Third Quarter of 2017
Bayer: Sales and Earnings Increased
- Covestro deconsolidated
- Group sales €8.0 billion (Fx & portfolio adj. +1.2%)
- EBITDA before special items rises to €2.2 billion (+4.1%)
- Sales and earnings growth at Pharmaceuticals
- Consumer Health business weak, as expected
- Sales gains at Crop Science and Animal Health
- Net income €3.9 billion including Covestro book profit
- Core earnings per share €1.47
- Group outlook for 2017 confirmed based on change in structure
Economic Position of the Bayer Group
Following the deconsolidation of Covestro, the Bayer Group’s sales rose by 1.2% (Fx & portfolio adj.) to €8.0 billion in the third quarter of 2017. Group EBITDA before special items increased by 4.1% to €2.2 billion. We achieved growth in sales and earnings at Pharmaceuticals, while business declined at Consumer Health, as expected. Sales at Crop Science and Animal Health rose, however, EBITDA before special items was down from the prior-year quarter.
In September 2017, Bayer AG sold an additional 16.3% of Covestro shares, generating total proceeds of around €2.2 billion.
As a result of further reducing its interest in the company and concluding a control termination agreement, Bayer has ceded de facto control over Covestro AG. Accordingly, Covestro was deconsolidated at the end of the third quarter and presented as an associate for the first time. This resulted in a gain of €2.8 billion that was presented as income from discontinued operations after income taxes in the consolidated income statement.
On October 13, 2017, Bayer signed an agreement to sell selected Crop Science businesses to BASF for €5.9 billion in light of the planned acquisition of Monsanto. The assets to be sold include Bayer’s global glufosinate-ammonium business and the related LibertyLink™ technology for herbicide tolerance, a substantial part of the field crop seed businesses, as well as respective research and development capabilities. The transaction is subject to regulatory approval as well as the successful closing of Bayer’s acquisition of Monsanto. Bayer will continue to own, operate and maintain these businesses until the closing of this divestiture.