Bayer Group releases Second Quarter 2012 performance information

The Bayer Group saw continued growth momentum in the second quarter of 2012, registering gains in both sales and underlying earnings. “In view of the strong business performance, we are raising our guidance for the full year 2012,” said Management Board Chairman Dr. Marijn Dekkers on Tuesday at the presentation of the interim report. He reported that Bayer had achieved sales of approximately EUR 10.2 billion – a new record – thanks in part to positive currency effects. “All the subgroups contributed to the increase, especially CropScience which continued to grow strongly,” said Dekkers. In operational terms, this subgroup posted new records for second-quarter sales and EBITDA before special items.

HealthCare even had its best quarter of all time for these same indicators. MaterialScience generated the highest quarterly sales in its history, as well as its best underlying EBITDA in a second quarter since 2007. Net income for the Bayer Group in the second quarter of 2012 was impacted by special items of EUR 0.8 billion. This sum included risk provisions of EUR 0.5 billion for litigations. Overall, net income declined to EUR 0.5 billion.

Confident for the second half of the year

“Following the good business performance in the first half of 2012, especially at CropScience and HealthCare, we are also confident for the second half of the year,” said Dekkers. In addition, Bayer is benefiting from a very favorable currency environment. Against this background, the company is raising its sales and earnings forecast for the full year. These predictions are based on the exchange rates on June 30, 2012. For the full year 2012, Bayer is now anticipating a currency- and portfolio adjusted sales increase of between 4 and 5 percent (previously: 3 percent). This would result in Group sales of between approximately EUR 39 billion and EUR 40 billion (previously: EUR 37 billion). Bayer now plans to increase EBITDA before special items by a high-single-digit percentage (previously: slight improvement). The company expects to raise core earnings per share by about 10 percent (previously: slight improvement). In addition to the special charges already recognized, Bayer anticipates further expenses of between EUR 0.1 billion and EUR 0.2 billion for ongoing restructuring programs in the second half of 2012.

HealthCare’s top priority for 2012 is to successfully commercialize the new pharmaceutical products. The subgroup expects sales to increase by between 3 and 4 percent (previously: by a low- to mid-single-digit percentage) after adjusting for currency and portfolio effects. HealthCare now plans to improve EBITDA before special items by a mid- to high-single-digit percentage (previously: slightly improve) to which high positive currency effects will contribute. Sales of the Pharmaceuticals segment are now forecast to move slightly higher (previously: remain stable or move slightly higher) on a currency- and portfolio-adjusted basis, and EBITDA before special items to rise by a mid-single-digit percentage (previously: approximately match the prior-year level). In the Consumer Health segment, the subgroup anticipates that currency- and portfolio-adjusted sales will grow by a mid-single-digit percentage and EBITDA before special items by a high-single-digit percentage (previously: mid-single-digit growth).

Following the good business development in the first half of the year, Bayer is also raising its outlook for CropScience. The subgroup now anticipates that sales will advance by approximately 10 percent on a currency- and portfolio-adjusted basis and that EBITDA before special items will improve by approximately 20 percent (previously: sales and EBITDA before special items to advance by mid-single-digit percentages). CropScience continues to predict above-market growth.