Bayer (BAYN) Q3 2024 earnings summary

Executive summary

• Q3 2024 group sales were €9.97–€10.0 billion, up 0.6–1% currency- and portfolio-adjusted, but down 3.6–4% reported year-over-year; EBITDA before special items fell 25.8–26% to €1.25–€1.3 billion, and core EPS dropped 36.8–37% to €0.24.

• Net income was negative €4.18 billion, mainly due to €3.78 billion in impairment losses at Crop Science; litigation, especially glyphosate and PCB cases, remains a major uncertainty.

• Pharmaceuticals and Consumer Health delivered growth, offsetting Crop Science declines, with strong launches and margin improvements.

• The new operating model led to over 5,500 job reductions, mostly managerial, improving efficiency and cash conversion.

• Free cash flow for Q3 was €1.1–€1.15 billion, and net financial debt reduced to €35.0 billion.

Financial highlights

• Q3 2024 group EBITDA margin before special items was 12.6%, down from 16.3% in Q3 2023.

• Core EPS for Q3 was €0.24, down €0.14 year-over-year; reported EPS was €-4.26 due to a €3.8 billion crop science impairment.

• Free cash flow for Q3 was €1.1–€1.15 billion, down from €1.6 billion last year; net financial debt reduced by €1.8 billion during the quarter.

• Gross profit declined to €4.88 billion from €5.53 billion year-over-year.

• Net income in Q3 and 9M 2024 was impacted by significant impairment losses in Crop Science.

Outlook and guidance

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

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

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

• Clean EBITDA outlook for 2024 lowered to -11% to -8% year-over-year; free cash flow for 2024 forecasted at €2.0–€3.0 billion.

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