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Email Content: Poultry Industry News, Comments and more by Simon M. Shane

Beleaguered Bayer Reports Lower Net Profit for FY 2018


Bayer AG reported net earnings of $1.90 billion on sales of $44.35 billion for FY 2018 ending December 31st 2018.  EPS declined from $4.1 in FY 2017 to $2.0 for the most recent fiscal year.  Long-term debt stands at $39.98 billion partly due to the purchase of Monsanto for $63 billion.  Bayer has an asset value of $141.5 billion including $20.2 billion in intangible assets.


The Animal Health segment generated sales of $1.68 billion or 3.8 percent of company revenue with and EBITDA of $448 million or 4.2 percent of total company EBITDA.


Among problems facing the company and CEO Werner Baumann is the expiration of drug patents on two human pharmaceutical products representing 35 percent of sales in 2018.  The company has a relatively thin pipeline and will obviously have to purchase drugs in late stages of development to maintain revenue in the pharmaceutical sector.  The second overhang relates to lawsuits filed against the company alleging carcinogenicity of glyphosate, the active ingredient of Roundup™.


It is rumored that Bayer is currently considering sale of the Animal Health business which is heavily oriented towards antiparasiticals.  To be attractive, the segment would have to offer synergy to a potential purchaser which narrows the scope of potential acquirers given that the recent wave of consolidations has limited companies that might be interested in the Bayer animal health business.


Copyright 2019 Simon M. Shane