Net income fell 35% from the $22.3 billion acquisition of Schering, but exceeded analysts expectations.
According to Bayer, the acquired Schering business contributed E1.4 billion to sales in the third-quarter. This is the first full quarter that Schering has contributed to Bayer’s results.
Net debt decreased by E924 million in the third quarter, to E19 billion. “The divestiture of HC Starck to financial investors Advent International and The Carlyle Group…will bring down net debt by about another E1 billion,” said Bayer management board chairman Werner Wenning, adding that the proceeds from the divestitures of the diagnostics business and of Wolff Walsrode would lead to further reductions.
The principal growth engine for Bayer’s business in the third quarter was the Bayer HealthCare subgroup, where sales climbed by 72.5%. Bayer HealthCare recorded good sales gains for Kogenate, key primary care products and its oncology business. The Schering business also performed well, with growth driven primarily by the Yasmin product family and the multiple sclerosis treatment Betaferon/Betaseron.
“We can therefore reaffirm our target of realizing E700 million a year in synergies by 2009,” commented Mr Wenning.
The Bayer Group expects sales for the full year 2006 to be in the region of E30 billion, including roughly E3 billion in revenues from the Schering business since June 23, 2006. Bayer currently holds more than 96.1% of the outstanding shares of Schering.