Sales of the Bayer Group climbed by 13.2 percent in the first quarter of 2011, to EUR 9,415 million (Q1 2010: EUR 8,316 million). Adjusted for currency and portfolio effects, sales were up by 10.4 percent. Despite the positive business trend, the operating result (EBIT) improved by only 4.0 percent to EUR 1,148 million (Q1 2010: EUR 1,104 million).
"All three subgroups contributed to the strong start to the year with sales and earnings increases," Bayer CEO Dr. Marijn Dekkers explained on Thursday when the company's first-quarter results were released. He was especially pleased at how well the season had begun at CropScience. MaterialScience achieved significant growth compared with the prior-year quarter, which was still hampered by the financial and economic crisis, and HealthCare also posted a solid performance. Dekkers expressed his optimism for the year as a whole: "We are raising our Group sales and earnings forecast for this year, mainly because of the improvement we expect at CropScience."
Earnings were diminished by special charges of EUR 442 million (Q1 2010: EUR 77 million). Of this figure, the restructuring measures already announced at CropScience and HealthCare accounted for EUR 248 million. Charges of EUR 194 million were taken mainly for an intended settlement program in connection with litigations concerning genetically modified rice in the United States. "We hope this subject is now dealt with to a large extent," said Dekkers.
EBIT before special items improved by 34.6 percent to EUR 1,590 million (Q1 2010: EUR 1,181 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) - before special items - climbed by 22.3 percent to EUR 2,232 million (Q1 2010: EUR 1,825 million). Net income came in at EUR 684 million (Q1 2010: EUR 631 million), up 8.4 percent year on year. Core earnings per share rose by 28.3 percent to EUR 1.45 (Q1 2010: EUR 1.13).
Gross cash flow climbed by 11.1 percent to EUR 1,309 million (Q1 2010: EUR 1,178 million), while net cash flow rose by 9.4 percent to EUR 801 million (Q1 2010: EUR 732 million). Net financial debt was reduced by EUR 0.8 billion compared with the end of 2010, to EUR 7.1 billion. The rating agency Standard & Poor's recently confirmed Bayer's good credit rating (A-) and raised the outlook from "negative" to "stable".
About Bayer HealthCare
The Bayer Group is a global enterprise with core competencies in the fields of health care, nutrition and high-tech materials. Bayer HealthCare, a subgroup of Bayer AG with annual sales of EUR 16.913 billion (2010), is one of the world's leading, innovative companies in the healthcare and medical products industry and is based in Leverkusen, Germany. The company combines the global activities of the Animal Health, Consumer Care, Medical Care and Pharmaceuticals divisions. Bayer HealthCare's aim is to discover and manufacture products that will improve human and animal health worldwide. Bayer HealthCare has a global workforce of 55,700 employees (Dec 31, 2010) and is represented in more than 100 countries.