Agricultural Solutions
Q2 2019
The Agricultural Solutions segment recorded considerable sales growth compared with the second quarter of 2018. This was primarily attributable to portfolio effects from the acquisition of significant businesses and assets from Bayer in August 2018.1 In addition, we achieved a slightly higher price level in the legacy business. Sales were also lifted by positive currency effects. Sales volumes were well below the prior-year quarter, mainly due to significantly lower volumes in North America.
Volumes |
|
(12%) |
|---|---|---|
Prices |
|
3% |
Portfolio |
|
28% |
Currencies |
|
1% |
Sales |
|
20% |
In Europe, we considerably increased sales compared with the prior-year quarter. This was due to portfolio effects, which more than compensated for the significant decline in fungicide, seed treatment and herbicide volumes in northern and eastern Europe.
Sales in North America were considerably higher than in the second quarter of 2018, mainly as a result of portfolio effects. Positive currency effects and a slightly higher price level also contributed to the sales increase. This was partially offset by lower fungicide and herbicide volumes, especially in the United States and Canada due to distributor destocking and challenges relating to weather conditions and the trade conflicts.
We considerably improved sales in Asia, mainly due to portfolio effects. Slightly positive currency effects also had a positive impact. Sales were reduced by lower fungicide volumes.
Sales in the region South America, Africa, Middle East rose considerably. We significantly increased sales volumes, especially in Brazil for seed treatment and fungicides. A significantly higher price level and portfolio effects also contributed to the positive sales development. Negative currency effects had an offsetting impact.
Income from operations (EBIT) before special items was considerably weaker than in the prior-year quarter. Negative earnings from the acquired businesses due to their seasonality contributed to this development. Moreover, earnings in the legacy business were lower due to distributor destocking and challenges relating to weather conditions and the trade conflicts in North America.
EBIT includes special charges, primarily for the integration of the acquired businesses.
1 In the second quarter of 2019, the sales contribution from the acquired businesses is still reported as a portfolio effect in our analysis of sales effects as the acquisition of significant businesses and assets from Bayer was closed in August 2018. The volumes, price and currency effects thus relate to BASF operations excluding the acquired activities.
|
|
Q2 |
H1 |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
2019 |
2018 |
+/– |
2019 |
2018 |
+/– |
||||
|
|||||||||||
Sales to third parties |
|
1,796 |
1,501 |
20% |
4,445 |
3,229 |
38% |
||||
Income from operations before depreciation, amortization and special items |
|
298 |
340 |
(12%) |
1,208 |
827 |
46% |
||||
Income from operations before depreciation and amortization (EBITDA) |
|
205 |
321 |
(36%) |
1,148 |
802 |
43% |
||||
Depreciation and amortizationa |
|
176 |
62 |
184% |
347 |
126 |
175% |
||||
Income from operations (EBIT) |
|
29 |
259 |
(89%) |
801 |
676 |
18% |
||||
Special items |
|
(92) |
(19) |
. |
(60) |
(25) |
. |
||||
EBIT before special items |
|
121 |
278 |
(56%) |
861 |
701 |
23% |
||||
Assets (June 30) |
|
17,348 |
8,074 |
115% |
17,348 |
8,074 |
115% |
||||
Investments including acquisitionsb |
|
148 |
43 |
244% |
116 |
77 |
51% |
||||
Research and development expenses |
|
205 |
126 |
63% |
398 |
243 |
64% |
||||
H1 2019 sales by indication and sector
c Functional Crop Care has been renamed Seed Treatment.