Management Report
5. Performance by Subgroup, Segment and Region
5.1 HealthCare
| Key Data – HealthCare | [Table 2] |
|---|
| | 3rd Quarter
2010 | 3rd Quarter
2011 | Change | First Nine
Months 2010 | First Nine
Months 2011 | Change |
|
€ million |
€ million |
% | Fx (& p)
adj.
% |
€ million |
€ million |
% | Fx (& p)
adj.
% |
| Sales | 4,271 | 4,200 | -1.7 | +1.6 | 12,445 | 12,574 | +1.0 | +2.4 |
| Change in sales | | | | | | | | |
| Volume | +1.5% | +1.0% | | | +1.7% | +2.5% | | |
| Price | -0.6% | +0.6% | | | +0.1% | -0.1% | | |
| Currency | +7.6% | -3.5% | | | +4.3% | -1.7% | | |
| Portfolio | 0.0% | +0.2% | | | -0.8% | +0.3% | | |
| Sales by segment | | | | | | | | |
| Pharmaceuticals | 2,732 | 2,663 | -2.5 | +0.3 | 8,011 | 7,978 | -0.4 | +0.5 |
| Consumer Health | 1,539 | 1,537 | -0.1 | +3.8 | 4,434 | 4,596 | +3.7 | +5.8 |
| Sales by region | | | | | | | | |
| Europe | 1,590 | 1,537 | -3.3 | -3.0 | 4,712 | 4,725 | +0.3 | 0.0 |
| North America | 1,161 | 1,061 | -8.6 | -0.9 | 3,500 | 3,199 | -8.6 | -2.9 |
| Asia/Pacific | 854 | 924 | +8.2 | +9.0 | 2,366 | 2,652 | +12.1 | +10.7 |
| Latin America/Africa/Middle East | 666 | 678 | +1.8 | +9.2 | 1,867 | 1,998 | +7.0 | +9.5 |
| EBIT | 735 | 866 | +17.8 | | 1,990 | 2,421 | +21.7 | |
| Special items | (50) | (43) | | | (268) | (131) | | |
| EBIT before special items* | 785 | 909 | +15.8 | | 2,258 | 2,552 | +13.0 | |
| EBITDA* | 1,072 | 1,184 | +10.4 | | 3,131 | 3,392 | +8.3 | |
| Special items | (50) | (42) | | | (136) | (130) | | |
| EBITDA before special items* | 1,122 | 1,226 | +9.3 | | 3,267 | 3,522 | +7.8 | |
| EBITDA margin before special items* | 26.3% | 29.2% | | | 26.3% | 28.0% | | |
| Gross cash flow** | 707 | 800 | +13.2 | | 2,129 | 2,328 | +9.3 | |
| Net cash flow** | 694 | 814 | +17.3 | | 2,102 | 2,231 | +6.1 | |
2010 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 6 "Calculation of EBIT(DA) Before Special Items." ** For definition see Chapter 8 "Financial Position of the Bayer Group." |
Sales of the HealthCare subgroup amounted to €4,200 million in the third quarter of 2011 (reported: -1.7%). Adjusted for currency and portfolio effects, sales rose by 1.6%. The Pharmaceuticals business experienced pleasing growth in the emerging markets but declined in Europe and North America. The Consumer Health business developed positively in all regions.
EBIT of the HealthCare subgroup grew by 17.8% in the third quarter of 2011 to €866 million after special charges of €43 million for restructuring. EBIT before special items rose by 15.8% to €909 million. EBITDA before special items advanced by 9.3% to €1,226 million, mainly as a result of higher earnings in Pharmaceuticals. Currency changes had a negative effect.
Pharmaceuticals
| Key Data – Pharmaceuticals | [Table 3] |
|---|
| | 3rd Quarter
2010 | 3rd Quarter
2011 | Change | First Nine
Months 2010 | First Nine
Months 2011 | Change |
|
€ million |
€ million |
% | Fx (& p)
adj.
% |
€ million |
€ million |
% | Fx (& p)
adj.
% |
| Sales | 2,732 | 2,663 | -2.5 | +0.3 | 8,011 | 7,978 | -0.4 | +0.5 |
| General Medicine | 1,675 | 1,661 | -0.8 | +1.8 | 4,969 | 4,991 | +0.4 | +1.0 |
| Specialty Medicine | 1,057 | 1,002 | -5.2 | -2.0 | 3,042 | 2,987 | -1.8 | -0.3 |
| Sales by region | | | | | | | | |
| Europe | 1,014 | 949 | -6.4 | -6.1 | 3,028 | 2,936 | -3.0 | -3.3 |
| North America | 601 | 535 | -11.0 | -4.0 | 1,905 | 1,618 | -15.1 | -10.2 |
| Asia/Pacific | 687 | 742 | +8.0 | +8.9 | 1,900 | 2,142 | +12.7 | +11.3 |
| Latin America/Africa/Middle East | 430 | 437 | +1.6 | +7.9 | 1,178 | 1,282 | +8.8 | +10.4 |
| EBIT | 420 | 566 | +34.8 | | 1,191 | 1,569 | +31.7 | |
| Special items | (50) | (34) | | | (268) | (118) | | |
| EBIT before special items* | 470 | 600 | +27.7 | | 1,459 | 1,687 | +15.6 | |
| EBITDA* | 689 | 820 | +19.0 | | 2,134 | 2,346 | +9.9 | |
| Special items | (50) | (33) | | | (136) | (117) | | |
| EBITDA before special items* | 739 | 853 | +15.4 | | 2,270 | 2,463 | +8.5 | |
| EBITDA margin before special items* | 27.0% | 32.0% | | | 28.3% | 30.9% | | |
| Gross cash flow** | 450 | 547 | +21.6 | | 1,423 | 1,588 | +11.6 | |
| Net cash flow** | 421 | 579 | +37.5 | | 1,468 | 1,536 | +4.6 | |
2010 figures restated Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales; Fx adj.: Sales by region) * For definition see Chapter 6 "Calculation of EBIT(DA) Before Special Items." ** For definition see Chapter 8 "Financial Position of the Bayer Group." |
Sales in the Pharmaceuticals segment in the third quarter of 2011 came to €2,663 million (Fx & portfolio adj. +0.3%). We achieved the largest sales gains in the Asia/Pacific region and in Latin America, especially in China and Brazil. Sales declined in North America and Western Europe, where business continued to be held back by health system reforms.
| Best-Selling Pharmaceuticals Products | [Table 4] |
|---|
| | 3rd Quarter
2010 | 3rd Quarter
2011 | Change | First Nine
Months 2010 | First Nine
Months 2011 | Change |
|
€ million |
€ million |
% | Fx adj.
% |
€ million |
€ million |
% | Fx adj.
% |
| Betaferon™/Betaseron™ (Specialty Medicine) | 308 | 289 | -6.2 | -1.9 | 893 | 836 | -6.4 | -3.9 |
| Kogenate™ (Specialty Medicine) | 277 | 257 | -7.2 | -3.9 | 759 | 802 | +5.7 | +7.6 |
| YAZ™/Yasmin™/Yasminelle™ (General Medicine) | 243 | 275 | +13.2 | +16.5 | 819 | 780 | -4.8 | -4.0 |
| Nexavar™ (Specialty Medicine) | 175 | 177 | +1.1 | +4.5 | 516 | 520 | +0.8 | +2.1 |
| Adalat™ (General Medicine) | 171 | 156 | -8.8 | -6.7 | 494 | 469 | -5.1 | -5.8 |
| Mirena™ (General Medicine) | 138 | 137 | -0.7 | +4.3 | 404 | 424 | +5.0 | +8.8 |
| Avalox™/Avelox™ (General Medicine) | 100 | 103 | +3.0 | +6.7 | 353 | 355 | +0.6 | +1.5 |
| Aspirin™ Cardio (General Medicine) | 94 | 102 | +8.5 | +11.4 | 259 | 291 | +12.4 | +13.0 |
| Glucobay™ (General Medicine) | 91 | 88 | -3.3 | -0.2 | 260 | 266 | +2.3 | +3.6 |
| Levitra™ (General Medicine) | 110 | 75 | -31.8 | -31.0 | 292 | 239 | -18.2 | -17.3 |
| Ultravist™ (Specialty Medicine) | 81 | 76 | -6.2 | -4.0 | 231 | 233 | +0.9 | +2.1 |
| Cipro™/Ciprobay™ (General Medicine) | 61 | 53 | -13.1 | -12.0 | 197 | 170 | -13.7 | -13.5 |
| Magnevist™ (Specialty Medicine) | 55 | 48 | -12.7 | -7.5 | 164 | 139 | -15.2 | -12.4 |
| Iopamiron™ (Specialty Medicine) | 44 | 47 | +6.8 | +8.3 | 135 | 133 | -1.5 | -4.4 |
| Diane™ (General Medicine) | 43 | 47 | +9.3 | +12.4 | 125 | 133 | +6.4 | +6.3 |
| Total | 1,991 | 1,930 | -3.1 | -0.3 | 5,901 | 5,790 | -1.9 | -0.6 |
| Proportion of Pharmaceuticals sales | 73% | 72% | | | 74% | 73% | | |
| Fx adj. = currency-adjusted |
Sales in our General Medicine business unit amounted to €1,661 million, up 1.8% after adjusting for currency and portfolio effects. Our YAZ™/Yasmin™/Yasminelle™ product group developed well, especially in North America and Asia/Pacific. The improvement in North America was mainly attributable to higher sales of YAZ™ compared with the weak prior-year quarter and to the launch of Beyaz™ in the United States. Business with this product group also continued to develop well in Japan. Sales of our hormone-releasing intrauterine device Mirena™ moved ahead, thanks largely to higher volumes. By continuing to invest in our marketing activities in China, we significantly raised sales of Aspirin™ Cardio for the prevention of myocardial infarction. Sales of our antibiotic Avalox™/Avelox™ rose, particularly in the United States, from the weak level of the prior-year period.
Sales of our erectile dysfunction treatment Levitra™ again fell significantly because of the partial reorganization of distribution for general medicine products in the United States, while business in the prior-year quarter benefited from an agreement concluded with a major customer. Sales of Adalat™, used to treat high blood pressure and coronary heart disease, were held back by generic competition, particularly in Canada and Japan, but increased in China. Business with our antibiotic Cipro™/Ciprobay™ was down, mainly because of generic competition in Japan and Europe.
Sales in the Specialty Medicine business unit moved back by 2.0% on a currency- and portfolio-adjusted basis to €1,002 million. Business with our blood-clotting drug Kogenate™ was down from the prior-year quarter due to fluctuations in the ordering schedule of our distribution partner. Sales of our multiple sclerosis drug Betaferon™/Betaseron™ receded slightly, with selling price increases and higher volumes in North America partly offsetting losses of market share and price reductions in connection with health system reforms in Europe.
Our cancer drug Nexavar™ developed positively, mainly for the liver cancer indication. We achieved higher volumes in the Asia/Pacific region, particularly in Japan and China, and benefited from price and volume increases in the United States. In Europe, on the other hand, sales were down against a strong prior-year quarter.
EBIT of the Pharmaceuticals segment climbed by 34.8% in the third quarter of 2011 to €566 million. Earnings were diminished by special charges of €34 million for restructuring. EBIT before special items advanced by 27.7% to €600 million. EBITDA before special items rose by 15.4% to €853 million due to lower costs in all functions, including reduced development costs following the successful completion of most Phase III studies for our anticoagulant Xarelto™. Earnings were diminished by the effects of health system reforms and negative currency changes.
In the first nine months of 2011, sales in our Pharmaceuticals segment totaled €7,978 million, which was 0.5% above the prior-year period after adjusting for currency and portfolio effects. Business developed positively in the emerging markets, while sales were down in the established markets, especially North America, mainly due to health system reforms and generic competition. Encouraging sales gains were achieved particularly for our blood-clotting medicine Kogenate™, the hormone-releasing intrauterine device Mirena™, and Aspirin™ Cardio for prevention of myocardial infarction. By contrast, our oral contraceptives YAZ™/Yasmin™/Yasminelle™ and the multiple sclerosis drug Betaferon™/Betaseron™ saw sales decline.
EBIT moved ahead by 31.7% in the first nine months of 2011 to €1,569 million after special charges of €118 million, which were incurred mainly for restructuring. EBIT before special items advanced by 15.6% to €1,687 million. EBITDA before special items increased by 8.5% to €2,463 million.
Consumer Health
| Key Data – Consumer Health | [Table 5] |
|---|
| | 3rd Quarter
2010 | 3rd Quarter
2011 | Change | First Nine
Months 2010 | First Nine
Months 2011 | Change |
|
€ million |
€ million |
% | Fx (& p)
adj.
% |
€ million |
€ million |
% | Fx (& p)
adj.
% |
| Sales | 1,539 | 1,537 | -0.1 | +3.8 | 4,434 | 4,596 | +3.7 | +5.8 |
| Consumer Care | 880 | 885 | +0.6 | +5.5 | 2,460 | 2,588 | +5.2 | +7.9 |
| Medical Care | 375 | 370 | -1.3 | +2.9 | 1,109 | 1,104 | -0.5 | +2.7 |
| Animal Health | 284 | 282 | -0.7 | 0.0 | 865 | 904 | +4.5 | +3.9 |
| Sales by region | | | | | | | | |
| Europe | 576 | 588 | +2.1 | +2.4 | 1,684 | 1,789 | +6.2 | +6.1 |
| North America | 560 | 526 | -6.1 | +2.3 | 1,595 | 1,581 | -0.9 | +5.8 |
| Asia/Pacific | 167 | 182 | +9.0 | +9.6 | 466 | 510 | +9.4 | +8.4 |
| Latin America/Africa/Middle East | 236 | 241 | +2.1 | +11.4 | 689 | 716 | +3.9 | +7.8 |
| EBIT | 315 | 300 | -4.8 | | 799 | 852 | +6.6 | |
| Special items | 0 | (9) | | | 0 | (13) | | |
| EBIT before special items* | 315 | 309 | -1.9 | | 799 | 865 | +8.3 | |
| EBITDA* | 383 | 364 | -5.0 | | 997 | 1,046 | +4.9 | |
| Special items | 0 | (9) | | | 0 | (13) | | |
| EBITDA before special items* | 383 | 373 | -2.6 | | 997 | 1,059 | +6.2 | |
| EBITDA margin before special items* | 24.9% | 24.3% | | | 22.5% | 23.0% | | |
| Gross cash flow** | 257 | 253 | -1.6 | | 706 | 740 | +4.8 | |
| Net cash flow** | 273 | 235 | -13.9 | | 634 | 695 | +9.6 | |
2010 figures restated Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales; Fx adj.: Sales by region) * For definition see Chapter 6 "Calculation of EBIT(DA) Before Special Items." ** For definition see Chapter 8 "Financial Position of the Bayer Group." |
Sales in our Consumer Health segment came to €1,537 million in the third quarter of 2011. The currency- and portfolio-adjusted increase came to 3.8%. All regions contributed to this performance, particularly Latin America/Africa/Middle East.
| Best-Selling Consumer Health Products | [Table 6] |
|---|
| | 3rd Quarter
2010 | 3rd Quarter
2011 | Change | First Nine
Months 2010 | First Nine
Months 2011 | Change |
|
€ million |
€ million |
% | Fx adj.
% |
€ million |
€ million |
% | Fx adj.
% |
| Contour™ (Medical Care) | 147 | 159 | +8.2 | +11.2 | 442 | 470 | +6.3 | +8.3 |
| Advantage™ product line (Animal Health) | 103 | 91 | -11.7 | -6.6 | 333 | 336 | +0.9 | +5.2 |
| Aspirin™* (Consumer Care) | 110 | 108 | -1.8 | +3.0 | 305 | 324 | +6.2 | +10.1 |
| Aleve™/naproxen (Consumer Care) | 78 | 74 | -5.1 | +1.9 | 205 | 209 | +2.0 | +8.0 |
| Bepanthen™/Bepanthol™ (Consumer Care) | 51 | 53 | +3.9 | +5.2 | 161 | 175 | +8.7 | +8.1 |
| Canesten™ (Consumer Care) | 57 | 55 | -3.5 | -2.3 | 159 | 168 | +5.7 | +5.6 |
| One A Day™ (Consumer Care) | 48 | 42 | -12.5 | -3.7 | 131 | 127 | -3.1 | +3.5 |
| Baytril™ (Animal Health) | 44 | 40 | -9.1 | -4.4 | 117 | 114 | -2.6 | 0.0 |
| Supradyn™ (Consumer Care) | 37 | 36 | -2.7 | +2.2 | 100 | 101 | +1.0 | +2.6 |
| Breeze™ (Medical Care) | 31 | 27 | -12.9 | -9.5 | 93 | 84 | -9.7 | -7.5 |
| Total | 706 | 685 | -3.0 | +1.4 | 2,046 | 2,108 | +3.0 | +6.0 |
| Proportion of Consumer Health sales | 46% | 45% | | | 46% | 46% | | |
Fx adj.= currency-adjusted * Including Aspirin™ Cardio, which is reflected in sales of the Pharmaceuticals segment, Aspirin™ Q3 2011 sales totaled €210 million (Q3 2010: €204 million), and 9M 2011 sales totaled €615 million (9M 2010: €564 million). |
Sales in our Consumer Care Division rose by 5.5% on a currency- and portfolio-adjusted basis, to €885 million. Business with our Bepanthen™/Bepanthol™ line of skincare products expanded in all regions. The development of our analgesic Aspirin™ in the United States also contributed to the growth in sales, the main factor here being the launch of Advanced Aspirin™, a new formulation with particularly rapid action. Sales of the One A Day™ line were down from the strong prior-year quarter, partly due to heightened competition in the United States.
Sales of the Medical Care Division rose by a currency- and portfolio-adjusted 2.9% to €370 million. The growth in our Diabetes Care business was based mainly on our Contour™ line of blood glucose meters. Sales of Contour™ rose in all regions, especially North America, where volumes increased from a weak prior-year quarter. Sales of our medical devices business increased in all regions, particularly North America.
Sales of the Animal Health Division, at €282 million, were level with the prior-year quarter after adjusting for currency and portfolio effects. Gains in Asia/Pacific and Latin America offset the weak trend in North America. Business with our Advantage™ line of flea, tick and worm control products receded, particularly in the United States, mainly due to unfavorable weather conditions. Sales of the antibiotic Baytril™ also declined, largely because of generic competition in Europe.
EBIT of our Consumer Health segment declined by 4.8% in the third quarter of 2011 to €300 million after special charges of €9 million for restructuring. EBIT before special items amounted to €309 million (-1.9%). EBITDA before special items was slightly down from the prior-year period at €373 million (-2.6%). Positive earnings contributions from the increase in sales were offset by higher selling expenses, especially at Consumer Care, and adverse currency effects.
In the first nine months of 2011, we raised sales in our Consumer Health segment by 5.8% on a currency- and portfolio-adjusted basis to €4,596 million. All regions contributed to this performance. The majority of our Consumer Health products saw strong sales growth, particularly the analgesics Aspirin™ and Aleve™/naproxen, the Bepanthen™/Bepanthol™ line of skincare products and the Contour™ family of blood glucose meters.
EBIT in the first nine months of 2011 rose by 6.6% to €852 million. Special items amounted to minus €13 million. EBIT before special items advanced by 8.3% to €865 million. EBITDA before special items increased by 6.2% to €1,059 million.