Special items totaled minus EUR 144 million (Q2 2010: minus EUR 255 million). Restructuring, particularly at CropScience and HealthCare, accounted for EUR 179 million of this figure. By contrast, valuation adjustments for our pension provisions in the United Kingdom resulted in income of EUR 35 million.
EBIT before special items increased by 11.9 percent to EUR 1,417 million (Q2 2010: EUR 1,266 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) - before special items - improved by 5.8 percent to EUR 2,035 million (Q2 2010: EUR 1,923 million). Bayer grew net income by a very substantial 40.9 percent, to EUR 747 million (Q2 2010: EUR 530 million). Core earnings per share rose by 11.2 percent to EUR 1.29 (Q2 2010: EUR 1.16).
Gross cash flow moved forward by 18.6 percent to EUR 1,532 million (Q2 2010: EUR 1,292 million), while net cash flow remained level year on year at EUR 1,530 million (Q2 2010: EUR 1,545 million). Net financial debt climbed only slightly despite the high outflows for the dividend, variable compensation and interest payments that are typical for the second quarter, increasing from EUR 7.1 billion on March 31, 2011 to EUR 7.4 billion on June 30, 2011.
The Bayer Group continued its successful performance in the second quarter of 2011. "We are pleased with the way our business performed," said Bayer CEO Dr. Marijn Dekkers when he presented the company's interim report on Thursday. "We have also achieved significant progress with products from our research and development pipeline." Furthermore, the efficiency-enhancing measures announced in November 2010 are being implemented as planned. Bayer's CEO is optimistic for the current fiscal year and confirmed the sales and earnings forecast for 2011 that was raised in April.
HealthCare successful in emerging markets
Sales of the HealthCare subgroup declined by 2.3 percent in the second quarter to EUR 4,208 million (Q2 2010: EUR 4,305 million). This corresponds to a currency- and portfolio-adjusted gain of 1.8 percent. "HealthCare posted gratifying growth in the Asia/Pacific and Latin America/Africa/Middle East regions, while sales in North America and Europe fell back slightly," said Dekkers.
Sales in the Pharmaceuticals segment came to EUR 2,666 million, an increase of 0.5 percent (Fx & portfolio adj.). Growth in sales in the emerging markets, especially China, offset the weak performance in North America and Western Europe. In the United States, sales of the YAZ™ line of oral contraceptives were down again because of generic competition. Sales worldwide decreased by 7.0 percent on a currency-adjusted (Fx adj.) basis. The Pharmaceuticals business was additionally impacted by health reforms in various countries. By contrast, sales of our anti-coagulant Kogenate™ and the hormone-releasing intrauterine device Mirena™ grew by a gratifying 15.4 percent and 26.2 percent (Fx adj.), respectively. Sales of Aspirin™ Cardio increased by 10.0 percent (Fx adj.). Marketing activities for this product in China were expanded. By contrast, sales of our erectile dysfunction treatment Levitra™ and our antibiotic Avalox™/Avelox™ were down by 10.6 percent and 6.8 percent (Fx adj.), respectively, because of a partial reorganization of distribution activities in the United States. Sales of our multiple sclerosis drug Betaferon™/Betaseron™ declined by 4.7 percent (Fx adj.). Here, increased competition and price reductions in connection with health system reforms in Europe had a negative effect.
Sales in the Consumer Health segment climbed by 4.1 percent (Fx & portfolio adj.) to EUR 1,542 million, with all regions contributing to this success. In the non-prescription medicines business (Consumer Care), the analgesics Aleve™/naproxen and Aspirin™ posted gratifying currency-adjusted gains of 11.6 percent and 7.4 percent (Fx adj.), respectively. Sales of the Bepanthen™/Bepanthol™ line of skincare products rose by 7.1 percent (Fx adj.). Sales of the Medical Care Division came in at the prior-year level, despite the decline in our Diabetes Care business in the United States. By contrast, business in our Animal Health Division expanded, driven mainly by 9.8 percent (Fx adj.) growth of our Advantage™ line of flea, tick and worm control products.
Second-quarter EBITDA before special items of Bayer HealthCare climbed by 3.0 percent to EUR 1,156 million (Q2 2010: EUR 1,122 million). This improvement was due especially to lower costs at Pharmaceuticals.
About Bayer HealthCare
The Bayer Group is a global enterprise with core competencies in the fields of health care, nutrition and high-tech materials. Bayer HealthCare, a subgroup of Bayer AG with annual sales of EUR 16.913 billion (2010), is one of the world’s leading, innovative companies in the healthcare and medical products industry and is based in Leverkusen, Germany. The company combines the global activities of the Animal Health, Consumer Care, Medical Care and Pharmaceuticals divisions. Bayer HealthCare's aim is to discover and manufacture products that will improve human and animal health worldwide. Bayer HealthCare has a global workforce of 55,700 employees (Dec 31, 2010) and is represented in more than 100 countries.