By Ludwig Burger
FRANKFURT (Reuters) -Drug and pesticide maker Bayer said its 2023 results would likely come in at the lower bound of its target range, hurt by cost inflation and the reversal of last year's price boost for its glyphosate-based weedkillers.
Bayer saw herbicide sales jump 44% in 2022 after Hurricane Ida damaged rival producers and constrained Chinese suppliers failed to plug the gap. Prices have been dropping as competitors have returned to the market this year.
"Overall, we expect target attainment to come in at the lower end of our guidance," CEO Werner Baumann, who will be succeeded by former Roche executive Bill Anderson next month, said in a statement on Thursday.
Baumann cited "potential risks mainly arising from the significantly reduced market price expectations for glyphosate-based products".
Bayer, which is facing costly litigation over its glyphosate-based weedkillers, will replace its CEO early amid demands from some investors that the German industrial giant simplify its diversified structure and split into separate groups.
The healthcare and agriculture group said first-quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), declined 14.9% to 4.47 billion euros ($4.92 billion), falling short of the average analyst estimate of 4.63 billion euros in a consensus posted on the company's website.
The gap was largely due to lower-than-expected sales of its best-selling drug Xarelto, which saw revenues fall 13.2% as large purchasing tenders in China weighed on the price.
Quarterly group revenues slipped 2% to 14.4 billion euros.
Adjusted EBITDA in 2023 would be near the lower bound of 12.5 billion euros of its previous target range, a decline from the 13.5 billion euros reported for 2022, the company said.
That reflected dampened sales expectations at its agriculture unit, while its sales growth targets for pharmaceuticals and consumer health products were reaffirmed.
(Reporting by Ludwig BurgerEditing by Miranda Murray, Friederike Heine and Kim Coghill)