Statements of Income
Future Perspectives
Bayer Links
Management Report
Future Perspectives
Economic outlook
It is currently not possible to predict the extent to which loan default risks in the banking sector will impact the continuing development of the world economy. So far the global business cycle has proven robust, especially as the slowdown in the United States has been offset by continuing strong growth in the emerging economies and steady expansion in Europe. We currently expect the global economy to remain in relatively good shape, with slightly lower rates of growth in the coming months.
We anticipate stable growth overall in the markets relevant to our HealthCare business, with the pharmaceuticals market in particular likely to maintain its current pace of expansion. The global crop protection market in 2007 is benefiting from more favorable weather patterns than in the previous year and from generally positive conditions in the world’s agricultural markets. In the markets of greatest importance for Bayer MaterialScience we expect steady growth to continue overall, though with regional and sectoral variations.
We anticipate stable growth overall in the markets relevant to our HealthCare business, with the pharmaceuticals market in particular likely to maintain its current pace of expansion. The global crop protection market in 2007 is benefiting from more favorable weather patterns than in the previous year and from generally positive conditions in the world’s agricultural markets. In the markets of greatest importance for Bayer MaterialScience we expect steady growth to continue overall, though with regional and sectoral variations.
Sales and earnings forecast
Bayer’s business performance in the first nine months of 2007 has strengthened our confidence that we will report another record year despite high raw material costs and adverse shifts in exchange rates.
We now forecast an increase in Group sales in 2007 to more than €32 billion. This would correspond to an increase of about 6 percent after adjusting for portfolio and currency effects (previous forecast: about 5 percent).
We plan to increase the Group’s EBITDA margin before special items by at least one percentage point from the 19.3 percent recorded in 2006 (previous forecast: increase to more than 20 percent).
We remain optimistic about the prospects for our HealthCare business. For the year as a whole, we continue to expect that all of its divisions will grow with or faster than the market. We are raising the target margin for Bayer HealthCare and now expect to achieve an EBITDA margin before special items of more than 25 percent (previous forecast: 25 percent). This takes into account our expectation that marketing and research and development costs will be higher in the fourth quarter of 2007 than in the preceding quarters.
For our CropScience business we anticipate a continuing positive market environment in the fourth quarter. For the full year 2007, we confirm the raised target we announced in August of increasing the EBITDA margin before special items to more than 22 percent.
We also do not envisage any significant change in the business environment for our MaterialScience subgroup in the fourth quarter and continue to expect a good, value-creating earnings level. Due to the normal seasonal slowdown in business activity toward the end of the year, we expect EBITDA before special items in the fourth quarter to be below that of the third quarter but above the fourth quarter of 2006. We have initiated extensive cost-structure measures to sustainably improve our earning power. For more information, please refer to the “Subsequent Events”.
We now forecast an increase in Group sales in 2007 to more than €32 billion. This would correspond to an increase of about 6 percent after adjusting for portfolio and currency effects (previous forecast: about 5 percent).
We plan to increase the Group’s EBITDA margin before special items by at least one percentage point from the 19.3 percent recorded in 2006 (previous forecast: increase to more than 20 percent).
We remain optimistic about the prospects for our HealthCare business. For the year as a whole, we continue to expect that all of its divisions will grow with or faster than the market. We are raising the target margin for Bayer HealthCare and now expect to achieve an EBITDA margin before special items of more than 25 percent (previous forecast: 25 percent). This takes into account our expectation that marketing and research and development costs will be higher in the fourth quarter of 2007 than in the preceding quarters.
For our CropScience business we anticipate a continuing positive market environment in the fourth quarter. For the full year 2007, we confirm the raised target we announced in August of increasing the EBITDA margin before special items to more than 22 percent.
We also do not envisage any significant change in the business environment for our MaterialScience subgroup in the fourth quarter and continue to expect a good, value-creating earnings level. Due to the normal seasonal slowdown in business activity toward the end of the year, we expect EBITDA before special items in the fourth quarter to be below that of the third quarter but above the fourth quarter of 2006. We have initiated extensive cost-structure measures to sustainably improve our earning power. For more information, please refer to the “Subsequent Events”.
Bookmark this page
E-mail this page
Advanced Search
