Bayer Q4 Profit Climbs; Sees Higher Earnings, Sales In FY14
Bayer Q4 Net Profit climbs; Sees higher earnings, sales in FY14 German conglomerate Bayer AG (BYR.L,BAYRY.PK,BAYZF.PK) reported Friday a higher net income in its fourth quarter, benefited by strong sales growth in its recently launched products, despite a poor performance by MaterialScience segment. However, EBITDA before special items declined for the period.
Looking ahead for fiscal 2014, the company projects increase in core earnings per share, adjusted EBITDA, a key earnings metric, as well as sales.
Management Board Chairman Marijn Dekkers said, "We are optimistic for 2014 and plan further growth in sales and earnings. We aim to maintain the growth of our recently launched products in the Life Science businesses and improve profitability at MaterialScience."
The company's fourth-quarter net income advanced 24.3 percent to 455 million euros (about $624.08 million) from the prior year's 366 million euros. Earnings per share improved 22.2 percent year-over-year to 0.55 euros.
Core earnings per share, which excluded certain items, were 1.10 euros, compared to 1.01 euros in the prior year.
Earnings before interest and tax or EBIT, meanwhile, declined 10.2 percent to 655 million euros. EBIT before special items dropped 5.1 percent to 1.09 billion euros.
Earnings before interest, tax, depreciation and amortization or EBITDA grew 2.3 percent, but declined 3.1 percent before special items to 1.77 billion euros, mainly due to substantial negative currency effects, as well as higher research and development expenditures, the company noted.
Group sales edged up 0.3 percent to 9.89 billion euros from last year's 9.86 billion euros. Adjusted for currency and portfolio effects, sales grew 6.4 percent. The company attributed the sales development mainly to the recently launched pharmaceutical products and the robust expansion of volumes at CropScience.
For fiscal 2013, net income increased 32.7 percent to 3.19 billion euros, and core earnings per share grew 5.8 percent to 5.61 euros. EBITDA before special items improved 1.5 percent to 8.40 billion euros. Annual sales edged up 1 percent to 40.16 billion euros, which the company said a new record in its 150-year history. Adjusted for currency and portfolio effects, sales grew 5.1 percent.
The recently launched products, including the anticoagulant Xarelto, the eye medicine Eylea, and the cancer drugs Stivarga and Xofigo, posted combined sales of 1.52 billion euros in the year, significantly higher than last year's 368 million euros.
Bayer said it now has significantly increased estimate of the combined peak annual sales potential of these products, including pulmonary hypertension treatment Adempas, to at least 7.5 billion euros.
The company noted that its high-tech polymer materials business, MaterialScience, faced considerable challenges in 2013, in what remained a difficult market environment.
Looking ahead for fiscal 2014, Bayer plans to grow sales by about 5 percent on a currency- and portfolio-adjusted basis. Sales would be between approximately 41 billion euros and 42 billion euros for the year, including currency impacts.
In 2014, Bayer plans to raise EBITDA before special items by a low- to mid-single-digit percentage. Bayer expects increase in core earnings per share by a mid-single-digit percentage, allowing for expected negative currency effects of around 6 percent.
The 2014 results would include special charges of about 200 million euros for restructuring.
On Frankfurt's Xetra, Bayer shares closed Thursday's trading at 99.85 euros.