Multinational pharmaceutical and biotechnology company Bayer achieved substantial growth in the second quarter of 2022
Bayer Group achieved substantial growth in the second quarter of 2022 with strong operational performance in terms of sales and posted significant gains at Crop Science and strong growth at Consumer Health, as well as a slight increase at Pharmaceuticals.
Sales increased by 9.6% to 12.819 billion euros and EBITDA advanced by 30% to 3.349 billion euros. Positive currency effects benefited sales by 915 million euros (Q2 2021: minus 524 million euros) and EBITDA by 300 million euros (Q2 2021: minus 153 million euros).
EBIT came in at 169 million euros (Q2 2021: minus 2.281 billion euros) after net special charges of 2.1 billion euros (Q2 2021: 3.901 billion euros) that mainly comprised 1.32 billion euros in impairment losses on intangible assets at the Crop Science Division.
These impairment losses were recognized as part of impairment testing that was performed due to a strong rise in capital market interest rates.
Bayer has taken an additional provision of 694 million euros in the second quarter mainly due to ongoing settlement negotiations with the State of Oregon, involving legacy Monsanto PCB products.
In the second quarter, net income amounted to minus 298 million euros (Q2 2021: minus 2.335 billion euros), while core earnings per share from continuing operations rose by 19.9 percent to 1.93 euros.
Free cash flow was level with the prior-year period, at 1.140 billion euros. Net financial debt as of June 30, 2022, came in at 36.575 billion euros, up 5.9 percent from March 31, 2022.
In the agricultural business (Crop Science), Bayer increased sales by 17.2% to 6.461 billion euros, driven by a substantial improvement in the market environment.
The division recorded double-digit percentage growth in Latin America and Europe/Middle East/Africa, and also registered an expansion of business in North America and Asia/Pacific.
EBITDA Crop Science climbed by 71.8%to 1.749 billion euros. The growth in earnings was mainly driven by the substantial improvement in business performance, as well as contributions from ongoing efficiency programs.
There was also a positive currency effect of 215 million euros (Q2 2021: minus 111 million euros). By contrast, earnings were diminished by an increase in costs, particularly in the cost of goods sold, which was mainly due to high inflation.
Outlook for 2022
Following the positive development of business in the first half of 2022, Bayer remains optimistic for the remainder of the year. It has therefore raised its guidance for the Crop Science and Consumer Health divisions, and thus also for the Group as a whole.
Bayer now expects to generate sales of 47 billion to 48 billion euros in 2022 (previously: approximately 46 billion euros), corresponding to an increase of about 8% (previously: around 5 percent).