Emerging markets boost Bayer sales in Q2
Ups and downs in the pharmaceuticals segment
Bayer Group, the German chemicals and pharmaceuticals company, reported sales of €9.3bn, up 0.8% (Q2 2010: €9.2bn), in the second quarter of 2011, boosted by an above-average contribution from emerging markets, particularly Eastern Europe and Asia.
EBITDA before special items improved by 5.8% to €2.0bn. Net income rose by 40.9% to €747m.
Sales of the HealthCare division declined by 2.3% in Q2 to €4.2bn. The company saw growth in the Asia/Pacific and Latin America/Africa/Middle East regions, while sales in North America and Europe fell back slightly.
Sales in the Pharmaceuticals segment were €2.7bn, up 0.5%. Growth in emerging markets, particularly China, offset the weak performance in North America and Western Europe.
In the US, sales of the YAZ line of oral contraceptives were down again because of generic competition. Sales worldwide decreased by 7.0% on a currency-adjusted basis. Health reforms in various countries also had an impact on sales.
By contrast, sales of the anti-coagulant Kogenate and the hormone-releasing intrauterine device Mirena grew by 15.4% and 26.2% (currency adjusted), respectively. Sales of Aspirin Cardio increased by 10% and marketing activities for this product were expanded in China.
Bayer also saw a dip in sales of erectile dysfunction treatment Levitra and the antibiotic Avalox/Avelox, owing to a partial reorganisation of distribution activities in the US. Sales of multiple sclerosis drug Betaferon/Betaseron fell by 4.7% owing to increased competition and price reductions in connection with health system reforms in Europe.
Sales in the Consumer Health segment rose by 4.1% to €1.5bn. In the non-prescription medicines business (Consumer Care), the analgesics Aleve/naproxen and Aspirin posted currency-adjusted gains of 11.6% and 7.4 %, respectively. Sales of the Bepanthen/Bepanthol line of skincare products rose by 7.1%.
Medical Care Division sales were at the prior-year level, in spite of a decline in Bayer’s Diabetes Care business in the US.
‘We are pleased with the way our business performed,’ said Bayer ceo Marijn Dekkers. ‘We have also achieved significant progress with products from our research and development pipeline.’
Bayer also significantly improved sales and earnings in the first half of 2011, with all three subgroups contributing.
In the first six months, sales rose by 6.7% to €18.7bn (H1 2010: €17.5bn). EBITDA before special items advanced by 13.8% to €4.3bn (H1 2010: €3.7bn), while net income improved by 23.3% to €1.4bn (H1 2010: €1.2bn).
Innovation and the development of new markets are also driving growth. Successful new products include the anticoagulant Xarelto, VEGF Trap-Eye for the treatment of wet age-related macular degeneration and the cancer drug Alpharadin.
‘We plan to invest a total of €15bn in our company’s future through 2013, with research and development accounting for around two-thirds of this amount,’ said Dekkers.
Bayer spent a total of €1.5bn on r&d in the first six months of 2011.
Dekkers said Bayer is making good progress with its efforts to refocus resources on growth and innovation. In November 2010, the company announced an initiative aimed at achieving annual savings of b800m worldwide starting in 2013. About half of this amount is to be reinvested in r&d, in marketing new products and in expanding business activities in the emerging markets.
‘We confirm the full-year sales and earnings forecast that we raised in April,’ he said.
Bayer is targeting a currency- and portfolio-adjusted sales increase of between 5–7%, or €36–€37bn. EBITDA before special items is expected to reach more than €7.5bn.