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Bayer CropScience
The Bayer CropScience subgroup once again considerably expanded its business in the second quarter of 2008. Sales climbed by a gratifying 15.5 percent to €1,804 million (Q2 2007: €1,562 million), with the currency- and portfolio-adjusted increase amounting to 23.0 percent. Our business benefited from the positive development of global agricultural markets and largely favorable weather patterns in the most important European and Latin American markets.
EBITDA before special items grew by 26.5 percent to €501 million (Q2 2007: €396 million). This outstanding earnings improvement was due especially to volume and selling price increases in our crop protection business. Earnings were diminished by negative currency effects, higher research and development expenditures at BioScience and a drop in sales at Environmental Science. EBIT before special items climbed by 43.1 percent to €375 million (Q2 2007: €262 million). Special charges of €8 million were recorded for our cost structure program. EBIT jumped by 73.9 percent to €367 million.
EBITDA before special items grew by 26.5 percent to €501 million (Q2 2007: €396 million). This outstanding earnings improvement was due especially to volume and selling price increases in our crop protection business. Earnings were diminished by negative currency effects, higher research and development expenditures at BioScience and a drop in sales at Environmental Science. EBIT before special items climbed by 43.1 percent to €375 million (Q2 2007: €262 million). Special charges of €8 million were recorded for our cost structure program. EBIT jumped by 73.9 percent to €367 million.
| Bayer CropScience | 2nd Quarter 2007 | 2nd Quarter 2008 | Change | 1st Half 2007 | 1st Half 2008 | Change |
| € million | € million | % | € million | € million | % | |
| Sales | 1,562 | 1,804 | +15.5 | 3,348 | 3,782 | +13.0 |
| Crop Protection | 1,262 | 1,526 | +20.9 | 2,696 | 3,148 | +16.8 |
| Environmental Science, BioScience | 300 | 278 | -7.3 | 652 | 634 | -2.8 |
| Sales by Region | ||||||
| Europe | 675 | 798 | +18.2 | 1,537 | 1,820 | +18.4 |
| North America | 431 | 453 | +5.1 | 878 | 909 | +3.5 |
| Asia/Pacific | 237 | 260 | +9.7 | 456 | 471 | +3.3 |
| Latin America/Africa/ Middle East | 219 | 293 | +33.8 | 477 | 582 | +22.0 |
| EBITDA1 | 348 | 493 | +41.7 | 896 | 1,156 | +29.0 |
| Special items | (48) | (8) | (84) | (58) | ||
| EBITDA before special items2 | 396 | 501 | +26.5 | 980 | 1,214 | +23.9 |
| EBITDA margin before special items | 25.4% | 27.8% | 29.3% | 32.1% | ||
| EBIT1 | 211 | 367 | +73.9 | 619 | 891 | +43.9 |
| Special items | (51) | (8) | (90) | (62) | ||
| EBIT before special items2 | 262 | 375 | +43.1 | 709 | 953 | +34.4 |
| Gross cash flow1 | 259 | 377 | +45.6 | 628 | 866 | +37.9 |
| Net cash flow1 | 494 | 731 | +48.0 | 256 | 419 | +63.7 |
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* | 2nd Quarter 2007 | 2nd Quarter 2008 | Change | Currency- adjusted change | 1st Half 2007 | 1st Half 2008 | Change | Currency- adjusted change |
| € million | € million | % | % | € million | € million | % | % | |
| Confidor®/Gaucho®/ Admire®/Merit® (Insecticides/Seed Treatment/ Environmental Science) | 132 | 133 | +0.8 | +12.7 | 295 | 290 | -1.7 | +7.0 |
| Proline® (Fungicides) | 75 | 125 | +66.7 | +80.3 | 147 | 206 | +40.1 | +47.5 |
| Flint®/Stratego®/ Sphere® (Fungicides) | 53 | 91 | +71.7 | +89.9 | 113 | 182 | +61.1 | +75.6 |
| Basta®/Liberty® (Herbizide) | 89 | 90 | +1.1 | +8.9 | 161 | 171 | +6.2 | +11.6 |
| Folicurr®/Raxil® (Fungicides/Seed Treatment) | 61 | 83 | +36.1 | +44.6 | 138 | 158 | +14.5 | +19.6 |
| Puma® (Herbicides) | 69 | 84 | +21.7 | +30.1 | 138 | 150 | +8.7 | +14.3 |
| Atlantis® (Herbicides) | 15 | 12 | -20.0 | -11.5 | 91 | 136 | +49.5 | +55.3 |
| Poncho® (Seed Treatment) | 31 | 35 | +12.9 | +27.1 | 90 | 107 | +18.9 | +31.0 |
| Decis®/K-Othrine® (Insecticides/ Environmental Science) | 52 | 53 | +1.9 | +9.3 | 97 | 99 | +2.1 | +8.4 |
| Fandango® (Fungicides) | 15 | 50 | • | • | 42 | 95 | +126.2 | +131.4 |
| Total | 592 | 756 | +27.7 | +38.5 | 1,312 | 1,594 | +21.5 | +29.2 |
| Proportion of Bayer CropScience sales | 38% | 42% | 39% | 42% |
* 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 expanded by 20.9 percent in the second quarter of 2008, to €1,526 million (Q2 2007: €1,262 million). Adjusted for currency effects, sales advanced by 29.1 percent. Sales of all business units rose in a positive market environment, with our fungicides portfolio developing especially well. Above-average growth was achieved especially by our young products based on active ingredients introduced in core markets since 2000. Sales of these products advanced by 50 percent year on year, to more than €500 million.
In the Europe region, sales moved ahead by 22.8 percent to €695 million (Q2 2007: €566 million), or by 25.0 percent on a currency-adjusted basis. Thanks to the higher acreages in the European Union – particularly for cereals – and favorable weather patterns, we increased sales of the cereal herbicides Puma® and Hussar® and, in particular, the cereal fungicides Proline®, Input® and Fandango®. Our fungicides for grapes and potatoes also contributed to sales growth.
Our crop protection business in North America expanded considerably by 13.8 percent to €363 million, against €319 million in the previous year. Adjusted for currency effects, the increase came to 26.0 percent. Demand increased, particularly for our fungicides, such as Flint®, Proline® and Folicur®, and for our insecticidal seed treatment products. In our herbicides portfolio, the new products Huskie® and InfinityTM, introduced in the first quarter of this year, performed very well. Despite pressure on prices from generic products, the insecticides business held steady at the prior-year level.
Sales in the Asia-Pacific region rose by 9.8 percent to €202 million (Q2 2007: €184 million). The currency-adjusted increase was 20.6 percent. The main factor contributing to this growth was the higher sales of insecticides and fungicides in India and Southeast Asia. More favorable weather patterns in parts of Australia led to a recovery in our business, particularly with herbicides.
Sales in Latin America/Africa/Middle East rose by 37.8 percent to €266 million (Q2 2007: €193 million). Adjusted for currency effects, the increase was 53.8 percent. While sales in Africa and the Middle East were largely in line with the second quarter of 2007, business in Latin America registered a very pleasing increase, as in the first quarter. In Brazil, particularly, we successfully expanded sales across our entire portfolio in a positive market environment. Fungicides posted especially strong growth.
In the Europe region, sales moved ahead by 22.8 percent to €695 million (Q2 2007: €566 million), or by 25.0 percent on a currency-adjusted basis. Thanks to the higher acreages in the European Union – particularly for cereals – and favorable weather patterns, we increased sales of the cereal herbicides Puma® and Hussar® and, in particular, the cereal fungicides Proline®, Input® and Fandango®. Our fungicides for grapes and potatoes also contributed to sales growth.
Our crop protection business in North America expanded considerably by 13.8 percent to €363 million, against €319 million in the previous year. Adjusted for currency effects, the increase came to 26.0 percent. Demand increased, particularly for our fungicides, such as Flint®, Proline® and Folicur®, and for our insecticidal seed treatment products. In our herbicides portfolio, the new products Huskie® and InfinityTM, introduced in the first quarter of this year, performed very well. Despite pressure on prices from generic products, the insecticides business held steady at the prior-year level.
Sales in the Asia-Pacific region rose by 9.8 percent to €202 million (Q2 2007: €184 million). The currency-adjusted increase was 20.6 percent. The main factor contributing to this growth was the higher sales of insecticides and fungicides in India and Southeast Asia. More favorable weather patterns in parts of Australia led to a recovery in our business, particularly with herbicides.
Sales in Latin America/Africa/Middle East rose by 37.8 percent to €266 million (Q2 2007: €193 million). Adjusted for currency effects, the increase was 53.8 percent. While sales in Africa and the Middle East were largely in line with the second quarter of 2007, business in Latin America registered a very pleasing increase, as in the first quarter. In Brazil, particularly, we successfully expanded sales across our entire portfolio in a positive market environment. Fungicides posted especially strong growth.
| Crop Protection | 2nd Quarter 2007 | 2nd Quarter 2008 | Change | 1st Half 2007 | 1st Half 2008 | Change |
| € million | € million | % | € million | € million | % | |
| Sales | 1,262 | 1,526 | +20.9 | 2,696 | 3,148 | +16.8 |
| Herbicides | 479 | 521 | +8.8 | 1,047 | 1,185 | +13.2 |
| Fungicides | 385 | 576 | +49.6 | 769 | 1,024 | +33.2 |
| Insecticides | 313 | 321 | +2.6 | 624 | 643 | +3.0 |
| Seed Treatment | 85 | 108 | +27.1 | 256 | 296 | +15.6 |
| Sales by Region | ||||||
| Europe | 566 | 695 | +22.8 | 1,289 | 1,575 | +22.2 |
| North America | 319 | 363 | +13.8 | 611 | 659 | +7.9 |
| Asia/Pacific | 184 | 202 | +9.8 | 373 | 387 | +3.8 |
| Latin America/Africa/ Middle East | 193 | 266 | +37.8 | 423 | 527 | +24.6 |
| EBITDA1 | 297 | 427 | +43.8 | 722 | 991 | +37.3 |
| Special items | (13) | (8) | (49) | (51) | ||
| EBITDA before special items2 | 310 | 435 | +40.3 | 771 | 1,042 | +35.1 |
| EBITDA margin before special items | 24.6% | 28.5% | 28.6% | 33.1% | ||
| EBIT1 | 180 | 321 | +78.3 | 484 | 767 | +58.5 |
| Special items | (16) | (8) | (55) | (55) | ||
| EBIT before special items2 | 196 | 329 | +67.9 | 539 | 822 | +52.5 |
| Gross cash flow1 | 219 | 325 | +48.4 | 501 | 741 | +47.9 |
| Net cash flow1 | 313 | 630 | +101.3 | 200 | 364 | +82.0 |
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.
EBITDA before special items in the Crop Protection segment advanced by 40.3 percent to €435 million (Q2 2007: €310 million). This strong earnings growth was mainly the result of considerably higher volumes and selling price increases. Earnings were held back by negative currency effects. EBIT before special items climbed by 67.9 percent to €329 million (Q2 2007: €196 million). Special charges of €8 million were taken in connection with the cost structure program we initiated in 2006. EBIT came in at €321 million (Q2 2007: €180 million).
Sales of the Crop Protection segment in the first half grew by 16.8 percent to €3,148 million (H1 2007: €2,696 million). The currency-adjusted increase was 23.1 percent. EBITDA before special items rose by 35.1 percent to €1,042 million. EBIT before special items improved by 52.5 percent to €822 million (H1 2007: €539 million). Our cost structure program resulted in special charges of €55 million. EBIT came in at €767 million, up 58.5 percent year on year (H1 2007: €484 million).
Sales of the Crop Protection segment in the first half grew by 16.8 percent to €3,148 million (H1 2007: €2,696 million). The currency-adjusted increase was 23.1 percent. EBITDA before special items rose by 35.1 percent to €1,042 million. EBIT before special items improved by 52.5 percent to €822 million (H1 2007: €539 million). Our cost structure program resulted in special charges of €55 million. EBIT came in at €767 million, up 58.5 percent year on year (H1 2007: €484 million).
Environmental Science, BioScience
In the Environmental Science, Bioscience segment, sales fell by 7.3 percent in the second quarter of 2008 to €278 million (Q2 2007: €300 million). On a currency- and portfolio-adjusted basis, sales decreased by 2.6 percent.
Sales of Environmental Science receded by 17.5 percent in the second quarter to €165 million (Q2 2007: €200 million). The currency-adjusted decrease came to 10.9 percent. In North America, this was mainly attributable to a further drop in sales of products for professional users in the green industry, while in Europe, sales were down particularly in the area of home and garden products for consumers. We also registered lower sales of specialty active ingredients to downstream customers.
Sales of BioScience grew by 13.0 percent in the second quarter, to €113 million. Adjusted for currency and portfolio effects – the latter resulting from acquisitions in the cotton and vegetable seed businesses – sales expanded by 13.9 percent. This increase was mainly attributable to the good performance of our cotton seed business in North America, Mexico and India, and the successful expansion of our hybrid rice business under the Arize® brand in Asia.
EBITDA before special items in the Environmental Science, BioScience segment came in at €66 million, down 23.3 percent from €86 million in the same period of 2007. Earnings were held back by lower sales of Environmental Science and adverse shifts in exchange rates. In addition, we increased research and development spending at BioScience to strengthen our future competitiveness. EBIT before special items fell by 30.3 percent to €46 million. While the prior-period figure contained special charges for litigations, there were no special items in the second quarter of 2008. EBIT climbed by 48.4 percent to €46 million (Q2 2007: €31 million).
Sales in the Environmental Science, BioScience segment in the first half decreased by 2.8 percent to €634 million (H1 2007: €652 million). Adjusted for currency and portfolio effects, sales were level with the prior-year period. EBITDA before special items dropped by 17.7 percent to €172 million. EBIT before special items amounted to €131 million (H1 2007: €170 million). After special charges of €7 million, first-half EBIT came in at €124 million (H1 2007: €135 million).
Sales of Environmental Science receded by 17.5 percent in the second quarter to €165 million (Q2 2007: €200 million). The currency-adjusted decrease came to 10.9 percent. In North America, this was mainly attributable to a further drop in sales of products for professional users in the green industry, while in Europe, sales were down particularly in the area of home and garden products for consumers. We also registered lower sales of specialty active ingredients to downstream customers.
Sales of BioScience grew by 13.0 percent in the second quarter, to €113 million. Adjusted for currency and portfolio effects – the latter resulting from acquisitions in the cotton and vegetable seed businesses – sales expanded by 13.9 percent. This increase was mainly attributable to the good performance of our cotton seed business in North America, Mexico and India, and the successful expansion of our hybrid rice business under the Arize® brand in Asia.
EBITDA before special items in the Environmental Science, BioScience segment came in at €66 million, down 23.3 percent from €86 million in the same period of 2007. Earnings were held back by lower sales of Environmental Science and adverse shifts in exchange rates. In addition, we increased research and development spending at BioScience to strengthen our future competitiveness. EBIT before special items fell by 30.3 percent to €46 million. While the prior-period figure contained special charges for litigations, there were no special items in the second quarter of 2008. EBIT climbed by 48.4 percent to €46 million (Q2 2007: €31 million).
Sales in the Environmental Science, BioScience segment in the first half decreased by 2.8 percent to €634 million (H1 2007: €652 million). Adjusted for currency and portfolio effects, sales were level with the prior-year period. EBITDA before special items dropped by 17.7 percent to €172 million. EBIT before special items amounted to €131 million (H1 2007: €170 million). After special charges of €7 million, first-half EBIT came in at €124 million (H1 2007: €135 million).
| Environmental Science, BioScience | 2nd Quarter 2007 | 2nd Quarter 2008 | Change | 1st Half 2007 | 1st Half 2008 | Change |
| € million | € million | % | € million | € million | % | |
| Sales | 300 | 278 | -7.3 | 652 | 634 | -2.8 |
| Environmental Science | 200 | 165 | -17.5 | 388 | 330 | -14.9 |
| BioScience | 100 | 113 | +13.0 | 264 | 304 | +15.2 |
| Sales by Region | ||||||
| Europe | 109 | 103 | -5.5 | 248 | 245 | -1.2 |
| North America | 112 | 90 | -19.6 | 267 | 250 | -6.4 |
| Asia/Pacific | 53 | 58 | +9.4 | 83 | 84 | +1.2 |
| Latin America/Africa/ Middle East | 26 | 27 | +3.8 | 54 | 55 | +1.9 |
| EBITDA1 | 51 | 66 | +29.4 | 174 | 165 | -5.2 |
| Special items | (35) | 0 | (35) | (7) | ||
| EBITDA before special items2 | 86 | 66 | -23.3 | 209 | 172 | -17.7 |
| EBITDA margin before special items | 28.7% | 23.7% | 32.1% | 27.1% | ||
| EBIT1 | 31 | 46 | +48.4 | 135 | 124 | -8.1 |
| Special items | (35) | 0 | (35) | (7) | ||
| EBIT before special items2 | 66 | 46 | -30.3 | 170 | 131 | -22.9 |
| Gross cash flow1 | 40 | 52 | +30.0 | 127 | 125 | -1.6 |
| Net cash flow1 | 181 | 101 | -44.2 | 56 | 55 | -1.8 |
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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