PL First Cut – Bayer AG- 2QCY23
PL First Cut – Bayer AG- 2QCY23 – Himanshu Binani – Research Analyst, Prabhudas Lilladher Pvt Ltd
Bayer AG- 2QCY23 Results- Key Takeaways
Crop Protection- 2Q Performance
❇️ Revenue -24% YoY (Vol/Price/Fx/Portfolio -15%/-3%/-3%/-2%) from Euro6.46bn to Euro4.92bn.
❇️ ~Euro1,156mn decline in Glyphosate revenues during 2QCY23 (-70% YoY).
❇️ Region-wise growth- Europe/NAFTA/APAC/LATAM declined by -23%/-26%/-8%/-29% YoY
❇️ Segment-wise growth- Herbicides/Fungicides/Insecticides/Corn Seeds/Soybean Seeds/Vegetable seed grew by -48%/-5%/-16%/+6%/-11%/-7% YoY.
❇️ EBITDA at Euro725mn; down 59% YoY, with EBITDA margins at 14.7% down 1240bps YoY.
2QCY23 Highlights
❇️ Lower cotton and soybean acres has impacted company's performance in the NAFTA region.
❇️ Adverse weather conditions in key markets during the quarter has resulted in lower volumes of fungicides and insecticides.
❇️ The prices of glyphosate continued to normalize and has reverted back to historical average of USD3.8/Kg.
Revised Guidance for 2023 in CP business
❇️ Revenue growth +5-7% YoY (Excl. Glyphosate) (Vs +10% YoY earlier); expects double-digit sales growth in corn seeds, fungicides, insecticides, supported by higher prices from continued innovation and strong farm incomes. Overall Revenue decline of 5% in 2023 (Incl. Glyphosate) (V/s +1.5% earlier) as Company hinted that price correction in glyphosate prices due to improved supply. Now expects glyphosate based herbicides sales to decline by 50% YoY to ~Euro2.3bn (Earlier guided to decline by 30-35% YoY to ~Euro1.7bn in 1QCY23.)
❇️ EBITDA margins guided at 21% (earlier in the range of 25%). Higher prices (Ex-glyphosate) and cost savings to partially offset the incremental inflation and decline in glyphosate based herbicide sales.
❇️ Region-Wise Outlook- Company expects +4-6%/+8-10%/+6-8%/>10% growth from NAFTA/EMEA/APAC/LATAM during CY23.
❇️ Segment-Wise Outlook- Herbicides/Fungicides/Insecticides/Corn Seeds/Soybean Seeds/Vegetable seed to grow by +5%/+6-8%/>10%/>10%/+0-2%/+6-8% YoY.