Bayer Profit Drops 35%, Launches Overhaul To Counter Generic Pressure

Bayer AG BAYRY reported on Tuesday that the first quarter of 2025 net profit was 1.3 billion euros (around $1.45 billion), down from 2 billion euros a year ago.

The company reported:

Adjusted earnings of 65 cents, beating the consensus of 38 cents.
Sales reached $14.45 billion (13.74 billion euros), beating the consensus of $13.39 billion.
EBITDA before restructuring and litigation charges fell 7% year-on-year to 4 billion euros in the first quarter.
Earnings were held back by the business performance in the Crop Science Division, higher expenses for the Group-wide long-term incentive (LTI) program, and a negative currency effect of 165 million euros arising primarily from hyperinflationary impacts.
Sales in the agricultural business decreased 3.3% to 7.58 billion euros.
Sales of prescription medicines increased by 4.1% to 4.548 billion euros.
The division's new products achieved significant gains
Bayer recorded growth rates of 77.5% for the cancer drug Nubeqa (515 million euros) and 86.6% for Kerendia (161 million euros), for chronic kidney disease associated with type 2 diabetes.

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Bayer CFO Wolfgang Nickl said: "Based on the current status of tariffs announcements and our mitigation measures, we expect to manage the impact, and we confirm our outlook at constant currencies for the full year 2025."

On Monday, Bayer announced it is reorganizing parts of its Crop Science division in Germany, focusing on how it produces and develops crop protection products. This move is meant to help the company stay competitive globally.

In recent years, generic crop protection makers—mainly in Asia—have created too much supply and are selling products at very low prices, sometimes even below what it costs to produce them in Europe. At the same time, tougher regulations and export restrictions are making things even more difficult.

Bayer will concentrate more on advanced, strategic products that offer farmers clear benefits and are harder for generics to copy. As part of the changes, Bayer will end its operations in Frankfurt by late 2028.

The company's Dormagen site will continue operating and remain Bayer’s main production hub for crop protection products. However, it will be streamlined to stay competitive. Bayer will stop making generic active ingredients and formulations that are now widely available globally at cheaper prices.

These changes will be rolled out gradually by 2028. They’re expected to affect about 200 of Dormagen’s roughly 1,200 employees, mostly those in active ingredient production and formulation.

Price Action: Bayer stock is up 3.33% at $6.97 at the last check on Tuesday.

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