Dusseldorf Bayer AG is changing the leadership of its agricultural division. The long-standing board member Liam Condon is leaving the company at the end of the year. The new head of Bayer Crop Science and a member of the Group Board of Management will be Brazilian Rodrigo Santos, who has previously been the unit’s Chief Operating Officer.
Behind the change is the recent disappointing development of the agricultural business, which has not delivered the hoped-for and promised growth and earnings contributions since the takeover of Monsanto. The management around Head of Division Condon has therefore been under enormous pressure internally for a long time.
The 53-year-old had helped shape the takeover of the US seed company with a volume of 63 billion dollars since 2016. For a long time internally, Condon was also considered a possible successor to CEO Werner Baumann, because he has many years of experience in the Bayer Group and has also headed the Leverkusen-based pharmaceuticals business for many years.
According to Bayer, he is now pursuing career opportunities outside the group. Chairman of the Supervisory Board Nobert Winkeljohann thanked Condon for his services over the more than 30 years at Bayer. At the same time, the chief controller expressed clear expectations of the successor: Bayer’s agricultural business is well positioned. “Now it is a matter of fully exploiting the huge potential for value growth on this basis in the coming years,” he said.
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These words reflect criticism and probably also disappointment that this has not yet succeeded after the Monsanto takeover, which was completed in 2018. Bayer had to struggle with numerous internal and external problems and has so far not been able to achieve the financial targets set for the agricultural division during the takeover.
Bayer exceeds analyst expectations
This was not only due to the burdens caused by the legal dispute over the weed killer glyphosate, which could cost Bayer up to $ 15 billion in the end. Most recently, the agricultural division disappointed in the summer of 2021 with a weak margin compared to the competition, for which the financial market was not prepared. The share then fell sharply.
There is a surprising change in personnel in the Crop Science division.
Photo: Bayer
But Condon can walk with his head held high. The Crop Science division grew strongly in the third quarter and thus contributed to Bayer exceeding analysts’ forecasts overall. In the third quarter, the group increased its adjusted profit by 16 percent to 2.1 billion euros. The consensus expectations of the analysts were 1.9 billion euros.
Bayer’s group sales also exceeded expectations and came to 9.8 billion euros (up 14 percent). The Group has raised its targets slightly for the full year 2021. Based on the exchange rates as of September 30, the company now expects a slightly higher Ebitda margin of 25.5 percent and adjusted earnings per share of EUR 6.10 to EUR 6.30.
The news was well received on the stock market. Bayer shares rose 2.5 percent in the morning to EUR 51.50, putting them at the top of an overall stagnating Dax-40.
Condon’s successor Santos can take over the agricultural business at a time when it is picking up again significantly. Sales rose in the third quarter by 25.8 percent after adjusting for exchange rate effects to 3.85 billion euros because Bayer sold significantly more and at the same time was able to increase prices. Adjusted profit rose to 471 million euros after a loss in the previous year and was well above expectations.
The 48-year-old Santos is currently responsible for the global commercial management of Bayer Crop Science and works from the former Monsanto headquarters in St. Louis, Missouri, USA. The Brazilian has worked for the company in Brazil, the USA and Eastern Europe for over 23 years, primarily in the areas of sales, marketing, strategy and business development.
Medicinal lines are also growing
“We are delighted that Rodrigo Santos, a proven expert with more than 25 years of international experience in the agricultural sector, has taken over the management of the Crop Science division. Rodrigo Santos is characterized by his customer orientation, assertiveness and innovative strength, ”said Supervisory Board Chairman Winkeljohann.
The two pharmaceutical divisions of Bayer also increased their sales. The business with prescription drugs grew by 7.1 percent to 4.54 billion euros. After the restrictions in the pandemic year 2021, the division was able to sell more again, for example with the Eylea eye care product. However, adjusted earnings in the pharmaceuticals business fell significantly by ten percent to 1.37 billion euros. The reasons were higher marketing costs for the introduction of new products and higher research costs.
Bayer increased sales of non-prescription health products (Consumer Health) by eleven percent to 1.35 billion euros compared to a very strong prior-year quarter. Food supplements in particular performed well. The adjusted profit of this division rose by 2.3 percent to 308 million euros.
More: Five years after the Monsanto acquisition: These five graphs show how the takeover is affecting Bayer.