Bayer off to a successful start in 2016

BayerThe Bayer Group got off to a successful start in the new fiscal year. "All segments posted gains in their operating performance," said CEO Dr. Marijn Dekkers when he presented the interim report for the first quarter on Tuesday. At Pharmaceuticals, Bayer again benefited from the very good development of its recently launched products. The Consumer Health business also developed positively. Crop Science outperformed the prior-year quarter despite a weak market environment. Animal Health posted substantial gains. Thus the Life Science businesses showed encouraging development. Sales at Covestro declined as anticipated, while earnings rose significantly. Dekkers remains optimistic for the year as a whole: "We confirm our outlook for 2016."

Sales of the Bayer Group moved ahead in the first quarter of 2016 by 0.5 percent to EUR 11,941 million (Q1 2015: EUR 11,879 million). After adjusting for currency and portfolio effects (Fx & portfolio adj.), the increase was 3.2 percent. EBITDA before special items advanced by a substantial 15.7 percent to EUR 3,404 million (Q1 2015: EUR 2,941 million), despite higher research and development expenses at Pharmaceuticals and Crop Science and negative currency effects of around EUR 60 million. EBIT climbed by a robust 20.1 percent to EUR 2,335 million (Q1 2015: EUR 1,944 million) after special charges of EUR 272 million (Q1 2015: EUR 244 million). These mainly comprised impairment losses on intangible assets, costs for the integration of acquired businesses and costs associated with efficiency improvement measures. Net income grew 13.3 percent to EUR 1,511 million (Q1 2015: EUR 1,334 million). Core earnings per share from continuing operations advanced by 13.9 percent to EUR 2.37 (Q1 2015: EUR 2.08).

Gross cash flow from continuing operations advanced by 28.1 percent to EUR 2,576 million (Q1 2015: EUR 2,011 million), due mainly to the expansion of business. Net cash flow (total) was diminished by an increase in cash tied up in working capital but rose by 82.6 percent to EUR 1,322 million (Q1 2015: EUR 724 million), mainly because of the inflow from the divestiture of the Diabetes Care business. Net financial debt declined by EUR 1.1 billion against December 31, 2015, to EUR 16.3 billion on March 31, 2016.

Pharmaceuticals Division posts substantial sales and earnings growth
Sales of prescription medicines (Pharmaceuticals) rose in the first quarter by a very encouraging 12.2 percent (Fx & portfolio adj.) to EUR 3,889 million. "This was largely attributable to the continued strong development of the company’s recently launched products," said Dekkers. The anticoagulant Xarelto™, the eye medicine Eylea™, the cancer drugs Stivarga™ and Xofigo™, and Adempas™ to treat pulmonary hypertension generated total combined sales of EUR 1,187 million (Q1 2015: EUR 898 million). Xarelto™ posted encouraging sales gains of 31.5 percent (Fx adj.), which were mainly attributable to volume increases in Europe and Japan. Business with Xarelto™ also developed positively in the United States, where it is marketed by a subsidiary of Johnson & Johnson. Bayer registered considerably higher sales (Fx adj. plus 48.9 percent) of the eye medicine Eylea™ in all regions, particularly in Europe, Canada and Japan.

Among the established products, the blood-clotting medicine Kogenate™ posted significant sales gains in comparison with a weak prior-year quarter. Bayer also began marketing the new hemophilia medicine Kovaltry™ in Europe and the United States in the first quarter of 2016. Sales of the Kogenate™/Kovaltry™ product family climbed 13.7 percent (Fx adj.). Business with the hormone-releasing intrauterine devices of the Mirena™ product family rose by 7.2 percent (Fx adj.) overall, benefiting especially from expanded volumes in the United States. The cancer drug Nexavar™ achieved currency-adjusted growth of 10.8 percent, due particularly to considerable sales gains in the United States. Sales of the multiple sclerosis product Betaferon™ / Betaseron™ were down 7.9 percent (Fx adj.) overall, due partly to changes in sales phasing for tender businesses in Latin America. By contrast, sales rose in the United States. Overall, Bayer substantially expanded the Pharmaceuticals business (Fx adj.) in all regions.

EBITDA before special items of the division advanced by 16.2 percent to EUR 1,261 million. This substantial increase in earnings was due largely to very good business performance, more than offsetting higher investments in research and development and negative currency effects of around EUR 30 million.

Bayer: Science For A Better Life
Bayer is a global enterprise with core competencies in the Life Science fields of health care and agriculture. Its products and services are designed to benefit people and improve their quality of life. At the same time, the Group aims to create value through innovation, growth and high earning power. Bayer is committed to the principles of sustainable development and to its social and ethical responsibilities as a corporate citizen. In fiscal 2015, the Group employed around 117,000 people and had sales of EUR 46.3 billion. Capital expenditures amounted to EUR 2.6 billion, R&D expenses to EUR 4.3 billion. These figures include those for the high-tech polymers business, which was floated on the stock market as an independent company named Covestro on October 6, 2015.

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