# Sales Performance #Follow
Oct. 28, 2016
In the third quarter of 2016, Bayer CropScience posted sales of €2,057 million (Q3 2015: €2,081 million). This amounted to a decline of 1.2 percent on a reported basis. Adjusted for currency and portfolio effects, sales were level year on year. Business at Crop Protection / Seeds was steady overall at the prior-year level despite an ongoing weak market environment, particularly in Latin America. Sales of Environmental Science developed very encouragingly.
The sales developed encouragingly in Europe (Fx adj. plus 5.8 percent) and North America (Fx adj. plus 5.7 percent). Sales edged forward year on year (Fx adj. plus 1.1 percent) in the Asia/Pacific region but declined (Fx adj. minus 5.3 percent) in the Latin America/Africa/Middle East region.
Fungicides posted an increase of 8.1 percent (Fx. & portfolio adj.), whereas Insecticides saw a considerable decrease (Fx & portfolio adj. minus 16.8 percent). Performance at Herbicides (Fx & portfolio adj. minus 1.0 percent) and Seed-Growth (Fx & portfolio adj. minus 3.7 percent) declined year on year. Development at Seeds was very encouraging, with sales expanding by 21.6 percent (Fx & portfolio adj.). Environmental Science also expanded sales by a robust 17.7 percent (Fx & portfolio adj.).
EBITDA before special items of Bayer CropScience increased by 0.6 percent to EUR 318 million (Q3 2015: EUR 316 million). Higher selling prices and a positive currency effect of around EUR 80 million stood against lower volumes, higher write-downs on receivables and higher research and development expenses, among other things.
First nine months of 2016 Sales
Sales of Crop Science in the first nine months of 2016 were level year on year at €7,511 million (Fx & portfolio adj. + 0.6%) despite the difficult market environment. At Crop Protection, higher sales at Fungicides were offset by a considerable decline at Insecticides and slightly lower sales at SeedGrowth. The company expanded business at Seeds and Environmental Science. Sales increased slightly in the Asia / Pacific and Europe regions, whereas business remained at the prior-year level in North America and declined slightly in Latin America / Africa / Middle East.
EBITDA before special items in the first nine months of 2016 was level year on year at €2,070 million (+ 0.5%; 9M 2015: €2,059 million). Higher selling prices and a positive currency effect of around €60 million stood against lower volumes, higher write-downs on receivables and higher research and development expenses, among other things. EBIT decreased by only a slight 0.1% to €1,602 million after special charges of €104 million (9M 2015: €79 million), largely in connection with the agreed acquisition of Monsanto and efficiency improvement measures.
Regional sales (currency-and portfolio-adjusted)
> Sales in Europe climbed to €463 million (Fx adj. + 5.8%). Following a weak prior-year quarter, Fungicides developed especially well with double-digit growth. The company also considerably improved sales at Herbicides and business with oilseed rape / canola seed. By contrast, it registered a decline at SeedGrowth. Business at Environmental Science developed very positively.
> Sales in North America advanced by 5.7% (Fx adj.) to €368 million. We achieved strong double-digit sales growth in the Seeds unit, particularly for soybean seeds. At Crop Protection, business with herbicides for application in corn developed very positively. By contrast, there were considerable sales declines at Fungicides and Insecticides. Sales at Environmental Science increased by a double-digit percentage.
> In the Asia / Pacific region, sales edged forward to €367 million (Fx adj. + 1.1%). A gratifying, weather related increase in sales at Fungicides more than offset declines at Herbicides and Insecticides. Sales at Seeds came in well below the prior-year quarter. Environmental Science developed very positively.
> Sales in the Latin America / Africa / Middle East region declined by 5.3% (Fx adj.) to €859 million. The company again registered a substantial decrease in sales in Brazil, due to the difficult market and liquidity situation. Business contracted at both Insecticides and Herbicides. By contrast, there was an increase in sales at Fungicides, primarily with products for use in soybeans and corn. Business with soybean seeds developed very encouragingly. Environmental Science also grew business substantially.
In light of the persistently weak market environment, Bayer CropScience continues to expect sales to be on the prior-year level on a currency- and portfolio-adjusted basis. As before, this is equivalent to reported sales of about EUR 10 billion. Bayer CropScience continues to expect a low-single-digit percentage decrease in EBITDA before special items.
"Bayer and Monsanto are a perfect fit"
Bayer reached a major milestone on September 14, 2016, with the signing of a binding agreement to acquire Monsanto for USD 128 per share, representing a transaction value of around USD 66 billion. “This step is entirely logical,” said Baumann. “The two companies are a perfect fit and complement each other ideally. We will combine our strengths in seeking solutions to one of the major societal challenges: how to feed a substantially growing global population in an ecologically sustainable way.” Bayer’s portfolio will be tailored to the needs of customers throughout the world – from large-scale commercial operations in the United States to smallholder farmers in India. The transaction is subject to customary closing conditions, including approval of the merger agreement by a majority of Monsanto’s stockholders and receipt of required approvals from the relevant antitrust and other authorities. Bayer has initiated the process of obtaining these approvals. It intends to submit the necessary application in the United States before the end of this year and in the European Union probably in the first quarter of 2017. In terms of financing, Bayer successfully closed syndication of the USD 57 billion bank facilities at the beginning of October. Refinancing in the capital markets will depend on respective market conditions and might be executed in part well in advance of closing of the transaction, which Bayer expects by the end of 2017.
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