Bayer: Life Sciences off to a good start in anniversary year

For the Bayer Group, the first quarter of 2013 was marked by the positive development of its Life Sciences businesses. “HealthCare and CropScience got off to a good start in our anniversary year. Our new pharmaceutical products especially grew at a dynamic pace,” said Management Board Chairman Dr. Marijn Dekkers when the interim report for the first quarter was published. By contrast, MaterialScience faced cost pressure. “We continue to see attractive perspectives for 2013 overall. We confirm our outlook for the Bayer Group,” said Dekkers.

Sales of the Bayer Group climbed by 2.1 percent in the first quarter, to EUR 10,266 million (Q1 2012: EUR 10,054 million). Adjusted for currency and portfolio effects (Fx & portfolio adj.), business expanded by 3.7 percent. The gain in the Emerging Markets, at 6.8 percent (Fx adj.), was nearly three times larger than in the industrialized countries (Fx adj. plus 2.5 percent). “We expanded business especially strongly in the BRIC countries – in other words Brazil, Russia, India and China,” Dekkers explained.

EBIT grew by 8.6 percent to EUR 1,771 million (Q1 2012: EUR 1,631 million). Special items, which in the first quarter of 2013 resulted entirely from restructuring measures, amounted to minus EUR 45 million. Total special items in the prior-year period were minus EUR 169 million. EBIT before special items came in at EUR 1,816 million (plus 0.9 percent; Q1 2012: EUR 1,800 million). EBITDA before special items was level with the prior-year period at EUR 2,453 million (plus 0.4 percent; Q1 2012: EUR 2,443 million). Net income increased by 11.5 percent to EUR 1,160 million (Q1 2012: EUR 1,040 million), while core earnings per share advanced by 1.8 percent to EUR 1.70 (Q1 2012: EUR 1.67).

Gross cash flow in the first quarter of 2013 moved ahead by 12.9 percent to EUR 1,807 million (Q1 2012: EUR 1,600 million), mainly as a result of lower taxes. Net cash flow advanced by 38.0 percent to EUR 327 million (Q1 2012: EUR 237 million). Net financial debt rose from EUR 7.0 billion on December 31, 2012 to EUR 7.5 billion on March 31, 2013, mainly because of cash outflows for operating activities.

HealthCare strengthened by new pharmaceutical products

Sales of the HealthCare subgroup increased by 2.3 percent (Fx & portfolio adj. 4.9 percent) in the first quarter of 2013, to EUR 4,443 million (Q1 2012: EUR 4,341 million). “This positive development was primarily driven by our new pharmaceutical products,” said Dekkers. The business with non-prescription medicines (Consumer Care) also experienced a strong quarter. Sales in the Emerging Markets, particularly those of Asia and Eastern Europe, maintained their momentum, posting double-digit growth rates (Fx adj.).

Business in the Pharmaceuticals segment moved ahead by 1.9 percent (Fx & portfolio adj. 5.0 percent) to EUR 2,564 million. “Our new products Xarelto™, Eylea™ and Stivarga™ made a particularly strong contribution,” Dekkers explained. Combined sales of these three products came in at EUR 244 million (Q1 2012: EUR 42 million). The anticoagulant Xarelto™ continued to post very gratifying sales gains, especially in Germany and France. Eylea™, a medicine to treat wet age-related macular degeneration, met with success in the early launch phase in Japan and Australia. The cancer drug Stivarga™ contributed significantly to sales growth following its successful launch in the United States. Among the segment’s best-selling products, the diabetes treatment Glucobay™ (Fx adj. plus 20.3 percent), the hormone-releasing intrauterine device Mirena™ (Fx adj. plus 4.9 percent) and the blood-clotting drug Kogenate™ (Fx adj. plus 3.7 percent) developed positively. By contrast, sales of the YAZ™/Yasmin™/ Yasminelle™ line of oral contraceptives (Fx adj. minus 12.5 percent) were hampered above all by generic competition in Western Europe. Business with the multiple sclerosis drug Betaferon™/Betaseron™ was down by 6.9 percent (Fx adj.) as expected due to lower volumes, particularly in the United States and Brazil.

Sales in the Consumer Health segment improved by 3.0 percent (Fx & portfolio adj. 4.8 percent) to EUR 1,879 million. “This positive development was mainly attributable to sales growth in the Consumer Care Division, especially in the Emerging Markets,” Dekkers said. Consumer Care generated the highest growth rates with the skincare product Bepanthen™/Bepanthol™ (Fx adj. plus 13.9 percent) and the antifungal Canesten™ (Fx adj. plus 11.6 percent). The analgesics Aleve™/naproxen (Fx adj. plus 7.6 percent) and Aspirin™ (Fx adj. plus 2.6 percent) saw growth particularly in Latin America. By contrast, sales of the Medical Care Division fell slightly. Although business with the Contour™ line of blood glucose meters moved forward by 2.6 percent (Fx adj.), sales in the Diabetes Care business declined slightly overall for market-related reasons, as did sales in the radiology and interventional business. Sales in the Animal Health Division rose by 3.4 percent (Fx & portfolio adj.). The launch of the Seresto™ flea and tick collar in the United States had a positive effect here. Business with the Advantage™ line of flea, tick and worm control products also showed a slight increase, particularly in the United States.

EBITDA before special items of HealthCare improved by 8.1 percent to EUR 1,277 million (Q1 2012: EUR 1,181 million). The higher earnings were mainly attributable to the good business development at Pharmaceuticals and Consumer Care. However, earnings development was held back by higher selling expenses.

About Bayer HealthCare

The Bayer Group is a global enterprise with core competencies in the fields of health care, agriculture and high-tech materials. Bayer HealthCare, a subgroup of Bayer AG with annual sales of EUR 18.6 billion (2012), 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 55,300 employees (Dec 31, 2012) and is represented in more than 100 countries.

 

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