Business Development by Segment

Animal Health

Key Data – Animal Health

 

 

Q3 2017

 

Q3 2018

 

Change1

 

9M 2017

 

9M 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

 

359

 

304

 

−15.3

−13.5

 

1,249

 

1,171

 

−6.2

−0.1

Change in sales1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Volume

 

+1.1%

 

−12.9%

 

 

 

 

−0.1%

 

+0.6%

 

 

 

Price

 

+0.3%

 

−0.6%

 

 

 

 

+2.2%

 

−0.7%

 

 

 

Currency

 

−3.9%

 

−1.8%

 

 

 

 

+0.4%

 

−6.1%

 

 

 

Portfolio

 

+2.2%

 

0.0%

 

 

 

 

+2.1%

 

0.0%

 

 

 

Sales by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe / Middle East / Africa

 

94

 

77

 

−18.1

−17.3

 

360

 

329

 

−8.6

−7.3

North America

 

144

 

112

 

−22.2

−22.9

 

529

 

492

 

−7.0

+1.0

Asia / Pacific

 

82

 

81

 

−1.2

+1.8

 

238

 

239

 

+0.4

+6.6

Latin America

 

39

 

34

 

−12.8

−1.6

 

122

 

111

 

−9.0

+3.8

EBITDA1

 

73

 

41

 

−43.8

 

 

324

 

305

 

−5.9

 

Special items1

 

(8)

 

(3)

 

 

 

 

(8)

 

(6)

 

 

 

EBITDA before special items1

 

81

 

44

 

−45.7

 

 

332

 

311

 

−6.3

 

EBITDA margin before special items1

 

22.6%

 

14.5%

 

 

 

 

26.6%

 

26.6%

 

 

 

EBIT1

 

64

 

31

 

−51.6

 

 

297

 

276

 

−7.1

 

Special items1

 

(8)

 

(3)

 

 

 

 

(8)

 

(6)

 

 

 

EBIT before special items1

 

72

 

34

 

−52.8

 

 

305

 

282

 

−7.5

 

Net cash provided by operating activities

 

68

 

99

 

+45.6

 

 

134

 

200

 

+49.3

 

Third quarter of 2018

Sales

Sales of Animal Health in the third quarter of 2018 fell by 13.5% (Fx & portfolio adj.) to €304 million. Business in the North America region declined sharply due to shifts in demand from the third quarter into the first six months. Sales were also down year on year in the Europe / Middle East / Africa and Latin America regions. By contrast, we achieved gains in the Asia / Pacific region on a currency- and portfolio adjusted basis. Sales continue to be negatively impacted by amended financial reporting standards (IFRS 15).

Best-Selling Animal Health Products

 

 

Q3 2017

 

Q3 2018

 

Change1

 

9M 2017

 

9M 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

 

119

 

77

 

−35.3

−34.7

 

401

 

347

 

−13.5

−8.1

Seresto™

 

29

 

29

 

0.0

+3.0

 

186

 

216

 

+16.1

+23.3

Drontal™ product family

 

34

 

32

 

−5.9

−5.9

 

102

 

93

 

−8.8

−4.5

Baytril™

 

24

 

25

 

+4.2

+8.7

 

82

 

74

 

−9.8

−2.9

Total

 

206

 

163

 

−20.9

−19.6

 

771

 

730

 

−5.3

+0.5

Proportion of Animal Health sales

 

57%

 

54%

 

 

 

 

62%

 

62%

 

 

 

Sales by product

  • Sales of our Advantage™ line of flea, tick and worm control products declined, particularly in North America, due to substantial shifts in demand from the third quarter into the first six months. In the Europe / Middle East / Africa region, and particularly the U.K., our business continued to decline due to persistently high competitive pressure. We posted gains in the Latin America region.
  • Business with our Seresto™ flea and tick collar expanded slightly. Growth was chiefly attributable to increased demand in the Latin America and Europe / Middle East / Africa regions.
  • Our Drontal™ line of dewormers posted volume-related sales declines. Growth in the Asia / Pacific region was not sufficient to offset the declines in the other regions.
  • Our Baytril™ antibiotic achieved strong sales growth in the North America and Latin America regions that more than offset the declines in the other regions.

Earnings

EBITDA before special items of Animal Health declined by 45.7% to €44 million in the third quarter of 2018 (Q3 2017: €81 million). Adjusted for negative currency effects in the amount of €3 million, earnings were down by 42.0%. This significant decline is primarily attributable to lower volumes, mainly due to shifts in demand from the third quarter into the first half of the year, and to a negative impact on earnings from the application of IFRS 15. A decline in expenses, especially selling expenses, was insufficient to offset these negative factors.

EBIT declined by 51.6% to €31 million, after special charges of €3 million (Q3 2017: €8 million).

Special Items1 Animal Health

 

 

EBIT Q3 2017

EBIT Q3 2018

 

EBIT 9M 2017

EBIT 9M 2018

 

EBITDA Q3 2017

EBITDA Q3 2018

 

EBITDA 9M 2017

EBITDA 9M 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

 

(8)

(3)

 

(8)

(6)

 

(8)

(3)

 

(8)

(6)

Total special items

 

(8)

(3)

 

(8)

(6)

 

(8)

(3)

 

(8)

(6)

First nine months of 2018

Sales

Sales of Animal Health were level year on year in the first nine months of 2018, at €1,171 million (Fx & portfolio adj. −0.1%). The sales decline in the Europe / Middle East / Africa region was offset by gains in the other regions. Business was negatively impacted by the first-time application of IFRS 15, among other factors.

Earnings

EBITDA before special items of Animal Health decreased by 6.3% to €311 million in the first nine months of 2018 (9M 2017: €332 million). Adjusted for negative currency effects in the amount of €23 million, earnings were up by 0.6%. A higher cost of goods sold, a negative impact on earnings from the application of IFRS 15, and negative price effects stood against a decline in expenses, especially selling expenses.

EBIT declined by 7.1% to €276 million, after special charges of €6 million (9M 2017: €8 million).

Compare to Last Year