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Leverkusen, April 28, 2020 – The Bayer Group can look back on 2019 as a year of strategic and operational success. “We’ve worked hard and we’ve delivered,” said Werner Baumann, Chairman of the Board of Management, on Tuesday at the first virtual stockholders’ meeting held by a DAX company. Baumann addressed the company’s stockholders – who were originally due to meet in Bonn – via a livestream. “On the one hand it makes us a digital pioneer. But we will also miss the direct dialog with you,” he admitted to the stockholders, saying that the COVID-19 pandemic had made it impossible for him to address them in person. Baumann expressed Bayer's wish to remain a reliable partner, especially in such unusual times. “When it comes to your health and safety, there is no room for compromise.”
For Bayer’s more than 100,000 employees, the past two months have involved tremendous challenges, he said. Their health and safety is always at the top of the agenda, Baumann noted. “Whether it’s face masks, protective clothing, distancing rules, separating employees who work different shifts, or taking people’s temperatures as they enter the site: our policy is safety first – with no ifs and buts.” Baumann said he is personally very pleased that all these measures are proving effective and that as a result the company is currently able to keep its production operations well on track. He explained that because health and nutrition count among humanity’s basic needs, Bayer has been considered an essential business during the pandemic. “That’s why we’ve done everything in our power in recent weeks to live up to this responsibility,” Baumann said.
“Of course, we conduct our business with commercial success in mind. But we’re also an integral part of society.” For example, Bayer has donated large quantities of chloroquine to numerous countries, including China, Italy, the United States and Germany, he noted. So far there have been no robust results from clinical trials that would indicate a positive benefit-risk profile for chloroquine in the treatment of COVID-19. In addition, chloroquine is a prescription medicine that can cause damage to health when used incorrectly and therefore may only be taken under medical supervision. Should a benefit in the treatment of COVID-19 be scientifically proven, it could be used globally. “We would produce the medicine entirely for the public good and supply it to governments free of charge,” Baumann said.
“Supporting those most in need”
Bayer has provided testing devices that are being used to perform thousands of additional coronavirus tests in Germany every day, Baumann explained. In Berlin, the company has granted leave of absence to more than 140 staff so that they can volunteer in a test laboratory located at the headquarters of the Pharmaceuticals Division, he added. The company is also donating other medicines and self-care products, such as antibiotics or vitamin supplements, in numerous countries, Baumann noted. “That makes me very proud. Being there when it matters. Supporting those most in need. That’s how I’ve experienced this company for more than 30 years, and especially in these times,” he said. “I’d therefore like to sincerely thank all of our employees – also on behalf of my colleagues on the Board of Management and, I’m sure, on your behalf as stockholders – for their tremendous commitment.”
Baumann believes the coronavirus crisis vindicates Bayer's chosen focus. “We’re active in the right businesses,” he said. “After all, what could be more important than contributing to health and nutrition around the world?” The company is also on course to implement the extensive measures that the Board of Management initiated at the end of 2018 and has continued to pursue with vigor since the 2019 Annual Stockholders’ Meeting, Baumann said. “We also took to heart the disappointing voting results at last year’s Annual Stockholders’ Meeting. We engaged in close dialog with investors, took on board the criticisms expressed and worked to improve.”
Bayer achieved its financial targets in 2019 despite encountering a challenging market environment in the agriculture sector in particular, Baumann said. Sales increased by 3.5 percent to 43.5 billion euros on a currency- and portfolio-adjusted basis (Fx & portfolio adj.). On a reported basis, sales were up by 18.5 percent. EBITDA before special items advanced by 28.3 percent to 11.5 billion euros – a record high for Bayer. Core earnings per share from continuing operations rose by 14.3 percent to 6.40 euros.
Bayer was able to implement the announced portfolio measures earlier than anticipated – and also achieved attractive divestment proceeds. The company has divested its stake in the site services provider Currenta and has sold the Dr. Scholl’s™ and Coppertone™ brands. In addition, Bayer continues to expect the sale of its Animal Health business to Elanco to close in the middle of this year. Bayer is also making swifter progress than anticipated with its efficiency and structural measures, with the company targeting gross annual contributions of 2.6 billion euros starting in 2022. This figure includes the planned synergies from the integration in the agriculture business.
Furthermore, the company has set itself new sustainability targets. “We decided that Bayer will become a 100 percent carbon-neutral company by 2030,” Baumann said. “Our goals for 2030 are very ambitious – but even after that we will continue to work on sustainability issues and solutions to improve people’s lives. This basic approach is part of our vision at Bayer: ‘Health for all, hunger for none’ – this is the thinking that will shape our company and power it forward in the coming years.”
To enable stockholders to appropriately share in the company’s success in 2019, the Board of Management and Supervisory Board of Bayer AG have proposed to the Annual Stockholders’ Meeting that an unchanged dividend of 2.80 euros per share entitled to the dividend be paid. Bayer has also registered a good start to 2020, with sales in the first quarter rising by 6.0 percent (Fx & portfolio adj.) to 12.8 billion euros. EBITDA before special items increased by 10.2 percent to 4.4 billion euros.
Regarding the glyphosate litigation, Bayer continues to engage constructively in the mediation discussions. “We had made some progress in this – before the outbreak of COVID-19 overshadowed this topic as well and thus significantly slowed down progress in the negotiations,” said Baumann. Numerous meetings would have had to be canceled. "Our basic attitude has not changed: Regardless of the duration of the negotiations, we will continue to consider a solution only if it is financially reasonable and puts in place a mechanism to resolve potential future claims efficiently. Against the background of a looming recession and looking at, in part, considerable liquidity challenges, this applies more than ever.”
Impact of COVID-19 on outlook not yet reliably quantifiable
Looking to the future in the context of the COVID-19 pandemic, the company currently has numerous uncertainties to contend with, Baumann said. “In the coming months, it will be crucial for us to keep our supply chains as resilient as possible and thus further secure our business operations,” he said. The forecast for full-year 2020 published in February – before COVID-19 developed into a pandemic – continues to reflect the company’s targets, Baumann noted. “It will not be possible to reliably assess the positive and negative effects until later in the year.”
Wenning to step down as Supervisory Board Chairman after more than 50 years of service at Bayer
Werner Wenning is to step down as Chairman of the Supervisory Board at the end of the Annual Stockholders' Meeting. He has been with the company for 54 years – with over 20 years of service on the Board of Management and Supervisory Board. Baumann praised Wenning as a person who “has embodied Bayer’s DNA for decades and at the same time symbolizes the courage needed to initiate necessary changes.” Wenning’s legacy also includes the company’s systematic focus on health and nutrition, Baumann noted.
Prof. Dr. Norbert Winkeljohann will take over as Chairman of the Supervisory Board. Winkeljohann served as Chairman of the Board of Management of PricewaterhouseCoopers Europe SE until June 2018 and has been a member of Bayer’s Supervisory Board since May 2018. The Supervisory Board has proposed to the Annual Stockholders’ Meeting that former TUI Group CFO Horst Baier be elected to the Supervisory Board to take the stockholder representative seat that will be vacated. If elected by the Annual Stockholders’ Meeting, Baier is set to replace Winkeljohann as Chairman of the Audit Committee. Ertharin Cousin and Prof. Dr. med. Dr. h.c. mult. Otmar D. Wiestler have also been proposed for election for a term of four years. Both are already members of the Supervisory Board, with Cousin having been appointed by the Local Court of Cologne as the successor to Thomas Ebeling, who stepped down effective September 30, 2019.
Stockholders will also vote on a revised compensation system for members of the Board of Management. Under the new system, “20 percent of the Board of Management’s long-term variable compensation will be linked to the attainment of our sustainability goals starting next year,” Baumann said. “That makes us one of the pioneers among the DAX companies.” The system is intended as a significant contribution to promoting Bayer’s long-term corporate strategy.
Stockholders had until April 25 to submit their questions for the virtual Annual Stockholders' Meeting. As in the past, stockholders were able to exercise their voting rights by submitting a postal vote ahead of the event or by assigning proxies designated by the company, provided they had registered for the Annual Stockholders’ Meeting by the deadline. Stockholders can also exercise their voting rights online, including during the event. Further details are provided in the notice.
Notes to editors:
Further information is available online at www.media.bayer.com:
- Text and slides for the presentation by Werner Baumann (from approx. 10:00 a.m. CEST)
- Recent Bayer photo material and images from the Annual Stockholders' Meeting (as soon as they are available)
Additional material is available at www.bayer.com/stockholders-meeting
- Livestream of the entire Annual Stockholders' Meeting (from approx. 10:00 a.m. CEST)
- Recording of the Annual Stockholders’ Meeting (as soon as possible after the event)
TV editors can download the latest film footage about Bayer free of charge at www.tv-footage.bayer.com
Bayer’s commitments during the coronavirus pandemic: www.bayer.com/corona
For more information go to www.bayer.com
This release may contain forward-looking statements based on current assumptions and forecasts made by Bayer management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayer’s public reports which are available on the Bayer website at www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.
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