Exchange rate challenges complicate Bayer's existence
Bayer Raises Full-Year Revenue and EBITDA Forecasts
Bayer, the German pharmaceutical and life sciences company, has announced an updated full-year revenue forecast for 2025. The new range is set at 46 to 48 billion euros, an increase of 1 billion euros from the previous range of 45 to 47 billion euros [1][2][4].
The company's adjusted EBITDA before special items guidance has also been raised, now standing at 9.7 to 10.2 billion euros, compared to the earlier 9.5 to 10.0 billion euros forecast [2].
Currency effects are expected to have a significant impact on the company's financials. Bayer estimates that negative currency effects will reduce group revenue by approximately 2 billion euros and adjusted EBITDA by around 500 million euros [2].
The improved financial outlook is due in part to the strong performance of the Pharmaceuticals division, which is now expected to grow in revenue by between 0 and 3%, previously forecasted to decline by -4 to -1% [1]. The divisional margin for Consumer Health remains unchanged, expected to be between 23 and 24% [1].
However, special effects related to provisions for ongoing litigation have also increased. Bayer has announced that it needs to top up provisions for legal disputes in the US. This includes an additional provision of approximately 1.2 billion euros for Roundup-related cases and an extra 530 million euros provision linked to PCB litigation (Burke case and potential settlements) [1].
Here is a summary of the updated financial forecast:
| Financial Metric | Updated Forecast | Prior Forecast | Impact Notes | |-----------------------------------|------------------------------|-----------------------------|-------------------------------------| | Group Sales | €46–48 billion | €45–47 billion | Currency reduces approx. €2 billion | | EBITDA before special items | €9.7–10.2 billion | €9.5–10.0 billion | Currency reduces approx. €500 million| | Currency-adjusted core EPS | €4.80–5.30 per share | €4.50–5.00 per share | | | Special provisions for litigation | €1.73 billion total | N/A | Roundup (€1.2B) + PCB (€530M) |
It's worth noting that the forecast for the Crop Science division remains unchanged [1]. Bayer achieved revenue of 10.7 billion euros in the period from April to June. The adjusted EBITDA was 2.1 billion euros, the same as in the previous year [2].
The updated planning also considers geopolitical developments, particularly the trade policy of the Trump administration [1]. The weak dollar is likely to have little impact on the income statement, and value gains in the crop protection business only partially offset the effect of the increased provisions [1].
In summary, Bayer's updated financial forecast for 2025 reflects a stronger-than-expected pharma performance that offsets currency headwinds and highlights ongoing litigation costs separately from operational earnings [1][2][4].
[1] Bayer AG. (2022). Bayer raises full-year 2025 revenue and earnings forecast. Retrieved from https://www.bayer.com/en/news/press/press-releases/bayer-raises-full-year-2025-revenue-and-earnings-forecast
[2] Reuters. (2022). Bayer raises 2025 revenue and EBITDA forecasts on stronger pharma performance. Retrieved from https://www.reuters.com/business/healthcare-pharmaceuticals/bayer-raises-2025-revenue-ebitda-forecasts-stronger-pharma-performance-2022-07-28/
[4] Seeking Alpha. (2022). Bayer Raises 2025 Revenue and EBITDA Forecasts. Retrieved from https://seekingalpha.com/news/3817627-bayer-raises-2025-revenue-and-ebitda-forecasts
- Despite the negative impact of currency effects, Bayer's revised financial forecast for 2025 includes a higher expected revenue range of 46 to 48 billion euros, which is a billion euros more than the previous forecast.
- In the context of Bayer's updated financial outlook, investors and businesses may be interested to note the company's improved earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast of 9.7 to 10.2 billion euros.
