Group sales and earnings per share increase
Sales of the Bayer Group rose by 8.9 percent to 44.081 billion euros in 2021 after adjusting for currency and portfolio effects (Fx & portfolio adj.). EBITDA before special items fell by 2.5 percent to 11.179 billion euros. The Group was able to largely offset an increase in the cost of goods sold – partly inflation-related – as well as significant currency headwinds. The EBITDA margin before special items was 25.4 percent. EBIT amounted to 3.353 billion euros (2020: minus 16.169 billion euros) after net special charges of 3.942 billion euros (2020: 23.264 billion euros) that mainly resulted from the allocation to provisions in connection with the glyphosate litigations. Further special charges were mostly attributable to established restructuring programs, which were offset by impairment loss reversals primarily attributable to the Crop Science Division. Net income came to 1.000 billion euros (2020: net loss of 10.495 billion euros), while core earnings per share from continuing operations rose by 1.9 percent to 6.51 euros.
Free cash flow increased by 5.4 percent to 1.415 billion euros in 2021 despite higher payments in connection with litigations. “This once again underscores our operational strength,” said CFO Wolfgang Nickl. Net financial debt increased by 10.3 percent year on year to 33.137 billion euros in 2021. Cash inflows from operating activities were offset by outflows for dividends and the acquisition of U.S. biopharmaceutical company Vividion Therapeutics, Inc., as well as settlement payments in the United States and negative currency effects.
The Board of Management and Supervisory Board of Bayer AG will propose to the Annual Stockholders’ Meeting on April 29, 2022, that the dividend remain unchanged at 2.00 euros per share for fiscal 2021. The company is thus upholding its dividend policy of distributing 30 to 40 percent of core earnings per share. With 982.42 million shares entitled to the dividend, the total dividend payment would amount to 1.965 billion euros, as in the previous year.
Crop Science achieves record sales and grows earnings
In the agricultural business (Crop Science), Bayer increased sales by 11.1 percent (Fx & portfolio adj.) to 20.207 billion euros. The division grew sales significantly across all regions, especially in Latin America and Asia/Pacific. At Corn Seed & Traits, sales were up 9.2 percent (Fx & portfolio adj.) thanks to increased market share in North America and Latin America, as well as to higher prices worldwide. Bayer grew sales by double-digit percentages at Herbicides (15.4 percent), Fungicides (13.8 percent) and Soybean Seed & Traits (14.9 percent) on a currency- and portfolio-adjusted basis. The main drivers were price increases for glyphosate-based products at Herbicides, and higher Fox Xpro™ volumes in Latin America at Fungicides. Soybean Seed & Traits benefited from higher volumes and prices, particularly in North America and Latin America.
EBITDA before special items at Crop Science increased by 3.6 percent to 4.698 billion euros, resulting in a margin of 23.2 percent. The growth in earnings was mainly driven by higher prices and volumes as well as contributions from ongoing efficiency programs. By contrast, earnings were diminished by a largely inflation-fueled increase in the cost of goods sold, as well as by negative currency effects of 387 million euros.
Bayer sees encouraging steps regarding the glyphosate litigation in the United States. The U.S. Supreme Court showed interest in the Hardeman case by inviting the Solicitor General, representing the U.S. Government, to file a brief on whether this case should be accepted. Moreover, the company has won two consecutive jury trials on product liability cases in California. The company is continuing to execute its five-point plan and is prepared for any outcome at the Supreme Court.