Bayer AG Updates 2025 Financial Outlook Following Strong Pharmaceuticals Performance in H1, Ahead of Q2 Earnings Release
Bayer AG has released a preliminary update on key financial performance indicators ahead of its detailed publication of second-quarter results, scheduled for Wednesday, August 6, 2025. The multinational life sciences company has revised its financial outlook for the full year of 2025, citing stronger-than-anticipated performance in its Pharmaceuticals Division during the first half of the year. These developments have prompted Bayer to upgrade its forecasts for Group-level sales, EBITDA before special items, and core earnings per share — all on a currency-adjusted basis.
Upward Revision of 2025 Full-Year Guidance
Driven by the improved operational performance of the Pharmaceuticals business, Bayer now expects Group sales for the full year 2025 to reach between 46 billion and 48 billion euros, up from its previous estimate of 45 billion to 47 billion euros. This forecast is made on a currency-adjusted basis, using the average monthly exchange rates from 2024 as the benchmark for adjustments.
Similarly, Bayer has lifted its guidance for EBITDA before special items, now expecting earnings in the range of 9.7 billion to 10.2 billion euros — an increase from its previous forecast of 9.5 billion to 10.0 billion euros. The improvement reflects strong financial discipline and operational resilience in the Pharmaceuticals business, along with cost control measures and a favorable financial result in the second quarter.
Bayer is also increasing its forecast for core earnings per share (EPS). The company now anticipates delivering between 4.80 euros and 5.30 euros per share for the full year 2025, up from the previously guided 4.50 euros to 5.00 euros. This adjustment takes into account not only operational performance but also lower tax expenses and a more favorable financial result in the first half of the year.
In contrast, the company’s guidance for free cash flow remains unchanged at 1.5 billion to 2.5 billion euros, as does its projection for net financial debt, which is expected to come in between 31.0 billion and 32.0 billion euros, both figures adjusted for currency effects.
Division-Specific Guidance Updates
Bayer’s Pharmaceuticals Division was the primary driver behind the company’s upgraded financial expectations. For this division, the company now expects currency- and portfolio-adjusted sales growth of 0 to +3 percent, marking a significant improvement from the earlier forecast range of -4 to -1 percent. In terms of profitability, the EBITDA margin before special items for the Pharmaceuticals Division is now expected to land between 24 and 26 percent, slightly narrowed and improved from the earlier range of 23 to 26 percent.
For the Crop Science Division, Bayer is maintaining its previous guidance. The division has shown steady growth, and its outlook remains consistent with prior expectations.
In the Consumer Health Division, Bayer now expects sales growth to be at the lower end of its previously communicated range of +2 to +5 percent on a currency- and portfolio-adjusted basis. However, the EBITDA margin before special items remains unchanged, forecasted between 23 and 24 percent, indicating a stable profitability outlook despite a more conservative growth expectation.
Currency Effects and Geopolitical Considerations
Bayer has highlighted the ongoing effects of currency fluctuations, noting that they are expected to have a negative impact on key financial figures. The company anticipates that Group sales will be reduced by approximately 2 billion euros, EBITDA before special items by around 500 million euros, and core EPS by roughly 0.35 euros due to adverse currency effects.
However, these negative impacts will be partially offset on the balance sheet. Bayer expects a positive effect of about 1.2 billion euros on net financial debt due to currency movements, which provides some cushion in the current economic environment.
Additionally, Bayer continues to monitor geopolitical developments, particularly those related to tariff policies from the United States government. The company has confirmed that the potential financial ramifications of such developments have been incorporated into its revised guidance.
Preliminary Q2 2025 Business Performance
Based on preliminary and unaudited figures for the second quarter of 2025, Bayer reports Group sales of approximately 10.7 billion euros. This represents a stable overall performance, with individual division dynamics varying:
- The Crop Science Division posted a sales increase of 2.2 percent on a currency- and portfolio-adjusted basis.
- Pharmaceuticals saw a modest sales growth of 0.6 percent, while
- Consumer Health sales grew by 0.2 percent, both compared to the prior-year quarter on a similar adjusted basis.
Group EBITDA before special items in Q2 stood at approximately 2.1 billion euros. Breaking this down by division:
- Crop Science EBITDA before special items rose to 0.7 billion euros,
- Pharmaceuticals EBITDA declined to 1.1 billion euros, and
- Consumer Health recorded EBITDA just above the prior-year level, reaching 0.3 billion euros.
In the Reconciliation segment, EBITDA before special items improved to negative 13 million euros, reflecting better corporate efficiency and cost management.
The Group’s core earnings per share increased to 1.23 euros, driven mainly by improvements in financial results and reduced tax liabilities. However, free cash flow in the second quarter was relatively low, coming in at around 0.1 billion euros, while net financial debt stood at 33.3 billion euros as of the quarter’s end.
Special Items and Litigation-Related Provisions
Bayer recorded special items in EBIT totaling approximately negative 1 billion euros during the second quarter. This amount includes:
- 0.8 billion euros in impairment loss reversals from asset impairment testing at Crop Science, and
- 1.7 billion euros in provisions and liabilities, primarily for litigation matters in the United States.
Given these developments, Bayer has revised its full-year forecast for special items in EBITDA, now expecting between negative 3.5 billion and negative 2.5 billion euros, significantly more than its previous estimate of negative 1.5 billion to negative 0.5 billion euros.
U.S. Litigation Updates: Glyphosate and PCBs
In relation to the ongoing Roundup™ (glyphosate) litigation in the U.S., Bayer has established additional legal provisions of around 1.2 billion euros, included within the 1.7 billion euros mentioned above. These provisions primarily stem from an adverse appellate court ruling in the Anderson et al. case. Bayer has since filed for a review by the Missouri Supreme Court, continuing its robust legal defense strategy.
Despite this setback, Bayer has achieved a significant settlement with a major plaintiffs’ law firm, reducing the number of unresolved glyphosate-related claims to 61,000. Of the original 192,000 claims, approximately 131,000 have been resolved either through settlements or due to ineligibility. The company maintains its goal to substantially curtail glyphosate litigation exposure by the end of 2026.
In addition to glyphosate, Bayer also addressed developments in its polychlorinated biphenyls (PCBs) litigation. The company recorded 530 million euros in additional provisions, which cover potential liabilities from the Burke case, anticipated settlements regarding Sky Valley Education Center (SVEC) in Washington State, and other related litigation costs. The SVEC lawsuits, centered on alleged personal injury claims from PCB exposure at a Seattle-area school, remain a focal point. Bayer continues to await a decision from the Washington Supreme Court in the Erickson case, which may influence future proceedings.
