Management Report
3. Sales and Earnings Forecast
The following forecasts for 2010 are based on the business performance described in this report, taking into account the potential risks and opportunities. The sales and earnings forecast for the period through 2012 is given in chapter
11.4 of the Bayer Annual Report 2009.
Bayer Group
We remain optimistic for 2010. The decline in business momentum at HealthCare and CropScience is being offset by the recovery at MaterialScience, which is progressing faster than expected. Since, in addition, currency parities have so far trended more favorably than anticipated, we are raising our earnings forecast for the Bayer Group.
We continue to target currency- and portfolio-adjusted sales growth of more than 5%. We now aim to increase EBITDA before special items to more than €7 billion (previously: toward €7 billion).
Core earnings per share are expected to improve by more than 15% (previously: about 10%). Our estimates are based on the exchange rates prevailing at the end of the first quarter (for example, 1.35 (previously: 1.40) U.S. dollars to the euro).
HealthCare
In light of the business trend in the first quarter, we are adjusting our 2010 sales forecast for HealthCare as follows: For Pharmaceuticals we anticipate below-market growth. In Consumer Health, however, we expect to expand faster than the market. This corresponds to currency- and portfolio-adjusted growth for HealthCare of about 3% (previously: about 5%). We are targeting a further increase in EBITDA before special items.
CropScience
Following the delayed start to the season due to weather conditions, business at CropScience has now gained momentum. Despite this, we now anticipate lower sales growth in view of the weak market development in the first quarter. We confirm our goal of achieving slightly above-market growth in 2010. We now expect to post a currency- and portfolio-adjusted sales increase of between 2% and 3% (previously: approximately 4%) and EBITDA before special items level with the previous year (previously: a small increase).
MaterialScience
We anticipate a continuing recovery in the markets relevant to our MaterialScience business. In light of this we are targeting a sales increase in the region of 20% (previously: more than 10%) on a currency- and portfolio-adjusted basis in 2010. We plan to more than double (previously: considerably increase) EBITDA before special items.
In the second quarter of 2010 we anticipate further growth in sales and an improvement in EBITDA before special items compared with the first quarter of the year.