BAYN Bayer AG

By Kimberly Chin

Bayer AG expects sales for fiscal 2021 to be at similar levels to fiscal 2020 despite the effects of the Covid-19 pandemic on its business.

The German pharmaceutical and life-sciences company also expects 2021 core per-share earnings to be slightly below 2020 levels.

Bayer on Wednesday said it would introduce a cost-savings plan of more than 1.5 billion euros ($1.8 billion) annually from cost cuts and other moves as of 2024. This is on top of its previously announced target of EUR2.6 billion in savings as of 2022, the company said.

This could lead to some job cuts though it is too early to say, Bayer said.

"We believe the additional measures are necessary to accelerate our overall transformation, generate margin improvements and thus maintain our competitive profile," Chairman Werner Baumann said, adding that the savings could go toward fueling innovation, growth opportunities, and reducing debt.

Bayer will also consider exiting non-strategic businesses or brands.

The pandemic has led to currency headwinds and lower revenue particularly in the company's crop science and pharmaceuticals divisions.

The company's agricultural business has been hurt by low commodity prices for major crops, increased competition for soy and lower biofuel consumption. The company expects to incur charges in the mid- to high single-digit-billion euro range on agricultural assets in the near term.

While it has diminished growth expectations for its agricultural segment, it expects its pharmaceutical business to return to growth in 2021. Bayer said it intends to bolster its product pipeline with next-generation platforms, in-licensing agreements and bolt-on acquisitions.

Write to Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

September 30, 2020 15:06 ET (19:06 GMT)

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