Author: pr-moritz
Last saved by: Roland Birkhoff
Company: Bayer
Document comments: V-2023-02-28

Second quarter of 2024
Bayer: Modest performance in challenging agricultural market environment – Group outlook confirmed
•	Group sales at 11.144 billion euros (Fx & portfolio adj. plus 3.1 percent)
•	EBITDA before special items declines to 2.111 billion euros (minus 16.5 percent), impacted by currency headwinds
•	Crop Science posts slight increase in sales and sharp fall in earnings
•	Pharmaceuticals and Consumer Health report higher sales (Fx & portfolio adj.) and lower earnings
•	Core earnings per share at 0.94 euros (minus 23.0 percent)
•	Net income at minus 34 million euros
•	Free cash flow at 1.273 billion euros
•	Good progress on strategic priorities – advances in innovation, especially in the Pharmaceuticals Division

Leverkusen, August 6, 2024 – The Bayer Group generated increased sales and lower earnings in the second quarter of 2024. Each business delivered a competitive performance in their respective industries, positioning the Group to confirm its 2024 outlook. “Our Crop Science business nearly offset headwinds in a challenging agricultural market environment,” CEO Bill Anderson said on Tuesday when presenting the company’s half-year financial report. In addition, the Pharmaceuticals Division’s new products Nubeqa™ and Kerendia™ continued their impressive momentum, and Consumer Health returned to growth, he noted. Beyond its operational progress, the company advanced on its strategic priorities. “One of the central commitments we made at Capital Markets Day is that this organization will consistently perform while simultaneously addressing the longer-term roadblocks holding us back. The 154 days since March 5th have been pretty good evidence that we can do both.”

Anderson outlined where the company stands in addressing four strategic focus areas, with good progress in growth and innovation, the US litigation, cash and deleveraging, and the introduction of the new Dynamic Shared Ownership (DSO) operating model. Highlighting the headway the Pharmaceuticals Division is making in driving innovation, he commented: “In just the past 90 days, we’ve taken big steps toward filling the mid-stage pipeline, expanding labels and advancing late-stage assets.” Just recently, Bayer has released positive Phase III results that could pave the way for broader indications for the cancer drug Nubeqa™ and Kerendia™ for the treatment of chronic kidney disease associated with type 2 diabetes. Anderson also noted that the company is planning to launch two new drugs as early as next year: elinzanetant, a non-hormonal solution for women suffering from vasomotor symptoms associated with menopause, and acoramidis, a cardiology drug Bayer has exclusive marketing rights for in Europe. “Our Pharma pipeline is one of our biggest levers for value creation,” he said.

Group sales rose by 3.1 percent on a currency- and portfolio-adjusted basis (Fx & portfolio adj.) to 11.144 billion euros in the second quarter of 2024. There was a negative currency effect of 240 million euros (Q2 2023: 553 million euros). EBITDA before special items decreased by 16.5 percent to 2.111 billion euros. This figure included a negative currency effect of 129 million euros (Q2 2023: 120 million euros). The decline in earnings was mainly due to an unfavorable product mix. In addition, the provisions for the Group-wide short-term incentive program were lower in the prior-year period. EBIT improved to 525 million euros (Q2 2023: minus 956 million euros) after net special charges of 490 million euros (Q2 2023: 2.490 billion euros). The special charges primarily related to expenses for ongoing restructuring measures and affected all divisions and functional areas. Net income amounted to minus 34 million euros (Q2 2023: minus 1.887 billion euros).

Free cash flow came in at 1.273 billion euros (Q2 2023: minus 473 million euros), primarily due to the increase in operating cash flow. Net financial debt as of June 30 stood at 36.760 billion euros, down 1.9 percent from the end of March, mainly as a result of cash inflows from operating activities.

Business up slightly at Crop Science

In the agricultural business (Crop Science), sales increased by 1.1 percent (Fx & portfolio adj.) to 4.981 billion euros. Growth was mainly driven by higher sales of glyphosate-based herbicides, with a particularly strong performance in North America. Despite a decline in sales of non-glyphosate-based products, the Herbicides strategic business entity posted overall growth of 8.7 percent (Fx & portfolio adj.). Sales at Soybean Seed & Traits increased by a significant 12.4 percent (Fx & portfolio adj.), mainly thanks to substantially higher volumes in North America. Business was also up at Insecticides, with growth of 6.9 percent (Fx & portfolio adj.). By contrast, sales at Fungicides were down amid a soft market environment, falling 12.4 percent (Fx & portfolio adj.) as a result of lower volumes and prices in North and Latin America. Sales also decreased at Corn Seed & Traits, which saw a decline of 2.8 percent (Fx & portfolio adj.) that was mainly attributable to lower volumes in Latin and North America amid a decline in planted acreages.

EBITDA before special items at Crop Science decreased by 27.7 percent to 524 million euros, partly due to an unfavorable product mix. By contrast, there was a positive currency effect of 49 million euros (Q2 2023: negative currency effect of 96 million euros). 

Business up at Pharmaceuticals thanks to new products

Sales of prescription medicines (Pharmaceuticals) rose by 4.5 percent (Fx & portfolio adj.) to 4.605 billion euros. The division’s new products achieved significant gains, with growth rates of 90.0 percent (Fx & portfolio adj.) for Nubeqa™ and 72.9 percent (Fx & portfolio adj.) for Kerendia™. The division also posted continued sales growth for the ophthalmology drug Eylea™, with an increase of 7.7 percent (Fx & portfolio adj.), as well as in the Radiology business, largely driven by higher volumes and prices for CT Fluid Delivery and Ultravist™. Sales of the long-term contraceptives in the Mirena™ product family advanced by 11.1 percent (Fx & portfolio adj.) thanks to higher volumes and prices, particularly in the United States and Brazil. Aspirin™ Cardio, Bayer’s product for secondary prevention of heart attacks, posted a 29.6 percent (Fx & portfolio adj.) increase in sales, with business mainly up in China following a weak prior-year quarter. By contrast, business was mainly held back by declines for Xarelto™, with sales of the oral anticoagulant falling 10.6 percent (Fx & portfolio adj.) due to patent expirations.

EBITDA before special items at Pharmaceuticals decreased by 4.1 percent to 1.322 billion euros. The increase in sales was offset by an unfavorable product mix as well as high negative currency effects of 150 million euros (Q2 2023: 40 million euros). By contrast, earnings benefited from a decline in selling expenses for more mature products. In addition, higher investments in early-stage research and in cell and gene therapy and chemoproteomics technologies were offset by significantly lower expenses for projects in advanced clinical development. 

Consumer Health returns to growth

Sales of self-care products (Consumer Health) rose by 5.3 percent (Fx & portfolio adj.) to 1.458 billion euros. Growth was particularly strong in the Digestive Health category, which saw sales advance 14.5 percent (Fx & portfolio adj.) amid an improved supply situation. The category also benefited from increased Iberogast™ sales in Europe/Middle East/Africa as well as from the product’s launch in the United States. The Dermatology and Nutritionals categories likewise posted double-digit percentage gains, with growth of 13.8 percent and 11.6 percent (Fx & portfolio adj.), respectively. By contrast, sales at Allergy & Cold were down 17.6 percent (Fx & portfolio adj.), in part due to a weaker season.

EBITDA before special items at Consumer Health decreased by 6.3 percent to 314 million euros. This was mainly due to a rise in costs and higher investments in its strong brands, such as the market launch of Iberogast™ in the United States. The prior-year quarter had additionally benefited from income from the sale of minor, non-strategic brands. These effects were partially offset by the division’s continuous cost and price management efforts. There was a negative currency effect of 17 million euros (Q2 2023: 31 million euros). 

Group outlook confirmed

Bayer confirmed its Group outlook for full-year 2024. “We remain on track to deliver,” Anderson said. For the Crop Science Division, the company expects currency- and portfolio-adjusted sales growth and the EBITDA margin before special items to come in at the lower end of the projected ranges (between minus 1 and plus 3 percent, and between 20 and 22 percent, respectively). For the Pharmaceuticals Division, Bayer has upgraded its forecast for currency- and portfolio-adjusted sales growth to between 0 and 3 percent (previously: between minus 4 and 0 percent).

Sustainability: major progress in renewable energy efforts

In a bid to bolster its sustainability endeavors, Bayer has published the Climate Transition and Transformation Plan, which underpins its aspiration to achieve net zero. The plan covers Bayer’s commitment as a company to reduce its greenhouse gas emissions by at least 90 percent by 2050 (“Transition”) and, going beyond the company’s boundaries, to generate positive impact in the businesses in which it operates (“Transformation”). The company’s transition toward net zero carbon emissions involves switching to renewable energies, among other measures. In the second quarter, Bayer concluded two supply contracts for electricity from renewable energy sources, marking major steps forward on its path to becoming climate-neutral by 2030. Together, the agreements secure the supply of 300 gigawatt hours of electricity from 100 percent renewable energy sources. The power to be provided under these agreements is equivalent to the annual electricity consumption of around 75,000 households.

Notes:

The following tables contain the key data for the Bayer Group and its divisions for the second quarter and the first six months of 2024.

The full Half-Year Financial Report is available online at:
www.bayer.com/halfyearreport

The speech given by Bill Anderson and Wolfgang Nickl to the media will be available online from around 9 a.m. CEST at: www.bayer.com/speeches

Live broadcast of the media update from around 9 a.m. CEST and recording available from around 1 p.m. CEST at: www.bayer.com/live-mc

Additional information for investors and access – from around 2 p.m. CEST – to the live broadcast of the investor conference call at: www.bayer.com/live-ic

Print-quality photos can be found online at: www.bayer.com/photo-footage

Contact for media inquiries:
Christian Hartel, phone +49 214 30-47686
Email: christian.hartel@bayer.com

Tino Andresen, phone +49 214 30-66048
Email: tino.andresen@bayer.com

Contact for investor inquiries:
Bayer Investor Relations Team, phone +49 214 30-72704
Email: ir@bayer.com 
www.bayer.com/en/investors/ir-team

Find more information at www.bayer.com.

tia	(2024-0119E)

Forward-Looking Statements 
This release may contain forward-looking statements based on current assumptions and forecasts made by Bayer management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayer’s public reports which are available on the Bayer website at www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments. 

Bayer Key Data, Second Quarter and First Half of 2024
(Continuing operations)

Bayer Group
(EUR million)

Q2 2023

Q2 2024

Change
(%)

H1 2023

H1 2024

Change
(%)

Sales

11,044

11,144

+0.9
+3.1*

25,433

24,909

-2.1
+1.0*

EBITDA before special items | 2,527 | 2,111 | -16.5 | 6,998 | 6,523 | -6.8
EBITDA margin before special items | 22.9% | 18.9% | - | 27.5% | 26.2% | -
EBIT | -956 | 525 | - | 2,017 | 3,617 | +79.3
Special items | -2,490 | -490 | - | -2,921 | -697 | -
EBIT before special items | 1,534 | 1,015 | -33.8 | 4,938 | 4,314 | -12.6
Net income** | -1,887 | -34 | - | 291 | 1,966 | -
Earnings per share (EUR)** | -1.92 | -0.03 | - | 0.30 | 2.00 | -
Core earnings per share (EUR) | 1.22 | 0.94 | -23.0 | 4.17 | 3.76 | -9.8
Free cash flow** | -473 | 1,273 | - | -4,575 | -1,353 | -
Number of employees*** | 102,048 | 96,567 | -5.4 | 102,048 | 96,567 | -5.4

Crop Science
(EUR million)

Q2 2023

Q2 2024

Change
(%)

H1 2023

H1 2024

Change
(%)

Sales

4,924

4,981

+1.2
+1.1*

13,275

12,888

-2.9
-1.4*

EBITDA before special items | 725 | 524 | -27.7 | 3,992 | 3,373 | -15.5
EBITDA margin before special items | 14.7% | 10.5% | - | 30.1% | 26.2% | -
EBIT | -2,207 | -229 | - | 112 | 1,834 | -
Special items | -2,353 | -79 | - | -2,649 | -138 | -
EBIT before special items | 146 | -150 | - | 2,761 | 1,972 | -28.6

Pharmaceuticals 
(EUR million)

Q2 2023

Q2 2024

Change
(%)

H1 2023

H1 2024

Change
(%)

Sales

4,557

4,605

+1.1
+4.5*

8,964

8,963

0.0
+4.2*

EBITDA before special items | 1,379 | 1,322 | -4.1 | 2,485 | 2,516 | +1.2
EBITDA margin before special items | 30.3% | 28.7% | - | 27.7% | 28.1% | -
EBIT | 1,047 | 1,040 | -0.7 | 1,853 | 1,912 | +3.2
Special items | -75 | -32 | - | -117 | -128 | -
EBIT before special items | 1,122 | 1,072 | -4.5 | 1,970 | 2,040 | +3.6

Consumer Health
(EUR million)

Q2 2023

Q2 2024

Change
(%)

H1 2023

H1 2024

Change
(%)

Sales

1,466

1,458

-0.5
+5.3*

3,039

2,890

-4.9
+1.6*

EBITDA before special items | 335 | 314 | -6.3 | 714 | 645 | -9.7
EBITDA margin before special items | 22.9% | 21.5% | - | 23.5% | 22.3% | -
EBIT | 239 | 135 | -43.5 | 521 | 364 | -30.1
Special items | -7 | -75 | - | -13 | -84 | -
EBIT before special items | 246 | 210 | -14.6 | 534 | 448 | -16.1

Sales changes on a currency- and portfolio-adjusted basis (Fx & portfolio adj.), EBIT(DA), special items, core earnings per share and free cash flow are not defined in the International Financial Reporting Standards and should therefore be regarded only as supplementary information. For the definition of these indicators, see the current annual report at www.bayer.com.

* Fx & portfolio adj. / ** Including discontinued operations / *** Full-time equivalents at end of period

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