Bayer Posts 13% Jump in Net Profit
April 26 2016 - 4:10AM
Dow Jones News
FRANKFURT—German health care company Bayer AG reported a 13.3%
jump in net profit for the first quarter of 2016, driven by strong
earnings growth at the group's pharmaceuticals division, while
confirming a cautious guidance for the full year.
Net profit for the period ended March 31 was €1.51 billion
($1.70 billion), compared with €1.33 billion during the same period
a year earlier, beating analysts' forecasts. Analysts had predicted
a net profit of €1.45 billion, according to a recent poll conducted
by The Wall Street Journal.
The results come just days before Chief Executive Marijn Dekkers
is set to step down after six years in the top job to take over as
chairman of consumer-products conglomerate Unilever PLC. Mr.
Dekkers will be succeeded by management board member Werner
Baumann.
Over the course of his tenure, Mr. Dekkers, a Dutchman who spent
the majority of his career in the U.S., has reshaped the group
around its life sciences businesses and sought to shake up a staid
corporate culture.
Last year, he floated on the stock market part of Bayer's
specialty plastics business, which primarily produces polyurethanes
and polycarbonates, though the company still holds a majority stake
in the business. The year prior, he orchestrated a $14.2 billion
acquisition of U.S.-based Merck & Co.'s over-the-counter drug
business.
First-quarter sales rose slightly, by 0.5%, to €11.94 billion,
boosted by strong sales of the company's recently launched
prescription drugs. The medicines include anticoagulant Xarelto;
eye treatment Eylea; cancer drugs Stivarga and Xofigo; and
pulmonary hypertension drug Adempas. They generated combined sales
of €1.19 billion, compared with €898 million during the first
quarter of last year.
Bayer's closely watched earnings before interest, taxes,
depreciation and amortization before special items climbed by
15.7%, to €3.4 billion, helped by strong earnings growth at the
pharmaceuticals division and animal health divisions, as well as at
Covestro, the company's recently spun-off specialty plastics
business.
Ebitda before special items at the pharmaceuticals division rose
by 16.2%, to €1.26 billion, despite higher research and development
expenses and negative currency effects. At Covestro, Ebitda before
special items jumped by 18.9%, to €504 million, boosted by higher
volumes and decreased raw material prices.
Bayer reported a "very good set of figures" at its life science
businesses and at the entire group level, according to Peter
Spengler, an analyst at Germany's DZ Bank.
Bayer reiterated its guidance for the current year, saying it
expects sales of approximately €35 billion for the life sciences
businesses and to increase Ebitda before special items for those
businesses by a mid-single-digit percentage.
Write to Christopher Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
April 26, 2016 03:55 ET (07:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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