Análisis de Bayer: ¿Buen momento para entrar en Bayer AG (BAY)?

Los resultados son horribles como se esperaba. Y hablan de los litigios aunque yo no entiendo qué coño nos quieren decir: 

November 03, 2020

Bayer:

Group sales decrease by 5.1 percent (Fx & portfolio adj.) to 8.506 billion euros / EBITDA before special items falls 21.4 percent to 1.795 billion euros / Substantial decline in sales and earnings at Crop Science, heavily impacted by seasonal and currency effects / Pharmaceuticals business recovering - higher earnings but slightly lower sales / Strong performance at Consumer Health / Net loss of 2.744 billion euros - impairment charges at Crop Science, proceeds from divestment of Animal Health / Core earnings per share decline by 30.2 percent to 0.81 euros / Free cash flow falls by 2.1 percent to 1.237 billion euros

Leverkusen, November 3, 2020 - Bayer has confirmed its targets for full-year 2020 following a challenging third quarter due to seasonal factors. "Despite the weak quarter and the substantial impact of the pandemic, our currency- and portfolio-adjusted sales and core earnings per share in the first nine months of the year were level with the prior-year period thanks to stringent cost management and the acceleration of our structural measures. We can therefore confirm our currency-adjusted Group outlook for 2020," said Werner Baumann, Chairman of the Board of Management, on Tuesday during a conference call. Summarizing the company's business performance, Chief Financial Officer Wolfgang Nickl said: "We saw a challenging quarter in our agricultural business, a recovery in our pharmaceuticals business and strong growth at Consumer Health." Employee safety during the pandemic remains a top priority for Bayer. The company has implemented a wide range of protective measures to ensure that it can continue to provide patients, farmers and consumers with a reliable supply of products, especially life-saving medicines.

"The impact of the pandemic is placing additional strain on our Crop Science Division. We are also facing negative currency effects, such as the massive depreciation of the Brazilian real, which is weighing heavily on business in the world's second-largest agricultural market," said Nickl. In view of the headwinds in the agriculture business, the company has taken non-cash impairment charges for the division, as announced on September 30.

AskBio acquisition strengthens long-term growth prospects
Bayer last week announced the acquisition of Asklepios BioPharmaceuticals, marking a very important strategic step for the company. AskBio is a U.S.-headquartered biopharmaceutical company specialized in the research, development and manufacture of gene therapies across different therapeutic areas. "The acquisition significantly strengthens our position in cell and gene therapies," Baumann said. "Bayer is better positioned than almost any other company to harness the long-term innovation potential of the bio-revolution in health and agriculture, and thus make a key contribution to solving some of the most pressing questions facing humanity: How can we feed up to 10 billion people by 2050 in a world impacted by climate change? And how can we ensure quality of life for a growing number of elderly people? Finding answers to these questions - that's what underpins our attractive long-term growth prospects."

Group sales in the third quarter came in at 8.506 billion euros, down 5.1 percent on a currency- and portfolio-adjusted basis (Fx & portfolio adj.). Group EBITDA before special items decreased by 21.4 percent to 1.795 billion euros. This figure included a negative currency effect of 205 million euros. EBIT came in at minus 9.399 billion euros (Q3 2019: plus 1.208 billion euros) after taking into account the non-cash impairment charges on intangible assets in the Crop Science Division, including goodwill, that amounted to 9.251 billion euros in total.

EBIT included net special charges of 10.181 billion euros (Q3 2019: 13 million euros) that pertained to the aforementioned impairment charges and provisions in connection with potential future Roundup™ litigation as part of the glyphosate litigations. Other special charges resulted from the ongoing restructuring program and litigations at Pharmaceuticals. Net income came in at minus 2.744 billion euros (Q3 2019: plus 1.036 billion euros). Core earnings per share from continuing operations fell by 30.2 percent to 0.81 euros in the third quarter but were level year on year in the first nine months at 5.07 euros.

Free cash flow declined by 2.1 percent to 1.237 billion euros in the third quarter. At 28.268 billion euros, net financial debt as of September 30, 2020, was down 21.5 percent from the end of June 2020, mainly thanks to the proceeds from the divestment of the Animal Health business unit.

Crop Science impacted by high product returns

In the agricultural business (Crop Science), sales declined by 11.6 percent (Fx & portfolio adj.) to 3.028 billion euros. Business was down in North America in particular, while sales increased in the Asia/Pacific region. Global sales at Corn Seed & Traits fell by 39.9 percent (Fx & portfolio adj.), with substantial declines in North America in particular due to higher product returns and lower license revenues arising from lower than anticipated planted acreages for corn this year. At Herbicides, sales declined by 12.7 percent (Fx & portfolio adj.) against the strong prior-year quarter. Business was primarily down in the North America region, where sales in the prior year had shifted into the third quarter due to extreme weather conditions in the first half of the year.

Sales at Soybean Seed & Traits were level with the prior-year period (Fx & portfolio adj. plus 0.2 percent), with growth in Latin America offsetting lower volumes in North America. Sales at Fungicides advanced by 12.0 percent (Fx & portfolio adj.), with growth across all regions. In Latin America, Bayer primarily benefited from the market switching to the Fox Xpro™ product in Brazil.

EBITDA before special items at Crop Science decreased to minus 34 million euros (Q3 2019: plus 500 million euros). The decline was mainly due to the decrease in sales in North America, which was primarily attributable to the developments relating to product returns. There was also a negative currency effect of 123 million euros.

In October there was some encouraging news from the United States, with the country's Environmental Protection Agency (EPA) announcing a new five-year registration for the dicamba-based XtendiMax™ herbicide with VaporGrip™ Technology, an important weed-control tool for many U.S. growers. The news puts an end to the uncertainty following a U.S. court decision in June that prohibited the use of dicamba.

There are approximately 88,500 claims in the litigation involving glyphosate-based Roundup™ products that are either covered by fully executed master settlement agreements (MSAs), MSAs to be executed, or agreements in principle. At the end of June, Bayer had reported that there were approximately 125,000 filed and unfiled claims. Given uncertainties about eligibility and participation, this number will not be finalized until the settlement process is completed. The company is also continuing to work on a joint proposal to address potential future Roundup™ claims together with plaintiffs' counsel and is working in good faith to address the issues raised by the court to the satisfaction of all parties. Though progress is being made, it will take more time to complete this process. Bayer took an additional provision in the third quarter to cover the increased cost of a revised class plan, as it is far enough along in the negotiations to know that the new plan will come in at approximately 2 billion U.S. dollars, an increase over the original cost of 1.25 billion U.S. dollars. Upon completion of the formal agreement, the company will file a motion for preliminary approval.