Dow Chemical 2014 Annual Report Download - page 67

43
AGRICULTURAL SCIENCES
The Agricultural Sciences segment is a global leader in providing crop protection and seed/plant biotechnology products and
technologies, urban pest management solutions and healthy oils. The business invents, develops, manufactures and markets
products for use in agricultural, industrial and commercial pest management, and food service. Agricultural Sciences consists of
two businesses - Crop Protection and Seeds.
Agricultural Sciences
In millions 2014 2013 2012
Sales $ 7,290 $ 7,137 $ 6,382
Price change from comparative period (1)% 1% 3%
Volume change from comparative period 3 % 11% 10%
Equity earnings $ 4 $ 5 $ 1
EBITDA $ 962 $ 894 $ 923
2014 Versus 2013
Agricultural Sciences sales were $7,290 million in 2014, up 2 percent from $7,137 million in 2013, a record for the segment
and both businesses. Compared with last year, volume was up 3 percent and price was down 1 percent due to the unfavorable
impact of currency. Sales gains were reported in both businesses, driven by the introduction and ramp up of new products and
technologies, and in all geographic areas, except North America. Crop Protection sales were up 3 percent due to increased
demand for new products, which increased 20 percent, and continued strong demand for rice and cereal herbicides. Seeds sales
increased 1 percent as volume gains in soybeans and cotton seeds and the favorable impact of a one-time gain related to the end
of a licensing agreement were partially offset by volume declines in corn, canola and sunflower seeds.
EBITDA for 2014 was $962 million, a record for the segment and the Crop Protection business, compared with $894 million in
2013. EBITDA increased as volume growth in Crop Protection and Seeds more than offset a decline in selling prices (driven
almost entirely by the unfavorable impact of currency) and increased investment in SG&A to support continuing growth
initiatives.
2013 Versus 2012
Agricultural Sciences sales were $7,137 million in 2013, up 12 percent from $6,382 million in 2012. Compared with 2012,
volume increased 11 percent and price increased 1 percent. Latin America reported 21 percent sales growth and North America
sales increased 13 percent. Crop Protection sales were up 10 percent driven by new product sales, which increased 14 percent,
while strong sales growth was also reported for the spinosyns and the corn and cereal herbicide portfolios. Seeds sales
increased 19 percent with strong growth across most major crop portfolios. SmartStax® Corn Hybrids posted record sales
growth driven by the ramp up of POWERCORE™ Insect Trait Technology in Latin America and REFUGE ADVANCED®
Seed in North America.
EBITDA for 2013 was $894 million, compared with $923 million in 2012. EBITDA declined primarily due to higher operating
expenses and increased spending on growth investments which offset strong sales growth in the Americas led by favorable
global agricultural and food industry conditions, new product sales and new seed technologies.
Agricultural Sciences Outlook for 2015
Agricultural Sciences sales for 2015 are expected to grow above the levels achieved in 2014, with growth expected in all
geographic areas. A continuation of the market dynamics experienced in the second half of 2014 is expected to sustain lower
than historical average crop commodity prices and flat industry growth rates in the short-term. The Crop Protection business
expects continued sales growth from spinetoram and ISOCLASTTM Insecticides, N-SERVETM Nitrogen Stabilizer and
aminopyralid and ARYLEXTM Herbicides. Strong demand for corn and canola seeds is expected to drive sales growth in the
Seeds business.
On September 17, 2014, the U.S. Department of Agriculture issued deregulation decisions for Dow AgroSciences LLC’s
ENLIST™ Corn and Soybean events. On October 15, 2014, the Company announced it received registration from the U.S.
Environmental Protection Agency for ENLIST DUO™, the companion herbicide for use with ENLIST™ Corn and Soybeans,
in six key states. The Company expects a limited, stewarded launch of ENLIST™ Corn Seeds in the United States in 2015,
with harvested seeds strictly controlled and limited sales.
On July 2, 2014, Dow AgroSciences LLC ("DAS") signed a binding agreement to purchase Cooperativa Central de Pesquisa
Agrícola's ("Coodetec") seed business, pending regulatory approval by the Brazilian Antitrust Authority ("CADE"). CADE
approved the transaction on December 12, 2014. On January 30, 2015, DAS acquired Coodetec's seed business for