Management Report
Management Report

5. Business Development by Subgroup, Segment and Region

5.1 HealthCare

Key Data – HealthCare[Table 2]
 3rd
Quarter
2011
3rd
Quarter
2012
ChangeFirst
Nine
Months
2011
First
Nine
Months
2012
Change
 
€ million

€ million

%
Fx
(& p)
adj. %

€ million

€ million

%
Fx
(& p)
adj. %
Sales4,2004,719+12.4+5.512,57413,689+8.9+3.9
Change in sales        
Volume+1.0%+4.0%  +2.5%+3.2%  
Price+0.6%+1.5%  -0.1%+0.7%  
Currency-3.5%+7.1%  -1.7%+5.2%  
Portfolio+0.2%-0.2%  +0.3%-0.2%  
Sales by segment        
Pharmaceuticals2,4202,734+13.0+6.17,2697,936+9.2+4.0
Consumer Health1,7801,985+11.5+4.75,3055,753+8.4+3.8
Sales by region        
Europe1,5371,573+2.3+1.24,7254,752+0.6-0.1
North America1,0611,298+22.3+8.93,1993,680+15.0+5.3
Asia/Pacific9241,108+19.9+7.52,6523,098+16.8+5.8
Latin America/Africa/Middle East678740+9.1+5.71,9982,159+8.1+7.0
EBIT866638-26.3 2,4211,613-33.4 
Special items(43)(334)  (131)(1,122)  
EBIT before special items*909972+6.9 2,5522,735+7.2 
EBITDA*1,1841,047-11.6 3,3922,937-13.4 
Special items(42)(250)  (130)(789)  
EBITDA before special items*1,2261,297+5.8 3,5223,726+5.8 
EBITDA margin before special items*29.2%27.5%  28.0%27.2%  
Gross cash flow**800668-16.5 2,3282,030-12.8 
Net cash flow**8141,116+37.1 2,2312,482+11.3 

2011 figures restated

Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales and Sales by segment; Fx adj.: Sales by region)

* For definition see Chapter 6 “Calculation of EBIT(DA) Before Special Items.”

** For definition see Chapter 8 “Financial Position of the Bayer Group.”

Sales of the HealthCare subgroup increased by 5.5% (Fx & portfolio adj.) in the third quarter of 2012, to €4,719 million (reported: +12.4%). The Pharmaceuticals and Consumer Health segments both contributed to this positive performance. Business developed particularly well in North America and the emerging markets. HealthCare maintained its growth momentum, especially in China.
HealthCare Quarterly Sales
EBIT of HealthCare declined by 26.3% in the third quarter of 2012 to €638 million, after special items of minus €334 million (Q3 2011: minus €43 million). EBIT before special items, however, rose by 6.9% to €972 million. EBITDA before special items increased by 5.8% to €1,297 million. The underlying earnings improvement was largely attributable to good business development in the Pharmaceuticals segment and positive currency effects.
HealthCare Quarterly EBIT / HealthCare Quarterly EBITDA Before Special Items

Pharmaceuticals

Key Data – Pharmaceuticals[Table 3]
 3rd
Quarter
2011
3rd
Quarter
2012
ChangeFirst
Nine
Months
2011
First
Nine
Months
2012
Change
 
€ million

€ million

%
Fx
(& p)
adj. %

€ million

€ million

%
Fx
(& p)
adj. %
Sales2,4202,734+13.0+6.17,2697,936+9.2+4.0
General Medicine1,6611,913+15.2+8.44,9915,485+9.9+4.8
Specialty Medicine759821+8.2+0.92,2782,451+7.6+2.2
Sales by region        
Europe877888+1.3+0.52,7122,689-0.8-1.4
North America498619+24.3+11.01,5161,769+16.7+7.3
Asia/Pacific628781+24.4+11.31,8222,168+19.0+7.5
Latin America/Africa/Middle East417446+7.0+4.11,2191,310+7.5+6.4
EBIT515366-28.9 1,426918-35.6 
Special items(34)(247)  (118)(786)  
EBIT before special items*549613+11.7 1,5441,704+10.4 
EBITDA*735591-19.6 2,0971,609-23.3 
Special items(33)(236)  (117)(767)  
EBITDA before special items*768827+7.7 2,2142,376+7.3 
EBITDA margin before special items*31.7%30.2%  30.5%29.9%  
Gross cash flow**489364-25.6 1,4121,070-24.2 
Net cash flow**517795+53.8 1,3761,717+24.8 

2011 figures restated

Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales; Fx adj.: Sales by region)

* For definition see Chapter 6 “Calculation of EBIT(DA) Before Special Items.”

** For definition see Chapter 8 “Financial Position of the Bayer Group.”

Sales of our Pharmaceuticals segment in the third quarter of 2012 rose by 6.1% (Fx & portfolio adj.) to €2,734 million. Growth was achieved mainly in North America and in the emerging markets, especially China.
Best-Selling Pharmaceuticals Products[Table 4]
 3rd
Quarter
2011
3rd
Quarter
2012
ChangeFirst
Nine
Months
2011
First
Nine
Months
2012
Change
 
€ million

€ million

%
Fx
adj. %

€ million

€ million

%
Fx
adj. %
Betaferon™/Betaseron™ (Specialty Medicine)289292+1.0-6.1836887+6.1+0.7
Kogenate™ (Specialty Medicine)257300+16.7+8.9802884+10.2+4.8
YAZ™/Yasmin™/Yasminelle™ (General Medicine)275277+0.7-4.0780775-0.6-3.7
Nexavar™ (Specialty Medicine)177199+12.4+4.2520580+11.5+5.4
Mirena™ (General Medicine)137183+33.6+22.5424542+27.8+19.2
Adalat™ (General Medicine)156171+9.6-0.3469501+6.8-1.5
Avalox™/Avelox™ (General Medicine)103119+15.5+6.8355363+2.3-3.4
Aspirin™ Cardio (General Medicine)102124+21.6+13.0291347+19.2+12.2
Glucobay™ (General Medicine)88122+38.6+23.5266309+16.2+5.4
Levitra™ (General Medicine)75750.0-1.9239220-7.9-9.6
Xarelto™ (General Medicine)2081+305.0+294.055191+247.3+238.0
Cipro™/Ciprobay™ (General Medicine)5365+22.6+17.3170173+1.8-2.4
Zetia™ (General Medicine)4555+22.2+8.1124150+21.0+8.5
Diane™ (General Medicine)4752+10.6+9.9133145+9.0+7.4
Fosrenol™ (General Medicine)3147+51.6+36.5104137+31.7+18.6
Total1,8552,162+16.5+8.65,5686,204+11.4+5.4
Proportion of Pharmaceuticals sales77%79%  77%78%  

2011 figures restated

Fx adj. = currency-adjusted

Sales of the General Medicine business unit advanced by 8.4% (Fx & portfolio adj.) to €1,913 million. We achieved sales of €81 million with our anticoagulant Xarelto™, which we continue to launch in further countries and indications. Sales of this product showed the strongest growth in Germany and the United States. The significant increase in revenues from our hormone-releasing intrauterine device Mirena™ was based mainly on higher volumes in the United States. In China, we again raised sales of our products by steadily expanding our marketing activities, particularly for our oral antidiabetic Glucobay™, Aspirin™ Cardio for the prevention of myocardial infarction, and the antibiotic Avalox™/ Avelox™. Sales of our antibiotic Cipro™/ Ciprobay™ benefited from a government contract in the United Kingdom.
Business with our YAZ™/ Yasmin™/ Yasminelle™ line of oral contraceptives was hampered by generic competition, especially in Western Europe. Sales gains in the Asia/Pacific and Latin America regions only partly compensated for this effect.
Sales in the Specialty Medicine business unit came in at €821 million, up 0.9% on a currency- and portfolio-adjusted basis. Business with our blood-clotting product Kogenate™ developed positively, with growth driven by increased shipments to our distribution partner during this quarter and by higher volumes resulting from tender business in Australia. The gains in sales of our cancer drug Nexavar™ occurred mainly in China and in the United States. Business with our multiple sclerosis treatment Betaferon™/ Betaseron™ receded by 6.1% (Fx adj.) worldwide, mainly due to a decline in Europe.
EBIT of the Pharmaceuticals segment fell by 28.9% in the third quarter of 2012 to €366 million. The decrease was attributable to special items of minus €247 million (Q3 2011: minus €34 million), chiefly comprising €205 million in further accounting measures taken in connection with claims asserted concerning Yasmin™/ YAZ™. EBIT before special items rose by 11.7% to €613 million. EBITDA before special items moved ahead by 7.7% to €827 million. Earnings growth was due mainly to sales gains resulting from higher volumes as well as to positive currency effects. This development was partially offset by increased expenses for the marketing of new products and the steady expansion of our distribution activities in the emerging markets.
Sales of our Pharmaceuticals segment improved by 4.0% (Fx & portfolio adj.) in the first nine months of 2012 to €7,936 million. Business developed particularly well in the emerging markets and in North America. In Europe, however, there was a slight drop in sales, largely as a result of health system reforms and generic competition in Western Europe.
EBIT fell by 35.6% in the first nine months of 2012 to €918 million. The special charges of €786 million resulted mainly from accounting measures taken in connection with claims asserted concerning Yasmin™/ YAZ™. EBIT before special items advanced by 10.4% to €1,704 million. EBITDA before special items rose by 7.3% to €2,376 million.

Consumer Health

Key Data – Consumer Health[Table 5]
 3rd
Quarter
2011
3rd
Quarter
2012
ChangeFirst
Nine
Months
2011
First
Nine
Months
2012
Change
 
€ million

€ million

%
Fx
(& p)
adj. %

€ million

€ million

%
Fx
(& p)
adj. %
Sales1,7801,985+11.5+4.75,3055,753+8.4+3.8
Consumer Care885984+11.2+5.12,5882,797+8.1+4.2
Medical Care613661+7.8+1.01,8131,937+6.8+1.9
Animal Health282340+20.6+11.39041,019+12.7+6.3
Sales by region        
Europe660685+3.8+2.12,0132,063+2.5+1.6
North America563679+20.6+6.91,6831,911+13.5+3.5
Asia/Pacific296327+10.5-0.7830930+12.0+2.1
Latin America/Africa/Middle East261294+12.6+8.4779849+9.0+7.8
EBIT351272-22.5 995695-30.2 
Special items(9)(87)  (13)(336)  
EBIT before special items*360359-0.3 1,0081,031+2.3 
EBITDA*449456+1.6 1,2951,328+2.5 
Special items(9)(14)  (13)(22)  
EBITDA before special items*458470+2.6 1,3081,350+3.2 
EBITDA margin before special items*25.7%23.7%  24.7%23.5%  
Gross cash flow**311304-2.3 916960+4.8 
Net cash flow**297321+8.1 855765-10.5 

2011 figures restated

Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales; Fx adj.: Sales by region)

* For definition see Chapter 6 “Calculation of EBIT(DA) Before Special Items.”

** For definition see Chapter 8 “Financial Position of the Bayer Group.”

Sales in the Consumer Health segment rose by 4.7% (Fx & portfolio adj.) in the third quarter of 2012 to €1,985 million. This positive development was attributable mainly to sales growth in the Consumer Care and Animal Health divisions. Business developed especially well in the emerging markets and in North America.
Best-Selling Consumer Health Products[Table 6]
 3rd
Quarter
2011
3rd
Quarter
2012
ChangeFirst
Nine
Months
2011
First
Nine
Months
2012
Change
 
€ million

€ million

%
Fx
adj. %

€ million

€ million

%
Fx
adj. %
Contour™ (Medical Care)159189+18.9+11.7470529+12.6+7.8
Advantage™ product line (Animal Health)91125+37.4+25.1336403+19.9+11.9
Aspirin™* (Consumer Care)108116+7.4+0.7324331+2.2-2.1
Ultravist™ (Medical Care)7677+1.3-3.2233240+3.0-1.2
Aleve™/naproxen (Consumer Care)7484+13.5+0.1209236+12.9+3.5
Bepanthen™/Bepanthol™ (Consumer Care)5365+22.6+19.5175202+15.4+14.8
Canesten™ (Consumer Care)5568+23.6+18.4168185+10.1+6.4
Gadovist™ (Medical Care)4051+27.5+20.5116149+28.4+25.0
One A Day™ (Consumer Care)4250+19.0+5.4127143+12.6+2.8
Iopamiron (Medical Care)4744-6.4-17.2133128-3.8-14.0
Total745869+16.6+8.42,2912,546+11.1+5.4
Proportion of Consumer Health sales42%44%  43%44%  

2011 figures restated

Fx adj.= currency-adjusted

* Sales of Aspirin™ – including Aspirin™ Cardio, which is reflected in the sales of the Pharmaceuticals segment – increased by 14.3% (Fx adj. +6.7%) in the third quarter of 2012 to €240 million (Q3 2011: €210 million). In the first nine months of 2012, they increased by 10.2% (Fx adj. +4.7%) to €678 million (9M 2011: €615 million).

Our Consumer Care Division grew sales by 5.1% (Fx & portfolio adj.) to €984 million. Business with our skincare product Bepanthen™/ Bepanthol™ and the antifungal Canesten™ benefited from increased marketing activities, especially in Europe.
Sales of the Medical Care Division were roughly level with the prior-year period at €661 million (Fx & portfolio adj. +1.0%). While the Diabetes Care business expanded, driven by higher sales of our Contour™ line of blood glucose meters in the United States, we recorded slightly lower sales of contrast agents and medical equipment.
Sales of the Animal Health Division came in at €340 million (Fx & portfolio adj. +11.3%). Business with our Advantage™ line of flea, tick and worm control products increased against a weak prior-year quarter, mainly due to sales gains in North America and successful marketing.
EBIT of the Consumer Health segment fell by 22.5% in the third quarter of 2012 to €272 million after special items of minus €87 million (Q3 2011: minus €9 million), consisting mainly of impairment losses recognized on intangible assets. EBIT before special items was flat with the prior-year quarter at €359 million (-0.3%). EBITDA before special items increased by 2.6% to €470 million, primarily as a result of the higher sales and positive currency effects. However, earnings were negatively impacted by higher marketing expenses.
Sales of our Consumer Health segment in the first nine months of 2012 improved by 3.8% (Fx & portfolio adj.) to €5,753 million, with all divisions contributing to growth.
EBIT declined by 30.2% in the first nine months of 2012 to €695 million. Special items totaled
minus €336 million and mainly comprised impairment losses on intangible assets. EBIT before special items rose by 2.3% to €1,031 million. EBITDA before special items increased by 3.2% to €1,350 million.
Last updated: October 30, 2012

http://www.stockholders-newsletter-q3-2012.bayer.com/en/bayer-healthcare.aspx

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