Bayer, a global leader in the life sciences sector, has reported sales for the first half of 2023 that exceeded expectations, reinforcing the company's confidence to affirm its annual projections. As detailed in a release on Tuesday, Bayer's interim sales reached 24.91 billion euros, reflecting a modest growth of 1% when adjusted for currency fluctuations and portfolio changes.
However, when considered on a reported basis, sales experienced a downturn of 2.1%. These figures surpass consensus estimates from Visible Alpha, which forecasted sales at around 24.70 billion euros. Breaking down the performance by segment, Crop Science emerged as the largest contributor with net sales totaling 12.91 billion euros.
This was followed closely by the Pharmaceuticals segment, which generated 8.98 billion euros, and Consumer Health, with a sales figure of 2.89 billion euros. In terms of profitability, Bayer reported a substantial surge in net income from continuing and discontinued operations, climbing to 1.97 billion euros over the 291 million euros reported in the previous year.
Core earnings per share (EPS) from continuing operations, however, fell by 9.8%, settling at 3.76 euros. "With the first six months behind us, we have gained improved visibility for the full year," commented Chief Financial Officer Wolfgang Nickl. He reiterated the company's full-year sales estimate for 2024, which Bayer had projected in its 2023 annual report at a range of 47 billion to 49 billion euros when currency-adjusted, compared to the actual total of 47.6 billion euros in 2023. Nickl elaborated that, by division, Crop Science sales for the full year are anticipated to achieve the lower end of guidance, while sales in Pharma are expected to exceed initial growth projections.
Consumer Health appears to be on track as well. Bill Anderson, Chairman of the Management Board, highlighted the company's commitment to making "bold decisions" that have characterized its recent endeavors, including a planned overhaul of the Consumer Health division. "We will continue making them.
Our three business segments now follow a leaner organizational structure that is less hierarchical and more customer and product-focused. We are committed to continual improvement in line with our mission," he stated. In a research note issued on Tuesday, Deutsche Bank remarked, "Overall, it was positive to see an earnings beat, but the underlying results remain soft, particularly within the Crop Science division.
The confirmation of guidance is a positive outcome; however, Bayer faces challenges with FX rates trending unfavorably, which could result in slight downward adjustments to consensus earnings." At the close of late morning trading, Bayer's stock reflected a slight increase on Xetra and rose over 1% in Frankfurt, trading at $26.85, with a minor change of $+0.04, translating to a percent change of +0.15%..