Bayer sees lower 2023 operating profit on cost inflation

By Ludwig Burger

FRANKFURT (Reuters) -Agriculture and healthcare company Bayer (OTC:) said operating earnings would likely decline in 2023, hurt by higher costs and the reversal of last year’s price boost for its glyphosate-based weedkillers.

In a statement on Tuesday, Bayer said earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for special items, would likely be between 12.5 billion euros ($13.23 billion) and 13 billion euros this year, excluding the effect of currency swings.

That would be a decline from the 13.5 billion reported for 2022, which was up 20.9% from a year earlier and slightly higher than analysts had expected on average, according to a consensus posted on the company’s website.

In his last presentation of the company’s quarterly results, Chief Executive Werner Baumann said the company is active in the right areas of business.

“Health and nutrition are fundamental human needs,” he said.

Bayer said this month it would replace its CEO early, recruiting the former head of Roche’s pharmaceuticals business, Bill Anderson, amid demands by some investors that Bayer should simplify its diversified structure and split into separate groups.

Bayer, which acquired glyphosate products as part of its 2018 takeover of Monsanto (NYSE:), saw herbicide sales jump 44% in 2022 after hurricane Ida damaged rival producers and constrained Chinese suppliers were not able to make up for the gap.

For 2023, “the company anticipates lower prices for agricultural herbicides as well as for some of its established pharmaceutical products,” Bayer said, also citing high inflation-driven cost increases.

($1 = 0.9447 euros)