Crop Science

Market environment improves slightly

Overall, the global seed and crop protection market expanded slightly in 2017, growing by around 1% (2016: 0%). While demand for high-quality seed increased, sales of crop protection products stagnated worldwide. Positive growth momentum in 2017 came from the North America and Eastern Europe regions. Market volumes in Latin America declined as a result of high inventories of crop protection products and unfavorable macroeconomic conditions in Brazil. The Western European market also contracted, primarily as a result of relatively low fungal infestation levels.

Sales down slightly against the previous year

Sales of Crop Science fell by 2.2% (Fx & portfolio adj.) in 2017 to €9,577 million. The decline was mainly attributable to the crop protection business in Brazil. High inventories in that market necessitated measures to normalize the situation that in turn led to negative sales development. When the Brazilian business is excluded, sales of Crop Science rose by 3.0% year on year on a currency- and portfolio-adjusted basis. Environmental Science posted a positive performance, in part due to the delivery of products to the company that acquired our consumer business.

Sales by region

• Sales in the Europe / Middle East / Africa region improved by 1.5% (Fx adj.) to €3,335 million. Insecticides developed very positively, thanks in part to increased demand and the introduction of new products. We also achieved sales growth in the Seeds business, particularly for vegetables. On the other hand, increased competitive pressure led to declines at SeedGrowth and Fungicides.
• In the North America region, we posted a 5.8% (Fx adj.) increase in sales to €2,772 million. We registered a double-digit growth rate in the Seeds business, with robust sales gains for oilseed rape / canola – due to increased acreages in Canada – and for soybeans more than offsetting declines for cotton. SeedGrowth also developed very positively due to increased demand for products to treat soybean and wheat seed. In contrast, we recorded declines at Insecticides. Environmental Science, for its part, posted a considerable increase in sales.
• Sales in Asia / Pacific moved forward by 2.0% (Fx adj.) year on year to €1,563 million. Business performance was encouraging at Fungicides, particularly in Southeast Asia, and at Herbicides, mainly due to new product launches in China and Japan. We also achieved sales growth in the Seeds business, particularly for cotton and oilseeds, but posted a decline at Insecticides.
• Sales in Latin America decreased by 18.0% (Fx adj.) to €1,907 million. This decline was attributable to returns of crop protection products and to lower sales into the distribution channel to normalize inventories in Brazil. Price reductions also had an effect. We posted gains in sales overall in the other Latin American countries on a currency-adjusted basis.

Earnings

In 2017, EBITDA before special items of Crop Science declined by 15.6% to €2,043 million. Adjusted for negative currency effects of €63 million, earnings were down by 13.0%. The decline is largely attributable to the aforementioned situation in Brazil, which resulted in lower selling prices and volumes. Outside of Brazil, lower selling prices were offset by expanded volumes. Other operating income had a positive effect on earnings.

EBIT declined by 29.6% to €1,235 million, after special charges of €408 million (2016: €143 million) that primarily related to the planned acquisition of Monsanto and the execution of a divestment project.