KWS SAAT SE Stock

Good morning, ladies and gentlemen, and welcome to KWS SAAT SE Publication of Full Year Results 2025-2026. The conference will be recorded. [Operator Instructions]

Let me now turn the floor over to your host, Dr. Jörn Andreas.

Good morning, everyone. Thank you for joining us today for our full year '25-'26 results call. Before we dive into the numbers, let me start with a brief perspective on the year. So '25-'26 was certainly a challenging year for the agricultural 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. Against this backdrop, we delivered actually a very resilient performance. While sales were affected by market conditions, we maintained a strong profitability. We generated excellent cash flow and further strengthened our balance sheet.

And at the same time, we continued investing in innovation and in executing our strategic priorities, and we are happy -- 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.

Before we dive into more detail, 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's start with the group highlights. Sales reached EUR 1.63 billion. Organic sales declined by only 1% despite significant acreage reductions in sugarbeet and corn. In addition, currencies and portfolio effects each reduced reported sales by roughly 1 percentage point. EBITDA came in at EUR 343 million and remained at a strong level despite a softer market environment. Net income increased by more than 13% to EUR 158 million, supported by a significantly improved financial result.

And free cash flow remained strong at approximately EUR 123 million and was virtually unchanged from last year. As a consequence, net debt dropped -- declined further to less than EUR 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.

Let me now put this result into the 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. We initially expected around 3% organic growth and later adjusted our outlook to roughly flat development. The result of -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 continue to focus on what is in our control. So we implemented efficiency measures that contributed roughly EUR 25 million in savings in fiscal year '25-'26. And in addition, we also actively managed headcount development, generating efficiency gains that will also continue to support profitability going forward.

As a result, despite weaker-than-expected acreage development and also adverse currency effects, but also significantly impacting our EBITDA, we successfully delivered an adjusted EBITDA margin within our guided range of 19% to 21%.

In addition, the disposal of our North American corn license rights that we've completely -- successfully completed the strategic alignment of our corn segment, that contributed another EUR 29 million to our EBITDA, also in line with our expectation.

And finally, we intend to increase the dividend to EUR 1.30 per share, reflecting our ambition to deliver stable or rising dividends every year. So taken together, we delivered 3 out of 4 targets in a challenging environment.

Turning to sales. Looking at the bridge, 3 factors explain the reported sales decline. First, lower acreage reduced organic sales by 1%. Second, currencies, they created another percentage point of headwind, mainly the U.S. dollar, the Turkish lira, and the Ukrainian hryvnia. And third, portfolio effects accounted for the remaining and were largely related to the absence of R&D service revenues from our former AgReliant joint venture. So 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. So as in the last years, we recorded a few onetime items as shown on the 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 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 let's start with Sugarbeet, our largest product segment. '25-'26 was another year in which our innovation-driven strategy clearly paid off. Global sugarbeet acreage declined by roughly 10% as high sugar inventories prompted producers to contract lower beet volumes, especially in Europe. And 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. Nevertheless, against this backdrop and against this market contraction, the organic sales decline of just 0.6% for the Sugarbeet segment provides a compelling evidence of the resilience of our world-leading Sugarbeet business.

And here, innovation remains the key driver. So CONVISO SMART and CR+ continue to gain traction and now account for 63% of segment sales. And this ongoing shift towards more differentiated, higher-value solutions remains one of the most important drivers of long-term value creation in this segment.

Profitability also remained exceptional. So even after this reduction in acreage, Sugarbeet delivered an EBITDA margin of almost 42%. And looking ahead, high sugar prices and expected lower sugar yields in most of our sugarbeet 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 Sugarbeet 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 effects stemming from the AgReliant transaction. However, looking beneath the surface, the development was actually encouraging. So 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%. 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 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. But even if you take this out, even excluding this onetime effect, the segment delivered a meaningful improvement in operating profitability. And 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 were mainly broad -- sales remained broadly stable despite continued pressure in several crop markets. Rapeseed was once again the clear standout performer. So 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. And 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 the effect of lower commodity prices last year ahead of the planting. Profitability was additionally impacted by a provision that we already flagged after the 9-month results related to an antitrust investigation in France. And excluding this effect, the underlying earnings development remained broadly in line with past levels. So overall, Cereals once again demonstrated the value of its diversified crop portfolio.

Lastly, Vegetables. Sales were below prior year's level, mainly reflecting developments in spinach and timing effects in certain markets. Our focus remains unchanged. It remains firmly on long-term value creation, and we continued investing heavily in building capabilities, infrastructure and new crops while further expanding our innovation pipeline. So this rationale remains fully intact, and we are all looking forward to providing more insights to you in next week's Vegetables Investor and Analyst seminar in Andijk in the Netherlands.

Let me now turn to cash flow. Despite lower sales volumes in 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 a decline in EBITDA and higher working capital requirements. And at the same time, investing cash flow improved by the same amount, which is due to 2 reasons: first, the payment of the first tranche in the context of the AgReliant divestiture; and second, somewhat lower capital expenditures, mainly due to project phasing. So even in the year characterized by lower acreage and adverse currency developments, KWS continued to convert earnings in cash very effectively.

And that has, of course, positive implications. 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 EUR 9 million at year-end. And I think a few companies in our industry operate with a balance sheet as strong as ours today. And 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. 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. Based on the results achieved, we propose to increase the dividend to EUR 1.30 per share, and 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. So since the financial year 2019-'20, our dividend has actually increased from EUR 0.70 to the proposed EUR 1.30 per share, which represents a compounded annual growth rate of approximately 11%. And 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 the outlook. For '26-'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. And in combination with our diversified portfolio and our strong market positions, we feel well prepared to return to stronger growth next year.

For profitability, we expect an EBITDA margin between 19% to 20%, and this also remains fully aligned with our midterm ambition and continues to include also substantial investments in R&D. So overall, we enter the financial year with good confidence in profitable growth.

So before moving to Q&A, let me briefly remind you on our Vegetables Investor and 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, and 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. So looking forward to it.

So for now, let me close with 3 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. And third, we continue to invest. We continue to invest in innovation, in future growth while maintaining financial discipline. So taken together, I think these achievements leave us well positioned for the year ahead, and that makes us really confident. So thank you very much for your attention.

And Peter and I are now happy to answer all your questions.

So the first question is from Michael Schaefer from ODDO BHF.

The first one would be on your Sugarbeet 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 rather strong recovery in recent months. So I wonder what you have baked into your slight organic sales growth outlook on the top line. So shall we think about some more price pressure? Or for me, it looks like a rather conservative statement on that one. This would be my first question.

The second one is on your Cereals, on rapeseed, where you said, well, that you gained market share and you may overtake the #1 position in the next season. So can you just give us a bit of color what's the delta in terms of market share to the #1 in the segment?

And 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 Sugarbeet segment? Or so what's your view on the region? And how it's affecting the respective segments? This would be my 3 questions for the beginning.

So first of all, yes, Sugarbeet outlook. So that's our best estimate on the acreage reduction last year that we mentioned. And exactly because of, let's say, this, we were a little 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. Yes. So our current data that we have, I would say, is more positive. That's what you also said. That's true. So we saw a strong increase in sugar prices also -- reflecting also some El Niño effects in India and Thailand. So we have here not a great harvest, which is putting more bullish, let's say, factors, let's say, on the prices. We see also not good or not great yields in Europe. I'm talking about the heat wave in certain parts of Southern Europe or the southern part of Germany. So that leaves also clearly a mark on the supply, and so that bodes well for us.

So a big driver of the acreage reduction last year was the supply and demand balance because we came from 2 years of very good harvest. So we believe that actually this year, Europe will be -- completely balance out its inventory, will also be a net importer because we not have enough own produced sugar supply. That means we have rebalanced, let's say, supply and demand situation after this season. And that provides us with a good starting point for the upcoming growing season.

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 in order to be here also more on the safe side. And if that trend here 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, of course, happening, then I think that this gives us also some opportunities because we will also continue to further increase the penetration of CONVISO and CR+, which anyway will also then help us on the growth side.

Oilseed rape, that's a fantastic situation for us. And you know that this is basically the first quarter of our fiscal year. It's the most important quarter for oilseed rape. That's where now the planting happens, let's say, for the current season. And we had a fantastic start, I have to say, to the new fiscal year, strong growth in oilseed rape. So 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. So we are now #1.

We have gained market shares in all key markets. And that is for us really a situation where stars align because oilseed rape prices are, of course, very high, commodity prices are high. So there's naturally incentive for the farmer to move into oilseed rape if, let's say, the crop rotation allows. And that fits, let's say, a market or as a portfolio where we have the best product in the market. So that helps us really good, and we had a good start.

Russia, yes, 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're discussing the situation. So it remains for us still a revenue contributor with less than 10%, let's say, to the overall KWS portfolio. So that has also not changed, let's say.

For our Sugarbeet business, I told you already that for Cereals and Corn there's anyway anymore of an opportunistic business, let's say. So that's anyway very low, let's say, in terms of revenue contribution, if at all. So Sugarbeet is still remaining key business that we have. 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, in the domestic demand. 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.

The next question is from Christian Faitz from Kepler Cheuvreux.

A couple of questions remaining, please. I'll ask my veggie 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?

And second, just a minor question, but can you please elucidate a bit the antitrust investigation you seem to be facing in France?

Yes. Very good. Looking forward to your veggie questions next week. So 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. So we've now gained #1 position in hybrid rye anyway, by far #1 and same for wheat and for barley as well. So it's a really good position to be in.

So for the other winter crops, last year was a bit, I would say, more challenging because of the low, let's say, commodity prices last year, farmers chose more to plant their seed. So basically our revenue was more or less stable. We were not able really to increase, let's say, revenue in the situation. So for the coming year, we are more confident because at some point in time, the farmer needs also to purchase fresh new seeds to catch up also with the yield expectation. So on that side, we are also confident. But I would say, overall, 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 agricultural crop rotation because sugar prices are going up.

And anyway, if the farmer would be, let's say, completely unconstrained, would plant as much sugarbeet as possible, obviously 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. So I would say, overall, let's say, the other winter cereals are the residual loser, let's 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-saved seed situation last year, which I think how I would describe the situation. And that's also how we see at the start of the year. The rye is pretty stable after the decline last year. So it really stabilized and also even slightly growing. And that's what we see for the other as well. So overall, I think a good start.

And the second question, the antitrust, so that is basically unchanged to what we also discussed after 9 months. So there is a situation that for the Cereals business in France, there's a certain mechanism that's also transparent and public, everyone can see it on the website, where prices for royalties and the basic seed are set. That is also done in conjunction also with French authorities. And there is a question whether this mechanism, let's say, is, let's say, compliant and future-oriented or not, let's say. And in order to be prudent, we took a provision of EUR 5 million, but we as well as all other market participants rejected this claim because it's in practice since 30 years. It's been looked at many times. It's public, let's say. So -- but it is what it is. It's on our balance sheet as a provision, and then, we'll see how it develops, but we defending our position, we reject this claim.

Okay. Great. If I may, one last question. You talked about Russia, but how are -- how is the business going for you in Ukraine at this point in time?

Look, Ukraine is actually going well, I have to say. And I say this with some humility, let's say, because we are in very close contact with our people in Ukraine. So last week, a Board member basically was also in Ukraine visiting the teams and the site, which, of course, was an important one for us. And I can tell you, I mean, the pressure on the teams locally is significant. And we are, I mean, just very grateful and a lot of respect for team that's within this, let's say, conditions. We again, let's say, increased our revenue in Ukraine in a significant, I would say, single-digit amount. So businesses 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. So it's actually going well despite, of course, very, very challenging conditions.

[Operator Instructions] And next question is from Leon Mühlenbrock from mwb Research.

So 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?

And my second question would be to the margins. So your current margin target is 19% to 20%. What could be a driver to move above the 20% in the long term?

Very good question. Now, so El Niño, of course, we all read the news. We had a very pronounced El Niño this year that already affected some of the farm growing regions in Asia, in particular, India and Thailand. And those are also the key regions for us that influence, let's say, global sugar prices. And that is 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 get the rainfall and that has an impact, let's say, on some of the harvest.

You have then the counter effect basically Latin America, where you have the heavy rainfall part of Brazil, you have the heavy rainfall in Argentina. And for some of the areas, it could be also beneficial, let's say. So Argentina is a winner from El Niño, and Brazil, it can be both directions, but also 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, it's -- you cannot really say, it's really mixed bag, as it could be in one or the other direction because losses in one side of the, let's say, globe could be compensated theoretically on other side, which is then dependent really on conditions. You have super heavy rainfall, then you can also harvest better yield, 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. And that's also the experience that we have looking in the past because we have the El Niño effect, of course, every few years. And that's also the experience that we've made in previous situations. So on the other ones, we are more or less say, neutral, I would say.

In terms of margin, yes, so we continue to invest in our business. That's why we said, okay, we want to keep the margin expectation between 19% and 20% for the time being. But of course, if we are benefiting from a better acreage, then we will -- this will have a significant operating leverage in our business. And that will help us clearly to move also margin above 20%. And our midterm target is between 19% and 21%, so means midpoint is 20%, and that's nothing that we want to achieve in the far future, but this is something that we want to achieve every year. So that's why we were 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.

At the moment, there seems to be no further questions. [Operator Instructions]

We have Michael Schaefer from ODDO BHF on the line.

Well, coming back to Vegetables, and I don't want to preempt here on your next week's CMD. However, on the numbers. So looking into -- obviously, you 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. So I wonder whether you can give a bit more color, let's say, how challenging '25-'26 was for the segment, and maybe on those kind of metrics, how we should think about going into '26-'27?

Yes. No, absolutely. And to be fair, I mean, we had an organic decline last year, but also this is also against very high comparables. Of course, in the previous year, we've grown 16%. So over 2 years, it's still a high single-digit growth. And we were having, I would say, 2 -- or let's say, 3, let's say, headwinds. First was that we had a lower market demand in North America. Foodservice segment was a bit lower, let's say, in terms of demand. We had an order phasing, which was -- the order phasing because an order slipped from June into July. So that also made an impact because, okay, the business in terms of size was not as big as it's then not fully, let's say, I would say, unaffected by order phasing effects. And then, we also had the high comparables that I mentioned in the previous year. So I think in that context, it's an okay result, and we definitely plan to come back to growth this year also in the rest of the segment, that's very clear.

On your question on selling expenses, 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 Pop Vriend brand. And 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 this EUR 10 million onetime write-off -- brand write-off last year, then it's actually a slight increase in selling expenses, which means very consistently continuing to build infrastructure both on the R&D side as well as on the go-to-market side.

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.

All right. Thanks again. Yes. No, just thank you again for your interest and time, of course, joining us this morning. And as already mentioned, for several times, looking forward to seeing you next week at our Vegetables Investor Day in Andijk. We look forward to spending some time with you. And with that, thank you, and have a good day.

Ladies and gentlemen, welcome to the KWS SAAT Quarterly Reports 9 Months 2025-2026. [Operator Instructions] Let me now turn the floor over to your host, Jorn Andreas, Chief Financial Officer of KWS SAAT.

Thank you, and a warm welcome, everyone. This is Jorn Andreas, CFO of KWS. Thank you, everyone, for joining us today for our 9 months '25-'26 update. Before I take you through our financial results, let me start with the big picture. As you know, agriculture remains a challenging environment, ongoing political tensions, fluctuating commodity prices and pressure on acreage and farm economics have reduced the visibility not only for our farmers, but also by extension for our industry. And yes, this is exactly where we, as KWS prove our strength in a challenging environment, we delivered a resilient top line, solid earnings and a strong operational discipline.

And this is not a coincidence. It reflects 3 things: our diversified portfolio, our consistent execution, and our innovation-driven business model. Even in areas under pressure, such as the Sugarbeet acreage, we navigated the environment effectively. And importantly, our strong financial position and our leverage gives us the flexibility to invest organically and also where it fits via M&A.

And with that perspective, let's move into the numbers. And as always, at this point, a quick reminder, some of the statements we'll be making today are forward-looking and subject to risks and uncertainties. As always, please refer to Slide 2 for the full disclaimer. Let me now walk you through the key figures. So net sales reached EUR 1.35 billion, slightly above prior year. On an organic basis, this translates into a 2.6% growth, and this was partly offset by currency headwinds of minus 1.8% and the portfolio effect of minus 0.5%. EBITDA increased to EUR 386.8 million from EUR 360.8 million. And I'll come back to the drivers, including the special items in a moment.

Net income from continuing operations rose to EUR 220 million from EUR 202.8 million, mainly driven by the improved EBITDA and a better financial result. CapEx decreased to EUR 56 million from EUR 73.6 million last year, reflecting a normalization of our elevated prior year level across segments. Free cash flow was at minus EUR 52.4 million compared to minus EUR 3.9 million last year. The main drivers were 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 EUR 179 million, and our trailing 12-month leverage improved to 0.4x EBITDA, down from 0.5x. Overall, we are pleased with the result. In a nutshell, we see a resilient demand, a strong EBITDA 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 Sugarbeet. Currency effects mainly by the Turkish lira and the U.S. dollar amounted to a minus 1.8% translation impact. And the portfolio effect of minus 0.5% primarily relates to the absence of R&D services invoiced to our former joint venture client.

Now on profitability. EBITDA improved to EUR 386.8 million and includes several special effects. So let me strip that out for you. First, EBITDA includes a EUR 29 million positive contribution from the sale of license rights in the North American Corn business. Second, an EUR 8 million effect relates to the reversal of a VAT provision in the Sugarbeet segment and the prior year comparison in context. And finally, a currency effect of approximately EUR 15 million, again mainly driven by the Turkish lira and U.S. dollar, mostly of it was translation-led.

Importantly, when adjusting for these special items, EBITDA increased from EUR 353 million to EUR 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 continued discipline on the cost and execution, which has been a key priority for us this year.

Let's now turn to the segment review, starting with Sugarbeet. Sales increased to EUR 703.8 million, including negative currency effects of 2.7%. Organic sales growth was plus 4.2%, reflecting both pull-forward effects and a higher share of innovation-led offerings. Specifically, our leading innovations such as CONVISO SMART and CR+ accounted for 62% of sales, up from 57% last year. So the mix shift towards differentiated premium-price products is continuing. And this success speaks again to the strength of our portfolio as the global acreage in 2026 is estimated to shrink about 6% to roughly 4.3 million hectares for Sugarbeet worldwide. So we continue to generate more value per hectare. And going forward, we expect an estimate of this negative trend in the global acreage has somewhat bottomed out with stable or slightly growing acreage expected in the next season.

Considering the prior year positive one-off related to the reversal of a VAT provision and also some negative currency effects in the current period, we were able to defend our strong profitability in the segment despite the challenges I already described in the Sugarbeet market.

Moving to Corn. Sales were EUR 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 substantial growth in the years to come, delivered encouraging double-digit growth supported by our renewed variety portfolio. Our EBITDA performance in Corn improved significantly and includes the EUR 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 JV AgReliant.

Next, Cereals. Sales were stable at EUR 243.4 million. Organic growth was 0.7%. Oilseed rape performed strongly, with sales up 21%, driven by a high performance portfolio. This was partially offset by hybrid rye which declined 14%, impacted by comparatively low rye market prices. Wheat remained broadly at the prior year level. EBITDA 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 EUR 46.5 million. Organic growth was 2%, supported by higher bean seed sales and a stable demand in Spinach. EBITDA 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, driven 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 the partial payment of the purchase price related to the North American Corn business. And as mentioned at the beginning, CapEx decreased to EUR 56 million below the prior year across segments. Free cash flow came in at around EUR 52.7 million (sic) [ minus EUR 52.7 million ], down from minus EUR 3.9 million last year. For the full year, however, we are confident to exceed the free cash flow figure of EUR 123 million for last year, driven by both better operating and investing cash flow.

On net debt leverage, net debt stands at EUR 179 million essentially and the bridge reflects a strong EBITDA contribution offset by working capital seasonality, CapEx and the dividend payment, which was at EUR 41.3 million this year compared with EUR 33 million last year. Our trailing 12-month net debt-to-EBITDA ratio improved to 0.4x, down from 0.5x. And we continue to expect net debt to be significantly lower at year-end driven by the usual seasonal unwind in working capital. Coming to our forecast for full year '25-'26, which we are confirming today based on the 9 months performance and our current visibility. While currency volatility and regional order patterns remain factors to watch, our underlying business performance and cost discipline support the outlook. And 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 KWS Vegetables Investor & Analyst Seminar at the end of September on 29 September '26, in Andijk, Netherlands. And we will be very pleased if you could join us. We know that our Vegetables business continues to attract a lot of questions and rightly so. And this seminar 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 the site, you will be able to experience our breeding activities with the teams, of course, that drive the progress and engage in discussions around strategy execution in Vegetables. 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.

[Operator Instructions] So the first question is from Mr. Christian Faitz from Kepler Cheuvreux.

So a couple of questions, please. First of all, you had pull-forward effects apparently in both Corn as well as in Sugarbeet, as you mentioned. Can you give us an idea of the magnitude, i.e., what would then be missing in your Q4? Second, in your corn segment, sunflower seeds grew quite nicely, I believe, double-digit. Can you give us an idea how prominent sunflower seeds are within your Corn segment in the meantime? And my third question pertains to the sale of the license rights, i.e., the EUR 29 million proceeds. Is this stemming from the 2015 agreement with Syngenta i.e, the . Can you confirm that? Thanks very much.

Thank you very much, Christian. So first on your question on the pull-forward effect. Yes. So we have seen that orders Q3 from Q4 and that, as you know, has always something to do with all the weather conditions and the different regions where we operate. So roughly, you can say that the pull-forward effect on organic growth was roughly EUR 30 million. So which means that if you say cancel, let's say, these forward effects, the growth was more or less flat, which is also in line with our full year guidance. And what you can also say is that 2/3 of the pull-forward effects were roughly in the Corn business unit and 1/3 in the Sugarbeet business unit. I think that gives you a good indication.

Sunflower, yes, so we are really thrilled with how the Sunflower business develops. I mean, we discussed this also in our Capital Markets Day that we are now launching our own varieties. We have really some advantage on the R&D side with some key capabilities that we have to accelerate our capabilities and pipeline. So we've been able to increase our Sunflower sales double-digit. And we are now having a revenue of around about EUR 15 million in our Sunflower business year-to-date 9 months. So I think that's really nice growth from where we have been, and there's also more to come in the years of course. And we indicated that we want to achieve EUR 100 million revenue with sunflower by the end of the decade.

And last question on the license. So this is really related to the license that we provide for our germplasm to AgReliant in the past. So this has been part of the overall AgReliant deal last year, meaning that we've not only, of course, sold our assets or subsidiaries or shareholding in our AgReliant business, but we also gave the buyer GDM also the rights to the varieties, which were held, let's say, by our operations in Europe. And for this license rights, we recognized a gain of EUR 29 million in the first quarter, '25-'26.

Okay. Great. Just a quick follow-up. Did you say EUR 15 million year-to-date for the sunflower or was it EUR 50 million?

EUR 15 million.

Next question is from Mr. Michael Schaefer from ODDO BHF.

I have two on the Sugarbeet to start with. Well, the first one is, if I'm looking at your profitability and you reported a EUR 325 million EBITDA, so roughly 46% margin. If you compare this with last year and strip out the EUR 8 million one-off gain. So I come to the actually slightly higher, 46.6% EBITDA margin adjusted for it. The question is, despite the 4.2% organic sales growth and despite the very strong at least from my perspective, very strong mix effect you have reported, so why have we seen on an operating basis margin walking backwards? This would be my first question.

And the second one is, you indicated that probably on the Sugarbeet acreage side, we have seen the bottom in terms of, let's say, total acreage. Can you elaborate what do you expect into the next season across the different regions in your production planning for next year?

And then one final question on the Cereal segment, this kind of legal risk provision which you have put in place there, mid-single digit. So what is this all about?

Perfect, Michael. Good questions. So first of all, on the margins, first of all, we are actually quite pleased also that we are able to keep the operating margins in Sugarbeet at continuously high level. So a contribution margin of around 66%. That's actually the level of last year. And as you can imagine, that we are operating in an environment, we have pressure on acreage, being able to keep, let's say, that profitability on that pretty high level is, I think, also really a testament of the pricing power that we have in our markets.

So in terms of the changes, this really primarily relates to the regional sales mix that we have. So we have also communicated that we had a significant translational -- negative translational effect in our EBITDA, EUR 15 million in our EBITDA and a big part comes from the U.S. dollar and from our regional mix perspective, our U.S. business is, say, margin accretive within say, Sugarbeet, and this has then a mix effect on our overall profitability in the EU.

So meaning on the country level, let's say, or regional level, there's no change. It's really more mix effect than anything else. And as you rightly said, so with the mix shift towards our more innovative varieties, CONVISO and CR+ that really effectively counterbalance other, let's say, challenges that we face, of course, in this macro environment.

The second question was, I think, on acreage and acreage development. So yes, we have seen, of course, in this season, a pretty strong reduction in acreage to 4.3 million hectares, that's minus 6%. And what we see, I mean, it's early days, to be quite honest, [indiscernible] customers how they also plan for next year. It's early days, but we feel, as I already said earlier that things have bottomed out in our scenario right now is that we are either stable on current levels or see a slight increase but that's something we will probably give you more, let's say, visibility further down in the year.

And I think last question was on the legal risk in Cereals business. Yes. So in Cereals, we recognized the provision for an ongoing antitrust investigation in France for which we have made a provision in a mid-single-digit million-euro amount. And yes, for your understanding that, of course, given the ongoing proceedings, we -- or I cannot comment really any further on the details, but what we can say is that we are defending here our position, we're not going for settlement. So that's why it's an ongoing case.

And the next question is from Mr. Leon Muhlenbruch from MWB Research.

I have a question to the EBIT margin. Your target is 19% to 21%. Do you see potential for even -- in the next years, for even more than 21%? Or is it -- can we imagine that's the limit?

Well, I mean, of course, we are ambitious and we always strive to increase our profitability, but we actually feel quite good with the 19% to 20% range at this time. So I mentioned at the beginning, we are in, I would say, volatile times also in agriculture with farmers having had quite significant pressure also on the margins, I would say, over the last 12 to 18 months. And of course, with the increase in input cost for the farmer that has hit, much of it will still hit because as we all know, things like fertilizer, et cetera, have been already contracted most of it last year. So that's still a weight for us and also cost inflation for the farmers. I think there's pressure and we also have to see how much, let's say, leeway we have in our pricing activities.

And at the same time, what we really want to do, of course, is to continue to reinvest our profits also in R&D. So that's really a priority for us. So I mean, if we would have the opportunity to gain additional, let's say, profitability, we'll probably reinvest this R&D and sales in the corridor that we have communicated.

Okay. And under the challenging environment, do you believe that the vegetable demand will already be a meaningful contributor over the -- for the growth in the near term? Or is it more in the long term?

So what is really exciting. That's why we have decided to have this investor seminar next September or coming September in Andijk is that we have really a pivotal milestone for us next year, next fiscal year '26-'27, because in next year '26-'27, we will be launching all fully -- what you call the fully cropped . So for all our varieties that we have invested quite a lot of, as you all know, over the last years, tomato, pepper, cucumber, melon, watermelon, all of these varieties, we will see market launches next year. Of course, for some of it will be a couple of varieties on the portfolio. So we start small and the contribution will be, I would say, mid-single-digit million-euro revenue next year to start with. But it's really the first time that we are really out in the market actively selling, let's say, our varieties. And the goal is to grow obviously to EUR 100 million by the end of the decade from roughly EUR 70 million where we are today.

So that's why there is growth definitely built into our plan, and that's why we are also excited to really invite you to Andijk, see the team, see also the pipeline that is ahead of us, and that gives you all the confidence that we really have a nice growth engine that we have built over last years.

Okay. There -- at the moment, there seem to be no further questions.

All right. So I'm pretty sure that we will have plenty of opportunity today and over the next days to follow up on a few things. We will be also on the road. So thank you again for your interest and joining us this morning. And I mentioned it already, we look forward to seeing you of course, if not on the road, then latest at our Vegetables Investor Day in Andijk. And with that, thank you, and have a good day.

So good morning, everyone. Welcome to our first Capital Markets Day here in Einbeck, live from our headquarters. And I'm very happy to see so many familiar faces here coming to Einbeck, coming to us. I also would like to welcome the participants joining today via our webcast. My name is Peter Vogt, Head of Investor Relations at KWS and your host and moderator today.

Before we start the program, just a few opening remarks. As customary, please take note of the cautionary language as we will be making forward-looking statements today. So please take note of that language. This brings us to the agenda of today, fully packed. We have the first presentation of our CEO, Felix Büchting and he will talk about the importance of seed innovation to address the challenges of agriculture and how we at KWS want to contribute to that. Second presentation by Sebastian Talg, member of the Executive Board on cereals and corn.

Maybe I should say cereals and corn and sunflower. It's a crop that we haven't talked so much yet. But as we have matured our product pipeline over the last couple of years, we're actually at the edge of introducing a wave of new products coming in the next few years, and we have the ambition to build a significant relevant business out of that, reaching EUR 100 million, hopefully in 10 years.

The second -- sorry, the third presentation will be delivered by Nicolas Wielandt on the one hand on Sugarbeet, our flagship business, you could say. And Nicolas will talk about how we will, in the future, build on the success of the past innovation that we have with bringing new innovations. And here, we also have ambitions to expand our business, targeting EUR 1 billion sales by the end of the decade. And vegetables, where we have invested quite significantly in the past years. And we are actually at a point where also here, we have moved the product pipeline forward. And over the next 2, 3 years, we will introduce new varieties from our strategic crops. And by 2028, all of our strategic vegetable crops should be on the market. After that, we will enter a break of about 2 hours, first for lunch, but also for an R&D tour.

So the second tour for today, the morning, we -- you participated here in Einbeck in the Sugarbeet tour. The second tour will be on -- will have the focus on R&D. And we want to show how we combine high-tech with handcraft, and I think that will be a very interesting ex caution. And I will talk a bit for those who are here in the room, I will give some instructions later once we are there.

The afternoon will be kicked off by a presentation of Thomas Ehrhardt, our Head of Global Research on Research and Development. the longest presentation of today. As you can expect from a company that is so much dedicated to innovation, Tom will talk, among other things about how we use cutting-edge technologies today to develop the products of tomorrow. After that, presentation by Jorn Andreas, our CFO, on financial framework and outlook. But he will also talk about our business model and why it's so attractive to be a pure-play seat breeder. And there are even the companies out there that are even breaking up these days to get there.

So that's, I think, a very good spot that we are in, and Jon will talk about more of that. The day will be finished by our CEO, Felix Büchting, with closing remarks, and we will then also open up for Q&A. All presenters will be on stage addressing your questions. So we have plenty of time either then or during the lunch break to talk about your questions as well. With this, leads me to wish you an insightful informative day, and I'll leave the stage now for our CEO, Felix Betking, please.

Good morning, ladies and gentlemen. Very happy to see that so many of you came here to Einbeck in the middle of nowhere and Lower Saxony, and also welcome to those participating online. It's a beautiful winter day. We had the forest frost this morning. I had to scrape my windshield. So it shows we are in the seasons, and this is exactly what agriculture is all depending about. Thank you, Peter, for the introduction.

So my name is Felix Büchting. I'm the CEO of KWS, and I have a big pleasure of kicking off today's first ever Capital Market Day for KWS. For those of you who might not know, I have more than a professional relationship with KWS. I have a great privilege of being the seventh generation in operational responsibility. We are and remain a family company, and this has certain repercussions and quotation marks, as you will see in the course of our presentations. It's the long look. It's thinking in generation and not being afraid of tackling challenges that might not have an immediate return on invest next year or the year after. But we're convinced that with these decisions, we pave the way for the future.

But before looking into the future, it's important to know where we come from, the past, looking back at almost 170 years of history. It all started in a small village south of [indiscernible], therefore, hence, KW as, of course, for seeds. And was my ancest that started sugar beet breeding, 1856. Today, we're a market leader, about 70% market share, and Nicolas will talk more about that.

In the 1920s, we decided to go into a portfolio diversification, as you would say today, and we picked up cereals breeding, so meaning wheat, barley oats. Today, we're #1 in winter wheat and winter barley in Europe, and we're a global leader in hybrid rye. In the mid-50s, we launched our corn breeding activities and oilseed rate breeding activities. Today, in Europe, we are #1 in silage corn, so for animal feed and the strong #3 in grain corn.

In oilseed rape, we're #2, and it's our clear ambition to become #1 in Europe. 2019, we started to step a little bit outside our comfort zone. in the sense to leave the world of row crops and to go into vegetable breeding. Today, we're a market leader in spinach, strong in beans. And those 5 strategic crops that Peter alluded to, we'll see what will happen in the future. But our ambition is clear.

With that, I would like to take a little bit a look at what is the field and the current situation we operate in. What's the framework for a seed company? What's the framework for agriculture? And there are plenty of challenges. And I think most of you are somewhat familiar with these numbers. They don't come as a surprise. Global population is rising. We expect to be roughly 10 billion people by 2050. That means we need to produce 60% more food and feed by then.

At the same time, we lose arable land due to urbanization in the more favorable climate zones and of course, due to climate change in certain regions of the world. This translates to the fact that we'll have 33% less acreage per capita by 2050. So if we want to continue to feed everyone on this planet, we have to make up for this gap. And we, as a seed specialists are part of the solution. I think we're not so bold to say we're the only one that will not be true, but we have an important role to play because we can bring a lot to agriculture, agricultural productivity because the seed is at the start of the agricultural and food production value chain.

You could say it starts with us. How are we going to contribute to these global challenges and have an impact. One, of course, is what we do since 170 years, it's increasing yields, leveraging genetic diversity, translating that into genetic gain and at the end, allowing the farmer to harvest more on the same acreage or to produce the same with less acreage per se, sustainable. But this won't be enough. With climate change and irregular weather patterns, we focus on the development of resilient varieties.

Varieties is what we call products. And this means varieties that can cope with prolonged period of drought or stress or pests. In addition, we see, especially in Europe, that we have an environment and the societal expectation that we reduce the input of crop protection, so reducing inputs. And while this is clearly driving a more sustainable agriculture, it kind of counteracts productivity. And therefore, we see an opportunity to provide genetic solutions also in this regard. This relates on the one hand side, to innovations in a given crop.

But on the other hand, we see a tremendous potential in what we call unleashing the power of crop rotations because one is controlling disease pressure or weeds in a given crop. And on the other hand, using crop rotation to preserve soil fertility and pest and weed management on a long-term basis.

Last but not least, healthy nutrition, our venture into vegetables, a clear contribution on that side. We also know we want to feed 10 billion people by 2050, we'll not be able to feed those people if they all live in American way of life in terms of diet. This means less meat, more vegetables.

And last but not least, of course, also for agriculture, we were convinced to leverage digital solutions, holistic advice to our customers to run their farms effectively and efficiently. So that's the big picture. That's our contributions.

How do we want to leverage that in terms of value capture? Very easy. First on the bottom, classic breeding, cutting-edge technology. And Tom Ehrhardt will allude more on that, what that means. In addition, you know that we continuously deliver explicit trade innovation. That's how we call it, explicit trade because you can name it, you can price it, you can see it. That's CONVISO SMART, Cercospora Plus, [indiscernible].

In addition, we have digital tools and services to support our customers in running their farm operations. And Niko will share with us how we venture into high-value crops, vegetables, the endeavor we have started in 2019 and a daunting challenge to convert the potato market from a tubber market to a seed market, but I don't want to spoil it too much. At the end, we also realized that leveraging our technology and our knowledge about P genetics, we can identify genetics that bring advantages to the food industry as a food ingredient. It's a small activity also there, Niko will share some more light on it, but we see potential for value capture also in this domain, maybe a little bit new business model compared to selling a bag of seed to a farmer.

Taken all this together, we have given ourselves a relatively new strategic framework for the short and midterm. We have published that at our -- after our results published end of September, and it is clearly spelled out because it's very easy, 4 numbers, if you want, even though you only see 3 on the slide. 3% to 5% organic sales growth, and Jorn will dive deeper into that, 19% to 21% EBITDA margin and a dividend payout ratio of 25% to 30%. While some of you might say 25% to 30% is not that ambitious, well, we're a family company, and we're convinced that it's most important to reinvest the money into the company to fuel tomorrow's innovations. All that based on our sustainability ambition.

How are we going to achieve that? Three pillars: lead, build, advance. And I'll briefly touch on those because later on, my colleagues will take you deeper into each of those segments. Lead refers to our broad portfolio in agricultural crops or row crops. I've already spelled out of you where we are currently in the markets and what we have achieved so far. We're convinced that with a customer-centric go-to-market, a full advice to the farmer on how to leverage crop rotations, we can leverage this very broad portfolio, which is almost unique in the industry. You see here sugar beet, of course, we will continue to drive and lead the market with innovations.

Silage corn, we are #1, and we're very strong in grain corn and will certainly make gains in market share and expansion in this area. You're also aware that we have reshaped our portfolio here. We've stepped out consciously out of the GM markets of North and South America to focus on the European and non-GM markets, and Sebastian will share a bit more insights on that. And then you have the cereals. That's actually the cereals business unit because those of you that paid attention in biology will clearly say oilseed rape is not a cereal. And I have to say you're absolutely right because cereals usually refers to monoots and oilseed rape is a die cot.

But we clustered under cereals. We are #1 in hybrid rye. We're strong globally and #1 in winter wheat and winter barley in Europe. And as I said, #2 in oilseed rape. And we are very sure that we can leverage that portfolio even further. Also there on the horizons, and I think later in Tom's speech talk about that, what we see as the next step in cereal innovation talking about hybrids.

[ Build ] the next pillar. This is our long-term value capture and growth drivers. On one hand side, vegetables, and I remember very well the discussions we had in the Executive Board in 2019, if we should dare to step into that segment. On the one hand side, we can fully leverage our breeding expertise, know-how, our technologies to bring that to vegetable breeding. On the other hand, different breeding targets, different markets, different customers. Your average tomato grower in the south of Spain is not growing sugar beet. So there was a little bit of step out of the comfort zone.

But also here, we have a clear plan. We had a clear target. We know that it takes time to start breeding programs from the scratch, but this is a hallmark of us as a seed specialist and a family company with a long look. In addition, we were able to acquire [ Popfrin ] Seed. Today, our running operational vegetables business going very strong, and Niko will share more about that.

KWS Food Ingredients, as I said, bringing innovation to the food producers in terms of plant-based protein ingredients. And the real challenge then potato seeds, where we want to replace 3 tons of tubes for a hectare by a bag of seed. Also, this takes determination, innovation and a long look. So it goes way beyond the normal midterm horizon.

Third pillar advance, and we'll spend most of the afternoon, almost all of the afternoon on this part. First, with a tour of R&D and then with the presentation of Tom to look into where we are in trade development in breeding. And I just want to leave it with this teaser, I think clearly showing that we have a track record in delivering innovation to farmers and the various crops we work in.

With that, I would like to hand over to Sebastian to take you into the cereals, oily grape and corn and sunflower world. Wish you an enriching day. I hope you take a lot with you and that we can show you why we are unique, why KWS is special, why KWS is strong and going strong as a seed specialist.

Thank you. Good morning, everyone. I am Sebastian Talg. I'm the newest member of the Executive Board. I started in September this year. So I'm one of the few people in this company who have very little knowledge about sea breeding. So bear with me, I have to use my cards and read a little bit and be very cautious with asking questions later on. I will do my very best.

I would like to give you a little personal here because that is quite linked to the history of the -- or the strategy of the company itself. I grew up in agriculture. And for the last 23 years, I worked for the company, GRIMME. GRIMME is a manufacturer for harvesting equipment for sugar beets, potatoes and vegetables. And I grew up in that company, spent 6 years in America, 4 years in China, worked in different functions, but mainly in sales and service. So mainly worked with customers all over the world, farmers all over the world, grew up into the management position and together with the son, it's a family business.

I was running the management team for the last 10 years. So perfect conditions, everything was fine. And now you can ask the question, why would you change? And I'd like to explain a little bit why I change. Felix Büchting mentioned already that in the next years, we will need about 60% more food. And the question is how do we make that? How do we get there? I mean, 60% more food in a shrinking arable land environment, global climate change, we all know the factors. How do we manage to do that? And when you look in the past, we've mainly -- the main growth drivers since the population was growing in the last 50, 100 years already quite high.

The main growth drivers were synthetic fertilizer, chemical plant protection, mechanization, my background, and plant breeding. But if we look in the future, we have some major challenges in that way. Our farmers have some major challenges. Fertilizer use is very much regulated all over the world in the meantime. So the amount of fertilizer being available to farmers to use on their land will go drastically down in the next years. Chemical plant protection is denied by the consumers. So the consumers will not or lower -- less and less accept chemical plant protection in the future. It is also regulated by a lot of governments. The mechanization is at its limit. And like I said, I know that from my background.

Today, in Germany, there's only 1% of the population being employed in -- so the most gains in mechanization have already been accomplished. So as you said, we -- I think we can be proud that plant breeding is one of the major leverage to contribute to that 60% growth of food production. And that was one reason or one motivator or the biggest motivator for me to say, I'd like to change to KWS to change from the mechanization industry into the seed breeding industry. Now I'm proud to be part of the management team of the new form part of the management team and on the other side, even more proud to be part of that fantastic team of 5,000 people spending every day and a lot of time during the day in seed innovation and trying to cope with that challenge we have for the future.

Today, I'm responsible for cereals and corn, and let's look at that business unit a little bit closer. 50% of the world's food production is coped or done by cereals and corn. And I think that's a tremendous number. So I'm very honest that I'm being in charge of that very, very important section of our business. But let's look a little bit deeper into cereals. Does anybody know what kind of crop that is on this picture? I'm glad that there's not too many experts in the room then. So I just want to make sure. This is [indiscernible], one of the very success stories in our portfolio.

Today, Felix Büchting mentioned we are a market leader in a lot of crops, but that didn't happen overnight. It started actually at the end of the 19th century already with the family [ Loho ] in a small village [indiscernible] in Badenburg, starting to develop and starting to create well, the breeding on rye and also already on wheat. And KWS started, as Felix mentioned, in the 1920s. The Loho family became much a later part of the KWS family. And so like I said, it's a long, long history already. In the 1955, we started oilseed rape. 1987, the success story of hybrid rye started in Germany.

In 2008, we started the breeding of sorghum. And in 2014, we started looking on the grain side into North America, one of the -- or the biggest market actually. With hybrid rye, hybrid rye is not very successful, not very known in North America, but that started in 2014. In '15, we launched some new things, some new hybrid -- the new hybrid wheat system and the first soft red varieties in North America and in 2024 last year -- or the year after last year, we started hybrid barley, which I'll come a little bit later to because that's a very, very important step.

Let's look at the big growth drivers. We have had a very successful growth rate. In the past 10 years, 9.2%, so almost 10% of growth year-over-year. And why is that? It's because we have a strong portfolio. Even though commodity prices are low, our portfolio is very, very strong, and we can leverage that, and we're able to grow also with new crops like oilseed rape, which is a part of that number very heavily. You see in '24 and '25, we have a little dip in that gross history, and that's mainly because of the Russian market dropped out. And you all know the reasons why that is.

So we -- with grain have no cereals, we don't have access to the Russian marketing also it dropped. Still, we have our target of more than EUR 300 million in the next -- well, between 2028 and 2030. And I think we can be very, very optimistic to get to this point.

Let's look at the portfolio. Today, our cereals portfolio consists of hybrid rye like I said, success story of KWS is 38% of our total cereals portfolio. Then we have 31% oilseed rape, and that's growing very, very fast. So it becomes kind of an offset of the hybrid rye story. And as of this year, I can give you a little preview. It's already at the same level as hybrid rye. And it's a different market, as Felix mentioned, it's not cereals. It's a different market. And therefore, it's a perfect balance to hybrid rye. Then we have 15% wheat and 8% barley.

And the main reason this is smaller, doesn't mean it's less important. The main reason for those 2 crops, they are not hybridized yet. So they are standard production crops, no hybridization in there. So we don't multiply the seed ourselves, and I will dig a little bit deeper into that and explain a little bit more what that means. That means that third parties are multiplying the seed. So in reality, the business is much bigger, but we don't multiply the seed ourselves.

So today, we are #1 globally in hybrid rye, #2 in oilseed drape in Europe. And the oilseed drape business, we are very proud of since we are growing very, very fast on that. So we believe it's a question of years that we can also capture position #1 in oilseed drape in Europe. Wheat, we are #1 in the EU plus the U.K. And also in winter barley, we are #1. What are the main growth drivers? Oilseed drape, hybrid rye. Like I said, that's our success story. So if you ask anybody what is the big success of KWS, you will mention hybrid rye.

We have 77% global market share that brings us, of course, to be #1 in that market. And with 5.3% annual growth rate, you can ask the question is how do we want to expand on that? How do we want to make that bigger? And that's a very good question since 77% is very hard to top. So our answer to that is we have to increase the market on hybrid rye. And hybrid rye is right now a good solution in animal feed. but it's not known everywhere in the world.

So for example, in North America, hybrid rye, especially in pig feeding is very, very limited. And we are getting to the point that we're entering the market in North America and actually communicate to farmers that hybrid rye is a very good addition or a very good balance to what in a lot of times. We also look at innovation because hybrid rye and dye in general has some disadvantages.

On the one hand side, it's very -- well, it's very critical to get the right seeding point of hybrid rye. You see it here in Northern Germany, end of September, beginning of October. If you see too late, you lose a lot of capacity, a lot of potential yield. And therefore, we introduced already a couple of years ago flexible types.

So you're much more flexible in seeding, so you can seed much later or even in the early months of the year, like in January, February. And that allows us to be -- to put that into a larger part of the crop rotation. And this way, we are able to increase the market by just extending the growing season basically. On the other hand side, rye is a very tall crop. Everybody who has stood in a rye field is -- you can tell it's one of the tallest rye or grain cereal crops. And therefore, our breeders did a fantastic job in developing short varieties.

So short types, we call them. And the first variety for that is actually on the verge to being launched next year. So this will also kill that disadvantage of the high-growing plant because especially when you are in heavier, richer soils with a lot of manual of fertilizers being spread on that is the downside is that the rye is going towards lodging, so it will break down because it's getting too heavy. So with a new variety, we will disconnect or take that disadvantage out and really, again, make it more attractive to growers to go into this type of rye. Whole crop types and green mass types are new varieties, and therefore, we tackle markets for using the whole plant for feeding or using the green mass types, especially in biogas plants to again extend the portfolio to make the market bigger on rice.

Let's look at the oilseed drape. That's a real success story and one of the strong growth drivers right now. We are #2 on the market position in Europe. We have had a steady growth of almost 19% in the last 5 years year-over-year. And therefore, we gained 7% points on the market share side. So this really tells that we have a strong portfolio in oilseed drape, and it took a long time to get to this point. We started breeding of this crop a long time ago already. And now we are at the point that the portfolio is full, that we can leverage it. There's a new a lot of new varieties on the verge to being launched. And one good example of how we can contribute to less chemical input, I'd like to explain a little bit deeper.

This little black friend is called the Cabbage stem flea beetle who managed that. And the [indiscernible] beetle is a big problem in European oilseed production since it's in a very early stage. It's going into the plant. It's drilling into the stems of the plant, and so it can reduce the yield of up to 30%. And the big downside of that is it's resistant to a lot of chemicals. So our farmers have a very hard time fighting this disease or this little animal. And the other part is that European legislation leads to a lot less chemicals being available. So we have to find answers for that. And our breeders were able to change the genetics of our input by breeding, traditional breeding. And with that, we were able to launch an innovation, which is called Insect Protect, and that reduces the infection of the cab steam-free lab actually by 30% and it's a true answer to that big problem.

And again, that leads a little bit back to the initial story I told that we have to cope with those climate changes. The beetle is part of the climate change problems getting warmer. On the other side, to deal with legislation, less chemical input and I think that's a perfect example how we can show that breeding is an answer to this question. Okay. Let's look at wheat and winter barley. Number one in Europe plus U.K., both crops. In wheat, we have a market share of 20%. In winter barley, we have a market share of almost 30%. So this is, again, shows how an important player we are in both crops. We have an annual growth rate of 3.9% is not super impressive. But like I said, it's a very important market.

But I'd like to explain a little bit why that market can be even more important for us. And therefore, I have to show you a little bit more details, seed value. This chart is very, very important, and therefore, I'd like to take some time on the left high axle, you see production in million tonnes. And on the vertical -- on the horizontal axle, you see the average area planted all over the world. It's a global chart. So for example, in corn, you see -- sorry, go back. In corn, you see there's almost 50 million or roughly 55 million hectares being planted worldwide with roughly 500 million tonnes of production. And within the bubble, it says 213 million, that's the seed value. So USD 213 per hectare does the farmer need to spend to buy the seed for this important crop. Sugar beet, you see here on the left-hand side, 283 million, also a high-value seed crop. And on the right-hand side, you see wheat.

It's the most important crop since it's grown on more than 90 million hectares worldwide, but the seed value is very, very low. It's only USD 10 per hectare. And why is that? The reason for that is that a lot of farmers are saving seed, farm state seed, we call it, they're saving seed from the current production and replant in the next year. And therefore, the market for wheat is right now fairly small. And what we are trying to do is by hybridization creating new innovation for farmers to increase yield or deal with insects or climate change.

And with that hybridization, we are able to increase the seed value for wheat. And the downside of hybridization for the farmer is that every year, he has to buy new seeds. He cannot use the seed again. But the upside is through the heterosis effect, our breeders were able to to react to climate change and to needs the farmers have faster, so we can increase the yield faster. And that is the innovation we are working really on cereals on, not only on wheat, but also on barley.

We believe that through hybridization in the future, we can increase the seed value. Barley, you see in the bottom is 20. We can increase the seed value of up to USD 100 per hectare. And I mean, you can calculate it yourself, 90 million hectares worth of wheat multiplied with USD 100 per hectare how much or how big that market can be. And again, in Western Europe, we are a market leader already. So hybridization will be a huge driver to become even bigger on that.

So overall, to summarize, we are in a poor position in the run for global food security in cereals. We are -- we have a broad portfolio to fight climate change and to deal with less chemical input. And we have a significant growth potential through hybridization, especially on wheat and barley, which we will launch the first varieties in wheat in the mid 2030s. So barley, the first variety is launched already. So we are a little bit ahead of the curve. So those are huge impact drivers for the upcoming years.

Let's look at corn and sunflower. I mean, we all know we live in a very changing environment on the newspaper on the news every morning, each of us here is war in Ukraine and Gaza and Sudan. We have a climate crisis. We deal with global trade protections. We have an energy crisis at the end. And therefore, I find it very, very smart and very brave for the former Executive Board, it was a couple of years before my time to make the decision to divest from our businesses in North America, South America and China. And to show you a little bit what that effect was and how brave that decision was, I think this chart really is impressive and shows the outcome of that.

In 2022 and 2023, we did more than EUR 1 billion worth of turnover with the 2 main areas. We call it GM markets, South America, North America and China and the European traditional market. In 2023, we decided to divest from the joint venture in China. In 2024, we decided to divest or sell the South American business. And now in 2025, we decided to sell the joint venture in North America. And that led to a turnover reduction of more than half. So right now, we are right around EUR 450 million worth of sales, but it made us way more robust. way less capital intensive, way more profitable than in the past, and we have a much bigger focus on the traditional European market where we can really have potential to gain market share. And I'd like to show you how we think we can gain market share in that end.

Today, the annual growth rate over the last 10 years is 2%, which is truly not impressive. But putting that into perspective, the area in Europe is shrinking due to several reasons. And still, especially in the last 5 years, we were able to grow. And I found that quite impressive in a shrinking market still growing. And the question is why -- how did we do that? And the main reason for that is innovative products. And our products, both on silage and corn really have the potential to grow even more. And therefore, we believe that we can reach more than EUR 500 million turnover in the Western European market within the next 4, 5 years.

And I'd like to show you how we are planning to do that. And again, you know this chart, you have seen this chart already, but this is a little different than the first one you saw. This one focuses on the European market, not the global market, like the one we saw before. And the bubble size is not U.S. dollars per hectare like we saw on the previous chart. This one is euros total. So for example, you see the grain and silage corn market being at EUR 3 billion total market in Europe. Again, you see at the bottom, roughly 20 million hectares being planted corn being planted in Europe.

That shows very impressively that corn is the biggest seed value market in Europe. And it's split up in grain and silage. Silage roughly EUR 1 billion; grain, roughly EUR 2 billion, so 1/3 to 2/3 split up. And also, you see the other crops in that chart, and that's the reason I like that chart so much. You see wheat in Europe being planted is roughly 30 million hectares, only EUR 500 million seed market.

So again, it's the most planted crop in open fields in Europe, but the seed market is only EUR 500 million. It's the same size like sugar beets in Western Europe. And sugar beets are being planted on 2 million hectares roughly in Western Europe. So that shows, again, relating back to the wheat story, how much potential that has. But again, looking back to grain and silage, it is actually the biggest market with EUR 3 billion in Western Europe. And I'd like to show you a little bit how we believe we can profit, how we can gain market share in this market.

Today, we are #1 in silage corn with 18% market share, Silage being used mainly as a whole plant to -- for feeding cows or used in biogas plants. And in grain corn, we are with 10% #3 in the market ahead of us being pioneer and buyer. 2 big players, of course. And therefore, it's important that we being -- still being innovative or having a good pipeline to gain market share, especially on the grain corn side since you've seen it's the bigger market, 2/3 of that is in the grain side.

So we believe that we can grow quite a bit. And we've seen in the last 5 years, we were able to gain market share. We were able to increase the business. Starting with silage corn. We believe that we can strengthen our leading position by innovation, and we see already we have top-tier performance in innovation coming up. Good example of that is energy boost corn. So since silage corn, like I said, is mainly used in production of milk or meat or in biogas factories or biogas plants, the methodology is actually the same.

So you try to put as much energy into the cow and the cow produces milk or meat and man. So the same happens in the biogas plant, by the way. So that's the reason the systems are quite comparable to that. And we have done in the past years a new innovation, which we call energy boost corn. And that means you harvest more energy per hectare because it's a higher dense energy corn. That being launched brought us to the fact that we are kind of market leader on the silage side today. The downside of that is digestibility.

And digestibility means that a cow can only take a certain percentage of the energy being fed and transfer into milk or meat. And the digestibility was always a downside of having the high energy input. It was used by our competitors to be more creative. And we have overcome that issue with a new innovation, which we call high digestibility energy boost. So we combine both innovations, high energy with digestibility to a new innovation and really that will bring us to a very competitive edge product.

And we see already the first trials, especially in France, that this innovation truly outperforms everything which was currently on the market. And we are very anxious to the product launch, which will happen in '27, '28 because this will take or will boost again our position in the market and will boost again the market shares we saw already. And again, a good example of how breeding can really contribute to less input, more output concept. So really, with this concept, we can -- our farmers have a lot less input and more output to cope again with the challenges we've talked about earlier. Let's look at the grain corn side.

Grain corn, super innovative as well. We've launched more varieties than all other competitors in the past 3 years, and that shows how strong the portfolio is and will be. So over the next years, you will see a lot of new varieties coming on the market. And therefore, we believe that we can even grow our market share, which is 10% in grain, as we've seen earlier, just by the speed of our breeding right now. So we are really in that -- on the very competitive edge right now. And with that speed of breeding, we believe we can really gain on the market share side. And I brought 3 examples of that. We launched a couple of years ago already the plus 4 grain varieties.

This is a high-performance hybrid on normal suitable grain conditions or corn conditions. It outperforms yield-wise pretty much all competitors in the market. So that's for standard grain production. Then we've launched a new variety or new varieties, new hybrids in the section of climate control. And Climate Control 3 actually means that we are -- or this variety, this hybrid is able to cope with drought. And this is a huge factor in a lot of Western and Eastern Europe also. Southeast Europe has a huge problem with climate change, and it's just raining not enough.

We just talked to some colleagues a couple of weeks ago, and they actually had no rain during the whole growing season. So these varieties or those varieties can much better cope with this drought factor than -- or with drought stress than conventional varieties. And the new innovation in the run is [ DryDown+ ]. And again, [ DryDown+ ] is a variety, which is an innovation which is available, especially for farmers in the northern parts of Europe, where the downside is that with cold, wet autumns, the problem is that you are not able to get the corn and dry. And therefore, it's important to have a new variety there to -- which is called this very early variety, DryDown+ makes it easier and earlier to harvest the grain dry. And therefore, we can also create other innovation by extending the crop rotation by harvest being able to harvest earlier, we can again put different crops in the ground with that.

Let's look at our most beautiful crop in the portfolio, sunflower. Sunflower is a fairly new crop, and we are heavily working on that, that we -- at a certain point of time, we can call this business unit not cereals and corn anymore that we call it cereals, grain and oilseed rape and sunflower. So oilseed [indiscernible] is growing very much. You've seen on the oilseed rape market, it's about EUR 400 million. On the oilseed [indiscernible] side, we have 60% market share. On the sunflower market, we have 1.6% market share and the market of sunflower is EUR 1 billion.

So you saw that earlier in that nice seed value chart. sunflower has an amazing amount of market. And that market is still growing. Why? It's the global vegetable oil market. And this is -- the global vegetable oil market consists of 220 million tonnes. 10% of that is sunflower. And we believe our experts believe that, that vegetable oil market is expected to grow by 10% in the next 5 years basically. So it's growing. We have 10% sunflower content in vegetable oil in general. And we have only 1.6% market share.

That really shows that we can grow in this area. And here you can see a little bit of story of sunflower. We started in 2011 basically with the first breeding programs. Again, 10 years later, you show the -- you can see the long breeding cycles. 10 years later, we launched the first own variety by KWS called KWS Ademes. And since then, from 2023 on, we are gaining market share. Right now at 1.6%, but looking at the pipeline and the varieties to come and the market to expect it to grow, we believe that we can grow our market share to 10%, which would mean in the current market size already EUR 100 million turnover. Yes.

To conclude, overall, my last slide. I hope I was able to show you why I made personally the change from the mechanical industry to the seed industry because I truly believe that in KWS, we can answer or with KWS or KWS can answer a lot of the questions we have concerns the 60% more food we will need in the next years. And KWS will cope with climate change and more regulation in terms of fertilizer input and chemical usage. So I believe at the end, with KWS, we don't have to worry for the future. This is really, really a successful story. And therefore, I'd like to thank you for the attention and I'd like to hand over to my colleague, Nico.

All right. Good morning, everybody. I hope you guys have a good breakfast. We're slightly behind schedule, but I hope we will finish on time for your lunch. I'm Nicolas Wielandt. I've been with KWS 19 years already. I'm originally from Chile. Although my last name sounds German, unfortunately, it didn't come with -- the DNA didn't come with those skills. So last night, we were trying to speak in German a bit, but Spanish is, of course, my mother tongue. And I've been very happy the last 19 years at KWS.

I think KWS is a company from an employee perspective that provide a lot of opportunities, and that was my case coming from Chile, moving here, taking roles starting in regional responsibility for sales in sugar beet for quite some time. Then I took over the Sugar beet business unit for 5 years. So we have this Head of business unit. I was in that role between 2014 and '19. Then in '19, I moved to corn.

I was responsible for Corn Europe. And in '22, I had the honor and the responsibility, which I do with a lot of humbleness and challenge, of course, to move into the Executive Board. And in the last -- basically since '22 until this year, I was very much focused on what you have seen from Sebastian, the divestments we did of all our portfolio of the Americas, of the American corn market. And now since July, I'm happy to be back on one side on the sugar beet part and then also to take the challenge on vegetables, which is I would like to walk you through. And if we start with sugar beet and I brought some things that you can feel and touch, but this is not a real beat, but this is more or less what farmers will have actually harvest from a hectare of sugar beet.

We have seen from Felix, we started in 1856 with the intention of the sugar industry to improve the raw material, so to make this be more productive. And you have seen we have been growing, and this is only the last 10 years, very sustainable, and this growth has been driven by innovation. We are today close to 900 million, and the intention is to go to 1 billion. And I will walk you through what are those innovations actually that make us quite confident that we will reach this target. If we talk about the sugar beet acreage, unfortunately, we're not talking about hundreds of millions of hectares like in other crops. Unfortunately, it's only 4.6 million hectares. There is about 10% and you see this orange bar is actually the percentage that represent of the total market.

The U.S. is about 10%, although it's a very important market for us. We have very strong market share there, well, all over, but in the U.S., in particular. So there are about 200 million, almost EUR 200 million sales that are coming actually from the U.S. And then the rest is, of course, in Europe. So we have between EU 27, if you want or the European Union plus East Europe, we have about 3 million hectares. And then the rest of the world, particularly North Africa, Middle East is another 1.2 million hectares. So that's today our footprint. That footprint of the crop has not been stable. So if you look back in time, the acreage actually have reduced significantly. And we were discussing yesterday that we work against ourselves.

On one side, we want to be more sustainable. So we want to have more yield per hectare. But that, of course, make us producing more yield, so less hectares are needed, and there have been a lot of sugar market reforms during the time, which are now meanwhile over. But you can see that while the acreage reduced from 7.4 million hectares to 4.6 million that we have today, our sales went up. So our revenue from 131 million to this 872 million record year we had last year.

And our profitability, even more important, grew amazingly to EUR 367 million. Again, this is based on our ability to turn innovation into value. While we launch innovation, of course, we become the preferable partner for the farmers, and this has been rewarded on our market share. today, we are close to 70% market share. This is value-based market share because yesterday, we were talking during dinner about, well, 70%, the chances to grow maybe are limited.

But actually, we still, from a volume point of view, we're only at 60%. So there is a 40% in terms of volume that we can capture ahead of us. And you can see the main competitors. So the strongest competitors here now is a joint venture between our historical competitors, the [indiscernible], that was [indiscernible] for the ones who are familiar with our seed industry. and then DLF, which is a Danish breeder, which have acquired a portfolio from Syngenta.

So Syngenta divested their sugar beet business, and this has been acquired by this group. And then [indiscernible], an historical company based here in Germany that has been recently acquired by ET, a French breeder. And the rest are some local institutes. But today, we're in a very strong position. The market size is EUR 1.2 billion per year. This has been developed and growth, thanks to the innovation that we have brought to the market. So if we talk about innovation, I think this is quite key to understand what have been the key milestones along this process, starting with the [indiscernible] so that hopefully, from seed, it only grows one route, one plant. In the past, this was not the case.

So it was called [indiscernible]. So you were putting one seed in the ground and they were growing several plants. So the first -- that was the first step technically to have a very uniform stand in the field. Later on, we introduced resistance to Romania and [indiscernible], which were diseases that were really affecting the crop. And then we start getting into what we call herbicide tolerance. So you have during your crop, you have non-wanted plants or wheats, as we will call it, starting in 2007 with the introduction of the transgenic Roundup Ready bits in North America. And then moving into 2018, what we call [indiscernible].

I will go into details. So in Europe and the rest of the world. And now recently, in 2021, a resistance to a fungal disease called [indiscernible], which significantly affected the sugar beet.

And actually, we have created a very interesting value in that regard. So starting with CONVISO. CONVISO was a collaboration. We founded with Bayer. So this was a joint work once the Bayer had responsibility to develop the herbicide. The reside is called CONVISO ONE, and we have developed the varieties of the plant that actually can stand this every site without dying. And then, of course, the rest of the wheats are being eliminated or removed from the field. And that really brings a lot of convenience for the farmers because the classical or the former way of managing the field regarding that the farmer needs to go with the tractor 3 to 4 in the field. And of course, they have families, they have other crops, et cetera, have to go 3 to 4x. And in the right moment to spray it is a tough challenge. So with this, we introduced a lot of convenience for the farmer. And as a result, you see you can manage the weeks much better. And that, of course, increased the yield as well. So this innovation has brought a lot of value.

I will come into that now. You see here a little bit of them up on the adoption of how CONVISO SMART has been penetrating the market. So today, we are above EUR 300 million sales varieties which contain this technology. So not all the values only on the CONVISO part is also on the generic. But the 2 things combined, we have sales for EUR 300 million. And this year, we actually expect still another growth of about 10% in terms of value on this technology. And as you can see as well, the penetration is still not which it speak to come on CONVISO. And this has been driven by the registration of the herbicide and certain regulatory aspects. So we couldn't launch all the countries at the same time. So there are countries which are quite advanced and others which are still in development phase, but I expect that still we have another 2 years of growth, at least on this product. This -- we still need to have other chemistry. So that's a requirement. We still need to have basically something to combine with CONVISO, especially to manage with resistance. So if you only spray the same product all the time, with time the wheats actually do not get controlled. So it's very important to have other alternatives. But at the same time, as we have heard from my colleagues, the regulatory framework from pesticides of all means is getting tougher and tougher. And actually, many of the classical herbicides that used to exist in sugar beet that not available already. So CONVISO has become really a fundamental solution for farmers today in Europe.

Okay. I will move to Cercospora. Cercospora is a fungal disease. And basically, you see the impact of this is quite significant. So you can have 50% of losses because actually, what it does it destroy the leaves, you see there the leaves get necrotic, the leaves die. And as a result, the routes start growing new leads and that takes the sugar out. What we want to do at the end of the day is that the farmer harvests a bit full of sugar. But if it all the time, the energy is going to grow new leaves, of course, you lose the performance of this crop. This has been KWS innovation, which we have launched and that actually really balance or limit the damage of this disease. The penetration as well has been much faster. This has been really a very strong successful story. I would say here, we have really reached in most of the market a certain peak. But nevertheless, today, we're close to EUR 250 million of varieties that have this technology. And the best, of course, of all is when you have a variety like this one, which is basically a combination of pulp. So you have CR+ and CONVISO SMART in one product. And this has really boost the sales. So today, we have -- if you combine both, we have about EUR 500 million sales of varieties, either having CONVISO, Cercospora or the combination. And this has really been a great story of innovation, how do we bring innovation to the market.

And as I think Felix mentioned at the beginning, we are capturing value from the chemical industry into bidding. And this is really a unique opportunity as I see the specialist that you can reduce fungicide applications, so less fungicide and more value into the seeding, into the breeding pipeline. And you might wonder, okay, what's next? Is the story going to continue? And yes, it will continue. We're investing about EUR 100 million per year on breeding and this is super important for -- just for sugar beet in order to keep a pipeline of products coming up. We know these technologies do not last forever. So you need to think on successful products. On one side, we have digital tools to manage resistance to tell the farmers when it's the right moment, for example, to spray. So they have a better efficacy. We're about to launch a triple stack of herbicide tolerance in the U.S. I said in 2007, we have launched the Roundup Ready system. So glyphosate apply on the leaves, with time and especially in the U.S., the farmers are basically growing everything on the Roundup. So they only spray the same product. And that, of course, with time, creates these resistance. And we have started this project in 2014. We have signed the agreement with Monsanto. Monsanto give us the genes. We do the transformation into the sugar pit, and then we're ready to launch it. The launch will come in '27, '28. So you need to think on how long it takes really all these developments, but we're quite excited. At the same time, we have virus yellows. I will go into that into detail. And a new disease that have shown up, I think you were asking me yesterday. The situation is a disease that emerge now because of the ban on the neonics and we're also having solutions for it. So as I said before, the new generation of herbicide tolerance in the U.S. is called TRUVERA, has 3 mode of actions farmers are really, really looking forward to it. The main reason why we cannot launch earlier is due to regulatory aspects. So some of the byproducts of the sugar beet, like the pulp, et cetera, which is used for animal nutrition is exported. And until all the regulatory frame is, for example, in Japan, in Europe, et cetera, is not done. We'd rather start small, knowing that basically everything we harvest will stay in the U.S. But we expect that after '27, '28 and the years after the regulatory packet will be ready and then we can really go into a more broader launch, but that will be the start. So this is really something that we're quite looking forward mentioned before, the ban of neonics have increased the spread of an in a similar concept of what [indiscernible] was mentioning before in oil field rep. The good news is we see a variation within our portfolio. So that tells us already, okay, we can tackle this problem to breeding. At the same time, working very closely with the sugar industry. We have found ways on when to spray. So when is the right time to spray certain insecticides to control it. So this is really a joint effort in order to solve a problem that is -- was becoming a big concern. And luckily, we are getting quite good results already in a relatively quick frame.

Similar with virus yellows, viruses, again, this was also stressed by a small fee, small insect and basically, with the ban of neonics, which we used to put in the seed treatment the plants become vulnerable to this attack of the AFIC and the trusted diseases, in this case, a virus. And we have started already quite early a breeding program for virus yellows, that actually without having the incentive side will give us a quite good level of resistance, and we're planning to launch the first generation on '27, '28, and that's, again, a way of how do we capture value that used to be in an insecticide, we bring it to the breathing material to our varieties. So in short, we have very good news. We have a very strong pipeline of innovation coming up. So I said we have true the next generation of visitor for the U.S., about to be launched and the virus yellows authorities. We have an ambition plan to go to this EUR 1 billion sales in the near future. And of course, the objective is to maintain and to keep their profitability as we have done until today.

So changing gears. Now we're moving to what we say the build. So what are we really going to grow in the future. These are long-term bets, very long-term bets. On one side, we have vegetables, potato and the Caves food ingredients. I will start with vegetables it was mentioned, we have done an acquisition in 2019. We have acquired pop vriend. And why we did that? Why we did the step into vegetables? On one side, as Felix mentioned, we believe, in having a more balanced and sustainable portfolio, also following what are the market trends? What are really the needs in terms of consumption per capita of more vegetable products and the population growth that has been already mentioned and described. And to give you an idea, if we talk about the global market size in terms of money, vegetables is about EUR 7 billion. But of course, within this EUR 7 billion, there are a lot of different crops and within the different crops, there are a lot of different types of vegetables. So you can find the store today multiple type of tomato, you have the big tomato, the small tomato, the long tomato. So every single crop within vegetables can be split in another segment. So where are we today? So when we have acquired pop vriend, the sales actually at that time were high. We did some divestments of crops that didn't really fit to what we wanted to develop. So for example, carrots, and there were a few other crops that we were not really interested to keep mainly to the profitability and complexity.

Then came COVID and COVID for us has a significant impact because a lot of the sales we do today are in spinach, this baby spinach the leaves that you did in the salad. And one of the main drivers are the restaurants in the United States. When COVID came, people didn't go to the restaurants. And that, of course, triggered a drop of market. We took about 2 years to recover. We're quite happy. We see now the trend in a positive direction. And the aim, of course, of the overall business unit is to achieve EUR 100 million from here until 2030. But we don't stay only there. So the long-term ambition is really to go to EUR 300 million. Why we step into vegetables? I mentioned the sustainability aspect and the other one is, of course, very important, the profitability one vegetables in general are crops that offer EBITDA in the ratio of 20% and more. So very similar to what we would expect in sugar it, for example. There are smaller niches. We think we have a very good opportunity to enter this market because there are different segments so we can choose our battles. And we have and you will learn in the afternoon when you do the research, that we have a very good base from a research point of view to support different crops. So this has been the key benefit to put the engine we have here of breeding and research to serve other crops, which offer higher profitability.

The market that we are targeting, and you can see the first 4 crops is basically what we have acquired from pop vriend. So we're talking about swiss chard and spinach and then the next 5 are something that we're starting from scratch. So we are breeding really organically. That means we're basically carrying a backpack of investment for a few years of products that we still do not bring into the market. The market potential of all these 9 crops is about EUR 3.9 billion. So half basically -- a little bit less than 1/3, if you want of the total potential of the market. And the first step that we have done is really to set up the infrastructure, mostly connected to research. So where do we do the research for the local market. So we have open stations in -- starting from the Americas, in Brazil, in Mexico to build -- to bring those crops. Inside Europe as a very important, of course, footprint. Spain and Murcia Almeria, in the Netherlands, we have the original acquisition from pop vriend. Turkey and Italy, of course, are also very important markets. So the first step has been also to build up the team to build the infrastructure. And actually, we have been -- we're quite happy that we are already in all these 5 new crops quite active.

If we look in more detail spinach. Spinach is still the main driver of the sales. So from the EUR 72 million you saw basically where EUR 48 million are coming from spinach. We are market leaders in spinach. So we have a market share of about 38%. There are different type of spinach. Our strongest footprint is in this baby leave, as I said, for the salad, but we're targeting the other segments, too. Profitability, super important is delivering more than 20% EBITDA. So this is confirmed for the acquisition is responding to what we have planned. Similar story with beans with a little bit smaller market size and still smaller market share. So here, there is also opportunity to grow. And especially, we see that we have the opportunity to grow in the fresh market, especially for the U.S. At the moment, we have about 18% -- sorry, EUR 18 million sales, 19% market share. And we see here, we still have an opportunity to develop. And actually, there is a pipeline of products that fit new markets for us, which make us quite exciting.

Last 2 smaller from the acquisition, swiss chard and red beet. And what is the cool thing or the opportunity we have with these 2 crop is exactly the same specie as sugar beet. So as I said before, in sugar beet, we're putting EUR 100 million research, of course, we will never put a EUR 100 million research in these small crops based on the market size. So swiss chard is only EUR 14 million and red beet is EUR 40 million. But nevertheless, we can use all the technology because it's exactly the same species that we have derived and developing sugar bid into the service of these 2 crops. So here, we really expect that we'll be able to get market share and presence relatively fast. So at the moment, also our core starting point in red beet is 4% in swiss chard we're a little bit stronger. So we have 20% market share. But as you have seen before, in sugar beet, we have 70% market share. So there is room to develop and to grow in these 2 areas. It has been mentioned also by Felix the approach of these 5 crops should be delivering -- this pipeline should be delivering now in the upcoming years. We have -- I don't have it here. But actually, watermelon, we already started in Brazil that was went faster than we had foreseen. So we have the first varieties already sold there, and we are starting now with tomato, and then we will start adding melon, again, more watermelon pepper and cucumber. So this is all the products should be delivering within the short term in order to reach that target, as I said before, of EUR 100 million.

Now I will switch totally the year and moving to potato. And potato actually, what you see here is what we call true potato seeds, and I will maybe give you the chance to experience that. So what I have here is about what you will need to plant 1 hectare of potato. I will pass it by don't drop it would be nice, but that's basically -- that will replace 3 months. So if you think about 3 tons, imagine here, there is a cubic meters times, let's say, 4 times, so that's really what you're replacing with what you have in your hands. The here the 2 challenge on one side, the crop today is tetraploid. And we'll go into a genetic class, but we're bringing it from tetraploid to deployed. What is the advantage of that? And at the same time, we're creating hybrids is that you're able to introduce resistance to different disease just like we do it in sugar beet. So you will be able actually to, for example, 1 big reset called Fitotra, you will be able to introduce innovation into potato much faster. We decided not to do this alone. So we started with a company called Simplot. Simplot is a U.S. family-owned company. Maybe you guys have heard about it. These are the biggest suppliers of McDonald. They have recently acquired Clarabout, a very big franchise processor in Belgium. And the owners got Simplot, he said, hey, we really want to do something with our raw material. So that reminds me the story, the same what we did in sugar beet or what the sugar industry said in 1856. We want to make something with our raw material. I really believe that we are in the starting phase of a really big change regarding the crop. Of course, it required that farmers instead of planting at tuber will plan a true seed, and you're seeing there is very small. So it's a long process to get there. It's a lot of technical things we need to solve, but actually, we're making very good steps.

We are focusing on franchise and crisp. So these are the industrial segment. That's why the value is not the full potato world. It's just a part of it. The main reason, these are the ones that have very clear breeding targets and where the highest value is in. So we can -- with that, we can really drive the innovation with time. We can also go into the table potato or the were potato that you will need at home for other uses. But the main focus has been really on this high value. So a lot of sustainable sustainability aspect, of course, you don't need to store it. And there is a lot of sanitary aspects which are improved, so you don't trust me many disease through this true potato seed compared to a tuber, which has a lot of water and is susceptible to diseases. So we are really here. I'm quite excited. I think this will be a huge innovation. We have started this in 2018, this joint venture, although our program already started in '11. So we have been quite some time. We still have -- after 2030 is when I think you will start hearing us going with the first products into the market. So a way to go. But nevertheless, the EBITDA in this case is similar to what you can see on sugar beet or it's going to be a very interesting product for KWS.

And last but not least, this was the top of the pyramid that was shown by Felix is about using our bringing innovation to change trades for consumers. In this case, we're talking about P. I myself drink normally only plant-based milk. And the example here, we have already a collaboration with FLY to make basically milk with a better taste, one being able to find varieties of piece that actually have better taste. And this is really a way for us to integrate ourselves in the value chain in a food producer value chain. We're starting. So this is really a first kind of exploratory set of projects and products that we are delivering. But we think that we [indiscernible] have that power of actually changing things all the way to the consumer. So putting the things altogether, we're really very much excited about the vegetable position thing that we really bring KWS into a very profitable and sustainable segment for the future. All these products that we are organically producing today will start delivering within the midterm. Potato, I hope you guys will have the chance to see it on the field. I was this year in Idaho seeing this true potato seed already planted in the field and it's really overwhelming, I would say. And we will really disrupt the market. That's I'm quite convinced we'll be able to do that. And last but not least, this opportunity to breed freights for the consumer is really something that is untapped basically opportunity we have. And I think we are in a very good position, actually, to make use of our breeding engine to provide added value all the way to the consumers.

So with that, I will hand it over to Peter and looking forward to talk to you at lunch. Thanks.

So thank you, Nico, and we are perfectly in time to go into the break, and this concludes the first part of the day to day. And for those who are joining us via the webcast, we will be back at 02:15 with the second part. And for us, I would like to invite you...

[Break]

Okay. Welcome back, everybody in the room, everybody online as well. I hope you had a refreshing break and got some inspiration by technology. And I think it's, for me, the pleasure to build some bridges between the business and the tech that you've seen here today to show you how we drive innovation at KWS.

But before jumping into it, I'd also like to start on a personal note. And I can tell you, I'm a bit more than [ 4 ] years with KWS in the role as the Head of Global Research, and I've worked 22 years before BASF ancoprotection research and trade research, I can tell you, when I joined here at KWS, the first thing that I noticed was the different kind of people and the team spirit that we have here. We really have some people here that want to roll up their sleeves that shows some agility even when it comes to change. I see a remarkable difference here. And speaking as a head of research, knowing that innovation is always about many people having to work for a common goal and knowing that the people need some inspiration as well and a positive atmosphere. I feel this is super important. And we see this actually as a key differentiator of KWS in the market of competitors that we have around us.

So with that little prelude, let's go into the topic of innovation. And to start with some definitions from research. We like to do some definitions first. What is innovation about in our business here. I think you've heard already a lot about it. First of all, it's bringing reliably and sustainably good new products to the market and generate some value for our customers and have some share of that value with us. Products in the market first. Second, and you've seen a little bit of that. It's about efficiency increase and how we do our processes, how we can speed up the things, how we can take costs out, become more efficient in our innovation processes. And third is technology awareness, becoming aware of what's going on out there and jumping on opportunities that are coming up. And I'd like to frame a little bit the picture around these 3 dimensions and take you on that journey how KWS is innovating.

And I'm just picking up that slide shown by Felix already before, and that is our retrospective in terms of pipeline that we have delivered over the last years. And the first message here is already a repetition of what you've heard already. We think in decades. We think in long term because breeding innovation is in itself a long term process 10 to 12 years typically from the first cross to a new variety reaching the market. And that is, by and large, because we cannot help, but the plants need the time from growth in the earth to set some new seats. That is the biological limitation. Everything else around, we can influence, and we try to influence where we can, and that is part of the story. The other part that you see is that we are talking about key innovations here that are in the most expect traits, that are new features. We've heard about it herbicide tolerance, biological tolerances, resistances to fungi, insects. We have seen all that already today. And you see hybrids. Hybrids is another big topic, which I also like to give some insights on. And that is not even the full picture because the core of the innovation is a very steady stream of incremental performance increase in our varieties.

And what is most important performance for the pharma yield, of course. And I would like to shed some light on that in the first place to understand how our innovation engine works. So that is a picture of our whole crop portfolio. crops. And you've heard that we are embarking just on most of the vegetables, which are new. And you need more breeding programs to cater that because, for example, you've heard in corn, we have silage and we have grain corn. These are 2 different breading targets that need to be catered by different breading innovation processes. And when you then look into the differentiation that you have in some of the vegetables like tomatoes, small, big cluster tomato for pasta sauce, some for fresh markets, we've actually have a fragmentation of significant size, and that fragmentation also needs to be built up in the breeding process. So you may ask, wow, that's a big portfolio. And I think we have heard it is a pretty unique broad portfolio in the industry. How does that make sense? I mean, from a business perspective, we have already heard it. Chances and risk balances in different dynamics of different market segments that's helping.

From an innovation perspective, here, you have one of the core messages I'd like to convey to you today. And that is, actually, breeding is a very fundamental and a very similar process from crop to crop. You all know it, what is breeding at the end, crossing 2 plants and selecting for some positive outcome. And that is very comparable in the first phase. I don't want to play it down, but because there's a lot of knowledge involved how to do it actually good and fast and reliable. But in essence, it is very comparable. And it's also very scalable. Actually, you can calculate how many output you will get over after a couple of years when producing a certain input of numbers that you put into the system because behind it, there is a lot of pure science and pure predictability. So I think the message I want to convey here is that the core breeding innovation engine in the first part is very reliable and stable and very predictable in a way. And that is the reason why the output of this innovation engine is very predictably. And you see also looking back in decades, year-on-year, how many varieties as KWS gotten approved by a variety of approvals in the authorities overall. You see it's more or less a constant increase, and that is about the reliability of this engine. Record high of 584 approvals in the last fiscal year. Of course, a substantial spend in terms of research input. But I think there are some industries out there which would envy us for this kind of scalability that is in the process. But this is not the whole story. I'll come to some more challenging parts of that in a second.

You see also that we have about 1/3 of our employees engaged in that, a substantial commitment and that the general output of that for the farmer is an annual yield increase by 1% to 2% that we deliver. And just to be very clear on that, the process of variety approvals in most of the markets is a super objective one. Officials do tests with our competitors material and compare it against. And only if you really have a better performance of an existing product or -- and it needs to be different, too, then you get the approval.

So it's a very, very tight measure of innovation, what we see here. That is why I will not talk about the breeding process for the rest of the talk, but focus more on what we do on those step change innovations on traits. And this is just a summary of the presentations of the colleagues in the first part where you see the anticipated product launches that we have planned for our crops.

And we see again, we have traits like the digestibility you've seen, TRUVERA as a second-generation herbicide tolerance and all the kinds of resistance traits in between. And you also see that we want to launch hybrid barley as a new product that we get and the vegetable products, which will come totally new to the market. So looking back as well as looking forward in the next years, I think it's proof that we have a pretty solid and reliable innovation machine that we are actually running.

So looking a little bit more on the traits end and to give you a little bit of a feel for what that means in terms of scale and efforts. again, maybe starting with the definition, what is a trait, and you've heard it here and there. We offer special features and performances to the farmer that give an added value to him. And then we share that value in the seeds. Often, it is actually reducing input costs. It is kind of herbicide use, fungicide, insecticide use, agronomic properties that includes fertilizers as well as other features in the plant.

So actually, we help to do more with less input, and that's an economical benefit, not to speak about the sustainability aspects of shifting from chemicals to [ seed ] value. You also see that sugar beet is our biggest traded crops, and we have already heard that there is a relationship between if you can really deliver innovation into traits that can deliver market leadership. And you see the other here as well.

And when we look from that perspective of that portfolio, you often see an innovation-driven companies something like pipelines like this. And on a very high level, about 1/3 is very close to the market and 2/3 is not so close to the market. That's not an important message. The important message is behind that picture. And that is if you compare this innovation pipeline with other industries, let's say, agrochemical, for example, then the question is where is the biggest risk.

And for agrochemicals, a big substantial risk is still in late phase. You can have already spent millions into a new chemical and it hits a toxicological or whatever wall and you cannot market it in some markets or get lost it totally. This is totally different in our case. The biggest risk is actually here at the very beginning. The risk is just to find the trait, find the genes that make up the trait. Once you have identified it, everything else is classical breeding and bringing it through.

I think it's a very important message because sometimes you look at risk and kind of reliability of innovation, and we have a very reliable innovation pipeline there as well. So we could say at this point in time, everything is fine. We have a very good solid base to do our stuff, demonstrated by the successes in the last years. What's the biggest risk now? The biggest risk is complacency and limited foresight.

Who of you still has a cathode ray TV and is not using display panels? Technological innovation, display technology, EV, electronic cars versus classical combustion engines, innovation in battery technology. And who would doubt that generative AI and AI as such will drive industries, also our industry in the future.

So what I want to say is the foresight, which is core of -- one of the core values of KWS, it's very important to stay in the business, even if you have a reliable innovation engine of that kind. And that is why it makes sense to look into breeding from the first stage where human kind started crossing and selecting for better performances. 10,000s of years, this worked very nicely. Until in the mid-1880s, monk in the Czech Slovakia has identified how this thing works in plants. He identified that what you actually see on the field is actually the results and correlated to a building plan inside the plant. And that building plan, we all know today are the genes and the genomic information that is the construction code.

And in the decades after that, we have learned to read this and to use this information. And that was basically the kickstart of a big technological innovation. And if you missed out as in the industry, you could be lagging behind very quickly, although innovation time lines are long. And the new kids on the block are genome editing and genomic selection. Genomic selection is the marker-based technologies that Wolfgang Michel has talked about for you today.

So let's go a little bit into this and summarize it on a sufficiently high level. What are the 4 key innovation drivers for us as KWS and I would say, in the industry overall. Marker and genomic selection, genome editing, it's a little bit newer, crop hybridization and basically AI-driven data science. And you see there in different level of maturity with marker and genomic selection, you have seen throughput is the most mature.

Genome editing is the new kid on the block. Hybridization, we are very good in, but we are still going for more and AI-driven breeding is then the future innovation wave to come. So I'd like to go through those with you a little bit. So starting with genomic selection. And you've seen what our people are doing there. The principle is take a little sample from the plants like here, cutting out a [ punch ] from a leaf, extract the DNA and look at that marker map that is inside there because these markers tell you if a trait is there or not. And then you don't have to necessarily wait until the plant goes in the field and shows the properties, but you can actually deduce it already from that digital information that you have gained.

So it's an efficiency increase and one because you can save on doing field trials and it's a way of accelerating parts of the process to market. And therefore, it's a process which has after, let's say, 15, 20 years of ramp-up, entered into a phase of scaling, we are only scaling. There is nothing technologically super new about it anymore. We know how to do it. You've seen the chips.

They are loaded with samples and scaling is about reducing cost. So we are not talking about fancy technology. We are talking about really strong innovation by scaling cost. So you see in the gray bars, we are doing more than 800,000 samples by year. So we test 800,000 genomes in the plant per year. And the cost per sample of doing this have at the same time halved, and we are on a further journey by scaling effects and making that bigger.

That is the result of the robotics that we have seen. So a very mature technology delivering extremely well to our processes. Totally different story, genome editing or also known as new breeding technologies, NBT. Big in the public awareness and debate, I would assume that everybody knows that there is something going on. And why is that important? What's so special about this for us as breeders? And that is it's because it's totally different from breeding, but delivering the same results. What's different? Breeding is a shotgun approach. You basically put a lot of diversity in there, go to our Elite get some genetic diversity and screen in the field for the properties and maybe enhanced by genomic selection.

Genome editing is the total opposite. It's like a laser sharp scalpel where you can say, I know which gene I want to have introduced or changed in the plant and you do it in a single step, straightforward, super precise, super targeted and therefore, in itself, very fast relative to continuous screening and breeding processes.

So speed by precision. That doesn't mean that you can change the whole breeding approach in the future with that because what you need to know is what to actually change, and that is where the knowledge and the precision then comes from. But overall, it's speeding up in the cases that we can use it. We have agreed on an improvement by 2 to 3 years, but nobody knows today because we are still not using it in full steam, delivering product to the market, but that's the best estimation. And I can tell you from a technical perspective, there are examples, [ Niko ] has mentioned potato, which are basically impossible to breed today, breeding progress is super slow in potato because of genetic complexity. Genome editing in potato is a super powerful tool to achieve things that classical breeding can't.

So the bandwidth of achievement by genome editing is very broad. And KWS is very well positioned to genome editing because we have -- we are running a research center in St. Louis with about 50 people, which sole task is to develop the technology platform and put the first trait developments for future products in place. We have technology access. It's a very new technology. There's IP around it, and that needs to be taken care of. We have all the tools in hand that we need to do this.

And by establishing the platform, we are already generating own IP to solidify our technological position. And all of this goes mostly hand-in-hand with some strong partners that we have and that we use generally in innovation in our industry. So this is maybe one more thing, breeding is a method that is very standardized. You cross plants and get something out. Genome editing is not. Genome editing is actually a very plant-specific approach where you have to develop those technologies for each crop differently because I always say, in the field, every plant does the same.

In the lab, every plant is [ diva ]. They want to be treated with special care. So that is why technology development effort for genome editing is a little bit on the higher side than as compared to plant breeding. And when we look at the time line, there's 2 important messages for you here. First, it's about that thing that I said, have the foresight. Actually, the first reports of crop plants actually that they can be edited were in 2013. And 2 years later, KWS started with the GRC in production and building -- having that lab ramped up and going live.

So that shows you that at that time, and it's well before my time joining the company, there were some decisions that had the foresight and were courageous because at that time, there were still many questions open, can it work? Will it actually be delivering to the market. And actually, the second question is what about today, how do we get the products to the market? Because I hope most of you know, genome editing plants are currently in Europe still treated as genetically modified plant.

And that's a [indiscernible] word. Nobody wants that. No consumer likes GMO plants and the regulatory hurdles and the efforts that you do have to spend in money to develop plants as GMOs is just prohibitive. Currently, that is still the case. But there is a super active and as we speak, actually in the European legislation, people are talking with each other. We have the so-called trialogue of Commission Council and Parliament talking with each other to find a compromise and have a regulation that is much more favorable of developing those plants in Europe.

And that sounds like a European problem, but it is not because from the GMO plant debate, we know or the situation we know. For example, our Truvera sugarbeet, it's a GM plant marketed in the U.S. In order to do this, you have import approval from a regulatory side in Europe for the produce actually coming. Even the sugar needs to be -- so we needed to make sure to say, hey, there is no genes in the sugar and whatnot. So the regulatory hurdle even for products that are produced somewhere else are very high.

And therefore, it is -- basically, this is putting the plug out of the can and the whole thing will fly. And that is also the basic principle how KWS approaches this. We are basically ready to bring the products quickly to the market once this door opens, and we are very confident to do so. Why are we confident about that? That is mainly because KWS is in a super middle position between the big companies, which are happening to be agrochemical companies, not only seed companies and the very small breeders, which basically cannot afford using those technologies.

So we're in a perfect position to be a trustable, reliable partner, and we are influencing in these discussions and help showing the value of this technology to the public. Now that is all about the technology itself. What are we actually doing today? So we show you here the portfolio of genome edited trait development products that is very resembling to the overall trait development picture that I've shown you with a strong focus on biotic resistance, fungal virus insects, agronomic qualities and a little bit quality and herbicide.

Why should it be different than our breeding portfolio? Because it's basically just another technology approach to get to the same results. So we would expect that this portfolio looks the same. And the other number, which we are also a little bit proud of is that the summarized value of this portfolio of activities in terms of a net present value is EUR 270 million that we want to realize in the next years to come.

With the first -- with the ambition plan to have the first products launched very, very early in the next decade. And I just show 2 examples for you to just show, hey, there is something in the pipeline without going into the detail, obviously. And you have heard that [indiscernible] already Cabbage stem flea beetles that is a part where our InsectPROTECT product line that comes from classical breeding delivers already that 30% that Sebastian has mentioned to you. The 30% is relatively low if you compare it to chemical solutions, which usually are 100% solutions, right? So there is air to breathe and room to grow.

And in parallel, we use genome editing to test genes to add something on top. And here, we have the first genes in hand where we see up to 50% saving of plants, so less feeding damage in our assays. And we are very passionately now pushing those genes on top of the initial plants directly in to find the next generation of solutions for Cavishemfietle. Cabbage stem flea beetles.

And 2 more to share. You've heard about sugarbeet diseases virus yellows. And SBR. We didn't dare to spell the name, syndrome basses richesses, say that 3x fast, so it's really tongue breaker. syndrome basses richesses is one of those upcoming new diseases that are shifting pests coming to the northern, more cool areas, Southern Germany, even middle Germany, sugarbeet areas are now infected. It's coming so fast that even academia didn't have a big chance to understand this disease.

We know the principles already. It's 2 bacteria doing something, and it's actually coming together with another disease, which is called RTD, super complex stuff. But here, the point is that genome editing can help to test and understand the disease very much from the beginning and then deliver some solution on it. So it's very complementary, again, additive to what we do in classical breeding to deliver something. And virus yellows is a very similar story. I save us some time going there. So that's technology-wise on these genetic technologies.

Next level, I'd like to talk about digitalization a little bit more. And that was the wrong direction. And I'd like to start with a product dimension -- on a product that you have already seen. We have our CONVISO SMART product. And here, it's actually already a double product with other traits stacked on top of it. If you look to the package, it's Cercospora Plus as well as Rhizomania and nematode. So it's actually 4 products, [indiscernible] year product and 3 traits in there, plus you see a sticker here like KWS, that is our digital platform that we entertain and the farmer can find a useful tool to help him with that system in the field.

In a few words, you've already heard from Nicolas, you have the seeds, which are resistant, plants against the herbicide and the herbicide in one package, and that gives you a very strong yield -- sorry, weed control solution in the field. The [indiscernible] is that you have to spray the herbicide at the right point in time to get the full boost of only using 1 or 2 herbicide applications.

And the timing of that, the window is relatively narrow. If you spray too early, then the weeds have not even all come out of the field and you have to spray a second time. If you spray too late, the weeds are too strong and you need to spray a second and the third time because they are too strong already and withstand a little bit the herbicide. So the timing is very important. Now the digital tool behind this is simply a mobile phone app that the farmer can download.

He makes some pictures of the weeds and the tool understands the size and the timing and makes a prediction on the timing when to apply best to have that best opportunity of the product performance. So it's actually another product stacked on top of the pure seed that we have given them. And that's a little bit the strategy here to offer farmer complete package solutions in a sophisticated crop like sugarbeet.

But talking about digitalization is there is another dimension. And that's the same dimension I've talked about with the genetic technologies for you that is efficiency increase speeding up in our innovation processes as such. And here's 3 examples, 2 of which I would like to go a little bit into the detail. The first, what you see here is an aerial view of a breeding plot of some, I guess, it was cereals,'s too low of a resolution. But actually, a plot is a stripe like this finger. It's always different varieties in the field.

So we have lots of those in the field. Overall, roughly, at about 45 breeding stations that we have, we have 2 millions of these plots per year in all our crops. Some are bigger, some are smaller, but it's a huge number. How do you do the logistics for that? How do you plan those field trials? How do you translate the wish of the breeder, I need these and these things into the practical reality. And to do this, our IT folks have developed a digital twin, basically a field maps in the computer where you have these plots and you can plan the activities in the computer.

And then as a next step, it's going to the stations. And at the stations, they put the seeds on a seeding machine and the seeds are put with GPS precision into the field. And that's a GPS precision of 3 centimeters. It's not your car GPS with 20 meters or 100 meters. It is 3 centimeter of precision. So we know exactly where which seed is, where which plant is, and we can map all the environmental data and all the evaluation data on top of it. This is a little bit of a techy story, I know, but take home is, this is not something that you can buy. That is something that is so special that you need to do it on your own.

And we have the capabilities and the teams to do that. And here, I have a little of those hand-on objects for you, which are obviously KWS, as you see by the color. To explain this one, who has recently bought a robotic lawnmower of you? None? Okay. If you had, it comes always with a second device that you put into your garden to increase GPS precision and let that little thing run precisely through your garden.

You can buy that today for this, but this has been developed about 7 years ago, and you need this on the field to have that GPS precision. This thing here, please just don't fill it with the buttons, but you can hand it that has been developed by our digital teams. There is no external company involved in that. I personally was super impressed when I saw that joining KWS, it's not only breeding and dealing with seeds, but there's actually teams of engineers, small teams that are developing those things. There's a little respberry pie in there and a bit of software and they 3D print the things and off we go.

The second is this year, what's that, a little numpad, very simple device, you can hold in your hand and you put in data. It's connected via Bluetooth with your mobile phone. Why is that good? Have you ever tried to stay in the sun on a field, having your digital app and putting in some numbers? Nobody likes that.

That was the feedback that our digital guys got from the field station and saying, it's nice and we can enter all the data, but it actually is very cumbersome. Can you help us with that? And now they go around, print these things, cost $50. And while having the database and their phone in the one hand, they can basically touch feel and make the rating at the field and so on. It's a nice example for me how passion and how good colleague yield interaction leads to very simple things which can make a big difference in our innovation process.

So that's the Field Explorer story, and there's many more tools that we develop for that. And I will go one step back because the second example here in the middle is if it starts running, it's a little bit this kind of video thing, which always go wrong when you do presentations. So maybe like this, yes, now it works. So basically, you're standing at the edge of a corn field here. And what you see is a harvester machine in the breeding plot passing by the rows. And you see an AI run time seeing where the corn plants are, where in red, the crops are, the ears are. And it measures the ear height, which is a very important breeding parameter. It also measures plant height, and it's all run run time AI.

So by harvesting the machine collects the data to put to the database and have as information for the breeder making some decisions. And the whole machine looks like that, big mass of wires and optics and so on, but it's even past the prototype status, and it's a home innovation approach with lots of passionate people doing this stuff because we need it.

And that is, again, something which you cannot buy anywhere from the shelf. So getting close to the last topic, this is just a headlight on AI. I would say there's 2 kinds of AI. The one thing that everybody already uses today, which is kind of having your pictures in the phone and let them see, oh, it's a cat. Actually, you can Google the cat then. Great. For us, the equivalent is what I've just shown you, image data recognition. We use drone to fly the fields and digitally capture the data, things like that.

And we use these kind of AI models a lot. The other next-generation thing of AI is generative AI, and that is making use of deep data sets that we have. And here, we are just at the beginning. And that is why I put this as the youngest part of innovation in our pipelines where we have to gain a lot. So we have a very good base, good starting point, but there is still room to grow.

And just to complete, we are not shy of including other data sets like public data sets, satellite data shows you the temperatures in the field, the weather and so on and integrating it into our things. The higher-level message here, collaboration is key. It's not only true for digital. It is actually one of our core elements that we go with academia, with start-ups and use a lot of that knowledge in all kinds of innovation features.

Coming to the last topic. we are good in time. I know it's a lot. So bear with me, just 10 more minutes. Hybridization, you've heard about hybrids. Why are hybrids good and important. We have heard some of the stories already. If you do a Sunday walk through the fields in the summer and pass a corn field and some other fields and you compare the corn field, what you see with maybe a barley field that is just at the other side. The main difference is that the corn is basically standing there like soldiers on a road. It's super reproducible, like all of the same kind.

Barley, it's a little bit more dynamic, a little bit bigger, a little bit smaller and kind of thicker, thinner stems and so on. There's a little bit more variety in that. And that's one of the features demonstrating that corn is actually -- it's a hybrid, that a hybrid produces more reproducibility, less variety and more vigorous character. It actually produces more yield. And it's also a way of introducing traits, and we have heard already before, from a breeding perspective, it's nice because a hybrid can only work one time in the field and then the farmer has to buy a new bag of seeds in the next season.

So breeders love hybrids. They love to sell hybrids, but to make hybrids, it's actually much more cumbersome than normal varieties. And it's a little bit techy, but I think some of the principles need to be explained to get a feel for it. What is a hybrid? Hybrid is basically 2 breeding programs in parallel. You have one breeding program on the mother side and one breeding program on the father side. And you basically in breed to make these both lines very homogeneous. We call that homozygous. That means genetically, they are very pure. And when you cross in the seed production to fill the bag of seeds sold to the farmer, when you cross one mother with one father there, you get this heterozygous effect, the hybrid effect that the offspring potency is much higher than what the parental line does. And the yield increase potential of this relative to classical varieties is in the double-digit area. So that is why this hybrid is such a big thing for our industry.

So that is why this hybrid is such a big thing for our industry. And KWS has been pioneering hybrid's crop development and market launch ever since. A good story of that we have heard already is hybrid rye, introduced around 1987 as a first time as hybrids. And if you compare over time, non-hybrids to hybrids, you have overall 23% in general yield increase relative to non-hybrids and the slope of increase is also higher. So breeders love hybrids. And when you look at our portfolio, most of our crops are already hybrids. We are taking good benefit of that. The only 3 left up, we've heard it already, barley, wheat and potato. And the last little tech information is to show you that it's not super trivial to make a non-hybrid into a hybrid. Just remember, again, you need a mother line strictly separated from a father line and then cross them. But plants are swiders. They have pollen and female organs, and they pollinate themselves. So one of the big issues is to keep the mother plant, which actually gives the [ kernels ] and the seed, keep them from self-pollinating. And the way how we do it, actually, you've seen it already today in the greenhouse, I hope, we emasculate. We take the pollen organs off the plant. And in other words, we make the mother's sterile for pollen, male sterile, pollen-free mother plants. If you have such a system, you're in good shape. You can do it. You don't want to do it by hand, for seed production. In corn, it's easy because actually here are corn plants. What you see on top of the corn plants late in the season, these castles, these are the pollen organs. The female organs are somewhere below. So in the field production, we just before the pollen gets fertile, we take a razor and cut the pollen from the plant. So you only have the female. So a separation of organs makes it very easy in corn. Where it's not easy is in small grain cereals. Why? Because the flower fertilizes itself even before you see it, right? It's actually hidden in between the leaves when the fertilization happens. So we need genetic means to make the mother sterile, but we also need to make that switchable because if you keep mother sterile, you don't get any fertile seeds produced at the end. So it's a huge complex system. Lots of features need to be -- and we call that a working hybrid system needs to be in place. And some of the details are that you have to control flower biologies because you want pollen and female organs to develop in the same stage and have good fertilization and so on. You also need to take care of production because, obviously, having that complexity managed adds costs to the production process and you want to have all these things at bay. And at the end, you need all these mother and father lines in your breeding program as pools of diversity and that is what we call optimal parent genetics, which we have under control. That's one of the core breeding things. Now just quickly going through it, where are we in winter barley, which is the most advanced, as we have heard already today, basically, there is already hybrids produced in the market. So the system is there. We have floral biology largely under control, and those things are more in an improvement phase, but they're principally already tackled. And that is why we anticipate to have first own hybrids launched somewhat in '27, '28 to European markets and then take it off from there.

In wheat, we are a little more behind, but shooting for mid of the decade, something like that. And the good thing is that we have the working hybrid system in place. And just that little detail, I don't know that doesn't work. You see the kernels in the back, right? And you see they have different colors. There are some more bluish and some normal colored. And that's why it's called blue [indiscernible] system. Basically, the blue are the female infertiles on that side and the others are the normal. So you basically need a selection process where each and every seed is actually selected by a high-throughput seed soughter, all solutions that are there in the market, and that's the key of this system. KWS has developed that in the last years with a University in Sydney. And the whole industry is working on this since, I think, 40 years, even more, I don't know. It's a super long unsuccessful innovation event, and we have cracked the nut. So what we now need to do is optimize on floral biology and all the other factors that will take a little bit more of time, but we are very optimistic that we can deliver that product to human kind.

And the the last part, last tech slide here is on the potato side, where you've already heard that fantastic story of getting from tubes to seed and where we've heard already that the hybrids are an intermediate step to get there. So today, everything is from an in vitro culture,, and you basically cannot breed it, and we will leverage it by hybridization through the first -- through the whole process. This is a super long innovation journey, which will take a few more years, but we are making all the progress that is needed step by step. We are still super confident to have that done.

With that, I'm through my little presentation. I know it's a lot. Sorry for bothering you with techniques, but we are passionate for that. And if there's three things that I'd like you to take home is, first of all, we have a core engine, which is very reliable, very scalable, and that is the core basis for innovation. We beef that up with traits, with hybridization and technologies that we know deliver superior performance in the market. And we use cutting-edge technologies to accelerate and improve efficiency along our innovation pipeline. And that is why we feel confident that KW is on a very good track.

Thank you very much for your open ears and looking forward to our Q&A session a little bit later.

I will now hand over to something that is much more convenient to you, I guess, financial framework with Jorn helping you there.

All right. So good afternoon, everyone.

I'm really happy to have you all here in Einbeck and of course, also welcome belated welcome also from my side to those attending virtually. I said it already yesterday to you, what we want to make sure is that you come really closer to KWS here a little bit what's going on behind the scenes and provide you with clarity, provide you with clarity as to what makes us strong, the innovation power behind it, our portfolio, our products. And I think it's fair to say that we covered already a lot, let's say, today in the presentations, of course, during the tours, also a lot that really shaped also my belief and also my view of KWS right from the beginning and that also got me excited joining the company. And I said it also yesterday, if plant breeding was a mystery for you before the Capital Markets Day, at least it should be a fascinating mystery after leave today. And I think I have not overpromised on that side. But I think you already see what is shaping the company. Felix mentioned it at the beginning also of our talk, is very strong, rooted truly lived long-term mindset really on all levels of the organization, the way we make decisions. It is -- innovation is not a buzzword, right? It's a really deep commitment to excellence. We talked about our portfolio, our diversified portfolio, our pipeline. And Sebastian and Nico, you talked about also the customer relationships. So long-standing, reliable customer relationships that have been built over generations. And this trust and this relationship, of course, is not something that you see on our balance sheet, but it's a real strategic asset -- strategic asset for the company. So what I want to do is to expand this picture on the financial framework. And okay, as I'm talking to analysts and investors, to you right. So now this is a moment you've all been waiting for. And I would really like first to start with a bigger picture because -- so what really makes really a good industry to be in, right? And for us, it's really an industry that is resilient, that's robust through a cycle. It's an industry that is really driven by innovation. It's not competing on price. Of course, it's an industry where the customer cannot really delay purchase decisions and it's also an industry with high barriers to entry. And all of this is basically the seed industry and all of this characterizes the seed industry. You see this when you look at seed prices and value and look at the agricultural commodity cycle, they've been relatively immune to this, low elasticity. Of course, we heard it, it's all about innovation that we can then convert also into a premium product. And of course, our customers must plant. So they cannot delay purchase decisions, and that's a bit unlike of, let's say, agricultural machinery where you can also postpone these kind of decisions. And talking about barriers to entry, I think talk about the decades of green experience it takes really to build a product. So it's clear that we are in a fantastic industry, and KWS is a pure-play seed company. And I would say, arguably also with the most diversified portfolio. So in a robust and resilient industry, we are also even more diversified player. That's really a strong starting position. But we all know industry structure is one thing. But the other question is, okay, what do we make out of this? How do you bring the horsepower, let's say, to the pavement. And I think that slide illustrates pretty good how we've been able to translate also a, let's say, favorable industry structure and revenue growth and value growth for KS. So over the last 10 years, we've been able to grow our revenue 6% every year. And we heard it already today is really driven by innovation, CONVISO, CR+, also new hybrids on the cereal side that we introduced in the market, R Oedrape recently with big success. So all of this is really driven by innovation. And that makes us confident this track record, a strong track record makes us confident that we can also reach our midterm target, 3% to 5% over the midterm cycle. What is behind all of that? What is kind of our secret sauce? We believe it's our KWS value model. So classic growth compounder, if you want. So it all starts with innovation. You've seen this. You heard it over the course of today. So that's really the core, the decades of 3D experience developing advanced sophisticated products. And then we are able to convert. We are able to convert this innovation into premium pricing, into value capture via our trades. We are able to convert this also in very attractive gross margins. And you saw also last year where revenue-wise, we're growing 1% on an organic basis, so more or less on par. On the gross margin, 63%, we even increased this slightly over the previous years because we are able really to get the innovation also to our customers and are able to capture the value out of innovation. And we are then able to control our cost, control our SG&A, then we are, of course, also able to generate the funds that we can then reinvest, redeploy into our, let's say, cycle into our wheel, and that kind of sustains itself year-over-year, year-over-year. numbers speak more than words. So you see that. So every year over the last 10 years, we've been able to up to increase our R&D investments, increase our R&D expenses. And at the same time, we've been able to increase, expand our margin from 16% to 20%. So I think it's a clear testament that we're able really to convert that we're able to maintain and increase our profitability. And that's really a strong position to be in, and that really is something that propels us forward like a classic, let's say, compound interest curve. And of course, we, as a CFO organization, as an admin organization also want to contribute that we can achieve our margin goals and that we also contribute to that. And I'll just give you just two examples how we are doing this from the admin side. One, of course, is our S/4HANA program that we are running at the moment. So we -- legacy-wise, we are on SAP, but operating in a heterogeneous landscape. So for us, bringing this all on one platform, one harmonized single source of truth across all regions, across all crops is a major game changer because it provides us with clarity, it provides us with transparency, it provides us with better business steering, data-driven decision-making. And we are really well underway. 15 of 27 countries are already covered, that's 55%, and we want to complete this program by 2030. So a very important initiative to really get this efficiency and get this drive, let's say, also into our admin processes.

But having a, let's say, harmonized system is one thing, but you also need a platform and structure, how you can scale this, how you can leverage this and how you get efficiencies out of this. And the good thing here is that we have this already in place. We have one global shared service center in Berlin. We have -- there are over 300 people. We cover almost 30 different languages. And this shared service center is doing all of our processes worldwide. So from Chile to United States, from China to Morocco, everything is handled out of this global shared service center in Berlin. And that's, of course, a super strong hub, a super strong platform and also a very nice launch pad if you think about introducing smart solutions, if you think about introducing digital solutions. And one example that I have brought to you is Hypertos, for example. So AI-based engine, smart solution for invoice processing, sounds a bit boring, a PAR. But what actually helped us is actually to leverage the efficiencies in the area of 20%. So 20% basic FTE that we could took out -- could take out of our invoice processing processes and then redeploy into higher value-adding activities. And that is the leverage the efficiency that you have when you have one central place, one hub, one starting pad and also digitalize and great efficiencies in those processes.

All right. So let's move on from, let's say, value creation to value allocation. So how do we then allocate the value that we are creating. So let's talk capital allocation. I think that's not, let's say, a surprise to you that our first priority is, of course, organic growth. We have plenty of really good reinvestment opportunities. We talked about expanding our market shares. We talked about our innovation programs, our pipelines. So there's a lot that we are doing, and that's, of course, first and foremost, our priority.

M&A, yes. So it's a part also of our menu card focus and discipline, of course. For us, our approach is clearly bolt-on, not transformative. We want to stay independent. Felix mentioned this also in the morning, and that is also -- will also continue also going forward. What are our focus areas? Vegetables is clear. I mean that's an area where we really feel we can also accelerate strategically. And the other area would be certain regions, certain crops where we are underrepresented today and where we can continue also to build a stronger position and a stronger portfolio.

Dividends, I think it's very clear. We said this also in the summer in the presentation of our full year results that we've reinforced our commitment to attractive dividends. We've adjusted our payout ratio from 20% to 25% of adjusted net income to 25% to 30% of adjusted net income. The underlying spirit is the same, continuity, reliability, our dividends stable, ideally increasing. And of course, with the 25% to 30% payout ratio, this gives us also room also for the coming years, and we feel good about that. And of course, very clear, everything starts with the first step. And I think it's a strong signal also that we're proposing to the AGM to increase our dividends by 25%, EUR 1.25, of course, subject to AGM approval in two weeks. So I think that's a good balance, and we want to keep that balance of really reinvesting into the future, fueling our innovation engine and at the same time, providing also attractive returns today.

Free cash flow because if you want to deliver attractive dividends, okay, then -- and also reinvest, of course, in organic growth, then you also need attractive and good free cash flows, and that means discipline, right? So let me talk a little bit about how we are going to ensure this. You see over the last years that we've already last year, increased our free cash flow contribution. So that's good. But of course, we want to push that further. So let me quickly walk you through the main moving items. CapEx, we want to cap that essentially at EUR 120 million. That means, of course, also as the company grows, the capital intensity will then also decline over time. A key element, of course, of our free cash flow generation is our net working capital. Two main moving parts. One is receivables, okay, we improved already. We brought it down by 15% last year, mainly through the portfolio transformation because after the disposal of the South American business with unfavorable payment terms that already improved a lot. But there's more than we can do in terms of collection discipline, dispute management, of course, system harmonization, understanding all the different payment terms across crops, across the different entities and countries is definitely an area we can do better.

Inventory management. For sure, also going forward, inventory will follow the sales. I mean that generally will also be the case also going forward. And there is an element also volatility, which is just inherent in our business model, right? So a big part of our production happens in the field. There are harvest cycles. There will be times when we have higher or lower inventories. But here also, I think there's really an element of improvement that we can bring, which is agility, again, having a better view on how we steer our business, being able to quicker respond also acreage developments and how we then manage also our own multiplication and production partners. I think there's element of steering of managing this in specific corridors that we can improve, and that's also something we want to look into also in the future. And taxes, so basically for your model, 30%, I think, is a good assumption because that reflects very much, let's say, our regional distribution as well as recent changes on the transfer pricing side.

Just to obviously finish up, let's say, the housekeeping with a view on the financial position. Really nothing spectacular to report. And I think that's good news, let's say, for financial position. We have brought net debt substantially down to 0.3x EBITDA by the end of the first quarter. That's good. Maturities, I think, very balanced. We have two bullets in follow of us, one September next year, the other one then September 2029. And at this time, without any, let's say, M&A considerations, we feel really good to cover this, let's say, with our own funds at hand.

All right. So with that, let me just quickly recap the first quarter results that we published last week. You know that the first quarter is not the, let's say, most meaningful quarter for us. So July to September, we only generate 10% to 15%, let's say, of our revenues. So apart for cereals, for which, of course, winter crop business, that's a very important quarter. There's not a lot that you can really extrapolate from the first quarter. But for cereals, actually, we have been quite happy also with the start, let's say, to our fiscal year, a very solid 4% growth. Sebastien was talking about the oilseed rape business that has grown 19% over prior year. And we kind of hoped and expected that on the performance trials, how our varieties perform in the field, but that we are really able also to bring this now into the market, gain significant market share is a strong step, and that will really propel us forward also to gain market leadership in oilseed rape. Sugarbeet on the other hand, was impacted by order phasing. So we had last year an unusually high number of early order sales in sugar beet, mainly in East Europe. So that come to fruition this year. It's an order pattern thing. We remain with our forecast unchanged for Sugarbeet because, as you know, the big quarter -- I mean, the really important quarter is the third quarter where we have the spring sowing season.

EBITDA improved substantially in the first quarter, but that was because of the onetime effect with regards to the [indiscernible] divestiture or [indiscernible] deal. So we recognized the gain from the license agreement as part of this entire year, EUR 33 million recognized in the first quarter in the EBITDA, and that is something also we flagged already end of last year when we signed the deal. So overall, I would say, a solid start to the year for us after the first quarter.

In terms of outlook, I mentioned this already also to you that, of course, currently, the uncertainty in the market is, of course, visible with the low agricultural commodity prices, there is an uncertainty among our customers on what to plant. We expect also a decline of our business in Russia this year, this fiscal year. But at the same time, this also offers opportunities because if there's uncertainty in what to plant and given our very broad portfolio, there's also opportunities that we can capture. So that's why we confirm our guidance of around plus/minus 3% organic sales growth for the year. We will be landing in the corridor of 19% to 21% EBITDA margin. And this is, of course, without the onetime gain, the EUR 33 million onetime gain I mentioned that we also guided at the beginning of the year and that you can essentially already tick off your list because that's recognized settled in the first quarter.

With that, yes, let me wrap up. So as I said, we are in the right industry. We have winning portfolio that makes us really confident that we can also continue to maintain this momentum. We have a proven growth compounder model. It has worked for us in the past. It will work for us also in the future. And of course, we, as an admin organization, want to also pursue targeted transformation in order to make sure that we control SG&A that we are able to also improve the margins. Capital allocation, I think pretty clear first priority, organic sales, but we will also capture M&A opportunities if they are in front of us, and if they make a strategic sense for us. We put a renewed focus on free cash flow generation, and that gives us confidence and that puts us on a good position to deliver on the 3% to 5% midterm growth forecast and the 19% to 21% EBITDA margin.

So thanks for that. And then Felix, I hand it over to you for your closing remarks.

Thank you, Jorn. Congratulations. You almost made it. I see some a little bit maybe tired faces, lots of information, lots to digest, lots to take away to take home. I hope that we got our point across what makes KWS special, and why we are unique. Well, I think we've very clearly laid out how and where we're going to play in the future, building on our existing large crop portfolio in the field crops, lead, and I think Niko and Sebastien very clearly underlined that how that's going to look in the future regarding sugar beet, hybrid dry oilseed grape or corn.

Secondly, the growth opportunities, the building phase, entering new crops, new markets, new opportunities, vegetable, full steam ahead, KFI tapping into the food value chain and the big bet on true potato seeds. And I know, yes, it's going to take a little bit of time, but I'm very confident we'll meet here again at some point in time and those little seeds in that little tube will have turned reality.

Thirdly, our exciting innovation pipeline. Tom, thanks for giving us a detailed look into that. And I hope you get some look and feel in that when you took the R&D tour, visited our facilities. Jorn took you through the financial figures, short and brief, precise to the point, clearly laying out our ideas, ambitions in hard facts and figures.

And with that, I think it's time to turn tables. We did a lot of talking. Now it's up to you to talk to us, to ask your questions. And for that, I think we'll bring up some chairs on the stage, and I would like my colleagues to join me here. I think Peter will moderate a little bit if that's necessary.

And with that, I would like to -- first of all, again, thank you for coming here, finding little [ Einbeck ] on the German map and taking that time spending a whole day or maybe even more with us and to get an understanding for what we are, KWS.

With that, the floor is yours.

Thank you, Felix. Just for the Q&A session, we have colleagues with a microphone. So please use a microphone that people attending via the webcast can also hear the questions. So please raise your hand and state the name and the company, and that would be very helpful for the Q&A. Thank you.

Christian Faitz, Kepler Cheuvreux.

Two questions, if I may, to start. First of all, on your breeding efforts, can you share with us some thoughts on short-stature corn varieties, which you might bring or might not bring because one of your at least key peers, and I think we both know them well, is quite successful launching short-stature corn. And then second, your EUR 300 million sales ambition in veg seeds. That means you will still have to add some EUR 200 million in non-inflation adjusted, obviously, blah, blah, blah in 2040. How much would you believe as a guesstimate is organic growth from your own breeding efforts? How much is acquisition? Because as we all know, and I guess is also a good example for that. EV sales multiples are anywhere between 4 and 5 and sometimes even higher.

Do you want to start with the vegetables?

Okay. I can start with that one. So I think to the vegetable question, yes, indeed, most of the growth, which we are expecting or we plan is mostly coming organically. So it's not really counting. We don't have, at the moment, a transaction on the table that we are accounting for in that part. So it's mostly these 5 new crops delivering, plus, as I mentioned during the presentation, the two crops within the existing portfolio, so red beat and swiss chat, where we think we have a quick opportunity to win share there as well. And of course, continue our development in beans and spinach. So it's mostly organic. But as Jorn mentioned, we are looking also with a lot of interest to specific targets, of course, that can complement or speed up the development in some of the crops.

So no M&A in this figure.

Right.

So they start the corn on...

So the corn is successfully progressed to some extent with lots of ambition and power. The product has not, to my understanding, fully materialized and taken grips to the market. It is a tool in the first instance related to the North American and U.S. market because it's actually a combination package of the whole traded package, which we are obviously not playing in that field anymore. And I think it's fair to say that we have invested a little bit into such direction, but the ambitions have reduced significantly with the new strategic position that we have in corn.

And maybe just to add because there are some products coming into Europe as well based on non-GM basis. There is a trade-off between the size of the plant, so that machine that need to do the photosynthetic activity and yield. And so far, we still see that. We see maybe a certain value on areas or under extreme conditions of wind, et cetera, where maybe a shorter plant can resist maybe better.

So there is a certain need for such a product. We actually have already a pipeline on that just by pure breeding. So we have already shorter plants that can manage that. But as Tom rightly mentioned, the target market, if we think about, I don't know, Brazil, South America or also the U.S. for us is not really one of our key topics today.

Maybe to add on that, if you look at the development of corn plants over the last 20 years, there was a great tendency that plant length was elongating. And therefore, I think it's also kind of a natural phenomenon that you want to reduce plant height a little bit again. And there is, of course, if you plot lines a clear optimum in selling density, plant height and then yield output. There's just an optimum and you can, of course, move those a little bit, but you cannot shift it biologically.

Oliver Schwarz.

Oliver Schwarz, Warburg Research.

First of all, thank you very much for the plethora of information we received. I'd like to challenge your 3% to 5% organic growth aspiration for the coming years. Coming from 2 -- perhaps coming from 2 separate points.

First of all, 20 years ago, your R&D ratio was 15%. Now it's 18%. Over the last couple of years, your CAGR in sales was 6%, and now you're aiming for 3% to 5%. So what's happening here? Why is growth going down while R&D expenditure has gone up? I appreciate that the margin has gone up to a level that seems -- now it's 20% that seems given your aspiration of 19% to 21%, which seems to be sustainable. But that seems to be also just the result of scale effects in production and not reduced our R&D costs to sales, at least that's the way it presents itself to me.

And the second one was, given all the very interesting projects you have and the record number of new products coming to a green light from the authorities and coming to the markets from your side and giving the sales potential of those projects. I appreciate that none of them will really spike just next year. But we are talking about midterm targets. So probably until 2030, where at least some of them will have made it to the market, plus, let's say, the tailwind from existing products, which are still growing. And still the organic growth rate is expected at 3% to 5%. Please help me to, let's say, bridge that gap for me to understand what's happening here. Is it because you're now so focused on Europe, which seems to be a mature market that your growth perspectives in that region is limited by the region itself.

Maybe I can just get started and maybe others can chip in and add to that. So first of all, I mean, if we can deliver more, we are, of course, happy about that. So that's clear. But we want to be also realistic, let's say, in talking about the environment in which we operate in particular right now and also looking at what comes when exactly also on the market to fuel also further growth. And when we look at, let's say, market growth then in the 3% to 5% corridor, then we look specifically over the next 3 years. So we don't look at 2030.

We don't say 2035 because you saw that already that major contributions also will kick in a bit later when you think about sunflower, when you talk about vegetables, when you talk about also hybrid wheat at the beginning of the 2030s. So that is not baked in the 3% to 5% growth ambition. So we will look, let's say, over the really midterm period, next 3 years because we want to give you also a clear visibility and a clear picture and not as an anchor some kind of funny number, let's say, in 10 years, but want to provide this clarity. And if we compare ourselves against the market, and we talk about, let's say, 3%, 2.5%, 3% as a market growth rate.

That's also, let's say, what I would say our peers are essentially guiding towards. So we're already growing faster than the market. We're already growing faster than our peers. And right now, also with the environment which we operate, which means low agricultural commodity prices, everyone a bit cautious as to when the pendulum will swing because it will swing, but we don't know exactly when it will swing. We feel actually quite good with the 5% -- 3% to 5% growth at Corridor.

Maybe to add on that, if you look at the past growth rate, I think you have to clearly also take into account that Brazil was a strong growth driver. There we started in 2011 with roughly 1% market share, and we divested that business reaching almost 12% market share. And as you see on these other numbers, we are very strong in the markets we're in today. And so of course, you can -- if you are lucky with the right products, obtain a different growth rate in new markets that you enter. And that was just what [indiscernible] laid out. That is what is to come, but what is not in this 3-year window.

In addition, I would like to point out, since most of the markets we operate in our regulated markets is that means that the product that will come to the market tomorrow and after tomorrow are already in national registration. So we know what will come to the market. And it's not that we can say we have an innovation we sell it tomorrow. We take the innovation, we have to submit it to the regulator, see trials.

And therefore, of course, we have, on the other hand, a very clear visibility of what is coming in the next 2 to 3 years. And therefore, when we have a product ready, we have to take into account these 1, 2 or 3 years of official registration before the regulator says, okay, you're free to get that product into the market. And therefore, there's always that time delay you have to take into consideration.

Maybe just to add to your question of the R&D ratio, which I think all the rest has been answered. We discussed it yesterday. You have seen it as well today. We have a lot of products which are long-term investments, which are carrying a lot of research. So from the hybridization, from the new fruit crops that we're bringing in vegetables, all those are not yet in the market. Nevertheless, we are investing quite a lot of resources into bringing them forward. And the other component is that we are through the divestment, we have reduced, of course, top line. And that, of course, have the ratio today at the 18% where you have mentioned yesterday, and it's very much the main driver.

Leon Muhlenbruch. MWB Research. I have only a short question. Where do you see the biggest risk for your business? You see it in the research part? You see it in the regulation part or where you see for you for the future, the biggest risk?

Tom, maybe from a research part first?

I think I made a story more from the where is the low risk, I appreciate the question. There is, by and large, technical considerations, technical risk that need to be taken into consideration. And as I've mentioned, we have those more or less under control. If there is an uncertainty, I would not call a risk, then it's the uncertainty about how is the EU going into the editing area because this will be an innovation leverage over time. But this, I wouldn't call risk so much because as far as we see, we can be quite optimistic that there will be a solution. How far reaching the solution may be basically determines how much we can leverage there, and we are prepared to adjust our activities according to that, if necessary.

But even that, I wouldn't call a big risk. So the question is what is a big risk to be taken to be considered in that I don't see many of them.

I think maybe to add on that, a risk in quotation mark, of course, at the moment, certainly the geopolitical uncertainties. And that is nothing particular to KWS, but we see a continuous ongoing war in Eastern Europe. We see a hard to predict U.S. government. And therefore, we are in a state, I think, of less visibility than maybe 10 years ago, and that is that remains an uncertainty.

Yes. I just exactly want to add to that because these are the 2 topics, let's say, I would say, from a financial geo perspective. You know that we still have a business in Russia. It's below 10% of our revenues. It has drastically been reduced over the last years, of course, since we are not able anymore to really have even business in corn and on the cereal side, but we still maintain a sugar beet business in Russia. Right now, it works. It's very difficult to substitute.

But of course, that's really not really in our control, let's say. So that is definitely something that always continues and swings with us, let's say. On the tariff side, U.S. side, I would say a bit more relaxed, let's say, because seed industry is an industry which is very local or regional. You produce locally regional in the region for the region. There's only one area, let's say, in our group where we export a meaningful, let's say, share of seeds from Europe to North America, and that's Spinach's on the digital side. But also here, 60% of our production and Spinach is actually locally in North America. In the other areas of our business, we were not really affected by any tariff issues.

Advisory.

[indiscernible] Advisory. I would like to spend a little bit on corn first. Last year was pretty lousy in the margin, if I say, in Europe, and this year, it should be much better. Could you elaborate on the reason for last year and for next year? And rapeseed is in a very good dynamic in growth now. I remember a period of more than 10 years ago when we have seen already a very dynamic growth, and then it stopped at one time and market shares were even declining and now they are recovering.

What is your confidence that the varieties we bring to the market is not only for the next 2 to 3 years, but will extend this growth? And the last one is on hybrid. Wheat I'm not sure whether the competitors are real in what they say, but they want to come a couple of years earlier. I think as of '27 is what [indiscernible] says, what said and was also BASF say. They say this for long. I'm not sure whether this '27 is real or whether you are more humble in saying it will be north of 2030 and might be still the first. But maybe you can elaborate how you see your competitive situation in that.

Very good. Maybe I'll start with a hybrid what to pick up on the last one. And you used the word which I like very much, and that is humbleness. Yes, we would like to stay humble, where, as Tom said, rather north of 2030. We, of course, observe what competitors are doing. They have a different approach in terms of communication and promising products to the market. We are very confident in our planning, our milestones in our more maybe conservative way. But I think you have gotten to know in KWS as to delivering on our promises. And therefore, in this case, I would rather concentrate on ourselves than on our competition.

Maybe I'll take the first question on the margin on the corn business. So just that you take into consideration last year, of course, we still had a big portion of the North America business in our segment reporting. And the way we report our figures on a segment basis was on a quarterly basis, which means we have also 50% of the Aging share in our segment reporting. And of course, that has been a business which has had negative earnings last year as we were going through a lot of restructuring and preparing the business for sale. And of course, as this is now out of the equation, and I think Sebastien mentioned this on his slide, when you look at the parameters, not only operative profitability, but also capital intensity and so on has, of course, substantially improved.

And our goal is to deliver a 15% EBITDA margin for the corn business this year.

And we believe on the corn side, that's not unrealistic because we have launched 12 new varieties in the last 1.5 years. So the growth driver, the innovation is there. It's not in the pipeline. So we see that right now. So market share is gaining on that side, and I've explained and shown some of the innovations we have going. Additionally, to your question on rap seed, rapes seed is a very good alternative for Western European farmers right now since commodity prices on rapes seed is high compared to everything else basically, except sugar beet.

Sugar beet is still strong, but rapes seed is a good alternative for cereal and grain or corn farmers. And so we see an uptrend market in general in rapes seed, and we are really there at the right time with our product portfolio to capture that. And this 19% growth we've seen in rap seed, we will see that this year too or even stronger this year. So the outlook is quite promising that we will continue to grow and capture market share additional to the growing market.

And maybe in addition to that, I'm fully convinced of our strong portfolio in oilseed grape.

But on the other hand, of course, we are not alone in the market and others are -- will certainly try to beat us, and that is what is in the interest of the farmer to have the best product. And we have to do what we can do in order to assure that our products are most competitive. On the other hand, if you look in the history of the winter oilseed rate market in Europe, I think it's one of the most volatile seed markets. If you look back 10 years, [indiscernible] today, Bayer had 60% market share. So there is a lot of volatility, and you need that little touch of luck maybe in your crosses at the end to be on the very front line. But I think at the moment, we're very well set up, and I'm fully confident that our continue will go strong, or our portfolio will continue to go strong.

Axel Herlinghaus from DZ Bank. I just have a question to the Russia business. So how have these Russia revenues developed from '23, '24 to '24, '25? In the light of increasingly stringent import quotas, have you still relevant corn and cereal business in Russia? And what export import quota do you expect in 2026?

So I can start and then you maybe add Nico. So overall the last year, so '24, '25 fiscal year compared to '23, '24, it was a mixed picture, I would say. So we had, of course, to face the situation that we did not anymore get business for our corn business and, let's say, on the cereal side, business that we were used to. So that has really came down.

And maybe you saw that in the charts of Sebastian that cereals as a total BU dropped, let's say, '24, '25 compared to '23, '24. That was exactly because of this Russia effect. So it was mixed, let's say. So on those let's say, crops where we did not get a quota or we only were able to get opportunistic business, let's say, there was a decline where sugar beet on the other hand, actually upheld, let's say, its import quota share.

And hence, we're also then still able to benefit, let's say, from the business in Russia. And this is basically also how we started this year that we aim to maintain our market share in terms of import quota. And on the other, let's say, crops, it continues to be opportunistic. Sometimes there is a need for a truck or 2 and then we deliver, but it's not really a, let's say, reliable business. And that's why also I guided also for the outlook this year that on those areas, outside of sugar beet, non-sugar beet business, we will see also a further decline of the revenues. For the quarter next year, it's too early to say. We will only get this by the end of the year for next year.

But maybe, Nico, if you want to maybe talk a bit more about the situation.

I think it's almost all said. As you might be aware, the Russian government is trying to localize the seed production. The fact is that for sugar beet, that's very difficult to do, and they have been trying already for many years. We also did in the past some activities there, and they have not been able to have a stable and high-quality seed. And basically, we're quite convinced that no matter what happened, they will require to import seed. That's the fact. And that's why we think we still have a chance to import seat into the market.

As Jon mentioned, already for the sowing of 2026, that's pretty much set. So we already have the quotas. The seat is on its way. That's done. So basically, what we are discussing now will be the quotas for the year after, so for sowing '27. There is already an indication, but what we don't know is how much -- how the allocation will be distributed among the different seat players. The assumption is that it will be something similar to what we have done in the last year. So at the moment, it is relatively stable. But of course, it's a situation that is not fully under our control.

Once again, sorry for that. Oliver Schwarz. Warburg Research. Two questions from my side. Could you give your thoughts on the West European sugar market? You showed the slide where the acreage has been declining for the last couple of years. And it seems like sugar consumption in Europe is on the decline for various reasons and also suppliers, hence, the producers seem to be aiming for a deficit market, which would imply that acreage has to decline further.

Do you share that opinion? Is there somewhere, let's say, where that effect peters out? Or will that continue for [indiscernible] period of time in your view? That would be my first question. Second one, completely unrelated, so to speak. Free cash flow on average was EUR 100 million on average over the last 5 years. Given that you stated that you want to have a stable CapEx of EUR 120 million, but increasing sales and earnings over the next couple of years, I would expect that number to increase, especially as you stated that you want to focus more on free cash flow generation and bring working capital quotas a tad down from their present numbers. So that EUR 100 million number would is likely to increase from my point of view.

And even after the significant increase in the dividend, you're selling out to shareholders EUR 40 million. So you're aggregating capital over the next couple of years. I appreciate that you have M&A ambitions. And -- but if they don't materialize, are there any plans to distribute some more funds to shareholders in the midterm? Or would you just stack that up and wait for some attractive offer to come around to make a bolt-on acquisition?

[indiscernible] with the last one?

Because I mean, there's really not much to say because you answered the question already yourself. It's exactly like you say. So when we look, let's say, into our projections, this number should increase. We don't -- as you know, we don't give a specific free cash flow guidance because harvest volatilities, it's difficult, but we want to improve that.

And I think last year is already a pretty big jump. So 7% free cash flow of sales previous 2 years was more like 3% to 4%. And that should be also the way going forward. We feel actually with this corridor, that's why we also increased the corridor to have that flexibility in order to be able to also make steps in the direction that you've described.

But for us, this consistency is important that we don't have big shifts from 1 year to the other year, but we have stable, ideally increasing dividends year-over-year. And I think with what you described and also this increased payout ratio that gives us exactly that flexibility.

Connected to the sugar market, basically, on one side, the demand of sugar inside of Europe is more or less stable, around 17 million tonnes per year. And normally, Europe produced about 16.5. So in general, we are a net importer. We're talking about EU '27. The market per se is protected. So they normally between 2 million to 2.5 million tons per year that can be imported without any tariff. After that, then the tariff apply and basically made the whole importation not attractive.

It's almost double of the world price today. So that's basically not attractive for the producers. But what happened at the beginning, especially at the low world market prices, which we see today, which is one of the lowest we have in the last 5 years, that sugar comes in, and that's what already happened as soon as the calendar year opened.

At the same time, the last 2 years have been very successful internally in Europe on sugar production. Also, there is also some sugar coming from Ukraine into the European market as well for different reasons. So what happened as well is that the normal amount of sugar that will be exported out of the EU for countries, for example, in the Middle East, based on the low prices outside, they're also not going out. So today, we're in a -- from my perspective, in a cycle, which I think is short term, it's not something that will stay, but the market need to adjust, and this is the news that you see today, we need to reduce the acreage because at the moment, we have contracted beet growers for a price of ton of beet that will derive in a sugar price, which is higher than actually what we will be able to sell it. So that's natural.

So it's a matter of demand and supply. But we don't see those huge reductions we saw from the 7 million to the 4 million, what I was showing 4.5 million. That has been driven by a lot of reforms. So there were 2 waves of sugar market reforms in the last 30 years. which is deriving a lot of closing of factories and things like that, where certain specific incentive for sugar production were allocated. All those are already gone.

So basically, what remains is really those, as I said, import quotas. We're discussing a bit yesterday about [indiscernible]. [indiscernible] is also about 200,000 tons. So it's also not going to be something that is going to move the needle. So short term, you might see these cycles and affecting us on a yearly basis, I would say. But it could also go the other way around if there is a disaster in Brazil or in India regarding to weather, we have those not to a few years ago and sugar prices go up, and then we'll see another wave in the other direction.

So it's mostly as anything we do in agriculture driven by nature, I would say.

Christian, again. Two quick questions. Sunflower, what makes you so confident that you can essentially quintuple, I believe, if I remember the market, the number correctly, the market share over the next 10 years and that the established producers are fighting back, including your friends out of the Ivania region. And then just maybe a naive question, but can you share with us how competitive sugar from beads is at this point in time versus cane? And has this maybe changed with various burn brands in Brazil, for example, I think 10 years ago or so or 12 years?

On the sunflower question, I -- bear with me, I'm not an expert on that.

I'll support you.

No, I mean, we see a strong portfolio coming in and the trials of those are really strong. And so we believe we have a competitive edge, and you saw the time when we started breeding on that. And the pipeline is just emerging. The first varieties are coming out and the trials are very, very promising. So we hope by innovation to gain market share on that. And of course, that's not easy right now since you've noticed already, we focus on Southeast Europe and Southeast Europe is hidden by drought. And so the acreage in that area is trending down. Although the innovations we are adding are focusing on drought resistant to. So we believe that could be a little bit of competitive edge for us as well. But on the same time, we also focus or look at different areas and change a little bit towards France and those areas because we believe that will be a growing market in that condition right now.

Almost all said. I think we also -- when we look at competition in the sunflower landscape and you see the level of R&D investment, it's not like what we see in sugar beet. So it's not that people are investing $100 million plus. Actually, if you look at the market, those who have the leading position in sunflower are likely not putting the right focus that have driven in 2 things.

On one side, I think we are catching up with them in terms of operating progress, as you said. And on the other side, we have been able to recruit a lot of highly talented people from those companies because they really appreciate this seed specialist approach that we have and the attention to the individual crops. So in that regard, I'm quite confident that we'll be able to catch up. And then the synergy with the crop in the go-to-market with corn and in the whole rotation is also something that makes us confident that having that portfolio, it will make us basically stronger. So that's clear.

Beet versus cane?

Yes. So beet versus cane, today, as maybe most of you know, about only 20% of the sugar, which is sourced is coming from beet, 80% is coming from cane. The main exporter is Brazil. So Brazil export about 30 million tons per year into the market. Then you have different effects on one side, like today, when oil prices are low, Brazil moved the needle to produce more sugar instead of ethanol out of that cane. So the quota moved more on the sugar side.

In terms of competitiveness from a cost point of view, today, we have about a 30% gap. So beet -- sorry, cane is 30% cheaper than beet, depending on which market you compare to which market there, I'm looking really to Brazil. So the leading market compared to what would be, for example, the Netherlands, which is highly, let's say, effective and efficient in beet production. What will happen in the long run, at least this is one of our long term, and we don't present it here because it's going to take time to get there. But the breeding in cane is super slow, very, very slow just by the chromosomic composition of the plant, the fact that there are no private breeders really investing a lot in breeding in cane, basically that mostly public institutes in Brazil, in India, in Thailand.

So you see that the breeding progress is quite slow. So the curves that Tom was showing, this 1% to 2% that we get in beet and in other crops, at some point, we should be able to close basically that gap in terms of overall performance. You know that we will replace cane. So that I think to be realistic, maybe it will not be the outcome. But likely, we'll be able to serve markets like the Middle East and Africa that due to transportation, et cetera, we are closer. And we're quite optimistic that in the longer run, we should be able to offer more, let's say, world sugar source from BP.

So are there more questions? Everyone so much overwhelmed all the detailed projects we introduced today. If not, then that brings us to the end of the day. I think also on behalf of the presenters and the Executive Board, thank you very much for your attention, for your interest and also participation. As I said, a lot of things will be presented today. So please feel free to reach out to my IR colleague, [indiscernible] or myself in the next couple of days. Happy to answer your questions that may arise. For those who came to [indiscernible], have a safe trip home, and see you soon. Bye-bye.

Thank you.

Thank you. Bye-bye.

Good morning, ladies and gentlemen, and welcome to the KWS SAAT conference regarding the publication of the financial results '24-'25. [Operator Instructions] Let me now turn the floor over to Dr. Jorn Andreas.

Good morning, everyone, and welcome to our analyst and investor call for the fiscal year '24-'25. I'm very pleased to share how KWS has delivered in a challenging agricultural environment with a robust operational performance and a number of deliberate strategic choices that set us up well for the future. Before we begin, as always, a brief reminder. Today's remarks include forward-looking statements that are subject to risks and uncertainties, and you will find the full disclaimer on this slide. And with that, let me take you through the year's highlights.

Over the past year, we navigated a weaker agricultural market condition with resilience, and we delivered our full year targets in line with the latest guidance. Two signals stand out: a strong increase in free cash flow and a low net debt position, both underlying KWS earnings power and balance sheet strength. We also sharpened our focus. We streamlined the portfolio. We repositioned the corn segment as we also anticipated and communicated earlier and set a new financial framework designed to drive sustainable, profitable growth.

As a leading seed specialist, this means targeted long-term investments in growth areas and in our innovation pipeline and continue to help to address the real challenges facing agriculture. At the same time, we want our shareholders to participate in the company's long-term success. We are aiming for a higher payout ratio, while maintaining a strong commitment on dividend continuity. And looking ahead to '25-'26, we are confident in the resilience and the trajectory of our market-leading businesses. So even if market headwinds unfortunately won't disappear overnight, we expect to stay on our growth path and create sustainable value for all our stakeholders.

Let's now take a look at our key performance indicators for the last fiscal year. So the figures presented on that slide relate to the continuing operations of KWS following the sale of our South American corn and sorghum activities that we closed in the first quarter of the last fiscal year. Net sales of EUR 1.68 billion were at previous year's level, including a slight negative currency effect. On a comparable basis, so on a constant exchange rate basis and without portfolio effects, organic growth was plus 1%. So overall, I find this quite remarkable as an outcome, given the declining acreage that we've seen in our global ag markets, in particular, in our core European markets.

EBITDA was EUR 351 million, down 13.4%. This reflects special items and operating developments. Keep in mind that previous year included a positive onetime effect of EUR 28 million from divestments of our Chinese corn business. We also had higher costs on the administrative side, increased R&D and also selling expenses. Net income declined to EUR 140 million, mainly due to lower EBIT and a higher tax rate. The financial result, however, improved significantly, driven by higher interest income after we materially reduced our net debt.

A very nice result is our increased gross margin, which grew slightly to 63.1%, benefiting from positive [Technical Difficulty] sugarbeet. So this development clearly demonstrates our pricing power even in times of challenging commodity market and the premium innovation [Technical Difficulty]. Free cash flow from continuing operations improved substantially to EUR 123 million, mainly due to higher cash from operating activities and lower CapEx. As a consequence, our net debt fell significantly from EUR 385 million to EUR 62 million or 0.2x EBITDA. So all in all, this is a very solid picture against the industry backdrop. A quick walk-through of the sales bridge. We achieved a slight organic growth despite the continued headwinds and lower acreage, organic growth of plus 1%, mainly driven by sugarbeet and vegetables.

With this, we slightly exceeded our latest sales outlook where we guided around 0% growth. On the other hand, FX effects had a negative effect of approximately 1% primarily related to the Turkish lira. Overall, this underscores our ability and our resilience to deliver stable sales under challenging conditions. Our 2 differentiators, the economic value of our [ varieties ] and the broad portfolio that balances opportunities and risks. To illustrate, in the last fiscal year '24-'25, we generated 2/3 of our sales with new varieties, which is a strong indicator of our innovation power and also a clear evidence of our R&D effectiveness.

We also achieved a new record, 584 new varieties approved in the last year -- last reporting year. That's an increase of more than 4% versus the previous year, which means with this, we're also laying the foundation for future growth. Our income statement reflects both a robust underlying business performance, but also several one-off items. So let me walk you quickly through the special items that impacted our results. First, prior years included a positive onetime gain of EUR 28 million from the sale of our Chinese corn business.

This year, we benefited from the reversal of a VAT provision amounting to EUR 7.7 million in our Sugarbeet segment. So this was established in the previous fiscal year related to a claim which we successfully fended off. Another one-off effect is the EUR 20.7 million write-down related to the divestment of our North American joint venture, AgReliant that we completed in June 2025. Despite these effects, we maintained a strong profitability of an adjusted EBITDA margin of 20.4%, while continuing our high level of R&D investments that are crucial for our long-term competitive advantage.

Net income from continuing operations reached EUR 140 million or EUR 4.24 per share. And taking into account the extraordinary gain of EUR 96 million from the sale of our corn and sorghum business in South America, earnings per share increased sharply to EUR 7.16 per share. Let us now turn to our segments, and we are starting with Sugarbeet and Sugarbeet net sales rose to EUR 872 million on an organic basis, plus 2.2%, even though acreage declined by roughly 3%. The context matters here. So European producers reduced contracted areas from last season's very high base, moving essentially back toward normal levels.

Growth was driven primarily by Northern, Western and Eastern Europe and also, but to a lesser extent from North America. Our sustainable product innovations, CONVISO SMART and CR+ continue to lead. Together, they account now for 61% of our segment sales, which is up from 56% last year. We also launched unique combination varieties, so a combination of CONVISO and CR+ across several European countries, which will also support the future growth. EBITDA increased 5%, including the EUR 7.7 million onetime provision reversal. EBITDA margin rose to 45.5% so overall profitability improved, supported by portfolio mix and sustained pricing power.

Moving on to corn. I mentioned it earlier, corn saw a fundamental strategic change, which I address later. Market-wise, Europe moved lower with reduced acreage in our continuum corn operations, which includes the pro rata contribution of AgReliant, sales declined 2.7% to EUR 683 million. Adjusted again for FX and portfolio, the decline was minus 1.6%. So Europe held stable and the decline came mainly from North America, reflecting FX, but also volumes in a pretty competitive market.

EBITDA was at EUR 53 million, below prior year's EUR 82 million, which had include, however, the EUR 28 million onetime gain that I mentioned. The EBITDA margin [Technical Difficulty] accordingly below last year. Let's now turn to Cereals. In Cereals, net sales declined as expected by about 4.6% to EUR 263 million, driven by weaker commodity markets and a declining business [ in Russia ] where we benefited from onetime sales in the previous fiscal year. Our largest crops, hybrid rye and oilseed rape were slightly down versus last year, while wheat was stable. EBITDA declined to EUR 43 million, reflecting the softer top line and continued high R&D investments, in particular with regards to our hybridization efforts in cereals.

On the other hand, Vegetables continued to perform very well. It was our fastest-growing business unit in the last fiscal year, top line 16.2% to EUR 72 million. And this increase was primarily driven by spinach seeds, which accounts now for 2/3 of the segment sales. We added sales activities across key European markets. We improved our go-to-market, which supported the dynamic sales growth and also strengthened our global leadership in spinach seeds. The bean business was flat in a slightly softer market. So also here, we were able to gain market shares. EBITDA was at minus EUR 22 million below last year due to the planned step-up in expenses for breeding and sales expansion. These are, as you know, deliberate investments to build a significant long-term position in the vegetable seed market. Operating cash flow increased significantly to EUR 228 million, mainly because cash outflows for inventory and receivables were lower.

Cash outflow from investing activities was at EUR 105 million, slightly above last year. However, last year included roughly EUR 40 million proceeds from the sale of our Chinese corn activities. So that is important for comparison purposes. Investments focused on production, R&D capacity, including the completion of our lead seed storage in Einbeck and the opening of an R&D center for vegetable seeds in the Netherlands. So overall, free cash flow improved substantially to EUR 123 million. As a consequence, our net debt position improved substantially from EUR 385 million to EUR 62 million or 0.2x EBITDA. In practice, that puts us close to a net debt-free position.

Two main drivers. First, our annual EBITDA of EUR 350 million already covered a large share of the starting debt and our M&A proceeds of EUR 277 million from our divestments further debt. Net working capital did build through the year, but it remained significantly below the prior year period, supporting free cash flow. Our capital structure is now fundamentally stronger, giving us flexibility to invest in growth, advance our strategy and, of course, also selectively pursue M&A from a position of strength.

I'm pleased to report that beyond the operational delivery, we reached key strategic milestones in our positioning. Most notably, we realigned our corn segment, streamlining the portfolio with divestments in North and South America and in the prior year in China, of course. The result, higher profitability and a much stronger financial position. Going forward, KWS will focus on the profitable European corn business, where we already today hold a market leadership position. So we are deliberately exiting sales outside Europe in exchange for higher margins, in exchange for reduced currency and market risks and also lower capital intensity.

So by exiting the corn GMO markets, we've also reduced our dependence on external IP and can concentrate on our own proprietary breeding technologies. This focus supports our goal of sustainable profitable growth, it supports our goal of entrepreneurial independence and it also fits very well to the growth opportunities we see in Europe, in particular, in grain corn. With the portfolio adjustments behind us, we are now entering a new phase of corporate development, and that's why we have refreshed our strategic framework, and we set new medium-term financial targets.

And our priorities rest on 3 pillars: First, expand our market leadership in established crops. We want to scale activities where we see additional value potential such as vegetable seeds. And of course, we want to continually push innovation in plant breeding. And these 3 drivers, lead, build, advance, they form a clear framework for our profitable and sustainable growth in the future. And over the next 3 years, so over the midterm period, we're targeting a 3% to 5% organic net sales growth and EBITDA margin of 19% to 21% alongside our 2030 sustainability ambition.

And in this context, we have also updated our dividend policy. KWS values continuity, and we are committed to stable and increasing dividends. We are now aiming for a higher payout ratio of 25% to 30% of earnings after taxes adjusted for portfolio and other onetime effects. And for last fiscal year [ '24-'25 ], the Executive Board and Supervisory Board will propose a dividend of EUR 1.25 per share [indiscernible] year-over-year. So that implies a 26% payout ratio of adjusted earnings after taxes. And as always, we will balance dividends with investments, inorganic growth and potentially M&A. That balance is important to us.

Let's now turn to the outlook for the current fiscal year. In line with our midterm ambitions, we expect a comparable net sales to grow by approximately 3% year-over-year in '25-'26 so despite a subdued -- still subdued agricultural backdrop and an expected decline in Russia due to import restrictions and localization of seeds. And I think that's a strong statement. We also expect an EBITDA margin of 19% to 21%, so consistent with our midterm target range. This excludes a positive special effect of around EUR 30 million from the sale of our license rights as part of the divestments of our North American corn activities that we will recognize in the first quarter '25-'26.

Yes, with that, and before I close, I would like to warm you -- invite you to our Capital Markets Day on 18th of November 2025 in Einbeck. So my fellow Board colleagues and I will share deeper insights into our goals, into our growth ambitions. And while we offer [Technical Difficulty] participation, I would be delighted to see many of you in person. So you can really expect a full day of presentations, Q&A with deep dives on strategy, on business, on financials and also on pipeline and innovation plus on-site insights into our innovation capabilities. We talk about genome editing, we talk about hybridization. And of course, you will have a look also at our sugarbeet production backbone. So there will be ample of opportunities to have direct conversations, and I look forward to welcoming you on 18th November in Einbeck.

That concludes my prepared remarks. Thank you for your attention, and I look forward to the Q&A together with our Head of Investor Relations, Peter Vogt.

[Operator Instructions] And first up is Oliver Schwarz from Warburg Research.

Congrats on the past results. I've got 2 questions here on the results. Firstly, I saw that earnings were boosted by a reversal of provisions to the amount of EUR 7.8 million. Could you elaborate on that one? Secondly, I saw that -- or realize that the outlook is now basically performed on -- when it comes to earnings on the EBITDA level, no longer on the EBIT level. But still, you tend to report the EBIT as the prime earnings figure in the segmental overview. Is that going to change in the future? And what's the rationale in regard to switching from an EBIT guidance to an EBITDA guidance? That would be my questions.

Oliver, thank you for your question. So yes, correct. So on the VAT provision, we basically refer to VAT provision in the amount of EUR 7.7 million that we took basically earlier -- in the previous fiscal year. It relates to a dispute [Technical Difficulty] in Russia with the applicability of a certain VAT rate, and we successfully tendered this off in front of the court. So that put us in a position to reverse this provision, and that had a positive onetime effect that we recognized in the Sugarbeet segment.

On the EBITDA, correct, yes, so we are switching essentially from EBIT to EBITDA, and that is mainly driven by 2 factors. First is we had a longer discussion in the first half of this year, market perception study where we talked to many people in the financial community, and there was the preference and the rest also to be more comparable also to our peers in our industry. And that's why we switch from EBIT to EBITDA. And also internally, that provides us with a much cleaner view on our operating performance because it strips out accounting effects in particular with regards to the purchase price allocation also in our vegetables segment.

So with that, we want to make sure that we are consistently also reporting internally and externally with a true view of our operating -- underlying operating performance. And this will be also the guidance going forward, both on the group level as well as on a business unit or segment level.

The next question comes from Christian Faitz from Kepler Cheuvreux.

I just have a question on your relatively cautious outlook for this current fiscal year. Is that because pharma profitability in your relevant markets continues to be low? Or what's the background to essentially a flat development minus obviously the 3% envisaged organic sales growth?

That's a good question. So exactly as you're saying, so we are still in a period of, I would say, subdued agriculture commodity prices. So when you look at the price development, then we are essentially on 2020 commodity price levels, which has, of course, an impact on the producer margin. So there is not so much, of course, an incentive of our customers to increase production, to increase acreage under these, let's say, price -- commodity price conditions, and that has also an effect on our guidance. We still believe that the 3%, we are actually making also a strong statement because the market will be more in the area of 1% to 2% growth for the current fiscal year.

So we believe with this outlook, actually, we will be able to grow faster than the relevant markets. And of course, what we also took also into consideration in our outlook and I mentioned this is that we will have also [Technical Difficulty] also going forward based on the current activities to increase the localization of production and the reduction of the import quota. So that has an effect that has been built also in our guidance. But still, this is very much also with what we guide for the midterm. So we actually feel good with that.

And next up is Michael Schaefer from ODDO BHF.

The first one is on your outlook statement on -- for sugarbeet. I mean, you're looking for a slight organic growth. This is, if I understand, despite what you're expecting maybe from Russia, maybe some clarification to what extent you expect the Russian business or how this to evolve in sugarbeet primarily? And then also related to the sugarbeet business, you are forecasting basically a lower margin in the Sugarbeet segment for the current fiscal year. This is on the back of the special effects, which -- to the VAT recovery basically, which you accounted for. However, if I strip this out, I'm getting to something like 44.6% margin for last year. So question is, how do you see basically this on a more comparable basis, the margin to evolve on sugarbeet? This would be my first question.

The second one is on the vegetables side. [Technical Difficulty] correctly, you provided some undistorted sort of profitability target of -- or a number of around 20% margin for the vegetables business on that one. So if I strip this out compared to your reported negative number, so I'm getting to something like a EUR 36 million -- EUR 35 million of extra OpEx, which you are basically earmarking for investing into further growth. So I wonder how this number is evolving in the years to come on what's baked into the midterm guidance for the segment or for the group in general, how this is evolving. So this would be my 2 questions.

Very good, Michael. Very good questions. So as you rightfully said, so we believe that the market -- of course, the sugar market is still under pressure. I mentioned already a very weak commodity price situation still. Of course, as a seed producer, we are only indirectly affected by these commodity price movements. However, we believe on an acreage basis for sugarbeet in our relevant markets, it will be more stagnating in the current fiscal year. We initially had a more optimistic outlook, but I would say right now, what we see in front of us, it's rather stagnating.

However, what we've also demonstrated in the past, and that's really important is that even under those conditions, we are to grow and we also increase our profitability, thanks to our innovative product portfolio. So the pricing power that we have, the portfolio effects [Technical Difficulty] innovative varieties CONVISO, CR+ and also our unique new combination varieties always puts us in a position to be able to grow and also to deliver value even under, let's say, adverse, I would say, market conditions.

That means also that we are confident that we will be able to maintain also the profitability. You rightfully said we had in the last fiscal year, the reversal of a provision, which is a positive onetime effect. We will not, of course, have that in the current fiscal year [Technical Difficulty] a profitability well above 40%. So with that, I believe we are well positioned also to navigate also this more challenging environment that we see. I mentioned Russia. So for Russia, I would say our outlook is stable. So for us, sugarbeet remains a better business for us also in the current fiscal year. For the other crops, it's more an opportunistic business because here, the localization of the activities in Russia have already progressed quite a bit, and that's also baked into our guidance that in particular, when it comes to corn, for example, we have a much lower forecast for our business.

And this is more on the opportunistic side. But so far, I would say the situation in Russia is neutral. It hasn't worsened. It hasn't improved, and that's also how we react to this market picture. Vegetables, yes. So we are really happy also with the operative profitability. You can imagine with the 16%, we are able to also turn this into a very nice operating leverage for our underlying business, so spinach and beans. So that's really on the positive side. But at the same time, we need to build our go-to-market structure. We need to build our breeding infrastructure. We are roughly halfway through, let's say, the innovation cycle of what we call our foody crops, so tomato, pepper, cucumber, melon and watermelon.

So you will see also, I would say, until the 2020s, an additional buildup of expenses in order to build that structure, but our goal is over the midterm for the next 3 years to launch basically product launch varieties in each of the foody crops so that you see also now traction when it comes also [Technical Difficulty] years. So that's what you can expect. So further buildup of structure in the next years, but also a launch of key varieties that will be the driver of our future growth in the years to come.

Can I have a follow-up on vegetables, please? I mean you reported strong organic sales growth in the past fiscal 15% plus, but guiding for flat organic sales growth for the current -- for the ongoing fiscal year. So what's holding back?

Well, it's more a comparable topic. So of course, we are now comparing ourselves against [Technical Difficulty] 16%. It's a significant growth, and we've been able to capture very good market share, particularly Italy, other parts of Europe. We also saw nice growth also in North America. That's why we've been a bit on the cautious side and say, okay, based on that high comparable level, I think would be for us already a good result if you can sustain this also given, of course, the pressure that the consumers have when they choose these products. So I can -- from my side -- I mean, I would not be surprised if we can maybe put a little bit on top of that, but we said, okay, based on the very good, let's say, lending of last year, that is basically what we see in front of us.

At the moment, there are no further questions. [Operator Instructions] There are no further questions.

All right. If there are no further questions, then again, thank you very much for your interest in KWS. And as I said earlier, please have a look at your Inbox to see the invitation to our Capital Markets Day. So we look forward to welcoming you Einbeck, continue the dialogue on site and of course, also over the coming weeks and months together with our Investor Relations team. So thank you and all the best until then.