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Bayer plans to significantly expand Life Science businesses

Staff writer |
Bayer aspires to grow HealthCare sales by an average of about 6 percent a year through 2017 to more than EUR 25 billion (2014: EUR 20 billion) and to increase the EBITDA margin before special items to between 29 and 31 percent (2014: 27.5 percent).

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These estimates are based on exchange rates as of December 31, 2014, including a rate of USD 1.21 to the euro. The percentage changes in sales are based on pro forma figures that present the acquired businesses as if the acquisitions had been completed on January 1, 2014.

Bayer aims to increase sales at Pharmaceuticals by approximately 7 percent each year through 2017, to more than EUR 15 billion (2014: EUR 12.1 billion) and to achieve an EBITDA margin before special items of between 32 and 34 percent (2014: 30.7 percent) in this division.

The margin level will be largely determined by the success of the commercialized products – and also by the progress of the projects currently in the research and development pipeline, explained the CEO. He said that the better the Pharmaceuticals pipeline develops, the more investment will be required for further clinical trials.

Bayer expects the mid- and late-stage projects in its pipeline to make significant progress over the next 12 to 18 months. Bayer plans to spend more than EUR 4.0 billion (2014: EUR 3.6 billion) on research and development in 2015 alone, with more than half of this amount – some EUR 2.2 billion – earmarked for the Pharmaceuticals business.

In the Consumer Health segment, sales are projected to rise by an average of around 4 percent annually through 2017 to more than EUR 10 billion (2014: EUR 7.9 billion) and the EBITDA margin before special items to between 24 and 26 percent (2014: 22.5 percent) – driven by the consumer care business acquired from Merck & Co., Inc., United States.

Dekkers said the integration of this business is well on track, with Bayer now occupying the global number two position in non-prescription (over-the-counter) products.

In Crop Protection, the new products launched since 2006 are predicted to achieve sales of about EUR 2.8 billion in 2017 (2014: EUR 1.9 billion).

For CropScience as a whole, the aim is to achieve above-market growth and raise sales to more than EUR 11 billion in 2017 (2014: EUR 9.5 billion), giving average annual growth of around 5 percent. It is intended to maintain the EBITDA margin before special items at an industry-leading level of 23 to 25 percent (2014: 24.9 percent).

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