What is Growth Strategy and Future Prospects of Bayer Company?

Bayer is actively pursuing expansion in emerging markets, particularly in Asia and Latin America. This involves establishing new distribution networks and local research and development centers to tap into growing customer bases and increasing healthcare spending.

The company anticipates substantial growth from new pharmaceutical product launches. The combined sales of Nubeqa and Kerendia are projected to surpass €2.5 billion by 2025, with further launches planned for 2025 including Beyonttra and elinzanetant.

In its Crop Science division, Bayer aims for above-market growth, targeting over €3.5 billion in incremental sales from innovation by 2029. This includes launching ten major products within the next decade, each with peak sales potential exceeding €500 million.

Bayer has extended its partnership with Silal until 2028 to advance sustainable desert farming. This collaboration focuses on developing digital farming solutions and conducting vegetable seed trials, aligning with its broader sustainability goals.

Bayer has raised its full-year 2025 guidance, now projecting Group sales between €46 billion and €48 billion on a currency-adjusted basis. This upward revision from the previous €45 billion to €47 billion forecast signals increased confidence in the company's trajectory. Furthermore, EBITDA before special items is expected to fall within the range of €9.7 billion to €10.2 billion, an increase from the earlier estimate of €9.5 billion to €10.0 billion.

Currency-adjusted core earnings per share are anticipated to be between €4.80 and €5.30 for 2025. While Q1 2025 saw Group sales remain flat year-over-year at €13.738 billion, EBITDA before special items declined by 7.4% to €4.085 billion, with core earnings per share at €2.49, down 11.7%. The company anticipates free cash flow for the full year 2025 to be between €1.5 billion and €2.5 billion, unchanged from previous expectations. Q1 2025 free cash flow was negative at -€1.528 billion, though this represented a €1 billion improvement year-over-year. Net financial debt is projected to be between €31.0 billion and €32.0 billion by the end of 2025.

The CEO has described 2025 as a 'pivotal' and 'most difficult' year within the company's turnaround plan, with expectations for improved financial performance starting in 2026. The new operating model, Dynamic Shared Ownership (DSO), is a key component of this strategy, aiming to generate €800 million in savings for 2025, building upon the approximately €500 million achieved in 2024. This focus on efficiency is central to Bayer's growth strategy.

The Pharmaceuticals Division is targeted to achieve an EBITDA margin of 24% to 26% in 2025, indicating a strong focus on this segment's profitability. Looking further ahead, the Crop Science division aims for a mid-20s percentage EBITDA margin before special items by 2029, underscoring the long-term Bayer future prospects for this crucial sector. These divisional targets are integral to the overall Bayer company strategy.

With 61,000 unresolved claims as of August 2025, the company has set aside approximately €1.2 billion in provisions for these cases, highlighting the ongoing financial impact.

New provisions of €1.89 billion were recorded in Q2 2025 for PCB liabilities, contributing to total provisions exceeding €1.7 billion, reflecting the substantial financial commitment to resolving these issues.

Bayer's Bayer business development includes a $2.3 billion savings program by 2026 and job cuts to strengthen its financial position and mitigate the impact of legal expenses.

The company's management believes the robust performance of its Pharmaceuticals division, alongside efficiency initiatives, provides a critical buffer against legal costs and supports the Bayer company strategy for future growth.