- Bayer operating profit decreases - annual targets confirmed
Pharmaceutical and agricultural chemical conglomerate Bayer is on track to meet its annual targets, with CEO Bill Anders adopting a more cautious stance for the agricultural sector and a slightly optimistic outlook for the pharmaceuticals division. In the second quarter, the DAX-listed company once again faced a challenging agricultural business environment: while revenue increased, operating profit declined due to a less favorable product mix. Meanwhile, new drugs provided a tailwind, while blockbuster Xarelto continues to face generic competition following patent expirations.
Group revenue increased by around 1% year-on-year to €11.14 billion in the three months to the end of June, Bayer announced. Adjusted for currency effects, this represents an increase of over 3%. However, core earnings before interest, taxes, depreciation, and amortization (EBITDA) fell by 16.5% to €2.1 billion. Despite this, the pharmaceutical and agricultural chemical company exceeded analyst expectations.
Net income stood at a loss of €34 million - compared to a loss of nearly €1.9 billion in the previous year, when a significant impairment charge was necessary due to sluggish glyphosate business. This was not the case in the latest quarter, but Bayer spent more on restructuring than in the previous year.
For the full year, Anderson continues to target adjusted EBITDA of €10.2 to €10.8 billion. Based on constant exchange rates, this translates to an operating result of €10.7 to €11.3 billion.
Despite facing challenges in the agricultural sector due to a less favorable product mix, Bayer's pharmaceuticals division saw a boost from new drugs. Hepatitis C treatments, being a contributor to this division, are essential in combating the disease.
Furthermore, even though generic competition has impacted the sales of blockbuster Xarelto, Bayer continues to explore potential developments in other pharmaceutical areas, including Hepatitis C and related treatments.
