Bayer Sets Growth Targets Through 2022; Aims To Grow Sales By 4-5% Annually
The Bayer Group (BAYZF.PK,BAYRY.PK,BYR.L) announced the company aims to significantly enhance its performance in the coming years and has set itself ambitious growth and margin targets through 2022. The company is targeting sales growth of approximately 4 percent next year and an annual average of 4 to 5 percent in the following years through 2022, based on constant foreign exchange rates. This corresponds to an increase in sales from an anticipated 44.6 billion euros (pro forma) in 2018 to around 46 billion euros in 2019 and to approximately 52 billion euros in 2022.
The target for EBITDA before special items is average annual growth of 9 percent, with an increase from an anticipated 11.5 billion euros (pro forma) in 2018 to around 12.2 billion euros in 2019 and to approximately 16 billion euros in 2022. The EBITDA margin before special items is expected to amount to about 26 percent in 2018 (pro forma), with a target of around 27 percent in 2019 and more than 30 percent in 2022.
Bayer is targeting an average annual increase for core earnings per share of around 10 percent. Core EPS is expected to amount to 5.70 to 5.90 euros in 2018 in line with previous guidance, with a target of around 6.80 euros in 2019 and approximately 10 euros in 2022.
Between 2019 and 2022, Bayer is targeting a total of approximately 23 billion euros in free cash flow. Free cash flow generation is targeted to accelerate by an annual average of 18 percent compared to the 2018 base year – hitting approximately 8 billion euros in 2022.
“We intend to use these funds, together with the additional cash generated from the announced portfolio measures, to further increase dividends and to continue to reduce net financial debt in order to reach financial metrics in line with our A-category credit rating target. Beyond that, we will also explore the option of utilizing a significant portion of the divestment proceeds for share buybacks,” said CFO Wolfgang Nickl.
Bayer’s net debt level is expected to remain stable at around 36 billion euros in 2019, and then targeted to decrease significantly to between 26 and 28 billion euros by 2022.
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