Volkswacht Bodensee - Bayer shares hit 20-yr low as problems pile up

The group vowed to press ahead with its cost-cutting efforts after reporting a loss of 4.18 billion euros ($4.45 billion) in the three months to the end of September, much worse than analysts' forecasts.

It was weighed down by bad news from its agrochemicals division, including a heavy drop in sales of its glyphosate-based weedkillers, at the centre of long-running legal fights in the United States over claims they cause cancer.

Earnings at the agricultural unit were also hit by a hefty writedown on assets.

Bayer, which also makes pharmaceuticals and consumer health products, saw its shares plunge more than 11 percent on the Frankfurt Stock Exchange after reporting its second quarterly loss in a row.

It is a fresh headache for CEO Bill Anderson, who was hired last year to steer the troubled group in a new direction, and has launched a major restructuring drive while resisting calls from activist investors for a break-up of the group.

They also reflect a bleak picture for Germany's traditional manufacturers generally, who are struggling with challenges ranging from high costs to weak demand, as Europe's top economy heads for a second straight year of contraction.

The problems for Bayer, the maker of Aspirin, looked set to continue in 2025 with chief financial officer Wolfgang Nickl warning of a "muted outlook" next year, "with likely declining earnings".

"We plan to accelerate our cost and efficiency measures," he said.

- 'No quick fix' -

After Tuesday's results, the Leverkusen-based group lowered its 2024 outlook for EBITDA -- or operating earnings, a key measure of profitability -- to between 10.4 billion and 10.7 billion euros from a previous forecast of between 10.7 billion and 11.3 billion euros.

It also cut the outlook for profit margins in the agrochemicals division.

Anderson is aiming to make savings of two billion euros a year from 2026, in particular by reducing management positions.

The group has already cut some 5,500 jobs since the start of the year, including 3,200 in the first half, according to the CEO.

It is also hoping for progress in resolving the massive litigation issues linked to the Roundup weedkiller, a problem it inherited in the 2018 takeover of US firm Monsanto.

The group has faced a wave of lawsuits in the United States over claims Roundup, which contains the active ingredient glyphosate, causes cancer. Bayer denies the claim but has spent billions of euros on legal costs.

It hopes the US Supreme Court will take up the cases related to Roundup in order to clarify the legal situation.

Bayer is considering which case to bring to the court and, if it does, would expect a decision in the 2025-26 term, said Anderson.

But he cautioned: "This is a long road, with no quick fix."

Sales overall edged up slightly in the quarter to 9.97 billion euros.

Away from the agrochemicals unit, the picture was brighter, with higher sales in the pharmaceuticals division due to strong sales of some blockbuster drugs.

The consumer health unit also reported higher earnings and sales.

T.Germann--VB