Despite negative currency effects of about EUR 70 million or approximately 6 percent, EBITDA before special items advanced by 1.6 percent to EUR 1,098 million (Q1 2013: EUR 1,081 million). This earnings growth was mainly attributable to significantly increased volumes and higher selling prices. However, earnings were hampered by increases in both selling expenses and research and development expenses.
Earnings at Material Science substantially improved
Sales of the high-tech polymer materials business ( Material Science) increased in the first quarter by 1.0 percent (Fx & portfolio adj. 4.8 percent) to EUR 2,803 million (Q1 2013: EUR 2,775 million). "This growth was the result of significantly higher volumes in all business units and regions except Latin America/Africa/Middle East," Dekkers explained. Selling prices were below the level of the prior-year period.
Sales of foam raw materials (Polyurethanes) improved by 6.5 percent (Fx & portfolio adj.). Higher volumes in nearly all regions, especially North America and Asia/Pacific, contributed to this increase. Sales of high-tech plastics (Polycarbonates) rose by 2.3 percent (Fx & portfolio adj.) as a result of higher volumes in nearly all regions. Business with the raw materials marketed by the Coatings, Adhesives, Specialties business unit expanded by 6.6 percent (Fx & portfolio adj.) due to higher volumes in all regions.
EBITDA before special items of Material Science improved by a substantial 79.4 percent against a weak prior-year quarter, to EUR 366 million (Q1 2013: EUR 204 million). This increase was largely due to lower raw material prices. Earnings were also boosted by higher volumes and efficiency improvement measures. Lower selling prices, however, had a negative effect.
Adjusted sales growth of about 5 percent planned for 2014
After the very encouraging first quarter, Bayer confirms the 2014 guidance it issued at the end of February based on average exchange rates for the fourth quarter of 2013. The company experienced negative currency effects in the first quarter of 2014 compared to these assumptions, but so far these have been more than offset by the improvement in its operational performance and by seasonal effects. Bayer plans to grow sales for the full year by about 5 percent on a currency- and portfolio-adjusted basis.
Allowing for expected negative currency effects of about 2 percent compared to the previous year, Group sales would be approximately EUR 41 billion to EUR 42 billion. It is planned to raise EBITDA before special items by a low- to mid-single-digit percentage, allowing for expected negative currency effects of about EUR 450 million or roughly 5 percent. Bayer aims to increase core earnings per share by a mid-single-digit percentage, allowing for expected negative currency effects of around 6 percent. Bayer expects net financial debt at year end to be less than EUR 9.0 billion.
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