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Bayer Annual Profit Slides, Sales Hit Record; Expects Growth In 2013

Bayer AG (BYR.L,BAYRY.PK,BAYZF.PK) Thursday reported a marginal drop in annual profit, weighed down by items, while sales reached the highest level in the company's 150-year history. Looking ahead, the company sees higher profit and sales for 2013.

Bayer CEO Dr.Marijn Dekkers said, "2012 was a very successful year for the Bayer Group. We continued to grow dynamically and achieved our targets for the Group. All the subgroups posted gains in sales and earnings before special items."

For the year, net income edged down 1 percent to 2.446 billion euros from 2.470 billion euros. Special items totaled 1.71 billion euros, including a 1.19 billion euros in litigation expenses in connection with the Yasmin/YAZ line of oral contraceptives. In 2011, special items amounted to 876 million euros.

For the fourth quarter, net income dropped 6 percent to 374 million euros ($491.3 million) from 397 million euros, hurt by 424 million euros in special items, compared to 215 million euros in items last year. Sales climbed 7.3 percent to 9.86 billion euros.

Operating profit for the year dropped 4.6 percent to 3.96 billion euros. Excluding items, operating profit climbed 12.9 percent to 5.67 billion euros.

Earnings before interest, tax, depreciation and amortization, or EBITDA, were flat with last year at 6.92 billion euros, while adjusted EBITDA grew 8.8 percent.

Annual sales increased 8.8 percent to 39.76 billion euros from 36.53 billion euros. Adjusted for currency and portfolio effects, sales grew 5.3 percent.

Sales of the HealthCare subgroup increased 8.4 percent to 18.612 billion euros with Pharmaceuticals sales and Consumer Health sales advancing 4.2 percent each.

CropScience increased sales by 15.5 percent to 8.383 billion euros, due largely to good business with new products in Crop Protection and rapidly expanding sales at Seeds.

For 2013, the group plans to increase EBITDA before special items by a mid-single-digit percentage and core earnings per share by a high-single-digit percentage.

Bayer expects currency and portfolio adjusted sales growth of between 4 and 5 percent, corresponding to group sales of about 41 billion euros.

The company sees higher capital expenditures and increased research and development spend in 2013.

On Frankfurt's Xetra, Bayer shares are currently trading at 75.71 euros, up 1.85 euros or 2.50 percent.

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by RTT Staff Writer

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