Bayer

Bayer: continuing growth momentum

Bayer2012 was a very successful year for the Bayer Group. "We continued to grow dynamically and achieved our targets for the Group. All the subgroups posted gains in sales and earnings before special items," said Bayer CEO Dr. Marijn Dekkers at the Financial News Conference in Leverkusen on Thursday. The life-science businesses registered particularly rapid growth and were strengthened by further progress in the innovation pipeline. Moreover, Bayer sharply expanded business in the emerging markets. Dekkers expressed his confidence for the company’s future development: "We expect to continue our record development in 2013 and beyond."

Sales of the Bayer Group grew by 8.8 percent in 2012, to EUR 39,760 million (2011: EUR 36,528 million). "Sales thus reached the highest level in our company’s 150-year history," said Dekkers. Adjusted for currency and portfolio effects (Fx & portfolio adj.), sales were up by 5.3 percent. The gain in the emerging markets, at 7.4 percent (Fx & portfolio adj.), was twice as large as in the industrialized countries. "In other words, our strategic focus on these markets of the future - and the investments we are making there - are paying off," Dekkers remarked.

EBIT declined by 4.6 percent to EUR 3,960 million (2011: EUR 4,149 million). Special items totaled minus EUR 1,711 million (2011: minus EUR 876 million). They included EUR 1,186 million in litigation expenses in connection with the Yasmin™/YAZ™ line of oral contraceptives. Of this figure, EUR 455 million was taken in the fourth quarter of 2012, primarily in connection with further provisions for the settlement in the United States of venous clot injury claims of which Bayer is currently aware and anticipated future claims. Further special charges for the year overall included EUR 396 million for restructuring measures and EUR 289 million for impairment of intangible assets. An offsetting effect came from gains of EUR 158 million from divestitures and EUR 114 million in adjustments of benefit entitlements.

EBIT before special items increased by 12.9 percent to EUR 5,671 million (2011: EUR 5,025 million). EBITDA before special items rose by 8.8 percent to EUR 8,284 million (2011: EUR 7,613 million). Contributing to this were a good business performance and savings from the efficiency program successfully completed in 2012. Earnings also benefited from positive currency effects totaling about EUR 400 million. Net income declined slightly by 1.0 percent to EUR 2,446 million (2011: EUR 2,470 million). Core earnings per share, however, improved by 10.8 percent to EUR 5.35 (2011: EUR 4.83).

Gross cash flow fell by 11.1 percent to EUR 4,599 million (2011: EUR 5,172 million), while net cash flow declined by 10.4 percent to EUR 4,532 million (2011: EUR 5,060 million). Net financial debt was level with December 31, 2011, at EUR 7.0 billion. "This included additional funding of EUR 1.0 billion for our pension fund in the fourth quarter of 2012," explained Chief Financial Officer Werner Baumann. "Our outstanding financial liabilities have a balanced maturity structure. We therefore intend to continue making repayments in the coming years entirely from our available liquidity and current cash flows," Baumann added.

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 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.

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