Bayer Aktiengesellschaft (ETR:BAYN) outlined its full-year 2025 performance and 2026 outlook, highlighting delivery on upgraded guidance, continued progress under its Dynamic Shared Ownership (DSO) operating model, and an expected swing to negative free cash flow in 2026 driven by significant litigation-related payouts.
2025 results: guidance delivered amid FX headwinds and litigation charges
CEO Bill Anderson said the company delivered its upgraded 2025 currency-adjusted sales and earnings guidance, reporting sales of EUR 45.5 billion, core earnings per share (EPS) of EUR 4.91, and free cash flow of EUR 2.1 billion. He characterized 2025 as a year of progress in Bayer’s broader turnaround, while emphasizing that “the journey is far from over.”
Nickl said reported EPS was -EUR 3.68, with the gap to core EPS largely driven by litigation-related items. He said litigation-related special items totaled EUR 7.5 billion, and that Bayer’s litigation-related provisions and liabilities of EUR 11.8 billion reflect “all litigation-related costs we know today and can reliably forecast,” including past glyphosate verdicts either settled or pending on appeal.
DSO rollout: savings target reaffirmed; job cuts disclosed in Q&A
Heike Prinz, who provided an update on DSO, said the model is now implemented across all countries, divisions, and enabling functions. She said Bayer has reorganized into an “agile network of teams,” redesigned HR processes, and shifted more decisions to employees. She said bureaucracy reduction contributed to an additional EUR 700 million in cost reductions last year, and that by the end of 2026, total DSO-driven savings are expected to reach EUR 2 billion, consistent with prior commitments.
During Q&A, management reiterated that DSO is not being managed to a headcount target. However, Anderson said there have been about 14,000 job reductions since implementation began, noting that some reductions were directly tied to the new system while others reflected site closures and exits from product lines.
Litigation: class settlement timeline “days,” Supreme Court ruling expected in June
Anderson said Bayer is pursuing a “multi-pronged strategy” to contain litigation, pointing to a recently announced nationwide class settlement in the U.S. glyphosate litigation that is moving through approvals. He said the company is confident in the merits of the agreement and is prepared “for any scenario,” but declined to speculate on a denial scenario. In response to a question on timing, he said a judge’s decision could come in “days.”
He also said Monsanto has filed opening briefs with the U.S. Supreme Court and received support via amicus briefs from the U.S. government, attorneys general in 15 states, the U.S. Chamber of Commerce, and others. Bayer expects a Supreme Court ruling “likely in the second half of June.” Anderson argued regulators in more than 50 countries have confirmed glyphosate safety and described glyphosate as essential to agriculture and food security.
Asked why Bayer would settle despite its view that glyphosate is safe, Anderson called the U.S. tort system complex and said the settlement is intended to allow the company to “move on” after nearly a decade of litigation. He also said the Supreme Court case and the settlement are distinct, describing the Supreme Court matter as addressing whether the EPA’s labeling authority governs pesticide safety questions versus litigation being decided across many courtrooms.
2026 outlook: stable core EPS at constant currencies, negative free cash flow expected
For 2026, Nickl guided to group net sales of EUR 45 billion to EUR 47 billion at constant currencies (0% to 3% currency- and portfolio-adjusted growth). Bayer expects EBITDA before special items of EUR 9.6 billion to EUR 10.1 billion (-1% to +4% versus 2025). Core EPS is guided to EUR 4.30 to EUR 4.80 at constant currencies.
Nickl also announced a methodology change to core EPS beginning in 2026 to “provide enhanced transparency” and move core EPS closer to reported EPS. Under the new approach, Bayer will include amortization of certain intangible assets, particularly software. He said this would reduce 2025 core EPS by about EUR 0.35, implying an adjusted 2025 baseline of EUR 4.57 on a like-for-like basis.
Free cash flow is expected to be -EUR 1.5 billion to -EUR 2.5 billion at constant currencies, reflecting expected litigation-related payouts of around EUR 5 billion. Bayer expects net financial debt to rise to EUR 32 billion to EUR 33 billion at constant currencies. Nickl said ultimate financing for litigation resolutions is planned to rely on senior bonds and instruments receiving equity credit from rating agencies, rather than an AGM-authorized capital increase, while current debt guidance conservatively assumes straight debt financing.
Divisional commentary: Crop Science framework, Pharma resilience phase, Consumer Health volatility
Crop Science: Rodrigo Santos said the division established its five-year framework and is simplifying its portfolio and footprint, targeting more than EUR 1 billion in margin improvement. Actions include divesting and outsourcing active ingredients, exiting nearly 200 crop protection products, and streamlining the global site footprint, as well as exiting lower-return vegetable crops and a non-core seed treatment equipment business. He said a resolution with Corteva represents licensing revenue for Bayer’s proprietary technology and “does not change our growth outlook or license expectation.”
Nickl provided additional detail on the Corteva resolutions, saying about EUR 300 million supported corn performance in Q4 2025, and about EUR 450 million is expected to support soy performance in Q1 2026, already reflected in the outlook. Santos said Crop Science expects core business growth of 1% to 4% currency- and portfolio-adjusted in 2026 and an EBITDA margin before special items of 20% to 22% at constant currencies. He also said Bayer expects glyphosate sales to decline 2% to 6% year-over-year, citing reduced tariffs and generic pricing pressure.
Pharmaceuticals: Stefan Oelrich said the division is in the last year of its “resilience phase,” balancing declines in mature products with growth from newer medicines. He said Nubeqa and Kerendia are expected to grow about 50% in 2026 at constant currencies, supported by market penetration and anticipated indication expansion, including a potential EU approval for Kerendia in heart failure following a positive CHMP opinion. He said Xarelto is expected to decline 35% to 40% amid generic pressure, and the EYLEA franchise is expected to decline 20% to 25% due to pricing pressure following biosimilar entry, despite plans to increase EYLEA 8 mg’s contribution to about 70% of the franchise. Pharma expects 2026 sales growth of 0% to +3% at constant currencies and an EBITDA margin before special items of 23% to 25%.
Consumer Health: Julio Triana said the division faced a challenging environment in 2025, citing softness in the U.S. and China and continued weakness in cough, cold, and allergy categories. For 2026, he said Bayer expects its relevant market to grow about 2% to 3%, with net sales growth guided at 0% to 4% currency- and portfolio-adjusted terms, and an EBITDA margin before special items of 22% to 24% at constant currencies. He said the company plans to reinvest efficiencies into brand equity, market share gains, and increased investment in e-commerce and AI.
In leadership updates, Anderson introduced Judith Hartmann, who joined Bayer’s board of management on March 1 and is slated to assume the CFO role in June. Hartmann said she has begun meeting teams across the company and cited DSO and AI investment as levers to accelerate performance.
About Bayer Aktiengesellschaft (ETR:BAYN)
Bayer Aktiengesellschaft, together its subsidiaries, operates as a life science company worldwide. It operates through Pharmaceuticals, Consumer Health, and Crop Science segments. The Pharmaceuticals segment offers prescription products primarily for cardiology and women's health care; specialty therapeutics in the areas of oncology, hematology, and ophthalmology; and diagnostic imaging equipment and digital solutions, and contrast agents, as well as cell and gene therapy. The Consumer Health segment markets nonprescription over-the-counter medicines for self-medication and self-care; and solutions for nutritional supplements, allergy, cough and cold, dermatology, pain and cardiovascular risk prevention, and digestive health.
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