BAYRY - Bayer's Q3 sales grow on back of Herbicides while Xarelto slumps; confirms FY22 outlook

Bayer's ( OTCPK:BAYRY ) ( OTCPK:BAYZF ) Q3 sales were driven by its Crop Sciences business, offsetting the decline in sale of its top selling pharma product Xarelto.

The German conglomerate confirmed its FY22 outlook.

Bayer's core EPS grew +7.6% Y/Y to €1.13. EBITDA before special items increased 17.3% Y/Y to $2.45B.

Group sales grew +15.3% Y/Y (or +5.7% on a currency and portfolio-adjusted basis, or Fx & portfolio adj.) to ~€11.28B.

"Despite rising inflation and global supply chain problems, we were again able to boost sales and earnings," said Werner Baumann, chairman of the board of management. "Crop Science in particular continued its growth trajectory,"

Sales from Crop Science business increased +21.9% Y/Y (+8.4% on Fx & portfolio adj.) to ~€4.69B. The company said the segment achieved double-digit percentage gains in Latin America and Europe/Middle East/Africa but saw sales fall significantly in North America, mainly due to higher seed returns.

Bayer said Herbicides posted considerable gains due to price increases, especially in Latin and North America and in Europe/Middle East/Africa, as the company continued to benefit from a positive market environment for its glyphosate-based products.\

The company's Roundup (glyphosate) weedkiller has been mired in controversy as Bayer faces several lawsuits related to the product.

Herbicides grew +62.4% Y/Y (44.9% Y/Y on Fx & portfolio adj. basis) to ~€1.74B. However, sales at Corn Seed & Traits fell by -4.3% Y/Y ( -15.8% on Fx & portfolio adj. basis) to €731M

EBITDA before special items at Crop Science grew by +33.5% to ~€629M.

Sales from the Pharmaceuticals division grew +9.2% Y/Y (+2.9% on Fx & portfolio adj.) to ~€4.96B.

Bayer said growth was mainly due to higher sales of new products, especially Nubeqa, but was held back by declines for Xarelto which were largely due to tender procedures in China and the expiration of its patent in Brazil.

Blood clot prevention therapy Xarelto sales fell -6.2% Y/Y (-8.1% on Fx & portfolio adj.)  to ~€1.11B.

Bayer had been facing lawsuits related to the drug and noted that as of Oct. 14, 11 Canadian lawsuits relating to Xarelto seeking class action certification and one individual action had been served upon Bayer.

Sales of wet-AMD drug Eylea , developed with Regeneron, grew +6.3.% Y/Y (+4.3% Fx & portfolio adj.) to €811M.

Prostate cancer drug Nubeqa sales grew +122.8.% Y/Y (+97.7% Fx & portfolio adj.) to €127M.

Birth control product Mirena /Kyleena/Jaydess sales increased +36.6%% Y/Y (+20.5% Fx & portfolio adj.) to €377M.

EBITDA before special items at Pharmaceuticals increased by 15.2% Y/Y to ~€1.57B.

Sales from Consumer Health segment grew +15% Y/Y (+4.4% Fx & portfolio adj.) to ~€1.55B.

Allergy & Cold portfolio grew +32.6% Y/Y (+16.6% Fx & portfolio adj. basis) to €342M. Dermatology increased 21.5% Y/Y (+14.3% Fx & portfolio adj. basis) to €328M.

EBITDA before special items at Consumer Health advanced by +9.1% Y/Y to ~€336M.

Outlook :

Bayer said following Q3 performance, it has confirmed the outlook provided in August.

During Q2 results Bayer had said, that on a currency-adjusted basis: For 2022 Bayer expects sales between €47B and €48B. Core EPS now expected ~€7.30.

Global Supply Woes : Bayer said it expects the cost increases triggered by high inflation to continue next year.

In Germany, Bayer aims to be independent of Russian gas by the end of the year. The company noted that as global supply chains remain under strain, procurement management and supply chain stability are top priorities for the company.

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