KWS SAAT SE & Co KGaA (KNKZF) (Q4 2026) Earnings Call Highlights: Resilient Margins, Strong ...

Q: On cereals and rapeseed, you mentioned gaining market share and potentially overtaking the number one position next season. Can you give color on the market share delta to number one? A: (CEO) For oilseed rape, we had a fantastic start to the new fiscal year with strong sales. We are now number one in Europe, having gained market share in all key markets. High prices incentivize farmers to grow oilseed rape, and we have the best product in the market.

Q: On Russia, how should we think about your Russian business in general? Is there also a risk to the sugar beet segment? A: (CEO) Russia remains a revenue contributor with less than 10% of the overall KWS portfolio, largely unchanged. For sugar beet, it is the remaining key business. We do not see local production matching domestic demand, so it is currently stable, but no one can predict the future.

Q: Can you talk about your cereals business, such as winter wheat, given higher wheat prices into the seeding season? A: (CEO) We have a very diversified cereals portfolio and are the leader in Europe in all crops we operate, including hybrid rye, wheat, and barley. Last year was challenging due to low commodity prices and on-farm saved seed, but we are more confident for the coming year as farmers need to purchase fresh seeds and catch up on yield expectations. Overall, the winter cereals business supports the crop rotation, and we hope to gain more share from a stronger farm income situation.

Q: Can you please elucidate a bit on the antitrust investigation you seem to be facing in France? A: (CEO) The situation is unchanged from what we discussed after nine months. In France, there is a transparent mechanism for setting prices for royalties and basic seed, done in conjunction with French authorities. There is a question whether this mechanism is compliant. To be prudent, we took a provision of EUR5 million, but we reject this claim as it has been in practice for 30 years and is public. We will see how it develops.

Q: How is the business going for you in Ukraine at this point in time? A: (CEO) Ukraine is actually going well. We increased our revenue in Ukraine by a significant single-digit amount. The business is growing, and our portfolio helps a lot in these days, especially oilseed rape, corn, and sunflower. Despite very challenging conditions, it is going well.

Q: Could a strong El Nino event also negatively affect your business overall, especially the other segments? A: (CEO) For sugar, El Nino is a positive driver, as it has affected India and Thailand, leading to poor harvests and higher prices. For other crops, the effect is more balanced. Losses in one region could be offset by gains in another. We do not expect big movements, based on past experience. Overall, we are more or less neutral for other crops.

Q: Your current margin target is 19% to 20%. What could be a driver to move above 20% in the long-term? A: (CEO) We continue to invest in our business and keep the margin expectation between 19% and 20% for now. If we benefit from better acreage, this will have significant operating leverage and help us move above 20%. Our midterm target is 19% to 21%, with a midpoint of 20%, which we want to achieve every year. We feel confident we can get there.

Q: On vegetables, you reported a 6.8% organic sales decline, and it seems you cut back significantly on marketing spend. Can you give more color on how challenging 2025-26 was and how we should think about 2026-27? A: (CEO) The decline was against very high comparables (16% growth previous year). We had lower demand in North America, order phasing from June into July, and high comparables. In that context, it is an okay-ish result. We plan to return to growth this year. On selling expenses, we actually increased them; last year had a one-off EUR10 million write-off of the Pop Vriend brand from purchase price allocation, which pollutes the figures. Excluding that, there was a slight increase in selling expenses, consistent with continued investment in infrastructure, R&D, and go-to-market.

Q: You delivered a resilient performance despite market headwinds. Can you summarize the key financial achievements for fiscal year 2025-26? A: (CEO) Sales reached EUR1.63 billion, with organic sales declining only 1% despite significant acreage reductions in sugar beet and corn. EBITDA came in at EUR343 million. Net income increased by more than 13% to EUR158 million, supported by an improved financial result. Free cash flow remained strong at approximately EUR123 million. Net debt dropped to less than EUR9 million, leaving an exceptionally strong balance sheet. We delivered three out of four targets in a tangent environment.

Q: What is your outlook for fiscal year 2026-27? A: (CEO) For 2026-27, we expect organic sales growth of around 3%, assuming better market conditions. Commodity prices have recovered substantially, which bodes well for better acreage development and improved farm profitability. For profitability, we expect an EBITDA margin between 19% and 20%, fully aligned with our midterm position and including substantial investments in R&D. Overall, we enter the financial year with good confidence in profitable growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .