Management Report
5.2 CropScience
| Key Data – CropScience | [Table 7] |
|---|
| | 2nd
Quarter
2011 | 2nd
Quarter
2012 |
Change | 1st
Half
2011 | 1st
Half
2012 |
Change |
| |
€ million |
€ million |
% | Fx
(& p) adj. % |
€ million |
€ million |
% | Fx
(& p) adj. % |
| Sales | 1,943 | 2,276 | +17.1 | +12.7 | 4,200 | 4,886 | +16.3 | +13.6 |
| Change in sales | | | | | | | | |
| Volume | +11.1% | +11.2% | | | +12.0% | +12.5% | | |
| Price | -1.9% | +1.5% | | | -0.6% | +1.1% | | |
| Currency | -5.8% | +5.2% | | | -1.8% | +3.5% | | |
| Portfolio | -0.3% | -0.8% | | | -0.1% | -0.8% | | |
| Sales by business group | | | | | | | | |
| Crop Protection/BioScience | 1,757 | 2,087 | +18.8 | +14.5 | 3,836 | 4,510 | +17.6 | +14.9 |
| Environmental Science | 186 | 189 | +1.6 | -3.8 | 364 | 376 | +3.3 | -0.3 |
| Sales by region | | | | | | | | |
| Europe | 777 | 847 | +9.0 | +8.1 | 1,779 | 1,899 | +6.7 | +6.5 |
| North America | 535 | 721 | +34.8 | +23.4 | 1,205 | 1,588 | +31.8 | +24.1 |
| Asia/Pacific | 334 | 354 | +6.0 | +2.4 | 603 | 698 | +15.8 | +11.4 |
| Latin America/Africa/Middle East | 297 | 354 | +19.2 | +12.1 | 613 | 701 | +14.4 | +10.4 |
| EBIT | 272 | 382 | +40.4 | | 491 | 1,233 | +151.1 | |
| Special items | (81) | (53) | | | (486) | (63) | | |
| EBIT before special items* | 353 | 435 | +23.2 | | 977 | 1,296 | +32.7 | |
| EBITDA* | 405 | 501 | +23.7 | | 821 | 1,473 | +79.4 | |
| Special items | (66) | (48) | | | (395) | (57) | | |
| EBITDA before special items* | 471 | 549 | +16.6 | | 1,216 | 1,530 | +25.8 | |
| EBITDA margin before special items* | 24.2% | 24.1% | | | 29.0% | 31.3% | | |
| Gross cash flow** | 304 | 381 | +25.3 | | 618 | 1,059 | +71.4 | |
| Net cash flow** | 823 | 935 | +13.6 | | 609 | 280 | -54.0 | |
Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales and Sales by business group; Fx adj.: Sales by region) * For definition see Chapter 6 “Calculation of EBIT(DA) Before Special Items.” ** For definition see Chapter 8 “Financial Position of the Bayer Group.” |
Sales of the CropScience subgroup advanced by 12.7% (Fx & portfolio adj.) in the second quarter of 2012 to €2,276 million (reported: +17.1%). Thus we were able to build on the successful start to the season in the previous quarter. We once again saw particularly strong growth in North America, due especially to the realignment of our commercial activities. Our business in Europe and in Latin America/Africa/Middle East also showed gratifying development, while sales rose moderately in Asia/Pacific. Positive market conditions, particularly as a result of the persisting high price level for agricultural commodities, contributed to this growth.
Sales of Crop Protection/BioScience in the second quarter of 2012 amounted to €2,087 million, up 14.5% (Fx & portfolio adj.) from the same period of 2011.
Crop Protection once again posted marked growth in all product groups and regions. Nearly all business units saw double-digit growth rates. The expansion of business with seed treatment products was particularly strong following a moderate performance in the preceding quarter. The fungicides business benefited mainly from the introduction of X-Pro™ in additional European countries and the positive sales development of the Prosaro™ product group in the United States. Insecticides saw strong sales growth in North America, where our product Belt™ profited from the good market conditions in soybean cultivation. Herbicides posted significant growth across all regions. This was attributable primarily to the expansion of sales of the Adengo™ and Liberty™ product families.
| Sales – Crop Protection/BioScience | [Table 8] |
|---|
| | 2nd
Quarter
2011 | 2nd
Quarter
2012 |
Change | 1st
Half
2011 | 1st
Half
2012 |
Change |
| |
€ million |
€ million |
% | Fx & p adj. % |
€ million |
€ million |
% | Fx & p adj. % |
| Sales | | | | | | | | |
| Herbicides | 607 | 697 | +14.8 | +9.7 | 1,308 | 1,545 | +18.1 | +14.7 |
| Fungicides | 518 | 614 | +18.5 | +15.1 | 1,015 | 1,168 | +15.1 | +13.7 |
| Insecticides | 317 | 378 | +19.2 | +14.5 | 605 | 714 | +18.0 | +15.9 |
| Seed Treatment | 120 | 161 | +34.2 | +25.8 | 310 | 360 | +16.1 | +11.9 |
| Crop Protection | 1,562 | 1,850 | +18.4 | +13.8 | 3,238 | 3,787 | +17.0 | +14.4 |
| BioScience | 195 | 237 | +21.5 | +20.5 | 598 | 723 | +20.9 | +18.2 |
| Crop Protection/BioScience | 1,757 | 2,087 | +18.8 | +14.5 | 3,836 | 4,510 | +17.6 | +14.9 |
| Fx & p adj. = currency- and portfolio-adjusted |
Sales of Crop Protection in Europe rose by 10.9% (Fx adj.) to €750 million, with the fungicides, seed treatment and herbicides businesses posting pleasing growth. Sales of insecticides remained level year on year. Nearly all countries contributed to this positive performance overall. We achieved considerable growth in the United Kingdom, France, Russia and Poland. This development was due in large part to X-Pro™ and the Prosaro™ product family.
We registered strong growth in North America in the second quarter as well. Crop Protection sales improved by a considerable 21.5% (Fx adj.) to €515 million. The positive market environment overall stimulated our business in the United States and Canada. We achieved double-digit growth rates in all business units, with insecticide sales expanding particularly strongly compared with the prior year. This was attributable above all to increased sales of Belt™ and Movento™. In Canada, the herbicides business benefited mainly from combination with canola seed within the context of our integrated product offering. Our fungicides also saw very gratifying gains there.
Sales in the Asia/Pacific region grew by a moderate 3.7% (Fx adj.) to €266 million. Business benefited primarily from strong growth in herbicides, particularly for rice and cereals. We significantly improved sales in Australia and India, while business in Japan and Thailand was down against the strong prior-year level.
Sales in the Latin America/Africa/Middle East region moved forward by 12.9% (Fx adj.) year on year to €319 million. We registered the strongest gains in Brazil, where business with seed treatment products doubled. Sales of insecticides, and especially Belt™, rose sharply. Fungicides also developed positively, mainly in corn cultivation. Business performance was positive overall in Africa and the Middle East.
BioScience built on its success in the preceding quarter, markedly expanding sales by 20.5% (Fx & portfolio adj.) to €237 million. We achieved the strongest sales growth in North America, mainly in broad-acre crops. Our cotton seed brands Stoneville™ and FiberMax™ posted particularly strong performance. Sales of our vegetable seeds marketed under the Nunhems™ brand declined slightly.
Sales of the Environmental Science business unit moved back by 3.8% (Fx adj.) to €189 million. This decline was mainly attributable to business with both professional users and products for private customers in Europe. By contrast, business in the United States developed positively.
EBIT of CropScience climbed substantially in the second quarter of 2012 from €272 million to €382 million (+40.4 %). Special charges amounted to €53 million (Q2 2011: €81 million) and were incurred mainly for restructuring at Crop Protection. EBIT before special items improved by 23.2% to €435 million, while EBITDA before special items advanced by 16.6% to €549 million. This was attributable above all to higher volumes and prices. Progress made with our efficiency improvement programs also had a positive impact on earnings. In addition, we benefited from one-time gains of €25 million (Q2 2011: €16 million) in connection with outlicensing activities at Crop Protection.
CropScience sales in the first half of 2012 increased by 13.6% (Fx & portfolio adj.) to €4,886 million. After a successful prior year, business in 2012 was also driven by a good season in the northern hemisphere. In addition to an attractive market environment, the realignment of our sales and marketing activities and our streamlined product portfolio contributed to the positive business performance. Crop Protection recorded double-digit growth in all business units. At BioScience we achieved gratifying sales gains with seed for the core crops oilseed rape/canola, cotton and rice. We also saw strong expansion in Latin America. On the other hand, business with vegetable seeds was down in a difficult market environment. Sales in the Environmental Science business unit were level year on year.
EBIT of CropScience rose substantially in the first half of 2012 from €491 million to €1,233 million after special charges of €63 million (H1 2011: €486 million). These mainly comprised expenses for restructuring at Crop Protection. EBIT before special items increased by 32.7% to €1,296 million. EBITDA before special items climbed 25.8% year on year to €1,530 million thanks to the good business development, especially in the northern hemisphere. Our business in North America made a substantial contribution. In addition, we benefited from one-time gains of €47 million (H1 2011: €16 million), primarily in connection with outlicensing activities and the divestment of active ingredients at Crop Protection.