✓ audited

Business review

Crop Protection

  • Sales improve considerably as a result of increased volumes in all regions and indications as well as positive currency effects and higher prices
  • Earnings rise significantly
  • Access to growth market for organic crop protection products through acquisition of Becker Underwood
  • Outlook 2013: increased sales and earnings targeted in continuing positive market environment

In 2012, we increased our sales to third parties by €514 million to €4,679 million, mainly as a result of higher sales volumes. This considerable sales growth was additionally boosted by positive currency effects and higher prices. Thanks to the successful development of our business, income from operations rose by €218 million to reach a new record level of €1,026 million.

We will continue our successful innovation strategy in 2013 as well, and aim for a renewed improvement in sales and earnings.

Sales – Agricultural Solutions (million €)
Agricultural Solutions – Sales (bar chart)Enlarge image
Factors influencing sales –
Agricultural Solutions
Agricultural Solutions – Factors influencing sales (bar chart)Enlarge image

Business was very successful in the Crop Protection division in 2012. At €4,679 million, sales to third parties were €514 million higher than in the previous year (volumes 6%, prices 1%, currencies 5%). We were able to increase sales volumes in all indications and regions. Positive currency effects and higher sales prices also contributed to this considerable sales growth.

Income from operations – Agricultural Solutions (million €)
Agricultural Solutions – Income from operations (bar chart)Enlarge image

In Europe, sales rose by €161 million compared with the previous year to €1,820 million. This growth was mostly attributable to high demand for our fungicides and herbicides. We successfully launched the new fungicide Xemium® in our core markets in Western Europe. In herbicides, we posted strong demand in Eastern Europe for our herbicide tolerance system, Clearfield®. We were able to raise sales volumes for canola (oil-seed rape) herbicides in Western Europe. Higher sales prices additionally supported sales development.

Sales in North America grew by €143 million to €1,108 million. This was especially due to the stronger U.S. dollar and to higher prices. Our business with herbicides based on the active ingredient Kixor® as well as with imidazolinone herbicides saw particularly successful development. We were also able to increase our sales with fungicides, despite the drought in the Midwestern United States.

In Asia, sales improved by €38 million to €525 million thanks to higher volumes and positive currency effects. This increase was the result of our successful herbicide business in India as well as high demand for products based on the fungicide F 500®. The weaker season in Japan dampened sales growth.

At €1,226 million, sales to customers in South America in 2012 exceeded the level of the previous year by €172 million, despite the drought in the first half of the year. Increased demand for fipronil-based insecticides and for F 500® served as a particular growth driver. Positive currency effects also contributed to this increase in sales.

We continued the expansion of our business activities worldwide in 2012. Despite the costs associated with this, income from operations surpassed the previous year’s level by €218 million to reach €1,026 million. This significant growth was primarily attributable to higher sales volumes and positive currency effects.

The acquisition of Becker Underwood in November 2012 affords us access to the growth market for biological crop protection products, which represent a supplement to conventional chemical crop protection methods. Through this addition to our product range, we are also further expanding our strategic partnerships with seed treatment companies.

In 2013, we expect the market environment to remain positive. We anticipate prices for agricultural products that continue to be above historical averages, yet which show high volatility. In addition to agricultural commodity prices and weather conditions, the exchange rates of important currencies will play a key role in our business development. In view of the acquisition of Becker Underwood and the resulting expansion of our product range for biological crop protection products, we aim to once again increase sales and earnings in 2013 compared with the high levels of the previous year.

Information relevant to the principles of the Global Compact

Crop Protection – Sales by region
(Location of customer)
Agricultural Solutions – Crop Protection – Sales by region (pie chart)Enlarge image
Crop Protection – Sales by indication
 
Agricultural Solutions – Crop Protection – Sales by indication (pie chart)Enlarge image
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Segmentdaten Agricultural Solutions 1 (million €)

 

 

2012

2011

Change in %

1

Research and development expenses, sales, earnings and all other data of BASF Plant Science are not included in the Agricultural Solutions segment; they are reported in Other.

Sales to third parties

 

4,679

4,165

12

Intersegmental transfers

 

29

27

7

Sales including intersegmental transfers

 

4,708

4,192

12

Income from operations before depreciation and amortization (EBITDA)

1,182

981

20

EBITDA margin

%

25.3

23.6

Income from operations (EBIT) before special items

1,037

810

28

Income from operations (EBIT)

 

1,026

808

27

Income from operations (EBIT) after cost of capital

384

242

59

Assets

 

6,527

5,350

22

Research and development expenses

 

430

412

4

Additions to property, plant and equipment and intangible assets

1,054

150

.