Bayer posts good figures – U.S. lawsuit industry invests heavily in television advertising

Bayer published its quarterly results today. Here are the key figures.

Sales amounted to EUR 9.83 billion (prior-year quarter: EUR 9.26 billion). Profit (EBITDA pre exceptionals) was EUR 2.29 billion, compared with EUR 2.13 billion in the prior-year quarter.

The stock reacts almost unchanged from the previous day.

Here is Bayer’s most important headline statement:

The Bayer Group has made progress in all key areas and is on track both operationally and strategically. “Bayer can look back on a successful third quarter,” said Werner Baumann, Chairman of the Board of Management, on Wednesday at a telephone press conference on the company’s quarterly results. “We increased the Group’s sales and adjusted EBITDA. All divisions showed pleasing business development. At the same time, we also made great strategic progress. I am talking here primarily about the efficiency, structural and portfolio measures that we announced at the end of 2018.”

Bayer here in the wording with a reference to the glyphosate lawsuits in the United States:

In connection with the crop protection agent glyphosate, approximately 42,700 plaintiffs had started lawsuits in the United States by October 11th, 2019. The significant increase is apparently due to the fact that claimants approximately doubled their estimated television advertising expenses in the third quarter compared to the first half of the year. However, the number of lawsuits says nothing about their validity. Bayer remains convinced that it has strong arguments to defend its claims and intends to defend itself vigorously against the three first-instance verdicts and all future appeals. At the same time, the company is playing a constructive role in the mediation proceedings ordered by a federal judge in California.

Here is a wording of Bayer’s outlook:

Bayer confirms the forecast for the current fiscal year published in February 2019. It was prepared on the assumption that all businesses would continue. In the meantime, the sale of the Animal Health business and the stake in Currenta has progressed so far that the original forecast can be adjusted for its sales and earnings contributions, which are reported as discontinued operations. In addition, the current currency development has been taken into account.

Bayer thus expects sales of about EUR 43.5 billion, which corresponds to an unchanged increase of about 4 percent (FX & portfolio adj.) The original forecast of about EUR 46 billion is reduced by about EUR 3 billion due to the portfolio measures and increased by about EUR 0.5 billion due to currency movements. Accordingly, EBITDA pre exceptionals is expected to total about EUR 11.5 billion in this fiscal year (the portfolio measures reduce the original forecast of approximately EUR 12.2 billion by about EUR 0.6 billion, the currency development by another EUR 0.1 billion) and adjusted earnings per share by about EUR 6.35. The portfolio measures reduce the original forecast of EUR 6.80 by about EUR 0.35, the currency development by another EUR 0.10.

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