Q4 2026 KWS SAAT SE & Co KgaA Earnings Call

September 23, 2026

Speaker #1: Sie hören Musik, bis der Konferenzleiter die Konferenz eröffnet.

Speaker #3: Ladies and gentlemen, welcome to the KWS SAAT SE publication of full-year results 2025–2026. The conference will be recorded. At this time, all participants have been placed on listen-only mode.

Speaker #3: The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Dr. Jorn Andreas.

Jörn Andreas: Good morning, everyone. Thank you for joining us today for our full year 2025, 2026 results call. Before we dive into the numbers, let me start with a brief perspective on the year. 2025, 2026 was certainly a challenging year for the agriculture sector. We have seen lower acreage in several crops, cautious farmer sentiment, and also adverse currency developments that created quite some headwinds across many of our markets. Against this backdrop, we delivered actually a very resilient performance. While sales were affected by market conditions, we maintained a strong probability, we generated excellent cash flow and further strengthened our balance sheet. At the same time, we continued investing in innovation and in executing our strategic priorities. We are very happy about that. In short, the year once again demonstrated the resilience of the KWS business model and the strength of our diversified portfolio.

Jörn Andreas: Good morning, everyone. Thank you for joining us today for our Full Year 2025, 2026 Results Call. Before we dive into the numbers, let me start with a brief perspective on the year. 2025, 2026 was certainly a challenging year for the agriculture sector. We have seen lower acreage in several crops, cautious farmer sentiment, and also adverse currency developments that created quite some headwinds across many of our markets. Against this backdrop, we delivered actually a very resilient performance.

Speaker #4: Good morning, everyone. Thank you for joining us today for our full-year 2025–2026 results call. Before we dive into the numbers, let me start with a brief perspective on the year.

Speaker #4: So, 2025-2026 was certainly a challenging year for the agriculture sector. We've seen lower acreage in several crops, cautious farmer sentiment, and also adverse currency developments that created quite some headwinds across many of our markets.

Speaker #4: Against this backdrop, we delivered a very resilient performance. While sales were affected by market conditions, we maintained strong profitability, generated excellent cash flow, and further strengthened our balance sheet.

Jörn Andreas: While sales were affected by market conditions, we maintained a strong probability, we generated excellent cash flow and further strengthened our balance sheet. At the same time, we continued investing in innovation and in executing our strategic priorities. We are very happy about that. In short, the year once again demonstrated the resilience of the KWS business model and the strength of our diversified portfolio.

Speaker #4: At the same time, we continued investing in innovation and in executing our civic priorities, and we're very happy about that. So, in short, the year once again demonstrated the resilience of the KWS business model and the strength of our diversified portfolio.

Jörn Andreas: Before we dive into more details, as always, please note that some statements made today are forward-looking and are therefore subject to risks and uncertainties. Please refer to the disclaimer on slide 2. Let us start with the group highlights. Sales reached €1.63 billion. Organic sales declined by only 1%, despite significant acreage reductions in sugar beet and corn. In addition, currencies and portfolio effects each reduced reported sales by roughly one percentage point. EBITDA came in at €343 million and remains at a strong level despite the softer market environment. Net income increased by more than 13% to €158 million, supported by a significantly improved financial result. Free cash flow remained strong at approximately €123 million and was virtually unchanged from last year. As a consequence, net debt dropped, declined further to less than €9 million, leaving us with an exceptionally strong balance sheet.

Speaker #4: Before we dive into more details, as always, please note that some statements made today are forward-looking and are therefore subject to risks and uncertainties.

Speaker #4: Please refer to the disclaimer on slide 2. Let's start with the group highlights. Sales reached €1.63 billion. Organic sales declined by only 1%, despite significant acreage reductions in sugar beet and corn.

Speaker #4: In addition, currencies and portfolio effects each reduced reported sales by roughly 1 percentage point. EBITDA came in at €343 million and remained at a strong level despite the softer market environment.

Jörn Andreas: Net income increased by more than 13% to €158 million, supported by a significantly improved financial result. Free cash flow remained strong at approximately €123 million and was virtually unchanged from last year. As a consequence, net debt dropped, declined further to less than €9 million, leaving us with an exceptionally strong balance sheet. While market positions affected growth, profitability, cash generation, and financial strength remained very solid for us. Let me now put this result into the perspective against the targets that we set at the beginning of the year.

Speaker #4: Net income increased by more than 13% to €158 million, supported by a significantly improved financial result. Every cash flow remained strong at approximately €123 million and was virtually unchanged from last year.

Speaker #4: As a consequence, net debt declined further to less than €9 million, leaving us with an exceptionally strong balance sheet. So, while market conditions affected growth, profitability, cash generation, and financial strength remained very solid for us.

Jörn Andreas: While market positions affected growth, profitability, cash generation, and financial strength remained very solid for us. Let me now put this result into the perspective against the targets that we set at the beginning of the year. Looking at our guidance, sales development was clearly more challenging than anticipated at the beginning of the year. We initially expected around 3% organic growth and later adjusted our outlook to roughly flat development. The result of minus 1% reflects weaker than expected acreage development throughout the year that we, to a large extent, mitigated by our portfolio strength. At the same time, we continued to focus on what is in our control. We implemented efficiency measures that contributed roughly EUR 25 million in savings in fiscal year 2025/2026. In addition, we also actively managed account development, generating efficiency gains that will also continue to support profitability going forward.

Speaker #4: Let me now put this result into perspective against the targets that we set at the beginning of the year. So, looking at our guidance, sales development was clearly more challenging than anticipated at the beginning of the year.

Jörn Andreas: Looking at our guidance, sales development was clearly more challenging than anticipated at the beginning of the year. We initially expected around 3% organic growth and later adjusted our outlook to roughly flat development. The result of minus 1% reflects weaker than expected acreage development throughout the year that we, to a large extent, mitigated by our portfolio strength. At the same time, we continued to focus on what is in our control. We implemented efficiency measures that contributed roughly EUR 25 million in savings in fiscal year 2025/2026.

Speaker #4: We initially expected around 3% organic growth, and later adjusted our outlook to roughly flat development. The result of minus one reflects weaker-than-expected acreage development throughout the year, which we, to a large extent, mitigated by our portfolio strength.

Speaker #4: At the same time, we continue to focus on what is in our control. We implemented efficiency measures that contributed roughly €25 million in savings in fiscal year 2025–2026. In addition, we also actively managed headcount development, generating efficiency gains that will continue to support profitability going forward.

Jörn Andreas: In addition, we also actively managed account development, generating efficiency gains that will also continue to support profitability going forward. As a result, despite an unexpected acreage development and also adverse currency effects that were also significantly impacting our EBITDA, we successfully delivered an adjusted EBITDA margin within our guide range of 19% to 21%.

Jörn Andreas: As a result, despite an unexpected acreage development and also adverse currency effects that were also significantly impacting our EBITDA, we successfully delivered an adjusted EBITDA margin within our guide range of 19% to 21%. In addition, the disposal of our North American corn license rights, with that we've successfully completed the strategic alignment of our corn segment that contributed another EUR 29 million to our EBITDA, also in line with our expectation. Finally, we intend to increase the dividend to EUR 1.30 per share, reflecting our ambition to deliver stable or rising dividends every year. Taken together, we delivered three out of four targets in a challenging environment. Turning to sales, looking at the bridge, three factors explain the reported sales decline. First, lower acreage reduced organic sales by 1%. Second, currencies.

Speaker #4: As a result, despite weaker-than-expected acreage development and also adverse currency effects—which significantly impacted our EBITDA—we successfully delivered an adjusted EBITDA margin within our guided range of 19% to 21%.

Jörn Andreas: In addition, the disposal of our North American corn license rights, with that we've successfully completed the strategic alignment of our corn segment that contributed another EUR 29 million to our EBITDA, also in line with our expectation. Finally, we intend to increase the dividend to EUR 1.30 per share, reflecting our ambition to deliver stable or rising dividends every year. Taken together, we delivered three out of four targets in a challenging environment. Turning to sales, looking at the bridge, three factors explain the reported sales decline. First, lower acreage reduced organic sales by 1%.

Speaker #4: In addition, the disposal of our North American corn license rights would have successfully completed the strategic alignment of our corn segment. That contributed another $29 million to our EBITDA, also in line with our expectation.

Speaker #4: And finally, we intend to increase the dividend to €1.30 per share, reflecting our ambition to deliver stable or rising dividends every year.

Speaker #4: So, taken together, we delivered 3 out of 4 targets in a challenging environment. During the sales, looking at the bridge, three factors explain the reported sales decline.

Speaker #4: First, lower acreage reduced organic sales by 1%. Second, currencies created another percentage point of headwind, mainly from the US dollar, the Turkish lira, and the Ukrainian hryvnia.

Jörn Andreas: Second, currencies. They created another percentage point of headwind, mainly the US dollar, the Turkish lira, and the Ukrainian hryvnia. Third, portfolio effects accounted for the remaining decline and were largely related to the absence of R&D service revenues from our former AgReliant Genetics joint venture. The key message is here that the decline in reported sales was not driven by our portfolio. Rather, it reflects a combination of acreage reductions, currency effects, and portfolio-related changes. Turning to profitability.

Jörn Andreas: They created another percentage point of headwind, mainly the US dollar, the Turkish lira, and the Ukrainian hryvnia. Third, portfolio effects accounted for the remaining decline and were largely related to the absence of R&D service revenues from our former AgReliant Genetics joint venture. The key message is here that the decline in reported sales was not driven by our portfolio. Rather, it reflects a combination of acreage reductions, currency effects, and portfolio-related changes. Turning to profitability. As in the last years, we recorded a few one-time items as shown on this slide. Current year benefited from a EUR 29 million gain related to the disposal of our North American corn license rights, while the prior year included the reversal of a VAT provision.

Speaker #4: And third, portfolio effects accounted for the remaining decline and were largely related to the absence of R&D service revenues from our former AgriLine joint venture.

Speaker #4: So, the key message here is that the decline in reported sales was not driven by our portfolio; rather, it reflects a combination of acreage reductions, currency effects, and portfolio-related changes.

Speaker #4: Turning to profitability. As in previous years, we recorded a few one-time items, as shown on this slide. The current year benefited from a €29 million gain related to the disposal of our North American corn license rights, while the prior year included the reversal of a VAT provision.

Jörn Andreas: As in the last years, we recorded a few one-time items as shown on this slide. Current year benefited from a EUR 29 million gain related to the disposal of our North American corn license rights, while the prior year included the reversal of a VAT provision. The largest year-on-year improvement came from the financial results, mainly supported by positive effects from the sale of our participation in AgReliant Genetics against the corresponding negative effect in the previous year. Including those effects, net income and earnings per share, as previously mentioned, increased by 13%.

Speaker #4: The largest year-on-year improvement came from the financial result, mainly supported by positive effects from the sale of our participation in AgriLine, as compared to the corresponding negative effect in the previous year.

Jörn Andreas: The largest year-on-year improvement came from the financial results, mainly supported by positive effects from the sale of our participation in AgReliant Genetics against the corresponding negative effect in the previous year. Including those effects, net income and earnings per share, as previously mentioned, increased by 13%. Let's now dive into the segments and start with Sugar Beet, our largest product segment. 2025/2026 was another year in which our innovation-driven strategy clearly paid off. Global sugar beet acreage declined by roughly 10% as high sugar inventories prompted producers to contract lower beet volumes, especially in Europe. This reduction was higher than we anticipated at the beginning of the season last year and reduced our ability to achieve growth in the last financial year.

Speaker #4: Including those effects, net income and earnings per share, as previously mentioned, increased by 13%. Let's now dive into the segments and start with sugar beet, our largest product segment. 2025/26 was another year in which our innovation-driven strategy clearly paid off.

Jörn Andreas: Let's now dive into the segments and start with Sugar Beet, our largest product segment. 2025/2026 was another year in which our innovation-driven strategy clearly paid off. Global sugar beet acreage declined by roughly 10% as high sugar inventories prompted producers to contract lower beet volumes, especially in Europe. This reduction was higher than we anticipated at the beginning of the season last year and reduced our ability to achieve growth in the last financial year.

Speaker #4: Global sugar beet acreage declined by roughly 10% as high sugar inventories prompted producers to contract lower beet volumes, especially in Europe. This reduction was higher than we anticipated at the beginning of the season last year, and it reduced our ability to achieve growth in the last financial year.

Jörn Andreas: Nevertheless, against this backdrop and against this market contraction, the organic sales decline of just 0.6% for the sugar beet segment provides compelling evidence of the resilience of our world-leading sugar beet business. Here, innovation remains the key driver. CONVISO® SMART and CR+ continued to gain traction and now account for 63% of segment sales. This ongoing shift towards more differentiated, higher value solutions remains one of the most important drivers of long-term value creation in the segment. Profitability also remained exceptional, even after this reduction in acreage, sugar beet delivered an EBITDA margin of almost 42%.

Speaker #4: Nevertheless, against this backdrop and against this market contraction, the organic sales decline of just 0.6% for the sugar beet segment provides compelling evidence of the resilience of our world-leading sugar beet business.

Speaker #4: And here, innovation remains the key driver. So, Conviso Smart and CR Plus continue to gain traction and now account for 63% of segment sales.

Speaker #4: And this ongoing shift towards more differentiated, higher-value solutions remains one of the most important drivers of long-term value creation in the segment. Profitability also remained exceptional, so even after this reduction in acreage, sugar beet delivered an EBITDA margin of almost 42%.

Jörn Andreas: Profitability also remained exceptional, even after this reduction in acreage, sugar beet delivered an EBITDA margin of almost 42%. Looking ahead, high sugar prices and expected lower sugar yields in most of our sugar beet regions this year should support a stable or even growing acreage in the upcoming season, which would allow us to generate top and bottom-line growth in the sugar beet segment again, and that makes us confident for the current fiscal year.

Jörn Andreas: Looking ahead, high sugar prices and expected lower sugar yields in most of our sugar beet regions this year should support a stable or even growing acreage in the upcoming season, which would allow us to generate top and bottom-line growth in the sugar beet segment again, and that makes us confident for the current fiscal year. Turning to our corn segment, the headline sales decline primarily reflects lower acreage across markets, as well as portfolio tech stemming from the Agroland transaction. However, looking beneath the surface, the development was actually encouraging. Excluding Russia, comparable sales growth reached 2%, and more importantly, we continue to gain market share both in grain and silage across Europe, which confirms the competitiveness of our portfolio. Another highlight was clearly sunflower, where sales increased 35%.

Speaker #4: And looking ahead, high sugar prices and expected lower sugar yields in most of our sugar beet regions this year should support stable or even growing acreage in the upcoming season, which would allow us to generate top- and bottom-line growth in the sugar beet segment again. That makes us confident for the current fiscal year.

Jörn Andreas: Turning to our corn segment, the headline sales decline primarily reflects lower acreage across markets, as well as portfolio tech stemming from the Agroland transaction. However, looking beneath the surface, the development was actually encouraging. Excluding Russia, comparable sales growth reached 2%, and more importantly, we continue to gain market share both in grain and silage across Europe, which confirms the competitiveness of our portfolio. Another highlight was clearly sunflower, where sales increased 35%.

Speaker #4: Turning to our corn segment, the headline sales decline primarily reflects lower acreage across markets, as well as portfolio effects stemming from the AgriLine transaction.

Speaker #4: However, looking beneath the surface, the development was actually encouraging. Excluding Russia, comparable sales growth reached 2%. More importantly, we continue to gain market share both in grain and silage across Europe, which confirms the competitiveness of our portfolio.

Speaker #4: Another highlight was clearly sunflower, where sales increased 35%. While still a relatively small business today, this development confirms our conviction that sunflower can become an increasingly important growth driver for the years ahead. And remember, our ambition is to deliver €100 million in revenues by the end of the decade.

Jörn Andreas: While still a relatively small business today, this development confirms our conviction that sunflower can become an increasingly important raw material for the years ahead. Remember, our ambition is to deliver EUR 100 million revenues by the end of the decade. Profitability improved also significantly in corn. Reported EBITDA benefited from the disposal of license rights. Even if you take this out, even excluding this one-time effect, the segment delivered meaningful improvement in operating profitability. That is important because it demonstrates the quality of the remaining portfolio and also the decision behind the recent portfolio changes. Turning to cereals, sales remained broadly stable despite continuing pressure on several crop markets. Rapeseed was once again the clear standout performer. Sales increased 24% in oilseed rape. Our market share continued to rise and further strengthen our position as one of the leading players in Europe.

Speaker #4: Profitability improved significantly in corn. Reported EBITDA benefited from the disposal of license rights, but even if you take this out—even excluding this one-time effect—the segment delivered a meaningful improvement in operating profitability. That is important because it demonstrates the quality of the remaining portfolio and also the decision behind the recent portfolio changes.

Jörn Andreas: That is important because it demonstrates the quality of the remaining portfolio and also the decision behind the recent portfolio changes. Turning to cereals, sales remained broadly stable despite continuing pressure on several crop markets. Rapeseed was once again the clear standout performer. Sales increased 24% in oilseed rape. Our market share continued to rise and further strengthen our position as one of the leading players in Europe. I would say this coming season, we will be the leading player in Europe.

Speaker #4: Turning to cereals, sales remained broadly stable despite continued pressure, and in several crop markets, rapeseed was once again the clear standout performer. Sales increased 24% in oilseed rape, our market share continued to rise, and further strengthened our position as one of the leading players in Europe. I would say, this coming season, we will be the leading player in Europe.

Jörn Andreas: I would say this coming season, we will be the leading player in Europe. By contrast, rye, wheat, and barley continue to face weaker market conditions, largely reflecting lower commodity prices last year ahead of the planting. Profitability was additionally impacted by a provision that we already reflect after the nine months results related to an antitrust investigation in France. Excluding this effect, the underlying earnings development remained broadly in line with past levels. Overall, cereals once again demonstrated the value of its diversified crop portfolio. Lastly, vegetables, sales were below prior year's levels, mainly reflecting developments in vintage and timing effects in certain markets. Our focus remains unchanged. It remains firmly on long-term value creation, and we continued investing heavily in breeding capabilities, infrastructure, and new crops while further extending our innovation pipeline.

Jörn Andreas: By contrast, rye, wheat, and barley continue to face weaker market conditions, largely reflecting lower commodity prices last year ahead of the planting. Profitability was additionally impacted by a provision that we already reflect after the nine months results related to an antitrust investigation in France. Excluding this effect, the underlying earnings development remained broadly in line with past levels. Overall, cereals once again demonstrated the value of its diversified crop portfolio.

Speaker #4: By contrast, rye, wheat, and barley continue to face weaker market conditions, largely the effect of lower commodity prices last year ahead of the plan.

Speaker #4: Profitability was additionally impacted by a provision that we had already flagged after the nine-month results related to an antitrust investigation in France. Excluding this effect, the underlying earnings development remained broadly in line with past levels.

Speaker #4: So overall, cereals once again demonstrated the value of its diversified crop portfolio. Lastly, vegetables sales were below the prior year's level, mainly reflecting developments in spinach and timing effects in certain markets.

Jörn Andreas: Lastly, vegetables, sales were below prior year's levels, mainly reflecting developments in vintage and timing effects in certain markets. Our focus remains unchanged. It remains firmly on long-term value creation, and we continued investing heavily in breeding capabilities, infrastructure, and new crops while further extending our innovation pipeline. This rationale remains fully intact, and we are all looking forward to providing more insights during next week's vegetable investor and analyst seminar in Andijk in the Netherlands.

Speaker #4: Our focus remains unchanged; it is firmly on long-term value creation. We continued investing heavily in breeding capabilities, infrastructure, and new crops, while further expanding our innovation pipeline.

Speaker #4: So, this rationale remains fully intact, and we are all looking forward to providing more insights during next week's Vegetable Investor and Analyst Seminar in Undyk, in the Netherlands.

Jörn Andreas: This rationale remains fully intact, and we are all looking forward to providing more insights during next week's vegetable investor and analyst seminar in Andijk in the Netherlands. Let me now turn to cash flow. Despite lower sales volumes and a more challenging market environment, we once again generated free cash flow of approximately EUR 123 million. The composition of the cash flow differs, however, from last year. Operating cash flow was lower, reflecting both decline in EBITDA and higher working capital requirements. At the same time, investing cash flow improved by the same amount, which is due to two reasons. First, the payment of the first tranche in the context of the Agroland divestiture. Second, somewhat lower capital expenditures, mainly due to project phasing. Even in a year characterized by lower acreage and adverse currency developments, KWS continued to convert earnings in cash very effectively.

Jörn Andreas: Let me now turn to cash flow. Despite lower sales volumes and a more challenging market environment, we once again generated free cash flow of approximately EUR 123 million. The composition of the cash flow differs, however, from last year. Operating cash flow was lower, reflecting both decline in EBITDA and higher working capital requirements. At the same time, investing cash flow improved by the same amount, which is due to two reasons. First, the payment of the first tranche in the context of the Agroland divestiture.

Speaker #4: Let me now turn to cash flow. Despite lower sales volumes and a more challenging market environment, we once again generated free cash flow of approximately €123 million.

Speaker #4: The composition of the cash flow differs, however, from last year. Operating cash flow was lower, reflecting both a decline in EBITDA and higher working capital requirements. At the same time, investing cash flow improved by the same amount, which is due to two reasons.

Speaker #4: First, the payment of the first tranche in the context of the AgriLine divestiture; and second, somewhat lower capital expenditures, mainly due to project phasing.

Jörn Andreas: Second, somewhat lower capital expenditures, mainly due to project phasing. Even in a year characterized by lower acreage and adverse currency developments, KWS continued to convert earnings in cash very effectively. That has, of course, positive implications. Our balance sheet improved further during the financial year and remains one of the key strengths of KWS. Net debt declined significantly to less than EUR 9 million at year-end. I think few companies in our industry operate with a balance sheet as strong as ours today.

Speaker #4: So, even in the year characterized by lower acreage and improved currency developments, KWS continued to convert earnings into cash very effectively. And that has, of course, supported implications.

Jörn Andreas: That has, of course, positive implications. Our balance sheet improved further during the financial year and remains one of the key strengths of KWS. Net debt declined significantly to less than EUR 9 million at year-end. I think few companies in our industry operate with a balance sheet as strong as ours today. As a result, we enter the financial year with exceptional financial flexibility, and this gives us considerable scope to continue investing in R&D to support the growth of our existing businesses and pursue attractive opportunities if they create long-term value for our shareholders. Our balance sheet is stronger than ever, and it provides a very solid foundation for the growth of KWS. We remain committed to predictable and sustainable dividend growth. Based on the results achieved, we propose to increase the dividend to EUR 1.30 per share.

Speaker #4: So, our balance sheet improved further during the financial year and remains one of the key strengths of KWS. Net debt declined significantly to less than €9 million at year-end, and I think few companies in our industry operate with a balance sheet as strong as ours today.

Speaker #4: And as a result, we enter the financial year with exceptional financial flexibility. This gives us considerable scope to continue investing in R&D, to support the growth of our existing businesses, and pursue iterative opportunities if they create long-term value for our shareholders.

Jörn Andreas: As a result, we enter the financial year with exceptional financial flexibility, and this gives us considerable scope to continue investing in R&D to support the growth of our existing businesses and pursue attractive opportunities if they create long-term value for our shareholders. Our balance sheet is stronger than ever, and it provides a very solid foundation for the growth of KWS. We remain committed to predictable and sustainable dividend growth. Based on the results achieved, we propose to increase the dividend to EUR 1.30 per share.

Speaker #4: So, our balance sheet is stronger than ever, and it provides a very solid foundation for the growth of KWS. And we remain committed. We remain committed to predictable and sustainable dividend growth.

Speaker #4: Based on the results achieved, we propose to increase the dividend to €1.30 per share. This represents another year of dividend growth and results in a payout ratio of approximately 29%, which is fully in line with our dividend policy.

Jörn Andreas: This represents another year of dividend growth and results in a payout ratio of approximately 29%, which is fully in line with our dividend policy. Since the financial year 2019/20, our dividend has actually increased from 70 cents to the proposed EUR 1.30 per share, which represents a compounded annual growth rate of approximately 11%. I think that's a very strong commitment to creating sustainable value for our shareholders over time, and we will continue on this path. Let me conclude with outlook. For 2026/27, we expect organic sales growth of around 3% in the assumption of better market conditions, which is what we currently see. Commodity prices have recovered substantially over the last weeks. Driven by various factors, current levels bode well for better acreage development and improved farm profitability in the upcoming season.

Speaker #4: So, since the financial year 2019/20, our dividend has actually increased from €0.70 to the proposed €1.30 per share, which represents a compounded annual growth rate of approximately 11%. I think that's a very strong commitment to creating sustainable value for our shareholders over time, and we will continue on this path.

Jörn Andreas: Let me conclude with outlook. For 2026/27, we expect organic sales growth of around 3% in the assumption of better market conditions, which is what we currently see. Commodity prices have recovered substantially over the last weeks. Driven by various factors, current levels bode well for better acreage development and improved farm profitability in the upcoming season. In combination with our diversified portfolio and our strong market positions, we feel well-prepared to return to stronger flows next year.

Speaker #4: Let me conclude with outlook. For 2027, we expect organic sales growth of around 3%, based on the assumption of better market conditions, which is what we currently see.

Speaker #4: Commodity prices have recovered substantially over the last weeks, driven by various factors. Current levels bode well for better acreage development and improved farm profitability in the upcoming season.

Jörn Andreas: In combination with our diversified portfolio and our strong market positions, we feel well-prepared to return to stronger flows next year. For profitability, we expect an EBITDA margin between 19% to 20%, and this also remains fully in line with our midterm ambition and continues to include also substantial investments in R&D. Overall, we enter the financial year with good confidence in profitable growth. Before moving to Q&A, let me briefly remind you on our vegetables and investor analyst seminar in Andijk next week. We have fantastic participation and we really look forward to discussing the development and long-term potential of this business in much greater detail. You will see this on-site, you will get to taste and feel our products and that will be, I think, a very great event. Looking forward to it. For now, let me close with three takeaways.

Speaker #4: And in combination with our diversified portfolio and our strong market positions, we feel well prepared to return to stronger flows next year. For profitability, we expect an EBITDA margin between 19% and 20%, and this also remains fully in line with our mid-term ambition and continues to include substantial investments in R&D.

Jörn Andreas: For profitability, we expect an EBITDA margin between 19% to 20%, and this also remains fully in line with our midterm ambition and continues to include also substantial investments in R&D. Overall, we enter the financial year with good confidence in profitable growth. Before moving to Q&A, let me briefly remind you on our vegetables and investor analyst seminar in Andijk next week. We have fantastic participation and we really look forward to discussing the development and long-term potential of this business in much greater detail.

Speaker #4: So, overall, we enter the financial year with good confidence in profitable growth. So, before moving to Q&A, let me briefly remind you about our Vegetables and Investor Analyst Seminar in Undyk next week.

Speaker #4: We have fantastic participation, and we really look forward to discussing the development and long-term potential of this business in much greater detail. You will see this on-site.

Jörn Andreas: You will see this on-site, you will get to taste and feel our products and that will be, I think, a very great event. Looking forward to it. For now, let me close with three takeaways. First, we delivered a resilient profitability despite significant market headwinds. Second, we generated strong cash flow and further strengthened our already very healthy balance sheet. Third, we continue to invest. We continue to invest in innovation, in future growth while maintaining financial discipline. Taken together, I think these achievements leave us well-positioned for the year ahead and that makes us really confident.

Speaker #4: You will get to taste and feel our products, and that will be, I think, a very great event. So, looking forward to this. For now, let me close with three takeaways.

Jörn Andreas: First, we delivered a resilient profitability despite significant market headwinds. Second, we generated strong cash flow and further strengthened our already very healthy balance sheet. Third, we continue to invest. We continue to invest in innovation, in future growth while maintaining financial discipline. Taken together, I think these achievements leave us well-positioned for the year ahead and that makes us really confident. Thank you very much for your attention and Peter and I are now happy to answer all your questions.

Speaker #4: First, we delivered resilient profitability despite significant market headwinds. Second, we generated strong cash flow and further strengthened our already very healthy balance sheet.

Speaker #4: And third, we continue to invest. We continue to invest in innovation and future growth, while maintaining financial discipline. Taken together, I think these achievements leave us well positioned for the year ahead, and that makes us really confident.

Speaker #4: So, thank you very much for your attention, and Peter and I are now happy to answer all your questions.

Jörn Andreas: Thank you very much for your attention and Peter and I are now happy to answer all your questions.

Speaker #1: Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press star 9 and the pound key on your telephone keypad.

Operator: Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press star nine and pound key on your telephone keypad. If you would like to revoke your question, press star three and pound key. You can also use the dial-in function in the webcast and raise your hand if you would like to ask a question by phone. The first question is from Michael Schäfer from ODDO BHF. Please go ahead. The floor is yours.

Speaker #1: If you would like to revoke your question, press star 3 and the pound key. You can also use the dial-in function in the webcast and raise your hand if you would like to ask a question by phone.

Speaker #1: So, the first question is from Michael Schaefer from Odo BHF. Please go ahead, the floor is yours.

Michael Schäfer: Yeah. Good morning, gentlemen. Thanks for taking my questions. The first one would be on your sugar beet segment outlook. Jörn, you mentioned the 10% decline in global acreage in the past season, and obviously we have seen sugar prices that are in a rather strong recovery in recent months. I wonder what you have baked into your slight organic sales growth outlook on the top line. Shall we think about some more price pressure? For me, it looks like a rather conservative statement on that one. This will be my first question. The second one is on cereals, on rapeseed. You said that you gained market share and you may overtake the number one position in the next season. Can you just give us a bit of color? What's the delta in terms of market share to the number one in the segment?

Speaker #2: Good morning, gentlemen. Thank you for taking my questions. My first question is regarding your outlook for the sugar beet segment. You mentioned a 10% decline in global acreage in the past season, and we've seen sugar prices show a strong recovery in recent months.

Speaker #2: So, I wonder what you have baked into your slide on organic sales growth outlook for the top line. Should we expect more price pressure, or, to me, it looks like a rather conservative statement on that one.

Speaker #2: This would be my first question. The second one is on cereals, on rapeseed. Well, you said that you gained market share and you may overtake the number one position in the next season.

Michael Schäfer: The second one is on cereals, on rapeseed. You said that you gained market share and you may overtake the number one position in the next season. Can you just give us a bit of color? What's the delta in terms of market share to the number one in the segment? Last not least on Russia. Obviously, there was some setbacks in corn. On a more, let's say, general or more broader terms, how should we think about your Russian business in general? Is there also a risk to the sugar beet segment? What's your view on the region and how it's affecting the respective segments?

Speaker #2: So, can you just give us a bit of color on what the delta is in terms of market share compared to the number one in the segment?

Speaker #2: And last but not least, on Russia, there were obviously some setbacks in corn. On a more general, or broader terms, how should we think about your Russian business in general?

Michael Schäfer: Last not least on Russia. Obviously, there was some setbacks in corn. On a more, let's say, general or more broader terms, how should we think about your Russian business in general? Is there also a risk to the sugar beet segment? What's your view on the region and how it's affecting the respective segments? This would be my three questions for the beginning. Thanks.

Speaker #2: Is there also a risk to the sugar beet segment, or what's your view on the region, and how is it affecting the respective segments?

Michael Schäfer: This would be my three questions for the beginning. Thanks.

Speaker #2: These would be my three questions for the beginning. Thanks.

Jörn Andreas: Questions. First of all, yes, sugar beet outlook. That's all estimates on the acreage reduction last year that we mentioned. Exactly because of, let's say, this, we were a bit more cautious, to be honest. You might label it conservative. We say more cautious, let's say, on when we put together the outlook, let's say, yeah. Our current data that we have, we'll say is more positive. That's what you also said. That's true. We saw a strong increase in sugar prices also reflecting also some El Niño, let's say, effects in India and Thailand. We have here not a great harvest, which is putting more bullish, let's say, sectors, let's say, on the prices. We see also not good or not great yields in Europe. I'm talking about the heat waves in certain parts of Southern Europe, of the southern part of Germany.

Speaker #3: Questions. So, first of all, yes, sugar beet outlook. That's the obvious estimate linked to the acreage reduction last year that we mentioned. And exactly because of this, we were a bit more cautious—to be honest, you might label it conservative.

Speaker #3: We say more cautious, let's say, on when we put together the outlook, let's say. So, our current, let's say, data that we have would say is more positive.

Speaker #3: That's what you also said, that's true. We saw a strong increase in sugar prices, also reflecting some linear effects in India and Thailand.

Speaker #3: So, we have here not a great harvest, which is, yeah, putting more bullish, let’s say, sectors, let’s say, on the prices. We see also not good or not great yields in Europe.

Jörn Andreas: We have here not a great harvest, which is putting more bullish, let's say, sectors, let's say, on the prices. We see also not good or not great yields in Europe. I'm talking about the heat waves in certain parts of Southern Europe, of the southern part of Germany. That leaves also clearly a mark on the supply and that bodes well for us. A big driver of the acreage reduction last year was the supply and demand balance. Of course, we came from 2 years of very good harvest.

Speaker #3: I'm talking about the heat wave in certain parts of southern Europe, also the southern part of Germany. So, that clearly also leaves a mark on the supply.

Jörn Andreas: That leaves also clearly a mark on the supply and that bodes well for us. A big driver of the acreage reduction last year was the supply and demand balance. Of course, we came from 2 years of very good harvest. We believe that actually this year Europe will be completely balanced out its inventory, will also be a net importer because we not have enough own-produced sugar supply. Means we have rebalanced, let's say, supply and demand situation after this season. That provides us with a good starting point for the upcoming growing season. We've been a bit more conservative and said, okay, in our outlook, we work with a stable acreage. That means we have not put in, I would say, very optimistic assumptions in our outlook, yeah, in order to be here also more on safe side.

Speaker #3: And so, that bodes well for us. A big driver of the acreage reduction last year was the supply and demand balance, because we have come off two years of very good harvests.

Speaker #3: So, we believe that actually this year Europe will completely balance out its inventory. We'll also be a net importer because we'll not have enough, let's say, own-produced sugar supply.

Jörn Andreas: We believe that actually this year Europe will be completely balanced out its inventory, will also be a net importer because we not have enough own-produced sugar supply. Means we have rebalanced, let's say, supply and demand situation after this season. That provides us with a good starting point for the upcoming growing season. We've been a bit more conservative and said, okay, in our outlook, we work with a stable acreage. That means we have not put in, I would say, very optimistic assumptions in our outlook, yeah, in order to be here also more on safe side.

Speaker #3: That means we have a rebalanced, let's say, supply-demand situation after this season. And that, you know, provides us with a good starting point for the upcoming growing season.

Speaker #3: So, we've been a bit more conservative and said, okay, in our outlook, we work with a stable acreage. That means we have not put in, I would say, very optimistic assumptions in our outlook.

Speaker #3: In order to be here also more on the safe side, and if that trend continues, and if we see in October really the results of the harvest—that we see already today in the trial harvests that are already, of course, happening—then I think that this gives us also some opportunities, because we will also continue to further increase the penetration of Compiso and CA+, which anyway will also then help us on the growth side.

Jörn Andreas: If that trend continues and if we see in October really the results of the harvest that we see already today in the trial harvest that are already positioning, then I think that this gives us also some opportunities. Because we will also continue to further increase the penetration of CONVISO and ATREAplus, which anyway will also then help us on the growth side. Oilseed rape. That's a fantastic situation for us. You know that this is basically the first quarter of our fiscal year, it's the most important quarter for oilseed rape. That's when all the planting happens, let's say, for the current season. We had a fantastic start, I have to say, yeah, to the new fiscal year. Strong growth in oilseed rape.

Speaker #3: Obviously, great. It's a fantastic situation for us. And you know that this is basically the first quarter of our fiscal year—the most important quarter for Oilseed Rape.

Speaker #3: That's basically where the planting now happens for the current season. And we had a fantastic start, I have to say, to the new fiscal year.

Jörn Andreas: We had a fantastic start, I have to say, yeah, to the new fiscal year. Strong growth in oilseed rape. When we say we want to become the leader, let's say, in Europe now in the upcoming growth season, I have to say it actually happened. Yeah. We are now number one. We have gained market share from all key markets and that is for us really a situation where star in mind because oilseed rape prices are, of course, very high. Commodity prices are high.

Speaker #3: Strong growth in Oilseed Rape. So, you know, when we say, hey, we want to become the leader, let's say, in Europe now in the upcoming growing season, I have to say, it actually happened.

Jörn Andreas: When we say we want to become the leader, let's say, in Europe now in the upcoming growth season, I have to say it actually happened. Yeah. We are now number one. We have gained market share from all key markets and that is for us really a situation where star in mind because oilseed rape prices are, of course, very high. Commodity prices are high. There's literally incentive for the farmer to move into oilseed rape if, let's say, the computation allows and that hits, let's say, a market or a portfolio where we have the best product in the market. That helps us really good and we had a good start. Yeah. Russia is, of course, still a moving target, if you want, the dynamic situation.

Speaker #3: So, we are now number one. We have gained market share from all key markets, and that is for us, you know, really a situation where, you know, we started nine because oilseed rape prices are, of course, very high—commodity prices are high.

Speaker #3: So, that's initially incentive for the farmer to move into oilseed rape if, let's say, the crop rotation allows. And that's it, let's say, okay, a market or a portfolio where, you know, we have the best product in the market.

Jörn Andreas: There's literally incentive for the farmer to move into oilseed rape if, let's say, the computation allows and that hits, let's say, a market or a portfolio where we have the best product in the market. That helps us really good and we had a good start. Yeah. Russia is, of course, still a moving target, if you want, the dynamic situation. It is largely unchanged, I would say, compared to all the previous calls when we were discussing the situation. It remains for us still a revenue contributor of less than 10%, let's say, to the overall KWS portfolio. That has also not changed, let's say.

Speaker #3: So, that helps us really well, and we had a good start. Russia, yeah, Russia is of course still, you know, a moving target—if you want—a dynamic situation.

Jörn Andreas: It is largely unchanged, I would say, compared to all the previous calls when we were discussing the situation. It remains for us still a revenue contributor of less than 10%, let's say, to the overall KWS portfolio. That has also not changed, let's say. For our sugar beet business, I told you already that for cereals and corn, that's anyway any more an opportunistic business, let's say. Also that anyway, very low, let's say, in terms of revenue contribution if at all. Sugar beet is the remaining key business that we have. We do not see, let's say, that any local production will be able to match the performance requirements necessary in order to supply the demand, let's say, in the domestic demand. We don't see that. Currently it's operating, so it's pretty stable.

Speaker #3: It is largely unchanged, I would say, compared to all the previous quarters when we were discussing the situation. So, it remains for us still a revenue contributor with less than 10%, let's say, to the overall KDOS portfolio.

Speaker #3: So, that has also not changed, let's say, yeah. For our sugar beet business, I told you already that for cereals and corn, there is anyway anymore an opportunistic business, let's say, yeah.

Jörn Andreas: For our sugar beet business, I told you already that for cereals and corn, that's anyway any more an opportunistic business, let's say. Also that anyway, very low, let's say, in terms of revenue contribution if at all. Sugar beet is the remaining key business that we have. We do not see, let's say, that any local production will be able to match the performance requirements necessary in order to supply the demand, let's say, in the domestic demand. We don't see that. Currently it's operating, so it's pretty stable. But of course, no one can predict the future, but so far, so good.

Speaker #3: So, that's anyway very low, let's say, in terms of revenue contribution, if at all. So, sugar beet is the remaining key business that we have.

Speaker #3: And we do not see, let's say, that any local production will be able to match the performance requirements necessary in order to supply the demand, let's say, the domestic demand.

Speaker #3: So, we don't see that. Currently, it's operating, so it's pretty stable. But of course, no one can predict the future, but so far, so good.

Jörn Andreas: But of course, no one can predict the future, but so far, so good.

Speaker #2: Thank you very much.

Michael Schäfer: Thank you very much.

Operator: The next question is from Christian Faitz from Kepler Cheuvreux. The floor is yours.

Speaker #1: Very much. The next question is from Christian Fites from Kepler Cheuvreux. The floor is yours.

Operator: The next question is from Christian Faitz from Kepler Cheuvreux. The floor is yours.

[Analyst] (Kepler Cheuvreux): Yes, thanks. Good morning, Jörn, Peter, and team. A couple of questions remaining, please. I will ask my battery questions next week. First of all, you talked about, obviously, the oilseed rape business, which seems to be going well into the new season. Can you talk a bit about your cereals business, such as, for example, winter wheat, how that is going, also given higher wheat prices into the seeding season? Second, just a minor question, but can you please elucidate a bit the antitrust investigation you seem to be facing in France? Thanks very much.

Christian Faitz: Yes, thanks. Good morning, Jörn, Peter, and team. A couple of questions remaining, please. I will ask my battery questions next week. First of all, you talked about, obviously, the oilseed rape business, which seems to be going well into the new season. Can you talk a bit about your cereals business, such as, for example, winter wheat, how that is going, also given higher wheat prices into the seeding season? Second, just a minor question, but can you please elucidate a bit the antitrust investigation you seem to be facing in France? Thanks very much.

Speaker #2: Yes, thanks. Good morning, Jorn, Peter, and team. A couple of questions remaining, please. I'll ask my batch of questions next week. First of all, you talked about the Oilseed Rape business, which seems to be going well into the new season.

Speaker #2: Can you talk a bit about your cereals business, such as, for example, winter wheat and how that is going? Also, given higher wheat prices going into the seeding season.

Speaker #2: And second, just a minor question, but can you please elucidate a bit the antitrust investigation you seem to be facing in France? Thanks very much.

Jörn Andreas: Yeah, very good. Of course, looking forward to your battery questions next week. Thanks then. For cereals in general, I would say that we have a very diversified portfolio in cereals, and in all crops that we operate in cereals, we are the leader in Europe. Also where we have now gained number one position in hybrid rye anyway, we are by far number one, and same for wheat and for barley as well. So it is a really good position to be in. For the other winter crops, last year was a bit, I would say more challenging because of the low commodity prices last year. Farmers were more to plant safe seed, so basically our revenue was more or less stable. We were not able really to increase, let us say, revenue in this situation.

Speaker #3: Yeah, very good. Of course, looking forward to the key questions next week. So, now for cereals in general, I would say that we have a very diversified portfolio in cereals and in all crops that we operate in cereals.

Speaker #3: We are the dealer in Europe. So, Oilseed Rape—we've now gained the number one position in hybrid rye, by far number one. And the same for wheat and for barley as well.

Speaker #3: So, it's a really good position to be in. So, for the other bidder crops, last year was a bit, I would say, more challenging because of the low, let's say, commodity prices last year.

Jörn Andreas: Farmers were more to plant safe seed, so basically our revenue was more or less stable. We were not able really to increase, let us say, revenue in this situation. For the coming year, we are more confident because at some point in time, the farmer needs also to purchase fresh new seeds in order to catch up also with the yield expectation. On that side, we are also confident. But I would say overall, if you look at the crop rotation, the winter cereals business, of course, a residual loser, let us say, if you look at the overall agricultural crop rotation. Because sugar prices are going up.

Speaker #3: Farmers also turned more to farm-based seed. So, basically, our revenue was more or less stable. We were not really able to increase, let's say, the revenue in this situation.

Jörn Andreas: For the coming year, we are more confident because at some point in time, the farmer needs also to purchase fresh new seeds in order to catch up also with the yield expectation. On that side, we are also confident. But I would say overall, if you look at the crop rotation, the winter cereals business, of course, a residual loser, let us say, if you look at the overall agricultural crop rotation. Because sugar prices are going up. Anyway, if the farmer would be, let us say, completely unconstrained, would plant as much sugar as possible. Oilseed rape is very good, so that will be also a very strong drive to plant more oilseed rape. Corn prices have increased, so that might also help also to move some acreage to corn.

Speaker #3: So, for the coming year, we are more confident, yeah, because at some point in time, the farmer needs also to, you know, purchase fresh, new seeds and also catch up with the yield.

Speaker #3: Expectation. So, on that side, we are also confident, but I would say overall, let's say, if you look at the crop rotation, the winter cereal business is of course a residual loser, let's say, if you look at the overall, let's say, agricultural crop rotation.

Speaker #3: Because sugar prices are going up, and anyway, if the farmer, you know, would be, let's say, completely unconstrained, they would, you know, plant as much sugar as possible.

Jörn Andreas: Anyway, if the farmer would be, let us say, completely unconstrained, would plant as much sugar as possible. Oilseed rape is very good, so that will be also a very strong drive to plant more oilseed rape. Corn prices have increased, so that might also help also to move some acreage to corn. I would say overall, let us say the other winter fields are the residual loser, let us say. But within this market, which we would deem will be stable, maybe slightly increasing, we hope that we can gain more share by our business coming from this more stronger farm safe seed situation last year.

Speaker #3: Oilseed rape is very good. So, that will also be a very strong driver to plant more oilseed rape. Corn prices have increased, so that might also help to move some acreage to corn.

Jörn Andreas: I would say overall, let us say the other winter fields are the residual loser, let us say. But within this market, which we would deem will be stable, maybe slightly increasing, we hope that we can gain more share by our business coming from this more stronger farm safe seed situation last year. That is I think how I would describe the situation. That is also how we see as the start of the year, the rise is pretty stable after the decline last year. So it really stabilized and also even slightly growing. That is what we see for the others as well. Overall, I think a good start. Yeah. Then the second question. Antitrust. That is basically unchanged to what we also discussed after nine months.

Speaker #3: So, I would say, overall, let’s say, the other winter cereals are the residual loser, let’s say, yeah, but within this market, which we would deem will be, you know, stable—maybe slightly increasing—we hope that we can gain more share by, you know, our business coming from this, you know, more strong farm-based seed situation last year.

Jörn Andreas: That is I think how I would describe the situation. That is also how we see as the start of the year, the rise is pretty stable after the decline last year. So it really stabilized and also even slightly growing. That is what we see for the others as well. Overall, I think a good start. Yeah. Then the second question. Antitrust. That is basically unchanged to what we also discussed after nine months. There is a situation that for the cereals business in France, there is a certain mechanism that is also transparent, it is public, everyone can see it on the website, where prices for royalties and the basic seeds are set.

Speaker #3: So, I think that's how I would describe the situation. That's also how we see it as a start to the year. So, rye is pretty stable after the decline last year.

Speaker #3: So, it’s really stabilized, and it’s even slightly growing. That’s what we see for the others as well. So, overall, I think it’s a good start.

Speaker #3: And then there was a second question. Yeah. So, that is basically unchanged from what we also discussed after nine months. So, there is a situation that, for the cereals business in France, you know, there's a certain mechanism that's also transparent and public.

Jörn Andreas: There is a situation that for the cereals business in France, there is a certain mechanism that is also transparent, it is public, everyone can see it on the website, where prices for royalties and the basic seeds are set. That is also done in conjunction also with French authorities. There is a question whether this mechanism, let us say, is compliant and future-oriented or not. In order to be prudent, we took a provision of EUR 5 million, but we, as well as all other market participants, reject this claim because it is a practice since 30 years. It has been looked at many times. It is public, let us say. But it is what it is. It is now on our balance sheet as a provision, and then we will see how it develops, but we will be defending our position and reject this claim.

Speaker #3: Everyone can see it on the website, where prices for royalties and the basic seed are set, you know, that is also done basically in conjunction also with, you know, French authorities.

Jörn Andreas: That is also done in conjunction also with French authorities. There is a question whether this mechanism, let us say, is compliant and future-oriented or not. In order to be prudent, we took a provision of EUR 5 million, but we, as well as all other market participants, reject this claim because it is a practice since 30 years. It has been looked at many times. It is public, let us say. But it is what it is. It is now on our balance sheet as a provision, and then we will see how it develops, but we will be defending our position and reject this claim.

Speaker #3: And there is a question whether this mechanism, let's say, is compliant and also future-oriented or not, let's say, yeah. And in order to be prudent, we took a provision of €5 million, but we, as well as all other market participants, reject this claim because it's a practice since 30 years.

Speaker #3: It's been looked at many times. It's public, let's say, yeah. So, well, but it is what it is. It's not on our balance sheet as a provision.

Speaker #3: And then we'll see how it develops, depending, of course, on our position. And we reject this claim.

[Analyst] (Kepler Cheuvreux): Okay, great. Thanks very much, Jörn. If I may, one last question. You talked about Russia, but how is the business going for you in Ukraine, at this point in time?

Christian Faitz: Okay, great. Thanks very much, Jörn. If I may, one last question. You talked about Russia, but how is the business going for you in Ukraine, at this point in time?

Speaker #2: Okay, great. Thanks very much, Jorn. If I may, one last question—you talked about Russia, but how are things going for you in Ukraine at this point in time?

Jörn Andreas: Luke, Ukraine is actually going well, I have to say. I say this with some tonality, let us say, because we are very in close contact with our people in Ukraine. Last week, our board member basically was also in Ukraine visiting the teams and the site, which of course was an important one for us. I can tell you, the pressure on the teams locally is significant. We are just very grateful and a lot of respect for our team that within, let us say, conditions, we again, increased our revenue in Ukraine and a significant, I would say, single-digit amount. Business is valid, is growing and of course we have also a portfolio which helps us a lot also in these days in Ukraine.

Speaker #3: Look, you know, Ukraine is actually going well. I have to say, yeah. And I say this with, yeah, with some tonality, let's say, because we are in very close contact with our people in Ukraine.

Speaker #3: So, last week, a board member was also in Ukraine, visiting the teams and the site, which, of course, was an important one for us.

Speaker #3: I can tell you, I mean, the pressure on the teams locally is significant. And we are, I mean, just very grateful and have a lot of respect for our people that are within these, let's say, conditions.

Speaker #3: We again, let's say, increased our revenue in Ukraine by a significant, I would say, single-digit amount, yeah. So, business is valid; it's growing. And, of course, we have also a portfolio which helps us a lot, also in these days in Ukraine.

Jörn Andreas: Business is valid, is growing and of course we have also a portfolio which helps us a lot also in these days in Ukraine. If you think about oilseed rape, if you think about corn, et cetera, if you think about sunflower, where also the growth is coming from that area. It is actually going well, despite, of course, very challenging conditions.

Jörn Andreas: If you think about oilseed rape, if you think about corn, et cetera, if you think about sunflower, where also the growth is coming from that area. It is actually going well, despite, of course, very challenging conditions.

Speaker #3: If you think about oilseed rape, if you think about corn, et cetera, if you think about sunflower, we're also seeing growth coming from that area.

Speaker #3: So, it's actually going well, despite, of course, very, very challenging conditions.

Speaker #2: Thank you very much. See you next time.

[Analyst] (Kepler Cheuvreux): Thank you very much. See you next week.

Christian Faitz: Thank you very much. See you next week.

Jörn Andreas: See you next week, Luke.

Speaker #3: Yeah, great.

Operator: Before we move on to the next question, I would like to repeat, if you would like to ask a question, please press star nine and pound key on your telephone keypad, or use the dial-in function on the webcast and raise your hand. The next question is from Leon Mühlenbruch from mwb research. Please go ahead.

Speaker #1: Before we move on to the next question, I would like to repeat: if you would like to ask a question, please press star-nine and pound key on your telephone keypad, or use the dial-in function in the webcast and raise your hand.

Speaker #1: Next question is from Leon Mullenbruch from MWB Research. Please go ahead.

Leon Mühlenbruch: Hello, everyone. Thank you for taking my question. You already answered my question on the market environment and the drivers of your expected recovery. My follow-up on this would be, as you mentioned, the potential impact of El Niño and the potential improvements in sugar. Could a strong El Niño event also negatively affect your business overall, especially the other segments? My second question would be to the margins. Your current margin target is 19% to 20%. What could be a driver to move above 20% in the long term?

Speaker #4: Hello everyone. Thank you for taking my question. You have already answered my question on the market environment and the drivers of your expected recovery.

Speaker #4: My follow-up on this would be, as you mentioned, the potential impact of El Niño and the potential improvements in sugar. Could a strong El Niño event also negatively affect your business overall?

Speaker #4: So, especially the other segments. And my second question would be regarding the margins. Your current margin target is 19% to 20%. What could be a driver to move above 20% in the long term?

Jörn Andreas: Very good question. El Niño, of course, you already read it on the news, we had a very pronounced El Niño this year that already affected some of the important growing regions in Asia, in particular India and Thailand. Those are also the key regions for us that influence the global sugar prices. That has already a mark on the commodity prices, because the harvest is not going as expected, because you have a lot of the drought, you don't emit the rainfall, and that has an impact, let's say, on the harvest. You have then the counter effect, basically Latin America, where you have the heavy rainfall parts of Brazil, you have the heavy rainfall in Argentina. For some of the areas, it could be then also beneficial, let's say.

Speaker #3: Very good question. Yeah. So, El Niño, of course—I mean, you already saw the news. We had a very pronounced El Niño this year.

Speaker #3: That has already affected some of the important growing regions in Asia, in particular India and Thailand. Those are also the key regions for us that influence, I would say, global sugar prices.

Speaker #3: And that is, okay, that's already a mark on the commodity prices. Because the harvest is not going as expected, because you have a lot of, let's say, drought, you don't, you miss a rainfall, and that has an impact, let's say, on the harvest.

Speaker #3: If you look at the counter effect—basically, in Latin America, where you have areas of heavy rainfall in Brazil, you also have heavy rainfall in Argentina.

Jörn Andreas: You have then the counter effect, basically Latin America, where you have the heavy rainfall parts of Brazil, you have the heavy rainfall in Argentina. For some of the areas, it could be then also beneficial, let's say. Usually Argentina is a winner from El Niño and Brazil can be both directions. We also have very different growing regions in Brazil. So I would say for sugar, it's a positive, let's say, driver and that's already materializing.

Speaker #3: And for some areas, it could then also be beneficial, let's say, yeah. So, usually Argentina is the winner from El Niño, and for Brazil, it can go in both directions, because you also have very different growing regions in Brazil.

Jörn Andreas: Usually Argentina is a winner from El Niño and Brazil can be both directions. We also have very different growing regions in Brazil. So I would say for sugar, it's a positive, let's say, driver and that's already materializing. For the other crops, you cannot really say, you didn't expect that there could be one or the other direction because losses in one side of the, let's say, globe could be compensated theoretically on other sides. It's very dependent really on conditions. If you have super heavy rainfall, then you can also not harvest better yields, for example. So I would say on the other part, it's really more balanced, I would say, the effect. We don't expect any big, let's say, movement. That's also experience that we have looking in the past, because we have this El Niño effect, of course, every few years.

Speaker #3: So, I would say for sugar, it's a positive driver, and that's already materializing. For the other crops, you cannot really say—it's really an expectation that there could be movement in one or the other direction, because losses on one side of the globe could theoretically be compensated on the other side, which then is really dependent on the local conditions.

Jörn Andreas: For the other crops, you cannot really say, you didn't expect that there could be one or the other direction because losses in one side of the, let's say, globe could be compensated theoretically on other sides. It's very dependent really on conditions. If you have super heavy rainfall, then you can also not harvest better yields, for example. So I would say on the other part, it's really more balanced, I would say, the effect. We don't expect any big, let's say, movement. That's also experience that we have looking in the past, because we have this El Niño effect, of course, every few years.

Speaker #3: If you have super heavy rainfall, then you also cannot harvest. You know, it's a better yield, for example. Yeah. So I would say, on the other parts, it's really more balanced.

Speaker #3: I would say, regarding the effect, we don't expect any big, let's say, movement. And that's also the experience that we have looking at the past, because we have an El Niño effect, of course, every few years.

Jörn Andreas: That's also the experience that we've made in previous situations. On the other ones, we are more, let's say, neutral, I would say. In terms of margin, yes. We continue to invest in our business. We said, okay, we want to keep the margin expectation between 19% and 28% for the time being. But of course, if we are benefiting from better acreage, then this will have significant operating leverage in our business. That will help us clearly to move also margin above 20%. Our midterm target is between 19% and 21%, so means midpoint is 20%. That's nothing that we want to achieve in the far future, but this was something that we want to achieve every year. That's why, we are very cautious more at the beginning of the year.

Speaker #3: And that's also the experience that we've had in previous situations, yeah. So, on the other ones, we are more, let's say, neutral, I would say, yeah.

Speaker #3: In terms of margin, yes. So, we continue to invest in our business. That's why we said, okay, we want to, you know, keep the margin expectation between 19% and 20% for the time being.

Speaker #3: But of course, if we are benefiting from a better acreage, that will, this will have significant operating leverage in our business. And that will help us clearly to move also the margin above 20%, yeah.

Speaker #3: And our, you know, mid-term target is between 19% and 21%. So, the midpoint is 20%. And that's nothing but what we want to achieve in the far future.

Jörn Andreas: That's nothing that we want to achieve in the far future, but this was something that we want to achieve every year. That's why, we are very cautious more at the beginning of the year. But we feel confident that, with what we have in our hands, we will be able to get there.

Speaker #3: But this is something that we want to achieve every year, yeah. So that's why we have been more cautious at the beginning of the year.

Speaker #3: But we feel confident that, you know, with what we have in our hands, we will be able to get there.

Jörn Andreas: But we feel confident that, with what we have in our hands, we will be able to get there.

Leon Mühlenbruch: Okay, perfect. Thank you. See you next week.

Speaker #1: Okay, perfect. Thank you. See you next week.

Jörn Andreas: See you.

Speaker #3: Exactly.

Speaker #1: Thank you very much. At the moment, there seem to be no further questions. I'll repeat again: if you would like to ask a question, please press star nine and the pound key on your telephone keypad.

Operator: Thank you very much. At the moment, there seems to be no further questions. I repeat again, if you would like to ask a question, please press star nine and pound key on your telephone keypad, or just use the dial-in function and raise your hand. We have Michael Schäfer from ODDO BHF on the line. Please go ahead.

Speaker #1: And, or you can just use the dial-in function and raise your hand. We have Michael Schaefer from BHF on the line. Please go ahead.

Speaker #2: Yeah, so thanks for taking my follow-up. Well, coming back to vegetables—and I don't want to preempt here on your next week's CMD—however, on the numbers.

Michael Schäfer: Well, thanks for taking my follow-up. Coming back to vegetables, and I do not want to preempt you on your next week's CMD. However, on the numbers, looking into, obviously, your reported -6.8% decline organically on the sales side. But looking into the details, I realized that you cut back significantly on the marketing spend, even on a relative basis compared to, let us say, historical levels. So I wonder whether you can give a bit more color, let us say, how challenging 2025, 2026 was for the segment and maybe on those kind of metrics, how we should think about going into 2026, 2027.

Speaker #2: So, looking into, obviously, your reported minus 6.8% decline organically on the sales side. But looking into the details, I realized that you cut back significantly on the marketing spend, even on a relative basis compared to, let's say, historical levels.

Speaker #2: So, I wonder whether you can give a bit more color—let's say, how challenging 2025 and 2026 were for the segment, and maybe on those kinds of metrics, how we should think about going into 2026 and 2027.

Speaker #3: Yeah, no, absolutely. And, you know, to say, I mean, we had an organic decline last year, but also, this is again very high compared with, of course, the previous year, where we've grown this by 16%.

Jörn Andreas: Yeah. No, absolutely. To say, we had a decline last year, but this is also against very high comparable, of course, in the previous year where it grew almost 16%. So over 2 years, it is the highest single digit growth. We were having, I would say, two, or I would say, three that happened. First was that we had a lower market demand in North America. Food service segment was with lower segments of demand. We had an order phasing, which was to be order phasing of an order slip from June into July. So that also made an impact because, okay, this is size was not as big as then not fully, I would say, unaffected by all the phasing effects. Then we also had these high comparables that I mentioned in the previous year.

Speaker #3: So, over two years, it's the highest single-digit growth. And we were having, I would say, two—or let's say, three—let's say, headwinds. First was that we had a lower market demand in North America.

Speaker #3: Food service segment was a bit lower, let's say, in terms of demand. We had an order phasing, which should be order phasing, because an order slipped from June into July.

Jörn Andreas: So that also made an impact because, okay, this is size was not as big as then not fully, I would say, unaffected by all the phasing effects. Then we also had these high comparables that I mentioned in the previous year. I think in that context, it is an okay result, and we definitely plan to come back to growth this year also in the vegetable segment. That is very clear now. On the question of selling expenses, it is a bit of an artifact, Michael, because we actually increased also the selling expenses. However, last year we had this one-off write-off of the Pop Vriend brand.

Speaker #3: So, that, you know, also made an impact because, okay, the business size was not as big as it then is, not fully, let's say, I would say, unaffected by this order phasing effect.

Speaker #3: And then we also had these high comparables that I mentioned in the previous year. Yeah, so I think in that context, it's an archaic result.

Jörn Andreas: I think in that context, it is an okay result, and we definitely plan to come back to growth this year also in the vegetable segment. That is very clear now. On the question of selling expenses, it is a bit of an artifact, Michael, because we actually increased also the selling expenses. However, last year we had this one-off write-off of the Pop Vriend brand. This basically was a EUR 10 million write-off coming from the purchase price allocation, and that is a bit, say, polluting the figures here. So if you take out, there is this EUR 10 million one-time write-off, brand write-off last year, then it is actually a size increase in selling expenses, which seems very consistent and continuing to build infrastructure both on the R&D side as well as on the good margin side.

Speaker #3: And we definitely plan to come back to growth this year also in the vegetable segment. That's very clear, yeah. On the question of selling spend, it's a bit of an artifact, Michael, because we actually increased also the selling expenses; however, last year we had this one-off write-off of the Popprint brand, yeah.

Speaker #3: And this, basically, was a $10 million write-off coming from the purchase price allocation. And that is a bit, let's say, polluting the figures here.

Jörn Andreas: This basically was a EUR 10 million write-off coming from the purchase price allocation, and that is a bit, say, polluting the figures here. So if you take out, there is this EUR 10 million one-time write-off, brand write-off last year, then it is actually a size increase in selling expenses, which seems very consistent and continuing to build infrastructure both on the R&D side as well as on the good margin side.

Speaker #3: So, if you take out—there’s this $10 million one-time brand write-off last year—then it’s actually a size increase in selling expenses, which means very consistent and continued building of infrastructure, both on the R&D side as well as on the go-to-market side.

Speaker #2: Okay, that's well understood. Thank you very much. Thanks.

Michael Schäfer: Okay, that is well understood. Thank you very much. Thanks.

Speaker #1: Great.

Jörn Andreas: Yeah.

Speaker #3: Yeah.

Speaker #1: Thank you very much. There seem to be no further questions. I thank everyone for your participation. With that, I would like to hand over to your host, Mr. Andreas, for the closing remarks.

Operator: Thank you very much. There seems to be no further questions. I thank everyone for your participation, and with that, I would like to hand over to your host, Mr. Andreas, for the closing remarks.

Speaker #3: All right. Thanks again. Yeah, no, just thank you again for your interest and time, of course, joining us this morning. And as Aurea mentioned for you also several times, looking forward to seeing you next week at our vegetables investor day in Undyke.

Jörn Andreas: Right. Thanks again. Yeah, just thank you again for your interest and time for joining us this morning. As already mentioned several times, looking forward to seeing you next week at our Vegetables Investor Day in Andijk. Looking forward to spending some time with you. With that, thank you and have a good day.

Browse all earnings call transcripts

Q4 2026 KWS SAAT SE & Co KgaA Earnings Call

Request TrialDemo

KWS SAAT SE & Co

Earnings