Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bayer AG (BAYRY, Financial) reported a strong performance in its Pharmaceuticals division with a 4% growth, driven by the exceptional momentum of Nubeqa and Kerendia, which grew 80% year-over-year.
- The company achieved a 12% increase in EBITDA before special items in the Pharmaceuticals division, indicating effective cost management and efficiency gains.
- Consumer Health division saw a 2.5% growth, with a 2% increase in volume, positioning the division well to meet its annual guidance.
- Bayer AG (BAYRY) is on track to meet its full-year guidance for 2025, with core EPS expected to be between EUR4.50 to EUR5.00 at constant currencies.
- The company has made significant progress in its strategic priorities, including the launch of Beyonttra in the EU and preparations for the launch of elinzanetant in the second half of the year.
Negative Points
- Bayer AG (BAYRY) reported a 3% decline in sales for its Crop Science division, primarily due to regulatory impacts affecting higher margin sales.
- The company's free cash flow was negative at EUR1.5 billion, attributed to the seasonality of the Crop business, although it showed improvement from the previous year.
- Xarelto sales declined by 31% due to continued generic pressure in Europe and Japan, impacting the Pharmaceuticals division's top and bottom line.
- The Consumer Health division experienced soft conditions in key markets, with a slight decline in margins compared to the previous year.
- Bayer AG (BAYRY) faces ongoing litigation challenges, including an adverse decision by the Superior Court of Pennsylvania, which may impact financial provisions and require further legal actions.
Q & A Highlights
Q: Could you discuss the expected growth in Crop Science for Q2 and any impacts from forward purchasing on crop protection products?
A: Rodrigo Santos, Head of Crop Science, explained that excluding regulatory impacts, the core business would have grown by 2.4%. The corn business is expected to grow by 2.5% in Q1 due to accounting adjustments. Crop protection reported 2% growth, which would be 5% excluding regulatory impacts. The company remains confident in its guidance for the year, driven by innovation and core business health.
Q: Can you provide an update on the glyphosate litigation and potential outcomes if the Supreme Court does not accept the case?
A: William Anderson, CEO, stated that Bayer expects to hear from the Supreme Court in June or October. The company is not relying solely on this plan and is working with Congress for potential legislative solutions. Bayer is also considering structural options and remains open to settlements, provided they offer a high degree of finality.
Q: How confident are you in the safety and efficacy of Asendexian, and what is the expected market potential?
A: Stefan Oelrich, Head of Pharmaceuticals, expressed confidence in Asendexian's safety and efficacy, noting positive results from the Pacific program. The Phase III study targets populations with significant effects observed in Phase II. The market potential is substantial, especially if prevalent cases are included.
Q: Could you elaborate on the state legislation efforts related to glyphosate and their significance?
A: William Anderson highlighted that state legislation is crucial for providing certainty to manufacturers and signaling to Congress the need for federal clarification. Missouri is a key state due to the volume of lawsuits filed there. Bayer is pursuing legislation in additional states to support its position.
Q: What are Bayer's expectations for corn acreage in the U.S., and how does it impact profitability compared to soy?
A: Rodrigo Santos stated that Bayer is optimistic about high corn acreage in the U.S., potentially reaching 94-95 million acres. Corn is more profitable than soy, and Bayer expects growth in corn globally. The company is also focused on margin expansion through cost control and efficiency improvements.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
