Statements of Income
Performance by Subgroup and Segment
Bayer Links
Investor Relations
Management Report
Bayer HealthCare
Sales of the HealthCare subgroup rose by 3.4 percent in the first quarter of 2008, to €3,731 million. Adjusted for currency and portfolio effects, business expanded by 8.6 percent. This increase was mainly attributable to the positive performance of the Pharmaceuticals segment. On a currency-adjusted basis, sales rose strongly in all regions, and by 5.2 percent in North America.
Bayer HealthCare increased first-quarter EBITDA before special items by 10.8 percent to €1,050 million (Q1 2007: €948 million). Earnings growth was bolstered by the strong business performance and synergies from the integration of Schering AG, Germany. Negative currency effects were more than offset. EBIT before special items also rose considerably from the prior-year period to €663 million (Q1 2007: €624 million). Included here is some €60 million in additional amortization of intangible assets, which also takes into account the change in the patent situation regarding Yasmin®. The special items totaling minus €100 million resulted from charges in connection with the acquisition of Schering AG. EBIT advanced by 16.1 percent to €563 million.
The names “Bayer Schering Pharma” or “Schering” as used in this report always refer to Bayer Schering Pharma AG, Berlin, Germany, or its predecessor, Schering AG, Berlin, Germany, respectively. The reference to Bayer Schering Pharma AG or Schering AG also includes business conducted by affiliated entities in countries outside Germany. Bayer Schering Pharma AG and Schering-Plough Corporation, New Jersey, U.S., are unaffiliated companies that have been totally independent of each other for many years.
Bayer HealthCare increased first-quarter EBITDA before special items by 10.8 percent to €1,050 million (Q1 2007: €948 million). Earnings growth was bolstered by the strong business performance and synergies from the integration of Schering AG, Germany. Negative currency effects were more than offset. EBIT before special items also rose considerably from the prior-year period to €663 million (Q1 2007: €624 million). Included here is some €60 million in additional amortization of intangible assets, which also takes into account the change in the patent situation regarding Yasmin®. The special items totaling minus €100 million resulted from charges in connection with the acquisition of Schering AG. EBIT advanced by 16.1 percent to €563 million.
The names “Bayer Schering Pharma” or “Schering” as used in this report always refer to Bayer Schering Pharma AG, Berlin, Germany, or its predecessor, Schering AG, Berlin, Germany, respectively. The reference to Bayer Schering Pharma AG or Schering AG also includes business conducted by affiliated entities in countries outside Germany. Bayer Schering Pharma AG and Schering-Plough Corporation, New Jersey, U.S., are unaffiliated companies that have been totally independent of each other for many years.
Pharmaceuticals
In the Pharmaceuticals segment, sales increased by 4.8 percent in the first quarter of 2008 to €2,614 million (Q1 2007: €2,495 million). Adjusted for currency effects, business expanded by 9.9 percent. The principal growth drivers were Yasmin®/YAZ®/Yasminelle® and Nexavar®.
Sales of the Primary Care business unit rose slightly by 0.4 percent to €776 million (Q1 2007: €773 million). On a currency-adjusted basis, this was equivalent to a 4.4 percent increase. Significant sales gains for Aspirin Cardio® (currency-adjusted: +22.4 percent), Avalox®/Avelox® (currency-adjusted: +18.2 percent) and Glucobay® (currency-adjusted: +14.6 percent) more than offset the expected decline for Cipro®/Ciprobay® (currency-adjusted: -21.7 percent) in Europe and North America that resulted from generic competition.
The positive trend in the Women’s Healthcare business unit – particularly in the United States – continued, with sales up 11.0 percent to €696 million (Q1 2007: €627 million). Adjusted for currency changes, sales advanced by 17.4 percent. The strongest growth was recorded by the intra-uterine system Mirena®, sales of which climbed by 50.8 percent on a currency-adjusted basis. Business with the oral contraceptives of the Yasmin®/YAZ®/Yasminelle® product group climbed by 33.3 percent when adjusted for currency effects. In early March 2008, a U.S. court declared our patent ’531 for Yasmin® invalid. Bayer has appealed this ruling (see Risk Report).
Sales of the Diagnostic Imaging business unit fell by 2.9 percent to €298 million (Q1 2007: €307 million), but rose by 2.9 percent on a currency-adjusted basis. Business with Ultravist® improved by 28.4 percent after adjusting for currency effects, the prior-year figure having been diminished by a temporary interruption in distribution of the 375 mgI/ml formulation of Ultravist®. Sales of Magnevist® dropped by a currency-adjusted 20.2 percent, partly because of a shift toward Gadovist®. The Medrad business expanded by 8.0 percent on a currency-adjusted basis. At the beginning of April 2008, Bayer HealthCare subsidiary Medrad, Inc. completed its tender offer for U.S.-based Possis Medical, Inc., a supplier of mechanical thrombectomy systems to treat constricted or blocked arteries and veins. Our interest in this company as of March 31, 2008 amounted to 91.8 percent.
Sales of the Primary Care business unit rose slightly by 0.4 percent to €776 million (Q1 2007: €773 million). On a currency-adjusted basis, this was equivalent to a 4.4 percent increase. Significant sales gains for Aspirin Cardio® (currency-adjusted: +22.4 percent), Avalox®/Avelox® (currency-adjusted: +18.2 percent) and Glucobay® (currency-adjusted: +14.6 percent) more than offset the expected decline for Cipro®/Ciprobay® (currency-adjusted: -21.7 percent) in Europe and North America that resulted from generic competition.
The positive trend in the Women’s Healthcare business unit – particularly in the United States – continued, with sales up 11.0 percent to €696 million (Q1 2007: €627 million). Adjusted for currency changes, sales advanced by 17.4 percent. The strongest growth was recorded by the intra-uterine system Mirena®, sales of which climbed by 50.8 percent on a currency-adjusted basis. Business with the oral contraceptives of the Yasmin®/YAZ®/Yasminelle® product group climbed by 33.3 percent when adjusted for currency effects. In early March 2008, a U.S. court declared our patent ’531 for Yasmin® invalid. Bayer has appealed this ruling (see Risk Report).
Sales of the Diagnostic Imaging business unit fell by 2.9 percent to €298 million (Q1 2007: €307 million), but rose by 2.9 percent on a currency-adjusted basis. Business with Ultravist® improved by 28.4 percent after adjusting for currency effects, the prior-year figure having been diminished by a temporary interruption in distribution of the 375 mgI/ml formulation of Ultravist®. Sales of Magnevist® dropped by a currency-adjusted 20.2 percent, partly because of a shift toward Gadovist®. The Medrad business expanded by 8.0 percent on a currency-adjusted basis. At the beginning of April 2008, Bayer HealthCare subsidiary Medrad, Inc. completed its tender offer for U.S.-based Possis Medical, Inc., a supplier of mechanical thrombectomy systems to treat constricted or blocked arteries and veins. Our interest in this company as of March 31, 2008 amounted to 91.8 percent.
| Bayer HealthCare | 1st Quarter 2007 | 1st Quarter 2008 | Change |
| € million | € million | % | |
| Sales | 3,610 | 3,731 | +3.4 |
| Pharmaceuticals | 2,495 | 2,614 | +4.8 |
| Consumer Health | 1,115 | 1,117 | +0.2 |
| Sales by Region | |||
| Europe | 1,495 | 1,626 | +8.8 |
| North America | 1,145 | 1,045 | -8.7 |
| Asia/Pacific | 466 | 526 | +12.9 |
| Latin America/Africa/Middle East | 504 | 534 | +6.0 |
| EBITDA1 | 783 | 970 | +23.9 |
| Special items | (165) | (80) | |
| EBITDA before special items2 | 948 | 1,050 | +10.8 |
| EBITDA margin before special items | 26.3% | 28.1% | |
| EBIT1 | 485 | 563 | +16.1 |
| Special items | (139) | (100) | |
| EBIT before special items2 | 624 | 663 | +6.3 |
| Gross cash flow1 | 557 | 737 | +32.3 |
| Net cash flow1 | 383 | 577 | +50.7 |
1 for definition see Bayer Group Key Data.
2 for definition see also Calculation of EBIT(DA) Before Special Items .
2 for definition see also Calculation of EBIT(DA) Before Special Items .
| Pharmaceuticals | 1st Quarter 2007 | 1st Quarter 2008 | Change |
| € million | € million | % | |
| Sales | 2,495 | 2,614 | +4.8 |
| Primary Care | 773 | 776 | +0.4 |
| Women’s Healthcare | 627 | 696 | +11.0 |
| Diagnostic Imaging (including Medrad) | 307 | 298 | -2.9 |
| Specialized Therapeutics | 303 | 327 | +7.9 |
| Hematology/Cardiology | 268 | 255 | -4.9 |
| Oncology | 159 | 202 | +27.0 |
| Dermatology (Intendis) | 58 | 60 | +3.4 |
| Sales by Region | |||
| Europe | 1,039 | 1,140 | +9.7 |
| North America | 754 | 707 | -6.2 |
| Asia/Pacific | 379 | 429 | +13.2 |
| Latin America/Africa/Middle East | 323 | 338 | +4.6 |
| EBITDA1 | 546 | 714 | +30.8 |
| Special items | (165) | (80) | |
| EBITDA before special items2 | 711 | 794 | +11.7 |
| EBITDA margin before special items | 28.5% | 30.4% | |
| EBIT1 | 281 | 341 | +21.4 |
| Special items | (139) | (100) | |
| EBIT before special items2 | 420 | 441 | +5.0 |
| Gross cash flow1 | 390 | 544 | +39.5 |
| Net cash flow1 | 279 | 415 | +48.7 |
1 for definition see Bayer Group Key Data.
2 for definition see also Calculation of EBIT(DA) Before Special Items .
2 for definition see also Calculation of EBIT(DA) Before Special Items .
The Specialized Therapeutics business unit saw sales rise by 7.9 percent to €327 million (Q1 2007: €303 million). Adjusted for changes in currency parities, business expanded by 12.6 percent. Sales of Betaferon®/Betaseron®, our product to treat multiple sclerosis, continued to grow strongly, increasing by 18.3 percent on a currency-adjusted basis. Business with Betaferon®/Betaseron® in the United States, Russia and Germany was particularly gratifying.
In the Hematology/Cardiology business unit, sales declined by 4.9 percent to €255 million (Q1 2007: €268 million). On a currency-adjusted basis, sales edged down 0.6 percent. The main reason for this was the temporary, worldwide suspension of marketing in November 2007 for Trasylol®, the product to control loss of blood during coronary bypass operations. Business with Kogenate® increased by a currency-adjusted 21.5 percent from the previous year’s low level.
Sales of the Oncology business unit expanded by 27.0 percent to €202 million, with the currency-adjusted increase amounting to 34.7 percent. Growth was mainly attributable to our cancer drug Nexavar®, which posted a currency-adjusted 129.9 percent increase. During 2007 we received marketing authorization for Nexavar® in various countries to treat renal cell carcinoma and hepatocellular carcinoma. In January 2008, Nexavar® was approved in Japan for the treatment of advanced renal cell carcinoma, the most common form of kidney cancer. Also in January 2008, the Japanese health authority mhlw granted Priority Review Status to the registration application for Nexavar® to treat liver cancer.
Sales of the Dermatology (Intendis) business unit improved by 3.4 percent to €60 million (Q1 2007: €58 million). This corresponds to a currency-adjusted increase of 6.2 percent.
EBITDA before special items in the Pharmaceuticals segment improved to €794 million in the first quarter of 2008 (Q1 2007: €711 million). This increase was mainly due to the gratifying business performance and to synergies already realized. EBIT before special items came in at €441 million, up €21 million or 5.0 percent from the prior-year period. Earnings were diminished by special charges of €100 million from the acquisition of Schering. EBIT rose by 21.4 percent to €341 million (Q1 2007: €281 million).
In the Hematology/Cardiology business unit, sales declined by 4.9 percent to €255 million (Q1 2007: €268 million). On a currency-adjusted basis, sales edged down 0.6 percent. The main reason for this was the temporary, worldwide suspension of marketing in November 2007 for Trasylol®, the product to control loss of blood during coronary bypass operations. Business with Kogenate® increased by a currency-adjusted 21.5 percent from the previous year’s low level.
Sales of the Oncology business unit expanded by 27.0 percent to €202 million, with the currency-adjusted increase amounting to 34.7 percent. Growth was mainly attributable to our cancer drug Nexavar®, which posted a currency-adjusted 129.9 percent increase. During 2007 we received marketing authorization for Nexavar® in various countries to treat renal cell carcinoma and hepatocellular carcinoma. In January 2008, Nexavar® was approved in Japan for the treatment of advanced renal cell carcinoma, the most common form of kidney cancer. Also in January 2008, the Japanese health authority mhlw granted Priority Review Status to the registration application for Nexavar® to treat liver cancer.
Sales of the Dermatology (Intendis) business unit improved by 3.4 percent to €60 million (Q1 2007: €58 million). This corresponds to a currency-adjusted increase of 6.2 percent.
EBITDA before special items in the Pharmaceuticals segment improved to €794 million in the first quarter of 2008 (Q1 2007: €711 million). This increase was mainly due to the gratifying business performance and to synergies already realized. EBIT before special items came in at €441 million, up €21 million or 5.0 percent from the prior-year period. Earnings were diminished by special charges of €100 million from the acquisition of Schering. EBIT rose by 21.4 percent to €341 million (Q1 2007: €281 million).
| Best-Selling Pharmaceutical Products | 1st Quarter 2007 | 1st Quarter 2008 | Change | Currency- adjusted change |
| € million | € million | % | % | |
| Yasmin®/YAZ®/Yasminelle® (Women’s Healthcare) | 240 | 297 | +23.8 | +33.3 |
| Betaferon®/Betaseron® (Specialized Therapeutics) | 244 | 274 | +12.3 | +18.3 |
| Kogenate® (Hematology/Cardiology) | 201 | 233 | +15.9 | +21.5 |
| Adalat® (Primary Care) | 145 | 150 | +3.4 | +6.0 |
| Avalox®/Avelox® (Primary Care) | 128 | 143 | +11.7 | +18.2 |
| Mirena® (Women’s Healthcare) | 81 | 112 | +38.3 | +50.8 |
| Nexavar® (Oncology) | 47 | 101 | +114.9 | +129.9 |
| Levitra® (Primary Care) | 84 | 82 | -2.4 | +4.0 |
| Cipro®/Ciprobay® (Primary Care) | 108 | 81 | -25.0 | -21.7 |
| Glucobay® (Primary Care) | 72 | 80 | +11.1 | +14.6 |
| Ultravist® (Diagnostic Imaging) | 55 | 68 | +23.6 | +28.4 |
| Aspirin Cardio® (Primary Care) | 54 | 64 | +18.5 | +22.4 |
| Magnevist® (Diagnostic Imaging) | 80 | 60 | -25.0 | -20.2 |
| Iopamiron® (Diagnostic Imaging) | 47 | 43 | -8.5 | -7.8 |
| Diane® (Women’s Healthcare) | 45 | 41 | -8.9 | -7.5 |
| Total | 1,631 | 1,829 | +12.1 | +18.2 |
| Proportion of Pharmaceuticals sales | 65% | 70% |
Consumer Health
Sales in the Consumer Health segment edged up 0.2 percent to €1,117 million in the first quarter of 2008 (Q1 2007: €1,115 million). After adjusting for currency and portfolio changes, the increase came to 5.4 percent.
In the Consumer Care Division, sales remained practically level with the prior-year period, at €655 million(-0.6 percent) . Adjusted for currency and portfolio effects, business was up by 3.9 percent. The strongest growth was achieved by Bepanthen®/Bepanthol® (currency-adjusted: +27.8 percent), Canesten® (currency-adjusted: +14.9 percent) and Supradyn® (currency-adjusted: +10.7 percent). Sales of Aleve®, however, were down by 21.7 percent on a currency-adjusted basis. Here it should be kept in mind that the prior-year sales performance was positively impacted by the launch of Aleve® Liquid Gels in the United States. Bayer HealthCare has reached an agreement to acquire the over-the-counter (OTC) medicines business of U.S.-based Sagmel, Inc. Sagmel operates this business in the Commonwealth of Independent States (CIS), where it occupies a leading position. With this acquisition, Bayer aims to strengthen its Consumer Care business in eastern Europe, one of the world’s fastest-growing otc markets. Closing of the transaction is expected for the second half of this year.
The Diabetes Care Division had sales of €227 million (+0.4 percent). Adjusted for shifts in exchange rates, business expanded by 6.6 percent. This performance was attributable largely to the successful marketing of the Contour® blood glucose monitoring systems (currency-adjusted: +27.7 percent), which are replacing our Elite® systems (currency-adjusted: -26.3 percent). Sales of Breeze® dropped by 17.1 percent on a currency-adjusted basis, the high sales level in the prior-year period having been due to the market introduction of “Breeze® 2” in North America.
Sales of the Animal Health Division grew by 2.2 percent to €235 million (Q1 2007: €230 million), and by 8.5 percent when adjusted for the effects of currency translation. The principal growth driver was the Advantage® product line (currency-adjusted: +10.3 percent).
EBITDA of the Consumer Health segment in the first quarter of 2008 improved by 8.0 percent to €256 million (Q1 2007: €237 million). EBIT rose by €18 million, or 8.8 percent, to €222 million.
In the Consumer Care Division, sales remained practically level with the prior-year period, at €655 million
The Diabetes Care Division had sales of €227 million (+0.4 percent). Adjusted for shifts in exchange rates, business expanded by 6.6 percent. This performance was attributable largely to the successful marketing of the Contour® blood glucose monitoring systems (currency-adjusted: +27.7 percent), which are replacing our Elite® systems (currency-adjusted: -26.3 percent). Sales of Breeze® dropped by 17.1 percent on a currency-adjusted basis, the high sales level in the prior-year period having been due to the market introduction of “Breeze® 2” in North America.
Sales of the Animal Health Division grew by 2.2 percent to €235 million (Q1 2007: €230 million), and by 8.5 percent when adjusted for the effects of currency translation. The principal growth driver was the Advantage® product line (currency-adjusted: +10.3 percent).
EBITDA of the Consumer Health segment in the first quarter of 2008 improved by 8.0 percent to €256 million (Q1 2007: €237 million). EBIT rose by €18 million, or 8.8 percent, to €222 million.
| Consumer Health | 1st Quarter 2007 | 1st Quarter 2008 | Change |
| € million | € million | % | |
| Sales | 1,115 | 1,117 | +0.2 |
| Consumer Care | 659 | 655 | -0.6 |
| Diabetes Care | 226 | 227 | +0.4 |
| Animal Health | 230 | 235 | +2.2 |
| Sales by Region | |||
| Europe | 456 | 486 | +6.6 |
| North America | 391 | 338 | -13.6 |
| Asia/Pacific | 87 | 97 | +11.5 |
| Latin America/Africa/Middle East | 181 | 196 | +8.3 |
| EBITDA1 | 237 | 256 | +8.0 |
| Special items | 0 | 0 | |
| EBITDA before special items2 | 237 | 256 | +8.0 |
| EBITDA margin before special items | 21.3% | 22.9% | |
| EBIT1 | 204 | 222 | +8.8 |
| Special items | 0 | 0 | |
| EBIT before special items2 | 204 | 222 | +8.8 |
| Gross cash flow1 | 167 | 193 | +15.6 |
| Net cash flow1 | 104 | 162 | +55.8 |
1 for definition see Bayer Group Key Data.
2 for definition see also Calculation of EBIT(DA) Before Special Items .
2 for definition see also Calculation of EBIT(DA) Before Special Items .
| Best-Selling Consumer Health Products | 1st Quarter 2007 | 1st Quarter 2008 | Change | Currency- adjusted change |
| € million | € million | % | % | |
| Contour® 1 (Diabetes Care) | 106 | 128 | +20.8 | +27.7 |
| Aspirin® 2 (Consumer Care) | 113 | 114 | +0.9 | +7.2 |
| Advantage® product line (Animal Health) | 75 | 77 | +2.7 | +10.3 |
| Aleve®/naproxen (Consumer Care) | 69 | 48 | -30.4 | -21.7 |
| Canesten® (Consumer Care) | 43 | 47 | +9.3 | +14.9 |
| Bepanthen®/Bepanthol® (Consumer Care) | 36 | 46 | +27.8 | +27.8 |
| Baytril® (Animal Health) | 40 | 38 | -5.0 | +2.0 |
| Supradyn® (Consumer Care) | 33 | 35 | +6.1 | +10.7 |
| Breeze® 1 (Diabetes Care) | 43 | 34 | -20.9 | -17.1 |
| Elite® 1 (Diabetes Care) | 44 | 32 | -27.3 | -26.3 |
| Total | 602 | 599 | -0.5 | +5.3 |
| Proportion of Consumer Health sales | 54% | 54% |
1 previously included with the Ascensia® product family
2 total Aspirin® sales = €178 million (Q1 2007: €167 million), including Aspirin Cardio®, which is reflected in sales of the Pharmaceuticals segment
2 total Aspirin® sales = €178 million (Q1 2007: €167 million), including Aspirin Cardio®, which is reflected in sales of the Pharmaceuticals segment
Bookmark this page
E-mail this page
Advanced Search
