Bayer Reaffirms 2025 Outlook Following Robust First-Quarter Performance, Showcases Strength in Pharmaceuticals and Strategic Advancements in Crop Science
Bayer AG has started 2025 with a strong operational footing, underscoring confidence in its full-year guidance amid an increasingly complex economic and geopolitical backdrop. In its first-quarter financial report, presented on Tuesday, CEO Bill Anderson emphasized the company’s promising start and reaffirmed Bayer’s strategic focus for the year. The company’s performance in the Pharmaceuticals division stood out with significant growth in both revenue and profitability, serving as a strong validation of its evolving operating model.
“This first quarter puts us in a good position to deliver in what will be a very challenging and important year for Bayer,” said Anderson. “Our strong Pharmaceuticals performance is a promising sign that our new operating model is working — empowering teams to do more with less.” Bayer now expects the Pharmaceuticals segment to close the year at the upper end of its forecasted sales and margin ranges.
At the same time, Anderson stressed that Bayer continues to actively monitor global developments, including inflationary pressures, evolving trade dynamics, and the broader macroeconomic climate. “We remain vigilant, particularly around geopolitical and economic uncertainties,” he said.
Chief Financial Officer Wolfgang Nickl echoed this sentiment while providing reassurance regarding the company’s overall financial resilience. “Given our current understanding of tariff developments and our ongoing mitigation strategies, we are positioned to manage potential impacts effectively,” he stated. “We are reaffirming our guidance for the full year 2025 at constant currencies.”
Advancing Long-Term Strategy in Crop Science
A central focus of the company’s long-term growth strategy is the transformation underway within the Crop Science division. CEO Bill Anderson reaffirmed Bayer’s strategic vision for this segment, building on commitments detailed at the Annual Stockholders’ Meeting held in April. With a sharpened emphasis on profitability, the Crop Science division is undergoing a five-year operational transformation aimed at countering industry-wide cost pressures and unlocking new growth opportunities.
According to Bayer, Crop Science is expected to outpace industry growth over the next several years and generate more than €3.5 billion in additional revenue from innovation by 2029. Profitability targets are also ambitious, with the division aiming for an EBITDA margin before special items in the mid-20s by the same year. On the cash flow front, Bayer expects Crop Science to deliver a free operating cash flow exceeding €3 billion annually by 2029.
To achieve these goals, Bayer has launched a comprehensive optimization plan focusing on cost reduction and innovation. The plan includes streamlining the product portfolio, sharpening R&D investments on high-value innovations, and improving the efficiency of the production network. These efforts are not only intended to drive mid-term financial performance but also to increase the division’s ability to adapt to unpredictable market dynamics.
As Rodrigo Santos, head of the Crop Science division and a member of Bayer’s Board of Management, noted during an investor webinar, the division is taking bold steps to address current challenges. “We are radically focusing on improving profitability, delivering top-notch innovation, and leveraging new value pools. We are taking decisive action on our challenges, and we are focusing the business to deliver innovations faster than ever before,” he said.
Crop Science is also targeting long-term sustainability by promoting regenerative agriculture practices. With the global population expected to reach 10 billion by 2050, Bayer believes agriculture must evolve to become more productive and environmentally sustainable. Key innovations already in the pipeline include the Preceon™ Smart Corn System, Vyconic™ soybeans — the first to include tolerance to five different herbicides — and icafolin, a novel herbicide designed to reduce environmental impact.
Group Financial Overview: Stable Sales, Pressured Earnings
Bayer reported total group sales of €13.738 billion for the first quarter of 2025, remaining effectively flat on a currency- and portfolio-adjusted basis (down 0.1%). Currency fluctuations negatively impacted reported sales by €55 million, a marked improvement compared to a €525 million hit in Q1 2024.
EBITDA before special items came in at €4.085 billion, reflecting a 7.4% year-over-year decline. This decrease was primarily driven by weaker results in the Crop Science division, increased long-term incentive (LTI) expenses, and a €165 million adverse currency effect largely tied to hyperinflationary markets. Reported EBIT declined 24.8% to €2.324 billion due to €587 million in special charges — nearly triple the amount recorded in Q1 2024. These charges stemmed mostly from legal provisions related to the Roundup™ litigation and continued restructuring expenses.
Net income for the quarter fell 35.1% year over year to €1.299 billion. Core earnings per share dropped by 11.7% to €2.49, largely reflecting the deterioration in Crop Science profitability.
However, Bayer managed to improve free cash flow, narrowing the quarterly outflow to minus €1.528 billion compared to minus €2.626 billion a year earlier. The improvement was largely attributed to advance payments from Crop Science customers that partially offset seasonal cash flow pressures typical for the first quarter. As of March 31, 2025, Bayer’s net financial debt stood at €34.255 billion — up 5.0% from year-end 2024, but down 8.6% compared to the same period in the previous year.
Crop Science: Expected Headwinds Materialize
As anticipated, Crop Science faced moderate headwinds in the first quarter, with sales declining 3.3% on a currency- and portfolio-adjusted basis to €7.580 billion. The decrease was primarily driven by regulatory setbacks, including the vacatur of the U.S. label for dicamba-based herbicides and the expiration of the Movento™ registration in Europe, both of which impacted product demand across Seeds, Traits, and Insecticides.
Sales of glyphosate-based herbicides dropped sharply, reflecting strategic volume phasing into later quarters in Latin America and North America. However, non-glyphosate herbicides performed better, benefiting from higher volumes against a weaker comparative quarter. Fungicide sales remained steady, with modest volume gains offsetting slight price erosion.
EBITDA before special items in Crop Science declined by 10.2% to €2.557 billion, driven largely by the drop in sales and ongoing regulatory impacts. The EBITDA margin before special items contracted by 2.3 percentage points to 33.7%.
Pharmaceuticals: Innovation-Driven Momentum
In contrast to the challenges in Crop Science, Bayer’s Pharmaceuticals division posted a strong quarter, with sales rising 4.1% (Fx & portfolio adj.) to €4.548 billion. The performance was underpinned by standout growth from key new products. Nubeqa™, Bayer’s prostate cancer therapy, saw a 77.5% jump in sales, while Kerendia™, used for chronic kidney disease associated with type 2 diabetes, surged 86.6%.
Bayer also reported continued momentum for ophthalmology treatment Eylea™ (up 4.7%) and radiology solutions such as CT Fluid Delivery systems and Ultravist™ contrast media. Women’s health products also contributed positively, with the Mirena™ and YAZ™ contraceptive families up 18.4% and 14.1%, respectively.
However, these gains were partially offset by a 31.2% drop in sales of Xarelto™, Bayer’s blockbuster anticoagulant, which is facing mounting generic competition in Europe and Japan.
EBITDA before special items for the Pharmaceuticals segment rose 12.4% to €1.342 billion, fueled by volume-driven sales growth and cost savings from operational efficiency programs. One-time effects further boosted earnings. The EBITDA margin improved by 2.1 percentage points to 29.5%.
Consumer Health: Modest Gains Amid Mixed Performance
Sales in the Consumer Health division increased by 2.5% (Fx & portfolio adj.) to €1.499 billion, supported by volume growth in North America and Asia/Pacific. Digestive Health was the standout category, growing 12.7% across all regions. Cough and cold product sales rebounded in the U.S. after a weak flu season the prior year.
On the downside, the Nutritionals segment posted a 5.2% sales decline, while the allergy category also recorded lower revenues.
EBITDA before special items rose 3.3% to €342 million. Continuous cost management and lower input costs helped mitigate the financial impact of increased marketing investments in innovative products. However, the EBITDA margin slipped slightly by 0.3 percentage points to 22.8%, partly due to a tough comparison against the prior year, which benefited from divestiture income.
Reaffirmed Amid Caution on Legal and Geopolitical Risks
Bayer has reaffirmed its full-year 2025 guidance on a currency-adjusted basis, citing confidence in its business fundamentals, particularly in the Pharmaceuticals division, which is now expected to finish the year at the upper end of previously communicated sales and margin ranges.
However, the company remains cautious regarding potential legal and geopolitical risks. Bayer has revised its forecast for special items in EBIT and EBITDA, now expecting these to hit the upper end of the estimated €1.5 billion in charges, primarily due to ongoing legal proceedings.
Despite these headwinds, Bayer sees no immediate need to alter its 2025 full-year financial guidance. “We are constantly assessing global developments, especially on tariffs and exchange rates,” said CFO Wolfgang Nickl. “For now, our calculations suggest we are on track — but we remain prepared for volatility.”
In summary, Bayer’s first-quarter performance shows strong momentum in Pharmaceuticals, measured progress in Crop Science transformation, and disciplined financial management — all of which put the company in a resilient position as it navigates the rest of 2025.
