Fiscal 2015: Another record year for Bayer

The Bayer Group had a very successful year in 2015, both strategically and operationally. "Operationally it was another record year for Bayer. Sales reached the highest level in the company’s history, exceeding EUR 46 billion. Clean EBITDA substantially rose by about 18 percent and also set a new record of more than EUR 10 billion," Management Board Chairman Dr. Marijn Dekkers said on Thursday at the Financial News Conference in Leverkusen. "Strategically we have taken all the necessary steps to make Bayer a pure Life Science company," said Dekkers. The Bayer CEO explained that the company had floated the former MaterialScience subgroup on the stock market under the name Covestro and implemented a reorganization to set the course for Bayer’s successful further development. Dekkers forecasted further growth in sales and earnings in 2016.

Group sales advanced by 12.1 percent to EUR 46,324 million (2014: EUR 41,339 million). After adjusting for currency and portfolio effects (Fx & portfolio adj.), the increase was 2.7 percent. EBITDA before special items increased by 18.2 percent to EUR 10,266 million (2014: EUR 8,685 million). The good business development was accompanied by higher R&D expenses (a year-on-year increase of around EUR 740 million). Positive currency effects buoyed earnings by about EUR 680 million. EBIT increased by 15.8 percent to EUR 6,250 million (2014: EUR 5,395 million) after net special charges of EUR 819 million (2014: EUR 438 million). The special charges mainly comprised expenses for the consolidation of production sites, integration costs for acquired businesses and expenses connected with the carve-out and stock market flotation of Covestro. A special gain from a litigation in connection with a breach of contract and patent infringement had a positive effect. Net income climbed by 20.0 percent to EUR 4,110 million (2014: EUR 3,426 million), and core earnings per share from continuing operations by 16.0 percent to EUR 6.83 (2014: EUR 5.89).

Gross cash flow from continuing operations rose by 4.4 percent to EUR 6,999 million (2014: EUR 6,707 million) and was thus substantially above the gross cash flow hurdle of approximately EUR 5.7 billion. "In 2015, Bayer far exceeded the minimum return and reproduction requirements and thus created value. All subgroups contributed to this performance," stressed Chief Financial Officer Johannes Dietsch. Net cash flow (total) rose by 18.6 percent to EUR 6,890 million (2014: EUR 5,810 million). Net financial debt declined by EUR 2.2 billion between the end of 2014 and December 31, 2015, to EUR 17.4 billion.

Covestro posts strong earnings improvement
Sales of the high-tech polymer materials business (Covestro, formerly MaterialScience) moved forward by 2.8 percent to EUR 11,982 million (2014: EUR 11,651 million). Adjusted for currency and portfolio effects, sales declined by 5.1 percent as a result of lower selling prices in all business units. On the other hand, Covestro expanded volumes in all business units. EBITDA before special items improved by a marked 39.8 percent to EUR 1,659 million (2014: EUR 1,187 million). Considerably lower raw material prices more than offset the decline in selling prices. Furthermore, earnings were buoyed by positive currency effects of about EUR 240 million.

Bayer currently still holds a 69 percent interest in Covestro. As a fully consolidated subsidiary, Covestro continues to be included in the Bayer Group consolidated financial statements. In core earnings per share, however, 31 percent of Covestro earnings are attributable to external stockholders of Covestro. This has the effect of diminishing Bayer’s core earnings per share.

Source: Bayer