Leverkusen, Germany: The Bayer Group registered strong growth in the second quarter of 2021.

“Sales at all divisions increased by a double-digit percentage after adjusting for currency and portfolio effects, and we expect this positive sales momentum to continue in all our businesses,” said Werner Baumann, Chairman of the Board of Management at Bayer, an Executive Member of the Asian Golf Industry Federation.

“We are therefore upgrading our full-year guidance, and now anticipate higher sales and core earnings per share than in our previous forecast,” he added.

Presenting the company’s half-year financial report, Baumann said: “We have achieved major successes in developing and launching drugs, some of which have blockbuster potential. We have successfully expanded the launch of our cancer drug Nubeqa and are continuously surpassing our own expectations.

“We have continued to advance the launch of Verquvo for the treatment of symptomatic chronic heart failure, with approvals gained in the European Union and Japan, and we’re now in the process of launching Kerendia in the United States.”

The latter product was approved in July by the US Food and Drug Administration for the treatment of adult patients with chronic kidney disease and type 2 diabetes.

Bayer has also announced the acquisition of Vividion Therapeutics, as the company continues to make strides in implementing its strategy for the Pharmaceuticals Division.

“Vividion’s unique technologies and special expertise will significantly strengthen our drug discovery capabilities,” Baumann emphasised.

Bayer recently formed its own cell and gene therapy platform as part of its transformation strategy for pharmaceuticals. The platform already has potentially ground-breaking medical innovations in clinical development, such as a therapy for the treatment of Parkinson’s.

Group sales in the second quarter increased by 12.9 per cent on a currency-and portfolio-adjusted basis (Fx & portfolio adj.) to 10.854 billion euros, after the prior-year period had been significantly impacted by the restrictions introduced in response to Covid-19. EBITDA before special items fell by 10.6 per cent to 2.577 billion euros.

Negative currency effects impacted sales by 524 million euros and EBITDA before special items by 153 million euros, with the latter also being diminished by allocations to provisions for variable compensation.

EBIT came in at minus 2.281 billion euros (Q2 2020: minus 10.784 billion euros) after net special charges of 3.901 billion euros (Q2 2020: 12.511 billion euros).

The special charges related primarily to the previously announced allocation to provisions – in the discounted amount of around 3.5 billion euros – in connection with the glyphosate litigations. Other special charges related to impairments and restructuring. Net income amounted to minus 2.335 billion euros (Q2 2020: minus 9.548 billion euros), while core earnings per share from continuing operations increased by 1.3 per cent to 1.61 euros.

Free cash flow declined by 17.8 per cent to 1.152 billion euros. Net financial debt as of June 30, 2021, increased to 34.361 billion euros, up 1.3 per cent from March 31, 2021. Cash inflows from operating activities and positive currency effects almost offset the outflow for the dividend payment and settlement payments for litigations in the United States.

In the agricultural business (Crop Science), Bayer increased sales by 10.6 per cent (Fx & portfolio adj.) to 5.021 billion euros, with growth in all regions.

The division registered double-digit percentage gains in Latin America and Asia-Pacific as well as significant growth in North America after adjusting for currency and portfolio effects.

Fungicides (Fx & portfolio adj. plus 22.9 per cent) and Herbicides (Fx & portfolio adj. plus 16.2 per cent) achieved particularly strong gains.

Fungicides registered a significant increase in volumes, primarily in Latin America thanks to the Fox Xpro product, and also in North America due to the launch of new products such as Delaro Complete.

The increase in sales at Herbicides was driven by increased volumes and prices, especially in North America, which saw higher volumes for XtendiMax and increased prices for Roundup.

Business was also up at Soybean Seeds & Traits, which recorded growth of 9.1 per cent (Fx & portfolio adj.) thanks to higher volumes in North America. Sales at Corn Seed & Traits advanced by 8.6 per cent (Fx & portfolio adj.), with business benefiting in particular from increased volumes in Latin America and higher prices in North America.

EBITDA before special items at Crop Science decreased by 25.4 per cent to 1.018 billion euros, giving a margin of 20.3 per cent. Higher prices and volumes along with contributions from on-going efficiency programmes only partly offset an increase in costs, and particularly in the cost of goods sold.

Earnings were also diminished by a negative product mix, currency effects of 111 million euros, and the later receipt of license revenues.