 of the Notes)
quarter and collects a large proportion of the receivables
Assessment of uncertain tax positions in accordance with
owed to it in the fourth quarter. As regards customers’
IFRIC 23 (section 6.5 of the Notes)
solvency, no circumstances justifying impairment of the
Definition of measurement assumptions and future
receivables above and beyond the existing approach were
results in connection with impairment tests, above all for
identified. Potential industry and country specific risks
capitalized goodwill and brands with an indefinite useful
were, and will continue to be, considered in assessing the
life (section 7.1 of the Notes)
potential impact of the coronavirus pandemic on trade
Determination of the need to recognize impairment losses
receivables.
on inventories (section 7.6 of the Notes)
Definition of the parameters required for measuring
pension provisions (section 7.12 of the Notes)
Measurement of other provisions (section 7.12 of
the Notes)
Determination whether there is reasonable certainty as
to whether extension or termination options as a part of a
lease will be exercised or not (section 7.15 of the Notes)
3. Accounting Policies | Notes for the KWS Group | Annual Financial Statements
101
KWS Group | Annual Report 2020/2021
4. Consolidated Group and Changes in
the Consolidated Group
The number of companies consolidated in the KWS Group
decreased from 88 at June 30, 2020, to 86 at June 30, 2021.
Number of companies including KWS SAAT SE & Co. KGaA
Germany
Abroad
Total
Germany
Abroad
Total
06/30/2021
06/30/2020
Fully consolidated
Equity method
Joint operation
Total
13
0
0
13
60
5
8
73
73
5
8
86
13
0
0
13
63
4
8
75
76
4
8
88
Fair Value of the identifiable assets and liabilities
as at the date of acquisition
Acquisition of KWS VEGETABLES ITALIA S.R.L.
(formerly GENEPLANTA S.R.L.)
As part of expansion of its business unit for vegetables,
the KWS Group took over all of the shares in KWS
VEGETABLES ITALIA S.R.L., Noceto/Parma, Italy, on
in € thousand
Assets
Intangible assets
March 9, 2021. The company, which was established in
Property, plant and equipment
2011, focuses on breeding, producing and distributing
Financial assets
tomato seed. Its main sales regions include Italy and
Deferred tax assets
Mexico.
The transferred consideration was €8,086 thousand and is
composed of a cash component of €7,886 thousand and a
purchase price tranche of €200 thousand, which is due in
September 2022.
The net assets acquired in return at the time of initial
consolidation are composed as follows:
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
03/09/2021
5,095
4,144
40
683
180
11
37
1,959
289
80
66
295
203
1,026
3,136
4,950
The acquired intangible assets identified as part of the
purchase price allocation relate to customer relationships
(€3,600 thousand) and technologies (€529 thousand). The
amortization periods for the intangible assets are between
four and ten years.
102 Annual Financial Statements | Notes for the KWS Group | 4. Consolidated Group and Changes in the Consolidated Group
Annual Report 2020/2021 | KWS Group The goodwill from acquisition of the company totals
The subsidiary KWS VEGETABLES MEXICO S.A. DE C.V.
€4,950 thousand and mainly reflects access to markets
(Mexico) was founded on September 2, 2020, for the
and synergy potentials that will significantly speed up
purpose of establishing future vegetable seed breeding.
development of KWS’ own global tomato breeding
In addition, the subsidiary BETASEED RUS LLC (Russia)
programs. The goodwill is not tax-deductible.
was established on November 23, 2020, for the purpose
The deferred tax liabilities from acquisition of the company
TECHNOLOGY CO., LTD (China) was established on
relate exclusively to intangible assets and inventories and
November 24, 2020. Its objective is to strengthen future
have been taken into account at a tax rate of 24%.
expansion of breeding business in China.
of distributing sugarbeet seed. KWS SEED SCIENCE &
KWS VEGETABLES ITALIA S.R.L. generates net sales and
The KWS Group’s stake in the company IMPETUS
income solely for the Vegetables Segment. The consolidated
AGRICULTURE, INC. was diluted to less than 50% as a
financial statements of the KWS Group contain net sales of
result of a capital increase on December 29, 2020. The
€305 thousand and income after taxes of €–154 thousand
KWS Group’s stake at June 30, 2021, was 38.82%. As a
from KWS VEGETABLES ITALIA S.R.L. Assuming that the
result, the KWS Group lost the possibility of controlling the
company had been acquired effective July 1, 2020, net sales
company. After disposal of assets (€64 thousand), liabilities
at the Vegetables Segment would have increased by 1.4%
(€1 thousand) and minority interests (€116 thousand), re-
and there would have been an insignificant change to the
classification of currency gains (€123 thousand) recognized
consolidated net income for the year.
in the Other comprehensive income, and first-time at-
Other changes in the consolidated group
was a deconsolidation gain of €1,099 thousand. This was
KWS SERVICES EAST GMBH was merged with KWS
carried as other operating income. From now on, IMPETUS
AUSTRIA SAAT GMBH on February 10, 2021, retroactively
AGRICULTURE, INC. is included in the consolidated
effective July 1, 2020.
financial statements as an associated company using the
equity measurement at fair value (€923 thousand), there
On August 14, 2020, the KWS Group participated in
equity method.
establishing KWS FIDC and acquired 100% of the equity
The companies POP VRIEND RESEARCH B.V., BELAMI B.V.,
interests in the company. The initial capital contribution
POP VRIEND VEGETABLES SEEDS B.V., POP VRIEND
was €7,720 thousand. The company is included as a fully
PRODUCTION B.V. and POP VRIEND SEEDS USA B.V.
consolidated subsidiary in the consolidated financial
were merged with POP VRIEND SEEDS B.V. effective
statements. The company uses most of its funds to
December 31, 2020. CHURA B.V. was also merged with
purchase receivables.
POP VRIEND HOLDING B.V. (formerly BIRIKA B.V.), likewise
effective December 31, 2020.
4. Consolidated Group and Changes in the Consolidated Group | Notes for the KWS Group | Annual Financial Statements
103
KWS Group | Annual Report 2020/2021 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
Vegetables
Corporate
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 the
KWS Group. The only exception relates to consolidation
of the equity-accounted joint ventures and associated
companies that are assigned to the Corn Segment, namely
The core competency for the KWS Group’s entire product
AGRELIANT GENETICS LLC., AGRELIANT GENETICS INC.,
range, plant breeding, including the related biotechnology
FARMDESK B.V. and KENFENG – KWS SEEDS CO., LTD.
research, is essentially concentrated at the parent company
In accordance with internal controlling practices, they are
KWS SAAT SE & Co. KGaA in Einbeck. The breeding
included proportionately as part of segment reporting.
material for Sugarbeet and Corn, including the relevant
information and expertise about how to use it, is owned
The presentation of net sales, income, depreciation and
by KWS SAAT SE & Co. KGaA, and for Cereals it is owned
amortization, other noncash items, operating assets,
by KWS LOCHOW GMBH. Product-related R&D costs are
operating liabilities and capital expenditure on noncurrent
carried directly in the product segments Corn, Sugarbeet
assets by segment have been determined in accordance
and Cereals. The activities of the Vegetables Segment
with the internal operational controlling structure. The
are aggregated in KWS VEGETABLES B.V. in Wageningen
allocation of the above joint ventures and associated
(the Netherlands) and its subsidiaries. Centrally controlled
companies are consolidated proportionately (management
corporate functions are grouped in the Corporate Segment.
approach) on the same basis. In order to permit better
The distribution and production of oil and field seed are
comparability, they have been reconciled with the figures in
reported in the Cereals and Corn Segments, in keeping with
the consolidated financial statements.
the legal entities currently involved.
104 Annual Financial Statements | Notes for the KWS Group | 5. Segment Reporting for the KWS Group
Annual Report 2020/2021 | 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
2020/2021
2019/2020
2020/2021
2019/2020
2020/2021
2019/2020
774,167
524,370
776,093
491,898
191,581
191,348
58,268
18,702
83,523
18,207
120
63
342
30
423
52
185
0
12,712
13,593
774,047
524,307
775,669
491,846
191,240
191,163
58,238
5,990
83,523
4,615
1,567,088
1,561,069
13,266
14,253
1,553,822
1,546,816
–243,590
–264,264
1,310,232
1,282,552
Segment sales contains 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
2020/2021
2019/2020
2020/2021
2019/2020
2020/2021
2019/2020
71,292
174,748
21,290
–18,106
–91,976
67,072
170,062
26,357
–7,543
–104,626
34,852
18,064
9,435
23,633
21,707
36,143
16,897
9,917
23,083
17,489
–10,957
–36,047
–1,742
–1,701
–2,220
1,254
–6,169
–1,135
–14,722
–11,133
157,247
151,323
107,692
103,528
–31,342
–53,230
–20,214
–13,957
–13,864
–15,377
29,600
47,922
137,032
137,366
93,828
88,151
–1,742
–5,308
5,181
–7,842
142,214
129,524
The income statements of the consolidated companies
income of each segment is reported as the segment result.
are assigned to the segments by means of profit center
The segment results are presented on a consolidated basis
allocation. Operating income, an important internal
and include all directly attributable income and expenses.
parameter and an indicator of the earnings strength in the
Items that are not directly attributable are allocated to
KWS Group, is used as the segment result. The operating
the segments on the basis of an appropriate formula.
Depreciation and amortization charges allocated to
the segments relate exclusively to intangible assets and
property, plant, and equipment.
5. Segment Reporting for the KWS Group | Notes for the KWS Group | Annual Financial Statements 105
KWS Group | Annual Report 2020/2021
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
2020/2021
2019/2020
2020/2021
2019/2020
787,432
389,606
138,734
437,148
213,708
759,323
371,019
137,992
454,552
207,211
1,966,627
1,930,096
–216,076
–232,576
1,750,551
1,697,521
626,192
537,946
151,699
149,741
82,461
41,036
7,969
112,724
395,888
–39,696
356,193
966,832
71,612
33,498
8,223
117,770
380,845
–58,066
322,779
918,190
KWS Group acc. to consolidated financial statements
2,376,743
2,235,467
1,323,025
1,240,969
The operating assets of the segments are composed
The operating liabilities attributable to the segments include
of intangible assets, property, plant, and equipment,
the borrowings reported on the balance sheet in accordance
inventories, biological assets and trade receivables that can
with the management approach, less financial liabilities,
be charged directly to the segments or indirectly allocated
provisions for taxes and the portion of other liabilities that
to them by 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
2020/2021
2019/2020
28,601
26,464
7,264
1,273
22,971
86,573
–5,235
81,337
30,901
32,308
10,088
1,568
38,583
113,449
–5,415
108,034
The capital expenditure in the Corn Segment mainly
in the Cereals Segment mainly relates to expansion and
relates to expansion and modernization of production and
modernization of production plants, in particular in Germany
processing plants, such as in Romania, Brazil and the U.S.
and France, and modernization of breeding stations. The
The Sugarbeet Segment’s capital expenditure relates mainly
capital expenditure in the Corporate Segment relates,
to continued expansion of sugarbeet seed production at
among other things, to expansion of a new laboratory
the Einbeck location. Further investments were made in a
building in Einbeck, but was well below the figure for the
new production plant in Russia. The capital expenditure
previous year.
106 Annual Financial Statements | Notes for the KWS Group | 5. Segment Reporting for the KWS Group
Annual Report 2020/2021 | KWS Group Disclosures by region
assets comprise goodwill, other intangible assets, property,
The disclosures on the regional composition of net sales
plant, and equipment, and financial assets.
and noncurrent operating assets have been made in
accordance with the accounting policies to be applied to
The external net sales by sales region are broken down on
the consolidated financial statements of the KWS Group
the basis of the country where the customer is based. No
and thus without proportionate consolidation of the equity-
individual customer accounted for more than 10% of total
accounted financial investments. Noncurrent operating
net sales in the current and the previous fiscal years.
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
thereof in the Netherlands
North and South America
thereof in Brazil
thereof in the U.S.
Rest of world
KWS Group
2020/2021
2019/2020
242,468
620,869
122,678
358,189
109,152
194,623
88,706
239,835
573,205
112,449
378,527
110,187
222,410
90,985
1,310,232
1,282,552
2020/2021
2019/2020
318,919
627,590
60,932
453,390
257,007
35,214
197,867
5,937
313,829
621,712
63,820
465,558
252,110
29,921
199,521
6,719
1,209,454
1,194,370
6. Notes to the Income Statement
6.1 Net sales and function costs
Sugarbeet Segments. The total cost of goods sold was
Net sales increased by 2.2% to €1,310,232 (1,282,552)
€400,215 (357,408) thousand.
thousand. Net sales are mainly generated from seed
deliveries (€1,200,594 thousand; previous year: €1,174,301
The impairment losses on inventories and the decreases in
thousand) and royalties (€81,025 thousand; previous year:
the impairment loss, which are carried as a reduction in the
€81,276 thousand). A breakdown by segments and regions
cost of materials in the period, are as follows:
is provided in the segment reporting in section 5 of the
Notes.
The cost of sales increased by 3.8% to €570,690 (549,899)
thousand, or 43.6% (42.9%) of sales. The key factors in
this development were higher cost of sales in the Corn and
July 1 to June 30
in € thousand
Impairment losses
Decreases in
impairment loss
2020/2021
2019/2020
6,883
4,597
8,666
5,441
6. Notes to the Income Statement | Notes for the KWS Group | Annual Financial Statements 107
KWS Group | Annual Report 2020/2021 The impairment losses relate mainly to unsold seed. They
amounted to €252,226 (236,102) thousand. That was 19.3%
are based on, among other things, empirical values and
(18.4%) of sales. Development costs for new varieties are
expectations as to their substitution by new varieties.
not recognized as an asset because evidence of future
economic benefit can only be provided after the variety
Selling expenses decreased by €4,603 thousand to
has been officially certified.
€244,218 (248,821) thousand, or 18.6% (19.4%) of sales.
The fall is mainly attributable to exchange rate effects.
General and administrative expenses decreased by
Research & development is recognized as an expense
lower costs as a result of the pandemic; they represent
in the year it is incurred; in the year under review, this
9.7% of sales, after 10.1% the year before.
€2,309 thousand to €127,142 (129,451) thousand due to
6.2 Other operating income
July 1 to June 30
in € thousand
Foreign exchange gains
Performance-based public grants
Income from the reversal of provisions
Income from reversal of valuation allowance for trade receivables and
recovery of written off receivables
Income from sales of fixed assets
Other income related to previous periods
Unrealized gain on derivatives measured at fair value through profit or loss
Income from loss compensation received
Gain on net monetary position (hyperinflation)
Miscellaneous other operating income
Total
2020/2021
2019/2020
33,197
9,910
5,607
3,505
2,940
1,405
239
14
0
14,629
71,446
42,355
8,200
1,560
6,591
846
2,742
1,289
400
651
16,615
81,250
The other operating income mainly comprises foreign
reversal of provisions includes the partial reversal of a
exchange gains, government grants, and income from the
provision totaling €4,000 thousand to a current level of
reversal of allowances on receivables. The performance-
€1,000 thousand due to a reassessment of possible license
based government grants mainly relate to breeding
price payments in connection with the development of
allowances and farm payments. The income from the
hybrid potatoes.
6.3 Other operating expenses
July 1 to June 30
in € thousand
Foreign exchange losses
Valuation allowance on receivables
Loss on net monetary position (hyperinflation)
Unrealized 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.
108 Annual Financial Statements | Notes for the KWS Group | 6. Notes to the Income Statement
2020/2021
2019/2020
35,799
6,754
541
148
2
7,127
50,369
42,310
11,870
0
2,810
38
5,135
62,163
Annual Report 2020/2021 | KWS Group
6.4 Net financial income/expenses
July 1 to June 30
in € thousand
Interest expenses
Interest income
Interest effects from pension provisions
Interest expenses for lease liabilities
Interest expense for other long-term provisions
Income from other financial assets
Interest result
Result from equity-accounted financial assets
Net income from equity investments
Net financial income/expenses
2020/2021
2019/2020
16,151
6,132
1,273
876
38
14
21,514
5,462
1,294
1,184
105
20
–12,193
–18,615
17,374
17,374
5,181
10,773
10,773
–7,842
Net financial income/expenses improved, mainly due
Net financial income/expenses from the equity-accounted
to better financing terms in Germany and exchange
joint ventures improved sharply year on year due to higher
rate effects in Brazil. The interest effects from pension
earnings by AGRELIANT GENETICS LLC.
provisions comprise interest expenses (compounding) and
the planned income.
6.5 Taxes
Income tax expenses
in € thousand
Actual income taxes
thereof from previous years
Deferred taxes
Income taxes
2020/2021
2019/2020
36,174
6,624
–4,550
31,624
45,101
6,102
–10,797
34,304
The KWS Group pays tax in Germany at a rate of 29.8%
The profits generated by group companies outside Germany
(29.8%). Corporate income tax of 15.0% (15.0%) and
are taxed at the rates applicable in the country in which they
solidarity tax of 5.5% (5.5%) are applied uniformly to
are based. The tax rates in foreign countries vary between
distributed and retained profits. In addition, trade tax is
5.0% (6.0%) and 34.4% (34.4%).
payable on profits 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%).
6. Notes to the Income Statement | Notes for the KWS Group | Annual Financial Statements
109
KWS Group | Annual Report 2020/2021
The deferred taxes that are recognized relate to the
following balance sheet items and tax loss carryforwards:
Deferred taxes
in € thousand
At 06/30/2020
Recog-
nized in
profit or
loss
Other
Compre-
hensive
Income
Currency
Recog-
nized
in other
compre-
hensive
income
–352
85
–268
–292
69
–222
157
–1,570
–43
–37
372
374
10
119
–1,189
–1,196
–33
–2,091
499
–1,592
–1,808
–1,561
Deferred
tax assets
Deferred
tax
liabilities
438
826
0
2,242
11,602
19,143
47,259
23,782
22,030
78,452
19,254
4
3,211
4,978
20,768
6,939
0
2,265
Net value
–78,014
–18,428
–4
–969
6,624
–1,625
40,320
23,782
19,765
103,540
135,871
10,656
0
–43,606
–43,606
–32,331
10,656
0
11,722
–106
4
1,247
959
372
–1,270
–2,736
9,655
–5,105
0
70,590
92,264
–21,675
4,550
–2,091
499
–1,592
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)
in € thousand
At 06/30/2021
Deferred tax assets
Deferred tax liabilities
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)
298
276
0
5,062
11,757
10,598
43,306
21,316
20,738
92,034
5,552
–49,943
47,642
66,858
18,809
0
5,005
4,174
11,731
5,983
0
3,741
116,302
0
–49,943
66,359
Net value
–66,559
–18,534
0
56
7,583
–1,133
37,323
21,316
16,996
–24,268
5,552
0
–18,717
110 Annual Financial Statements | Notes for the KWS Group | 6. Notes to the Income Statement
Annual Report 2020/2021 | KWS Group
Due to the use of tax loss carryforwards and tax credits on
companies, and interests in joint arrangements, where the
which no deferred taxes were recognized in the past, the
KWS Group is able to control the timing of the reversal of
actual tax expense fell by €113 (332) thousand.
the differences and it is probable that the reversal will not
occur in the foreseeable future.
There is a deferred tax expense of €2,304 (3,413) thousand
from the allowance for deferred taxes on tax loss
In the year under review, there were surpluses of
carryforwards and temporary differences in the year under
deferred tax assets from temporary differences and loss
review. The first-time recognition of deferred taxes and
carryforwards totaling €17,052 (46,198) thousand at group
use of deferred taxes on loss carryforwards that had not
companies that made losses in the past period or the
previously been recognized result in deferred tax income of
previous period. These were considered recoverable, since
€5 (602) thousand.
it is assumed that the companies in question will post
taxable profits in the future. The fact is taken into account
No deferred taxes were formed for tax loss carryforwards
here that the KWS Group may realize income with a delay
totaling €14,337 (5,561) thousand that have not yet been
due to the long-term nature of research & development
utilized. Of these, €72 (923) thousand must be utilized within
spending.
a period of five years. Loss carryforwards totaling €14,265
(4,638) thousand can be utilized without any time limit.
The reconciliation of the expected income tax expense to
No deferred taxes were recognized on temporary
the consolidated income before taxes and the nominal tax
differences totaling €25,290 (41,806) thousand associated
rate for the Group of 29.8% (29.8%), taking into account the
with investments in subsidiaries, branches and associated
following effects:
the reported income tax expense is derived on the basis of
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%)
2020/2021
2019/2020
142,214
42,422
129,524
38,637
–8,313
–8,216
6,451
–9,430
–353
2,186
–505
8,093
–710
31,624
22.2%
–6,613
–73
4,203
–8,391
–435
–162
–568
7,757
–51
34,304
26.5%
6. Notes to the Income Statement | Notes for the KWS Group | Annual Financial Statements
111
KWS Group | Annual Report 2020/2021 Income taxes relating to other periods include in particular
Employees by region
effects from field tax audits that have been completed and
future field tax audits at the KWS Group.
Effects from changes in tax rates relate in particular to
the Dutch companies. The future realization of recognized
deferred taxes for the Netherlands takes into account
the influence of research & development activities on
the effective tax. Excluding the changes to tax rates, the
effective tax rate in the year under review would have been
28.0%.
Employees
Germany
Europe (excluding Germany)
North and South America
Rest of world
Total
Trainees and interns
Germany
2020/2021
2019/2020
1,978
1,475
913
183
4,549
1,857
1,417
879
164
4,317
109
97
There is no definitive tax assessment in respect of several
With our joint ventures and associated companies
years at the Group. The KWS Group believes it has
consolidated proportionately, the number of employees was
made adequate provisions for these years where the tax
5,004 (4,780).
assessment is not concluded. Future legislation or changes
in the opinions of the fiscal authorities mean that it is
6.7 Share-based payment
not possible to rule out that there may be tax refunds or
payments of tax arrears for past years.
Employee Stock Purchase Plan
Other taxes, primarily real estate tax, are allocated to the
Purchase Plan. All employees who have been with the
The KWS Group has established an Employee Stock
relevant functions.
company for at least one year without interruption and have
an employment relationship that has not been terminated
6.6 Personnel costs/employees
at a KWS Group company that participates in the program
July 1 to June 30
in € thousand
Wages and salaries
Social security contributions,
expenses for pension plans
and benefits
Total
are eligible to take part. That also includes employees
who are on maternity leave or parental leave or who are in
2020/2021
2019/2020
semi-retirement.
259,697
246,215
66,600
63,858
326,297
310,073
Each employee can acquire up to 2,000 shares. A bonus of
20% is deducted from the purchase price, which depends
on the price applicable on the key date. The shares are
subject to a lock-up period of four years beginning when
they are posted to the employee’s securities account. The
right to a dividend, if declared by KWS SAAT SE & Co.
Personnel costs went up by 5.2%. The number of
KGaA, exists during the lock-up period. Holders can also
employees increased from 4,317 to 4,549, or by 5.4%. Of
exercise their right to participate in the Annual Shareholders’
the 4,549 (4,317) employees, 4,307 (4,052) are permanent
Meeting during the lock-up period. They can dispose freely
employees and 242 (265) are temporary employees. The
of the shares after the lock-up period.
number of trainees and interns is recorded separately and
not included in the headcount (the previous year’s figures
In the year under review, 76,120 (52,315) shares were
have been adjusted accordingly). There were 109 (97)
repurchased for the Employee Stock Purchase Plan at
trainees and interns at KWS at June 30, 2021.
a total price of €5,558 (2,957) thousand and transferred
directly to the employees. The total cost for issuing shares
at a reduced price was €1,521 thousand in the past fiscal
year (previous year: €555 thousand).
112 Annual Financial Statements | Notes for the KWS Group | 6. Notes to the Income Statement
Annual Report 2020/2021 | KWS Group Long-term incentive (LTI)
6.8 Net income for the year
The stock-based compensation plans awarded at the
The KWS Group’s net income for the year was
KWS Group are recognized in accordance with IFRS 2
€110,590 (95,220) thousand on operating income of
“Share-based Payment.” The incentive program, which was
€137,032 (137,366) thousand and net financial income/
launched in fiscal 2009/2010, involves stock-based payment
expenses of €5,181 (–7,842) thousand and after taxes totaling
transactions with cash compensation, which are measured
€31,624 (34,305) thousand. The return on sales (net income
at fair value at every balance sheet date. Members of
for the year relative to net sales) was 8.4% (7.4%), well up
the Executive Board are obligated to acquire shares in
over the previous year. Net income for the year after minority
KWS SAAT SE & Co. KGaA every year in a freely selectable
interest was €109,450 (95,331) thousand. Diluted/undiluted
amount ranging between 35% and 50% of the gross
earnings per share are calculated by dividing the net income
performance-related bonus. Along with that, members
for the year (€110,590 thousand) by 33,000,000 shares and
of the first management level below the Executive Board
was €3.35 (2.89).
likewise take part in an LTI program. As part of this program,
they are obligated to invest in shares in KWS SAAT SE &
Co. KGaA every year in a freely selectable amount ranging
between 10% and 40% of the gross performance-related
bonus. The shares acquired under the LTI program may
be sold at the earliest after a regular holding period of five
years beginning at the time they are acquired (end of the
quarter in which the shares were acquired). In addition to
the shares being unlocked, the entitled persons are paid a
long-term incentive (LTI) in the form of cash compensation
after the holding period for the tranche in question. Its
level is calculated on the basis of KWS SAAT SE & Co.
KGaA’s share performance and on the KWS Group’s
return on sales (ROS), measured as the ratio of operating
income to net sales, over the holding period. For persons
with contracts as of July 1, 2014, the cash compensation
for members of the Executive Board is a maximum of
one-and-half times (for the Chief Executive Officer two
times), and for members of the first management level
below the Executive Board a maximum of two times their
own investment (LTI cap). The costs of this compensation
are recognized in the income statement over the period
and, taking the cash compensation in January 2021 into
account, were €737 (1,163) thousand in the period under
review. The provision for it at June 30, 2021, was €2,920
(2,560) thousand. The LTI fair values are calculated by an
external expert.
6. Notes to the Income Statement | Notes for the KWS Group | Annual Financial Statements
113
KWS Group | Annual Report 2020/2021 7. Notes to the Balance Sheet
7.1 Intangible assets
Reconciliation of carrying amount of intangible assets
in € thousand
Gross book values: 07/01/2020
Currency translation
Change in consolidation scope
Additions
Disposals
Transfers
At 06/30/2021
Amortization and impairment: 07/01/2020
Currency translation
Additions
Impairment
Disposals
Transfers
Gross book values: 06/30/2021
Net book values: 06/30/2021
Net book values: 06/30/2020
in € thousand
Gross book values: 07/01/2019
Currency translation
Change in consolidation scope
Additions
Disposals
Transfers
At 06/30/2020
Amortization and impairment: 07/01/2019
Currency translation
Additions
Impairment
Disposals
Transfers
Gross book values: 06/30/2020
Net book values: 06/30/2020
Net book values: 06/30/2019
114 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Patents,
industrial
property
rights and
software
460,327
178
4,144
12,417
3,200
3,608
477,474
91,966
232
33,092
2,223
3,046
–694
123,773
353,701
368,361
Patents,
industrial
property
rights and
software
139,200
–4,594
320,277
14,080
8,683
47
Goodwill
117,289
403
4,950
0
0
0
122,642
–1
0
0
0
0
0
–1
122,643
117,290
Goodwill
26,190
–4,027
95,126
0
0
0
Intangible
Assets
577,616
581
9,094
12,417
3,200
3,608
600,116
91,965
232
33,092
2,223
3,046
–694
123,772
476,344
485,651
Intangible
Assets
165,390
–8,620
415,403
14,080
8,683
47
460,327
117,289
577,616
73,315
–4,306
31,626
0
8,671
2
91,966
368,361
65,885
0
–1
0
0
0
0
–1
117,290
26,190
73,315
–4,307
31,626
0
8,671
2
91,965
485,651
92,075
Annual Report 2020/2021 | KWS Group
Intangible assets include purchased varieties, rights
The impairment test uses the expected future cash flows
to varieties and distribution rights, brands, customer
on which the medium-term plans of the companies, which
relationships, software licenses for electronic data
are grouped in segments, are based; these plans, which
processing, and goodwill. The current additions of €12,417
cover a period of four years, have been approved by the
(14,080) thousand related to software licenses and patents,
Executive Board. They are based on historical patterns and
as well as implementation of a new ERP system. The
expectations about future market development.
impairments for intangible assets totaling €2,223 thousand
relate to software implementation projects for which no
For all of the KWS Group’s sales markets, the key
longer-term use is intended anymore. The impairment is
assumptions on which corporate planning is based include
included in the administrative expenses of the Corporate
assumptions about price trends for seed, in addition to
Segment. Amortization of intangible assets amounted to
the development of market shares and the regulatory
€33,092 (31,626) thousand.
framework. Average net sales growth in the mid-single digit
percentage range has been assumed for the KWS Group’s
The POP VRIEND brand is regarded as having an indefinite
detailed planning horizon. Company-internal projections
useful life, since the KWS Group intends to keep on using
take the assumptions of industry-specific market analyses,
it and the period of time in which the brand yields an
company-related growth perspectives and appropriate cost
economic benefit can therefore not be determined. The
efficiencies into account.
carrying amount is €20,752 thousand, as in the previous
year. The recoverable amount for the POP VRIEND brand
The discount rate at the KWS Group has been derived as
is calculated separately using the license price analogy
the weighted average cost of capital (WACC).
method, allowing for the POP VRIEND Group’s sales
planning, for which average annual net sales growth in the
mid-single digit percentage range has been assumed, and
applying a WACC before taxes of 5.24% (5.22%). A growth
rate of 1.5% (1.5%) has been assumed for extrapolation
beyond the detailed planning horizon. Sensitivity analyses
were also carried out, in which a 10% reduction in future net
Sugarbeet
sales, a 10% increase in the cost of capital, and a reduction
Cereals
in the long-term growth rate to 1% were assumed. The
Vegetables
sensitivity analyses did not reveal the need to recognize an
impairment loss.
WACC before taxes
Business Unit in %
2020/2021
2019/2020
Corn America
Corn Europe/Asia
8.63
7.08
7.02
6.85
7.29
6.10
6.29
6.28
6.30
7.72
In order to meet the requirements of IFRS 3 in combination
Corn America is mainly attributable to the increase in the
with IAS 36 and to determine any impairment of goodwill,
underlying country risk premium. A growth rate of 1.5%
cash-generating units have been defined in line with internal
(1.5%) has been assumed here beyond the detailed planning
budgeting and reporting processes. In the KWS Group,
horizon in order to allow for extrapolation in line with the
The change in the WACC before taxes of the Business Unit
these are the Business Units. To test for impairment, 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
2020/2021 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 2020/2021 was determined on the basis of the value
in use of the respective cash-generating unit excluding the
Business Unit Vegetables.
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
115
KWS Group | Annual Report 2020/2021 Goodwill
in € thousand
Vegetables
Corn America
Cereals
Others
Total
06/30/2021 06/30/2020
100,076
16,185
3,989
2,392
95,126
15,966
3,866
2,333
122,643
117,290
Sensitivity analyses were also carried out for all cash-
generating units to which goodwill is allocated. As part
of that, it was assumed that the future cash flows would
fall by 10%, the weighted average cost of capital would
increase by 10% and the long-term growth rate would fall
by 1 percentage point. The sensitivity analyses did not
reveal the need to recognize an impairment loss for any
cash-generating unit.
7.2 Property, plant, and equipment
Reconciliation of carrying amount of property, plant and equipment
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: 07/01/2020
389,360
299,341
130,179
36,889
Currency translation
Adjustment for hyperinflation IAS 29
Change in consolidation scope
Additions
Disposals
Transfers
At 06/30/2021
Depreciation and impairment: 07/01/2020
Currency translation
Adjustment for hyperinflation IAS 29
Additions
Impairment
Disposals
Transfers
Gross book values: 06/30/2021
Net book values: 06/30/2021
Net book values: 06/30/2020
–6,103
3,028
10
13,768
1,303
21,444
420,204
105,120
–999
637
12,801
0
1,011
9,438
125,987
294,218
284,240
–5,426
1,964
20
11,520
6,312
6,431
307,538
174,559
–2,790
730
21,481
0
5,616
145
188,509
119,029
124,782
–1,994
1,171
11
10,386
2,593
–5,400
131,760
81,912
–830
593
11,701
0
2,302
–2,986
88,089
43,671
48,267
–214
–260
0
33,246
131
–20,181
49,349
0
0
0
0
0
0
0
0
49,349
36,889
855,769
–13,738
5,904
40
68,920
10,340
2,295
908,851
361,591
–4,619
1,961
45,983
0
8,929
6,597
402,585
506,266
494,178
116 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2020/2021 | KWS Group
in € thousand
Gross book values: 07/01/2019
Currency translation
Adjustment for hyperinflation IAS 29
Change in consolidation scope
Additions
Disposals
Transfers
At 06/30/2020
Depreciation and impairment: 07/01/2019
Currency translation
Adjustment for hyperinflation IAS 29
Additions
Impairment
Disposals
Transfers
Gross book values: 06/30/2020
Net book values: 06/30/2020
Net book values: 06/30/2019
Land and
buildings
343,058
–5,550
3,174
8,442
19,893
1,289
21,633
389,360
102,746
–1,296
446
11,589
0
8,468
104
105,120
284,240
240,312
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
299,341
160,950
–3,429
541
20,216
0
4,060
341
174,559
124,782
92,991
124,332
–4,064
739
172
12,181
4,892
1,710
130,179
75,439
–1,790
382
12,714
0
4,387
–447
81,912
48,267
48,893
62,318
–3,120
–806
0
36,267
7,594
–50,176
36,889
0
0
0
0
0
0
0
0
36,889
62,318
783,649
–18,703
4,389
10,750
93,934
18,204
–47
855,769
339,135
–6,516
1,370
44,519
0
16,915
–2
361,591
494,178
444,514
The main focus of the KWS Group’s capital spending in the
7.3 Equity-accounted financial assets
year under review remained on increasing production and
research & development capacities. There was an expansion
Equity-accounted joint ventures
of the plants for sugarbeet seed production in Germany
The joint ventures AGRELIANT GENETICS LLC. and
and Russia, as well as investment in the completion of
AGRELIANT GENETICS INC., which the KWS Group
the research building in Einbeck and of the greenhouse in
operates together with its joint venture partner Vilmorin,
Lochow, as well as in breeding stations. and drying and
are recognized at equity. They are both classified together
production capacities for corn seed were increased further
as significant joint ventures.
in South America, in particular in Brazil.
The joint ventures AGRELIANT GENETICS LLC. and
AGRELIANT GENETICS INC. are closely affiliated operating
units. The main business activity of the two joint ventures
is the production and sale of corn and soybean seed in
North America.
The following disclosures relate to the two joint ventures,
which KWS runs with its joint venture partner Vilmorin and
an identical management team.
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
117
KWS Group | Annual Report 2020/2021
Disclosures on equity-accounted joint ventures
(with the partner Vilmorin)
Disclosures on significant associated companies
accounted for using the equity method
in € thousand
06/30/2021 06/30/2020
in € thousand
06/30/2021 06/30/2020
Stake in the joint ventures
50%
50%
Current assets
275,652
286,724
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
Net sales
Depreciation and amortization
Net income for the year
Comprehensive income (100%)
Comprehensive income (50%)
Group share of
comprehensive income
Dividend payment
32,584
213,537
194,684
34,605
241,357
247,475
105,527
123,398
2,646
291,859
145,929
8,802
154,731
466,908
26,207
24,070
21,062
10,531
10,531
5,837
3,971
276,634
138,317
8,802
147,119
510,621
28,707
12,664
16,147
8,073
8,073
5,936
Stake in the associated
company
Current assets
thereof cash and cash
equivalents
Noncurrent assets
Current liabilities
Noncurrent liabilities
Net assets (100%)
Group share of net assets (49%)
Carrying amount for the
stake in the associated
company
Net sales
Depreciation and amortization
Net income for the year
Comprehensive income (100%)
Comprehensive income (49%)
Group share of
comprehensive income
Dividend payment
49%
28,657
11,493
15,864
8,087
124
36,309
17,792
17,792
42,770
1,566
11,333
10,125
4,961
4,961
5,491
49%
22,000
11,410
16,471
8,951
260
29,259
14,337
14,337
40,524
1,629
9,081
9,637
4,722
4,722
4,980
In addition, in the year under review, IMPETUS
AGRICULTURE, INC. was included as an insignificant
associated company in the KWS Group’s consolidated
In addition, FARMDESK B.V. was included as an insignificant
financial statements using the equity method.
joint venture in the KWS Group’s consolidated financial
statements using the equity method.
7.4 Proportionately consolidated joint operations
Equity-accounted associated companies
the joint operations are included proportionately (at 50%)
In the year under review, the Chinese joint venture
in the consolidated financial statements. The main activity
KENFENG – KWS SEED CO., LTD. was classified as a
of the proportionately consolidated GENECTIVE S.A.,
significant associated company and is included in the
including its subsidiaries, is development of its own traits
KWS Group’s consolidated financial statements using
for genetically improving crops. The proportionately
The assets and liabilities and revenue and expenses from
the equity method.
consolidated joint operation AARDEVO B.V., including its
subsidiaries, specializes in developing potato seed.
118 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2020/2021 | KWS Group 7.5 Financial assets
7.7 Current receivables and other assets
This item mainly comprises the investments in the
capital investment fund MLS Capital Fund II (financing of
Current receivables and other assets
projects/access to biotechnology developments) totaling
€8,777 (5,450) thousand, which are measured 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 loans,
shares in cooperatives, and other securities.
in € thousand
Trade receivables
Current tax assets
Other current financial assets
Other current assets
Total
06/30/2021 06/30/2020
449,501
432,569
91,546
40,592
34,488
83,409
63,391
29,741
616,127
609,109
7.6 Inventories and biological assets
The trade receivables include €12,999 (10,331) thousand in
receivables from joint ventures and joint operations.
Inventories and biological assets
in € thousand
Raw materials and
consumables
Work in progress
Immature biological assets
Finished goods
Right of return
Total
06/30/2021 06/30/2020
This item also includes trade receivables totaling
43,721
114,042
5,546
32,990
70,843
15,869
106,118
110,219
2,725
2,553
272,152
232,475
€14,554 thousand that were transferred to third parties under
factoring agreements. Transferred receivables were not
derecognized, since all the risks remain with the KWS Group.
In this connection, a liability toward the factoring company
was recognized to the same amount and carried under short-
term financial liabilities. All the receivables sold to factoring
companies are due in less than one year, which means that
the fair value of the receivables and related liabilities equals
the carrying amount in each case.
Inventories and biological assets increased by
€39,677 thousand, or 17.1%, a figure that includes
The need to recognize impairment losses at June 30, 2021,
cumulative impairment losses on the net realizable value
was analyzed using the provision matrix on the basis of
totaling €49,280 (51,559) thousand. Immature biological
the expected losses. To enable that, the receivables were
assets relate to living plants in the process of growing
grouped by geographical region and the length of time they
(before harvest) at the farms. The field inventories of the
were overdue and multiplied by appropriate default rates.
previous year have been harvested in full and the fields have
Receivables that are overdue by more than 360 days and
been newly tilled in the year under review. Public subsidies
are no longer subject to an enforcement measure have been
of €1,744 (€1,872) thousand, for which all the requirements
classified as uncollectible and written off in full.
were met at the balance sheet date, were granted for
agricultural activity in the fiscal year. Future public subsidies
depend on the further development of European agricultural
policy.
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
119
KWS Group | Annual Report 2020/2021 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, 2021:
Credit risk exposure on trade receivables
in € thousand
06/30/2021
Expected credit loss rate
Total gross amount at default
Expected credit loss
06/30/2020
Expected credit loss rate
Total gross amount at default
Expected credit loss
not overdue
1–180 days
181–360 days
> 360 days
Total
Overdue in days
0.97%
397,702
–3,839
0.83%
391,315
–3,258
3.86%
54,204
–2,094
5.15%
42,066
–2,168
53.33%
7,260
–3,872
44.86%
6,518
–2,924
99.35%
21,316
–21,177
96.15%
26,517
–25,497
480,482
–30,982
466,417
–33,848
The credit risks were reflected by the following allowances
7.8 Cash and cash equivalents
at June 30, 2021, and in the previous year:
This item comprises cash and cash equivalents in the
Change in allowances on receivables
in € thousand
07/01
Changes in consolidation
scope and exchange rates
Addition
Disposal
Reversal
06/30
2020/2021
2019/2020
33,848
32,909
993
5,947
6,328
3,479
–3,900
12,193
1,101
6,252
30,981
33,848
form of cash on hand, checks, and immediately available
balances at banks, as well as securities.
Cash and cash equivalents at June 30, 2021, were
€177,169 (91,472) thousand. Securities amounting to
€45,577 (€28,266) thousand relate to money market
accounts of our U.S. subsidiaries.
The change in cash and cash equivalents compared to the
previous year is explained in the cash flow statement.
At June 30, 2021, the KWS Group had firmly promised loans
it had not used totaling €250,000 (200,000) thousand.
120 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2020/2021 | KWS Group
7.9 Equity
for equity-accounted financial assets, the reserve for the
The fully paid-up capital of KWS is still €99,000 thousand.
changes in value of the cash flow hedges of the equity-
The no-par bearer shares are certificated by a global
accounted joint venture, and the reserve for revaluation of
certificate for 33,000,000 shares. The company does not
at equity instruments (with changes in value in the other
hold any shares of its own. KWS has Authorized Capital of
comprehensive income) are also carried here.
up to €9,900 thousand at the balance sheet date.
The capital reserves essentially comprise the premium
of foreign business operations into the currency used
obtained as part of share issues.
by the group in reporting (euro) are carried in the item
Differences from translation of the functional currency
Reserve from currency translation differences on foreign
The other reserves and net retained profit essentially
operations. The item Revaluation of net liabilities/assets
comprise the net income generated in the past by
from defined benefit plans includes the actuarial gains
the companies included in the consolidated financial
and losses on defined benefit plans. Differences from
statements, minus dividends paid to shareholders, and the
translation of the functional currency of equity-accounted
net retained profit. The reserve for currency translation,
foreign business units into the currency used by the group
the reserve for remeasurement gains and losses on
in reporting (euro) are carried in the reserve for currency
defined benefit plans, the reserve for currency translation
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
2020/2021
2019/2020
Before
taxes
Tax
effect
After
taxes
Before
taxes
Tax
effect
After
taxes
–39,905
–38,993
–912
8,813
0
0
0
–2,074
–39,905
–38,127
–38,993
–39,596
–912
6,738
1,469
–5,630
0
0
0
825
–38,127
–39,596
1,469
–3,835
3,300
–635
2,666
1,891
–354
1,313
5,513
–31,092
–1,439
–2,074
4,073
–7,521
–33,167
–43,757
1,179
825
–5,148
–41,962
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
121
KWS Group | Annual Report 2020/2021 The objective of the KWS Group’s capital management
to optimize the average cost of capital. Another goal is a
activities is to pursue the interests of shareholders and
balanced mix of equity and debt capital. Consolidated income
employees in accordance with the corporate strategy and
(after taxes and minority interests) is €109,450 (95,331)
earn a reasonable return on investment. One main goal is
thousand. However, there was a total dividend payout of
to retain the trust of investors, lenders and the market so as
€23,100 (22,110) thousand in December 2020. This ensures the
to strengthen the company’s future business development.
adequate financing of future operating business expansion in
The KWS Group’s capital management activities intend
the long term.
Capital structure
in € thousand
Equity
Long-term financial borrowings
Other noncurrent liabilities
Short-term borrowings
Other noncurrent liabilities
Total capital
Equity ratio
06/30/2021
06/30/2020
1,053,718
601,080
237,929
97,225
386,791
994,498
521,744
273,721
93,663
351,841
2,376,743
2,235,467
44.3%
44.5%
The focus in selecting financial instruments is on
In addition, borrower’s note loans totaling €53,000 thousand
financing with matching maturities, which is achieved by
were repaid in the course of the fiscal year. Consequently,
controlling the maturities. Long-term financial borrowings
the remaining liabilities from borrower’s note loans, using
increased by €64,999 thousand (previous year: increase of
the effective interest method, were €346,506 thousand at
€339,474 thousand).
June 30, 2021, and have remaining maturities through 2029.
7.10 Minority interests
There are no minority interests in the KWS Group at
Noncurrent liabilities
June 30, 2021.
7.11 Noncurrent liabilities
Noncurrent liabilities increased by
€29,207 (431,087) thousand. KWS utilized a loan of
€150,000 thousand from the European Investment Bank
(EIB) in the current fiscal year. The financing provided by
the EIB is specifically intended for research & development
activities in the EU and has a term of twelve years.
in € thousand
06/30/2021 06/30/2020
Long-term provisions
Long-term borrowings
Trade payables
132,500
601,080
242
140,074
521,744
264
Deferred tax liabilities
66,359
92,265
Other noncurrent financial
liabilities
Lease liabilities
Other noncurrent liabilities
Total
62
37,465
1,301
207
39,896
1,014
839,009
795,465
122 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2020/2021 | KWS Group
Long-term provisions
in € thousand
06/30/
2020
Changes
in the
consoli-
da ted
group,
currency
Interest
ex penses
from
com-
pounding
Adjust-
ment not
affecting
profit or
loss
Addition
Con-
sumption
Reclassi-
fication Reversal
06/30/
2021
Pension
provisions
Other
provisions
Total
129,098
–1,056
1,274
11,706
–5,513
13,059
0
62
122,388
10,976
140,075
–80
38
3,326
0
1,819
–1,136
1,311
15,032
–5,513
14,878
–2,328
–2,328
0
62
10,111
132,500
The other provisions mainly comprise provisions by
0.89% compared with 0.85% the year before, 2.95% in the
the German companies for semi-retirement and loyalty
U.S. compared with 2.85% the year before, and between
bonuses.
0.25% and 1.65% (0.30% and 1.40%) in the rest of the
The pension provisions are based on defined benefit
world.
obligations, determined by years of service and pensionable
The following mortality tables were used at June 30, 2021:
compensation. They are measured using the accrued
benefit method under IAS 19, on the basis of assumptions
In Germany: The 2018 G mortality table of Klaus Heubeck
about future development. The assumptions in detail are
Abroad: Mainly Pri-2012 Private Retirement Plans
that wages and salaries in Germany will increase by 3.00%
Mortality Table Projection Scale MP-2020 and INSEE
(3.00%) annually, in the U.S. by 3.50% (3.50%) annually and
TD/TV 15-17.
in the rest of the world by 2.00% to 2.10% (2.00% to 2.40%)
annually. An annual increase in pensions of 2.00% (2.00%)
A retirement age of 65 years is imputed for Germany, a
is assumed in Germany. The discount rate in Germany was
retirement age of 65 years is imputed for the U.S., and a
retirement age of 66 years is imputed for France.
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
123
KWS Group | Annual Report 2020/2021
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
manager.
occupational 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
€8,776 (10,361) 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
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, the KWS Group countered the usual risks
of direct obligations by converting the pension obligations
An old-age pension at the age of 65
from defined benefit to defined contribution plans. As a
An early retirement pension before the age of 65 – to
result, subsequent benefits will be provided by a provident
be eligible, the employee must be at least 55 and the
fund backed by a guarantee. The existing obligations,
minimum vesting period is five years
which are partly covered by plan assets, are funded from
A pro-rata pension if the employee reaches the minimum
the operating cash flow and are subject to the previously
vesting period of five years, but is below 55.
mentioned measurement risks.
124 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2020/2021 | KWS Group
Changes in accrued benefit entitlements
in € thousand
2020/2021
2019/2020
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
Accrued benefit entitlements from
retirement obligations on June 30
Change in planned assets
in € thousand
Fair value of the planned assets
on July 1
127,760
32,318
160,078
127,401
26,924
154,325
789
1,099
–1,650
1,723
789
–474
2,512
1,888
–2,125
881
1,138
3,335
1,516
895
3,473
2,396
2,034
6,808
–758
–435
–1,193
1,970
3,502
5,472
0
–892
–5,133
0
–878
838
–736
–1,644
32
–878
0
–54
–5,870
–1,644
32
1,365
–4,994
0
–363
334
–778
340
–52
–363
1,700
–5,772
340
–52
122,864
32,007
154,871
127,760
32,318
160,078
Germany
Abroad
Total
Germany
Abroad
Total
2020/2021
2019/2020
10,361
20,620
30,981
10,191
18,386
28,577
Interest income
85
529
614
94
646
740
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
–997
–673
0
4,385
–639
0
3,388
–1,312
0
–1,134
–1,134
–54
–54
743
–667
0
68
–608
1,873
272
–17
811
–1,276
1,873
272
–17
8,776
23,707
32,483
10,361
20,620
30,981
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
125
KWS Group | Annual Report 2020/2021 In order to allow reconciliation with the figures in the balance
sheet, the accrued benefit must be netted off with the plan
assets.
Reconciliation with the balance sheet values for pensions
in € thousand
2020/2021
2019/2020
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
122,864
32,007
154,871
127,760
32,318
160,078
8,776
114,088
23,706
8,301
32,482
122,389
10,361
117,399
20,619
30,980
11,699
129,098
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)
2020/2021
Germany
Abroad
789
1,013
1,723
260
Total
2,512
1,274
Germany
Abroad
881
1,045
1,516
249
2019/2020
Total
2,396
1,294
1,802
1,983
3,785
1,925
1,765
3,690
997
–4,385
–3,388
–743
–68
–811
–758
–878
–1,636
1,970
3,502
5,472
0
–435
–435
0
–363
–363
–892
838
–54
1,365
334
1,700
–653
–4,859
–5,513
2,592
3,405
5,997
1,149
–2,876
–1,727
4,517
5,170
9,687
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.
126 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2020/2021 | KWS Group The fair value of the plan assets was split over the following
investment categories:
Breakdown of the planned assets by investment category
in € thousand
2020/2021
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
8,776
8,776
6,398
15,714
2,874
2,391
1,808
2,950
1,897
3,794
1,595
Total
6,398
15,714
2,874
2,391
1,808
2,950
1,897
3,794
1,595
8,776
Germany
Abroad
5,496
13,751
2,546
2,010
1,525
2,288
1,988
3,394
1,373
20,620
10,361
10,361
Total
5,496
13,751
2,546
2,010
1,525
2,288
1,988
3,394
1,373
10,361
30,981
23,707
32,483
The plan assets abroad relate mainly to the U.S.
The following sensitivity analysis at June 30, 2021, shows
how the present value of the obligation would change given
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
assets: the fair value can be derived from their stock
account in this, i.e. if an assumption varies, the other
market prices. 65.81% (previous year: 62.8%) of the
assumptions were kept constant. The projected unit credit
corporate bonds have an AAA rating.
method used to calculate the balance sheet values was
also used in the 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
2020/2021
Effect on obligation in
2019/2020
Change in
assumption
Decrease
Increase
Change in
assumption
Decrease
Increase
+/– 100
bps 1
+/– 50
bps
+/– 25
bps
+/– 1 year
27,767
–21,655
–1,263
1,361
–3,585
–5,510
3,755
5,656
+/– 100
bps 1
+/– 50
bps
+/– 25
bps
+/– 1 year
29,169
–22,682
–1,333
1,467
–3,762
–5,754
3,941
5,908
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
127
KWS Group | Annual Report 2020/2021
The following undiscounted payments for pensions (with
their due dates) are expected in the following years:
Anticipated payments for pensions
in € thousand
2021/2022
2022/2023
2023/2024
2024/2025
2025/2026
2026/2027 – 2030/2031
Anticipated payments for pensions
in € thousand
2020/2021
2021/2022
2022/2023
2023/2024
2024/2025
2025/2026 – 2029/2030
Germany
Abroad
4,936
4,955
5,005
4,990
4,929
24,373
933
995
1,012
1,207
1,238
8,039
Germany
Abroad
5,070
5,038
5,070
5,110
5,079
24,935
937
917
1,050
1,050
1,229
6,997
2020/2021
Total
5,869
5,950
6,017
6,197
6,166
32,412
2019/2020
Total
6,007
5,955
6,120
6,160
6,308
31,932
The weighted average time at which the pension obligations
have to be recognized for them, since there are no further
are due is 15.5 (15.8) years in Germany and 21.0 (19.8) years
obligations above and beyond payment of the contributions
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 2020/21 were as follows:
Pension costs
in € thousand
Germany
Abroad
Total
Germany
Abroad
Total
2020/2021
2019/2020
Cost for defined contribution
plans
Service cost for the defined
benefit obligations
Pension costs
2,855
789
3,643
838
3,693
2,925
1,011
3,936
1,723
2,561
2,512
6,204
881
3,806
1,516
2,527
2,396
6,333
In addition, contributions of €15,799 (15,965) thousand were
guarantee. The contributions to this pension plan were
paid to statutory pension insurance institutions.
€2,968 (2,718) thousand. In addition, the benefit obligation
from salary conversion was backed by a guarantee that
The costs for defined contribution plans in Germany
exactly matches the present value of the obligation of
mainly related to the provident fund backed by a
€5,223 (4,885) thousand.
128 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2020/2021 | KWS Group
7.12 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
Lease liabilities
Other current liabilities
Contract liabilities
Total
06/30/2021
06/30/2020
39.455
92.694
4.531
97.225
52.467
63.074
30.589
93.663
153.748
109.747
31.503
14.203
10.961
111.687
25.234
484.016
41.840
17.133
11.404
100.059
19.191
445.504
The tax liabilities of €31,503 (41,840) thousand include
amounts for the year under review and the period for which
the external tax audit has not yet been concluded.
Short-term provisions
in € thousand
06/30/2020
Changes in
the consoli-
dated group,
currency
Addition
Consump-
tion
Reclassifi-
cation
Reversal
06/30/2021
Obligations from sales
transactions
Other obligations
Total
29,040
23,428
52,468
–387
–195
–582
3,222
9,419
12,641
11,187
9,527
20,714
–2,172
3,422
1,250
1,565
4,042
5,607
16,950
22,505
39,455
The obligations from sales transactions essentially relate to
obligations for services received that have not been invoiced
(licenses) and sales commission obligations, where they are
not contained in the trade payables. The other obligations
relate to litigation risks, provisions from procurement
transactions, such as compensation for breeding areas, and
other provisions that cannot be assigned to the group of
sales transactions.
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
129
KWS Group | Annual Report 2020/2021 7. Notes to the Balance Sheet
7.13 Derivative financial instruments
Hedging transactions
in € thousand
Currency hedges
Interest-rate hedges
Total
06/30/2021
06/30/2020
Nominal
volume
Net book
values
Fair value
Nominal
volume
Net book
values
Fair value
16,634
8,000
24,634
205
–62
143
205
–62
143
218,341
31,000
249,341
–2,616
–197
–2,812
–2,616
–197
–2,812
As in the previous year, all currency hedges have a
accessible markets for identical assets and liabilities, where
remaining maturity of less than one year. The interest rate
the fair value results from quoted prices that are observable
hedges have a remaining maturity of more than five years.
(level 1 input factors). The KWS Group did not hold any
financial instruments that can be assigned to level 1 in the
7.14 Financial instruments
year under review.
In general, the fair values of financial assets and liabilities
are calculated on the basis of the market data available on
The level 2 input factors relate to derivative financial
the balance sheet date and are assigned to one of the three
instruments that have been concluded between KWS Group
hierarchy levels in accordance with IFRS 13. The principal
companies and banks. The prices can thus be derived
market, i.e. the market with the largest volume of trading and
indirectly from active market prices for similar assets and
the greatest business activity, is used to calculate the fair
liabilities. The level 3 input factors cannot be derived from
value. If this market does not exist for the asset or liabilities
observable market information.
in question, the market that maximizes the amount that
would be received to sell the asset or minimizes the amount
The carrying amounts and fair values of the financial assets
that would be paid to transfer the liability, after taking into
(financial instruments), split into the measurement categories
account transaction costs, is used. These are active and
in accordance with IFRS 9, are as follows:
06/30/2021
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
Cash and cash equivalents
Other current financial assets
of which derivative
financial instruments
Total
9,433
7,330
449,501
222,745
40,592
239
729,602
2
7,330
449,501
222,745
40,352
0
719,932
9,433
0
0
0
0
0
9,433
0
0
0
0
239
239
239
9,436
7,330
449,501
222,745
40,592
239
729,604
130 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2020/2021 | KWS Group 06/30/2020
in € thousand
Fair values
At amortized cost
At fair value
through other
comprehensive
income
At fair value
through profit and
loss
Total
carrying
amount
Financial assets
Carrying amounts
Financial assets
Financial assets
Other noncurrent financial
assets
Trade receivables
Cash and cash equivalents
Other current financial assets
of which derivative
financial instruments
Total
6,230
8,072
432,569
119,737
63,391
849
629,999
0
6,230
8,072
432,569
119,737
62,542
0
622,921
0
0
0
0
0
6,230
0
0
0
0
849
849
849
6,230
8,072
432,569
119,737
63,391
849
629,999
The financial assets and derivative financial instruments are
The fair value of derivative financial instruments is the
measured and carried at fair value. The fair value of trade
present values of the payments related to these balance
receivables, other current financial assets, and cash and
sheet items. These instruments are mainly forward
cash equivalents is the same as the carrying amounts as a
exchange deals. They are measured on the basis of quoted
result of the short time in which these instruments are due.
exchange rates and yield curves available from the market
The fair value of the long-term fund shares contained in
the financial assets is measured using generally accepted
The carrying amounts and fair values of the financial
methods based on directly and indirectly observable market
liabilities (financial instruments), split into the measurement
inputs (level 2).
categories in accordance with IFRS 9, are as follows:
data and allowing for counterparty risks (level 2).
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
131
KWS Group | Annual Report 2020/2021 06/30/2021
in € thousand
Fair values
Financial liabilities
Carrying amounts
At amortized
cost
At fair value
through other
comprehensive
income
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
06/30/2020
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
Total
carrying
amount
601,080
242
62
62
97,225
153,748
14,203
34
866,559
0
0
62
62
0
0
34
34
96
615,308
601,080
242
0
0
97,225
153,748
14,169
0
866,463
242
62
62
97,225
153,748
14,203
34
880,786
Fair values
Financial liabilities
Carrying amounts
At amortized
cost
At fair value
through other
comprehensive
income
527,379
521,745
264
207
207
93,663
109,747
17,133
3,661
748,394
264
0
0
93,663
109,747
13,472
0
738,891
0
0
207
207
0
0
3,661
3,661
3,868
Total
carrying
amount
521,745
264
207
207
93,663
109,747
17,133
3,661
742,759
The fair value of long-term borrowings was calculated on the
Due to the generally short times by which trade payables
basis of discounted cash flows. To enable that, interest rates
and other current financial liabilities (excluding derivatives)
for comparable transactions and yield curves were used.
are due, it is assumed that their carrying amounts are equal
to the fair value.
132 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2020/2021 | KWS Group The following table shows the financial assets and liabilities
measured at fair value:
Assets and liabilities measured at fair value
in € thousand
06/30/2021
06/30/2020
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
Financial assets
Derivative financial instruments without
application of hedge accounting under IFRS 9
Financial liabilities
0
0
0
0
0
239
9,433
9,673
96
96
0
0
0
0
0
239
9,433
9,673
96
96
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
The table below presents the net gains/losses carried in
Credit risks
the income statement for financial instruments in each
The credit risk is the risk that a business partner does not
measurement category:
Net gain/losses of financial instruments
in € thousand
2020/2021
2019/2020
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
activities mainly in relation to trade receivables.
Financial assets measured
at fair value through other
comprehensive income
Financial assets measured at
fair value through profit or loss
Financial assets measured at
amortized cost
Financial liabilities measured at
amortized cost
Financial liabilities measured at
fair value through profit or loss
In order to control the credit risks resulting from receivables
2,666
1,313
from customers, a regular creditworthiness analysis is
conducted in accordance with the credit volume. If a
–239
–1,289
customer’s credit risk is classified as high, it is reduced
by means of security. This includes, in particular, credit
2,883
182
insurance, prepayments, down payments, promissory
–16,153
–21,391
148
2,810
notes and guarantees. Depending on the contract’s design,
reservation of ownership of goods is agreed with our
customers. Credit limits are defined for our customers.
Credit limits, outstanding claims and the collection of
receivables are analyzed in regular meetings of the Credit
The net gains for assets measured at fair value through
Committee. For details of the exposure to the risk of default
other comprehensive income include income from non-
at June 30, 2021, please refer to section 7.7 of the Notes.
terminable interests in investment funds.
Credit risks from financial transactions are controlled
The net losses from financial assets and net gains in
centrally by the Treasury department. In order to minimize
financial liabilities measured at fair value through profit
risks, financial transactions are exclusively conducted
or loss solely comprise changes in the market value of
within defined limits with banks and partners who always
derivative financial instruments.
have an investment grade. Compliance with the risk limits is
constantly monitored. The limits are adjusted depending on
The net gains from financial assets measured at cost
the credit volume only subject to the approval of the regional
mainly include effects from changes in the allowances for
or divisional management and the Executive Board.
impairment.
The net losses from financial liabilities measured at
amortized cost result mainly from interest expense.
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
133
KWS Group | Annual Report 2020/2021 Liquidity risks
been agreed as part of specific interest-bearing loans and
Liquidity risk is the risk that funds to settle due payment
relate to the capital structure. The lenders have the right to
obligations cannot be obtained on time or at all.
terminate the loan agreements in question immediately if
these requirements are not met. The KWS Group complied
Liquidity is managed in the Eurozone by the central Treasury
with all agreed financial covenants in the fiscal year.
unit using a cash pooling system. Liquidity requirements are
generally determined by means of cash planning and are
The table below shows the KWS Group’s liquidity analysis
covered by cash and promised credit lines.
for non-derivative and derivative financial liabilities. The
As part of its liquidity management, the KWS Group ensures
payment flows (interest and payments of principal):
that it complies with the financial covenants that have
table is based on contractually agreed, undiscounted
Fiscal year 2020/2021
in € thousand
Book
value
Liquidity analysis of financial liabilities
06/30/2021
06/30/2021
total
Financial liabilities
Trade payables
Other financial liabilities
Lease liabilities
698,305
723,402
153,989
153,989
14,169
48,426
14,169
49,908
Due in
< 1 year
86,138
153,748
14,169
18,277
Nonderivative financial liabilities
914,889
941,469
272,331
Payment claim
Payment obligation
Derivative financial liabilities
Fiscal year 2019/2020
in € thousand
96
Book
value
13,685
13,806
121
13,685
13,540
–145
Due in
> 1 year and
< 5 years
Cash flows
Due in
> 5 years
333,048
304,217
242
0
20,685
353,975
0
206
206
0
0
10,946
315,163
0
61
61
Due in
< 1 year
85,166
109,747
16,922
11,614
223,450
165,981
171,971
5.991
Due in
> 1 year and
< 5 years
306,584
264
207
23,811
330,866
0
126
126
Cash flows
Due in
> 5 years
233,639
0
0
18,585
252,224
0
18
18
Liquidity analysis of financial liabilities
06/30/2020
06/30/2020
total
Financial liabilities
Trade payables
Other financial liabilities
Lease liabilities
Nonderivative financial liabilities
Payment claim
Payment obligation
615,407
625,390
110,012
110,012
17,340
51,300
17,129
54,010
794,058
806,540
165,981
172,115
Derivative financial liabilities
3.868
6.135
The cash flows of the derivative financial liabilities mainly
relate to forward exchange deals and are presented as
an undiscounted gross amount. These derivative financial
instruments are settled in gross.
134 Annual Financial Statements | Notes for the KWS Group | 7. Notes to the Balance Sheet
Annual Report 2020/2021 | KWS Group Currency risks
Interest rate sensitivity is a measure for showing the
Currency risks are where the fair value or future cash
interest rate risk. The interest rate sensitivity analysis was
flows of a financial instrument are subject to fluctuations
conducted for the portfolio of financial instruments with a
due to exchange rate changes. The KWS Group is mainly
variable interest rate at the balance sheet date and shows
exposed to currency risks as part of its financing activities
the hypothetical effect on income for one year. The variable-
with foreign subsidiaries. Derivative financial instruments
interest components of the KWS Group’s interest expenses
(forward exchange deals and currency swaps) are
and interest income were determined to calculate it. In
concluded to hedge against currency risks from intra-Group
a scenario analysis, the effects of an increase/reduction
financing. The company ensures that the derivative financial
of one percentage point (100 base points) in the relevant
instrument is commensurate with the risk to be hedged.
underlying capital market interest rate on the interest result
were calculated. An increase in all relevant rates of interest
In order to assess the currency risk, the sensitivity of a
of 1 percentage point would result in additional interest
currency to fluctuations was determined. The calculated
expense of €243 (700) thousand. Due to the contractual
figures relate to the portfolio of financial instruments at the
arrangements relating to negative interest rates, a reduction
balance sheet date and show the hypothetical effect on
in the rates of interest of 1 percentage point would not have
income and equity for one year. After the euro, the US dollar
any significant impact on net income for the year.
is the most important currency in the KWS Group. All other
currencies are of minor importance. The currency risk
7.15 Leases
mainly results from intra-Group receivables and liabilities
from financing activity. The average USD/EUR exchange rate
Book values of right-of-use assets
in the fiscal year was 1.19 (1.11). If the US dollar depreciated
by 10%, the extra expense would be €1,005 thousand
(previous year: extra income of €23,562 thousand). If the
US dollar appreciated by 10%, the extra income would
be €1,005 thousand (previous year: extra expense of
€23,562 thousand). The net income for the year would
change accordingly.
in € thousand
Land and buildings
Technical equipment and
machinery
Operating and office
equipment
Total
06/30/2021 06/30/2020
34,592
37,678
664
689
8,415
43,671
7,982
46,349
Risk of changes in interest rates
The risk of changes in interest rates is where the fair value
Additions to rights of use for leased assets totaling
or future cash flows of a financial instrument are subject to
€8,703 (30,590) thousand were recognized in fiscal
fluctuations due to changes in market interest rates.
2020/2021 and the amortization on them was as follows:
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
fixed-interest and variable-interest amounts determined
with reference to a previously agreed nominal amount with
a contractual partner at defined intervals of time.
Depreciation of right-of-use assets
in € thousand
Land and buildings
Technical equipment and
machinery
Operating and office
equipment
Total
2020/2021
2019/2020
5,874
5,194
420
384
4,275
10,569
5,059
10,637
7. Notes to the Balance Sheet | Notes for the KWS Group | Annual Financial Statements
135
KWS Group | Annual Report 2020/2021
Expenses for short-term leases and for leases relating to low-
7.16 Contingent liabilities and other financial obligations
value assets totaled €14,426 (12,437) thousand in the period
The obligations from uncompleted capital expenditure
under review.
projects, mainly relating to property, plant, and
equipment, and other capital commitments amount
Short-term lease liabilities totaled €10,961 (11,404) thousand
to €16,661 (29,439) thousand.
and long-term lease liabilities €37,465 (39,896) thousand at
June 30, 2021. The maturity analysis of the lease liabilities
There are guarantees with respect to third parties
is presented in section 7.14 of the Notes. Lease payments
amounting to €76,412 (95,537) thousand. As in previous
totaled 11,905 (14,376) thousand in fiscal 2020/2021. Interest
years, they are mainly guarantees KWS has given to banks
expenses from interest accrued on the lease liabilities were
for the credit lines of the subsidiary KWS SEMENTES LTDA.
€876 (1,184) thousand.
There are still guarantees toward a non-Group third party
for the license payments of the joint venture AGRELIANT
In general, lease agreements are concluded without
GENETICS, LLC. The likelihood that these guarantees will
extension or termination options. Possible cash outflows of
be utilized is seen as slight, based on the experience of
€20,880 (20,683) thousand for existing options to extend a
previous years. No claims have yet been made.
property rental agreement were not included in determining
the lease liabilities since there is no reasonable certainty as to
As in the previous year, there are no other contingent
whether the options will be exercised.
liabilities that need to be reported at the balance sheet date.
The KWS Group also acts as a lessor. There is currently a
long-term sublease agreement, which has been classified
as a financial lease in relation to the main lease agreement.
The interest income was €55 (25) thousand. The sublease is
8. Notes to the Cash Flow Statement
reported under the other noncurrent receivables to an amount
The cash flow statement shows the changes in cash and
of €4,328 (4,682) thousand and under the other current
cash equivalents of the KWS Group in the three categories
receivables to an amount of €598 (586) thousand. The annual
of operating activities, investing activities and financing
income from the sublease is €692 (589) thousand. The lease
activities. The effects of exchange rate changes and
agreement contains a clause permitting annual adjustment of
changes in the consolidated group have been eliminated
the lease payment depending on market circumstances.
from the respective balance sheet items, except those
affecting cash and cash equivalents.
As in previous years, cash and cash equivalents are
composed of cash (on hand and balances with banks)
and current securities.
Financial liabilities changed as follows:
Changes in financial liabilities
in € thousand
06/30/2020
Cash flows
Changes in
the scope of
consolidation
Non-cash-
effective changes
New
IFRS 16
contracts
Currency
Financial liabilities
615,407
82,383
Lease liabilities
51,300
–11,905
355
0
74
557
0
8,703
136 Annual Financial Statements | Notes for the KWS Group | 8. Notes to the Cash Flow Statement
Other
effects 06/30/2021
86
–229
698,305
48,426
Annual Report 2020/2021 | KWS Group 9. Other Notes
9.1 Proposal for the appropriation of net retained profits
In fiscal year 2020/2021, total Executive Board
The net retained profits of KWS SAAT SE & Co. KGaA are
compensation amounted to €5,820 (€5,428) thousand.
€321,395 thousand (previous year: net retained profits of
The variable compensation, which is calculated on the
€23,100 thousand).
basis of the net profit for the period of the KWS Group, is
made up of a bonus and a long-term incentive. The bonus
A proposal will be made to the Annual Shareholders’
totals €2,562 (2,500) thousand; there are contributions
Meeting that an amount of €26,400 thousand (previous
from the long-term incentive tranche for 2020/2021 totaling
year: €23,100 thousand) should be used to pay a dividend
€1,175 thousand (tranche for 2019/2020: €847 thousand).
of €0.80 (previous year: €0.70) for each of the 33,000,000
Pension provisions totaling €1,612 (1,619) thousand
shares.
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
the Supervisory Board and the Executive Board of
Board and their surviving dependents amounted
KWS SAAT SE & Co. KGaA
to €1,238 (1,419) thousand. Pension provisions
The compensation of the members of the Supervisory Board
recognized for this group of persons amounted to
was converted to a purely fixed compensation pursuant to
€13,809 (14,837) thousand as of June 30, 2021, before
the resolution adopted by the Annual Shareholders’ Meeting
being netted off with the relevant plan assets.
in December 2017. Members of the Supervisory Board who
are members of a committee – with the exception of the
9.3 Related party disclosures
Chairman of the Supervisory Board – receive an additional
Transactions with related parties in accordance with IAS 24
fixed payment therefor. The total compensation for members
are all business dealings that are conducted with the
of the Supervisory Board amounts to €620 (620) thousand,
reporting entity by entities or natural persons or their close
excluding value-added tax. The total compensation
family members, if the party or person in question controls
for members of the Supervisory Board of KWS SE, the
the reporting entity or is a member of its key management
personally liable partner of KWS SAAT SE & Co. KGaA, in
personnel, for example.
the year under review amounted to €195 (185) thousand,
excluding value-added tax.
Pursuant to the change in legal form to a partnership limited
by shares on July 2, 2019, the personally liable partner
KWS SE provides business management services on behalf
of KWS SAAT SE & Co. KGaA.
Related parties
in € thousand
KWS SE
At equity accounted
joint ventures
At equity accounted
associated companies
Other related parties
Deliveries and
services provided
Received deliveries
and services
Receivables
Payables
2020/2021 2019/2020 2020/2021 2019/2020 2020/2021 2019/2020 2020/2021 2019/2020
0
0
5,885
5,330
0
556
3,721
0
4,919
3,134
5,106
10,906
5,463
25,072
2,552
1,897
6,602
37
6,546
18
0
116
0
117
6,366
6,283
0
0
100
947
0
1,058
9. Other Notes | Notes for the KWS Group | Annual Financial Statements
137
KWS Group | Annual Report 2020/2021
9. Other Notes
As part of its operations, the KWS Group procures goods
9.5 Audit of the annual financial statements
and services worldwide from a large number of business
On December 16, 2020, the Annual Shareholders’ Meeting
partners. They also include companies in which the
of KWS SAAT SE & Co. KGaA elected the accounting firm
KWS Group has an interest and on which representatives
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft,
of the KWS Group’s Supervisory Board exert a significant
Hanover, to be the Group’s auditors for fiscal year 2020/21.
influence. Business dealings with these companies are
always conducted on an arm’s length basis and are not
material in terms of volume.
As part of Group financing, short- and medium-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
2020/2021 2019/2020
a) Audit of the consolidated
financial statements
b) Other certification services
c) Tax consulting
d) Other services
Total fee paid
927
60
0
0
1,370
50
0
0
987
1,420
of the Executive Board and the Supervisory Board are
Other certification services in fiscal 2020/2021 essentially
presented in the Compensation Report, which is part of the
comprised non-audit services as part of the voluntary audit
Combined Management Report.
of the Non-Financial Declaration.
There were also no business transactions or legal
9.6 Report on events after the balance sheet date
transactions that required reporting for related parties in
There have been no events of particular significance that
fiscal 2020/2021.
9.4 Disclosure
might have an impact on the presentation of the KWS
Group’s earnings, financial position and assets since the
end of the fiscal year.
The following subsidiaries with the legal form of a
corporation within the meaning of Section 264 (3) and
9.7 Declaration of compliance with the German
264b of the German Commercial Code (HGB) have utilized
Corporate Governance Code
the exemption provided in Section 264 (3) of the German
KWS SAAT SE & Co. KGaA has issued the declaration of
Commercial Code (HGB) as regards preparation of financial
compliance with the German Corporate Governance Code
statements and their publication:
required by Section 161 of the Aktiengesetz (AktG – German
KWS LOCHOW GMBH, Bergen
shareholders on the company’s home page at www.kws.com.
Stock Corporation Act) and made it accessible to its
KWS LANDWIRTSCHAFT GMBH, Einbeck
BETASEED GMBH, Frankfurt am Main
KWS SAATFINANZ GMBH, Einbeck
DELITZSCH PFLANZENZUCHT GMBH, Einbeck
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.
138 Annual Financial Statements | Notes for the KWS Group | 9. Other Notes
Annual Report 2020/2021 | KWS Group 9.8 List of shareholdings
List of shareholdings in accordance with Section 313 (2) HGB (German Commercial Code)
Fiscal year 2020/2021
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., New Belgrade/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 R&D INVEST B.V., Emmeloord/Netherlands
BETASEED FRANCE S.A.R.L., Bethune/France
KWS SEEDS LLC (former BETASEED INC.),
Bloomington/U.S.
€
€
€
€
€
€
€
€
€
€
€
€
RSD
CLP
€
BGN
ARS
HUF
€
CHF
€
PLN
CZK
HRK
€
€
€
€
€
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
1
1
1
1
1
1
1
27
28
3
3
3
3
3
3
3
3
3
3
3
3
24
9. Other Notes | Notes for the KWS Group | Annual Financial Statements
139
KWS Group | Annual Report 2020/2021 Currency
Interest held
Total in %
Footnote
USD
USD
GBP
PEN
RON
DKK
RUB
RUB
€
USD
TRY
UAH
PLN
USD
€
€
€
€
TRY
TRY
€
TRY
CNY
€
€
MAD
BRL
BRL
USD
UAH
CNY
€
€
PYG
RUB
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
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
4
4
3
5
25
3
23
7
3
3
3
23
3
4
16
18
18
18
19
20
3
3
8
6
3
9
29
30
4
10
8
11
3
12
7
Fiscal year 2020/2021
Name and Company’s registered office
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., Kiew/Ukraine
KWS LOCHOW POLSKA SP.Z O.O., Kondratowice/Poland
KWS GATEWAY RESEARCH CENTER LLC, St. Louis/U.S.
POP VRIEND HOLDING B.V., Amsterdam/Netherlands
POP VRIEND SEEDS B.V., Andijk/Netherlands
EUROPSEEDS B.V., Enkhuizen/Netherlands
POP VRIEND INTERNATIONAAL B.V., Andijk/Netherlands
POP VRIEND TOHUMCULUK VE TARIM ÜRÜNLERI
SANAYI VE TICARET LIMITED SIRKETI , Istanbul/Turkey
PV TOHUMCULUK TARIM ÜRÜNLERI SANAYI VE
TICARET LIMITED SIRKETI, Izmir/Turkey
KWS SEMILLAS CANARIAS S.L.U.,
Gran Canaria/Spain
BTS TURKEY TARIM TICARET LIMITED SIRKETI,
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/Brasil
KWS SERVICOS E PARTICIPACOES SOUTH AMERICA
LTDA., São Paulo/Brasil
KWS SERVICES NORTH AMERICA LLC,
Bloomington/U.S.
KWS PODILLYA T.O.V., Kiew/Ukraine
BEIJING KWS AGRICULTURE TECHNOLOGY CO., LTD.,
Beijing/China
KWS MOMONT RECHERCHE S.A.R.L.,
Mons-en-Pévèle/France
KWS MOMONT S.A.S., Mons-en-Pévèle/France
KWS PARAGUAY SRL, Asunción/Paraguay
KWS KUBAN O.O.O., Krasnodar/Russia
140 Annual Financial Statements | Notes for the KWS Group | 9. Other Notes
Annual Report 2020/2021 | KWS Group Fiscal year 2020/2021
Name and Company’s registered office
Currency
Interest held
Total in %
Footnote
SEED PLANT KWS O.O.O., Lipetsk/Russia
KWS INTERNATIONAL HOLDING II B.V.,
Emmeloord/Netherlands
KWS VEGETABLES MEXICO S.A. de C.V.,
Mexico City/Mexico
BETASEED RUS LLC, Moscow/Russia
KWS VEGETABLES ITALIA S.R.L A SOCIO UNICO,
Noceto/Parma/Italy
KWS Seed Science & Technology (Sanya) Co., Ltd.,
Sanya/China
KWS FIDC, Rio de Janeiro/Brasil
Equity-accounted joint ventures
AGRELIANT GENETICS INC., Chatham/Canada
AGRELIANT GENETICS LLC, Westfield/U.S.
FARMDESK B.V., Antwerp/Belgium
Equity-accounted associated companies
KENFENG - KWS SEEDS CO., LTD., Beijing/China
IMPETUS AGRICULTURE INC., Lewes/U.S.
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
RUB
€
MXN
RUB
€
CNY
BRL
CAD
USD
€
CNY
USD
€
CAD
TWD
USD
JPY
KRW
USD
USD
RS
RON
100.00
100.00
100.00
100.00
100.00
100.00
100.00
50.00
50.00
50.00
49.00
38.82
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
100.00
100.00
7
3
31
32
16
3
33
13
22
21
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 POP VRIEND HOLDING B.V. and KWS VEGETABLES B.V.
18 Subsidiary of POP VRIEND HOLDING B.V und CHURA B.V.
19 Subsidiary of POP VRIEND INTERNATIONAL B.V.
20 Subsidiary of POP VRIEND TOHUMCULUK VE TARIM ÜRÜNLERI SANAYI VE
TICARETLIMITED 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 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
31 Subsidiary of KWS INTERNATIONAL HOLDING B.V. and KWS VEGETABLES B.V.
32 Subsidiary of KWS INTERNATIONAL HOLDING B.V. and KWS INTERNATIONAL HOLDING II B.V.
33 Subsidiary of KWS SEMENTES LTDA.
9. Other Notes | Notes for the KWS Group | Annual Financial Statements
141
KWS Group | Annual Report 2020/2021 9.9 Supervisory and Executive Boards of KWS SAAT SE & Co. KGaA in fiscal 2020/2021
Other seats 2020/2021
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)
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
142 Annual Financial Statements | Notes for the KWS Group | 9. Other Notes
Annual Report 2020/2021 | KWS Group 9.9.2 Supervisory Board committees
Committee
Audit Committee
Victor W. Balli
Chairman/Chairwoman
Members 2020/2021
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
Other seats
Membership in other legally required supervisory boards:
Hero AG, Lenzburg (Switzerland)
(member of the Board of Administration)
C.H. Boehringer Sohn AG & Co. KG, Ingelheim
(member of the advisory group)
Membership in other legally required supervisory boards:
Zumtobel Group AG, Dornbirn (Austria)
(member of the Supervisory Board and Chairwoman of
the Audit Committee)
9.9.3 Executive Board
Members
Dr. Hagen Duenbostel
Einbeck
Chief Executive Officer
Corn North and Southamerica, Corn China, 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
Einbeck, September 23, 2021
KWS SE
Dr. Hagen Duenbostel | Dr. Léon Broers | Dr. Felix Büchting | Dr. Peter Hofmann | Eva Kienle
9. Other Notes | Notes for the KWS Group | Annual Financial Statements
143
KWS Group | Annual Report 2020/2021 Independent Auditor’s Report
To KWS SAAT SE & Co. KGaA
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that
Report on the audit of the consolidated financial
compliance of the consolidated financial statements and of
statements and of the group management report
the group management report.
our audit has not led to any reservations relating to the legal
Opinions
Basis for the opinions
We have audited the consolidated financial statements of
We conducted our audit of the consolidated financial
KWS SAAT SE & Co. KGaA, Einbeck, and its subsidiaries
statements and of the group management report in
(the Group), which comprise the consolidated statement of
accordance with Sec. 317 HGB and the EU Audit Regulation
comprehensive income for the fiscal year from 1 July 2020
(No 537/2014, referred to subsequently as “EU Audit
to 30 June 2021, and the consolidated balance sheet as at
Regulation”) and in compliance with German Generally
30 June 2021, consolidated statement of changes in equity
Accepted Standards for Financial Statement Audits
and consolidated cash flow statement for the fiscal year from
promulgated by the Institut der Wirtschaftsprüfer [Institute
1 July 2020 to 30 June 2021, and notes to the consolidated
of Public Auditors in Germany] (IDW). Our responsibilities
financial statements, including a summary of significant
under those requirements and principles are further
accounting policies. In addition, we have audited the group
described in the “Auditor’s responsibilities for the audit
management report of KWS SAAT SE & Co. KGaA, which
of the consolidated financial statements and of the group
was combined with the management report of the Company,
management report” section of our auditor’s report. We are
for the fiscal year from 1 July 2020 to 30 June 2021. In
independent of the group entities in accordance with the
accordance with the German legal requirements, we have not
requirements of European law and German commercial and
audited the content of the parts of the group management
professional law, and we have fulfilled our other German
report listed in the appendix to the auditor’s report.
professional responsibilities in accordance with these
In our opinion, on the basis of the knowledge obtained in the
of the EU Audit Regulation, we declare that we have not
requirements. In addition, in accordance with Art. 10 (2) f)
audit,
provided non-audit services prohibited under Art. 5 (1) of
the EU Audit Regulation. We believe that the audit evidence
the accompanying consolidated financial statements
we have obtained is sufficient and appropriate to provide
comply, in all material respects, with the IFRSs as
a basis for our opinions on the consolidated financial
adopted by the EU, and the additional requirements of
statements and on the group management report.
German commercial law pursuant to Sec. 315e (1) HGB
[“Handelsgesetzbuch”: German Commercial Code] and, in
Key audit matters in the audit of the consolidated finan-
compliance with these requirements, give a true and fair
cial statements
view of the assets, liabilities and financial position of the
Key audit matters are those matters that, in our professional
Group as at 30 June 2021 and of its financial performance
judgment, were of most significance in our audit of the
for the fiscal year from 1 July 2020 to 30 June 2021, and
consolidated financial statements for the fiscal year from
the accompanying group management report as a
1 July 2020 to 30 June 2021. These matters were addressed
whole provides an appropriate view of the Group’s
in the context of our audit of the consolidated financial
position. In all material respects, this group management
statements as a whole, and in forming our opinion thereon;
report is consistent with the consolidated financial
we do not provide a separate opinion on these matters.
statements, complies with German legal requirements
and appropriately presents the opportunities and
Below, we describe what we consider to be the key audit
risks of future development. Our opinion on the group
matters:
management report does not cover the content of the
parts of the group management report listed in the
appendix to the auditor’s report.
144 Annual Financial Statements | Independent Auditor’s Report
Annual Report 2020/2021 | KWS Group (1) Revenue recognition from the sale of seed
Reference to related disclosures
With regard to the recognition and measurement policies
Reasons why the matter was determined to be a key
applied for the recognition of revenue from the sale of seed,
audit matter
refer to the disclosure in note 3.6 “Recognition of income
In the consolidated financial statements of KWS SAAT SE &
and expenses” in section 3 “Accounting Policies” in the
Co. KGaA, revenue from the sale of seed is recognized
notes to the consolidated financial statements.
when control is transferred to the customer, allowing for
contractually agreed returns. In light of the large number of
(2) Impairment testing of goodwill and brands
different contractual agreements and the resulting judgment
exercised in assessing expected returns, we consider
Reasons why the matter was determined to be a key
revenue recognition to be complex and therefore to pose an
audit matter
elevated risk of misstatement.
Pursuant to IAS 36, the internal management and reporting
Auditor’s response
During our audit, we considered, based on the criteria
structure serves as the basis for designating cash-generating
units to which the respective items of goodwill are allocated.
defined in IFRS 15, the accounting policies applied in
At KWS SAAT SE & Co. KGaA, goodwill and brands are
accordance with the internal accounting instructions in
monitored and managed at divisional level.
the consolidated financial statements of KWS SAAT SE &
Co. KGaA for the recognition of revenue. Our response
Goodwill and brands are tested for impairment as of 30 June
included an examination of whether control was transferred
each year. The result of these tests is highly dependent on
to the customers upon the sale of seed. We analyzed
the executive directors’ estimate of future cash flows and the
the process implemented by the Executive Board of
respective discount rates used.
KWS SAAT SE & Co. KGaA and the accounting and
valuation requirements for the recognition of seed sales,
In light of the definition of the cash-generating units, the
in particular taking into account knowledge about actual
complexity of the valuation and the judgment exercised during
returns. Based on analytical procedures defined group-
valuation, the impairment tests for goodwill and brands were a
wide, we examined whether the significant revenue items
key audit matter.
for fiscal year 2020/2021 correlate with the corresponding
trade receivables to identify any irregularities in the
Auditor’s response
development of revenue. With a view to the recognition
During our audit, among other things, we obtained an
of revenue on an accrual basis, we also obtained balance
understanding of the methods used to carry out the
confirmations from customers and performed data analyses
impairment tests including an examination of the suitability
to identify any irregularities in comparison with the prior
of the procedure for performing an impairment test in
year. We analyzed the recognition of revenue based on
accordance with IAS 36. In doing so, we analyzed the
the contractual arrangements on a sample basis with
planning process and the operating effectiveness of the
regard to the requirements of IFRS 15. Based on analytical
controls implemented therein. We discussed the significant
procedures carried out on historical data and the analysis
planning assumptions with the executive directors and
of the underlying contracts, we examined the calculation of
compared these with the results and cash inflows realized
expected returns of seed and their deduction from revenue.
in the past. Our assessment of the results of the impairment
tests as of 30 June was based among other things on a
Overall, our procedures relating to the recognition
comparison with general and industry-specific market
of revenue from the sale of seed did not lead to any
expectations underlying the expected cash inflows. Based on
reservations.
our understanding that even relatively small changes in the
Independent Auditor’s Report | Annual Financial Statements
145
KWS Group | Annual Report 2020/2021 discount rates used can at times have significant effects on
Auditor’s response
the amount of the business value calculated, we analyzed the
The executive directors of KWS SAAT SE & Co. KGaA
inputs used to determine the discount rates and reperformed
regularly engage external tax experts to validate their
the calculation with regard to the relevant requirements of
own risk assessment. We called on our tax specialists
IAS 36. In addition, we analyzed the sensitivity analyses
to consider these tax assessments. Our specialists
performed by the executive directors of KWS SAAT SE &
also analyzed the correspondence with the competent
Co. KGaA on the goodwill impairment tests in order to estimate
tax authorities and the assumptions used to calculate
any potential impairment risk associated with a reasonably
provisions for current taxes and deferred taxes, considering
possible change in one of the significant assumptions used in
in particular the applicable transfer prices, based on their
the valuation.
knowledge and experience of how the authorities and courts
currently apply the relevant legal provisions. In addition, we
We obtained evidence that the divisions represent the lowest
involved tax specialists from our international network with
level within the Group at which independent cash inflows are
the relevant knowledge of the respective local jurisdictions
generated and goodwill is monitored for internal management
and regulations. We critically assessed the assumptions
purposes.
on the recoverability of deferred tax assets, in particular
by analyzing the assumptions with respect to projected
Our procedures did not lead to any reservations relating to
future taxable income and by comparing them to the
the valuation of goodwill and brands.
internal business plan. Our auditor’s response also included
Reference to related disclosures
statements of KWS SAAT SE & Co. KGaA on current and
the disclosures in the notes to the consolidated financial
With regard to the recognition and measurement policies
deferred income taxes.
applied for goodwill and brands, refer to the disclosure
on intangible assets in section 3 “Accounting Policies” in
Our procedures did not lead to any reservations relating to
the notes to the consolidated financial statements. For the
the recognition of current and deferred income taxes.
related disclosures on judgments by the executive directors
and sources of estimation uncertainty as well as the
Reference to related disclosures
disclosures on goodwill, refer to note 7.1 “Intangible assets”
With regard to the recognition and measurement policies
in section 7 “Notes to the Balance Sheet” in the notes to the
applied for current and deferred income taxes, refer to
consolidated financial statements.
the disclosure on deferred taxes and income tax liabilities
(3) Current and deferred income taxes
consolidated financial statements and, with regard to the
information on income taxes, no. 6.5 “Taxes” in section
Reasons why the matter was determined to be a key
6 “Notes to the Income Statement” in the notes to the
audit matter
consolidated financial statements.
in section 3 “Accounting Policies” in the notes to the
The KWS SAAT SE & Co. KGaA Group operates in different
legal jurisdictions with the resulting complexity of matters
Other information
affecting the recognition of current and deferred income
The Supervisory Board is responsible for the Report of
taxes, namely the transfer prices used, changes in tax
the Supervisory Board. In all other respects, the executive
legislation and intragroup financing. To calculate the
directors are responsible for the other information. The other
provision for tax obligations and deferred tax items, the
information comprises the parts of the group management
executive directors of KWS SAAT SE & Co. KGaA must
report listed in the appendix to the auditor’s report as well as
exercise judgment in assessing tax matters, estimating
the other parts of the annual report, except for the audited
tax risks and with regard to the realization of deferred tax
consolidated financial statements and group management
assets.
report and our auditor’s report, in particular the Declaration
146 Annual Financial Statements | Independent Auditor’s Report
Annual Report 2020/2021 | KWS Group by Legal Representatives pursuant to Sec. 297 (2) Sentence
Furthermore, the executive directors are responsible for
4 HGB, the “Foreword of the Executive Board” section of
the preparation of the group management report that,
the annual report and the Report of the Supervisory Board
as a whole, provides an appropriate view of the Group’s
pursuant to Sec. 171 (2) AktG [“Aktiengesetz”: German
position and is, in all material respects, consistent with
Stock Corporation Act]. We obtained a version of this other
the consolidated financial statements, complies with
information prior to issuing our auditor’s report.
German legal requirements, and appropriately presents
the opportunities and risks of future development. In
Our opinions on the consolidated financial statements and
addition, the executive directors are responsible for such
on the group management report do not cover the other
arrangements and measures (systems) as they have
information, and consequently we do not express an opinion
considered necessary to enable the preparation of a
or any other form of assurance conclusion thereon.
group management report that is in accordance with the
applicable German legal requirements, and to be able to
In connection with our audit, our responsibility is to read the
provide sufficient appropriate evidence for the assertions
other information and, in so doing, to consider whether the
in the group management report.
other information
is materially inconsistent with the consolidated financial
Group’s financial reporting process for the preparation of
statements, with the group management report or our
the consolidated financial statements and of the group
The Supervisory Board is responsible for overseeing the
knowledge obtained in the audit, or
management report.
otherwise appears to be materially misstated.
Auditor’s responsibilities for the audit of the
Responsibilities of the executive directors and the
consolidated financial statements and of the group
Supervisory Board for the consolidated financial
management report
statements and the group management report
Our objectives are to obtain reasonable assurance about
The executive directors are responsible for the preparation
whether the consolidated financial statements as a whole
of the consolidated financial statements that comply,
are free from material misstatement, whether due to fraud or
in all material respects, with IFRSs as adopted by
error, and whether the group management report as a whole
the EU and the additional requirements of German
provides an appropriate view of the Group’s position and,
commercial law pursuant to Sec. 315e (1) HGB, and that
in all material respects, is consistent with the consolidated
the consolidated financial statements, in compliance
financial statements and the knowledge obtained in the
with these requirements, give a true and fair view of
audit, complies with the German legal requirements and
the assets, liabilities, financial position and financial
appropriately presents the opportunities and risks of
performance of the Group. In addition, the executive
future development, as well as to issue an auditor’s report
directors are responsible for such internal control as they
that includes our opinions on the consolidated financial
have determined necessary to enable the preparation
statements and on the group management report.
of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
In preparing the consolidated financial statements, the
with Sec. 317 HGB and the EU Audit Regulation and in
executive directors are responsible for assessing the
compliance with German Generally Accepted Standards
Group’s ability to continue as a going concern. They
for Financial Statement Audits promulgated by the Institut
also have the responsibility for disclosing, as applicable,
der Wirtschaftsprüfer (IDW) will always detect a material
matters related to going concern. In addition, they are
misstatement. Misstatements can arise from fraud or
responsible for financial reporting based on the going
error and are considered material if, individually or in the
concern basis of accounting unless there is an intention to
aggregate, they could reasonably be expected to influence
liquidate the Group or to cease operations, or there is no
the economic decisions of users taken on the basis of
realistic alternative but to do so.
these consolidated financial statements and this group
management report.
Independent Auditor’s Report | Annual Financial Statements
147
KWS Group | Annual Report 2020/2021 We exercise professional judgment and maintain
and the additional requirements of German commercial
professional skepticism throughout the audit. We also:
law pursuant to Sec. 315e (1) HGB.
Obtain sufficient appropriate audit evidence regarding the
Identify and assess the risks of material misstatement of
financial information of the entities or business activities
the consolidated financial statements and of the group
within the Group to express opinions on the consolidated
management report, whether due to fraud or error,
financial statements and on the group management
design and perform audit procedures responsive to those
report. We are responsible for the direction, supervision
risks, and obtain audit evidence that is sufficient and
and performance of the group audit. We remain solely
appropriate to provide a basis for our opinions. The risk
responsible for our audit opinions.
of not detecting a material misstatement resulting from
Evaluate the consistency of the group management report
fraud is higher than for one resulting from error, as fraud
with the consolidated financial statements, its conformity
may involve collusion, forgery, intentional omissions,
with [German] law, and the view of the Group’s position it
misrepresentations, or the override of internal control.
provides.
Obtain an understanding of internal control relevant
Perform audit procedures on the prospective information
to the audit of the consolidated financial statements
presented by the executive directors in the group
and of arrangements and measures (systems) relevant
management report. On the basis of sufficient appropriate
to the audit of the group management report in order
audit evidence we evaluate, in particular, the significant
to design audit procedures that are appropriate in the
assumptions used by the executive directors as a basis
circumstances, but not for the purpose of expressing an
for the prospective information, and evaluate the proper
opinion on the effectiveness of these systems.
derivation of the prospective information from these
Evaluate the appropriateness of accounting policies used
assumptions. We do not express a separate opinion on
by the executive directors and the reasonableness of
the prospective information and on the assumptions used
estimates made by the executive directors and related
as a basis. There is a substantial unavoidable risk that
disclosures.
future events will differ materially from the prospective
Conclude on the appropriateness of the executive
information.
directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a
We communicate with those charged with governance
material uncertainty exists related to events or conditions
regarding, among other matters, the planned scope and
that may cast significant doubt on the Group’s ability
timing of the audit and significant audit findings, including
to continue as a going concern. If we conclude that a
any significant deficiencies in internal control that we identify
material uncertainty exists, we are required to draw
during our audit.
attention in the auditor’s report to the related disclosures
in the consolidated financial statements and in the group
We also provide those charged with governance with
management report or, if such disclosures are inadequate,
a statement that we have complied with the relevant
to modify our respective opinions. Our conclusions are
independence requirements, and communicate with them
based on the audit evidence obtained up to the date of
all relationships and other matters that may reasonably be
our auditor’s report. However, future events or conditions
thought to bear on our independence and where applicable,
may cause the Group to cease to be able to continue as a
the related safeguards.
going concern.
Evaluate the overall presentation, structure and content
From the matters communicated with those charged with
of the consolidated financial statements, including the
governance, we determine those matters that were of
disclosures, and whether the consolidated financial
most significance in the audit of the consolidated financial
statements present the underlying transactions and
statements of the current period and are therefore the key
events in a manner that the consolidated financial
audit matters. We describe these matters in our auditor’s
statements give a true and fair view of the assets,
report unless law or regulation precludes public disclosure
liabilities, financial position and financial performance of
about the matter.
the Group in compliance with IFRSs as adopted by the EU
148 Annual Financial Statements | Independent Auditor’s Report
Annual Report 2020/2021 | KWS Group Other legal and regulatory requirements
control systems set forth in IDW Standard on Quality
Control: “Requirements for Quality Control in Audit Firms”
Report on the assurance in accordance with Sec. 317
(IDW QS 1).
(3b) HGB on the electronic reproduction of the consoli-
dated financial statements and the group management
Responsibilities of the executive directors and the
report prepared for publication purposes
Supervisory Board for the ESEF documents
Opinion
The executive directors of the Company are responsible
for the preparation of the ESEF documents including
We have performed assurance work in accordance with
the electronic reproduction of the consolidated financial
Sec. 317 (3b) HGB to obtain reasonable assurance about
statements and the group management report in
whether the reproduction of the consolidated financial
accordance with Sec. 328 (1) Sentence 4 No. 1 HGB and
statements and the group management report (hereinafter
for the tagging of the consolidated financial statements in
the “ESEF documents”) contained in the attached
accordance with Sec. 328 (1) Sentence 4 No. 2 HGB.
electronic file KWS SAAT SE_KA_KLB_ESEF_30.06.2021
and prepared for publication purposes complies in all
In addition, the executive directors of the Company
material respects with the requirements of Sec. 328 (1) HGB
are responsible for such internal control as they have
for the electronic reporting format (“ESEF format”).
considered necessary to enable the preparation of ESEF
In accordance with German legal requirements, this
documents that are free from material non-compliance
assurance only extends to the conversion of the information
with the requirements of Sec. 328 (1) HGB for the electronic
contained in the consolidated financial statements and
reporting format, whether due to fraud or error.
the group management report into the ESEF format and
therefore relates neither to the information contained in this
The executive directors of the Company are also responsible
reproduction nor to any other information contained in the
for the submission of the ESEF documents together with
abovementioned electronic file.
the auditor’s report and the attached audited consolidated
In our opinion, the reproduction of the consolidated financial
report as well as other documents to be published to the
statements and the group management report contained in
operator of the Bundesanzeiger [German Federal Gazette].
the abovementioned attached electronic file and prepared
for publication purposes complies in all material respects
The Supervisory Board is responsible for overseeing the
with the requirements of Sec. 328 (1) HGB for the electronic
preparation of the ESEF documents as part of the financial
financial statements and the audited group management
reporting format. We do not express any opinion on the
reporting process.
information contained in this reproduction nor on any other
information contained in the abovementioned file beyond
Group auditor’s responsibilities for the assurance work
this reasonable assurance opinion and our audit opinion
on the ESEF documents
on the accompanying consolidated financial statements
Our objective is to obtain reasonable assurance about
and the accompanying group management report for the
whether the ESEF documents are free from material non-
fiscal year from 1 July 2020 to 30 June 2021 contained
compliance with the requirements of Sec. 328 (1) HGB,
in the “Report on the audit of the consolidated financial
whether due to fraud or error. We exercise professional
statements and of the group management report” above.
judgment and maintain professional skepticism throughout
the engagement. We also:
Basis for the opinion
We conducted our assurance work on the reproduction
Identify and assess the risks of material non-compliance
of the consolidated financial statements and the group
with the requirements of Sec. 328 (1) HGB, whether due to
management report contained in the abovementioned
fraud or error, design and perform assurance procedures
attached electronic file in accordance with Sec. 317 (3b) HGB
responsive to those risks, and obtain assurance evidence
and the Exposure Draft of IDW Assurance Standard:
that is sufficient and appropriate to provide a basis for our
Assurance in Accordance with Sec. 317 (3b) HGB on the
assurance opinion.
Electronic Reproduction of Financial Statements and
Obtain an understanding of internal control relevant
Management Reports Prepared for Publication Purposes
to the assurance on the ESEF documents in order to
(ED IDW AsS 410). Our responsibilities under that standard
design assurance procedures that are appropriate in the
are further described in the “Group auditor’s responsibilities
circumstances, but not for the purpose of expressing an
for the assurance work on the ESEF documents” section.
assurance opinion on the effectiveness of these controls.
Our audit firm applied the requirements for quality
Independent Auditor’s Report | Annual Financial Statements
149
KWS Group | Annual Report 2020/2021 Evaluate the technical validity of the ESEF documents,
Furthermore, we have not audited the content of the
i. e., whether the electronic file containing the ESEF
following disclosures extraneous to management reports.
documents meets the requirements of Delegated
Disclosures extraneous to management reports are such
Regulation (EU) 2019/815, in the version valid as of the
disclosures that are not required pursuant to Secs. 315,
reporting date, on the technical specification for this
315a HGB or Secs. 315b to 315d HGB:
electronic file.
Evaluate whether the ESEF documents enable an XHTML
Section 2.1.3 “Responsible Business Activity”
reproduction with content equivalent to the audited
Section 2.4 “Environmental Report”
consolidated financial statements and to the audited
Section 2.5.2 “Occupational Health and Safety”
group management report.
Section 2.5.3 “Recruitment and Employee Loyalty”
Evaluate whether the tagging of the ESEF documents with
Section 2.5.4 “Qualification, Further Training and
Inline XBRL technology (iXBRL) enables an appropriate
Development”
and complete machine-readable XBRL copy of the
Section 2.5.5 “Labor and Social Standards”
XHTML reproduction.
Section 2.6.3 “Business Ethics and Compliance”
Section 2.6.4 “Responsibility in the Supply Chain”
Further information pursuant to Art. 10 of the
Section 2.7 “Social Report”.
EU Audit Regulation
We were elected as group auditor by the Annual
Hanover, 23 September 2021
Shareholders’ Meeting on 16 December 2020. We were
engaged by the Supervisory Board on 11 July 2021. We
Ernst & Young GmbH
have been the group auditor of KWS SAAT SE & Co. KGaA
Wirtschaftsprüfungsgesellschaft
without interruption since fiscal year 2016/2017.
We declare that the opinions expressed in this auditor’s
report are consistent with the additional report to the audit
Ludwig
Dr. Janze
committee pursuant to Art. 11 of the EU Audit Regulation
Wirtschaftsprüfer
Wirtschaftsprüfer
(long-form audit report).
[German Public Auditor]
[German Public Auditor]
German Public Auditor responsible for the engagement
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:
The combined non-financial declaration for
KWS SAAT SE & Co. KGaA and the KWS Group contained
in section 2.10.2 “Combined Non-Financial Declaration
for the KWS SE & Co. KGaA Group” of the group
management report, including any information in other
sections referred to in this declaration. The respective
sections are marked “NFE” in the margin.
The information in section 2.6.1 “Corporate Governance
Report and Declaration on Corporate Governance.”
150 Annual Financial Statements | Independent Auditor’s Report
Annual Report 2020/2021 | KWS Group
Independent Auditor’s Limited Assurance Report
The assurance engagement performed by Ernst & Young (EY) relates exclusively to the German PDF version of the combined
non-financial statement 2020/2021 of KWS SAAT SE & Co. KGaA. The following text is a translation of the original German
Independent Assurance Report.
To KWS SAAT SE & Co. KGaA, Einbeck
We have performed a limited assurance engagement on the
Our audit firm applies the national statutory regulations
group non-financial statement of KWS SAAT SE & Co. KGaA
and professional pronouncements for quality control, in
according to § 315b HGB (“Handelsgesetzbuch”: German
particular the by-laws regulating the rights and duties of
Commercial Code), which is combined with the non-financial
Wirtschaftsprüfer and vereidigte Buchprüfer in the exercise
statement of the parent company according to § 289b HGB,
of their profession [Berufssatzung für Wirtschaftsprüfer
consisting of the chapter “2.10.2 Combined Non-Financial
und vereidigte Buchprüfer] as well as the IDW Standard on
Declaration for the KWS Group” in the combined
Quality Control 1: Requirements for Quality Control in audit
management report and the chapters “2.1 Fundamentals of
firms [IDW Qualitätssicherungsstandard 1: Anforderungen
the KWS Group”, “2.4.1 Product Innovations”, “2.4.2 Product
an die Qualitätssicherung in der Wirtschaftsprüferpraxis
Quality and Safety”, “2.4.3 Emissions and Water”,
(IDW QS 1)].
“2.5.2 Occupational Health and Safety”, “2.5.3 Recruitment
and Employee Loyalty”, “2.5.4 Qualification, Further Training
Auditor’s responsibility
and Development”, “2.5.5 Labor and Social Standards”,
Our responsibility is to express a limited assurance
“2.6.3 Business Ethics and Compliance”, “2.6.4 Responsibility
conclusion on the combined non-financial statement based
in the supply chain” and “2.7.1 Use of Genetic Resources”
on the assurance engagement we have performed.
in the combined management report being incorporated by
reference (hereafter combined non-financial statement), for
We conducted our assurance engagement in accordance
the reporting period from 1 July 2020 to 30 June 2021.
with the International Standard on Assurance Engagements
Management’s responsibility
than Audits or Reviews of Historical Financial Information,
The legal representatives of the Company are responsible
issued by the International Auditing and Assurance
for the preparation of the combined non-financial statement
Standards Board (IAASB). This Standard requires that we
in accordance with §§ 315c in conjunction with 289c to
plan and perform the assurance engagement to obtain
(ISAE) 3000 (Revised): Assurance Engagements other
289e HGB.
limited assurance about whether the combined non-
financial statement of the Company has been prepared,
This responsibility includes the selection and application of
in all material respects, in accordance with §§ 315c in
appropriate methods to prepare the combined non-financial
conjunction with 289c to 289e HGB. In a limited assurance
statement as well as making assumptions and estimates
engagement the assurance procedures are less in extent
related to individual disclosures, which are reasonable in
than for a reasonable assurance engagement and therefore
the circumstances. Furthermore, the legal representatives
a substantially lower level of assurance is obtained. The
are responsible for such internal controls that they have
assurance procedures selected depend on the auditor's
considered necessary to enable the preparation of a
professional judgment.
combined non-financial statement that is free from material
misstatement, whether due to fraud or error.
Within the scope of our assurance engagement, which has
Auditor’s declaration relating to independence and
performed amongst others the following assurance and
been conducted between June and September 2021, we
quality control
other procedures:
We are independent from the Company in accordance
with the provisions under German commercial law and
Inquiries of employees and inspection of documents
professional requirements, and we have fulfilled our other
regarding the selection of topics for the combined non-
professional responsibilities in accordance with these
financial statement, the risk assessment and the concepts
requirements.
of the parent company and the group for the topics that
have been identified as material,
Independent Auditor’s Report | Annual Financial Statements
151
KWS Group | Annual Report 2020/2021
Inquiries of employees responsible for data capture and
Engagement terms and liability
consolidation as well as the preparation of the combined
The “General Engagement Terms for Wirtschaftsprüfer
non-financial statement, to evaluate the reporting
and Wirtschaftsprüfungsgesellschaften [German Public
processes, the data capture and compilation methods
Auditors and Public Audit Firms]” dated 1 January 2017 are
as well as internal controls to the extent relevant for the
applicable to this engagement and also govern our relations
assurance of the combined non-financial statement,
with third parties in the context of this engagement (www.
Identification of likely risks of material misstatement in the
de.ey.com/general-engagement-terms). In addition, please
combined non-financial statement,
refer to the liability provisions contained there in no. 9 and
Inspection of relevant documentation of the systems
to the exclusion of liability towards third parties. We assume
and processes for compiling, aggregating and validating
no responsibility, liability or other obligations towards third
relevant data in the reporting period and testing such
parties unless we have concluded a written agreement to
documentation on a sample basis,
the contrary with the respective third party or liability cannot
Analytical evaluation of disclosures of the parent company
effectively be precluded.
and on Group level as well as selected sites relating to the
quality of the reported data,
We make express reference to the fact that we do
Inquiries and inspection of documents on a sample
not update the assurance report to reflect events or
basis relating to the collection and reporting of selected
circumstances arising after it was issued unless required to
qualitative statements and data,
do so by law. It is the sole responsibility of anyone taking
Evaluation of the presentation of disclosures in the
note of the result of our assurance engagement summarized
combined non-financial statement.
in this assurance report to decide whether and in what way
Assurance conclusion
this result is useful or suitable for their purposes and to
supplement, verify or update it by means of their own review
Based on our assurance procedures performed and
procedures.
assurance evidence obtained, nothing has come to our
attention that causes us to believe that the combined
Munich, 23 September 2021
non-financial statement of KWS SAAT SE & Co. KGaA
for the period from 1 July 2020 to 30 June 2021 has not
Ernst & Young GmbH
been prepared, in all material respects, in accordance with
Wirtschaftsprüfungsgesellschaft
§§ 315c in conjunction with 289c to 289e HGB.
Intended use of the assurance report
We issue this report on the basis of the engagement
Nicole Richter
Annette Johne
agreed with KWS SAAT SE & Co. KGaA. The assurance
Wirtschaftsprüferin
Wirtschaftsprüferin
engagement has been performed for the purposes of the
[German Public Auditor]
[German Public Auditor]
Company and the report is solely intended to inform the
Company as to the results of the assurance engagement
and must not be used for purposes other than those
intended. The report is not intended to provide third parties
with support in making (financial) decisions.
152 Annual Financial Statements | Independent Auditor’s Report
Annual Report 2020/2021 | KWS Group
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 accounting, and that an accurate picture of
the course of business, including business results, and the
Group’s situation is conveyed by the Group Management
Report, 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 2021
KWS SE
Hagen Duenbostel Léon Broers Felix Büchting
Peter Hofmann Eva Kienle
Declaration by Legal Representatives
153
KWS Group | Annual Report 2020/2021 Additional Information
Financial calendar
Date
November 18, 2021
December 2, 2021
February 14, 2022
May 12, 2022
September 28, 2022
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
Quarterly Report Q1 2021/2022
Annual Shareholders’ Meeting
Semiannual Report 2021/2022
Quarterly Report 9M 2021/2022
Publication of 2021/2022 financial statements,
annual press and analyst conference
707400
DE0007074007
KWS
Prime Standard
SDAX
Non-par
33,000,000
Dividend payment and dividend ratios of the past ten years
0.60
0.60
0.60
0.60
0.56
0.80
0.64
0.64
0.70
0.67
25%
20%
21.7
19.6
24.7
23.6
23.2
24.3
23.9
21.6
21.2
21.3
11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19
19/20 20/21
Dividend proposal 2021
Dividend payment in €
Dividend ratio (total
dividends/net income)
in %
154
Additional Information
Annual Report 2020/2021 | 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
Manuel Babolin Paul Epp Andrea Favarin Frank Stefan Kimmel Karsten Koch Roman Thomas
Date of publication: October 20, 2021
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