--Bayer expects momentum to return to sales growth this year before gathering pace

--The company sees its pharmaceutical segment returning to sustainable growth in 2025 after it a slight decline in 2024 due to major patents expiring

--Bayer said it will keep to its dividend policy and will invest further resources in bolt-in acquisitions

   By Joshua Stein 

Bayer AG said Wednesday that it expects sales growth to regain momentum this year and accelerate further through 2024.

The German chemical and pharmaceutical company said at its capital markets day that net sales should reach between 43 billion and 45 billion euros ($51.17 billion-$53.55 billion) by 2024, driven by life-science innovations, increasing efficiency and a push for innovation across all its divisions.

Core earnings per share should come in at between EUR7.00 and EUR7.50 in 2024 based on constant currencies, while free cash flow is expected to grow to around EUR5 billion by 2024.

Bayer said it expects its crop-science division to reach above-market sales growth from 2022, and sales growth at a currency and portfolio-adjusted rate of between 3% and 5% annually from 2022 to 2024. The crop-science division's earnings before interest, taxes, depreciation and amortization margin before special items should reach between 27% and 29% by 2024 due to further efficiency improvements, Bayer said.

At the company's pharmaceuticals branch, Bayer expects annual sales growth at a currency and portfolio-adjusted rate of 3% to 5% through 2023. The division is anticipated to register a low-to-mid-single-digit percentage decline in sales in 2024 due to patent expirations of its major Xarelto and Eylea drugs, but to return to sustainable growth in 2025. Research and development investment should push pharmaceuticals to an Ebitda margin before special items of between 32% and 34% through 2023, the company said. The margin is also expected to remain above 30% in 2024 despite the patent expirations, Bayer said.

Bayer's consumer health segment should have an increase of sales between 3% and 5% annually, adjusted for currency and portfolio, and is expected to increase its market share. Innovation and branding, along with further digitalization and possible acquisitions, should drive growth, the company said. The Ebitda margin before special items at consumer health is anticipated to be a mid-20s percentage, it said.

Bayer said it will maintain its dividend policy and plans to pay out between 30% and 40% of its core earnings per share, while further resources will be invested in bolt-in acquisitions.

Net debt is expected to drop to between EUR28 billion and EUR30 billion by the end of 2024, excluding divestment proceeds, the company said.

At 1358 GMT, Bayer shares were trading 3.5% higher at EUR54.93


Write to Joshua Stein at joshua.stein@wsj.com


(END) Dow Jones Newswires

March 10, 2021 09:15 ET (14:15 GMT)

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