Overview
Performance by Subgroup, Segment and Region
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3.2 Bayer CropScience
 Crop Protection |
| Environmental Science/BioScience |
| Key Data – CropScience | [Table 3.9] | ||
|---|---|---|---|
2008 | 2009 | Change | |
| € million | € million | % | |
| Sales | 6,382 | 6,510 | +2.0 |
| Crop Protection | 5,339 | 5,424 | +1.6 |
| Environmental Science, BioScience | 1,043 | 1,086 | +4.1 |
| Sales by Region | |||
| Europe | 2,625 | 2,540 | -3.2 |
| North America | 1,396 | 1,529 | +9.5 |
| Asia/Pacific | 964 | 1,028 | +6.6 |
| Latin America/Africa/Middle East | 1,397 | 1,413 | +1.1 |
| EBITDA* | 1,450 | 1,311 | -9.6 |
| Special items | (153) | (197) | |
EBITDA before special items* | 1,603 | 1,508 | -5.9 |
| EBITDA margin before special items* | 25.1% | 23.2% | |
| EBIT* | 918 | 798 | -13.1 |
| Special items | (166) | (219) | |
EBIT before special items* | 1,084 | 1,017 | -6.2 |
| Gross cash flow** | 1,192 | 1,043 | -12.5 |
| Net cash flow** | 736 | 745 | +1.2 |
* for definition see “Calculation of EBIT(DA) Before Special Items” ** for definition see “Liquidity and Capital Expenditures of the Bayer Group” | |||
CropScience improved sales by 2.0% in 2009 to €6,510 million (2008: €6,382 million). After adjusting for currency and portfolio effects, sales rose by 2.5%. Higher selling prices contributed 1.3 percentage points and higher volumes 1.2 percentage points to this increase.
EBITDA before special items was down by 5.9% to €1,508 million (2008: €1,603 million). The EBITDA margin before special items fell to 23.2%. This drop in earnings was due primarily to higher raw material costs and negative currency effects, which were only partly offset by positive earnings contributions from the expansion of business. EBIT before special items fell by 6.2% to €1,017 million. There were special charges for our current cost-structure program, the restructuring of our production site in Institute, West Virginia, United States, and additional funding for the German corporate pension assurance association. Further special charges related to defense costs associated with litigation pending in the United States in connection with genetically modified rice. After special charges of €219 million, EBIT was €798 million (2008: €918 million).
| Best-Selling CropScience Products * | [Table 3.10] | |||
|---|---|---|---|---|
2008 | 2009 | Change | Currency-adjusted change | |
| € million | € million | % | % | |
| Confidor®/Gaucho®/Admire®/Merit® (Insecticides/Seed Treatment/Environmental Science) | 599 | 606 | +1.2 | -0.3 |
| Flint®/Stratego®/Sphere®/Nativo® (Fungicides) | 365 | 400 | +9.6 | +8.0 |
| Basta®/Liberty®/Rely®/Ignite® (Herbicides) | 235 | 323 | +37.4 | +34.3 |
| Proline®/Input®/Prosaro® (Fungicides) | 246 | 267 | +8.5 | +12.3 |
| Atlantis® (Herbicides) | 244 | 231 | -5.3 | -3.0 |
| Folicur®/Raxil® (Fungicides/Seed Treatment) | 242 | 210 | -13.2 | -12.0 |
| Poncho® (Seed Treatment) | 223 | 183 | -17.9 | -17.4 |
| Decis®/K-Othrine® (Insecticides/Environmental Science) | 175 | 170 | -2.9 | -0.9 |
| Puma® (Herbicides) | 203 | 167 | -17.7 | -14.5 |
| Fandango® (Fungicides) | 132 | 146 | +10.6 | +13.7 |
| Total | 2,664 | 2,703 | +1.5 | +1.9 |
| Proportion of CropScience sales | 42% | 42% | ||
* Figures are based on active ingredient class. For the sake of clarity, only the principal brands and business units are listed. | ||||
Crop Protection
| Key Data – Crop Protection | [Table 3.11] | ||
|---|---|---|---|
2008 | 2009 | Change | |
| € million | € million | % | |
| Sales | 5,339 | 5,424 | +1.6 |
| Herbicides | 1,856 | 1,986 | +7.0 |
| Fungicides | 1,565 | 1,564 | -0.1 |
| Insecticides | 1,275 | 1,234 | -3.2 |
| Seed Treatment | 643 | 640 | -0.5 |
| Sales by Region | |||
| Europe | 2,277 | 2,206 | -3.1 |
| North America | 979 | 1,081 | +10.4 |
| Asia/Pacific | 818 | 862 | +5.4 |
| Latin America/Africa/Middle East | 1,265 | 1,275 | +0.8 |
| EBITDA* | 1,252 | 1,161 | -7.3 |
| Special items | (145) | (140) | |
EBITDA before special items* | 1,397 | 1,301 | -6.9 |
| EBITDA margin before special items* | 26.2% | 24.0% | |
| EBIT* | 804 | 713 | -11.3 |
| Special items | (158) | (162) | |
EBIT before special items* | 962 | 875 | -9.0 |
| Gross cash flow** | 1,026 | 924 | -9.9 |
| Net cash flow** | 653 | 591 | -9.5 |
* for definition see “Calculation of EBIT(DA) Before Special Items” ** for definition see “Liquidity and Capital Expenditures of the Bayer Group” | |||
Sales in the Crop Protection segment rose by 1.6% in 2009 to €5,424 million (2008: €5,339 million). After adjusting for shifts in exchange rates, business expanded by 2.3%. Despite a shrinking market overall, with lower producer prices and unfavorable weather conditions in major agricultural markets, we significantly expanded our herbicides business in particular, with our young products once again achieving above-average growth. In 2009 we reached our goal of €2 billion in sales of products based on active substances introduced to the market since 2000.
In the Europe region, sales fell by 3.1% to €2,206 million (2008: €2,277 million). Sales rose moderately on a currency-adjusted basis, however, by 0.9%. Business with our herbicides and insecticides improved modestly, while the fungicides business moved back slightly, above all due to unfavorable weather conditions and low fungal infestation. We saw an especially gratifying trend for our young products, such as the insecticides 
Biscaya®/Proteus®, the corn herbicide Laudis®, the fungicide Fandango® and the seed treatment product Poncho®.
Biscaya®/Proteus®, the corn herbicide Laudis®, the fungicide Fandango® and the seed treatment product Poncho®.Sales of our crop protection business in North America advanced by a substantial 10.4% to €1,081 million (2008: €979 million). The currency-adjusted increase was 6.8%. This improvement was largely due to the outstanding performance of our herbicides portfolio including the young products Corvus®/Velocity™, Laudis®, Infinity®/Wolverine® and Balance® flexx, as well as the herbicide Ignite® for use in genetically modified crops. In contrast, sales of our seed treatment business receded in the face of strong competition in the United States that affected particularly our corn seed treatment Poncho®.
Corvus®/Velocity™, Laudis®, Infinity®/Wolverine® and Balance® flexx, as well as the herbicide Ignite® for use in genetically modified crops. In contrast, sales of our seed treatment business receded in the face of strong competition in the United States that affected particularly our corn seed treatment Poncho®.Sales in the Asia/Pacific region climbed from €818 million in 2008 to €862 million, an increase of 5.4%. Adjusted for currency changes, business improved by 3.5%. In Southeast Asia and on the Indian subcontinent in particular, business expanded markedly due to the very good performance of our fungicides and herbicides. In addition, a very gratifying trend for our herbicides in Japan and Australia more than offset declines for our insecticides in China and Japan that resulted from low pest infestation.
Sales in the Latin America/Africa/Middle East region advanced by €10 million to €1,275 million (+0.8%). Adjusted for currency effects, sales increased by 0.4%. Business in Latin America was level year on year. Lower sales of our insecticides and fungicides as a result of very dry weather in Argentina and southern Brazil at the beginning of the year were offset by gratifying gains for seed treatment products, herbicides and fungicides in the second half. Especially positive performances were registered by the seed treatment product CropStar®, the young corn herbicide Soberan® and the fungicides Nativo® and Sphere® Max. Sales in Africa were up mainly because of expanded business with insecticides, while we posted slight declines in the Middle East.
CropStar®, the young corn herbicide Soberan® and the fungicides Nativo® and Sphere® Max. Sales in Africa were up mainly because of expanded business with insecticides, while we posted slight declines in the Middle East. EBITDA before special items in the Crop Protection segment fell 6.9% to €1,301 million (2008: €1,397 million). This was due above all to a rise in raw material costs and more unfavorable currency parities; these factors were only partially offset by higher selling prices in Europe and increased volumes in North and Latin America. EBIT before special items declined by 9.0% to €875 million. Special charges of €162 million in 2009 related to the cost structure program initiated in 2006, the restructuring of our production site in Institute, West Virginia, United States, and additional funding for the German corporate pension assurance association. EBIT was €713 million, down 11.3% from the prior-year figure of €804 million.
Environmental Science, BioScience
| Key Data – Environmental Science, BioScience | [Table 3.12] | ||
|---|---|---|---|
2008 | 2009 | Change | |
| € million | € million | % | |
| Sales | 1,043 | 1,086 | +4.1 |
| Environmental Science | 591 | 583 | -1.4 |
| BioScience | 452 | 503 | +11.3 |
| Sales by Region | |||
| Europe | 348 | 334 | -4.0 |
| North America | 417 | 448 | +7.4 |
| Asia/Pacific | 146 | 166 | +13.7 |
| Latin America/Africa/Middle East | 132 | 138 | +4.5 |
| EBITDA* | 198 | 150 | -24.2 |
| Special items | (8) | (57) | |
EBITDA before special items* | 206 | 207 | +0.5 |
| EBITDA margin before special items* | 19.8% | 19.1% | |
| EBIT* | 114 | 85 | -25.4 |
| Special items | (8) | (57) | |
EBIT before special items* | 122 | 142 | +16.4 |
| Gross cash flow** | 166 | 119 | -28.3 |
| Net cash flow** | 83 | 154 | +85.5 |
* for definition see “Calculation of EBIT(DA) Before Special Items” ** for definition see “Liquidity and Capital Expenditures of the Bayer Group” | |||
Sales in the Environmental Science, BioScience segment grew by 4.1% in 2009, to €1,086 million (2008: €1,043 million). Adjusted for currency and portfolio effects, business was up by 4.0%.
Sales of the Environmental Science business unit fell by 1.4% to €583 million. Adjusted for currency effects, the decrease was 2.4%. This was largely attributable to declining sales of green industry products for professional users in the United States. On the other hand, we saw a gratifying expansion in business with our “Bayer Advanced” products for private consumers in North America that offset lower sales of our “Bayer Garden” portfolio in Europe. We also registered increased sales of specialty active ingredients for the processing industry.
BioScience increased sales by a substantial 11.3% to €503 million (2008: €452 million). After adjustment for currency and portfolio effects, business expanded by 12.3%. A key growth driver was our canola seed business in North America marketed under the InVigor® brand. Sales of our Arize® hybrid rice seed advanced further, while our cotton seed business remained level year on year despite a much smaller total cultivation area worldwide. Our vegetable seeds business posted very encouraging gains in Europe, Asia and the Middle East.
InVigor® brand. Sales of our Arize® hybrid rice seed advanced further, while our cotton seed business remained level year on year despite a much smaller total cultivation area worldwide. Our vegetable seeds business posted very encouraging gains in Europe, Asia and the Middle East. EBITDA before special items in the Environmental Science, BioScience segment remained level year on year at €207 million (2008: €206 million). The decline in business at Environmental Science and higher research and development expenditures at BioScience resulted in lower earnings contributions. These effects were offset by higher selling prices in both business units, increased volumes at BioScience and cost containment at Environmental Science. EBIT before special items advanced by €20 million to €142 million (+16.4%). Special charges of €57 million related, among other items, to defense costs associated with litigation pending in the United States in connection with genetically modified rice, as well as to restructuring measures. EBIT contracted by 25.4% to €85 million (2008: €114 million).
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