2021 Sales of Bayer Crop Science increased by 11%, with business up in all regions

The Bayer Group had a successful year in 2021, both operationally and strategically. “We posted substantial growth, strengthened our innovation pipeline and made progress toward our sustainability targets. All this shows that Bayer is on the right track!” said Werner Baumann, Chairman of the Board of Management, on Tuesday during the company’s Financial News Conference. “We not only met our updated Group forecast, but in fact exceeded it. What's particularly encouraging is that all three divisions grew dynamically in 2021, and what's more, they all outpaced their respective markets.”

Baumann also emphasized Bayer's progress in its transformation toward becoming a carbon-neutral company. He said Bayer had reduced its direct and indirect greenhouse gas emissions by 11.5 percent in 2021 and is on course to be carbon-neutral by 2030. “Last year we grew our business while at the same time reducing emissions. This means we’ve decoupled growth and CO2 emissions. So, we’re on the right track here, too!” A contributing factor was that Bayer concluded agreements in 2021 covering around 600,000 megawatt-hours of green electricity, thereby raising its share within the electricity mix to approximately one quarter. In addition, Bayer has set an internal CO2 price of 100 euros per metric ton to be factored into investment decisions and to accelerate its decarbonization efforts.

Crop Science achieves record sales and grows earnings

Encouraging market environment

The global seed and crop protection market grew strongly in 2021 (Fx adj. +7%; 2020: +4%). Continued strong global demand for corn and soybeans encouraged further acreage growth in Latin America as well as the application of premium crop protection across the globe. Growth was also driven by higher prices for agrochemicals, in particular nonselective herbicides, reflecting high cost inflation and supply bottlenecks.

Sales

Sales at Crop Science advanced by a significant 11.1% (Fx & portfolio adj.) in 2021 to €20,207 million, with business up in all regions. Bayer registered double-digit percentage gains in Latin America and Asia/Pacific, and posted significant growth in North America and Europe/Middle East/Africa.

Sales at Corn Seed & Traits rose in all regions. The business in Latin America and North America in particular benefited from an increase in acreages that was driven by positive market developments as well as greater market penetration. Bayer also implemented price increases worldwide.

Bayer recorded encouraging sales gains at Herbicides, primarily due to price increases for the glyphosate-based products across all regions as well as higher volumes.

Bayer also significantly increased sales at Fungicides, mainly driven by higher Fox Xpro™ volumes in Latin America. Sales also rose in the Asia/Pacific and Europe/Middle East/Africa regions due to favorable weather conditions, whereas business in North America decreased.

Soybean Seed & Traits recorded double-digit percentage growth in Latin America and North America due to an increase in volumes and prices.

Sales at Insecticides increased year on year due to higher volumes, primarily in Latin America thanks to Curbix™ product, but also in Asia/Pacific and North America. However, business was down in Europe/Middle East/Africa due to the loss of a registration.

Sales at Environmental Science rose in all regions, with growth in North America driven by higher demand and price increases for Roundup™.

Sales at Vegetable Seeds increased in Latin America, Asia/Pacific and North America due to higher volumes and prices.

Sales in the reporting unit “Other” advanced year on year, largely due to higher acreages in Asia/Pacific in the cotton seed business.

Earnings

EBITDA before special items at Crop Science increased by 3.6% in 2021 to €4,698 million (2020: €4,536 million). The growth in earnings was mainly driven by higher prices and volumes as well as contributions from ongoing efficiency programs. By contrast, earnings were diminished by an increase in costs, particularly in the cost of goods sold, that was mainly due to high inflation, as well as by negative currency effects of €387 million. The EBITDA margin before special items declined by 0.9 percentage points to 23.2% (2020: 24.1%).

EBIT came in at minus €495 million in 2021 (2020: minus €18,629 million) after special charges of €2,915 million (2020: €20,420 million) that primarily related to provisions in connection with the Roundup™ litigation as part of the glyphosate litigations. In addition, impairment loss reversals were recorded in the cash-generating units Corn Seed & Traits, Soybean Seed & Traits, and glyphosate.

Fourth quarter of 2021

Sales

Sales advanced by 8.8% (Fx & portfolio adj.) to €4,690 million in the fourth quarter. Business was up in all regions, with sales rising by double-digit percentages in Asia/Pacific and Latin America. Sales at Corn Seed & Traits increased in Latin America due to higher volumes and prices. At Herbicides, sales rose year on year due to an increase in prices across all regions, especially for the glyphosate-based products. The growth in sales at Fungicides was mainly driven by higher Fox Xpro™ volumes in Latin America. Bayer increased sales at Soybean Seed & Traits thanks to higher prices in Latin America. Sales at Insecticides rose significantly, mainly due to shifts in demand. Business at Environmental Science was up year on year, largely owing to increased demand for Roundup™ in North America. Sales at Vegetable Seeds decreased in all regions, primarily due to shifts in demand into the third quarter. Sales in the reporting unit “Other” advanced year on year, largely driven by growth in the cotton seed business in the Asia/Pacific and North America regions.

Earnings

EBITDA before special items rose by 28.1% in the fourth quarter to €761 million (Q4 2020: €594 million). The growth in earnings was attributable to higher prices and contributions from ongoing efficiency programs. By contrast, earnings were diminished by an increase in costs, particularly in the cost of goods sold. In addition, Bayer recorded a positive currency effect of €4 million. The EBITDA margin before special items came in at 16.2%.

EBIT increased to €1,435 million in the fourth quarter (Q4 2020: €91 million). This figure included special gains of €1,263 million (Q4 2020: €54 million) that mainly related to the impairment loss reversals outlined in the full-year commentary above.