Bayer (BAYN) Q3 2024 earnings summary

Executive summary

• Q3 2024 group sales were €9.97–€10.0 billion, up 1% currency- and portfolio-adjusted, but down 3.6–4% as reported; Pharmaceuticals and Consumer Health growth offset Crop Science declines.

• EBITDA before special items fell 25.8–26% to €1.25–€1.3 billion, mainly due to lower Crop Science and Pharma results and significant FX headwinds.

• Core EPS dropped 36.8–37% to €0.24, with reported EPS at €-4.26 due to €3.78 billion Crop Science impairment; net income was negative €4.18 billion.

• Litigation, especially glyphosate and PCB cases, remains a major focus, with 63,000 glyphosate cases outstanding and ongoing efforts to contain risks.

• The Dynamic Shared Ownership model led to over 5,500 job reductions and improved operational efficiency across >1,000 teams.

Financial highlights

• Q3 EBITDA margin before special items was 12.6%, down from 16.3% in Q3 2023; gross profit declined to €4.88 billion.

• Free cash flow for Q3 was €1.1–€1.15 billion; net financial debt reduced to €35.0 billion, aided by positive cash flow and FX tailwind.

• FX headwinds impacted sales by €440 million in Q3 and €1.2 billion year-to-date.

• Net income and EPS were significantly impacted by impairment losses in Crop Science.

• Operating cash flow decreased to €2.11 billion, and free cash flow fell 29.4% year-over-year.

Outlook and guidance

• 2024 group guidance for sales growth, core EPS, and free cash flow confirmed at constant FX; Crop Science and Consumer Health forecasts revised downward.

• Crop Science 2024 sales expected to decline 3% to 1%, with EBITDA margin before special items at 18–20%.

• Pharmaceuticals expected at the upper end of revised guidance; Consumer Health anticipates 1–3% sales growth.

• Clean EBITDA outlook lowered to -11% to -8% versus prior year; core EPS expected at €5.10–€5.50.

• 2025 outlook is muted, with likely declining earnings and continued FX headwinds; cost and efficiency measures to be accelerated.