Bayer's Q1 revenue grows backed by agriculture business; confirms FY22 outlook

May 10, 2022 5:17 AM ETBayer Aktiengesellschaft (BAYRY), BAYZFBy: Ravikash, SA News Editor7 Comments

The Bayer AG plants located in Wuppertal Elberfeld

JFsPic/iStock Editorial via Getty Images

Bayer's (OTCPK:BAYRY) (OTCPK:BAYZF) Q1 revenue grew on the back of sales in its Agriculture segment, and the company maintained its FY22 outlook.

The German conglomerate's core EPS grew +36.3% Y/Y to €3.53.

Net income (including discontinued operations) grew +57.5% to ~€3.29B.

Group sales grew +18.7% Y/Y (or +14.3% on a currency and portfolio-adjusted basis, or Fx & portfolio adj.) to ~€14.64B.

“We achieved outstanding sales and earnings growth, with particularly substantial gains for our agriculture business,” said Werner Baumann, chairman of the board of management.

The company said that in Q1 group sales and earnings were not negatively impacted by Russia’s invasion of Ukraine. In total, the two countries account for ~3% of sales.

Bayer added that sales from Agricultural business (Crop Science) increased +27.1% Y/Y (+21.6% on Fx & portfolio adj.) to ~€8.45B due to substantial price and volume growth.

Herbicides grew at +59.8% and Fungicides 18.6% Y/Y, both on Fx & portfolio adj. basis. Corn Seed & Traits posted sales gains, mainly due to price increases in all regions. While sales at Soybean Seed & Traits were largely flat Y/Y.

EBITDA before special items at Crop Science grew by +49.9% to ~€3.67B.

Sales from the Pharmaceuticals division grew +5.9% Y/Y (+2.6% on Fx & portfolio adj.) to ~€4.62B.

Bayer said the division was more than able to offset price-related declines in sales due to tender procedures in China, especially for oral anticoagulant Xarelto (Fx & portfolio adj. -5%) and cancer drug Nexavar (Fx & portfolio adj. -34.7%) through higher volumes for other products.

Sales of wet-AMD drug Eylea, developed with Regeneron, grew 13.9% Y/Y (Fx & portfolio adj.). X-ray imaging drug Ultravist grew +26.4% Y/Y; both on Fx & portfolio adj. basis.

EBITDA before special items at Pharmaceuticals declined by -7.3% to ~€1.39B, mainly due to marketing and distribution of new products — kidney disease drug Kerendia, prostate cancer therapy Nubeqa and heart failure drug Verquvo.

Sales from Consumer Health segment grew +20.8% Y/Y (+17.2% Fx & portfolio adj.) to ~€1.51B.

EBITDA before special items at Consumer Health advanced by 32.9% Y/Y to ~€388M

Bayer noted that free cash flow improved by 63.2% to -€1.19B.

As of March 31, 2022, Net financial debt was ~€34.53B, +4.2% higher than at year-end 2021.

Outlook:

"Our forecast going forward this year remains confident despite the great uncertainties, including the stability of supply chains and energy supplies, and we confirm the currency adjusted outlook for the full year published in March," said Baumann.

In its Q4 earnings release in March, Bayer said that for FY 2022, it expects sales of ~€46B. EBITDA of ~€12B and free cash flow of €2B-€2.5B after deducting settlement payments.

The company expects core EPS at ~€7.00, and plans to maintain its dividend at €2.00.

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