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Bayer Q2 EBITDA Before Special Items Rises, Sales Down 2.5%; Adjusts 2020 Forecast

The Bayer Group (BAYZF.PK,BAYRY.PK,BYR.L) reported a second quarter net loss of 9.548 billion euros due to special items for litigations compared to net income of 404 million euros, previous year. Loss per share was 9.72 euros compared to profit of 0.41 euros. EBIT was minus 10.78 billion euros compared to EBIT of 785 million euros, last year after net special charges of 12.511 billion euros. EBITDA before special items rose by 5.6 percent to 2.88 billion euros. Core earnings per share from continuing operations rose by 5.3 percent to 1.59 euros.

Second quarter Group sales declined by 2.5 percent on a currency- and portfolio-adjusted basis (Fx & portfolio adj.) to 10.05 billion euros. Sales in the Pharmaceuticals and Consumer Health divisions receded.

"Thanks to the growth in our agricultural business, we raised EBITDA before special items - and we did so in a challenging environment," said Werner Baumann, Chairman of the Board of Management.

For fiscal 2020, the company is now targeting currency-adjusted growth in sales to between 43 and 44 billion euros (previously: to between 44 and 45 billion euros). This corresponds to an increase of 0 to 1 percent (previously: about 3 to 4 percent) on a currency- and portfolio-adjusted basis. The company targets EBITDA before special items of around 12.1 billion euros (previously: 12.3 to 12.6 billion euros) on a currency-adjusted basis. Core earnings per share are now anticipated to rise to between 6.70 and 6.90 euros (previously: to between 7.00 and 7.20 euros) on a currency-adjusted basis.

Bayer also expects to register substantial negative currency effects, primarily due to the depreciation of the Brazilian real. Based on the June 30, 2020, exchange rates, the company now expects to post Group sales of between 42 and 43 billion euros, an EBITDA margin before special items of 28 percent, and core earnings per share of between 6.40 and 6.60 euros for 2020.

For fiscal 2020, the company now expects free cash flow at between minus 0.5 billion euros and zero. Bayer now only expects to reduce net financial debt to around 33 billion euros (previously: to about 27 billion euros).

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