Second quarter impacted by declines in glyphosate enterprise

Leverkusen, August 8, 2023 – Bayer printed detailed outcomes for the second quarter of 2023 on Tuesday, after having already communicated key figures for the three-month interval and reducing its outlook for full-year 2023 in a July 24 information launch. The revised steering was primarily on account of a major additional decline in gross sales of glyphosate-based merchandise on the Crop Science Division. Gross sales at Prescribed drugs have been secure on a currency- and portfolio-adjusted foundation (Fx & portfolio adj.), whereas earnings have been down 12 months on 12 months. Shopper Well being registered greater gross sales (Fx & portfolio adj.) and likewise elevated earnings.

Group gross sales declined by 8.2 p.c (Fx & portfolio adj.) to 11.044 billion euros within the second quarter. There was a unfavourable foreign money impact of 553 million euros (Q2 2022: optimistic foreign money impact of 915 million euros). EBITDA earlier than particular objects declined by 24.5 p.c to 2.527 billion euros. This determine included a unfavourable foreign money impact of 120 million euros (Q2 2022: optimistic foreign money impact of 300 million euros). In contrast, the corporate registered revenue throughout all divisions totaling round 481 million euros on account of a lower in provisions for the Group-wide Quick-Time period Incentive program. EBIT got here in at minus 956 million euros (Q2 2022: plus 169 million euros) after internet particular fees of two.490 billion euros (Q2 2022: 2.111 billion euros) that primarily associated to unscheduled impairment testing within the Crop Science Division. Consequently, internet revenue got here in at minus 1.887 billion euros (Q2 2022: minus 298 million euros). Core earnings per share decreased by 36.8 p.c to 1.22 euros.

Gross sales within the agricultural enterprise (Crop Science) fell by 18.5 p.c (Fx & portfolio adj.) to 4.924 billion euros, primarily pushed by decrease volumes and costs for glyphosate-based merchandise. This impact significantly impacted enterprise in North and Latin America in addition to in Europe/Center East/Africa, and resulted in a forty five.6 p.c lower in gross sales (Fx & portfolio adj.) at Herbicides. Excluding the glyphosate enterprise, Crop Science gross sales have been stage with the earlier 12 months (Fx & portfolio adj.), as greater costs have been offset by decrease volumes. Gross sales at Corn Seed & Traits rose by 10.6 p.c (Fx & portfolio adj.), largely due to greater costs in all areas in addition to elevated acreages in North America. Enterprise at Fungicides was stage with the prior-year quarter (Fx & portfolio adj.). Gross sales at Soybean Seed & Traits have been down 9.3 p.c (Fx & portfolio adj.), primarily on account of decreased acreages and a decline in license revenues in North America.

EBITDA earlier than particular objects at Crop Science fell by 58.5 p.c to 725 million euros, primarily as a result of decline in gross sales of glyphosate-based merchandise. Larger costs in the remainder of the enterprise and price financial savings solely partially compensated for this impact. Earnings have been additionally diminished by a primarily inflation-related improve in the price of items bought and a unfavourable foreign money impact of 96 million euros (Q2 2022: optimistic foreign money impact of 215 million euros).

Prescribed drugs: new merchandise ship substantial development

Gross sales of prescription medicines (Prescribed drugs) got here in at 4.557 billion euros, matching the prior-year stage on a currency- and portfolio-adjusted foundation. The division’s new merchandise achieved important good points: Gross sales of the most cancers drug Nubeqa™ almost doubled, whereas Kerendia™ for the remedy of persistent kidney illness related to sort 2 diabetes noticed enterprise develop greater than threefold. As well as, the Radiology enterprise continued to develop, primarily pushed by good points for the CT Fluid Supply and Ultravist™ product households. Gross sales of the ophthalmology drug Eylea™ additionally elevated, with development of 5.6 p.c (Fx & portfolio adj.) pushed by greater volumes in all areas and significantly in North America and Asia/Pacific. In contrast, the division recorded a decline in gross sales in China, partly on account of tender procedures for Adalat™. On a worldwide stage, gross sales of the cardiovascular drug decreased by 26.1 p.c (Fx & portfolio adj.). Enterprise in China was additionally impacted by a lower in demand for Aspirin™ Cardio, with world gross sales falling 29.3 p.c (Fx & portfolio adj.). As anticipated, world gross sales of the oral anticoagulant Xarelto™ have been down, with aggressive strain from generic merchandise in addition to decrease costs, significantly in Asia/Pacific and Latin America, leading to a lower of three.3 p.c (Fx & portfolio adj.).

EBITDA earlier than particular objects at Prescribed drugs declined by 6.7 p.c to 1.379 billion euros, largely on account of greater R&D investments in cell and gene remedy and chemoproteomics applied sciences, in addition to in tasks in superior scientific improvement. As well as, the prior-year quarter had obtained a major increase from the sale of non-core companies. There was a unfavourable foreign money impact of 40 million euros (Q2 2022: optimistic foreign money impact of 41 million euros).

Shopper Well being continues to develop

Gross sales of self-care merchandise (Shopper Well being) elevated by 5.4 p.c (Fx & portfolio adj.) to 1.466 billion euros in comparison with a powerful prior-year quarter, with contributions from all areas. The division posted important good points within the Dermatology enterprise, with development of 10.9 p.c (Fx & portfolio adj.) pushed partly by continued excessive demand for Bepanthen™, in addition to within the Ache & Cardio class, the place gross sales rose by 10.0 p.c (Fx & portfolio adj.). As well as, gross sales of cough and chilly merchandise elevated considerably amid a persistently sturdy chilly season, whereas the allergy enterprise expanded barely regardless of a weaker allergy season on account of weather-related components. General, the Allergy & Chilly class registered development of 5.7 p.c (Fx & portfolio adj.). The division continued to face some provide constraints within the second quarter, significantly within the Digestive Well being class, the place gross sales have been stage with the prior-year interval (Fx & portfolio adj.). The availability state of affairs is anticipated to enhance within the second half of the 12 months.

EBITDA earlier than particular objects at Shopper Well being elevated by 1.5 p.c to 335 million euros following a really sturdy prior-year quarter, pushed by steady operational productiveness and value administration measures. These efforts compensated for ongoing inflation-driven price will increase and funding in advertising and marketing progressive merchandise. The division additionally recorded greater proceeds from the sale of minor, non-strategic manufacturers. There was a unfavourable foreign money impact of 31 million euros (Q2 2022: optimistic foreign money impact of 49 million euros).

Group outlook lowered on July 24

The Bayer Group lowered its outlook for full-year 2023 on July 24, primarily on account of a major additional decline in gross sales of glyphosate-based merchandise. When speaking its first quarter outcomes, Bayer had already guided in the direction of the decrease finish of the forecast it had beforehand issued. On a currency-adjusted foundation (i.e. based mostly on the typical month-to-month alternate charges from 2022), Bayer now expects to generate gross sales of between 48.5 and 49.5 billion euros (preliminary forecast: 51 to 52 billion euros). This now corresponds to a decline of two to three p.c on a currency- and portfolio-adjusted foundation (preliminary forecast: improve of two to three p.c). EBITDA earlier than particular objects is now anticipated to return in at 11.3 billion to 11.8 billion euros on a currency-adjusted foundation (preliminary forecast: 12.5 to 13.0 billion euros). The corporate now anticipates core earnings per share of 6.20 to six.40 euros on a currency-adjusted foundation (preliminary forecast: 7.20 to 7.40 euros). As well as, it now tasks free money circulation of roughly zero euros (preliminary forecast: roughly 3.0 billion euros) and internet monetary debt of roughly 36 billion euros (preliminary forecast: 32 to 33 billion euros) on a currency-adjusted foundation. Bayer now expects to take particular objects of round minus 3.5 billion euros (preliminary forecast: round minus 1.0 billion euros) in EBIT after adjusting for foreign money results.

With respect to the divisions, the corporate now expects Crop Science gross sales to fall by round 5 p.c 12 months on 12 months (preliminary forecast: improve by round 3 p.c) and Prescribed drugs gross sales to point out a roughly 0 p.c change in opposition to the prior-year stage (preliminary forecast: improve by roughly 1 p.c) after adjusting for foreign money and portfolio results. The currency-adjusted EBITDA margin earlier than particular objects is now projected to return in at round 21 p.c at Crop Science (preliminary forecast: 25 to 26 p.c) and roughly 28 p.c at Prescribed drugs (preliminary forecast: barely above 29 p.c). The forecast for Shopper Well being stays unchanged, with gross sales development of roughly 5 p.c on a currency- and portfolio-adjusted foundation, and a currency-adjusted EBITDA margin earlier than particular objects of round 23 p.c.

Notes:

The next tables include the important thing knowledge for the Bayer Group and its divisions for the second quarter and the primary six months of 2023.

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Ahead-Trying Statements
This launch could include forward-looking statements based mostly on present assumptions and forecasts made by Bayer administration. Numerous identified and unknown dangers, uncertainties and different components may result in materials variations between the precise future outcomes, monetary state of affairs, improvement or efficiency of the corporate and the estimates given right here. These components embody these mentioned in Bayer’s public studies which can be found on the Bayer web site at www.bayer.com. The corporate assumes no legal responsibility in any respect to replace these forward-looking statements or to adapt them to future occasions or developments.