Bayer Gains on Projecting Profits Will be Higher This Year

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Bayer Gains on Projecting Profits Will be Higher This Year

By Dhirendra Tripathi – Bayer AG (DE: BAYGN ) stock traded 1.5% higher in Frankfurt trading Tuesday after the company forecast its adjusted profits will return to growth in the current year.

The company said earnings before interest, tax, depreciation, and amortization before special items should touch 12 billion euro ($13.4 billion) in 2022, when adjusted for currency swings, up 7%. This compares to a 2.5% fall in annual adjusted EBITDA in 2022 to $11.2 billion as the company weathered cost pressures and “significant currency headwinds” while attempting to offset those challenges with a price hike.

Adjusted EBITDA was almost flat in the fourth quarter.

The company is guiding for a 5% growth in 2022 revenue to around 46 billion euro, assuming “a stable geopolitical environment in Eastern Europe, which in the meantime has changed dramatically.” Bayer said it will closely monitor and mitigate these risks to the extent possible.

Bayer is anticipating sales growth of around 7% at crop science, the company’s largest business with around 45% share in total sales. According to the company, earnings growth at the division will come in from mark-ups in prices, market share gains as well as efficiency measures to offset cost pressures.

The company sees 3-4% sales growth at pharmaceuticals and around 4-5% at consumer health.

Sales in the fourth quarter rose 11.2% to 11.1 billion euro. All three businesses grew. Adjusted profit per share almost tripled to 1.18 euro, driven by both higher volumes and price increases.

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