News Bayer
Bayer lose billions due to Roundup settlement
Despite the corona crisis, chemical group Bayer has achieved a good result in 2020. The total turnover of the group has grown by 0,6% to €41,4 billion. Nevertheless, the group is recording a loss of more than €10 billion. This is mainly due to a settlement of 8 billion in the Roundup case.
The Crop Science (agro) and Pharmaceuticals (medicines) divisions achieved EBITDA last year as expected. The Consumer Health division (health products for consumers) even showed strong growth above expectations.
“Our operational strength in these turbulent times demonstrates how resilient our companies are, even during the pandemic,” said CEO Werner Baumann during the annual results presentation today (Thurs. 25 February). "This week, a year ago, the first suspected corona case was reported in Leverkusen. A lot has happened since then. We focused on the responsibility to our approximately 100.000 employees and how we could provide customers with our products that in some cases are essential. to be."
Demand for crop protection products recovered
“In the first half of 2020, we suffered from lower demand for crop protection products, especially in North America,” said CFO Wolfgang Nickl. "A decline in the demand for biofuels is putting pressure on the prices of agricultural commodities. In addition, as a global company, we were also affected by exchange rate fluctuations. The corona crisis had an unexpected positive effect on travel and accommodation costs, which are 2020 much lower."
Despite the poor start, Crop Science saw its turnover grow by 1,3% to €18,84 billion. This growth came from Latin America, Asia and Oceania. In North America there was a contraction in turnover. Looking at the different product groups, there was considerably more demand for fungicides. This is mainly due to the introduction of new drugs. Sales of herbicides decreased by 1%. The authorization of several agents in the EMEA and North America has been (partially) withdrawn. Sales of seed treatment agents in 2020 were virtually the same as in 2019.
Positive mood
Bayer is positive about the agricultural market. "Looking ahead to the agricultural market, we are cautiously optimistic. Prices for corn, soybean and other crops have risen sharply since September and China has recovered from African swine fever. We hope to maintain this momentum in 2021," said Nickl. Bayer expects revenue to grow by approximately 2021% in 3 to €42 to €43 billion. Crop Science is even expected to grow by 4%.
Bayer has used the past year to lay the foundation for further growth in the future, explains Baumann. "For example, we see opportunities in new technologies such as gene editing (Cripsr-Cas) as a solution to feed the growing world population and adapt to climate change." For example, Bayer has introduced the new Vitala maize variety as part of a pilot project in Mexico. Shorter straw makes this variety more resistant to extreme weather conditions, which are more common due to climate change. In addition, the variety can use less water and nitrogen to achieve the same yields. Bayer has high hopes for these developments.
Solution for Roundup lawsuits insight
"Another important goal remains to resolve the glyphosate disputes in the US," Baumann said. "In 90.000 cases we have reached an agreement with the prosecutors or found that the cases do not meet the criteria. At the beginning of February we took another big step forward. New proposals have been made for the pending and any future claims. These proposals are lying now in the US court pending approval."
To make the company future-proof, Bayer will focus more on its core tasks. As a result, it was announced yesterday that Bayer plans to sell its Environmental Science Professional division. Crop Science must once again fully focus on primary agriculture.
Jurphaas Lugtenburg
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