Bayer Ag S/Adr

Good afternoon and good morning, everybody. Welcome to our conference call to review Q4 and full year 2025 and to look into 2026. To begin, Bill will share his perspective on our business development, the progress we've made in our transformation and the path ahead of us. Wolfgang will then provide an overview of our financials in 2025 and the outlook for 2026. We will then hear from our divisional presidents on the performance of their businesses and plans going forward to execute their strategies. And then we move to the Q&A. Before we begin, please note the cautionary language in our safe harbor statement. Let me also remind you that we'll speak about our sales growth in currency and portfolio adjusted terms throughout today's presentation, if not stated differently. And with that, over to you, Bill.

Thanks, Joost. Thanks all of you for joining today's call. We're really happy to go through our 2025 results and to provide an outlook for 26. Before doing that, I do want to share a short update on company leadership. As we announced in November, Judith Hartman has joined the company and the Board of Management as of March 1st. So she's going to spend the coming weeks getting to know the company, its customers, our people, our products, before taking over as CFO in June. So she's looking forward to meeting you. I know some of you know her already, picking up from Wolfgang, who's definitely locked in on steering the company through an important next three months. So let's get into 2025. In July, we upgraded our currency-adjusted sales and earnings guidance for the year. And today, we're announcing that we delivered that guidance, landing comfortably within the improved corridor. Sales came in at 45.5 billion, and we posted core earnings per share of 4 euros and 91 cents, and our free cash flow came in at 2.1 billion euros. Here's a picture of our businesses. CropScience progressed in the first year of its profitability improvement program. A rejuvenated picture of our pharmaceuticals business emerged, with launch medicines establishing themselves as growth drivers and others advancing through our pipeline to the market. Our consumer health business suffered from the market softness in the United States and China, but maintained the bottom line. And across the firm, we're seeing improvements to the way we operate. Launches are moving at great speed, resources moving much more fluidly. Our organization is considerably flatter and leaner, less managerial and more mission-oriented. We have roughly half as many layers and we've reduced management by two-thirds compared with when we kicked off this work. The 88,000 people of Bayer are doing more, faster, with less. And all in all, we recognize progress on our comprehensive turnaround plan, but the journey is far from over. There's much more to do in each of our priorities and each of our businesses. Our focus is on the important work ahead. One of those key priorities is significantly containing litigation. Two weeks ago, Monsanto and plaintiff lawyers in the U.S. announced a nationwide class settlement to resolve eligible current and future cases in the glyphosate litigation. And today, I want to reiterate a few key points. First, the class settlement is moving through approvals. Just as we said two weeks ago, we're confident in the merits of the agreement. We await the judge's ruling and we'll be ready for any scenario. Second, Monsanto has filed its opening briefs with the U.S. Supreme Court, and the case has received strong support from the U.S. government, attorneys general in 15 states, the U.S. Chamber of Commerce, and many more. We will continue preparing our case in anticipation of a ruling likely in the second half of June. We're particularly grateful for the backing we've gotten from farmer groups across the United States, who know better than anyone how important glyphosate is for their vital work. In fact, the White House recently recognized how essential glyphosate is for US food security with an executive order. We share that view and we're fully prepared to comply. Overall, our multi-pronged strategy proceeds apace. We know we have some important milestones ahead of us. We'll stay focused on taking the right steps for the company and remaining prepared for all outcomes. Beyond that, this issue has garnered a lot of attention lately, and in the coming months, we expect a rigorous debate about American agriculture and what's needed to create a food system that's robust, sustainable, healthy, and regulated by sound science. We appreciate that people come to this issue with a range of opinions, and we welcome that conversation. Most importantly, we've got to be clear on the facts. Fact one. Glyphosate safety is resoundingly confirmed by regulators. More than 50 countries, including the U.S., Canada, and countries across Europe, say so. These are thorough reviews, not designed at getting clicks or going viral, but carefully assessed risk and reaching scientific assessments. Fact two, glyphosate is essential for agriculture and food systems. It keeps carbon in the soil and protects harvests from being wiped out by weeds. It helps keep a trip to the grocery store affordable at a time when food prices are a topic of concern. American farmers are a bedrock of the nation's economy and a force for food security around the world, and we want to keep it that way. Fact three, Litigation in the U.S. is big business. Litigation costs amount to more than $600 billion a year. That's taking more than $4,000 out of the pocket of every American household. And it's growing thanks to backing by private equity and foreign investors who enjoy tax-free returns. Last week, the Washington Post called on Congress to pass tort reform and specifically cited the glyphosate litigation as an example of how the system has gone wrong. So the next time the narrative is framed as sticking it to the big corporation, people should question who is actually the big corporation here and who's ultimately bearing the cost. For years now, Bayer has been on the record on this issue and many others surrounding the glyphosate litigation. We've made our case to politicians across political lines and the general public, and we'll continue to be clear and transparent about our interests. We'll engage with people of differing opinions, and we'll hope to find common ground. Most importantly, when it comes to questions this big, we'll always start with what's true. Now, beyond litigation, we have a full agenda for 2026. We have ambitions to help many more patients with Nubeka and Corendia. 2026 will be the first full year of sales for both Biantra and Linquet, and we want to launch Azindexian as soon as possible. Our crop science business set the foundation in 2025, establishing its five-year framework. Execution is underway and will continue in 2026 with the goal of improving the top and bottom line in 26, all while preparing important launch plans scheduled for 27 and beyond. Consumer health plans to advance its road to billions strategy, offsetting an uncertain market by making the right investment decisions in categories where we have the most to win. And in a year where we're bearing the brunt of litigation-related impact, we're exercising vigilant discipline in how we manage our resources. Cash conversion is of the utmost importance. De-leveraging remains a big focus area, and Wolfgang will tell you more about our financing plans for this year. And we're laser-focused on delivering the 2 billion euros in organizational savings through our operating model. In terms of our outlook, we expect a solid performance in 2026 with product declines in pharma and crop science due to loss of exclusivity and regulatory pressure in the EU, offset by continued strong performance of our launch products and our annual portfolio refresh. In addition, we want to ensure continued investment in our pipeline and launch products in 2026 to set ourselves up for growth in 2027 and beyond. Before accounting for FX changes, we see our core earnings per share landing roughly in line with last year. And as we shared two weeks ago, we're expecting a negative free cash flow this year due to litigation-related payouts. That outlook is emblematic of the company's current strategic position. Strong signs of progress, but still working on a comprehensive turnaround. We've made major gains across the company, but that work is not yet complete. We're focused on delivering what we've committed for 26 and making the right long-term decisions to set Bayer up for sustained profitable growth. We have a clear picture of what needs to be done in every area. We're dialed in on the tasks at hand, and we're ready to deliver. So Wolfgang will walk you through the numbers. Over to you. Thanks, Bill.

Welcome also from my side. Let's first take a closer look at the group financials for the full year 25. In a pivotal year, we fully achieved our raised financial guidance for all group KPIs. Group net sales grew by 1% year over year in a currency and portfolio adjusted terms. All divisions delivered their adjusted guidance. Let me briefly highlight the main business drivers by division. For crop science, the anticipated regulatory headwinds from the dicampa label vacature and the Movento expiration were offset by strong corn seeds and traits growth. Corn growth was driven by several factors. Historically high corn acreage in North America, strong performance of our corn seeds and traits globally, and finally a portion of incremental licensing revenue from the resolutions with Cultiva in Q4. Let me pause for a few additional comments on the Coteva resolutions. First, the resolutions represent licensing fees rightfully owed to us for the usage of our proprietary technology across multiple periods, including the years 25 and 26. Licensing fees are an important element of our business model and thus are accounted for as operating revenue. Second, Based on content and timing of the resolutions, about 300 million euros supported our corn performance in Q4 of 25. And as you may have read in the annual report, about 450 million euros will support our soy performance in Q1 26, which is reflected in our outlook. We always had a high level of confidence that we would prevail, but these numbers were higher than what we modeled before. Third, given the positive impact, we decided to advance certain strategic measures like product portfolio streamlining. Together with an impact on incentives, this is largely offsetting the positive effects from licensing income in 2025. It is important to note that the underlying operational targets would have been achieved without these effects as well. Our pharma business fully delivered on its raised guidance. Nubeka and Carinthia continued their significant growth momentum and finished the year ahead of our raised expectations. With that, the launch assets performance more than offset the expected declining Xarelto as well as headwinds in ILEA. Our consumer health division delivered resilient performance in a challenging market environment with net sales stable year over year and in line with our revised guidance. Nutritionals were partially affected by difficult market conditions in both China and the U.S., while softer seasonality in cough, cold, and allergy led to a decline in this category. As previously indicated, our group top line was impacted by material FX headwinds of around 1.7 billion euros, driven by the depreciation of the US dollar, the Brazilian RAI, and some hyperinflation currencies. Let's move to the bottom line. Group EBITDA before special items came in at 9.7 billion euros compared to the prior year. Negative foreign exchange effects of around 500 million euros weighed on profitability. We also saw higher incentive provisions and gross investments compared to the prior year, while top line growth and cost savings helped to compensate. In an important year for our transformation, all our divisions and the enabling function delivered on the profitability commitments, balancing necessary growth investments with disciplined resource allocation and cost savings. Core earnings per share came in at €4.91. The decline versus the prior year was driven by the expected lower EBITDA before special item and includes FX headwinds of about $0.30. Our core financial result came in better than anticipated. Compared to the prior year, it improved markedly, mainly driven by lower interest expenses and positive changes in equity results. Reported earnings per share were at minus 3 euros and 68 cents, as you can see in the appendix. Main drivers for the delta, next to the regular amortization of intangibles, are significant litigation related provisions and liabilities classified as special items. Litigation related special items amounted to 7.5 billion euros in total, including the increases that we announced two weeks ago. Let me also clarify again that our litigation-related provisions and liabilities are based on a comprehensive assessment. The provision and liabilities of €11.8 billion contain all litigation-related costs we know today and can reliably forecast, also covering past glyphosate verdicts, either settled or pending in appeals. Our free cash flow came in at the upper end of our guidance range at 2.1 billion euros. The anticipated year-over-year decrease is mainly driven by the expected higher incentive and litigation-related payouts. With our continued focus on improving working capital and prioritizing capital expenditures, we have further reduced our year-end working capital-to-sales and our capex-to-sales ratios in 25. Net financial debt was reduced to below 30 billion euros by the end of 25 due to the cash flow contribution and about 1.4 billion euros in foreign exchange tailwinds driven by a weaker US dollar. Let's now move to the outlook for 26. Let me start by explaining the background for a methodology change that we will implement for our core earnings per share KPI as of this year. What we want to achieve with that is to provide enhanced transparency around our operational performance, reflecting necessary cost of doing business and moving core EPS closer to reported EPS. Previously, our core EPS definition only included the core depreciation linked to usual depreciation of property, plant, and equipment. All amortizations of intangibles were excluded. As of this year, we will also factor in the amortization of certain intangible assets, in particular software. The change in methodology leads to an approximately 35 cents step down in 2025. Adjusting for the new methodology, we come from the €4.91 that I just mentioned to €4.57 in 2025. For 26, we anticipate stable core earnings per share at constant currencies on a like-for-like basis. All businesses plan to further progress in their transformation, continue to execute their strategic agenda, and set the basis for future growth. overall expected higher earnings contributions from crop science and consumer health will be offset by anticipated lower earnings in pharma in line with the divisional strategies. On the corporate level, our outlook assumes higher long-term incentive provisions due to the increased share price compared to 25. This also results in higher reconciliation cost as you can see in our modeling assumptions in the appendix. We also expect higher interest expenses impacting our core financial result. This is driven by an anticipated increase in net financial debt due to the substantial litigation-related payouts and the resulting negative free cash flow in 2026. Finally, on geopolitics. Let me start by addressing the recently started war in the Middle East. Our thoughts are with the people across the region. Our focus is on ensuring the safety of our people and the continuity of our business. At this point in time, we do not see a material impact on our business, and we will continue to closely monitor the situation. we are in close contact with our people on the ground who ensure continued supply of our essential products. Regarding tariffs and FX, we are prepared to deal with a new dimension of volatility across businesses In 25, we successfully managed the dynamic trade environment and limited the impact of additional tariffs. This was achieved through a combination of mitigating measures by our cross-functional teams, as well as tariff exemptions based on the relevance of our products. Our new way of working proved extremely helpful in flexibly handling the situation, and we will continue to build on that strength going forward. For 2026, our outlook includes our latest assessment of estimated direct and indirect geopolitical impacts, As mentioned previously, we expect foreign exchange rate fluctuations to remain a major swing factor. Based on year-end spot rates, we anticipate continued foreign exchange headwinds of about 30 cents to our core earnings per share, as shown on the right side of the chart. Managing our FX exposure in the geopolitical context has been a major priority for us in 2025 and will continue to be a major priority in 2026. Overall, we will continue to monitor the situation very closely. This includes the future of the US-EU trade relations following the recent court ruling on IEPA-based tariffs. Let me summarize with the outlook for all group KPIs for 2026. We anticipate net sales of between 45 and 47 billion euros at constant currencies, representing a growth range of 0 to 3% in currency and portfolio adjusted terms. For EBITDA before special items, we target between 9.6 and 10.1 billion euros in 26 at constant currencies, representing a minus 1 to plus 4% development versus the prior year. As mentioned, core earnings per share are expected to come in between 4 euros and 30 cents and 4 euros and 80 cents at constant currencies. In our free cash flow outlook of minus 1.5 to minus 2.5 billion euros of constant currencies, we account for the expected significant litigation-related payouts of around 5 billion euros, as also announced two weeks ago. With the negative cash flow, we expect net financial debt to increase to between 32 and 33 billion euros at constant currencies. As also announced two weeks ago, ultimate financing for the litigation resolutions is planned to rely on senior bonds on the one side and instruments receiving equity credit ratings by the rating agencies on the other side and not on the HM authorized capital increase. While finalizing these measures, please note that the current net financial debt outlook for now conservatively reflects straight debt financing. In the last column of this slide, you will find the estimated foreign exchange impact based on months and December 2025 spot rates. And for modeling purposes, we have included all relevant assumptions in the appendix to this presentation, including the combined value for core depreciation and core amortization based on the core EPS methodology change. And with that, Rodrigo, over to you.

Thank you, Wolfgang. In crop science, we have built a more agile organization through DSO. and strengthen our operational discipline through our five-year framework. That discipline is already delivering tangible impacts. It shows up in three areas, underscoring the strengths of our core business and the differentiated growth we see through the end of the decade. Number one, in the resilient performance we deliver in 2025. Number two, in the clear step forward we expect in 2026. And number three, in the progress already made against our five-year framework, laying the foundation for a stronger performance through the midterm. So before turning to 2025 and 2026 specifically, let me anchor us in where we stand in the five-year framework, because this is the lens through which we manage the business and the roadmap that guides every decision we make. We are on track to deliver across the triangle sales growth, margin, and cash. We've strengthened the operational foundation of the business. By simplifying the portfolio and sharpening our footprint, we are firmly on course to deliver the more than 1 billion euro margin improvement. Actions include divesting and outsourcing multiple active ingredients, exiting nearly 200 crop protection products, and streamlining our global site footprint from crop protection to seed production. We are also exiting lower-return vegetable crops and the non-core seed treatment equipment business. As we advance our efforts, portfolio streamlining and go-to-market models will be largely completed by year-end. Innovation remains our engine for future growth. Protecting our proprietary trades and R&D capabilities is critical. Simply put, the recent resolution with Corteva is licensing revenue for the use of our technology. It does not change our growth outlook or licensing expectation. It does ensure fair compensation for our technologies today and well into the future. and it safeguards the value of our innovation engine with advanced six projects and introduced 470 new hybrids and varieties last year. Our industry-leading pipeline positions us for different durable growth. Our first blockbuster Planexus is now launched and will expand into Brazil this year. Ecafolin submissions are complete. New Gold Camelina is now in the market for biofuels, and the nine additional blockbusters are on track for upcoming introductions. And that includes the Pression Smart Corn introduced with biotech approach, along with the Viconic in 2027. As followed close by our fifth-generation herbicide-tolerant soybean trade, positioned us for double-digit share growth and put us firmly on a path to reclaim the number one soybean trade position in North America. This is the strength of our pipeline. We have an unprecedented number of market-shaped innovations on the horizon with a clear pathway for growth. With that strategic contest in place, let's look at how this foundation is already showing up in our results starting with the resilient performance in 2025. 2025 demonstrated that the strengths and resilience of our growth engine. We deliver on guidance despite significant regulatory pressure and additional market and currency headwinds. We recognize additional licensing revenue and executed strategic measures specifically to streamline our portfolio. advancing our five-year framework and strengthening the financial health of our business. Seed and traits deliver robust growth propelled by a near double-digit increase in corn, excluding licensing income, with a strong start to the Latin season and expansion globally. In addition, vegetables deliver a fourth straight year with growth over 5%. Finally, through discipline and execution, we deliver roughly 400 million euros of efficiency and cost savings. We close out 2025 with a business that is structurally healthier, better positioned to deliver steady improvement towards our midterm ambition. So let's talk about 2026. 2026 represents yet another step forward in delivering our five-year framework. We expect ag market fundamentals to remain challenging and project below-average market growth. However, our resilient base and focused execution give us confidence. While we benefit from the licensing income, we will continue pushing hard on our five-year framework measures. Overall, 2026 is another year of diligent execution of our strategic plan, setting us for the future. Our core business growth is expected at 1% to 4% currency and portfolio adjusted. An important contributor for this growth is the recent approval of our STRI-X dicamba formulation. This marks the first step in reestablishing the momentum of our North America soybean business, giving farmers the added flexibility they have been waiting for. For 2026, we expect striax herbicide growth, as well as pricing gains in soy and cotton. Still, we do not expect full recovery, yet preparing for the iconic introduction in 2027. For corn, we expect low single digit growth globally, based on anticipated price and market share increase, despite acreage reduction in the US. And in core crop protection, we anticipate software growth on higher volumes driven by new products, offsetting continued pricing pressure and EU regulatory impact as previously expected. For glyphosate, tariffs recently have been reduced on Chinese import into the U.S. and in generic. So generic PRC pricing has declined below the historical median. With that, we currently expect glyphosate sales to decrease by 2% to 6% compared to the prior year. We will continue to monitor the situation and adjust pricing as needed for the separate managed commodity business. As we look at calendarization, The no-soil licensing revenue will benefit the first quarter. However, lower tariffs and generic price decline are adversely affecting glyphosate sales. And in addition, we expect a soft start to the crop protection season on top of continued regulatory effects in Europe. Our growth drivers, such as striac sales, will only emerge later in the season. On the bottom line, we will strengthen our margin profile with expected EBITDA margins before special items of 20% to 22% at constant currency, inclusive of the dilutive glyphosate margins. This reflects continued cost discipline as well as pricing and mixed benefits from portfolio streamline in line with our five-year framework. For example, in SOI, we are focused on pricing to value and improve utilization rates over top line growth. We will monitor current closely as sales seasonally in the soft currency markets like Brazil can create volatility in the both on top and bottom line results. Taking together these factors underpin a realistic execution focused 2026 outlook and underscore the momentum we are building for the years ahead. our sharpener portfolio, linear footprint, and increasing resilience earnings model give us a strong confidence in delivering our midterm targets and navigating X cycles with a greater consistency. We will provide updates through the year and also invite you to join us in Iowa this September for an innovation showcase and a deeper dive into our strategic progress. And with that, over to you, Stephan.

Thank you, Rodrigo. And over to the pharmaceuticals division in which we continue to make great progress on our strategic agenda as we have now entered what we call the last year of the so-called resilience phase. And we've seen tangible results for all of our strategic pillars throughout 2025. We're well on track in renewing our top line. and our strategy of balancing expected declines for our mature products with growth from new products, which is ultimately working out really well. I will shortly provide more details on our 2025 performance and also on our expectations for 2026, which are both fully in line with this strategy. However, I want to also highlight that we're well set for our next wave of growth right into the next decade, driven by significant sustained Nubeka and Corendia sales, as well as a successful launch of Biontra, the first launch of Linquid in the U.S., and very positive data presented for Asundexion only a few weeks ago. We have demonstrated also great success in our efforts to grow our pipeline value and nourishing our foundation for future growth. Driven by our innovation, our new innovation model, we have progressed 16 clinical programs across the development phases and achieved approval for five new key indications or products in 2025. I already mentioned Asvindexion. But I do want to reiterate the genuine excitement we witnessed among attending physicians at the International Stroke Conference in New Orleans earlier this year. Not many were expecting such groundbreaking results. With this potential new treatment option in secondary stroke prevention, we may have an opportunity to truly rewrite the future for stroke survivors and their families. In addition, this study is a great example of how we are de-risking our pipeline. It also demonstrates our excellence in executing a study that has been praised by the scientific community for its pragmatic design and for being very representative of clinical practice. In addition, we are continuing to leverage our new operating model for increased performance. With a significantly more outcome-centered organization, we're fully focused on those activities that generate the most value for our customers and the company, and therewith also for our shareholders. At the same time, we're applying very stringent OPEX management, which has enabled us to not only increase our performance, but also our efficiency. We have consequently been able to sustain our margin in the mid-20s range, all of this despite facing continued LOE pricing and VBP-related pressures, while we continue to invest into our launches and also into our pipeline. Now, briefly turning to our 2025 performance, Bay of Pharma has delivered on its upgraded 2025 guidance, growing by about 2% in 2025. With strong growth of Nubeka across regions, as well as a fantastic growth of Corendia, mainly driven by the U.S. and China, resulting in a total combined sales of 3.2 billion euros just for these two medicines. We clearly overachieved expectations. In line with our narrow guidance corridor, Xarelto declined by 32% or 1.1 billion euros due to continued genericization, especially in Japan and Europe. For ILEA, we're seeing increased pricing pressures with the market entry of biosimilars, which we were only partially able to offset with volume growth, including an increasing contribution of ILEA 8 milligrams, making up 26% of total ILEA franchise sales through the year and roughly 40% at year end. With strong growth in radiology and women's health, More than offsetting VBP-related declines, mainly affecting Cardio Aspirin and Stevarga, as well as declines in our mature portfolio, our base business grew by 2% and achieved 2025 sales of €9.2 billion. Looking at our margins, we also delivered on our guidance. While the declines from 26% in the prior year to 25.4% in 2025 were driven by changed product mix and pricing pressure, higher growth investments into launches and innovation, as well as FX headwinds, we were able to partially offset these by volume growth, continued savings from efficiency programs, and reversals of write-downs and inventory. Moving into 2026, we expect an unbroken growth momentum for Nubeka and Corendia, amounting to an expected growth of approximately 50% at constant currencies, respectively driven by continued market penetration and indication expansions, such as, for example, the upcoming EU approval for Corendia in hard failure, following the recent positive CHMP opinion that we received. This growth momentum will be further supported by the continued launch dynamics of Beantra and also of Linquet. While we were able to defend Xarelto well in 2025 overall, we experienced increased generic pressure towards this year end. Therefore, we also expect a slight acceleration of relative declines in 2026 in comparison to last year. being in the range of 35% to 40%. With the accelerated pricing pressures we have seen for ILEA, with the entry of 2 mg biosimilars since Q3 2025, which we may have slightly underestimated, We will focus our activities to build on the strong clinical profile and unparalleled label of ILEA 8 milligrams to significantly expand its contribution to the ILEA franchise to approximately 70% and sustain our market-leading position in volume shares. Despite these efforts, we will likely see declines for the ILEA franchise in the range of approximately 20% to 25% at constant currencies in this year. with the pricing pressures somewhat leveling out thereafter. Since 2 mg biosimilars only entered the market fairly recently, we will continue to closely observe and evaluate the evolving situation and will provide updates as we gain more clarity as per usual reporting practice. In line with the stringent shift of resources to focus our activities on our current and future growth drivers, as well as continued VBP pressures out of China and declines in our mature product portfolio, we expect a modest contraction of our base business in 2026. In sum, We're expecting growth of 0% to plus 3% at constant currencies for this last year of what we call our resilience phase, before returning to mid-single-digit growth as of 2027. As we are hovering over a prior year during which the IRA, VBP, and LOE-related pressures increased over the quarters, and Nubeka and Corendia will continue to grow as this year progresses, we expect the top line for the second half of 2026 to come in stronger than the first half. Looking at our 2026 margin, we would expect that the impact of a changed product mix and increasing growth investments throughout the year will only be partially balanced by cost savings from efficiency measures. We therefore expect a 2026 EBITDA margin before special items in between 23% and 25% at constant currencies as we keep working to expand our margin as of 28 towards 30% by 2030. With that, over to you, Julio.

Thank you, Stefan. Over to Consumer Health now. So as we review our performance and set our priorities, I want to begin with the progress we're making on our Road to Billions strategy. Last year's market environment was challenging for two reasons. First, market dynamics in the US and in China. And second, the continuation of seasonal softness in cough, cold, and allergy. Despite these obstacles, we have stayed committed to our strategic approach, focusing on areas where we can create the most value and actively respond to evolving market conditions. Across markets, we also see structural shifts consumers are more deliberate in how they spend e-commerce continues to scale quickly at the same time traditional retail is consolidating and retailers have reduced inventory levels to manage working capital more tightly especially in the united states and china despite this backdrop the fundamentals of our business remain attractive a growing middle class Rising healthcare adoption and constrained healthcare systems continue to support durable demand for our categories. In the near term, we expect continued volatility in China and in the U.S., with performance likely to contract. Over the long term, we expect both markets to return to sustainable healthy growth patterns. While allergy, cough, and cold have been soft for two years, the fundamentals underlying our categories remain very solid. Our Road to Billions strategy is designed to convert the solid foundation into sustainable value creation. At its core, the strategy aims to increase household penetration by reaching billions of consumers through both online and offline channels, as well as through our strong presence in pharmacy and healthcare professional settings. In the medium term, this will support consistent sell-out growth and more predictable sell-in. We're executing this strategy through four pillars. Focusing resources on our power couples, the brand and market combinations with the highest right to win. Strengthening our trusted brands through innovation and leveraging a repeatable growth model. Aligning our lean organization around consumers, customers, and categories. And driving productivity and protect our margin in reinvesting growth. I remain confident in our fundamentals. Executing with focus across these four levers will deliver long-term value creation. Now, let me turn to our performance in 2025. 2025 was a challenging year that tested our resilience in a difficult environment across the entire industry. Against this backdrop, our sellout held in line with the market at close to 3%. This was supported by our active approach to partnering with retailers aligning sell-in with sell-out. We delivered 5.8 billion euros in net sales. This was essentially flat year over year and in line with our revised guidance. Price contributed modestly while volume declined as expected reflecting market dynamics. However, sell-out overall was stronger than sell-in. Category performance was mixed. Dermatology, digestive health, and cardio gained market share. The allergy and cold categories were held back by softer seasons. Nutritionals came under pressure in the U.S., and in China, the prenatal segment contracted as demand for elevate declined in line with falling birth rates. Our EVDA margin before special items was 23.1%, slightly below last year. On a currency-adjusted basis, it was in line with 2024 at 23.3%. This demonstrates resilience in a year marked by volatility. Productivity gains from our new operating model and active cost management offset inflation and helped fund investment in our power couples and in the fast-growing e-commerce channel. Now looking ahead to 2026, we expect continued macro and geopolitical volatility. Given our geographic footprint and the segments where we compete, we expect our relevant market to grow by about 2% to 3%. This is about 100 basis points slower than the total consumer health market. Category dynamics, geographic mix, and increased volatility underpin our net sales growth outlook of 0 to 4% in currency and portfolio adjusted terms. Building on our 2025 base, we aim for continued volume recovery. The United States and China, our two biggest markets, will play a crucial role in our overall performance. Slowing growth and market volatility there could heavily influence our results. consumer confidence remains soft across the world. If consumer spending picks up and seasonal categories see higher incidents, we might achieve the higher end of our growth forecast. If not, growth could be toward the lower end. Given the volatility and its impact on our top line, our EVDA margin outlook before special items for 2026 is 22 to 24% on a constant currency basis. Savings from our new operating model and active cost management are expected to offset annual cost increases. We continue to reinvest portions of those efficiencies to strengthen our brand equity and gain share. We will continue to accelerate investment in e-commerce and AI across brand building and activation, consumer engagement, and product supply. Prioritizing self-care and empowering people to take control of their health has never been more important. Through our Road to Billion strategy, focused on building trusted brands, we are uniquely positioned to meet the needs of consumers, creating lasting impact and long-term value. Thank you. Just over to you for the Q&A.

Thank you all. We now begin our Q&A session. And before we start, just a few housekeeping comments. If you have a question, please raise your hand and follow the instructions provided in the chat. And as usual, to allow as many participants as possible, please limit yourself to two questions. We'll start today with Richard Vosser from J.P. Morgan, followed by Sachin Jain from Bank of America. Richard, the floor is yours.

Thanks, Jost. Thanks very much for taking my few questions. First question is on ILEA, please. Thanks very much for the guidance for the year, but could you give us a little bit more colour in terms of the building blocks, in terms of price, volume? and how you're thinking about the 8 milligrams ability to increase volume in your regions for ILEA. Just some color there on 26 would be helpful. And then second question just on crop. Maybe you could talk about with dicamba coming back on the market, how you see the benefit on pricing for soy and cotton seeds through 26 and how we should think about that impacting those two seeds. Thanks very much.

Hi, Richard. Thanks for the question. So on ILEA, I'm pleased to report that we're seeing very positive volume uptake of 8 milligrams. And that is bound to continue throughout all of 26. So I was talking about 70% of our total sales should come from 8 milligrams by end of the year. And I think that will continue quarter over quarter. We're seeing excellent demand based on the, I think, category-leading label that we have for 8 milligram. And so that will, unfortunately, not fully compensate for the price declines that we're seeing on the 2 milligrams because biosimilar entry is not so much a volume erosion for us as it is much more a price erosion, and that's really hard to beat.

And Richard, let me cover the prompt question here. Thanks for that one. So on soybean, let me separate two elements here. Of course, having Stri-X labeled back in 2026 is important for us because it allows us to recover some price, both in soy and cotton, as you said. Important to say that we are expecting significant volume growth and share gains when we are launching the next generation that is iconic that we are planning for 2027. This is when we... planning to recover significant portion of market share in the market, grow double-digit, and recover that leadership that we have in the trade market. Twenty-six is a transition for soybean as we lay out in our last five-year framework. Important to have that to recover some of that value, but the key driver of growth will come in 27 and beyond when we launch the new technology in U.S.

Thank you. So next one in line is Sachin Jain from Bank of America, and he's followed by Charles Pittman-King from Barclays. Sachin, go ahead, please.

Hi there. Thanks for my questions. Two topics, please. I'm going to kick off with litigation, and perhaps you could just touch on how you think about opt-out. So any color on class timelines for preliminary approval and how important it is for the opt-out period to conclude pre-scotus final decision? And just any color on your scenario around what happens if scopes, this is a no, some of our feedback suggests a class could fall apart. I'm just interested in your thoughts there. And then the second one for Stefan, I have to ask on azidexin and gladiator excitement. I wonder if you could just comment to two factors that could drive azidexin market size to be different to the existing antiplatelets. I wonder if you could touch on treatment duration potentially being longer. and then usage in a broader population, i.e., prevalent versus incidence. The reason for the latter point is I think there's some data ISE that suggested you could use it broader than within 72 hours of index. Do you plan any further analyses that could further build on that? Thank you.

Yeah, thanks, Sachin. So on the litigation questions, first off, the timeline for preliminary approval, the standard timeline is 15 days, which is today. But the judge can extend that at his discretion. So it could come today. It could come in the days ahead. As I said before, we designed this settlement agreement in collaboration with a large set of the plaintiff's lawyers. We designed it in a way that it met the needs of the plaintiffs and the needs of Bayer. So we would anticipate that it would receive preliminary approval and ultimate approval. The timeline can be 90 days after preliminary approval for opt-out period, or it can be longer than that. And, yeah, I mean, there's probably different scenarios where it comes before or after a Supreme Court decision. It would be better if it comes before. But it doesn't change the fundamental nature of the question there that's before SCOTUS and the opportunity. in the settlement agreement. You asked about opt-outs. I think we said before that the opt-outs needs to be something approaching zero, okay, because, yeah, if people opt out, then you don't really have an agreement, and then we'd have to move on to other potential solutions. But I probably won't speculate beyond that. And maybe, as in Dexian, Stephan? Yeah.

Yeah, Sachin, thank you for sharing our enthusiasm on the Ascendexion data. You can imagine we're all thrilled. And I don't want to tell you how that day went when we opened the data. It's certainly memorable to me and will be so for a long time. So the questions you ask are really good questions based on the strong data. We're looking at analyzing our study data to – to the full degree, so there will be scientific meetings where we will share some of these analysis throughout the year. Of course, it's also in our interest, and I think in anybody's interest, given the strong data to de-risk secondary stroke patients' risk as much as possible. And that includes potentially taking a product like Acindexion longer and also maybe at a later point in time than just at the point of the event. That's something that we'll be discussing with regulators. Those discussions have just started. So stay tuned for more. But I understand that obviously the answer to those questions also determines very much the potential of the product.

Thanks. So the next to get ready in our queue is Christian Feitz from Kepler Chevrolet. But before that, we hear from Charles Pittman King from Barclays. Charles.

Hi, guys. Thanks very much for taking my questions. Firstly, on crop science, I'm just thinking about the impact of the Corteva in-licensing and your kind of margin target. You mentioned the underlying in-licensing was better than you expected, more beneficial than you expected, which in turn allowed you to pursue that further product streamlining. So I'm just wondering if you could give us a little bit more detail. We understand that you have 300 million and then the 450 million guided on the in-licensing, but how much of the greatest streamlining on the negative side, if you see an impact in the underlying crop science business. And just thinking about the kind of potential repetition of these in-licensing payments going forward, how is that impacting your mid-term margin target? Are you still expecting that mid-20s EBITDA pre by 2029? Is that therefore more de-risk given these in-licensing revenues should be booked at 100% margin? And then just secondly, more briefly on Xarelto, given the accelerated erosion versus consensus, I'm just wondering if that timeline to hit your sales target floor of $900 million to $1 billion mentioned at 3Q within two years is still valid, and what gives you that confidence that that is a defendable floor? Thank you.

So let me start with the last part of your question. So the licensing resolution doesn't change our five-year plan and our goals to achieve the mid-20 EBITDA margin targets that we mentioned about that one. And that includes, of course, our licensing business that is over 2 billion euros today. So, yes, it doesn't change that outlook that we have planned for the next five years. Going deeper a little bit on the elements here, when you think about the impact in 2025, We deliver the end of our guidance in crop science, also impacted by that licensing resolution. But even excluding that licensing resolution, and just let me do one remark here, part of that should be impacting 2025 and 2026 as well. But even if we exclude completely that resolution, we would achieve our guidance in 2025. And to give you even a deeper information on that one, when you look to the corn performance that we book our results in 2025, we grew by 13%. If you take, again, completely that resolution, we would still have the double-digit growth in corn based on the global performance that we have. If you go to 26, the year-on-year is a marginal or is not material impact of that licensing because of the year-on-year element here. We're going to have soybean, and you're going to see that on the Q1, but year-on-year is not a material performance. In the end of the day, it's an important recognition of our licensing, our R&D innovation, and our leadership, but doesn't change the course of the plan that we have on the five-year framework and the growth that we are planning for the next five years. Thank you for that.

Charles, thanks for the question. So last year we had guided that we may land Xarelto at 1 to 1.5 billion negative. We're happy that we could do better than that and land at the upper end of this. So what we sort of like... failed to lose last year, we're going to lose it this year. And that's where the increased pace comes from. That does not change the fact that we're going to land at what you call the floor. Now, there is no mathematical precision around the floor, but I think the numbers you indicated resonate with us. And why do we believe that to be the case? There are a number of regions where already today we have cash-paying patients that prefer to buy a branded product over a generic product. And those are typically regions in the global south, in parts of Eastern Europe, or also in China. And there is every reason to believe that this flow will hold. Thank you.

Great. Before moving to Christian from Kepler Chivalry, we will, after moving to Christian, we will hear from James quickly from Goldman Sachs. But the next one is Christian from Kepler. Please go ahead.

Yes. Good afternoon. Good morning. Two questions, please, on crop, that is. Rodrigo, I know your remarks of a soft start in crop protection into 2026. What are the key reasons? Is it whether channel inventories or continued share losses versus generics or a combination of all three? And then the second question is, when would you expect Icafolin having a significant contribution to your non-clyphosate herbicide franchise? Is it this decade or rather early next decade? Thanks very much.

Thank you very much. So let me go deeper on our crop protection. On our core crop protection, excluding glyphosate, we are planning to grow in 2026. The growth will come from the launches that we have, the expansion of Planexus to Brazil or Verangu Prime and the Fox family that we have there, also the new launches like StriX in U.S., offsetting some of the regulatory losses that we're going to continue to have in the EU as we plan it, and also, of course, the pricing that you mentioned of the generics in the market. With that, we still plan to grow our core business here. Glyphosate is a different element here as we guided for minus 2% to minus 6%, and this is really a high-commodity business here. We are planning Ikafulin to launch, and we already completed the regulatory process, and the plan is to launch 27, 28. We're going to expand that launch to globally, and that will come with the new launches that we have. So we should have an impact, as you said, by the end of this decade of Ikafulin coming to that market to complete our portfolio as well. So that's the frame that we have in crop protection here.

So James Quigley from Goldman Sachs, followed by Vincent Andrews from Morgan Stanley. James, you're next.

Great. Thank you for taking my questions. I've got two please. First of all, thank you for your help over the years. It's a shame that we won't see you tomorrow in person, but best of luck for the future. So first one is on Nubeka. So you're expecting 50% growth next year. It seems to suggest sales around €3.4 billion. The previous targets were greater than €3 billion peak sales. You would have reached that after about six years with four to five years left of patent life to go. So how are you thinking about the trajectory from here? The market's quite dynamic with Zotandi Generics on the horizon. J&J published a study suggesting a leader in the real world was stronger than Nubeka, although not necessarily a fair comparison. And you're going to have competition on the horizon from Plovicto and also Pfizer's EZ-H2 combination with Cytani. So how are you thinking about this trajectory here over the next couple of years? And then secondly, also, Stefan. So the data did look pretty impressive in oceanic stroke at ISC, justifying your excitement there. So what are you hearing from KOL diligence that you had at the conference? How are you thinking about potential indication expansion as well, particularly those patients who can't dose up on factor X inhibitors or can't tolerate factor X inhibitors? To what extent is there potential for expansion here, or do the results of oceanic AF make this tricky?

Thank you. Okay. So first of all, James, thanks for on Nubeka. We're super pleased. We're seeing extremely strong growth momentum across all regions in the world. And I don't see good reasons why that would change anytime soon. Last year, remember, We already had an impact on IRA-related impact in the U.S. because of the overall situation there. So we're quite bullish on Nubeka. I've said publicly this is likely to be the largest product we've ever had. I think our outlook for this year proves that. How far this is going to get us, well, we'll see. And the entry of generics, of course, will have an impact. We clearly anticipate that. But let's not forget also that we have a very differentiated profile with this product, and patients appreciate that, and also prescribing doctors appreciate that. So we see continued growth for Nubeqa also beyond that. For , that's an excellent question, and that's precisely an area that I've had the pleasure of discussing with KOLs, including our lead investigators of the Oceanic Stroke Study, and obviously the results promise to redefine standard of care in secondary stroke survivors, but they also open new questions about can this type of mechanism be a solution for improved brain health in patients maybe with or without prior stroke. And then, of course, can it also be an option for the population you described in atrial fibrillation? Those are questions we're looking at constantly. And stay tuned. You'll hear more from us during the course of the year. This is a very competitive space, so I won't share it all here on this forum.

So Alec Ebeling from UBS will follow up. after Vincent Andrews from Morgan Stanley. Vincent, please go ahead. Vince, can you hear us?

Yeah, I can hear you. Sorry about that. Thank you, and good morning, everyone. Just wondering, Rodrigo, if you can talk a little bit about the seed order book for North America. in particular the mix you're seeing between corn orders and soy orders from an acreage perspective, and if you think that might shift a little bit more towards soy, just given there's been a pretty significant run-up in nitrogen prices this week, given the conflict in the Middle East, and if you think that might skew your book more towards soy, and if you could remind us sort of what the profitability differential is these days between a corn acre and a soy acre in North America. And I have a follow-up.

Thanks, Vincent, and you're spot on. So this is part of why we are guiding 26 and we're expecting a modest market growth. One of the elements of that is the shift from corn to soy. Of course, geopoliticals is another important element and the farm economics, as you said. That's why low single-digit expectation in terms of market, and that's why we guide our core business to grow 1% to 4%. One of the reasons is that one. We will see a shift from corn to soy. The order book in corn is very strong in the U.S. I need to say that to you. Also with canola, we're having a very great season in terms of order books by now in Canada as well. So on our seeds and traits, we have that element. But we will see. How much will be the shift from corn to soy? This is still hard to define right now, but we'll have more soybean. And as you mentioned, corn is more profitable for us per acre than soybean. So this is not an year that is ideal when we have that shift. When we have the corn years is where we have the highest benefit here. And this is including our guidance of the 1% to 4% growth in the core. One of the elements is exactly what you said, Vincent. Thank you.

Good. The next one in line is Alec Ebeling from UBS, and we have two more waiting then, Thibaut Boudarin from Morgan Stanley and Sébastien Bray from Burenberg. But, Alec, the floor is yours now.

Hi, thanks for taking my questions. Two, please, on pharma. First, on Linquet. I was just wondering if you have insights you can share on how the initial launch has been progressing. Previously, you said that there's kind of maybe a wide range of potential peak sales outcomes. So just wondering if the initial launch has given you any more clarity on the potential peak sales or when we could have that. And second, on your actinium PSMA radioligand. So you recently presented phase one data for this asset and noted that the results support moving to the next stage of clinical development, but you didn't say it was being moved forwards. Previously, you also mentioned that there was a possibility to move this asset straight into a phase three trial. So just wondering how we should view the next steps in development for this asset. Thank you.

Thank you, Alec. Both excellent questions. So maybe on liquid first, it's going to be mostly qualitative. So we're seeing high awareness. We're seeing awareness growth. I think we're also seeing very positive uptake compared to competitor brands in that space, which is not surprising because we've been there for such a long time and have so much experience in the OBGYN space. So we're in the PCP launch as we speak. All of this speaks to that we're on the right track. We still consider this a blockbuster brand, but it's still early days. So stay with us. I don't think that it makes much sense to give you much, much more than that for now. But we're seeing that – that we're seeing good uptake across the board. Also the prescriber base is broader than what we've seen in this particular non-hormonal class before. So all of this points in the right direction. And on PSMA Trillium, This is an area, certainly one of our potential catalysts for the future, not just to sustain our leadership position in prostate cancer, but overall. So we were super pleased and continue to be super pleased with the phase one data, and we will be moving this medicine in all likelihood forward this year. That could be to a level that could be sufficient for registrational trials. You know, if you have single-agent activity in oncology, you typically see something in phase one. That's what we saw. And so we feel confident about this. And it's a modality that bears a lot of promise. It's an alpha emitter, so we believe it's more targeted than other therapies that are out there. And so, yeah, we're going to move this forward. Whether we call it a phase three or we call it potentially registrational remains to be seen.

So next one is Tibor Buterin from Morgan Stanley. Please go ahead.

Thank you very much. Just a question for Stéphane and Béantra. If you can give us an indication of what sales look like in 2025 and an expected contribution in 2026, and your estimated sort of shape of the run to reach the blockbuster potential. And then the second question is for Rodrigo, just on the Corteva one-off benefiting Q1 26. So you talked about the step up, the step from 25 to 26, because both have a one-off, then it's fine. But just if you could help us in terms of how we should think about the step from 26 to 27. So how should we think about modeling 27 from 26 if we should adjust for the benefit? and model from here. So basically how to think about that sequential step of the following year. Thank you.

Thank you, Laurent. So sales in 25 are still modest. We don't report them out at that level. I don't think it adds anything. So 26, we're going to see gradual increase. This is not a switch product. At least we're not seeing it as such up to now, unless you have situations like in Denmark with national tenders. So that means we have to go out for new patients, and that means it's a slow ramp. It's not a fast ramp. So don't expect blockbuster status any time in the very near future.

Thibault, on your question on the licensing resolution, right, we have the impact on corn in 2025, the impact of Q1 soybean in 26. We're not expecting this kind of resolution for 27. We're going to continue to have our licensing revenue. Licensing is a very important business for us. I mentioned we have over 2 billion euros of licensing today. Most of that comes from medium to small regional companies, and this will continue in the course of the next years. But I'm excited about 27 and beyond, and we're going to talk about it in the future, about that one, because then it's where we start to have a lot of the launches. Just to mention to you very briefly, when you think about 27, we're talking about the press shown, smart corn system, biotech version, viconic soybean, and we are preparing the biggest launch of soybean that we had in many years in U.S., Then you have the new formulations like a CAFOLIN that I shared as well. So very consistent. When you hear about the approach, and Bill talks a lot about that one, what we did in 25 on the resilience performance, a solid performance in 26, and preparing for the growth that we are planning for the future here, that's the consistent of an execution that we're doing today.

Great. The last participant in our queue is Sebastian Brey from Burenberg. Sebastian, please go ahead.

Hello, good afternoon, and thank you for taking my questions. I have two, both on crop science. The first is, Bill, I think you mentioned at the start that there would be further regulatory pressure in Europe. I thought most of the memento phase-out is done. What is there to expect for 2027, or 2026, I should say, in this respect? And my second question is on margins in seeds and royalties. Am I right in saying that the EBITDA margin in seeds has declined substantially over the last five years at Bayer? I ask this because it looks as if there has been a loss of royalty revenue. I don't know what it was five years ago. It may be around €2 billion now. And how exactly does Bayer expect the €2 billion of royalty revenues to develop in future? Thank you.

Good. So let me address both. And let me start with the last one. No, we have a very healthy margin on our seeds and traits business. Yes, in soybean specifically in North America, you have the penetration of that technology because of the vacant. We lost some licensing revenue in 2025 on soybean. But the business that we have on the licensing and the seeds and traits margin is healthy because we continue to have. When you think about the licensing in the future, and we talk about the end of this decade, Think about all the biotech traits that I mentioned here, and you can go to the Intacta 5 Plus in Brazil or SIP4 in Brazil, or you can think about the corn rootworm 4 that we are launching in the U.S. So those are the engines of the licensing that we're going to continue to see, and this should be helping us to expand our margin and also, again, to help our seeds and traits business continue to grow. The first question? The first question was about the regulatory pressure. Oh, yes. That's an important one because if you go back to May when we shared a five-year framework, we mentioned that on the next five years we're going to continue to see, because of the European Green Deal, you're going to see still regulatory impacts for us and for the entire industry. So we have one example for 26, Fufetstena Set. is one that we have an impact for 26, but this is part of the plan that we have. We are planning to grow modest our crop protection in 26, and we have our plans for the next five years, including the impact that we have on the regulatory. This is as expected, and it's part of the plans that we have for the next five years. Thank you for that question as well.

Thank you very much. Thanks for your interest and the quite detailed questions today. And that concludes our conference call for the full year and the fourth quarter of 2025. With that, I wish you a great day.