German pharma giant Bayer to save €2 billion by 2026, no split-up

German pharmaceutical giant Bayer AG plans to save €2 billion ($2.2 billion) in organizational costs by 2026 in a bid to overcome high debts without selling any divisions.

Asked about the future structure of the company and a possible split-up, Bayer's chief executive Bill Anderson said "not now."

Nevertheless, "we will remain open to everything," Anderson said on Tuesday during the presentation of the company's annual figures, according to a press release.

In view of the very limited room for manoeuvre, business development should first be improved and more strategic flexibility created, he said.

Bayer had already announced in January that the planned streamlining of administration and the intended acceleration of decision-making processes are likely to result in a significant reduction in personnel in Germany.

The bottom line for Bayer in 2023 was a loss of €2.9 billion - after a profit of €4.2 billion in the previous year - in part due to high write offs in the agriculture business.

This year, the group expects a further decline in operating profit.

Earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to reach €10.7 billion to €11.3 billion, Bayer further announced.

In 2023, the operating result fell by 13.4% to €11.7 billion.

Adjusted for the effects of exchange rate changes, Bayer is also targeting sales of €47 billion to €49 billion euros in 2024 after €47.6 billion last year.

As Bayer further announced on Tuesday with regard to the legal disputes in the United States, "new approaches inside and outside the courtrooms" are to be pursued in order to reduce legal risks and the associated uncertainties.

Investors have long criticized the failure to draw a line under the glyphosate issue. Bayer brought the problems surrounding the glyphosate-based weedkiller Roundup into the company in 2018 with the takeover of Roundup's US parent company, Monsanto, which cost over $60 billion.

Earlier on Tuesday, the pharmaceutical giant presented its figures for the fourth quarter of 2023, showing a surge in net profit compared to the same period of the previous year based on a decline in costs and expenses, but a drop in sales over the same period.

For the fourth-quarter, Bayer reported a net income of €1.337 billion ($1.451 billion), or €1.36 per share, higher than €611 million, or €0.62 per share, reported for the same period last year.

Core earnings per share were up €1.85, from last year's €1.35 per share.

Pre-tax profit stood at €1.644 billion as against €870 million in 2022.

Earnings before interest, taxes (EBIT) were at €2.189 billion, higher than the previous year's €1.432 billion.

Excluding special items, EBIT was €1.942 billion, compared with €1.453 billion a year ago.

Earnings before interest, taxes, depreciation and amortization (EBITDA) before special items was at €3.023 billion as against €2.462 billion in 2022.

Research and development expenses dropped to €1.070 billion from €1.614 billion a year ago.

Selling expenses moved down to €2.839 billion from the previous year's €3.706 billion.

Cost of goods sold was at €4.486 billion, compared with €4.768 billion in 2022.

Sales were €11.862 billion, down from €12 billion last year.

For the full year, the company will pay a dividend of €0.11 per share, less than the previous year's €2.40 per share.