Annual Report
2021 | 2022
KWS in Figures
The KWS Group (in € millions)
2021/2022
2020/2021
2019/2020
2018/2019
2017/2018
2016/2017
Net sales and income
Net sales
EBITDA
EBIT
as a % of net sales (EBIT margin)
Net financial income/expense
Net income for the year
Other figures on earnings
R&D intensity in %
1,539.5
1,310.2
1,282.6
1,113.3
1,068.0
1,075.2
252.4
155.1
10.1
–16.9
107.8
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
18.6
19.3
18.4
18.5
18.5
17.7
Key figures on the financial position and assets
Capital expenditure
Depreciation and amortization
Equity
Equity ratio in %
Return on equity in %
Return on assets in %
Net debt 1
Total assets
Capital employed (avg.) 2
ROCE (avg.) in % 3
Cash flow from operating activities
Free cash flow 4
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)
93.5
97.4
81.3
93.8
1,245.9
1,053.7
47.0
10.5
5.1
521.9
2,651.8
1,667.9
9.3
100.3
9.5
4,865
355.8
3.27
0.80
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
1,517.7
981.1
13.8
98.1
30.0
3,852
253.9
3.02
0.67
63.3
49.4
836.9
56.0
13.1
7.3
48.5
1,495.2
990.1
13.3
122.4
57.6
3,705
247.0
2.96
0.64
Corn
Sugarbeet
Cereals
Vegetables
Corporate
20.8%
935
774
12.2%
588
524
–20.8%
71
57
11.6%
175
195
13.2%
191
216
38.7%
21
30
Net sales
EBIT
Net sales
EBIT
Net sales
EBIT
2020/2021
2021/2022
Reconciliation (in € millions)
Net sales
EBIT
– 6.8%
58 54
–2.3%
EBIT
Net sales
–18
–19
38.5%
– 6.0%
6
8
Net sales
EBIT
–92
–97
Segments Reconciliation
KWS Group
1,802.5
165.7
–263.3
–10.6
1,539.5
155.1
1 Short-term + long-term borrowings – cash and cash equivalents – securities
2 Total capital employed at the end of the quarters (intangible assets + property, plant and equipment + inventories + trade receivables – trade payables)/4
3 EBIT/Capital Employed (avg.)
4 Adjusted for special effects from acquisition of the Pop Vriend Seeds Group. Information on interest paid changed
2
5 FTE: Full-time equivalents
6 Earnings and dividend per share of previous periods adjusted due to share split
7 The dividend for 2021/2022 is subject to the consent of the 2022 Annual Shareholders’ Meeting in December.
To Our Shareholders |
Annual Report 2021/2022 | KWS Group
Contents
1. To Our Shareholders
Foreword of the Executive Board
Report of the Supervisory Board
KWS on the Capital Market
2. Combined Management Report 2021/2022
of the KWS Group
2.1 Fundamentals of the KWS Group
2.2 Research & Development Report
2.3 Economic Report
2.4 EU Taxonomy
2.5 Environmental Report
2.6 Employee Report
2.7 Corporate Governance
2.8 Social Report
2.9 Opportunity and Risk Report
2.10 Forecast Report
2.11 Report on KWS SAAT SE & Co. KGaA and
Non-Financial Declaration (Declaration Based
on the German Commercial Code (HGB))
2
2
5
12
15
16
23
26
43
44
49
55
61
63
77
79
3. Consolidated Financial Statements of
82
KWS SAAT SE & Co. KGaA 2021/2022
The cover photo shows ripening peas on a test field in southern Lower Saxony. Compared
to other field crops, grain peas have a high crude protein content, which is interesting for
feeding and for human nutrition. This is also the reason that in terms of the classic breeding
goals, the protein content is the primary focus, in addition to stability and a high yield.
| To Our Shareholders
1
KWS Group | Annual Report 2021/2022 Executive Board
Peter Hofmann Sugarbeet, Vegetables, Cereals, Oilseed Rape/Special Crops & Organic Seed, Marketing & Communications
Nicolás Wielandt Corn Europe and South America
Eva Kienle Finance & Procurement, Controlling, Global Transaction Center, Legal Services & IP, IT, Compliance, Governance & Risk Management
Hagen Duenbostel (CEO) Corn North America, Corn China, Strategy
Felix Büchting Research & Breeding, Human Resources, Farming
Foreword of the Executive Board
2
To Our Shareholders | Foreword of the Executive Board
Annual Report 2021/2022 | KWS Group To Our
Share
holders
Foreword of the Executive Board
A sustainable food system – good for us, good for the planet.
Those are the words used by the EU Commission to herald in the realignment of agriculture
in Europe. Sustainable food systems are at the core of the Farm to Fork Strategy for
sustainable and inclusive growth. The objective is to boost the economy, increase people’s
health and quality of life, and enhance nature conservation. The EU Commission’s goals
are to safeguard the food supply despite climate change and biodiversity loss, reduce the
ecological footprint of the EU’s food system, and transition to competitive sustainability and
a crisis-proof food system.
We’re currently witnessing dramatic proof of the need for that. Russia’s attack on Ukraine
is causing immeasurable suffering to the population and is also negatively impacting food
security and price stability around the world – especially in poorer countries. Our task as a
food producer is to supply farmers with seed, even under these tough circumstances. We’re
not losing sight of our focus on delivering solutions for sustainable agriculture in the face of
more difficult climatic conditions.
Our products and services are major production factors that contribute to the commercial
success of a farm. Our research & development activities extend far beyond breeding high-
yielding varieties. Our focus is also on crops with improved resistance to drought stress,
pests and diseases, and thus on reducing the use of pesticides and on conserving the
precious resource of water. Our digital solutions help farmers secure and further increase
the yields per hectare they need. As a partner to farmers, we are thus making a clear
contribution to more ecological agriculture, while enabling subsequent generations to run
their farms successfully under constantly changing conditions.
Foreword of the Executive Board | To Our Shareholders
3
KWS Group | Annual Report 2021/2022 We can now offer our customers innovative Cercospora-tolerant sugarbeet varieties, for example. This
widespread leaf disease regularly causes significant losses in yield. The effectiveness of the available
chemical fungicides is diminishing, and they aren’t an ecological solution, either. The result of our many years
of breeding is now the new CR+ varieties, which combine very high protection with excellent yield, thereby
strengthening the position of sugarbeet as an important part of diverse crop rotations.
Another example is the development of new rapeseed varieties that can withstand one of the main pests,
the cabbage stem flea beetle. The harvest of entire areas infested with this insect may be lost completely.
The excellent genetics of KWS’ new varieties are significantly less susceptible to infestation and help ensure
profitable and sustainable rapeseed cultivation in Europe, particularly given the current shortages of oil plants.
These examples illustrate that innovative seed can and will play a key role in the transformation toward
more sustainable agriculture. This means KWS, one of the world’s leading plant breeding companies, has
considerable economic potential – and we intend to leverage it.
As part of our strategic planning in the past fiscal year, we identified four main areas in which we aim to grow
in the future through innovation: products and services for sustainable agriculture, linking our seed to digital
offerings, expanding digital sales channels that foster customer proximity, and innovations for the growing
market of plant proteins as the basis for sustainable food. We’re thus aligning our business rigorously and
promptly to the defining megatrends in agriculture.
Our motto “Seeding the Future – since 1856” stands over all our activities to promote sustainable agriculture.
This is more than just a slogan. It’s an expression of how we think and act in terms of generations. We continue
to abide by this maxim, and at our last Annual Shareholders’ Meeting we initiated a multistage generational
change on the Executive and Supervisory Boards. Continuity, our character as a family business and
independence will remain at the heart of how we run our company.
These guiding principles will help us to stay on course and expand our business even in troubled waters.
My heartfelt thanks go out to KWS’ employees worldwide for their great commitment and efforts. I also thank
our customers, partners and shareholders for the successful working relationship and their 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 2021/2022 | KWS Group
Report of the Supervisory Board
Russia’s invasion of Ukraine not only marked a
in all key decisions. The Supervisory Board was
geopolitical turning point, but also deeply shook us
provided with the necessary information in written
at KWS. We have had ties with Ukraine that extend
and oral form regularly, promptly and comprehen-
as far back as 1900, when we opened our first
sively. This included all key information on relevant
foreign location in Vinnytsia, in western Ukraine. Our
questions, in particular relating to strategy, plan-
thanks and support today go to our approximately
ning, the business performance and the situation of
170 employees who have made it possible for us to
the Company and the KWS Group, including the risk
supply farmers with seed under extremely difficult
situation, risk management and compliance. In the
conditions and have thus made an important contri-
year under review, there were no transactions with
bution to the country’s future. However, we would
related parties that require the Supervisory Board’s
also like to pay tribute to the many private initiatives
approval in accordance with Section 111b of the
by KWS colleagues who provided urgently needed,
German Stock Corporation Act (AktG).
practical help. As a company, we will continue to
stand by Ukraine and its people and help in its
The Company’s business policy, corporate and
reconstruction in the shape of concrete projects.
financial 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
partner, KWS SE, both have a separate Supervisory
projects, risk management at the KWS Group, in
Board, each with the same shareholder represen-
particular in relation to preventive healthcare in the
tatives serving on them. The Supervisory Board
wake of the COVID-19 pandemic, were the subject
of KWS SAAT SE & Co. KGaA has two employee
of detailed discussions in the year under review.
representatives in addition to the shareholder
representatives. Both boards predominantly hold
The Chairman of the Supervisory Board continued
joint meetings, with the result that the employee
the direct discussions with the Chief Executive
representatives are integrated at an early stage in
Officer of KWS SE and individual members of the
upcoming decisions by the personally liable partner.
Executive Board in regular talks outside the meet-
ings of the Supervisory Board in the year under
The Supervisory Board of KWS SAAT SE &
review. In addition, there were monthly meetings
Co. KGaA discharged the duties incumbent on it in
between the Chairman of the Supervisory Board
accordance with the law, the Company’s Articles of
and the Executive Board as a whole, where the
Association and the bylaws, regularly advised and
Company’s current business development and,
monitored the personally liable partner, represented
in particular, its strategy, occurrences of special
by its Executive Board, in its activities and satisfied
importance and individual aspects were dealt with.
itself that the Company was run properly and in
The Chairman of the Supervisory Board informed
compliance with the law, and that it was organized
the Supervisory Board of the results of these
efficiently and cost-effectively. The Supervisory
meetings. The Supervisory Board did not make use
Board extensively discussed all significant busi-
of its right to conduct an examination granted by
ness transactions and carefully accompanied the
Section 111 (2) of the German Stock Corporation
Executive Board in all fundamental decisions of
Act (AktG) since the reporting by the Executive
importance to the Company. As is customary, the
Board meant there was no reason to do so.
Executive Board involved the Supervisory Board
Report of the Supervisory Board | To Our Shareholders
5
Report of the Supervisory Board
KWS Group | Annual Report 2021/2022
Focal areas of deliberations
situation in Ukraine at short, regular intervals. As
The Supervisory Board of KWS SAAT SE &
scheduled, the status of the breeding programs for
Co. KGaA convened four times in fiscal 2021/2022,
all major crops was also presented to the Supervi-
holding these meetings in hybrid form due to the
sory Board at this meeting.
pandemic. In addition, the Supervisory Board
gathered at Pop Vriend Seeds in Andijk, in the
On June 23, 2022, the Supervisory Board discussed
Netherlands, for its budget meeting in June 2022.
the budget and medium-term planning, including
The presence of the Supervisory Board was always
ways of countering the significant cost increases.
complete, but with Cathrina Claas-Mühlhäuser
The Supervisory Board of KWS SE subsequently
being prevented from attending two meetings.
adopted the budget and planning.
At the beginning of the year under review, the
Corporate governance
Supervisory Board of KWS SAAT SE & Co. KGaA
The Supervisory Board discussed compliance with
convened its meeting to discuss the financial
the recommendations of the “German Commission
statements on October 21, 2021. At this meeting,
for the Corporate Governance Code” and issued
which was also attended by the independent
a new Declaration of Compliance with the German
auditor for fiscal 2020/2021, the Supervisory Board
Corporate Governance Code in the version dated
examined and approved the financial statements
April 22, 2022, in accordance with Section 161 of
of KWS SAAT SE & Co. KGaA and approved
the German Stock Corporation Act (AktG) together
the consolidated financial statements of the
with the personally liable partner in September
KWS Group as of June 30, 2021. This meeting was
2022. The Declaration of Compliance can be
followed by a joint meeting of the two boards, at
obtained on the Company’s website at
which the Supervisory Board heard reports on the
www.kws.com/corp/en/company/investor-relations/
Company’s anticipated business performance in
corporate-governance.
the current year and on the status of the “Strategic
Planning 31,” which covers a timescale of ten years.
In the year under review, the Supervisory Board
regularly addressed the question of any conflicts
The Supervisory Board adopted the “Strategic
of interest on the part of its members and those of
Planning 31,” which – in addition to operational
the Executive Board. In the year under review, there
goals – primarily defines far-reaching sustainability
were no such conflicts of interests that had to be
objectives, on December 1, 2021. In addition, the
disclosed immediately to the Supervisory Board
new Head of KWS Research, Dr. Thomas Ehrhardt,
and reported to the Annual Shareholders’ Meeting.
informed the Supervisory Board about the status
of the most important research projects. On
The Supervisory Board conducted a self-assess-
December 2, 2021, the Supervisory Board was
ment in the year under review, in accordance with
given a presentation of the “Succession Manage-
recommendation D.12 of the German Corporate
ment System,” which envisages structured
Governance Code. It is carried out every two
succession planning for all key positions at the
years and was accompanied by Deloitte GmbH
KWS Group.
Wirtschaftsprüfungsgesellschaft. Based on the
evaluation of specific questionnaires for the full
The meeting on March 15, 2022, focused on the
Supervisory Board, the Audit Committee and the
geopolitical crisis in Eastern Europe and the ways
Executive Board, Deloitte determined that the
KWS’ 170 employees in Ukraine and their families
Supervisory Board works in compliance with best
could be supported. In addition, the Supervisory
practices.
Board received written reports on the current
6
To Our Shareholders | Report of the Supervisory Board
Annual Report 2021/2022 | KWS Group The Annual General Meeting on December 2, 2021 was held again in a virtual format.
Supervisory Board committees
for 2021/2022 were discussed in particular at the
In the year under review, the Supervisory Board
meeting on November 16, 2021. The meeting on
of KWS SAAT SE & Co. KGaA had two commit-
February 11, 2022, discussed and defined the focus
tees: the Audit Committee and the Nominating
of the audit for fiscal year 2021/2022 in the pres-
Committee.
ence of the appointed independent auditor. It also
discussed the situation as regards the KWS Group’s
The Audit Committee convened for four joint
financing and the Semiannual Report 2021/2022 in
meetings in fiscal 2021/2022, each of which was
detail. In addition, the report by Internal Auditing
attended by all members either in person or online
for fiscal 2021/2022 was discussed and the audit
(with the exception of the meeting in February 2022,
plan for the subsequent years was defined and
which Dr. Andreas J. Büchting was prevented from
adopted at the meeting on May 10, 2022. The risk
attending). In its meeting on September 23, 2021,
situation, the 9M Quarterly Report for 2021/2022
the Audit Committee discussed the annual financial
and tax-related issues of the KWS Group were also
statements and accounting of KWS SAAT SE &
discussed.
Co. KGaA and the consolidated financial state-
ments of the KWS Group for the fiscal year
In addition, the Audit Committee obtained the state-
2020/2021, along with the Combined Manage-
ment of independence from the auditor, ascertained
ment Report and the proposal by the Executive
and monitored the auditor’s independence and
Board on the appropriation of the profits. The
examined its qualifications. The Audit Committee
Compliance Report and the 1st Quarterly Report
also satisfied itself that the regulations on internal
Report of the Supervisory Board | To Our Shareholders
7
KWS Group | Annual Report 2021/2022 rotation were observed by the independent auditor
Annual Shareholders’ Meeting of KWS SAAT SE &
and dealt with the issue of any additional services
Co. KGaA on December 6, 2022. He will thus be
rendered by the independent auditor.
released from his duties on the Executive Board
The Supervisory Board of KWS SAAT SE &
ment. Felix Büchting will succeed him as Chief
Co. KGaA does not hold personnel responsibility
Executive Officer of KWS SE, as we also announced
and leave KWS SAAT SE & Co. KGaA’s top manage-
as regards management, in particular in relation
in last year’s report.
to the Executive Board of KWS SE. Nevertheless,
we would like to take this opportunity to inform
The Nominating Committee dealt with the revision
you about the personnel changes at the personally
of the profile of skills for the Supervisory Board
liable partner.
of KWS SAAT SE & Co. KGaA in the year under
review. The profile had to be adapted, in particular
As we announced in last year’s report,
in view of the anticipated new recommendations
Dr. Léon Broers retired from the Executive Board
in the German Corporate Governance Code. At
of KWS SE when his contract of employment ended
its meeting on June 26, 2022, the Supervisory
on December 31, 2021, after having been respon-
Board adopted the revised profile of skills along
sible for Research & Breeding on the Executive
with a corresponding qualification matrix. We have
Board for 15 years. One indicator of our innova-
published both of them on our homepage as part
tiveness has always been the number of official
of the “Declaration on Corporate Governance.” On
marketing approvals for new KWS varieties. It
the basis of the new profile of skills, the Nominating
almost doubled during his tenure in the Executive
Committee then drew up proposals for candidates
Board to around 500 product approvals per annum.
for the forthcoming election of the new Supervi-
Our product portfolio also increased significantly
sory Board. The Supervisory Board endorsed the
with the addition of sunflower breeding in 2010, the
proposals of the Nominating Committee, with the
tropical corn breeding program in Brazil in 2012,
result that it will propose the following shareholder
cereal breeding in North America starting in 2013,
representatives for election to the Supervisory
and most recently vegetable breeding in 2019
Board of KWS SAAT SE & Co. KGaA at the Annual
during the time he worked with us. We are well
Shareholders’ Meeting on December 6, 2022: The
positioned in basic research and in our numerous
Deputy Chairwoman of the Supervisory Board,
application-oriented research projects. The large
Dr. Marie Th. Schnell, and the current Chairman
number of patents we hold is also testimony to this.
of the Audit Committee, Victor W. Balli, will be
Léon Broers is thus handing over a well-kept ship to
proposed for reelection. As reported last year,
his successor.
our former Chief Executive Officer, Philip Freiherr
von dem Bussche, has agreed to stand for elec-
As had been announced at the Annual
tion during an interim period (cooling-off period
Shareholders’ Meeting in December 2020,
of Hagen Duenbostel in 2023 and 2024). We are
Dr. Felix Büchting took charge of Research &
also delighted to announce that we have been able
Development on January 1, 2022. He also
to win the services of Professor Dr. Dr. h.c. mult.
remains in charge of Human Resources, but
Stefan W. Hell from Göttingen, who will strengthen
has handed over responsibility for cereals busi-
our Supervisory Board’s scientific expertise. The
ness to Dr. Peter Hofmann. At the same time,
résumés of the candidates and a corresponding
Peter Hofmann took over the Vegetables Segment
qualification matrix will be published along with
from Léon Broers. Nicolás Wielandt joined the
the Notice of the Annual Shareholders’ Meeting.
Executive Board as its fifth member effective
I would add that these candidates will also be
January 1, 2022. A native of Chile, he is now
proposed for election to the Supervisory Board at
responsible for Corn Europe and South America.
the Annual Shareholders’ Meeting of KWS SE on
Dr. Hagen Duenbostel will embark on his envis-
November 24, 2022.
aged two-year cooling-off period at the end of the
8
To Our Shareholders | Report of the Supervisory Board
Annual Report 2021/2022 | KWS Group Andreas J. Büchting, Chairman of the Supervisory Board
The committee satisfied itself that all the candidates
The employees of KWS’ European subsidiaries
also had the time expected for them to discharge
(in the EU) elected their representatives for the
their duties on the board. The aspect of diversity
future Supervisory Board of KWS SAAT SE & Co.
should be taken into account in filling posts on the
KGaA on July 26, 2022. Under the regulations,
Supervisory Board. In this context, the Supervisory
one representative from Germany and a further
Board decided in accordance with Section 111 (5)
representative from a foreign subsidiary were to
of the German Stock Corporation Act (AktG) that
be elected. The Chairwoman of the European
the ratio of women and men among the shareholder
Employees’ Committee (EEC), Christine Coenen,
representatives on the Supervisory Board should
was once again successful and will therefore begin
not be less than 25% by June 30, 2027. However,
her second term of office on our Supervisory Board
the Supervisory Board is not responsible for setting
in December. The workforce elected Eric Gombert
a target figure for the employee representatives,
from KWS France as a further representative. He
since the regulations for election of employee
is 54 years of age and is the head of our breeding
representatives on the Supervisory Board do not
station in Buzet, France. Eric Gombert has worked
specify any targets or a minimum figure for the ratio
in the seed industry for more than 30 years, 15 of
of women and men.
them with KWS. He has been a member of the EEC
since 2015. I would like to take this opportunity to
congratulate both employee representatives on their
election.
Report of the Supervisory Board | To Our Shareholders
9
KWS Group | Annual Report 2021/2022 Annual and consolidated financial statements
Supervisory Board as preparation. For example,
and auditing
all of them were provided with the annual financial
Ernst & Young GmbH Wirtschaftsprüfungs-
statements, consolidated financial statements,
gesellschaft, Hanover, the independent auditor
Combined Management Report, audit reports
chosen at the Annual Shareholders’ Meeting on
by the independent auditor, and the proposal by
December 2, 2021, and commissioned by the Audit
the personally liable partner on the appropria-
Committee, has audited the financial statements of
tion of the profits. The Supervisory Board like-
KWS SAAT SE & Co. KGaA that were presented by
wise received and discussed the Non-Financial
the personally liable partner, KWS SE, and prepared
Declaration (Section 289b and Section 315b of
in accordance with the provisions of the German
the German Commercial Code (HGB)), which is
Commercial Code (HGB) for fiscal 2021/2022 and
part of the Combined Management Report and
the financial statements of the KWS Group (IFRS
contains disclosures on the KWS Group and the
consolidated financial statements), as well as the
parent company KWS SAAT SE & Co. KGaA, as
Combined Management Report of KWS SAAT SE &
well as the related audit report by the independent
Co. KGaA and the KWS Group (Group Manage-
auditor (Section 111 (2) Sentence 4 of the German
ment Report), including the accounting reports,
Stock Corporation Act (AktG)) as part of a limited
and awarded them its unqualified audit certificate.
assurance engagement.
In addition, the auditor concluded that the audit of
the financial statements did not reveal any facts
The Audit Committee convened on Septem -
that might indicate a misstatement in the Declara-
ber 9, 2022, to discuss the annual financial state-
tion of Compliance issued by the personally liable
ments of KWS SAAT SE & Co. KGaA and the
partner and the Supervisory Board in accordance
KWS Group’s consolidated financial statements for
with Section 161 of the German Stock Corporation
the 2021/2022 fiscal year and accounting, along
Act (AktG) with respect to the recommendations
with the Combined Management Report. The inde-
of the “Government Commission for the German
pendent auditor for fiscal 2021/2022 explained the
Corporate Governance Code.” The Non-Financial
results of its audit of the annual financial statements
Declaration (Section 289b and Section 315b of the
and consolidated financial statements. It pointed
German Commercial Code (HGB)) in the Combined
out that there were no grounds for assuming a
Management Report was likewise audited by the
lack of impartiality on the part of the independent
independent auditor.
auditor in its audit. The Audit Committee also dealt
with the proposal by the personally liable partner
The Supervisory Board received and discussed the
on the appropriation of the net retained profit of
financial statements of KWS SAAT SE & Co. KGaA
KWS SAAT SE & Co. KGaA and recommended that
and the consolidated financial statements of the
the Supervisory Board approve it.
KWS Group and Combined Management Report
of KWS SAAT SE & Co. KGaA and the KWS Group,
The Supervisory Board also held detailed
along with the report by the independent auditor of
discussions of questions on the agenda at its
KWS SAAT SE & Co. KGaA and the KWS Group and
meeting to discuss the financial statements on
the proposal on appropriation of the net retained
September 26, 2022. The auditor took part in the
profit for the year made by KWS SAAT SE &
meeting. It reported on the main results of the
Co. KGaA, in due time. Comprehensive documents
audit and was also available to answer additional
and drafts were submitted to the members of the
questions and provide further information for the
10
To Our Shareholders | Report of the Supervisory Board
Annual Report 2021/2022 | KWS Group Supervisory Board. According to the report of the
independent auditor, there were no material weak-
nesses in the internal control and risk manage-
ment system in relation to the accounting process.
There were also no circumstances that might raise
concerns about a lack of impartiality on the part of
the independent auditor. The independent auditor
did not provide any additional services.
In accordance with the final results of its own exam-
ination, the Supervisory Board endorsed the results
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 of KWS SAAT SE & Co. KGaA submitted
by the personally liable partner, and to the consol-
idated financial statements of the KWS Group and
the Combined Management Report of KWS SAAT
SE & Co. KGaA and the KWS Group and recom-
mended that the Annual Shareholders’ Meeting on
December 6, 2022, approve the annual financial
statements of KWS SAAT SE & Co. KGaA prepared
by the personally liable partner. The Supervisory
Board also endorsed the proposal by the personally
liable partner to the Annual Shareholders’ Meeting
on the appropriation of the net retained profit of
KWS SAAT SE & Co. KGaA after having examined it.
The Supervisory Board expresses its thanks to the
Executive Board and all employees of the KWS
Group for their commitment and contribution to the
successful further development of KWS in the past
fiscal year.
Einbeck, September 26, 2022
Dr. Drs. h. c. Andreas J. Büchting
Chairman of the Supervisory Board
KWS SAAT SE & Co. KGaA
Report of the Supervisory Board | To Our Shareholders
11
KWS Group | Annual Report 2021/2022 KWS on the Capital Market
Stock markets and share performance
KWS’ share was not able to buck this trend,
Global stock markets proved very robust up to
falling by around 20% in fiscal 2021/2022. It
the end of 2021, despite the ongoing COVID-19
stood at €55.80 at the end of June 2021 (previous
pandemic and rising inflation. Leading stock
year: €69.40). The average trading volume per day
indexes worldwide reached new highs in the wake
on XETRA fell from around 9,000 shares to approxi-
of massive economic stimulus programs and central
mately 7,700.
banks’ expansionary monetary policy. The DAX
recorded a new all-time high of 16,272 points on
Employee Stock Purchase Plan
January 5, 2022.
For more than 30 years KWS has offered its
employees the chance to become shareholders
However, global stock markets suffered heavy
in the Company and thus share in its success.
losses in the first half of 2022 against the back-
594 (592) employees in nine (eight) European
drop of growing risks from the significant rise in
countries participated in this year’s Employee
inflation, Russia's invasion of Ukraine and tighter
Stock Purchase Plan and purchased a total of
monetary policy. The DAX closed at 12,784 points
68,998 (76,120) shares. The acquired shares are
on June 30, 2022, well down from the previous year
subject to a lock-up period of four years. They
(15,531). The SDAX, on which the KWS share is
cannot be sold, transferred or pledged during this
listed, fell by around 26% to stand at 11,881 on the
period. As in previous years, the shares used for
balance sheet date (previous year: 16,021).
the Employee Stock Purchase Plan were acquired
in accordance with Section 71 (1) No. 2 of the
German Stock Corporation Act (AktG). More details
have been published in information released for the
capital market and can be viewed on our website at
www.kws.com.
The KWS share’s performance over ten years
400%
350%
300%
250%
200%
150%
100%
50%
July 1, 2012
KWS
DAX
SDAX
+148%
+97%
+36%
June 30, 2022
KWS on the Capital Market
12
To Our Shareholders | KWS on the Capital Market
Annual Report 2021/2022 | KWS Group
Shareholder structure at June 30, 2022
(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 good performance,
ISIN
the Executive and Supervisory Boards will again
Share class
propose a dividend of €0.80 (0.80) per share for
Number of shares
fiscal year 2021/2022 to the Annual Shareholders’
Index
Meeting on December 6, 2022. €26.4 (26.4) million
would thus be distributed to KWS SAAT SE &
Co. KGaA’s shareholders. This corresponds to a
dividend payout ratio of 24.5% (23.9%), 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, 2022
June 30, 2021
High and low
High (November 15, 2021)
Low (March 7, 2022)
DE0007074007
Non-par
33,000,000
SDAX
in €
55.80
69.40
in €
76.50
56.10
Average trading volume
in shares/day
2021/2022
2020/2021
7,687
9,203
Market capitalization
in € millions
June 30, 2022
June 30, 2021
1,841
2,290
KWS on the Capital Market | To Our Shareholders
13
KWS Group | Annual Report 2021/2022
14
To Our Shareholders | KWS on the Capital Market
Annual Report 2021/2022 | KWS Group
2. Combined Management Report
2021/2022 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 EU Taxonomy
2.5 Environmental Report
2.5.1 Product Innovations
2.5.2 Product Quality and Safety
2.5.3 Emissions & Water
2.6 Employee Report
2.6.1 Employment Trends
2.6.2 Occupational Health
and Safety
2.6.3 Recruitment & Employee Loyalty
2.6.4 Qualification, Further Training
and Development
2.6.5 Labor and Social Standards
16
16
18
18
19
21
22
23
26
26
29
33
43
44
44
45
46
49
49
49
50
51
53
2.7 Corporate Governance
2.7.1 Corporate Governance and Declaration on
Corporate Governance
2.7.2 Declaration of Compliance in Accordance
with Section 161 AktG (German Stock
Corporation Act)
2.7.3 Business Ethics & Compliance
2.7.4 Responsibility in the Supply Chain
2.7.5 Remuneration Report
2.7.6 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)
2.8 Social Report
2.8.1 Use of Genetic Resources and Intellectual
Property
2.8.2 Social Commitment
2.9 Opportunity and Risk Report
2.9.1 Opportunity Management
2.9.2 Risk Management
2.10 Forecast Report
2.10.1 Changes in the KWS Group’s Composition
that are Significant for the Forecast
55
55
55
55
57
58
58
61
61
62
63
63
65
77
77
2.10.2 Forecast for the KWS Group’s Statement of
77
Comprehensive Income
2.10.3 Forecast for the Segments
2.11 Report on KWS SAAT SE & Co. KGaA and
Non-Financial Declaration (Declaration Based
on the German Commercial Code (HGB))
2.11.1 KWS SAAT SE & Co. KGaA
2.11.2 Combined Non-Financial Declaration for
the KWS Group
78
79
79
80
KWS on the Capital Market | To Our Shareholders
15
KWS Group | Annual Report 2021/2022
2. Combined Management Report
The Combined Management Report comprises aspects of sustainability reporting in addition to content related to finan-
cial 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 80. 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 sugar-
sunflowers, as well as production and distribution
beet breeding, KWS has evolved into an innova-
of soybeans. Its operating performance depends
tive, international supplier with a broad portfolio
largely on the spring sowing season in the northern
of crops. The Company covers the complete value
hemisphere. This means the lion’s share of the
chain of a modern seed producer – from developing
segment’s net sales is generated in the second half
new varieties, multiplication and processing, to
of the fiscal year (January to June). The segment
marketing of the seed and consulting for farmers.
generates a lower share of its revenue in the first
KWS’ core competence lies in breeding new,
two quarters, mainly from corn and soybean seed in
high-performance varieties that are adapted to
South America. KWS is the market leader for silage
regional needs, such as climatic and soil conditions.
corn in Europe.
Targeted breeding of resistances against fungi or
viruses, for example, also enables a significant
The Sugarbeet Segment comprises sugarbeet
reduction in the use of chemical pesticides in
seed breeding, production and distribution, as well
agriculture. Every new variety delivers sustainable
as the development of diploid hybrid potatoes.
added value for our customers. KWS’ business
KWS’ high-quality sugarbeet varieties are consis-
model is based on this added value – which is ulti-
tently some of the highest-yielding in the industry.
mately attributable to breeding progress, optimiza-
KWS is the world market leader in sugarbeet seed,
tion of seed quality and pinpointed consulting.
not 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
In fiscal 2021/2022, the KWS Group’s operational
offers farmers efficient solutions for growing
business consisted of five Business Units, which
sugarbeet in the shape of locally adapted, multiple-
were grouped in the four product segments Corn,
resistant varieties. Sugarbeet is sown in the spring,
Sugarbeet, Cereals and Vegetables. The Business
which means that net sales in this segment are
Units Sugarbeet, Cereals and Vegetables are iden-
likewise largely generated in the second half of the
tical to the segments of the same name. The Corn
fiscal year (January to June).
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 2021/2022 | KWS Group The Cereals Segment includes breeding, produc-
Main business processes
tion and distribution of seed for rye, wheat, barley
KWS’ breeding processes are geared toward
and rapeseed. Rye accounts for the largest share
exploiting plants’ potential as much as possible
of revenue from cereals (around 40%), followed
and leveraging that potential to tackle the major
by rapeseed, wheat and barley. KWS generates
challenges of modern sustainable agriculture.
the remainder from other crops such as sorghum,
Whether it is plants for producing food, fodder or
peas, catch crops (e.g., mustard) and oats. Farmers
energy, conventional, organic or genetically modi-
in KWS’ core markets (Germany, Poland, the UK,
fied: KWS offers its customers a broad portfolio of
France and Scandinavia) predominantly sow cereals
high-performance varieties. It takes an average of
seed in the fall. Consequently, the segment gener-
eight to ten years to breed a new variety. Thanks
ates most of its revenue in the first half of the fiscal
to its large network of breeding and trial stations in
year (July to December).
all the world’s key markets, the Company can test
the individual candidates under a wide range of
The Vegetables Segment comprises vegetable
climatic and local conditions to determine whether
seed breeding, production and distribution. KWS is
the varieties are suitable for cultivation. In most
the world leader in spinach seed, which accounts
markets, variety development ends in an official
for around 60% of the segment’s net sales. Its
approval process in which candidates have to meet
portfolio also includes seed for beans, Swiss chard,
high quality standards, usually in three-year field
red beet and tomatoes. The segment generates just
trials. Seed multiplication in selected cultivation
about half its revenue in the U.S. KWS’ strategic
regions also takes up to two years. Only then can
objective is to build a significant position in the
the varieties be marketed via the various distribution
vegetable seed market long-term. Our focus apart
channels.
from spinach is on the world’s five most important
crops in this segment: tomatoes, peppers, cucum-
Products, markets and external factors
bers, watermelons and melons.
KWS offers its customers – farmers – a broad range
of agricultural crops that have been adapted by
Apart from the operating segments, there is also
breeding to the conditions of their specific loca-
Corporate, a segment which by and large does
tion. 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 2021/2022. 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 the external factors in our Opportunity
and Risk Report on pages 63 to 76.
2.1 Fundamentals of the KWS Group | Combined Management Report
17
KWS Group | Annual Report 2021/2022 Breeding and test 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 company with a tradition of family owner-
of KWS’ global activities is pooled under its roof.
ship, we think across generations. Apart from
It is headquartered in Einbeck, Germany, and
our corporate objectives, responsible business
controls breeding of the KWS Group’s range of
activity with regard to people and the environment
varieties. It conducts basic research, produces and
is therefore a firmly entrenched principle of how
distributes sugarbeet and corn seed, and is home
we run our company. As a profitable company that
to a number of central functions. There are also
acts sustainably, we have the necessary entre-
currently 87 subsidiaries and associated companies
preneurial stability and freedom to operate largely
in 34 countries. You can find a detailed breakdown
independently of short-term interests.
of net sales by region on page 30. An overview of
our subsidiaries and associated companies can be
Guidelines
found in the Notes on pages 140 to 143.
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:
18 Combined Management Report | 2.1 Fundamentals of the KWS Group
* Not an audited part of the Combined Management Report
Annual Report 2021/2022 | KWS Group We leverage genetic potential through
As part of the strategic planning we updated in
outstanding research and top-class breeding
fiscal 2021/2022, we have honed our fundamental
programs.
business model and the strategic contributions a
We supply our farmers with seed of the very best
seed company makes to these future topics with
quality.
regard to long-term megatrends and classified them
We aim to be a strong partner that earns the trust
into fields of growth that are to support KWS’ future
of our customers.
success:
We create entrepreneurial freedom and help
people unfold their talents.
Sustainable Agricultural Practices: products and
services that address climate change and promote
We also have a central policy framework (Group
sustainability in agriculture
Standards) with which we create a common under-
standing of the freedoms and decision-making
Connected Seeds: solutions that generate added
processes within the KWS Group. The Group
value for farmers by linking our seeds with digital
Standards are continuously improved by means of
offerings
constant monitoring and feedback. They comple-
ment our existing guiding principles, with the
Future Sales Models: more e-commerce offer-
objective of preserving KWS’ unmistakable profile,
ings to expand distribution channels and enable
also against the backdrop of the Group’s increasing
personalized addressing of customers
internationalization.
2.1.4 Objectives and Strategy
growing market of plant proteins as the basis for
Nutritional Food Ingredients: innovations for the
Our strategic planning is the foundation for the KWS
sustainable food.
Group’s further development. It defines strategic
objectives, initiatives and core measures for existing
We expect the successful implementation of this
activities and for potential new fields of business.
strategic agenda to further boost KWS’ growth.
The planning is based on a long-term horizon (ten
years) and includes an analysis and assessment of
Corporate objectives of the KWS Group
market trends, competitors and the KWS Group’s
Sustainable solutions for agriculture have always
position. Strategic planning is carried out regularly
been the foundation and driver of our business
on a rolling basis.
model. We use them as the basis for deriving our
objectives, which form the framework for all divi-
sions and strategic decisions: independence, profit-
able growth, constant innovation and sustainability.
2.1 Fundamentals of the KWS Group | Combined Management Report
19
KWS Group | Annual Report 2021/2022 The KWS Group’s medium- and long-term objectives
Main strategic subject areas
Explanation
Profitable growth
An average increase in consolidated
Page 26 et seq.
net sales of at least 5% p.a.
EBIT margin ≥ 10%
A dividend payout ratio of 20% to 25%
of the KWS Group’s net income for the
year
Page 26 et seq.
Page 138 (Notes)
Innovation
R&D intensity of at least 17% of
Page 23
consolidated net sales
Independence
Retention of a control structure
shaped by the family owners
Page 58 et seq.
Sustainability
Implementation of the
KWS Sustainability Ambition 2030
Page 43 et seq. (NFD) and
Sustainability Report 2021/2022
Profitable growth
Sustainability
is vital for our future development. Long-term
is and always will be both an obligation and an
profitable growth ensures we can retain our
opportunity for us. Agriculture faces huge chal-
commercial freedom of action. We strive to increase
en ges globally. They include the world’s growing
net sales by an average of at least 5% p.a. and
population, the increasingly severe consequences
achieve an EBIT margin of at least 10%.
of climate change and the preservation of biodi-
Innovation
versity and natural resources. Innovations in
plant breeding play a key role in tackling these
drives our business model. The need for innovative
challenges.
technology in plant breeding continues to increase.
Climate change, significant population growth and
With our KWS Sustainability Ambition 2030, we
changes in eating habits, where alternative protein
clearly define the framework for the focus of KWS’
sources are growing in importance, pose chal -
sustainable development – economically, ecologi-
enges for us. In addition, digitization is playing a
cally and socially – in the coming years.
greater and greater role in agriculture. In the year
under review, we devoted around €286 million to
Guided by the principle that “sustainability in
research & development, and thus once again a
agriculture begins with seed,” we pursue concrete
significant share of our net sales. We are tackling
goals.
these challenges with this spending and regard it as
an investment in future growth.
We refer you to the 2021/2022 Sustainability Report
and to our homepage www.kws.com for details of
Independence
our sustainability program.
has always been a key corporate objective for KWS.
It is part of the shared values held by our customers
Our business developed largely in line with our
and employees. Our independence and long-
strategic objectives in the year under review. We
term orientation enable us in particular to invest
deal with this and other details regarding the
in research & breeding projects with an eye to the
achievement of our objectives in the respective
future.
sections, which are referred to in the table on the
corporate objectives.
20 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2021/2022 | KWS Group 1 Farm-to-Fork-Strategie
1 Farm-to-Fork-Strategie
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
2.1.5 Control System
The planning is compared every quarter with the
Detailed annual and medium-term operational plans
Company’s actual business performance and the
are used to control the Group and our Business
underlying general conditions. If necessary, we
Units. The medium-term plan covers the time frame
initiate suitable countermeasures and make adjust-
of the annual plan and the three subsequent fiscal
ments. We update the forecast for the current fiscal
years. It is thus an anchor point for our strategic
year at the end of every quarter. At the end of each
planning, which covers a timescale of ten years.
fiscal year, all the units conduct a detailed variance
The targets set in the annual planning (“top-down
to optimize the quality of our planning assumptions.
analysis of the planned and actual results. It serves
target”) are arrived at on the basis of the strategic
planning, results achieved, regional economic
Controlling is responsible for coordinating and
and legal situation, anticipated macroeconomic
documenting all planning processes and our current
trends and assessments of the Company’s position
expectations. It reports on compliance with adopted
in the market and the potential product perfor-
budgets and analyzes the efficiency and cost-
mance. In a subsequent bottom-up process,
effectiveness of business processes and measures.
which also includes the development of our joint
Controlling and the Business Partner Finance also
ventures, we use these premises to plan figures for
advise our decision makers on economic optimi-
sales volumes and net sales, breeding activities,
zation measures. In particular, the heads of the
production capacities and quantities, the alloca-
product segments, the regional directors and the
tion of resources (including capital spending and
heads of research & breeding activities and the
personnel), the level of material costs and internal
central functions are responsible for the content of
charge allocation and the resultant balance sheet
the planning and current forecasts.
data, along with the financial budget. In principle,
part of the planning documentation is also an
The Executive Board uses various indicators for
opportunity/risk assessment, which every manager
planning, controlling and monitoring the business
must conduct for his or her unit.
performance of the KWS Group and its operating
2.1 Fundamentals of the KWS Group | Combined Management Report
21
KWS Group | Annual Report 2021/2022 units. The main indicators for the KWS Group are
governance in accordance with Section 289f of
net sales, operating profitability (EBIT margin) and
the German Commercial Code (HGB) contains
R&D intensity 2. KWS’ product segments, which
detailed information on the extensive and close
are divided into Business Units, are in turn geared
cooperation between the Executive Board and
toward the main indicators of net sales and EBIT
the Supervisory Board and has been published at
margin. All cross-segment costs for the KWS
www.kws.com/corp/en/company/investor-relations/
Group’s central functions and research expenditure
corporate-governance.
are charged to the Corporate Segment; the key
performance indicator for controlling here is EBIT.
2.1.6 Fundamentals of Research & Development
The objective of KWS’ research & development
Management and control
work is to create high-performance varieties
The Company is a partnership limited by shares
that meet various environmental and application
(KGaA). The personally liable partner is responsible
requirements and deliver continuous value added
for the tasks of running the business of a partner-
to farmers. They include absolute yield, as well
ship limited by shares. The Company’s sole person-
as issues such as yield stability, resistance to
ally liable partner is KWS SE, whose Executive
diseases, resource efficiency, cultivation charac-
Board is therefore responsible for management of
teristics or constituent properties. We accordingly
the Company’s business.
continue to invest in expanding our research &
breeding capacities.
The rights and obligations of the Supervisory Board
at a partnership limited by shares differ greatly from
Plant breeding is a very research-intensive and
those at a stock corporation (AG) or a European
long-term business. It takes an average of eight
Company (societas Europaea or SE). In particular,
to ten years to develop a new, high-performance
the Supervisory Board at a partnership limited by
variety. As part of this, the new varieties are
shares does not hold personnel responsibility as
adapted to the specific environmental conditions
regards management; moreover, it cannot appoint
of their target markets. Our breeders are assisted
any further personally liable partners and define the
in that by a global network of various breeding and
contractual terms and conditions for them, enact
trial stations. This means candidate varieties can be
bylaws for the Executive Board, or define business
tested under the location-specific conditions of their
transactions requiring its consent.
target markets over several years.
The Annual Shareholders’ Meeting of a partnership
By applying leading-edge breeding methods, which
limited by shares basically has the same rights as
are continually optimized by the use of molecular
the Annual Shareholders’ Meeting of a stock corpo-
biology, IT or technical approaches, KWS has
ration or SE. It also adopts resolutions on whether
created sustainable progress in yields for decades.
to approve the Company’s annual financial state-
The Company also increases genetic diversity
ments and ratify the acts of the personally liable
by new crossings, which is vital to improving
partner. Certain resolutions adopted by the Annual
crops. We contribute to sustainable agriculture
Shareholders’ Meeting of a partnership limited by
by continuously improving yields, minimizing the
shares also require the approval of the person-
use of resources, increasing varietal diversity and
ally liable partner. The declaration on corporate
supporting sustainable nutrition.
2 R&D expenditure as a % of net sales
22 Combined Management Report | 2.1 Fundamentals of the KWS Group
Annual Report 2021/2022 | 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 3
1 Average headcount
2 As a % of net sales
3 Previous year’s figure adjusted
avg.
in %
in %
2021/2022
2020/2021
1,834
1,669
35.8
286.4
18.6
486
34.5
252.2
19.3
494
+/-
9.9%
–
13.6%
–
–1.6%
Innovative seed plays a key role in tackling climate
particular, countries in Eastern and southeastern
change and enabling sustainability in agriculture.
Europe are now affected by significant climatic
With its 1,834 (1,669) employees and 486 (494)
changes with prolonged dry periods. In view of that,
variety approvals worldwide, KWS’ research &
we are developing grain corn varieties with lower
development organization made important contribu-
losses in yield under drought stress as part of a
tions to achieving those goals in fiscal 2021/2022.
special research and breeding program. We can
now offer KWS HYPOLITO, for example, a medi-
Our R&D activities focus on four main areas:
um-late variety that exhibits excellent performance
securing food production through higher agricultural
and yield stability under drought stress conditions.
yields, minimizing the use of resources, increasing
varietal diversity and supporting sustainable
The results from the official performance tests
nutrition. As part of the KWS Sustainability Ambi-
across regions, locations and maturity groups also
tion 2030 (see also section 2.1.4 Objectives and
point to further growth in our grain corn portfolio in
Strategy) we have set ourselves long-term, chal-
the coming years.
lenging and measurable objectives in these areas.
Sugarbeet: Two powerful technologies
There are also numerous current examples of
combined – CONVISO ® SMART and CR+
how KWS’ research & development helps deliver
CONVISO® SMART and CR+ are two success
sustainable solutions in agriculture. Some of them
stories at KWS. The innovative CONVISO® SMART
are presented in this Research & Development
system for controlling weeds in sugarbeet culti-
Report to illustrate our work.
vation has now been successfully launched in
25 markets, achieving a share of up to 60% in some
Corn: KWS is growing in the European grain
countries. CONVISO® SMART enables a significant
corn market with new varieties
reduction in the use of herbicides and thus helps
In recent years, KWS has continuously increased
protect the environment in beet cultivation.
its competitiveness in Europe’s major grain corn
regions, such as France, Hungary and Romania. In
The Cercospora-tolerant CR+ sugarbeet varieties
what is still a fairly young market for us, our KWS
offer maximum leaf health and a very high level
KASHMIR variety is now one of the main corn vari-
of performance on fields that are heavily or lightly
eties in Europe. The 2022 sowing season confirmed
infested by the phytopathogenic Cercospora
the strong trend in KWS’ grain corn breeding,
fungus. CR+ varieties also have the potential to
with numerous new approvals being awarded to
significantly reduce the use of chemical fungicides.
high-performance varieties in the medium-early to
medium-late market segment.
The infestation pressure from Cercospora is also
very high in many regions where we are enjoying
Our portfolio now also includes grain corn vari-
market success with CONVISO® SMART. To enable
eties that are better adapted to climate change. In
our CONVISO® SMART customers to benefit
2.2 Research & Development Report | Combined Management Report
23
KWS Group | Annual Report 2021/2022 from the breakthrough in Cercospora resistance
Peas and oats: Big chance for small crops
breeding, too, we are now combining both technol-
KWS sees great potential in the coming years
ogies in one product. Initial variety candidates with
for what have been regarded as “small” crops
both traits have already been developed and will
to date, such as peas and oats, which will gain
be tested for the first time in official approval trials
in importance as people move toward a more
in 2022.
plant-based diet.
Rye: New varieties to defend against ergot
We started breeding yellow grain peas back in
One major focus in our cereal breeding is on
the 1980s and are now the leader in France, the
protection against ergot. The ergot fungus is a
most important European market for peas. It takes
parasite that grows on plant ears and mainly affects
an average of about seven years – from the initial
rye and triticales. When a plant is infected during
crossing to market maturity – to develop new pea
flowering, black resting structures called sclerotia
varieties. KWS cultivates trial fields for this purpose
are formed, especially when little pollen is avail-
in numerous countries, including the U.S., Canada,
able due to variety traits or poor weather. Ergot
Lithuania and Spain. In the future, we intend to
sclerotia contain toxic alkaloids that can cause
further expand breeding activities and focus on
severe poisoning symptoms in humans and animals
optimizing specific traits, such as protein concen-
if consumed. Stricter limits on maximum levels
tration and flavor.
of ergot sclerotia and alkaloids for rye intended
for consumption will apply in the European Union
Demand for oats also continues to rise. The high-
beginning in 2024. This makes protection against
fiber cereal has many positive properties for human
ergot even more important for rye farmers, and we
nutrition and is not only consumed in the traditional
expect demand for our varieties with very high ergot
form of flakes or bars, but is also increasingly used
resistance to increase.
as oat milk and in producing meat substitutes. In
addition, oats are a summer cereal and therefore
In recent years, we have expanded our R&D activi-
of interest to farmers because they can expand
ties aimed at improving ergot resistance in rye and
the crop rotation and help suppress weeds. This
supplemented our PollenPlus® technology with
crop therefore contributes to greater sustainability
additional pollen shedding genes through breeding.
in agriculture. KWS has been successful for many
The result is varieties such as KWS GATANO or
years in breeding leading oat varieties, with a
KWS TREBIANO, which exhibit greatly increased
focus on France. Given the increased move toward
pollen shedding and therefore have exceptionally
plant-based nutrition, KWS will expand its breeding
good ergot resistance. Our breeding success can
program to markets such as Germany and the UK in
also be seen in the shape of KWS TUTOR, a variety
the future.
that gained approval in 2021. It impresses with one
of the best ergot resistances compared to the other
Vegetables: New breeding stations start
varieties examined in official tests. In the coming
operating
years, we will continue to expand the proportion of
KWS made important progress in vegetable
rye varieties with greatly increased pollen shedding
breeding in the last fiscal year. In Brazil and Mexico,
in order to meet growing demand.
we are working intensively to establish our own
breeding stations. We have taken out a long-term
lease on 13 hectares of land near Uberlândia in the
Brazilian state of Minas Gerais, and construction
work has commenced there.
24 Combined Management Report | 2.2 Research & Development Report
Annual Report 2021/2022 | KWS Group In the focus of our research & development is the green peach aphid –
a carrier of numerous plantpathogenic viruses.
Alongside this, our local breeding team has
Research: More disease resistance –
launched activities relating to tomatoes, peppers,
less chemical pesticide
melons and watermelons. The first variety candi-
Insect pests are a growing challenge for agricul-
dates for watermelons and melons are expected
ture. They can either damage plants directly or act
as early as fiscal 2022/2023. In Mexico, KWS has
as vectors for plant diseases. Increasing regu-
acquired ten hectares of land near Culiacan to
latory restrictions on the use of chemical pesti-
set up its own breeding station and drive tomato
cides have intensified the trend away from using
breeding there. A pepper breeding program for the
them to protect crops. KWS is therefore pursuing
Mexican market is also being prepared.
new approaches to reduce the use of pesticides,
yet safeguard yields in a more sustainable way.
In the center of European vegetable breeding near
Expansion of our phytopathology (plant diseases)
Almería, in Spain, we have acquired a 14.5-hectare
unit is of key importance in this context. We took
site to build a breeding station with trial areas and
the first step in the last fiscal year by expanding
offices. The location’s focus will be on breeding
insect breeding capacities. Insect-borne yellowing
tomatoes, cucumbers and peppers.
viruses that infect sugarbeet are a focus here. In the
coming years, we will expand capacities to include
We also pressed ahead with expanding our
further insects, crop species and fungal diseases.
research capacities. KWS is establishing a cell
In addition to sugarbeet, our activities center on
culture laboratory at Wageningen, in the Nether-
rapeseed, corn and cereals. The goal is to provide
lands. The research lab is scheduled to start work
resistance breeding with the data needed to select
at the beginning of the new fiscal year and will
resistant varieties throughout the year and in a high-
support our vegetable breeding activities with inno-
throughput process.
vative technologies.
2.2 Research & Development Report | Combined Management Report
25
KWS Group | Annual Report 2021/2022 2.3 Economic Report
2.3.1 Business Performance
Exchange rates for main currencies
General macroeconomic conditions
Fiscal 2021/2022 was again dominated by global
challenges. In Europe and the U.S., government
support programs and catch-up effects in connec-
tion with the COVID-19 pandemic led to a significant
recovery in economic output. At the same time,
inflationary tendencies intensified as a result of
expansionary monetary policy and disruptions to
supply chains.
Rate on balance sheet date
06/30/2022
06/30/2021
Argentina
131.27
113.68
Brazil
UK
Russia
Turkey
Ukraine
USA
5.51
0.86
53.86
17.52
30.78
1.05
5.89
0.86
86.20
10.36
32.30
1.19
Russia’s invasion of Ukraine in February 2022 and
In addition, if a country is suffering from hyperin-
the subsequent international sanctions sparked a
flation, this erodes the value of its currency and is
further appreciable rise in the prices of raw mate-
thus a relevant factor for KWS’ business. According
rials in particular, such as fossil fuels and agricul-
to the International Financial Reporting Standards,
tural goods. At the end of the period under review,
hyperinflation must be reflected in the accounts in
the rate of inflation was 8.6% in the European Union
relation to countries where the cumulative infla-
and 9.1% in the U.S.
tion rate has exceeded 100% over the past three
years. That has been true of Argentina since fiscal
The export-driven economies of Brazil and Argen-
2018/2019. However, it has also applied to Turkey
tina, our main markets in South America, benefited
since the year under review.
from rising demand for agricultural and industrial
products. In Brazil alone, a year-on-year increase
General conditions in the agricultural sector
in agricultural cultivation area of around 6% is
The agricultural sector underwent far-reaching
assumed in 2021/2022. At the same time, high
changes in fiscal 2021/2022. Prices for key agri-
vaccination rates against the coronavirus allowed
cultural raw materials, such as corn, soybean and
economic and social activities to be largely
wheat, rose sharply in the period under review (see
maintained.
the chart), reaching all-time highs. This trend was
reinforced by Russia’s invasion of Ukraine, as both
KWS’ international orientation means that changes
countries are considered major exporters of agricul-
in exchange rates impact our key economic figures.
tural products.
The following overview shows the changes in the
most important currencies for KWS relative to
Commodity Price Data
the euro:
200%
175%
150%
125%
100%
75%
50%
July 2021
June 2022
Corn
Soybeans
Wheat
Source: World Bank
26 Combined Management Report | 2.3 Economic Report
Annual Report 2021/2022 | KWS Group
In connection with the war in Ukraine and the
The higher prices for agricultural raw materials also
possible loss of agricultural exports, the United
impact the production costs of seed companies
Nations, among others, fears the outbreak of food
such as KWS. This particularly affects the costs
crises and starvation in the poorest countries of
of external seed multiplication. In some cases –
Africa and the Middle East. Although a large part of
depending on the contractual arrangements – they
the agricultural area in Ukraine was able to be culti-
are directly linked to the prices on international
vated in the spring of 2022, there is a risk that crops
commodity markets.
cannot be harvested or exported if the hostilities
continue.
Guidance versus actual business performance
of the KWS Group
Climate-related crop failures also exacerbated
Due to the overall economic and sector-specific
the availability of key agricultural raw materials on
uncertainties, there were significant changes to our
the world market in the period under review. For
estimates for 2021/2022 as a whole in the course of
example, a lengthy heat wave in Canada in the
the year. They can be seen in the table below.
summer of 2021 led to a 27% drop in the cereal
harvest, and even a 43% fall for wheat.
The KWS Group’s consolidated net sales rose by
more than 17% to €1,539.5 million and were thus
Given the significantly higher purchase prices for
well above the forecasts made during the year. The
agricultural raw materials, farmers can expect
R&D intensity was 18.6%, within the forecast range
higher income in the current growing season and
of 18% to 20%.
had a strong incentive to expand cultivation area. At
the same time, their costs for fertilizers, pesticides
The EBIT margin was 10.1% and was thus below our
and other operating resources also rose signifi-
original forecast. During the year, we had assumed
cantly during the year under review.
a lower margin due to uncertainties in the wake
of Russia’s invasion of Ukraine, price increases
and volatile currencies (including the effects of
adjustments due to hyperinflation in Argentina and
Turkey).
Guidance versus actual business performance of the KWS Group
Results in
2020/2021
Guidance for
2021/2022
Adjustments to the guidance
during the year
Results in
2021/2022
Annual Report
2020/2021
Semiannual
Report
Ad hoc
release
as at
03/04/2022
9M Report
Net sales
€1,310 million
R&D intensity
EBIT margin
19.3%
10.5%
5–7%
18–20%
ca. 10%
9–11%
18–20%
ca. 10%
6–8%
18–20%
8–9%
ca. 10%
18–20%
8–9%
€1,540 million
17.5%
18.6%
10.1% 1
1 EBIT margin since FY 2021/2022 excluding net exchange rate gains or losses from financing activities of the KWS Group
2.3 Economic Report | Combined Management Report
27
KWS Group | Annual Report 2021/2022 Summary of the segments’ course of business
Net sales in the Vegetables Segment, in which
and comparison with the guidance ¹
the activities of Pop Vriend Seeds, the vegetable
Net sales in the Corn Segment rose sharply by
seed company acquired effective July 1, 2019,
20.9% to €935.4 (774.0) million, in particular due
are consolidated, fell to €54.3 (58.2) million in the
to further expansion of business in South America,
year under review. The segment’s net sales were
and were thus in line with our guidance (sharp
therefore lower than stated in the updated guidance
increase).
in the 9M Quarterly Report for 2020/2021 (net sales
at the level of the previous year). At the beginning of
A sharp increase in the cost of sales, expansion
the fiscal year, we still assumed that net sales would
of our business in Brazil and negative impacts
increase sharply. Restrictions due to the corona-
from the war in Ukraine weighed on the segment’s
virus, poor weather conditions in seed multiplication
income, which fell to €57.2 (71.3) million. Lower
in New Zealand and strong competition necessi-
contributions to earnings from the joint venture
tated adjustments during the year.
AgReliant due to product-mix effects also had a
negative impact. The segment’s EBIT margin fell
As a result of the course of business and
from 9.2% to 6.1%, in line with the updated guid-
the planned expansion of our breeding activ-
ance of a decline in the EBIT margin we issued in
ities, the segment’s income fell slightly
the 9M Quarterly Report for 2020/2021 (previously:
to €–18.5 (–18.1) million. Excluding effects from
at the level of the previous year).
the purchase price allocation as part of company
acquisitions, the segment’s income declined
Net sales in the Sugarbeet Segment rose by
to €0.6 (7.9) million. As forecast in the 9M Quarterly
12.2% to €588.4 (524.3) million, in line with our
Report for 2020/2021, the EBIT margin was conse-
updated guidance in the Semiannual Report
quently below that of the previous year. At the
2021/2022 (sharp increase, previously: at the level
beginning of the year, we had expected a significant
of the previous year). The significant expansion of
improvement in it, but that did not materialize due to
business is attributable to the market success of
the above-mentioned effects.
innovative CONVISO® SMART and CR+ varieties.
The EBIT margin in the Sugarbeet Segment was
Revenue (albeit slight) from our farms in Germany,
33.1% and was thus, as forecast, at the level of the
France and Poland is grouped in the Corporate
previous year (33.3%).
Segment. Since all cross-segment costs for the
KWS Group’s central functions and research
Net sales in the Cereals Segment rose sharply
expenditure are still charged to the Corporate
by 13.0% to €216.4 (191.2) million and were thus in
Segment, its income is usually negative. The
line with the updated guidance in the Semiannual
segment’s income fell to €–97.7 (–92.0) million,
Report 2021/2022 (sharp increase, previously: slight
mainly due to positive exchange rate effects from
increase). This positive trend was mainly driven by
financial instruments reported in the previous year
growing business in rapeseed, rye and wheat seed.
and higher research expenditure due to reclas-
The segment’s EBIT margin likewise rose sharply to
sification, and was thus in line with the guidance
13.6% (11.1%) and was thus in line with the updated
(“around €–100 million”).
guidance in the Semiannual Report 2021/2022
(sharp increase, previously: slight increase).
1 Including equity-accounted companies. Details on the segments’ business
performance and their economic environment can be found in the segment
reports.
28 Combined Management Report | 2.3 Economic Report
Annual Report 2021/2022 | KWS Group 2.3.2 Earnings, Financial Position and Assets
Earnings
Condensed income statement
in € millions
Net sales
EBITDA
EBIT
Net financial income/expense
Result of ordinary activities
Income taxes
Net income for the year
Earnings per share
EBIT margin
2021/2022
2020/2021
1,539.5
1,310.2
252.4
155.1
–16.9
138.1
30.4
107.8
230.9
137.0
5.2
142.2
31.6
110.6
+/–
17.5%
9.3%
13.2%
–
–2.9%
–3.8%
–2.5%
in €
in %
3.27
3.35
–2.6%
10.1
10.5
–
Strong net sales growth, low exchange rate
accounted for 32.1% (27.3%) of our total net sales.
effects as a whole
Revenues from our North American and Chinese
The KWS Group increased its net sales sharply in
equity-accounted companies are only included
the year under review to €1,539.5 (1,310.2) million
at the segment level (see our segment reporting
or by 17.5% compared with the previous year. While
starting on page 33).
the Corn, Sugarbeet and Cereals Segments posted
double-digit growth, net sales from vegetable seed
Sharp increase in EBITDA and EBIT
declined. Overall, exchange rate effects had a small
The KWS Group’s operating income before deprecia-
impact throughout the fiscal year due to counter-
tion and amortization (EBITDA), including effects from
acting trends. While we benefited considerably
leases and hyperinflation, increased in fiscal 2021/2022
from changes in the value of the Brazilian real and
by 9.3% to €252.4 (230.9) million, while operating
the US dollar, high inflation in Turkey resulted in a
income (EBIT) rose by 13.2% to €155.1 (137.0) million.
significant depreciation of the Turkish lira against
The increase was mainly due to the pleasing perfor-
the euro.
mance of the Sugarbeet and Cereals Segments. The
EBIT margin was 10.1% and thus almost matched the
The Corn and Sugarbeet Segments accounted for
previous year’s figure (10.5%).
a major share of total net sales, namely 43.7% and
38.2%, respectively, (40.3% and 40.0%). The share
The KWS Group’s cost of sales rose sharply by
of the Cereals Segment in the year under review
21.7% to €694.3 (570.7) million in the year under
was virtually constant at 14.1% (14.6%). The Vege-
review against the backdrop of the strong expan-
tables Segment accounted for 3.5% (4.4%) of total
sion of business, higher prices for agricultural raw
net sales.
materials and higher inventory write-downs. The
cost of sales ratio was therefore 45.1% (43.6%).
The region where we generated most of our busi-
ness was Europe, which accounted for 61.6% of net
Selling expenses rose by 15.2% to
sales (Germany: 16.3%). The share of net sales in
€281.3 (244.2) million and thus less strongly
North and South America increased sharply, mainly
than net sales. The selling expense ratio
due to the expansion of business in Brazil, and
therefore improved slightly to 18.3% (18.6%).
2.3 Economic Report | Combined Management Report
29
KWS Group | Annual Report 2021/2022 Net sales by region
Total net sales €1,539.5 million 1
Rest of world 7%
North and South America 32%
16% Germany
45% Europe (excluding Germany)
Net sales by segment
Total net sales €1,539.5 million 1
Corporate 1%
Vegetables 4%
Cereals 14%
43% Corn
38% Sugarbeet
1 Without sales of our at-equity-accounted consolidated companies
Research & development expenditure
Net income for the year and earnings per share
rose by 13.6% in the period under review
at the level of the previous year
to €286.4 (252.2) million; the R&D intensity was
Our net financial income/expense is made up of the
18.6% and thus at the high level of the previous
net income from equity investments and the interest
year (19.3%).
result. In addition, realized and unrealized foreign
exchange differences from financing activities
Administrative expenses rose only slightly by 4.0%
were reported within net financial income/expense
to €132.2 (127.1) million, among other things due to
for the first time in the year under review. The
the phase-out of expenditure on the transformation
net exchange loss amounted to €11.5 million. Net
project ONEGLOBE (optimization of the adminis-
income from equity investments includes the earn-
trative functions and processes). The administra-
ings from equity-accounted joint ventures, which
tive expense ratio thus improved significantly to
decreased to €7.7 (17.4) million, in particular due
8.6% (9.7%).
to AgReliant’s weak operating performance. The
interest result fell slightly to €–13.1 (–12.2) million.
The balance of other operating income and other
Net financial income/expense declined sharply
operating expenses fell to €9.7 (21.1) million, in
to €–16.9 (5.2) million
particular due to exchange rate effects. The related
on the back of these effects.
individual items are explained in detail in the Notes
on pages 107 to 108.
Earnings before taxes remained stable
at €138.1 (142.2) million. Income taxes
were €30.4 million compared with €31.6 million
in the previous year, giving a tax rate of 22.0%
(22.2%). Overall, the KWS Group generated
net income of €107.8 (110.6) million in the year
under review. Given that the number of shares is
33,000,000, earnings per share were €3.27 (3.35).
30 Combined Management Report | 2.3 Economic Report
Annual Report 2021/2022 | 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
2021/2022
2020/2021
203.7
100.3
–90.9
9.4
222.7
168.3
–84.2
84.2
Net cash from financing activities
–28.4
34.9
+/–
–8.5%
–40.4%
–
–
–
Securing the KWS Group’s financial flexibility,
The main focus of the KWS Group’s capital
enabling its profitable growth and preserving its
spending in the year under review was again on
independence are the core tasks of our financial
erecting and expanding production and research &
management. Among other things, we ensure that
development capacities. A sugarbeet seed
by extensive liquidity planning, monitoring of cash
production plant was completed in Russia. Invest-
flows, and hedging the risk of interest rate changes
ments were also made in warehouses in Italy and
and currency risks. The main financial instruments
Germany. Expansion of drying and production
used by the Group in the fiscal year, apart from a
capacities for corn seed was continued in South
syndicated credit line, were in particular borrowers’
America, especially in Brazil. Investments were
notes and commercial papers with different loan
also made in new breeding capacities in Spain.
periods and terms. Further tranches of the loan
Across all segments, investments were made in
from the European Investment Bank (EIB) to fund
office and laboratory equipment and in IT systems,
research & development were also utilized. The
among other things. Total capital spending in fiscal
maturity profile of the Group’s borrowings has a
2021/2022 (excluding acquisitions, interest received
broad spread, with a high proportion of medium-
and noncash additions) totaled €93.5 (81.3) million.
and long-term financing.
Depreciation and amortization increased as planned
In order to secure KWS’ growth, we also consider
the option of a capital increase in exceptional
The free cash flow was €9.4 million compared
cases, for example to fund a further large
with €84.2 million in the previous year, due to an
in the year under review to €97.4 (93.8) million.
acquisition.
increase in working capital requirements. The net
cash from financing activities was €–28.4 million,
The net cash from operating activities decreased
well below the figure for the previous year
significantly to €100.3 (168.3) million, due in partic-
(€34.9 million); this was mainly attributable to the
ular to the increase in working capital as part of
repayment of loans. Cash and cash equivalents fell
the expansion of business in South America. In
slightly to €203.7 (222.7) million.
Brazil in particular, trade receivables increased
sharply due to the high growth and longer payment
periods customary in the market. Inventories
likewise increased further against the backdrop of
our growth targets. The net cash from investing
activities totaled €–90.9 (–84.2) million in fiscal
2021/2022.
2.3 Economic Report | Combined Management Report
31
KWS Group | Annual Report 2021/2022 Capital expenditure by segment
Total capital expenditure €93.5 million 1
Corporate 20%
Vegetables 10%
Cereals 7%
28% Corn
35% Sugarbeet
1 Without capital expenditure of our equity accounted companies
Capital expenditure by region
Total capital expenditure €93.5 million 1
Rest of world 2%
North and South America 19%
39% Germany
40% Europe (excluding Germany)
1 Without capital expenditures of our at-equity-accounted consolidated companies
Assets
Equity increased to €1,245.9 (1,053.7) million,
The KWS Group’s balance sheet is impacted by the
mainly as a result of the positive net income for
seasonal nature of our business. In the course of
the year and effects from currency translation for
the year, there are usually balance sheet items that
subsidiaries and the remeasurement of defined
differ significantly from the corresponding figures
benefit plans. The equity ratio rose to 47.0%
at the balance sheet date, in particular in relation to
(44.3%).
working capital.
The fall in noncurrent liabilities to €814.2 (839.0) mil-
Total assets at June 30, 2022, were
lion is attributable to higher interest rates used in
€2,651.8 (2,376.7) million. The rise was mainly
remeasurement of pension commitments.
attributable to an increase in current assets as a
result of the expansion of business in South America;
Trade payables increased sharply, among other
they totaled €1,329.0 (1,111.0) million, with trade
things due to the expansion of business in South
receivables rising to €518.5 (449.5) million. Inven-
America. Contract liabilities increased as a result
tories increased sharply to €354.6 (266.6) million,
of payments on account received for the upcoming
mainly due to the planned business expansion and
sales season in Eastern Europe. As a conse-
higher prime costs in seed multiplication.
quence, current liabilities likewise rose sharply
to €591.7 (484.0) million.
Noncurrent assets increased to €1,318.8 (1,265.0) mil-
lion. The increase in property, plant and equipment as
Net debt (long-term and short-term borrowings from
part of our investing activities in the Corn, Sugarbeet
banks less cash and cash equivalents) increased
and Corporate Segments is mainly offset by depreci-
to €521.9 (475.6) million.
ation of property, plant and equipment and amortiza-
tion of intangible assets identified as part of company
acquisitions.
32 Combined Management Report | 2.3 Economic Report
Annual Report 2021/2022 | KWS Group
Condensed balance sheet
in € millions
Assets
Noncurrent assets
Current assets
Assets held for sale
Equity and liabilities
Equity
Noncurrent liabilities
Current liabilities
Total assets
2.3.3 Segment Report
06/30/2022 06/30/2021
+/–
1,318.8
1,329.0
4.0
1,265.0
1,111.0
0.7
1,245.9
1,053.7
814.2
591.7
839.0
484.0
2,651.8
2,376.7
4.3%
19.6%
–
18.2%
–3.0%
22.3%
11.6%
Reconciliation with the KWS Group
are therefore lower than the total for the segments.
The KWS Group’s consolidated financial state-
The earnings contributed by the equity-accounted
ments are prepared in accordance with the Inter-
companies are instead included under net financial
national Financial Reporting Standards (IFRS).
income/expense. Our equity-accounted compa-
The segments are presented in the Management
nies are included proportionately in the segment
Report in line with our internal corporate controlling
reports in line with our internal corporate controlling
structure in accordance with GAS 20. The main
structure.
difference is that we do not carry the revenues and
costs of our equity-accounted companies in the
The difference from the KWS Group’s statement of
statement of comprehensive income (in accordance
comprehensive income is summarized for a number
with IFRS 11). The KWS Group’s net sales and EBIT
of key indicators in the reconciliation table:
Reconciliation table
in € millions
Net sales
EBIT
Number of employees avg.
Capital expenditure
Total assets
Segments Reconciliation
KWS Group
1,802.8
165.7
5,507
98.9
2,776.9
–263.3
–10.6
–387
–5.4
–125.1
1,539.5
155.1
5,120
93.5
2,651.8
The reconciliation between the KWS Group’s state-
ment of comprehensive income and the reporting
by segments in fiscal 2021/2022 is impacted by our
equity-accounted companies in the North American
and Chinese corn markets. This 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 2021/2022 Corn
Corn Segment
General industry-specific conditions: Prices for
Production of agricultural goods in Brazil, our most
agricultural raw materials remain high
important sales market in Latin America, again grew
The general economic conditions for the Corn
on the back of strong global demand. Corn cultiva-
Segment were still positive in the year under
tion area there rose by around 9% year over year.
review as sales prices for agricultural raw mate-
rials and, related to that, demand for high-quality
The segment’s performance: Sharp rise in net
seed remained high. Although Russia’s invasion of
sales; earnings decline
Ukraine and general inflation meant that farmers’
The Corn Segment again grew its net sales sharply
input costs, such as for energy, fertilizer, pesticides
by 20.9% to €935.4 (774.0) million in the year
and seed, increased (in some cases sharply), profit
under review. The South America region, where
per hectare remained relatively high. The COVID-19
net sales increased by more than 70%, made a
pandemic only had a regional impact on agricultural
major contribution to this. In addition to significant
production, such as in China.
volume effects, we were also able to raise our
The U.S. saw a significant shift in cultivation area
movements. In Brazil’s important winter season
from corn to soybean, as higher fertilizer costs
(safrinha), we supplied the second-largest variety
made it advantageous for some farmers to grow
and were thus able to expand our market share. In
soybean due to its lower nitrogen requirements.
Europe, we achieved sales growth of around 7%
prices and benefited from favorable exchange rate
34 Combined Management Report | 2.3 Economic Report
Annual Report 2021/2022 | KWS Group in a highly competitive environment, while corn
development expenditure increased above-
cultivation areas declined due to the war in Ukraine.
proportionately as a result of the expansion of our
In particular, our high-performance hybrid grain corn
Brazilian business. Lower contributions to earnings
varieties again performed positively, enabling us to
from the joint venture AgReliant due to product mix
further strengthen our market position in this area
effects also had a negative impact. The segment’s
and gain market share overall. Sunflower in partic-
EBIT margin fell from 9.2% to 6.1%.
ular recorded the largest increase in cultivation area
in the EU 27, due to the shortage of vegetable oils.
Investments in further growth
KWS has only been able to gain a slight share of
The segment’s capital spending was €32.0 (28.7) mil-
growth in the sunflower market so far. We expect to
lion in the year under review. Alongside routine
launch new, high-performance varieties in 2023. Net
maintenance measures, the main focus was on
sales of our U.S. joint venture AgReliant increased
the renewed expansion of our production and
by around 3% in local currency terms, mainly on
processing plant in Brazil. Having increased our
the back of higher sales volumes of soybean seed.
annual capacity from 900,000 to more than two
In China, our business declined slightly against the
million units in 2019, we now plan to expand it to
backdrop of the restrictions due to the coronavirus.
more than four million units by fiscal 2026/2027. In
Europe, we invested in particular in expanding our
A sharp increase in the cost of sales and negative
breeding capacities, for example for sunflower in
impacts from the war in Ukraine weighed on the
France. We also expanded our seed processing
segment’s income, which fell to €57.2 (71.3) million.
operations in Romania and Ukraine.
In addition, selling expenses and research &
Key figures
in € millions
Net sales
EBITDA
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.) ¹
ROCE (avg.) ²
2021/2022
2020/2021
935.4
95.8
57.2
6.1
32.0
788.9
7.2
774.0
106.1
71.3
9.2
28.6
694.6
10.3
+/–
20.9%
–9.7%
–19.8%
–
11.9%
13.6%
–
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 2021/2022
Sugarbeet
Sugarbeet Segment
General industry-specific conditions:
While cultivation area in the European Union and
Recovery in sugar prices; cultivation area stable
North America declined slightly, it rose slightly in
Against the backdrop of growing global sugar
Eastern Europe and the other markets.
demand coupled with lower availability, world prices
for raw and white sugar continued to rise during the
The segment’s performance: Net sales
fiscal year, reaching multiyear highs. In particular,
and EBIT grow sharply
below-average harvests in Brazil, the world’s largest
The segment’s net sales increased sharply by
sugar producer, contributed to the supply shortage.
12.2% to €588.4 (524.3) million due to the great
The prices paid for sugarbeet also increased as a
growing faster than the market and again under-
consequence of higher sugar prices, offering favor-
scoring KWS’ leading position in the global sugar-
able conditions for growing it. After a lengthy phase
beet seed market.
success of innovative KWS varieties. We are thus
of decline globally, cultivation areas for sugarbeet
remained stable overall in the period under review.
36 Combined Management Report | 2.3 Economic Report
Annual Report 2021/2022 | KWS Group Europe is the segment’s most important market,
The segment’s income rose to €195.0 (174.7) million
accounting for 59% (59%) of total net sales,
on the back of the positive net sales.
followed by North America with 31% (32%).
Strong demand for CONVISO® SMART – an inno-
were higher selling expenses (+10%) and increased
vative system for controlling weeds – again drove
research and development expenditure (+15%). The
our growth in the past fiscal year. These varieties
EBIT margin was 33.1% and thus at the level of the
While gross profit was much higher (+13%), there
are now available in 25 countries and accounted for
previous year (33.3%).
19%, and thus a significant share, of the segment’s
net sales. CONVISO® SMART enables stable yields
We are continuing to invest strongly in expanding
in sugarbeet cultivation while reducing the use of
our breeding programs so that we can continue to
pesticides, thus making a concrete contribution to
provide sugarbeet growers with innovative seed
sustainable agriculture.
in the future. The focus is on solutions to combat
disease or insect infestation and to enable effective
Our new varieties with Cercospora tolerance (CR+)
weed control.
proved to be another growth driver. Against the
backdrop of the growing spread of Cercospora, a
Important capital spending projects completed
leaf disease that reduces yields in sugarbeet culti-
We completed extensive, multiyear capital spending
vation, our CR+ varieties saw very strong demand in
projects in fiscal 2021/2022. The PIA (Production
only their second year on the market. The new vari-
Extension and Innovation Einbeck) project, in which
eties were initially available only in some markets in
we are expanding our seed production plant in
the past sowing season. We plan to introduce CR+
Einbeck, was completed in early 2022. In addition,
varieties gradually in other markets moving ahead.
we put a production plant in Russia into operation
in January 2022. The segment invested a total
of €32.4 million compared to €26.5 million in the
previous year.
Key figures
in € millions
Net sales
EBITDA
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2021/2022
2020/2021
588.4
216.1
195.0
33.1
32.4
386.5
50.4
524.3
192.8
174.7
33.3
26.5
357.9
48.8
+/–
12.2%
12.1%
11.6%
–
22.3%
8.0%
–
in %
in %
2.3 Economic Report | Combined Management Report
37
KWS Group | Annual Report 2021/2022
Cereals
Cereals Segment
General industry-specific conditions: Sharp
Given the significantly higher purchase prices for
increase in prices for agricultural products
agricultural raw materials, farmers can expect
The industry environment in the period under review
higher income in the current growing season and
was characterized by significant price increases for
had a strong incentive to expand cultivation area.
agricultural products. After first being impacted by
At the same time, their costs for fertilizers, pesti-
declining harvests, prices reached long-term highs
cides and other operating resources also rose
following the outbreak of the Ukraine war, as Russia
significantly during the year under review.
and Ukraine are considered major exporters of
agricultural raw materials. For example, the price of
The segment’s performance: High growth in
wheat, one of the world’s most important cereals,
net sales and earnings
increased from around €200 to approximately
Net sales at the Cereals Segment rose sharply by
€350 a ton on the Euronext exchange in the course
13.2% to €216.4 (191.2) million. This positive result
of the year under review, reaching an all-time high
was mainly driven by strong growth from rapeseed
of €450 a ton in May 2022. There were also similar
seed. That business was boosted by 42%, in partic-
price rises for other important agricultural raw
ular on the back of favorable market conditions and
materials.
an improved performance by the variety portfolio.
38 Combined Management Report | 2.3 Economic Report
Annual Report 2021/2022 | KWS Group The largest increases were achieved in our core
While gross profit increased (+13%), there were –
markets of Germany and France.
as planned – higher selling expenses (+8%) due
Our rye seed business also performed very well,
further increased our research and development
to numerous growth initiatives. In addition, we
particularly in Germany, increasing by 4%. Demand
expenditure (+10%).
for rye seed is underpinned by the increasing use
of rye in fodder and its high yield stability under dry
The focus of our research and development work
conditions. Sales volumes of rye seed set a new
in the year under review remained on breeding
record in the year under review, enabling us once
high-performance varieties and their resource
again to underscore our leading position in this
efficiency.
market segment. Rye seed business accounts for
around 40%, and thus a significant share, of the
KWS aims to continue growing on the back of
segment’s net sales.
hybrid rye seed. In particular, the Eastern Europe
and North America regions offer additional potential
Net sales from wheat seed business increased by
here.
around 7% thanks to positive market conditions,
with the biggest growth being recorded in Germany,
Another focus is on breeding hybrid seed for wheat
France and the UK. However, net sales from barley
and barley. The Company also pressed ahead with
seed were slightly below the level of the previous
its breeding programs for sorghum, wheat in the
year.
U.S., new rapeseed varieties in Europe and alterna-
tive protein sources with a highly promising future,
There was a sharp increase in net sales from busi-
such as peas and oats.
ness with sorghum, a type of millet adapted to hot
and dry climatic conditions, mainly due to higher
Investment in breeding and production
sales volumes in Brazil.
continued
The segment’s income rose sharply by 39%
review was €6.6 (7.3) million and thus on a par with
to €29.5 (21.3) million thanks to the pleasing level of
the previous year. The main focus of investment
net sales. The EBIT margin increased to 13.6% and
activity was again on expanding and modernizing
was thus well above the level of the previous year
production plants, in particular in Germany and
The segment’s capital spending in the year under
(11.1%).
Key figures
in € millions
Net sales
EBITDA
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
France, and modernizing breeding stations.
2021/2022
2020/2021
216.4
39.2
29.5
13.6
6.6
156.6
18.9
191.2
30.7
21.3
11.1
7.3
147.3
14.5
+/–
13.2%
27.7%
38.5%
–
–9.6%
6.3%
–
in %
in %
2.3 Economic Report | Combined Management Report
39
KWS Group | Annual Report 2021/2022 Vegetables
Vegetables Segment
General industry-specific conditions:
The segment’s performance: Net sales and
Challenging market environment
earnings lower year on year
The general conditions for vegetable seed were
Net sales in the Vegetables Segment, in which
again challenging in the year under review. While
the activities of Pop Vriend Seeds, the vegetable
restrictions caused particularly by the coronavirus
seed company acquired effective July 1, 2019, are
had recently curbed demand, out-of-home food
consolidated, fell to €54.3 (58.2) million in the year
consumption in particular recovered significantly in
under review.
the current year, but did not reach its former level.
Higher costs for energy and fertilizers, a shortage
Spinach seed again accounted for the largest share
of raw materials and disruptions in supply chains
of the segment’s net sales, contributing just under
aggravated the general conditions in vegetable
60%. While sales in the U.S. recovered slightly, we
farming. Far higher retail prices for fruit and vege-
recorded declining demand in Europe and Asia.
table products also dampened consumer demand.
Although there was a noticeable pickup in out-of-
home food consumption of spinach, there were also
In addition, climate-related challenges have
high seed inventories at distributors and intense
continued to increase, with heat waves in southern
competition. In addition, poor weather conditions
Europe and the U.S. and torrential rains in India and
during seed multiplication in New Zealand resulted
New Zealand resulting in crop failures.
in lower product availability.
40 Combined Management Report | 2.3 Economic Report
Annual Report 2021/2022 | KWS Group Moreover, the resistance of our varieties to the
Faster expansion of vegetable breeding
fungal disease downy mildew, which is widespread
KWS made important progress in vegetable
in spinach cultivation, was no longer strong enough
breeding in the last fiscal year and thus laid the
in some regions. In view of this, KWS developed
foundation for future growth. In Brazil and Mexico,
new mildew-resistant varieties in the year under
we are working intensively to establish our own
review and will commence production of them in the
breeding stations for tomatoes, peppers, melons
current fiscal year.
and watermelons. The first variety candidates for
watermelons and melons are expected as early as
Bean seed business, which accounts for around
fiscal 2022/2023.
27% of net sales, was robust compared to the
previous year. High prices for agricultural raw mate-
In the center of European vegetable breeding near
rials in Europe partly made the cultivation of beans
Almería, in Spain, we have acquired a 14.5-hectare
less attractive for some farmers, thus preventing
site to build a breeding station with trial areas and
further growth in this area. In the year under review,
offices. The location’s focus will be on breeding
KWS also posted initial net sales from the tomato
tomatoes, cucumbers and peppers.
breeding activities it acquired in the previous year.
We also pressed ahead with expanding our
As a result of the course of business and the
research capacities. KWS is establishing a
planned expansion of our breeding activities, the
cell culture laboratory at Wageningen, in the
segment’s income fell slightly to €–18.5 (–18.1) mil-
Netherlands. The research lab is scheduled to
lion. Excluding effects from the purchase price
start work in the current fiscal year and will
allocation as part of company acquisitions, the
support our vegetable breeding activities with
segment’s income declined to €0.6 (7.9) million.
innovative technologies. Capital spending in the
Vegetables Segment increased sharply overall
from €1.3 million in the previous year to €9.0 million.
Key figures
in € millions
Net sales
EBITDA
EBIT
EBIT margin
Capital expenditure
Capital employed (avg.)
ROCE (avg.)
2021/2022
2020/2021
54.3
3.0
–18.5
–34.1
9.0
420.4
–4.4
58.2
5.5
–18.1
–31.1
1.3
437.6
–4.1
+/–
–6.7%
–45.5%
–2.2%
–
–
–3.9%
–
in %
in %
2.3 Economic Report | Combined Management Report
41
KWS Group | Annual Report 2021/2022
Corporate
Corporate Segment
Key figures
in € millions
Net sales
EBITDA
EBIT
Capital expenditure
2021/2022
2020/2021
8.3
–77.8
–97.5
18.9
6.0
–70.3
–92.0
23.0
+/–
38.3%
–10.7%
–6.0%
–17.8%
Net sales in the Corporate Segment
to positive effects from financial instruments in
totaled €8.3 (6.0) million. This was attributable in
the previous year, and to higher research expen-
particular to a price-related increase in net sales at
diture due to reclassification. Capital spending
our farms in Germany, France and Poland.
was €18.9 (23.0) million and thus below that of the
previous year.
At the same time, since all cross-segment costs for
the KWS Group’s central functions and research
Alongside general spending on office and labora-
expenditure are charged to the Corporate Segment,
tory equipment and IT systems, one focus of our
its income is usually negative. The segment’s
investment activity was the construction of a new
income fell to €–97.5 (–92.0) million, mainly due
grain storage facility for the farm in Germany.
42 Combined Management Report | 2.3 Economic Report
Annual Report 2021/2022 | KWS Group 2.4 EU Taxonomy
capital expenditures (CapEx) or operating expenses
(OpEx) as defined by the EU taxonomy are not
The EU is also striving to transform the economy
considered material and are therefore not included
by specifying “green” investment requirements for
in reporting. The taxonomy-eligible activities
the capital market. To this end, capital market-ori-
classified as non-material each total less than one
ented companies such as KWS have been obliged
percent of net sales, capital expenditures (CapEx)
to report on the nature and scope of ecologically
or operating expenses (OpEx) in the fiscal year
sustainable economic activities using a predefined
2021/2022.
classification system termed the EU taxonomy.
All net sales were analyzed internally to determine
There is still some easing of this reporting obli-
whether they were taxonomy-eligible. Taxonomy-
gation for fiscal 2021/2022. The proportions of
eligible net sales were determined on the basis
business activities regarded as taxonomy-eligible
of the relevant business transactions identified.
have to be reported. Taxonomy-eligible in this
Furthermore, an analysis was performed to deter-
context denotes that an activity described by the
mine whether the identified revenues can be allo-
EU taxonomy is performed by the Company. In turn,
cated to revenue in accordance with IFRS. Capital
the proportions of taxonomy-eligible activities must
expenditures (CapEx) and operating expenditures
be reported on using the defined key figures of
(OpEx) assigned to taxonomy-eligible activities are
revenue, capital expenditure (CapEx) and operating
aggregated at the level of the relevant asset items
expenses (OpEx). Taxonomy-eligible economic
and income statement accounts.
activities within the meaning of Article 1 No. 5
of the Delegated Act dated July 6, 2021, supple-
As a plant breeding and seed company, our core
menting Article 8 of Regulation (EU) 2020/852 are
business activities are not currently defined in
defined and stipulated in detail for the first two
Annexes I and II. Consequently, our revenue-gener-
environmental objectives in Annexes I and II to the
ating activities are not currently taxonomy-eligible.
Delegated Act dated June 4, 2021. The described
There were also no material taxonomy-eligible
economic activities relate to the environmental
operating expenses (OpEx). Non-taxonomy-eligible
objectives of climate change mitigation (Annex I)
net sales and operating expenses (OpEx) amounted
and climate change adaptation (Annex II). Business
to €1,539.5 million and €308.9 million, respectively,
activities that are not listed in these annexes or that
in the 2021/2022 fiscal year. However, there are
do not match the descriptions of business activities
capital expenditures (CapEx) we were able to assign
given there are not taxonomy-eligible.
to taxonomy-eligible activities. These activities
are all exclusively assigned to the environmental
To determine whether activities are taxonomy-
objective of climate change mitigation and relate
eligible, the Sustainability, Finance and Controlling
to transportation by means of passenger cars and
departments compared all of KWS’ material busi-
light commercial vehicles as well as the renovation
ness activities with those defined by the taxonomy
and construction of buildings.
in Annexes I and II and predefined relevant activities
by means of a preliminary analysis focusing on
Our capital expenditures (CapEx) in accordance
KWS SAAT SE & Co. KGaA. The relevant activi-
with the taxonomy 1 in the fiscal year totaled
ties were then specifically selected by means of
€103.5 million and are disclosed on pages 105
internal screening of the emissions database and
and 136 in the Notes for the KWS Group. Of this
an external benchmark. To avoid double counting,
amount, 26.09% (€27.0 million) was spent as a
all activities were evaluated in terms of their impact
taxonomy- eligible proportion for transportation
on the aspects of climate change mitigation and
by means of passenger cars and light commer-
climate change adaptation and assigned to one
cial vehicles as well as for the renovation and
of the two aspects. As part of this, individual
construction of buildings. A proportion of 73.91%
taxonomy -eligible activities that account for less
(€76.5 million) was thus identified as being
than one percent (<1%) of KWS’ revenue (net sales),
non-taxonomy-eligible.
1 Delegated Regulation (EU) 2021/2139; Annex I; number 1.1.2.1.
2.4 EU Taxonomy | Combined Management Report
43
KWS Group | Annual Report 2021/2022 2.5 Environmental Report
2.5.1 Product Innovations
Initial data for measuring the defined sustainability
Every year, KWS develops new varieties that have
goals was collected in fiscal 2021/2022. As a result,
to meet the differing requirements of its customers,
KWS supported farmers on around 1.7 million hect-
i.e., farmers, and reflect the conditions at the partic-
ares with digital solutions by the end of the fiscal
ular location and the regional climate. With our seed
year. These solutions can be used to calculate the
for sugarbeet, corn, various cereals and vegetables,
seed rate for specific subplots or to determine when
rapeseed and catch crops, for example, we offer
to harvest plants, for example. In addition, 19.8%
a broad range of products for conventional and
of the R&D budget 1 was invested in breeding and
organic farming.
developing resource-conserving varieties, enabling
them to contribute to a reduction in the use of
We continuously work to further develop our
agricultural resources such as water, fertilizers or
varieties as part of our breeding programs. At the
pesticides. KWS had breeding programs for a total
start of fiscal 2020/2021, we geared our breeding
of 24 crops at the end of the fiscal year.
objectives more strongly to sustainability aspects,
in particular by defining measurable goals (see
Another indicator of our breeding progress, and
section 2.1.4 Objectives and Strategy). Our focus in
one that has been reported on in previous years,
this is on increasing yields by an average of 1.5% a
is the number of official variety approvals granted
year, as well as on enhancing our varieties’ resource
each year. Only varieties that offer a clear improve-
efficiency, with the potential that offers for reducing
ment in cultivation or further processing (what
use of necessary agricultural resources, such as
is termed “value for cultivation and use”) over
fertilizers and pesticides. We also aim to increase
already approved ones can be marketed in the EU,
the share of our varieties that are suitable for human
for example. We obtained 486 variety approvals
consumption and expand our breeding programs
worldwide in the fiscal year compared to 494 in the
from 24 to 27 crops in order to preserve biodiver-
previous year 2.
sity. Moreover, we strive to constantly improve the
resilience of our varieties so as to further reduce
One example of our breeding success is the
potential losses due to diseases or extreme envi-
following rye and sugarbeet varieties we have
ronmental influences. These crop-specific devel-
developed.
opment objectives are agreed annually between
Research, the respective breeding departments,
In the past years, we have worked on rye ergot
Production and Sales, submitted for the Executive
resistance and added further pollen shedding genes
Board to decide on and reported to the Supervisory
to our PollenPlus technology through breeding.
Board. The progress made over the past years is
The result is varieties such as KWS GATANO or
also examined and reported on regularly as part
TREBIANO, which exhibit increased pollen shed-
of that.
44 Combined Management Report | 2.5 Environmental Report
ding and therefore boast better resistance to the
ergot fungus. Our success has also been confirmed
by KWS TUTOR, a variety that gained approval in
February 2021. It has one of the best ergot resis-
tances compared to the other varieties examined in
official tests.
1 In R&D controlling, not all research & breeding activities that contribute to reducing
the use of resources can be clearly separated from other breeding activities such
as increasing yield. Consequently, the key figure includes the actual costs for
individual R&D projects and a pro-rata share of the total costs for the breeding
programs for corn, cereals and vegetables. This share is based on the ratio
reported for sugarbeet, which was approximately 19% for fiscal year 2021/2022.
The ratio of the pro-rata R&D costs relative to the total key figure is 52% in the year
under review.
2 The previous year’s figure has been revised due to the inclusion of catch crop
varieties.
Annual Report 2021/2022 | KWS Group The infestation pressure from Cercospora is also
approval so that biological seed treatments devel-
very high in many regions where sugarbeet is
oped by us can be offered in additional countries.
grown and where we are enjoying market success
We also expanded our screening capabilities to
with CONVISO® SMART. To enable our CONVISO®
identify usable biologicals and are supporting the
SMART customers to leverage our Cercospora
development of these sustainable applications in
resistance CR+, too, we are now combining both
academic research partnerships.
technologies in one product. Initial variety candi-
dates with both traits have already been devel-
We intend to expand our portfolio of varieties for
oped and will be tested for the first time in official
organic farming in the future. As part of this, we
approval trials in 2022. Compared to those without
hired new personnel with specific expertise in
CR+, CR+ sugarbeet varieties boast greater leaf
organic farming for our breeding activities and for
health coupled with higher yield potential on fields
our trial technology in the period under review.
that are heavily or lightly infested by the phyto-
With a location in Wiebrechtshausen, KWS has had
pathogenic fungus.
its own site for organic farming in Germany for 20
years. In addition, we are continuously expanding
With our KWS FIT4NEXT range of catch crop
our trial areas and improving the quality of trials
mixtures, we offer farmers in Europe an additional
by means of statistical analyses, enabling even
element for common crop rotations that they can
more precise selection of candidate varieties under
use as break crops. Catch crop mixtures containing
ecological conditions.
legumes can further improve the nitrogen efficiency
of the entire crop rotation. The additional nitrogen
2.5.2 Product Quality and Safety
that generates reduces the amount of fertilizer
We want to supply top-quality seed to our farmers.
farmers need, while ensuring a favorable carbon
So that we live up to that corporate principle, the
footprint. Our catch crop mixtures also help improve
entire process from breeding to seed processing
soil fertility by binding nitrogen and forming humus,
is accompanied by extensive quality testing. KWS
which can help protect the climate. In addition,
keeps on developing and establishing new tech-
other properties of catch crop mixtures, such as
nologies, processes and methods for improving
preventing erosion, suppressing weeds, reducing
product quality and safety. They include X-raying
nematodes and increasing the diversity of beneficial
sugarbeet seed so as to obtain information on the
organisms, enable sustainable and future-oriented
seedling’s development or the use of image analysis
arable farming.
methods in examining germination speed.
In addition, we have worked for years on developing
We set internal quality requirements, some of
biologicals as an alternative or complement to
which exceed those demanded by law, such as
chemical means of seed treatment. They comprise
our QualityPlus standard for cereals. These quality
microorganisms such as fungi and bacteria, as
assurance measures are flanked by our Group-wide
well as substances obtained from plants or micro-
Integrated Management System (IMS), in which the
organisms. We have treated sugarbeet, rapeseed,
various quality management systems are combined.
corn and rye seed with biologicals since fiscal
The IMS not only comprises our internal rules and
2019/2020. Biological applications for further crops,
regulations and extensive process descriptions,
such as sorghum, are being developed. In the year
but also audit management for controlling our
under review, we submitted further applications for
internal and external audits. The majority of our
2.5 Environmental Report | Combined Management Report
45
KWS Group | Annual Report 2021/2022 German locations hold ISO 9001 (quality manage-
A key component of our internal quality manage-
ment) certification. Certification in accordance with
ment is the annual Management Review Report,
ISO 14001 (environmental management) has previ-
which is used as the basis for top management to
ously focused on our Einbeck location, but is to be
confirm the effectiveness of the Integrated Manage-
extended in fiscal 2022/2023 to include the German
ment System. In addition, there is regular dialogue
locations that were likewise already certified under
between the person in charge of governance and
ISO 9001. The extended certification is expected to
the responsible Executive Board member. In the
be awarded in August.
period under review, interaction between gover-
nance and risk management was also intensified,
We also hold further external certification. One
since the effectiveness of risk mitigation measures
example is SeedGuard, an industry-specific stan-
is to be reviewed in the future by means of internal
dard relating to proper use of seed treatments.
audits.
Seven treatment facilities in Germany currently
2.5.3 Emissions & Water
hold SeedGuard certification. Further locations will
As a seed company, KWS is part of the agricul-
also be certified moving ahead. A further important
tural value chain. For production-related reasons,
certificate in the seed industry is the “Heubach
seed development, multiplication and processing
test,” a quality assurance measure to reduce
accounts for a significant proportion of the
dust-off in treated seed. In fiscal 2020/2021, the
resources the Company uses. KWS uses cold
laboratory in Einbeck responsible for sample testing
storage cells in sugarbeet research and develop-
was awarded this recertification.
ment to simulate cold weather dormancy, while an
important factor in seed multiplication is to supply
Responsible use of genetically modified organisms
plants with water and nutrients, as well as the use
has always been an important issue. KWS works in
of pesticides. Moreover, energy is used in drying
compliance with the international “ETS – Excellence
and treating seed in the pre-cleaning and further
through Stewardship” industry standard, which
processing stages.
is tailored specifically to this field. Here, too, we
apply our quality management maxim “plan-do-
In order to minimize the ecological impacts of its
check-act”: Documented processes throughout
locations and operations, KWS strives to continu-
the life cycle, training, defined quality controls,
ously improve internal processes, the technologies
a network of local contact persons, internal and
it uses and internal company standards. The loca-
external audits, and a standardized approach to
tions themselves are responsible for the concrete
handling unforeseen events are key pillars of the
application and operational implementation of
system. The whole KWS Group has also been certi-
resource-conserving measures. Concrete minimum
fied in accordance with this standard since 2015,
requirements in our global HSE (health, safety and
and this certification was confirmed in 2022.
environment) management activities ensure that
all KWS locations are governed by comparable
regulations.
We have recorded key consumption indicators for
all German locations since fiscal 2008/2009. That
process was internationalized in fiscal 2017/2018
and has been continuously expanded since. The
internal materiality analysis we conducted in fiscal
46 Combined Management Report | 2.5 Environmental Report
Annual Report 2021/2022 | KWS Group 2019/2020 focused on the Company’s own emis-
sions and water consumption, among other things.
As part of its Sustainability Ambition 2030, KWS
rolled out scorecards for evaluating internal produc-
tion sites, including the processing plants and
internal seed multiplication areas, and has already
analyzed them for some locations. Our goal is to
leverage greater transparency on our production
sites in the future, in order to support the choice
of sustainable locations and investment planning.
New approaches and developments are presented
to the Executive Board and discussed as part of the
Sustainability Ambition 2030. In addition, the Exec-
utive Board and Supervisory Board are informed
about progress in sustainability management as
part of annual reporting.
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
Emissions
Scope 1 emissions are produced directly through
In fiscal 2020/2021, we defined quantitative targets
the use of resources (such as combustion of gas or
for continuously reducing the emissions caused
emissions from fertilizing fields). Scope 2 emissions,
by KWS. The Company aims to reduce all Scope 1
on the other hand, are caused indirectly by the
and Scope 2 emissions it causes by 50% by 2030.
purchase of electricity, district heating and district
The goal is then to cut them to net zero by 2050
cooling. All emissions are recorded worldwide and
in accordance with current, science-based stan-
consolidated centrally. That covers all companies
dards. The base year for that is fiscal 2020/2021.
in which KWS owns a stake of more than 50%, with
The Company is aiming at moving ahead to expand
the exception of holding companies. In the current
the target to include Scope 3 emissions, which are
fiscal year, emissions caused by the application of
attributable to purchased goods and the use of
fertilizer by KWS were included in data collection.
services, for example.
Total emissions in fiscal 2021/2022 were
70,388 tons of CO2e ¹, of which the parent company
KWS SAAT SE & Co. KGaA produced 23,443 tons.
1 The total emissions also include emissions from biomass.
2.5 Environmental Report | Combined Management Report
47
KWS Group | Annual Report 2021/2022 resources in construction projects must be exam-
ined so that, for example, use of groundwater can
Emissions 1 of the KWS Group 2
Delta
(%)
In tons of
CO2e 3
Scope 1
emissions 5 –
direct
Scope 2
emissions –
indirect
2021/2022 2020/2021 4
be reduced further. For example, energy-efficient
+10%
41,601
37,657 6
construction of buildings, the use of solar energy,
heat recovery from processes and also the use
of other heat sources (use of effluents from the
sewage treatment plant to generate heat for build-
+4%
28,787
27,741
ings) are aspects that are to be pursued in planning
and implemented in new buildings.
Emissions 1 of KWS SAAT SE & Co. KGaA 2
In tons of
CO2e 3
Scope 1
emissions 5 –
direct
Scope 2
emissions –
indirect
Delta
(%)
2021/2022 2020/2021 4
research buildings, the highest levels of fresh water
Alongside water consumption in offices and
+2%
15,539
15,280 6
are used in watering the plants at our trial and multi-
plication locations. This is necessary so as to create
the best-possible conditions for healthy seed and
ensure a high yield in multiplication. The water we
+3%
7,904
7,699
need is taken from local water supply networks or,
1 Calculated in accordance with the Greenhouse Gas Protocol guidelines
and using the location-based method. Does not match the Greenhouse
Gas Protocol, as the emission factors used also include emissions from the
upstream and downstream value chain
if possible in a region, we use groundwater, surface
water or rainwater. The issue of water was taken
into account in defining the contents of our internal
2 As a rule, the emissions relate to the fiscal year. In individual cases, the
consumption figures for the calendar year were used due to lack of availability.
scorecards. In the future, we will ascertain whether
3 According to Ecoinvent cut-off 3.8 - IPCC 2013-climate change-
GWP 100a-(kg CO2-Eq) per 1 unit of reference product
4 Errors in the previous year’s figures corrected
5 Emissions from fertilizer were calculated in accordance with “Metodologia do
GHG Protocol da agricultura” (https://ghgprotocol.org/sites/default/files/stan-
dards_supporting/Metodologia.pdf)
6 Emissions from fertilizer application were included for the first time this year,
and the previous year’s figures were adjusted accordingly.
Water
production sites can use renewable water sources
and whether sites are located at or within areas of
water stress, for instance.
A reduction in absolute water consumption is
unlikely due to KWS’ growth trajectory and high
dependence on the weather. We are currently
Water is an important business resource for KWS
recording and consolidating our global water
as a seed specialist and plant breeder. It is vital in
consumption inside the Company. We are striving to
every phase of seed production – from research
develop a normative key performance indicator for
to the finished product that is ready for sale. We
water use intensity and suitable auditing systems in
believe it is therefore our obligation to maximize
the future.
eco-friendliness and efficiency in consuming
water. Apart from our HSE Guidelines, our internal
KWS-specific HSE Manual specifies that we aim
to work in a way that conserves resources and to
avoid process-related effluents as far as possible.
Internal guidelines state that the use of renewable
48 Combined Management Report | 2.5 Environmental Report
Annual Report 2021/2022 | KWS Group 2.6 Employee Report
Over the generations, our employees have made
2.6.2 Occupational Health and Safety
KWS what it is today: an innovative, world-
The health and safety of our employees at all loca-
leading plant breeding company. This is due in
tions have top priority for us. We have internal stipu-
great measure to their skills, mindsets, ideas and
lations that define local and international standards
commitment. As a company with a tradition of
and communicate statutory requirements transpar-
family ownership, we attach importance to a high
ently so as to help achieve that objective.
degree of personal initiative, personal and profes-
sional development, and a work culture marked by
One key component is our HSE Guidelines (Health,
respect, openness, trust and team spirit.
Safety and Environment). It contains consistent
regulations on the issues of occupational health
2.6.1 Employment Trends
and safety, emergency preparedness, risk preven-
The KWS Group employed an average of 5,120
tion and protection of the environment. Examples
(4,833) people (excluding seasonal workers) in the
that can be cited here include regulations on what
fiscal year, a year-on-year increase of around 6%.
to do in the event of an emergency, prevention of
explosions or procedures relating to emission-pro-
A total of 2,294 (2,201), or around 44.8% (45.6%)
ducing facilities. Under the HSE Guidelines, a
of the workforce, was employed in Germany.
workplace risk assessment must be created as
Once again, the area that accounted for the most
the foundation for all technical, organizational
employees was research and development, which
and personal measures. This can be used as the
made up 35.8% (34.5%) of the total workforce.
basis for training and instruction required by law or
appropriate to employees’ functions. The Global
KWS was again able to offer reliable employment
HSE Manager is responsible for developing the
conditions worldwide in the third fiscal year under
HSE standards further. The currently applicable
the coronavirus. It did not resort to short-time work
HSE stipulations and updates to them are usually
or layoffs due to COVID-19, nor did it stop hiring
communicated to the local companies through the
employees for key projects.
local HSE Managers. The location’s management is
responsible for implementing them.
Employees by region
Number of employees 5,120
Rest of world 193
North- and South America 1,007
2,294 Germany
1,626 Europe (excluding Germany)
Employees by function
Number of employees 5,120
Administration 863
Distribution 1,384
1,834 Research & Development
1,039 Production
2.6 Employee Report | Combined Management Report
49
KWS Group | Annual Report 2021/2022
In fiscal 2021/2022, we also revised the globally
We also revised and expanded central recording
applicable HSE Guidelines and specified in more
of occupational accidents at the KWS Group. As
detail the role of managers in relation to occu-
part of this, we rolled out an adapted process
pational health and safety for employees. That
relating to a new recording system, with the objec-
involved new regulations on the issue of entrepre-
tive of gaining greater transparency globally on the
neurs’ and operators’ duties applicable to Germany.
number of accidents and days lost in all areas of the
In addition to the globally valid contents of the HSE
Company. Moving forward, KWS aims to leverage
Guidelines, the associated defined procedures
this transparency to measure annual accident rates
describe additional occupational health and safety
and thus keep on improving employees’ health and
obligations for employees who are tasked with
safety in the workplace. The accident rate (OSHA ¹
entrepreneurs’ and operators’ duties in relation to
incident rate) at the KWS Group ² was 1.2, while that
buildings and technical facilities. Employees’ occu-
for KWS SAAT SE & Co. KGaA was 1.9. We regret
pational health and safety is a subject of continuous
to report that an employee in Chile suffered a fatal
dialogue between internal specialists and external
accident due to storm damage at a copse.
(insurance) partners. For example, our non-life
insurer conducts multiple risk assessments a year
Since February 2022, our HSE activities have
at the KWS Group’s locations in order to examine
focused in particular on protecting our employees
fire and explosion prevention measures, among
in Ukraine. Together with local colleagues and in
other things, and issues appropriate recommen-
intensive cooperation with our HR department,
dations if necessary. In the year under review, the
KWS employees and their families were supported
Einbeck location was awarded the HPR (Highly
in relocating within Ukraine and to neighboring
Protected Risk) status by our non-life insurer. KWS
countries.
thus meets a very high industry standard in terms of
protection of property and its emergency organiza-
2.6.3 Recruitment & Employee Loyalty
tion at this location.
As an international company and in view of its
growth plans, the KWS Group endeavors to win and
Our global and local HSE activities were signifi-
keep suitable employees.
cantly impacted by crisis management activities
in the year under review. In cooperation with an
We use digital and traditional channels to reach out
incident team, HSE management used a global
to potential applicants. This enables us to address
pandemic network that had been established
each target group specifically, for example on
in fiscal 2019/2020 in order to ensure efficient
social networks such as LinkedIn, XING, Glassdoor,
implementation of consistent internal and external
kununu and Facebook. As a result, we were able
requirements governing how to deal with the
to increase the number of our direct followers (e.g.,
corona- virus at the Company. The incident team
on LinkedIn from around 84,000 in June 2021 to
and, in particular, the HSE Manager acted here as
around 107,000 in June 2022) by staging targeted
the central point of contact within the KWS Group.
campaigns (in Berlin, for example) and actively
As in the previous year, KWS has been able to
publishing job advertisements on these networks.
maintain all core processes during the ongoing
Apart from using common digital channels, we
pandemic.
continued to take part in virtual career fairs in fiscal
2021/2022. This gave students the chance to partic-
The first internationally planned HSE audits in the
ipate in online presentations and – workshops and
first half of fiscal 2021/2022 had to be canceled due
chat directly with employees.
to the COVID-19 pandemic. However, audits exam-
ining implementation of the HSE Guidelines were
able to be held at multiple international locations in
the second half.
1 OSHA incident rate = (number of fatal occupational accidents + incidents involving
loss of 1 day or more) * 200,000 / total number of hours worked in the year under
review.
2 Excluding the companies KWS Vegetables Italia SRL, Genective USA Corp.,
Pop Vriend Group, KWS Mexico and KWS Seeds Canada Ltd.
50 Combined Management Report | 2.6 Employee Report
Annual Report 2021/2022 | KWS Group Through the position of Lead of Global Scientific
including the corporate and unit strategy, as well as
Affairs, we again engaged in intensive and direct
the opportunity to network with each other and with
dialogue with universities and research institutes in
top management.
the field of research and development, in order to
deepen our cooperation with them, with the goal of
We continue to believe that it is important to take
recruiting employees. We also award scholarships
the changing individual life circumstances of
at universities and offer induction programs. As a
employees into account, especially as regards
result, we again accompanied many young people
organization of their working time. Depending on
successfully on their path to gaining vocational
their field of activity, we therefore offer various
qualifications in the past fiscal year. In Germany, 63
working time models, which allow them to strike
(79) trainees were employed in vocational training
a good work-life balance. For example, we have
and seven (nine) students were on dual courses of
developed a global policy that generally permits
study in the period under review.
mobile working for employees, where that is
compatible with their specific activity and in compli-
Keeping employees with our company is very
ance with local legislation. Where legally and oper-
important for us. Our goal is therefore to continu-
ationally feasible, we also offer various part-time
ously measure employee engagement in the future
models on a temporary or permanent basis, as well
in order to identify action areas based on the results
as the possibility of taking leave in order to care for
and to develop measures that will help to further
family members, for example.
strengthen employee engagement. Our mission
is to create the right conditions for them in every
In the annual independent rankings by the
phase of their employment. As part of onboarding,
consulting firm Universum in 2022, KWS came in
for example, we attach great importance not only
54th (2020/2021: 43rd) in the area of sciences in the
to introducing new employees to their field of
list of the 100 most popular employers in Germany.
work and assignments, but also communicating
Our goal is to be among the top 50 employers again
the Company’s values. With this goal in mind, we
next year. We aim to achieve that in particular by
have developed the “Local Ambassador Program,”
attending career fairs and university events, where
which is used worldwide. Our “local ambassa-
we can present KWS and persuade potential candi-
dors” are experienced, committed employees who
dates of its great attractiveness as an employer. We
organize the local induction events, accompany
enhance KWS’ attractiveness as an employer with
our new colleagues in their first days and weeks,
these measures.
and act as contacts for any questions they may
have, so that they can feel at home with us from
2.6.4 Qualification, Further Training
day one. Parts of our onboarding process, such as
and Development
the monthly induction events in Berlin or Einbeck,
KWS’ long-term commercial success is founded not
were held virtually during the COVID-19 pandemic.
only on its employees’ commitment and satisfac-
In addition, a multi-day International Onboarding
tion, but also on their personal skills and profes-
and Networking Summit (IONS) is held once a
sional qualifications. KWS’ range of education and
year specifically for managers who are new to the
development offerings is diverse and supports
Company or are promoted from their previous
various learning objectives.
position to a management role. Participants gain
extensive insights into all areas of the Company,
2.6 Employee Report | Combined Management Report
51
KWS Group | Annual Report 2021/2022 We support our employees with tailored education
In the International Development Program (IDP) we
and further training measures to help them build on
give identified high-potential individuals the oppor-
their expertise and abilities. They are generally held
tunity to gain experience through cross-functional
as in-person or online events, although in-person
project work in an international team and to develop
training was largely suspended again in the period
their management and leadership skills. The
under review given the restrictions imposed as a
established development program was expanded
result of the pandemic. To compensate for that,
in the past fiscal year to include a refined selection
we kept on expanding our range of online training
process using interviews and psychometric tests
and continued our cooperation with a large online
specifically tailored to this group. This enabled
self-study platform. As a result, we can give our
more pinpointed selection of the final participants.
employees free digital access to various learning
The accompanying events were held virtually and in
content during the COVID-19 pandemic and
person in the past fiscal year.
beyond.
We are particularly committed to having all
In regular in-person or virtual development meet-
employees receive qualified leadership and support
ings, which are part of the annual performance
from their managers. KWS’ existing competence
and career development reviews, our employees
model, which defines the core competencies of
formulate perspectives for their further develop-
managers, was developed further in a participa-
ment at KWS together with their managers. The
tory process over the past two years by means of
meetings are to be used not only to jointly agree on
interviews and an employee survey and renamed
future goals but also to define concrete continuing
the “Leadership Capability Model” (LCM). Rollout
education and development measures aimed at
of the new model is scheduled for fiscal 2022/2023.
enhancing employees’ personal and professional
The objective of the enhanced model is to support
skills and competence.
continuous development of the whole organization
against the backdrop of an increasingly agile and
In addition to the individual performance and
dynamic working world, and also to reflect the skills
career development reviews between employees
that are additionally required.
and their managers, we continued our global talent
and successor management process in the year
We are also continuously expanding the manage-
under review. As part of that, we identify talents
ment development program we launched at the end
up to the fourth tier and critical positions up to
of 2018. The new module “Leading Leaders” for
the third tier below the Executive Board, in order
experienced managers was rolled out in May 2022.
to ensure that functions that are critical to KWS’
Around 95 participants completed either the basic
success are (re)filled. The Orientation Center (OC),
module “Leading Self” or the module “Leading Indi-
an intensive evaluation of potential successors for
viduals” or began the “Leading Leaders” module in
senior management posts, was held annually up to
the current period under review.
the outbreak of the pandemic, but was suspended
in the period under review due to COVID-19. The
The development program launched in October
concept of the Orientation Center was revised in
2020 specifically for managers in our research and
the current fiscal year and it will be staged again
development organization was expanded further.
at shorter intervals starting in September of fiscal
It allows them to acquire management skills that
2022/2023.
promote innovation and flexibility in developing
52 Combined Management Report | 2.6 Employee Report
Annual Report 2021/2022 | KWS Group solutions. Around 200 managers are to take part
2.6.5 Labor and Social Standards
in the program over a period of three years. Its
As an international, innovation-oriented company
contents include issues such as feedback and
that aims to keep on growing, we believe that
innovation culture, leadership in uncertain times and
upholding labor and social standards at KWS and in
conflict management.
our supply chain is of great importance.
To support the further transition to our GLOBE
Our global internal labor standards comprise
(Global Business Excellence) target structure for
technical, organizational and occupational health
administrative functions and the related implemen-
measures to prevent accidents and diseases at work.
tation of the role of Business Partner, we initiated a
A major part of that is global, cross-functional crisis
Business Partner Academy for KWS Business Part-
management, where the prime goal is to ensure the
ners in all functions in October 2020 and continued
safety of our employees in situations such as the
it in the period under review. The Business Partner
coronavirus pandemic and the war in Ukraine.
Academy comprises development measures aimed
at the role of Business Partner and necessary key
A crisis team was therefore formed in January 2022.
competencies, and focuses on imparting more
As a precautionary measure in the event of war in
in-depth knowledge of KWS’ business activities.
Ukraine, it developed a contingency plan with a
Approximately 70 Business Partners have partic-
package of measures to support the 164 employees
ipated in the academy’s various modules since
who work for us at four locations in Ukraine.
it was launched. We intend to continue focusing
on qualifying and developing our employees and
When the war broke out, we set up an interna-
managers in the future and will expand our training
tional crisis network with appropriate communi-
portfolio nationally and internationally to enable this.
cation channels so as to be able to keep in daily
contact with our employees and offer them the
In order to reach high-potential individuals for KWS
greatest possible security. In this context, it was
at an early stage, a new graduate program for a
also important for us to provide the families of
carefully selected group of talents entering the labor
our employees with assistance, for example by
market for the first time was initiated in October
establishing a safe point of contact and organizing
2021. The two-year program has two paths: the
accommodation as well as supplies.
commercially oriented Growing into the Future, with
its four six-month rotations in various business and
At the same time, we took measures to give our
functional areas, and the research-focused Growing
employees and their families the best possible
with Science, in which participants spend twelve
support after leaving Ukraine, including by orga-
months within research and four three-month rota-
nizing transportation and accommodation and
tions in research-related units. Both paths include
offering financial assistance. Numerous KWS
at least one international rotation. The program will
employees from many countries, especially Poland
be continued in the future.
and Romania, also supported their Ukrainian
colleagues in their free time during this difficult
period and in some cases took them into their own
families.
2.6 Employee Report | Combined Management Report
53
KWS Group | Annual Report 2021/2022 KWS is committed to internationally recognized
or belief, ethnic origin, age, disability, skin color,
human rights standards, such as those of the
language or sexual orientation. We have enshrined
International Labour Organization (ILO) proscribing
this in our Code of Business Ethics, which is
child, forced and compulsory labor. To this end,
binding on all employees. We believe that the
we launched a project in the last year under review
diversity of our employees, as displayed in their
and expanded it further this year with the aim of
individual experience, knowledge, skills and ideas,
integrating new internal standards defined in writing
is a key value and a competitive advantage. In
as well as appropriate measures and controls in our
this connection, KWS aims to further increase the
supply chains.
ratio of female managers. The envisaged targets
for KWS SAAT SE & Co. KGaA of 15% in the first
The contractual working conditions of employees of
management tier and 10% in the second manage-
the KWS Group are defined in writing and comply
ment tier have already been achieved
with local labor and social insurance legislation. The
overall compensation package for KWS employees
Employees’ interests are represented collectively to
takes into account their individual expertise, profes-
management by the locally elected Works Coun-
sional experience and local market circumstances.
cils and the persons entrusted with representing
Depending on general local conditions, it consists
young people and trainees. We also have a Euro-
of a basic salary, social benefits, performance-re-
pean Employees’ Committee (EEC), a body that
lated payment components (if applicable), benefits
represents European employees and is responsible
in kind (if applicable) and Employee Stock Purchase
for cross-border matters within the EU. In regions
Plans (if applicable) where staff can buy shares in
where there is no collective employee represen-
the Company. Equal pay for the same activities is
tative body, we also attach importance to mutual
a fundamental principle of our basic compensation
respect and dialogue between regional manage-
policy.
ment and employees.
KWS is committed to the principle of non-dis-
crimination and to equal opportunities and rights
for its employees, regardless of gender, religion
54 Combined Management Report | 2.6 Employee Report
Annual Report 2021/2022 | KWS Group 2.7 Corporate Governance
2.7.1 Corporate Governance and Declaration on
2.7.3 Business Ethics & Compliance
Corporate Governance *
The basis of our compliance concept is the imple-
Responsible corporate governance has always
mentation of our corporate culture. KWS’ values are
been of great importance at KWS SAAT SE & Co.
practiced when the compliance rules are applied.
KGaA. Since it was founded 165 years ago, our
Compliance with basic principles of business
company’s successful development has been
ethics is vital to our license to operate. Accord-
based on thinking in the long term and acting in
ingly, the compliance rules apply to all employees
terms of sustainability. The Executive Board (the
in the KWS Group. That is the foundation for KWS’
personally liable partner KWS SE, whose Executive
compliance objectives, namely to gain and retain
Board is responsible for management of the
customers’ trust through ethical conduct and to
Company’s business) and the Supervisory Board
protect the Company’s employees, reputation
run and accompany KWS with the goal of ensuring
and assets. Information, training and continuous
it creates sustainable value added. They once
intensive consulting help integrate compliance in
again examined in the year under review whether
business processes and support management in
the Company complies with the stipulations of the
making business decisions rooted in our corporate
German Corporate Governance Code and issued
culture.
the Declaration of Compliance in Accordance with
Section 161 AktG (German Stock Corporation Act)
Our Code of Business Ethics, with its accompa-
to the effect that the Company complies almost fully
nying guidelines defining the basic regulations
with the code’s recommendations.
relating to compliance with the law, fair competition,
prevention of corruption and money laundering,
You can find detailed information on corporate
safety at work, protection of the environment, and
governance in our declaration on corporate gover-
the need to treat each other, customers, business
nance in accordance with Section 289f of the
partners, other third parties and public authorities
German Commercial Code (HGB), which is available
with respect, gives our employees crucial guidance
in full on our website at www.kws.com/corp/en/
in their day-to-day work. All employees undertake
company/investor-relations/corporate-governance.
to comply with the code by signing a commitment
The Remuneration Report for fiscal 2021/2022 is
to do so when they are hired and are provided with
also available there.
2.7.2 Declaration of Compliance in Accordance
with Section 161 AktG (German Stock Cor-
poration Act) *
generally applicable information on compliance, as
well as related information specific to their function.
Our Code of Business Ethics also covers the issue
of international anti-corruption management as
The final version of the Declaration of Compliance in
an integral part of our compliance system. On the
accordance with Section 161 AktG (German Stock
basis of the regulations in the code, there is a policy
Corporation Act) is available to shareholders on the
of zero tolerance toward any form of corruption at
website https://www.kws.com/corp/en/company/
the KWS Group, and that principle is stipulated as a
investor-relations/declaration-of-corporate-gover-
Group-wide standard in the Anti-Corruption Policy.
nance.html.
This standard applies regardless of whether bribery
is prohibited by law, tolerated or permitted in the
country in question. The Group-wide Anti-Corrup-
tion Policy defines the responsibilities, processes
and regulations in relation to preventing corruption
and bribery at the KWS Group.
* Not an audited part of the Combined Management Report
2.7 Corporate Governance | Combined Management Report
55
KWS Group | Annual Report 2021/2022 The Governance, Compliance and Risk Manage-
Implementation and observance of individual
ment (GCR) unit is the central point of contact for
compliance aspects are reviewed as part of
questions on our Code of Business Ethics and
audits. No significant violations of the international
other related issues. It advises all divisions of the
Anti-Corruption Policy or antitrust, data protection
KWS Group in complying with laws, regulations and
or money laundering regulations resulting in disci-
internal rules of conduct and controlling their obser-
plinary consequences or official measures such as
vance. The focus is on the subjects of antitrust law,
fines were reported to the compliance function in
anti-corruption, prevention of money laundering,
the year under review.
data protection and capital market law.
If an examination or report reveals indications
The Compliance Officers regularly provide informa-
of a compliance violation, the investigation is
tion about the compliance system and its princi-
conducted in accordance with KWS’ regulations
ples, as well as about frequently asked questions
“Procedures of Internal Compliance Notification.”
and the latest developments, in training courses,
KWS’ employees are obligated to report suspected
information events and workshops. Apart from this
violations; the open door principle applies to that.
information, a broad range of aids is also available
Employees can supply information on suspected
to our employees. Checklists, toolkits, instructional
violations to their supervisor, to the Compliance
leaflets and other guides provide practical tips on
department or to the Compliance Reporting Plat-
observing compliance rules in everyday work. All
form. Information can be sent to the platform in any
information and rules of conduct can be accessed
required language. Reports of suspected violations
by employees worldwide in the Compliance Portal
can also be submitted anonymously. The reported
on KWS’ intranet. Around 80% (81%) of the total
cases are investigated by KWS. Whistleblowers
workforce has access to the Compliance Portal. In
do not suffer any disadvantages unless they have
addition, all supervisors are obliged to inform their
obviously abused their right to report violations.
employees about compliance issues.
They receive confirmation that their report has been
The entire system for compliance training and
asked to provide further information. Finally, whis-
workshops was reorganized to enable the events to
tleblowers are informed when the investigation has
received and may be contacted via the portal and
be held online due to global travel restrictions and
been completed.
home-office regulations. Large on-site workshops
were replaced by numerous smaller online events.
If suspected cases prove to be violations, the
system of sanctions is applied. In general, it can
In the year under review, the e-learning course
be applied to all types of compliance violations.
on anti-corruption and antitrust law was rolled
The system of sanctions defines various criteria
out further and a total of 2,285 employees were
governing the measures to be taken, such as the
additionally invited to participate. Of these, 1,658
gravity of the violations, the degree of the person’s
(73%) had completed the course by the end of
breach of duty, the functional level, behavior after
the year under review. In addition, data protection
the violation – help in investigating it or attempts
training for employees at the EU companies was
to cover it up – as well as consequences of the
integrated in the e-learning program in the final
violation, such as the threat of damage or actu-
quarter of the fiscal year. A total of 3,384 staff were
ally incurred damage, among other things. The
enrolled for the training; 2,332 (69%) of the invited
sanctions range from cautions and warnings to
employees had completed it by the end of the year
immediate dismissal and the filing of charges.
under review. Further e-learning modules are being
prepared and will be rolled out gradually.
56 Combined Management Report | 2.7 Corporate Governance
Annual Report 2021/2022 | KWS Group The Executive Board and the Supervisory Board’s
Our Sourcing Policy, which defines the funda-
Audit Committee are informed once a year about
mental principles in the procurement process, and
the current status and latest developments of the
a largely centralized process landscape are the
Compliance Management System.
basis for making sure that our purchasing transac-
tions worldwide can be conducted in accordance
2.7.4 Responsibility in the Supply Chain
with consistent regulations. Purchase agreements
Compliance with norms and standards is an integral
relating to the supply of goods and services are
part of our corporate culture. We also demand the
concluded on the basis of standardized templates
same from our suppliers and other service providers
and specify the general conditions, including appli-
(termed “suppliers” in the following). We therefore
cation of the Code of Business Ethics for Suppliers.
obligate our suppliers to observe our Code of Busi-
A central Seed Purchasing Policy also stipulates
ness Ethics for Suppliers and abide by its principles
that these standards are also to be applied in
on ethics and socially responsible conduct. The
agreements concluded with external seed multipli-
code states, for example, that our suppliers must
cation partners.
not permit forced labor or child labor and must
comply with the regulations on the minimum age
KWS has further centralized its supplier data
for admission to employment defined in the latest
management over the past years. All countries are
version of ILO Convention No. 138. They are also
to be included in it as part of the centralization of
to comply with the provisions on safety at work,
administrative functions by the end of 2022. As
product safety, protection of the environment and
part of supplier onboarding, a cross-unit prelimi-
avoidance of corruption, as well as on the require-
nary check on various aspects relating to suppliers
ment to ensure fair competition and protection of
was carried out this fiscal year, with the objective
personal data and third-party know-how.
of enabling KWS to centrally monitor and track
compliance with its standards before any substan-
The central sourcing concept aims to support
tial business is concluded with a supplier. This
standardized and cost-effective cooperation with
process will be developed into a more extensive
external partners and observance of specific social
means of supplier validation that is to be automated
or environmental standards. We will also include
moving forward. All existing suppliers are screened
requirements from the German Supply Chain Due
regularly to ascertain whether they are on sanctions
Diligence Act, which will be binding on KWS from
lists.
January 1, 2024, or the expansion of our emissions
management to cover Scope 3 emissions in our
Due to the COVID-19 pandemic, the audits planned
sourcing concept and related purchasing processes
for the first time to monitor compliance with the
in the future. Initial calculations were conducted
Code of Business Ethics for Suppliers could still not
during the fiscal year and are expected to be vali-
be carried out, but are planned for the future.
dated by fiscal 2024/2025.
2.7 Corporate Governance | Combined Management Report
57
KWS Group | Annual Report 2021/2022 2.7.5 Remuneration Report
partnership limited by shares (KGaA). In addition, no
The Remuneration Report outlines the principles
voting rights accrue to the Company on the basis of
and salient features of the compensation systems
the shares it holds (Section 71b AktG).
for the Executive Board of KWS SE, the managing
partner of KWS SAAT SE & Co. KGaA, and its
The personally liable partner is not aware of any
Supervisory Board. It is no longer part of the Group
contractual restrictions relating to voting rights or
Management Report. The Remuneration Report
transfer of shares. If there are no restrictions on
pursuant to Section 162 of the German Stock
voting rights, all shareholders who register for the
Corporation Act (AktG) for the fiscal year 2021/2022,
Annual Shareholders’ Meeting in time and have
together with the report on the substantive and
submitted proof of their authorization to participate
formal audit by the independent auditor, can be
in the Annual Shareholders’ Meeting and exercise
found on our website at www.kws.com.
their voting rights are authorized to exercise the
voting rights conferred by all the shares they hold
2.7.6 Explanatory Report of the Personally Liable
and have registered. If members of the Executive
Partner (KWS SE) of KWS SAAT SE & Co.
KGaA in Accordance with Section 176 (1)
Sentence 1 AktG (German Stock Corpora-
tion Act) on the Disclosures in Accordance
with Section 289a (1) and Section 315a (1)
HGB (German Commercial Code)
Board of the personally liable partner or executive
employees of the Company have acquired shares
as part of the long-term incentive programs, these
shares are subject to a lock-up period until the
end of the fifth year after the end of the quarter in
The personally liable partner of KWS SAAT SE &
which they were acquired. The lock-up period for
Co. KGaA provides the following explanation on the
shares that employees have acquired as part of the
following disclosures in accordance with Section
Employee Stock Purchase Plans runs until the end
289a and Section 315a HGB (German Commercial
of the fourth year as of when they are posted to the
Code):
employee’s securities account.
Composition of the subscribed capital
Direct and indirect participating interests
The subscribed capital of KWS SAAT SE & Co.
in excess of 10% of the voting rights
KGaA is €99,000,000.00 and is divided into
The Company has been informed by shareholders
33,000,000 bearer shares. The pro-rata share of
of the following direct or indirect participating inter-
each share in the capital stock is €3.00. Each share
ests in the capital of KWS SAAT SE & Co. KGaA in
grants the holder the right to cast one vote at the
excess of 10% of the voting rights in accordance
Annual Shareholders’ Meeting. The rights of share-
with Section 33 and Section 34 of the German
holders are governed by the German Stock Corpo-
Securities Trading Act (WpHG) or elsewhere.
ration Act (AktG) and the Articles of Association.
Restrictions relating to voting rights
of the persons, companies and foundations
or the transfer of shares
stated below each exceed 10% and total 69.1%:
1. The voting shares, including mutual allocations,
There may be restrictions relating to voting rights
or the transfer of shares as a result of statutory or
AKB Stiftung, Hanover
contractual provisions. For example, shareholders
Büchting Beteiligungsgesellschaft mbH, Hanover
are barred from voting under certain conditions
Zukunftsstiftung Jugend, Umwelt und Kultur,
pursuant to Section 136 of the German Stock
Einbeck
Corporation Act (AktG) in conjunction with Section
Dr. Drs. h.c. Andreas J. Büchting, Germany
278 (3) of the German Stock Corporation Act (AktG)
RETOKE Holding Vermögensverwaltungs-
or Section 44 of the German Securities Trading Act
gesellschaft mbH & Co. KG, Bad Schwartau
(WpHG); the bars on voting pursuant to Section 285
Tessner Beteiligungs GmbH, Goslar
of the German Stock Corporation Act (AktG) must
Tessner Holding KG, Goslar
also be observed for personally liable partners at a
58 Combined Management Report | 2.7 Corporate Governance
Annual Report 2021/2022 | KWS Group 2. The voting shares of the persons stated below,
Shares with special rights and voting control
including mutual allocations and allocations
Shares with special rights that grant powers of
of voting shares of Dr. Drs. h.c. Andreas J.
control have not been issued by the Company.
Büchting, Germany, AKB Stiftung, Hanover,
There is no special type of voting control for the
Büchting Beteiligungsgesellschaft mbH,
participating interests of employees. Employees
Hanover, Zukunftsstiftung Jugend, Umwelt und
who have an interest in the Company’s capital exer-
Kultur, Einbeck, and RETOKE Holding Vermö-
cise their control rights in the same way as other
gensverwaltungsgesellschaft mbH & Co. KG,
shareholders.
Bad Schwartau, each exceed 10% and total
54.7%:
Christiane Stratmann, Germany
Dorothea Schuppert, Germany
Appointment and removal of management
The personally liable partner, KWS SE, is respon-
sible for managing the business of KWS SAAT SE
& Co. KGaA under Section 7.2 of the Articles of
Michael C.-E. Büchting, Germany
Association of KWS SAAT SE & Co. KGaA.
Annette Büchting, Germany
Stephan O. Büchting, Germany
In accordance with Section 6 (3) of the Articles
Christa Nagel, Germany
of Association of KWS SAAT SE & Co. KGaA, the
Matthias Sohnemann, Germany
personally liable partner shall leave the Company
Malte Sohnemann, Germany
Arne Sohnemann, Germany
if the majority of shares in the personally liable
partner can no longer be held directly and/or indi-
rectly for a time longer than 30 calendar days by
3. The voting shares of the shareholder named
persons who hold a combined total of more than
below, including allocations of the persons,
15% of the Company’s capital stock directly and/
companies and foundations named in 1. above,
or indirectly through a company that is dependent
exceed 10% and total 69.2%:
in accordance with Section 17 (1) of the German
Hans-Joachim Tessner, Germany
accordance with Section 290 (2) of the German
Stock Corporation Act (AktG) or is controlled in
Commercial Code (HGB). This shall not apply if all
4. The voting shares of the shareholder named
shares in the personally liable partner are held by
below, including allocations of all the persons,
the Company.
companies and foundations named in 2. above,
exceed 10% and total 55.9%:
Furthermore, Section 6 (4) of the Articles of Asso-
ciation of KWS SAAT SE & Co. KGaA stipulates
Dr. Arend Oetker, Germany
that the personally liable partner shall leave the
Company if a person who is not a family share-
5. The voting shares of the shareholders named
holder (acquiring party) obtains control over the
below, including allocations of all the persons,
personally liable partner directly or indirectly
companies and foundations named in 2. above,
(acquisition of control) and does not submit to the
exceed 10% and total 54.8%:
Company’s limited partners a takeover or manda-
Dr. Marie Th. Schnell, Germany
otherwise in accordance with the provisions in
Johanna Sophie Oetker, Germany
the German Securities Acquisition and Takeover
Leopold Heinrich Oetker, Germany
Act (WpÜG) within three months of acquisition of
tory offer in accordance with this provision and
Clara Christina Oetker, Germany
Ludwig August Oetker, Germany
control.
2.7 Corporate Governance | Combined Management Report
59
KWS Group | Annual Report 2021/2022 Under Section 6.5 of the Articles of Association of
majority of the votes cast and a simple majority of
KWS SAAT SE & Co. KGaA, the personally liable
the capital stock represented in adoption of the
partner shall also leave the Company by means of
resolution, unless obligatory statutory regulations
termination. Notice of termination shall be given to
or the Articles of Association otherwise compel.
all the limited partners at the Annual Shareholders’
Meeting. Outside of the Annual Shareholders’
The power to make amendments to the Articles of
Meeting, notice of termination shall be given to the
Association that only affect the wording (Section
Chairperson of the Supervisory Board or his or her
179 (1) Sentence 2 AktG) has been conferred on the
deputy. The notice of termination shall be at least
Supervisory Board in accordance with Section 22
six months before the end of, and effective the end
of the Articles of Association of KWS SAAT SE &
of, a fiscal year.
Co. KGaA.
The other statutory grounds for the personally
Powers of the personally liable partner,
liable partner leaving the Company shall remain
in particular in relation to issuing or buying
unaffected.
back shares
The personally liable partner is authorized, with the
The members of the Executive Board of the
consent of the Supervisory Board, to increase the
personally liable partner, which is responsible for
capital stock of the Company in the period up to
managing the Company’s business, are appointed
midnight on December 15, 2025, once or in install-
and removed by the Supervisory Board of the
ments by a total of up to €9,900,000.00 by issuing
personally liable partner, KWS SE. Pursuant to
new shares in exchange for cash contributions
Article 46 (1) of Council Regulation (EC) 2157/2001
and/or contributions in kind (Authorized Capital
in conjunction with Section 6 of the Articles of
2020). As a matter of principle, shareholders have
Association of KWS SE, members of the Executive
a subscription right to the shares. The shares can
Board are appointed for a maximum period of six
also be assumed by one or more credit institutions
years. Members may be reappointed.
or enterprises within the meaning of Section 186 (5)
Sentence 1 of the German Stock Corporation Act
Amendments to the Articles of Association
(AktG) appointed by the personally liable partner,
Amendments to the Company’s Articles of Associ-
with the obligation to offer them for subscription
ation are made pursuant to a resolution adopted by
solely to the shareholders (indirect subscription
the Annual Shareholders’ Meeting in accordance
right). However, shareholders’ subscription
with Section 278 (3) in conjunction with Section
rights can be excluded with the consent of the
179 of the German Stock Corporation Act (AktG).
Supervisory Board, subject to certain conditions
Section 285 (2) Sentence 1 of the German Stock
defined in the authorization.
Corporation Act (AktG) stipulates that amendments
to the Articles of Association require the approval of
Significant agreements in the event of a
the personally liable partner.
change of control, compensation agreements
Significant agreements subject to the condition of
In accordance with Section 133, Section 179 (2)
a change in control pursuant to a takeover bid have
of the German Stock Corporation Act (AktG) and
not been concluded. The agreements with members
Section 18 (1) of the Articles of Association of
of the Executive Board of the personally liable
KWS SAAT SE & Co. KGaA, a resolution by the
partner stipulate that any commitments in the case
Annual Shareholders’ Meeting to amend the Arti-
of a change in control are limited to the maximum
cles of Association must be adopted by a simple
amounts specified by the German Corporate
Governance Code.
60 Combined Management Report | 2.7 Corporate Governance
Annual Report 2021/2022 | KWS Group 2.8 Social Report
2.8.1 Use of Genetic Resources and
The Breeding Information Circle, which is currently
Intellectual Property
being developed, is a digital platform for inte-
KWS runs a broad network of worldwide stations
grating research information on all of KWS’ crops.
and trial fields for seed breeding. We test different
It enables information currently stored and used in
genetic material for the respective application areas
individual tools to be linked and aggregated.
there. Where this genetic material is used, the rights
of the indigenous peoples in all regions the material
There is regular dialogue during the year with the
originates from must be respected.
Executive Board member responsible for research
and breeding both in the context of the semiannual
KWS is aware of its obligations in this regard and
meetings of the ISF and also as and when required.
supports the various international access and
An annual report to the Executive Board is only
benefit-sharing frameworks to protect the rights
drawn up if specific issues or incidents have been
of indigenous peoples and sustainable use of
identified as part of the due diligence process. No
biodiversity. Of prime mention in this respect are
such incidents were reported in the year under
the Convention on Biological Diversity with the
review.
Nagoya Protocol and the International Treaty on
Plant Genetic Resources for Food and Agriculture
Access to genetic resources is also important with
(ITPGRFA). The ITPGRFA is particularly relevant to
regard to intellectual property. That is why there
regulating transfer of genetic resources. KWS works
is variety protection in plant breeding. It protects
through industrial associations, such as Euroseeds
intellectual property, as well as ensuring access
and the International Seed Federation (ISF), to
to protected varieties by means of the breeder’s
ensure practicable means of securing sustainable
exemption, so that they can be used for further
access to genetic resources and preserving them
breeding. At the same time, patented traits that
now and in the future.
have been technically developed and are intended
to offer resistance to pests or diseases, for
We have implemented a due diligence process
example, are increasingly found in plant varieties.
to ensure compliance with these guidelines. All
This trend will probably intensify as new breeding
employees who work with genetic material are
methods grow in importance. These traits have not
obligated to digitally register all materials used. Our
yet been accessible for breeding in all European
Intellectual Property department then instigates
countries; KWS is therefore a strong advocate of
an examination of where the genetic material has
licensing platforms that enable guaranteed access
come from. Colleagues from our Legal department
to genetic material and traits on fair terms. In the
also provide assistance in more complex cases. In
area of vegetables, KWS is thus a member of the
addition, new employees are offered training, and
International Licensing Platform Vegetable (ILP).
an annual seminar is held for all the employees
A group of companies including KWS is currently
involved. If an examination should find that the
developing a platform that is basically similar for
origin of the genetic material or the process by
crops, namely the Agricultural Crop Licensing
which it was obtained is unclear, we refrain from
Platform (ACLP), and it is to be implemented in
using it.
this calendar year 2022. In addition, KWS offers its
own patents relating to patented traits for licensing
No deviations were identified as part of the above
to interested parties. A standard licensing model
due diligence process in fiscal 2021/2022. As part of
for this is currently being formulated and is to be
the Breeding Information Circle, KWS has begun to
published on KWS’ website soon.
optimize IT processes relating to the documentation
and approval of access to new genetic resources.
2.8 Social Report | Combined Management Report
61
KWS Group | Annual Report 2021/2022 2.8.2 Social Commitment
The focus is on corn and quinoa in Peru and on
Irrespective of its business activities, KWS wants to
barley and wheat in Ethiopia. In Zambia, we teamed
assume responsibility and contribute to developing
up with various partners to launch a project that is
solutions to social problems. KWS sees itself as an
intended to enable local farmers to improve their
active member of society and thus wants to propa-
seed development skills and knowledge of, and
gate its corporate values – such as farsightedness,
access to, different varieties of corn, sunflower,
proximity and reliability – beyond the Company and
beans and sorghum. Above and beyond develop-
to society.
ment cooperation, we initiated a project in Brazil
that creates school gardens and also supports
The content of our activity in this area is geared
small infrastructure projects in less developed
toward the United Nations’ Sustainable Develop-
regions where seasonal workers mainly live.
ment Goals ¹ and toward company-related topics.
That is why KWS focuses its supraregional social
The Company’s social commitment in Germany is
commitment on promoting education in the field
organized centrally and is concentrated mainly at
of natural and agricultural sciences. KWS’ regional
the Company’s headquarters in Einbeck.
social engagement focuses on cultural, social and
socioeconomic development in its – mostly rural –
The COVID-19 pandemic also impacted organiza-
surrounding areas in order to increase the loca-
tion of our commitment at the Einbeck location in
tions’ attractiveness as a whole.
the past fiscal year, although cultural events were
still able to be supported. KWS also promoted the
KWS’ management underscores the importance of
digitization of schools to enable remote teaching.
social commitment with its target of using around
In addition, we supported social and educational
1% of the Group’s operating income (EBIT) for
institutions. We added a special form of engage-
social commitment and social projects.
ment at the Einbeck location this year, when KWS
sponsored the “Jugend forscht – Schüler experi-
Internationally, our social commitment is organized
mentieren” (“Youth Researches – School Students
on a decentralized basis and includes various
Experiment”) contest for young scientists.
long-term scholarship programs in cooperation
with different universities as well as development
In fiscal 2021/2022, KWS spent around €1.3 million ²
partnerships. Our ongoing development cooper-
– or approximately 0.8% of its operating income
ation activities in Peru and Ethiopia from the past
(EBIT) – on its social commitment worldwide. Of
years were supplemented by our engagement in
that sum, approximately €0.7 million was spent on
Zambia in the last fiscal year. In Peru and Ethiopia,
donations, development programs and corporate
we support young researchers, in particular, in
citizenship projects and €0.6 million on sponsorship
the conservation of plant genetic resources, plant
activities. KWS SAAT SE & Co. KGaA accounted for
breeding and the establishment of seed systems.
0.7% of this spending relative to the Group’s oper-
KWS implements the regulations stipulated in the
ating income (EBIT).
International Treaty on Plant Genetic Resources for
Food and Agriculture as part of that.
1 No. 2 Zero Hunger and no. 17 Partnerships for the Goals
2 Does not include KWS Peru S. A. C., KWS Maroc S. A. R. L. A. U.,
Kant-Hartwig & Vogel GmbH, KWS Vegetables Italia SRL a Socio Unico and
KWS Vegetables Mexico S. A. de C. V.
62 Combined Management Report | 2.8 Social Report
Annual Report 2021/2022 | KWS Group 2.9 Opportunity and Risk Report
The opportunities and risks as part of our business
account by adapting our administration or opening
activity as an international plant breeding company,
new lines of business, for example. We wish to
as well as the processes for identifying them, are
report on our progress transparently. We will there-
described in the following.
fore expand the key performance indicators we
2.9.1 Opportunity Management
Strategic opportunities
publish in the future.
In addition to the fundamental goal of sustainable
development of agriculture as described above, we
By strategic opportunities, we mean developments
see further strategic areas of opportunity and risk
that are of major importance for the KWS Group
for the KWS Group. We summarize them below.
and may have a lasting positive impact on our
commercial success. In particular, we see major
Innovative varieties and product performance
strategic opportunities in promoting the sustain-
To succeed in achieving sustainable, profitable
able further development of agricultural practice.
growth in the future as well, our prime goal must be
Our breeding processes are geared toward deliv-
to retain and increase our innovativeness. It is vital
ering new variety traits to achieve continuous
to increase plants’ yield potential, enhance resource
improvements in yield and – alongside other
efficiency or develop their resistance to detrimental
breeding objectives – reduce the use of fertilizer
influences, of whatever type. That requires contin-
and pesticide. As a result, we give our customers
uous and intensive research work. It takes up to ten
the potential to cut costs and enhance their emis-
years for a new variety to gain approval and be put
sion footprint in the battle against climate change.
on the market. We therefore invest a large propor-
Our diverse product range enables soil-conserving
tion of our net sales in research and development
crop rotations, fosters humus formation to bind
projects every year, with the goal of achieving an
emissions, and serves conventional and organic
average yield progress of 1.5% p.a. Alongside the
markets. We want to provide new varieties in order
opportunities that arise, our complex research and
to further expand the range of products for direct
breeding processes are subject to risks that may
and balanced human nutrition.
result in local weaknesses in our portfolio. They
include internal factors such as technical problems
We can leverage these opportunities success-
and process delays, and external factors such as
fully only if we keep on improving our company in
climate change, new diseases or restrictions on
the areas of economics, ecology, social aspects
the use of operating resources. The varieties we
and governance. To this end, we conduct internal
develop must meet high quality requirements. The
analyses, set ourselves challenging goals, such as
performance of our varieties is reassessed every
under the KWS Sustainability Ambition 2030, and
year by management and the Supervisory Board so
work unswervingly toward achieving them. In our
that we can respond immediately to weaknesses in
strategic planning, we regularly review whether
our portfolio if necessary.
our objectives are still appropriate. The strategic
planning covers a ten-year time frame and is
Plant breeding has great potential to make agri-
jointly formulated on a rolling basis, discussed
cultural processes more sustainable through
and adopted by the Executive Board. Our strategy
continuous and proactive further development. The
processes are oriented toward identifying future
development and use of innovative crop rotations,
trends in good time, analyzing them and translating
new cultivation systems, new resistances and
them into innovative company processes by means
tolerances or nutrient efficiencies have the potential
of strategic initiatives. We take new findings into
to increase and stabilize yields, reduce the use of
2.9 Opportunity and Risk Report | Combined Management Report
63
KWS Group | Annual Report 2021/2022 resources such as fertilizer, pesticide or water, and
Changes in demand
increase biodiversity. Higher yields can also result
New, permanent customer needs – differing from
in less cultivation area being required. The carbon
region to region – are emerging, which entail
footprint per unit yield can be reduced with more
long-term opportunities and risks. While meat
efficient plant varieties. KWS is working to develop
consumption in countries such as Germany, France
such products, crop rotations and cultivation
or Italy has declined continuously in recent years,
systems to leverage this potential.
for example, it continues to grow in other countries
such as China, Russia or Portugal. The product
Modern breeding technology
portfolio for agriculture must therefore be broad
State-of-the-art breeding technologies and analysis
so that opportunities that arise can be seized and
methods are used in developing new resource-con-
one-sided dependencies can be reduced. We take
serving varieties, so as to speed up our devel-
into account relevant long-term trends by estab-
opment work and improve its precision. The new
lishing and expanding new product lines and by
breeding methods complement plant breeders’
including new crops in our portfolio. We are also
toolsets and offer additional opportunities to
committed to expanding our direct contact with
improve plants in a targeted way through breeding.
customers on a lasting basis, so that we can sell our
The consequences of climate change, new harmful
products successfully. We already have a presence
fungi and the desire for less fertilizer on the field
in global sales networks and so can be reached
and high-quality agricultural products – plant
directly by our customers.
breeders are responding to all these challenges
demanded of sustainable agriculture by delivering
Operational opportunities
new varieties and using the most suitable breeding
We understand an operational opportunity as a
technologies. New data analysis methods also
development that is consistent with our strategic
increase efficiency in plant breeding and agricul-
planning and might have a positive short-term
ture. Agricultural areas can be farmed in a tailored
impact on our earnings, financial position and
way thanks to automated communication, big data
assets and has not yet been reflected fully or at all
analytics, robotics or artificial intelligence. Drones
in the Company’s financial planning. Operational
and satellites, for example, supply information that
opportunities are identified and assessed by our
helps improve analysis of plant stands in the field.
Business Units. We leverage them by pinpointed
As a result, infestation by pests or infection by
investment in production capacities, research and
diseases can be detected quickly, pinpointed and
development activities and expansion of distribu-
combated in a targeted manner. Pinpointing where
tion, for example.
crops are infested or infected helps reduce the use
of pesticides and the number of times machines
We have opportunities as a result of our still-young
have to run over the field. These technologies will
activities in the vegetables market or expansion of
gain in practical relevance in the future. We already
our portfolio of corn varieties in tropical regions.
use them in our research and breeding processes.
Our corn activities in Brazil will enable us to tap
We need to develop and establish new, highly
additional sales potential for the KWS Group in the
promising technologies in order to avoid risks such
medium to long term, including in other tropical
as competitive disadvantages.
markets, by developing varieties tailored to their
climatic conditions.
64 Combined Management Report | 2.9 Opportunity and Risk Report
Annual Report 2021/2022 | KWS Group Investing in expansion of our production capacities
If a risk does not entail any relevant opportunities,
and modernization of our seed processing offers
or if risks jeopardize achievement of the Group’s
opportunities in existing and adjacent markets.
key financial targets (10% EBIT margin, at least 5%
Further development of our variety portfolio and
net sales growth), they are to be avoided or their
expansion of capacities are accompanied by expan-
impact must be reduced as far as possible, taking
sion of our international distribution structures
cost-benefit considerations into account. Violations
to enable tailored information and advice for our
of the law and important corporate principles, such
customers on the possible uses of our seed and so
as respect for human rights, are totally unaccept-
allow us to leverage further sales potential. In addi-
able. To assess our risk-bearing capacity, we
tion, continuous optimization of processes offers
compare our equity and liquidity with the aggregate
the KWS Group opportunities to increase produc-
risk situation. As part of that, we also consider
tivity and digitization and improve cost structures.
anticipated developments for the coming fiscal year.
The results are included in the Executive Board’s
Recording of operational opportunities was inte-
overall assessment of the risk situation.
grated in risk management in the year under review.
Responsibility
2.9.2 Risk Management
The Executive Board is responsible for Group-wide
risk management. The Supervisory Board or the
Risk management strategy and objectives
Audit Committee reviews the risk management
The objective of the KWS Group’s Central Risk
system at least once a year to assess its suitability
Management is to identify high risks at an early
and effectiveness. It is assisted in that by the
stage, mitigate financial, reputational, environ-
independent auditor of the financial statements as
mental, legal, strategic or health-related damage,
part of the statutory audit assignment. In addition,
and ensure compliance with key corporate prin-
a Risk Committee consisting of representatives
ciples and social standards. We consequently
from all divisions who have a good knowledge of
understand the term “risks” as denoting events and
the issue of risks has been established. It usually
potential developments, both inside and outside
convenes twice a year, discusses and reviews the
the KWS Group, that have a negative impact on
risks maintained in the risk management system
achievement of our corporate objectives or princi-
and measures to control them, and formulates
ples. That also includes events that impair our value
recommendations for the Executive Board, if neces-
chain and harm the environment, and which we can
sary. Responsibility for identifying, assessing and
influence.
controlling risks lies with the divisions, while Central
Risk Management coordinates the processes and
We strive to address risks openly. A proactive and
ensures reporting to company management. Other
open risk culture is part of that. Speaking about
roles in our risk management are specified in the
risks should be established practice in our daily
chart “Players and systems in managing risks
work. KWS applies an entrepreneurial attitude
at KWS.”
to risk, i.e., deliberate risks can be taken if that
offers opportunities that are consistent with the
KWS Group’s strategic planning and corporate
objectives.
2.9 Opportunity and Risk Report | Combined Management Report
65
KWS Group | Annual Report 2021/2022 Players and systems in managing risks at KWS in accordance with the Three Lines of Defense model
Supervisory Board
Executive Board
Risk Committee
Central Risk Management
Divisions
(1st line)
Control and
monitoring systems
(2nd line)
Process-independent controls
(3rd line)
Business Units
Controlling (incl. early detection)
Internal auditing
Research & Development
Global Functions, incl. the
Internal control system,
accounting processes
Transaction Center
Compliance Management
Risk Management
Other systems (such as Quality
Management, Stewardship, etc.)
KWS Governance (vision, mission, cornerstones, Group Standards, etc.)
Central Risk Management processes
for all risks and classify the risks as “moderate,”
Our Central Risk Management process consists of
“medium” and “high.” This allows us to priori-
the phases of identification, assessment, control,
tize the risks we record in a consistent manner
documentation, monitoring of risks and risk
in managing them. We query linkages between
reporting. It is conducted regularly, usually twice a
risks as part of risk identification, document them
year. As part of risk identification, we record indi-
and take them into account in risk assessment in
vidual risks on an electronic platform and assess
evaluating the likelihood of their occurrence. We
them qualitatively or quantitatively on the basis of
record risks that impact our short-term (one-year),
Group-wide standards, in each case before (gross
medium-term (four-year) and long-term (ten-year)
risk) and after (net risk) any countermeasures. As
planning horizon. The individual risks are classified
part of this, we calculate expected monetary values
as follows:
Scheme for assessing individual risks
Likelihood of occurrence
Unlikely
< 10%
Possible
10% – 50%
Likely
50% – 90%
Almost certain
≥ 90%
l
i
a
c
n
a
n
F
i
Very low
€0.1 million – €3.0 million
Low
≥ €3 million – €7.5 million
Medium
≥ €7.5 million – €15.0 million
)
T
B
E
(
t
c
a
p
m
i
High
≥ €15 million
In the risk situation section, we report risks in the area framed in black.
66 Combined Management Report | 2.9 Opportunity and Risk Report
Annual Report 2021/2022 | KWS Group
Risk classification for single risks
Formula assessment of single risks
Risk level
Moderate
Medium
High
Risk Score
Smaller than 1
Between 1 and 5
Above 5
Risk scoring
Net financial damage (in € million) x net likelihood
= risk score for an individual risk
We decide systematically on what appropriate
1st line: Decentralized risk management by the
countermeasures to take to manage risks, in partic-
divisions, such as transaction controls, quality
ular high risks. They may be measures to reduce
controls, certification, contract management or IP
risks, constant monitoring of them or taking out
due diligence
insurance, or the acceptance of risks (where no
measures are possible or make economic sense),
2nd line: Global controls by means of higher-level
for example. The KWS Group’s current risk situation
systems, such as our risk management, compliance
is aggregated by Central Risk Management into risk
management or controlling systems
categories and reported first to the Risk Committee.
On that basis, the Risk Committee discusses how
3rd line: Independent audits by Internal Auditing
to deal with the risks and submits recommendations
to company management if required. Central Risk
The various levels are supported, among other
Management coordinates the entire risk manage-
things, by Group-wide internal guidelines as well as
ment process and supports the departments in their
centralized and standardized process definitions that
tasks.
enable variance analyses. The principle of separation
of functions is also laid down in our guidelines, as is
We meet the statutory requirements for early detec-
a system of information classification.
tion of risks with our financial controlling and risk
management processes. To supplement the Central
In the current fiscal year, the Executive Board and
Risk Management process, we carry out standard-
Supervisory Board had no information to indicate
ized, monthly early risk identification processes with
any significant inefficiencies in the effectiveness of
the product segments and Research & Develop-
or any inadequacy in, the internal control system. In
ment and report their results in writing to KWS’ top
principle, however, it should be borne in mind that
two management tiers.
an internal control system, regardless of its design,
does not provide absolute certainty that errors in our
Control and monitoring systems *
business processes will be detected.
We structure the internal control system at KWS on
the basis of the Three Lines of Defense model. It
In the following, we deal with the internal control
enables a systematic approach to monitoring and
system for accounting in more detail.
managing risks. We make a distinction here between
three different levels (see also the chart “Players and
The internal control and risk management
systems in managing risks at KWS in accordance
system in relation to the accounting process
with the Three Lines of Defense model”):
(Section 315 (4) of the German Commercial
Code (HGB))
Global Finance has structures and processes that
enable proper and effective accounting and finan-
cial reporting. They include:
* Not an audited part of the Combined Management Report
2.9 Opportunity and Risk Report | Combined Management Report
67
KWS Group | Annual Report 2021/2022 Process-integrated controls, such as validation
Description of the KWS Group’s current
of reported data, separation of functions and
risk situation
the four-eyes principle, as well as regular ana-
Here we provide a summarized report on the
lytical controls by Business Partner Finance and
medium or high individual risks that are known to us
Controlling
and involve net financial damage of at least
€7.5 million and a horizon of up to ten years. We
Standardized financial accounting processes
group the individual risks by their type and cate-
through the use of the Global Transaction Cen-
gory. If the risk classes of the categories have
ter, in which a large part of all Group companies
changed compared to the previous year, we explain
are integrated, and appropriate assurance that
this in the respective sections. Our strategic risk
business transactions are included in accounting
categories are linked to long-term opportunities. We
consistently, promptly and correctly and that all
therefore explain the latter separately in the section
applicable statutory accounting regulations, stan-
“Opportunity Management.”
dards and internal guidelines are implemented
throughout the Group
There are currently no non-financial risks whose
Ensuring that the consolidated financial state-
on aspects that require reporting in accordance
ments (including the Management Report) comply
with Section 289c of the German Commercial Code
occurrence is very likely and entail serious impacts
with the rules by means of Group-wide specifica-
(HGB).
tions relating to accounting guidelines, charts of
accounts and uniform reporting processes
In view of new requirements defined in the auditing
standard IDW PS 340 and relating to measures by
Central preparation of the consolidated financial
the Executive Board in accordance with Section 91
statements using the uniform reporting process as
(2) of the German Stock Corporation Act (AktG),
well as system and manual controls with regard to
we made a number of adaptations to our risk
accounting-specific interconnections
management processes in the year under review.
They included revising our risk categories and
Notification of employees in the Global Trans-
reallocating individual risks. Changes have been
action Center, Business Partner Finance and
indicated where necessary. The affected catego-
Controlling, as well as other relevant contact
ries therefore do not directly match those of the
persons at the Group companies, about changes
previous year. The changes in the risk situation as a
in the financial statement preparation process on
whole are addressed in the overall statement on the
a quarterly basis
risk situation by the Executive Board.
Protection of accounting-related IT systems
Operational risks
against unapproved access by means of authori-
IT
zation and access regulations for the IT account-
The KWS Group’s business and production
ing systems
processes, as well as its internal and external
communications, are run on globally networked IT
Ensuring the professional aptitude of employees
systems. Attacks or outages can lead to a loss of
involved in the accounting and financial reporting
confidentiality, availability, integrity and/or authen-
process by means of selection processes and
ticity of data, information and systems. This harbors
training
risks, such as loss of know-how, data manipulation,
loss of personal data and loss of image, and may
result in large financial losses. We reduce these
risks by means of organizational and technical
measures. IT service providers constantly examine
our IT security so as to issue recommendations
68 Combined Management Report | 2.9 Opportunity and Risk Report
Annual Report 2021/2022 | KWS Group for optimization measures on the basis of their risk
The category’s risk situation increased significantly
assessment. Uncontrolled and/or undetected loss
compared to the previous year due to the Ukraine
and damage as a result of hacking and malware
crisis. Gas shortages in particular pose a risk for
are still possible even if very good precautionary
European production sites and may potentially
measures are in place. In the year under review, our
lead to restrictions or interruptions to business
risk assessment for the category increased slightly
operations. We are countering this risk – as far as
due to potential external attacks in connection with
possible – by expanding our emergency heating oil
the Ukraine crisis.
Product quality
reserves in the short term, making technical adjust-
ments, for example to use LNG, taking contingency
measures such as the establishment of crisis and
We have established detailed checks and tests
expert teams, and switching in the medium to
to determine the performance and quality of our
long term to a self-sufficient, low-emission energy
seed. Quality controls, such as germination and
supply based on renewable energies. The spread
sprouting strength tests, are conducted at all
of hostilities in Ukraine may result in interruptions
stages of production. These checks and tests are
to business operations (corn seed production). The
also intended to reduce risks such as claims for
further tightening of sanctions against Russia may
damages due to product liability, which may be
in turn lead to restrictions on our local sugarbeet
significant, especially in Anglo-American juris-
seed production. Where necessary, we are coun-
dictions. We also have product liability insurance
tering this risk by expanding production at other
to defend against unjustified claims and to settle
locations.
justified claims. Very strict requirements must be
met regarding management of genetically modified
Projects, company organization,
products, in particular, to prevent GMOs becoming
process management
mixed with conventional seed. KWS is a member
So that we can continue to grow profitably and
of the “Excellence Through Stewardship” (ETS)
sustainably with the support of an efficient organi-
initiative, an internationally standardized quality
zation and harmonized processes that also reflect
management program. The category’s risk situation
the increasing complexity of the requirements
in the year under review decreased in the wake of
demanded of our workforce, we regularly review
the regular expert assessments.
their adequacy and realign them where necessary.
Without appropriate realignment, there may be
Production, interruptions to business operations
organizational risks, such as an excessive workload
KWS uses technically complex seed processing
on individual departments. In turn, a realignment
plants. Interruptions to business operations may
may entail integration risks (M&As), for example,
have a negative impact on the volumes that are
or temporarily result in process inefficiencies
available for sale and represent significant risks,
or unplanned costs. Our measures to counter
especially if they occur in our sales season. In
these risks include the establishment of special-
order to reduce these risks, we conduct regular risk
ized functions (such as M&A experts), rollout of
inspections, carry out preventive maintenance, and
a new standard process model and automation,
have property and business interruption insurance.
complemented by our globally applicable company
standards. In the year under review, we reassessed
Seed multiplication is dependent on the weather.
efficiency risks that were already known in connec-
We reduce the risk of crop failures by multiplying
tion with our internal standards, which is why the
seed – depending on the crop – in separate
risk situation in this category has increased.
locations and regions in Europe, North and South
America and Asia. We can carry out contra-
seasonal multiplication in the winter half-year in
the southern hemisphere if there are bottlenecks in
the volume of seed produced.
2.9 Opportunity and Risk Report | Combined Management Report
69
KWS Group | Annual Report 2021/2022 Health, safety and environment
Human Resources
Accidents, technical problems or misconduct in our
Recruiting the right employees for KWS, offering
business processes may result in injury to persons
them diverse development opportunities and
and environmental damage and are high risks. One
striving for a long-term working relationship with
measure we have taken to reduce these risks is to
them are factors that are crucial to our business
implement a global health, safety and environment
success. In order to counter potential risks such
standard, which the central HSE Manager function
as the loss of employees or lengthy vacancies, we
will keep on developing.
regularly review our attractiveness and positioning
as an employer. In this way, we prevent any future
In Ukraine, we implemented a preventive crisis
staffing risks through structured succession plan-
management system in January 2022, the prime
ning, continuously expand our employer brand on
goal of which was to protect all local employees
the external market and strengthen our employees’
and their families in the event of an outbreak of
loyalty through attractive development programs
war. When the war broke out, we provided not only
and compensation at a fair market level. The inten-
financial support, but also emergency accommoda-
sifying battle for talents and experts on the labor
tion in and outside Ukraine, and we also organized
market and the associated rise in internal require-
transportation, food supplies and modern commu-
ments as regards retaining employees led to the
nications technology. A crisis team continues to
higher risk classification in this risk category in the
support local colleagues and collectively reas-
year under review.
sesses the situation on a weekly basis. Our busi-
ness activities are not currently in close proximity
Finance and capital markets
to the fighting; however, we see a high risk to the
Tax risks
health of our local colleagues due to the continuing
KWS operates in about 70 countries and is there-
air raids throughout the country and the ongoing
fore subject to an array of complex national tax
war, factors that determine this category’s current
requirements and laws. Changes that are not
risk classification.
detected in time and/or incomplete implementation
of tax law, court rulings and interpretations by the
The pandemic continues to pose a health risk to our
fiscal authorities may have an effect on tax assets
employees, but we do not currently view this risk
and liabilities, as well as on deferred tax assets and
critically given that vaccination rates are generally
deferred tax liabilities. This can result in significant
high. The risk situation is reassessed regularly, for
risks, which we counter by continuously identifying
example on the basis of changes in the sickness
and assessing the tax frameworks and by central
absence rate at KWS.
coordination through our Finance department. If
necessary, tax provisions are formed on the basis of
We consider the risk of technical accidents at our
estimates. In the year under review, we completed
seed production plants and the resulting danger to
the establishment of the central Group Tax depart-
life and limb and the threat to the environment to be
ment, which reassessed our tax exposure and
lower – also due to the fact that we have expanded
initiated necessary measures. The category’s risk
our internal audits in this area.
classification fell.
70 Combined Management Report | 2.9 Opportunity and Risk Report
Annual Report 2021/2022 | KWS Group Currency risks
Capital market
Currency risks arise in particular from receivables
In view of the diverse and increasing demands
and liabilities denominated in foreign currency.
placed on business by the capital market, inade-
We address currency risks to a reasonable extent
quate data and processes, especially non-financial
through the usual hedging instruments and internal
ones, can lead to reputational risks and, in the
standards in order to reduce the influence on the
medium term, to poorer conditions on the capital
KWS Group’s earnings and assets situation. We
market. We are countering these risks by, among
also reduce our transaction risks by means of
other things, increasing the number of staff (in
natural hedging, when expenses are incurred in
terms of FTEs) in sustainability activities in the
the same currency in which we generate revenue.
Corporate Segment in order to accelerate the
Remaining currency risks from cash flows from
implementation of processes from our Sustainability
operating activities in foreign currency are gener-
Ambition 2030 in addition to proactively providing
ally of minor significance. In fiscal 2021/2022, we
relevant non-financial data.
hedged our intra-Group loans to a large part by
using standard currency derivatives in order to
Politics and the law
reduce currency risks. In response to the Ukraine
Compliance
crisis, our foreign currency positions in Russia and
We are exposed to potential compliance risks, for
Ukraine in particular were continuously reviewed to
example under antitrust, competition, anti-corrup-
determine whether they were appropriate, and were
tion and money laundering law and data protection
reduced if necessary and where legally possible.
requirements. Violations of statutory requirements
Liquidity risks
may have consequences under criminal and civil
law, including fines and other financial disadvan-
The overriding goal of our liquidity management is
tages. Under our compliance policy, the Code of
to ensure we meet our payment obligations on time.
Business Ethics and our Group Standards, we
External factors, such as global crises, may restrict
obligate our managers and employees to undertake
the availability of credit lines and/or mean we can
to act in accordance with laws, contracts, internal
only obtain economically disadvantageous terms
guidelines and our corporate values and raise their
and conditions. Our central Treasury department
awareness in this regard. Regular communication,
determines what funding we require in its liquidity
instruction and training are intended to ensure
planning and covers those needs by providing
compliance. We rigorously investigate reports of
cash, promised credit lines and other financial
compliance violations. As is expressly pointed
instruments. We have agreed customary financial
out, sanctions are imposed if our compliance
covenants for part of these promised credit lines. If
regulations are violated. The new measures such
these covenants are breached, the lender has the
as sanctions or comparable legal requirements
right to terminate the agreement.
that are now being continuously adopted against
or by Russia in the wake of the Ukraine crisis
Risk of counterparty defaults
are analyzed, assessed and implemented by the
We nurture extensive business relationships with
relevant departments, also with the involvement
various customer groups – from the sugar industry
of external experts. Nevertheless, unwitting viola-
and agricultural wholesalers to individual farmers.
tions, substantive inconsistencies or legal unclarity
If, in particular, large customers are not able to
may result in financial penalties or revocation of
meet their contractual payment obligations to us,
the business license, and these were the main
we could suffer losses. We reduce such credit
factors behind the increase in the category’s risk
risks through our receivables management and,
classification.
where possible and expedient, by means of credit
insurance. The risks of counterparty defaults in
Ukraine and Russia were largely manageable
due to the introduction of advance payments and
remained low.
2.9 Opportunity and Risk Report | Combined Management Report
71
KWS Group | Annual Report 2021/2022 Intellectual property (IP)
Eastern Europe. In the fiscal year, the outbreak of
Protecting intellectual property is vital to compa-
the Ukraine war in Eastern Europe had profound
nies that conduct research if they wish to preserve
negative impacts on our business activities in
their freedom of action and keep on generating
Ukraine, Russia and Belarus. It resulted in health
value. The seed-specific property rights under
risks for our Ukrainian employees (see the section
“variety protection” ensure they are compensated
“Health, safety and environment”), but also a large
for the years-long process of research, breeding
number of business risks, such as a decline in the
and development of new varieties and that third
cultivation area in Ukraine, an important future
parties cannot market the same variety at no costs
market for KWS, and the lack of export opportuni-
to themselves. KWS uses patents to protect certain
ties for farmers there. The repercussions were also
plant traits, in particular if they have been devel-
felt at our other European locations, for example
oped or produced by means of technical methods.
as a result of the prevailing energy crisis (see in
In order to secure its freedom of action and avoid
particular the sections “Price developments and
infringing third-party proprietary rights, KWS has
procurement” and “Production, interruptions to
implemented far-reaching due diligence processes
business operations”). Our business activities in
throughout the Company.
Russia were impacted by the imposition of require-
Regulatory risks
ments and sanctions, despite the humanitarian
importance of the seed market for the world food
As part of modern agriculture and as an inno-
situation and prices. The reduced availability of
vative plant breeding company, KWS also uses
services and spare parts may result in delays in
state-of the-art breeding technologies to develop
operational processes and even critical interrup-
new, resource-conserving varieties. There is still a
tions to business operations. Thanks to prompt,
negative perception of new breeding technologies
centralized and local crisis management, we were
among the general public, despite the high stan-
able to mitigate individual risks, keep our business
dards in force and scientific facts to the contrary.
operations running in all affected countries and
New breeding technologies could speed up our
reduce the expected financial damage. All devel-
variety development and improve its precision. The
opments continue to be monitored by the Central
EU continues to impose tougher regulations on
Risk Management department and our product
important research technologies and restrict the
segments, pooled centrally and reported regularly
use of established operating resources. We conduct
to the Executive Board and Supervisory Board.
an intensive dialogue with all stakeholders on this
issue and are increasing the internationalization of
General legal risks
our research – without reducing our commitment in
KWS faces risks from official proceedings and legal
the EU.
Political instability
disputes. Legal disputes with suppliers, licensors,
customers, employees, lenders and investors are
possible and may result in payments or other obli-
KWS faces political risks in many countries in the
gations. There were no legal proceedings involving
strongly regulated international agricultural industry.
significant amounts in fiscal 2021/2022.
In addition, the tense global geopolitical situation in
recent years has led to further risks for our business
activities and growth plans in the Middle East and
72 Combined Management Report | 2.9 Opportunity and Risk Report
Annual Report 2021/2022 | KWS Group Markets and competition
Changes in cultivation area
Competition and business partners
Strong competitive pressure, such as that due
Slight declines and shifts in cultivation areas are
to aggressive pricing strategies by other market
typical in agriculture and usually have no signifi-
players, may have a negative impact on our busi-
cant net impact on our business success. Extreme
ness success. In particular, good local variety
changes in cultivation areas – in particular where
performance is the most effective means of
they affect strategically important crops and
protecting against this. Acquisition or licensing
markets – have the potential to impact our local
of technologies – such as genetically modified
market success significantly due to lower demand
traits – is customary in the industry and necessary
for seed. They may be caused by factors such as
in markets such as North and South America. We
a sudden drop in agricultural prices due to global
strive to reduce the related risks by developing
crises or extreme weather events, or may be the
our own innovations, which may also be attractive
consequence of high inventories as a result of good
to competitors, and through long-term license
harvests. We counter such risks in the medium and
agreements.
long term by diversifying our product portfolio and
expanding our market footprint. Risks from changes
Price developments and procurement
in cultivation area are impossible or difficult to
We are exposed to potential price fluctuations,
reduce in the short term, but usually impact all
delays and reduced availability in our global
market players alike. In Ukraine, the develop-
purchasing activities. We counter these risks by
ment of corn cultivation areas in 2023 depends, in
pooling our purchasing power in a centralized
particular, on whether the current massive export
Procurement Management unit and, in particular,
restrictions can be lifted.
Market trends
we adopt a structured approach in relation to the
organization, management and long-term develop-
ment of supplier relationships. Hedging instruments
This covers local external risks in particular that
in the form of commodity derivatives are used to
may impact our business success and over whose
offset fluctuations in the prices of raw materials to
emergence we have no – or currently only limited –
a limited extent. Derivative financial instruments
direct influence. They include changes in demand
are used exclusively for hedging purposes and are
and the local conditions of the respective market.
insignificant overall. We are currently revising and
In China, the opening of the market for genetically
improving the management of potential supply
modified corn varieties by the authorities may turn
chain risks and plan to complete the project in
into a disadvantage for KWS if our own product
the coming fiscal year. Due to rampant inflation
pipeline cannot deliver any, or cannot supply
worldwide and the ongoing supply crisis fueled by
enough genetically modified traits, or government
the war in Ukraine, additional massive price rises
stipulations exclude KWS from this market. We are
are to be expected in all relevant price indices,
reducing this risk by reviewing our cooperation with
which resulted in the increase in the risk classi-
local partners, through new licenses or by devel-
fication in this category. We explain the risks of
oping proprietary variety traits.
possible shortages in the supply of natural gas in
the category “Production, interruptions to business
operations.”
2.9 Opportunity and Risk Report | Combined Management Report
73
KWS Group | Annual Report 2021/2022 Weather events and natural disasters
enables two cultivation cycles a year. In addition
Extreme weather events such as heavy rain,
to extreme weather events, climate change is also
flooding, storms or drought may impact key busi-
causing a gradual increase in average temperatures,
ness processes. We mainly develop new varieties
changes in regional average rainfall, and changes in
and multiply our seed outdoors, meaning these
disease or pest pressure. We counter this by contin-
activities are exposed to weather events. More-
uously developing our varieties as part of our global
over, weather risks can be insured against only at
breeding programs. The breeding objectives as part
economically unfavorable terms and conditions, if at
of this include drought resistance, standing power,
all. In addition to local protection measures such as
better nutrient utilization and new resistances.
irrigation, flood control or greenhouses, we can limit
Climate change thus also entails significant oppor-
risks through regional diversification. Contra-sea-
tunities for KWS, which we explain in the section
sonal production in the southern hemisphere
“Opportunity Management.”
Strategic risk categories with an horizon up to ten years
Risk type
Strategic
Risk category
Category
classification
Previous year
Limited Access to Technology
Noticeable
Structural Change of Demand
Substantial
Structural Underperformance
Substantial
–
–
–
of Products
74 Combined Management Report | 2.9 Opportunity and Risk Report
Annual Report 2021/2022 | KWS Group Risk categories with an horizon up to four years
Risk type
Operational
Risk category
Human Resources
Information Technology
Product Quality
Production and
Business Interruption
Category
classification
Noticeable
Substantial
Noticeable
Substantial
Previous year
Medium
Substantial
Substantial
Substantial
Projects, Corporate
Substantial
Substantial
Organization and
Process Management
Health, Safety and
Substantial
Substantial
Finance and
capital markets
Environment
Capital Markets
FX Risks
Liquidity Risks
Receivable Risks
Tax Risks
Political and legal
Compliance Risks
General Legal Risks
Intellectual Property (IP)
Political Instability
Regulatory Risks
Markets and competition
Acreage Developments
Competition and
Business Partners
Market Developments
Price Developments
and Supply
Severe Weather and
Natural Disasters
Medium
Medium
Low
Low
Medium
Substantial
Low
Medium
Substantial
Low
Medium
Medium
Medium
Substantial
Medium
–
Medium
Low
Low
Noticeable
Noticeable
Low
Medium
Low
Low
Medium
Medium
Medium
Medium
–
2.9 Opportunity and Risk Report | Combined Management Report
75
KWS Group | Annual Report 2021/2022 Formulas aggregated view
Risk classification for aggregated risk categories
Formula
1: Net impact (in € million) x Net likelihood =
Risk scoring of a single risk
2: ∑ of reported risk scores within a category =
Risk scoring of a category
Risk class
Low
Medium
Noticeable
Substantial
Total sum of risk score
of the category
Smaller than 3
Between 3 and 8
Between 8 and 15
Above 15
The strategic risk categories are linked to significant
In view of the available assessments and counter-
strategic opportunities and are therefore explained
measures we have initiated, risks that jeopardize
in the Opportunity Report.
the Company’s existence are not discernible at
present. Furthermore, based on the analysis of
Overall statement on the risk situation
our risk-bearing capacity with our aggregated risk
by the Executive Board
situation, we did not identify any potential threat to
The KWS Group’s risk situation increased signifi-
the Company’s existence. We feel sure that, thanks
cantly in the fiscal year compared with the previous
to our global footprint, innovative strength and the
year, in particular due to the outbreak of the war
quality of our products, we can seize opportuni-
in Ukraine, the very sharp rise in inflation and the
ties and successfully manage risks as they arise.
disruptions to supply chains. In the context of the
However, we cannot rule out the possibility that
Ukraine crisis, initial measures were taken to protect
other factors that are currently unknown or which
employees and business processes even before the
are not assessed as significant may jeopardize the
outbreak of war. In the course of this, the central
continued existence of the KWS Group in the future.
crisis management team, together with the depart-
ments, ensured continuous monitoring of all devel-
opments, conducted regular analyses and initiated
countermeasures where necessary and technically
feasible. Reports were submitted directly to the
Executive Board and the Supervisory Board.
76 Combined Management Report | 2.9 Opportunity and Risk Report
Annual Report 2021/2022 | KWS Group 2.10 Forecast Report
The expectations of management outlined here are
2.10.2 Forecast for the KWS Group’s Statement
based on our corporate planning and the informa-
of Comprehensive Income
tion it takes into account, including market expec-
The KWS Group’s economic performance in fiscal
tations, strategic decisions, regulatory measures or
2022/2023 will continue to be impacted by the
exchange rate trends. They are subject to the same
challenging changes on global agricultural markets.
premises as the consolidated financial statements
Significantly higher prices for agricultural raw
and forecast of our business performance up to the
materials as a result of the war in Ukraine and lower
end of fiscal 2022/2023 on June 30, 2023. In our
harvests in some cases are expected to fuel high
forecast for the KWS Group’s statement of compre-
global demand for seeds. In this context, KWS also
hensive income in accordance with IFRS, we deal
expects a sharp increase in sales prices for innova-
with the KWS Group’s anticipated net sales, EBIT
tive seed.
and R&D intensity. Our forecast for the segments
contains comments on our net sales and EBIT
At the same time, higher prices for agricultural raw
expectations, including the contributions made
materials will drive up the costs for seed multiplica-
by our equity-accounted companies, which are
tion. We also anticipate above-average price rises
included proportionately in the segment reports in
in most procurement categories as well as higher
line with our internal corporate controlling structure.
personnel costs as a consequence of strong infla-
2.10.1 Changes in the KWS Group’s Composition
that are Significant for the Forecast
There have not been any changes in the
tionary trends. There are still significant currency
risks in important markets, in particular in South
America and Eastern Europe.
KWS Group’s composition that are of significance
We expect the KWS Group to grow its net sales (on
for the forecast for its business performance in
a comparable basis, excluding exchange rate and
fiscal 2022/2023.
portfolio effects) by 7% to 9% in fiscal 2022/2023
compared with the previous year (€1,539.5 million).
We anticipate that the EBIT margin will be in the
range of 10% to 11%. Our R&D intensity is expected
to be in the range of 18% to 20%. Due to the
strongly seasonal nature of our business as a result
of the great importance of the spring sowing season
and external factors that are difficult to anticipate,
such as the weather and fluctuations in cultivation
area, we are providing ranges in our forecasts here,
since more detailed statements on our net sales
and earnings performance cannot yet be made with
sufficient reliability.
2.10 Forecast Report | Combined Management Report
77
KWS Group | Annual Report 2021/2022 2.10.3 Forecast for the Segments
We also anticipate a higher cost of sales, in partic-
In fiscal 2022/2023, we anticipate that the
ular from seed multiplication. All in all, we expect
Corn Segment (on a comparable basis) will
the EBIT margin to remain the same as in the
grow its net sales¹ sharply over the previous year
previous year (13.6%).
(€935.1 million), in particular on the back of rising
sales volumes in South America and Europe. We
The Vegetables Segment essentially comprises
assume that competition will remain intense in
the net sales and earnings contributed by acquired
North America. As far as can be seen at present,
vegetable seed businesses. Assuming a recovery
the EBIT margin is expected to be at the level of the
in the market environment, in particular for spinach
previous year (6.1%).
seed, we expect the segment’s net sales ¹ (on a
comparable basis) to rise sharply compared to the
In the Sugarbeet Segment, our high-yielding
previous year (€54.3 million). There are also costs
portfolio of varieties will likely mean another
for establishing an international breeding program
successful fiscal year for us. We assume that
and the Business Unit in the segment. Conse-
sugarbeet cultivation area will remain stable all in
quently, the number of employees will probably
all. The segment’s business performance should
increase further. We anticipate that the EBIT margin
benefit from further growth due to CONVISO®
will be above that of the previous year, among other
SMART seed and demand for Cercospora-tolerant
things due to a sharp fall in noncash effects from
(CR+) varieties. We expect that the segment’s net
the purchase price allocation as part of company
sales (on a comparable basis) will increase ¹ sharply
acquisitions. We anticipate that the EBIT margin
compared with the previous year (€588.4 million)
after adjustment for the above-mentioned effects
and that the EBIT margin will be at the level of the
will be on a par with that of the previous year (1.1%).
previous year (33.1%).
Revenue (albeit slight) from our farms in Germany,
We assume that net sales in the Cereals Segment
France and Poland is grouped in the Corporate
(on a comparable basis) will rise ¹ sharply compared
Segment. Since all cross-segment costs for the
to the previous year (€216.4 million). In particular,
KWS Group’s central functions and research expen-
we expect rapeseed and hybrid rye seed business
diture are still charged to the Corporate Segment,
to boost growth here. The segment’s earnings will
its income is usually negative. In view of the planned
benefit from an increase in sales of rye seed; at the
cost developments and continuation of the trans-
same time, we are planning to expand our research
formation project GLOBE, we expect the segment’s
and development and distribution activities further.
EBIT to be around €–110.0 (–97.7) million.
Forecast for the 2022/2023 fiscal year
Statement of
comprehensive income of
the KWS Group
Net sales
EBIT margin
R&D intensity
7–9%
10–11%
18–20%
1 Increase of more than 7%
78 Combined Management Report | 2.10 Forecast Report
Annual Report 2021/2022 | KWS Group 2.11 Report on KWS SAAT SE & Co. KGaA and NonFinancial Declaration
2.11 Report on KWS SAAT SE & Co. KGaA and NonFinancial
Declaration (Declaration Based on the German Commercial
Code (HGB))
2.11.1 KWS SAAT SE & Co. KGaA
with Section 289f of the German Commercial Code
(HGB), which also contains the compliance declara-
References to KWS SAAT SE & Co. KGaA in the
tion in accordance with Section 161 AktG (German
KWS Group’s Annual Report
Stock Corporation Act), has been published on the
The Management Reports of KWS SAAT SE &
Internet at www.kws.com. The following disclosures
Co. KGaA and the KWS Group are combined. The
are identical to those of the KWS Group and are
declaration on corporate governance in accordance
printed in this Annual Report:
References to KWS SAAT SE & Co. KGaA in the KWS Group’s Annual Report
Disclosures
Report in accordance with Section 289 (4) of the German Commercial Code (HGB)
and explanatory report of the Executive Board
Disclosures on business activity, corporate strategy, corporate controlling and
management, as well as explanations on business performance
Disclosures on the dividend
Disclosures on research and development
Disclosures on the report on events after the balance sheet date
Page(s)
58 to 60
16 to 42
138 (Notes)
23 to 25
139 (Notes)
KWS SAAT SE & Co. KGaA is the parent company
The balance of other operating income and
of the KWS Group. It is responsible for strategic
other operating expenses was €1.7 (8.2) million.
management and, among other things, multiplies and
KWS SAAT SE & Co. KGaA’s operating income
distributes sugarbeet and corn seed. It finances basic
improved slightly to €–40.8 million compared
research and breeding of the main range of varieties at
with €–46.5 million in the previous year (guidance:
the KWS Group and provides its subsidiaries with new
slight decline). Net financial income/expense is
varieties every year for the purpose of multiplication
made up of the net income from equity invest-
and distribution.
Earnings
ments and the interest result. Net income from
equity investments fell sharply to €20.0 million
(378.1) million. The high figure for the previous year
Net sales at KWS SAAT SE & Co. KGaA
was mainly due to dividend payouts from retained
in fiscal 2021/2022 increased sharply
profits of foreign subsidiaries in connection with
to €691.1 (618.0) million (guidance: slight increase
intra-Group financing. The interest result improved
in net sales). That increase is attributable to our
year on year to €–2.3 (–4.1) million, in particular as a
corn and sugarbeet business. Gross profit like-
result of lower interest expenses and higher interest
wise rose sharply to €390.5 (343.2) million due
income. Taking into account tax income, the net
to the expansion in business. Research and
loss for the year was €13.0 million (previous year:
development expenditure, which is pooled at
net income of €321.4 million).
KWS SAAT SE & Co. KGaA, was increased as
planned to €226.2 (204.5) million. Selling expenses
Financial position and assets
rose to €82.9 (73.1) million. Most of the adminis-
KWS SAAT SE & Co. KGaA’s total
trative expenses at the KWS Group are incurred
assets in fiscal 2021/2022 increased
at KWS SAAT SE & Co. KGaA. General and
to €1,687.5 (1,623.1) million. Fixed assets at the
administrative expenses in the year under review
balance sheet date were €1,031.5 (1,016.3) million.
totaled €120.5 (120.3) million.
2.11 Report on KWS SAAT SE & Co. KGaA and Non-Financial Declaration | Combined Management Report
79
KWS Group | Annual Report 2021/2022 Property, plant and equipment rose slightly, while
2.11.2 Combined Non-Financial Declaration for
financial assets and intangible assets were at the
the KWS Group
level of the previous year. Inventories, in particular
In accordance with Sections 289b et seq. and
of unfinished goods, rose to €104.4 (79.8) million
Sections 315b et seq. of the German Commer-
due to the planned increase in production quan-
cial Code (HGB), KWS is obliged to prepare a
tities. Receivables and other assets declined
Non-Financial Declaration for the parent company
to €479.9 (495.7) million, in particular as a result
KWS SAAT SE & Co. KGaA and the Group
of the fall in receivables from affiliated compa-
disclosing details of the business model and
nies. Liabilities at the balance sheet date rose
related material corporate social responsibility
to €1,012.4 (914.3) million, mainly due to an
(CSR) aspects (environmental issues, social issues,
increase in liabilities to affiliated companies.
employee issues, human rights, and prevention of
KWS SAAT SE & Co. KGaA’s equity decreased
corruption and bribery), where these are necessary
to €492.1 (531.3) million, giving an equity ratio of
for an understanding of the course of business,
29.2% (32.7%).
Employees
business results, the situation of KWS SAAT SE &
Co. KGaA and the KWS Group, and the effects on
said aspects. The disclosures in the Combined
An average of 1,681 (1,633) people were employed
Non- Financial Declaration relate to both
at KWS SAAT SE & Co. KGaA in the year under
KWS SAAT SE & Co. KGaA and the KWS Group,
review.
unless otherwise specified.
Risks and opportunities
In order to identify aspects that need to be reported
The opportunities and risks at KWS SAAT SE &
in the Non-Financial Declaration, the relevant
Co. KGaA are essentially the same as at the
issues based on a Global Reporting Initiative (GRI)
KWS Group. It shares the risks of its subsidiaries
materiality analysis in fiscal year 2020/2021 were
and associated companies in accordance with its
systematically reassessed to determine their impact
respective stake in them. You can find a detailed
on the environment and society and on the position
description of the opportunities and risks and
of the KWS Group. The analysis was reviewed in
an explanation of the internal control and risk
the past fiscal year. As part of the Sustainability
management system (Section 289 (4) of the German
Ambition 2030, social commitment was included
Commercial Code (HGB)) on pages 63 to 76.
as a further material issue in our reporting. Further
Forecast Report
material issues were not identified. As a result, the
subject areas of innovative and sustainable product
KWS SAAT SE & Co. KGaA generates the main
development, product quality and safety, emissions,
part of its net sales from sugarbeet and corn seed
water, occupational health and safety, recruitment
business and royalties from basic corn seed. Its
and 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, use of genetic
growth markets. On the basis of our planning, we
resources and social commitment are therefore
anticipate a slight increase in net sales, in particular
also defined as material within the meaning of the
due to growing cereals and sugarbeet business.
statutory regulations.
KWS SAAT SE & Co. KGaA’s operating income is
mainly impacted by the costs of central functions of
Significant effects of current developments on the
the KWS Group and cross-segment research and
non-financial issues, such as COVID-19 or devel-
development activities. As a result of the anticipated
opments in Ukraine, are reported in the respective
higher spending on research and development
sections. Given that we aim to conduct the GRI
and on distribution activities, KWS SAAT SE &
materiality analysis every two years, the next one is
Co. KGaA’s EBIT will likely be below that of the year
scheduled for fiscal 2022/2023.
under review.
80 Combined Management Report | 2.11 Report on KWS SAAT SE & Co. KGaA and Non-Financial Declaration
Annual Report 2021/2022 | KWS Group The Executive Board concretized its comprehensive
We did not identify any risks that exceeded
sustainability program with relevant targets and key
the statutory materiality threshold defined in
performance indicators in the year under review.
Section 289c (3) of the German Commercial Code
They are explained in the Non-Financial Declaration
(HGB). In addition, the KWS Group has not defined
(starting on page 44).
any non-financial performance indicators relating to
controlling at present.
The table below gives an overview of the CSR
report aspects stipulated by law in accordance
As part of preparation of the Non-Financial
with Section 289c of the German Commercial Code
Declaration, we were guided by the GRI standards
(HGB) and other associated issues that require
in conducting the materiality analysis. We did not
reporting, as well as references to the sections in
use any other framework apart from that.
which the required disclosures on concepts, results,
risks and key performance indicators are made.
Index for the Non-Financial Declaration
Required HGB disclosures Material issues for KWS
Reference to sections
–
Business model
Environmental issues
Employee issues
–
–
Innovative & Sustainable Product
Development
Product Quality and Safety
Emissions
Water
Occupational Health and Safety
Recruitment & Employee Loyalty
Qualification, Further Training and
Development
Employee Engagement
Human and Labor Rights
2.4 EU Taxonomy
2.1.1 Business Model
2.5.1 Product Innovations
2.5.2 Product Quality and Safety
2.5.3 Emissions & Water
2.6.2 Occupational Health and Safety
2.6.3 Recruitment & Employee Loyalty
2.6.4 Qualification, Further Training
and Development
2.6.5 Labor and Social Standards
Corruption and bribery
Business Ethics & Compliance
2.7.3 Business Ethics & Compliance
Human rights
Responsibility in the Supply Chain
Human and Labor Rights
2.7.4 Responsibility in the
Supply Chain
Social issues
Use of Genetic Resources
2.8.1 Use of Genetic Resources
and Intellectual Property
2.8.2 Social Commitment
Einbeck, September 14, 2022
KWS SE
Dr. Hagen Duenbostel | Dr. Felix Büchting | Dr. Peter Hofmann | Eva Kienle | Nicolás Wielandt
2.11 Report on KWS SAAT SE & Co. KGaA and Non-Financial Declaration | Combined Management Report
81
KWS Group | Annual Report 2021/2022
3. Consolidated Financial Statements
for KWS SAAT SE & Co. KGaA
2021/2022
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes for KWS SAAT SE & Co. KGaA 2021/2022
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
84
85
86
88
90
90
90
91
102
103
6. Notes to the Consolidated Statement of Comprehensive Income 106
7. Notes to the Consolidated Balance Sheet
8. Notes to the Consolidated Cash Flow Statement
9. Other Notes
Independent Auditor’s Report
Independent Auditor’s Limited Assurance Report
Declaration by Legal Representatives
Additional Information
113
137
138
146
154
157
158
Consolidated 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
Financial income
Financial expenses
Income from equity-accounted financial assets
Financial result
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.
2021/2022
2020/2021
1,539,518
1,310,232
6.4
–16,934
6.1
6.1
6.1
6.1
6.1
6.2
6.3
6.5
6.8
7.9
7.9
7.9
7.9
7.9
694,306
845,212
281,270
286,423
132,161
85,628
75,928
155,058
12,242
36,855
7,679
138,124
30,365
107,760
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
36,452
18,021
–38,993
–912
54,473
–39,905
550
25,723
26,274
80,746
188,506
107,760
0
2,666
4,073
6,738
–33,167
77,423
110,609
–19
6.8
107,760
110,590
188,506
0
188,506
77,442
–19
77,423
Diluted and basic earnings per share (in €)
6.8
3.27
3.35
84 Consolidated Financial Statements | Consolidated Statement of Comprehensive Income
Annual Report 2021/2022 | KWS Group
Consolidated 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
Equity
Long-term provisions
Long-term borrowings
Noncurrent lease liabilities
Deferred tax liabilities
Other noncurrent financial / non-financial 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.
06/30/2022
06/30/2021
7.1
7.1
7.15
7.2
7.3
7.5
7.14
6.5
7.6
7.6
7.7
7.8
7.7
7.7
7.7
4
7.9
7.9
7.9
7.9
7.11
7.11
7.15; 7.11
6.5
7.11
7.11
7.12
7.12
7.15; 7.12
7.12
7.12
7.12
7.12
7.12
7.12
122,991
332,999
44,414
565,870
186,776
10,104
553
14,388
40,704
122,643
353,701
43,671
506,267
173,736
9,436
606
7,330
47,642
1,318,800
1,265,033
354,618
8,955
518,508
203,664
124,475
55,257
63,524
266,606
5,546
449,501
222,745
91,546
40,592
34,488
1,329,001
1,111,024
3,995
686
2,651,796
2,376,743
99,000
5,530
1,141,382
1,245,911
95,225
613,588
37,228
63,984
4,141
814,165
41,878
111,991
11,923
201,702
25,313
41,857
50,377
106,679
591,719
99,000
5,530
949,188
1,053,718
132,500
601,080
37,465
66,359
1,605
839,009
39,455
97,225
10,961
153,748
31,503
14,203
25,234
111,687
484,016
1,405,885
2,651,796
1,323,025
2,376,743
Consolidated Balance Sheet | Consolidated Financial Statements
85
KWS Group | Annual Report 2021/2022
Consolidated Statement of Changes in Equity
July 1 to June 30
in € thousand
Comprehensive other Group income
Subscribed
capital
Capital
reserve
Accumulated
Group equity
from earnings
Comprehensive
other Group income
Reserve for
currency
translation
differences
on foreign
operations
Reserve for
currency
trans lation
differences
on at equity
accounted
financial assets
99,000
5,530
1,031,127
–92,821
7,216
–23,100
110,609
0
0
0
0
0
–38,993
–6,635
110,609
–38,993
–6,635
0
0
5,016
1,123,652
1,123,652
–26,400
107,760
0
0
0
–131,814
–131,814
0
0
0
0
0
581
581
0
0
36,452
20,404
99,000
99,000
5,530
5,530
99,000
5,530
1,235,099
–95,362
107,760
30,088
36,452
0
20,404
0
20,985
06/30/2020
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
06/30/2021
07/01/2021
Dividends paid
Net income for the year
Other comprehensive income
after tax
Total consolidated gains
(losses)
Other changes
06/30/2022
86 Consolidated Financial Statements | Consolidated Statement of Changes in Equity
Annual Report 2021/2022 | KWS Group
Consolidated Statement of Changes in Equity
July 1 to June 30
in € thousand
Comprehensive other Group income
Parent company Minority interest
Group equity
Subscribed
capital
Capital
reserve
Accumulated
Group equity
from earnings
Comprehensive
other Group income
Comprehensive other
Group income
Total
Reserve for
currency
translation
differences
on foreign
Reserve for
currency
trans lation
differences
on at equity
accounted
operations
financial assets
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
2,186
–57,879
06/30/2020
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
06/30/2021
07/01/2021
Dividends paid
after tax
(losses)
Other changes
06/30/2022
Net income for the year
Other comprehensive income
Total consolidated gains
99,000
5,530
1,031,127
–92,821
7,216
–38,993
–6,635
110,609
–38,993
–6,635
–23,100
110,609
0
0
0
5,016
1,123,652
1,123,652
–26,400
107,760
107,760
30,088
0
0
0
0
0
0
0
0
99,000
99,000
5,530
5,530
–131,814
–131,814
581
581
36,452
20,404
36,452
20,404
99,000
5,530
1,235,099
–95,362
20,985
0
0
0
0
0
0
0
0
0
0
0
5,723
5,723
0
0
0
5,723
5,723
0
0
–2,384
–2,384
0
3,339
0
0
2,666
2,666
0
0
0
4,852
4,852
0
0
550
550
0
5,402
0
0
4,073
4,073
0
0
0
–53,806
–53,806
0
0
994,360
–23,100
110,609
–33,167
77,442
0
0
5,016
1,053,718
1,053,718
–26,400
107,760
25,723
80,746
25,723
0
–28,083
188,506
30,088
1,245,911
139
0
–19
0
–19
–120
0
0
0
0
0
0
0
0
0
0
994,498
–23,100
110,590
–33,167
77,423
–120
0
5,016
1,053,718
1,053,718
–26,400
107,760
80,746
188,506
30,088
1,245,911
Consolidated Statement of Changes in Equity | Consolidated Financial Statements
87
KWS Group | Annual Report 2021/2022
Consolidated 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 assetss
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.
2021/2022
2020/2021
6.8
7.2; 7.1; 7.15
6.5
6.4
107,760
94,540
–1,666
1,131
332
30,365
–35,577
11,917
110,590
93,828
–1,660
–12,430
–465
31,382
–37,347
10,885
–196,788
–75,173
71,927
12,660
3,723
100,323
155
–10,725
510
–83,425
0
0
0
0
2,610
–90,874
50,402
5,609
–7,298
168,322
154
–12,269
1,876
–68,644
–518
0
0
–8,285
3,524
–84,161
88 Consolidated Financial Statements | Consolidated Cash Flow Statement
Annual Report 2021/2022 | KWS Group
July 1 to June 30
in € thousand
Dividend payments (–) to owners
Payment (–) of principal portion of lease liabilities
Payment (–) of interest portion of lease liabilities
Interest paid (–) incl. transaction costs on issuance of promissory
notes and borrowings
Proceeds from long-term borrowings
Repayment from long-term borrowings
Changes from proceeds (+)/repayments (–) of short-term borrowings
Net cash from financing activities
Net cash changes in cash and cash equivalents and
restricted cash
Changes in chash 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
thereof restricted cash and cash equivalents at end of year
Note no.
2021/2022
2020/2021
7.9
7.15
7.15
–26,400
–9,628
–936
–14,378
178,537
–153,068
–2,554
–28,427
–23,100
–11,905
–876
–11,572
206,201
–116,695
–7,123
34,930
–18,978
119,091
–103
–16,083
222,745
119,737
8
203,664
222,745
44
46
Consolidated Cash Flow Statement | Consolidated Financial Statements
89
KWS Group | Annual Report 2021/2022 Notes for the KWS Group
Notes for
KWS SAAT SE & Co. KGaA 2021/2022
1. General Disclosures
2. Standards and Interpretations
The consolidated financial statements of KWS SAAT SE &
Applied for the First Time
Co. KGaA and its subsidiaries were prepared under
The following standards and interpretations have been
the assumption that the operations of the companies
adopted and applied for the first time in fiscal year
will be continued and applying Section 315e of the
2021/2022:
German Commercial Code (HGB). They comply with the
International Financial Reporting Standards (IFRS) as
applicable in the European Union (EU).
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
Standards and interpretations applied for the first time
Financial reporting standards and interpretations
IFRS 9/IAS 39/ IFRS 7/ IFRS 4/ IFRS 16 –
Interest Rate Benchmark Reform (Phase 2)
IFRS 16 – Covid–19-Related Rent Concessions beyond
30 June 2021
IFRS 4 – Extension of the temporary exemption from
applying IFRS 9
agriculture. KWS covers the complete value chain of a
All changes to the accounting standards and interpretations
modern seed producer – from breeding of new varieties,
and interpretations have no material effect on the impact on
multiplication and processing to marketing of the seed
the consolidated financial statements of the KWS Group.
and consulting for farmers. KWS’ core competence is in
breeding new, high-performance varieties that are adapted
Standards and interpretations to be applied in future
to regional needs, such as climatic and soil conditions.
The IASB has issued the following standards and
The Executive Board of KWS SE, the personally liable
yet mandatory for the 2021/2022 fiscal year and for some
partner of KWS SAAT SE & Co. KGaA, prepared the
of which the European Union had not yet completed the
consolidated financial statements on September 14, 2022,
endorsement process. The following standards have not
and released them for distribution to the Supervisory
yet been applied by the KWS Group:
amendments to standards whose application was not
Board. The Supervisory Board has the task of examining
the consolidated financial statements and declaring
whether it approves them.
90 Consolidated Financial Statements | Notes for the KWS Group | 1. General Disclosures
2. Standards and Interpretations Applied for the First Time
Annual Report 2021/2022 | KWS Group
Standards and Interpretations to be applied in future
Financial reporting standards and interpretations
Annual Improvements to IFRS 2018–2020 Cycle
IFRS 3 – Amendments to IFRS 3: Business Combinations –
Reference to the Conceptual Framework
IAS 16 – Amendments to IAS 16: Property, Plant and Equipment:
Proceeds before Intended Use
IAS 37 – Amendments to IAS 37: Provisions, Contingent Liabilities
and Contingent Assets: Onerous Contracts: – Costs of Fulfilling a Contract
IFRS 17 – Insurance Contracts, including amendments to IFRS 17:
Initial application of IFRS 17 and IFRS 9 – Comparative Information
Mandatory first-time
application
Fiscal year 2022/2023
Fiscal year 2022/2023
Fiscal year 2022/2023
Fiscal year 2022/2023
Fiscal year 2023/2024
IAS 1 – Amendments to IAS 1: Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current including Deferral of Effective Date
Fiscal year 2023/2024
IAS 1 – Amendments to IAS 1: Presentation of Financial Statements
and IFRS Practice Statement 2: Disclosure of Accounting Policies
Fiscal year 2023/2024
IAS 8 – Amendments to IAS 8: Accounting Policies, Changes in Accounting Estimates
and Errors: Definition of Accounting Estimates
Fiscal year 2023/2024
IAS 12 – Amendments to IAS 12: Income Taxes: Deferred Tax related to Assets
and Liabilities arising from a Single Transaction
Fiscal year 2023/2024
IFRS 17 – Initial Application of IFRS 17 and IFRS 9: Comparative Information
Fiscal year 2023/2024
Based on an analysis, the standards and interpretations to
differences in the income statement in relation to the
be applied in future are not expected to have a significant
KWS Group’s financing activities, the aim of which was
impact on the consolidated financial statements of the
to improve clarity. The accounting policies for currency
KWS Group.
translation can be found in section 3.4.
3. Accounting Policies
Foreign currency differences from internal and external
financing activities recognized in profit or loss are no
longer carried under the items “Other operating income”
3.1 Consistency of accounting policies
or “Other operating expenses.” Instead, they are carried
Consistent accounting policies are applied in the financial
in the financial result under the items “Financial income”
statements of the companies included in the consolidated
and “Financial expenses.” All foreign currency differences
financial statements. There were no changes to accounting
from operating activities recognized in profit or loss are
policies from the previous financial year, with the exception
still reported under the items “Other operating income”
of the standards to be applied for the first time and the
and “Other operating expenses.” The following presents a
following change in presentation.
reconciliation of the previous year’s figures.
The KWS Group published new Group-wide guidelines
All estimates and assessments as part of accounting and
on currency management at the beginning of fiscal year
measurement are continually reviewed; they are based
2021/2022. As a consequence, there was a change in the
on historical patterns and expectations about the future
presentation of realized and unrealized foreign exchange
regarded as reasonable in the particular circumstances.
2. Standards and Interpretations Applied for the First Time | Notes for the KWS Group | Consolidated Financial Statements
3. Accounting Policies
91
KWS Group | Annual Report 2021/2022 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
Financial income
Financial expenses
Income from equity-accounted financial assets
Net financial income/expenses
Earnings before taxes
Taxes
Net income for the year
Reported
Adjustment
2020/2021
After
adjustment
2020/2021
1,310,232
1,310,232
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
23,368
21,276
23,368
21,276
570,690
739,542
244,218
252,226
127,142
48,078
29,093
134,941
29,513
39,613
17,374
7,274
142,214
31,624
110,590
3.2 Companies consolidated in the KWS Group
3.3 Consolidation methods
The consolidated financial statements of the KWS Group
The single-entity financial statements of the individual
include the single-entity financial statements of
subsidiaries included in the consolidated financial
KWS SAAT SE & Co. KGaA and its subsidiaries in
statements and the single-entity financial statements of the
Germany and other countries, as well as joint ventures and
joint ventures and associated companies included using
associated companies, which are carried using the equity
the equity method and of the proportionately consolidated
method, and joint operations. A company is a subsidiary
joint operations were uniformly prepared on the basis
if KWS SAAT SE & Co. KGaA currently has existing rights
of the accounting and measurement policies applied at
that give it the ability to control its relevant activities.
KWS SAAT SE & Co. KGaA. For business combinations,
Relevant activities are the activities that significantly affect
capital consolidation is performed according to the
the Company’s returns. Control therefore only exists if
acquisition method by allocating the cost of acquisition to
KWS SAAT SE & Co. KGaA has the ability to use its power
the Group’s interest in the subsidiary’s remeasured equity
to affect the amount of the variable returns. Control can
at the time of acquisition. Any excess of interest in equity
usually be derived from holding a majority of the voting
over cost is recognized as an asset, up to the amount by
rights directly or indirectly. Details on the changes in the
which fair value exceeds the carrying amount. Any goodwill
consolidated group are provided in section 4. Consolidated
remaining after first-time consolidation is recognized as
Group and Changes in the Consolidated Group.
an intangible asset. Costs incurred as part of the business
combination are recognized as an expense and carried as
administrative expenses.
92 Consolidated Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2021/2022 | KWS Group According to IAS 36, goodwill is not amortized, but tested
Deferred taxes on consolidation transactions recognized
for impairment at least once a year at the end of the year
in income are calculated at the tax rate applicable to the
(impairment-only approach). Investments in insignificant
Company concerned. These deferred taxes are aggregated
unconsolidated subsidiaries are carried at fair value.
with the deferred taxes recognized in the separate financial
statements.
Joint ventures are consolidated using the equity method
in application of IFRS 11 and IAS 28. The basis for a joint
As part of the elimination of intra-Group balances,
venture is a contractual agreement with a third party to
borrowings, receivables, liabilities, and provisions
control and manage a venture collectively. In the case of
are netted between the consolidated companies.
joint ventures, the parties who exercise joint management
Intercompany profits not realized at Group level are
have rights to the net assets of the agreement.
eliminated from intra-Group transactions. Sales,
In the case of joint ventures carried in accordance with
companies, and intra-Group distributions of profit are
income, and expenses are netted between consolidated
the equity method, the carrying amount is increased
eliminated.
or reduced annually by the equity capital changes
corresponding to the KWS Group’s share. In the case of
Non-controlling interests are recognized in the amount
first-time consolidation of equity investments using the
of the imputed percentage of equity in the consolidated
equity method, differences from first-time consolidation
companies.
are treated in accordance with the principles of full
consolidation. The changes in the proportionate equity
3.4 Currency translation
that are recognized in profit or loss are included, along
Under IAS 21, the financial statements of the consolidated
with impairment of goodwill, under the item “Income from
foreign subsidiaries that conduct their business as
equity-accounted financial assets” in the net financial
financially, economically, and organizationally independent
income/expenses. Associated companies in which the
entities are translated into euros using the functional
KWS Group exerts a significant influence because it holds
currency method and rounded in accordance with
a stake of between 20% and 50% are likewise measured
standard commercial practice as follows:
using the equity method.
Income statement items at the average exchange rate
The basis for a joint operation is likewise a contractual
for the year on a monthly basis;
agreement with a third party to manage the Company’s
Balance sheet items at the exchange rate on the
activities jointly. In this case, the parties have rights to
balance sheet date.
the assets that can be ascribed to the agreement and
obligations in respect of the liabilities. The assets and
The following exchange rates were applied in the
liabilities and revenue and expenses are included in the
consolidated financial statements for the main foreign
consolidated financial statements proportionately in
currencies relative to the euro:
accordance with the KWS Group’s stake (50%).
3. Accounting Policies | Notes for the KWS Group | Consolidated Financial Statements
93
KWS Group | Annual Report 2021/2022 Exchange rates for main currencies
1 EUR/
ARS1
BRL
GBP
RUB
TRY1
UAH
USD
Argentina
Brazil
UK
Russia
Turkey
Ukraine
USA
Rate on balance sheet date
Average rate
06/30/2022
06/30/2021
2021/2022
2020/2021
131.27
113.68
131.27
113.68
5.51
0.86
53.86
17.52
30.78
1.05
5.89
0.86
86.20
10.36
32.30
1.19
5.92
0.85
85.14
17.52
31.51
1.13
6.43
0.89
89.04
9.21
33.22
1.19
1 The average rate corresponds to the rate at balance sheet date due to application of IAS 29 for KWS ARGENTINA S.A and KWS TÜRK TARIM TICARET A.S.
The difference resulting from the application of annual
hyperinflationary economy. The net gains or losses from
average rates on a monthly basis to the net income for the
the ongoing inflation of non-monetary assets and liabilities
year in the income statement at the rate on balance sheet
as well as equity and all items in the income statement are
date is taken directly to equity.
recognized in profit or loss under “Other operating result.”
Differences arising from currency translation are
The financial statements of these subsidiaries are generally
recognized in profit or loss under “Other operating income”
based on the historical cost approach. Due to changes in
or “Other operating expenses” and, where they result
the general purchasing power of the functional currency,
from financial transactions, under “Financial income” or
these financial statements had to be adjusted to the unit of
“Financial expenses.” An exception is currency translation
measure applicable at the balance sheet date.
differences from loan receivables that represent part of the
net investment in a foreign subsidiary. According to IAS 21,
Argentina’s IPC price index was 483.60 points at
these translation differences are recognized in the Other
July 1, 2021, and rose by 64.0% in the current fiscal year
comprehensive income and are not reclassified to profit or
to 793.03 points at June 30, 2022. Turkey’s Consumer
loss until disposal of the net investment. The accumulated
Price Index (CPI) was 557.36 points at July 1, 2021, and
amount is recognized in the income statement only when
rose by 75.5% in the current fiscal year to 977.9 points at
the net investment is disposed of.
June 30, 2022.
Argentina was still classified as a hyperinflationary
3.5 Classification of the statement of
economy this fiscal year, as a result of which IAS 29
comprehensive income
“Financial Reporting in Hyperinflationary Economies” was
The KWS Group has prepared the income statement using
applied to KWS ARGENTINA S.A. In addition, inflation
the cost-of-sales method. The costs for the functions
increased significantly in Turkey in fiscal year 2021/2022.
include all directly attributable costs, including other taxes.
The Turkish Statistical Institute reported a three-year
cumulative inflation rate of 109% and a twelve-month
3.6 Recognition of income and expenses
inflation rate of 61% for March 2022. Given the current
Revenue from contracts with customers is primarily
economic environment, it is expected that the cumulative
generated from the sale of seed. It is recognized when
inflation rate over the past three years will continue to
the KWS Group transfers control over products to the
exceed 100%. Accordingly, Turkey was classified as
customer. That is usually the time when risk passes to the
a hyperinflationary economy in fiscal year 2021/2022,
customer. The revenue is recognized at the amount of the
with the result that IAS 29 was applied for the first time
consideration promised in the contract.
to subsidiaries based in Turkey. It was applied for the
first time as if Turkey had always been classified as a
94 Consolidated Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2021/2022 | KWS Group
The KWS Group’s contracts with customers do not
Intangible assets acquired as part of business
usually have any significant separable performance
combinations are carried separately from goodwill if they
obligations apart from the delivery of seed. Consequently,
are separable according to the definition in IAS 38 or result
splitting of the transaction price is not required for most
from a contractual or legal right.
of the KWS Group’s contracts with customers. The total
purchase price must be recognized at a point in time.
The useful life of intangible assets is as follows:
If the contracts specify further performance obligations,
Useful life of intangible assets
such as granting of discount coupons, credit memos
for returned goods and bonus points, in addition to
seed delivery, they must be measured separately. The
Breeding material, proprietary rights
to varieties and trademarks
KWS Group uses empirical country-specific and seasonal
figures and information on already announced returns to
Other rights
Software
estimate the anticipated returns.
The level of the promised consideration is not adjusted by
the effects of a financing component because the period
Distribution rights
Customer relationships
Useful life
10–30 years
3–10 years
3–8 years
5–20 years
1–5 years
for payment is usually less than 12 months.
3.8 Property, plant, and equipment
The incremental costs of obtaining a contract are
straight-line depreciation over its expected useful life and
recognized as a current expense in the period.
impairment losses. Depreciation of an asset commences
Property, plant, and equipment is measured at cost less
Revenue from service transactions is recognized over
necessary for it to be capable of operating in the manner
the period of time in which the service is provided
intended by management. Depreciation of an asset ends
and measured on an output-oriented basis using the
when the asset has been fully expensed or is classified
percentage of completion method. Revenue from royalties
as held for sale in accordance with IFRS 5 or at the latest
when the asset is at its location and is in the condition
and other income, such as interest and dividends, are
when it is derecognized.
recognized in the period in which they accrue as soon as
there is a contractual or legal entitlement to them.
If property, plant, and equipment is sold or scrapped, the
profit or loss from the difference between the proceeds
Performance-based public grants are presented under the
and residual carrying amount is recognized under the other
other operating income as part of profit/loss.
operating income or other operating expenses.
Operating expenses are recognized in the income
In addition to directly attributable costs, the cost of self-
statement upon the service in question being used or as of
produced plant or equipment also includes a proportion of
the date on which they occur.
the overheads and depreciation/amortization.
3.7 Intangible assets
Purchased intangible assets are carried at cost less
straight-line amortization and impairment losses. It is
necessary to examine whether the useful life of intangible
assets is finite or indefinite. Goodwill has an indefinite
useful life. Goodwill and intangible assets with an indefinite
useful life are not amortized, but tested for impairment at
least once a year.
3. Accounting Policies | Notes for the KWS Group | Consolidated Financial Statements
95
KWS Group | Annual Report 2021/2022
Useful life of property, plant and equipment
If the KWS Group is the lessee, leases are recognized
Buildings
Operating equipment and
other facilities
Technical equipment and machinery
Laboratory and research facilities
Other equipment, operating and
office equipment
Useful life
10–50 years
as a right-of-use asset and lease liability in the balance
sheet in accordance with the regulations of IFRS 16. In
subsequent periods, the right-of-use asset is depreciated
5–25 years
over the lease’s term, taking into account the exercise of
5–15 years
5–13 years
any renewal options. This depreciation is recognized in the
respective function costs. Interest expense is accrued on
the lease liability in the course of the lease and the liability
3–15 years
is reduced by the lease payments that have been made.
The effect from the accrued interest is recognized in the
interest expense under net financial income/expenses.
Low-value assets are fully expensed in the year of
purchase; they are reported as additions and disposals in
The lease payments for short-term leases and leases of
the year of purchase in the statement of changes in fixed
low-value assets are recognized as operating expenses in
assets.
accordance with the available exemption.
If there is evidence of a possible impairment, an
The right-of-use assets are recognized to the amount of
impairment test on the property, plant, and equipment or
the corresponding lease liabilities, adjusted for any prepaid
at a cash-generating unit is carried out in accordance with
or accrued lease payments if applicable. The right-of-use
IAS 36. An impairment is recognized if the recoverable
assets and lease liabilities are each reported in the balance
amount for the asset/cash-generating unit has fallen below
sheet under a separate item.
the residual carrying amount. The recoverable amount is
the higher of the fair value less costs to sell or the value
If the KWS Group is the lessor and the main risks and
in use. If the reason for an earlier impairment loss on
rewards from use of the leased object are transferred
property, plant, and equipment no longer applies, its value
to the contractual partner, the lease is deemed to be
is increased to up to the amount that would have resulted if
a financial lease. The net investment in the lease is
the impairment loss had not occurred, taking depreciation
recognized as a receivable.
into account. In accordance with IAS 20, government
grants for assets are deducted from the costs of the asset.
If the KWS Group acts as a lessor as part of an operating
Any deferred income is not recognized.
lease, the lease payments are recognized as other
operating income in the income statement on a straight-
The residual values, useful economic lives and methods
line basis over the lease’s term.
of depreciation for property, plant, and equipment are
reviewed at the end of each fiscal year and adjusted
The KWS Group’s leases mainly relate to tenancy
prospectively if necessary.
agreements for office space, lease agreements and leased
In accordance with IAS 23, borrowing costs are capitalized
if they can be classified as qualifying assets.
3.10 Financial instruments
vehicles.
3.9 Leases
Classification and measurement
A lease is an agreement whereby the lessor conveys the
Apart from equity instruments, financial instruments are
right to use an asset for an agreed period of time to the
financial assets and financial liabilities.
lessee in exchange for a payment or a series of payments.
96 Consolidated Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2021/2022 | KWS Group When financial assets are initially recognized, they are
Impairment losses
assigned to one of the following three categories for the
The credit risk is the risk that a contractual partner
purpose of subsequent measurement: at amortized cost,
does not fulfill its payment obligations as part of a
at fair value through other comprehensive income, or at fair
financial instrument. The risks of default are monitored
value through profit or loss.
and controlled constantly and reflected by means of
impairment losses. The KWS Group ascertains the need
Equity instruments are generally measured at fair value
to recognize an impairment loss for all financial assets
through profit or loss, unless an option to classify them
not classified in the category “at fair value through profit
irrevocably as being measured at fair value through other
or loss.” That is calculated on the basis of the expected
comprehensive income is exercised when they are initially
losses. The expected losses are in general the present
recognized. Such an option is available if the financial
value resulting from the difference between the cash flows
investments in equity instruments are neither held for
defined in the contract and the cash flows the KWS Group
trading nor constitute a contingent consideration as part of
expects to receive.
a company acquisition. The debt instruments are classified
taking into account the KWS Group’s business model for
In general, a two-stage model must be applied in
controlling these financial assets and the contractual cash
calculating the expected losses. If the credit risk for
flow characteristics for the financial instrument. A financial
financial instruments has not increased significantly, the
asset is measured at amortized cost if it is held with the
risk provision is recognized only on the basis of losses
objective of collecting contractual cash flows and the latter
resulting from default events within the next twelve months.
comprise solely payments of interest and principal. If the
In the case of financial instruments whose credit risk has
financial assets are held as part of the business model
increased significantly since first-time recognition, the
to collect contractual cash flows and sell the financial
entire remaining lifetime is used to calculate the expected
instruments, these are classified as being measured at fair
losses.
value through other comprehensive income. All the other
financial instruments are classified in the category “at fair
The KWS Group uses a simplified approach under IFRS 9
value through profit or loss.” There is also the option of
to determine the expected losses because the financial
designating the debt instrument as being measured at fair
assets mainly consist of short-term trade receivables.
value through profit or loss under certain conditions when
Measurement and first-time recognition of the receivables
it is carried for the first time.
and also their subsequent measurement therefore take into
account expectations of default on the item in question
The financial assets consist of bank balances and cash
over its entire lifetime.
on hand, trade receivables, loans, fund shares, securities,
derivatives and other financial assets. Regular-way
The KWS Group determines the expected counterparty
purchases and sales of financial assets are recognized
default on the basis of the probability of default and the
or derecognized in general at the settlement date.
loss rate in the event of default.
Because fund shares have the characteristics of equity,
they are classified irrevocably as being measured at
The probability of default is generally determined on the
fair value through other comprehensive income. The
basis of customer-specific ratings. The probability of
changes to fair value in subsequent measurement are
default relates to a year, which is usually the maximum
recognized as unrealized gains and losses directly in other
lifetime of receivables at the KWS Group. Since specific
comprehensive income.
ratings are not available for all customers, an average
rating based on all classified customers is calculated for
The other financial assets are measured at amortized
each country, regardless of the receivables per customer.
cost. The carrying amount of receivables, money market
It is then applied to the total amount for all the receivables
accounts and cash is assumed as the fair value.
in the country in question. If that information is not
available for a country, the average rating of a country with
a comparable risk is applied.
3. Accounting Policies | Notes for the KWS Group | Consolidated Financial Statements
97
KWS Group | Annual Report 2021/2022 The loss rate is the percentage loss in the event of default
measurement at fair value. The fair value of financial
and corresponds to the amount of the unpaid receivables
liabilities with a long-term fixed interest rate is determined
less an expected recovery rate. The KWS Group applies a
as present values of the payments related to the liabilities,
uniform recovery rate determined regardless of customer
using a yield curve applicable on the balance sheet date.
group, due date and country over a long period of time and
over a broad total number of company insolvencies.
All financial liabilities at the KWS Group, with the exception
Changes to the level of the risk provision must be carried in
amortized cost using the effective interest method. The
the income statement as a reversal of an impairment loss
liabilities are derecognized at the time they are settled or
or as an impairment loss.
when the reason why they were formed no longer exists.
of derivative financial instruments, are measured at
Cash and cash equivalents are exposed only to an
Financial instruments in level 1 are measured using quoted
insignificant risk of fluctuations in their value. The seasonal
prices in active markets for identical assets or liabilities. In
nature of the KWS Group’s liquidity situation over the
level 2, they are measured by directly observable market
fiscal year only permits short-term cash deposits in the
inputs or derived indirectly on the basis of prices for similar
period from May to August. The bank balances and short-
instruments. Finally, input factors not based on observable
term cash deposits are mainly with banks that have high
market data are used to calculate the value of level 3
and stable creditworthiness. Given the external credit
financial instruments.
rating for these banks, the KWS Group’s cash and cash
equivalents are regarded as low-risk. Moreover, bank
3.11 Derivatives
balances are spread over multiple banks in order to avoid
The KWS Group uses derivatives to reduce currency and
any concentration of them. Impairment losses on cash and
commodity price risks. It mainly uses forward exchange
cash equivalents are regularly calculated on the basis of
and currency swap deals as well as commodity options
credit default swaps (CDS) of the banks. Bank balances are
that are customary in the market for that purpose.
recognized at nominal value less any necessary allowance
The KWS Group (with the exception of the equity-
for expected credit losses.
accounted joint venture AGRELIANT GENETICS LLC.)
has not designated any existing derivatives as a hedging
Financial assets are mainly derecognized once the
instrument.
contractual rights to obtain cash flows from financial
assets have expired or the financial assets with all
Derivative instruments are measured at fair value; they
their risks and rewards have been transferred to a third
can be assets or liabilities. The fair value of the financial
party. When the contractual rights are transferred, the
instruments is measured on the basis of the market
KWS Group assesses whether and to what extent risks
information available on the balance sheet date and using
and rewards associated with ownership of them remain
recognized mathematical models, such as present value
with the Group. If the risks and rewards are not transferred
or Black-Scholes, to calculate option values, taking their
in full, the KWS Group continues to recognize the asset
volatility, remaining maturity and capital market interest
to the extent of its continuing involvement. In that case, a
rates into account. The instruments must also be classified
related liability is also recognized.
in a level of the fair value hierarchy.
The financial liabilities mainly comprise trade payables,
The changes in the market value of derivatives not
loans from banks, derivatives and other financial liabilities.
designated as hedging instruments are recognized in the
When financial liabilities are initially recognized, they are
income statement. Derivatives are derecognized on their
classified as being measured at fair value through profit
day of settlement.
or loss or at amortized cost. KWS Group adopts first-time
98 Consolidated Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2021/2022 | KWS Group 3.12 Inventories and biological assets
Deferred tax assets are recognized if it is considered
Inventories are measured at the lower of cost or net
probable that there will be sufficient future taxable profit
realizable value less an allowance for obsolescent or slow-
against which the deductible temporary differences, tax
moving items. In addition to directly attributable costs,
loss carryforwards, tax credits and interest carryforwards
the cost of sales also includes indirect labor and materials
can be offset. Deferred tax liabilities must be recognized
including depreciation under IAS 2.
for all taxable temporary differences. All deferred taxes
must be assessed individually at each balance sheet date.
Biological assets mainly result from the KWS Group’s
farming activities at its locations in Germany, France
Deferred tax liabilities on taxable temporary differences
and Poland. At these locations, the KWS Group has
associated with investments in subsidiaries, branches and
farms that carry out all agricultural activities as part of
associated companies, and interests in joint arrangements,
seed multiplication. Under IAS 41, biological assets are
are not recognized if the entity is able to control the timing
measured at fair value less the estimated costs to sell.
of the reversal of the temporary differences and it is
If their fair value cannot be reliably determined, they are
probable that the reversal will not occur in the foreseeable
measured at cost. Immature biological assets are carried
future.
as inventories as of the time they are harvested.
3.14 Income tax liabilities
3.13 Deferred taxes
The income tax liabilities comprise obligations from actual
Deferred taxes are calculated in accordance with IAS 12.
income taxes. The actual income taxes are calculated
Deferred taxes are calculated on differences between
on the basis of the respective national taxable profit
the carrying amounts of assets and liabilities between
and regulations for the year. In addition, the actual taxes
the IFRS and their tax base, including differences from
recognized in the fiscal year also include adjustments for
consolidation measures, and on tax loss carryforwards,
any tax payments or refunds in respect of years that have
tax credits and interest carryforwards. Since it is not
not yet been definitively assessed, but excluding interest
permissible to recognize deferred tax liabilities arising from
payments, interest refunds and penalties on payments of
initial recognition of goodwill, the KWS Group does not
tax arrears.
calculate any deferred taxes on them.
If there is uncertainty over the income tax treatment, the
Deferred taxes are measured on the basis of the applicable
KWS Group measures actual or deferred tax claims or
local income tax rates anticipated at the time the asset
liabilities in accordance with the regulations of IAS 12
is realized or the liability is settled. Deferred tax assets
and IFRIC 23. The KWS Group decides on a case-by-
and liabilities are measured based on the tax rates/laws
case basis whether the uncertain tax treatment should
that apply or have been enacted or substantively enacted
be considered independently or collectively together with
by the balance sheet date. No discounting is carried out.
one or more other uncertain tax treatments, depending
Deferred taxes and actual taxes are generally recognized
on which approach provides better predictions of the
as an expense, unless they relate to transactions or events
resolution of the uncertainty.
that are recognized outside of profit or loss.
Deferred tax assets are netted off against deferred tax
accept an uncertain tax treatment, the KWS Group
liabilities if there is a legally enforceable right to set off
recognizes the effects of the uncertainty at the amount
actual tax refund claims against actual tax liabilities and
of the anticipated tax payment (the expected value or
if the deferred taxes relate to income taxes levied by the
most likely amount of the tax treatment). Tax assets from
same taxing authority.
uncertain tax positions are recognized if it is probable
If it is considered improbable that the tax authority will
3. Accounting Policies | Notes for the KWS Group | Consolidated Financial Statements
99
KWS Group | Annual Report 2021/2022 that they can be realized. No tax liability is recognized
3.16 Other provisions
for these uncertain tax positions only if there is a tax loss
Provisions are recognized for present legal and
carryforward or an unused tax credit; instead, the deferred
constructive obligations arising from past events that will
asset is adjusted for the unused tax loss carryforwards
likely give rise to a future outflow of resources, provided
and tax credits.
that a reliable estimate can be made of the amount of the
In assessing whether and how an uncertain tax treatment
obligations.
affects determination of the taxable profits/taxable losses,
Provisions are measured at their expected amount or
tax bases, unused loss carryforwards, unused tax credits
most likely amount, depending on whether they comprise
and tax rates, the KWS Group assumes that a tax authority
a large number of items or constitute a single obligation.
will examine the amounts it is authorized to examine and
Provisions are reviewed regularly and adjusted to reflect
has full knowledge of all related information as part of such
new findings or changes in circumstances. If it is no longer
examinations.
likely that economic outflow of a provision will occur, or
the conditions for why it was recognized no longer apply,
The KWS Group operates in a large number of countries
the provision is reversed by the corresponding amount and
and is therefore subject to various tax jurisdictions.
the resulting income recognized in the operating expense
Determining the tax liabilities requires a number of
item(s) in which the original charge was recognized. If the
assessments by management. Management has
reversal amount is material and so the effect not related
conducted an extensive assessment of tax-related
to the period must be classified as material, the reversal
uncertainties; however, it is not possible to rule out a
is carried as income from the reversal of provisions under
deviation from the results of that and the actual outcome of
other operating income not related to the period.
the uncertainties.
Any deviations may impact the amount of tax liabilities or
future cost increases and using a market interest rate that
deferred taxes in the year the decision is made.
adequately reflects the risk, provided the interest effect is
Long-term provisions are discounted taking into account
3.15 Provisions for pensions and other employee
benefits
material.
3.17 Contingent liabilities
The provisions for pensions and other employee benefits
The contingent liabilities result from debt obligations where
are calculated using actuarial principles in accordance
outflow of the resource is not probable or the level of the
with the projected unit credit method. Actuarial gains
obligation cannot be estimated with sufficient reliability or
and losses must be recognized directly in equity in Other
from potential obligations for loan amounts drawn down by
comprehensive income. The service costs (including
third parties as of the balance sheet date.
past service costs) are recognized in operating income
in accordance with the employees’ assignment to the
3.18 Significant accounting judgments,
functions. If there are plan assets and the relevant
estimates and assumptions
requirements for netting them off are met, they are netted
In preparing the consolidated financial statements,
off against the associated obligations.
management has to make certain assumptions and
estimates that may substantially impact the presentation of
The provisions for semi-retirement include obligations from
the Group’s financial position and / or results of operations.
concluded semi-retirement agreements. Payment arrears
Essential estimates and assumptions that may affect
and top-up amounts for semi-retirement pay and for the
reporting in the various item categories of the financial
contributions to the statutory pension insurance program
statements are described in the following:
are recognized in measuring them.
100 Consolidated Financial Statements | Notes for the KWS Group | 3. Accounting Policies
Annual Report 2021/2022 | KWS Group Calculation of the expected returns from customers at
Both these significant events and their impact on overall
the balance sheet date (section 3.6 of the Notes)
economic conditions were taken into account in the
Determination of the useful life of the depreciable asset
accounting policies at June 30, 2022.
(sections 3.7 and 3.8 of the Notes)
Assessment by management of whether deferred tax
Goodwill and intangible assets with an indefinite useful life
assets can be realized, taking into account the time
underwent an annual impairment test at June 30, 2022,
at which deferred tax liabilities are reversed and the
while the changes in the market situation due to the
anticipated future taxable income in the period under
coronavirus pandemic and the war between Russia and
review (section 6.5 of the Notes)
Ukraine were reflected in the adopted budget and medium-
Assessment of uncertain tax positions in accordance
term planning. All in all, there were no impairments for
with IFRIC 23 (section 6.5 of the Notes)
the cash-generating units and intangible assets with an
Definition of measurement assumptions and future
indefinite useful life. In addition, indications of impairment
results in connection with impairment tests, above all for
of property, plant, and equipment and other intangible
capitalized goodwill and brands with an indefinite useful
assets were examined against the backdrop of the conflict
life (section 7.1 of the Notes)
between Russia and Ukraine. All in all, the examination did
Determination of the need to recognize impairment
not reveal any impairment losses.
losses on inventories (section 7.6 of the Notes)
Definition of the parameters required for measuring
The effect on other assets, such as trade receivables and
pension provisions (section 7.11 of the Notes)
inventories, was continually examined with regard to the
Measurement of other provisions (section 7.12 of the
impact of the coronavirus pandemic and the war in Ukraine
Notes)
on the economic environment. The KWS Group’s business
Determination whether there is reasonable certainty as
model is seasonal in nature, which is why it generates most
to whether extension or termination options as a part
of its net sales by the end of the third quarter and collects
of a lease will be exercised or not (section 7.15 of the
a large proportion of the receivables owed to it in the fourth
Notes).
quarter. As regards customers’ solvency, no circumstances
justifying impairment of the receivables above and beyond
Estimates are based on historical experience and other
the existing approach were identified. Potential industry-
assumptions that are considered reasonable under given
and country-specific risks were, and will continue to be,
circumstances. They are continually reviewed but may vary
taken into account in assessing the potential impact of the
from the actual values.
two significant events on trade receivables.
3.19 Impact of significant events
The Group Management Report provides a more detailed
There were two significant events in fiscal 2021/2022 that
explanation of the effects of these two significant events.
have an impact on the assumptions and judgments of
the KWS Group’s accounting policies and resulted in an
examination. They are the coronavirus pandemic and the
war between Russia and Ukraine.
The coronavirus pandemic also impacted the global
economy in fiscal year 2021/2022. In view of its influence
on the KWS Group’s activities, its potential impacts on
assets, financial position and earnings are continuously
analyzed.
The security situation in Europe has changed as a result
of the war between Russia and Ukraine, resulting
in significant impacts on the political, geopolitical and
macroeconomic environment facing the KWS Group.
Russia and Ukraine are important countries for the
KWS Group from a business perspective.
3. Accounting Policies | Notes for the KWS Group | Consolidated Financial Statements 101
KWS Group | Annual Report 2021/2022 4. Consolidated Group and Changes
in the Consolidated Group
The number of companies consolidated in the KWS Group
increased from 86 at June 30, 2021, to 87.
Number of companies including KWS SAAT SE & Co. KGaA
Germany
Abroad
Total
Germany
Abroad
Total
06/30/2022
06/30/2021
Fully consolidated
Equity method
Joint operation
Total
13
0
0
13
61
5
8
74
74
5
8
87
13
0
0
13
60
5
8
73
73
5
8
86
Changes in the consolidated group
trading business, which mainly generates its net sales in
The KWS Group established the fully consolidated
the Middle East, Africa and Asia. Its disposal is expected
subsidiary KWS SEEDS CANADA LTD (Canada) on
to be completed in the course of fiscal year 2022/2023.
January 31, 2022. Its objective is to strengthen future
expansion of hybrid rye business.
All the assets of the PV Veg division were classified as held
for sale. They were still measured at their carrying amount,
The fully consolidated subsidiary KWS SEEDS INDIA
since it is lower than the fair value. The fair value was
PRIVATE LIMITED (India) was founded on June 24, 2022,
determined on the basis of the anticipated sales price less
for the purpose of establishing future vegetable seed
costs to sell.
breeding.
The fully consolidated subsidiary KWS SERVICES
allocated to the PV Veg division:
NORTH AMERICA LLC (USA) was dissolved effective
The table below presents the main groups of assets
June 30, 2022.
Disposal group
At the end of March 2022, the KWS Group made the
decision to sell the “PV Veg” (Pop Vriend Vegetable Seeds)
division within the Vegetables Segment, as this division
is not part of the core business of the Business Unit
Vegetables. PV Veg comprises the POP VRIEND Group’s
Assets held for sale “PV Veg”
in € thousand
Goodwill
Inventories
Trade receivables
Total assets
06/30/2022
500
1,971
895
3,366
102 Consolidated Financial Statements | Notes for the KWS Group | 4. Consolidated Group and Changes in the Consolidated Group
Annual Report 2021/2022 | KWS Group
5. Segment Reporting for the
KWS Group
In accordance with its internal reporting and controlling
The Executive Board is the main decision-making body
system, the KWS Group is primarily organized according to
and is responsible for allocating resources and assessing
the following business segments:
the earnings strength of the business segments. The
Corn
Sugarbeet
Cereals
Vegetables
Corporate
segments and regions are defined in compliance with the
internal controlling and reporting systems (management
approach). The accounting policies used to determine
the information for the segments are 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 core competency for the KWS Group’s entire
the Corn Segment, namely AGRELIANT GENETICS LLC.,
product range, plant breeding, including the related
AGRELIANT GENETICS INC., FARMDESK B.V. and
biotechnology research, is essentially concentrated
KENFENG – KWS SEEDS CO., LTD. In accordance
at the parent company KWS SAAT SE & Co. KGaA in
with internal controlling practices, they are included
Einbeck. The breeding material, including the relevant
proportionately as part of segment reporting.
information and expertise about how to use it, is owned
by KWS SAAT SE & Co. KGaA with respect to sugarbeet
The presentation of net sales, income, depreciation and
and corn and by KWS LOCHOW GMBH with respect to
amortization, other noncash items, operating assets,
cereals. Product-related R&D costs are carried directly in
operating liabilities and capital expenditure on noncurrent
the product segments Corn, Sugarbeet and Cereals. The
assets by segment have been determined in accordance
activities of the Vegetables Segment are pooled at KWS
with the internal operational controlling structure. The
VEGETABLES B.V. in Wageningen (the Netherlands) and its
allocation of the above joint ventures and associated
subsidiaries. Centrally controlled corporate functions are
companies are consolidated proportionately on the same
grouped in the Corporate Segment. The distribution and
basis. In order to permit better comparability, they have
production of oil and field seed are reported in the Cereals
been reconciled with the figures in the consolidated
and Corn Segments, in keeping with the legal entities
financial statements.
currently involved.
5. Segment Reporting for the KWS Group | Notes for the KWS Group | Consolidated Financial Statements
103
KWS Group | Annual Report 2021/2022 Sales per segment
in € thousand
Corn
Sugarbeet
Cereals
Vegetables
Corporate
Segment sales
Internal sales
External sales
2021/2022
2020/2021
2021/2022
2020/2021
2021/2022
2020/2021
935,461
588,544
216,426
54,284
22,211
774,167
524,370
191,581
58,268
18,702
85
105
24
16
13,913
14,143
120
63
342
30
12,712
935,376
588,439
216,402
54,268
8,298
774,047
524,307
191,240
58,238
5,990
13,266
1,802,783
1,553,822
–263,265
–243,590
1,539,518
1,310,232
Segments total
1,816,925
1,567,088
Elimination of equity-accounted
financial assets
Sales according to group profit and
loss statement
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
2021/2022
2020/2021
2021/2022
2020/2021
2021/2022
2020/2021
Corn
Sugarbeet
Cereals
Vegetables
Corporate
Segments total
Elimination of at equity-accounted
financial assets
Total without consideration of at
equity-accounted fincancial assets
57,162
194,970
29,519
–18,526
–97,474
165,651
71,292
174,748
21,290
–18,106
–91,976
157,247
38,591
21,149
9,706
21,529
19,723
34,852
18,064
9,435
23,633
21,707
–40,288
–10,957
–7,731
–1,591
–412
–13,298
–1,742
–1,701
–2,220
–14,722
–31,342
110,699
107,692
–63,320
–10,593
–20,214
–13,326
–13,864
18,916
29,600
155,058
137,032
97,373
93,828
–44,404
–1,742
Net financial income/expenses
Earnings before taxes
–16,934
138,124
5,181
142,214
The income statements of the consolidated companies
attributable are allocated to the segments on the basis of
are assigned to the segments by means of profit center
an appropriate formula. Depreciation and amortization
allocation. Operating income, an important internal
charges allocated to the segments relate exclusively to
parameter and an indicator of the earnings strength
intangible assets and property, plant, and equipment.
in the KWS Group, is used as the segment result. The
operating income of each segment is reported as the
The other noncash items recognized in the income
segment result. The segment results are presented on
statement relate to noncash changes in the allowances on
a consolidated basis and include all directly attributable
inventories and receivables, and in provisions.
income and expenses. Items that are not directly
104 Consolidated Financial Statements | Notes for the KWS Group | 5. Segment Reporting for the KWS Group
Annual Report 2021/2022 | KWS Group Operating assets and operating liabilities per segment
in € thousand
Corn
Sugarbeet
Cereals
Vegetables
Corporate
Segments total
Operating assets
Operating liabilities
2021/2022
2020/2021
2021/2022
2020/2021
932,424
451,189
160,069
427,682
225,651
787,432
389,606
138,734
437,148
213,708
212,152
102,961
45,546
7,944
80,962
151,699
82,461
41,036
7,969
112,724
2,197,015
1,966,627
449,566
395,888
Elimination of equity-accounted financial assets
–239,003
–216,076
–60,028
–39,696
Total without consideration of at equity-accounted
fincancial assets
Others
1,958,011
1,750,551
389,539
693,785
626,192
1,016,346
356,193
966,832
KWS Group acc. to consolidated financial statements
2,651,796
2,376,743
1,405,885
1,323,025
The operating assets of the segments are composed
The operating liabilities attributable to the segments
of intangible assets, property, plant, and equipment,
include the borrowings reported on the balance sheet in
inventories, biological assets and trade receivables that
accordance with the management approach, less financial
can be charged directly to the segments or indirectly
liabilities, provisions for taxes and the portion of other
allocated to them by means of an appropriate formula.
liabilities that cannot be charged directly to the segments
or indirectly allocated to them by means of an appropriate
formula.
Investments in long-term assets by segment1
in € thousand
Corn
Sugarbeet
Cereals
Vegetables
Corporate
Segments total
Elimination of at equity-accounted financial assets
Investments according to group statement
1 Excluding Right-of-Use assets according to IFRS 16
2021/2022
2020/2021
31,960
32,384
6,606
8,989
18,948
98,887
–5,387
93,500
28,601
26,464
7,264
1,273
22,971
86,573
–5,235
81,337
The main capital spending for each segment is as follows:
Cereals: Expansion and modernization of production
plants, in particular in Germany
Corn: Expansion and modernization of production and
Vegetables: Acquisition of breeding areas in Spain and
processing plants, namely in Brazil
Mexico
Sugarbeet: Expansion of storage capacities in Italy and
Corporate: Expansion of the production plant in Einbeck
the production plant in Russia
and implementation of new ERP software
5. Segment Reporting for the KWS Group | Notes for the KWS Group | Consolidated Financial Statements 105
KWS Group | Annual Report 2021/2022
Disclosures by region
assets comprise goodwill, other intangible assets,
The disclosures on the regional composition of net sales
property, 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
2021/2022
2020/2021
251,333
696,460
138,131
493,837
205,837
216,066
97,888
242,468
620,869
122,678
358,189
109,152
194,623
88,706
1,539,518
1,310,232
2021/2022
2020/2021
327,073
637,948
59,135
435,010
287,763
42,149
212,642
10,371
318,919
627,590
60,932
453,390
257,007
35,214
197,867
5,937
1,263,155
1,209,454
6. Notes to the Consolidated State
ment of Comprehensive Income
6.1 Net sales and function costs
inventory write-downs. The total cost of goods sold
Net sales increased by 17.5% to € 1,539,518
was € 493,122 (400,215) thousand. The impairment losses
(1,310,232) thousand. Net sales are mainly generated
on inventories and the decreases in the impairment loss,
from seed deliveries (€ 1,392,427 thousand;
which are carried as a reduction in the cost of materials in
previous year: € 1,200,594 thousand) and royalties
the period, are as follows:
(€ 92,974 thousand; previous year: € 81,025 thousand).
A breakdown by segments and regions is provided in
the segment reporting in section 5 of the Notes.
The cost of sales increased by 21.7% to € 694,306
(570,690) thousand, or 45.1% (43.6%) of sales. The main
factors driving that were the strong expansion of business
in the Corn, Sugarbeet and Cereals Segments and higher
July 1 to June 30
in € thousand
Impairment losses
Decreases in
impairment loss
106 Consolidated Financial Statements | Notes for the KWS Group | 5. Segment Reporting for the KWS Group
2021/2022
2020/2021
63,263
42,749
4,683
4,597
Annual Report 2021/2022 | KWS Group
The impairment losses relate mainly to unsold seed. They
Research and development is recognized as an expense
are based on, among other things, empirical values (such
in the year it is incurred; in the year under review, this
as germination capacity) and expectations as to their
amounted to € 286,423 (252,226) thousand. That was
substitution by new varieties.
18.6% (19.3%) of sales. Development costs for new
varieties are not recognized as an asset because evidence
Selling expenses increased by € 37,052 thousand
of future economic benefit can only be provided after the
to € 281,270 (244,218) thousand, or 18.3% (18.6%) of
variety has been officially certified.
sales. The increase is mainly due to the expansion of
business and increased travel activity compared with the
General and administrative expenses rose only slightly
by € 5,019 thousand to € 132,161 (127,142) thousand,
among other things due to lower costs for the
transformation project ONEGLOBE (optimization of the
administrative functions and processes); they are thus
8.6% (9.7%) of sales.
previous year.
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
Miscellaneous other operating income
Total
2021/2022
2020/2021
53,008
12,227
1,826
9,252
77
123
101
239
8,776
85,628
33,197
9,910
5,607
3,505
2,940
1,405
239
14
14,629
71,446
The other operating income mainly comprises foreign
receivables. The performance-based government grants
exchange gains. The significant increase in foreign
mainly relate to breeding allowances and farm payments.
exchange gains is largely attributable to the high volatility
The increase in income from the reversal of allowances
of various currencies during the year, particularly in Eastern
is mainly attributable to receivables in Brazil. They were
Europe and South America.
reversed in connection with the deposit of security for
trade receivables.
The other operating income also comprises government
grants, and income from the reversal of allowances on
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
2021/2022
2020/2021
52,774
5,832
4,473
1,109
347
11,393
75,928
35,799
6,754
541
148
2
7,127
50,369
6. Notes to the Consolidated Statement of Comprehensive Income | Notes for the KWS Group | Consolidated Financial Statements
107
KWS Group | Annual Report 2021/2022
The other operating expenses mainly comprise foreign
The increase in losses from the net monetary position
exchange losses and valuation allowances on receivables.
(hyperinflation) is due to above-proportionate inflation in
The significant increase in foreign exchange losses
of IAS 29 for the Turkish subsidiaries (€ 484 thousand).
Argentina (€ 3,989 thousand) and the first-time application
is largely attributable to the high volatility of various
currencies during the year, particularly in Eastern Europe,
Turkey and South America.
6.4 Net financial income/expenses
July 1 to June 30
in € thousand
Interest income
Income from other financial assets
Foreign exchange income
Financial income
Interest expense
Interest effects from pension provisions
Interest expenses for lease liabilities
Interest expense for other long-term provision
Foreign exchange losses
Financial expenses
Result from equity-accounted financial assets
Financial result
2021/2022
2020/2021
6,806
42
5,394
12,242
17,831
1,162
936
49
16,876
36,855
7,679
–16,934
6,132
14
0
6,145
16,151
1,273
876
38
0
18,338
17,374
5,181
Net financial income/expenses deteriorated compared
Net income from the equity-accounted joint ventures and
to prior year, mainly due to net exchange losses from
associated companies fell sharply compared to prior year
financing activities at the KWS Group, which are carried for
due to lower earnings by AGRELIANT GENETICS LLC.
the first time in the financial result.
6.5 Taxes
Income tax expenses
in € thousand
Actual income taxes
thereof from previous years
Deferred taxes
Income taxes
2021/2022
2020/2021
37,089
–1,266
–6,724
30,365
36,174
6,624
–4,550
31,624
The KWS Group pays tax in Germany at a rate of 29.7%
The profits generated by group companies outside
(29.8%). Corporate income tax of 15.0% (15.0%) and
Germany are taxed at the rates applicable in the country
solidarity tax of 5.5% (5.5%) are applied uniformly to
in which they are based. The tax rates in foreign countries
distributed and retained profits. In addition, trade tax is
vary between 2.0% (5.0%) and 35.0% (34.4%).
payable on profits generated in Germany. Trade income
tax is applied at a weighted average rate of 13.9% (14.0%),
resulting in a total tax rate of 29.7% (29.8%).
108 Consolidated Financial Statements | Notes for the KWS Group | 6. Notes to the Consolidated Statement of Comprehensive Income
Annual Report 2021/2022 | KWS Group The deferred taxes that are recognized relate to the
following balance sheet items and tax loss carryforwards:
Deferred taxes
in € thousand
At 06/30/2021
Movements current year
Deferred
tax assets
Deferred
tax
liabilities Net value
Recog-
nized in
profit or
loss
Other
Compre-
hensive
Income
Currency
Intangible assets
Property, plant and equipment
Biological assets
Financial assets
Inventories
Current assets
Noncurrent liabilities
of which pension
provisions
Current liabilities
298
276
0
5,062
11,757
10,598
43,306
21,316
20,738
66,858
18,809
0
5,005
4,174
11,731
5,983
0
3,741
–66,559
–18,534
0
57
7,583
–1,133
37,323
21,316
16,996
7,460
–1,326
0
374
1,002
2,106
2,788
–10
–11
0
–508
0
–256
–10,439
–245
–10,439
–5,836
0
Deferred taxes recognized
(gross)
92,034
116,302
–24,268
6,569
–11,223
Tax loss carryforward
5,552
0
5,552
Setting off
–49,943
–49,943
0
154
0
0
0
69
–479
0
75
–723
–207
587
40
338
–341
277
0
Recog-
nized
in other
compre-
hensive
income
59
–490
0
–433
–723
–462
–9,852
–10,399
338
–11,564
277
0
Deferred taxes recognized
(net)
47,642
66,359
–18,717
6,724
–11,223
–64
–11,287
Deferred taxes
in € thousand
Intangible assets
Property, plant and equipment
Biological assets
Financial assets
Inventories
Current assets
Noncurrent liabilities
of which pension
provisions
Current liabilities
Deferred taxes recognized
(gross)
Tax loss carryforward
Setting off
Deferred taxes recognized
(net)
Deferred
tax assets
Deferred
tax liabilities
403
570
0
4,326
14,838
7,861
31,699
10,932
13,566
73,264
5,983
–38,543
40,704
59,443
20,921
0
4,329
6,977
7,350
1,441
260
2,067
102,527
0
–38,543
63,984
At 06/30/2022
Net value
–59,040
–20,350
0
–2
7,861
511
30,258
10,672
11,499
–29,263
5,983
0
–23,280
6. Notes to the Consolidated Statement of Comprehensive Income | Notes for the KWS Group | Consolidated Financial Statements
109
KWS Group | Annual Report 2021/2022
Due to the use of tax loss carryforwards and tax credits on
with investments in subsidiaries, branches and associated
which no deferred taxes were recognized in the past, the
companies, and interests in joint arrangements, where the
actual tax expense fell by € 3 (113) thousand.
KWS Group is able to control the timing of the reversal of
the differences and it is probable that the reversal will not
There is a deferred tax expense of € 514 (2,304) thousand
occur in the foreseeable future.
from the allowance for deferred taxes on tax loss
carryforwards and temporary differences in the year under
In the year under review, there were surpluses of deferred tax
review. The first-time recognition of deferred taxes and
assets from temporary differences and loss carryforwards
use of deferred taxes on loss carryforwards that had not
totaling € 18,885 (17,052) thousand at Group companies that
previously been recognized result in deferred tax income
made losses in the past period or the previous period. These
of € 593 (5) thousand.
were considered recoverable, since it is assumed that the
companies in question will post taxable profits in the future.
No deferred taxes were formed for tax loss carryforwards
The fact is taken into account here that the KWS Group may
totaling € 4,944 (14,337) thousand that have not yet
realize income with a delay due to the long-term nature of
been utilized. Of these, € 0 (72) thousand must be
research and development spending.
utilized within a period of five years. Loss carryforwards
totaling € 4,944 (14,265) thousand can be utilized without
The reconciliation of the expected income tax expense to
any time limit.
the reported income tax expense is derived on the basis of
the consolidated income before taxes and the nominal tax
No deferred taxes were recognized on temporary
rate for the Group of 29.7% (29.8%), taking into account
differences totaling € 27,929 (25,290) thousand associated
the following effects:
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 effects2
Reported income tax expense
Effective tax rate
1 Tax rate in Germany: 29.7% (29.8%)
2 In other effects are € 2m from the application of IAS 29 (Hyperinflation) included
2021/2022
2020/2021
138,124
41,031
142,214
42,422
–8,655
–2,375
6,643
–6,216
–2,975
–166
0
–348
3,426
–8,313
–8,216
6,451
–9,430
–353
2,186
–505
8,093
–710
30,365
21.98%
31,624
22.24%
110 Consolidated Financial Statements | Notes for the KWS Group | 6. Notes to the Consolidated Statement of Comprehensive Income
Annual Report 2021/2022 | KWS Group The item “Taxes relating to previous periods” also includes
Employees (FTE) by region
the effects of estimating uncertain tax positions in
connection with 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 and development activities on the
effective tax. Tax rates have also changed in Argentina and
Turkey in particular.
There is no definitive tax assessment in respect of
Employees (FTE)
Germany
Europe (excluding Germany)
North and South America
Rest of world
Total
2021/2022
2020/2021
2,083
1,590
994
199
1,978
1,475
913
183
4,865
4,549
Apprentices and interns
116
109
several years at the Group. A tax audit in Germany and
With our joint ventures and associated companies
in a number of other countries has currently not been
consolidated proportionately, the number of employees
concluded. Since the KWS Group operates multinationally
was 5,286 (5,004).
and there are numerous relationships between affiliated
companies, queries on the subject of transfer prices in
6.7 Share-based payment
particular are expected from the local fiscal authorities.
The KWS Group believes it has made adequate provisions
Employee Stock Purchase Plan
for these years where the tax assessment is not
KWS has an Employee Stock Purchase Plan. All employees
concluded. As a result of future legislation or changes in
who have been with the Company for at least one year
the opinions of the fiscal authorities, and allowing for the
without interruption and have an employment relationship
fact that there is fundamentally some uncertainty in the
that has not been terminated at a KWS Group company
area of transfer pricing, it is not possible to rule out that
that participates in the program are eligible to take part.
there may be tax refunds or payments of tax arrears for
That also includes employees who are on maternity leave
past years.
or parental leave or who are in semi-retirement.
Other taxes, primarily real estate tax, are allocated to the
Each employee can acquire up to 2,000 shares. A bonus of
relevant functions.
20% is deducted from the purchase price, which depends
on the price applicable on the key date. The shares are
6.6 Personnel costs/employees
subject to a lock-up period of four years beginning when
July 1 to June 30
in € thousand
Wages and salaries
Social security contributions,
expenses for pension plans
and benefits
Total
they are posted to the employee’s securities account.
The right to a dividend, if declared by KWS SAAT SE &
2021/2022
2020/2021
Co. KGaA, exists during the lock-up period. Holders
282,792
259,697
can also exercise their right to participate in the Annual
73,052
66,600
355,844
326,297
Shareholders’ Meeting during the lock-up period. They can
dispose freely of the shares after the lock-up period.
In the year under review, 68,998 (76,120) shares were
repurchased for the Employee Stock Purchase Plan at
a total price of € 4,730 (5,558) thousand and transferred
Personnel costs went up by 9.1%. The number of
directly to the employees. The total cost for issuing shares
employees increased from 4,549 to 4,865, or by 6.9%.
at a reduced price was € 640 thousand in the past fiscal
Of the 4,865 (4,549) employees, 4,631 (4,307) are
year (previous year: € 1,521 thousand).
permanent employees and 234 (242) are temporary
employees. The number of trainees and interns is recorded
separately and not included in the headcount. There were
116 (109) apprentices and interns at KWS at June 30, 2022.
6. Notes to the Consolidated Statement of Comprehensive Income | Notes for the KWS Group | Consolidated Financial Statements
111
KWS Group | Annual Report 2021/2022 Long-term incentive (LTI)
6.8 Net income for the year
The stock-based compensation plans awarded at the
The net income for the year denotes the KWS Group’s
KWS Group are recognized in accordance with IFRS 2
after-tax profit. It was € 107,760 (110,590) thousand on
“Share-based Payment.” The incentive program, which
operating income of € 155,058 (137,032) thousand and net
was launched in fiscal 2009/2010, involves stock-based
financial income/expenses of € –16,934 (5,181) thousand
payment transactions with cash compensation, which
and after taxes totaling € 30,365 (31,624) thousand.
are measured at fair value at every balance sheet date.
The return on sales (net income for the year relative
Members of the Executive Board are obligated to acquire
to net sales) was 7.0% and thus below the previous
shares in KWS SAAT SE & Co. KGaA every year in a
year (8.4%). Net income for the year after minority
freely selectable amount ranging between 35% and 50%
interest was € 107,760 (110,609) thousand. Diluted/
of the gross performance-related bonus. Along with
undiluted earnings per share are calculated by dividing
that, members of the first management level below the
the net income for the year (€ 107,760 thousand) by
Executive Board likewise take part in an LTI program.
33,000,000 shares and was € 3.27 (3.35).
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 and February 2022
into account, were € 697 (737) thousand in the period
under review. The provision for it at June 30, 2022,
was € 2,780 (2,920) thousand. The LTI fair values are
calculated by an external expert.
112 Consolidated Financial Statements | Notes for the KWS Group | 6. Notes to the Consolidated Statement of Comprehensive Income
Annual Report 2021/2022 | KWS Group 7. Notes to the Consolidated Balance Sheet
7.1 Intangible assets
Intangible assets
in € thousand
Gross book values: 07/01/2021
Currency translation
Adjustment for hyperinflation IAS 29
Additions
Disposals
Transfers
Transfers held for sale (IFRS 5)
At 06/30/2022
Amortization and impairment: 07/01/2021
Currency translation
Additions
Disposals
Transfers
Gross book values: 06/30/2022
Net book values: 06/30/2022
Net book values: 06/30/2021
€ thousand
Gross book values: 07/01/2020
Currency translation
Change in consolidation scope
Additions
Disposals
Transfers
At 06/30/2021
Amortization and impairment: 07/01/2021
Currency translation
Additions
Impairment
Disposals
Transfers
Gross book values: 06/30/2021
Net book values: 06/30/2021
Net book values: 06/30/2020
Patents,
industrial
property
rights and
software
477,474
1,471
29
10,725
401
–21
0
489,275
123,773
1,360
31,469
246
–79
156,277
332,998
353,701
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
Goodwill
122,642
848
0
0
0
0
500
122,990
–1
0
0
0
0
–1
122,990
122,643
Goodwill
117,289
403
4,950
0
0
0
122,642
–1
0
0
0
0
0
–1
122,643
117,290
Intangible
Assets
600,116
2,318
29
10,725
401
–21
500
612,265
123,772
1,360
31,469
246
–79
156,276
455,989
476,344
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
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements
113
KWS Group | Annual Report 2021/2022 Intangible assets include purchased varieties, rights
Goodwill and intangible assets with an indefinite useful
to varieties and distribution rights, brands, customer
life obtained as part of company acquisitions are tested
relationships, software licenses for electronic data
for impairment at least once a year. To enable that, cash-
processing, and goodwill. The current additions
generating units have been defined in line with internal
of € 10,725 (12,417) thousand related to software licenses
budgeting and reporting processes. In the KWS Group,
and patents, as well as ongoing implementation of a
these are the Business Units. To test for impairment, the
new ERP system. Amortization of intangible assets
carrying amount of each Business Unit is determined by
amounted to € 31,469 (33,092) thousand. The carrying
allocating the assets and liabilities, including attributable
amount of the technology from acquisition of the
goodwill and intangible assets. An impairment loss is
POP VRIEND SEEDS Group is € 257,907 (266,708) thousand.
recognized if the recoverable amount of a Business Unit
The POP VRIEND brand is regarded as having an indefinite
is the higher of the fair value less costs to sell and the
useful life, since the KWS Group intends to keep on using
value in use of a cash-generating unit. The recoverable
it and the period of time in which the brand yields an
amount in fiscal 2021/2022 was determined on the basis
economic benefit can therefore not be determined. The
of the value in use of the respective cash-generating unit
carrying amount is € 20,752 thousand, as in the previous
excluding the Business Unit Vegetables.
is less than its carrying amount. The recoverable amount
year. The recoverable amount of the POP VRIEND brand
was calculated in fiscal 2021/2022 by applying the value in
The impairment test uses the expected future cash flows
use at the level of the relevant cash-generating unit of the
on which the medium-term plans of the companies,
POP VRIEND Group. In the previous year, the recoverable
which are grouped in segments, are based; these plans,
amount for the POP VRIEND brand was assessed
which cover a period of four years in general, have been
separately using the license price analogy method
approved by the Executive Board. They are based on
due to the fact that the POP VRIEND Group had been
historical patterns and expectations about future market
acquired recently. In determining the value in use of the
development and include an allocation of the KWS Group’s
POP VRIEND cash-generating unit, the forecast cash flows
corporate units.
of the budgeting and medium-term and long-term planning
are used in accordance with the technology assets’
For all Business Units for which the recoverable amount
remaining useful life of 27 years. The planning is based on
is calculated by means of the value in use, the key
the long-term expectations of the POP VRIEND Group with
assumptions on which corporate planning is based include
average annual net sales growth in the mid single-digit
assumptions about price trends for seed, in addition to
range, an average operating margin in the mid double-digit
the development of market shares and the regulatory
range and using a WACC before taxes of 6.26% (5.24%).
framework. In this connection, average net sales growth
Sensitivity analyses were also carried out, in which a 10%
in the mid single-digit percentage range has been
reduction in future net sales and a 10% increase in the cost
assumed for the KWS Group’s detailed planning horizon.
of capital were assumed. The sensitivity analyses did not
Company-internal projections take the assumptions of
reveal the need to recognize an impairment loss.
industry-specific market analyses, company-related
growth perspectives and appropriate cost efficiencies into
account.
114 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | KWS Group The recoverable amount for the Business Unit Vegetables
The impairment tests conducted at the end of fiscal year
is calculated as the fair value less costs to sell.
2021/2022 confirmed that the existing goodwill is not
Measurement is based on the present value of future cash
impaired.
flows derived from planning (fair value hierarchy level 3).
This takes into account not only the medium-term but also
the long-term net sales and earnings expectations from
establishment of KWS’ vegetable breeding operations.
For this reason, the estimate of future cash flows covers
a long-term period extending beyond the basic detailed
planning period until a stable state is reached in fiscal
2039/2040. Further important foundations were laid for
the Business Unit’s future long-term growth in fiscal
2021/2022. The Company is working to establish its own
breeding stations for tomatoes, peppers, melons and
Goodwill
in € thousand
Vegetables
Corn America
Cereals
Others
Total
06/30/2022 06/30/2021
99,576
17,020
3,984
2,411
100,076
16,185
3,989
2,392
122,991
122,643
watermelons at its locations in Brazil and Mexico. The
Sensitivity analyses were also carried out for all cash-
focus of vegetable breeding in Spain is on tomatoes,
generating units to which goodwill is allocated. As part
cucumbers and peppers. In addition to the long-term
of that, it was assumed that the future cash flows would
developments in the Business Unit Vegetables, we also
fall by 10%, the weighted average cost of capital would
assume that the market environment for existing vegetable
increase by 10% and the long-term growth rate would fall
seed crops, particularly for spinach seed, will soon
by 1 percentage point. The sensitivity analyses did not
recover. Accordingly, we expect a significant year-on-year
reveal the need to recognize an impairment loss for any
increase in net sales as early as fiscal 2022/2023.
cash-generating unit.
The discount rate at the KWS Group has been derived as
the weighted average cost of capital (WACC).
WACC before taxes
Business Unit in %
2021/2022
2020/2021
Corn America
Corn Europe/Asia
Sugarbeet
Cereals
Vegetables
9.92
8.14
7.73
7.78
6.13
8.63
7.08
7.02
6.85
7.29
The change in the WACC before taxes of the Business
Unit Corn America is mainly attributable to the increase
in the underlying country risk premium. A long-term
growth rate of 1.5% (1.5%) has been assumed here for all
Business Units beyond the detailed planning horizon in
order to allow for extrapolation in line with the expected
inflation rate.
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements 115
KWS Group | Annual Report 2021/2022 7.2 Property, plant, and equipment
Reconciliation of carrying amount of property, plant and equipment
in € thousand
Technical
equipment
and
machinery
Operating
and office
equipment
Prepayments
for assets
under
construction
Property,
plant and
equipment
Land and
buildings
Gross book values: 07/01/2021
420,204
307,538
131,760
49,349
908,851
Currency translation
Adjustment for hyperinflation IAS 29
Additions
Disposals
Transfers
At 06/30/2022
Depreciation and impairment:
07/01/2021
Currency translation
Adjustment for hyperinflation IAS 29
Additions
Disposals
Transfers
Gross book values: 06/30/2022
Net book values: 06/30/2022
Net book values: 06/30/2021
6,513
8,893
18,620
338
20,768
474,660
4,537
8,249
21,154
1,551
31,427
2,457
2,745
10,505
2,577
3,045
9,564
273
32,496
221
–55,292
23,071
20,159
82,775
4,687
–51
371,355
147,935
36,168
1,030,118
125,987
188,509
2,251
2,258
13,587
97
–546
143,440
331,220
294,218
4,638
4,685
22,837
1,380
553
219,842
151,513
119,029
88,089
2,014
1,387
11,845
2,368
0
100,967
46,968
43,671
0
0
0
0
0
0
0
36,168
49,349
402,585
8,903
8,329
48,270
3,845
7
464,248
565,870
506,266
in € thousand
Technical
equipment
and
machinery
Operating
and office
equipment
Prepayments
for 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
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
–5,426
1,964
20
11,520
6,312
6,431
–1,994
1,171
11
10,386
2,593
–5,400
420,204
307,538
131,760
105,120
–999
637
12,801
1,011
9,438
125,987
294,218
284,240
174,559
–2,790
730
21,481
5,616
145
188,509
119,029
124,782
81,912
–830
593
11,701
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
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
8,929
6,597
402,585
506,266
494,178
116 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | KWS Group
The main focus of the KWS Group’s capital spending in the
year under review was again on erecting and expanding
Disclosures on equity-accounted joint ventures
(with the partner Vilmorin)
production and research and development capacities.
in € thousand
06/30/2022 06/30/2021
A sugarbeet seed production plant was completed in Russia.
Stake in the joint ventures
50%
50%
Investments were also made in warehouses in Italy and
Current assets
346,361
275,652
Germany. Expansion of drying and production capacities
for corn seed was continued in South America, especially
thereof cash and cash
equivalents
in Brazil. Investments were also made in new breeding
capacities in Spain and Mexico.
Noncurrent assets
Current liabilities
43,488
230,509
255,197
32,584
213,537
194,684
First-time application of IAS 29 in Turkey results in an
effect on the opening balance sheet values of the net
carrying amounts for property, plant, and equipment
totaling € 3,235 thousand (of which gross carrying amounts
are € 6,068 thousand and depreciation is € 2,833 thousand).
7.3 Equity-accounted financial assets
Equity-accounted joint ventures
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
The joint ventures AGRELIANT GENETICS LLC. and
Net sales
AGRELIANT GENETICS INC., which the KWS Group
operates together with its joint venture partner Vilmorin,
are recognized at equity. They are both classified together
as significant joint ventures.
The joint ventures AGRELIANT GENETICS LLC. and
AGRELIANT GENETICS INC. are closely affiliated operating
Depreciation and amortization
Net income for the year
Comprehensive income
(100%)
Comprehensive income (50%)
Group share of
comprehensive income
units. The main business activity of the two joint ventures
Dividend payment (100%)
is the production and sale of corn and soybean seed in
North America.
119,850
105,527
4,576
2,646
317,096
291,859
158,548
145,929
8,802
8,802
167,350
154,731
512,158
466,908
26,772
7,286
39,995
19,997
19,997
13,624
26,207
24,070
21,062
10,531
10,531
5,837
The following disclosures relate to the two joint ventures,
insignificant joint venture in the KWS Group’s consolidated
which KWS runs with its joint venture partner Vilmorin and
financial statements using the equity method.
In addition, FARMDESK B.V. was included as an
an identical management team.
Equity-accounted associated companies
In the year under review, the Chinese joint venture
KENFENG – KWS SEED CO., LTD. was classified as a
significant associated company and is included in the
KWS Group’s consolidated financial statements using the
equity method.
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements 117
KWS Group | Annual Report 2021/2022 Disclosures on significant associated companies
accounted for using the equity method
7.6 Inventories and biological assets
in € thousand
06/30/2022 06/30/2021
Inventories and biological assets
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 (100%)
49%
28,046
22,552
15,884
7,047
156
49%
28,657
11,493
15,864
8,087
124
36,728
36,309
17,996
17,792
17,996
40,813
1,793
8,948
12,350
6,051
6,051
11,933
17,792
42,770
1,566
11,333
10,125
4,961
4,961
5,491
in € thousand
Raw materials and
consumables
Work in progress
Immature biological assets
Finished goods
Right of return
Total
06/30/2022 06/30/2021
66,423
152,619
8,955
43,721
114,042
5,546
132,766
106,118
2,810
2,725
363,573
272,152
Inventories and biological assets increased
by € 91,421 thousand or 33.6%. Immature biological assets
relate to living plants in the process of growing (before
harvest) at the farms. The field inventories of the previous
year have been harvested in full and the fields have been
newly tilled in the year under review. Government subsidies
of € 1,083 (1,744) thousand, for which all the requirements
were met at the balance sheet date, were granted for
agricultural activity in the fiscal year. Future government
subsidies depend on the further development of European
agricultural policy.
In addition, IMPETUS AGRICULTURE, INC. was also
included as an insignificant associated company in the
7.7 Current receivables and other assets
Current receivables and other assets
KWS Group’s consolidated financial statements at a carrying
in € thousand
06/30/2022 06/30/2021
amount of € 637 (851) thousand using the equity method.
Trade receivables
Current tax assets
7.4 Proportionately consolidated joint operations
Other current financial assets
The assets and liabilities and revenue and expenses from
Other current assets
the joint operations are included proportionately (at 50%)
Total
in the consolidated financial statements. The main activity
of the proportionately consolidated GENECTIVE S.A.,
518,508
124,475
55,257
63,524
449,501
91,546
40,592
34,488
761,764
616,127
including its subsidiaries, is development of genetically
The trade receivables include € 13,955 (12,999) thousand in
improved traits for crops. The proportionately consolidated
receivables from joint ventures and joint operations.
joint operation AARDEVO B.V., including its subsidiary,
specializes in developing potato seed.
The need to recognize impairment losses at June 30, 2022,
7.5 Financial assets
was analyzed using the provision matrix on the basis of
the expected losses. To enable that, the receivables were
This item mainly comprises the investments in the
grouped by geographical region and the length of time they
capital investment fund MLS Capital Fund II (financing
were overdue and multiplied by appropriate default rates.
of projects / access to biotechnology developments)
Receivables that are overdue by more than 360 days and
totaling € 9,435 (8,777) thousand, which are measured at
are no longer subject to an enforcement measure have
fair value through other comprehensive income due to the
been classified as uncollectible and written off in full.
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.
118 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | KWS Group
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, 2022:
Credit risk exposure on trade receivables
in € thousand
06/30/2022
Expected credit loss rate
Total gross amount at default
Expected credit loss
06/30/2021
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
1.00%
463,920
3,567
1.00%
397,702
3,839
2.00%
52,613
1,198
4.00%
54,204
2,094
38.00%
6,231
2,393
53.00%
7,260
3,872
87.00%
22,019
19,116
99.00%
21,316
21,177
544,783
26,274
480,482
30,982
The credit risks were reflected by the following allowances
Other current assets include advance payments made on
at June 30, 2022, and in the previous year:
account totaling € 52,317 (25,108) thousand.
Change in allowances on receivables
7.8 Cash and cash equivalents
in € thousand
07/01
Changes in consolidation
scope and exchange rates
Addition
Disposal
Reversal
06/30
2021/2022
2020/2021
30,981
33,848
This item comprises cash and cash equivalents in the
form of cash on hand, checks, and immediately available
balances at banks, as well as securities.
–1,084
5,832
208
9,247
993
5,947
6,328
3,479
26,274
30,981
Cash and cash equivalents at June 30, 2022,
were € 203,613 (177,169) thousand. Securities at the
balance sheet data amounted to € 51 (45,577) thousand.
As in the previous year, the annual impairment test of
cash and cash equivalents did not result in any need to
The current tax assets of € 124,475 (91,546) thousand
recognize impairment losses.
mainly comprise value-added tax claims, tax subsidies
from research and development, and receivables from
The change in cash and cash equivalents compared to the
other taxes.
previous year is explained in the cash flow statement.
Other current financial assets include deposited security
At June 30, 2022, the KWS Group had undrawn promised
related to derivative positions totaling € 1,243 (0) thousand.
loan facilitates totaling € 379,000 (250,000) thousand.
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements 119
KWS Group | Annual Report 2021/2022 7.9 Equity
of at equity instruments (with changes in value in the
The fully paid-up capital of KWS remains € 99,000 thou-
other comprehensive income) are also comprised here.
sand. The no-par bearer shares are certificated by a global
Differences from translation of the functional currency
certificate for 33,000,000 shares. The Company does not
of foreign business operations into the currency used
hold any shares of its own. KWS has Authorized Capital of
by the Group in reporting (euro) are carried in the item
up to € 9,900 thousand at the balance sheet date.
Reserve from currency translation differences on foreign
operations. The item Revaluation of net liabilities/assets
The capital reserves essentially comprise the premium
from defined benefit plans includes the actuarial gains
obtained as part of share issues.
and losses on defined benefit plans. Differences from
translation of the functional currency of equity-accounted
The other reserves and net retained profit essentially
foreign business units into the currency used by the Group
comprise the net income generated in the past by
in reporting (euro) are carried in the reserve for currency
the companies included in the consolidated financial
translation for equity-accounted financial assets.
statements, minus dividends paid to shareholders, and the
net retained profit. The reserve for currency translation,
The other changes in equity include effects from the
the reserve for remeasurement gains and losses on
hyperinflation of the equity components of the subsidiaries
defined benefit plans, the reserve for currency translation
in Argentina and Turkey in accordance with IAS 29. First-
for equity-accounted financial assets, the reserve for the
time application of IAS 29 in Turkey results in an effect on
changes in value of the cash flow hedges of the equity-
the opening balance sheet values for the Group’s equity
accounted joint ventures, and the reserve for revaluation
totaling € 3,702 thousand.
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
2021/2022
2020/2021
Before
taxes
Tax
effect
After
taxes
Before
taxes
Tax
effect
After
taxes
54,473
36,452
18,021
0
0
0
54,473
–39,905
36,452
–38,993
18,021
–912
0
0
0
–39,905
–38,993
–912
36,967
–10,694
26,274
8,813
–2,074
6,738
657
–107
550
3,300
–635
2,666
36,310
91,440
–10,587
–10,694
25,723
80,746
5,513
–31,092
–1,439
–2,074
4,073
–33,167
120 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | KWS Group
The objective of the KWS Group’s capital management
management activities intend to optimize the average
activities is to pursue the interests of shareholders and
cost of capital. Another goal is a balanced mix of equity
employees in accordance with the corporate strategy and
and debt capital. Consolidated net income for the year
earn a reasonable return on investment. The KWS Group is
(after taxes and minority interests) is € 107,760 (110,609)
not subject to any external minimum capital requirements.
thousand. However, there was a total dividend payout
One main goal is to retain the trust of investors, lenders
of € 26,400 (23,100) thousand in December 2021. This
and the market so as to strengthen the Company’s
ensures the adequate financing of future operating
future business development. The KWS Group’s capital
business expansion in 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 (%)
06/30/2022
06/30/2021
1,245,911
1,053,718
613,588
200,577
111,991
479,728
601,080
237,929
97,225
386,791
2,651,796
2,376,743
47.0
44.3
The focus in selecting financial instruments is on
Noncurrent liabilities
financing with matching maturities, which is achieved by
controlling the maturities. Long-term financial borrowings
increased by € 12,508 thousand (previous year:
increase of € 79,336 thousand).
7.10 Minority interests
There are no minority interests in the KWS Group at
June 30, 2022.
7.11 Noncurrent liabilities
Noncurrent liabilities decreased by € 24,844 thousand
in € thousand
06/30/2022 06/30/2021
Long-term provisions
Long-term borrowings
Trade payables1
95,225
613,588
304
132,500
601,080
242
Deferred tax liabilities
63,984
66,359
Other noncurrent financial
liabilities1
Lease liabilities
Other noncurrent liabilities1
0
37,228
3,837
62
37,465
1,301
Total
814,165
839,009
(previous year: increase of 43,544 thousand). A borrower’s
1 These positions are shown consolidated in the balance sheet.
note loan totaling € 37,000 thousand was repaid during
the fiscal year. Consequently, the remaining liabilities from
borrower’s note loans, using the effective interest method,
were € 309,662 thousand at June 30, 2022, and have
remaining maturities through 2029.
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements 121
KWS Group | Annual Report 2021/2022
Long-term provisions
in € thousand
06/30/2021
Changes
in the
consoli-
dated
group,
currency
Interest
expenses
from
com-
pounding
Adjust-
ment not
affecting
profit or
loss
Addition
Con-
sumption
Reversal
06/30/2022
Pension
provisions
Other
provisions
Total
122,388
10,111
132,500
727
–26
701
1,173
1,898
–36,310
4,239
0
85,638
49
1,222
7,242
9,140
0
–36,310
7,583
11,822
207
207
9,587
95,224
The pension provisions are based on defined benefit
2.95% the year before, and between 2.74% and 7.00%
obligations, determined by years of service and
(0.25% and 1.65%) in the rest of the world.
pensionable compensation. They are measured using
the accrued benefit method under IAS 19, on the basis of
The following mortality tables were used at June 30, 2022:
assumptions about future development. The assumptions
in detail are that wages and salaries in Germany will
In Germany: The 2018 G mortality table of Klaus
increase by 3.00% (3.00%) annually, in the U.S. by 4.50%
Heubeck
(3.50%) annually and in the rest of the world by 2.63%
Abroad: Mainly Pri–2012 Private Retirement Plans
to 7.00% (2.00% to 2.10%) annually. An annual increase
Mortality Table Projection Scale MP–2021 and INSEE
in pensions of 2.00% (2.00%) is assumed in Germany.
TD/TV 15–17.
The discount rate in Germany was 3.20% compared with
0.89% the year before, 4.65% in the U.S. compared with
A retirement age of 65 years is imputed for Germany,
a retirement age of 65 years is imputed for the U.S.,
and a retirement age of 66 years is imputed for France.
122 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | KWS Group Nature and scope of the pension benefits
A pro-rata pension if the employee reaches the
In Germany
minimum vesting period of five years, but is below 55.
The following benefits are provided under a company
agreement relating to the Company retirement pension
The pension plans are mainly subject to the following risks:
program:
Investment and return
An old-age pension at the age of 65
The present value of the defined benefit obligation from the
An early retirement pension before the age of 65,
pension plan is calculated using a discount rate defined
coupled with benefits from the early retirement pension
on the basis of the returns on high-quality fixed-income
from the statutory pension insurance program
corporate bonds. If the income from the plan assets is
An invalidity pension for persons who suffer from
below this rate of interest, that may result in general in a
occupational disability or incapacity to work as defined
shortfall in the plan. The corporate bonds and share funds
by the statutory pension insurance program
are chosen to ensure risk diversification and managed by
A widow’s or widower’s pension
an external fund manager.
For benefit obligations backed by a guarantee by an
Change in interest rates
insurance company toward three former members of the
The fall in the returns on corporate bonds and thus the
Executive Board, the plan assets of € 7,064 (8,776) thousand
discount rate will result in an increase in the obligations,
correspond to the present value of the obligation. In
which is only partly compensated for by a change in the
accordance with IAS 19, the pension commitments are
value of the plan assets.
netted off against the corresponding plan assets.
Life expectancy
Abroad
The present value of the defined benefit obligation from
The defined benefit obligations abroad mainly relate to
the plan is calculated on the basis of the best-possible
pension commitments in the U.S. Share funds and bonds
estimate using mortality tables. An increase in the life
were mainly invested as plan assets to cover them. All
expectancy of the entitled employees results in an increase
employees who have reached the age of 21 are entitled to
in the plan liabilities.
benefits. In addition, each employee must have worked at
least one year and at least 1,000 working hours to earn an
Salary and pension trends
entitlement.
The present value of the defined benefit obligation from the
plan is calculated on the basis of future salaries/pensions.
The legal and regulatory framework of the pension plan in
Consequently, increases in the salary and pension of
the U.S. is based on the U.S. Employee Retirement Income
the entitled employees results in an increase in the plan
Security Act (ERISA), which sets minimum standards
liabilities.
for pension plans, including the minimum funding level.
In accordance with U.S. regulations, the funding level is
In previous years, the KWS Group countered the usual
determined on the basis of a regular assessment in order
risks of direct obligations by converting the pension
to avoid benefit restrictions.
obligations from defined benefit to defined contribution
plans. As a result, subsequent benefits will be provided
The following benefits are granted from the pension plan:
by a provident fund backed by a guarantee. The existing
obligations, which are partly covered by plan assets, are
An old-age pension at the age of 65
An early retirement pension before the age of 65 – to
be eligible, the employee must be at least 55 and the
minimum vesting period is five years
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements 123
KWS Group | Annual Report 2021/2022 funded from the operating cash flow and are subject to the
previously mentioned measurement risks.
Changes in accrued benefit entitlements
in € thousand
2021/2022
2020/2021
Germany
Abroad
Total
Germany
Abroad
Total
Accrued benefit entitlements from
retirement obligations on July 1
Service cost
Interest expense
122,864
32,007
154,871
127,760
32,318
160,078
748
1,072
2,037
964
2,785
2,036
789
1,099
–1,650
1,723
789
–474
2,512
1,888
–2,125
Actuarial gains (–)/losses (+)
–32,993
–8,584
–41,577
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
Interest income
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
–32,079
–7,924
–40,003
–758
–435
–1,193
0
130
130
0
–878
–878
–914
–4,823
0
0
–790
–893
3,801
0
–1,705
–5,716
3,801
0
–892
–5,133
0
0
838
–736
–1,644
32
–54
–5,870
–1,644
32
86,868
29,332
116,199
122,864
32,007
154,871
Germany
Abroad
Total
Germany
Abroad
Total
2021/2022
2020/2021
8,776
75
–1,164
–624
0
0
0
23,707
32,483
10,361
20,620
30,981
787
863
85
529
614
–4,103
–769
886
3,073
–85
–5,266
–1,392
886
3,073
–85
–997
–673
0
0
0
4,385
–639
0
–1,134
–54
3,388
–1,312
0
–1,134
–54
7,064
23,496
30,561
8,776
23,707
32,483
124 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | KWS Group
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
2021/2022
2020/2021
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
86,867
29,332
116,199
122,864
32,007
154,871
7,064
79,803
23,496
5,836
30,561
85,638
8,776
114,088
23,706
8,301
32,482
122,389
The following amounts were recognized in the statement of
comprehensive income:
Effects on the statement of comprehensive income
n € 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)
2021/2022
2020/2021
Germany
Abroad
748
996
2,037
177
Total
2,785
1,173
Germany
Abroad
789
1,013
1,723
260
Total
2,512
1,274
1,744
2,214
3,958
1,802
1,983
3,785
1,164
4,103
5,266
997
–4,385
–3,388
–32,079
–7,924
–40,003
–758
–878
–1,636
0
130
130
0
–435
–435
–914
–790
–1,705
–892
838
–54
–31,829
–4,481
–36,311
–653
–4,859
–5,513
–30,085
–2,268
–32,353
1,149
–2,876
–1,727
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.
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements 125
KWS Group | Annual Report 2021/2022 The fair value of the plan assets was split over the following
investment categories:
Breakdown of the planned assets by investment category
in € thousand
Corporate bonds
Equity funds
Consumer industry
Finance
Industry
Technology
Health care
Other
Cash and cash equivalents
Reinsurance policies
Planned assets on June 30
7,064
7,064
Germany
Abroad
2021/2022
2020/2021
6,714
15,283
2,486
2,411
1,646
2,871
1,954
3,915
1,499
Total
6,714
15,283
2,486
2,411
1,646
2,871
1,954
3,915
1,499
7,064
Germany
Abroad
6,398
15,714
2,874
2,391
1,808
2,950
1,897
3,794
1,595
8,776
8,776
Total
6,398
15,714
2,874
2,391
1,808
2,950
1,897
3,794
1,595
8,776
23,496
30,560
23,707
32,483
The plan assets abroad relate mainly to the U.S.
The following sensitivity analysis at June 30, 2022, 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. 69.24% (previous year: 65.81%) 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
Effect on obligation in
2021/2022
Effect on obligation in
2020/2021
Change in
assump-
tion
Decrease
Increase
Change in
assump-
tion
Discount rate
+/–100 bps1
16,954
–13,600
+/–100 bps1
Anticipated annual pay increases
+/–50 bps
Anticipated annual pension increase
+/–25 bps
Life expectancy
+/–1 year
–887
–2,127
–3,315
961
+/–50 bps
2,215
3,357
+/–25 bps
+/–1 year
Decrease
Increase
27,767
–1,263
–3,585
–5,510
–21,655
1,361
3,755
5,656
1 Lower limit 0%
126 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | KWS Group
The following undiscounted payments for pensions (with
their due dates) are expected in the following years:
Anticipated payments for pensions
in € thousand
2022/2023
2023/2024
2024/2025
2025/2026
2026/2027
2027/2028–2031/2032
Anticipated payments for pensions
in € thousand
2021/2022
2022/2023
2023/2024
2024/2025
2025/2026
2026/2027–2030/2031
Germany
Abroad
4,854
4,917
4,929
4,864
4,855
24,136
1,142
1,118
1,339
1,314
1,484
9,120
Germany
Abroad
4,936
4,955
5,005
4,990
4,929
24,373
933
995
1,012
1,207
1,238
8,039
2021/2022
Total
5,997
6,035
6,268
6,178
6,338
33,256
2020/2021
Total
5,869
5,950
6,017
6,197
6,166
32,412
The weighted average time at which the pension
Defined contribution plans
obligations are due is 12.7 (15.5) years in Germany and
Apart from the above-described pension obligations,
18.0 (21.0) years abroad.
there are other old-age pension systems. However, no
provisions have to be recognized for them, since there are
no further obligations above and beyond payment of the
contributions (defined contribution plans). These comprise
benefits that are funded solely by the employer and
allowances for conversion of earnings by employees.
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements 127
KWS Group | Annual Report 2021/2022 The total pension costs for fiscal 2021/2022 were as
follows:
Pension costs
in € thousand
Germany
Abroad
Cost for defined contribution plans
3,467
881
Service cost for the defined benefit
obligations
Pension costs
748
4,215
2,037
2,918
2021/2022
2020/2021
Total
4,348
2,785
7,132
Germany
Abroad
2,855
789
3,643
838
1,723
2,561
Total
3,693
2,512
6,204
In addition, contributions of € 15,724 (15,799) thousand
Other provisions
were paid to statutory pension insurance institutions.
The other provisions mainly comprise provisions by
the German companies for semi-retirement and loyalty
The costs for defined contribution plans in Germany
bonuses.
mainly related to the provident fund backed by a
guarantee. The contributions to this pension plan
were € 3,212 (2,968) thousand. In addition, the benefit
obligation from salary conversion was backed by a
guarantee that exactly matches the present value of the
obligation of € 5,584 (5,223) thousand.
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
06/30/2022
06/30/2021
41,878
107,256
4,735
111,991
39,455
92,694
4,531
97,225
201,702
153,748
25,313
41,857
11,923
106,679
50,377
591,719
31,503
14,203
10,961
111,687
25,234
484,016
128 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | KWS Group
Trade payables include liabilities of € 519 (301) thousand
and other taxes (in particular value-added tax) account
resulting from reverse factoring agreements between
for € 11,382 (10,125) thousand.
suppliers and financial institutions. There is no change
in presentation, as such liabilities continue to constitute
The increase in contract liabilities to € 50,377 (25,234) thou-
debts for the payment of goods received or delivered and
sand is mainly due to advance payments received
are realized within the normal business cycle.
from our customers in Eastern Europe in connection
The tax liabilities of € 25,313 (31,503) thousand include
Advance payments received are always recognized
amounts for the year under review and the period for which
as revenues in the next fiscal year. Contract liabilities
the external tax audit has not yet been concluded. Of that
increased from € 19,191 thousand in the previous year
figure, income taxes account for € 13,931 (21,377) thousand
to € 25,234 thousand.
with seed deliveries for the upcoming sales season.
Short-term provisions
in € thousand
06/30/2021
06/30/2022
Changes in
the con-
solidated
group,
currency
Addition
Consump-
tion
Reversal
Obligations from sales
transactions
Other obligations
Total
16,950
22,505
39,455
793
500
1,292
4,481
20,190
24,671
8,948
12,766
21,714
304
1,522
1,826
12,972
28,907
41,878
The obligations from sales transactions essentially relate to
other obligations relate to litigation risks, provisions
guarantees, obligations for services received that have not
from procurement transactions, such as compensation
been invoiced (licenses) and sales commission obligations,
for breeding areas, and other provisions that cannot be
where they are not contained in the trade payables. The
assigned to the group of sales transactions.
7.13 Hedging instruments and derivative financial
instruments
Hedging transactions
in € thousand
Currency hedges
Interest-rate hedges
Commodity hedges
Total
06/30/2022
06/30/2021
Nominal
volume
Net book
values
Fair value
Nominal
volume
Net book
values
Fair value
18,988
0
14,920
33,908
1,003
0
–567
436
1,003
0
–567
436
16,634
8,000
0
24,634
205
–62
0
143
205
–62
0
143
Currency hedges have a remaining maturity of up to four
years. All commodity derivatives have a maturity of less
than one year.
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements 129
KWS Group | Annual Report 2021/2022 7.14 Financial instruments
The KWS Group has commodity derivatives that are
In general, the fair values of financial assets and liabilities
assigned to level 1 in the current fiscal year.
are calculated on the basis of the market data available
on the balance sheet date and are assigned to one of the
The level 2 input factors relate to equity instruments (fund
three hierarchy levels in accordance with IFRS 13. The
shares) and derivative financial instruments that have been
principal market, i.e. the market with the largest volume
concluded between Group companies and banks. The fair
of trading and the greatest business activity, is used to
values of such financial instruments are measured on the
calculate the fair value. If this market does not exist for the
basis of market data that is directly or indirectly connected
asset or liabilities in question, the market that maximizes
with the financial instrument. The level 3 input factors
the amount that would be received to sell the asset or
cannot be derived from observable market information.
minimizes the amount that would be paid to transfer the
There were no reclassifications between the levels in the
liability, after taking into account transaction costs, is
fiscal year.
used. These are active and accessible markets for identical
assets and liabilities, where the fair value results from
The carrying amounts and fair values of the financial
quoted prices that are observable (level 1 input factors).
assets (financial instruments), split into the measurement
categories in accordance with IFRS 9, are as follows:
06/30/2022
in € thousand
Fair values
Financial assets
Carrying amounts
At amortized
cost
At fair value
through other
comprehen-
sive income
At fair value
through profit
and loss
Total carrying
amount
Financial assets
Financial assets
Other non-current receivables
of which derivative financial
instruments
Trade receivables
Cash and cash equivalents
Other current financial assets
of which derivative
financial instruments
10,104
14,388
1,408
518,508
203,664
55,257
2
12,981
0
518,508
203,664
55,049
208
0
10,102
0
0
0
0
0
0
Total
801,922
790,204
10,102
0
1,408
1,408
0
0
208
208
1,616
10,104
14,388
1,408
518,508
203,664
55,257
208
801,922
130 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | KWS Group
06/30/2021
in € thousand
Fair values
Financial liabilities
Carrying amounts
At amortized
cost
At fair value
through other
comprehen-
sive 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
9,433
7,330
449,501
222,745
40,592
2
7,330
449,501
222,745
40,352
239
0
9,433
0
0
0
0
0
Total
729,602
719,932
9,433
0
0
0
0
239
239
239
9,436
7,330
449,501
222,745
40,592
239
729,604
The financial assets and derivative financial instruments
The fair value of currency derivatives is the present values
are measured and carried at fair value. The fair value of
of the payments related to these balance sheet items.
the long-term fund shares contained in the financial assets
These instruments are mainly forward exchange and
is measured using generally accepted methods based on
currency swap deals. They are measured on the basis of
directly and indirectly observable market inputs.
quoted exchange rates and yield curves available from
the market data and allowing for counterparty risks.
Commodity derivatives are mainly measured on the basis
of current market prices.
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements 131
KWS Group | Annual Report 2021/2022 The carrying amounts and fair values of the financial
liabilities (financial instruments), split into the measurement
categories in accordance with IFRS 9, are as follows:
06/30/2022
in € thousand
Financial liabilities
Long-term borrowings
Long-term trade payables
Short-term borrowings
Short-term trade payables
Other current financial liabilities
of which derivative financial instruments
Total
06/30/2021
in € thousand
Fair values
Financial liabilities
Carrying amounts
At amortized
cost
At fair value
through other
comprehen-
sive income
567,555
304
111,991
201,702
41,857
1,180
923,410
613,588
304
111,991
201,702
40,677
0
968,263
0
0
0
0
1,180
1,180
1,180
Total
carrying
amount
613,588
304
111,991
201,702
41,857
1,180
969,443
Fair Values
Financial liabilities
Carrying amounts
At amortized
cost
At fair value
through other
comprehen-
sive 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
615,308
601,080
242
62
62
97,225
153,748
14,203
34
242
0
0
97,225
153,748
14,169
0
Total
880,786
866,463
0
0
62
62
0
0
34
34
96
Total
carrying
amount
601,080
242
62
62
97,225
153,748
14,203
34
866,559
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 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | KWS Group The table below shows the financial assets and liabilities
measured at fair value:
Assets and liabilities measured at fair value
in € thousand
06/30/2022
06/30/2021
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
1,616
10,102
11,718
513
513
666
666
0
0
0
0
0
1,616
10,102
11,718
1,180
1,180
0
0
0
0
0
239
9,433
9,673
96
96
0
0
0
0
0
239
9,433
9,673
96
96
The table below presents the net gains/losses carried in
The net losses from financial liabilities measured at
the income statement for financial instruments in each
amortized cost result mainly from interest expense.
measurement category:
Credit risks
Net gain/losses of financial instruments
(gain(+)/loss(-))
The credit risk is the risk that a business partner does not
fulfill its obligations as part of a financial instrument or
in € thousand
2021/2022
2020/2021
contract with a customer, resulting in a financial loss. The
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
550
2,666
1,679
239
9,764
2,883
KWS Group is exposed to credit risks in its operational
activities mainly in relation to trade receivables.
In order to control the credit risks resulting from
receivables from customers, a regular creditworthiness
analysis is conducted in accordance with the credit
volume. If a customer’s credit risk is classified as high,
–17,831
–16,153
it is reduced by means of security. This includes, in
–1,330
–148
particular, credit insurance, prepayments, down payments,
promissory 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
The net gains for assets measured at fair value through other
collection of receivables are analyzed in regular meetings
comprehensive income include income from non-terminable
of the Credit Committee. For details of the exposure
interests in investment funds.
to the risk of default at June 30, 2022, please refer to
The net gains from financial assets and net losses in
section 7.7 of the Notes.
financial liabilities measured at fair value through profit
or loss solely comprise changes in the market value of
Credit risks from financial transactions are controlled
derivative financial instruments.
centrally by the Treasury department. In order to minimize
The net gains from financial assets measured at amortized
within defined limits with banks and partners who always
cost mainly include effects from changes in the allowances
have an investment grade. Compliance with the risk
risks, financial transactions are exclusively conducted
for impairment.
limits is constantly monitored. The limits are adjusted
depending on the credit volume only subject to the
approval of the regional or divisional management and the
Executive Board.
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements 133
KWS Group | Annual Report 2021/2022 Liquidity risks
have been agreed as part of specific interest-bearing
Liquidity risk is the risk that funds to settle due payment
loans and relate to the capital structure. The lenders have
obligations cannot be obtained on time or at all.
the right to terminate the loan agreements in question
immediately if these requirements are not met. The
Liquidity is managed in the Eurozone by the central Treasury
KWS Group complied with all agreed financial covenants in
unit using a cash pooling system. Liquidity requirements are
the fiscal year.
generally determined by means of cash planning and are
covered by cash and promised credit lines.
The table below shows the KWS Group’s liquidity analysis
for non-derivative and derivative financial liabilities. The
As part of its liquidity management, the KWS Group
table is based on contractually agreed, undiscounted
ensures that it complies with the financial covenants that
payment flows (interest and payments of principal):
Fiscal year 2021/2022
in € thousand
Book value
Liquidity analysis of financial
liabilities
06/30/2022
06/30/2022
total
Financial liabilities
Trade payables
Other financial liabilities
Lease liabilities
725,580
202,006
40,677
49,151
740,560
202,006
40,677
52,187
Nonderivative financial liabilities
1,017,414
1,035,430
Payment claim
Payment obligation
Derivative financial liabilities
0
0
1,180
5,420
5,865
445
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
Nonderivative financial liabilities
Payment claim
Payment obligation
Derivative financial liabilities
698,305
153,989
14,169
48,426
914,889
0
0
96
723,402
153,989
14,169
49,908
941,469
13,685
13,806
121
Due in
< 1 year
120,873
201,702
40,677
12,017
375,269
5,420
5,865
445
Due in
< 1 year
86,138
153,748
14,169
18,277
272,331
13,685
13,540
–145
Due in
> 1 year and
< 5 years
433,825
304
0
24,251
458,380
0
0
0
Due in
> 1 year and
< 5 years
333,048
242
0
20,685
353,975
0
206
206
Cash flows
Due in
> 5 years
185,862
0
0
15,919
201,781
0
0
0
Cash flows
Due in
> 5 years
304,217
0
0
10,946
315,163
0
61
61
The cash flows of the derivative financial liabilities for
forward exchange deals are presented as an undiscounted
gross amount. These derivative financial instruments
are settled in gross. Net settlement is envisaged for
commodity derivatives. Accordingly, cash flows are
presented on a net basis.
134 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | 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
flows of a financial instrument are subject to fluctuations
was conducted for the portfolio of financial instruments
due to exchange rate changes. The KWS Group is mainly
with a variable interest rate at the balance sheet date
exposed to currency risks as part of its financing activities
and shows the hypothetical effect on income for
with foreign subsidiaries. Derivative financial instruments
one year. The variable-interest components of the
(forward exchange deals and currency swaps) are
KWS Group’s interest expenses and interest income were
concluded to hedge against currency risks from intra-Group
determined to calculate it. In a scenario analysis, the
financing. The Company ensures that the derivative financial
effects of an increase/reduction of one percentage point
instrument is commensurate with the risk to be hedged.
(100 base points) in the relevant underlying capital market
In order to assess the currency risk, the sensitivity of a
increase in all relevant rates of interest of 1 percentage
currency to fluctuations was determined. The calculated
point would result in additional interest expense
figures relate to the portfolio of financial instruments at
of € 187 (243) thousand. A reduction in the rate of interest
the balance sheet date and show the hypothetical effect
of 1 percentage point would add a further € 187 thousand
interest rate on the interest result were calculated. An
on income and equity for one year. After the euro, the US
in income.
dollar is the most important currency in the KWS Group.
All other currencies are of minor importance. The currency
Commodity price risks
risk mainly results from intra-Group receivables and
Price volatility of certain agricultural raw commodities
liabilities from financing activity. The average USD/EUR
has an impact on the KWS Group. In its procurement
exchange rate in the fiscal year was 1.13 (1.19). If the US
transactions, the KWS Group is partly exposed to a risk
dollar depreciated by 10%, the extra expense would
from fluctuating market prices for agricultural commodities.
be € 2,584 (1,005) thousand. If the US dollar appreciated by
10%, the extra income would be € 2,584 (1,005) thousand.
The KWS Group mitigates the impact of market price risks
on operating income by hedging them with derivative
Risk of changes in interest rates
financial instruments. Options and swaps on commodity
The risk of changes in interest rates is where the fair value
futures exchanges are used in that.
or future cash flows of a financial instrument are subject to
fluctuations due to changes in market interest rates.
As part of analysis of the market price risk, a sensitivity
analysis is performed based on the portfolio of financial
The risk of changes in interest rates is controlled by means
instruments at the balance sheet date. The values
of a balanced portfolio of fixed-interest and variable-
calculated show the hypothetical impact of a 10% change
interest loans. Interest rate swaps are concluded if there is
in forward market quotations on operating income for
a high risk of interest rate variability in the portfolio. As part
one year.
of them, the KWS Group exchanges the difference between
fixed-interest and variable-interest amounts determined
A 10% increase in the year-end price of commodity futures
with reference to a previously agreed nominal amount with a
would result in additional expense of € 571 thousand.
contractual partner at defined intervals of time.
A 10% decrease in the year-end price of commodity futures
would add a further € 634 thousand in income.
7. Notes to the Consolidated Balance Sheet | Notes for the KWS Group | Consolidated Financial Statements 135
KWS Group | Annual Report 2021/2022 7.15 Leases
Book values of right-of-use assets
extend a property rental agreement were not included
in determining the lease liabilities since there is no
reasonable certainty as to whether the options will be
in € thousand
Land and buildings
Technical equipment and
machinery
Operating and office
equipment
Total
06/30/2022 06/30/2021
exercised.
34,468
34,592
321
664
a long-term sublease agreement, which has been
The KWS Group also acts as a lessor. There is currently
9,625
44,414
8,415
43,671
classified as a financial lease in relation to the main lease
agreement. The interest income was € 30 (55) thousand.
The sublease is reported under the other noncurrent
receivables to an amount of € 3,936 (4,328) thousand
and under the other current receivables to an amount
Additions to rights of use for leased assets
of € 627 (598) thousand. The annual income from the
totaling € 9,947 (8,703) thousand were recognized in fiscal
sublease is € 697 (692) thousand. The lease agreement
2021/2022 and the amortization on them was as follows:
contains a clause permitting annual adjustment of the
lease payment depending on market circumstances.
Depreciation of right-of-use assets
in € thousand
Land and buildings
Technical equipment and
machinery
Operating and office
equipment
Total
2021/2022
2020/2021
4,428
5,874
7.16 Contingent liabilities and other financial obligations
The obligations from uncompleted capital expenditure
projects, mainly relating to property, plant, and
359
420
equipment, and other capital commitments amount
to € 32,606 (16,661) thousand.
4,517
9,304
4,275
10,569
There are guarantees with respect to third parties amounting
to € 188,171 (76,412) thousand. As in previous years, they are
mainly guarantees KWS has given to banks for the credit
Expenses for short-term leases and for leases relating to
lines of the subsidiary KWS SEMENTES LTDA. There are
low-value assets totaled € 16,615 (14,426) thousand in the
also still guarantees toward non-Group third parties for the
period under review.
obligations of the joint venture AGRELIANT GENETICS,
LLC (which include payment obligations to banks and
Short-term lease liabilities totaled € 11,923 (10,961) thousand
license payments). The likelihood that these guarantees
and long-term lease liabilities € 37,228 (37,465) thousand at
will be utilized is seen as low, based on the experience of
June 30, 2022. The maturity analysis of the lease liabilities
previous years. No claims have yet been made.
is presented in section 7.14 of the Notes. Lease payments
totaled € 9,628 (11,905) thousand in fiscal 2021/2022. Interest
There were contingent liabilities from tax-related matters
expenses from interest accrued on the lease liabilities
at June 30, 2022. € 18,958 thousand of these contingent
were € 936 (876) thousand.
liabilities relate to possible obligations of the Brazilian
subsidiary KWS SEMENTES LTDA. to pay certain tax
In general, lease agreements are concluded without
levies on agricultural companies. KWS SEMENTES LTDA.’s
extension or termination options. Possible cash outflows
obligation to pay contributions is being clarified and the
of € 21,902 (20,880) thousand for existing options to
probability of the obligation occurring is considered to be
low.
136 Consolidated Financial Statements | Notes for the KWS Group | 7. Notes to the Consolidated Balance Sheet
Annual Report 2021/2022 | KWS Group 8. Notes to the Consolidated
Cash Flow Statement
The cash flow statement shows the changes in cash and
cash equivalents of the KWS Group in the three categories
of operating activities, investing activities and financing
activities. The effects of exchange rate changes and
changes in the consolidated group have been eliminated
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 this year and in the
previous year:
Changes in financial liabilities
in € thousand
Cash flows
Non-cash-
effective changes
06/30/2021
Financial liabilities
Lease liabilities
698,305
48,426
22,915
–9,628
06/30/2020
Financial liabilities
615,407
82,383
Lease liabilities
51,300
–11,905
Changes in
the scope of
consolidation Currency
New
IFRS 16
contracts
Other
effects
0
0
355
0
4,345
1,363
74
557
0
9,947
0
8,703
15
–957
86
–229
06/30/2022
725,580
49,151
06/30/2021
698,305
48,426
8. Notes to the Consolidated Cash Flow Statement | Notes for the KWS Group | Consolidated Financial Statements 137
KWS Group | Annual Report 2021/2022 9. Other Notes
9.1 Proposal for the appropriation of net retained profits
The variable compensation, which is calculated
The net retained profits of KWS SAAT SE & Co. KGaA
on the basis of the net income for the year of the
are € 282,010 (321,395) thousand.
KWS Group, is made up of a bonus and a long-term
incentive. The bonus totals € 2,558 (2,644) thousand;
A proposal will be made to the Annual Shareholders’
there are contributions from the long-term incentive
Meeting that an amount of € 26,400 (26,400) thousand
tranche for 2021/2022 totaling € 458 thousand
should be used to pay a dividend of € 0.80 (0.80) for each
(tranche for 2020/2021: € 650 thousand). Pension
of the 33,000,000 shares.
provisions totaling € 984 (1,612) thousand were
formed for two members of the Executive Board at
9.2 Total remuneration of the Supervisory Board and
KWS SAAT SE & Co. KGaA.
the Executive Board and of former members of the
Supervisory Board and the Executive Board of
KWS SAAT SE & Co. KGaA
Compensation of former members of the Executive
Board and their surviving dependents amounted
The compensation of the members of the Supervisory
to € 1,315 (1,238) thousand. Pension provisions recognized
Board was converted to a purely fixed compensation
for this group of persons amounted to € 4,484 (6,780)
pursuant to the resolution adopted by the Annual
thousand as of June 30, 2022, before being netted off with
Shareholders’ Meeting in December 2017. Members of
the relevant plan assets.
the Supervisory Board who are members of a committee
– with the exception of the Chairman of the Supervisory
9.3 Related party disclosures
Board – receive an additional fixed payment therefor.
Transactions with related parties in accordance with IAS 24
The total compensation for members of the Supervisory
are all business dealings that are conducted with the
Board amounts to € 620 (620) thousand, excluding value-
reporting entity by entities or natural persons or their close
added tax. The total compensation for members of the
family members, if the party or person in question controls
Supervisory Board of KWS SE, the personally liable
the reporting entity or is a member of its key management
partner of KWS SAAT SE & Co. KGaA, in the year under
personnel, for example.
review amounted to € 195 (195) thousand, excluding value-
added tax.
The personally liable partner KWS SE provides
business management services on behalf of
In fiscal year 2021/2022, total Executive Board
KWS SAAT SE & Co. KGaA.
compensation amounted to € 6,193 (5,773) thousand.
Related parties
in € thousand
KWS SE
At equity
accounted
joint ventures
At equity
accounted associ-
ated companies
Other related
parties
Deliveries and
services provided
Received deliveries
and services
Receivables
Payables
2021/2022 2020/2021 2021/2022 2020/2021 2021/2022 2020/2021 2021/2022 2020/2021
0
0
6,221
5,885
0
0
3,132
3,721
6,685
4,919
5,103
5,106
6,505
5,463
3,545
2,552
6,655
6,602
36
37
0
115
0
6,367
6,366
116
0
0
100
836
100
947
138 Consolidated Financial Statements | Notes for the KWS Group | 9. Other Notes
Annual Report 2021/2022 | KWS Group
As part of its operations, the KWS Group procures goods
KWS SAAT SE & Co. KGaA prepares the consolidated
and services worldwide from a large number of business
financial statements for the largest and smallest group of
partners. They also include companies in which the
companies.
KWS Group has an interest or on which representatives
of the KWS Group’s Supervisory Board exert a significant
9.5 Audit of the annual financial statements
influence. The services for joint ventures and associated
On December 2, 2021, the Annual Shareholders’ Meeting of
companies are mainly rendered under existing license
KWS SAAT SE & Co. KGaA elected the accounting firm Ernst
agreements. The services received from joint ventures
& Young GmbH Wirtschaftsprüfungsgesellschaft, Stuttgart,
relate to research activities. Transactions with related
to be the Group’s auditors for fiscal year 2021/2022.
companies are generally conducted at arm’s length and
are of minor importance for the Group in terms of volume.
As part of Group financing, short- and medium-term term
loans are taken out from and granted to subsidiaries at
market interest rates.
Fee paid to the external auditors under
Section 314 (1) No. 9 HGB
in € thousand
a) Audit of the consolidated
financial statements
b) Other certification services
2021/2022 2020/2021
843
89
0
0
932
927
60
0
0
987
The compensation of members of the Executive Board
c) Tax consulting
comprises short-term employee benefits, share-based
payment benefits and post-employment benefits.
Individualized disclosures on the compensation of
members of the Executive Board and the Supervisory
d) Other services
Total fee paid
Board are presented in the Compensation Report. The
Other certification services in fiscal 2021/2022 essentially
Compensation Report can be found on our website at:
comprised non-audit services as part of the voluntary
www.kws.com.
audit of the Non-Financial Declaration and auditing of the
There were also no business transactions or legal
transactions that required reporting for related parties in
9.6 Report on events after the balance sheet date
Compensation Report.
fiscal 2021/2022.
9.4 Disclosure
There have been no events of particular significance
that might have an impact on the presentation of the
KWS Group’s earnings, financial position and assets since
The following subsidiaries with the legal form of a
the end of the fiscal year.
corporation within the meaning of Section 264 (3) and
264b of the German Commercial Code (HGB) have utilized
9.7 Declaration of compliance with the German
the exemption provided in Section 264 (3) of the German
Corporate Governance Code
Commercial Code (HGB) as regards preparation of
KWS SAAT SE & Co. KGaA issued the declaration of
financial statements and their publication:
compliance with the German Corporate Governance
Code required by Section 161 of the Aktiengesetz
KWS LOCHOW GmbH, Bergen
(AktG – German Stock Corporation Act) in September 2022
KWS Landwirtschaft GmbH, Einbeck
and made it accessible to its shareholders on the
Company’s homepage at www.kws.com.
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
9. Other Notes | Notes for the KWS Group | Consolidated Financial Statements 139
KWS Group | Annual Report 2021/2022 9.8 List of shareholdings
List of shareholdings in accordance with Section 313 (2) HGB (German Commercial Code)
Fiscal year 2021/2022
Name and Company’s registered office
Fully consolidated subsidiaries (direct)
Germany
AGROMAIS GMBH, Everswinkel
BETASEED GMBH, Frankfurt am Main
DELITZSCH PFLANZENZUCHT GMBH, Einbeck
EURO-HYBRID GESELLSCHAFT FÜR GETREIDEZÜCH-
TUNG MBH, Einbeck
KANT-HARTWIG & VOGEL GMBH, Einbeck
KWS BERLIN GMBH, Berlin
KWS INTERSAAT GMBH, Einbeck
KWS KLOSTERGUT WIEBRECHTSHAUSEN GMBH,
Northeim-Wiebrechtshausen
KWS LANDWIRTSCHAFT GMBH, Einbeck
KWS LOCHOW GMBH, Bergen
KWS SAATFINANZ GMBH, Einbeck
RAGIS KARTOFFELZUCHT- UND HANDELS-
GESELLSCHAFT MBH, Einbeck
Foreign
KWS ARGENTINA S.A., Balcarce/Argentinia
KWS BULGARIA EOOD., Sofia/Bulgaria
KWS SEMENA S.R.O., Bratislava/Slovakia
KWS SRBIJA D.O.O., Neu Belgrad/Serbia
SEMILLAS KWS CHILE LTDA., Rancagua/Chile
Currency
Interest held
Total in %
Footnote
€
€
€
€
€
€
€
€
€
€
€
€
ARS
BGN
€
RSD
CLP
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
28
140 Consolidated Financial Statements | Notes for the KWS Group | 9. Other Notes
Annual Report 2021/2022 | KWS Group Fiscal year 2021/2022
Name and Company’s registered office
Fully consolidated subsidiaries (indirect)
Foreign
BEIJING KWS AGRICULTURE TECHNOLOGY CO., LTD.,
Beijing/China
BETASEED FRANCE S.A.R.L., Bethune/France
BETASEED RUS LLC, Moskau/Russia
BTS TURKEY TARIM TICARET LIMITED SIRKETI,
Eskisehir/Turkey
EUROPSEEDS B.V., Enkhuizen/Netherlands
GLH SEEDS INC., Bloomington/USA
KLEIN WANZLEBENER SAATZUCHT MAROC
S.A.R.L.A.U., Casablanca/Marocco
KWS AGRICULTURE RESEARCH & DEVELOPMENT
CENTER, Hefei/China
KWS AUSTRIA SAAT GMBH, Vienna, Austria
KWS BENELUX B.V., Amsterdam/Netherlands
KWS CEREALS USA LLC, Champagne/USA
KWS FIDC, Rio de Janeiro/Brazil
KWS FRANCE S.A.R.L., Roye/France
KWS GATEWAY RESEARCH CENTER LLC, St. Louis/
USA
KWS INTERNATIONAL HOLDING B.V., Emmeloord/
Netherlands
KWS INTERNATIONAL HOLDING II B.V., Emmeloord/
Netherlands
KWS ITALIA S.P.A., Forli/Italy
KWS KUBAN O.O.O., Krasnodar/Russia
Currency
Interest held
Total in %
Footnote
CNY
€
RUB
TRY
€
USD
MAD
CNY
€
€
USD
BRL
€
USD
€
€
€
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
8
3
32
3
18
4
9
8
3
3
4
33
3
4
6
3
3
7
9. Other Notes | Notes for the KWS Group | Consolidated Financial Statements 141
KWS Group | Annual Report 2021/2022 Fiscal year 2021/2022
Name and Company’s registered office
KWS LOCHOW POLSKA SP.Z O.O., Kondratowice/Poland
KWS MAGYARORSZÁG KFT., Györ/Hungary
KWS MAIS FRANCE S.A.R.L., Champol/France
KWS MOMONT RECHERCHE S.A.R.L.,
Mons-en-Pevele/France
KWS MOMONT S.A.S., Mons-en-Pevele/France
KWS OSIVA S.R.O, Velké Mezirici/Czech Republic
KWS PARAGUAY SRL, Asuncion/Paraguay
KWS PERU S.A.C., Lima/Peru
KWS PODILLYA T.O.V., Kiew/Ukraine
KWS POLSKA SP.Z O.O., Poznan/Poland
KWS R&D INVEST B.V., Emmeloord/Netherlands
KWS R&D RUS LLC, Lipezk/Russia
KWS RUS O.O.O., Lipezk/Russia
KWS SCANDINAVIA A/S, Guldborgsund/Denmark
KWS Seed Science & Technology (Sanya) Co., Ltd.,
Sanya/China
KWS Seeds Canada, LTD., Calgary/Canada
KWS SEEDS INC., Bloomington/USA
KWS SEEDS INDIA PRIVATE LIMITED, New Delhi/ India
KWS SEEDS LLC, Bloomington/USA
KWS SEMENTES LTDA., Patos de Minas/Brazil
KWS SEMILLAS CANARIAS S.L.U., Gran Canaria/Spain
KWS SEMILLAS IBÉRICA S.L., Zaratán/Spain
KWS SEMINTE S.R.L., Bukarest/Romania
KWS SERVICOS E PARTICIPACOES SOUTH AMERICA
LTDA., São Paulo/Brazil
KWS SJEME D.O.O., Osijek/Croatia
KWS SUISSE S.A., Basel/Switzerland
KWS TÜRK TARIM TICARET A.S., Eskisehir/Turkey
KWS UK LTD., Thriplow/Great Britain
KWS UKRAINA T.O.V., Kiew/Ukraine
KWS VEGETABLES B.V., Heythuysen/Netherlands
KWS VEGETABLES ITALIA S.R.L A SOCIO UNICO,
Noceto/Parma/Italy
KWS VEGETABLES MEXICO S.A. de C.V., Mexico City/
Mexico
POP VRIEND HOLDING B.V., Amsterdam/Netherlands
POP VRIEND INTERNATIONAAL B.V., Andijk/
Netherlands
POP VRIEND SEEDS B.V., Andijk/Netherlands
POP VRIEND TOHUMCULUK VE TARIM ÜRÜNLERI
SANAYI VE TICARET LIMITED SIRKETI , Istanbul/Turkey
Currency
Interest held
Total in %
Footnote
PLN
HUF
€
€
€
CZK
PYG
PEN
UAH
PLN
€
RUB
RUB
DKK
CNY
CAD
USD
INR
USD
BRL
€
€
RON
BRL
HRK
CHF
TRY
GBP
UAH
€
€
MXN
€
€
€
TRY
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
3
3
3
11
3
3
12
5
10
3
3
7
23
3
3
3
3
3
4
29
3
3
25
30
3
3
3
3
23
3
16
31
16
18
18
19
142 Consolidated Financial Statements | Notes for the KWS Group | 9. Other Notes
Annual Report 2021/2022 | KWS Group Currency
Interest held
Total in %
Footnote
Fiscal year 2021/2022
Name and Company’s registered office
PV TOHUMCULUK TARIM ÜRÜNLERI SANAYI VE
TICARET LIMITED SIRKETI, Izmir/Turkey
SEED PLANT KWS O.O.O., Lipetsk/Russia
Equity-accounted joint ventures
AGRELIANT GENETICS INC., Chatham/Canada
AGRELIANT GENETICS LLC, Westfield/U.S.
FARMDESK B.V., Antwerp/Belgium
Equity-accounted associated companies
IMPETUS AGRICULTURE INC., Lewes/USA
KENFENG - KWS SEED CO., LTD., Beijing/China
Joint operations (proportionately consolidated)
AARDEVO B.V., Nagele/Netherlands
AARDEVO NORTH AMERICA LLC, Boise/USA
GENECTIVE CANADA INC., Montreal/Canada
GENECTIVE Japan K.K., Chiba/Japan
GENECTIVE KOREA, Sangdaewon-dong/Korea
GENECTIVE S.A., Chappes/France
GENECTIVE TAIWAN LTD., Taipeh City/Taiwan
GENECTIVE USA Corp., Weldon/USA
TRY
RUB
CAD
USD
€
USD
CNY
USD
USD
CAD
JPY
KRW
€
TWD
USD
100.00
100.00
50.00
50.00
50.00
38.82
49.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
20
7
13
22
21
14
15
26
26
26
26
26
2
Unconsolidated subsidiaries
VAN RIJN BALCAN S.R.L., Vulcan/Romania
RON
100.00
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 PARTICIPA- COES SOUTH AMERICA LTDA.
6 Subsidiary of KWS INTERSAAT GMBH
7 Subsidiary of KWS RUS O.O.O.
8 Subsidiary of EURO-HYBRID GESELLSCHAFT FÜR GETREIDEZÜCHTUNG MBH
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 and CHURA B.V.
19 Subsidiary of POP VRIEND INTERNATIONAL B.V.
20 Subsidiary of POP VRIEND TOHUMCULUK VE TARIM ÜRÜNLERI
SANAYI VE TICARET LIMITED SIRKETI
21 Participation of KWS R&D INVEST B.V.
22 Participation of KWS INTERNATIONAL HOLDING B.V.
23 Subsidiary of EURO-HYBRID GESELLSCHAFT FÜR GETREIDEZÜCHTUNG
and KWS SAATFINANZ GMBH
24 Subsidiary of KWS SEEDS Inc.
25 Subsidiary of KWS INTERSAAT GMBH and der 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 Subsidiary 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 | Consolidated Financial Statements 143
KWS Group | Annual Report 2021/2022
9.9 Supervisory Board and Executive Board of KWS SAAT SE & Co. KGaA in fiscal 2021/2022
Other seats 2021/2022
Membership of comparable German and foreign
oversight boards:
DR. SCHNELL GmbH & Co. KGaA, Munich
(member of the Advisory Board)
Membership of comparable German and foreign
oversight boards:
Givaudan SA, Vernier (Switzerland)
(Chairman of the Audit Committee, member of the Board
of Directors 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,of the Audit
Committee and of the ESG Committee)
Louis Dreyfus Holding B.V., Amsterdam (Netherlands)
(member of the Supervisory Board and Chairman of the
Audit Committee)
Membership in other legally required 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
144 Consolidated Financial Statements | Notes for the KWS Group | 9. Other Notes
Annual Report 2021/2022 | KWS Group
9.9.2 Supervisory Board committees
Committee
Audit Committee
Victor W. Balli
Chairman/Chairwoman
Members 2021/2022
Nominating Committee
Dr. Marie Theres Schnell
Dr. Drs. h. c. Andreas J. Büchting
Jürgen Bolduan
Dr. Drs. h. c. Andreas J. Büchting
Cathrina Claas-Mühlhäuser
9.9.3 Executive Board
Members
Other seats
Dr. Hagen Duenbostel
Einbeck
Chief Executive Officer
Corn Southamerica, Group Compliance, Group Governance
& Risk Management (until 12/31/2021)
Corn Northamerica, Corn China/Asia, Group Strategy,
Corporate Office & Services
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)
Dr. Léon Broers (until 12/31/2021)
Einbeck
Research & Breeding, Vegetables
Dr. Felix Büchting
Einbeck
Cereals, Oilseed Rape/Special Crops & Organic Seed
(until 12/31/2021)
Research & Breeding (since 01/01/2022)
Human Resources, Farming
Dr. Peter Hofmann
Einbeck
Corn Europe (until 12/31/2021)
Cereals, Oilseed Rape/Special Crops & Organic Seed
(since 01/01/2022)
Sugarbeet, Global Marketing & Communications
Eva Kienle
Göttingen
Group Compliance, Group Governance & Risk Management
(since 01/01/2022)
Finance & Procurement, Controlling,
Global Transaction Center
Legal Services & IP, IT, KWS Digital
Innovation Accelerator
Nicolás Wielandt (since 01/01/2022)
Einbeck
Corn Europe and Southamerica
Einbeck, September 14, 2022
KWS SE
Membership in other legally required supervisory boards:
Zumtobel Group AG, Dornbirn (Austria)
(member of the Supervisory Board and Chairwoman of
the Audit Committee)
Dr. Hagen Duenbostel | Dr. Felix Büchting | Dr. Peter Hofmann | Eva Kienle | Nicolás Wielandt
9. Other Notes | Notes for the KWS Group | Consolidated Financial Statements 145
KWS Group | Annual Report 2021/2022
Independent Auditor’s Report
To KWS SAAT SE & Co. KGaA
management report does not cover the content of the
parts of the group management report listed in the
Report on the audit of the consolidated financial
appendix to the auditor’s report.
statements and of the group management report
Opinions
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that
our audit has not led to any reservations relating to the
We have audited the consolidated financial statements of
legal compliance of the consolidated financial statements
KWS SAAT SE & Co. KGaA, Einbeck, and its subsidiaries
and of the group management report.
(the Group), which comprise the consolidated statement of
comprehensive income for the fiscal year from 1 July 2021
Basis for the opinions
to 30 June 2022, and the consolidated balance sheet as
We conducted our audit of the consolidated financial
at 30 June 2022, consolidated statement of changes in
statements and of the group management report
equity and consolidated cash flow statement for the fiscal
in accordance with Sec. 317 HGB and the EU Audit
year from 1 July 2021 to 30 June 2022, and notes to the
Regulation (No 537/2014, referred to subsequently as
consolidated financial statements, including a summary
“EU Audit Regulation”) and in compliance with German
of significant accounting policies. In addition, we have
Generally Accepted Standards for Financial Statement
audited the group management report of KWS SAAT SE &
Audits promulgated by the Institut der Wirtschaftsprüfer
Co. KGaA, which was combined with the management
[Institute of Public Auditors in Germany] (IDW). Our
report of the Company, for the fiscal year from 1 July 2021
responsibilities under those requirements and principles
to 30 June 2022. We have not audited the content of
are further described in the “Auditor’s responsibilities for
the parts of the group management report specified in
the audit of the consolidated financial statements and of
the appendix to the auditor’s report and the Company
the group management report” section of our auditor’s
information stated therein that is provided outside of the
report. We are independent of the group entities in
annual report and is referenced in the group management
accordance with the requirements of European law and
report.
German commercial and professional law, and we have
fulfilled our other German professional responsibilities
In our opinion, on the basis of the knowledge obtained in
in accordance with these requirements. In addition, in
the audit,
accordance with Art. 10 (2) f) of the EU Audit Regulation,
we declare that we have not provided non-audit services
the accompanying consolidated financial statements
prohibited under Art. 5 (1) of the EU Audit Regulation.
comply, in all material respects, with the IFRSs as
We believe that the audit evidence we have obtained
adopted by the EU, and the additional requirements of
is sufficient and appropriate to provide a basis for our
German commercial law pursuant to Sec. 315e (1) HGB
opinions on the consolidated financial statements and on
[“Handelsgesetzbuch”: German Commercial Code] and,
the group management report.
in compliance with these requirements, give a true and
fair view of the assets, liabilities and financial position
Key audit matters in the audit of the consolidated
of the Group as at 30 June 2022 and of its financial
financial statements
performance for the fiscal year from 1 July 2021 to
Key audit matters are those matters that, in our
30 June 2022, and
professional judgment, were of most significance in our
the accompanying group management report as a whole
audit of the consolidated financial statements for the fiscal
provides an appropriate view of the Group’s position.
year from 1 July 2021 to 30 June 2022. These matters were
In all material respects, this group management
addressed in the context of our audit of the consolidated
report is consistent with the consolidated financial
financial statements as a whole, and in forming our opinion
statements, complies with German legal requirements
thereon; we do not provide a separate opinion on these
and appropriately presents the opportunities and
matters.
risks of future development. Our opinion on the group
146
Consolidated Financial Statements | Independent Auditor’s Report
Annual Report 2021/2022 | KWS Group
Below, we describe what we consider to be the key audit
Overall, our procedures relating to the recognition
matters:
of revenue from the sale of seed did not lead to any
(1) Revenue recognition from the sale of seed
reservations.
Reference to related disclosures
Reasons why the matter was determined to be
With regard to the recognition and measurement policies
a key audit matter
applied for the recognition of revenue from the sale of
In the consolidated financial statements of
seed, refer to the disclosure in note 3.6 “Recognition of
KWS SAAT SE & Co. KGaA, revenue from the sale of
income and expenses” in section 3 “Accounting Policies”
seed is recognized when control is transferred to the
in the notes to the consolidated financial statements.
customer, allowing for contractually agreed returns. Due to
different contractual agreements and judgment exercised
(2) Impairment testing of goodwill and brands
in assessing expected return deliveries, therefore is an
elevated risk of misstatement in relation to the proper
Reasons why the matter was determined to be
recognition of revenue on an accrual basis.
a key audit matter
Auditor’s response
The goodwill and brands with an indefinite useful life
presented in the consolidated financial statements of
During our audit, we considered, based on the criteria
KWS SAAT SE & Co. KGaA result from the acquisition of
defined in IFRS 15, the accounting policies applied in
subsidiaries and are a significant balance sheet item.
accordance with the internal accounting instructions in
the consolidated financial statements of KWS SAAT SE &
Goodwill and brands with an indefinite useful life are tested
Co. KGaA for the recognition of revenue. Our response
for impairment as of 30 June each year. The result of
included an examination of whether control was
these tests is highly dependent on the executive directors’
transferred to the customers upon the sale of seed. We
estimate of future cash flows and the respective discount
analyzed the process implemented by the Executive Board
rates used.
of KWS SAAT SE & Co. KGaA for the recognition of seed
sales, taking into account knowledge about actual returns.
In light of the definition of the cash-generating units, the
Based on analytical procedures defined group-wide, we
complexity of the valuation and the judgment exercised
examined whether the significant revenue items for fiscal
during valuation, the impairment tests for goodwill and
year 2021/2022 correlate with the corresponding trade
brands with an indefinite useful life were a key audit matter.
receivables to identify any irregularities in the development
of revenue. With a view to the recognition of revenue on
an accrual basis, we also obtained balance confirmations
from customers and performed data analyses to identify
any irregularities in comparison with the prior year.
We analyzed the recognition of revenue based on the
contractual arrangements on a sample basis with regard
to the requirements of IFRS 15. Based on analytical
procedures carried out on historical data and the analysis
of the underlying contracts, we examined the calculation
of expected returns of seed and their deduction from
revenue.
KWS Group | Annual Report 2021/2022
Independent Auditor’s Report | Consolidated Financial Statements
147
Auditor’s response
Reference to related disclosures
During our audit, among other things, we obtained an
With regard to the recognition and measurement policies
understanding of the methods used to carry out the
applied for goodwill and brands with an indefinite useful
impairment tests including an examination of the suitability
life, refer to the disclosure on intangible assets in section
of the procedure for performing an impairment test in
3 “Accounting Policies” in the notes to the consolidated
accordance with IAS 36. In doing so, we analyzed the
financial statements. For the related disclosures on
planning process and the operating effectiveness of the
judgments by the executive directors and sources of
controls implemented therein. We discussed the significant
estimation uncertainty as well as the disclosures on
planning assumptions with the executive directors
goodwill and brands with an indefinite useful life, refer
and compared these with the results and cash inflows
to note 7.1 “Intangible assets” in section 7 “Notes to
realized in the past. Our assessment of the results of the
the Consolidated Balance Sheet” in the notes to the
impairment tests as of 30 June was based among other
consolidated financial statements.
things on a comparison with general and industry-specific
market expectations underlying the expected cash inflows.
(3) Current and deferred income taxes
Based on our understanding that even relatively small
changes in the discount rates used can at times have
Reasons why the matter was determined to be
significant effects on the amount of the business value
a key audit matter
calculated, we analyzed the inputs used to determine
The KWS SAAT SE & Co. KGaA Group operates in different
the discount rates and reperformed the calculation with
legal jurisdictions with the resulting complexity of the
regard to the relevant requirements of IAS 36. In addition,
recognition of current and deferred income taxes, namely
we analyzed the sensitivity analyses performed by the
the transfer prices used, changes in tax legislation and
executive directors of KWS SAAT SE & Co. KGaA on the
intragroup financing. To calculate the provision for tax
impairment tests of goodwill and brands with an indefinite
obligations and deferred tax items, the executive directors
useful life in order to estimate any potential impairment risk
of KWS SAAT SE & Co. KGaA must exercise judgment in
associated with a reasonably possible change in one of the
assessing tax matters, estimating tax risks and with regard
significant assumptions used in the valuation.
to the realization of deferred tax assets.
We obtained evidence that the divisions represent the
Auditor’s response
lowest level within the Group at which independent cash
The executive directors of KWS SAAT SE & Co. KGaA
inflows are generated and goodwill is monitored for internal
regularly engage external tax experts to validate their
management purposes. Our auditor’s response also
own risk assessment. We called on our tax specialists
included the disclosures in the notes to the consolidated
to consider these tax assessments. Our specialists
financial statements of KWS SAAT SE & Co. KGaA in
also analyzed the correspondence with the competent
relation to the requirements of IAS 36.
tax authorities and the assumptions used to calculate
provisions for current taxes and deferred taxes,
Our procedures did not lead to any reservations relating
considering in particular the applicable transfer prices,
to the valuation of goodwill and brands with an indefinite
based on their knowledge and experience of how the
useful life.
authorities and courts currently apply the relevant legal
provisions. In addition, we involved tax specialists from our
international network with the relevant knowledge of the
respective local jurisdictions and regulations. We critically
assessed the assumptions on the recoverability of deferred
tax assets, in particular by analyzing the assumptions
with respect to projected future taxable income and by
comparing them to the internal business plan. Our auditor’s
response also included the disclosures in the notes to
the consolidated financial statements of KWS SAAT SE &
Co. KGaA on current and deferred income taxes.
148
Consolidated Financial Statements | Independent Auditor’s Report
Annual Report 2021/2022 | KWS Group
Our procedures did not lead to any reservations relating to
Responsibilities of the executive directors and the
the recognition of current and deferred income taxes.
Supervisory Board for the consolidated financial
statements and the group management report
Reference to related disclosures
The executive directors are responsible for the preparation
With regard to the recognition and measurement policies
of the consolidated financial statements that comply,
applied for current and deferred income taxes, refer to
in all material respects, with IFRSs as adopted by
the disclosure on deferred taxes and income tax liabilities
the EU and the additional requirements of German
in section 3 “Accounting Policies” in the notes to the
commercial law pursuant to Sec. 315e (1) HGB, and that
consolidated financial statements and, with regard to the
the consolidated financial statements, in compliance
information on income taxes, no. 6.5 “Taxes” in section 6
with these requirements, give a true and fair view of
“Notes to the Consolidated Statement of Comprehensive
the assets, liabilities, financial position and financial
Income” in the notes to the consolidated financial
performance of the Group. In addition, the executive
statements.
Other information
directors are responsible for such internal control as they
have determined necessary to enable the preparation
of consolidated financial statements that are free from
The Supervisory Board is responsible for the Report of
material misstatement, whether due to fraud or error.
the Supervisory Board. The executive directors and the
Supervisory Board are responsible for the declaration
In preparing the consolidated financial statements, the
pursuant to Sec. 161 AktG [“Aktiengesetz”: German Stock
executive directors are responsible for assessing the
Corporation Act] on the German Corporate Governance
Group’s ability to continue as a going concern. They
Code, which is part of the Declaration on Corporate
also have the responsibility for disclosing, as applicable,
Governance, as well as for the paragraph “Control and
matters related to going concern. In addition, they are
monitoring systems” in section 2.9.2 “Risk Management”
responsible for financial reporting based on the going
of the group management report. In all other respects,
concern basis of accounting unless there is an intention to
the executive directors are responsible for the other
liquidate the Group or to cease operations, or there is no
information. The other information comprises the parts
realistic alternative but to do so.
of the annual report listed in the appendix. We obtained
a version of this other information prior to issuing our
Furthermore, the executive directors are responsible for
auditor’s report.
the preparation of the group management report that,
as a whole, provides an appropriate view of the Group’s
Our opinions on the consolidated financial statements
position and is, in all material respects, consistent with
and on the group management report do not cover the
the consolidated financial statements, complies with
other information, and consequently we do not express an
German legal requirements, and appropriately presents
opinion or any other form of assurance conclusion thereon.
the opportunities and risks of future development. In
addition, the executive directors are responsible for such
In connection with our audit, our responsibility is to read
arrangements and measures (systems) as they have
the other information and, in so doing, to consider whether
considered necessary to enable the preparation of a
the other information
group management report that is in accordance with the
applicable German legal requirements, and to be able to
is materially inconsistent with the consolidated financial
provide sufficient appropriate evidence for the assertions
statements, with the group management report or our
in the group management report.
knowledge obtained in the audit, or
otherwise appears to be materially misstated.
The Supervisory Board is responsible for overseeing the
Group’s financial reporting process for the preparation of
the consolidated financial statements and of the group
management report.
KWS Group | Annual Report 2021/2022
Independent Auditor’s Report | Consolidated Financial Statements
149
Auditor’s responsibilities for the audit of the
Obtain an understanding of internal control relevant
consolidated financial statements and of the
to the audit of the consolidated financial statements
group management report
and of arrangements and measures (systems) relevant
Our objectives are to obtain reasonable assurance about
to the audit of the group management report in order
whether the consolidated financial statements as a whole
to design audit procedures that are appropriate in the
are free from material misstatement, whether due to fraud
circumstances, but not for the purpose of expressing an
or error, and whether the group management report as
opinion on the effectiveness of these systems.
a whole provides an appropriate view of the Group’s
Evaluate the appropriateness of accounting policies
position and, in all material respects, is consistent with
used by the executive directors and the reasonableness
the consolidated financial statements and the knowledge
of estimates made by the executive directors and
obtained in the audit, complies with the German legal
related disclosures.
requirements and appropriately presents the opportunities
Conclude on the appropriateness of the executive
and risks of future development, as well as to issue
directors’ use of the going concern basis of accounting
an auditor’s report that includes our opinions on the
and, based on the audit evidence obtained, whether
consolidated financial statements and on the group
a material uncertainty exists related to events or
management report.
conditions that may cast significant doubt on the
Group’s ability to continue as a going concern. If we
Reasonable assurance is a high level of assurance, but is
conclude that a material uncertainty exists, we are
not a guarantee that an audit conducted in accordance
required to draw attention in the auditor’s report to
with Sec. 317 HGB and the EU Audit Regulation and in
the related disclosures in the consolidated financial
compliance with German Generally Accepted Standards
statements and in the group management report or,
for Financial Statement Audits promulgated by the Institut
if such disclosures are inadequate, to modify our
der Wirtschaftsprüfer (IDW) will always detect a material
respective opinions. Our conclusions are based on the
misstatement. Misstatements can arise from fraud or
audit evidence obtained up to the date of our auditor’s
error and are considered material if, individually or in the
report. However, future events or conditions may cause
aggregate, they could reasonably be expected to influence
the Group to cease to be able to continue as a going
the economic decisions of users taken on the basis of
concern.
these consolidated financial statements and this group
Evaluate the overall presentation, structure and content
management report.
of the consolidated financial statements, including the
disclosures, and whether the consolidated financial
We exercise professional judgment and maintain
statements present the underlying transactions and
professional skepticism throughout the audit. We also:
events in a manner that the consolidated financial
statements give a true and fair view of the net assets,
Identify and assess the risks of material misstatement of
financial position and profitability of the Group in
the consolidated financial statements and of the group
compliance with IFRSs as adopted by the EU and the
management report, whether due to fraud or error,
additional requirements of German commercial law
design and perform audit procedures responsive to
pursuant to Sec. 315e (1) HGB.
those risks, and obtain audit evidence that is sufficient
Obtain sufficient appropriate audit evidence regarding
and appropriate to provide a basis for our opinions. The
the financial information of the entities or business
risk of not detecting a material misstatement resulting
activities within the Group to express opinions on
from fraud is higher than for one resulting from error,
the consolidated financial statements and on the
as fraud may involve collusion, forgery, intentional
group management report. We are responsible for the
omissions, misrepresentations, or the override of
direction, supervision and performance of the group
internal control.
audit. We remain solely responsible for our audit
opinions.
150
Consolidated Financial Statements | Independent Auditor’s Report
Annual Report 2021/2022 | KWS Group
Evaluate the consistency of the group management
Other legal and regulatory requirements
report with the consolidated financial statements,
its conformity with [German] law, and the view of the
Report on the assurance on the electronic rendering
Group’s position it provides.
of the consolidated financial statements and the group
Perform audit procedures on the prospective
management report prepared for publication purposes
information presented by the executive directors in the
in accordance with Sec. 317 (3a) HGB
group management report. On the basis of sufficient
appropriate audit evidence we evaluate, in particular, the
Opinion
significant assumptions used by the executive directors
We have performed assurance work in accordance
as a basis for the prospective information, and evaluate
with Sec. 317 (3a) HGB to obtain reasonable assurance
the proper derivation of the prospective information
about whether the rendering of the consolidated financial
from these assumptions. We do not express a separate
statements and the group management report (hereinafter
opinion on the prospective information and on the
the “ESEF documents”) contained in the attached file
assumptions used as a basis. There is a substantial
KWS_SAAT_SE_KA_LB_ESEF_30.06.2022.zip and
unavoidable risk that future events will differ materially
prepared for publication purposes complies in all material
from the prospective information.
respects with the requirements of Sec. 328 (1) HGB for the
electronic reporting format (“ESEF format”). In accordance
We communicate with those charged with governance
with German legal requirements, this assurance work
regarding, among other matters, the planned scope and
extends only to the conversion of the information
timing of the audit and significant audit findings, including
contained in the consolidated financial statements and
any significant deficiencies in internal control that we
the group management report into the ESEF format and
identify during our audit.
therefore relates neither to the information contained within
these renderings nor to any other information contained in
We also provide those charged with governance with
the file identified above.
a statement that we have complied with the relevant
independence requirements, and communicate with them
In our opinion, the rendering of the consolidated financial
all relationships and other matters that may reasonably
statements and the group management report contained
be thought to bear on our independence and where
in the accompanying file identified above and prepared for
applicable, the related safeguards.
publication purposes complies in all material respects with
the requirements of Sec. 328 (1) HGB for the electronic
From the matters communicated with those charged with
reporting format. Beyond this assurance opinion and our
governance, we determine those matters that were of
audit opinions on the accompanying consolidated financial
most significance in the audit of the consolidated financial
statements and the accompanying group management
statements of the current period and are therefore the key
report for the fiscal year from 1 July 2021 to 30 June 2022
audit matters. We describe these matters in our auditor’s
contained in the “Report on the audit of the consolidated
report unless law or regulation precludes public disclosure
financial statements and of the group management report”
about the matter.
above, we do not express any assurance opinion on the
information contained within these renderings or on the
other information contained in the file identified above.
KWS Group | Annual Report 2021/2022
Independent Auditor’s Report | Consolidated Financial Statements
151
Basis for the opinion
Obtain an understanding of internal control relevant
We conducted our assurance work on the rendering of
to the assurance on the ESEF documents in order to
the consolidated financial statements and the group
design assurance procedures that are appropriate in the
management report contained in the accompanying file
circumstances, but not for the purpose of expressing
identified above in accordance with Sec. 317 (3a) HGB and
an assurance opinion on the effectiveness of these
the IDW Assurance Standard: Assurance on the Electronic
controls.
Rendering of Financial Statements and Management
Evaluate the technical validity of the ESEF documents,
Reports Prepared for Publication Purposes in Accordance
i.e., whether the file containing the ESEF documents
with Sec. 317 (3a) HGB (IDW AsS 410 10.2021). Our
meets the requirements of Commission Delegated
responsibility in accordance therewith is further described
Regulation (EU) 2019/815, in the version in force at
in the “Group auditor’s responsibilities for the assurance
the date of the financial statements, on the technical
work on the ESEF documents” section. Our audit firm
specification for this file.
applies the IDW Standard on Quality Management 1:
Evaluate whether the ESEF documents enable an
Requirements for Quality Management in the Audit Firm
XHTML rendering with content equivalent to the audited
(IDW QS 1).
consolidated financial statements and to the audited
group management report.
Responsibilities of the executive directors and the
Evaluate whether the tagging of the ESEF documents
Supervisory Board for the ESEF documents
with Inline XBRL technology (iXBRL) in accordance
The executive directors of the Company are responsible
with the requirements of Arts. 4 and 6 of Commission
for the preparation of the ESEF documents including
Delegated Regulation (EU) 2019/815, in the version in
the electronic rendering of the consolidated financial
force at the date of the financial statements, enables an
statements and the group management report in
appropriate and complete machine-readable XBRL copy
accordance with Sec. 328 (1) Sentence 4 No. 1 HGB and
of the XHTML rendering.
for the tagging of the consolidated financial statements in
accordance with Sec. 328 (1) Sentence 4 No. 2 HGB.
Further information pursuant to Art. 10 of the
EU Audit Regulation
In addition, the executive directors of the Company
We were elected as group auditor by the Annual
are responsible for such internal control as they have
Shareholders’ Meeting on 2 December 2021. We were
determined necessary to enable the preparation of ESEF
engaged by the Supervisory Board on 30 May 2022. We
documents that are free from material intentional or
have been the group auditor of KWS SAAT SE & Co. KGaA
unintentional non-compliance with the requirements of
without interruption since fiscal year 2016/2017.
Sec. 328 (1) HGB for the electronic reporting format.
The Supervisory Board is responsible for overseeing the
report are consistent with the additional report to the audit
preparation of the ESEF documents as part of the financial
committee pursuant to Art. 11 of the EU Audit Regulation
reporting process.
(long-form audit report).
We declare that the opinions expressed in this auditor’s
Group auditor’s responsibilities for the assurance
Other matter – Use of the auditor’s report
work on the ESEF documents
Our auditor’s report must always be read together with
Our objective is to obtain reasonable assurance about
the audited consolidated financial statements and the
whether the ESEF documents are free from material
audited group management report as well as the assured
intentional or unintentional non-compliance with
ESEF documents. The consolidated financial statements
the requirements of Sec. 328 (1) HGB. We exercise
and the group management report converted to the ESEF
professional judgment and maintain professional
format – including the version to be published in the
skepticism throughout the engagement. We also:
Bundesanzeiger [German Federal Gazette] – are merely
Identify and assess the risks of material intentional or
statements and the audited management report and do
unintentional non-compliance with the requirements
not take their place. In particular, the ESEF report and our
of Sec. 328 (1) HGB, design and perform assurance
assurance opinion contained therein are to be used solely
procedures responsive to those risks, and obtain
together with the assured ESEF documents made available
electronic renderings of the audited consolidated financial
assurance evidence that is sufficient and appropriate to
in electronic form.
provide a basis for our assurance opinion.
152
Consolidated Financial Statements | Independent Auditor’s Report
Annual Report 2021/2022 | KWS Group
German Public Auditor responsible for the
2. Additional other information
engagement
The German Public Auditor responsible for the
The other information comprises the following parts of
engagement is Martin von Michaelis.
the annual report, of which we obtained a version prior to
issuing this auditor’s report, in particular the sections:
Appendix to the auditor’s report:
1. Parts of the group management report whose content is
Foreword of the Executive Board
unaudited
Report of the Supervisory Board
KWS on the Capital Market
We have not audited the content of the following parts of
KWS in Figures
the group management report:
but not the consolidated financial statements, not the
The combined non-financial declaration for
management report disclosures whose content is audited
KWS SAAT SE & Co. KGaA and the KWS Group
and not our auditor’s report thereon.
contained in section 2.11.2 “Combined Non-Financial
Declaration for the KWS Group” of the group
3. Company information outside of the annual report
management report, including any information in other
referenced in the group management report
sections referred to in this declaration. The respective
sections are marked “NFE” in the margin.
We have not audited the content of the following
The declaration on corporate governance and
information that is cross-referenced in the management
the declaration of compliance in accordance with
report:
Sec. 161 AktG which are published on the websites
stated in sections 2.7.1 “Corporate Governance and
Remuneration Report pursuant to Section 162 of the
Declaration on Corporate Governance” and 2.7.2
German Stock Corporation Act (AktG)
“Declaration of Compliance in Accordance with Section
161 AktG (German Stock Corporation Act),” which are
part of the group management report.
Berlin, 14 September 2022
Furthermore, we have not audited the content of the
Ernst & Young GmbH
following disclosures extraneous to group management
Wirtschaftsprüfungsgesellschaft
reports. Disclosures extraneous to group management
reports are such disclosures that are not required pursuant
von Michaelis
Dr. Janze
to Secs. 315, 315a HGB or Secs. 315b to 315d HGB:
Wirtschaftsprüfer
Wirtschaftsprüfer
[German Public Auditor]
[German Public Auditor]
Section 2.1.3 “Responsible Business Activity”
Section 2.4 “EU Taxonomy”
Section 2.5 “Environmental Report”
Section 2.6.2 “Occupational Health and Safety”
Section 2.6.3 “Recruitment & Employee Loyalty”
Section 2.6.4 “Qualification, Further Training and
Development”
Section 2.6.5 “Labor and Social Standards”
Section 2.7.3 “Business Ethics and Compliance”
Section 2.7.4 “Responsibility in the Supply Chain”
Section 2.8 “Social Report”
Section 2.9.2 “Risk Management,” paragraph “Control
and monitoring systems”
KWS Group | Annual Report 2021/2022
Independent Auditor’s Report | Consolidated Financial Statements
153
Independent Auditor’s Report on a Limited Assurance Engagement
To KWS SAAT SE & Co. KGaA, Einbeck
These responsibilities of the Company’s executive
We have performed a limited assurance engagement on
directors include the selection and application of
the non-financial statement of KWS SAAT SE & Co. KGaA,
appropriate non-financial reporting methods and making
Einbeck, (hereinafter the “Company”), which is combined
assumptions and estimates about individual non-financial
with the non-financial statement of the Group, comprising
disclosures that are reasonable in the circumstances.
the chapter “2.11.2 Combined Non-Financial Declaration
Furthermore, the executive directors are responsible for
for the KWS Group” of the combined management
such internal control as the executive directors consider
report and the chapters “2.1.1 Business Model”, “2.4 EU
necessary to enable the preparation of a combined
Taxonomy”, “2.5.1 Product Innovations”, “2.5.2 Product
non-financial that is free from material misstatement,
Quality and Safety”, “2.5.3 Emissions & Water”, “2.6.2
whether due to fraud (manipulation of the combined
Occupational Health and Safety”, “2.6.3 Recruitment &
non-financial statement) or error.
Employee Loyalty”, “2.6.4 Qualification, Further
Training and Development”, “2.6.5 Labor and Social
The EU Taxonomy Regulation and the Delegated Acts
Standards”, “2.7.3 Business Ethics and Compliance”,
adopted thereunder contain wording and terms that are
“2.7.4 Responsibility in the Supply Chain”, “2.8.1 Use of
still subject to considerable interpretation uncertainties
Genetic Resources and Intellectual Property” and “2.8.2
and for which clarifications have not yet been published
Social Commitment” in the combined management report
in every case. Therefore, the executive directors have
being incorporated by reference for the period from 1
disclosed their interpretation of the EU Taxonomy
July 2021 to 30 June 2022 (hereinafter the “combined
Regulation and the Delegated Acts adopted thereunder in
non-financial statement”).
section “2.4 EU Taxonomy” of the combined non-financial
statement. They are responsible for the defensibility of this
Responsibilities of the executive directors
interpretation. Due to the immanent risk that undefined
The executive directors of the Company are responsible for
legal terms may be interpreted differently, the legal
the preparation of the combined non-financial statement
conformity of the interpretation is subject to uncertainties.
in accordance with Sec. 315c in conjunction with Secs.
289c to 289e HGB [“Handelsgesetzbuch”: German
Independence and quality assurance
Commercial Code] and Art. 8 of Regulation (EU) 2020/852
of the auditor’s firm
of the European Parliament and of the Council of 18 June
We have complied with the German professional
2020 on the establishment of a framework to facilitate
requirements on independence as well as other
sustainable investment and amending Regulation (EU)
professional conduct requirements.
2019/2088 (hereinafter the “EU Taxonomy Regulation”)
and the Delegated Acts adopted thereunder as well as in
Our audit firm applies the national legal requirements and
accordance with their own interpretation of the wording
professional pronouncements – in particular the BS WP/
and terms contained in the EU Taxonomy Regulation
vBP [“Berufssatzung für Wirtschaftsprüfer/vereidigte
and the Delegated Acts adopted thereunder as set out in
Buchprüfer”: Professional Charter for German Public
section “2.4 EU Taxonomy” of the combined non-financial
Accountants/German Sworn Auditors] in the exercise
statement.
154
Consolidated Financial Statements | Independent Auditor’s Report
Annual Report 2021/2022 | KWS Group
of their Profession and the IDW Standard on Quality
In the course of our assurance engagement we have,
Management issued by the Institute of Public Auditors in
among other things, performed the following assurance
Germany (IDW): Requirements for Quality Management
procedures and other activities:
in the Audit Firm (IDW QS 1) and accordingly maintains
a comprehensive quality management system that
Gain an understanding of the structure of the
includes documented policies and procedures with regard
sustainability organization and stakeholder engagement,
to compliance with professional ethical requirements,
Inquiries of the executive directors and relevant
professional standards as well as relevant statutory and
employees involved in the preparation of the combined
other legal requirements.
non-financial statement about the preparation process,
about the internal control system related to this process,
Responsibilities of the auditor
and about disclosures in the combined non-financial
Our responsibility is to express a conclusion with limited
statement,
assurance on the combined non-financial statement based
Inquiries of the employees regarding the selection of
on our assurance engagement.
topics for the combined non-financial statement, the risk
assessment and the policies of the Company and the
We conducted our assurance engagement in accordance
Group for the topics identified as material,
with International Standard on Assurance Engagements
Inquiries of employees of the Company and the Group
(ISAE) 3000 (Revised): “Assurance Engagements other
responsible for data capture and consolidation as
than Audits or Reviews of Historical Financial Information”
well as the preparation of the combined non-financial
issued by the IAASB. This standard requires that we plan
statement, to evaluate the reporting system, the data
and perform the assurance engagement to obtain limited
capture and compilation methods as well as internal
assurance about whether any matters have come to our
controls to the extent relevant for the assurance of the
attention that cause us to believe that the Company’s
disclosures in the combined non-financial statement,
combined non-financial statement is not prepared, in
Identification of likely risks of material misstatement in
all material respects, in accordance with Sec. 315c in
the combined non-financial statement,
conjunction with Secs. 289c to 289e HGB and the EU
Inspection of the relevant documentation of the systems
Taxonomy Regulation and the Delegated Acts adopted
and processes for collecting, aggregating and validating
thereunder as well as the interpretation by the executive
the relevant data in the reporting period and testing
directors disclosed in section “2.4 EU Taxonomy” of the
such documentation on a sample basis,
combined non-financial statement.
Analytical procedures on selected disclosures in the
combined non-financial at the level of the Company and
In a limited assurance engagement, the procedures
the Group,
performed are less extensive than in a reasonable
Inquiries and inspection of documents on a sample
assurance engagement, and accordingly, a substantially
basis relating to the collection and reporting of selected
lower level of assurance is obtained. The selection of
data,
the assurance procedures is subject to the professional
Evaluation of the process to identify the economic
judgment of the auditor.
activities taxonomy-eligible and the corresponding
disclosures in the combined non-financial statement,
Evaluation of the presentation of the combined
non-financial statement.
KWS Group | Annual Report 2021/2022
Independent Auditor’s Report | Consolidated Financial Statements
155
In determining the disclosures in accordance with Art. 8
General Engagement Terms and Liability
of the EU Taxonomy Regulation, the executive directors
The “General Engagement Terms for Wirtschaftsprüfer
are required to interpret undefined legal terms. Due
and Wirtschaftsprüfungsgesellschaften [German Public
to the immanent risk that undefined legal terms may
Auditors and Public Audit Firms]” dated 1 January 2017
be interpreted differently, the legal conformity of their
are applicable to this engagement and also govern
interpretation and, accordingly, our assurance engagement
our relations with third parties in the context of this
thereon are subject to uncertainties.
engagement (www.de.ey.com/general-engagement-terms).
Assurance conclusion
there in no. 9 and to the exclusion of liability towards
Based on the assurance procedures performed and the
third parties. We accept no responsibility, liability or other
evidence obtained, nothing has come to our attention
obligations towards third parties unless we have concluded
that causes us to believe that the combined non-financial
a written agreement to the contrary with the respective
statement of the Company for the period from 1 July 2021
third party or liability cannot effectively be precluded.
In addition, please refer to the liability provisions contained
to 30 June 2022 is not prepared, in all material respects,
in accordance with Sec. 315c in conjunction with Secs.
We make express reference to the fact that we will not
289c to 289e HGB and the EU Taxonomy Regulation and
update the report to reflect events or circumstances
the Delegated Acts adopted thereunder as well as the
arising after it was issued, unless required to do so by law.
interpretation by the executive directors as disclosed in
It is the sole responsibility of anyone taking note of the
section “2.4 EU Taxonomy” of the combined non-financial
summarized result of our work contained in this report to
statement.
Restriction of use
decide whether and in what way this information is useful
or suitable for their purposes and to supplement, verify or
update it by means of their own review procedures.
We draw attention to the fact that the assurance
engagement was conducted for the Company’s purposes
Eschborn/Frankfurt am Main, 14 September 2022
and that the report is intended solely to inform the
Company about the result of the assurance engagement.
Ernst & Young GmbH
As a result, it may not be suitable for another purpose than
Wirtschaftsprüfungsgesellschaft
the aforementioned. Accordingly, the report is not intended
to be used by third parties for making (financial) decisions
Meyer
Johne
based on it. Our responsibility is to the Company alone.
Wirtschaftsprüferin
Wirtschaftsprüferin
We do not accept any responsibility to third parties. Our
[German Public Auditor]
[German Public Auditor]
assurance conclusion is not modified in this respect.
156
Consolidated Financial Statements | Independent Auditor’s Report
Annual Report 2021/2022 | 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, 14 September 2022
KWS SE
Dr. Hagen Duenbostel
Dr. Felix Büchting
Dr. Peter Hofmann
Eva Kienle
Nicolás Wielandt
KWS Group | Annual Report 2021/2022
Declaration by Legal Representatives
157
Additional Information
Financial calendar
Date
November 14, 2022
December 6, 2022
February 9, 2023
May 11, 2023
September 27, 2023
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
Quarterly Report Q1 2022/2023
Annual Shareholders’ Meeting
Semiannual Report 2022/2023
Quarterly Report 9M 2022/2023
Publication of 2022/2023 financial statements,
annual press and analyst conference
707400
DE0007074007
KWS
Prime Standard
SDAX
Non-par
33,000,000
Dividend
Dividend payment and dividend ratios of the past ten years
0.60
0.60
0.60
0.60
0.64
0.64
0.67
0.70
0.80
0.80
24.7
23.6
23.2
21.7
21.6
21.2
21.3
24.3
23.9
24.5
25%
20%
12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20
20/21 21/22
Dividend proposal 2022
Dividend payment in €
Dividend ratio (total
dividends/net income)
in %
158
Additional Information
Annual Report 2021/2022 | 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.
Photo credits
Frank Stefan Kimmel Roman Thomas
Date of publication: September 27, 2022
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.
KWS SAAT SE & Co. KGaA
Grimsehlstrasse 31
P.O. Box 1463
37555 Einbeck/Germany
www.kws.com