By Ludwig Burger
FRANKFURT (Reuters) - Bayer
The inventor of Aspirin and maker of birth-control pill Yasmin said it now forecast full-year sales of about 40 billion euros ($55 billion), against a previous target of 40-41 billion euros, despite reporting better-than-expected quarterly earnings.
It was the latest European company to be hit by a strong euro, which gained more than 8 percent against the dollar between July and late October and has risen sharply against the Japanese yen and currencies in Latin America.
Bayer's finance chief said the group hedged currencies whenever it won an order to secure future cash flows, and hedged about half of its longer-term revenues.
"As a result you have a temporary levelling effect but no permanent protection," Chief Financial Officer Werner Baumann told journalists during a conference call.
North America accounts for about 25 percent of Bayer's total sales while Asia represents 21 percent and Latin America, the Middle East and Africa account for 16 percent.
Bayer has brought out a number of new drugs in the past 12 months, including stroke prevention pill Xarelto, eye drug Eylea and cancer treatment Stivarga, and they helped it post a 7.7 percent gain in adjust core earnings in the third quarter from a year earlier, beating forecasts for just a 0.8 percent increase.
"Importantly, the newer products performed well, with Xarelto again beating consensus expectations, and Eylea is also off to a good start," Berenberg analyst Alistair Campbell said in a note to clients.
Bayer's shares were down 1 percent after the sales warning, underperforming a 0.2 percent dip in Germany's blue-chip DAX index <.GDAXI>.
The group's MaterialScience unit, which makes padding foam chemicals for furniture and training shoes and transparent plastics, outperformed market expectations, posting a 2.7 percent rise in adjusted core earnings for the third quarter, against analysts' forecasts for a 14 percent drop.
Bayer said its total third-quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were 1.98 billion euros, up 7.7 percent and beating a forecast of 1.86 billion euros in a Reuters poll.(Editing by Elizabeth Piper and Susan Fenton)