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Bayer CropScience
Bayer CropScience raised sales by 10.8 percent in the first quarter of 2008 to €1,978 million (Q1 2007: €1,786 million). Adjusted for currency and portfolio changes, sales advanced by 14.8 percent. Substantially higher volumes and selling price increases contributed to growth. High prices for major agricultural crops due to low inventories worldwide, combined with stronger demand for plants as an alternative energy source, prompted farmers to increase their expenditures for high-quality seed and innovative crop protection products.
EBITDA before special items came in at €713 million, up 22.1 percent from €584 million in the prior-year period. This significant earnings improvement was due particularly to the growth in business, selling price increases and cost savings, which more than offset the negative currency effects. EBIT before special items rose by 29.3 percent to €578 million (Q1 2007: €447 million). Earnings were diminished by €54 million in special charges for the cost structure program we initiated in 2006. After special items, EBIT moved ahead 28.4 percent to €524 million (Q1 2007: €408 million).
EBITDA before special items came in at €713 million, up 22.1 percent from €584 million in the prior-year period. This significant earnings improvement was due particularly to the growth in business, selling price increases and cost savings, which more than offset the negative currency effects. EBIT before special items rose by 29.3 percent to €578 million (Q1 2007: €447 million). Earnings were diminished by €54 million in special charges for the cost structure program we initiated in 2006. After special items, EBIT moved ahead 28.4 percent to €524 million (Q1 2007: €408 million).
| Bayer CropScience | 1st Quarter 2007 | 1st Quarter 2008 | Change |
| € million | € million | % | |
| Sales | 1,786 | 1,978 | +10.8 |
| Crop Protection | 1,434 | 1,622 | +13.1 |
| Environmental Science, BioScience | 352 | 356 | +1.1 |
| Sales by Region | |||
| Europe | 862 | 1,022 | +18.6 |
| North America | 447 | 456 | +2.0 |
| Asia/Pacific | 219 | 211 | -3.7 |
| Latin America/Africa/Middle East | 258 | 289 | +12.0 |
| EBITDA1 | 548 | 663 | +21.0 |
| Special items | (36) | (50) | |
| EBITDA before special items2 | 584 | 713 | +22.1 |
| EBITDA margin before special items | 32.7% | 36.0% | |
| EBIT1 | 408 | 524 | +28.4 |
| Special items | (39) | (54) | |
| EBIT before special items2 | 447 | 578 | +29.3 |
| Gross cash flow1 | 369 | 489 | +32.5 |
| Net cash flow1 | (238) | (312) | -31.1 |
1 for definition see Bayer Group Key Data,
2 for definition see also Calculation of EBIT(DA) Before Special Items.
2 for definition see also Calculation of EBIT(DA) Before Special Items.
| Best-Selling Bayer CropScience Products* | 1st Quarter 2007 | 1st Quarter 2008 | Change | Currency- adjusted change |
| € million | € million | % | % | |
| Confidor®/Gaucho®/Admire®/Merit® (Insecticides/Seed Treatment/Environmental Science) | 163 | 157 | -3.7 | +2.5 |
| Atlantis® (Herbicides) | 76 | 124 | +63.2 | +68.4 |
| Flint®/Stratego®/Sphere® (Fungicides) | 60 | 91 | +51.7 | +63.1 |
| Basta®/Liberty® (Herbicides) | 72 | 81 | +12.5 | +14.9 |
| Proline® (Fungicides) | 72 | 81 | +12.5 | +13.9 |
| Folicur®/Raxil® (Fungicides/Seed Treatment) | 77 | 75 | -2.6 | -0.2 |
| Poncho® (Seed Treatment) | 59 | 72 | +22.0 | +33.1 |
| Puma® (Herbicides) | 69 | 66 | -4.3 | -1.8 |
| Hussar® (Herbicides) | 47 | 60 | +27.7 | +28.4 |
| Decis®/K-Othrine® (Insecticides/Environmental Science) | 45 | 46 | +2.2 | +7.5 |
| Total | 740 | 853 | +15.3 | +20.2 |
| Proportion of Bayer CropScience sales | 41% | 43% |
* Figures are based on active ingredient class. For the sake of clarity, only the principal brands and business units are listed.
Crop Protection
Sales of the Crop Protection segment for the first quarter of 2008 rose by 13.1 percent, from €1,434 million in the prior-year period to €1,622 million. The currency-adjusted increase was 17.8 percent. Sales of all business units rose significantly in a positive market environment.
Growth was driven mainly by our young products based on active ingredients that have been introduced to core markets since 2000. Sales of these products climbed by some 40 percent to more than €600 million.
In the Europe region, sales advanced by 21.7 percent to €880 million (Q1 2007: €723 million), or by 22.7 percent on a currency-adjusted basis. The suspension of mandatory fallowing practices in the European Union led to an increase in planted acreages, particularly for cereals. In France, we registered a sales shift from the fourth quarter of 2007 to the beginning of 2008 due to a change in the French taxation system for crop protection products. Overall, the positive market environment benefited all our business units, and especially sales of the herbicides Atlantis®, Hussar® and MaisTer®, the fungicides Fandango®, Proline® and Flint®, and the insecticide Biscaya®.
Our crop protection business in North America expanded by 1.4 percent to €296 million. Adjusted for currency effects, the increase came to 10.6 percent. Sales of our soybean fungicides, in particular, made considerable gains against the background of an anticipated increase in planted acreages, more than offsetting a slight decline in the insecticides business. Sales of our cereal herbicides recorded a gratifying increase, due partly to the successful market introduction of our products HuskieTM and InfinityTM based on the innovative active ingredient pyrasulfotole.
Sales in the Asia-Pacific region came in at €185 million, down 2.1 percent from the prior-year figure of €189 million, but up 2.8 percent on a currency-adjusted basis. Our business in India, Southeast Asia and China posted strong increases, particularly for insecticides, while herbicide sales declined as a result of the receding rice market, especially in Japan. Business in Australia improved slightly following rainfall over large areas of the country at the beginning of the year.
Growth was driven mainly by our young products based on active ingredients that have been introduced to core markets since 2000. Sales of these products climbed by some 40 percent to more than €600 million.
In the Europe region, sales advanced by 21.7 percent to €880 million (Q1 2007: €723 million), or by 22.7 percent on a currency-adjusted basis. The suspension of mandatory fallowing practices in the European Union led to an increase in planted acreages, particularly for cereals. In France, we registered a sales shift from the fourth quarter of 2007 to the beginning of 2008 due to a change in the French taxation system for crop protection products. Overall, the positive market environment benefited all our business units, and especially sales of the herbicides Atlantis®, Hussar® and MaisTer®, the fungicides Fandango®, Proline® and Flint®, and the insecticide Biscaya®.
Our crop protection business in North America expanded by 1.4 percent to €296 million. Adjusted for currency effects, the increase came to 10.6 percent. Sales of our soybean fungicides, in particular, made considerable gains against the background of an anticipated increase in planted acreages, more than offsetting a slight decline in the insecticides business. Sales of our cereal herbicides recorded a gratifying increase, due partly to the successful market introduction of our products HuskieTM and InfinityTM based on the innovative active ingredient pyrasulfotole.
Sales in the Asia-Pacific region came in at €185 million, down 2.1 percent from the prior-year figure of €189 million, but up 2.8 percent on a currency-adjusted basis. Our business in India, Southeast Asia and China posted strong increases, particularly for insecticides, while herbicide sales declined as a result of the receding rice market, especially in Japan. Business in Australia improved slightly following rainfall over large areas of the country at the beginning of the year.
| Crop Protection | 1st Quarter 2007 | 1st Quarter 2008 | Change |
| € million | € million | % | |
| Sales | 1,434 | 1,622 | +13.1 |
| Herbicides | 568 | 664 | +16.9 |
| Fungicides | 384 | 448 | +16.7 |
| Insecticides | 311 | 322 | +3.5 |
| Seed Treatment | 171 | 188 | +9.9 |
| Sales by Region | |||
| Europe | 723 | 880 | +21.7 |
| North America | 292 | 296 | +1.4 |
| Asia/Pacific | 189 | 185 | -2.1 |
| Latin America/Africa/Middle East | 230 | 261 | +13.5 |
| EBITDA1 | 425 | 564 | +32.7 |
| Special items | (36) | (43) | |
| EBITDA before special items2 | 461 | 607 | +31.7 |
| EBITDA margin before special items | 32.1% | 37.4% | |
| EBIT1 | 304 | 446 | +46.7 |
| Special items | (39) | (47) | |
| EBIT before special items2 | 343 | 493 | +43.7 |
| Gross cash flow1 | 282 | 416 | +47.5 |
| Net cash flow1 | (113) | (266) | -135.4 |
1 for definition see Bayer Group Key Data,
2 for definition see also Calculation of EBIT(DA) Before Special Items.
2 for definition see also Calculation of EBIT(DA) Before Special Items.
Sales in Latin America/Africa/Middle East rose by 13.5 percent to €261 million (Q1 2007: €230 million). Adjusted for currency effects, the increase was 24.1 percent. While sales in Africa and the Middle East moved slightly lower, business in Latin America registered very pleasing growth in a market environment that was considerably more favorable than in the previous year. Sales gained strongly in Brazil and Argentina, particularly those of insecticides and seed treatment products.
EBITDA before special items climbed by 31.7 percent in the first quarter of 2008, to €607 million. This earnings improvement resulted mainly from increased volume sales, slight selling price increases, and higher margin contributions by our new products, as well as from the savings achieved through the cost structure program initiated in 2006. These factors combined to more than offset negative currency effects. EBIT before special items also improved significantly, advancing by 43.7 percent to €493 million (Q1 2007: €343 million). Special charges for our cost structure program came to €47 million. EBIT rose by €142 million to €446 million (Q1 2007: €304 million).
EBITDA before special items climbed by 31.7 percent in the first quarter of 2008, to €607 million. This earnings improvement resulted mainly from increased volume sales, slight selling price increases, and higher margin contributions by our new products, as well as from the savings achieved through the cost structure program initiated in 2006. These factors combined to more than offset negative currency effects. EBIT before special items also improved significantly, advancing by 43.7 percent to €493 million (Q1 2007: €343 million). Special charges for our cost structure program came to €47 million. EBIT rose by €142 million to €446 million (Q1 2007: €304 million).
Environmental Science, BioScience
Sales in the Environmental Science, BioScience segment rose by 1.1 percent in the first quarter of 2008, to €356 million (Q1 2007: €352 million). After adjusting for currency and portfolio effects, sales improved by 2.3 percent.
Sales of Environmental Science fell by 12.2 percent to €165 million. The currency-adjusted decrease came to 8.3 percent. Business shrank in North America, chiefly as a result of adverse weather patterns and heightened generic competition. Sales growth in Europe only partially offset this decline.
Sales of BioScience grew by 16.5 percent to €191 million. Adjusted for currency and portfolio effects, business expanded by 14.4 percent. The portfolio effects resulted from the acquisition of the U.S. cotton seed producer Stoneville and from businesses acquired in the area of vegetable seeds. The expansion resulted mainly from the success of the InVigor® hybrid canola seed business in North America and a further increase in global sales of vegetable seeds.
EBITDA before special items in the Environmental Science, BioScience segment came in at €106 million, down €17 million compared with the same period in 2007. To reinforce the innovative capability and future growth of our seed business, we have increased research and development spending in BioScience. Earnings also were impacted by the decline in the Environmental Science business in North America. EBIT before special items receded by 18.3 percent to €85 million. Special charges in connection with our restructuring program amounted to €7 million. After special items, EBIT came in at €78 million (Q1 2007: €104 million).
Sales of Environmental Science fell by 12.2 percent to €165 million. The currency-adjusted decrease came to 8.3 percent. Business shrank in North America, chiefly as a result of adverse weather patterns and heightened generic competition. Sales growth in Europe only partially offset this decline.
Sales of BioScience grew by 16.5 percent to €191 million. Adjusted for currency and portfolio effects, business expanded by 14.4 percent. The portfolio effects resulted from the acquisition of the U.S. cotton seed producer Stoneville and from businesses acquired in the area of vegetable seeds. The expansion resulted mainly from the success of the InVigor® hybrid canola seed business in North America and a further increase in global sales of vegetable seeds.
EBITDA before special items in the Environmental Science, BioScience segment came in at €106 million, down €17 million compared with the same period in 2007. To reinforce the innovative capability and future growth of our seed business, we have increased research and development spending in BioScience. Earnings also were impacted by the decline in the Environmental Science business in North America. EBIT before special items receded by 18.3 percent to €85 million. Special charges in connection with our restructuring program amounted to €7 million. After special items, EBIT came in at €78 million (Q1 2007: €104 million).
| Environmental Science, BioScience | 1st Quarter 2007 | 1st Quarter 2008 | Change |
| € million | € million | % | |
| Sales | 352 | 356 | +1.1 |
| Environmental Science | 188 | 165 | -12.2 |
| BioScience | 164 | 191 | +16.5 |
| Sales by Region | |||
| Europe | 139 | 142 | +2.2 |
| North America | 155 | 160 | +3.2 |
| Asia/Pacific | 30 | 26 | -13.3 |
| Latin America/Africa/Middle East | 28 | 28 | 0.0 |
| EBITDA1 | 123 | 99 | -19.5 |
| Special items | 0 | (7) | |
| EBITDA before special items2 | 123 | 106 | -13.8 |
| EBITDA margin before special items | 34.9% | 29.8% | |
| EBIT1 | 104 | 78 | -25.0 |
| Special items | 0 | (7) | |
| EBIT before special items2 | 104 | 85 | -18.3 |
| Gross cash flow1 | 87 | 73 | -16.1 |
| Net cash flow1 | (125) | (46) | +63.2 |
1 for definition see Bayer Group Key Data,
2 for definition see also Calculation of EBIT(DA) Before Special Items.
2 for definition see also Calculation of EBIT(DA) Before Special Items.
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