Management Report & Annexes | Report on Economic Position

16. Earnings; Asset and Financial Position of the Bayer Group

16.1 Earnings Performance of the Bayer Group

Bayer Group Summary Income Statements[Table 3.16.1]
€ million€ million%
Net sales39,74140,157+1.0
Cost of goods sold19,07019,347+1.5
Selling expenses9,98110,080+1.0
Research and development expenses3,0133,190+5.9
General administration expenses1,8661,883+0.9
Other operating income (+) and expenses (–)(1,883)(723)+61.6
Financial result(752)(727)+3.3
Income before income taxes3,1764,207+32.5
Income taxes(723)(1,021)-41.2
Income after income taxes2,4533,186+29.9
of which attributable to non-controlling interest50(3)
of which attributable to Bayer AG stockholders (net income)2,4033,189+32.7
2012 figures restated
* EBIT = earnings before financial result and taxes

Sales of the Bayer Group rose to €40,157 million (+1.0%). The increase after adjusting for currency and portfolio effects was 5.1%.

The cost of goods sold increased by 1.5% to €19,347 million, mainly due to higher volumes and a rise in raw material costs at MaterialScience. The ratio of the cost of goods sold to total sales was 48.2% (2012: 48.0%). The selling expenses of €10,080 million (+1.0%) amounted to 25.1% of sales (2012: 25.1%). Research and development (R&D) expenses rose in 2013 by 5.9% to €3,190 million, the increase being attributable to HealthCare and CropScience. The ratio of R&D expenses to sales was slightly higher at 7.9% (2012: 7.6%). General administration expenses, at €1,883 million, were level with the prior year (+0.9%). The ratio of general administration expenses to total sales thus remained unchanged at 4.7%. The negative balance of other operating income and expenses was reduced considerably to minus €723 million (2012: minus €1,883 million), mainly because special charges for accounting measures related to legal claims were lower in 2013 (see also Chapter 16.2 “Calculation of EBIT(DA) Before Special Items”).

EBIT climbed by 25.6% in 2013 to €4,934 million.

The financial result improved by 3.3% to minus €727 million. It included €355 million (2012: €252 million) in net interest expense, €297 million (2012: €389 million) in interest cost for pension and other provisions, a €120 million (2012: €69 million) net exchange loss and a €59 million net gain (2012: €23 million net loss) from investments in affiliated companies. Income from investments in affiliated companies included a €77 million gain from the sale of Bayer’s interest in Onyx Pharmaceuticals Inc., United States. The net interest position was particularly affected by interest expense in connection with a court proceeding brought by former Schering stockholders. The decrease in pension-related interest cost resulted partly from the effect of lower interest rates on the interest cost for defined benefit plans, which is reported net of the expected return on plan assets.

Tax expense in 2013 increased to €1,021 million as a result of earnings growth (2012: €723 million). ­Income after income taxes came in at €3,186 million. Income attributable to non-controlling interest fell by €53 million to minus €3 million. The prior-year figure contained minority stockholders’ interest in divestiture gains. Bayer Group net income for 2013 was €3,189 million (2012: €2,403 million).

Last updated: February 28, 2014  Copyright © Bayer AG