Resilience and challenges: Bayer’s path in 2023

In 2023, Bayer AG proved to be resilient and, in some aspects, surpassed its competitors, according to Bill Anderson, the company's CEO, during the annual shareholders meeting held virtually today. The company has made significant progress in researching new medicines for cancer and Parkinson's disease, developing new herbicides and strengthening its main consumer brands.

"The soul of this company is alive and well. That has never been in doubt for me," said Anderson, who, alongside the chairman of the supervisory board, Norbert Winkeljohann, expressed gratitude to all employees for their commitment and dedication.

Challenges and Improvement Strategies

Despite advances, 2023 also highlighted critical areas that require improvement. Since taking office in June, Anderson has made a point of pointing out Bayer's vulnerabilities. “I am convinced that a shared understanding of the issues is the starting point for restoring trust, sharpening our organization’s focus and putting Bayer on the path to superior performance.”

The four main challenges identified were:

• loss of patent exclusivity in the prescription medicine segment and the structure of the pipeline in the pharmaceutical sector, with the majority of candidates still in the early stages of development;

• lawsuits in the United States;

• high level of company debt;

• Excessive bureaucracy that, like many other large companies, is slowing down Bayer's progress.

Operating model and renewal

To address these challenges, Anderson highlighted that the new dynamic shared ownership (DSO) operating model will enable the company's workforce to pursue Bayer's mission — "Health for all, hunger for none" — in more impactful ways. "This represents a radical change from the way most companies — including Bayer — are run. And it will be good for our customers, our employees and our business."

Two thousand twenty-four "is the first full year of a three-year rejuvenation process," Anderson announced. The agricultural sciences and consumer health divisions expect a slow start due to market dynamics, "but we are confident in our annual goals and the direction of our business," he assured, promising to communicate candidly about the company's progress.

Anderson also thanked Heiko Schipper, president of the consumer health division who is leaving after six years, highlighting his great contributions and the solid track record of performance he leaves as a legacy. Julio Triana, who succeeds Schipper from May 1st, was received with positive expectations for the future of the division.

Financial results and strategic decisions

Bayer achieved key financial targets for 2023 that were adjusted downward in guidance announced last summer. Group sales reached 47,6 billion euros, a decline of around 1% on a currency- and portfolio-adjusted basis. EBITDA before special items decreased by 13% to €11,7 billion and earnings per share fell by 20% to €6,39.

After reviewing capital allocation priorities, the company announced in February that it plans to pay the legally required minimum dividend for three years to reduce its debt.