As a listener to Bayer's conference call ($BAYN (+3,12 %) ) on the results for the fourth quarter and the full year 2024, I was able to gain a deep insight into the company's current situation and future plans.
William Anderson, Bayer's CEO, began with a summary of the 2024 results and gave an outlook for 2025. Despite the challenges, he was optimistic about the company's long-term prospects. It was particularly emphasized that the results were in line with the forecasts adjusted in November and that the debt was reduced to 32.6 billion euros. could be reduced.
Wolfgang Nickl, Chief Financial Officer, provided more detailed information on the Group's financial performance. Sales rose slightly by 1%, while EBITDA pre exceptionals fell by 14% to EUR 10.1 billion. This decline was mainly due to lower results in the Crop Science Division and negative currency effects. For 2025, Bayer expects sales of between 45 and 47 billion euros and EBITDA of between 9.5 and 10 billion euros. Free cash flow is expected to be between EUR 1.5 and 2.5 billion and net financial debt is expected to fall to between EUR 31 and 32 billion.
Anderson emphasized that Bayer will focus on reducing debton reducing debt, overcoming legal disputes and increasing profitability. An important point is the improving profitability in Crop Sciencewhere generic price pressure and regulatory challenges are putting pressure on margins. Bayer plans to accelerate growth through innovation and efficiency improvements and increase margins to mid-20% by 2029.
Pharmaceuticals: Stefan Oelrich, Head of the Pharmaceuticals Division, reported sales growth of 3.3% in 2024, driven by the strong performance of the new drugs Nubeqa and Kerendia. However, a decline in sales is expected for 2025, as the patent expiry of Xarelto will have a negative impact on earnings. Bayer plans to return to growth from 2027 through new product launches and an improved pipeline.
Consumer Health: Julio Triana, Head of the Consumer Health Division, highlighted growth in almost all categories, particularly in dermatology and digestive health. Further sales growth of between 2% and 5% is expected for 2025.
Crop Science: Rodrigo Santos, Head of the Crop Science Division, described 2024 as challenging, with a 2% decline in sales. Lower prices for glyphosate and regulatory hurdles had a negative impact on results. A slow market recovery is expected in 2025, and Bayer plans to increase profitability and growth through a comprehensive five-year strategy.
The subsequent Q&A session provided further insight into Bayer's strategic thinking. Here are some of the key points:
Asundexian: An analyst asked about the potential of Asundexian, a stroke prevention drug. Oelrich confirmed that the results of the Phase III trial are expected in the second half of the year and that the drug has blockbuster potential if the outcome is positive.
Dicamba: Another focus was on the regulatory challenges surrounding dicamba, an herbicide. Santos explained that Bayer is working on a solution for the next season and is confident that a new herbicide will be approved for 2026.
Glyphosate: Analysts were also interested in the impact of tariffs on glyphosate imports. Santos mentioned that tariffs on imports from China could potentially have a positive impact on prices.
Short-Stature Corn: Steve Byrne of Bank of America asked about the results of short-stem corn trials. Santos responded that the data to date shows higher yields at high density and no increased problems with weeds or disease have been noted.
Litigation: William Anderson outlined Bayer's strategy to address ongoing litigation related to PCBs and glyphosate. He emphasized that Bayer is committed to a scientific discussion of the facts.
Pipeline: Analysts expressed their interest in the pipeline and when initial results can be expected. Oelrich indicated that a more detailed update will be given later this year.
Profitability: The surprise inclusion of Crop Science profitability as a fifth focus area was questioned by analysts. Anderson explained that this was due to the structural problems in Crop Protection.
The conference call provided a comprehensive picture of Bayer in a period of upheaval. The company is facing significant challenges, particularly in connection with the patent expiry of Xarelto and the legal disputes in Crop Science. At the same time, however, there are also promising opportunities for growth, particularly through new product launches and an improved pipeline. Bayer's strategic priorities of reducing debt, managing litigation and increasing profitability appear well placed to position the company for long-term success.
Do any of you have Bayer in your portfolio?
