Management Report

5.2 CropScience

Key Data – CropScience      [Table 9]
  2nd
Quarter
2014
2nd
Quarter
2015


Change
1st
Half
2014
1st
Half
2015


Change
  € million € million % Fx & p
adj. %
€ million € million % Fx & p
adj. %
Sales 2,470 2,723 +10.2 -0.6 5,370 5,815 +8.3 +0.2
Change in sales                
Volume +7.5% -0.7%     +9.0% -1.6%    
Price +3.0% +0.1%     +2.2% +1.8%    
Currency -7.2% +10.0%     -7.1% +7.4%    
Portfolio 0.0% +0.8%     +0.1% +0.7%    
Sales                
Crop Protection/
Seeds
2,273 2,472 +8.8 -1.3 5,007 5,361 +7.1 -0.2
Environmental Science 197 251 +27.4 +6.6 363 454 +25.1 +5.5
                 
  € million € million % Fx adj. % € million € million % Fx adj. %
Sales by region                
Europe 887 894 +0.8 +0.9 2,126 2,272 +6.9 +10.3
North America 748 915 +22.3 +2.0 1,702 1,858 +9.2 -7.6
Asia/Pacific 371 443 +19.4 +4.9 700 803 +14.7 +0.6
Latin America/Africa/
Middle East
464 471 +1.5 -8.8 842 882 +4.8 -6.3
                 
EBIT 470 571 +21.5   1,458 1,445 -0.9  
Special items 0 (28)     0 (75)    
EBIT before special items1 470 599 +27.4   1,458 1,520 +4.3  
EBITDA1 615 705 +14.6   1,713 1,703 -0.6  
Special items 0 (28)     0 (70)    
EBITDA before special items1 615 733 +19.2   1,713 1,773 +3.5  
EBITDA margin before special items1 24.9% 26.9%     31.9% 30.5%    
Gross cash flow2 469 537 +14.5   1,239 1,242 +0.2  
Net cash flow2 971 742 -23.6   249 (81) .  
Fx & p adj. = currency- and portfolio-adjusted; Fx adj. = currency-adjusted
1 For definition see Chapter 6 "Calculation of EBIT(DA) Before Special Items."
2 For definition see Chapter 8 "Financial Position of the Bayer Group."

Sales of the CropScience subgroup in the second quarter of 2015, at €2,723 million, were level with the strong prior-year period (Fx & portfolio adj.: -0.6%; reported: +10.2%). Crop Protection/Seeds posted a slight sales decline against the background of a persisting difficult market environment, particularly in Latin America. This was partly offset by substantial increases at Environmental Science.

CropScience Quarterly Sales

Sales of Crop Protection/Seeds fell by 1.3% (Fx & portfolio adj.) to €2,472 million in the second quarter of 2015, mainly as a result of a sharp decline in business at Insecticides. By contrast, our Seeds business, which expanded by a double-digit figure, registered a positive trend – especially for vegetables and rice. We also significantly grew sales at Herbicides.

Sales of Environmental Science advanced by 6.6% (Fx & portfolio adj.) to €251 million, mainly as a result of strong growth in products for professional users.

Sales by Business Unit       [Table 10]
  2nd
Quarter
2014
2nd
Quarter
2015


Change
1st
Half
2014
1st
Half
2015


Change
  € million € million % Fx & p
adj. %
€ million € million % Fx & p
adj. %
Herbicides 683 787 +15.2 +5.6 1,648 1,693 +2.7 -2.7
Fungicides 781 827 +5.9 -2.4 1,443 1,657 +14.8 +8.9
Insecticides 390 360 -7.7 -17.7 742 695 -6.3 -15.2
SeedGrowth 156 163 +4.5 -5.1 408 384 -5.9 -12.5
Crop Protection 2,010 2,137 +6.3 -2.9 4,241 4,429 +4.4 -1.9
Seeds 263 335 +27.4 +11.0 766 932 +21.7 +9.1
Crop Protection/Seeds 2,273 2,472 +8.8 -1.3 5,007 5,361 +7.1 -0.2
Environmental Science 197 251 +27.4 +6.6 363 454 +25.1 +5.5
Fx & p adj. = currency- and portfolio-adjusted

The sales development of CropScience varied by region:

Sales in Europe came in at €894 million in the second quarter of 2015, up 0.9% on a currency-adjusted basis. Our seed treatments were successful, particularly those for use in cereals. The vegetable seed business also registered strong, double-digit growth. Sales at Fungicides were down against the strong prior-year quarter following an early start to the season in the first quarter and lower pest pressure due to weather conditions.

Sales in North America climbed by 2.0% (Fx adj.) to €915 million. This increase was mainly attributable to sales of herbicides in the United States for use particularly in corn and cotton. Sales at Fungicides fell sharply due in part to dry weather in Canada. At Environmental Science, business with products for professional users developed positively.

Sales in the Asia/Pacific region climbed by 4.9% (Fx adj.) to €443 million. The Seeds business registered a significant expansion in sales, particularly for rice, cotton and vegetables. Herbicides and Fungicides also posted successful development.

Sales in the Latin America/Africa/Middle East region moved back by 8.8% (Fx adj.) to €471 million. Crop Protection/Seeds registered a decline mainly in Insecticides in Brazil, where sales were weakened by lower pest pressure. Business at Herbicides and SeedGrowth also fell sharply in that region. At the same time, we posted strong sales gains at Fungicides, particularly for soybeans, and at Environmental Science.

CropScience Quarterly EBIT and EBITDA Before Special Items

ebit of CropScience rose by 21.5% in the second quarter of 2015 to €571 million, reflecting special charges of €28 million (q2 2014: €0 million) related to litigations and the revaluation of other receivables. ebit before special items climbed by 27.4% to €599 million. ebitda before special items came in 19.2% above the prior-year quarter at €733 million (q2 2014: €615 million). This increase was driven by a positive currency effect of about €70 million.

Sales of CropScience in the first half of 2015 were level year on year at €5,815 million (Fx & portfolio adj. +0.2%) despite the difficult market environment. At Crop Protection/Seeds, the positive overall development at Fungicides and Seeds offset lower sales at Insecticides and SeedGrowth. Environmental Science posted gratifying growth. In regional terms, we were particularly successful in the first half of 2015 in Europe, registering double-digit growth. By contrast, sales were down in North America and in Latin America/Africa/Middle East.

ebit of CropScience for the first half of 2015 came in level with the prior-year period at €1,445 million (-0.9%). Earnings were diminished by special charges of €75 million (h1 2014: €0 million) that resulted mainly from the consolidation of production sites. ebit before special items climbed by 4.3% to €1,520 million. ebitda before special items came in 3.5% above the prior-year period at €1,773 million. Negative effects of lower volumes and higher selling expenses were more than offset by an increase in selling prices and a positive currency effect of around €30 million.

Last updated: July 29, 2015  Copyright © Bayer AG
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