Bayer CropScience reports significant decline in sales

This decline was mainly attributable to significantly lower prices for glyphosate-based products due to reduced prices for generics.

The Bayer Group achieved its adjusted guidance for 2023. In his speech at the Financial News Conference in London, CEO Bill Anderson took stock of the company’s situation and looked toward the future.

Bayer Crop Science records significant decline in sales and earnings against very strong prior year, mainly due to lower glyphosate prices. Despite gains in Europe/Middle East/Africa and Asia/Pacific, Bayer’s agricultural business (Crop Science) saw overall sales fall by 3.7 percent (Fx & portfolio adj.) to 23.270 billion euros. This decline was mainly attributable to significantly lower prices for glyphosate-based products due to reduced prices for generics, resulting in a 26.0 percent (Fx & portfolio adj.) decline in sales at Herbicides. Amid an inflation-driven market environment, the rest of the portfolio saw a positive price development overall, driven by innovative products and higher commodity prices. The Corn Seed & Traits business achieved the strongest growth, with sales rising 13.8 percent (Fx & portfolio adj.), primarily due to higher prices. Business was also up at Fungicides, which posted growth of 8.8 percent (Fx & portfolio adj.) that was mainly driven by higher prices in Europe/Middle East/Africa and increased volumes in Latin and North America. Sales at Soybean Seed & Traits advanced by 5.5 percent (Fx & portfolio adj.), mainly thanks to higher license revenues in Latin America.

EBITDA before special items at Crop Science fell by 26.6 percent to 5.038 billion euros, primarily due to significant price declines for glyphosate-based products. Earnings were also diminished by a mainly inflation-related increase in the cost of goods sold. There was a positive currency effect of 103 million euros (2022: 284 million euros). The EBITDA margin before special items declined by 5.6 percentage points to 21.7 percent.

For the next 24 to 36 months, the company will put its energy and focus into building a strong pharmaceuticals pipeline, addressing litigation, reducing debt, and continuing to implement its radical new operating model Dynamic Shared Ownership (DSO) to improve performance, said Anderson. DSO will reduce hierarchy levels, cut bureaucracy, streamline structures and significantly accelerate decision-making. Further, DSO will enable Crop Science to strengthen its leading position in agriculture through generational innovation, with 10 blockbusters reaching the market over the next decade.

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