In the second quarter of 2009 the Bayer Group's businesses turned in a robust performance in a difficult environment. "The clear increase in sales and earnings at HealthCare was particularly pleasing," Management Board Chairman Werner Wenning commented. CropScience also continued to increase sales and matched the good earnings level of the prior-year period. MaterialScience improved its performance compared with the first quarter of 2009 but remained well below the prior year.
Key data for the Bayer Group improved in the second quarter of 2009 compared with the first three months - in some cases considerably - but remained below the high level of the second quarter of 2008. Group sales fell by 5.9 % to €8,009 million (Q2 2008: €8,511 million). Adjusted for currency and portfolio effects, sales fell by 8.9 %. Ebitda - before special items - dropped by 6.9 % to €1,765 million (Q2 2008: €1,896 million). The operating result (EBIT) before special items receded by 11.8 % to €1,101 million (Q2 2008: €1,248 million).
The Bayer Group's operating result was diminished in the second quarter by special items of minus €80 million (Q2 2008: minus €143 million). The negative items were partially offset by a net amount of €89 million in income from the integration of Schering, consisting mainly of gains from divestments of business activities in the Schering portfolio. After special items, EBIT declined by 7.6 % to €1,021 million (Q2 2008: €1,105 million). Net income of the Bayer Group was down 7.3 % year on year at €532 million (Q2 2008: €574 million); core earnings per share fell by 11.0 % to €1.05 (Q2 2008: €1.18).
Gross cash flow declined by 5.6 % to €1,248 million. However, net cash flow climbed by a gratifying 57.4 % to €1,399 million. The increase was due mainly to a further reduction in cash tied up in inventories, as well as to lower income tax payments. Net financial debt fell to €11.7 billion as of June 30 - compared to €14.0 billion on March 31 - thanks to the conversion of the mandatory convertible bond.
Bayer still expects to make capital expenditures of €1.4 billion in 2009, while R&D expenses are planned to rise to approximately €2.9 billion. It is intended to further reduce net financial debt toward €10 billion in 2009. This forecast does not take into account any possible portfolio changes. 