Business Development by Segment

Consumer Health

Market growth weaker than in the prior year

In 2016, global development of the Consumer Health market was below the prior-year level at 4% (2015: 5%). Reasons for this included particularly the low rate of transitioning prescription medicines to over-the-counter status (Rx-to- OTC (over-the-counter) designates the business with nonprescription medicines. switch), a weaker cold season and reduced demand in the Emerging Markets.

Key Data – Consumer Health

 

 

Q4 2015

Q4 2016

Change

 

2015

2016

Change

 

 

€ million

€ million

Repor­ted %

Fx & p adj. %

 

€ million

€ million

Repor­ted %

Fx & p adj. %

2015 figures restated; Fx & p adj. = currency- and portfolio-adjusted; Fx adj. = currency-adjusted

1

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

Sales

 

1,506

1,539

+2.2

+4.4

 

6,076

6,037

−0.6

+3.5

Changes in sales

 

 

 

 

 

 

 

 

 

 

Volume

 

+6.8%

+1.5%

 

 

 

+3.0%

+0.6%

 

 

Price

 

+3.0%

+2.9%

 

 

 

+3.1%

+2.9%

 

 

Currency

 

−1.2%

−2.2%

 

 

 

+2.7%

−4.1%

 

 

Portfolio

 

+0.2%

0.0%

 

 

 

+34.3%

0.0%

 

 

 

 

€ million

€ million

Repor­ted %

Fx adj. %

 

€ million

€ million

Repor­ted %

Fx adj. %

Sales by region

 

 

 

 

 

 

 

 

 

 

Europe / Middle East / Africa

 

490

499

+1.8

+2.7

 

1,955

1,918

−1.9

+1.5

North America

 

630

649

+3.0

+1.6

 

2,635

2,627

−0.3

−0.1

Asia / Pacific

 

188

194

+3.2

+3.2

 

738

781

+5.8

+8.1

Latin America

 

198

197

−0.5

+18.7

 

748

711

−4.9

+17.1

EBITDA1

 

333

334

+0.3

 

 

1,222

1,296

+6.1

 

Special items

 

(52)

(38)

 

 

 

(234)

(115)

 

 

EBITDA before special items1

 

385

372

−3.4

 

 

1,456

1,411

−3.1

 

EBITDA margin before special items1

 

25.6%

24.2%

 

 

 

24.0%

23.4%

 

 

EBIT

 

194

68

−64.9

 

 

768

695

−9.5

 

Special items

 

(55)

(199)

 

 

 

(237)

(292)

 

 

EBIT before special items1

 

249

267

+7.2

 

 

1,005

987

−1.8

 

Net cash provided by operating activities

 

140

221

+57.9

 

 

816

874

+7.1

 

+3.5%

growth in sales at Consumer Health (Fx & portfolio adj.

Sales up year on year

Sales of Consumer Health rose by 3.5% (Fx & portfolio adj.) in 2016 to €6,037 million. We achieved significant gains in Latin America and Asia / Pacific on a currency-adjusted basis, and Europe / Middle East / Africa contributed to sales growth with a slight increase. Sales in North America came in at the prior-year level.

Best-Selling Consumer Health Products

 

 

Q4 2015

Q4 2016

Change

 

2015

2016

Change

 

 

€ million

€ million

Repor­ted %

Fx adj. %

 

€ million

€ million

Repor­ted %

Fx adj. %

Fx adj. = currency-adjusted

1

Trademark rights and distribution only in certain countries outside the European Union

Claritin™1

 

134

122

−9.0

−12.6

 

627

605

−3.5

−2.6

Aspirin™

 

128

126

−1.6

+0.5

 

473

463

−2.1

+2.4

Aleve™

 

105

115

+9.5

+8.6

 

413

416

+0.7

+2.1

Bepanthen™ / Bepanthol™

 

85

90

+5.9

+6.2

 

355

362

+2.0

+9.2

Canesten™

 

66

64

−3.0

+10.0

 

267

269

+0.7

+13.4

Alka-Seltzer™ product family

 

81

87

+7.4

+7.7

 

251

253

+0.8

+2.2

Dr. Scholl’s™1

 

62

55

−11.3

−11.7

 

253

235

−7.1

−6.9

One A Day™

 

65

67

+3.1

+1.7

 

211

222

+5.2

+5.3

Coppertone™1

 

8

17

+112.5

+96.0

 

217

219

+0.9

+1.4

Elevit™

 

43

48

+11.6

+10.4

 

162

182

+12.3

+17.2

Total

 

777

791

+1.8

+2.2

 

3,229

3,226

−0.1

+3.2

Proportion of Consumer Health sales

 

52%

51%

 

 

 

53%

53%

 

 

Sales by product

  • Business with our antihistamine Claritin™ receded overall. Sales in Asia/Pacific were down against the strong prior year due to intensified competition and to price controls for prescription medicines in Japan. The gratifying increase in the United States due to a product line extension with ClariSpray™ only partly offset this effect.
  • Sales of our analgesic Aspirin™ increased moderately. The gains in the United States and Latin America more than offset declines in Europe that resulted from a weak cold season. Including business with Aspirin™ Cardio, which is reported under Pharmaceuticals, sales climbed by 5.0% (Fx adj.) to €1,001 million (2015: €997 million).
  • We registered a slight increase in sales of our analgesic Aleve™ that resulted from very favorable development in the United States, where we benefited from the addition of Aleve Tens™ to our product portfolio.
  • Sales of our Bepanthen™ / Bepanthol™ wound healing and skin care products advanced strongly, especially in Europe and particularly in France, Germany and Russia.
  • We achieved significant growth with our skin and intimate health brand Canesten™ thanks to expanded volumes in all regions. Business developed especially well in Germany, due primarily to Canesten Gyn™.
  • The Alka-Seltzer™ family of products to treat gastrointestinal complaints and cold symptoms registered slight growth that was mainly attributable to a product line extension in the United States.
  • Sales of our Dr. Scholl’s™ foot care products declined due to higher competitive pressure and a weak market environment in the United States.
  • We recorded pleasing sales development in the United States with our One A Day™ vitamin product, largely as the result of product line extensions and the expansion of our distribution channels.
  • Sales of our sunscreen product Coppertone™ were up slightly against the previous year. Higher demand in Asia/Pacific and Latin America more than offset declines in the United States.
  • Business with our prenatal vitamin Elevit™ saw particularly strong development. We posted double-digit-percentage growth rates in Asia/Pacific and Europe/Middle East/Africa.

Earnings

In 2016, EBITDA before special items declined by 3.1% to €1,411 million. Earnings were diminished by a higher cost of goods sold and negative currency effects of approximately €65 million. These factors were partly compensated by the positive development of sales and cost synergies.

EBIT of Consumer Health decreased by 9.5% to €695 million due to special charges of €292 million (2015: €237 million). These included €160 million for impairment losses on intangible assets (Triderm™ and Citracal™), €100 million for the integration of acquired businesses and €32 million for efficiency enhancement measures.

Special Items1 Consumer Health

 

 

EBIT Q4 2015

EBIT Q4 2016

 

EBIT
2015

EBIT
2016

 

EBITDA Q4 2015

EBITDA Q4 2016

 

EBITDA 2015

EBITDA 2016

 

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

 

€ million

€ million

1

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

Restructuring

 

(4)

(9)

 

(5)

(32)

 

(1)

(8)

 

(2)

(15)

Integration costs

 

(50)

(30)

 

(225)

(100)

 

(50)

(30)

 

(225)

(100)

Impairment losses / impairment loss reversals

 

(160)

 

(160)

 

 

Revaluation of other receivables

 

(1)

 

(7)

 

(1)

 

(7)

Total Special Items

 

(55)

(199)

 

(237)

(292)

 

(52)

(38)

 

(234)

(115)

Online Annex: A 2.2.2-2

limited assurance

The development of Consumer Health in 2016 is shown in the following graphics.

Quarterly Sales Consumer Health

Quarterly Sales Consumer Health (bar chart)Quarterly Sales Consumer Health (bar chart)

2015 figures restated

Consumer Health
Quarterly EBIT

Consumer Health Quarterly EBIT (bar chart)Consumer Health Quarterly EBIT (bar chart)

2015 figures restated

Consumer Health
Quarterly EBITDA before Special Items

Consumer Health Quarterly EBITDA before Special Items (bar chart)Consumer Health Quarterly EBITDA before Special Items (bar chart)

2015 figures restated