Bayer reports resilient sales amid agricultural challenges

Bayer reported increased sales but lower earnings for the second quarter of 2024, reflecting a challenging environment in the agricultural sector. Despite these headwinds, the company’s performance across its business units allowed it to confirm its full-year outlook.

Group sales rose by 3.1% on a currency- and portfolio-adjusted basis to €11.144 billion ($12.33 billion). However, EBITDA before special items decreased by 16.5% to €2.111 billion ($2.34 billion), mainly due to an unfavorable product mix and lower provisions for short-term incentives compared to the previous year. EBIT improved to €525 million ($581 million), significantly up from a loss of €956 million ($1.06 billion) in Q2 2023. Net income, however, remained in the red at minus €34 million ($37.6 million).

CEO Bill Anderson emphasized the company’s progress in its strategic focus areas, including growth and innovation, U.S. litigation, cash flow management, and the introduction of the Dynamic Shared Ownership (DSO) model. “Our Crop Science business nearly offset headwinds in a challenging agricultural market environment,” he said.

Crop Science sees slight uptick

Bayer’s Crop Science division saw sales rise by 1.1% on a currency- and portfolio-adjusted basis to €4.981 billion ($5.51 billion), driven by higher sales of glyphosate-based herbicides, particularly in North America. However, sales of non-glyphosate-based products declined. The Herbicides segment posted overall growth of 8.7%, while Soybean Seed & Traits saw a significant 12.4% increase, mainly due to higher volumes in North America. Insecticides also performed well, with a 6.9% rise in sales. Conversely, Fungicides sales fell by 12.4% amid a soft market environment, and Corn Seed & Traits sales decreased by 2.8% due to lower volumes in Latin and North America.

EBITDA before special items for Crop Science dropped by 27.7% to €524 million ($579 million), partly due to an unfavorable product mix. A positive currency effect of €49 million ($54.1 million) was noted, compared to a negative currency effect of €96 million ($106 million) in Q2 2023.

Sustainability and future outlook

Bayer reaffirmed its 2024 outlook, with expectations for the Crop Science division to achieve currency- and portfolio-adjusted sales growth and an EBITDA margin at the lower end of projected ranges.

On the sustainability front, Bayer published its Climate Transition and Transformation Plan, aiming to achieve net zero greenhouse gas emissions by 2050. The plan includes transitioning to renewable energy sources, with two new supply contracts securing 300 gigawatt hours of electricity annually from 100% renewable sources. This is equivalent to the annual electricity consumption of approximately 75,000 households.

Despite the challenging market conditions, Bayer’s strategic initiatives and commitment to sustainability position it for continued resilience and growth.