Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Bayer’s new chief executive Bill Anderson has blasted the German conglomerate’s performance as “not acceptable”, underlining the group’s struggle to revive its fortunes after the ill-fated acquisition of Monsanto.
The company, which is best known for creating aspirin more than a century ago, is exploring splitting off its crop sciences business or its consumer health division in an effort to appease disgruntled investors.
Anderson, who has led Bayer since April after joining from Swiss drugmaker Roche, has previously said that all options were on the table but on Wednesday narrowed those down, ruling out splitting the group into three.
Bayer’s $63n acquisition of US crop science group Monsanto in 2016 has so far failed to deliver on its promise. It has instead saddled the German company with debt and a vast legal fight in the US over Monsanto’s allegedly carcinogenic weedkiller Roundup. Bayer has denied the product causes cancer.
In a statement on Wednesday alongside Bayer’s third-quarter results, Anderson said: “We’re not happy with this year’s performance.” The American added that “nearly 50 billion euros in revenue but zero cash flow is simply not acceptable”.
Headquartered in Leverkusen, Bayer lowered its full-year forecast over the summer. Anderson said on Wednesday that meeting the revised forecast could be a stretch because it “requires a strong fourth quarter”.
In the third quarter, operating profit excluding one-offs plunged 48 per cent from a year ago to €709mn while revenues dropped 8 per cent to €10.3bn. Excluding currency swings, revenues were largely stable. Net debt climbed 8 per cent to €38.7bn.
The company said it would cut “multiple layers of management and co-ordination” by the end of this year as Anderson aims to shift the bulk of the decision-making “from managers to the people doing the work”. This will result in “a significant reduction in the workforce”.
Credit: Source link