German drugs and chemicals group Bayer AG turned in a solid set of results for the second quarter of the year, as a strong performance by its healthcare unit helped push profits up 11% over the year-ago period.
The firm saw net income jump 11.3% to 452 million euros ($579.7 million), or $0.60 a share, on sales growth of 5.8% to 7.1 billion euros.
Revenues for the period were driven by Bayer’s HealthCare unit which, out of the group’s three operating divisions, achieved the strongest growth in sales and earnings, with turnover rising 12.7% to 2.3 billion euros.
Under the segment, pharmaceuticals propelled revenues by a substantial 20.2% to nearly 1.2 billion euros, as performance was boosted by Bayer’s recent acquisition of rival drugmaker Schering AG. The marriage of the two firms was sealed last month, after Bayer beat rival suitor Merck KGaA to the altar. Consequently, Schering’s drugs contributed a week’s worth of sales – 144 million euros – to the second-quarter figures.
In addition, the new Consumer Health reporting segment, which comprises the Consumer Care, Diabetes Care and Animal Health divisions, also did well, with sales up 5.3% at just under 1.1 billion euros.
All this helped drive Bayer Healthcare’s underlying earnings before interest and tax, depreciation and amortisation up 27.4% to 470 million euros, including 30 million euros from the acquired Schering business, the group said.
The quarter was also a successful one in terms of strategy, according to Bayer. The acquisition of Schering AG is the largest transaction its history, creating a new company with 15 billion euros in annual sales and a pharmaceutical division - Bayer-Schering Pharmaceuticals - that will rank among the top 12 in the world with sales of around $10.8 billion. And the agreed sales of its Diagnostics Division is fully in line with its move to narrow the focus of its HealthCare business to concentrate on human and animal medicines and consumer health products, it said.
“Bayer is on the way to success strategically and operatively,” stated Chief Executive Werner Wenning. “Particularly in light of the long-term optimization of our portfolio, we remain optimistic about the Bayer Group’s future development.”