Management Report

5. Business Development by Subgroup, Segment and Region

5.1 HealthCare

Key Data – HealthCare       [Table 4]
  2nd
Quarter
2014
2nd
Quarter
2015


Change
1st
Half
2014
1st
Half
2015


Change
  € million € million % Fx & p
adj. %
€ million € million % Fx & p
adj. %
Sales 4,615 5,908 +28.0 +8.3 8,984 11,412 +27.0 +7.7
Change in sales                
Volume +5.5% +6.8%     +7.4% +6.7%    
Price +1.9% +1.5%     +1.3% +1.0%    
Currency -6.3% +7.9%     -6.7% +7.9%    
Portfolio +0.8% +11.8%     +0.9% +11.4%    
Sales                
Pharmaceuticals 2,960 3,492 +18.0 +10.7 5,742 6,692 +16.5 +9.0
Consumer Health 1,655 2,416 +46.0 +4.0 3,242 4,720 +45.6 +5.5
                 
  € million € million % Fx
adj. %
€ million € million % Fx
adj. %
Sales by region                
Europe 1,689 1,857 +9.9 +9.7 3,331 3,664 +10.0 +11.0
North America 1,186 1,946 +64.1 +41.7 2,256 3,658 +62.1 +41.0
Asia/Pacific 1,070 1,382 +29.2 +14.4 2,128 2,651 +24.6 +10.7
Latin America/Africa/
Middle East
670 723 +7.9 +17.0 1,269 1,439 +13.4 +15.8
                 
EBIT 927 1,068 +15.2   1,858 2,054 +10.5  
Special items (25) (145)     (9) (290)    
EBIT before special items1 952 1,213 +27.4   1,867 2,344 +25.5  
EBITDA1 1,293 1,533 +18.6   2,575 2,966 +15.2  
Special items (21) (142)     (5) (265)    
EBITDA before special items1 1,314 1,675 +27.5   2,580 3,231 +25.2  
EBITDA margin before special items1 28.5% 28.4%     28.7% 28.3%    
Gross cash flow2 920 1,131 +22.9   1,771 2,184 +23.3  
Net cash flow2 465 737 +58.5   1,105 1,954 +76.8  
2014 figures restated
Fx & p adj. = currency- and portfolio-adjusted; Fx adj. = currency-adjusted
1 For definition see Chapter 6 “Calculation of EBIT(DA) Before Special Items.”
2 For definition see Chapter 8 “Financial Position of the Bayer Group.”

Sales of the HealthCare subgroup increased by 8.3% (Fx & portfolio adj.) to €5,908 million (reported: +28.0%) in the second quarter of 2015. This increase was largely due to the gratifying sales performance of our recently launched pharmaceutical products. Business also expanded in the Consumer Health segment, with all divisions contributing to growth. The considerable reported increase was chiefly attributable to sales of products acquired from Merck & Co., Inc., United States, and to currency effects.

HaelthCare Quarterly Sales

ebit of HealthCare improved by 15.2% in the second quarter of 2015 to €1,068 million (q2 2014: €927 million), reflecting special charges of €145 million (q2 2014: €25 million). ebit before special items improved considerably by 27.4% to €1,213 million (q2 2014: €952 million). ebitda before special items increased by a substantial 27.5% to €1,675 million (q2 2014: €1,314 million). The continued very good business development at Pharmaceuticals and Consumer Health – which at Consumer Care was due mainly to the acquired businesses – resulted in positive earnings contributions, as did currency effects of approximately €110 million. Earnings were held back in particular by an increase in research and development expenses at Pharmaceuticals.

HealthCare Quarterly EBIT and EBITDA Before Special Items

Pharmaceuticals

Key Data – Pharmaceuticals      [Table 5]
  2nd
Quarter
2014
2nd
Quarter
2015


Change
1st
Half
2014
1st
Half
2015


Change
  € million € million % Fx & p
adj. %
€ million € million % Fx & p
adj. %
Sales 2,960 3,492 +18.0 +10.7 5,742 6,692 +16.5 +9.0
                 
  € million € million % Fx
adj. %
€ million € million % Fx
adj. %
Sales by region                
Europe 1,091 1,232 +12.9 +12.3 2,126 2,363 +11.1 +11.3
North America 671 864 +28.8 +8.0 1,262 1,625 +28.8 +9.1
Asia/Pacific 797 998 +25.2 +9.9 1,598 1,913 +19.7 +5.7
Latin America/Africa/
Middle East
401 398 -0.7 +12.5 756 791 +4.6 +9.7
                 
EBIT 656 706 +7.6   1,297 1,397 +7.7  
Special items (12) (74)     4 (98)    
EBIT before special items1 668 780 +16.8   1,293 1,495 +15.6  
EBITDA1 919 1,007 +9.6   1,808 1,971 +9.0  
Special items (8) (70)     8 (94)    
EBITDA before special items1 927 1,077 +16.2   1,800 2,065 +14.7  
EBITDA margin before special items1 31.3% 30.8%     31.3% 30.9%    
Gross cash flow2 662 720 +8.8   1,236 1,410 +14.1  
Net cash flow2 292 433 +48.3   739 1,185 +60.4  
Fx & p adj. = currency- and portfolio-adjusted; Fx adj. = currency-adjusted
1 For definition see Chapter 6 “Calculation of EBIT(DA) Before Special Items.”
2 For definition see Chapter 8 “Financial Position of the Bayer Group.”

Sales of our Pharmaceuticals segment rose by a substantial 10.7% (Fx & portfolio adj.) to €3,492 million in the second quarter of 2015. Our recently launched products XareltoTM, EyleaTM, StivargaTM, XofigoTM and AdempasTM continued to experience dynamic growth, posting combined sales of €1,051 million (q2 2014: €702 million). The Pharmaceuticals business grew in all regions on a currency-adjusted basis.

Best-Selling Pharmaceuticals Products [Table 6]
  2nd
Quarter
2014
2nd
Quarter
2015


Change
1st
Half
2014
1st
Half
2015


Change
  € million € million % Fx adj. % € million € million % Fx adj. %
XareltoTM 381 549 +44.1 +42.6 723 1,031 +42.6 +40.6
KogenateTM 243 299 +23.0 +14.3 513 560 +9.2 +1.6
EyleaTM 194 301 +55.2 +49.1 351 554 +57.8 +51.8
MirenaTM product family 208 270 +29.8 +11.1 386 502 +30.1 +12.5
BetaferonTM/BetaseronTM 216 222 +2.8 -8.8 406 430 +5.9 -5.2
NexavarTM 196 231 +17.9 +7.1 379 427 +12.7 +1.9
YAZTM/YasminTM/
YasminelleTM
191 174 -8.9 -9.8 372 355 -4.6 -6.6
AdalatTM 156 168 +7.7 -3.9 296 330 +11.5 -0.7
AspirinTM Cardio 117 127 +8.5 -2.3 232 263 +13.4 +3.0
GlucobayTM 106 129 +21.7 -0.3 208 259 +24.5 +3.9
AvaloxTM/AveloxTM 92 99 +7.6 +0.7 200 209 +4.5 -4.1
StivargaTM 61 92 +50.8 +33.0 115 163 +41.7 +24.0
XofigoTM 43 65 +51.2 +30.5 79 119 +50.6 +29.4
LevitraTM 62 53 -14.5 -14.2 124 106 -14.5 -15.8
FosrenolTM 33 47 +42.4 +37.7 80 85 +6.3 +0.9
Total 2,299 2,826 +22.9 +13.9 4,464 5,393 +20.8 +11.9
Proportion of Pharmaceuticals sales 78% 81%     78% 81%    
Fx adj. = currency-adjusted

Our new oral anticoagulant XareltoTM maintained its strong growth momentum. We registered substantial volume increases in all regions, especially in Europe and Japan. Business with XareltoTM also developed very positively in the United States, where it is marketed by a subsidiary of Johnson & Johnson. We posted further robust gains for our eye medicine EyleaTM mainly as a result of very good business in Europe and Japan after marketing authorization was granted in further indications. Our cancer drug StivargaTM benefited from positive development in the United States and particularly from the reversal of a rebate provision in France. A further positive contribution to sales development came from the cancer drug XofigoTM, particularly in Europe. Sales of AdempasTM to treat pulmonary hypertension amounted to €44 million (q2 2014: €23 million) and reflected the proportionate recognition of the one-time payment resulting from the sGC collaboration with Merck & Co., United States.

Higher sales of our blood-clotting drug KogenateTM were chiefly attributable to shifts in order patterns. The hormone-releasing intrauterine devices of the MirenaTM product family – MirenaTM and JaydessTM/SkylaTM – posted encouraging development, largely as a result of higher volumes in the United States. We also registered sales gains for our cancer drug NexavarTM, particularly in the United States.

Business with our multiple sclerosis drug BetaferonTM/BetaseronTM was down overall, due partly to increased competition in Europe and the United States. Receding sales of our yazTM/YasminTM/YasminelleTM line of oral contraceptives resulted from lower demand in Europe and the United States.

ebit of the Pharmaceuticals segment rose by 7.6% in the second quarter of 2015 to €706 million. This figure reflected special charges of €74 million (q2 2014: €12 million) that mainly comprised €54 million from the revaluation of other receivables and €18 million in costs for efficiency improvement measures. ebit before special items increased by 16.8% to €780 million. EBITDA before special items improved by 16.2% to €1,077 million. This earnings growth was primarily attributable to the ongoing good development of business, particularly for our recently launched products, and to positive currency effects of about €70 million. Earnings were diminished as expected by increased investment in research and development.

Sales of the Pharmaceuticals segment rose by 9.0% (Fx & portfolio adj.) in the first half of 2015 to €6,692 million. This increase was driven by our recently launched products XareltoTM, EyleaTM, StivargaTM, XofigoTM and AdempasTM, which generated combined sales of €1,948 million (h1 2014: €1,300 million). Pharmaceutical sales moved ahead in all regions.

ebit for the first half of 2015 advanced by 7.7% to €1,397 million after special charges of €98 million (h1 2014: special gains of €4 million) that mainly comprised €54 million from the revaluation of other receivables and €28 million in costs for efficiency improvement measures. ebit before special items advanced by 15.6% to €1,495 million. ebitda before special items improved by 14.7% to €2,065 million after positive currency effects of about €100 million.

Consumer Health

Key Data – Consumer Health      [Table 7]
  2nd
Quarter
2014
2nd
Quarter
2015


Change
1st
Half
2014
1st
Half
2015


Change
  € million € million % Fx & p
adj. %
€ million € million % Fx & p
adj. %
Sales 1,655 2,416 +46.0 +4.0 3,242 4,720 +45.6 +5.5
Consumer Care 932 1,590 +70.6 +3.2 1,855 3,146 +69.6 +5.8
Animal Health 358 428 +19.6 +6.4 688 814 +18.3 +6.3
Medical Care 365 398 +9.0 +3.8 699 760 +8.7 +4.0
                 
  € million € million % Fx
adj. %
€ million € million % Fx
adj. %
Sales by region                
Europe 598 625 +4.5 +4.8 1,205 1,301 +8.0 +10.5
North America 515 1,082 +110.1 +85.4 994 2,033 +104.5 +81.5
Asia/Pacific 273 384 +40.7 +27.5 530 738 +39.2 +25.8
Latin America/Africa/
Middle East
269 325 +20.8 +23.8 513 648 +26.3 +24.8
                 
EBIT 271 362 +33.6   561 657 +17.1  
Special items (13) (71)     (13) (192)    
EBIT before special items1 284 433 +52.5   574 849 +47.9  
EBITDA1 374 526 +40.6   767 995 +29.7  
Special items (13) (72)     (13) (171)    
EBITDA before special items1 387 598 + 54.5   780 1,166 + 49.5  
EBITDA margin before special items1 23.4% 24.8%     24.1% 24.7%    
Gross cash flow2 258 411 +59.3   535 774 +44.7  
Net cash flow2 173 304 +75.7   366 769 +110.1  
2014 figures restated
Fx & p adj. = currency- and portfolio-adjusted; Fx adj. = currency-adjusted
1 For definition see Chapter 6 “Calculation of EBIT(DA) Before Special Items.”
2 For definition see Chapter 8 “Financial Position of the Bayer Group.”

Sales of the Consumer Health segment climbed by 4.0% (Fx & portfolio adj.) to €2,416 million in the second quarter of 2015, with all divisions contributing to this growth. The significant reported increase in sales in the Consumer Care Division resulted from the products added through the recent acquisitions.

Following the signing of the divestiture agreement in June 2015, the Diabetes Care business is recognized under discontinued operations. The Medical Care Division now only comprises the business with contrast agents and medical devices. All data and prior-year figures are restated accordingly.

Best-Selling Consumer Health Products       [Table 8]
  2nd
Quarter
2014
2nd
Quarter
2015


Change
1st
Half
2014
1st
Half
2015


Change
  € million € million % Fx adj. % € million € million % Fx adj. %
ClaritinTM
(Consumer Care)1
167 . . 369 . .
AdvantageTM product family (Animal Health) 140 169 +20.7 +3.9 270 313 +15.9 +1.4
AspirinTM
(Consumer Care)
92 101 +9.8 +0.2 194 221 +13.9 +4.8
AleveTM (Consumer Care) 83 120 +44.6 +19.9 157 215 +36.9 +14.7
BepanthenTM/BepantholTM (Consumer Care) 91 88 -3.3 +6.9 177 182 +2.8 +10.4
CoppertoneTM
(Consumer Care)1
99 . . 182 . .
UltravistTM (Medical Care) 76 84 +10.5 +2.9 145 157 +8.3 +1.2
GadovistTM/GadavistTM (Medical Care) 57 71 +24.6 +12.1 110 140 +27.3 +16.6
Dr. Scholl’sTM
(Consumer Care)1
78 . . 136 . .
CanestenTM
(Consumer Care)
66 65 -1.5 +4.6 126 129 +2.4 +3.5
Total 605 1,042 +72.2 +53.5 1,179 2,044 +73.4 +55.0
Proportion of Consumer Health sales 37% 43%     36% 43%    
Fx adj.= currency-adjusted
Total sales of AspirinTM (including AspirinTM Complex), also including AspirinTM Cardio, which is reflected in sales of the Pharmaceuticals segment, increased by 9.1% (Fx adj. -1.1%) in Q2 2015 to €228 million (Q2 2014: €209 million). These total sales increased in the first half of 2015 by 13.6% (Fx adj. +12.9%) to €484 million (H1 2014: €426 million).
1 product acquired from Merck & Co., Inc.

Sales of the Consumer Care Division improved by 3.2% (Fx & portfolio adj.) to €1,590 million. Business with our analgesic AspirinTM was level with the prior-year period. A decline in sales in the United States was offset by the good development in Europe and Latin America/Africa/Middle East. Business with our analgesic AleveTM improved, due mainly to sales being brought forward in the United States. Our BepanthenTM/BepantholTM line of skincare products developed positively, especially in the Emerging Markets. We also registered an increase in sales of our antifungal CanestenTM.

Business with the products acquired from Merck & Co., Inc., United States, totaled €528 million in the second quarter of 2015.

Sales of the Animal Health Division rose by 6.4% (Fx & portfolio adj.) to €428 million. Our SerestoTM flea and tick collar made a significant contribution to this development, particularly in the United States and Europe. The increase in sales of the AdvantageTM family of flea, tick and worm control products was mainly attributable to gratifying development in the United States.

Sales of the Medical Care Division improved by 3.8% (Fx & portfolio adj.) to €398 million, mainly as a result of gratifying development in the United States. We posted significant sales gains for our mri contrast agent GadovistTM/GadavistTM following its registration in additional indications.

ebit of the Consumer Health segment improved by a substantial 33.6% in the second quarter of 2015 to €362 million after special charges of €71 million (q2 2014: €13 million). The special items mainly included charges of €55 million for the integration of acquired businesses and €13 million for efficiency improvement measures. ebit before special items climbed by a robust 52.5% to €433 million. ebitda before special items improved by 54.5% to €598 million (q2 2014: €387 million). This growth in earnings was attributable to all divisions. The main contributions came from the acquired consumer care businesses and a positive currency effect of around €40 million.

Sales of our Consumer Health segment in the first half of 2015 improved by 5.5% (Fx & portfolio adj.) to €4,720 million. All divisions contributed to this increase. The Consumer Care Division in particular grew sales on a currency- and portfolio-adjusted basis, especially in Latin America and Europe.

ebit in the first half of 2015 climbed by 17.1% to €657 million, reflecting special charges of €192 million (h1 2014: €13 million) that were due mainly to integration costs. ebit before special items improved by 47.9% to €849 million (h1 2014: €574 million). ebitda before special items improved by a significant 49.5% to €1,166 million (h1 2014: €780 million) after positive currency effects of approximately €60 million.

Last updated: July 29, 2015  Copyright © Bayer AG
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