German-headquartered pharma company Bayer delivered robust operational performance in 2020. “Our operational strength in these turbulent times shows just how resilient our businesses are, even during the pandemic,” said Werner Baumann, Chairman of the Board of Management, on Thursday during the company’s Financial News Conference. “We also used the past year to lay the foundation for future growth. We continued to drive forward our company’s transformation, advanced our product pipelines and invested in new technologies across all our business units,” Baumann said. For 2021, Bayer expects to achieve solid operational growth and stable earnings at constant currencies.

In the pharmaceuticals business alone, Bayer entered into more than 25 acquisition or collaboration agreements in 2020, with the largest acquisition being biotech company Asklepios BioPharmaceutical, Inc. (AskBio). “With AskBio and BlueRock Therapeutics, we are building a platform for cell and gene therapy and are further consolidating our emerging leadership in this highly promising and fast-growing field,” explained Baumann. Bayer also systematically invested in innovation in other areas in 2020, such as personalized nutrition, with the company taking a majority stake in Care/of for its Consumer Health business, he said. In addition, Crop Science launched its new short-stature corn Vitala™ in Mexico as part of a pilot project, Baumann noted.

Since the beginning of the pandemic, Bayer has introduced extensive protective measures across all of its sites and has supported employees working from home. “Our primary focus has of course always been on our responsibility toward our roughly 100,000 employees around the globe – and especially on providing what are in some cases essential products and services to customers, patients and farmers,” said Baumann, who also highlighted the commitment shown by the company’s workforce. “Our employees have displayed great initiative in doing what they can to help since the pandemic began,” he said. Bayer has also entered into an extensive partnership with biopharmaceutical company CureVac N.V., Germany, as part of efforts to combat COVID-19. “Our initial focus is on supporting the clinical studies and approval process for CureVac’s vaccine,” Baumann explained. “At the same time, preparations are underway in Wuppertal and across our global production network so that we can help with vaccine manufacture, too, as soon as possible.”

Group sales level with prior year 

Group sales amounted to 41.400 billion euros in 2020. Adjusted for currency and portfolio effects (Fx & portfolio adj.), sales were level year on year (plus 0.6 percent). At 11.461 billion euros, EBITDA before special items also came in at the prior-year level (minus 0.1 percent). Currency effects diminished sales by 1.941 billion euros and EBITDA before special items by 741 million euros. EBIT amounted to minus 16.169 billion euros (2019: plus 4.162 billion euros) after net special charges of 23.264 billion euros (2019: 2.813 billion euros). The special charges particularly comprised provisions for the agreements reached in the glyphosate, dicamba, PCB and Essure™ litigations. Other special items mainly included impairment charges at Crop Science. Net income came in at minus 10.495 billion euros (2019: plus 4.091 billion euros), while core earnings per share from continuing operations were level with the prior year, at 6.39 euros (plus 0.2 percent). “If you factor out the negative currency effects, core earnings per share would have been just under seven euros, which is almost the level we had been targeting before the pandemic spread,” Baumann said.

Outlook 2021:

The company expects to post sales of approximately 42 billion to 43 billion euros, which corresponds to an increase of about 3 percent (Fx & portfolio adj.). The company expects to generate an EBITDA margin before special items of around 27 percent. This would correspond to EBITDA before special items of 11.2 billion to 11.5 billion euros. Bayer plans to generate core earnings per share of approximately 6.10 to 6.30 euros. Free cash flow is expected to come in at between minus 3 billion and minus 4 billion euros. This figure takes into account an anticipated negative impact of around 8 billion euros from payments to resolve litigations. The company also expects net financial debt to be approximately 36 billion to 37 billion euros as of December 31, 2021.

Based on the exchange rates on December 31, 2020, Bayer expects in 2021 to post sales of approximately 41 billion euros, an EBITDA margin before special items of approximately 26 percent and thus EBITDA before special items of between 10.5 billion and 10.8 billion euros, and core earnings per share of approximately 5.60 to 5.80 euros. On this basis, the company anticipates a free cash flow of minus 3 billion to minus 4 billion euros and net financial debt of 35 billion to 36 billion euros.