Reuters | Sep 30, 2020 19:25
BERLIN (Reuters) - German drugs company Bayer AG (DE:BAYGn) announced plans on Wednesday for more than 1.5 billion euros (£1.36 billion)of cost cuts as of 2024 and said it would take impairment charges on its agricultural business as it battles with low commodity prices.
Bayer said that the impact of the coronavirus on the crop science business will be deeper than originally expected due to low commodity prices, intense competition in soy, and reduced biofuel consumption, compounded by negative currency effects.
As a result, Bayer expects to take non-cash impairment charges in the mid- to high-single-digit billion-euros range on assets in the agricultural business.
Bayer's share price has been pummelled by a deal it made in June to pay around $11 billion to settle U.S. lawsuits over its Roundup weedkiller. Bayer acquired Roundup with its purchase of Monsanto (NYSE:MON) for $63 billion in 2018.
Bayer said the new cuts come on top of annual savings of 2.6 billion euros as of 2022, which were announced in November 2018, adding that the company was also considering exiting non-strategic businesses or brands below the divisional level.
It said the restructuring, which may also lead to extra job cuts, is in the early stages of planning.
It expects its pharmaceuticals business to return to growth in 2021 and its consumer health unit to outpace peer growth, and could consider bolt-on acquisitions for both.
It expects 2021 sales to be about the same as in 2020, despite significant headwinds from COVID-19, and core earnings per share to be slightly lower at constant exchange rates.
It will leave its dividend policy unchanged, but expects payouts in coming years to be at the lower end of 30-40% of core earnings per share, rather than at the upper end as in previous years.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.