Report on Future Perspectives and on Opportunities and Risks

Future Perspectives

Economic Outlook

Economic Outlook1

 

 

Growth 2016

 

Growth forecast 2017

2016 figures restated

1

Real growth of gross domestic product, source: IHS Global Insight

2

Including about 50 countries defined by IHS Global Insight as emerging markets in line with the World Bank

As of March 2017

World

 

+2.5%

 

+2.9%

European Union

 

+1.8%

 

+1.7%

of which Germany

 

+1.8%

 

+1.9%

United States

 

+1.6%

 

+2.3%

Emerging Markets2

 

+3.8%

 

+4.4%

The global economy will likely grow more quickly in 2017 than in the previous year. In the United States particularly, we expect better economic development than in 2016. On the other hand, growth in the European Union is likely to slow down slightly, due partly to uncertainty surrounding future political development in Europe. Economic output in the Emerging Markets will probably pick up overall compared with the previous year. We continue to expect strong growth in China but at a slightly slower pace.

Economic Outlook for the Segments1

 

 

Growth 2016

 

Growth forecast 2017

2016 figures restated

1

Bayer’s estimate, except pharmaceuticals; source for pharmaceuticals market: QuintilesIMS Market Prognosis March 2017 Update; all rights reserved; currency-adjusted

As of March 2017

Pharmaceuticals market

 

+5%

 

+4%

Consumer health market

 

+4%

 

+3−4%

Seed and crop protection market

 

−1%

 

+1%

Animal health market

 

+5%

 

+5%

In 2017, Covestro expects a continuation of the growth trend in its main customer industries – construction, electrical engineering and electronics, and furniture. Growth in the automotive industry is still expected to be weaker than in the previous year.

Corporate Outlook

For 2017, Covestro is now budgeting a substantial sales increase (previously: increase) and a significant improvement in EBITDA after adjustment for special items (previously: on or above the prior-year level).

This development leads to the following changes for the Bayer Group. Sales are now expected to increase to around €51 billion (previously: more than €49 billion). This now corresponds to a mid- to high-single-digit (previously: low- to mid-single-digit) percentage increase on a currency- and portfolio-adjusted basis. EBITDA before special items is now expected to improve by a low-teens percentage (previously: mid-single-digit percentage). We now aim to grow core earnings per share from continuing operations by a mid- to high-single-digit percentage (previously: mid-single-digit percentage). Here it must be noted that Bayer’s interest in Covestro amounts to only 53% as of March 2017 (previously: 64% for the full year). Excluding capital and portfolio measures, net financial debt is targeted to be around €8 billion at the end of 2017 (previously: around €10 billion).

Taking into account the potential opportunities and risks, at this point in time we are not adjusting the forecasts issued for our Life Science businesses in February 2017. For more information on our business outlook, please consult our Annual Report 2016, Chapter “Corporate Outlook”.

This forecast is based on the exchange rates as of March 31, 2017. There were no significant changes compared with December 31, 2016.