FULL YEAR: BAYER'S SALES UP 9%, RETURNS TO PROFITABILITY--$1.12 BILLION
Mar. 1, 2022
Source: Bayer news release
Leverkusen - The Bayer Group had a successful year in 2021, both operationally and strategically.
"We posted substantial growth, strengthened our innovation pipeline and made progress toward our sustainability targets. All this shows that Bayer is on the right track!" said Werner Baumann, Chairman of the Board of Management, on Tuesday during the company's Financial News Conference.
"We not only met our updated Group forecast, but in fact exceeded it. What's particularly encouraging is that all three divisions grew dynamically in 2021, and what's more, they all outpaced their respective markets."
All divisions successfully launched innovations last year, with Baumann naming the Kerendia kidney disease drug, Intacta 2 Xtend soybean seeds and the Bepanthen Derma skincare product as examples.
The company invested a record amount in research and development and continued to strengthen its innovation capabilities by making numerous acquisitions, taking stakes in other companies and entering into partnerships, he explained.
The company's objective is to harness the huge opportunities of the Bio Revolution offered by the state-of-the-art technologies emerging in this digital age, Baumann continued. "We are leveraging the potential of gene editing in the fields of both healthcare and agriculture. In medicine, we are researching the targeted editing of individual genes responsible for illnesses such as Parkinson's disease. And in agriculture, we can give crops the traits they need to better withstand extreme weather conditions."
Sales of the Bayer Group rose by 8.9 percent to 44.081 billion euros in 2021 after adjusting for currency and portfolio effects (Fx & portfolio adj.). EBITDA before special items fell by 2.5 percent to 11.179 billion euros.
The Group was able to largely offset an increase in the cost of goods sold - partly inflation-related - as well as significant currency headwinds. The EBITDA margin before special items was 25.4 percent. EBIT amounted to 3.353 billion euros (2020: minus 16.169 billion euros) after net special charges of 3.942 billion euros (2020: 23.264 billion euros) that mainly resulted from the allocation to provisions in connection with the glyphosate litigations.
Further special charges were mostly attributable to established restructuring programs, which were offset by impairment loss reversals primarily attributable to the Crop Science Division. Net income came to 1.000 billion euros (2020: net loss of 10.495 billion euros), while core earnings per share from continuing operations rose by 1.9 percent to 6.51 euros.
Crop Science achieves record sales and grows earnings
In the agricultural business (Crop Science), Bayer increased sales by 11.1 percent (Fx & portfolio adj.) to 20.207 billion euros.
The division grew sales significantly across all regions, especially in Latin America and Asia/Pacific.
At Corn Seed & Traits, sales were up 9.2 percent (Fx & portfolio adj.) thanks to increased market share in North America and Latin America, as well as to higher prices worldwide.
Bayer grew sales by double-digit percentages at Herbicides (15.4 percent), Fungicides (13.8 percent) and Soybean Seed & Traits (14.9 percent) on a currency- and portfolio-adjusted basis. The main drivers were price increases for glyphosate-based products at Herbicides, and higher Fox Xpro volumes in Latin America at Fungicides. Soybean Seed & Traits benefited from higher volumes and prices, particularly in North America and Latin America.
EBITDA before special items at Crop Science increased by 3.6 percent to 4.698 billion euros, resulting in a margin of 23.2 percent. The growth in earnings was mainly driven by higher prices and volumes as well as contributions from ongoing efficiency programs. By contrast, earnings were diminished by a largely inflation-fueled increase in the cost of goods sold, as well as by negative currency effects of 387 million euros.
Bayer sees encouraging steps regarding the glyphosate litigation in the United States. The U.S. Supreme Court showed interest in the Hardeman case by inviting the Solicitor General, representing the U.S. Government, to file a brief on whether this case should be accepted. Moreover, the company has won two consecutive jury trials on product liability cases in California. The company is continuing to execute its five-point plan and is prepared for any outcome at the Supreme Court.
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