Bayer CropScience crop protection sales up 7% in 2014

Date:03-04-2015

Bayer CropScience's Crop Protection sales recorded a 12% increase to €1,821 million in the fourth quarter of 2014, and Seed sales improved by 21.1% to €171 million. Sales in Crop Protection / Seeds climbed by 12.9% to €2,028 million. Sales in Environmental Science advanced by 8.4% to €167 million. Bayer CropScience raised sales by 12.5% to €2,195 million.

For the full year of 2014, Crop Protection sales were up by 7.2% to €7,712 million, and Fungicide achieved the largest percentage increase. Sales developed positively in all parts of Seeds business, particularly for cotton seed, and Seed sales rose by 13.3% to €1,104 million.The combined Crop Protection and Seed business grew by 7.9% to €8,816 million, due to the attractive market environment and especially to an increase in sales of the new crop protection products (launched since 2006) to over €1.8 billion. Sales in Environmental Science advanced by 4.1% to €678 million. Bayer CropScience raised sales by 7.7% to €9,494 million.

Bayer CropScience’s Sales Results (€ million)
Q4 ended Dec. 31	Q4 2014	Q4 2013	% Change	Full Year 2014	Full Year 2013	% Change
Crop Protection	1,821	1,626	+ 12.0	7,712	7,194	+ 7.2
-Herbicides	517	469	+ 10.2	2,549	2,456	+ 3.8
-Fungicides	568	445	+ 27.6	2,490	2,195	+ 13.4
-Insecticides	482	465	+ 3.7	1,695	1,622	+ 4.5
-SeedGrowth	254	247	+ 2.8	978	921	+ 6.2
Seeds	207	171	+ 21.1	1,104	974	+ 13.3
Environmental Science	167	154	+ 8.4	678	651	+4.1
Total	2,195	1,951	+12.5	9,494	8,819	+7.7
EBITDA1	367	282	+30.1	2,358	2,184	+8.0
EBIT2	191	163	+17.2	1,806	1,729	+4.5
1 earnings before interest, tax, depreciation and amortisation; 2earnings before interest and tax.

EBIT of CropScience advanced by 4.5% in 2014 to €1,806 million (2013: €1,729 million) after special charges of €32 million (2013: €72 million), which were primarily related to the planned consolidation of production facilities. EBIT before special items rose by 2.1% to €1,838 million. EBITDA before special items improved by 5.0% to €2,360 million. The earnings contributions from the very positive business development – marked by considerable volume gains and higher selling prices – were partially offset by higher selling and R&D expenses and negative currency effects of around €50 million.

Regional sales ( currency- and portfolio-adjusted)

Sales in Europe rose by 7.4% to €2,957 million, driven by positive development at Crop Protection/ Seeds. Sales at SeedGrowth and Fungicides registered double-digit percentage increases, while sales at Herbicides rose moderately. Business at Insecticides declined slightly overall. Seeds registered growth in all units. Business at Environmental Science developed positively. A strong consumer business more than offset the decline in sales of products for professional users.

Sales in North America advanced by 10.2% to €2,334 million. This was primarily attributable to the good development in Herbicides, particularly for use in corn and cereals, and in SeedGrowth.

Business with cotton seed expanded briskly compared with the weak prior year and the soybean seed business also developed very well. The Fungicides business saw positive development, while sales at Insecticides declined due to lower pest pressure. Sales advanced at Environmental Science.

Sales in the Asia / Pacific region advanced by 5.5% to €1,374 million, thanks particularly to increased sales in Fungicides. Seeds business also developed well. Sales improved in the Insecticides and Herbicides businesses as well, but receded at SeedGrowth. Sales at Environmental Science expanded substantially. The region as a whole benefited especially from a significant business improvement in India, while sales in Japan and Australia also developed positively.

The strongest growth was recorded in Latin America / Africa /Middle East. Sales in that region climbed by a substantial 20.6% to €2,829 million. The Crop Protection / Seeds achieved double-digit growth in a very positive market environment. Sales in Fungicides saw particularly robust expansion,
especially for products used in soybeans. Herbicides also recorded strong growth. The SeedGrowth and Insecticides businesses also developed very well. Sales in Seeds also advanced considerably, particularly for soybeans, cotton and vegetable seeds. Sales in Environmental Science also moved ahead. Brazil, Argentina and Mexico accounted for a major part of the region's positive sales development overall.

Outlook

Following the persistent dynamic growth in the global seed and crop protection market last year, Bayer CropScience anticipates a volatile market environment in 2015. Global inventories of most agricultural commodities are predicted to increase in 2015, while prices will likely be buoyed by the steady rise in demand for food and feed products. In 2015 the company expects a slower rate of overall growth in the low single digits.

Latin America should continue to experience the strongest growth, though probably with a lower growth rate than in the prior year. This region’s seed and crop protection market is mainly driven by the steady expansion of soybean farming. In Asia / Pacific, too, Bayer expects agricultural production to continue to expand, though with markedly lower growth rates than in Latin America. Development in this region will mainly depend on cereals and rice along with specialty crops such as fruit and vegetables.

They expect markets in the industrialized regions of the northern hemisphere to show weaker growth momentum than in 2014.