Bayer crop protection sales up 10% in Q4 2015

Bayer CropScience raised sales by 7.2% in 2015, to €10,367million. Bayer registered growth at both Crop Protection/Seeds and Environmental Science. Fungicides played a major part in this sales increase. In regional terms, business in Europe saw particularly encouraging development.

EBIT of CropScience climbed by 16.4% in 2015, rising from €1,806 million to €2,103million. There were net special gains of €222million (2014: net special charges of €32million), comprising mainly damage and license payments in connection with the infringement of Bayer’s rights to the LibertyLink weed control system by Dow AgroSciences (DAS). EBIT before special items increased by 2.3% to €1,881million. EBITDA before special items improved by 2.4% to €2,416 million. In addition to positive earnings effects due to the satisfactory business development, including higher volumes and slightly improved selling prices, there was a very positive currency effect of about €220million. By contrast, there was an increase in the cost of goods sold and in research and development expenses.

Sales in Crop Protection/Seeds increased by 8.3% to €9,548million. Crop Protection posted gratifying sales gains at Fungicides and Herbicides but a distinct decline at Insecticides. In the Seeds business, sales of soybean and canola seed developed particularly well. Business in Environmental Science significantly advanced by 20.8% to €819million. There was a sharp increase in business with products for professional users, while the consumer business came in at the prior-year level.

Regional sales (currency-and portfolio-adjusted)

Sales in Europe rose by 8.2% (Fx adj.) to €3,123million, driven by the positive development at Crop Protection/Seeds. Sales at Herbicides grew by a double-digit percentage, and business at Fungicides also expanded significantly due to low inventories at the beginning of the year. In addition, we achieved encouraging gains in our canola and vegetable seed businesses. Environmental Science performed positively due to strong business with products for professional users.

Sales in the North America region declined by 1.6% (Fx adj.) to €2,689million. This decline was chiefly attributable to the negative development at Crop Protection, particularly at SeedGrowth, which in turn resulted from high inventories of already treated seed in the market. Business was also down for cotton seed, fungicides and herbicides. On the other hand, business with canola seed expanded briskly compared with the prior year. Our insecticides business also developed successfully. There was a very significant increase in sales at Environmental Science, especially due to the acquisition of parts of the DuPont land management business.

Sales in the Asia/Pacific region came in slightly above the prior year level at €1,531million (Fx adj. +1.3%). Contributing to this increase in particular were our SeedGrowth and Herbicides businesses. Sales of cotton and vegetable seed improved by double-digit percentages. Sales at Insecticides declined slightly against the previous year. Sales at Environmental Science were down year on year.

Despite a weakened market environment, particularly in Brazil, sales in Latin America / Africa / Middle East were level year on year at €3,024million (Fx adj. –0.5%). Sales at Insecticides receded sharply as a result of declining business in Latin America that was mainly attributable to lower infestation pressure in Brazil. Business was also down at SeedGrowth, an effect that could not be fully offset by double-digit-percentage growth in sales at Fungicides and a very gratifying performance of the Seeds business, especially for soybean and vegetable seed. Sales at Environmental Science also moved ahead by a double-digit percentage.

Outlook

CropScience aims to contribute to increased agricultural productivity in regions such as Africa and intends to expand its presence there. The offerings are tailored to the needs of African farmers and range from integrated crop solutions based on improved seed varieties through modern crop protection technologies and training in good agricultural practice (g.a.p.) and environmental protection to product safety programs. They also engage locally in public-private partnerships (ppps) to help increase the income of smallholder farmers through sustainable agriculture. Activities include expanding local value chains and training measures. This contributes to improving the living situation of the local population and enhancing the availability of staple foods in the project countries. In such ppps, Bayer cooperates with numerous partners including local governments, farmers’ associations and cooperatives, nongovernmental organizations and agricultural input industries. Bayer CropScience is currently participating in ppps associated with the value chains for rice and potatoes in Sub-Saharan Africa, India and Southeast Asia.

Together with representatives of GLOBALG.A.P., one of the world’s leading quality assurance systems, Bayer CropScience has continued developing the BayG.A.P. program to provide smallholder farmers in developing countries and Emerging Markets, for example, with access to professional local and global food markets. In 2015, pilot projects were carried out with food chain partners in the Asia/Pacific and Latin America regions. The service program includes an intensive training course in g.a.p., individual cultivation advice and subsequent support in meeting the respective local g.a.p. standard. The farmers can sell certified, high-quality produce at higher prices, thus raising their incomes.