Homepage  Homepage     Search on site  Search on site     To write the letter  To write the letter     Site map  Site map
Agro Perspectiva
We are on: 
   
 


Home > News

Bayer grows sales and earnings significantly

12.11.2021 13:35 "Agro Perspectiva" (Kyiv) The Bayer Group registered a significant increase in sales and earnings in the third quarter of 2021. «We delivered strong operational performance, with all divisions showing strong growth momentum,» said Werner Baumann, Chairman of the Board of Management, on Tuesday when presenting the companys third-quarter results. Bayer posted substantial growth in the agricultural business, while the Pharmaceuticals Division benefited in particular from large gains for the Eylea ophthalmology drug. Business at the Consumer Health Division was up in all regions and product categories. Bayer has also updated the upgraded outlook for 2021 that it had issued in August.

Group sales in the third quarter of 2021 rose by 14.3 percent on a currency- and portfolio-adjusted basis (Fx & portfolio adj.) to 9.781 billion euros. There was a positive currency effect of 67 million euros. EBITDA before special items increased by 16.4 percent to 2.089 billion euros, and included a negative currency effect of 44 million euros. EBIT came in at 530 million euros (Q3 2020: minus 9.399 billion euros) after net special charges of 694 million euros (Q3 2020: 10.181 billion euros) that primarily related to restructuring measures at all three divisions. Net income amounted to 85 million euros (Q3 2020: minus 2.744 billion euros), while core earnings per share advanced by 29.6 percent to 1.05 euros, mainly due to the development of business within the Crop Science Division.

Free cash flow increased by 58.0 percent to 1.954 billion euros. Net financial debt as of September 30, 2021, decreased to 33.981 billion euros, down 1.1 percent from June 30, 2021.

Crop Science reports strong sales gains and significant earnings growth

In the agricultural business (Crop Science), sales rose by 25.8 percent (Fx & portfolio adj.) to 3.850 billion euros thanks to a substantial increase in volumes and prices. Growth was particularly strong at Corn Seed & Traits (Fx & portfolio adj. 92.6 percent), driven by gains in North America due to lower product returns and the later receipt of license revenues. As expected, these license revenues were recorded in the third quarter this year as opposed to the second quarter as in 2020. Sales also advanced in Latin America due to the launch of the new VTPro4 trait for improved pest control as well as higher volumes and prices. Soybean Seed & Traits also registered strong growth (Fx & portfolio adj. 58.0 percent), driven by gains in North America — due to lower product returns and higher license revenues — and in Latin America as a result of higher prices and volumes. Herbicides also posted a substantial increase in sales (Fx & portfolio adj. 15.2 percent), with the business recording encouraging gains in North America and Europe/Middle East/Africa, mainly due to an increase in prices for glyphosate-based products and higher volumes.

EBITDA before special items at Crop Science rose to 471 million euros (Q3 2020: minus 34 million euros), resulting in a margin of 12.2 percent. The improvement in earnings was mainly attributable to higher prices and volumes, an increase in license revenues, and contributions from ongoing efficiency programs. By contrast, earnings were diminished in particular by an increase in the cost of goods sold.

Pharmaceuticals reports higher sales — new products provide boost

Sales of prescription medicines (Pharmaceuticals) rose by 7.1 percent (Fx & portfolio adj.) to 4.539 billion euros. The divisions ophthalmology business was able to grow market share and continued to recover following the COVID-19 restrictions, especially in Europe. As a result, sales of Eylea advanced by 19.0 percent (Fx & portfolio adj.). Sales of the oral anticoagulant Xarelto increased by 4.3 percent (Fx & portfolio adj.), with substantial volume growth in Russia and Germany in particular offsetting a price-related decline in China. Sales of Adalat, one of the companys products for the treatment of heart disease, rose by 24.2 percent (Fx & portfolio adj.) thanks to higher volumes in China. An increase in volumes in the United States resulted in sales gains for the pulmonary hypertension product Adempas (Fx & portfolio adj. 21.0 percent). Sales of Nubeqa rose significantly, driven by the cancer drugs successful launch in the United States, which is currently ongoing. In addition, Bayer initiated the market launch of Kerendia, its product for the treatment of patients with chronic kidney disease and type 2 diabetes, in the United States. By contrast, sales of the cancer drug Nexavar declined against the prior-year period (Fx & portfolio adj. 27.8 percent), particularly in China, where business was negatively impacted by strong competition and modified tender procedures for various classes of active ingredients.

EBITDA before special items at Pharmaceuticals decreased by 9.8 percent to 1.366 billion euros, resulting in a margin of 30.1 percent. Earnings were diminished by an increase in marketing costs, which was largely attributable to the launch of Kerendia and Nubeqa, and by a rise in research and development expenses, which was partly related to the divisions cell and gene therapy unit.

Consumer Health continues to grow and increases earnings

Sales of self-care products (Consumer Health) came in at 1.346 billion euros, up 10.9 percent (Fx & portfolio adj.) against a very strong prior-year quarter, with growth in all regions and categories. Business primarily benefited from continued high demand in Nutritionals, which saw sales rise 20.1 percent (Fx & portfolio adj.), and the launch of innovative products in all categories throughout the year. The Pain & Cardio category also registered particularly strong growth of 17.4 percent (Fx & portfolio adj.)

EBITDA before special items at Consumer Health increased by 2.3 percent to 308 million euros, resulting in a margin of 22.9 percent. The growth in earnings was driven by the divisions strong business performance and continuous cost management efforts. This was partially offset by investments associated with the launch of innovative products and by inflation-related increases in costs. 

Updated outlook

Following the very good business performance in the third quarter, Bayer has revised the upgraded outlook for 2021 that it issued in August. On a currency-adjusted basis (i.e. based on the average monthly exchange rates from 2020), the company continues to expect sales to come in at approximately 44 billion euros. This now corresponds to currency- and portfolio-adjusted growth of approximately 7 percent (previously: approximately 6 percent). The forecast for the currency-adjusted EBITDA margin before special items remains unchanged at around 26 percent. Core earnings per share are now expected to come in at approximately 6.50 euros to 6.70 euros after adjusting for currency effects (previously: approximately 6.40 euros to 6.60 euros). Free cash flow is now anticipated to amount to between approximately minus 0.5 billion euros and minus 1.5 billion euros (previously: between approximately minus 2 billion euros and minus 3 billion euros) as a portion of the settlement payments for the glyphosate litigations are now expected to be made in 2022 instead of 2021. In addition, Bayer is now anticipating net financial debt of around 35.5 billion euros (previously: around 36 billion euros) at the end of the year after adjusting for currency effects.

Based on the closing exchange rates on September 30, 2021, the company continues to expect full-year sales to come in at approximately 43 billion euros. This now corresponds to currency- and portfolio-adjusted sales growth of approximately 7 percent (previously: approximately 6 percent). The EBITDA margin before special items is now expected to amount to approximately 25.5 percent (previously: approximately 25 percent). The company is now anticipating core earnings per share of approximately 6.10 euros to 6.30 euros (previously: approximately 6.00 euros to 6.20 euros). Free cash flow is now expected to come in at between approximately minus 0.5 billion euros and minus 1.5 billion euros (previously: between approximately minus 2 billion euros and minus 3 billion euros). The companys forecast for net financial debt remains unchanged at around 35 billion euros.

«New technologies vitally important for health and nutrition»

«Our third-quarter performance shows that we are very much on the right track — both in terms of operational development and the market launch of new products,» said Baumann, underlining Bayers strength in delivering innovations. «We have aligned our corporate strategy and our innovation potential toward health and nutrition, which are areas of systemic importance. In doing so, we are looking to help solve a question of fundamental importance: How do we feed and satisfy the health needs of a growing population in the face of climate change?»

New technologies are vitally important in this respect, he explained. Together with its partners, the company is working on numerous projects involving technologies that can really make a difference for society. For example, Bayer is working on two novel therapeutic approaches for Parkinsons, a nervous system disorder for which there is currently no cure. Via its Leaps unit, the company has also invested in three biotech start-ups that are harnessing various technologies in their research on microbial engineering, potentially paving the way for more crops to fertilize themselves in the future. This would be great news for the climate, as it would enable farmers to bypass nitrogen fertilizers, which are used to grow around 40 percent of the worlds food but also account for roughly 4 percent of all greenhouse gas emissions worldwide.

Sustainability: Three-fold increase in volume of renewable energy sourced via supply agreements

Bayer is also working intensively on its ambitious sustainability targets, with the company committed to becoming carbon neutral in its own production operations by 2030. In addition to investing in more energy-efficient facilities and building technologies, it is also extensively harnessing renewable energy sources. As of the end of the third quarter, Bayer has this year concluded agreements covering around 400,000 megawatt-hours of green energy, representing a three-fold increase in volume.

Reinforcing its commitment to improve access to family planning, especially in low- and middle-income countries, the company recently initiated the construction of a new production site in Costa Rica and the expansion of an existing facility in Finland. Both sites are set to produce long-acting reversible contraceptives in the future. These investments are a milestone as the company works toward meeting its sustainability target of providing 100 million women with access to modern family planning by 2030.

Agro Perspectiva

< World food import bill to reach a record high in 2021 All news for
12.11.2021
Milk production in 2022 in Australia is forecast to increase moderately to 9.1 MMT >

24.11.2023  
12:25 SUGAR MARKET BY SESVANDERHAVE
09:32 BASF signs CNY 40 billion syndicated bank term loan facility with maturity of 15 years for its Verbund site in Zhanjiang, China
21.11.2023  
23:35 2023/24 European Union sugar production estimated up despite lower area in France
13:07 Inflation forecast to drop further and EU economy to show modest upturn
20.11.2023  
14:10 BASF, The Estée Lauder Companies, RSPO and Solidaridad support Enhanced Sustainable Palm Oil Production in Lampung, Indonesia
11:27 Preserving antimicrobials for the well-being of humans, animals, plants and ecosystems
11:18 Dobrodiya Foods started the production of glute-free oat flakes under the WOWOATS brand
09.11.2023  
20:43 Ukraine Grain Exports to Slide in 2023/24 Despite Recent Improvements
07.11.2023  
18:55 Hidden costs of global agrifood systems worth at least $10 trillion
03.11.2023  
20:13 As winter weather closes in on the Northern Hemisphere, the demand for limes changes accordingly
02.11.2023  
11:21 Wärtsilä supports Denmarks green energy future with opening of new biogas liquefaction plant
13.10.2023  
21:35 Shmyhal speaks about progress in issue of confiscation of Russian assets abroad
21:27 Immediate action is needed to get Africa on track with global goals
06.10.2023  
12:55 Global cereal production set to reach a record high in 2023, while trade could contract in 2023/24
18.09.2023  
13:55 Ukraine will sue Poland, Hungary and Slovakia over agricultural bans
15.09.2023  
21:02 Following the expiry of the restrictive measures on Ukrainian exports of grain and other foodstuff to the EU, Ukraine agrees to introduce measures to avoid a renewed surge in EU imports
13.09.2023  
17:54 Biodel AG Secures Series A Investment from Pangaea Ventures to Advance Novel Regenerative Agriculture Technologies
07:25 Rice Export Prices Highest in 15 Years as India Restricts Trade
11.09.2023  
17:54 Export Bans, Black Sea Tensions, Affecting Food Markets - WTO Agriculture and Commodities Division
09.09.2023  
18:36 Global cereal production forecast to match past record - FAO
14.08.2023  
13:22 EBRD provides EUR60 million guarantee to support lending by Ukraines PrivatBank
13:18 Supporting small business in the west of Ukraine via Bank Lviv
12.08.2023  
18:35 Russia Withdraws from Black Sea Grain Initiative
04.08.2023  
19:32 Falling international maize and sugar prices partly offset notable jumps in wheat and vegetable oil quotations
28.07.2023  
19:25 Cargill and partners announce first Gold Standard-approved methane emissions reduction methodology for beef producers
19:21 FAO welcomes European Union contribution of 25 million to advance wildlife conservation and food security
18:55 BASFs earnings in tough market environment significantly below strong prior-year quarter
24.07.2023  
00:45 Brazil continues to make export gains and set new records for beef, pork, and chicken meat
23.07.2023  
22:25 122 million more people pushed into hunger since 2019 due to multiple crises, reveals UN report
22.07.2023  
08:17 U.S. dairy exports to Southeast Asia have been weak to start 2023
13.07.2023  
07:00 Russia Exports Record Wheat Volumes; Ukraine Exports Plummet
08.07.2023  
09:00 FAO Food Price Index continued declining in June
06.07.2023  
20:10 Global agricultural and food production are projected to continue to increase over the next ten years
04.07.2023  
19:54 EBRD supports Ukrainian city of Dnipro with EUR25 million loan
09:03 Nibulon invests EUR 27 mln in construction of granary, flour mill in Izmail
23.06.2023  
08:57 World coffee production for 2023/24 is forecast 4.3 million bags higher than the previous year to 174.3 million
08:55 Mexicos Production Recovering from Coffee Leaf Rust
22.06.2023  
04:05 EBRD and Ukraine government to mobilise 600 million for Ukraine energy security
21.06.2023  
20:26 EBRD and Ukraine government to mobilise EUR600 million for Ukraine energy security
11.06.2023  
15:55 Argentina ramps up soybean imports from Paraguay and Brazil
10.06.2023  
04:35 World Oceans Day must be Humans Day: FAO Fisheries chief
09.06.2023  
11:24 EU extends trade benefits for Ukraine
05.06.2023  
11:25 2023/24 Grain Production Exceeds Consumption
02.06.2023  
11:45 Rebound seen for global cereal output, with worldwide stocks set to hit record levels
11:35 Significant drops in international quotations for wheat, maize, vegetable oils and cheese, while prices of rice, sugar and meat rise
01.06.2023  
11:56 Conflict Drives Acute Hunger in the Democratic Republic of Congo - UN agencies warn
31.05.2023  
12:29 Three New Foods and Their Applicable Food Safety Standards
30.05.2023  
11:55 Haiti: Nearly half of the population is facing acute hunger
11:34 Increasing risk of hunger set to spread in hotspot areas as the Sudan crisis spills over into subregion and el Niño looms - warns new UN report
28.05.2023  
12:51 Black Sea Grain Initiative not fully resumed UN

Also available: 


NewsNews - News - News - News - News - News
BriefWeekly Reports - Free article
SubscriptionTariff - News&Reports
AdvertisingMagazine - Site
ConferencesForum AGRO-2013 - DAIRY WORLD-2008 - FERTILIZERS-2010
Statistics
For our clientsAgroNewsDaily - Ukrainian Grain&Oilseed Market - Fertilizers - Milk Monthly - Milk Weekly
About usAbout project - Contact
2002 -2023 © Agrarika, ltd.
tel.: +380 67 4473802; +380 67 5964652
e-mail: client@agroperspectiva.com