Sales of the Bayer Group rose by 14.6 percent in the second quarter, to EUR 9,179 million (Q2 2009: EUR 8,009 million). Adjusted for currency and portfolio effects, business grew by 9.2 percent. Earnings before interest, taxes, depreciation and amortization (EBITDA) - before special items - improved by 8.6 percent to EUR 1,917 million (Q2 2009: EUR 1,765 million).
This was attributable primarily to the gratifying business trends at MaterialScience and Consumer Health, as well as to positive currency effects. The operating result (EBIT) before special items advanced by 14.4 percent to EUR 1,260 million (Q2 2009: EUR 1,101 million). Research and development expenses rose by 12.7 percent to EUR 747 million (Q2 2009: EUR 663 million).
Pleasing growth in the Consumer Health business
Sales of the HealthCare subgroup rose by 6.4 percent in the second quarter, to EUR 4,305 million (Q2 2009: EUR 4,045 million). Adjusted for currency and portfolio effects (Fx & portfolio adj.), business was up by 2.0 percent. "Both of the subgroupâs segments contributed to this performance, with Consumer Health posting particularly pleasing growth," explained Wenning.
The Pharmaceuticals segment raised sales by 4.3 percent (Fx & portfolio adj. 1.1 percent) to EUR 2,748 million. Business expanded especially in the Asia/Pacific and Latin America/Africa/Middle East regions, more than offsetting the declines in North America. Among the segmentâs top products, the hemophilia medication Kogenate® posted the highest growth rate of 25.2 percent (Fx adj.), benefiting from fluctuations in the ordering schedule. Business with the antibiotic Avalox®/Avelox® was also very successful, growing by 20.8 percent (Fx adj.), as was performance of the cancer drug Nexavar® at plus 19.6 percent (Fx adj.). Also achieving substantial gains were Aspirin® Cardio (Fx adj. plus 11.2 percent) and Kinzal®/Pritor® (Fx adj. plus 8.5 percent). By contrast, business with the YAZ® family of oral contraceptives fell by 14.9 percent (Fx adj.). These declines resulted mainly from lower demand in the United States, where business was additionally hampered by intensified generic competition. Sales of the multiple sclerosis drug Betaferon®/Betaseron® receded by 10.7 percent (Fx adj.), mostly because of intensified competition especially in Germany and the United States.
Sales of the Consumer Health segment climbed by 10.3 percent (Fx & portfolio adj. 3.8 percent) in the second quarter, to EUR 1,557 million. All regions, and particularly North America and Asia/Pacific, contributed to this increase. In the non-prescription medicines business (Consumer Care), there were particularly gratifying performances by the One-A-Day® multivitamin product line (Fx adj. plus 14.8 percent) and the analgesic Aleve®/naproxen (Fx adj. plus 14.3 percent). Canesten® for the treatment of fungal infections also improved significantly, gaining 14.0 percent on a currency-adjusted basis. Sales of the Medical Care Division grew less dynamically, particularly as a result of the weak trend in the U.S. diabetes care market. On a currency-adjusted basis, sales of the Contour® blood glucose meter line moved back by 8.8 percent. By contrast, the medical equipment business saw sales expand by 10.8 percent (Fx adj.). A substantial increase in sales was registered by the Animal Health Division, due especially to the positive performance of the Advantage® line of flea and tick control products (Fx adj. plus 20.5 percent).
EBITDA before special items at HealthCare came in nearly level with the prior year at EUR 1,102 million (Q2 2009: EUR 1,112 million), despite a significant increase of 13.9 percent in research and development costs. "With these expenditures, we are supporting the continued positive development of our research and development pipeline," explained Wenning. Lower earnings in the Pharmaceuticals segment were nearly offset by a gratifying improvement at Consumer Health.
"MaterialScience has left the crisis behind and saw business expand more strongly than expected. Volumes have returned to the pre-crisis level," explained Management Board Chairman Werner Wenning on Thursday following the publication of the interim report for the second quarter. Sales at HealthCare improved slightly, while the subgroup's earnings matched the prior-year level. CropScience was down year on year. That subgroup saw volumes and selling prices decline in a market environment made difficult by the competitive situation and unfavorable weather conditions. "We can confirm the 2010 Group outlook we raised in April," Wenning said.
The Bayer Chairman announced that the company will increase its investment for the future more substantially than planned. "We now expect research and development expenses for the full year to come in at a record level of some EUR 3.1 billion. In this way we are supporting our successful pharmaceutical research and development pipeline - and underscoring our position as the leading research-based pharmaceutical and chemical company in Germany," said Wenning. Previously the company had planned to raise research and development spending in 2010 to approximately EUR 2.9 billion, compared to EUR 2,746 million in the previous year.
The full report for the second quarter is available for online viewing and download at http://www.press.bayer.com.