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]
  2013 2014 Change
  € million € million %
Net sales 40,157 42,239 +5.2
Cost of goods sold 19,516 20,266 +3.8
Selling expenses 10,312 11,018 +6.8
Research and development expenses 3,406 3,574 +4.9
General administration expenses 1,712 1,741 +1.7
Other operating income (+) and expenses (–) (277) (134) +51.6
EBIT1 4,934 5,506 +11.6
Financial result (727) (981) -34.9
Income before income taxes 4,207 4,525 +7.6
Income taxes (1,021) (1,082) -6.0
Income after income taxes 3,186 3,443 +8.1
of which attributable to non-controlling interest (3) 17
of which attributable to Bayer AG stockholders (net income) 3,189 3,426 +7.4
2013 figures restated
1 EBIT = earnings before financial result and taxes

Sales of the Bayer Group rose to €42,239 million (+5.2%). The increase after adjusting for currency and portfolio effects was 7.2%.

The cost of goods sold increased by 3.8% to €20,266 million, mainly due to higher volumes at HealthCare and MaterialScience. The ratio of the cost of goods sold to total sales was 48.0% (201348.6%). The selling expenses of €11,018 million (+6.8%) amounted to 26.1% of sales (201325.7%). Research and development (r&d) expenses rose in 2014 by 4.9% to €3,574 million, the increase being attributable to HealthCare and CropScience. The ratio of r&d expenses to sales remained level at 8.5% (20138.5%). General administration expenses, at €1,741 million, were slightly above the prior year (+1.7%). The ratio of general administration expenses to total sales was somewhat lower at 4.1% (20134.3%). The negative balance of other operating income and expenses was reduced considerably to minus €134 million (2013: minus €277 million), mainly because special charges for accounting measures related to legal claims were lower in 2014 (see also Chapter 16.2Calculation of EBIT(DA) Before Special Items”).

ebit climbed by 11.6% in 2014 to €5,506 million.

The financial result fell by 34.9% to minus €981 million. It comprised €356 million (2013: €355 million) in net interest expense, €322 million (2013: €297 million) in interest cost for pension and other provisions, and a €248 million (2013: €120 million) net exchange loss. The year-on-year increase in the net exchange loss was mainly due to exchange rate effects in Venezuela, Ukraine and Argentina, higher exchange hedging costs and the fact that the prior year’s financial result included a one-time gain of €77 million from the sale of Bayer’s interest in Onyx Pharmaceuticals Inc., United States.

Tax expense in 2014 increased to €1,082 million as a result of earnings growth (2013: €1,021 million). Income after income taxes came in at €3,443 million. Income attributable to non-controlling interest rose by €20 million to €17 million. Bayer Group net income for 2014 was €3,426 million (2013: €3,189 million).

Last updated: February 26, 2015  Copyright © Bayer AG
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