Bayer agrochemical sales up 6% in Q3 of 2011

Date:11-01-2011

Bayer CropScience’s crop protection sales grew by 6.2% to €1,200 million in the third quarter of 2011. All product categories showed encouraging growth, with sales of seed treatments and fungicides gaining considerably and herbicides posting a positive performance. Insecticides business was saw significant growth despite the cessation of marketing for older products such as Temik™. For the first nine months, sales of crop protection increased by 7.6% to €4,438 million. Sales of the CropScience subgroup in the third quarter of 2011 grew by 9.4% to €1,379 million, due to higher volumes at Crop Protection. By contrast, BioScience and Environmental Science saw a drop in business. High prices for agricultural raw materials led to a favorable market environment overall.

Herbicides’ sales were up by 1.9 to €328 million in Q3, and up 8.2% to €1,636 million in the first nine months. Sales of fungicides rose by 3.8% to €297 million in Q3, and by 11.2% to €1,312 million in the first nine months. While sales of insecticides were flat with the same period of last year.

BioScience reported a sharp decline in business, mainly due to weaker third-quarter sales of canola and cotton seed in North America following a very successful sowing season overall. Both crops showed double-digit sales gains for the first nine months as a whole. The vegetable seed business (Nunhems™) continued to develop well, especially in the United States and the Asia / Pacific region. Sales of the Environmental Science business unit declined slightly by 3.2% to €114 million.

Bayer CropScience’s Sales Results (€ million)
Q3 ended Sept. 30th	Q3 2011	Q3 2010	%change	First nine months 2011	First nine months 2010	%change
Herbicides	328	322	+1.9	1,636	1,512	+8.2
Fungicides	297	286	+3.8	1,312	1,180	+11.2
Insecticides	334	334	0	939	974	-3.6
Seed treatment	241	188	+28.2	551	460	+19.8
Total crop protection	1,200	1,130	+6.2	4,438	4,126	+7.6
BioScience	65	86	-24.4	663	557	+19.0
Environmental Science	114	125	-8.8	478	494	-3.2
EBITDA*	143	-274	-	964	523	+84.3
EBIT**	24	-404	-	515	143	+260.1
Total	1,379	1,341	+2.8	5,579	5,177	+7.8
* earnings before interest, tax, depreciation and amortisation; ** earnings before interest and tax.

Sales by regions

Crop protection sales in Europe rose by 3.7% to €306 million. While fungicides and insecticides saw moderate business growth, sales of herbicides were below the strong figures for the previous year in several Western European countries. The business in France developed well, due especially to seed treatment products. In Eastern Europe, the company continued to benefit from favorable market conditions and recorded strong growth in all business units.

Sales in North America advanced by a substantial 14.5% to €160 million, particularly due to the strong growth for seed treatments, especially newly launched product Poncho™ / Votivo™. The herbicides business also developed well. Sales of insecticides were at the prior-period level, with higher sales of innovative products compensating for the withdrawal of older ones. The positive development for fungicides in Canada did not offset declines for this product group in the United States.

Sales in the Asia / Pacific region grew by 15.5% to €267 million, despite the discontinuation of some older insecticides. The company recorded particularly strong gains in India, China and Australia, chiefly for Nativo™ family of rice and cereal fungicides. Business with seed treatments grew strongly, while herbicides also posted significant sales gains.

Sales in the Latin America / Africa / Middle East region moved forward by 15.2% year on year to €467 million, driven mainly by insecticides and seed treatments in Latin America. Insecticide Belt™ developed especially well in Brazil and Argentina in the major applications for soybean, corn and cotton. The herbicides business saw encouraging growth thanks to a good start to the corn season for Soberan™. Sales of fungicides were also raised.

Outlook

Bayer expects the sales of CropScience business improved by a high-single-digit percentage on a currency- and portfolio-adjusted basis in 2011. They plan to expand EBITDA before special items by more than 20% compared to the weak prior year in light of the good business performance so far. The company hopes the positive development of the global seed and crop protection market to continue for the remainder of 2011. The remaining high level prices for agricultural raw material will accelerate market growth, especially in Latin America and Eastern Europe.