Bayer Aktiengesellschaft (ETR:BAYN) executives used the company’s fourth-quarter and full-year 2025 earnings call to outline progress on a multi-year turnaround, provide 2026 guidance, and address developments in U.S. glyphosate litigation that are expected to weigh heavily on cash flow this year.
Leadership update and transformation efforts
CEO Bill Anderson opened the call by noting a leadership transition in the finance function. As previously announced, Judith Hartmann joined the company and its board of management on March 1 and is expected to take over as CFO in June after an onboarding period. Current CFO Wolfgang Nickl is expected to guide the company through the intervening months.
Glyphosate litigation: settlement process and Supreme Court timeline
Litigation remained a central topic. Anderson reiterated that Monsanto and plaintiff lawyers announced a nationwide class settlement intended to resolve eligible current and future glyphosate cases, and said the agreement is moving through court approvals. He said Monsanto has filed its opening briefs with the U.S. Supreme Court and expects a ruling likely in the second half of June.
During Q&A, management provided timing detail on the settlement process. Anderson said a standard timeline for preliminary approval is 15 days (which he noted was “today” on the call), though a judge can extend it. He said the opt-out period could be 90 days after preliminary approval or longer, and added that while it would be “better” for the opt-out process to conclude before a Supreme Court decision, it does not change the core question before the court. Anderson emphasized that opt-outs need to be “something approaching zero,” saying otherwise “you don’t really have an agreement” and Bayer would have to consider other solutions.
2025 results: FX headwinds, divisional performance, and litigation provisions
Nickl said Bayer “fully achieved” its raised guidance for all group key performance indicators. Group net sales grew 1% year-over-year in currency and portfolio-adjusted terms, with all divisions delivering within adjusted guidance. He also highlighted foreign-exchange headwinds of around EUR 1.7 billion on the top line, driven by depreciation of the U.S. dollar, the Brazilian real, and some hyperinflation currencies.
Group EBITA before special items came in at EUR 9.7 billion. Nickl said negative FX effects of about EUR 500 million weighed on profitability, alongside higher incentive provisions and growth investments, partially offset by top-line growth and cost savings.
Core EPS was EUR 4.91, with Nickl attributing the year-over-year decline to lower EBITA and including FX headwinds of about EUR 0.30. Reported EPS was minus EUR 3.68, driven in part by what he called “significant litigation-related provisions and liabilities classified as special items.” Litigation-related special items totaled EUR 7.5 billion, including increases announced two weeks earlier. Nickl said litigation-related provisions and liabilities of EUR 11.8 billion include costs Bayer can “reliably forecast,” including past verdicts that are settled or pending appeal.
Net financial debt fell to below EUR 30 billion by year-end 2025, which Nickl attributed to cash flow and roughly EUR 1.4 billion in FX tailwinds from a weaker U.S. dollar.
2026 outlook: stable core EPS (methodology change), negative free cash flow expected
Bayer guided to 2026 net sales of EUR 45 billion to EUR 47 billion at constant currencies, representing 0% to 3% currency- and portfolio-adjusted growth. It expects EBITA before special items of EUR 9.6 billion to EUR 10.1 billion, implying a -1% to +4% development versus the prior year at constant currencies.
The company also announced a change in its core EPS methodology. Previously, core EPS included depreciation related to property, plant, and equipment while excluding amortization of intangibles. Starting in 2026, Bayer will include amortization of certain intangible assets, “in particular software,” which Nickl said is intended to enhance transparency and bring core EPS closer to reported EPS. He said the methodology change would reduce 2025 core EPS by about EUR 0.35, from EUR 4.91 to EUR 4.57 on the revised basis. For 2026, Bayer expects core EPS of EUR 4.30 to EUR 4.80 at constant currencies, and said it anticipates stable core EPS at constant currencies on a like-for-like basis versus 2025 under the new definition.
Free cash flow is expected to be negative, with 2026 guidance of -EUR 1.5 billion to -EUR 2.5 billion, including expected litigation-related payouts of around EUR 5 billion. Net financial debt is expected to rise to EUR 32 billion to EUR 33 billion at constant currencies. Nickl said Bayer plans to finance litigation resolutions using senior bonds and instruments that receive equity credit ratings from rating agencies, rather than an AGM-authorized capital increase, while noting the current debt outlook “conservatively reflects straight debt financing.”
Division commentary: Crop Science framework, Pharma launches, and Consumer Health volatility
Crop Science. Division president Rodrigo Santos said the business is executing its “Five-Year Framework,” targeting sales growth, margin improvement, and cash. He cited actions including divesting and outsourcing active ingredients, exiting nearly 200 crop protection products, streamlining the site footprint, exiting lower-return vegetable crops, and exiting a non-core seed treatment equipment business. Santos said Bayer is on track to deliver more than EUR 1 billion of margin improvement through these measures.
Nickl and Santos also discussed resolutions with Corteva that generated licensing revenue. Nickl said about EUR 300 million supported corn performance in Q4 2025 and about EUR 450 million is expected to support soy performance in Q1 2026. Santos said the resolution reflects compensation for Bayer’s proprietary technology and “does not change our growth outlook or licensing expectation.” In Q&A, Santos said Bayer is not expecting a similar “kind of resolution” for 2027, while emphasizing licensing remains a significant business (citing “over EUR 2 billion” of licensing revenue).
For 2026, Santos guided Crop Science core business growth of 1% to 4% currency and portfolio adjusted, supported in part by approval of the Stryax dicamba formulation. He said glyphosate is expected to decline 2% to 6% due to lower tariffs on Chinese imports into the U.S. and generic pricing declines, calling glyphosate a managed commodity business. Bayer expects Crop Science EBITDA margins before special items of 20% to 22% at constant currency.
Pharmaceuticals. Pharma head Stefan Oelrich said the division grew about 2% in 2025 and delivered on upgraded guidance. He highlighted strong growth in Nubeqa and Kerendia, with combined sales of EUR 3.2 billion, and said those assets more than offset expected declines in Xarelto and headwinds in EYLEA. Oelrich said Xarelto declined 32% (or EUR 1.1 billion) in 2025 due to genericization, and he expects declines of 35% to 40% in 2026. For EYLEA, he expects a 20% to 25% decline in 2026 at constant currencies amid pricing pressure from 2 mg biosimilars, while aiming to increase EYLEA 8 mg’s contribution to about 70% of the franchise by year-end 2026.
Oelrich said 2026 should see continued momentum in Nubeqa and Kerendia, each expected to grow about 50% at constant currencies, supported by market penetration and indication expansion, including an “upcoming EU approval for Kerendia in heart failure” following a positive CHMP opinion. Overall, Pharma expects 0% to +3% growth at constant currencies in 2026, which Oelrich described as the last year of the division’s “resilience phase” before returning to mid-single-digit growth in 2027. The division expects 2026 EBITDA margin before special items of 23% to 25% at constant currencies.
Consumer Health. Consumer Health president Julio Triana said 2025 was pressured by market softness in the U.S. and China and continued seasonal softness in cough, cold, and allergy. The division reported EUR 5.8 billion in 2025 net sales, essentially flat year-over-year, and EBITDA margin before special items of 23.1% (23.3% on a currency-adjusted basis, in line with 2024). For 2026, Triana expects relevant markets to grow about 2% to 3% and guided net sales growth of 0% to 4% currency and portfolio adjusted, with an EBITDA margin before special items of 22% to 24% at constant currency, reflecting continued volatility and planned reinvestment in areas such as e-commerce and AI.
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.
