Despite difficult market conditions the Bayer Group was able to achieve its earnings goals for 2008, which was operationally “the most successful year in Bayer’s long history”, according to Chairman Werner Wenning.
The company booked earnings before interest, taxes, depreciation and amortisation (EBITDA) – excluding special items – of 6.9 billion euros, rising 2.3% over the prior year, as a sharp fall in earnings by its MaterialScience division was buffered by strong gains in the HealthCare and CropScience segments.
Group net income came in at 1.7 billion euros marking a steep fall from 2007’s figure of 4.7 billion euros, when results were given a boost by a one-time tax income of more than 900 million euros, as well as 2.4 billion euros in gains from the sale of the firm’s diagnostics business. Accordingly, earnings per share fell to 2.22 euros but organically they grew to 4.17 euros from the 3.80 euros generated in the prior year.
Total sales for the year inched up 1.6% to 32.9 billion euros, again driven by strong performances of the HealthCare division, which booked turnover growth of 4.1% to 15.4 billion euros, and the CropScience unit, up 9.5% to 6.3 billion euros.
Bayer HealthCare achieved above-market growth in all divisions, with EBITDA before special items climbing 9.6% to 4.2 billion euros despite negative currency effects and higher marketing costs, largely on the back of “the successful development of the business and the synergies realised from the Schering integration,” the company said.
Pharma sales up 4%
Sales of the division’s pharmaceuticals segment grew 4.3% 10.7 billion euros, driven by strong performances by the group’s YAZ family of oral contraceptives, sales of which jumped 22.2% on a currency-adjusted basis, and the cancer drug Nexavar (sorafenib), rocketing 75.7% and Mirena, the firm’s levonorgestrel-releasing intrauterine contraceptive system, up 35.5%.
Revenues from the Consumer Health segment rose 3.6% to 4.7 billion euros, boosted by a 20.7% rise in the Bepanthen/Bepanthol line, and 18.4% growth in sales of Contour blood glucose monitoring devices.
Looking ahead, Wenning remained relatively confident with regard to the company’s performance in what he said “will undoubtedly be a difficult year dominated by uncertainty”. For 2009, Bayer is expecting steady growth of between 3% and 5% percent for the healthcare markets, while for CropScience the company is assuming moderate growth of between 2%-3%. Overall results next year are, however, likely to be hit by a further downturn in its MaterialScience business, for which a very difficult year marked by a great deal of uncertainty is forecast, Wenning said.
A more detailed analysis of Bayer’s results by our on-site reporter in Leverkusen, Germany, will follow
