Bayer's leader receives guidance from Xabi Alonso.
The troubled German company Bayer is implementing changes. The organizational structure is being simplified. Management has the pen in hand to reduce the massive debt and settle the glyphosate lawsuits. During daily operations, the company gets off to a solid start in the year.
CEO Bill Anderson of crisis-hit Bayer looks to emulate the victorious soccer team. "There are many alterations, and that can strain large groups," he said regarding the quarterly results. However, he's "assured that Bayer will celebrate numerous triumphs this year and in the future - not just in sports." He's proud of his colleagues at Bayer 04 and finds their achievements inspiring.
The board recently had lunch with the soccer team's coach Xabi Alonso and sporting director Simon Rolfes. "We had a truly interesting conversation. They had queries for us, and we had queries for them. I'm certain we can always learn from exceptional leadership."
Bayer's CEO Anderson, who's been leading for just shy of a year, knows he has to extricate Bayer from a deep crisis. His predecessor Werner Baumann's billion-euro takeover of glyphosate manufacturer Monsanto led Bayer into a seemingly endless legal battle over whether glyphosate is carcinogenic and caused a major loss in trust. Since the 2018 Monsanto purchase, Bayer's stock market value has plummeted by about 70 percent.
Eliminating glyphosate lawsuits via insolvent subsidiary?
Since taking position in June, Anderson has prioritized restructuring Bayer. He hasn't contemplated splitting the pharmaceutical and agricultural firm, contrary to investor advocacy. Instead, Anderson wants to strengthen the medicine pipeline, reduce legal risks, and lessen the load of staggering debt, currently at nearly 37.5 billion euros.
He introduced a new organizational strategy aiming to save 500 million euros this year and 2 billion by 2026 through this and job cuts. The Executive Board hasn't specified an overall job reduction figure.
The specifics of how Anderson intends to tackle the unyielding glyphosate lawsuit wave remain unclear. He previously confirmed that Bayer is evaluating all options. Nevertheless, Anderson refrained from commenting on whether it could entail assigning risks to a subsidiary and pushing it into insolvency. "The unsubstantiated attacks on our company by the litigation sector must cease, and we're exploring every option," the CEO stated.
Chief Financial Officer Wolfgang Nickl mentioned they're open to a settlement, so long as it's financially advantageous and restricts possible future cases. The number of glyphosate lawsuits has grown by nearly 3,000 since late January, totaling roughly 170,000. Settlements are still pending for about 57,000 claims.
Bayer's unexpectedly good performance in first quarter
In the first quarter, Bayer outperformed analysts' predictions, despite a decline in sales and earnings. The net operating income (EBITDA) slid by 1.3 percent to 4.4 billion euros - analysts had envisioned a lower number. Sales shrank by over 4 percent to approximately 13.8 billion euros, also due to negative exchange rate disparities; adjusted for currency impacts, sales were roughly unchanged.
Bayer suffered due to sluggish income in its CropScience agricultural division. The Group had already faced tepid glyphosate prices last year and experienced further declines in sales. Prevalent metrics of glyphosate usage in agriculture have slowed. Though sales in medications increased, their currency impacts put a drag on earnings. On balance, the company endured negative currency effects of more than 500 million euros in the first quarter.
Bayer reaffirmed its full-year goal of reducing income by 3%-9% after adjusting for currency effects. However, since currency charges have been heightened, the DAX-listed enterprise now forecasts an adjusted operating result of roughly 10.2-10.8 billion euros in 2024 - about 200 million euros less than previously.
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Bayer, being one of the Dax companies, reported a solid start to the year with its quarterly figures, despite facing challenges in its pharmaceutical industry. The company's CEO, Bill Anderson, is considering various strategies to reduce the company's massive debt and tackle the ongoing glyphosate lawsuits, which have significantly impacted Bayer's financial performance since the acquisition of Monsanto.
Source: www.ntv.de
