Fiscal 2015 Bayer Increases Group Sales in 2015 by 12 Percent
The Bayer Group had a very successful year in 2015. Sales reached the highest level in the company’s history, exceeding EUR 46 billion. In 2016, further growth in sales and earnings are expected.
Leverkusen/Germany – Group sales advanced by 12.1 percent to EUR 46,324 million (2014: EUR 41,339 million). After adjusting for currency and portfolio effects (Fx & portfolio adj.), the increase was 2.7 percent. EBITDA before special items increased by 18.2 percent to EUR 10,266 million (2014: EUR 8,685 million). The good business development was accompanied by higher R&D expenses (a year-on-year increase of around EUR 740 million).
“Strategically we have taken all the necessary steps to make Bayer a pure Life Science company,“ said Marijn Dekkers. The Bayer CEO explained that the company had floated the former Material Science subgroup on the stock market under the name Covestro and implemented a reorganization to set the course for Bayer’s successful further development. Dekkers forecasted further growth in sales and earnings in 2016.
Substantial sales and earnings growth at Health Care
Sales of the Bayer Health Care subgroup rose by 19.9 percent (Fx & portfolio adj. 8.1 percent) to EUR 22,874 million (2014: EUR 19,075 million). “This encouraging growth was driven by the recently launched pharmaceutical products,“ explained Dekkers. “Business also expanded in all divisions of the Consumer Health segment.“ The considerable reported sales growth was chiefly attributable to the products acquired from Merck & Co. and to currency effects.
Sales of the Pharmaceuticals segment climbed by a substantial 9.9 percent (Fx & portfolio adj.) to EUR 13,745 million. The recently launched products - the anticoagulant Xarelto, the eye medicine Eylea, the cancer drugs Stivarga and Xofigo, and Adempas to treat pulmonary hypertension - posted combined sales of EUR 4,231 million (2014: EUR 2,908 million).
Sales of the Consumer Health segment advanced by 5.1 percent (Fx and portfolio adj.) to EUR 9,129 million. Consumer Care achieved sales of EUR 1,770 million with the products acquired from Merck & Co. EBITDA before special items of Health Care rose by a substantial 19.8 percent to EUR 6,419 million (2014: EUR 5,357 million).
Crop Science: good business development despite a weaker market environment
Sales of the agriculture business (CropScience) increased in 2015 by 9.2 percent (Fx & portfolio adj. 1.7 percent) to EUR 10,367 million (2014: EUR 9,494 million). “Despite a weaker market environment, sales at Crop Science increased further,“ stressed Dekkers. “We thus grew faster on average than our most important competitors.“
Crop Protection posted gratifying sales gains at Fungicides (Fx & portfolio adj. plus 9.5 percent) and Herbicides (Fx & portfolio adj. plus 5.4 percent) but a substantial decline at Insecticides (Fx & portfolio adj. minus 14.0 percent) that was mainly attributable to lower pest pressure in Brazil. EBITDA before special items of CropScience improved by 2.4 percent to EUR 2,416 million (2014: EUR 2,360 million).
Covestro posts strong earnings improvement
Sales of the high-tech polymer materials business (Covestro, formerly MaterialScience) moved forward by 2.8 percent to EUR 11,982 million (2014: EUR 11,651 million). Adjusted for currency and portfolio effects, sales declined by 5.1 percent as a result of lower selling prices in all business units. On the other hand, Covestro expanded volumes in all business units. EBITDA before special items improved by a marked 39.8 percent to EUR 1,659 million (2014: EUR 1,187 million). .Bayer currently still holds a 69 percent interest in Covestro. As a fully consolidated subsidiary, Covestro continues to be included in the Bayer Group consolidated financial statements.
Bayer targeting further growth in 2016
Dekkers expressed his confidence for fiscal 2016: “We are targeting further growth in both sales and earnings, building on a record year,“ said the Management Board Chairman. In 2016, the Bayer Group including Covestro is planning sales of more than EUR 47 billion. This corresponds to a low-single-digit percentage increase on a currency- and portfolio-adjusted basis. Bayer plans to increase EBITDA before special items by a mid-single-digit percentage.
Sales of approximately EUR 35 billion are planned for the Life Science activities, i.e. the Bayer Group excluding Covestro (2015 pro forma: EUR 34,342 million). Despite declining price developments in some areas, Bayer expects sales of approximately EUR 16 billion (2015 pro forma: EUR 15,308 million) in the Pharmaceuticals Division including the Radiology business. In the Consumer Health Division, Bayer expects sales to come in at more than EUR 6 billion and plans to grow sales by a mid-single-digit percentage on a currency- and portfolio-adjusted basis (2015 pro forma: EUR 6,076 million). At Crop Science, Bayer expects sales to be at the prior-year level (2015: EUR 10,367 million). For 2016, Covestro is budgeting sales at the prior-year level and a decline in EBITDA after adjustment for special items.