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Bayer (ETR:BAYN) saw group sales increase by 1.9% to €9.9 billion and EBITDA (before special items) staying level year-on-year at €2.2 billion, with the pharmaceutical company recording a strong third quarter (Q3) in what has been a challenging period for the business and the industry at large.
The strong set of results saw shares in the company rise by 2.7% in early trading on Tuesday, with earnings beating analysts’ expectations.
Pharmaceutical sales rose by 4.8 percent to €4.2 billion in Q3 with the company seeing strong revenue growth in Europe and China, the company said.
It is the time since the company closed its $63 billion acquisition of Monsanto that the new business has been included for a full quarter, with the integration process fully underway, with Bayer reassuring shareholders that the group will see a boost to its bottom line.
‘Crop science posted a substantial rise in earnings due to the acquisition, while pharmaceuticals saw encouraging development,’ Bayer Chairman Werner Baumann said.
‘Consumer Health, for its part, posted higher sales on a currency- and portfolio-adjusted basis, although earnings were held back by currency effects,’ he added.
EBITDA in Bayer’s crop science division increased by 25.7% to €386 million, with the increase largely attributable to the €255 million in earnings that were contributed by the newly acquired Monsanto.
Bayer remains unfazed by the 9,300 lawsuits that it faces over alleged cancer risks posed by its glyphosate-based weed killer roundup.
‘We continue to believe that we have meritorious defences and intend to defend ourselves vigorously in all of these lawsuits,’ underlined Baumann
Bayer full year forecast confirmed
Its chairman also confirmed the adjusted group outlook for full year 2018, with Bayer expecting to see sales for fiscal year exceed €39 billion corresponding to a mid-single-digit percentage increase on a currency- and portfolio-adjusted basis.
However, the company admits that its forecasts for consumer health and animal health products are ‘becoming increasingly ambitious’.
Bayer continues to expect EBITDA before special items to increase by a low- to mid-single-digit percentage, with core earnings per share forecast at between €5.70 and €5.90 euros, matching previous guidance.
As before, Bayer aims to pay out a dividend per share for 2018 that is at least at the same level as in the prior year.