May 07, 2003
Bayer reports on the first quarter of 2003:

Operating result up 31 percent

- Operating profit climbs 80 percent before one-time items - Net income rises 12 percent to EUR 586 million - Further substantial reduction in net debt

- The Bayer Group got off to a successful start in 2003. The operating result from continuing operations improved by 31 percent to EUR 1,075 million in the first quarter. Disregarding one-time items, it advanced by 80 percent from EUR 464 million to EUR 833 million. "We are very satisfied with the first quarter," commented Bayer Management Board Chairman Werner Wenning. "After a year of transition and reorganization, it is clear that the acquisition of Aventis CropScience and our extensive efficiency improvement programs are bringing tangible benefits. Provided current economic conditions do not seriously worsen, we expect to increase our operating result from continuing operations by a double-digit percentage in 2003." Wenning also highlighted the 68 percent improvement in gross cash flow to EUR 1,402 million and the further EUR 1.1 billion reduction in net debt since the end of 2002, to EUR 7.7 billion.

Sales from continuing operations grew by 5 percent in the first quarter of 2003 to EUR 7,356 million. Measured in local currencies, revenues increased by 16 percent. Group net income rose by 12 percent to EUR 586 million.

The future business area company Bayer HealthCare had sales of EUR 2,108 million (compared to EUR 2,410 million in the first quarter of 2002) and an operating result of EUR 480 million (Q1 2002: EUR 230 million). In the Pharmaceuticals and Biological Products segment, the operating result climbed by 62 percent to EUR 199 million despite a 10 percent decline in sales that was mainly due to currency effects. "Our dedication to improving profitability is now paying off," explained Wenning.

Sales of Bayer CropScience jumped by 92 percent to EUR 1,661 million, mainly due to the Aventis CropScience acquisition. The operating result moved ahead to EUR 443 million (Q1 2002: EUR 144 million), also boosted by EUR 33 million in divestment gains and by earnings on sales of the insecticide fipronil up to the end of March. This product has since been divested as mandated by the antitrust authorities.

Despite certain negative factors - mainly currency effects - earnings of Bayer's two industrial business areas also improved thanks to the cost-structure programs. Polymers recorded operating profit of EUR 74 million (Q1 2002: EUR 21 million) on sales down 2 percent to EUR 2,552 million. In the Chemicals business area, the operating result increased by 3 percent to EUR 38 million despite a 7 percent decline in sales to EUR 872 million. Commented Wenning: "In the industrial businesses, too, it is clear that in recent months we have created a solid foundation for enhancing our performance."

Forward-looking statements<br/>
This news release contains forward-looking statements based on current assumptions and forecasts made by Bayer Group management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in our public reports filed with the Frankfurt Stock Exchange and with the U.S. Securities and Exchange Commission (including our Form 20-F).The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.



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