Bayer Continues Successful Course in Anniversary Year

The Bayer Group continued its successful course in 2013.

“We met important business objectives in our anniversary year,” said Management Board chairman Dr. Marijn Dekkers. There was continuing momentum in the Life Science businesses: HealthCare achieved gains with its recently launched pharmaceutical products, while CropScience was very successful in a positive market environment. Overall, Bayer achieved its operational targets in the Life Science businesses despite substantial negative currency effects.

The business of MaterialScience continued to be affected by a difficult market situation. “We are optimistic for 2014 and plan further growth in sales and earnings,” Dekkers said.

Sales of the Bayer Group climbed by 1.0% in 2013 to €40,157 million (2012: €39,741 million). “This is a new record in our company’s 150-year history,” said Dekkers Adjusted for currency and portfolio effects, sales grew by 5.1%. EBIT rose by 25.6% to €4,934 million (2012: €3,928 million). Earnings were diminished by net special charges of €839 million (2012: €1,711 million). The special charges mainly included €358 million in restructuring expenses and €276 million in additional charges related to legal claims. EBIT before special items advanced by 2.4% to €5,773 million (2012: €5,639 million), while EBITDA before special items rose by 1.5% to €8,401 million (2012: €8,280 million). Negative currency effects diminished Group earnings by about €260 million overall. In addition, expenses for long-term stock-based compensation increased by €70 million in light of the pleasing market performance of Bayer stock. Net income grew by 32.7% to €3,189 million (2012: €2,403 million), and core earnings per share advanced by 5.8% to €5.61 (2012: €5.30).

Gross cash flow climbed by 28.0% to €5,832 million (2012: €4,556 million), mainly because of the improvement in EBIT. Net cash flow moved ahead by 14.2% to €5,171 million (2012: €4,530 million), while net financial debt fell by €0.3 billion against Dec. 31, 2012, to €6.7 billion. “Due to the strong cash flow, we were able to slightly reduce debt despite high capital expenditures and the acquisitions of Conceptus and Steigerwald,” said CFO Werner Baumann.

“We are also optimistic about 2014,” added Dekkers. “We aim to maintain the growth of our recently launched products in the Life Science businesses and improve profitability at MaterialScience.” The forecast for fiscal 2014 is based on average exchange rates for the fourth quarter of 2013, including a rate of US$1.36 to the euro. In 2014 Bayer plans to grow sales by about 5% on a currency- and portfolio-adjusted basis. Allowing for expected negative currency effects of around 2% compared to the prior year, sales would be between approximately €41 billion and €42 billion. Bayer plans to raise EBITDA before special items by a low- to mid-single-digit percentage, allowing for expected negative currency effects of about €450 million or around 5%. The Bayer Group aims to increase core earnings per share by a mid-single-digit percentage, allowing for expected negative currency effects of around 6%.