Bayer AG - Annual Report 2006 - Performance by Region

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Management Report

Performance by Region

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In 2006 Bayer’s global business expanded by €4,255 million, or 17.2 percent, to €28,956 million. Adjusted for shifts in exchange rates, sales rose by 17.4 percent.

The largest increase in absolute terms was achieved in the Europe region, where sales climbed by 17.5 percent to €12,652 million. Portfolio-adjusted sales in Europe expanded by 5.1 percent, driven by HealthCare and MaterialScience. Sales of the CropScience subgroup remained steady at the previous year’s level due to unfavorable weather conditions, particularly in southern Europe. Sales in Germany grew 17.7 percent to €4,525 million, or by 7.9 percent when adjusted for portfolio effects.

Sales in North America advanced by 19.8 percent in 2006, to €7,779 million. Adjusted for portfolio effects, the increase came to 5.9 percent. In this region too, improvements were recorded by HealthCare, thanks to strong sales in the Consumer Health segment, as well as by MaterialScience in the Polyurethanes business unit and in Coatings, Adhesives, Sealants. In the Crop Protection segment, on the other hand, sales declined due to adverse weather patterns and increasing cultivation of genetically modified crops.

In the Asia/Pacific and Latin America/Africa/Middle East regions, sales rose by 13.2 percent and 16.5 percent, respectively. Notably, sales in Greater China advanced by a gratifying 24.1 percent from the previous year, to €1.5 billion. Portfolio-adjusted sales in the two regions advanced by 3.7 and 4.3 percent, respectively, thanks to growth in HealthCare and MaterialScience. However, CropScience sales in the Latin America/Africa/Middle East region receded by 9.1 percent due to the difficult market environment in Brazil, but dipped by only 1.0 percent in the Asia/Pacific region when adjusted for currency effects.