Bayer delivers robust performance despite pandemic – foundation laid for future growth
The Bayer Group 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 February 25, 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.”
Robust operational performance in 2020
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).
In the agricultural business (Crop Science), Bayer increased sales by 1.3 percent (Fx & portfolio adj.) to 18.840 billion euros. The businesses in the Latin America and Asia/Pacific regions contributed to the increase. Sales growth was particularly strong at Fungicides and Environmental Science, with these businesses expanding in all regions.
Pharmaceuticals grows earnings despite decline in sales, EBITDA before special items at Pharmaceuticals advanced by 2.6 percent to 6.016 billion euros.
Sales of self-care products (Consumer Health) increased by 5.2 percent (Fx & portfolio adj.) to 5.054 billion euros. The division’s performance was ahead of market, with all regions reporting growth. The greater focus on health and prevention in connection with the COVID-19 pandemic generated substantial growth in demand, especially in the Nutritionals category, which saw sales advance by 22.6 percent (Fx & portfolio adj.). Sales were also up in the Pain & Cardio, Dermatology and Digestive Health categories.
Progress made on sustainability targets
With regard to the non-financial Group targets, Bayer has reported on the progress made in 2020 toward meeting its ambitious sustainability goals for 2030. These are centered around the health of people and the planet, with a particular focus on climate protection. The company’s Sustainability Report, which was also published on Thursday, looks at these aspects in detail. Last year, Bayer drew up a roadmap based on the United Nations’ Sustainable Development Goals and took steps to implement it. The independent Science Based Targets initiative reviewed Bayer’s climate protection goals and confirmed that, by reducing its own emissions, the company is helping to limit global warming to 1.5°C and fulfill the Paris Climate Agreement. For example, Bayer has now switched to 100 percent green electricity in Spain and Mexico. As part of its efforts to protect the climate, the company has also initiated a pilot project in the United States and Brazil to help farmers adopt climate-friendly practices and utilize carbon capture and storage for their commercial benefit.
In line with its goals of reaching more people on low incomes, the company has launched the “Better Farms, Better Lives” program, for example. Under this program, the company has, for instance, provided more than 1.5 million smallholder farmers with access to modern crop protection products. In collaboration with The Challenge Initiative, Bayer is also providing support for solutions in the area of family planning and reproductive health for women and girls in Africa.
The establishment of the external Sustainability Council marked another important step. Furthermore, attainment of the sustainability targets has been incorporated into the long-term variable compensation of members of the Board of Management and other managers with a 20 percent weighting in the success factors starting in 2021. This highlights the importance of these targets for the company.
