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Best of NAMA 2024

by Bill Anderson,
Chairman of the Board of Management (CEO) of Bayer AG:

Thanks to all of you for joining us today as we share our first quarter results. This call comes 70 days after our comprehensive strategic update in March. So, today, I'll be focusing my remarks on our performance, our progress in each of the focus areas we shared in March, and our priorities going forward.

I'll start with our Q1 performance. Our sales came in at 13.8 billion euros. In currency and portfolio adjusted terms, which I'll use throughout my remarks, that puts us slightly below Q1 last year. We posted core earnings per share of 2 euros and 82 cents. Finally, free cash flow came in at minus 2.6 billion euros. This is an improvement over Q1 last year and is largely driven by lower litigation payouts. Overall, this result is in line with our expectations, and we're reaffirming our 2024 outlook at constant currencies.

First, on the highlights: In Crop Science, we outperformed all our peers in terms of sales trajectory in a challenging market environment. In Pharmaceuticals, our launch assets Nubeqa™ and Kerendia™ fueled our topline growth. In Consumer Health, our Dermatology category continued its impressive growth trajectory.

As you know, we also have some headwinds to manage: Glyphosate prices hurt our profitability in Crop Science. And we're seeing additional pressure from generics in some markets in Pharma - even if our team was actually able to manage a slight sales increase for Xarelto in the quarter.

In Crop Science, we are building on our leading position. With all of the new innovation we bring to the market, including hundreds of new hybrids and seed varieties, as well as several new crop protection formulations, we were able to outperform our peers in the first quarter. Just recently, we signed an agreement with AlphaBio Control. This deal gives us exclusive rights to market the first ever biological insecticide for arable crops.

Regarding litigation: About two weeks ago, a Washington court decided in our favor by completely overturning a 185-million-dollar verdict. That's an important win because of its potential implications - as the errors that the court identified are relevant for all of the Sky Valley Education Center, or SVEC, trials and verdicts.

So what happened in this case? First, the court threw out a substantial portion of the key plaintiffs' expert's testimony on exposure. That decision impacts both prior and future trials. The court's decision found that testimony, I quote, "unreliable, untested, or junk science."

Second, the court found that the Company was improperly prevented from making an important legal defense argument - a critical error that was repeated in many of the subsequent trials.

Plaintiffs will appeal the decision. However, we feel strongly that the appellate court's decision on these two points is in line with the applicable law.

Now, on glyphosate: Both inside and outside of the courtroom, this issue remains at the top of our agenda - because it's bigger than just us. Threats to a sustainable supply of glyphosate have big consequences for our operations, for U.S. agriculture, for food prices, and for our planet. Farmers across the United States realize this. And they are concerned. That's why more than 80 groups have joined the Modern Ag Alliance - a coalition who wants to see U.S. agriculture regulated by science-based law - not the litigation industry. Simply put, we want lawmakers to hear the voice of the American farmer. Beyond that, we're looking at new ways to address this threat to our operations, carefully and urgently weighing the best way forward for U.S. farmers, U.S. consumers and our employees.

To read the entire report click here.

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