Bayer beats expectations in the quarter and rallies on the stock exchange

(Il Sole 24 Ore Radiocor) - Bayer soared on the Frankfurt Stock Exchange after surprising the market with a stronger-than-expected first quarter. The German agri-chemical and pharmaceutical giant's share price in the three months to March posted a net profit per share of 2.76 billion, up from 1.30 billion last year. Earnings per share were EUR 2.81 from EUR 1.32. The result was driven by a capital gain of 324 million, mainly related to the sale of Avelox (antibiotics), and an increase in operating profit from its agricultural division (Crop Science). Net sales of the German pharmaceutical group amounted to EUR 13.41 billion, compared to EUR 13.74 billion in the previous year.

The group points out that excluding currency effects, which weighed in at EUR 886 million and portfolio effects, revenue increased by 4.1%. This was in line with analysts' expectations. Bayer reported organic growth in agriculture (+6.8% to EUR 7.55 billion) and consumer health products (+5.3% to EUR 1.5 billion), which more than offset the decline in the pharmaceuticals division (-0.5% to EUR 4.24 billion). The group's adjusted Ebitda increased by 9% to EUR 4.45 billion, exceeding analysts' consensus of EUR 3.93 billion and again benefiting from the agricultural division (+18% to EUR 3 billion), while pharmaceuticals posted -7.5% to EUR 1.24 billion and consumer health -1.5% to EUR 337 million.

For the full year 2026, Bayer confirmed its forecasts in constant currencies and revised them upwards on the basis of closing exchange rates on 31 March, now targeting sales of between EUR 44.5 and 46.5 billion, compared to the previous estimate of between EUR 44 and 46 billion. Basic earnings per share are now expected to be between EUR 4.10 and EUR 4.60, compared to the previous forecast of EUR 4-4.50. The revision," emphasises a statement, "only reflects the effects of currency fluctuations. The accounts also show the impact of litigation in the US.

Free cash flow for the quarter was negative EUR 2.32 billion from EUR -1.52 billion last year, "mainly due to payments to settle legal disputes, which as expected have increased and primarily relate to glyphosate and PCB litigation". Taken together, these payments resulted in a net outflow of EUR 2 billion compared to EUR 66 million in the first quarter of last year. 'As a result of the negative free cash flow', net financial debt increased by 9% to EUR 32.5bn. In February, the German giant reached an onerous financial settlement - up to $7.25 billion - to avoid lawsuits concerning Roundup, its glyphosate-based herbicide accused of being carcinogenic. At Bayer's request, the US Supreme Court is expected to rule on the admissibility of the lawsuits by June, following a late April hearing in Washington. In the first quarter, purchases of glyphosate-based herbicides fell by 15% year-on-year as Bayer's customers postponed their orders due to uncertainty. After years of legal battles that forced Bayer to set aside billions of dollars, the company aims to contain the legal dossier on Roundup, the world's most widely used herbicide, by 2026.