Bayer crop protection sales up 7% in 2013

Date:03-19-2014

Bayer CropScience's crop protection sales recorded a 5.6% increase to €1,626 million in the fourth quarter of 2013. However, seed sales improved by 20.4% to €171 million, and the combined crop protection and seed business in sales saw a 6.8% rise to €1,797 million.

For the full year of 2013, crop protection sales were up by 6.7% to €7,194 million, while seed sales slightly rose by 1.2% to €974 million. The combined crop protection and seed business grew 6% to €8,168 million. All of the crop protection business units developed positively. Fungicides and insecticides achieved the largest increases in percentage terms, with Herbicides and SeedGrowth posting encouraging gains. Sales of vegetable seeds also moved ahead.

Bayer CropScience’s Sales Results (€ million)
Q4 ended Dec. 31	Q4 2012	Q4 2013	%change	Full Year 2012	Full Year 2013	%change
Herbicides	451	469	+ 4.0	2,356	2,456	+ 4.2
Fungicides	445	445	0.0	1,974	2,195	+ 11.2
Insecticides	424	465	+ 9.7	1,514	1,622	+ 7.1
SeedGrowth1	220	247	+12.3	897	921	+ 2.7
Crop Protection	1,540	1,626	+ 5.6	6,741	7,194	+ 6.7
Seeds2	142	171	+ 20.4	962	974	+ 1.2
Crop Protection/Seeds	1,682	1,797	+ 6.8	7,703	8,168	+ 6.0
Environmental Science	174	154	– 11.5	680	651	– 4.3
EBITDA3	374	282	-24.6	2,050	2,184	+ 6.5
EBIT4	247	163	– 34.0	1,556	1,729	+ 11.1
Total	1,856	1,951	+5.1	8,383	8,819	+ 5.2
1 the “Seed Treatment” business unit was renamed to “SeedGrowth.” 2 In September 2012 the company renamed the “BioScience” business unit within the CropScience segment to“Seeds.” 3 earnings before interest, tax, depreciation and amortisation; 4 earnings before interest and tax.

In product category terms, herbicides increased by 4% to €469 million in this quarter, and annual sales registered a 4.2% growth to €2,456 million. Fungicide sales were flat at €445 million in this quarter, while annual sales rose 11.2% to  €2,195 million. Insecticide boosted by 9.7% to €465 million in this quarter, and by 7.1% to €1,622 million in 2013. Seed treatments improved 12.3% to €247 million, and annual sales grew 2.7% to €921million.

Bayer CropScience division

The sales for Bayer CropScience division rose by 5.1% to €1,951 million in this quarter. Annual sales rose by 5.2%to €8,819 million. Sales in Crop Protection / Seeds developed positively, due to the attractive market environment and especially to an increase in sales of the new crop protection products launched since 2006 to more than €1,510 million. Sales in the Seeds unit rose slightly overall despite reduced canola and cotton acreages in North America.

Volume sales for Bayer CropScience division increased by 11.8% in this quarter, while prices slightly rose 1%. Currency decreased 8.2% of sales, while portfolio achieved a 0.5% rise. For the full year of 2013, volume sales increased 6.8%, while prices rose 2.6% and portfolio boosted by 0.5%. Currency effects dropped by 4.7%.

Environmental Science sales decreased by 11.5% to €154 million in this quarter. Annual sales fell by 4.3% to €651 million. The positive development in products for professional users more than offset the decline in the consumer business.

Earnings before interest and tax (EBIT) of CropScience rose by 11.1% to €1,729 million in 2013. The special charges mainly comprised restructuring expenses in crop protection. EBIT before special items advanced by 16.7% to €1,801 million. EBITDA before special items moved ahead by 11% to €2,248 million. Earnings growth was mainly the result of significant volume increases and higher selling prices,with positive currency effects of some €20 million also contributing to the increase.

Regional sales

In Europe, Bayer CropScience’s sales rose by 4.3%to €2,799 million, mainly in light of the positive development at crop protection / seeds. Fungicides posted double-digit growth. Both Insecticides and the vegetable seed business developed well, while sales of herbicides showed only a small increase. Business in SeedGrowth receded overall, partly as a consequence of use restrictions for products containing neonicotinoids. Sales of Environmental Science receded due to the downturn in the consumer business.

Sales in North America advanced by 5.0% to €2,211 million. This was primarily attributable to the robust business development in SeedGrowth with products for use in corn and soybeans and to positive development in herbicides. Double-digit growth was also recorded in Fungicides, while sales in the Insecticides unit declined due to lower infestation pressure. Business in seeds was down against a strong prior year. The positive development in vegetable seeds business did not fully offset the lower sales of canola and cotton seed, which were due to reduced acreages. Business expanded at Environmental Science.

Sales in the Asia / Pacific region advanced by 7.9% to €1,358 million, due to increased sales in herbicides. Business in insecticides and fungicides also expanded. Seeds business developed successfully, too, with double-digit growth for vegetable and rice seeds. The region as a whole benefited especially from a significant business improvement in India. Sales in Environmental Science were at the previous year’s level.

Growth was strongest in Latin America / Africa / Middle East, where sales climbed by a substantial 23.6% to €2,451 million. They achieved double-digit growth in crop protection / seeds in a very positive market environment. Sales of the Insecticides unit posted particularly good gains, driven by products for use in soybeans and corn. In fungicides, products for use in soybeans were especially successful.The SeedGrowth and herbicides businesses also developed very well. Sales in Seeds advanced in addition, particularly for vegetable and cotton seed. The soybean seed business also developed very well, partly due to acquisitions made in 2013. Brazil and Argentina accounted for a major part of the region‘s positive sales development. Sales in Environmental Science also moved ahead.

Outlook

Bayer expects the market environment to remain favorable in 2014 but weaken over the course of the year. They also anticipate an overall growth rate in the mid-single digits in 2014, which would be lower than in the preceding year. The company expects Latin America to continue experiencing the strongest growth. In Asia / Pacific, too, they expect agricultural production to continue expanding, though with markedly lower growth rates than in Latin America. They see Eastern Europe and parts of Africa as further regions with above-average growth potential, albeit from relatively low levels. In the industrialized regions of the northern hemisphere, however, Bayer expects markets to expand much more slowly than in 2013.