Bayer CropScience sales keeps level in Q4 2016

Bayer CropScience posted sales of €9,915 million (Fx & portfolio adj. +0.1%) in 2016. At Crop Protection / Seeds, it matched the prior-year level despite a persisting weak market environment, particularly in Latin America. Environmental Science posted gratifying sales growth. Since the conclusion in May 2016 of an agreement to divest the consumer business of Environmental Science, these activities are reported retrospectively for 2015 and 2016 under discontinued operations. Environmental Science therefore now comprises only the business for professional users. The divestment was closed at the start of October 2016.

In 2016, EBITDA before special items of Bayer CropScience was level year on year at €2,421 million (2015: €2,406 million; +0.6%). A positive currency effect of around €140 million and higher selling prices compensated lower volumes, increased spending on research and development and higher impairment losses recognized on inventories and receivables.

EBIT decreased by 16.2% to €1,755 million, including special charges of €143 million (2015: special gains of €222 million), primarily in connection with the agreed acquisition of Monsanto and efficiency improvement measures.

Regional sales (currency-and portfolio-adjusted)

Sales in the Europe / Middle East / Africa region improved by 1.8% (Fx adj.) to €3,290 million. SeedGrowth registered gains, due particularly to higher demand for products to treat cereal seed. Bayer CropScience also slightly expanded business at Herbicides, while sales at Insecticides and Fungicides came in at the prior-year level. Sales of vegetable seed developed positively, as did sales at Environmental Science.

In the North America region, the company posted a 3.9% (Fx adj.) increase in sales to €2,616 million. Sales at SeedGrowth developed very positively thanks to increased demand for products to treat corn and cereal seed. Sales at Fungicides increased as well. It also achieved strong, double-digit-percentage growth with soybean seeds. By contrast, the company registered a substantial decline in sales of Insecticides resulting from weak demand. Sales at Environmental Science increased slightly.

Sales in Asia / Pacific increased by 2.7% (Fx adj.) year on year to €1,548 million. The Fungicides business saw positive development particularly in Australia and India. Sales of vegetable seeds increased by a double-digit percentage. Business at Herbicides receded slightly, as did sales of Environmental Science.

Sales in Latin America declined by 6.9% (Fx adj.) to €2,461 million. Business was held back by the persisting weak market environment in Brazil, particularly at Insecticides, Herbicides and SeedGrowth. Lower pest pressure had an additional negative impact on Insecticides. The company recorded gains in sales at Fungicides and Seeds. Business at Environmental Science expanded by a double-digit percentage.

New products and registrations

In 2016, Bayer CropScience received marketing authorization in certain countries for new mixtures and formulations, as well as for expanded indications for existing products. For example, we were granted authorization to market the herbicide indaziflam and its core brand AlionTM in Brazil and the new herbicide mixture DiFlexxTM Duo in corn in the United States. The herbicide active ingredient triafamone and its CouncilTM formulations were approved in Japan. We also received further marketing authorizations and the approval of expanded indications for the biological fungicide SerenadeTM ASO in various countries and for the nematicide VelumTM prime in southern Europe and Africa.

In July 2016, furthermore, the European Commission approved the dual herbicide tolerance trait Balance™ GT in soybeans for food and feed uses. Balance™ GT is owned by MS Technologies and is being codeveloped through a joint development agreement between that company and Bayer. The launch of soybeans with this new trait is planned for 2017, pending approval by the regulatory authorities.

Major success can be achieved with vegetables and many broad-acre crops using conventional and molecular plant breeding methods. As vegetables are intended especially to be marketed and eaten fresh, merchants and consumers have particularly strict requirements and expectations regarding their taste, appearance, nutrient content and shelf life. We continuously launch new vegetable seed varieties with these quality traits. In addition, we launch numerous new broad-acre crop varieties every year.

Environmental Science expanded its product range for forestry in Indonesia, Argentina and Brazil by launching the herbicide Esplanade™ F. Furthermore, the two new products DerigoTM and PistolTM Flexx supplemented our portfolio for vegetation control in noncrop areas. We are continuously expanding our range of products for the maintenance of golf courses by developing and introducing various innovative solutions such as the nematicide IndemifyTM and the fungicide ExterisTM in the United States. We are also supporting professional pest control around the world by expanding the MaxforceTM range of insecticides.

Outlook

Bayer CropScience assumes sales of more than €10 billion in 2017. This corresponds to a low single-digit percentage increase on a currency- and portfolio-adjusted basis. They expect EBITDA before special items to be at the prior-year level.