Bayer crop protection sales up 18% in Q2

Date:08-09-2012

Bayer CropScience’s crop protection sales grew by 18.4% to €1,850 million in the second quarter of 2012 ended June 30. Crop Protection once again posted marked growth in all product groups and regions. Nearly all business units saw double-digit growth rates. For first half year of 2012, sales of Crop Protection reached €3,787 million, up 17% compared with the same period of last year.

Herbicides posted significant growth across all regions with €697 million, up by 14.8%. This was attributable primarily to the expansion of sales of the Adengo™ and Liberty™ product families.

Fungicides sales rose by 18.5% to €614 million, the business benefited mainly from the introduction of X-Pro™ in additional European countries and the positive sales development of the Prosaro™ product group in the United States.

Insecticides increased by 19.2% to €378 million and saw strong sales growth in North America, where Belt™ profited from the good market conditions in soybean cultivation.

The expansion of business with seed treatment products was particularly strong following a moderate performance in the preceding quarter. Sales were up 34.2% to €161 million.

BioScience built on its success in the preceding quarter, markedly expanding sales by 20.5% to €237 million. This segment achieved the strongest sales growth in North America, mainly in broad-acre crops. Sales of the Environmental Science business unit moved back by 3.8% to €189 million. This decline was mainly attributable to business with both professional users and products for private customers in Europe. By contrast, business in the United States developed positively.

Sales of Crop Protection / BioScience in the second quarter of 2012 amounted to €2,087 million, up 14.5% from the same period of 2011.

Bayer CropScience’s Sales Results (€ million)
Q2 ended June 30th	Q2 2012	Q2 2011	%change	H1 2012	H2 2011	%change
Herbicides	697	607	+14.8	1,545	1,308	+18.1
Fungicides	614	518	+18.5	1,168	1,015	+15.1
Insecticides	378	317	+19.2	714	605	+18.0
Seed treatment	161	120	+34.2	360	310	+16.1
Total crop protection	1,850	1,562	+18.4	3,787	3,238	+17.0
BioScience	237	195	+21.5	723	598	+20.9
Environmental Science	189	186	+1.6	376	364	+3.3
EBITDA*	501	405	+23.7	1,473	821	+79.4
EBIT**	382	272	+40.4	1,233	491	+151.1
Total	2,276	1,943	+17.1	4,886	4,200	+16.3
* earnings before interest, tax, depreciation and amortisation; ** earnings before interest and tax.

CropScience subgroup

Sales of the CropScience subgroup advanced by 12.7% in the second quarter of 2012 to €2,276 million. Thus the company was able to build on the successful start to the season in the previous quarter. EBIT of CropScience climbed substantially in the second quarter of 2012 from €272 million to €382 million, while EBITDA advanced by 23.7% to €501 million.

Sales of the CropScience in the first half of 2012 increased by 13.6% to €4,886 million. EBIT rose substantially from €491 million to €1,233 million after special charges of €63 million. These mainly comprised expenses for restructuring at Crop Protection. EBITDA climbed 79.4% year on year to €1,473 million thanks to the good business development, especially in the northern hemisphere. After a successful prior year, business in 2012 was also driven by a good season in the northern hemisphere. In addition to an attractive market environment, the realignment of sales and marketing activities and streamlined product portfolio contributed to the positive business performance.

Regional sales of Crop Protection

Sales of Crop Protection in Europe rose by 10.9% to €750 million, with the fungicides, seed treatment and herbicides businesses posting pleasing growth. Sales of insecticides remained level year on year. Nearly all countries contributed to this positive performance overall. The company achieved considerable growth in the United Kingdom, France, Russia and Poland. This development was due in large part to X-Pro™ and the Prosaro™ product family.

Sales growth was also strong in North America, improved by a considerable 21.5% to €515 million. The positive market environment overall stimulated business in the United States and Canada. The company achieved double-digit growth rates in all business units, with insecticide sales expanding particularly strongly compared with the prior year. This was attributable above all to increased sales of Belt™ and Movento™. In Canada, the herbicides business benefited mainly from combination with canola seed within the context of integrated product offering. Fungicides also saw very gratifying gains there.

Sales in the Asia / Pacific region grew by a moderate 3.7% to €266 million. Business benefited primarily from strong growth in herbicides, particularly for rice and cereals. Sales were significantly improved in Australia and India, while business in Japan and Thailand was down against the strong prior-year level.

Sales in the Latin America / Africa / Middle east region moved forward by 12.9% year on year to €319 million. Seed treatment business was doubled in Brazil. Sales of insecticides, and especially Belt™, rose sharply. Fungicides also developed positively, mainly in corn cultivation. Business performance was positive overall in Africa and the Middle East.

Outlook

Following the good business development in the first half of the year, Bayer expects that sales of their CropScience business will advance by approximately 10% on a currency- and portfolio-adjusted basis and that EBITDA before special items will improve by approximately 20% (previously: sales and EBITDA before special items to advance by mid-single-digit percentages).