April 03, 2013
Bayer in Japan Sales Results for FY2012 (Jan. - Dec.)

Bayer in Japan remains confident about its Growth Strategy despite challenging conditions in 2012

  • Sales reached 234.9 billion yen in 2012
  • All subgroups maintained high level of sales
  • CropScience expanded market share
  • New Growth Strategy aims for 330 billion yen sales by 2017

Tokyo, April 3, 2013- Bayer in Japan posted group-wide sales of 234,911 million yen in FY2012 (-1.0% vs. previous year). However, excluding the impact of the NHI price revision in the pharma business, sales increased by 3%. Hans-Dieter Hausner, Senior Bayer Representative for Japan, commented "Bayer HealthCare and Bayer MaterialScience faced challenging business environments in 2012, but efforts to bring new products and applications to the market resulted in both businesses achieving volume growth as compared to the preceding year. Other factors, such as the positive sales growth of Bayer CropScience achieved through the successful launch of new products, allowed the group as a whole to maintain sales on a similar level as previous year. We remain confident about our Growth Strategy despite challenging conditions."

Bayer HealthCare generated sales of 169,443 million yen, representing a decrease of 1.1% over the previous year. Although 2012 was an NHI price revision year, Bayer HealthCare was able to offset the impact of the price revision (- 5%), through the launch of new products such as the oral anticoagulant Xarelto, a selective direct factor Xa inhibitor, Eylea, a treatment for wet age-related macular degeneration, as well as its strategy to concentrate key resources on increasing sales of growth drivers. Bayer CropScience successively introduced new formulations for paddy rice, increasing sales by 0.8% to 32,079 million yen and successfully expanding its market share. Bayer MaterialScience was heavily impacted by the declining output of consumer electronics in Japan and the challenges faced by export-dependent companies due to the strong yen. Although losses were partially offset by stronger demands of the construction industry for insulation materials, sales declined 2.2% to 33,389 million yen. The staff complement at Bayer in Japan at the end of December 2012 was 3,320 employees.

Subgroup Performance and Topics 2012

The oral anticoagulant, Xarelto, a selective direct factor Xa inhibitor, was launched in April, and an intravitreal VEGF inhibitor, Eylea, a treatment for wet age-related macular degeneration, was launched in November under a partnership with Santen Pharmaceutical Co., Ltd. Application for regulatory approval of Stivarga for colorectal cancer was filed in July 2012 and approval was granted on March 25, 2013 in Japan. Application for approval of Stivarga for gastrointestinal stromal tumors (GIST) was also filed in December 2012.
 Solid performances were again delivered by the key growth drivers: Fosrenol, a hyperphosphatemia agent; Zetia, for hyperlipidemia treatment; and YAZ, for dysmenorrhea treatment.
 Bayer HealthCare has 36 clinical trials in Phase II and Phase III in 2013. The subgroup aims to raise the current proportion of its sales deriving from new products without generic equivalents in Japan from current 52 % in 2012 to more than 60 % in 2014.

In the Crop Protection business, the rice insecticide/fungicide, Routine Quattro, and the rice herbicide, Gole, were launched in January 2012. The herbicide active ingredient, Fentrazamide, marked a large increase in sales, and the fungicide, Silvacur, and the rice insecticide, Kirappu, performed particularly well. Various promotional campaigns were conducted to commemorate the 20th anniversary of the launch of the insecticide, Admire.
 In the Environmental Science business, new products such as Mirage SC for golf courses/greens, which was launched in May 2012, and the herbicide Tribute OD, launched in 2011, made positive contributions to sales.
 The Japanese government has positioned agriculture as a growth area and is currently studying various policies to bolster agriculture in order to thrive as an industry. Bayer CropScience is scheduled to launch a total of 10 new products and active ingredients from the Crop Protection and Environmental Science businesses by 2015 and plans thereby to expand its market share.

The sharp decline in domestic LCD TV production, the negative impact of the appreciating yen on export-dependent industries, reduced Japanese automobile sales in the Chinese market, and other factors had a strong impact on sales for Bayer MaterialScience. While this loss was partially compensated by increased demands from the construction industry for insulation materials, sales were slightly below 2011 figures.
 As part of the EcoCommercial Building (ECB) program, Bayer MaterialScience collaborated with the Institute of Industrial Science of the University of Tokyo to develop an ECB prototype of an environmentally friendly building concept in Japan. The study showed that primary energy consumption can be reduced by approximately 65% as compared to a standard office building, and recovery of additional costs for energy-saving measures is achieved after 6 years only.
 Bayer MaterialScience is also actively engaged in Japan's globally leading field of robotics and co-sponsored in November 2012 the CYBERDINE Design Challenge, a design contest for next-generation robots, with CYBERDINE Inc. Bayer MaterialScience has high expectations for the application of robotics in many fields including services and healthcare, and plans thereby to deliver materials in its efforts to expand new business segments.

In November 2012, 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 aims to boost annual sales to 330 billion yen by 2017, with an average annual growth rate of more than 7%. Bayer will invest more than 500 million euros in development activities in Japan from 2013 until 2017 to drive innovation and ensure growth in all of its businesses.

Hausner comments, "The execution of new products launches and the introduction of new applications will ensure Bayer's future growth, and I am confident that we will achieve the targets we have set for 2017."

2013 is the commemorative year for Bayer as it marks its 150th anniversary of the company's foundation in Germany. In the past 150 years, with its long lasting history of innovation, Bayer has brought many products to the market in order to improve the quality of people's life. Under its mission statement "Bayer: Science For A Better Life", the company will continue on this path with its innovations.

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 234,911 million yen (FY2012) and 3,320 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 3, 2013