Bayer Raises 2026 Outlook as Pharmaceuticals Drive Q3 Growth

Bayer raised its 2026 adjusted earnings and cash-flow targets on November 3, 2026, after Pharmaceuticals drove third-quarter growth. Group sales reached €10.053 billion, up 4.1% as reported and 1.9% after currency and portfolio adjustments, while EBITDA before special items, which excludes items Bayer classifies as special, increased 6.9% to €1.615 billion, the company reported in its third-quarter results announcement.

Bayer now expects currency-adjusted Group EBITDA before special items of €9.8 billion to €10.3 billion for 2026, compared with €9.6 billion to €10.1 billion previously. The operational basis for that increase is a higher Pharmaceuticals EBITDA margin forecast before special items of 25% to 27%, raised from 23% to 25%. Other Group targets were confirmed except for cash flow and net financial debt.

Pharmaceuticals sales rose 8.0% reported and 6.4% adjusted to €4.680 billion. Divisional EBITDA before special items grew faster, climbing 23.6% to €1.292 billion and lifting the corresponding margin by 3.5 percentage points to 27.6%. Product data in the quarterly statement show the changing mix behind that performance:

Nubeqa, a cancer drug, and Kerendia, used for chronic kidney disease and heart failure, supplied the principal top-line impetus. Xarelto and Eylea declined as anticipated following patent expirations and generic competition. The product gains also required investment: higher selling expenses tied to marketing Lynkuet and Nubeqa and preparations for the asundexian launch partly offset the division’s earnings growth.

Pharmaceuticals Carried the Quarter

The other two divisions did not match that earnings momentum. Crop Science sales were €3.884 billion, up 0.7% reported but down 2.4% adjusted, as regulatory effects and adverse weather in Europe/Middle East/Africa and Asia/Pacific outweighed part of the benefit from Latin American demand for corn and soybean seeds. Its EBITDA before special items fell 41.3% to €101 million in what is typically its smallest quarterly earnings contribution, mainly because of higher cost of goods sold and selling expenses.

Consumer Health sales were €1.445 billion, 2.1% higher reported but only 0.1% higher adjusted. EBITDA before special items declined 4.4% to €347 million as higher marketing investment absorbed part of the benefit from cost and price management.

Cash and Reported Earnings Remain Under Pressure

The adjusted improvement coexisted with weaker bottom-line measures. Core EPS, which adjusts for specified amortization, impairment and special-item effects, fell to €0.31 from €0.49, reflecting a weaker core financial result and higher quarterly tax expense alongside the operational improvement. Bayer’s net loss narrowed to €672 million from €963 million a year earlier. The quarter included impairments of €307 million on the Xofigo brand and €215 million on Claritin, charges that help explain why stronger adjusted operating earnings did not produce positive net income.

Free cash flow, which Bayer defines as operating cash flow less capital expenditures, plus interest and dividends received and less interest paid, swung to negative €293 million from positive €596 million. Operating cash flow fell to €631 million from €1.685 billion. Payments to resolve legal proceedings, largely concerning glyphosate and PCBs, produced a net outflow of €1.121 billion, compared with €703 million a year earlier, and included payments into a trust fund for the proposed glyphosate class settlement. That makes litigation payments central to the gap between adjusted operating progress and reported cash generation.

Net financial debt was €31.083 billion at September 30, down €2.564 billion from June 30. The reduction mainly reflected Apollo’s €3.0 billion payment for a minority interest in a newly established entity containing Bayer’s long-acting reversible contraceptives business. Bayer retained majority ownership and operational control, meaning the debt improvement had a specific financing source rather than coming from quarterly operating cash generation.

For the full year, Bayer raised its free-cash-flow forecast by €1.0 billion to a range of negative €1.5 billion to negative €0.5 billion and lowered its year-end net-financial-debt forecast to €28.0 billion to €29.0 billion from €29.0 billion to €30.0 billion. Its separate forecast for free cash flow excluding settlement payments increased to €3.0 billion to €4.0 billion from €2.0 billion to €3.0 billion.

The revised outlook therefore separates two aspects of Bayer’s progress: Pharmaceuticals is growing strongly enough to lift Group adjusted earnings, but settlement payments still keep the reported free-cash-flow target below zero.