The DAX group continues to struggle with a difficult environment. But day-to-day business is going somewhat better than analysts expected.
The pharmaceutical and agrochemical company Bayer believes it is on track to achieve its annual targets. However, CEO Bill Anderson is becoming a little more cautious about the agricultural business and slightly more confident about the pharmaceutical division. In the second quarter, the DAX-listed company once again felt the effects of a difficult agricultural business: sales rose, but operating profit fell due to an unfavorable sales mix. In the pharmaceutical division, however, new drugs provided a tailwind, while the blockbuster Xarelto continues to face competition from generic drugs after patent expiration.
Bayer announced that group sales rose by almost one percent year-on-year to EUR 11.14 billion in the three months to the end of June. Excluding exchange rate effects, this represents an increase of a good 3 percent. Earnings before interest, taxes, depreciation and amortization adjusted for special items, however, fell by 16.5 percent to EUR 2.1 billion. The pharmaceutical and agrochemical group thus exceeded analysts’ expectations.
The bottom line is a loss of 34 million euros – after a loss of almost 1.9 billion a year ago. At that time, a goodwill write-down amounting to billions was necessary due to a sluggish glyphosate business. That was not the case in the past quarter, but Bayer spent more on restructuring than a year ago.
For the full year, Anderson is still aiming for earnings before interest, taxes, depreciation and amortization (EBITDA) adjusted for special items of 10.2 to 10.8 billion euros. Based on constant exchange rates, the operating result is planned to be between 10.7 and 11.3 billion euros.
Source: Stern
