Asset and Financial Position of Bayer AG

Bayer AG Summary Statements of Financial Position According to the German Commercial Code

 

 

Dec. 31, 2017

 

Dec. 31, 2018

 

 

€ million

 

€ million

ASSETS

 

 

 

 

Noncurrent assets

 

 

 

 

Intangible assets, property, plant and equipment

 

152

 

163

Financial assets

 

47,071

 

73,530

 

 

47,223

 

73,693

Current and other assets

 

 

 

 

Inventories

 

2,109

 

2,197

Trade accounts receivable

 

2,002

 

2,113

Receivables from subsidiaries

 

2,585

 

1,829

Other assets and deferred charges

 

901

 

492

Cash and cash equivalents, marketable securities

 

4,272

 

3,178

 

 

11,869

 

9,809

Total assets

 

59,092

 

83,502

EQUITY AND LIABILITIES

 

 

 

 

Equity

 

18,875

 

27,659

Provisions

 

2,201

 

3,159

Other liabilities

 

 

 

 

Bonds and notes, liabilities to banks

 

7,618

 

10,496

Trade accounts payable

 

1,750

 

1,913

Payables to subsidiaries

 

28,078

 

39,680

Remaining liabilities and deferred income

 

570

 

595

 

 

38,016

 

52,684

Total equity and liabilities

 

59,092

 

83,502

Change in financial position attributable to financing measures for Monsanto

The asset and liability structure of Bayer AG is dominated by the management functions for the Bayer Group, even following the integration of the parent company functions of the Pharmaceuticals and Crop Science divisions at the beginning of 2017. The financial position is shaped particularly by the management of subsidiaries and the financing of corporate activities. This is primarily reflected in the high level of investments in affiliated companies and of the receivables from, and payables to, Group companies.

See also above table “Bayer AG Summary Statements of Financial Position According to the German Commercial Code”

The acquisition of the Monsanto Group and the related financing measures resulted in considerable changes to the financial position of Bayer AG in 2018. Total assets increased by €24.4 billion, or 41.3%, to €83.5 billion. This was due to a €26.5 billion rise in noncurrent assets to €73.7 billion, while current assets fell by €2.1 billion to €9.8 billion.

Within noncurrent assets, investments in affiliated companies increased by €3.5 billion. Intra-Group capital increases totaling €4.9 billion stood against a €1.3 billion decrease from the sale of shares in Covestro AG, among other items. Investments in affiliated companies came in at €49.6 billion overall (2017: €46.2 billion), and continued to account for the largest item in total assets by far, at 59.4% (2017: 78.2%). Due to the granting of intra-Group loans totaling €22.4 billion in connection with the financing of the Monsanto acquisition, total loans increased by €0.9 billion to €23.3 billion. The remaining interest held in Covestro AG, valued at €0.6 billion, is now reflected as securities under noncurrent assets. Intangible assets, property, plant and equipment were practically unchanged at €0.2 billion.

Among the current asset items, inventories and trade accounts receivable increased slightly, each rising by €0.1 billion to €2.2 billion and €2.1 billion, respectively. There were also only minor changes in this regard within the divisions. Trade accounts receivable of €1.8 billion (2017: €1.6 billion) pertained mainly to Group companies. Receivables from subsidiaries amounted to €1.8 billion (2017: €2.6 billion) and accounted for 2.2% of total assets. The other receivables reflected in current assets (including deferred charges) decreased by €0.4 billion to €0.5 billion; the previous year’s total included €284 million in shares of Covestro AG divested to banks while exposure to the related economic risks and opportunities was retained. Cash and cash equivalents, which in the previous year exclusively comprised bank deposits except for the small amount of €25 million in commercial paper, fell by €1.1 billion to €3.2 billion in 2018.

Bayer AG’s equity rose by €8.8 billion, or 46.5%, to €27.7 billion (2017: €18.9 billion). This increase resulted from the net income of €2,117 million and inflows of €9,069 million from the two capital increases implemented in 2018, while the dividend payment of €2,402 million for 2017 had a diminishing effect. The equity ratio increased to 33.1% (2017: 31.9%) due to the proportionately smaller increase in total assets.

Provisions increased by €1.0 billion to €3.2 billion. In addition, provisions of €606 million were established in 2018 for the restructuring measures announced in November 2018. Pension provisions increased by a net amount of €432 million, of which €278 million was attributable to a higher discount rate and €211 million to lower fund assets. Additional increases in provisions for incentive payments (+€66 million) and income taxes (+€60 million) stood against decreases in other provisions, including a decrease of €217 million in those for impending losses from hedging transactions.

Liabilities (including deferred income) increased by €14.7 billion to €52.7 billion due to financing measures for the Monsanto acquisition. The growth in liabilities resulted entirely from higher financial debt. The main increases were in intra-Group financial debt (by €11.8 billion to €40.1 billion) and liabilities to banks (by €3.4 billion to €4.2 billion). A bond with a volume of €517 million was redeemed at maturity. Total financial debt as of the closing date was €50.7 billion (2017: €36.0 billion). After deduction of cash and cash equivalents of €3.2 billion (2017: €4.3 billion), net debt rose by €15.8 billion to €47.5 billion (2017: €31.7 billion). Within operating liabilities, trade accounts payable rose by €0.2 billion to €1.9 billion, while liabilities to Group companies declined by the same amount to €0.8 billion (gross of deductible receivables).

Compare to Last Year