April 06, 2010

Bayer in Japan Announced FY 2009 Results

  • Sales were 220.5 billion yen (minus 3.6 percent)
  • Vision to achieve sustainable growth

Tokyo, April 6, 2010- Bayer Holding Ltd. (Head office: Chiyoda-ku, Tokyo, President: Hans-Dieter Hausner) has announced its FY2009 (January-December) business results, highlighting that Bayer in Japan recorded a solid performance despite last year's difficult economic environment. Sales reached 220,525 million yen, representing a decline of 3.6 percent compared to the previous year.
"While the global recession caused tremendous economic repercussions in 2009, the impact on the Bayer Group worldwide and on Bayer in Japan was somehow limited. This is because approximately 80 percent of Bayer's current sales in Japan are derived from life sciences, comprising of HealthCare and CropScience, which were lesser affected by the global economic downturn," Hans-Dieter Hausner, Senior Bayer Representative for Japan, explained.
On an individual subgroup basis, HealthCare achieved sales of 153,388 million yen, a 3.6 percent increase over the previous year. Sales of CropScience declined 1 percent year-on-year to 36,209 million yen. MaterialScience was heavily affected by the global depression and its sales decreased 30.1 percent to 30,928 million yen.

HealthCare

HealthCare achieved sales of 153,388 million yen, a 3.6 percent increase over the previous year.
Two new products were launched: Fosrenol, a hyperphosphatemia agent, and Wellnara, a fixed-dose combination therapy for postmenopausal osteoporosis. The indications of the anticancer agent Nexavar were expanded to include hepatocellular carcinoma. In terms of life cycle management, Adalat CR 40mg small tablet, specially tailored to the Japanese market, was approved. In 2009, the four key growth drivers / products of HealthCare were Fosrenol, Nexavar, the MRI liver contrast agent EOB-Primovist and the antihyperlipidemia agent Zetia. As a result of this performance, sales grew at a rate well exceeding that of the Japanese pharmaceutical market. At the end of 2009, we announced the merger of Bayer Yakuhin Ltd. and Intendis K.K. The merger was completed on April 1, 2010.

CropScience

CropScience maintained its overall sales at a similar level compared to the preceding year. Sales declined by 1 percent to 36,209 million yen in 2009 as compared to 2008.
Although prices for crop protection products were increased at the end of 2008, the effect of this was offset by unseasonable weather, as well as reduced pest and disease incidence. Under this business environment, the Crop Protection business continued to emphasize a strategy of expanding consumption of its products close to the farmer by encouraging cooperatives to list our products on their crop spray calendars. Organizationally, we also established a new and focused "Customer Service Center" by combining the Order Entry Center with the Customer Support Office. In our product portfolio, Reliable, a new potato late blight fungicide was launched and business with our key products, Basta, Admire Innova as well as other products developed more than satisfactorily.
The Environmental Science business was impacted by a drop in housing construction due to the economic downturn and cuts in golf course management budgets. We launched the fungicide, Protecmate WDG for golf courses and the new termiticide, Hachikusan ME.

MaterialScience

2009 was another challenging year for the chemical industry as a whole due to the global economic recession. MaterialScience posted sales of 30,928 million yen, a year on year decrease of 30.1 percent. However, even in this difficult business environment, we continuously made efforts to improve free cash flow, in addition to establishing cost- competitive business structures. In Bayer MaterialScience, we used the Innovation Center to promote new joint application developments with our customers, and implemented tailor-made marketing activities targeted at customers in the automotive, electric/electronic and IT industries. Despite the challenging business environment, we continued to focus on innovation, launching an "Innovation Group" within Bayer MaterialScience, which will work on technologies such as carbon nanotubes, functional films and holographic materials.
The high importance for the safety of our operation was reflected by the Niihama plant of Sumika Bayer Urethane Co., Ltd., passing the noteworthy milestone of 2.5 million hours of incident-free operations during the year.

Outlook for Each Subgroup

The general view is that the Japanese economy will begin to show signs of a modest recovery during the 2nd Quarter of 2010. Bayer in Japan will endeavor to achieve ongoing sustainable growth through group-wide strategic initiatives.

HealthCare will continue to solve unmet medical needs of Japanese patients. As in 2009, we aim to achieve growth rates exceeding the market in order to become a leading specialty pharma company with a strong presence in primary care.

CropScience plans to launch important new products such as the rice herbicides Bodyguard, Possible and the rice blasticide Routine. Furthermore, we aim to strengthen our relationships with farmers at CropScience through integrated solutions and services based on various "crop platform strategies". Development work will also commence on seed treatment products for selected upland crops.
MaterialScience will continue to utilize the Innovation Center and promote application development work with our valued customers and provide various market segments with innovative materials and solutions.

Our Vision to Achieve Sustainable Growth

Upon assuming the position of the Senior Bayer Representative for Japan as of January 1. 2010, Hausner said, "In 2009, Bayer in Japan was the 4th largest subsidiary of the Bayer Group worldwide. Therefore, Japan will clearly remain a key strategic market for Bayer." And he explained the company's vision based on three main pillars to achieve sustainable growth.

"Firstly through economic responsibility - without doubt business growth remains a given necessity for us, therefore we intend to expand our market position and strengthen our market leadership positions in various fields of activities.
Secondly through social responsibility - we will continue with our efforts in order to fulfil our corporate social responsibilities via various CSR programs and sponsorships as a good corporate citizen in Japan.
And thirdly, based on our environmental programs, we intend to further contribute to climate protection. Under our Climate Program, Bayer worldwide will be investing approximately 1 Billion Euros (approx. 130 Billion Yen) over a three-year period between 2008 till 2010. This contribution is probably one of the largest investments a company has ever undertaken in the area of climate protection and we have also set ourselves ambitious targets till 2020," explained Hausner.

In 2011, Bayer in Japan will celebrate its 100th anniversary. Under the Mission Statement "Science For A Better Life", the company will continue on its future endeavor for sustainable growth based on its vision and ongoing strive for innovation.

Bayer in Japan: Highlights of 2009
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About Bayer in Japan
In Japan, Bayer is known as the company that developed Aspirin, an antipyretic-analgesic that has been on the market for more than 100 years. Bayer in Japan offers high value-added products and services in a broad range of fields, from healthcare, crop science and high-tech materials to contribute to the health and living of general consumers and the industry. Bayer in Japan has total sales of 220,525 million yen (FY2009) and 3,479 employees.

Forward-Looking Statements
This release may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup 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 Bayer's public reports which are available on the Bayer website at www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

Bayer Holding Ltd. / Corporate Communications
Tokyo, April 6, 2010