Bayer crop protection sales up 15.6% in Q1

A strong start to the season boosted Bayer CropScience’s crop protection business to €2,610 million in the first quarter of 2012, up by 15.6% (or 14.4% on a currency-adjusted basis) against the prior-year quarter.

Crop Protection segment posted growth in all product groups and regions. While seed treatment products showed a moderate increase, the other business units registered double-digit growth rates. Sales of insecticides rose by 16.7% to €336 million, benefited from company’s rejuvenated portfolio. The herbicides business remains the largest category, with sales surged 21% to €848 million, mainly driven by corn portfolio, especially the considerable increase in sales of the Adengo™ product family. The strongest growth in fungicide revenues was achieved in North America and Asia / Pacific, sales increased by 11.5% to €554 million.

Sales by regions

Sales of crop protection in Europe rose by 6.0% (Fx adj.) to €903 million. The herbicides, fungicides and insecticides businesses showed solid growth, while seed treatment products were down from the high level of the prior-year period. Growth was driven by the Eastern European countries, particularly Ukraine, along with Italy. In central Europe the company posted a slight increase. Business on the Iberian peninsula dropped noticeably due to an ongoing drought.

Crop Protection sales in North America advanced by a substantial 25.4% (Fx adj.) to €432 million. This was the result of an early start to the season and generally favorable market conditions in the United States, where the company nearly doubled sales of herbicides due to balanced portfolio. Insecticides business benefited from the rejuvenation of the portfolio, led by Movento™ for fruit and vegetables. Fungicides matched their strong prior-year development.

Sales in the Asia / Pacific region achieved double-digit growth rates in all business units, grew by a substantial 24.6% (Fx adj.) to €298 million. The products for rice and cereals were especially successful.

Sales in the Latin America / Africa / Middle East region moved forward by 14.1% (Fx adj.) year on year to €304 million. Growth in Latin America was driven by herbicides, insecticides and seed treatment products. The herbicides business expanded across the entire portfolio and in all important crops. Insecticides developed particularly well in Brazil and Argentina in the major crops of soybeans and cotton.

Tried-and-tested products such as CropStar™ and an extended range of customized solutions enabled us to continue expanding the seed treatment business. By contrast, demand for fungicides was impaired by drought. Business developed positively overall in Africa and the Middle East.

CropScience division

Sales of the CropScience subgroup advanced by 14.4% (Fx & portfolio adj.) in the first quarter of 2012 to €2,610 million. The season got off to an early and promising start in the northern hemisphere, especially in North America, with moderate growth stimuli in Europe. The company sharpened focus on marketing and distribution is already bearing fruit. With good market conditions continuing, the company grew all areas of the business.

EBIT of CropScience rose strongly in the first quarter of 2012 from €219 million to €851 million. Special charges amounted to €10 million (Q1 2011: €405 million) and were incurred for restructuring at Crop Protection. EBIT before special items improved by 38.0% to €861 million, while EBITDA before special items advanced by 31.7% to €981 million. Earnings growth – mainly the result of an early start to the season and considerably higher volumes – was also helped by efficiency improvements, successful cost management and positive currency effects. In addition, the company benefited from one-time gains of €22 million (Q1 2011: €0 million) in connection with the divestment of active ingredients at Crop Protection and from the earlier receipt of royalty payments.

Sales of Crop Protection / BioScience in the first quarter of 2012 amounted to €2,423 million, up 15.3% (Fx & portfolio adj.) from the same period of 2011. BioScience continued on its path of growth with a considerable sales gain of 17.1% (Fx & portfolio adj.) to €486 million. The largest increases were posted for InVigor™ (canola seed) and FiberMax™ (cotton seed) in North America. Our Nunhems™ vegetable seed business saw a modest start to the year, with a moderate decline in sales against a strong prior-year quarter.
Sales of the Environmental Science business group advanced slightly by 3.4% (Fx adj.) to €187 million. This was due to sales increases for consumer products in the United States and Europe. However, sales of products for professional users declined due to phasing in tender business.