Bayer Posts Profit Plunge as Weedkiller Litigation Continues to Bite -- Earnings Review
By Joshua Stein
German pharmaceutical and chemical conglomerate Bayer AG
reported fourth-quarter and full-year results on Thursday. Here's
what you need to know:
SALES: Fourth-quarter sales fell to 10.00 billion euros ($12.17
billion), from EUR10.75 billion and slightly behind analysts'
expectations of EUR10.01 billion, according to a consensus provided
by Vara Research.
EBITDA BEFORE SPECIAL ITEMS: Earnings before interest, taxes,
depreciation and amortization and before special items for the
quarter fell to EUR2.39 billion, compared with EUR2.48 billion in
the same quarter the previous year and analysts' expectations of
NET PROFIT: Bayer's quarterly net profit sunk to EUR308 million,
compared with EUR1.41 billion a year earlier. In 2020, Bayer
recorded a net loss of EUR10.50 billion, down from a net profit of
EUR4.09 billion in 2019.
WHAT WE WATCHED:
-PHARMACEUTICALS: Analysts at Citi said Bayer's pharmaceutical
pipeline update was disappointing after having voiced initial
concerns about the outlook for the division in recent months. Bayer
reported decreasing yearly sales for its Xofigo drug, for example,
with a marked decline in the U.S. Full-year sales of its Xarelto
drug went up by 12% on a currency and portfolio adjusted basis,
driven by increasing volumes in China and strong growth in
-GLYPHOSATE LITIGATION: Bayer's earnings for the year were
severely affected by litigation concerning the company's
glyphosate-based weedkiller, Roundup, the company said. Net special
charges, which were mainly made up by provisions for litigation to
do with the weedkiller, increased to EUR23.26 billion from EUR2.81
billion in 2019. Bayer has earmarked EUR8 billion to settle
additional litigation over Roundup in 2021.
-CROP SCIENCE BUSINESS: Bayer's crop science business didn't
live up to expectations, according to Warburg Research analyst
Ulrich Huwald. The division's worse-than-expected performance was
the main driver for Bayer's sales and adjusted Ebitda missing the
company's expectations, he said.
Bayer guided for moderate growth at the crop science segment in
2021, which Citi sees as conservative. Bayer said strong global
demand for corn and soybean should drive growth, but that it could
be held back by continuing pressure from the coronavirus
Write to Joshua Stein at email@example.com
(END) Dow Jones Newswires
February 25, 2021 10:32 ET (15:32 GMT)
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