Management Report & Annexes | Fundamental Information About the Group

4. Economic Environments of the Subgroups

The economic environments in which the subgroups operate are outlined below. (The economic environment for the Bayer Group as a whole is described in Chapter 1.6 “Corporate Environment.”)

Economic Environments of the Subgroups [Table 3.4.1]
  Growth1
2013
Growth1
2014
HealthCare    
Pharmaceuticals market +5% +8%
Consumer care market +5% +4%
Medical care market -3% -3%
Animal health market +3% +5%
CropScience    
Seed and crop protection market +9% +6%
MaterialScience (main customer industries)    
Automotive industry +4% +3%
Construction industry +3% +4%
Electrical/electronics industry +4% +5%
Furniture industry +3% +4%

2013 figures restated

1 Bayer’s estimate, except pharmaceuticals. Source for pharmaceuticals market: IMS Health, IMS Market Prognosis. Copyright 2015. All rights reserved, currency-adjusted; 2014 data provisional

as of February 2015

HealthCare

The pharmaceuticals market saw significantly higher growth in 2014 than in the previous year. In the United States in particular, there was a marked increase in sales of pharmaceuticals, mainly as a result of new product introductions and a smaller impact from patent expirations. Despite a persistently restrictive health policy environment, growth was stronger in a number of European countries due to the launch of new products. Pharmaceuticals growth in the emerging markets was comparable with the prior year.

Following the high growth in the previous year due to the strong cold season, the consumer care market resumed a normal growth rate in 2014, which was thus slightly below the 2013 rate. The shrinkage in the medical care market was due to the weakening of the diabetes care market, while the market for contrast agents and medical equipment (Radiology business unit) nearly reached the previous year’s level. Growth in the animal health market in 2014 picked up in the second half of the year and showed an increase for the year as a whole.

CropScience

The global seed and crop protection market continued to show dynamic development in 2014. There was a further tangible increase in the demand for high-value seeds. The global crop protection market also expanded, albeit at a slower rate than in the prior year.

Growth in the global seed and crop protection market last year was again driven by Latin America, particularly Brazil and Argentina. The European market also showed strong growth in 2014 thanks to generally favorable weather conditions. While growth rates were moderate in the Mediterranean region, they were above average in Eastern Europe despite the Ukraine conflict. In Asia/Pacific, too, the generally positive market trend persisted in 2014, with the Chinese and Indian crop protection markets showing the strongest momentum. Growth rates in North America, however, were below the average for the global market. This was mainly the result of a late start to the season in the corn- and soybean-growing areas caused by adverse weather conditions.

MaterialScience

Global development of the principal customer industries for MaterialScience (automotive, construction, electrical/electronics and furniture) in 2014 was slower than expected overall. This was partly due to the continued weakening of the business environment in the eurozone. The slower growth in China and some other emerging economies was offset by stronger-than-expected growth in North America.

The global automotive industry recorded moderate, albeit slightly slower, growth overall in 2014 than in the previous year. Strong demand across all vehicle segments led to robust growth in North America and Asia. Development in Western Europe was likewise positive, bolstered by a number of government incentive programs and continued strong demand for premium class vehicles. By contrast, Latin America, particularly Brazil and Argentina, posted considerable declines. In addition, 2014 was marked by numerous vehicle recalls affecting all the main automakers in all geographies.

Growth in the global construction industry improved year on year. The development was characterized by a sustained recovery in both Western and Eastern Europe, continuing positive development in the United States and a stabilizing trend in Latin America. Growth in Asia was steady overall with a slight weakening in China, the region’s most important market.

The global electrical and electronics industry posted robust growth once again in 2014. While the high growth rates experienced in past years continued in Asia, driven mainly by China, growth in Europe and North America was slower than in 2013.

Growth of the global furniture industry improved in 2014 compared with the previous year, with the industry benefiting from the progressive market recovery in North America and Europe. Growth in Latin America, however, slowed. Market development in Asia was satisfactory, driven by exports. Domestic demand in this region, however, increased only slightly.

Last updated: February 26, 2015  Copyright © Bayer AG
http://www.annualreport2014.bayer.com