Advertisement

Picture EBD Group BIO-Europe 2018 Copenhagen Denmark Partnerships 600x60px
Document › Details

Bayer AG. (10/30/14). "Press Release: News Conference Call for the Third Quarter of 2014. Address by Dr. Marijn Dekkers".

Organisation Organisation Bayer AG
  Group Bayer (Group)
Products Product pharmaceutical
  Product 2 AGRI LIFE SCIENCES
Person Person Dekkers, Marijn E. (Bayer 201001–201612 CEO before Thermo Fisher CEO TO LEAVE Bayer 12/16)
     


Address by Dr. Marijn Dekkers
Chairman of the Board of Management
(Please check against delivery)





Ladies and gentlemen,



Welcome to our conference call. As you already received our Interim Report this morning, I will focus on the most important messages and figures.






We continued our successful business development in the third quarter – Bayer is operationally strong!


The upward trend in our Life Science businesses – HealthCare and CropScience – persisted. This is also a testament to our innovative capability, which is reflected in the business development. In HealthCare we registered encouraging growth, largely due to the outstanding sales performance for our new pharmaceutical products. Crop Science recorded strong growth, particularly in North and Latin America. We also posted double-digit percentage growth in Europe. And MaterialScience also saw an encouraging sales increase.



Following a strong quarter overall, we have raised the Group forecast for 2014.

That brings me to the key data for the third quarter, starting with the Group figures. First, let me point out that all the changes in sales that I will mention today are adjusted for currency and portfolio effects.



Sales of the Bayer Group rose by 7.4 percent in the third quarter, to EUR 10.2 billion. EBIT of the Group improved by 12.7 percent to EUR 1.4 billion, partly as a result of special gains. Clean EBIT – that's before special items – came in at EUR 1.3 billion.


Clean EBITDA advanced by 1.4 percent to EUR 2.0 billion, after additional research and development expenses and selling expenses of roughly EUR 90 million each. These will support our future growth. Negative currency changes had an adverse effect of about EUR 80 million. The clean EBITDA margin declined by 0.9 percentage points to 19.7 percent.



Group net income came in at EUR 0.8 billion in the third quarter. That’s a 12.7 percent increase on the same period of last year. Core earnings per share advanced by 6.3 percent to EUR 1.35.






I'd now like to take a look at our third-quarter data for the subgroups. HealthCare's growth momentum continued unabated, with sales rising by 7.1 percent to EUR 5.0 billion. As I already mentioned, we registered outstanding sales growth, largely due to our recently launched pharmaceutical products. Sales of Xarelto™, Eylea™, Stivarga™, Xofigo™ and Adempas™ moved ahead from EUR 407 million in the prior-year quarter to EUR 750 million.




Ladies and gentlemen,

These products represent not only impressive progress in our business but also have a crucial importance when we look beyond the figures – they are proof of our commitment to our mission "Bayer: Science For A Better Life." Based on our market authorizations, these products offer new therapies, for example



• to reduce the risk of stroke,



• to improve the failing vision that accompanies some eye diseases,



• to inhibit tumor growth in certain types of cancer, or

• to improve the lives of people with certain lung diseases.



With Xarelto™, for instance, two out of every three strokes could be prevented compared with patients who take no anticoagulant medication. It is also very important for me personally: that we can improve people's lives with our innovations.



I'd now like to speak about our Consumer Health business, which posted a slight increase in sales against the prior-year period. This increase was driven by the Consumer Care and Animal Health divisions. Sales in the Emerging Markets continued to develop very positively.



However, we were faced with higher selling expenses in both segments – particularly for the launch of our recently launched pharmaceutical products and in Consumer Care. We also made considerable investments in research and development to expand our product pipeline in our Pharmaceuticals business. Earnings were also held back by negative currency effects of about EUR 70 million.



All in all, we increased EBITDA before special items of HealthCare by 0.7 percent to EUR 1.4 billion. However, the EBITDA margin before special items receded to 28.3 percent.






Now let's move on to CropScience, where we raised sales by 14.6 percent to EUR 1.9 billion. Business developed particularly well in North and Latin America, especially in Brazil. We also achieved double-digit percentage growth in Europe.




Ladies and gentlemen,

Like HealthCare, our CropScience products also enable us to improve people's lives. We all know that the world's population is increasing all the time. We need new and better ways to boost agricultural yields if we are to have an adequate food supply in the future. That's one of the tasks to which CropScience is extremely dedicated.



Now, back to the figures: EBITDA before special items of CropScience climbed by 24.1 percent to EUR 278 million. This increase – which was achieved despite higher R&D and selling expenses – mainly resulted from the good business development.





Ladies and gentlemen,

We also saw business expand in the MaterialScience subgroup, where sales rose by 5.3 percent to EUR 3.0 billion. This growth was due to significantly higher volumes for Polycarbonates, Polyurethanes, and Coatings, Adhesives, Specialties. We increased volumes in nearly all regions. There was a slight decline in raw material prices.



We achieved cost savings through our efficiency improvement programs. Currency effects diminished earnings by EUR 10 million. A further factor were the one-time gains of EUR 17 million in the prior-year quarter. EBITDA before special items thus declined by 3.5 percent to EUR 334 million.




Now, I'd like to speak about the Group outlook.



We have raised our guidance for 2014.



The reasons are:



• the positive business development,



• the inclusion of the consumer care business acquired from Merck & Co., Inc. starting from the fourth quarter,



• and the reversing trend for currency effects, which has prompted us to base our forecast on the exchange rates at the end of the third quarter.



We expect sales to increase by 6 percent after adjusting for currency and portfolio changes. Allowing for negative currency effects of 3 percent instead of the previously assumed 4 percent, our sales forecast is around EUR 42 billion.



We now plan to increase EBITDA before special items by a mid-single-digit percentage. Overall, we expect to see negative currency effects of approximately EUR 450 million or 5 percent.


We now aim to increase core earnings per share by a mid- to high-single-digit percentage, allowing for expected negative currency effects of around 7 percent.



Ladies and gentlemen,

I would now like to say a few words about Bayer's plans to focus entirely on the Life Science businesses, which we announced a few weeks ago. We are confident that this strategic decision is beneficial for both Bayer and MaterialScience and will allow both companies to create value in the long term, resulting in two global champions:



Bayer will become a pure life science company that is acknowledged for its success in science and innovation – a foundation we can build on. We create value through our achievements in the research-intensive areas of human, animal and plant health. This is always about newly discovered molecules with which we can make products that improve people’s lives – entirely in line with our mission "Bayer: Science For A Better Life.”



At the same time, MaterialScience can continue to develop its competitive position as a separate company. The business has an outstanding starting position and holds market leadership positions. Thanks to the significant investment of recent years, MaterialScience can benefit from one of the most modern global production networks – and from the cost leadership and customer proximity this network provides. With autonomous access to capital to finance its investment needs, MaterialScience can continue to develop successfully as an independent company for high-tech polymers.




Ladies and gentlemen,

We are thus making good progress operationally and strategically. This also includes the acquisition of the consumer care business of Merck & Co., Inc. for US$14.2 billion, which was completed at the beginning of October. The acquisition significantly strengthens Bayer's business with non-prescription medicines across multiple therapeutic categories and geographies. We are looking to expand our business in the future through both organic growth and acquisitions.



Let me summarize my remarks:



Our business was very successful in the third quarter of 2014 – above all due to the strong upward trend in our Life Science businesses.


That's why we have raised our guidance for the year.



In light of the steady progress we are making with strategy implementation and our innovation pipeline, we believe Bayer has very good long-term prospects as well.




Thank you for your attention.





Forward-Looking Statements


This release may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayer’s public reports which are available on the Bayer website at www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

   
Record changed: 2017-04-02

Advertisement

Picture Sacura Get Your Substance to Market iito 600x60px

More documents for Bayer (Group)


To subscribe to our free, monthly newsletter for the European life sciences, please send an e-mail to info@iito.de and simply fill the subject line with the word »LSE Newsletter«

To get even more information, please take a look at our [gs] professional services offering and read the gene-sensor Product Flyer [PDF file]

Advertisement

Picture Berlin Partner HealthCapital RegMed Forum 2018 October 600x60px




» top