Bayer’s New CFO Steps Into a Quarter of Strong Earnings and $2.3 Billion in Legal Cash Burn

Bayer's Q1 earnings surged past estimates driven by Crop Science, but $2 billion in litigation payments pushed free cash flow deeply negative as new CFO prepares to take over.

Judith Hartmann has barely settled into her seat on the Bayer board, but her first quarterly report already captures the company’s split personality. On one side, operating performance has clearly turned a corner, with core earnings per share surging past analyst estimates. On the other, the cash register was emptied by a fresh wave of litigation payments, sending free cash flow deep into negative territory.

Hartmann took up her board role on March 1 and will formally succeed Wolfgang Nickl as chief financial officer on May 31. The quarterly figures she helped present on May 12 give her a solid operational foundation — even if the balance sheet tells a more complicated story.

Earnings beat driven by Crop Science

Bayer’s first-quarter revenue reached €13.405 billion, a currency- and portfolio-adjusted gain of 4.1%. The core earnings per share landed at €2.71, a 12.9% year-over-year increase that comfortably topped the consensus. The main engine was Crop Science, where revenue climbed to €7.558 billion — up 6.8% on a currency-adjusted basis. Before special items, the division’s EBITDA rose 17.9% and its margin improved to 39.9%.

A notable tailwind came from the unwinding of a licensing agreement with Corteva in North America, which provided a one-time lift to soybean seed and trait sales. Not everything in the agricultural portfolio flourished, however. Sales of glyphosate-based products dropped 15%, as delayed purchasing decisions and lower volumes weighed on that segment.

Pharma was a mixed bag. Revenue held roughly steady at €4.249 billion but slipped slightly in currency-adjusted terms. Nubeqa and Kerendia continued to grow strongly, yet those gains were partially offset by declining sales of Xarelto — hit by patent expiries — and weaker numbers from Eylea. Segment EBITDA before special items fell 7.5%, as Bayer spent more on selling and research costs.

Cash flow turns sharply negative

The operational strength stood in stark contrast to the cash position. Free cash flow came in at minus €2.320 billion, largely because net payments of €2.002 billion flowed out for settlements related to PCB and glyphosate litigation. Net debt rose to €32.518 billion as of March 31, a 9.0% increase from the end of 2025.

Bayer’s management described the cash drain as planned, noting that a significant portion of the legal payouts had been deliberately scheduled for the first quarter. Even so, the figure overshadows the underlying business performance. The company left its full-year free cash flow forecast unchanged at minus €2.5 billion to minus €1.5 billion, which still anticipates roughly €5 billion in litigation-related outflows for the year.

Pipeline moves and a new acquisition

While the legal overhang dominated the narrative, Bayer also advanced its pharmaceutical pipeline. The company agreed to acquire Perfuse Therapeutics in a deal that could reach up to $2.45 billion, including a $300 million upfront payment. The prize is PER-001, a Phase II-stage candidate for glaucoma and diabetic retinopathy. It marks Bayer’s first biopharma acquisition since Vividion Therapeutics in 2021.

In separate pipeline news, the group reported positive Phase III results for a PET/CT radiotracer designed to diagnose cardiac amyloidosis. Bayer intends to discuss a regulatory filing with the FDA.

Legal calendar looms large

The share price response was muted. On the day of the earnings release, the stock changed hands at around €38.09, up just 0.26%. Over twelve months, however, it has climbed 71.38% — though it remains roughly 22% below the February high of €49.17.

Several dates now dominate investor attention. The opt-out deadline for the Roundup class-action settlement is June 4, with the final court hearing set for July. In parallel, the U.S. Supreme Court is expected to issue a ruling in the John Durnell case in June. A favorable outcome could cap future liability; an adverse one would keep the litigation spigot open.

The company maintained its 2026 guidance, targeting currency-adjusted revenue of €44.5 billion to €46.5 billion and EBITDA before special items of €9.4 billion to €9.9 billion. Deutsche Bank has a price target of €45 on the stock with a “Hold” rating.

For Hartmann, the next few weeks are pivotal. If the Roundup settlement holds and the Supreme Court delivers a clean ruling, the path to faster debt reduction could become much clearer — and her first chapter as CFO would begin on firmer footing.