Bayer AG has announced that the company confirm its adjust outlook for 2020 and expect 2021 sales at around 2020 level despite meaning headwind from the COVID-19 pandemic , especially in the agrarian market . Core earnings per plowshare in 2021 are expected to be slightly below 2020 stage at unvarying interchange rate . To further get on Bayer in a market environment that go forward to be challenging , its Board of Management has decided to introduce additional operable savings of more than 1.5 billion euro annually as of 2024 , on top of annual earnings contributions of 2.6 billion euro as of 2022 , which were foretell in November 2018 . The incremental cash menstruation from these travail will mainly be allocated for investments in further innovation , profitable growth opportunities and debt reduction .
“ Despite the difficult food market surround , the urgent penury for innovative healthcare and factory farm solutions has never been more evident . Our strategy of building conduce businesses in biography sciences remains unchanged , ” say Werner Baumann , Chairman of the Board of Management of Bayer AG . “ We believe the additional measures are necessary to speed up our overall shift , generate margin improvements and thus asseverate our competitory profile . They will help palliate the impact of COVID-19 on our business . We must adapt our cost structures to the changes in market condition and at the same metre generate resources for further investment in innovation and outgrowth . We also remain committed to reducing our net fiscal debt . ”
Like most company , the COVID-19 pandemic has led to headwinds in the 2020 fiscal year for Bayer , with significant currency effects presenting an extra burden on sales and salary growth . However , Bayer await to offset the impact of lower tax revenue in the Crop Science and Pharmaceuticals division through appropriate countermeasure , such as the speedup of be efficiency programs and cost contingencies . “ We can therefore sustain our adapt outlook for 2020 , ” Baumann said .
For 2021 , increment and cash flow generation are expected to be lowly than planned and can only be partially compensated by further nest egg step . The troupe now have a bun in the oven 2021 sales agreement to come in at around the 2020 levels , with 2021 effect salary per share somewhat below 2020 levels , based on changeless exchange charge per unit .
The unmediated and collateral consequence of the pandemic will be deep than bear on the Crop Science business concern . The farming sphere , in which Bayer has a leading function , is characterized by shorten growth prospect due to low good prices for major crops , vivid competitor in soy , and reduce biofuel economic consumption . This is compounded by minus currency effects , some of which are substantial as in the case of the Brazilian Real . This billet is improbable to improve substantially in the good - full term . Against that background signal , Bayer expects to take non - cash impairment kick in the mid to high - single - finger’s breadth billion - euro cooking stove on asset in the agricultural business .
The Pharmaceuticals business is anticipate to riposte to growth in 2021 . To tone the mid- and longer - full term growth potential drop of the Pharmaceuticals business , further increase in investments are plan to bolster the production pipeline with a next - multiplication innovation program featuring novel mechanisms of action mechanism as well as in - licensing agreement and bolt - on acquisitions .
The Consumer Health patronage has shown strong business carrying out and expects to outpace peer increment in the total year . The division will complement its constituent growth with pocket-sized bolt - on acquisition and in - licensing opportunities in high - likely segments over the come years .
The additional savings will benefit the visibility of Bayer in all divisions . Bayer also design to further optimize its working capital and capital outgo . Furthermore , the company is reviewing options to exit non - strategical businesses or brand below the divisional level . The Board of Management intends to leave Bayer ’s dividend policy , which have 30 to 40 percent of core earnings per share to stockholders each year , in place . earnings outs in the coming years are expected at the down destruction of this corridor rather than at the upper end as in previous years .
The extra operational savings measures , which may also pass to extra job reductions , are presently in the other microscope stage of development . They will be talk over with the relevant inner consistence , including employee representatives , and declare once finalize . Bayer will follow out the design measuring fairly and responsibly .
The company will show a detailed prognosis for 2021 along with an updated mid - condition outlook when it publish its results for the full year 2020 .
