The Bayer Group got off to a successful start to 2017 and generated strong sales and earnings growth in the first quarter.
“At Pharmaceuticals, we once again benefited from the very good performance of our key growth products,” CEO Werner Baumann said when he presented the interim report for the first quarter on Thursday.
Sales of the Bayer Group increased by 11.7 percent to €13,244 million (Q1 2016: €11,854 million) in the first quarter. Adjusted for currency and portfolio effects, sales advanced by 9.4 percent. Sales of the Life Science businesses amounted to €9,680 million, up by 4.9 percent year on year. Group EBITDA before special items improved by 14.9 percent to €3,893 million (Q1 2016: €3,387 million).
EBIT climbed by 34.3 percent to €3,116 million (Q1 2016: €2,320 million) after special charges of €85 million (Q1 2016: €272 million). These mainly resulted from expenses related to efficiency improvement programs, impairment losses on intangible assets, and costs in connection with the agreed acquisition of Monsanto.
EBIT before special items moved ahead by 23.5 percent to €3,201 million (Q1 2016: €2,592 million). Net income climbed by 37.9 percent to €2,083 million (Q1 2016: €1,511 million), and core earnings per share from continuing operations by 11.5 percent to €2.62 (Q1 2016: €2.35).
Cash flow provided by operating activities from continuing operations climbed by a substantial 49.6 percent to€826 million (Q1 2016: €552 million) due to the improvement in EBITDA. Net financial debt of the Bayer Group declined by €1.4 billion to €10.4 billion between December 31, 2016, and March 31, 2017, due mainly to cash inflows from the sale of Covestro shares.
Storng Gains in Pharmaceuticals
Sales of prescription medicines rose in the first quarter by 7.4 percent to €4,263 million (Q1 2016: €3,889 million).
“Our key growth products were once again especially successful, registering combined growth of 20 percent on a currency-adjusted basis,” Baumann said. The oral anticoagulant Xarelto, the eye medicine Eylea, the cancer drugs Xofigo and Stivarga, and the pulmonary hypertension treatment Adempas posted total combined sales of €1,445 million (Q1 2016: €1,187 million).
Sales of Xarelto climbed by 19.6 percent on a currency-adjusted basis, due primarily to higher volumes in Europe and Japan. In addition, Bayer once again significantly expanded its business with the eye medicine Eylea, with performance driven by higher sales volumes in Europe. Encouraging sales were also achieved in Canada and Japan.
Sales of the hormone-releasing intrauterine devices of the Mirena product family increased by a substantial 22.7 percent, primarily due to the performance of the U.S. business, which also benefited from the successful market launch of the new Kyleena intrauterine device. Bayer also recorded substantial sales increases for its diabetes treatment Glucobay, its Aspirin Cardio product for the secondary prevention of heart attacks, and its X-ray contrast agent Ultravist, primarily as a result of the positive development of business in China.
On the other hand, business with the Kogenate/Kovaltry blood-clotting medicines was down overall, largely due to fluctuations in the order volumes placed by Bayer’s distribution partner for these products. As expected, sales of the multiple sclerosis product Betaferon/Betaseron were also lower than in the prior-year quarter due to reduced demand in Europe and the United States. Overall, the Pharmaceuticals business grew in all regions on a currency-adjusted basis.
EBITDA before special items of Pharmaceuticals increased by a substantial 19.1 percent to €1,502 million (Q1 2016: €1,261 million). While sales rose, selling expenses and research and development expenditures were at around the same level as the prior-year quarter.
€1 = $1.09 on April 27, 2017
(Source: Bayer AG)
Filed Under: Drug Discovery