Management Report & Annexes | Report on Economic Position

15. Business Development by Subgroup, Segment and Region

15.1 HealthCare

Key Data – HealthCare[Table 3.15.1]
  4th
Quarter
2013
4th
Quarter
2014
Change Full
Year
2013
Full
Year
2014
Change
  € million € million % Fx (& p)
adj. %
€ million € million % Fx (& p)
adj. %
Sales 4,939 5,598 +13.3 +7.8 18,924 19,975 +5.6 +7.5
Change in sales                
Volume +4.7% +5.8%     +5.9% +6.4%    
Price +2.5% +2.0%     +0.9% +1.1%    
Currency -7.7% 0.0%     -5.7% -3.7%    
Portfolio +0.9% +5.5%     +0.6% +1.8%    
Sales                
Pharmaceuticals 2,975 3,271 +9.9 +10.1 11,188 12,052 +7.7 +11.2
Consumer Health 1,964 2,327 +18.5 +4.2 7,736 7,923 +2.4 +2.1
Sales by region                
Europe 1,817 1,964 +8.1 +10.7 6,853 7,364 +7.5 +9.2
North America 1,286 1,597 +24.2 +16.8 5,024 5,312 +5.7 +6.3
Asia/Pacific 1,080 1,230 +13.9 +11.5 4,188 4,479 +6.9 +11.0
Latin America/Africa/Middle East 756 807 +6.7 +15.9 2,859 2,820 -1.4 +12.3
EBIT 631 562 -10.9 3,260 3,581 +9.8
Special items (354) (376)   (713) (331)  
EBIT before special items1 985 938 -4.8 3,973 3,912 -1.5
EBITDA1 1,069 1,079 +0.9 4,858 5,186 +6.8
Special items (268) (347)   (476) (298)  
EBITDA before special items1 1,337 1,426 +6.7 5,334 5,484 +2.8
EBITDA margin before special items1 27.1% 25.5%     28.2% 27.5%    
Gross cash flow2 840 1,234 +46.9 3,573 4,011 +12.3
Net cash flow2 959 2,185 .   2,980 4,444 +49.1  

Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales; Fx adj.: Sales by region)

1 For definition see Chapter 16.2 “Calculation of EBIT(DA) Before Special Items.”

2 For definition see Chapter 16.5 “Liquidity and Capital Expenditures of the Bayer Group.”

Sales of the HealthCare subgroup rose by 7.5% (Fx & portfolio adj.) in 2014, to €19,975 million (reported: +5.6%). This encouraging growth was driven by our recently launched pharmaceutical products. Sales at Consumer Health came in slightly ahead of the prior year.

The integration of the businesses acquired from Merck & Co., Inc., United States, and from Dihon Pharmaceutical Group Co. Ltd., China, in the fourth quarter of 2014 is progressing on schedule.

HealthCare Quarterly Sales

ebit of the HealthCare subgroup advanced significantly by 9.8% in 2014 to €3,581 million. This increase was largely attributable to considerably lower special charges of €331 million (2013: €713 million). ebit before special items declined by 1.5% to €3,912 million. By contrast, we raised ebitda before special items by 2.8% to €5,484 million. This increase was driven by the gratifying business development in Pharmaceuticals, while earnings in Consumer Health posted a slight decrease. Earnings at HealthCare were diminished by higher selling expenses in both segments, higher research and development spending in Pharmaceuticals and negative currency effects of approximately €360 million.

HealthCare Quarterly EBIT / HealthCare Quarterly EBITDA Before Special Items

Pharmaceuticals

Key Data – Pharmaceuticals[Table 3.15.2]
  4th
Quarter
2013
4th
Quarter
2014
Change Full
Year
2013
Full
Year
2014
Change
  € million € million % Fx (& p)
adj. %
€ million € million % Fx (& p)
adj. %
Sales 2,975 3,271 +9.9 +10.1 11,188 12,052 +7.7 +11.2
Sales by region                
Europe 1,049 1,176 +12.1 +13.5 3,918 4,396 +12.2 +13.3
North America 663 735 +10.9 +4.2 2,540 2,728 +7.4 +8.2
Asia/Pacific 783 884 +12.9 +10.9 3,016 3,278 +8.7 +13.1
Latin America/Africa/Middle East 480 476 -0.8 +9.6 1,714 1,650 -3.7 +10.1
EBIT 321 375 +16.8 2,031 2,371 +16.7
Special items (259) (290)   (521) (286)  
EBIT before special items1 580 665 +14.7 2,552 2,657 +4.1
EBITDA1 618 678 +9.7 3,124 3,446 +10.3
Special items (204) (261)     (366) (253)    
EBITDA before special items1 822 939 +14.2 3,490 3,699 +6.0
EBITDA margin before special items1 27.6% 28.7%     31.2% 30.7%    
Gross cash flow2 510 843 +65.3 2,293 2,745 +19.7
Net cash flow2 625 1,719 .   1,853 3,266 +76.3  
Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales; Fx adj.: Sales by region)

1 For definition see Chapter 16.2 “Calculation of EBIT(DA) Before Special Items.”

2 For definition see Chapter 16.5 “Liquidity and Capital Expenditures of the Bayer Group.”

Sales of the Pharmaceuticals segment climbed by a substantial 11.2% (Fx & portfolio adj.) to €12,052 million. This very good performance was driven by our recently launched products XareltoTM, EyleaTM, StivargaTM, XofigoTM and AdempasTM, which posted combined sales of €2,908 million (2013: €1,522 million). Our Pharmaceuticals business grew in all regions on a currency-adjusted basis, particularly in China, the United States and Western Europe.

Best-Selling Pharmaceuticals Products[Table 3.15.3]
  4th
Quarter
2013
4th
Quarter
2014
Change Full
Year
2013
Full
Year
2014
Change
  € million € million % Fx adj. % € million € million % Fx adj. %
XareltoTM 316 516 +63.3 +65.0 949 1,679 +76.9 +81.6
KogenateTM 274 301 +9.9 +7.8 1,202 1,109 -7.7 -5.6
BetaferonTM/BetaseronTM 259 190 -26.6 -28.5 1,038 819 -21.1 -19.6
MirenaTM product family 195 225 +15.4 +10.0 719 819 +13.9 +15.1
NexavarTM 194 202 +4.1 +2.7 771 773 +0.3 +3.5
YAZTM/YasminTM/ YasminelleTM 219 198 -9.6 -4.4 853 768 -10.0 -3.3
EyleaTM 126 219 +73.8 +74.4 333 759 +127.9 +132.8
AdalatTM 157 153 -2.5 -2.9 603 588 -2.5 +2.5
AspirinTM Cardio 120 130 +8.3 +9.1 452 486 +7.5 +12.4
GlucobayTM 112 133 +18.8 +12.0 423 443 +4.7 +5.6
AvaloxTM/AveloxTM 106 96 -9.4 -8.4 426 381 -10.6 -6.9
LevitraTM 69 56 -18.8 -18.6 290 245 -15.5 -13.1
StivargaTM 59 63 +6.8 +4.0 197 224 +13.7 +16.6
CiproTM/CiprobayTM 42 52 +23.8 +27.3 197 191 -3.0 +1.9
ZetiaTM 45 47 +4.4 +9.4 172 168 -2.3 +5.9
Total 2,293 2,581 +12.6 +12.1 8,625 9,452 +9.6 +13.1
Proportion of Pharmaceuticals sales 77% 79%     77% 78%    
Fx adj. = currency-adjusted

Our oral anticoagulant XareltoTM maintained its growth momentum, with strong sales gains especially in Japan, France and Germany. Royalties received and recognized as sales in the United States, where XareltoTM is marketed by a subsidiary of Johnson & Johnson, more than doubled. Following its approval in additional indications, sales of our eye medicine EyleaTM continued to rise substantially, particularly in Europe. The cancer drug StivargaTM developed positively, and the cancer drug XofigoTM (sales in 2014: €157 million; 2013: €41 million) also made a pleasing contribution to sales growth, especially in the United States. The market introduction of AdempasTM to treat various forms of pulmonary hypertension continued successfully in additional countries. Since October 2014, we have been collaborating with Merck & Co., Inc., United States, in the development and commercialization of AdempasTM. The sales attributable to Bayer amounted to €89 million in 2014 (2013: €3 million). The one-time payment of €793 million from the sGC cooperation will be recorded as sales and earnings over a 13.5 year period. €15 million of this was accounted for in the fourth quarter.

Sales of the hormone-releasing intrauterine devices of the MirenaTM product family rose mainly as a result of higher prices and volumes in the United States. The cancer drug NexavarTM posted gains, mainly as a result of price increases in the United States. AdalatTM for the treatment of hypertension and coronary heart disease, AspirinTM Cardio for secondary prevention of heart attacks and our oral diabetes treatment GlucobayTM benefited from further rising demand in China.

Sales of our blood-clotting medicine KogenateTM receded, due partly to the temporary use of production capacities to develop our next-generation hemophilia medicines. Sales of the multiple sclerosis drug BetaferonTM/BetaseronTM fell particularly in the United States due to increased competition there. Business with our yazTM/YasminTM/YasminelleTM oral contraceptives was held back especially by generic competition in Western Europe and lower demand in Japan. Despite higher volumes in China, sales of the antibiotic AvaloxTM/AveloxTM declined overall, due particularly to the expiration of the patent in Europe and the United States. Sales of LevitraTM for the treatment of erectile dysfunction were down primarily in the United States.

ebit of the Pharmaceuticals segment rose by a substantial 16.7% in 2014 to €2,371 million. This was mainly due to lower special charges of €286 million (2013: €521 million), which mainly included €173 million for the derecognition of goodwill as a result of the sGC collaboration with Merck & Co., Inc., United States, and €88 million in accounting measures for litigations. ebit before special items increased by 4.1% to €2,657 million. We raised ebitda before special items by 6.0% to €3,699 million. This earnings growth was mainly attributable to the encouraging business development and especially to the strong sales gains for our recently launched products, while earnings were diminished by higher selling and r&d expenses and roughly €330 million in negative currency effects.

Consumer Health

Key Data – Consumer Health[Table 3.15.4]
  4th
Quarter
2013
4th
Quarter
2014
Change Full
Year
2013
Full
Year
2014
Change
  € million € million % Fx (& p)
adj. %
€ million € million % Fx (& p)
adj. %
Sales 1,964 2,327 +18.5 +4.2 7,736 7,923 +2.4 +2.1
Consumer Care 1,015 1,384 +36.4 +8.7 3,904 4,245 +8.7 +5.3
Medical Care 653 643 -1.5 -0.2 2,526 2,360 -6.6 -3.7
Animal Health 296 300 +1.4 -1.3 1,306 1,318 +0.9 +4.0
Sales by region                
Europe 768 788 +2.6 +6.9 2,935 2,968 +1.1 +3.6
North America 623 862 +38.4 +30.2 2,484 2,584 +4.0 +4.4
Asia/Pacific 297 346 +16.5 +13.1 1,172 1,201 +2.5 +5.7
Latin America/Africa/Middle East 276 331 +19.9 +26.8 1,145 1,170 +2.2 +15.5
EBIT 310 187 -39.7 1,229 1,210 -1.5
Special items (95) (86)   (192) (45)  
EBIT before special items1 405 273 -32.6 1,421 1,255 -11.7
EBITDA1 451 401 -11.1 1,734 1,740 +0.3
Special items (64) (86)   (110) (45)  
EBITDA before special items1 515 487 -5.4 1,844 1,785 -3.2
EBITDA margin before special items1 26.2% 20.9%     23.8% 22.5%    
Gross cash flow2 330 391 +18.5 1,280 1,266 -1.1
Net cash flow2 334 466 +39.5   1,127 1,178 +4.5  
Fx (& p) adj. = currency- (and portfolio-)adjusted (Fx & p adj.: Sales; Fx adj.: Sales by region)

1 For definition see Chapter 16.2 “Calculation of EBIT(DA) Before Special Items.”

2 For definition see Chapter 16.5 “Liquidity and Capital Expenditures of the Bayer Group.”

Sales of the Consumer Health segment advanced by 2.1% (Fx & portfolio adj.) in 2014 to €7,923 million. The Consumer Care and Animal Health divisions achieved sales gains, especially in the Emerging Markets. Sales in the Medical Care Division declined particularly in the United States and Europe.

Best-Selling Consumer Health Products [Table 3.15.5]
  4th
Quarter
2013
4th
Quarter
2014
Change Full
Year
2013
Full
Year
2014
Change
  € million € million % Fx adj. % € million € million % Fx adj.  %
ContourTM (Medical Care) 179 180 +0.6 -2.4 722 658 -8.9 -8.2
AdvantageTM product family (Animal Health) 98 105 +7.1 +2.9 487 495 +1.6 +3.1
AspirinTM (Consumer Care) 120 125 +4.2 +2.3 464 441 -5.0 -1.4
AleveTM (Consumer Care) 82 102 +24.4 +17.3 321 350 +9.0 +10.1
BepanthenTM/BepantholTM (Consumer Care) 77 85 +10.4 +17.1 310 346 +11.6 +18.3
UltravistTM (Medical Care) 80 84 +5.0 +5.7 322 302 -6.2 -3.3
CanestenTM (Consumer Care) 61 60 -1.6 -0.1 257 253 -1.6 +3.1
GadovistTM/GadavistTM (Medical Care) 55 65 +18.2 +14.8 205 233 +13.7 +14.3
One A DayTM (Consumer Care) 48 55 +14.6 +6.2 176 167 -5.1 -5.3
SupradynTM (Consumer Care) 43 42 -2.3 +10.7 158 154 -2.5 +8.2
Total 843 903 +7.1 +5.8 3,422 3,399 -0.7 +2.0
Proportion of Consumer Health sales 43% 39%     44% 43%    

Fx adj.= currency-adjusted

Total sales of AspirinTM (including AspirinTM Complex), also including AspirinTM Cardio, which is reflected in sales of the Pharmaceuticals segment, increased by 1.2% (Fx adj. 5.4%) in 2014 to €927 million (2013: €916 million). Total sales of this product in the fourth quarter of 2014 climbed by 6.3% (Fx adj. 5.7%) to €255 million (Q4 2013: €240 million).

Sales in the Consumer Care Division rose by 5.3% (Fx & portfolio adj.) to €4,245 million. The business acquired from Merck & Co., Inc., United States, on October 1, 2014, accounted for €289 million of sales in the fourth quarter, which is traditionally weaker for seasonal reasons. We registered considerably higher sales of our pain reliever AleveTM in the United States due mainly to a product line expansion. Our skincare product BepanthenTM/BepantholTM posted considerably higher sales on a currency-adjusted basis. Higher volumes in all regions contributed to this growth. Sales of our antifungal CanestenTM expanded particularly in the Emerging Markets. Driven partly by product line expansions, sales of our dietary supplement SupradynTM developed positively in Europe. Business with the pain reliever AspirinTM was held back mainly by a weak cold season in Europe. Business with our dietary supplement One A DayTM was held back mainly by lower demand in the United States.

Sales of the Medical Care Division fell by 3.7% (Fx & portfolio adj.) to €2,360 million. Sales of the Diabetes Care business declined overall despite positive development in the Emerging Markets. Business with our ContourTM line of blood glucose meters was held back, especially in the United States, due to reimbursement pressure and price decreases, mainly in the first half of the year. Sales of our contrast agents and medical equipment in the Radiology business were flat with the prior-year period on a currency-adjusted basis.

Business in the Animal Health Division improved by 4.0% (Fx & portfolio adj.) to €1,318 million. We raised sales of the AdvantageTM product family of flea, tick and worm control products due to good development in Europe. Business with the SerestoTM flea and tick collar advanced substantially in Europe and the United States.

ebit of the Consumer Health segment edged down by 1.5% in 2014 to €1,210 million after net special charges of €45 million (2013: €192 million). Reflected here are expenses of €122 million for the integration of acquired businesses and a one-time net gain of €77 million from the divestiture of the Interventional device business to Boston Scientific, United States. ebit before special items fell by 11.7% to €1,255 million. ebitda before special items, at €1,785 million, was below the prior-year level (2013: €1,844 million). This was due to lower earnings at Medical Care and Animal Health along with negative currency effects of around €30 million. However, there was a positive effect from earnings growth at Consumer Care, to which the business acquired from Merck & Co., Inc., United States, contributed €73 million.

Last updated: February 26, 2015  Copyright © Bayer AG
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