Published : 3 weeks ago, on 12/11/2024

By Ludwig Burger and Patricia Weiss

FRANKFURT (Reuters) -Bayer’s earnings will likely slip further next year on weak agricultural markets, the company said on Tuesday, pummelling its shares and piling more pressure on its chief executive to deliver on turnaround efforts.

CEO Bill Anderson has launched a push to cut jobs, speed up decision making and slash corporate bureaucracy to turn around the embattled industrial group, while putting plans to break up its diversified businesses on hold.

Overall, we expect a muted outlook on top and bottom line next year with likely declining earnings,” Chief Financial Officer Wolfgang Nickl said in the German group’s quarterly earnings statement.

Shares fell 8.4% to 22.37 euros, their lowest in almost 20 years, in early trading.

Based on earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for special items, the 2025 guidance would mean a third consecutive annual decline, after the group on Tuesday also lowered its projection for this year.

Bayer said that the earnings measure, when adjusted for the impact of currency swings, would likely come in at between 10.4 billion euros ($11.1 billion) and 10.7 billion euros, down from a previous forecast of 10.7-11.3 billion euros and last year’s 11.7 billion.

We’ve rapidly scaled the new operating model and significantly levelled up the Pharma pipeline,” Anderson said in the statement, also citing strong launch dynamics of new drugs Nubeqa for prostate cancer and Kerendia for kidney disease.

The group’s July-to-September EBITDA, adjusted for one-off items, fell almost 26% to 1.25 billion euros, missing the average analyst estimate of 1.31 billion euros posted on the company’s website, with Bayer citing weak agricultural markets in Latin America.

Bayer’s $63 billion purchase of seeds and pesticides maker Monsanto under Anderson’s predecessor in 2018 was a long-term bet on robust growth in farming supplies markets which has so far proven elusive.

Debt and costly U.S. product liability litigation over disputed claims that weedkiller Roundup causes cancer are further burdens from the takeover which Anderson is struggling to shake off.

According to recent earnings reports, U.S. agrichemicals competitor Corteva and the agriculture unit of domestic rival BASF have also been hit by lower prices as weak produce prices weighed on farmers’ demand.

Bayer added that special charges of 4.1 billion euros, mainly from write-downs on intangible assets in its Crop Science division, resulted in a quarterly net loss of 4.18 billion euros, compared with a loss of 4.57 billion euros a year earlier.

It confirmed its previous currency-adjusted guidance for 2024 sales and earnings per share before certain items.

($1 = 0.9401 euros)

(Reporting by Ludwig Burger, Editing by Rachel More, Kirsten Donovan)