Agricultural Solutions

1st Quarter 2016

• Sales declined considerably year-on-year due to lower volumes and negative currency effects
• Earnings increase slightly through improved margins and reduced fixed costs

In a market environment that remains difficult, we posted a considerable sales decline in the Agricultural Solutions segment in the first quarter of 2016. Price increases could not compensate for lower sales volumes and negative currency effects (volumes –5%, prices 2%, currencies –3%).

Sales in Europe were slightly below the prior first-quarter levels on account of negative currency effects. These could not be fully offset by the higher volumes and prices achieved particularly for herbicides in Russia and Ukraine and for specialty crop fungicides in southern Europe.

Sales fell considerably in North America, due especially to declining demand for herbicides and fungicides. This was mostly owing to high inventory levels and cautious buying patterns on the part of our customers.

Sales in Asia were down considerably compared with the previous first quarter, mostly because of lower volumes that were largely an effect of customers’ high inventory levels, especially in Japan and China.

We saw a considerable volume and currency-related sales decline in South America as demand in Brazil – especially for insecticides and fungicides – fell sharply. This was to a large extent an effect of high inventory levels and the ongoing difficult environment for our customers in Brazil.

Income from operations before special items improved slightly in the Agricultural Solutions segment. Compared with the previous first quarter, our margins rose, partly as a result of higher prices, and fixed costs were reduced.