- Upstream Ag Insights
- Posts
- Q1 2025 Agribusiness Earnings Results: Bayer AGM, Yara International, and Valmont Industries
Q1 2025 Agribusiness Earnings Results: Bayer AGM, Yara International, and Valmont Industries
A look at glyphosate, DSO and tariff impacts on top of Q1 2025 results.
Shane Thomas
April 26, 2025 • Read Time: 13 minutes
Index
1. Bayer’s 2025 AGM Highlights
This week, Bayer held its 2025 Annual Stockholders Meeting (AGM), providing updates on the state of its agriculture division and the ongoing glyphosate litigation risks.
The tone was not positive: As we all know, Bayer is navigating major headwinds.
a. Bayer’s Crop Science Business Overview
2025 Outlook — Bayer expects further sales declines in early 2025 and a slow market recovery. Crop protection margins are anticipated to remain under pressure through the year.
Strategic Response — A five-year turnaround plan is underway, centered on portfolio rationalization and managing dilutive, uncompetitive products and focusing on new sales from innovation. Generics were emphasized as an increasing challenge. Molecule patents for Bayer that have recently came off patent include:
Flubendiamide
Fluopicolide
Fluopyram
Penflufen
Bixafen
Thiencarbazone-methyl
Midterm Targets — Bayer reaffirmed its ambition to drive €3.5 billion in incremental innovation-driven sales and lift EBITDA margins for Crop Science into the mid-20% range by 2029.
For more, check out the full Upstream Ag Professional Bayer Crop Science FY 2024 Results Highlights and Analysis.
Glyphosate
Glyphosate remains problematic for Bayer.
Litigation Burden — Over 67,000 lawsuits remain pending in the U.S., despite a "winning record" at trial. Some large adverse verdicts have been appealed, with damages reportedly reduced by up to 90% in some cases.
Bayer highlighted that it supplies ~40% of global glyphosate production and remains the only U.S.-based manufacturer.
Multi-pronged Containment Strategy, as discussed in the April 20th 2025 edition:
A fresh petition to the U.S. Supreme Court seeks a decision on whether federal law preempts state-based failure-to-warn claims.
Legislative lobbying at the state level has led to new preemption laws in North Dakota and Georgia, with more efforts underway.
CEO Bill Anderson on the scenario and state bills:
“The status quo is not an option. We are nearing a point where the litigation industry could force us to even stop selling this vital product [glyphosate] in the U.S. — and that's not something we want to do, but we need to be prepared for all outcomes.”
“Three weeks ago, we filed a petition with the U.S. Supreme Court. We believe the critical issue — whether U.S. federal law preempts failure-to-warn claims in individual states — deserves its day in the highest court.”
“We welcome developments like the recent passage of important legislation in North Dakota and Georgia, reaffirming regulators’ authority on pesticide labeling.
Potential Glyphosate Exit — Executives remain candid: if litigation risks remain, Bayer is prepared to stop selling glyphosate in the U.S. and pull the label, which means no glyphosate can be used in the US.
A potential loss of glyphosate means a need for a thought experiment for the second order implications on the crop protection value chain:
Losing the most ubiquitous herbicide means a need to replace that with alternative, more expensive, and often inferior (efficacy/selection), products. But you cannot ramp up the supply chain on products like glufosinate ammonium or 2,4-D to replace glyphosate in <1 year, on top their relative efficacy to glyphosate, means a demand for more of those products per acre used. The same is true with pre-plant applied products. Maybe China can, but then factor in current tariff scenarios and how that will increase COGS at the farm gate. It causes major issues for farmers, retailers/distributors and input manufacturers to manage.
The implication then becomes a ramp up of demand for precision technology— See & Spray from John Deere or other providers in rapid fashion, including by retailers trying to manage their own supply and service businesses. It also arises the questions around interest in alternative weed removal methods (laser/electrical/mechanical). There likely becomes more interest in “weed seed destroyers” (light, or mechanical) oil combines, too. No matter how you look at it, ag equipment manufacturers stand to benefit from any indefinite shift away from glyphosate.
Bayer can threaten the pulling of glyphosate, but what might be best to prove their point is to actually pull it, scare significant portions of the industry and have industry players come to realization of what it means for farmers and their businesses, and then have the entire industry taking action by talking to the government.
To prepare for worst-case litigation scenarios, Bayer asked shareholders to approve authorized capital to raise up to 35% new equity, if needed. Importantly:
Use of proceeds is restricted to litigation containment efforts.
No M&A financing is allowed under this authorization.
The motion passed with shareholder support.
Bill Anderson had a confidence vote of 91% from shareholders.
Quotes
Bill Anderson (CEO) On Crop Protection Business Performance
On challenges:
“The crop protection market has seen a sharp decline. More and more generics flooding the market from Asia, coupled with increasing production costs in Europe, have strained margins significantly.”
On margin of off-patent products:
“Several of our products are both dilutive to margins and no longer competitive with generics in the market.”
On medium-term ambition:
“We reaffirm our target: above-market growth, €3.5 billion in incremental innovation-driven sales, and EBITDA margin improvement to the mid-20% range by 2029.”
On the scope of changes:
“Less than two years ago, Bayer’s organization had up to 12 layers of hierarchy. Today, 90% of the organization is within 6–7 layers — some units are as flat as only three.”
On reduction in bureaucracy:
“We've reduced the number of management positions by approximately 50%. Some leaders now have more than 80 direct reports. It’s a radical recalibration.”
He also stated they cut more than 10,000 jobs.
On initial cost savings:
“In 2024, we generated approximately €500 million in organizational savings. In 2025, we target €800 million in additional savings — with a goal of €2 billion by the end of 2026.”
On empowerment examples:
“Our crop science small molecules development team moved from a static model to self-organizing teams — allocating resources dynamically to the highest-impact innovation projects.”
DSO is definitely cutting costs. What remains to be seen, at least in the segment, is whether DSO is leading to improved results in terms of revenue generation, innovation etc. This will likely be a backward facing “yes” or “no” over the coming years.
For a contrasting perspective on DSO from an ex-Bayer employee, you can read Brett Massmann’s LinkedIn post here.
Additionally, Anderson stood by his decision in March to suspend for up to three years any preparations to break apart the German maker of pharmaceuticals, crop protection products and consumer health remedies.
2. Yara Q1 2025 Results - Yara
Yara’s Q1 2025 was a strong start to the year.
EBITDA excluding special items rose 47% year-over-year to $638 million, supported by a 7% increase in total deliveries, improved pricing, and cost control.
Crop nutrition deliveries reached 5.8 million tonnes—up 10% versus Q1 2024—led by a 17% increase in NPK and 17% in nitrate volumes.
Europe rebounded sharply with EBITDA (ex-special items) up $131 million, driven by a 15% volume increase and improved margins.
Brazil led growth in the Americas, with NPK volumes jumping 30% and regional deliveries up 12%.
Clean Ammonia grew with EBITDA rising 59% as improved plant uptime in the U.S. and Australia and expanded third-party volumes.
Yara generated $1.4 billion in price premium from its nitrate and premium NPK portfolio over comparable commodities, illustrating the opportunities in value added products.
Yara emphasized a shift toward high-return assets while phasing out marginal operations. The company’s global asset base and downstream presence provide opportunity and control in uncertain geopolitical landscape:
Yara CEO Svein Tore Holsether stated the following:
Yara has already demonstrated how we can capitalize on our operational flexibility in volatile times. The only thing we know is that we don't know what will happen next. So it's important to position our business to be both robust and also flexible to adapt to different scenarios. While volatility leads to risks which we need to manage, it also represents opportunities for a company like Yara
Tariffs:
ROIC
On ROIC, where Yara has been lagging (6% in last 12 months):
“While returns are improving, we maintain laser focus on further increasing returns through our improvement work, aiming to reach our through the cycle ROIC target of 10%”
ROIC by major fertilizer company 2022-2024. Source: Finchat.io
Notable Charts
3. Valmont Q1 2025 Results - Valmont
Valmont Industries reported steady performance in their Q1 2025 results, with Agriculture segment sales increasing 3.3% year-over-year to $267.3 million, representing 27.4% of total company sales.
While North America continued to experience softness in irrigation equipment demand, strong international performance offset the weakness, driven by robust growth in the Europe, Middle East, and Africa (EMEA) region and a stabilizing market in Brazil. Despite the topline growth, Agriculture operating income declined 11.6% to $36.2 million, with margins tightening to 13.6% due to a greater mix of large international projects and lower North American volumes.
Valmont reaffirmed its 2025 Agriculture sales outlook between $980 million and $1.04 billion, expecting international strength to continue playing a key role in supporting results through the balance of the year.
E-Commerce
Valmont talked about a new e-commerce platform driving aftermarket parts & AgSense 365 driving tech adoption.
Executives share the following quote:
Expanding our aftermarket parts business is a key priority, delivering high-margin revenue. Our new e-commerce platform enhances the customer experience with faster access to a broader range of parts and seamless direct ordering. Additionally, our new agtech platform, AgSense 365, has received positive early feedback for its performance and ease of use. We're very pleased with customer adoption rates and initial benefits are tracking in line with our growth plans. As the market leader, investing in digital tools for more precise irrigation is essential. We're helping growth, increase productivity with fewer inputs, improving yields and resource efficiency. We're also allocating capital and talent with discipline and our focus on ensuring resources are directed where they can have the greatest impact for our customers and our business.
Tariffs
Valmont acknowledged that tariffs had a $3 million impact in Q1 2025, but emphasized confidence in mitigating those costs for the remainder of the year:
“Our first quarter results include $3 million of costs from tariffs, or $0.11 per share.”
The company expects to be cost-neutral on a dollar basis for full-year 2025, across both its Infrastructure and Agriculture segments, through a mix of pricing strategies and operational adjustments:
“We’ll be cost-neutral, which we believe is very positive. And it will be cost-neutral for both segments.”
Specifically for Agriculture, which is heavily international, Valmont implemented several mitigation actions:
Increased use of U.S.-sourced steel.
Shifted coatings work to U.S.-based galvanizing facilities.
Raised prices in response to increased tariff-driven costs:
Additionally, the company highlighted its “Local for Local” strategy as a long-term buffer against tariff risks. This includes manufacturing agricultural products closer to the end markets they serve:
“We began implementing a Local for Local supply chain strategy to better serve our global customers. And that work is paying off, helping to reduce our exposure today.”
The company also confirmed that their Mexico operations remain USMCA compliant.
CFO Thomas Liguori stated that even though the first quarter bore the brunt of the tariff costs, they plan to recover those costs in the remaining quarters.