The Bayer Group generated increased sales and lower earnings in the second quarter of 2024. Each business delivered a competitive performance in their respective industries, positioning the Group to confirm its 2024 outlook.

“Our Crop Science business nearly offset headwinds in a challenging agricultural market environment,” CEO Bill Anderson said on Tuesday when presenting the company’s half-year financial report.

In addition, the Pharmaceuticals Division’s new products Nubeqa and Kerendia continued their impressive momentum, and Consumer Health returned to growth, he noted. Beyond its operational progress, the company advanced on its strategic priorities.

“One of the central commitments we made at Capital Markets Day is that this organization will consistently perform while simultaneously addressing the longer-term roadblocks holding us back. The 154 days since March 5th have been pretty good evidence that we can do both.”

Anderson outlined where the company stands in addressing four strategic focus areas, with good progress in growth and innovation, the US litigation, cash and deleveraging, and the introduction of the new Dynamic Shared Ownership (DSO) operating model. Highlighting the headway the Pharmaceuticals Division is making in driving innovation, he commented:

“In just the past 90 days, we’ve taken big steps toward filling the mid-stage pipeline, expanding labels and advancing late-stage assets.” Just recently, Bayer has released positive Phase III results that could pave the way for broader indications for the cancer drug Nubeqa and Kerendia for the treatment of chronic kidney disease associated with type 2 diabetes. Anderson also noted that the company is planning to launch two new drugs as early as next year: elinzanetant, a non-hormonal solution for women suffering from vasomotor symptoms associated with menopause, and acoramidis, a cardiology drug Bayer has exclusive marketing rights for in Europe. “Our Pharma pipeline is one of our biggest levers for value creation,” he said.

Group sales rose by 3.1 percent on a currency- and portfolio-adjusted basis (Fx & portfolio adj.) to € 11.14 billion in the second quarter of 2024. There was a negative currency effect of € 240 million (Q2 2023: 553 million euros).

EBITDA before special items decreased by 16.5 percent to € 2.11 billion. This figure included a negative currency effect of € 129 million (Q2 2023: € 120 million). The decline in earnings was mainly due to an unfavorable product mix. In addition, the provisions for the Group-wide short-term incentive program were lower in the prior-year period.

EBIT improved to € 525 million (Q2 2023: minus € 956 million) after net special charges of € 490 million (Q2 2023: € 2.490 billion). The special charges primarily related to expenses for ongoing restructuring measures and affected all divisions and functional areas. Net income amounted to minus € 34 million (Q2 2023: € minus 1.887 billion).

Business up slightly at Crop Science

In the agricultural business (Crop Science), sales increased by 1.1 percent (Fx & portfolio adj.) to 4.981 billion euros. Growth was mainly driven by higher sales of glyphosate-based herbicides, with a particularly strong performance in North America. Despite a decline in sales of non-glyphosate-based products, the Herbicides strategic business entity posted overall growth of 8.7 percent (Fx & portfolio adj.). Sales at Soybean Seed & Traits increased by a significant 12.4 percent (Fx & portfolio adj.), mainly thanks to substantially higher volumes in North America. Business was also up at Insecticides, with growth of 6.9 percent (Fx & portfolio adj.). By contrast, sales at Fungicides were down amid a soft market environment, falling 12.4 percent (Fx & portfolio adj.) as a result of lower volumes and prices in North and Latin America. Sales also decreased at Corn Seed & Traits, which saw a decline of 2.8 percent (Fx & portfolio adj.) that was mainly attributable to lower volumes in Latin and North America amid a decline in planted acreages.

EBITDA before special items at Crop Science decreased by 27.7 percent to € 524 million, partly due to an unfavorable product mix. By contrast, there was a positive currency effect of € 49 million (Q2 2023: negative currency effect of € 96 million).