KWS SAAT SE & Co. KGaA (KWS.DE) | Investment Case

1. Company Snapshot

1.a. Company Description

KWS SAAT SE & Co. KGaA develops, produces, and distributes seeds for farmers in Germany, rest of Europe, North and South America, and internationally.It operates through four segments: Corn, Sugarbeet, Cereals, and Vegetables segments.The Corn segment produces and distributes seed for corn, soybeans, and sunflowers.

The Sugarbeet segment engages in the development, breeding, production, and distribution of diploid hybrid potatoes and sugar beet seeds.The Cereals segment breeds, produces and distributes seeds for rye, wheat, barley, and rapeseed.This segment also generates remainder from other crops, including sorghum, peas, catch crops, and oats.

The Vegetables segment provides seeds for spinach, beans, carrots, and tomatoes.The company was formerly known as KWS SAAT SE and changed its name to KWS SAAT SE & Co. KGaA in July 2019.KWS SAAT SE & Co. KGaA was founded in 1856 and is headquartered in Einbeck, Germany.

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1.b. Last Insights on KWS

KWS SAAT SE & Co. KGaA's recent performance has been positively driven by the company's announcement of a 25% increase in its dividend to €1.25, which is likely to attract income-seeking investors. Additionally, the company's shareholders have seen a 12% increase in share price over the last quarter, indicating growing investor confidence. The increase in dividend and share price growth may be attributed to the company's solid financial prospects and growth momentum. KWS SAAT SE & Co. KGaA's ability to maintain a stable financial position and generate returns for shareholders may be driving the recent positive sentiment.

1.c. Company Highlights

Last Price	67.6
Change Percentage	0.75%
Open	67.2
Previous Close	67.1
Market Cap ( Millions)	2231
Volume	922
Year High	69.4
Year Low	50.3
M A 50	66.76
M A 200	61.27

FCF Yield	10.15%
Dividend Yield	1.85%
ROE	15.23%
Debt / Equity	30.19%
Net Debt / EBIDTA	31.77%
Price To Book	1.52
Price Earnings Ratio	10.29
Price To FCF	9.85
Price To sales	1.33
EV / EBITDA	6.79

2. Transcript Summary

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3. NewsRoom

KWS SAAT SE & Co. KGaA (ETR:KWS) Looks Interesting, And It's About To Pay A Dividend

Nov -30

Source:

KWS SAAT SE KGaA's (ETR:KWS) Upcoming Dividend Will Be Larger Than Last Year's

Oct -28

Source:

KWS SAAT SE & Co. KGaA's (ETR:KWS) Intrinsic Value Is Potentially 98% Above Its Share Price

Oct -14

Source:

KWS SAAT SE KGaA (ETR:KWS) Has Announced That It Will Be Increasing Its Dividend To €1.25

Sep -27

Source:

KWS SAAT SE KGaA (ETR:KWS) shareholders have endured a 4.2% loss from investing in the stock five years ago

Sep -12

Source:

LVMH: Share transactions disclosure

Sep -09

Source:

The BANK of Greenland issued and early redemption of Senior Non-Preferred capital

Sep -09

Source:

Cointreau Launches First-Ever Ready-To-Serve Range – Introducing Cointreau Citrus Spritz

Sep -09

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.94%)

6. Segments

Corn

Expected Growth: 5.5%

Growing demand for high-yielding and climate-tolerant crops, increasing adoption of precision agriculture, and rising focus on sustainable farming practices drive the growth of KWS SAAT SE & Co. KGaA's corn variety.

Sugarbeet

Expected Growth: 4.5%

Growing demand for sugar, increasing adoption of disease-resistant crops, and rising focus on sustainable agriculture drive the growth of the sugarbeet market, with KWS SAAT SE & Co. KGaA's high-yielding and sugar-rich crop variety well-positioned to capitalize on this trend.

Elimination of Equity-accounted Financial Assets

Expected Growth: 4.5%

The elimination of equity-accounted financial assets from KWS SAAT SE & Co. KGaA's financial statements is expected to improve transparency and accuracy. This removal will prevent double counting, enhancing the company's financial reporting. The growth is driven by the increasing demand for accurate financial reporting and the need for transparency in the agricultural industry.

Cereals

Expected Growth: 4.5%

Growing demand for high-quality cereal seeds, increasing adoption of precision farming, and rising focus on sustainable agriculture practices drive the growth of KWS SAAT SE & Co. KGaA's Cereals segment.

Vegetables

Expected Growth: 4.5%

Growing demand for sustainable agriculture, increasing adoption of precision farming, and rising popularity of home gardening drive the growth of the vegetable seeds market, benefiting KWS SAAT SE & Co. KGaA's diverse range of high-quality seeds.

Corporate Segment

Expected Growth: 4.5%

The Corporate Segment of KWS SAAT SE & Co. KGaA is expected to grow steadily, driven by the company's strategic investments in digitalization, process optimization, and talent acquisition. The segment's growth is also fueled by the increasing demand for efficient administrative services, supporting the company's expansion in the agricultural industry.

7. Detailed Products

Corn Seeds

High-quality corn seeds for farmers and agricultural businesses, offering high yields and resistance to diseases and pests.

Sugarbeet Seeds

Sugarbeet seeds designed for optimal sugar content and disease resistance, suitable for sugar production and biofuel applications.

Sunflower Seeds

High-performance sunflower seeds for oil production, bird feed, and confectionery applications, offering high yields and disease resistance.

Cereals

High-yielding cereal seeds for wheat, barley, oats, and rye, suitable for bread, brewing, and animal feed applications.

Rapeseed

Rapeseed varieties for oil production, biofuels, and animal feed, offering high yields and disease resistance.

Soybeans

High-yielding soybean seeds for food, feed, and industrial applications, offering high protein content and disease resistance.

8. KWS SAAT SE & Co. KGaA's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for KWS SAAT SE & Co. KGaA is moderate due to the presence of alternative crop varieties and farming practices.

Bargaining Power Of Customers

The bargaining power of customers is low due to the fragmented nature of the agricultural industry and the lack of concentration among buyers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of a few large suppliers of raw materials and the dependence of KWS SAAT SE & Co. KGaA on these suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the agricultural industry, including the need for significant capital investment and regulatory approvals.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the agricultural industry, leading to intense competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	37.82%
Debt Cost	6.68%
Equity Weight	62.18%
Equity Cost	6.68%
WACC	6.68%
Leverage	60.81%

11. Quality Control: KWS SAAT SE & Co. KGaA passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

ForFarmers

A-Score: 7.0/10

Value: 9.2

Growth: 4.6

Quality: 5.1

Yield: 8.1

Momentum: 8.5

Volatility: 6.3

1-Year Total Return ->

Anglo-Eastern Plantations

A-Score: 6.8/10

Value: 7.9

Growth: 5.2

Quality: 7.5

Yield: 5.0

Momentum: 10.0

Volatility: 5.0

1-Year Total Return ->

Origin

A-Score: 6.1/10

Value: 8.9

Growth: 4.6

Quality: 4.2

Yield: 3.8

Momentum: 8.5

Volatility: 7.0

1-Year Total Return ->

KWS SAAT

A-Score: 5.5/10

Value: 7.0

Growth: 3.9

Quality: 7.8

Yield: 2.5

Momentum: 5.0

Volatility: 7.0

1-Year Total Return ->

Grieg Seafood

A-Score: 4.4/10

Value: 8.4

Growth: 3.0

Quality: 3.2

Yield: 2.5

Momentum: 6.5

Volatility: 2.7

1-Year Total Return ->

Måsøval

A-Score: 3.7/10

Value: 6.2

Growth: 4.6

Quality: 1.2

Yield: 6.2

Momentum: 1.5

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.76%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.68%

KWS SAAT SE & Co. KGaA - DE0007074007

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on KWS

1.c. Company Highlights

Weak Momentum

Average Yield

Average Quality

Better Quality

Fairly Valued

Stable Momentum

Revenues Beats

Earnings Beats

Strong Momentum

Revenues Miss

Medium Volatility

Cheaper

Average Growth

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.94%)

6. Segments

Corn

Expected Growth: 5.5%

Sugarbeet

Expected Growth: 4.5%

Elimination of Equity-accounted Financial Assets

Expected Growth: 4.5%

Cereals

Expected Growth: 4.5%

Vegetables

Expected Growth: 4.5%

Corporate Segment

Expected Growth: 4.5%

7. Detailed Products

Corn Seeds

Sugarbeet Seeds

Sunflower Seeds

Cereals

Rapeseed

Soybeans

8. KWS SAAT SE & Co. KGaA's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: KWS SAAT SE & Co. KGaA passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

67.6$

Current Price

67.6$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA