Bayer’s Q1 2025 Earnings: Pharma Surges, Agriculture Stumbles

Mixed Start to 2025 for Bayer

German pharmaceutical and life sciences giant Bayer kicked off 2025 with a quarterly report that highlights contrasting trends across its business segments. While the pharmaceutical division remains the company’s primary growth engine, the agriculture unit continues to face operational and regulatory challenges. The company maintained its full-year guidance but flagged rising geopolitical and currency-related risks that could impact performance going forward.

Revenue Holds Steady as Net Profit Declines

Bayer reported Q1 2025 revenue of €13.7 billion, a marginal change compared to the same quarter last year. However, adjusted EBITDA fell by 7.4% to €4.1 billion, and net income dropped sharply by 35% to €1.3 billion, driven largely by one-time charges related to Roundup litigation and restructuring efforts. On a positive note, free cash flow improved significantly, narrowing to negative €1.5 billion from negative €2.6 billion in the previous quarter. Net financial debt climbed to €34.3 billion, which the company attributed to seasonal factors.

Pharma Division Delivers: Nubeqa and Kerendia Drive Double-Digit Growth

Bayer’s pharmaceutical segment posted 4.1% sales growth at constant currencies, with standout performances from two new therapies: Nubeqa, a prostate cancer treatment, and Kerendia, aimed at diabetic kidney disease. These products recorded sales increases of over 75% and 85%, respectively. The segment also reported a 12.4% increase in operating profit, with EBITDA margins improving to 29.5%—a signal of operational efficiency and product innovation. Management believes this division could meet or even exceed the upper end of its full-year targets.

Crop Science Unit Under Pressure: Five-Year Turnaround Plan Launched

The agriculture division, Crop Science, recorded a 3.3% decline in sales to €7.58 billion. Contributing factors included the withdrawal of dicamba-based products in the U.S. and weaker insecticide sales in Europe. Glyphosate-based herbicide sales also declined, although early indicators for alternative products are promising. Operating income fell by 10.2%, with EBITDA margins contracting to 33.7%. In response, Bayer launched a five-year strategy aimed at restoring profitability by 2029, with emphasis on R&D investment, supply chain optimization, and a focus on high-value innovations like Preceon (corn), Vyconic (soybeans), and a new insecticide called Ikapolin.

Consumer Health: Modest Growth in Asia and North America

The Consumer Health division reported 2.5% year-over-year sales growth, reaching €1.5 billion. The increase was fueled by higher demand for digestive and flu-related products, particularly in Asia and North America. Operating profit rose by 3.3%, although margins slipped to 22.8% due to increased spending on marketing and branding initiatives.

Full-Year Outlook Reaffirmed, But Risks Remain

Bayer reaffirmed its 2025 full-year guidance at constant currencies, with strong expectations for the pharmaceuticals division. However, management warned of external headwinds, including currency volatility, tightening regulatory frameworks, and potential disruptions tied to geopolitical tensions, especially in key global supply and export markets.

Why Investors Should Pay Attention

Bayer’s Q1 results not only reflect the company’s internal performance, but also offer insights into broader trends in the pharmaceutical, agriculture, and consumer health sectors. For equity and bond investors, as well as healthcare and agri-business analysts, the report underscores Bayer’s ability to innovate and optimize operations under pressure. Despite rising debt, the combination of resilient pharma growth and improved cash flow may position Bayer as a stock to watch closely in the coming quarters.