Bayer boss Bill Anderson wants to significantly reduce the pharmaceutical and agrochemical company’s debt by the end of 2026, reduce the legal risks surrounding glyphosate and save 2 billion euros with the help of the new organizational model.
FRANKFURT (Dow Jones)–In addition, Bayer will focus on building a strong pharmaceutical pipeline over the next two to three years, the company announced when presenting its balance sheet.
The split demanded by some investors should not initially take place, but it cannot be ruled out as a later option. The answer to the question about the future structure and a possible split of the group is “not now,” said CEO Bill Anderson. “Of course we will remain open to everything.” However, due to the very limited scope for action, “our main focus now is on overcoming our challenges, increasing our performance and creating strategic flexibility.”
Anderson is primarily relying on a new organizational model called Dynamic Shared Ownership, which will be rolled out worldwide by the end of the year and break up encrusted management structures.
An important goal for Bayer is to obtain an investment grade rating. Moody’s has been considering a downgrade of the company’s credit rating since November because the low cash inflows make it increasingly unlikely that Bayer will be able to keep its debt ratio at an appropriate level. In addition, US courts are increasingly ruling against Bayer in glyphosate damages cases. Bayer wants to take new approaches inside and outside the courts.
In the past financial year, Bayer recorded a decline in operating profit (adjusted EBITDA) of 14 percent to 11.7 billion euros. Bayer was therefore in line with its own forecast, but exceeded the almost 11 billion euros expected by the market. With sales of 47.6 billion euros, the adjusted EBITDA margin was 24.6 percent, 2 points below the previous year’s figure. After special expenses of 7 billion euros, primarily as a result of impairments within the agricultural division, there was a deficit of 2.94 billion euros – after a surplus of 4.15 billion in the previous year. Analysts had expected a loss of 3.64 billion euros.
For 2024, Bayer expects currency-adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 10.7 to 11.3 billion euros, adjusted earnings per share of 5.10 to 5.50 euros and currency-adjusted free cash flow of 2 to 3 billion euros. Currency-adjusted sales are expected to reach 47 to 49 billion euros.
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(END) Dow Jones Newswires
March 05, 2024 02:06 ET (07:06 GMT)
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