Shares in German seed company KWS SAAT SE & Co. KGaA fell nearly 8% to $72.50 on September 23 after the company reported fiscal 2025/26 results that showed strong margin performance offset by disappointing sales growth.
Net sales declined 3% to €1,627 million from €1,677 million a year earlier, while organic sales growth came in at minus 1%, missing both the original target of plus 3% and a revised target of roughly flat. The results weighed on investor sentiment despite a sharp improvement in profitability metrics.
Net income rose 13.1% to €158.4 million, and earnings per share increased 13.1% to €4.80. Adjusted EBITDA margin reached 19.3%, within the guided range of 19–21%, or 21.1% when including a one-time €29 million gain from the sale of North American corn license rights. On a reported basis, EBITDA was €343.1 million. Foreign exchange headwinds cost approximately €14 million in operating profitability.
The sugarbeet segment, KWS’s largest business, saw sales decline 2% to €854 million despite a roughly 10% reduction in global sugarbeet acreage. High-value varieties CONVISO SMART and CR+ accounted for 63% of segment sales, up from 61%. The segment’s EBITDA margin contracted to 41.9% from 45.5%, impacted by about €12 million in foreign exchange effects and the absence of an €8 million VAT provision reversal that boosted the prior year.
In corn, sales fell 5.3% to €434 million with organic growth down 1.6%, though comparable organic growth excluding Russia reached 2%. Silage corn market share in Europe rose to 16.8% from 15.9%, and grain corn share increased to 9.7% from 8.4%. Sunflower sales grew 35%. The corn segment’s EBITDA margin expanded sharply to 21.3% from 11.5%, with underlying margin at 14.6% versus 11.5% a year earlier.
The vegetables segment posted a deeper slump, with sales dropping 6.4% to €68 million as spinach demand weakened and bean sales fell 2%. An EBITDA loss of €25.8 million widened from €22.0 million due to ongoing breeding and infrastructure investments.
KWS dramatically reduced its net debt to €8.7 million from €61.6 million, bringing its leverage ratio to just 0.03 times EBITDA. Free cash flow held steady at €123 million. Operating cash flow declined to €173 million from €228 million on higher working capital needs, while investing cash flow improved to minus €50 million from minus €105 million.
The company proposed a dividend of €1.30 per share, up from €1.25, marking a compound annual growth rate of approximately 11% since fiscal 2019/20 when it stood at €0.70. The payout ratio of roughly 29% sits at the upper end of the 25–30% guidance range.
Other items included a €10 million gain from deconsolidating the AgReliant joint venture, a €5 million provision for a French antitrust investigation that management disputes, and a reminder that Russian operations represent less than 10% of the portfolio.
Looking ahead to fiscal 2026/27, KWS guided for organic sales growth of approximately 3%, in line with its mid-term target of 3–5%, and an EBITDA margin of 19–20% against a mid-term ambition of 19–21%.
The annual general meeting is scheduled for December 1, 2026.
