- Group sales reached: 137.65 EUR 100 million (negative Fx & portfolio adj.) 0.6% ), exchange rate fluctuations are generated 5.25 100 million euros
- EBITDA before special items declined 1.3% for 44.12 billion euros
- Sales and earnings in Crop Science and Consumer Health declined
- Sales and earnings in the Pharmaceuticals division increased
- Core earnings per share were: 2.82 EUR (minus.) 4.4% ）
- Net income was: 20 billion euros
- Free cash flow was negative 26.26 billion euros
- The currency-adjusted outlook of the Group has been confirmed
LEVERKUSEN, Germany, May 14, 2024 /PRNewswire/ -- Bayer Group's results for the first quarter of this year were in line with expectations. On Tuesday, CEO Bill Anderson said in the company's first-quarter earnings report: "Sales in the first quarter were down slightly from the same period last year. The Pharmaceuticals division achieved sales growth and profitability, and the Crop Science division also performed well in a difficult market environment. Consumer Health started slowly, but is expected to gradually return to growth within the year. He reiterated Bayer's outlook for 2024 at constant exchange rates. Anderson also spoke about the company's strategic priorities. "In order to get Bayer back on the right path, in March I identified four areas where the Group should focus its attention. Two months later, we're making progress in each of the four areas, "Growth & Innovation, U.S. Litigation Issues, Cash & Deleveraging, and the new DSO (Dynamic Shared Responsibility) operating model." Regarding the implementation of the DSO, Bayer's CEO explains, "We are consolidating responsibilities and building teams to reduce hierarchies while having a greater impact. We measure our impact more holistically, not just in terms of employment or cost savings goals, but also in our ability to drive innovation, grow our business and improve the quality of life for our customers. "
Group sales in the first quarter of 2024 amounted to 13,765 million euros, slightly below the prior-year figure (Fx & portfolio adj.: minus 0.6 percent). Currency changes had a negative impact of EUR 525 million (Q1 2023: EUR 102 million). EBITDA before special items declined by 1.3 percent to 4,412 million euros. After deducting net special charges of EUR 207 million (Q1 2023: EUR 431 million), EBIT increased by 4.0 percent to EUR 3,092 million. Special charges are primarily related to the cost of ongoing restructuring measures and affect all business units and functions. Net income declined by 8.2 percent to 2.0 billion euros and core earnings per share decreased by 4.4 percent to 2.82 euros.
Free cash flow was minus 2,626 million euros (Q1 2023: minus 4,102 million euros), mainly due to improved operating cash flow. As of March 31, 2024, net financial debt amounted to EUR 37,488 million, an increase of 8.7 percent compared to the end of 2023, mainly due to seasonal cash outflows from operating activities.
In the face of a severe market environment, the sales performance of the Crop Science Division leads the industryIn a challenging market environment, Bayer's agriculture business (Crop Science) outperformed its competitors. Sales declined by 3.0 percent (Fx & portfolio adj.) to 7,907 million euros, mainly due to lower sales of non-glyphosate herbicides and fungicides in the EMEA region. Glyphosate products experienced significant market-driven price declines across all regions, and although volumes recovered significantly, they did not fully offset the impact of price declines. Sales in the strategic areas of Herbicides and Fungicides declined by 13.3 percent and 8.5 percent, respectively (Fx & portfolio adj.). Sales in the Soybean Seed & Traits business were at the level of the prior-year quarter (Fx & portfolio adj.). Sales in the Corn Seed & Traits business increased by 2.0 percent (Fx & portfolio adj.), driven by higher prices in all regions. Sales of pesticides increased by 2.3 percent (Fx & portfolio adj.), driven by higher volumes in the Europe/Middle East/Africa and North America regions.
The EBITDA margin before special items of Crop Science declined by 12.8 percent to 2,849 million euros, mainly due to lower prices for glyphosate products. In addition, currency changes had a negative impact of EUR 92 million (Q1 2023: EUR 54 million).
The growth in the Pharmaceuticals Division was mainly driven by new productsSales of Pharmaceuticals (Pharmaceuticals) increased by 3.9 percent (Fx & portfolio adj.) to 4,358 million euros. Sales of the division's new cancer drug Nobego ® and Coshenda ®, a drug for the treatment of chronic kidney disease associated with type 2 diabetes, both increased by around two-thirds (Fx & portfolio adj.). In addition, sales of the ophthalmic drug Eylylene ® increased by 3.4 percent (Fx & portfolio adj.) due to volume and price increases. The diagnostic imaging business also grew by around 10 percent (Fx & portfolio adj.) in both the CT high-pressure injection systems product line and the Univision ® product range. Sales of the oral anticoagulant Xarelto ®, which was in line with expectations, increased by 1.7 percent (Fx & portfolio adj.) despite the impact of generic competition. In contrast, headwinds for the division included lower sales due to tendering ® and procurement in China. Globally, sales of cardiovascular drugs declined by 23.0 percent (Fx & portfolio adj.).
EBITDA before special items in the Pharmaceuticals division increased by 8.0 percent to 1,194 million euros. Higher R&D investments in cell and gene therapies and chemoproteomics technologies were offset by lower spending on late-stage clinical development programs. The division has also been successful in reducing costs associated with its sales activities. Currency changes had a negative impact of EUR 127 million (Q1 2023: negative impact of EUR 6 million).
The Consumer Health division balances demand changes as a whole through pricingSales of Self-Care Products (Consumer Health) declined by 1.8 percent (Fx & portfolio adj.) to 1,432 million euros. The division performed strongly in the previous quarter as supply improved and inventories were replenished, but customer demand declined in the quarter. In addition, U.S. retailers have optimized inventory levels across the industry. However, the decline in sales was largely offset by strategic pricing. Sales in the Allergies & Colds category declined by 16.8 percent (Fx & portfolio adj.), while sales in the Nutrition category were flat (Fx & portfolio adj.) due to a relatively mild cold season and a mild winter. In contrast, sales in the Digestive Health category increased by 9.0 percent (Fx & portfolio adj.) due to improved supply. Iberogast™ and Rennie™ products drove growth across the division in Europe. Volume in the Skins category also increased, with sales increasing by 7.3 percent (Fx & portfolio adj.), mainly due to Bepanthen™ Derma products and strong demand for regional brands in China.
EBITDA before special items in Consumer Health declined by 12.7 percent to EUR 331 million, mainly due to a negative impact of EUR 46 million due to currency fluctuations (Q1 2023: negative impact of EUR 4 million). Thanks to ongoing cost and price management, the division was able to largely offset the negative impact of lower volumes, higher costs due to inflation, and higher marketing investments for innovative products. The division also generated higher revenues from the sale of small, non-strategic brands.
Confirmation of the outlook, adjusted for exchange rate adjustmentsBayer has confirmed its full-year 2024 outlook, based on monthly average exchange rates in 2023. However, based on the closing exchange rate as of March 31, 2024, the negative impact of exchange rate movements is expected. For example, if the closing exchange rate for the cut-off date of December 31, 2023 is used, the EBITDA forecast before special items falls from EUR 10.4 billion to EUR 11.0 billion to EUR 10.2 billion to EUR 10.8 billion.
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Forward-Looking StatementsThis press release includes forward-looking statements based on current assumptions and forecasts made by Bayer Group management. Various known and unknown risks, uncertainties and other factors could cause the Company's actual future results, financial condition, development or performance to differ materially from the estimates made in the forward-looking statements set forth above. These factors include Bayer's reports, which are publicly available on the Bayer website. The Company undertakes no obligation to update these forward-looking statements or to conform them to future events or developments.