KWS SAAT SE & Co. KGaA

Ladies and gentlemen, welcome to the KWS that quarterly reports nine months 2025-2026. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Jorn Andreas, Chief Financial Officer of KWS.

Thank you, and a warm welcome, everyone. This is Jorn Andreas, CEO of KWS. Thank you, everyone, for joining us today for our nine months, 25, 26 update. Before I take you through our financial results, let me start with the big picture. As you agriculture remains a challenging environment, ongoing political tensions, fluctuating commodity prices, and pressure on acreage and farm economics have reduced visibility only for our farmers, but also by extension for our industry. And yet, this is exactly where we as KDS prove our strength. In a challenging environment, we delivered a resilient top line, solid earnings, and a strong operational And this is not a coincidence. It affects three things, our diversified portfolio, our consistent execution, and our innovation-driven business model. Even in areas under pressure, such as the sugar beet acreage, we navigated the environment effectively. And importantly, our strong financial position and our leverage give us the flexibility to invest organically and also where it fits via M&A. From that perspective, let's move into the numbers. And as always, at this point, a quick reminder, some of the statements we will be making today are forward-looking and subject to risks and uncertainties. As always, please refer to slide two for the full disclaimer. Let me now walk you through the key figures. So, net sales reached 1.35 billion euros, slightly above prior year. On an organic basis, this translates into a 2.6% growth. And this was partly offset by currently of minus 1.8% and the portfolio effect of minus 0.5%. Every increase to 386.8 million from 360.8 million. And I'll come back to the drivers including the special items in a moment. Net income from continued operations rose to 220 million euros from 202.8 million, mainly driven by the improved EVDA and the better financial results. CapEx decreased to 56 million from 73.6 million last year, reflecting a normalization of our elevated prior year level across segments. Free cash flow was at minus 52.4 million compared to minus 3.9 million last year. The main drivers were a lower operating cash flow due to higher receivables backlog, partially offset by a payment related to the divestment of our North American corn business in Q1. The debt remained essentially stable at 179 million, and our trailing 12-month leverage improved 2.4 times APTA, down from 0.5 times. Overall, we are pleased with the result. In a nutshell, we see a resilient demand, strong APTA development, and an expected seasonality in our free cash flow. Now, turning to sales in more detail. Organic growth of 2.6% reflects a solid underlying demand across segments. However, our quarterly performance was also influenced by pull forward effects from Q4 into Q3 in certain regions, most notably in corn and to some extent also in sugar beet. Current effects mainly by the Turkish lira and the US dollar amounted to a minus 1.8% translation impact. And the portfolio effect of minus .5% primarily relates to the absence of R&D services invoiced to our former joint venture client. Now on profitability, EBITDA improved to 386.8 million and includes several special effects. So, let me strip this out for you. First, EBITDA includes a 29 million positive contribution from the sale of license rights in the North American corn business. Second, an 8 million effect relates to the reversal of the VAT provision in the sugar beet segment in the prior year comparison context. And finally, a currency effect of approximately $15 million, again, mainly driven by the Turkish lira and US dollar. Most of it was translational. Importantly, when adjusting for these special items, the PTA increased from $353 million to $357 million, supported by active cost mitigation measures. So, while special items supported the reported figures, the underlying profitability improved slightly. And this reflects the continent's discipline of cost and execution, which has been a key priority for us this year. Let's now turn to the segment review, starting with sugar beet. Sales increased to 703.8 million, including negative currency effects of 2.7%. Organic sales growth was plus 4.2%, reflecting both good forward effects and a higher share of innovation-led offerings. Specifically, our leading innovations, such as Convisio's Smart and Clear Plus, accounted for 62% of sales, up from 57% last year. So the mix shift was differentiated. Premium price product is continuum. And this success speaks again to the strength of our portfolio, as the global acreage in 2026 is estimated to shrink about to roughly 4.3 million hectares for sugar beet worldwide. So we continue to generate more value per hectare. And going forward, we expect an estimate that this negative trend in the global acreage has somewhat bottomed out, with stable or slightly growing acres expected in the next season. Considering the prior year positive one-off related to the reversal of AVAT provision and also some negative currency effects in the current period, we were able to defend our strong profitability in this segment despite the changes I already described in the sugar beet market. Moving to corn, sales were 349.4 million below the prior year, but a 1.3% organic growth. We saw clear pull-forward dynamics that shifted part of the volume into Q3. Our sunflower business, which is also consolidated in the BU corn, for which we expect potential growth in the years to come, delivered encouraging double-digit growth supported by our renewed variety portfolio. Our APTA performance in corn improved significantly and includes the 29 million one-off effect from the disposal of the license rights in North America. In addition, we incurred also lower R&D expenses due to the absence of charges by our former KV agroline. Next, cereals. Sales were stable at 243.4 million. Organic growth was 0.7%. Oil seed rate performed strongly with sales up 21% driven by high performance portfolio. This was partially offset by hybrid rye which declined 14% impacted by comparatively low rye market prices. Weed remained broadly at the prior year level. FEDA was clearly below prior year mainly due to increased R&D efforts as well as a provision for a legal risk in the mid-single-digit million-euro range. And finally, vegetables sales increased to 46.5 million. Organic growth was 2% supported by higher bean seed sales and a stable demand in spinach. was more negative year-on-year, which is in line with our plans as we are investing in the expansion of our vegetable breeding capacity. Let me now turn to cash flow. Operating cash flow was lower primarily because net working capital increased mainly by higher trade receivables, and this is a typical seasonal pattern and also reflects the sales phasing I discussed earlier. Investing cash flow includes a partial payment of the purchase price related to the North American corn business. And as mentioned at the beginning, capex increased to 56 million below the prior year across segments. Free cash flow came in at around 52.7 million, down from minus 3.9 million last year. For the full year, however, we are confident to exceed the free cash flow figure of 123 million for last year, driven by both better operating and investing cash flow. On net debt leverage, the debt stands at 179 million a year, and the bridge reflects a strong WTA contribution offset by working capital seasonality, capex, as a dividend payment, which was at 41.3 million this year, compared with 33 million last year. Our trading 12-month net debt WTA ratio improved 2.4 times, down from 0.5 times. And we continue to expect net debt to be significantly lower at year end driven by the usual seasonal unwind in ranking capital. Coming to our forecast for full year 25-26, which we are confirming today based on the nine-month performance and our current visibility. While current volatility and regional order patterns remain factors to watch, our underlying business performance and cost discipline support the outlook. Looking further out, while uncertainties remain, the underlying trend gives us confidence. Before we move to Q&A, I'd like to share a quick save-the-date with all of you. We are planning to host a KGS Vegetative Investor Analyst Seminar at the end of September, on 29th September, 26th, in Andijk, the Netherlands. And we will be very pleased if you could join us. We know that our business continues to attract a lot of questions, and rightly so, and this webinar provides a fantastic opportunity to take a closer look at how far we have already come and where we are heading next. So, being on site, you will be able to experience our reading activities, meet the teams, of course, that drives the progress. and engage in discussions around strategy execution in vegetatives. So, I have no doubt that this direct look behind the scenes will give you a much clearer sense of the progress and also the momentum that we have built in this business. So, we very much hope to see many of you there. And with that, I would like to close my prepared remarks. Thank you again for your attention and for joining us, and I now look forward to your questions together with my colleague Peter Vogt, head of IR.

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 cancel your question, please press star, three, and the pound key. You can also use the dial-in function in the webcast if you would like to ask a question by phone and raise your hand to ask a question. So the first question is from Mr. Christian Feitz from Kepler Schulz. Please go ahead, the floor is yours.