Bayer Crop Science grows sales in all regions in Q2FY2021

The Bayer Group has reported financial results for the second quarter of 2021 on Thursday. The financial results of Crop Science business for the first quarter are as follows: 

Crop Science grows sales in all regions

Second quarter of 2021
Sales

Crop Science posted a 10.6% increase in sales (Fx & portfolio adj.) to €5,021 million in the second quarter of 2021. Sales grew in all regions, with double-digit gains in Latin America and Asia / Pacific. Crop Science also registered significant sales growth in North America.

// Business at Corn Seed & Traits expanded in all regions, and especially in Latin America thanks to volume increases. The growth in sales in North America was attributable to higher prices.

// Herbicides posted double-digit percentage growth in all regions due to increased volumes and prices, and especially in North America, where business benefited from higher volumes for Bayer's XtendiMax™ product and increased selling prices for Roundup™.

// Sales also rose substantially at Fungicides, mainly as a result of higher volumes in Latin America for Bayer's Fox Xpro™ product and in North America due to the launch of new products such as Delaro Complete™.

// The sales increase at Soybean Seed & Traits was mainly driven by volume gains in North America.

// Sales at Insecticides declined in the Europe / Middle East / Africa region following a loss of registrations for thiacloprid-based crop protection products. By contrast, sales developed positively in the Asia / Pacific and Latin America regions as a result of expanded volumes.

// Environmental Science registered a significant increase in sales, particularly in North America due to strong demand for Roundup™.

// Sales at Vegetable Seeds continued to increase in the Asia / Pacific and Latin America regions thanks to expanded volumes.

// Sales in the reporting unit “Other” declined, due especially to earlier product returns in Bayer's cotton seed business in North America, which in the prior year had come in the third quarter.

Earnings

EBITDA before special items at Crop Science decreased to €1,018 million in the second quarter of 2021 (Q2 2020: €1,365 million), giving a margin of 20.3%. Higher prices and volumes along with contributions from ongoing efficiency programs only partly offset an increase in costs, and particularly in the cost of goods sold. Earnings were also diminished by a negative product mix, currency effects of €111 million, and the later receipt of license revenues.

EBIT came in at minus €3,483 million (Q2 2020: minus €9,600 million) after net special charges of €3,945 million (Q2 2020: €10,212 million) that were mainly attributable to the discounted allocation to provisions in connection with the Roundup™ litigation as part of the glyphosate litigations.

First half of 2021
Sales

Sales at Crop Science increased by 8.1% (Fx & portfolio adj.) to €11,667 million in the first six months of 2021, with all regions contributing to this performance. Crop Science achieved significant gains in Latin America and Asia / Pacific in particular. Sales at Corn Seed & Traits increased in the Europe / Middle East / Africa region due in particular to higher prices but declined in North America following the expiration of a license agreement. At Herbicides, Crop Science posted sales gains in all regions due to increased volumes and prices.

Thanks to an increase in volumes, Fungicides registered higher sales in Latin America and Soybean Seed & Traits reported growth in North America. At Insecticides, sales increased in the Asia / Pacific and Latin America regions as a result of higher volumes but declined in Europe / Middle East / Africa due to the loss of a registration. Sales at Environmental Science and Vegetable Seeds rose in all regions. In the reporting unit “Other,” Bayer's cotton seed business registered a decline in sales in North America in particular as a result of earlier product returns, which in the prior year had come in the third quarter.

Earnings

EBITDA before special items at Crop Science declined by 12.8% in the first half of 2021 to €3,466 million (H1 2020: €3,976 million). As detailed above, higher price and volumes along with contributions from ongoing efficiency programs only partly offset an increase in costs, and especially in the cost of goods sold. Earnings were also diminished by a negative product mix, currency effects of €363 million, the expiration of a license agreement, and the later receipt of license revenues. The EBITDA margin before special items declined to 29.7%.

EBIT amounted to minus €1,730 million (H1 2020: minus €8,100 million) after net special charges of €3,997 million (H1 2020: €10,491 million) that were mainly attributable to the discounted allocation to provisions in connection with the Roundup™ litigation as part of the glyphosate litigations.

Crop Science launches Carbon Initiative in Europe

At the end of June, the Crop Science Division initiated the European launch of its global Carbon Initiative program for the agricultural industry, after it had already kicked off in the United States and Brazil in 2020.

The decarbonization program is aimed at permanently reducing CO2 emissions in the agricultural value chain. As part of this initiative, farmers are given incentives to adopt climate-friendly practices to increase the resilience and sustainability of the food system.

Collaborations

In February, Bayer announced a global platform agreement with the German company Horsch, a manufacturer of on-farm technology. As a result, farmers around the world will have new ways to connect their Horsch seeders, planters and other implements to Bayer's Climate FieldView™ platform, making it easier for them to apply digital tools and data science on their farming operations.

In April, Bayer announced a collaboration with the French company RAGT. Bayer intends to work together to advance the development of hybrid wheat technology and provide an innovative wheat-growing system by combining Bayer's leading position in wheat crop protection, expertise in seed production systems and digital solutions in agriculture with RAGT’s wide range of varietal seed innovations.

Also in April, Bayer announced a collaboration with U.S.-based Kebotix to equip farmers with innovative crop protection tools powered by faster data-driven systems. Kebotix uses artificial intelligence and robotics to accelerate the discovery of new chemicals. Those discoveries can then be used by Bayer's researchers to develop new crop protection solutions.