Bayer Sustainable Development Report 2005 Economic indicators

Economic indicators


Value added	Net sales by subgroup and segment
Income taxes	Research and development expenses

Value added

The categories of value added indicate how the various stakeholders and Bayer itself participate in the Group’s economic success. The total operating performance of the Bayer Group rose by 18.2 percent in 2005 to EUR 28.8 billion. Value added was up 18.9 percent to EUR 9.6 billion, primarily due to the gratifying development of net sales, which rose significantly on the previous year, up 17.6 percent to EUR 27.4 billion. This value added can be broken down as follows: stockholders 7.2 percent (2004: 4.3 percent), employees 61.6 percent (2004: 78.8 percent) and governments 9.3 percent (2004: 6.7 percent). The remainder was retained by the company.

	2005	Change
Source	EUR million	%

Net sales	27,383	+17.6
Other income	1,390	+30.0
Total operating performance	28,773	+18.2
Cost of materials	9,726	+9.6
Depreciation	1,835	-6.3
Other expenses	7,609	+39.9
Value added	9,603	+18.9

	2005	Share
Distribution	EUR million	%

Stockholders	694	7.2
Employees	5,912	61.6
Governments	889	9.3
Lenders	913	9.5
Earnings retention	1,195	12.4
Value added	9,603	100.0

Income taxes

Included under income taxes are those paid or accrued in the individual countries, plus deferred taxes.

Income taxes of the Bayer Group (in EUR million)

	2004	2005
Income taxes paid or accrued	(490)	(541)
Deferred taxes	17	(100)
Income taxes	(473)	(641)

Net sales by subgroup and segment

In 2005 Bayer increased sales by a substantial EUR 4.1 billion to EUR 27.4 billion (+17.6 percent). While there was a slight drop in sales at Bayer CropScience (–0.8 percent), Bayer HealthCare and Bayer Material-Science recorded an increase in sales (+17.0 percent and +24.4 percent respectively). The Consumer Care and Materials segments made the biggest contributions (+76.3 percent and +25.8 percent respectively). Crop Protection, our second-most important source of sales revenue, recorded the biggest fall, at –1.7 percent.

Net sales by subgroup and segment

	2004	2004 share of Group	2005	2005 share of Group
EUR million		%		%
HealthCare	8,058	35	9,429	34
Pharmaceuticals, Biological Products	3,961	17	4,067	15
Consumer Care	1,336	6	2,355	8
Diabetes Care/Diagnostika	1,975	9	2,151	8
Animal Health	786	3	856	3

CropScience	5,946	25	5,896	22
Crop Protection	4,957	21	4,874	18
Environmental Science/BioScience	989	4	1,022	4

MaterialScience	8,597	37	10,695	39
Materials	3,248	14	4,086	15
Systems	5,349	23	6,609	24

Reconciliation	677	3	1,363	5

Group \| Continuing operations	23,278	100	27,383	100

In 2005 the Bayer Group spent EUR 1,886 million on research and development (the 2004 figure excluding Lanxess was EUR 1,927 million). This money was spent on improving our product portfolio and production processes and on developing new products.

Research and development expenses (in EUR million)

	2004	2005
Total	1,927	1,886
of which Bayer HealthCare	996	954
of which Bayer CropScience	679	664
of which Bayer MaterialScience	236	251
Lanxess	–	–
of which reconciliation	16	17