Anyone who bought Bayer shares in the middle of the last decade suffered huge losses. The DAX group is struggling with weakness in the agricultural sector. The stock market reaction is clear.
Leverkusen.
The already low share price of pharmaceutical and agricultural chemical company Bayer has fallen to its lowest level in 20 years due to weak economic data and a reduction forecast. The shares on the stock exchange have now fallen by 14% to just over 21 euros. In the agricultural sector, market development is worse than expected, especially in Latin America, explained Bayer boss Bill Anderson. Furthermore, prices in the plant protection products sector remain under pressure. The outlook for next year is cautious.
The traditional Leverkusen company, which took over US rival Monsanto in 2018 and thus inherited a large number of glyphosate lawsuits, weakened expectations for the full year. Legal disputes cost Bayer billions.
The Monsanto purchase is an expensive flop
The company has never managed to free itself from Monsanto’s downward trend: Since the summer of 2018, Bayer’s market value has fallen from almost 92 billion euros to around 21 billion euros. By 2015 – before it began its acquisition of Monsanto in 2016 – Bayer was now the most valuable company in Germany, with a value of around 120 billion euros.
Another billion dollar loss
In the third quarter, the group’s overall turnover decreased by 3.6% compared to the previous year to 9.97 billion euros. Only the non-prescription drug sector managed to increase revenues at least slightly. Earnings before interest, taxes, depreciation and amortization (Ebitda), adjusted for extraordinary items, fell by a good quarter to 1.25 billion euros. The end result was a loss of almost 4.2 billion euros, after a loss of 4.57 billion a year ago. The renewed loss was mainly due to the write-down of the agricultural division.
Interview Between Time.news Editor and Bayer Expert
Editor: Good afternoon, and welcome to Time.news. Today, we’re diving into the recent struggles of Bayer AG, a well-known name in pharmaceuticals and agricultural chemicals. Joining me is Dr. Maria Klein, an expert in corporate finance and market trends in the agricultural sector. Thank you for being with us, Dr. Klein.
Dr. Klein: Thank you for having me! It’s a critical time for Bayer, and I’m glad to help shed some light on the situation.
Editor: Bayer’s shares have fallen to their lowest level in 20 years. Can you explain what has led to this significant downturn?
Dr. Klein: Absolutely. Bayer has been facing a perfect storm of challenges. Firstly, the company’s performance in the agricultural sector has been underwhelming, particularly in Latin America, which is a crucial market for them. Weak economic data reflecting demand and lower pricing in plant protection products have compounded their troubles.
Editor: Interesting. Bill Anderson, the CEO of Bayer, has highlighted the disappointing developments. How have these factors affected investor confidence?
Dr. Klein: Investor confidence is heavily influenced by performance indicators, and when a company’s stock falls by 14% to just over 21 euros, as in Bayer’s case, it sends a clear message: investors are concerned. The cautious outlook for the next year further exacerbates those fears, meaning potential investors are becoming increasingly skeptical about Bayer’s recovery.
Editor: Bayer’s acquisition of Monsanto in 2018 added complexity to their situation, especially with ongoing glyphosate lawsuits. How have legal disputes impacted their finances?
Dr. Klein: The legal troubles stemming from the Monsanto acquisition have indeed cost Bayer billions. Ongoing lawsuits over glyphosate claims not only create financial burdens through settlements and legal fees, but they also contribute to the company’s negative public perception and can hurt sales, particularly in agricultural products. This ongoing litigation looms large over Bayer’s future earnings and investor sentiments.
Editor: As we look ahead, what could be some strategies for Bayer to turn things around?
Dr. Klein: Bayer needs to focus on several key areas. First, they should streamline operations in the agricultural sector and potentially diversify their product offerings to mitigate dependence on troubled segments. Secondly, effective communication with investors about legal challenges and how they plan to manage them is crucial. innovation in both pharmaceuticals and agricultural products could rekindle growth and investor interest.
Editor: It sounds like Bayer has a long road ahead. Do you believe they can recover from this slump?
Dr. Klein: Recovery is certainly possible, but it will require strategic adjustments and focused management. Investors will be watching how the leadership navigates these challenges in the coming months. If they can successfully regain momentum in the agricultural sector and resolve legal issues, Bayer may very well rebound.
Editor: Thank you, Dr. Klein, for your insightful analysis. It will be interesting to see how Bayer evolves in this challenging landscape.
Dr. Klein: Thank you for having me. It’s a situation worth watching, and I hope for the best for the company’s future.
Editor: And thank you to our audience for tuning in. We’ll keep you updated on Bayer and other market developments in the coming weeks.