Bayer ups 2007, 2009 guidance on better earnings

19 June 2007 07:40  [Source: ICIS news]

MUMBAI (ICIS news)--Bayer raised its earnings guidance for 2007 and 2009 due to improved earnings prospects for the healthcare business, the company said on Tuesday.

“We expect the underlying earnings before interest, taxes, depreciation and amortization (EBITDA) margin for the Bayer Group as a whole to exceed 20% this year, and we are aiming for over 22% by 2009,” Bayer chairman Werner Wenning said in a statement.

The company had previously expected to slightly improve over its earlier estimate of 19.3% for 2007 and begin generating a margin of around 22% starting 2009.

Both the Schering acquisition and the strong performance of the consumer health business were contributing to an increased profitability, Wenning said.

“We are proceeding faster than expected with the integration of Schering and would achieve synergy effects of more than €800m compared to the previously planned €700m by 2009,” he added.

The company planned to further expand its healthcare activities in order to strategically strengthen the entire enterprise and sustain future growth through innovation, Wenning said.

“Bayer HealthCare’s new pipeline comprises 14 projects in phase I, 17 projects in phase II and 19 projects in phase III. Another nine projects have already been submitted for marketing authorisation,” said Arthur Higgins, chairman of the division.

After evaluation, 20 pipeline projects would be discontinued due to either strategic reasons or low prospects for success, it said.

The company was also adjusting its pharmaceutical research and development budget for 2007 and 2008 to about 15% of the division’s sales, Higgins added.

By: Divya Chowdhury
+65 6780 4359

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