Sales of the Bayer Group advanced by 6.8 percent in the first quarter, to a record EUR 10,056 million (Q1 2011: EUR 9,415 million). Adjusted for currency and portfolio effects, business expanded by 5.2 percent. The operating result (EBIT) climbed by 42.6 percent to EUR 1,637 million (Q1 2011: EUR 1,148 million). Special items totaled minus EUR 169 million (Q1 2011: minus EUR 442 million). EBIT before special items rose by 13.6 percent to EUR 1,806 million (Q1 2011: EUR 1,590 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) - before special items - improved by 9.4 percent to EUR 2,442 million (Q1 2011: EUR 2,232 million). This was partly due to positive currency effects of EUR 85 million, which occurred mainly at Health Care and CropScience. Net income increased by 53.5 percent to EUR 1,050 million (Q1 2011: EUR 684 million). Core earnings per share rose by 15.9 percent to EUR 1.68 (Q1 2011: EUR 1.45).
"All the subgroups contributed to the encouraging increase in sales, particularly CropScience, which experienced a strong start to the season," Management Board Chairman Dr. Marijn Dekkers explained on Thursday when the first-quarter interim report was published. Earnings of the Group rose sharply. "In view of the good start to 2012, we are increasingly confident for the rest of the year," Dekkers added. Given the continuing uncertainties, however, he said Bayer is currently adhering to the guidance for 2012 that was issued at the end of February.
Gross cash flow moved ahead by 21.8 percent to EUR 1,595 million (Q1 2011: EUR 1,309 million) due to the improved operating performance. Net cash flow, however, was down by 66.2 percent year on year at EUR 271 million (Q1 2011: EUR 801 million), because cash tied up in working capital increased markedly due to the expansion of business. Net financial debt fell since the start of the year from EUR 7.0 billion to EUR 6.9 billion as of March 31, mainly as a result of positive currency effects.
HealthCare posts gains especially in emerging markets
Sales of the HealthCare subgroup increased by 4.2 percent in the first quarter, to EUR 4,342 million (Q1 2011: EUR 4,166 million). After adjusting for currency and portfolio effects, sales were up by 2.1 percent. "The Pharmaceuticals and Consumer Health segments both contributed to this growth. Business developed particularly well in the emerging markets as a whole," explained Dekkers.
Sales in the Pharmaceuticals segment rose by 1.6 percent (Fx & portfolio adj.) to EUR 2,517 million. Growth was achieved mainly in the emerging markets, especially China, while sales were slightly down in most European countries. Among the segment’s best-selling products, Aspirin™ Cardio for the prevention of myocardial infarction posted a significant sales gain of 15.7 percent on a currency-adjusted (Fx adj.) basis. Revenues from the hormone-releasing intrauterine device Mirena™ (Fx adj. plus 8.3 percent), the cancer drug Nexavar™ (Fx adj. plus 4.5 percent) and the blood-clotting product Kogenate™ (Fx adj. plus 1.9 percent) also developed positively. Following market launches in further countries and the expansion of indications, the anticoagulant Xarelto™ entered the list of Bayer’s best-selling pharmaceutical products for the first time. By contrast, sales of the antibiotic Avalox™/Avelox™ (Fx adj. minus 13.3 percent) and the erectile dysfunction treatment Levitra™ (Fx adj. minus 9.3 percent) were down because of a partial restructuring of distribution for general medicine products in the United States.
Sales in the Consumer Health segment rose by 2.9 percent (Fx & portfolio adj.) to EUR 1,825 million, with all divisions contributing to growth. Business developed especially well in the emerging markets. In the Consumer Care Division (non-prescription medicines), the skincare product Bepanthen™/Bepanthol™ (Fx adj. plus 7.7 percent) performed particularly well, while sales of the analgesic Aleven™/naproxen and the One A Dayn™ line of dietary supplements matched the good prior-year level. Sales of the analgesic Aspirin™ declined by 7.0 percent (Fx adj.) from the high level of the prior-year quarter. The Medical Care Division benefited mainly from the positive development of the contrast agent and medical equipment business. Sales of the contrast agent Gadovist™ climbed by 26.5 percent (Fx adj.). Among the diabetes care products, sales of the Contour™ line of blood glucose meters rose by 7.3 percent (Fx adj.). In the Animal Health Division, sales of the Advantage™ line of flea, tick and worm control products advanced by 16.2 percent (Fx adj.).
EBITDA before special items of Bayer HealthCare increased by 3.6 percent to EUR 1,181 million (Q1 2011: EUR 1,140 million). This was largely attributable to the positive business development and effective cost management in both segments.
In view of the good start to 2012, Bayer is increasingly confident for the rest of the year. Given the continuing uncertainties, however, the company is currently adhering to the guidance for the full year 2012 that it issued at the end of February. For the full year 2012, Bayer continues to forecast a currency- and portfolio-adjusted sales increase of about 3 percent. This would result in Group sales of approximately EUR 37 billion based on unchanged exchange rate assumptions (e.g. EUR 1 = US$1.40). Bayer continues to plan a slight improvement in EBITDA before special items. This will be driven by HealthCare and CropScience, while earnings at MaterialScience are likely to be flat with 2011 in view of the currently difficult market conditions. Bayer also plans to slightly improve core earnings per share.
About Bayer HealthCare
The Bayer Group is a global enterprise with core competencies in the fields of health care, nutrition and high-tech materials. Bayer HealthCare, a subgroup of Bayer AG with annual sales of EUR 17.2 billion (2011), is one of the world's leading, innovative companies in the healthcare and medical products industry and is based in Leverkusen, Germany. The company combines the global activities of the Animal Health, Consumer Care, Medical Care and Pharmaceuticals divisions. Bayer HealthCare's aim is to discover, develop, manufacture and market products that will improve human and animal health worldwide. Bayer HealthCare has a global workforce of 55,700 employees (Dec 31, 2011) and is represented in more than 100 countries.