Business Development by Segment

Animal Health

Key Data – Animal Health

 

 

Q2 2017

 

Q2 2018

 

Change1

 

H1 2017

 

H1 2018

 

Change1

 

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

Fx & p adj. = currency- and portfolio-adjusted

1

For definition see Annual Report 2017, Chapter “Alternative Performance Measures Used by the Bayer Group.”

Sales

 

450

 

453

 

+0.7

+7.6

 

890

 

867

 

−2.6

+5.4

Change in sales1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volume

 

−0.7%

 

+9.6%

 

 

 

 

−0.5%

 

+6.2%

 

 

 

Price

 

+2.8%

 

−2.0%

 

 

 

 

+3.0%

 

−0.8%

 

 

 

Currency

 

+1.6%

 

−6.9%

 

 

 

 

+2.3%

 

−8.0%

 

 

 

Portfolio

 

+1.9%

 

0.0%

 

 

 

 

+1.9%

 

0.0%

 

 

 

Sales by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe / Middle East / Africa

 

122

 

116

 

−4.9

−3.3

 

266

 

252

 

−5.3

−3.8

North America

 

208

 

220

 

+5.8

+14.9

 

385

 

380

 

−1.3

+9.9

Asia / Pacific

 

80

 

81

 

+1.3

+7.5

 

156

 

158

 

+1.3

+9.0

Latin America

 

40

 

36

 

−10.0

+5.0

 

83

 

77

 

−7.2

+6.0

EBITDA1

 

116

 

125

 

+7.8

 

 

251

 

264

 

+5.2

 

Special items1

 

 

(3)

 

 

 

 

 

(3)

 

 

 

EBITDA before special items1

 

116

 

128

 

+10.3

 

 

251

 

267

 

+6.4

 

EBITDA margin before special items1

 

25.8%

 

28.3%

 

 

 

 

28.2%

 

30.8%

 

 

 

EBIT1

 

107

 

116

 

+8.4

 

 

233

 

245

 

+5.2

 

Special items1

 

 

(3)

 

 

 

 

 

(3)

 

 

 

EBIT before special items1

 

107

 

119

 

+11.2

 

 

233

 

248

 

+6.4

 

Net cash provided by operating activities

 

97

 

88

 

.

 

 

66

 

101

 

+53.0

 

Second quarter of 2018

Sales

Sales of Animal Health in the second quarter of 2018 increased by 7.6% (Fx & portfolio adj.) to €453 million, despite the negative impact of amended financial reporting standards (IFRS 15). We posted considerable currency- and portfolio-adjusted sales increases in the North America region that resulted mainly from shifts in demand at the expense of subsequent quarters. We achieved encouraging sales gains (Fx & portfolio adj.) in the Asia / Pacific and Latin America regions. By contrast, sales declined in the Europe / Middle East / Africa region.

Best-Selling Animal Health Products

 

 

Q2 2017

 

Q2 2018

 

Change1

 

H1 2017

 

H1 2018

 

Change1

 

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

 

€ million

 

€ million

 

Reported %

Fx & p adj. %

Fx & p adj. = currency- and portfolio-adjusted

1

For definition see Annual Report 2017, Chapter “Alternative Performance Measures Used by the Bayer Group.”

Advantage™ product family

 

146

 

156

 

+6.8

+13.8

 

282

 

270

 

−4.3

+3.2

Seresto™

 

81

 

99

 

+22.2

+29.2

 

157

 

187

 

+19.1

+27.1

Drontal™ product family

 

33

 

30

 

−9.1

−3.2

 

68

 

61

 

−10.3

−3.8

Baytril™

 

31

 

24

 

−22.6

−17.1

 

58

 

49

 

−15.5

−7.8

Total

 

291

 

309

 

+6.2

+12.8

 

565

 

567

 

+0.4

+7.8

Proportion of Animal Health sales

 

65%

 

68%

 

 

 

 

63%

 

65%

 

 

 

Sales by product

  • Sales of our Advantage™ line of flea, tick and worm control products increased significantly, particularly in North America, due to substantial shifts in demand, primarily from the third quarter into the second quarter. In the Europe / Middle East / Africa region, business declined due to persistently high competitive pressure.
  • Business with our Seresto™ flea and tick collar once again expanded significantly, with sales increasing in all regions. Growth was chiefly attributable to increased demand in the United States and in the Europe / Middle East / Africa region.
  • We registered a decline in sales of our Drontal™ line of dewormers in the Europe / Middle East / Africa region. Price and volume increases in the other regions were not sufficient to offset this effect.
  • Sales of our Baytril™ antibiotic fell primarily in North America, following the positive effect of a change in the distribution model in the prior-year quarter, as well as in the Europe / Middle East / Africa region.

Earnings

EBITDA before special items of Animal Health increased by 10.3% to €128 million in the second quarter of 2018 (Q2 2017: €116 million). Adjusted for negative currency effects in the amount of €10 million, earnings were up by 19.0%. This development was attributable to significantly higher volumes, in part due to the aforementioned shifts in demand. By contrast, earnings were diminished by the application of IFRS 15, negative price effects, higher selling expenses and an increase in the cost of goods sold.

EBIT improved by 8.4% to €116 million, after special charges of €3 million (Q2 2017: €0 million)

Special Items1 Animal Health

 

 

EBIT Q2 2017

EBIT Q2 2018

 

EBIT H1 2017

EBIT H1 2018

 

EBITDA Q2 2017

EBITDA Q2 2018

 

EBITDA H1 2017

EBITDA H1 2018

 

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

1

For definition see Annual Report 2017, Chapter “Alternative Performance Measures Used by the Bayer Group.”

Restructuring

 

(3)

 

(3)

 

(3)

 

(3)

Total special items

 

(3)

 

(3)

 

(3)

 

(3)

First half of 2018

Sales

Sales of Animal Health rose by 5.4% (Fx & portfolio adj.) in the first half of 2018, to €867 million. Growth was negatively impacted by the first-time application of IFRS 15, among other factors. We posted sales gains (Fx & portfolio adj.) in the North America region that were mainly driven by shifts in demand from the second half of the year into the first half. Business also developed positively in the Latin America and Asia / Pacific regions on a currency- and portfolio-adjusted basis, but declined in Europe / Middle East / Africa.

Earnings

EBITDA before special items of Animal Health increased by 6.4% to €267 million in the first half of 2018 (H1 2017: €251 million). Adjusted for negative currency effects in the amount of €20 million, earnings were up by 14.3%. Significantly higher volumes more than offset the diminishing effects of the application of IFRS 15, a higher cost of goods sold and negative price effects.

EBIT increased by 5.2% to €245 million, after special charges of €3 million (H1 2017: €0 million).

Compare to Last Year