The Bayer Group successfully achieved its adjusted guidance for 2024, despite facing significant challenges. Speaking at the Financial News Conference on Wednesday, CEO Bill Anderson emphasized the company’s strong long-term prospects. “We have three great businesses with attractive opportunities ahead,” he stated. However, he acknowledged that navigating the near future will remain difficult. “We still have work to do,” Anderson noted, calling 2025 a “pivotal year” in Bayer’s ongoing turnaround efforts. The year will be particularly challenging in terms of financial performance, with net sales expected to remain steady while earnings and free cash flow may decline. The company anticipates improved performance starting in 2026.
As part of its strategic evolution, Bayer has introduced profitability at Crop Science as a key priority alongside its four existing strategic focus areas. The company has also launched an ambitious five-year initiative aimed at enhancing earnings. “You’re going to see us with our sleeves rolled up, taking the right steps to position our customers, our company, and our stakeholders for long-term success,” Anderson added.
Strategic Developments in Pharmaceuticals
In its Pharmaceuticals Division, Bayer expects strong growth from its key products. The combined sales of Nubeqa™, a cancer treatment, and Kerendia™, a drug for chronic kidney disease associated with type 2 diabetes, are projected to increase from around 2 billion euros to over 2.5 billion euros by 2025. Additionally, the company plans to introduce new medications this year, including Beyonttra™ (acoramidis) for heart conditions and elinzanetant, a non-hormonal treatment for menopause symptoms.
Bayer anticipates that the Pharmaceuticals Division will return to sales growth from 2027, with margins beginning to expand by 2028. The company is also taking proactive steps to address litigation risks in the United States, aiming for significant containment of related risks by the end of 2026. Meanwhile, cost-saving measures continue to be a priority, with Bayer’s new operating model expected to generate 800 million euros in savings for 2025, building on the 500 million euros saved in 2024.
Boosting Profitability at Crop Science
Bayer’s profitability plan for Crop Science includes key actions related to its product portfolio, research and development, production, commercial strategies, and operational efficiencies. These measures are projected to contribute over 1 billion euros in annual earnings by 2029. Additionally, Bayer is implementing a comprehensive cash productivity initiative to drive efficiency.
The company aims to achieve above-market growth in Crop Science, targeting more than 3.5 billion euros in additional sales through innovation by 2029. By the same year, the division seeks to attain an EBITDA margin before special items in the mid-20% range. “We recognize the need for action, and our team has a clear plan to deliver results,” Anderson affirmed.
Financial Performance Overview
Bayer reported group sales of 46.606 billion euros in 2024, reflecting a 0.7% increase on a currency- and portfolio-adjusted basis. Currency fluctuations negatively impacted revenue by 1.349 billion euros. EBITDA before special items fell by 13.5% to 10.123 billion euros, influenced by a 573 million euro negative currency effect. EBIT was reported at minus 71 million euros, following net special charges of 5.507 billion euros, primarily due to impairment losses in the Crop Science Division. Net income stood at minus 2.552 billion euros, while core earnings per share declined by 21% to 5.05 euros.
Despite these challenges, Bayer’s free cash flow more than doubled from the previous year, reaching 3.107 billion euros, slightly surpassing expectations. Net financial debt decreased by 5.4% to 32.626 billion euros as of December 31, 2024. In a move to strengthen its financial flexibility, Bayer plans to maintain its legal minimum dividend of 0.11 euros per share.
Crop Science Division Performance
Crop Science sales declined by 2.0% to 22.259 billion euros due to pricing pressures in the crop protection business and lower volumes in seeds and traits. Latin America experienced declines due to reduced corn planting areas and lower crop protection prices. However, North America saw slight sales growth driven by increased crop protection volumes and soybean planting, partially offset by reduced corn planting.
EBITDA before special items in the Crop Science Division fell by 14.2% to 4.325 billion euros, impacted by pricing declines in crop protection, inflationary cost increases, and higher provisions for the company’s short-term incentive (STI) program. These factors were partially mitigated by improved cost efficiencies in crop protection products. The EBITDA margin before special items decreased by 2.3 percentage points to 19.4%.
Pharmaceuticals Division Growth
Sales in the Pharmaceuticals Division increased by 3.3% to 18.131 billion euros, driven by strong performance from new products. Nubeqa™ and Kerendia™ grew by 78.2% and 73.9%, respectively. Additionally, sales of Eylea™, an ophthalmology drug, rose by 5.1%, while Radiology and pulmonary hypertension treatment Adempas™ saw strong gains. However, Xarelto™ sales fell by 13% due to patent expirations.
EBITDA before special items in Pharmaceuticals declined by 9.0% to 4.722 billion euros, affected by negative currency effects and shifts in product mix. Bayer partially offset these challenges through lower costs in advanced clinical development and reductions in selling expenses for mature products while increasing investments in early-stage research and advanced technologies.
Consumer Health Division Resilience
Sales in the Consumer Health Division increased by 1.9% to 5.870 billion euros. Dermatology led the growth with a 9.7% increase, driven by strong demand for Bepanthen™. Digestive Health sales also rose significantly, while the Allergy & Cold segment declined by 11.5% due to a weaker season and customer inventory adjustments.
EBITDA before special items in Consumer Health declined by 3.2% to 1.366 billion euros, mainly due to currency impacts. The division managed to counteract rising costs through effective pricing strategies and cost management, keeping its EBITDA margin at 23.3%.
