Bayer Q1 sales dips as crop, pharma segments decline; glyphosate prices weigh on outlook
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Bayer (OTCPK:BAYRY) (OTCPK:BAYZF) said it saw a slow start to year as Q1 sales in Crop Science and Pharmaceuticals both saw a decline, while Consumer Health segment grew.
CEO Werner Baumann said that for the remainder of the year Bayer sees potential risks mainly due to significantly reduced market price expectations for glyphosate-based products.
"We continue to expect performance to improve in our other businesses in the second half of the year,â Baumann added. "Overall, we expect target attainment to come in at the lower end of our guidance."
Q1 core EPS fell -16.4 Y/Y on reported basis to â¬2.95. The German conglomerate said Group earnings were mainly weighed down by the glyphosate business and inflation, and were also impacted by R&D investment at Pharmaceuticals, which remained high.
Group sales fell -1.7% Y/Y (-1.1% on a currency and portfolio-adjusted basis, or Fx & portfolio adj.) to ~â¬14.39B.
Sales from Crop Science business in Q1 declined -1.1% Y/Y (-1.1% on Fx & portfolio adj.) to ~â¬8.35B.
Bayer said Crop Science division recorded a significant decline in sales of glyphosate-based products which was almost fully offset by the other parts of its business.
Q1 sales in Herbicides fell +24% Y/Y (+24.3% Y/Y on Fx & portfolio adj. basis) to ~â¬1.89B.
Herbicides business saw a significant decline in sales due to lower volumes and prices for its glyphosate-based products. However, other herbicide products saw higher sales due to increased prices, according to the company.
Sales at Corn Seed & Traits in Q1 climbed +18.6% Y/Y (+15.8% on Fx & portfolio adj. basis) to ~â¬3.27B.
Sales from the Pharmaceuticals division declined -4.7% Y/Y (-3.1% on Fx & portfolio adj.) to ~â¬4.41B.
Bayer said the decline was mainly due to tender procedures in China, especially for Xarelto and Adalat. Meanwhile, pandemic related developments also weighed on sales in China.
However new products â cancer drug Nubeqa and Kerendia for chronic kidney disease linked with type 2 diabetes, saw gains â alongside growth in the Radiology business.
Blood clot prevention therapy Xarelto sales fell -13.2% Y/Y (-12.8% on Fx & portfolio adj.) to ~â¬943M, while high blood pressure drug Adalat's sales declined -25.9% Y/Y (-23.9% on Fx & portfolio adj.) to ~â¬177M.
Sales of wet-AMD drug Eylea, developed with Regeneron (NASDAQ:REGN), grew +1.9% Y/Y (+4.5% Fx & portfolio adj.) to â¬789M.
Prostate cancer drug Nubeqa sales in Q1 grew +134.2% Y/Y (+130.7% Fx & portfolio adj.) to â¬178M. Kerendia sale rose +372.7% Y/Y (+361.7% Fx & portfolio adj.) to â¬52M.
Gadovist product family sales grew +9.3% Y/Y (+10.5% Fx & portfolio adj.) to â¬118M.
Birth control product Mirena/Kyleena/Jaydess sales increased +2.7% Y/Y (0.9% Fx & portfolio adj.) to â¬303M.
Sales from Consumer Health segment rose +4.0% Y/Y (+4.1% Fx & portfolio adj.) to ~â¬1.57B, mainly driven by Allergy & Cold and Dermatology categories. However growth was slowed by temporary supply constraints, the company added.
Sale from Allergy & Cold segment rose +19.2 Y/Y (+15.9% Fx & portfolio adj.) to â¬410M, while Dermatology division grew +10.2 Y/Y (+10.3% Fx & portfolio adj.) to â¬345M.
Outlook:
Bayer confirmed its outlook but target attainment is expected to come in at the lower end.
During Q4 results the company noted that on a currency-adjusted basis, it expects sales between â¬51B and â¬52B in 2023. Meanwhile, core EPS range of â¬7.20 to â¬7.40 on a currency-adjusted