German chemical and pharmaceutical giant Bayer pledged Tuesday to "urgently" address key challenges after falling deep into the red in 2023, heavily burdened by woes related to its glyphosate-based weedkillers.
But CEO Bill Anderson, hired last year to help steer the troubled group in a new direction, ruled out any imminent company breakup – despite mounting pressure from activist investors.
Bayer swung to a 2.9-billion-euro loss ($3.1-billion) in 2023 after booking a net profit of 4.15 billion euros a year earlier, it said in a statement.
Sales fell by 6% to 47.6 billion euros, partly because of "significantly" lower prices for glyphosate-based herbicides in the group's crop science division.
Earnings were also dragged down by heavy impairment losses in the same division.
Sales of prescription medicines in the pharmaceuticals division were flat, while the consumer health unit saw an uptick in part thanks to higher demand for dermatology products.
Anderson said Bayer faced "four challenges that urgently must be addressed."
Bayer, the maker of Aspirin, has to strengthen its pharmaceuticals pipeline, he said, referring to the need to launch new products to compensate for the expiration of patents on several blockbuster drugs in the coming years.
The group also needs to address massive litigation issues linked to the Roundup weedkiller, Anderson said, a problem Bayer inherited in the 2018 takeover of U.S. firm Monsanto.
Bayer has faced a wave of lawsuits in the U.S. over claims Roundup, which contains the active ingredient glyphosate, causes cancer. Bayer denies the claim but has spent billions of euros on legal costs in recent years.
Anderson added that the group's high debt levels and a hierarchical bureaucracy that "blocks progress" were also key issues that need tackling.
But he pushed back against pressure from activist investors who wanted to split up the company and spin off at least one branch to generate cash.
On the question of a possible breakup of the group, "our answer is 'not now' – and this shouldn't be misunderstood as 'never,'" said Anderson.
"Our priority is on tackling our challenges," he added.
Bayer, which has already warned there would be "significant" job cuts to help turn around the group's fortunes, said it aimed to make 2 billion euros a year in savings from 2026.
Looking ahead, the group expects full-year sales to come in at 47 billion to 49 billion euros in 2024, while earnings are expected to decline again.