Business review

  • Sales improve by 2% to €5,696 million as a result of higher volumes
  • EBIT before special items down 5% year-on-year at €1,033 million due to lower margins

Sales to third parties in the Agricultural Solutions segment rose by €127 million to €5,696 million in 2017 as a result of higher sales volumes. In an ongoing difficult market environment for crop protection products, sales growth was negatively impacted by price declines, especially in South America, and negative currency effects.

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Segment data (million €)

 

 

 

2017

2016

Change in %

1

Amortization of intangible assets and depreciation of property, plant and equipment (including impairments and reversals of impairments)

2

Additions to intangible assets and property, plant and equipment

Sales to third parties

 

 

5,696

5,569

2

Intersegmental transfers

 

 

36

33

9

Sales including intersegmental transfers

 

 

5,732

5,602

2

Income from operations before depreciation and amortization (EBITDA)

 

 

1,282

1,305

(2)

EBITDA margin

 

%

22.5

23.4

–

Depreciation and amortization1

 

 

267

268

0

Income from operations (EBIT)

 

 

1,015

1,037

(2)

Special items

 

 

(18)

(50)

64

EBIT before special items

 

 

1,033

1,087

(5)

EBIT after cost of capital

 

 

171

172

(1)

Assets

 

 

8,096

8,899

(9)

Investments including acquisitions2

 

 

185

266

(30)

Research and development expenses

 

 

507

489

4

In Europe, sales increased by €25 million to €1,983 million. Volumes growth, especially in oilseed herbicides in eastern and southern Europe, more than compensated for declines in western and northern Europe, particularly in fungicides.

At €2,003 million, sales in North America exceeded the prior-year figure by €202 million. We were able to considerably increase sales volumes, especially for herbicides in the United States. The successful market launch of our new herbicide Engenia® contributed substantially to sales growth. Strong demand for fungicides in Canada also had a positive impact.

Sales in Asia rose by €33 million to €582 million. We achieved particularly strong volumes growth for fungicides in China and India, particularly with innovations such as our new product portfolio for rice. In Southeast Asia, sales volumes increased, especially for fungicides and herbicides.

In the region South America, Africa, Middle East, sales declined by €133 million to €1,128 million. This was largely due to lower prices for fungicides and insecticides, negative currency effects and the reduction of inventories at our customers in Brazil. Here, we were able to increase sales volumes despite the ongoing difficult business environment for crop protection products. The positive trend in Argentina also contributed to volumes growth in the region.

Agricultural Solutions – Factors influencing sales
Agricultural Solutions – Factors influencing sales (bar chart)
Agricultural Solutions – Sales by region 
(Location of customer)
Agricultural Solutions – Sales by region (pie chart)

Income from operations (EBIT) before special items was €1,033 million, down €54 million on the prior-year figure. The slight decline was mainly due to the lower average margins from a different product mix and the difficult market situation in Brazil. Earnings were also negatively impacted by the shutdowns of our production facilities in Beaumont, Texas, and Manatí, Puerto Rico, because of the hurricanes. Fixed costs rose slightly. EBIT declined by €22 million to €1,015 million.

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