Bayer CropScience crop protection sales up 11% in Q3 2015

Bayer CropScience's crop protection sales increased by 11.1% to €1,833 million in the third quarter of 2015. Seeds sales decreased by 5.3% to €124 million in this quarter, while Environmental Science also posted an increase of 5.4% to €156 million. In Crop Protection, the Herbicides business grew by 26.8%, while Fungicides improved by 20.5 percent. By contrast, sales at SeedGrowth (seed treatments) were down by 5.7 %.

EBITDA before special items of CropScience in the third quarter moved ahead by 11.2 % year on year, to €309 million (Q3 2014: €278 million). This increase was largely driven by a positive currency effect of about EUR 30 million. EBIT of CropScience rose by 14.6%in the third quarter of 2015to €180million. This figure reflected special charges of €4million (Q3 2014: €0million) resulting from the consolidation of production sites. EBIT before special items climbed by 17.2%to €184million.

Sales for the first nine months of 2015

Total sales in the first nine months of 2015 were increased by 8.6% year on year at €7,928million, despite the weaker market environment. At Crop Protection/Seeds, the positive overall development at Fungicides and Seeds offset lower sales at Insecticides and SeedGrowth. Environmental Science posted growth of 19.4% to €610 million.

In regional terms, Bayer CropScience was particularly successful in the first nine months of 2015 in Europe, as well as in Asia/Pacific. By contrast, sales were down in North America and in Latin America/Africa/Middle East.

EBIT for the first nine months of 2015came in slight growth of 0.6% with the prior-year period at €1,625million. Earnings were diminished by special charges of €79million (9m 2014: €0million) that resulted mainly from the consolidation of production sites. EBIT before special items climbed by 5.5%to €1,704million. EBITDA before special items came in 4.6%above the prior-year period at €2,082million. This was largely the result of higher selling prices and a positive currency effect of around €60million.

Regional sales (currency-and portfolio-adjusted)

Sales in Europe came in at €465million, up 3.1%on a currency-adjusted basis. Sales at Herbicides, particularly with products for use in cereals, grew by a double-digit percentage. Business with insecticides and vegetable seeds also expanded. Sales at Fungicides declined substantially against the strong prior-year quarter as a result of lower disease pressure due to weather conditions.

Sales in North America climbed by 4.3 to €367million in the third quarter of 2015. Bayer CropScience achieved very gratifying growth in the Herbicides, Fungicides, Insecticides and Seeds businesses. By contrast, business was down substantially at SeedGrowth, due particularly to high inventories of treated seed in the market. At Environmental Science, business with products for professional users developed positively. Canada played a key role in the positive development overall, as business expanded in all areas in that country.

Sales in the Asia / Pacific region climbed by a substantial 7.2%to €363million. The Herbicides and SeedGrowth businesses were especially successful in a slightly improved market environment, posting double-digit growth rates. Business also expanded significantly at Insecticides and Fungicides, as well as with vegetable seeds. On the other hand, the company registered declining sales for rice seed and at Environmental Science.

Sales in the Latin America / Africa / Middle East region edged back by 1.2%to €918million. Crop Protection / Seeds registered a decline mainly at Insecticides, and particularly in Brazil, where sales were weakened by considerably lower pest pressure. Significantly higher sales at Herbicides and Fungicides and for vegetable seeds did not fully offset this effect. Sales at Environmental Science declined substantially against the prior-year quarter.

Outlook

It is expected that the global seed and crop protection market to weaken considerably in 2015compared with previous years. Bayer CropScience anticipates stagnation or a slight decline, mainly as a result of low prices for agricultural commodities and the difficult market environment in Latin America.

Bayer CropScience is adjusting the outlook to reflect the weaker development of the market environment and lower-than-expected currency effects. We continue to expect above-market growth and now aim to raise sales to slightly above €10billion (previously: around €10.5billion). This still corresponds to a low-single-digit percentage increase on a currency- and portfolio-adjusted basis. It anticipates positive currency effects of about 7% (previously: about 8%) compared with 2014. In view of the weakened market environment, the company is now planning to improve EBITDA before special items by a mid-single-digit percentage (previously: a mid- to high-single-digit percentage).