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Bayer Crop Science FY 2024 Results Highlights and Analysis
Shane Thomas
March 08, 2025 • Read Time: 9 minutes
Index
Bayer Crop Science 2024 Financial Scorecard
Financial Overview
Bayer Crop Science reported a 2.0% decline in full-year revenue, bringing total sales to €22.3 billion in 2024. EBITDA before special items decreased 14.2% to €4.3 billion, with the EBITDA margin falling to 19.4%.
The decline was attributed to significant price reductions in crop protection, inflationary cost increases, and ongoing market challenges.
The decline was primarily driven by pricing pressures in crop protection and lower seed volumes, particularly in corn, due to reduced planting areas. More soybean acres masked the challenges they are experiencing in North American soybean due to dicamba regulatory challenges.
The glyphosate business experienced a 13% drop in pricing, though volume increased by 7%. Despite this increase in volume, glyphosate sales remained a major drag on overall revenue, reflecting pricing adjustments and increased generic competition. More on regulatory, tariffs, and business structure around glyphosate below.
Across product segments, seeds & traits sales remained flat— slightly down in corn and slightly up in soybean on a price and Fx adjusted basis.
In herbicides, non-glyphosate products saw modest growth, but overall performance was down due to the sharp decline in glyphosate pricing.
Meanwhile, fungicides faced challenges, as generic competition and industry-wide inventory destocking put downward pressure on sales. Insecticides were the largest growth segment for 2024 alongside vegetable seed.
Crop Protection had an overall decline of 4% in 2024, relatively consistent with other companies in the market. Bayer states that it is related to pricing pressures from generics, continued destocking and lower herbicide volumes of acreage decline. Glyphosate sales declined 6%, reflecting significant market price pressure despite volume recovery.
On a region basis, Latin America was the hardest hit while North America showed the most resilience:
Continued watchouts for the business include the loss of Dicamba registration in the U.S. and expiring Movento (spirotetramat) EU registration are expected to weigh on future performance.
Research and development was up on the year, although they have discrepancies in their reported financial documents, with their powerpoint presentation stating €2.4 billion and €2.6 billion euro in their annual report.
Bayer last year showed they have a preference to convey R&D as higher when it is convenient and EBITDA higher when it is convenient by pulling “special items” out (for high EBITDA) and putting the special items back in when it benefits their message (for R&D expenditure to look larger).
Bayer reported a net loss of €2.6 billion for the full year 2024, primarily due to impairment losses in the Crop Science division.
In 2024, Bayer Crop Science recorded significant impairment charges totaling €3.78 billion, primarily in crop protection. The majority of this was a €3.27 billion impairment on goodwill, reflecting weaker-than-expected agricultural market conditions.
Within specific product categories, the Cotton Seed business saw impairments amounting to €510 million, which included €411 million for patents and technologies, €66 million for trademarks, and €25 million for R&D projects. These impairments were primarily linked to delays in regulatory approvals for the complementary herbicide, creating uncertainty around future business performance.
Soybean Seed & Traits faced impairment losses of €313 million, mainly due to negative currency effects, particularly in Brazil. This included €239 million for patents and technologies, €36 million for R&D projects, and €30 million for trademarks.
Bayer also recognized a €213 million impairment on assets related to the sourcing of raw materials for glyphosate production. This impairment stemmed from updated assumptions about raw material pricing, reinforcing the continued pricing pressures within the glyphosate segment.
Outlook for 2025 and Beyond
In Crop Science, we anticipate a slow market recovery with earnings pressure from regulatory challenges and Crop Protection pricing, keeping margins at current levels. 2024 exacerbated these headwinds for our Crop Science business. That's evident in our results, and we expect continued impact in 2025.
And reiterated with more detail by Crop Science CEO Rodrigo Santos:
Our top line growth outlook for the year is expected within the range of minus 2% to plus 2%. Additionally, we anticipate an EBITDA margin consistent with the prior year levels in the range of 18% to 20%. To get there, we will take measures to compensate for the headwinds. Seeds and traits are expected to slightly decrease in the U.S. due to the regulatory headwinds from the dicamba label loss. We expect recovery in Latin America, with EMEA and APAC projecting double-digit growth. Our core Crop Protection business is expected to see slight growth driven by increased adoption in acres planted. This will be partially offset by continued pricing pressure and the regulatory impact of the expiring Movento registration.
Crop Science CEO did set the expectation for Q1 2025 to be challenged:
We expect a significant portion of the regulatory impact we communicated to materialize in Q1. In addition, the strategic decision to consolidate our regional brands in the U.S. will shift revenue recognition from the first quarter to the second quarter of this year, close to the customer purchases. As a result, in Q1, we anticipate a sales decline in the mid-single digits compared with the first quarter of last year.
Notable quotes and Executive Commentary
Profitability?
During the earnings call, Bayer AG CEO Bill Anderson stated the following:
You'll note that we've added Crop Science profitability to our agenda as a fifth focus area. Take that as a first sign that we're committed to improving.
It’s a curious addition— the pursuit of profitability in a publicly traded company should be implied, but adding it in as a “pillar” suggests they weren’t looking at profitability previously (which I doubt to be case, which again begets, why put it in?).
The new “strategic priority” highlights the challenges Bayer Crop Science has faced— they are so focused on just trying to put fires out from a litigation and regulatory management perspective, they seemingly haven’t been able to think long-term about the business. More on this later.
Crop Protection Challenges
Bayer on challenges in their Crop Protection business:
Our Crop Science business is home to outstanding assets, exceptional global platforms, including a highly profitable seeds business, an industry-leading pipeline and excellent people, but our business is exposed to cost pressures in ways that are both unique to our business and general to our industry, the biggest factor being generic pricing pressure on our leading Crop Protection business. This is eroding earnings, specifically in Crop Protection that a leading business simply can't accept. Our Crop Science team has kicked off a comprehensive plan to address earnings headwinds. What I want to emphasize is that we are pursuing a path to fuel more growth and significantly improving our margins through measures that are in our control. We're targeting above market growth, including more than EUR 3.5 billion of incremental sales from innovation and an EBITDA margin improvement to the mid-20s by 2029.
Bayer’s Innovation pipeline continues to be a point of emphasis. Preceon corn and 5-way soybean herbicide tolerance,. along with RNA traits, a new insecticide and fungicide remain a crucial for them to be successful with in the coming years.
Glyphosate as a Stand Alone Business
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