Hebei Lansheng Biotech Co., Ltd.
Beijing Multigrass Formulation Co., Ltd.

Bayer in second quarter of 2020: Solid performance despite COVID-19 impactqrcode

Aug. 5, 2020

Favorites Print
Forward
Aug. 5, 2020

The Bayer Group’s businesses turned in a solid performance in the second quarter of 2020 despite the COVID-19 pandemic and the associated uncertainties. “Thanks to the growth in our agricultural business, we raised EBITDA before special items – and we did so in a challenging environment,” said Werner Baumann, Chairman of the Board of Management, when the half-year financial report was released on Tuesday. Sales in the Pharmaceuticals and Consumer Health divisions receded, however. “Our primary aim during the coronavirus pandemic remains the safety and wellbeing of our employees and the society in which we live and work,” Baumann pointed out. He said Bayer is also taking the necessary steps to safeguard the continuity of business operations in these challenging times and ensure reliable supplies of its products and services to hospitals, physicians, patients, consumers and farmers. Bayer has adjusted its forecast for the current fiscal year because of the pandemic.


The second quarter of 2020 was also marked by the litigations in the United States. The company announced on June 24, 2020, that it had reached agreements in the product liability litigation concerning Roundup™ (active ingredient: glyphosate ). The agreements contain no admission of liability or wrongdoing. The total costs to settle the approximately 125,000 filed and unfiled glyphosate claims and support a class settlement agreement to manage and resolve potential future Roundup™ litigation are currently expected to be up to 10.9 billion U.S. dollars. On July 6, 2020, Judge Chhabria of the U.S. District Court for the Northern District of California, who must approve the class agreement, raised concerns about certain aspects of the proposed agreement. Thereupon, the parties decided to withdraw their motion in order to comprehensively address the court’s questions. Bayer remains strongly committed to a resolution that simultaneously addresses the current litigation on reasonable terms and provides a viable solution to manage and resolve potential future litigation.


On July 20, 2020, the California Court of Appeal affirmed the judgment in favor of Dewayne Johnson, one of the three cases continuing through the appeals process, but reduced the total judgment from 78.5 million U.S. dollars to approximately 20.5 million U.S. dollars. The company will consider its legal options, including an appeal to the Supreme Court of California. Settlement agreements were also reached in the dicamba drift litigation and for most of the PCB (polychlorinated biphenyls) water litigation.


Crop Science posts growth in three out of four regions


In the agricultural business (Crop Science), Bayer raised sales by 3.2 percent (Fx & portfolio adj.) to 4.802 billion euros, with the Latin America, Asia/Pacific and North America regions contributing to the increase. The division achieved 2.7 percent higher sales (Fx & portfolio adj.) at Corn Seed & Traits, mainly due to significant volume expansion in Brazil. Sales at Herbicides increased by 3.3 percent (Fx & portfolio adj.) thanks to higher volumes and advance purchases in Latin America coupled with substantial business growth in North America. Sales at Soybean Seeds & Traits showed particularly strong growth of 9.3 percent (Fx & portfolio adj.), with business recovering in North America thanks to an increase in acreages and to shifts in demand from the first quarter arising from uncertainties over COVID-19. In Latin America, an increase in market share had a positive effect. Sales at Insecticides rose by 4.5 percent (Fx & portfolio adj.), driven by gains in the Latin America and Asia/Pacific regions. By contrast, declines were primarily recorded at Vegetable Seeds (Fx & portfolio adj. minus 5.0 percent). Sales were down mainly in North America, where business was adversely impacted by shifts in demand into subsequent quarters and the COVID-19 pandemic.


Outlook for 2020 


The financial impact of the COVID-19 pandemic remains difficult to predict. Bayer is therefore adjusting the forecast issued in February 2020 as follows, based on the business development in the first half of the year and assumptions for the rest of the year that involve uncertainties. For the Crop Science Division it foresees a restrained start in the fourth quarter to the 2021 North America season as a result of pandemic-related reduced demand for biofuel, feed and fiber driving an expected reduction in 2021 planted acres, as well as from ongoing soy market dynamics.


Picture 0/1200

More from AgroNews

Magazine

2020 India Pesticide Suppliers Guide 2020 Market Insight
Chinese issue of 2020 Market Insight 2020 CRO & CRAO Manual
Chinese issue of 2020 Biologicals Special 2020 Biologicals Special
I wanna post a press Comment

Subscribe 

Subscribe Email: *
Name:
Mobile Number:  

Comment  

Picture 0/1200

Subscribe to daily email alerts of AgroNews.