Statements of Income
Outlook
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Management Report
Outlook
The outlook refers to continuing operations, including Schering. It does not reflect the Diagnostics business, which is to be divested and is reported under discontinued operations.
We expect Bayer Group sales to amount to about €30 billion for the full year 2006, including €3.0 billion in revenues from the Schering business.
Excluding the Diagnostics business now to be divested, we achieved underlying EBIT of €3,158 million and underlying EBITDA of €4,787 million in fiscal 2005. We aim to significantly improve on these numbers in 2006, and expect to achieve underlying EBITDA of approximately €5.7 billion, including about €0.7 billion from the Schering business. As explained in the previous interim report, this figure is adjusted for non-cash charges arising from the acquisition-related step-up of Schering inventories, thus ensuring comparability with future periods. For further details of the calculation of EBIT and EBITDA before special items for Schering see Calculation of EBIT(DA) Before Special Items for the Schering Business.
We expect to achieve underlying EBIT of approximately €3.5 billion in 2006, with the Schering business contributing about €0.1 billion to this total. Following the entry of the domination and profit and loss transfer agreement with Schering in the commercial register on October 27, 2006, we have embarked on the integration of Schering. We expect to incur net special charges of €0.6 billion in the fourth quarter, including €0.4 billion related to Schering. The €0.6 billion figure includes €0.3 billion in non-cash charges comprising write-downs and effects of the purchase price allocation.
With the integration of Schering proceeding on schedule, we are now planning an underlying EBITDA margin in HealthCare of approximately 22 percent for the full year 2006. This guidance already reflects expected increases in marketing and R&D costs in the fourth quarter.
Bayer CropScience continues to anticipate a negative market environment in the fourth quarter, particularly in Brazil. We therefore uphold our forecast of a drop in sales and a year-on-year decline in the underlying EBITDA margin for 2006 as a whole.
We maintain a positive view of the market environment for our MaterialScience business. For the full year 2006, we continue to aim for underlying EBIT and EBITDA on a par with the previous year. Some risks are inherent in the effects of raw material cost increases and the production shortfalls that have occurred.
We are targeting an EBITDA margin (before special items) for the Bayer Group of about 19 percent.
We expect Bayer Group sales to amount to about €30 billion for the full year 2006, including €3.0 billion in revenues from the Schering business.
Excluding the Diagnostics business now to be divested, we achieved underlying EBIT of €3,158 million and underlying EBITDA of €4,787 million in fiscal 2005. We aim to significantly improve on these numbers in 2006, and expect to achieve underlying EBITDA of approximately €5.7 billion, including about €0.7 billion from the Schering business. As explained in the previous interim report, this figure is adjusted for non-cash charges arising from the acquisition-related step-up of Schering inventories, thus ensuring comparability with future periods. For further details of the calculation of EBIT and EBITDA before special items for Schering see Calculation of EBIT(DA) Before Special Items for the Schering Business.
We expect to achieve underlying EBIT of approximately €3.5 billion in 2006, with the Schering business contributing about €0.1 billion to this total. Following the entry of the domination and profit and loss transfer agreement with Schering in the commercial register on October 27, 2006, we have embarked on the integration of Schering. We expect to incur net special charges of €0.6 billion in the fourth quarter, including €0.4 billion related to Schering. The €0.6 billion figure includes €0.3 billion in non-cash charges comprising write-downs and effects of the purchase price allocation.
With the integration of Schering proceeding on schedule, we are now planning an underlying EBITDA margin in HealthCare of approximately 22 percent for the full year 2006. This guidance already reflects expected increases in marketing and R&D costs in the fourth quarter.
Bayer CropScience continues to anticipate a negative market environment in the fourth quarter, particularly in Brazil. We therefore uphold our forecast of a drop in sales and a year-on-year decline in the underlying EBITDA margin for 2006 as a whole.
We maintain a positive view of the market environment for our MaterialScience business. For the full year 2006, we continue to aim for underlying EBIT and EBITDA on a par with the previous year. Some risks are inherent in the effects of raw material cost increases and the production shortfalls that have occurred.
We are targeting an EBITDA margin (before special items) for the Bayer Group of about 19 percent.
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