"From an operational standpoint, 2008 was the most successful year in Bayer's long history," said Management Board Chairman Werner Wenning on Tuesday at the Spring Financial News Conference in Leverkusen. He explained that Bayer is benefiting from its alignment toward the life-science businesses HealthCare and CropScience, which are less dependent on global economic development. "Our corporate strategy is proving effective even in a difficult environment," Wenning pointed out. However, he said the effects of the unexpectedly severe financial and economic crisis left a considerable mark on the MaterialScience business, especially in the fourth quarter. He expressed confidence for 2009 despite
substantial risks for the future development of the world economy: "We expect further growth in earnings at HealthCare and CropScience, along with a substantial reduction in net debt." By contrast, a substantial drop in earnings is anticipated at MaterialScience.
Group sales rose by 1.6 percent in 2008, to EUR 32,918 million (2007: EUR 32,385 million). Adjusted for currency and portfolio effects, the increase came to 4.4 percent. While HealthCare and CropScience contributed to this performance with strong growth of 6.9 and 13.9 percent, respectively, sales at MaterialScience fell by 4.6 percent. Group earnings before interest, taxes, depreciation and amortization (EBITDA) - before special items - improved by 2.3 percent to EUR 6,931 million (2007: EUR 6,777 million). Here, too, HealthCare and CropScience registered strong gains, while
MaterialScience saw underlying EBITDA fall sharply. The underlying EBITDA margin for the Bayer Group came in at 21.1 percent (2007: 20.9 percent). The operating result (EBIT) before special items advanced by 1.3 percent to
EUR 4,342 million (2007: EUR 4,287 million).
Bayer HealthCare: above-market growth in all divisions"2008 was a strong year for Bayer HealthCare," said Wenning. Sales of this subgroup climbed by 4.1 percent to EUR 15,407 million (2007: EUR 14,807 million). Adjusted for currency and portfolio effects, business expanded by 6.9 percent. Contributing to this increase was the positive business performance of both the Pharmaceuticals and Consumer Health segments. "We are particularly pleased that all divisions posted dynamic growth in sales, outperforming their respective markets," Wenning commented. Sales of the Pharmaceuticals segment expanded by 4.3 percent (currency- and portfolio-adjusted: 7.1 percent) to EUR 10,704 million. Particularly notable was the performance of the YAZ® family of oral contraceptives, sales of which rose by 22.2 percent on a currency-adjusted basis. The highest growth rates were registered by the cancer drug Nexavar® with 75.7 percent (Fx adj.) and the intra-uterine system Mirena® with 35.5 percent (Fx adj.). The multiple sclerosis treatment Betaferon®/Betaseron® gained 15.0 percent (Fx adj.), while business with the hemophilia medicine Kogenate® expanded by 7.3 percent. "Among the highlights of 2008 were the first marketing authorizations for our innovative anticoagulant Xarelto®," said Wenning. The drug can now be administered in tablet form for prophylaxis of venous thromboembolism following elective hip or knee-joint replacement surgery in adult patients. Xarelto® is already in the final phase of clinical development for the remaining indications - including the important long-term indications. "We believe this innovative drug has the potential to achieve peak annual sales of more than EUR 2 billion," said the Bayer Chairman. The Consumer Health segment increased sales by 3.6 percent to EUR 4,703 million. On a currency- and portfolio-adjusted basis, sales were up by 6.3 percent, with all divisions contributing similarly to growth. In the non-prescription medicines business (Consumer Care), the Bepanthen®/Bepanthol® product line posted the strongest growth, with a 20.7 percent increase. The antifungal Canesten® also performed very well, with sales up 16.1 percent. In the Diabetes Care Division, the Contour® blood glucose monitoring devices were once again the fastest-growing product line, with a gain of 18.4 percent. The top-selling products of the Animal Health Division - the flea and tick control products of the Advantage® line - recorded 11.1 percent higher sales. EBITDA before special items of Bayer HealthCare improved by 9.6 percent to EUR 4,157 million (2007: EUR 3,792 million). This earnings growth was mainly attributable to the successful development of the business and the synergies realized from the Schering integration. Earnings were diminished by negative currency effects and considerably higher marketing costs for the expansion of activities in emerging markets and the introduction of new products. The subgroup met its target with an underlying EBITDA margin of 27.0 percent. For further information and the complete Annual Report 2008, please visit:
www.investor.bayer.com