April 05, 2012
Bayer in Japan Sales Results for FY2011 (Jan.-Dec.)

Bayer in Japan achieved robust growth despite challenging conditions

  • Total sales in 2011 increased by 2.5% to 237.3 billion yen
  • 14.2 billion yen invested in R&D activities in Japan
  • Aiming for 300 billion yen in sales by 2015 under the new Growth Strategy

Tokyo, April 5, 2012 - Bayer in Japan turned 2011 into a year of growth by posting group-wide sales of 237,298 million yen, representing an increase of 2.5% over the preceding year. Hans-Dieter Hausner, Senior Bayer Representative for Japan, notes, "Bayer in Japan successfully maintained robust sales on the whole despite an extremely challenging business environment stemming from, amongst other reasons, the Great East Japan Earthquake on March 11."

On an individual subgroup basis, Bayer HealthCare generated sales of 171,329 million yen, thereby achieving an increase of 4.2% largely attributable to the strong performance by its major growth products. Bayer CropScience marked the launch of several new formulations for paddy rice in 2011, however, the sales decreased slightly by 1% to 31,819 million yen, mainly due to a declining market. The first-half year of Bayer MaterialScience was heavily impacted by effects of the March earthquake and tsunami, including a drop in local production of various manufacturing industries as well as nationwide efforts to conserve energy. Although output by automakers as well as manufacturers of electrical equipment and electronics improved from summer onward, Bayer MaterialScience's annual sales declined by 2.3% to 34,150 million yen. The staff complement at Bayer in Japan at the end of December 2011 was with 3,390 employees nearly at the same level of the preceding year.

During 2011 Bayer in Japan invested 14.2 billion yen (EUR 128 million) in R&D, with the majority of investments undertaken at Bayer HealthCare. The Group plans to maintain this substantial level of R&D investments in the years ahead with more than 50 billion yen in total by 2015 in order to further drive innovation in all its businesses.

Most administrative functions were consolidated under one new roof at Bayer Holding Ltd. in order to leverage efficiency improvements across the entire Bayer Group in Japan.

Subgroup Performance and Topics in 2011

The highlight of 2011 for the Bayer HealthCare was the filing of applications for regulatory approval for two major new products: Xarelto, an oral, direct Factor Xa inhibitor whose active ingredient is Rivaroxaban, and VEGF Trap-Eye for wet "Age-related Macular Degeneration" (wet AMD). In January 2012, approval was granted for the manufacture and sales of Xarelto. Other achievements in 2011 include the release of a new packaging for Betaferon SC inj. 9.6 mil IU (a treatment for preventing multiple sclerosis relapse and progression) that provided thinner needles, and the launch in July of the recombinant blood coagulation factor VIII Kogenate FS Bioset 2000IU. The subgroup's Animal Health division launched two new products in the market for companion animals, Baytril Flavor Tablets (February) and COSEQUIN Powder IN (July).
 From an organizational point of view, Bayer HealthCare realigned its new, streamlined organization for greater efficiency with the aim of reallocating resources for a clearer focus on new products and existing growth products. The redesigned organization went into effect with the start of this year.

Bayer CropScience successfully brought to the market a wide variety of new formulations for paddy rice throughout 2011, commencing full-scale sales of Bodyguard and Possible, two herbicides containing the new active ingredient tefuryltrione, while launching RoutineTres, the insecticide/fungicide mixtures based on the new active ingredient isotianil. The product portfolio of Bayer CropScience was further strengthened by two new products launched by the Environmental Science division, the lawn fungicide Signature and the lawn herbicide Tribute.
 The Research Center in Yuki was closed as a result of Bayer CropScience's global strategy for restructuring research functions. However, key product development activities will continue in Japan in order to keep providing Japanese farmers with innovative products and services.

The March 2011 earthquake and tsunami led to a decline in the output of various manufacturing sectors, which are also key customers of Bayer MaterialScience. However, production recovered in the second half of 2011. Responding to these circumstances, Bayer MaterialScience stepped up its marketing activities for highly innovative products such as carbon nanotubes and functional films. For the construction industry, one of its largest customer industries, Bayer MaterialScience promoted various innovative solutions, including the EcoCommercial Building program, a comprehensive solution for sustainable and energy efficient construction.
 In September, the newly renovated Coatings, Adhesives and Specialties laboratory at the Innovation Center in Amagasaki opened, which serves as the central hub for applied developments. The upgraded Innovation Center will pursue joint product development projects with customers in various fields, including the development of environmentally friendly products such as water-based coatings. In 2011 the Niihama Plant of Sumika Bayer Urethane achieved a record of three million incident-free work hours accumulated over 15 years.

2011 also marked both the 100th anniversary of Bayer in Japan and the start of a new Growth Strategy. During October 2011, Bayer in Japan announced its Growth Strategy, which spells out the Group's growth targets and the subgroup strategies in Japan over a five-year period. The Growth Strategy is aiming to boost annual sales to 300 billion yen (EUR 2.4 billion) by 2015 with an average annual growth rate of 6%.
 Hausner comments, "In order for us to achieve these ambitious goals, successful deployment and execution of each subgroup's strategies will be crucial."

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 237,298 million yen (FY2011) and 3,390 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.
Tokyo, April 5, 2012