Business Development by Segment

Animal Health

Stable market growth

The animal health market grew by a solid 5% in 2018 (2017: 2%). Both the companion and farm animals businesses experienced a significant upturn in the first half of the year, which then normalized over the course of the second half of the year. Market expansion was driven by dynamic growth in the Asia / Pacific and Latin America regions, while the markets in Europe / Middle East / Africa and North America grew at a slow pace.

Key Data – Animal Health

 

 

Q4 2017

Q4 2018

Change1

 

2017

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 Chapter “Alternative Performance Measures Used by the Bayer Group”

Sales

 

322

330

+2.5

+2.6

 

1,571

1,501

–4.5

+0.5

Change in sales1

 

 

 

 

 

 

 

 

 

 

Volume

 

+2.1%

+1.0%

 

 

 

+0.4%

+0.8%

 

 

Price

 

–0.3%

+1.6%

 

 

 

+1.6%

–0.3%

 

 

Currency

 

–6.1%

–0.1%

 

 

 

–0.9%

–5.0%

 

 

Portfolio

 

+2.2%

0.0%

 

 

 

+2.1%

0.0%

 

 

Sales by region

 

 

 

 

 

 

 

 

 

 

Europe / Middle East / Africa

 

82

80

–2.4

–2.9

 

442

409

–7.5

–6.5

North America

 

126

136

+7.9

+4.4

 

655

628

–4.1

+1.6

Asia / Pacific

 

79

78

–1.3

+0.1

 

317

317

0.0

+5.0

Latin America

 

35

36

+2.9

+12.1

 

157

147

–6.4

+5.7

EBITDA1

 

28

46

+64.3

 

 

352

351

–0.3

 

Special items1

 

(21)

(1)

 

 

 

(29)

(7)

 

 

EBITDA before special items1

 

49

47

–4.1

 

 

381

358

–6.0

 

EBITDA margin before special items1

 

15.2%

14.2%

 

 

 

24.3%

23.9%

 

 

EBIT1

 

10

36

.

 

 

307

312

+1.6

 

Special items1

 

(23)

(1)

 

 

 

(31)

(7)

 

 

EBIT before special items1

 

33

37

+12.1

 

 

338

319

–5.6

 

Net cash provided by operating activities

 

75

71

–5.3

 

 

209

271

+29.7

 

Sales level year on year, with growth in Asia / Pacific and Latin America

Sales of Animal Health came in at €1,501 million in 2018, matching the prior-year level (Fx & portfolio adj. +0.5%). Business in the Asia / Pacific region developed positively due to higher demand and minor price increases. We also posted growth in sales in Latin America on a currency- and portfolio-adjusted basis as a result of higher selling prices. Business in North America expanded slightly after adjusting for currency and portfolio effects, while sales in the Europe / Middle East / Africa region declined significantly due to a sharp fall in demand. Sales were also negatively impacted by amended financial reporting standards (IFRS 15).

Best-Selling Animal Health Products

 

 

Q4 2017

Q4 2018

Change1

 

2017

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 Chapter “Alternative Performance Measures Used by the Bayer Group”

Advantage™ product family

 

87

74

–14.9

–14.9

 

488

421

–13.7

–9.3

Seresto™

 

32

52

+62.5

+58.3

 

218

268

+22.9

+28.5

Drontal™ product family

 

30

30

0.0

–0.9

 

132

123

–6.8

–3.7

Baytril™

 

31

38

+22.6

+21.9

 

113

112

–0.9

+3.9

Total

 

180

194

+7.8

+6.9

 

951

924

–2.8

+1.7

Proportion of Animal Health sales

 

56%

59%

 

 

 

61%

62%

 

 

Sales by product

  • Sales of our Advantage™ family of flea, tick and worm control products were down significantly year on year, due mainly to increased competitive pressure and the related decline in demand in Europe / Middle East / Africa, especially in the United Kingdom, and in North America.
  • We achieved continued strong growth with our Seresto™ flea and tick collar that resulted chiefly from higher volumes in the United States and Europe.
  • Business with our Drontal™ line of dewormers declined due to lower demand in the Europe / Middle East / Africa and North America regions.
  • The increase in sales of our Baytril™ antibiotic resulted particularly from higher volumes in the United States and Latin America.

Earnings

EBITDA before special items declined by 6.0% to €358 million in 2018. Adjusted for negative currency effects of €26 million, earnings matched the prior-year level (+0.8%). An increase in the cost of goods sold and a negative impact on earnings from the application of IFRS 15 were offset by lower expenses in all functional areas – primarily general administration and selling expenses – and other factors.

EBIT of Animal Health increased by 1.6% to €312 million after special charges of €7 million (2017: €31 million) in connection with efficiency improvement measures.

Special Items1 Animal Health

 

 

EBIT Q4 2017

EBIT Q4 2018

 

EBIT
2017

EBIT
2018

 

EBITDA Q4 2017

EBITDA Q4 2018

 

EBITDA 2017

EBITDA 2018

 

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

1

For definition see Chapter “Alternative Performance Measures Used by the Bayer Group”

Restructuring

 

(23)

(1)

 

(31)

(7)

 

(21)

(1)

 

(29)

(7)

Total special items

 

(23)

(1)

 

(31)

(7)

 

(21)

(1)

 

(29)

(7)

Compare to Last Year