Bayer Expects Higher Profitability In Coming Years

Bayer AG (BAYZF.PK,BAYRY.PK,BYR.L) said it expects dynamic growth with higher profitability in the coming years and is accelerating its transformation.

Speaking at the virtual Capital Markets Day on Wednesday, CEO Werner Baumann emphasized Bayer's long-term growth perspectives.

The company expects core earnings per share to be between 7.00 euros and 7.50 euros in 2024 based on constant currencies. The free cash flow is set to grow to around five billion euros by 2024. By 2024, net sales are planned to reach 43 billion euros to 45 billion euros.

Sales growth at Bayer is planned to regain momentum in 2021 and further accelerate in the years thereafter.

The company noted that it will maintain its dividend policy and plan to pay out 30 to 40 percent of core earnings per share.

The Crop Science Division is projected to grow at a currency- and portfolio-adjusted rate of 3 to 5 percent annually from 2022 through 2024, and thus faster than the market.

The Pharmaceuticals Division is also expected to post annual sales growth of 3 to 5 percent (Fx & portfolio adj.) through 2023. In 2024, Bayer anticipates a low- to mid-single digit percentage decline in this division's sales due to the patent expirations for its established blockbuster products Xarelto and Eylea, with Pharmaceuticals set to return to sustainable growth in 2025.

Sales at Consumer Health are also projected to increase by 3 to 5 percent (Fx & portfolio adj.) annually, with the division set to gain further market share.
Crop Science is planned to achieve an EBITDA margin before special items of between 27 and 29 percent by 2024 on the back of further efficiency improvements.

In addition to the planned growth, the efficiency program announced in September 2020 will also help strengthen the company's earning power. "We aim to become an even simpler, leaner and more flexible company," CFO Wolfgang Nickl explained. The program is expected to deliver annual savings of more than 1.5 billion euros from 2024.

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