Bayer Implements 95% Dividend Cut to Reduce Debt Amid CEO Bill Anderson’s Turnaround Plan

- Bayer AG proposes a significant reduction in its dividend, offering 0.11 euros per share for 2023, compared to 2.40 euros in the previous year—a decrease of 95%.
- The company intends to maintain this minimized dividend policy for the next three years to focus on reducing its substantial debt.
- As of September 30, 2024, Bayer's net financial debt stood at approximately 38.7 billion euros.
- This move aligns with a broader strategy to enhance the company's financial flexibility, which includes operational changes such as job cuts and a shift towards a more agile organizational structure.
- Analysts suggest further major strategic actions might be needed beyond the dividend cut to restore the balance sheet, considering ongoing litigation costs and other challenges faced by Bayer.
- Bayer's CEO Bill Anderson emphasizes the importance of reducing debt and enhancing flexibility, stating that the amended dividend policy reflects investor input and was carefully considered.
- In 2023, Bayer expects to generate little to no free cash flow due to various issues, including patent expirations for top-selling drugs and legal disputes related to products like Roundup herbicide.
- Shares of Bayer experienced slight volatility upon the announcement, with a brief uptick before settling slightly lower.
- The company's previous dividend policy was to distribute 30% to 40% of adjusted earnings per share to shareholders.