The Bayer Group was again successful in the second quarter of 2014. Sales of the Bayer Group rose by 0.9 percent in the second quarter of 2014 to EUR 10,458 million (Q2 2013: EUR 10,360 million). Adjusted for currency and portfolio effects (Fx & portfolio adj.), sales advanced by 6.3 percent. EBIT rose by 14.5 percent to EUR 1,473 million (Q2 2013: EUR 1,287 million). The Group took special charges of EUR 48 million (Q2 2013: EUR 256 million). EBIT before special items was down by just 1.4 percent to EUR 1,521 million (Q2 2013: EUR 1,543 million). Despite negative currency effects of about EUR 160 million or approximately 7 percent, EBITDA before special items improved by 1.0 percent to EUR 2,217 million (Q2 2013: EUR 2,195 million) after additional research and development expenses of roughly EUR 70 million. Net income climbed by 13.3 percent to EUR 953 million (Q2 2013: EUR 841 million). Core earnings per share were flat with the prior-year quarter at EUR 1.53 (Q2 2013: EUR 1.54).
Gross cash flow in the second quarter of 2014 advanced by 1.5 percent to EUR 1,705 million (Q2 2013: EUR 1,680 million) due to the improvement in EBITDA, while net cash flow moved ahead by 4.2 percent to EUR 1,601 million (Q2 2013: EUR 1,536 million). Net financial debt increased from EUR 9.1 billion on March 31, 2014, to EUR 9.9 billion on June 30, 2014.
"Our Life Science businesses, in particular, saw unabated growth momentum, with very encouraging sales gains for our recently launched pharmaceutical products and our North and Latin American CropScience business," said Management Board Chairman Dr. Marijn Dekkers when the interim report was published on Wednesday. Although earnings growth was again held back by substantial negative currency effects, these were offset by the good business development. EBITDA before special items and core earnings per share were at the previous year's level. The Chairman confirmed the Bayer Group's forecast for the current year. Dekkers said Bayer made progress in the second quarter from a strategic point of view as well with the planned acquisition of the consumer care activities of U.S. company Merck & Co., Inc. "This acquisition will greatly strengthen our Consumer Health business," he explained.
Sales of HealthCare rose in the second quarter by 0.9 percent (Fx & portfolio adj. 6.3 percent) to EUR 4,845 million (Q2 2013: EUR 4,800 million). "This growth continued to be driven by our recently launched pharmaceutical products, while sales at Consumer Health were only slightly above the prior-year period," Dekkers commented. Sales showed above-average development in the Emerging Markets.
Sales of the Pharmaceuticals segment advanced by 10.0 percent (Fx & portfolio adj.) to EUR 2,960 million. This pleasing performance was driven by the recently launched products: the anticoagulant Xarelto™, the eye medicine Eylea™, the cancer drugs Stivarga™ and Xofigo™, and Adempas™ to treat pulmonary hypertension, which posted combined sales of EUR 702 million (Q2 2013: EUR 339 million). Xarelto™ alone achieved currency-adjusted (Fx adj.) sales growth of 79.3 percent.
Among the established pharmaceutical products, sales of the hormone-releasing intrauterine device Mirena™ increased by 13.1 percent (Fx adj.), and business with Aspirin™ Cardio for secondary prevention of heart attacks improved by 8.9 percent (Fx adj.). Sales of the cancer drug Nexavar™ rose by 3.4 percent (Fx adj.). Sales of the blood-clotting medicine Kogenate™, however, receded by 16.8 percent (Fx adj.), mainly due to shortages caused by the use of production capacities to develop the next-generation hemophilia medicines. Business with the multiple sclerosis drug Betaferon™/Betaseron™ declined by 15.8 percent (Fx adj.), again held back mainly by increased competition in the United States. Sales increases in the U.S. for the YAZ™/ Yasmin™/Yasminelle™ line of oral contraceptives only partly offset the declines in Western Europe, which were attributable to generic competition. Sales of these products were down by 3.3 percent (Fx adj.) overall.
Sales of the Consumer Health segment in the second quarter were slightly ahead of the prior-year period (Fx & portfolio adj.) at EUR 1,885 million (plus 1.1 percent). The skincare product Bepanthen™/Bepanthol™ and the dietary supplement Supradyn™ posted particularly good sales gains of 22.4 percent (Fx adj.) and 7.8 percent (Fx adj.), respectively, while sales of the analgesic Aspirin™ were down by 9.0 percent (Fx adj.), mainly due to a weak cold season in Europe. In the Medical Care Division, the U.S. Diabetes Care business continued to be held back by price declines. Sales of the Contour™ line of blood glucose meters receded by 13.9 percent (Fx adj.). Sales of contrast agents and medical equipment in the Radiology & Interventional business were flat with the prior-year period (Fx & portfolio adj.). The Animal Health business, however, developed positively.