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Bayer sets earnings targets for expanded business

Bayer produced a bullish analysis of its sales and earnings capabilities for the group and its Crop Science division at its Capital Markets Day in London, UK, yesterday.

Bayer produced a bullish analysis of its sales and earnings capabilities for the group and its Crop Science division at its Capital Markets Day in London, UK, yesterday. Group chairman of the board of management Werner Baumann led the presentation.  “Following our transformation into a life science company with leading businesses in health and nutrition, we are strongly positioned to benefit from key megatrends,” he said.

The recently reported intended divestments will aid in funding R&D boosts to “support innovation capabilities” in order to “create substantial value”.

The company expects sales at the Crop Science division to increase by 4% next year, based on this year’s expected pro forma sales of €19.3 billion ($22.1 million at the current rate). Between 2019 and 2022, Bayer is targeting average annual sales growth of more than 4%. The division’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin is anticipated to reach some 23% this year, while the business targets a 25% margin next year and one of 30% in 2022. The higher projected margins are based on expected pro forma EBITDA before special items of €4.5 billion ($5.1 billion) for this year.

The company had indicated a $1.2 billion annual earnings synergies boost from 2022, and an increase in core earnings per share (EPS) from 2019, following the Monsanto acquisition.  That would include a double-digit EPS rise from 2021.

Bayer notes that over the past 15 years, the group has transformed itself into a life sciences company, focused on crop science, healthcare and pharmaceuticals. That positions it well to take advantage of megatrends of an ageing and growing global population, the company says. The Crop Science division has a pipeline with more than 75 projects, it notes.

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