Bayer - Q1 2026 Earnings Analysis

Performance Highlights

Bayer reported Q1 2026 group sales of €13.4bn, down 2.4% as reported but up 4.1% on a currency- and portfolio-adjusted basis, as roughly €0.9bn in foreign exchange headwinds masked underlying volume growth of 5%. Core EPS of €2.71 rose 12.9% year on year, beating consensus expectations, while EBITDA before special items grew 9.0% to €4.45bn despite a €321m currency drag.

Crop Science was the standout driver, with EBITDA before special items surging 17.9% to €3.01bn and the EBITDA margin expanding 620 basis points to 39.9%, propelled by a €448m Corteva licensing resolution boosting Soybean Seed & Traits and disciplined cost savings; Pharmaceuticals held its EBITDA margin near 29%, as Nubeqa (+57%) and Kerendia (+84%) growth offset Xarelto (-40%) and Eylea (-21%) declines, while Consumer Health grew 5.3% in constant currencies on Dermatology and Nutritionals strength.

Management Outlook and Forward Catalysts

Management confirmed the full-year constant-currency outlook, targeting group sales of €45–47bn, EBITDA before special items of €9.6–10.1bn, Core EPS of €4.30–4.80, and free cash flow of minus €2.5bn to minus €1.5bn inclusive of approximately €5bn in litigation-related payouts, with the Perfuse Therapeutics ophthalmology acquisition adding to pipeline optionality at up to US$2.45bn. The confirmation signals management's confidence in the Five-Year Framework trajectory and its ability to absorb geopolitical and FX volatility.

The central investor debate heading into Q2 centres on the pace and finality of glyphosate and PCB litigation resolution, given that €2.1bn in Q1 outflows drove free cash flow to minus €2.3bn and net financial debt rose to €32.5bn; bulls will focus on Kerendia's expanding heart failure label, Nubeqa's mHSPC rollout, and Crop Science margin recovery, while bears will monitor FX pressure on reported earnings, generic competition facing Eylea, and whether litigation exposure remains fully bounded by current provisions.