Management Report & Annexes | Report on Economic Position

15. Business Development by Subgroup, Segment and Region

15.1 HealthCare

Key Data – HealthCare[Table 3.15.1]
4th Quarter
2012
4th Quarter
2013
Change Full Year
2012
Full Year
2013
Change
  € million € million % Fx (& p)
adj. %
€ million € million % Fx (& p)
adj. %
Sales 4,921 4,939 +0.4 +7.2 18,604 18,924 +1.7 +6.8
Change in sales
Volume +5.3% +4.7% +3.7% +5.9%
Price -0.2% +2.5% +0.5% +0.9%
Currency +2.4% -7.7% +4.5% -5.7%
Portfolio -0.4% +0.9% -0.3% +0.6%
Sales by segment
Pharmaceuticals 2,866 2,975 +3.8 +11.5 10,798 11,188 +3.6 +9.4
Consumer Health 2,055 1,964 -4.4 +1.0 7,806 7,736 -0.9 +3.2
Sales by region
Europe 1,731 1,817 +5.0 +6.5 6,483 6,853 +5.7 +6.8
North America 1,281 1,286 +0.4 +5.5 4,961 5,024 +1.3 +4.7
Asia/Pacific 1,104 1,080 -2.2 +12.5 4,196 4,188 -0.2 +11.1
Latin America/Africa/
Middle East
805 756 -6.1 +9.8 2,964 2,859 -3.5 +8.0
EBIT 558 631 +13.1 2,205 3,260 +47.8
Special items (460) (354) (1,582) (713)
EBIT before special items* 1,018 985 -3.2 3,787 3,973 +4.9
EBITDA* 895 1,069 +19.4 3,866 4,858 +25.7
Special items (464) (268) (1,253) (476)
EBITDA before special items* 1,359 1,337 -1.6 5,119 5,334 +4.2
EBITDA margin before special items* 27.6% 27.1% 27.5% 28.2%
Gross cash flow** 595 840 +41.2 2,659 3,573 +34.4
Net cash flow** 1,063 959 -9.8 3,546 2,980 -16.0
2012 figures restated
Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales and Sales by segment; Fx adj.: Sales by region)
* For definition see Chapter 16.2 “Calculation of EBIT(DA) Before Special Items.”
** For definition see Chapter 16.5 “Liquidity and Capital Expenditures of the Bayer Group.”

Sales of the HealthCare subgroup rose by 6.8% (Fx & portfolio adj.) in 2013, to €18,924 million (reported: +1.7%). This encouraging growth was driven by our recently launched pharmaceutical products.

EBIT of the HealthCare subgroup advanced by a substantial 47.8% in 2013 to €3,260 million, mainly because net special charges were much lower at €713 million (2012: €1,582 million). EBIT before special items improved by 4.9% to €3,973 million. EBITDA before special items rose by 4.2% to €5,334 million. This was attributable to the gratifying business development in Pharmaceuticals, while earnings in Consumer Health posted a slight decline. Earnings at HealthCare were held back by negative currency effects of about €290 million.

The integration of Conceptus, Inc., United States, and Steigerwald Arzneimittelwerk GmbH, Darmstadt, Germany, both acquired in 2013, proceeded on schedule.

Pharmaceuticals

Key Data – Pharmaceuticals[Table 3.15.2]
4th Quarter
2012
4th Quarter
2013
Change Full Year
2012
Full Year
2013
Change
  € million € million  % Fx (& p)
adj. %
€ million € million % Fx (& p)
adj. %
Sales 2,866 2,975 +3.8 +11.5 10,798 11,188 +3.6 +9.4
Sales by region
Europe 988 1,049 +6.2 +7.5 3,677 3,918 +6.6 +7.5
North America 601 663 +10.3 +15.6 2,370 2,540 +7.2 +10.6
Asia/Pacific 775 783 +1.0 +16.6 2,939 3,016 +2.6 +14.9
Latin America/Africa/
Middle East
502 480 -4.4 +12.4 1,812 1,714 -5.4 +6.8
EBIT 165 321 +94.5 1,104 2,031 +84.0
Special items (437) (259) (1,223) (521)
EBIT before special items* 602 580 -3.7 2,327 2,552 +9.7
EBITDA* 392 618 +57.7 2,022 3,124 +54.5
Special items (443) (204) (1,210) (366)
EBITDA before special items* 835 822 -1.6 3,232 3,490 +8.0
EBITDA margin before special items* 29.1% 27.6% 29.9% 31.2%
Gross cash flow** 228 510 +123.7 1,319 2,293 +73.8
Net cash flow** 545 625 +14.7 2,262 1,853 -18.1
2012 figures restated
Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales; Fx adj.: Sales by region)
* For definition see Chapter 16.2 “Calculation of EBIT(DA) Before Special Items.”
** For definition see Chapter 16.5 “Liquidity and Capital Expenditures of the Bayer Group.”

Sales of the Pharmaceuticals segment registered dynamic growth in 2013, climbing by 9.4% (Fx & portfolio adj.) to €11,188 million. The increase was driven by our recently launched products Xarelto™, Eylea™, Stivarga™ and Xofigo™, which recorded combined sales of €1,520 million (2012: €368 million). Marketing of Adempas™ (active ingredient: riociguat), our new medicine to treat pulmonary hypertension, commenced in the fall following approvals in North America. Our Pharmaceuticals business posted currency-adjusted sales growth in all regions, and especially in Japan, the United States, Germany and China.

Best-Selling Pharmaceuticals Products[Table 3.15.3]
4th Quarter
2012
4th Quarter
2013
Change Full Year
2012
Full Year
2013
Change
  € million € million  % Fx adj.
 %
€ million € million  % Fx adj.
 %
Kogenate™ 298 274 -8.1 -2.1 1,182 1,202 +1.7 +6.4
Betaferon™/Betaseron™ 329 259 -21.3 -17.6 1,216 1,038 -14.6 -11.6
Xarelto™ 131 316 +141.2 +158.9 322 949 +194.7 +210.7
YAZ™/Yasmin™/
Yasminelle™
270 219 -18.9 -11.4 1,045 853 -18.4 -12.5
Nexavar™ 212 194 -8.5 -1.2 792 771 -2.7 +3.3
Mirena™ 135 195 +44.4 +51.6 677 719 +6.2 +10.0
Adalat™ 169 157 -7.1 +6.1 670 603 -10.0 -0.9
Aspirin™ Cardio 129 120 -7.0 +1.9 476 452 -5.0 +0.6
Avalox™/Avelox™ 123 106 -13.8 -7.6 486 426 -12.3 -8.8
Glucobay™ 99 112 +13.1 +19.3 408 423 +3.7 +6.6
Eylea™ 14 126 . . 14 333 . .
Levitra™ 87 69 -20.7 -15.2 307 290 -5.5 -1.2
Cipro™/Ciprobay™ 56 42 -25.0 -15.4 229 197 -14.0 -7.8
Stivarga™ 31 59 +90.3 100.2 32 197 . .
Zetia™ 57 45 -21.1 +3.9 207 172 -16.9 +5.4
Total 2,140 2,293 +7.1 +15.9 8,063 8,625 +7.0 +13.4
Proportion of Pharmaceuticals sales 75% 77% 75% 77%
Fx adj. = currency-adjusted

Xarelto™ became the world leader among the novel oral anticoagulants in terms of sales in 2013 following considerable sales gains, especially in Germany, Japan and France.* Business with Xarelto™ also developed very positively in the United States, where it is marketed by a subsidiary of Johnson & Johnson. Sales of the eye medicine Eylea™ rose substantially, particularly in Japan, Australia and Germany. We successfully introduced our cancer drug Stivarga™ in additional countries, and recorded the first sales of the cancer drug Xofigo™ (2013 sales: €41 million).

Sales of our blood-clotting medicine Kogenate™ rose thanks to higher volumes. The cancer drug Nexavar™ posted currency-adjusted gains, mainly as a result of price increases in the United States. Sales of our hormone-releasing intrauterine device Mirena™ also increased, particularly in light of adjustments to provisions for rebates in the United States and higher volumes in other countries. The oral diabetes treatment Glucobay™ benefited from continuing growth in demand in the Emerging Markets.

Sales of the multiple sclerosis drug Betaferon™/Betaseron™ receded as expected, particularly in the United States due to increased competition there. Business with our YAZ™/Yasmin™/Yasminelle™ line of oral contraceptives was hampered mainly by generic competition in Western Europe and the United States. Business with the antibiotic Avalox™/Avelox™ declined, mainly as a result of lower demand in the United States. Our antibiotic Cipro™/Ciprobay™ registered lower sales, particularly in the United Kingdom, where we had benefited from a government contract in the previous year.

EBIT of the Pharmaceuticals segment rose by a substantial 84.0% in 2013, to €2,031 million. The main reason for this – apart from the increase in operational earnings – was the decrease in special charges to €521 million (2012: €1,223 million). The special charges comprised €269 million in charges related to legal claims, including €155 million related to claims concerning Yasmin™/YAZ™ in the United States; €140 million in impairment losses recognized on research projects; €66 million in restructuring charges; and €46 million in expenses for the integration of our Conceptus business. EBIT before special items rose by 9.7% to €2,552 million. We raised EBITDA before special items by 8.0% to €3,490 million. This earnings growth was mainly attributable to the good business development and especially to sharp sales increases for our recently launched products, while earnings were diminished by higher selling and R&D expenses and roughly €140 million in negative currency effects.

* as of November 2013; source: internal calculations based on IMS Health MIDAS database – monthly sales November 2013

Consumer Health

Key Data – Consumer Health[Table 3.15.4]
4th Quarter
2012
4th Quarter
2013
Change Full Year
2012
Full Year
2013
Change
  € million € million % Fx (& p)
adj. %
€ million € million % Fx (& p)
adj. %
Sales 2,055 1,964 -4.4 +1.0 7,806 7,736 -0.9 +3.2
Consumer Care 1,055 1,015 -3.8 +0.9 3,853 3,904 +1.3 +5.1
Medical Care 716 653 -8.8 -3.1 2,650 2,526 -4.7 -0.3
Animal Health 284 296 +4.2 +11.6 1,303 1,306 +0.2 +4.5
Sales by region
Europe 743 768 +3.4 +5.2 2,806 2,935 +4.6 +6.0
North America 680 623 -8.4 -3.5 2,591 2,484 -4.1 -0.7
Asia/Pacific 329 297 -9.7 +2.7 1,257 1,172 -6.8 +2.1
Latin America/Africa/
Middle East
303 276 -8.9 +5.6 1,152 1,145 -0.6 +10.0
EBIT 393 310 -21.1 1,101 1,229 +11.6
Special items (23) (95) (359) (192)
EBIT before special items* 416 405 -2.6 1,460 1,421 -2.7
EBITDA* 503 451 -10.3 1,844 1,734 -6.0
Special items (21) (64) (43) (110)
EBITDA before special items* 524 515 -1.7 1,887 1,844 -2.3
EBITDA margin before special items* 25.5% 26.2% 24.2% 23.8%
Gross cash flow** 367 330 -10.1 1,340 1,280 -4.5
Net cash flow** 518 334 -35.5 1,284 1,127 -12.2
2012 figures restated
Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales; Fx adj.: Sales by region)
* For definition see Chapter 16.2 “Calculation of EBIT(DA) Before Special Items.”
** For definition see Chapter 16.5 “Liquidity and Capital Expenditures of the Bayer Group.”

Sales of the Consumer Health segment advanced by 3.2% (Fx & portfolio adj.) in 2013 to €7,736 million. The increase was attributable to the Consumer Care and Animal Health divisions and to gratifying overall development in the Emerging Markets, particularly Russia and Brazil.

Best-Selling Consumer Health Products[Table 3.15.5]
4th Quarter
2012
4th Quarter
2013
Change Full Year
2012
Full Year
2013
Change
  € million € million % Fx adj.
 %
€ million € million  % Fx adj.
%
Contour™ (Medical Care) 193 179 -7.3 -4.1 722 722 0.0 +2.2
Advantage™ product line (Animal Health) 92 98 +6.5 +12.8 495 487 -1.6 +2.0
Aspirin™ (Consumer Care) 138 120 -13.0 -8.1 494 464 -6.1 -2.5
Ultravist™ (Medical Care) 82 80 -2.4 0.0 322 322 0.0 +2.3
Aleve™ (Consumer Care) 87 82 -5.7 -1.0 323 321 -0.6 +3.3
Bepanthen™/Bepanthol™ (Consumer Care) 67 77 +14.9 +23.6 269 310 +15.2 +20.3
Canesten™ (Consumer Care) 65 61 -6.2 +1.5 250 257 +2.8 +8.4
Gadovist™/Gadavist™ (Medical Care) 60 55 -8.3 -4.8 209 205 -1.9 -0.2
One A Day™ (Consumer Care) 53 48 -9.4 -3.4 196 176 -10.2 -7.0
Supradyn™ (Consumer Care) 42 43 +2.4 +10.4 146 158 +8.2 +14.3
Total 879 843 -4.1 +0.9 3,426 3,422 -0.1 +3.3
Proportion of Consumer Health sales 43% 43% 44% 44%
Fx adj.= currency-adjusted
Total sales of Aspirin™ (including Aspirin™ Complex), also including Aspirin™ Cardio, which is reflected in sales of the Pharmaceuticals segment, decreased by 5.6% (Fx adj. -1.0%) in 2013 to €916 million (2012: €970 million). Total sales of this product in the fourth quarter of 2013 declined by 10.1% (Fx adj. -3.3%) to €240 million (Q4 2012: €267 million).

Sales in the Consumer Care Division rose by 5.1% (Fx & portfolio adj.) to €3,904 million. Business with our analgesic Aleve™ expanded on a currency-adjusted basis, mainly due to increased marketing activities in Brazil and price increases in the United States. The skincare product Bepanthen™/Bepanthol™ registered strong growth in the Emerging Markets, especially Brazil and Russia. The antifungal Canesten™ also developed positively. Sales of the dietary supplement Supradyn™ advanced by a double-digit percentage on a currency-adjusted basis, partly as a result of strong business development in Russia. Business with our analgesic Aspirin™ and the dietary supplement One A Day™ declined, primarily due to lower demand in the United States.

Sales in the Medical Care Division were level year on year (Fx & portfolio adj.) at €2,526 million (-0.3%). Business in the United States was hampered particularly by reimbursement pressure and lower prices, while sales developed positively elsewhere. Our Diabetes Care business performed at around the previous year’s level in a shrinking overall market. However, we achieved slight currency-adjusted sales gains for the Contour™ line of blood glucose meters, mainly thanks to the launch of Contour™ Next. Sales of contrast agents and medical devices in the Radiology & Interventional business were at the ­prior-year level on a currency-adjusted basis.

Sales of the Animal Health Division rose by 4.5% (Fx & portfolio adj.) to €1,306 million. We slightly raised sales of the Advantage™ line of flea, tick and worm control products due to gratifying development in Europe. We achieved robust sales growth for the Seresto™ flea and tick collar (2013 sales: €31 million), which was also launched in the United States in 2013.

EBIT of the Consumer Health segment improved by 11.6% in 2013 to €1,229 million. This increase was attributable to the lower net special charges of €192 million (2012: €359 million). The special charges comprised €138 million in restructuring charges, a €44 million impairment loss recognized on an intangible asset and €30 million in expenses for the integration of acquired businesses. EBIT before special items amounted to €1,421 million (-2.7%). EBITDA before special items fell by 2.3% to €1,844 million. Positive earnings contributions from sales growth in the Consumer Care and Animal Health divisions were more than offset by higher selling expenses in the Emerging Markets and roughly €150 million in negative currency effects.

Last updated: February 28, 2014  Copyright © Bayer AG
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