Bayer outperforms expectations for 2009, but 4th quarter and guidance disappoints

German drug, crop and material sciences group Bayer reported 2009 results last Friday that were ahead of consensus forecasts, but its fourth quarter figures and forward guidance disappointed investors, despite a strong performance from its health care business ' which accounts for well over half its turnover - seeing its share price fall 3.3% to 47.76 euros at 10.22 GMT, making it the worst performing stock on Germany's blue-chip DAX index.

2009 was a difficult year all round, but Bayer achieved one of its strongest years, said management board chairman Werner Wenning announcing the figures at the group's headquarters in Leverkusen. Group sales for the year dropped 5.3% to 31.17 billion euros ($42.08 billion), EBITDA before special items fell 6.6% to 6.47 billion and net income slumped 20.95 to 1.36 billion euros but core earnings per share came in at 3.64 euros versus forecasts of 3.49 euros, but are expected to improve by about 10% in 2010.

Health care turnover was 15.99 billion euros, up 3.8% year-on-year, with pharmaceuticals rising 4.8% to 10.5 billion euros ' fuelled by strong performances in emerging markets and declining in North America, and consumer health increasing 2.1% to 5.5 billion euros, with strong sales gains in China and Russia. Underlying EBITDA for the business unit increased 7.5% to 4.47 billon euros and EBIT leapt 21.0% to 2.64 billion euros. Health care, as a result of the 2006 acquisition of fellow German drug major Schering AG, accounted for 53% of group sales in the fourth quarter. CropSciences revenues advanced 2.5% to 6.51 billion euros, generating EBIT of 798 million euros, down 13.1%, while MaterialScience turnover fell 24.7% to 7.52 billion euros, with EBIT flat at a 266 million-euro loss.