Business Review

  • Sales improve by 8% to €6,156 million due to portfolio effects, higher prices and increased volumes
  • EBIT before special items down 29% year on year at €734 million as a result of negative currency effects and the negative contribution from the acquired businesses

The Agricultural Solutions segment increased sales to third parties by €460 million to €6,156 million in 2018. The addition of the businesses and assets acquired from Bayer in August 2018 made a significant contribution. A higher price level and growth in sales volumes also contributed to the positive year-on-year sales development. In a continuing difficult market environment, strongly negative currency effects dampened sales in all regions.

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Segment data – Agricultural Solutions (Million €)

 

 


2018

2017

+/–

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

 

 

6,156

5,696

8%

Intersegment transfers

 

 

58

36

61%

Sales including intersegment transfers

 

 

6,214

5,732

8%

Income from operations before depreciation and amortization (EBITDA)

 

 

985

1,282

(23%)

EBITDA margin

 

%

16.0

22.5

–

Depreciation and amortization1

 

 

394

267

48%

Income from operations (EBIT)

 

 

591

1,015

(42%)

Special items

 

 

(143)

(18)

.

EBIT before special items

 

 

734

1,033

(29%)

EBIT after cost of capital

 

 

(562)

171

.

Assets

 

 

16,992

8,096

110%

Investments including acquisitions2

 

 

7,110

185

.

Research and development expenses

 

 

679

507

34%

Sales in Europe were €39 million higher than in the previous year, at €2,022 million. This was attributable to the acquired businesses and higher sales volumes in almost all indications, despite the extreme weather conditions and long dry period. Sales development was dampened by negative currency effects, particularly in eastern Europe and Turkey.

We increased sales in North America by €163 million to €2,166 million. The acquired businesses and a higher price level more than compensated for the negative currency effects. Lower volumes, especially for fungicides in Canada and the United States, also had an offsetting effect.

At €645 million, sales in Asia exceeded the prior-year figure by €63 million. We achieved volumes growth in all indications, particularly fungicides. The acquired businesses and a higher price level also contributed to the sales increase. Negative currency effects reduced sales development considerably.

In the region South America, Africa, Middle East, sales rose by €195 million to €1,323 million. The increase was largely driven by a higher price level and the contribution of the acquired businesses. Especially for fungicides in Brazil, sales volumes increased considerably. Negative currency effects had an offsetting impact.

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 €734 million, down €299 million from the prior-year figure. This was attributable to negative currency effects in all regions, as well as the strongly negative contribution from the acquired businesses due to the late, intrayear timing of the transaction, the seasonality of the business as well as costs for integrating the businesses into the BASF Group. EBIT decreased by €424 million to €591 million. Special items primarily arose from the acquisition.