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Investing.com -- Bayer (OTC:BAYRY)’s fourth-quarter results for 2024 came in slightly ahead of expectations, though the company’s performance across its core divisions lagged consensus estimates, sending its share up by over 4% on Wednesday.
The German pharmaceutical and agricultural giant reported adjusted EBITDA of €2.35 billion, above the consensus forecast of €2.27 billion.
Free cash flow exceeded expectations, while the "other" segment outperformed. However, adjusted EBITDA margins declined by 550 basis points year-over-year.
Full-year 2025 guidance from Bayer projects EBITDA in the range of €9.3 billion to €9.8 billion at closing foreign exchange rates, which aligns with consensus expectations.
Core earnings per share for the year are expected to be between €4.25 and €4.75, broadly in line with the consensus of €4.52.
Free cash flow guidance, however, came in softer than expected, with Bayer anticipating a range of €1.3 billion to €2.3 billion.
Net financial debt is expected to fall to €31.2 billion-€32.2 billion by the end of the year from €32.6 billion previously.
Total (EPA:TTEF) group sales for the quarter were reported at €11.73 billion, exceeding the consensus expectation of €11.30 billion.
Organic growth remained flat, with volumes down 0.3% and prices slightly up by 0.4%. Foreign exchange effects weighed on results, reducing revenue by 1.2%.
Bayer’s Crop Science division posted adjusted EBITDA of €917 million, below consensus estimates.
The unit saw sales decline by 2.3% on an organic basis, pressured by lower prices and adverse currency movements.
The company expects sales in the division to range between a 2% decline and 2% growth in 2025, with a 200-300 basis point impact from the loss of the US Dicamba label and the expiration of the Movento EU registration.
Seeds sales are projected to decline slightly in the US but grow elsewhere. Despite these challenges, Bayer anticipates maintaining EBITDA margins as cost savings offset these headwinds.
The Pharmaceuticals segment delivered €1.10 billion in adjusted EBITDA, missing consensus estimates.
Organic sales growth came in at 2.4%, driven entirely by price increases, while volumes remained flat.
The company has guided for a sales decline of between 1% and 4% in 2025, with EBITDA margins expected to range between 23% and 26%.
Longer-term, Bayer expects revenue growth to resume post-2027, with margins improving from 2028 onward.
The Consumer Health division reported adjusted EBITDA of €361 million, well below Jefferies’ estimate of €471 million and slightly under consensus expectations.
Sales declined 0.9% organically, with volumes down 4% while prices rose 3.1%. For 2025, Bayer projects sales growth of 2% to 5% at constant currency, with expectations of a more balanced volume-price mix and broad-based regional expansion. EBITDA margins for the segment are forecast to be between 23% and 24%.
The "Other" segment performed significantly better than expected, reporting an adjusted EBITDA loss of €33 million, compared to Jefferies’ projection of a €243 million loss and a consensus estimate of a €160 million loss.
Bayer’s operating cash flow in the quarter reached €5.61 billion, up from €4.99 billion a year ago. Free cash flow came in at €3.31 billion, comfortably surpassing the consensus expectation of €2.53 billion but down from the €4.26 billion reported in the prior year.
Net financial debt stood at €32.63 billion, translating to a leverage ratio of 3.2 times EBITDA. The company declared a dividend of £0.11 per share.