28 February 2020 by jbchevrel
All the attention over the past week has been on coronavirus. However, we have had some company reports... In particular, we got numbers from Bayer AG (BAYNGR) on Thursday. The numbers were broadly in line with expectation. BAYNGR delivered on their 2019 guidance, the planned deleveraging accelerated, and the 2020 guidance was better. That being said, they did not provide any update linked to the coronavirus troubles… Revenue came at €10.8b, up +3% while the expectation of the consensus was of €10.6b. As far as segments, Crop Sciences came €4.7b (-1% and lower than consensus) Pharma €4.7b (+7% and higher than consensus) Consumer Health came €1.3b (+6% and higher than consensus). EBITDA came at €2.5b (+26%) broadly in line with a consensus at €2.48b. of this €2.5b, Crop Science was €872m, Pharma was €1.4b, Consumer Health was €285m. They recognized c€300m of cumulative cost synergies which is €100m higher than expected. They did not change their €870m synergy target for a horizon of 2022. Thus FCF was reported €1.7b for Q4, taking the full-year-2019 figure at €4.2b better than the guidance range which was €3b-4b. Net Debt was reduced from €37.9b as of Q3 to €34.1b as of Q4, implying a Net Leverage of 2.9x. BAYNGR CDS closed last week at 45. We close this week at 69 (+24bp on the 5y CDS / vs -12% on the equity). In parallel, the Main index came +21.5 from 43 to 64.5. Today alone, BAYNGR CDS widened by +10bp and the Main index widened by +7bp.