Management Report
5.2 CropScience
| Key Data – CropScience | [Table 7] |
|---|
| | 3rd Quarter
2010 | 3rd Quarter
2011 | Change | First Nine
Months 2010 | First Nine
Months 2011 | Change |
|
€ million |
€ million |
% | Fx (& p)
adj.
% |
€ million |
€ million |
% | Fx (& p)
adj.
% |
| Sales | 1,341 | 1,379 | +2.8 | +9.4 | 5,177 | 5,579 | +7.8 | +10.9 |
| Change in sales | | | | | | | | |
| Volume | +8.6% | +11.3% | | | -3.2% | +11.8% | | |
| Price | -0.3% | -1.9% | | | -1.1% | -0.9% | | |
| Currency | +9.1% | -5.9% | | | +5.4% | -2.8% | | |
| Portfolio | +0.2% | -0.7% | | | +0.2% | -0.3% | | |
| Sales by business group | | | | | | | | |
| Crop Protection/BioScience | 1,216 | 1,265 | +4.0 | +10.7 | 4,683 | 5,101 | +8.9 | +12.1 |
| Environmental Science | 125 | 114 | -8.8 | -3.2 | 494 | 478 | -3.2 | -0.4 |
| Sales by region | | | | | | | | |
| Europe | 342 | 346 | +1.2 | +2.3 | 1,997 | 2,125 | +6.4 | +6.9 |
| North America | 227 | 212 | -6.6 | +2.2 | 1,248 | 1,417 | +13.5 | +17.8 |
| Asia/Pacific | 279 | 304 | +9.0 | +12.5 | 862 | 907 | +5.2 | +7.3 |
| Latin America/Africa/Middle East | 493 | 517 | +4.9 | +13.8 | 1,070 | 1,130 | +5.6 | +11.8 |
| EBIT | (404) | 24 | . | | 143 | 515 | . | |
| Special items | (386) | (22) | | | (500) | (508) | | |
| EBIT before special items* | (18) | 46 | . | | 643 | 1,023 | +59.1 | |
| EBITDA* | (274) | 143 | . | | 523 | 964 | +84.3 | |
| Special items | (386) | (22) | | | (500) | (417) | | |
| EBITDA before special items* | 112 | 165 | +47.3 | | 1,023 | 1,381 | +35.0 | |
| EBITDA margin before special items* | 8.4% | 12.0% | | | 19.8% | 24.8% | | |
| Gross cash flow** | (201) | 102 | . | | 358 | 720 | +101.1 | |
| Net cash flow** | 472 | 409 | -13.3 | | 989 | 1,018 | +2.9 | |
2010 figures restated 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 in the third quarter of 2011 grew by 9.4% (Fx & portfolio adj.) to €1,379 million (reported: +2.8%), due to higher volumes at Crop Protection. By contrast, BioScience and Environmental Science saw a drop in business. High prices for agricultural raw materials led to a favorable market environment overall.
Sales of Crop Protection/BioScience in the third quarter of 2011 amounted to €1,265 million, up 10.7% (Fx & portfolio adj.) year on year.
In Crop Protection, all product groups showed encouraging growth, with sales of seed treatments and fungicides gaining considerably and our herbicides posting a positive performance. We also saw significant growth in the insecticides business despite the cessation of marketing for older products such as Temik™.
| Sales – Crop Protection/BioScience | [Table 8] |
|---|
| | 3rd Quarter
2010 | 3rd Quarter
2011 | Change | First Nine
Months 2010 | First Nine
Months 2011 | Change |
|
€ million |
€ million |
% | Fx & p adj. % |
€ million |
€ million |
% | Fx & p adj. % |
| Sales | | | | | | | | |
| Herbicides | 322 | 328 | +1.9 | +6.2 | 1,512 | 1,636 | +8.2 | +10.9 |
| Fungicides | 286 | 297 | +3.8 | +10.5 | 1,180 | 1,312 | +11.2 | +14.7 |
| Insecticides | 334 | 334 | 0.0 | +10.2 | 974 | 939 | -3.6 | +2.9 |
| Seed Treatment | 188 | 241 | +28.2 | +35.1 | 460 | 551 | +19.8 | +24.7 |
| Crop Protection | 1,130 | 1,200 | +6.2 | +13.0 | 4,126 | 4,438 | +7.6 | +11.0 |
| BioScience | 86 | 65 | -24.4 | -20.9 | 557 | 663 | +19.0 | +18.1 |
| Crop Protection/BioScience | 1,216 | 1,265 | +4.0 | +10.7 | 4,683 | 5,101 | +8.9 | +12.1 |
2010 figures restated Fx & p adj. = currency- and portfolio-adjusted |
Development of the Crop Protection business varied from one region to another.
Sales in Europe rose by 3.7% (Fx adj.) to €306 million. While fungicides and insecticides saw moderate business growth, sales of herbicides were below the strong figures for the previous year in several Western European countries. Our business in France developed well, due especially to our seed treatment products. In Eastern Europe, we continued to benefit from favorable market conditions and recorded strong growth in all business units.
Crop Protection sales in North America advanced by a substantial 14.5% (Fx adj.) to €160 million. Here we saw particularly strong growth for seed treatments, especially our newly launched product Poncho™/Votivo™. The herbicides business also developed well. Sales of insecticides were at the prior-period level, with higher sales of our innovative products compensating for the withdrawal of older ones. The positive development for fungicides in Canada did not offset declines for this product group in the United States.
Sales in the Asia/Pacific region grew by a substantial 15.5% (Fx adj.) to €267 million, despite the discontinuation of some older insecticides. We recorded particularly strong gains in India, China and Australia, chiefly for our Nativo™ family of rice and cereal fungicides. Business with seed treatments grew strongly, while herbicides also posted significant sales gains.
Sales in the Latin America/Africa/Middle East region moved forward by 15.2% (Fx adj.) year on year to €467 million, driven mainly by insecticides and seed treatments in Latin America. Our insecticide Belt™ developed especially well in Brazil and Argentina in the major applications for soybean, corn and cotton. The herbicides business saw encouraging growth thanks to a good start to the corn season for Soberan™. We also raised sales of our fungicides.
BioScience reported a sharp decline in business, mainly due to weaker third-quarter sales of canola and cotton seed in North America following a very successful sowing season overall. Both crops showed double-digit sales gains for the first nine months as a whole. The vegetable seed business (Nunhems™) continued to develop well, especially in the United States and the Asia/Pacific region.
Sales of the Environmental Science business unit declined slightly by 3.2% (Fx adj.) to €114 million. This was attributable to the drop in sales of specialty actives and products for professional users in Japan. The consumer products business trended positively, especially in the United States.
EBIT of CropScience in the third quarter of 2011 rose to €24 million (Q3 2010: minus €404 million) after €22 million in special charges, mainly for restructuring. The special items in the prior-year quarter mainly comprised provisions established in connection with litigations concerning genetically modified rice (LL RICE). EBIT before special items improved to €46 million (Q3 2010: minus €18 million). EBITDA before special items advanced by 47.3% to €165 million. Earnings growth was mainly due to considerably higher volumes and improved capacity utilization.
CropScience sales in the first nine months of 2011 rose by 10.9% (Fx & portfolio adj.) to €5,579 million, with sales growth largely attributable to the positive business development at BioScience and Crop Protection. Sales of Environmental Science, however, remained level with the corresponding period of 2010. Due to the strong first half at BioScience, we achieved double-digit growth rates for seeds in the core crops – canola, cotton, rice and vegetables – and in all regions. Crop Protection raised sales substantially in the seed treatment, fungicides and herbicides businesses, thanks in part to our recent product launches. The insecticides business held steady year on year despite the absence of some older products. The increases at Crop Protection were attributable to all regions, with business in North and Latin America developing particularly well.
EBIT of CropScience advanced to €515 million in the first nine months of 2011 (9M 2010: €143 million) after special charges of €508 million. These charges related mainly to provisions established in connection with litigations concerning genetically modified rice (LL RICE) in the United States and to expenditures for restructuring measures at Crop Protection. EBIT before special items climbed by 59.1% to €1,023 million. EBITDA before special items increased by 35.0% year on year to €1,381 million thanks to the strong business performance in all regions.