Bayer Ag S/Adr

Good afternoon and good morning, everybody, and welcome to our conference call to discuss the first quarter results for 2025. To kick things off, Bill will share his insights on our overall business performance and the progress we've made on our strategic priorities thus far. Wolfgang will then provide further insights into the quarter one financials, the current geopolitical environment and our outlook for the remainder of the year. The presentations will be followed by our Q&A session, which will also include the presidents of our three divisions. As a reminder, we invite you also to join us for a crop science webinar later today. We start that at 4 p.m. Central European time or 10 a.m. Eastern time, and where we will delve further into the division strategy and outlook. Before we begin, please note the cautionary language in our safe harbor statement. And with that, over to you, Bill.

Thanks, Joost. And yeah, hi, everyone. Thanks for joining our call today. We're looking forward to going through our Q1 business results with you. And we're also aware that the present geopolitical and economic uncertainty is top of mind. So Wolfgang and I will try to give you a sense of how we're approaching that as well. So let's start with our first quarter performance. First, a reminder that we speak about our sales growth in currency and portfolio adjusted terms. As a group, our sales are flat year over year, positioning us well within the minus 3% to plus 1% corridor that we guided for in 2025. Core EPS came in at 249 euros, and we're on track to reach our outlook of four euros, 50 to five euros at constant currencies. Free cash flow is at minus 1.5 billion euros. And as we've explained before, the negative figure is due to the seasonality of the crop business. It's also 1 billion euros ahead of where we were last year at this time. So we're on pace to land within our 2025 guidance. I'll now go through our businesses one by one. In March, we said we expected mid-single-digit sales declines in crop science in Q1. Sales declined 3%. As expected, regulatory impact cut into some of our higher margin sales, which is why our EBITDA margin is behind last year's Q1 number. Overall, we expect growth in Q2, and we're on track to deliver our outlook for the year. In pharmaceuticals, we posted a strong first quarter with 4% growth. Nubeca and Corandia continued their exceptional momentum. Together, they grew 80% year over year. These gains more than offset the declines we're seeing on Xarelto. I also want to call out our cost management in pharma. We have launch activities underway across the business, so 12% earnings growth is a remarkable feat and an encouraging sign that our model is helping teams do more with less. We know the Xarelto declines will weigh heavily on our top and bottom line over the remainder of the year, but we're equally confident in the momentum of our launches and the fundamentals of our business. In fact, in a more certain environment, we would likely have adjusted our guidance for pharmaceuticals upward, but given the uncertainty around tariffs, we feel it's prudent to reaffirm what we said in March and then closely monitor developments. Given what we see right now, we expect our pharma business to come in at the upper end of our 2025 outlook in both the top and bottom line. In consumer health, we grew 2.5% with contributions from across the business while experiencing soft conditions in key markets. Most importantly, we saw 2% volume growth in Q1. On margins, we were slightly behind prior year, but our guidance of 23 to 24% is well within reach. Overall, these results put us in a good position to deliver the year. Now on to our strategic priorities. You see them captured on the slide. I'll touch on select highlights here. On the pharma pipeline, the Beantra launch is underway in the EU, and we're prepping to launch Elanzanitent in the second half of the year. On litigation, we received an adverse decision by the Superior Court of Pennsylvania, an appeal court, last week. That led to a technical revision of the provision, while we will continue to appeal. This also underscores the need of the U.S. Supreme Court to provide clarity on federal preemption. Our multi-pronged strategy to significantly contain litigation proceeds apace. We filed for U.S. Supreme Court review in the Durnell case, and we've received notable amicus briefs in support of the argument from legal scholars, commodity groups, and other experts in support of the merits of our petition. We also filed two hold petitions with SCOTUS for the Johnson and Salas cases, as the issue of federal preemption exists for both, as in Durnell, and we seek the court to hold cases pending final resolution of the Durnell case. In the legislative realm, we welcome the progress we've seen in several states, including passage in North Dakota and in Georgia, where the governor just signed this important bill last Friday. We await developments in additional key states as legislative sessions conclude in the coming weeks and months. And on crop science profitability, our team is taking action to improve midterm performance. Yesterday, we announced some changes to our production and R&D network in Germany. These are difficult decisions. We don't make them lightly, but they're necessary to position our business for the future. Later today, Rodrigo and his team will provide more color on how we're setting the business up for gains in growth, in profit, and in cash over a five-year horizon. And finally, onto our new system. The people of Bayer forge ahead in our journey to make Bayer leaner, faster, and more productive. We reduced around 2,000 rolls in the first quarter of 2025, amounting to a reduction of roughly 11,000 rolls since we started the system in July of 2023. We're currently focused on two big enablers. First, freeing up resources so our teams can flow to the highest impact work. And second, installing people enablement tools that are fit for our new system and that we continue to attract and retain top talent. So I want to close with three points. First, despite headwinds from patent expiries and regulatory impact, our first quarter puts us in a good spot to deliver in a challenging and important year for the company. Second, we have a plan to address the company's biggest priorities. You have a chance to get some more color on one of them, crop science profitability, later today. Finally, it's our mission to provide health and nutrition solutions, whatever comes. So we're keeping a close eye on the macro environment and we'll adapt as required. So over to you, Wolfgang. Thanks, Bill.

And also, hello from my side. I would like to start with some more color on the drivers of our first quarter results first. For the group Q1, net sales were flat versus the prior year quarter, both in currency and portfolio adjusted terms and as reported. A decline in crop science was offset by growth in both pharmaceuticals and consumer health. EBITDA before special items came in at 4.1 billion euros, which is 7% or about 300 million euros below the prior year quarter. The decline is largely related to lower crop science earnings and a lower reconciliation result. The latter was driven by higher long-term incentive provisions and balance sheet related hyperinflation postings. For Q1, the FX headwind on EBITDA before special items was €165 million, largely driven by the before-mentioned hyperinflation impacts. Core earnings per share of €2.49 were 33 cents, or 12% below the prior year quarter, mainly impacted by the lower EBITDA before special items. In Q1, we recorded EBITDA-relevant special items of 587 million euros, including the glyphosate litigation-related provision update Bill referred to earlier. Consequently, we now expect to come in rather towards the minus 1.5 billion euros of our full-year modeling range provided. Driven by the crop business seasonality, we saw a negative free cash flow of 1.5 billion euros in the first quarter. This reflects an improvement of about 1 billion euros compared to last year, primarily due to effects relating to advance payments from our crop science customers and including a change in factoring. In line with the seasonality of our cash flow profile, net financial debt increased by 1.7 billion euros to 34.3 billion euros since year end 24. Year on year, however, net financial debt was down by about 3 billion euros. Let's now take a closer look at the divisional performance. When I talk about sales growth, I will also always refer to currency and portfolio adjusted figures. For crop science, net sales came in at 7.6 billion euros in the first quarter, down 3% versus the prior year. As a reminder, we had projected mid single-digit declines for the first quarter, so we are largely in line with our internal assumptions. The core business declined by 3% with seats and trades down 5% impacted by lower soybean and cotton sales due to the US dicamba label vacature and corn volume facing to the second quarter following a strategic adjustment of our distribution network. The core crop protection business was up 2%, driven by higher non-glyphosate herbicide volumes, partially offset by lower insecticide volumes in the EU due to the expiration of the Movento registration. The regulatory impact related to dicampa and Movento in Q1 is in line with the previously communicated 200 to 300 basis points margin impact for the full year. We expect the majority of the effect in the first half of the year. Glyphosate sales declined by 10%, driven by phasing into subsequent quarters to support just-in-time purchases in the southern hemisphere. On profitability, EBITDA before special items came in 10% lower at 2.6 billion euros, resulting in a margin of 33.7%. As expected, the lower margin is primarily an effect of high margin sales losses due to the regulatory impacts and the corn phasing to Q2. We were able to partially compensate these effects by cost savings. Let's now move on to our pharma business. Net sales of 4.5 billion euros were up 4% in the first quarter, with growth across the portfolio more than offsetting the expected XRL to decline. Our launch assets Nubeka and Corentia continued to perform particularly well, growing 80% year over year and reaching combined sales of 680 million euros. This was largely driven by strong contributions from the United States. ILEA grew by a solid 5% supported by the ongoing rollout of 8 milligram and sales were particularly strong in Europe and also in Japan. Our base business grew by 6%, driven by strong contributions from radiology and women's health, in addition to high demand for cardio-aspirin and Adelaide in China. And as expected, Xarelto declined in the first quarter, coming in 31% below the prior year. This was mainly driven by continued generic pressure in Europe and in Japan. On the bottom line, EBITDA before special items increased by 12% to 1.3 billion euros in the first quarter, resulting in a margin of 29.5%. Both higher sales as well as continued efficiency gains more than offset slightly higher R&D investments and an FX headwind of one percentage point. Finally, turning to consumer health, sales here grew by nearly 3% with balanced category and regional growth. Volumes were up by 2% while price increases contributed 1%. All regions performed well with growth in North America, APEC, and EMEA. In Latam, we remained flat due to muted consumer sentiment influenced by the U.S.-Mexico trade relations. The digestive health category increased by 13%, driven by product launches, as well as supply improvements in products like Iberogast. For pain and cardio, we record a growth of 7%, fueled by product launches and good consumption of siredone in Asia Pacific. Additionally, aspirin also performed well across all regions. Dermatology was up 2% for the quarter thanks to Bepantene and Canistane, along with innovations within our product range, Kangwang in China. The allergy and cold category grew by 2% with strong growth for cold products in North America, partially offset by a slow start to the allergy season. Finally, nutritional declines by 5% year over year due to weak demand in our prenatal nutrition supplements in China and the discontinuation of the care-of business in the U.S. in June of last year. Our EBITDA before special items increased to €342 million, resulting in a margin of 22.8%, slightly below prior year, but within reach of our guidance range. The improvement in EBITDA before special items was primarily driven by increased sales. Additionally, our ongoing cost management effort positively impacted profitability, including a reduction in COGS. This was partially offset by lower divestment income and increased investments in marketing our innovative products. So let's now look at the outlook. As we see high volatility in the geopolitical environment, I will also share our thinking about the potential direct and indirect impacts around tariffs, as well as FX. We are continuously monitoring the various tariff announcements. Our experts are analyzing potential impacts and working on possible solutions to secure supply to our customers. We are focused on maintaining the stability of our supply chains and on minimizing any potential impact. Based on the current status of tariff announcement and our mitigation measures, we expect to manage the impact and we confirm our outlook at constant currencies for the full year 2025. For crop science, we expect the direct tariff effects to be limited overall, mainly impacting the crop protection portfolio, as seeds and trades are mostly produced in the regions where they are sold. As of now, most of our crop protection active ingredients, as well as glyphosate, are exempt from the latest tariffs. We're also evaluating indirect business implications. These could include, amongst others, the magnitude of acreage shifts from soy to corn in the United States, potential shifts to lead in soy, as well as several pricing and volume scenarios for glyphosate and the broader crop protection portfolio. For the full year for crop science, we are taking decisive measures to maintain stable sales and margins in spite of notable regulatory headwinds. As the anticipated regulatory impact materializes, recovery in Latin America and crop protection, along with strong efficiency gains, will help to compensate to achieve our full year guidance. Let me move on to pharma. On tariffs, we expect to see certain direct effects on parts of our portfolio, mainly product flows between the US and China. With our production footprint in the EU, there is an additional risk of potential tariffs on pharmaceutical imports from the EU into the US. As you know, these are currently exempt, but under a Section 232 investigation. The business performance in the first quarter, particular for our launch assets, provides confidence in our ability to sustainably compensate the Xarelto generalization. Considering this, together with what we currently know about tariffs, we expect pharma to deliver at the upper end of our sales and profitability guidance range. For consumer health, our expectations for the phasing throughout the year are in line with the full year guidance. Based on the current tariff announcement, we expect to be able to manage the direct impacts within the guidance range. We are monitoring additional indirect risks mainly related to potential demand impacts stemming from lower consumer confidence. Let me close with some comments on foreign exchange rates as well. In the past weeks, we have seen a material depreciation of the US dollar and other currencies against the euro, which negatively impacts our top line and, to a lesser extent, our bottom line. In line with long-standing practice and legal requirements, we are updating the FX estimate based on March month-end spot rates. Compared to constant currencies, this leads to the numbers shown in the last column of the table on page 11 of our investor deck. However, as we all know, currencies have materially changed since the announcements from the US administration in early April. To illustrate the potential impact, we performed further analysis based on the spot rates of April 24th. In that scenario, there is an incremental FX headwind of about 900 million euros in net sales and approximately 10 cents in core EPS. On the other hand, this would reduce net financial debt by another 500 million euros compared to the figures shown on the slide. We will monitor these further developments and update you on the impact with our next reporting. And with that, I close my remarks and hand it over to you, Joost, to moderate the Q&A, please.

Thank you, Wolfgang. Thank you, Bill. We will now start our Q&A session. For that, we have Stefan and Julio as well here with us in the room, and Rodrigo dialed in from the United States. Before we start, as usual, a few housekeeping comments. If you have a question, please raise your hand and follow the instructions provided in the chat. To allow as many participants as possible to join, please limit yourself to two questions. The first two participants in the line are Richard Foster from JP Morgan and Sachin Jain from Bank of America. So, Richard, please go ahead.

Hopefully, you can hear me. Thanks for taking my questions. Two questions, please. Firstly, on crop, perhaps you could – you mentioned growth in crop in Q2. Could you talk about the benefit of the shift from Q1 and what that is contributing in terms of the growth? And then whether you've seen any impact from forward purchasing maybe on crop protection products, given the uncertainty, particularly around the other herbicides, and how you think that strength will continue, if at all, in the coming quarters. And then a second question just on ILEA in Australia. in pharma. Future expectations, obviously very strong Q1. Could you just give us more color on how the 8 milligram is doing and how you're seeing the launch in the future of biosimilars? Thanks very much.

Great. Rodrigo, you want to take the first one and then Stefan can talk about ILEA?

Sure. So thanks for the question. And let me go deeper on the performance here of the core business, right? So if you would exclude the regulatory impact that we had on Q1, our core business would be growing 2.4%. On the specific questions about the phasing on corn, and this is the accounting treatment that we are doing because of some of the changes in the go-to market that we did in the U.S., our corn business would be growing at 2.5% on this first quarter. And this is basically the adjustment that we are doing on the accounting that you see on that one. If you go to crop protection, we reported 2% growth on Q1. Again, impacted by Movento. If you would exclude Movento, we would be growing by 5%. And on volume, to your question, was 7% higher on Q1. And there is a little bit of this dynamics that you mentioned about the market, about flowing markets. elements from Q1 and Q2. And that's why we feel when we see the numbers of Q1 very consistent to what we were expecting, we are confirming our guidance for the year and also our confidence on our core business growth based on the innovation. That is a good confirmation of the health of the core business that we have when we look to the deeper on the performance number here. Thanks for the question.

Hi, Richard. Thanks for the question, Ailea. We're very pleased with the performance of the first quarter. What you can see is that in an increasingly competitive field, we're maintaining and in some geographies even expanding market share following the introduction of the eight milligrams. We're very pleased, that being said. For now, we're essentially capturing new patients. So we're not seeing any movement from two to eight for now. So it's mostly new patients. That will accelerate once biosimilars will enter the game. Then we will probably see more movement from two to eight. Until then, we had guided that we expect ILEA to remain north of 3 billion over the coming years, and that's something that we still are targeting as of now. Thank you.

Great. Thanks, both. So the next one in line is Sachin Jain from Bank of America. Sachin, please go ahead.

Hi there. Can you hear me? Sorry for the delay.

Yeah, we can hear you.

Yes, two questions, please, on events upcoming. So, first, I guess, for Bill, on glyphosate, you referenced the SCOTUS application introduction. Just any colour on when you expect to hear back on whether it's accepted for review or not? And then, really, if you could flesh out plan B, if not accepted by SCOTUS, you touched on state legislation, but any colour on plans beyond that, particularly when you could give visibility on structural solutions you've been debating? And then the second one, Stefan, I'm sure you're expecting on as indexing from me, phase three data towards your end. I want to just touch on two points. One, learning from phase two that you've taken into phase three regarding the population you're assessing and the end points. And then perhaps you could touch on the size of the market given the focus mostly has been AF historically for this class. Thank you.

Yeah, thanks. Thanks, Ashan. So on SCOTUS, We think there's sort of two windows that we could hear. One is in June, and this is hearing back from them on, you know, they're accepting our petition or not. It could happen in June, or it could happen in October or slightly later. So those are kind of the timelines when that should happen, and we think the filing went in early enough that it could happen in the early window, but yeah, it's... It's hard to say. In terms of a plan B, if what you mean by, you know, well, what do we do if Supreme Court doesn't accept or something like that? Yeah, we definitely are not staking everything on any one plan. So I think some of the other things that we can do, we're working with members of Congress from both the Republicans and the Democrats. This is a bipartisan topic. It should be a bipartisan topic. And we were pleased to see that in Georgia, that we had a bipartisan legislation. And we're working with members of Congress from both parties on, you know, that this sort of language should also be in the next farm bill. The question there is when will be the next farm bill? I mean, one was due last year. One is sort of overdue this year. But in the current environment in Washington, you know, it's it's. It's not so easy to say whether that will actually happen this year. But that would be very useful because that would be a national legislation, which is, yeah, yet more effective than having it from individual states. We're still pursuing legislation in additional states. So that's, I guess, part of a plan B. There's always the potential for a settlement. because most of the time, these sorts of situations, they do get resolved by a settlement, but obviously for us, a settlement would need to be something with a high degree of finality, which was obviously not achieved on the one that was attempted a few years ago. So we would have a very high standard for that. And then finally, there are certain structural options that we are preparing for. And so we wanna make sure that we have, one way or another, a way to put the litigation situation behind us. We think the, yeah, the Bayer employees, the shareholders, our customers, they deserve that, and we're working really hard on it. Maybe Stefan on Azindexian? Okay.

Yeah, hi, Sachin. Yes, I was expecting your question to some degree. So first of all, thank you for your continued interest in the Asundexion program. We're eagerly awaiting readout of the study in the second half. And yes, we have modeled our phase three population to those populations where we saw the biggest effect in our phase two. There is a subgroup which against the composite of recurrent symptomatic ischemic stroke and TIA, where we saw a risk reduction of 36%. This is pretty much how we've built the phase three to have mostly that population be present. We're also looking at a higher likelihood of events when patients present with atherosclerotic cases, so that's also taken into account as we have selected the patient population. Your question on potential, This is one that has no easy answer because when you look at how the studies are built, we're studying acute cases for now. If you include the prevalent cases, then that would largely extend the market potential. So I think you have to probably think about this in two steps. Thank you.

Thanks, Stefan. All right. The next two in line are James Quickly from Goldman Sachs and Joe Walton from UBS. James, you're next.

Thank you, Jost. Hope you can hear me. James Quiddingham from Goldman Sachs. I've got two questions, please, and two farmer ones. So firstly, a follow-up on Ascendexium. I think in the roadshow and the call last time, last quarter, you seem confident on the efficacy. Given this trial also has a safety primary endpoint as well in terms of time to first major bleeding events, how is your confidence around this given the data we've seen before, particularly data from the Oceanic AF trial, which again, I'm cognizant hasn't been presented externally. And can you confirm if that is a superiority endpoint or a non-inferiority endpoint on the bleeding side of things? And then secondly, In terms of the phasing on the farmer margin, so obviously you had a very strong first quarter. The margin was well above the top end of the guidance range. You've already pointed that you're going to come in in the full year towards the top end. But could you talk to the phasing through the year? And could you quantify how much of the sales beat was from one-off elements in the quarter? I think stocking in aspirin was called out. So how should we think about the trajectory for the rest of the year in pharma, given as a relative as well?

Thank you. So thanks. On Ascendexia, and I will have to get back to you on, I think it's non-inferiority on bleeding, but it could be superiority. On bleeding, I'm not sure.

It's versus placebo, right? In stroke?

Yeah, but he asked for the whole oceanic trial. That includes the failed one. So what I can tell you is that we had in the Pacific program, we definitely met what, the difference that we were seeking in bleeding and from what I recall also in Oceanic. But we'll get back to you, James, on this one. So it's certainly a good data point. But I remember and I don't have a top of my head that on the bleeding side, we had a pretty clean bill of health in terms of all the studies that we've done from phase two, including the first phase three in the Oceanic and the ongoing we'll have to see. On the strong first quarter, thank you. I agree. We had an incredibly strong first quarter, and this against the backdrop of Xarelto being at minus 31%. We've also said, however, that we expect the first half to be a little stronger than the second half. I think that still holds true. So in order to get to progressively somewhere between... more than a billion, so somewhere between 1.2 to 1.5 billion on Xeralto. We would have to accelerate the losses slightly in the second half. The first half really was strong. The only thing that was outside of what we would normally see was the cardio aspirin sales in anticipation of volume based procurement in China. And then please note that we ran against a relatively weak quarter last year. So we're going to be running against stronger quarters for the remainder of the year comparatively. But all in all, We're extremely pleased, of course, with Nubeka and Corandia, both at 80% and 90% growth. We're also pleased with our continued strong growth in radiology. And we see recovery in women's health, which I still attribute to somehow recovery from COVID, which is linked to these long-acting contraceptives that take a little longer to recover, apparently. Thank you.

Thank you. So, the next one in line is Joe Walton from UBS. Joe, please go ahead. Joe, can you hear us?

Yes.

Great.

Sorry. Apologies for that. Can you hear me?

Yeah, we can hear you well. Thank you.

Oh, thank you. One ag and one pharma question, please. Just on the Plan B and the state legislature, just to get a sense of the importance that the states that you have succeeded in. So North Dakota, not that many people live there. Georgia, you've got a ruling through there which presumably gets rid of the Barnes case because that was in Georgia. But most relevant, how many of your cases are in Missouri? And can you just tell us a little bit about the timeline for the next steps there? We note that it's past the lower house, as it did last year, but it passed with a smaller majority this time than it did last year. And last year, it failed in the upper house. So can you just give us an idea of the sense of timing and Any degree of confidence that you have that you've shifted the mindset there to get that one over the line? And then my second question would be on Alan Zinitant. Now, Estella's is not nearly as much of a powerhouse in women's health as you are, but Fioza really hasn't done very well. It's sort of fairly it's stuck now in the last three quarters at between 50 and 60 million dollars. the US. I wonder if you could just tell us a little bit about how we should see that grow, whether they've done a good job in at least educating people that there will be something around or whether you'll be stuck with, well, you're another one of that not particularly good type of product. Thank you.

Yeah, thanks, Joe. Regarding the state legislation route, we think it's important beyond the simple question of, you know, what's the population of the state? In a way, if you think about it, the states shouldn't have to affirm a federal agency as having authority over the thing that the federal law in the first place said they have authority over. This would be a little bit like a state affirming that the FDA has authority over drug labels. Right. And the reason we're in this situation, though, is because state courts have, we believe, wrongly interpreted the FIFRA legislation as sort of, you know, that the that the EPA's mandate is not authoritative across the 50 states. And so this is why it needs clarified. So, yeah. So one reason to get these bills is because it It offers at least manufacturers certainty within those specific states that at least they know what the rules are. Now, in the case of Missouri, there's a there's a large majority of glyphosate lawsuits that have been filed in Missouri now. how Missouri law applies versus the law of the state of origin. So for example, a person in Georgia who's filed suit in Missouri, are they covered by the Georgia law or the Missouri law? And there's many questions that will basically need to get decided also in the courts. But the bottom line is getting the state legislation is a, I think it's a powerful signal also to the U.S. Congress that, hey, the states shouldn't have to do your job for you. The law needs clarified, and frankly, the Supreme Court can do that, the U.S. Congress can do it, and state legislatures can assist with that as well. So hopefully that gives you a little bit more color on it. You want to talk about Ellen Zanatent versus Vioza? Sure.

Hi, Joe, and thanks for your interest in Alan Zanatan. So just maybe to preface, we're well on our way, according to plan, to get this product approved in the middle of the year. U.S. will most likely be our first launch market. Actually, certainly our first launch market. We see a differentiated profile to other products in the space. We have an NK3, NK1 neurokinin inhibitor, and we think this also shows in our clinical results. We have every reason to believe that we can be best best product in this class. The unmet need of women who either cannot use hormone therapies or do not want to take hormone therapies to treat their hot flashes and also sleep disorder potentially is there. And we believe that we have a very competitive product and you named it. We are one of the leaders in this space with a strong legacy. And we intend to play that. So stay tuned. And we still think that this has potential north of a billion. So this is a blockbuster in our view.

Thank you. Fantastic.

Thank you.

Before we continue, we have one unidentified hand raised in the call. If you could just send us a short email so we can link the telephone number, that would be super helpful. In the meantime, we continue with Christian Feitz from Kepler Chevreux, followed by Joel Jackson from BMO. So Christian, please go ahead.

Yes, thanks. And good afternoon, good morning. Two questions, please. First of all, on crop. The current drought in Europe seems to be ongoing well into May, June. Rodrigo, do you see this as a threat to demand for crop protection products, particularly fungicides and insecticides for Q2? Second, on pharma, I know that news flow out of the U.S. is changing on at least daily basis. Yet, can you comment on yesterday's press conference at the White House and possible implications for your pharmaceutical product pricing? Thanks very much.

So, Rodrigo, yeah, sorry, go ahead, Rodrigo. Thank you, Bill. Well, Christian, thanks for that. So, fair enough. And we are watching very close. The next few weeks in Europe will be critical, right? And especially for the fungicide application, as you said. So, we're going to be watching very close. We have a, it's always like that, right? We had a good season in the Americas overall. And in Europe, we have this dry right now in some countries. We had some impact in the irrigation area of Turkey as another element of that impact. We are watching close on that one to see if the impact of that, but you nailed. The key element is how the weather will be on the next weeks and the impact of that on fungicide. That could have an impact on that one. We're going to be watching on this one, but overall, When I look globally, you have a more positive trend this year than we had last year. So that's also helpful for overall production globally. Thank you. To you, Stefan.

Yeah, thanks, Christian, for the question. Just like you, we're following this on a daily basis and continue to be sometimes surprised. On the other hand, I think we can say that pricing is complex. And when you look at the executive order, you can see how it's formulated, that this is not something that anyone can give a pinpointed answer to at this point. So I think we'll have to... see a little bit the specifics of how this is going to roll out. That being said, I think it's a clear call to action also to other geographies, namely Europe, to look at how to better support innovation with pricing. So this is, to me, a very clear ask and should be an opportunity for Europe to position itself as a strong supporter of this industry, the innovative industry.

Thanks very much.

Super, thank you. The next one is Joel Jackson from BMO. Joel, please go ahead. Joel, we can't hear you. Can you unmute yourself and then go ahead with your questions? All right, then I would propose to continue with the next two in line. We'll come back to Joel. So following from here is Vincent Andrews from Morgan Stanley and then Laurent Favre from BNP Paribas. So Vincent, please go ahead.

Thank you. Thank you. Good morning. I'm wondering if just in soybeans, if you can help us reconcile how it's flowing through. So I see a big I think 14% reduction in soybean seeds and traits revenue as a function of what's going on with Xtend. But then I also see the herbicides ex-glyphosate sales are actually up. And I would have thought dicamba sales would be down a fair amount. So can you just help us understand how it's flowing through? How much of the seeds and traits is volume versus price? And then why are you doing so well? And herbicides, X-glyphosate, even with what should be a pretty big headwind from dicamba sale.

Thank you, Vincent. So let me give you a little bit of a color on the seeds and traits. If you think about the CPA, it's a 6% impact negative on volume and a positive percent on price. This is including the regulatory impact. I mentioned before, Vincent, just going very briefly on corn. We have a negative CPA, but this is impacted by the accounting treatment. Otherwise, we would be at 2.5% growth. Specifically about North America, we would be at 3.5% growth, excluding the accounting element here. Coming back to soybean. Soybean, you're spot on. The impact that we have is mainly on Q1 on the regulatory side. and mainly on the licensing revenue. I think the biggest impact that we have on the 14% that you mentioned is the licensing revenue coming from big companies on our business. On CP overall, we have a 7% volume increase, excluding Movento from Nero. And this is a little bit of the shift also comparing to the previous quarter of last year, on the Q1 of last year. Some anticipation of the market, probably as we talk a little bit about the a lot of uncertainty in the market in terms of tariffs and so on. So some anticipation that we see in terms of volume, including the herbicide market, including the herbicide. Dicamba, we already had that impact, was not a massive volume in Q1. It was more impacted before, but overall, Soybean, the only thing that I didn't mention here on my point is that we are seeing a great momentum on the Intacta Q extending Latin America as well. And we are seeing growth of up to 20% penetration this year. So that will be also positive in the development of what we have in soybean there. But this is a little bit of a deeper view on the numbers here that I provided Vincent on that one. And just taking the opportunity of your question, I saw some of the notes before as well. We are expecting and we are confident to have the Canberra label for the 26th season. And that's something that we are working with the PA as well. So thank you for the question.

Okay, I'll leave it there. Thank you very much.

Excellent. The next one is Laurent Favre from BNP Paribas. Laurent.

This one is the last one.

Yes, thank you, Just. Rodrigo, two questions for you. The first one on seeds. Based on your comments, it sounds like you are not as optimistic as the USDA on corn acreage for this year. I was wondering what's driving that assumption. Is it just being conservative or are you maybe also losing market share in corn? And then maybe attached to that, can you remind us how much more profitable is an acre of corn compared to soy? If you have any sort of rough sensitivity on a per acre basis, that would be very useful. The second question is on CPC. Can you talk about the environment for pricing as raw material deflation starts to come in? Are you seeing an opportunity for margin expansion or would you expect more pricing pressure, especially from the generics? Thank you.

That's great. So let me go first. No, we are very optimistic about the corn acreage in U.S. as well. If this will land at 95 million acres as the USDA that you refer, or if it will be 94 million acres, that is hard to know right now. It's exactly the season that we have. And this is normally by June. After some of the returns, you have a great estimation. But definitely, you're going to have a very high growth of corn in U.S., And that's why when you look specifically about our numbers in North America, if I take out the accounting treatment that we are moving from Q1 to Q2, some of the recognition of sales, we would have a 3.5% growth on our corn business in US by now. So it's going on the right direction and we are also expecting Q2 to help and including corn also for other geographies. It's not only the North America, we are expecting a good corn development globally. It's going to the right impact here. On your question about overall CP, we do see competitive pricing pressure for the next quarters as we have a significant buildup of capacity in China. So that's why, and we're going to talk a lot about that later today, on our webinar, we're going to talk a lot about the plans that we have to expand our margin. We announced on the last quarter that we have a plan to expand our margin by 1 billion euros, and that is coming from the entire value chain. We're going to talk about some of our R&D adjustments that we have, a massive contribution from product supply on the 600 million euros. And 80% of that is in crop protection. And that is to support the margin expansion that we have. And there are some also adjustments that we are doing in the go-to market and the global function. So that is a massive contribution to the margin expansion that we have. So we're going to continue monitoring prices. But the work that we are doing on the margin expansion is to be focused a lot on the controllables that we have. And that's something that we are working right now. And we're going to talk more later today and give you a little bit more details on the plans that we have for the next year. So that's a little bit of the overall view here. Thank you.

Fantastic. Thank you. Before we close the call, because there's no more questions in the line, Stefan, do you want to follow up on James' questions on the non-inferiority?

Yes. James, that gave us the time to look it up. It was non-inferiority because we compared to standard of care. That was the comparator with positive outcomes of bleeding.

Excellent. So I guess there's plenty of more time this afternoon to speak about crop science. There's a reminder we have our event coming up at 4 p.m. And for now, I want to thank you very much for your questions and interest. That concludes our earnings call. And I hope to see you all then at our virtual crop science event in less than an hour. The material for that is also now available on our IR website. And until then, have a great day.