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Bill Anderson, CEO of struggling German company Bayer, said on Tuesday that the company was “deeply devastated” and currently unable to separate.
Investors have long pushed Bayer to split itself into three separate groups, but Anderson said the expected loss of its exclusivity on key drugs, high debt, costly litigation over the weed killer and the group's internal red tape prevented it from doing so.
“The four challenges the company faces greatly limit our ability to choose our destiny: whether it is a three-division company or in smaller parts,” he said.
Anderson pledged to overcome the four problems facing the company in the next 24 to 36 months, with the aim of reducing annual costs of two billion euros by 2026 by reducing internal bureaucracy. Last month, the company cut its dividend by 95 percent, while preserving more than two billion euros in cash annually. It also revealed on Tuesday that bonus payments to employees were reduced by €1.4 billion last year after key performance targets were not met.
Anderson, a former Roche director who joined the German group last year, said he recognized the appeal of a “pure play structure” in pharma, crop science and over-the-counter consumer medicines. However, he said the company needs to fix its other issues first. “Our answer is not now, and this should not be misunderstood as never,” he said in a statement.
In 2023, annual sales fell by 6.1 percent in 2023 to 47.6 billion euros. EBITDA fell by 13 percent to 11.7 billion euros.
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Bayer is still reeling from the fallout from its ill-fated $63 billion acquisition of US seed maker Monsanto in 2016, which saddled the company with billions in debt and exposed it to costly lawsuits over Roundup.
Shares, which have fallen 51 percent over the past year, fell 1.2 percent on Tuesday morning.
Bayer has warned that EBITDA will decline further in 2024 as it faces new competition for some of its best-selling drugs and lower prices for agricultural products.
After a 13 percent decline in EBITDA to 11.7 billion euros last year, Bayer is bracing for another decline of up to 9 percent.
