Bayer Weighs Structural Changes But Rules Out Three-Way Split -- 2nd Update
08 Novembre 2023 - 9:40AM
Dow Jones News
By Mauro Orru
Bayer Chief Executive Bill Anderson said he is looking at
options to overhaul the company's structure and remove multiple
layers of management in a move that will result in significant job
cuts, but ruled out splitting the group into three businesses.
Anderson, who took the helm of the German pharmaceutical and
agricultural conglomerate from Werner Baumann in June, said he had
engaged a team of advisors to look at various structural options,
including the separation of either its crop science or consumer
health divisions.
Bayer is one of few remaining groups housing pharmaceutical and
consumer-health assets under the same roof. Last month, French drug
giant Sanofi set out plans to spin off its consumer-health
business, the latest company to hive off a division selling
over-the-counter medicines and other retail products to focus on
more commercially lucrative but scientifically riskier prescription
drugs following similar moves by Johnson & Johnson, Pfizer and
GSK.
"We considered simultaneously splitting the company into three
businesses. We're ruling that option out," Anderson said. "A
three-way split would require a two-step process."
Shareholders such as Bluebell Capital Partners had been calling
for Bayer to split into three businesses--crop science, consumer
health and pharmaceuticals--saying the divisions had nothing to do
with each other.
Bayer plans to cut into several layers of management by the end
of next year to streamline operations. "We are redesigning Bayer to
focus only on what's essential for our mission -- and getting rid
of everything else," Anderson said.
Bayer's three divisions reported lower sales and earnings for
the third quarter, particularly at its agricultural division, which
booked impairment losses due to high interest rates. The company
has also been grappling with lower prices for glyphosate, the
active ingredient found in herbicides and other weed-control
products, a development that in July forced the group to slash its
overall sales and earnings guidance for the year.
Bayer on Wednesday posted a net loss of 4.57 billion euros
($4.89 billion) for the three months to the end of September
compared with profit of EUR546 million in last year's third
quarter.
Earnings before interest, taxes, depreciation, amortization and
special items--a profitability metric that is closely watched by
analysts and investors--plunged 31% to EUR1.69 billion. Core
earnings per share--another key profitability indicator--slumped to
EUR0.38 from EUR1.13.
Sales fell 8.3% to EUR10.34 billion. Bayer's agricultural
business, crop science, recorded a 7% contraction in sales to
EUR4.37 billion. Sales at its pharmaceuticals division fell 8.4% to
EUR4.54 billion, while the consumer health business contributed
EUR1.41 billion in sales, down 8.9% on year.
Analysts had forecast a net profit of EUR33 million, Ebitda
before special items of EUR1.73 billion, core EPS of EUR0.73 and
sales of EUR10.44 billion, according to a Vara Research
consensus.
Bayer continues to expect Ebitda before special items between
EUR11.3 billion and EUR11.8 billion for the full year, core EPS of
EUR6.20 to EUR6.40, and sales between EUR48.5 billion and EUR49.5
billion, all on a currency-adjusted basis based on the average
monthly exchange rates in 2022. It expects soft growth and
persisting challenges next year.
"We're not happy with this year's performance. Nearly EUR50
billion in revenue but zero cash flow is simply not acceptable,"
Anderson said.
Write to Mauro Orru at mauro.orru@wsj.com
(END) Dow Jones Newswires
November 08, 2023 03:25 ET (08:25 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
Grafico Azioni Bayer (TG:BAYN)
Storico
Da Ott 2024 a Nov 2024
Grafico Azioni Bayer (TG:BAYN)
Storico
Da Nov 2023 a Nov 2024