What Bayer Aktiengesellschaft (BAYN) Said on Its Q3 Earnings Call

Key Points

• Bayer raised its financial outlook, increasing adjusted EBITDA guidance to €9.8 billion–€10.3 billion and improving its free-cash-flow and year-end net-debt forecasts, while maintaining Core EPS guidance.
• Pharmaceuticals led growth, with NUBEQA and KERENDIA sales rising sharply; Bayer lifted its full-year pharmaceutical EBITDA margin outlook to 25%–27% despite continued declines in XARELTO and EYLEA.
• Litigation and operational pressures remain key risks: €3.7 billion in litigation payments drove negative free cash flow, while Crop Science faces crop-protection headwinds and Consumer Health expects growth in the lower half of its guidance range.

Bayer Aktiengesellschaft ETR: BAYN said it is on track to meet its 2026 commitments after reporting 3% organic sales growth and 7% adjusted EBITDA growth for the first nine months of the year, supported by Pharmaceuticals. The company raised its outlook for adjusted EBITDA, free cash flow and net financial debt, while maintaining its Core EPS guidance.

CEO Bill Anderson said Bayer’s operational performance remained resilient despite market pressures in Crop Science and Consumer Health, while Pharmaceuticals continued to gain momentum from newer products including NUBEQA and KERENDIA. Core earnings per share totaled €3.97 in the first nine months, in line with guidance. Free cash flow was negative €3 billion, largely due to €3.7 billion in litigation-related payments.

Pharmaceuticals Drives Growth and Higher Margin Outlook

Pharmaceuticals posted 2% year-to-date organic sales growth and a 26.8% EBITDA margin. NUBEQA sales rose 60% through the first nine months, while KERENDIA sales increased 76%. Beyonttra entered Bayer’s top 15 pharmaceutical products by sales for the first time during the third quarter, Anderson said.

Bayer said declines in XARELTO and EYLEA continued in line with expectations, but management believes the division has reached a turning point in its growth trajectory. The company now expects pharmaceutical sales growth to finish at the upper end of its prior guidance range and raised its full-year pharmaceutical adjusted EBITDA margin outlook to 25% to 27%, from 24% to 26% previously.

The company also announced plans during the quarter to build a production facility in New Albany, Ohio, to support its oncology, cardiovascular and renal-care portfolio.

Anderson highlighted the first approval of asundexian, marketed as SUNHARBO, in China for secondary stroke prevention. He said the medicine became the first approved Factor XIa inhibitor worldwide. Bayer is pursuing further approvals and intends to seek broad access rather than relying on private-market launches.

At the ESMO Congress, Bayer presented interim NUBEQA data showing a 58% reduction in the risk of metastases or death among prostate cancer patients with a very high risk of recurrence, according to Anderson.

Crop Science Holds Guidance as Seeds Offset Protection Pressures

Crop Science grew about 3.5% year to date, with an EBITDA margin of 24.6%. Bayer said its seeds and traits business recorded double-digit growth, aided by innovation and market-share gains in global corn and U.S. soybeans.

Core crop protection sales declined, reflecting planned portfolio exits, regulatory effects, generic competition, a historic drought in Europe and El Niño conditions. Still, Bayer said Latin America has had a strong start to the agricultural season and that seeds and traits performance should help offset additional crop protection headwinds.

The company introduced its PLENEXOS insecticide in Mexico and said its VYCONIC soybean stack had entered the final stage of European Union import approval. Bayer also continued consolidating crop protection production activities and reducing costs under its five-year profitability framework.

Anderson said the company’s integrated portfolio of seeds, crop protection and digital-farming offerings remains central to how it serves growers. He did not provide specific comments on competitive implications from industry changes involving rivals.

Consumer Health Faces Mixed Market Conditions

Consumer Health reported 2% organic growth through the first nine months and an EBITDA margin of 22.9%. Dermatology and digestive health grew, supported by BEPANTHEN across regions and MIRALAX in the United States. Allergy and cold products declined because of a weaker season.

CFO Judith Hartmann said the division remains on track to meet its full-year guidance, though Bayer expects growth to land in the lower half of its range. Competitive conditions in U.S. nutritionals and the development of the cough-and-cold season will be important fourth-quarter factors, she said.

Cash Flow, Debt and Litigation Remain Key Focus Areas

Bayer raised its group adjusted EBITDA outlook to €9.8 billion to €10.3 billion at constant currencies, compared with its prior range of €9.6 billion to €10.1 billion. It lifted its free-cash-flow forecast by €1 billion, now expecting negative free cash flow of €1.5 billion to negative €0.5 billion, versus the prior forecast of negative €2.5 billion to negative €1.5 billion.

Net financial debt was €31.1 billion at the end of the third quarter. Bayer said debt improved versus both the prior-year quarter and the second quarter of 2026, aided by €3 billion in proceeds from the Apollo equity investment. The company now expects year-end net financial debt of €28 billion to €29 billion at constant currencies, improved from its prior €29 billion to €30 billion forecast.

On Roundup litigation, Anderson said Bayer remains focused on achieving “significant containment.” The proposed class settlement reached its final approval hearing in September, and he said Bayer expects a court ruling before Christmas. He added that some plaintiffs who previously opted out of the settlement have sought to return following the U.S. Supreme Court ruling and a recent jury verdict favoring the company in the Aretino case.

Anderson said PCB litigation would remain an ongoing matter to be managed through legal defenses and selective settlements. Bayer has reserves for matters it considers highly likely, he said, but described the timing and scale of PCB claims as difficult to predict.

Management also reiterated that it is not pursuing a corporate breakup at present. Anderson said Bayer has too much operational work underway to pause for a multiyear separation process. He said the company has reduced its workforce by roughly 14,000 positions from its 2023 peak, while also adding roles in areas such as artificial intelligence and innovation.

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.

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