Bayer clearly exceeds expectations

Bayer clearly exceeds expectations. A recovery in the agricultural business on the one hand and the negative effects of exchange rate effects on the other enabled Bayer to get off to a better-than-expected start to the year in the end. As a result, the Leverkusen-based confirmed their previous forecast. "Overall, we see a good operational development, but as expected have been negatively impacted by currency effects," said CEO Werner Baumann. The adjusted operating result (Ebitda) fell from January to March over the year by a good six percent to 4.1 billion euros. However, analysts had expected a far greater decline. Bayer shares benefited from this and are the biggest winners in the leading index Dax. Sales fell in the first quarter by four percent to 12.3 billion euros, but adjusted for currency effects there was an increase of 2.8 percent. In the pharmaceutical business, Bayer stepped on the spot with its blockbuster drugs Xarelto and Eylea, despite good business. In the business with non-prescription health products, sales fell, especially with cold products, due to increased hygiene measures in the wake of the pandemic. In the agricultural sector, on the other hand, after poor deals and billions in depreciation in the past financial year, things picked up again - mainly thanks to growth in Latin America and Asia. Bayer benefited from growing demand for herbicides and higher prices, particularly for Roundup weedkillers containing glyphosate and fungicides. Thanks mainly to the agricultural business, sales in the quarter were four percent above analysts' expectations, the experts from Credit Suisse judged. The better prospects and a settlement of the glyphosate litigation in the US should further improve sentiment. So far, however, there has been no decisive news about the glyphosate lawsuits. On May 19, however, there is an eagerly awaited hearing on an important part of the glyphosate settlement with the competent judge Vince Chhabria, which will seek an agreement with plaintiffs' attorneys on how to deal with future lawsuits regarding the alleged carcinogenic effects of the herbicide. Chhabria still needs to give the green light. In the first quarter, settlement payments for legal cases in the USA weighed on the free cash flow. This was minus 3.23 billion (previous year: minus 793 million) euros. By the end of the year it could drop to minus four billion euros, as the group recently forecast. Baumann reaffirmed its goals for 2021: Adjusted for currency effects, Bayer is targeting sales of around EUR 42 billion to EUR 43 billion and adjusted earnings of between EUR 11.2 billion and EUR 11.5 billion. Last year the company achieved an adjusted result of 11.5 billion euros on sales of 41.4 billion euros.