Bayer

Sales and adjusted EBITDA were €13.4bn (+4.1% organic; -2.4% at actual exchange rates (AER)) and €4.5bn (+9% AER), respectively. Note that all the growth figures are on organic basis, unless otherwise specified. While sales were in line EBITDA is c 13% ahead of consensus and 8% ahead of AV expectations. 

In Q1, Crop Science sales (c.57% of total sales) increased 6.8% (organic) and Consumer Health also displayed a healthy performance (c.11%; +5.3%), whereas Pharmaceuticals (c.32% of sales; -0.5%) experienced a subdued quarter. On the profitability front, adjusted EBITDA gains were driven solely by Crop Science, as the other two segments saw a decline in their respective adjusted EBITDA.

For 2026, the management maintained its outlook at constant currency, wherein sales and adjusted EBITDA are expected to grow organically by 0-3% and between -1% to +4%, respectively.

Overall, a good set of results, and we reaffirm our favorable stance on Bayer, as the firm moves closer to resolving the glyphosate litigations (which have been an overhang since the 2018 Monsanto acquisition), and a gradual progress towards leverage reduction.

We expect a positive share price reaction today.

Expert Opinion:
Q1 results demonstrate that the business itself is healthy and growing, but the "legal drain" is visible in the negative cash flow (EUR-2.3bn) and rising debt ((EUR32.5bn). Investors are now looking almost exclusively toward the Supreme Court’s decision next month for any real relief on the legal front. We're still of the view that if the Supreme Court renders a favorable verdict for Bayer (which we believe), the stock will become fully investable again and that there is upside based on the company's fundamentals. 

For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu