Chairman’s Letter
Earnings Performance
Bayer Links
Management Report
Earnings Performance
| Bayer Group Summary Income Statements | 2005 | 2006 | Change |
| € million | € million | % | |
| Net sales | 24,701 | 28,956 | +17.2 |
| Cost of goods sold | (13,412) | (15,275) | +13.9 |
| Selling expenses | (5,247) | (6,534) | +24.5 |
| Research and development expenses | (1,729) | (2,297) | +32.9 |
| General administration expenses | (1,307) | (1,599) | +22.3 |
| Other operating income and expenses - net | (492) | (489) | -0.6 |
| EBIT (operating result) | 2,514 | 2,762 | +9.9 |
| Non-operating result | (602) | (782) | +29.9 |
| Income before income taxes | 1,912 | 1,980 | +3.6 |
| Income taxes | (538) | (454) | -15.6 |
| Income after taxes from discontinued operations | 221 | 169 | -23.5 |
| Income after taxes | 1,595 | 1,695 | +6.3 |
| of which attributable to minority interest | (2) | 12 | • |
| of which attributable to Bayer AG stockholders (net income) | 1,597 | 1,683 | +5.4 |
2005 figures restated
Net sales of the Bayer Group increased by 17.2 percent, or €4,255 million, from the previous year to €28,956 million. In local currencies and adjusted for portfolio effects, sales rose by 5.2 percent.
The cost of goods sold increased by 13.9 percent to €15.3 billion, mainly due to the inclusion of the business of Schering AG, Berlin, Germany, but also because of the growth in other businesses and higher raw material costs. The ratio of the cost of goods sold to total net sales was 52.8 percent, compared with 54.3 percent in the previous year. With the inclusion of Schering AG, selling expenses rose by a total of 24.5 percent to €6.5 billion. Due to the increase in the proportion of life science activities in our portfolio, the ratio of selling expenses to sales rose to 22.6 percent, from 21.2 percent in 2005. The importance of research and development in the Bayer Group has further increased through the Schering AG acquisition. Accordingly, our research and development expenses climbed by 32.9 percent to €2.3 billion, the ratio of R&D expenses to net sales being 7.9 percent (2005: 7.0 percent). General administration expenses came to €1,599 million. The negative balance of other operating income and expenses resulted from costs related to the acquisition of Schering AG and integration of the business, restructuring, litigation and valuation write-downs. Gains included mainly those from the sale of a building and the divestiture of low-volume product lines and active ingredients.
EBIT for 2006 came in at €2,762 million. Before net special charges of €717 million (2005: €533 million), EBIT climbed by 14.2 percent to €3,479 million.
The non-operating result worsened by €180 million to minus €782 million. Whereas income from investments in affiliated companies rose by a substantial €229 million, net interest expense increased by €390 million, due particularly to the acquisition-related increase in net debt at mid-year. Income from investments in affiliated companies included the proceeds of €236 million from the sale of our 49.9 percent interest in GE Bayer Silicones.
Income taxes for continuing operations in 2006 came to €454 million (2005: €538 million). The lower tax expense was due mainly to first-time recognition of deferred tax assets for loss carryforwards. The effective tax rate declined to 22.9 percent, from 28.1 percent in the prior year.
Including the result of discontinued operations and after minority interests, Group net income in 2006 improved by €86 million to €1,683 million.
The cost of goods sold increased by 13.9 percent to €15.3 billion, mainly due to the inclusion of the business of Schering AG, Berlin, Germany, but also because of the growth in other businesses and higher raw material costs. The ratio of the cost of goods sold to total net sales was 52.8 percent, compared with 54.3 percent in the previous year. With the inclusion of Schering AG, selling expenses rose by a total of 24.5 percent to €6.5 billion. Due to the increase in the proportion of life science activities in our portfolio, the ratio of selling expenses to sales rose to 22.6 percent, from 21.2 percent in 2005. The importance of research and development in the Bayer Group has further increased through the Schering AG acquisition. Accordingly, our research and development expenses climbed by 32.9 percent to €2.3 billion, the ratio of R&D expenses to net sales being 7.9 percent (2005: 7.0 percent). General administration expenses came to €1,599 million. The negative balance of other operating income and expenses resulted from costs related to the acquisition of Schering AG and integration of the business, restructuring, litigation and valuation write-downs. Gains included mainly those from the sale of a building and the divestiture of low-volume product lines and active ingredients.
EBIT for 2006 came in at €2,762 million. Before net special charges of €717 million (2005: €533 million), EBIT climbed by 14.2 percent to €3,479 million.
The non-operating result worsened by €180 million to minus €782 million. Whereas income from investments in affiliated companies rose by a substantial €229 million, net interest expense increased by €390 million, due particularly to the acquisition-related increase in net debt at mid-year. Income from investments in affiliated companies included the proceeds of €236 million from the sale of our 49.9 percent interest in GE Bayer Silicones.
Income taxes for continuing operations in 2006 came to €454 million (2005: €538 million). The lower tax expense was due mainly to first-time recognition of deferred tax assets for loss carryforwards. The effective tax rate declined to 22.9 percent, from 28.1 percent in the prior year.
Including the result of discontinued operations and after minority interests, Group net income in 2006 improved by €86 million to €1,683 million.
Bookmark this page
E-mail this page
Advanced Search
