On Wednesday, Bayer (BAYN.DE) indicated it might split the company in line with its business segments, Pharmaceuticals, Consumer Health, and Crop Science. It also confirmed that if the split went ahead, it is likely to be a two-way and not a three-way division of its diversified activities.
Bayer considers a business split after 2023 financial performance projections
Bayer’s chief executive officer, Bill Anderson, said:
We are looking closely at our structural options. We have an expert team – including external financial advisors – evaluating them. They’re reviewing market conditions, what structural changes would mean for our value creation, one-time costs and dis-synergies, cash flows and leverage ratios, tax leakage, and other criteria.
The company indicated it will make further details available after its Capital Market Dat and release of its annual financial report in March 2024. Bayer, however, anticipates more financial challenges in the year to come.
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After reporting a 31.1% drop in Q3 earnings before EBITDA to less than €1.7bn, the company confirmed a bleak full-year outlook. On the Bayer website, Anderson indicated they expected this paltry performance and said:
We know that this requires a strong fourth quarter. We’re fully focused on delivering exactly that – and the team is confident in our outlook.
Anderson, who stepped into his leadership position in June, reflected on the organisation’s financial performance so far this year and emphasised that approximately €50bn in revenue but no cashflow does not cut it. He also emphasised the company’s mission of ‘health for all, hunger for none’ as the cornerstone to strengthen finances and power innovation.
