Good morning, everybody, and thank you very much for joining our media update for the Q1 of 2024. We will keep the upfront portion of today's call rather short. Our CEO, Bill Anderson, will comment on our performance in the Q1, and he will also speak about the progress we made on the four priorities outlined at our Capital Markets Day in March. Our CFO, Wolfgang Nickl, will then explain the group performance in more detail and comment on the full-year outlook. After that, you'll have the opportunity to ask questions. I'd like to start by drawing your attention to the cautionary language that is included in our Safe Harbor statement. With that, I'd like to hand it over to Bill.
Thanks, Michael. Thanks to all of you for joining us today as we share our Q1 results. This call comes about 70 days after our comprehensive strategic update that we had in March. So today I'm going to be focusing my remarks on our performance, our progress in each of the focus areas that we shared in March, and also, talk a little bit about our priorities going forward. And that should leave us with plenty of time to take your questions. So let me start with our Q1 performance. Our sales came in at EUR 13.8 billion, and in currency and portfolio-adjusted terms, which I'll use throughout my remarks, that puts us slightly below Q1 last year. We posted core earnings per share of EUR 2.82.
Finally, free cash flow came in at EUR 2.6 billion, and that's an improvement over Q1 of last year, and it's largely driven by lower litigation payouts. Overall, this result is in line with our expectations, and we're reaffirming our 2024 outlook at constant currencies. Wolfgang will go through the financial performance in more detail in a few minutes. I'd like to share a few highlights and some headwinds that we saw in Q1. First, on the highlights, in Crop Science, we outperformed all our peers in terms of sales trajectory in a challenging market environment. In Pharmaceuticals, our launch assets, Nubeqa and Kerendia, fueled our top-line growth. And in Consumer Health, our Dermatology category continued its impressive growth trajectory. As you know, we also have some headwinds to manage glyphosate prices hurt our profitability in Crop Science.
We're also seeing additional pressure from generics in some markets in pharma, even if our team was actually able to manage a slight increase in sales of Xarelto in the quarter. Finally, currency effects weighed on our profitability across all three divisions, particularly Consumer Health. So while we're certainly never satisfied with declines, given market dynamics, particularly in agriculture, I think we can say that our teams kept their eyes on the ball in Q1. I'm really proud of that, and I'm confident in our ability to deliver this year. Beyond those results, a lot happened that didn't immediately show up in our numbers. In March, I highlighted four focus areas that we need to really nail to get Bayer back on track. Two months later, we've made progress in each of these areas.
So first, in terms of growth and innovation, in pharma, elinzanetant has now consistently delivered positive top-line results across all three late-stage trials. The first data from the OASIS program will be presented at the annual ACOG meeting on Friday, and our preparations to obtain the first marketing authorizations are running at full steam. Another highlight in the Q1 was the in-licensing of acoramidis from BridgeBio. This is an exciting opportunity, and we've started preparing ourselves to launch this important medicine in 2025. In Crop Science, we're building on our leading position. With all of the new innovation we bring to the market, including hundreds of new hybrids and seed varieties, as well as several new crop protection formulations, we were able to outperform our peers in the Q1. Just recently, we signed an agreement with AlphaBio Control.
This deal gives us exclusive rights to market the first-ever biological insecticide for arable crops. In Consumer Health, we introduced Iberogast to the United States last month. We acquired this trusted product in 2013, and we've since scaled it to many countries in Europe and beyond. I've even been a customer in the past, and now the tens of millions of Americans who experience occasional issues with their digestive health have the chance to benefit from Iberogast as well. Regarding litigation, about two weeks ago, a Washington State court decided in our favor by completely overturning a $185 million verdict. That's important because of its potential implications, as the errors that the court identified are relevant for all of the Sky Valley Education Center trials and verdicts. So what happened in this case?
Well, first, the court threw out a substantial portion of the key plaintiff's experts' testimony on exposure. That decision impacts both prior and future trials. The court's decision found that testimony, and I quote, "unreliable, untested, or junk science." Second, the court found that the company was improperly prevented from making an important legal defense argument, a critical error that was repeated in many of the subsequent trials. Plaintiffs will appeal the decision.
However, we feel strongly that the appellate court's decision on these two points is very much in line with the applicable law. Now, on glyphosate, both inside and outside of the courtroom, this issue remains at the top of our agenda because it's bigger than just us. Threats to a sustainable supply of glyphosate have big consequences for our operations, for U.S. agriculture, for food prices, and for our planet.
Farmers across the United States realize this, and they're concerned. That's why more than 80 groups have joined the Modern Ag Alliance, a coalition who wants to see U.S. agriculture regulated by science-based law and not by the litigation industry. Simply put, we want lawmakers to hear the voice of the American farmer. Beyond that, we're looking at new ways to address this threat to our operations. We're looking carefully, and we're urgently weighing the best way forward for U.S. farmers, for U.S. consumers, and for our employees. Next, let's talk about cash. So less than 3 weeks ago, at Bayer's annual stockholders' meeting, 99% of voters approved our dividend proposal. We appreciate the overwhelming endorsement of this tough measure. It's going to help us to de-leverage and to address the financial health of the company.
Beyond this decision, Wolfgang will highlight our improved focus on cash conversion in just a few minutes. Finally, regarding dynamic shared ownership, I'll say more on the holistic impact on our businesses in a second, but for now, I'll focus on the organizational changes we've made. Both our Crop Science and Pharmaceutical teams have already announced the architecture of their new organizations end to end. Julio just took over the Consumer Health division two weeks ago, and they're shaping their organization with speed and focus. We're consolidating roles. We're designing teams for more impact, and we're taking out layers. Our senior leadership circle is already noticeably smaller than it was a year ago. In the Q1 alone, we've reduced 1,500 roles, and approximately two-thirds of these were management jobs.
We have a target of EUR 500 million of sustainable cost savings in 2024 and EUR 2 billion in 2026, and we're focused on delivering. We'll continue to report on this on a quarterly basis so that you're clear how our organization is progressing. But the most important measure of our impact will be much greater than a job number or a cost savings target. It's going to be in our ability to innovate, to grow our businesses, and to improve life for our customers. That's what teams across Bayer are working on.
Our Crop Science division now has more than 250 teams in place working in Dynamic Shared Ownership, including all of the customer-facing teams in our two largest regions, North and Latin America. Our Pharmaceuticals division has more than 180 teams up and running, including teams behind our biggest launches like Nubeqa, Kerendia, and Eylea 8 mg.
Our 90 DSO teams in Consumer Health are seeing improvements in product supply and innovation delivery. Overall, we've increased the number of customer and product teams more than tenfold in just five months. It's been an eventful start to the year at Bayer. There's a lot of change underway, and that can be distracting for a large organization, but I'm daily inspired by our people's mission commitment and their drive to always deliver a better result. That's why I'm convinced there are plenty of wins in store for Bayer, both this year and in years to come, and on and off the football pitch. We're very proud of our colleagues at Bayer 04 Leverkusen. We're happy to lean on their example as we focus on steering Bayer to a consistent winning performance, one quarter at a time.
In that spirit, before handing over to Wolfgang, let me leave you with some innovation highlights that'll shape the next months at Bayer. Our Pharmaceuticals team soon expects a readout of the first phase III study on Kerendia in heart failure. They're also expecting a readout of the Nubeqa ARANOTE trial. Our Crop Science team is partnering with U.S. farmers on the commercial introduction of Preceon Smart Corn System, featuring Short Stature Corn, a true game-changer with the opportunity to reach more than 220 million acres globally. By the way, 220 million acres, that's the size of France and Germany combined, the whole countries. Our Consumer Health team has a focus on increasing launch effectiveness to get the most out of the science like Iberogast that we're bringing to the consumer market.
That's just a glimpse of some of the great things happening in our pipelines and our portfolios. We're confident in our prospects for the year. So now I'd like to turn it over to Wolfgang for more on our financial performance.
Well, thanks, Bill. And hello also from my side. I'd like to provide a bit more color on the drivers of our Q1 results. Our financial results came in largely as expected. On a currency- and portfolio-adjusted basis, Q1 sales were slightly below the prior year, down 1%. As reported, however, we saw a 4% decline, driven by about EUR 500 million in foreign exchange headwinds. On earnings, our EBITDA before special items came in at EUR 4.4 billion, which is 1% or about EUR 60 million below the prior year quarter.
We saw two major effects that largely compensated each other: a decline in Crop Science profitability, which is largely a function of lower glyphosate pricing, and a positive reconciliation result driven by lower long-term incentive provisions. We also saw about EUR 200 million of FX headwinds in our EBITDA before special items. Core earnings per share of EUR 2.82 were EUR 0.13, or 4% below the prior year period, and that was mainly impacted by higher interest payments and FX effects in the core financial result.
The core financial result is in line with our modeling assumptions of around EUR 2.3 billion for the full year. Our free cash flow came in at EUR 2.6 billion, in line with the crop business cycle. We saw a negative cash flow in the Q1. However, it improved by approximately EUR 1.5 billion compared to the last year.
This was mainly driven by lower litigation-related payouts for PCB. Additionally, the organization is laser-focused on improving earnings conversion into cash and actively managing the working capital. Our Q1 free cash flow includes first positive results from our inventory initiatives. Net financial debt increased to EUR 37.5 billion by the end of Q1, in line with the seasonality of our cash flow profile. The debt level was also impacted by the appreciation of the U.S. dollar. Let's now look at the outlook. Based on our latest forecast, we reaffirm our full-year outlook at constant currencies.
In Crop Science, we are still well-positioned to deliver a fourth consecutive year of growth in our core business and remain within the ranges we guided. The key vectors we anticipate for our core business are higher crop protection volumes and pricing in corn, the latter despite lower planted acres.
For glyphosate, we expect lower pricing, partially mitigated by volume recovery. In pharma, we are still expecting headwinds on Xarelto to increase throughout the year, likely resulting in year-on-year sales declines of the division for the next three quarters to come. With the Q1 results, we feel comfortable to deliver on the division's full-year guidance for 2024. For Consumer Health, we continue to further improve the supply situation and also focus on driving consumption. In addition, we are launching new innovation to the market.
With that, we plan to return to growth again in Q2 and to accelerate growth in the H2 of the year. As you can see on the right-hand side of the chart, we have updated our FX estimates based on March-end spot rates compared to December-end spot rates. We have seen an appreciation in the U.S. dollar.
While this positively impacts our top line, it has a proportionally higher negative effect on our cost positions. Furthermore, the portion of our debt denominated in U.S. dollar will see a negative translation impact. At the same time, we have seen depreciation in other currencies like the Argentinian peso, the Turkish lira, or also the Japanese yen. The current FX estimate considers the latest developments. Sales growth, as reported, remains in the range provided due to offsetting dynamics in the currency basket.
At the same time, we now see an increased headwind on EBITDA before special items of -4%, compared to about -3 percentage points previously. This then translates down to approximately -EUR 0.30 FX effects in core EPS. We also updated our FX estimate on free cash flow to approximately -EUR 300 million and net financial debt to about EUR 500 million. With that, I would like to close and hand the call back over to you, Michael, to manage us through the Q&A.
Yeah, thank you very much, Bill and Wolfgang, for your presentations. And with that, we now start with the Q&A session. If you would like to ask a question, please do the following. First, make sure that Zoom is the only active chat program open on your computers, as other programs might interfere with your ability to engage. Second, make sure your microphone is activated in Zoom. And third, use the raise hand function. We will register your interest in asking a question, and when it's your turn, I will call your name, and a pop-up window will open on your screen.
When you see this pop-up window, please unmute yourself and ask your question. Your camera will remain off. So enough about the logistics. Let's get started. The first question comes from Ludwig Burger from Reuters. Ludwig, over to you.
Thank you very much. I hope you can hear me now.
Yes, we can hear you.
Fantastic. Thanks for the instructions. So too quick.
You're welcome. That's okay.
Questions, please. So, on, you mentioned the 1.5, no, 1,005, 1,500 jobs in Q1 that have been eliminated. Is there any way to extrapolate throughout the rest of the year? You've made it clear that, you know, there wouldn't be kind of top-down targets on job cuts, but maybe are there any internal targets or ambitions that you've, that you've issued? And the second point, please, on your litigation strategy, specifically on any, on any efforts to settle, is there any way to aggregate current and future cases so that they can be settled en bloc? Maybe you could elaborate on that. Thank you.
Great. Thanks, Ludwig. Yeah, so in terms of the jobs, we've said from the beginning our focus really isn't on a headcount number. Our focus is really relentless on making sure that every job in the company is oriented around the mission. So in the commercial area, oriented around customers, or new product development, or in manufacturing, you know, what are the what are the essential roles? And second, that we basically clear out all the kind of all the jobs or roles that are, frankly, that are constraints that are, getting in the way of our people moving faster to innovate, to improve, to create more value for customers.
And so that's one of the reasons this is very different from a typical restructuring exercise where, you know, the management decides, "Oh, what's the number?" and then just sort of dispenses targets.
We haven't done that, and we're not going to do that. But what I'm really encouraged to see with these sort of early results with the teams that we've set up is we're hearing when we talk to the people that are operating in the new model, the frontrunner teams, they're basically saying, "Hey, this is working. It's happening. We're moving much faster." So, yeah, and maybe I'll hand it over to Wolfgang to talk about the settlement question.
Gladly, Ludwig. Good morning. And I think you will understand that we won't go into a ton of details here, but let me assure you that when it comes to litigation, we're following a very precise strategy that goes in the courtroom and outside of the courtroom. I think you've read a lot about this, heard a lot about this. We like our record so far.
I mean, we prevailed in 14 out of the last 20 PCB glyphosate cases, and you just heard from Bill the good news on PCB. So we're comfortable to defend our position. We're open for settlement, but in this case, it would A, have to make economic sense, and B, it would have to kind of put a lid on it at the end of the day, and that would obviously include currents and futures. But I have to leave it at this for this call.
Okay. And the next question comes from Klaus Knipprath, Agra Europe. Klaus, over to you. Important to unmute yourself. Maybe we try this again. Again, there's a pop-up window. Unmute yourself to ask your question. And if we're facing some issues on asking them, let me see if that works.
If it doesn't work, let's see if we can move on, and then we get Klaus in later. I have next on my list Jonas Jansen from Frankfurter Allgemeine Zeitung. Let's see if this works. Jonas, over to you.
Hi, good morning. I hope you can hear me.
Yes, we can hear you.
Perfect. Just two short questions regarding the Short Stature Corn that you mentioned, Bill. I heard about that a few years back, and maybe you could shed some light on how far in the talks with the, yeah, with the Crop Science guys and the what's why I'm searching for the word the landwirt, the farmer's, sorry, the farmer's PR. And maybe what your ideas are for this particular part, which role it plays in the overall Crop Science business.
And also, because you mentioned Iberogast in the US, how big would you expect this to be, like, in a big country like that, but with only one medication? Is that something just to just a good add-on, or do you see yourself also, like, as a big aggressive competitor there in the market? Because in Germany, it's a well-known brand, but I don't really know how the market there is working. Thanks.
Yeah, yeah, thanks, Jonas. Really, both of these are very interesting products. So Short Stature Corn, we fully expect that this is the way of the future for corn because, you know, it's pretty simple. I mean, a typical corn plant is growing 3 meters tall, and that means it's at quite high risk at the end of the season for storm damage.
And what we're finding is, with climate change, the incidence of severe weather - and by the way, these can be storms that last 30 minutes - but if you have violent winds for 30 minutes in a summer or harvest season thunderstorm, you can lose 30%, 40%, 50% of the crop. And so that's, you know, that's really terrible from the farmer's point of view. By the way, it's the number one use of crop insurance, number one payouts or expense for crop insurance programs in the U.S. is for corn lodging. This is this phenomenon of corn plants tipping over. And so the Short Stature Corn is basically delivering a corn that's very much equivalent to the normal corn, but the plants grow less than 2 meters tall instead of 3 meters tall.
And it turns out that that makes a huge difference when it comes to the ability to resist these violent winds and to basically stay standing. In addition, currently, with typical corn plants, once they get about 2 meters tall, the farmers have to make a decision about whether to spray for fungi or insects. Because once the corn gets above 2 meters, they can't get their sprayers into the field anymore.
And so what that means is, often, farmers, they're basically spraying crop protection chemicals before they actually need to, perhaps over the whole crop, because they don't want to have to be reliant on airplanes to do the spraying later. And so with Short Stature Corn, they don't have to make that decision. They can wait, and if there's no pests show up, they don't have to use pesticide.
Or if they only show up in one part of the field, they can limit the spraying to that area. So from an environmental standpoint, this is also a great result. And of course, the costs are there as well. So the original product we're launching is not a biotech version, so it's based on, you know, the traditional breeding methods. And we've already got that in our germplasm to have the Short Stature Corn.
We'll now be adding biotech traits. So, for example, insect-resistant traits or herbicide-resistant traits. So we believe that this corn will become the gold standard in the world. It'll be good for food security. It'll be good for the environment, and it'll be good for farmers. Your question about Iberogast, let's see. Well, sorry, let me just say, and you asked about how the conversations are going with farmers on the Short Stature Corn.
I'd say that they've been very enthusiastic about it. It's not rocket science to figure out the advantages. Now, farmers, typically, they adopt things over time. You know, they'll try one field. They're not going to plant their whole farm with a new seed that hasn't been tried before. So we've got a lot of that going on all across America right now, and then we'll be rolling this out around the world in the next few years. Iberogast, how big? Well, first off, you know, in Consumer Health, products tend to be smaller than, say, in prescription Pharmaceuticals. But we think Iberogast has quite large potential because it's targeting inflammatory or, sorry, irritable bowel syndrome. And to be honest, there's not a lot available.
So if you go to a pharmacy and you're looking for something for irritable bowel syndrome (and this is something that millions of people are dealing with in the U.S. in this case) if you go to a pharmacy, there's really not a lot available. And so we think Iberogast, even though it's a new product and it's not known in the U.S., we think it has a very good chance of becoming a leading therapy or a leading solution for people with IBS.
Okay. And the next question comes from Annette Becker, Börsen-Zeitung. Annette, over to you.
Yes. Oh, I think you can't hear me.
So we hear something, but try, go ahead, and maybe we can hear you better.
You can't hear me?
Yeah, kind of.
But I think.
Yeah, no, it's okay.
You can't hear me.
No, we hear you.
No, we hear you.
Go ahead.
Okay. I'll try then. You reported one-time costs for restructuring in the quarter of EUR 200 million, and you're looking for savings this year for EUR 500 million. Can you tell us how much on one-time cost restructuring you expect in this year?
Yeah, gladly, Annette. Just to frame it, the one-time cost for restructuring for the overall DSO program were pegged at about one time the savings, right? So if we save EUR 2 billion, you'll have one-time cost eventually of EUR 2 billion. Now, you record, like you rightfully say, them by quarter, depending on how firm you are with the decision and how concrete you are on the decision on the individual measures. And that led to just below EUR 200 million in the Q1.
So what we will record on one-time cost this year will not necessarily be linked to what we already saved this year, but to the decisions we made. So my point is, it could be more than EUR 500 million this year. That means we are moving ahead quite fast with the decision-making. And this also explains the range that we gave. And you find this also in our document that for one-time cost, which is largely restructuring-related cost, that we have a range of EUR 1 billion-EUR 2 billion for this year. So it's really a function of how fast we cement the specific actions. And the more we record this year will give you an indication how fast we can get the total impact of EUR 2 billion. I hope that helps you.
Okay. Thank you.
Thank you. And the next question comes from Bert Fröndhoff, Handelsblatt. Bert, over to you.
Yes, good morning altogether. Can you hear me?
Yes, we can hear you.
Okay, thank you. Yeah, good morning altogether. A couple of questions for you, Bill. Can you give us a total number of jobs that have been cut so far? I mean, you mentioned the 1,500 in the Q1, but you started the DSO program in late summer last year in the US. So the total number must be higher, I think. And that leads me to the question: Is the focus of the job cuts so far in the US or in Europe also and in Asia? And yeah, the second part is: Will you join the last match of Bayer Leverkusen on Saturday?
And will you take part in the championship celebrations in the city and in the ride of the team bus? That's the first question. Second question: Can Bayer learn something from the success Bayer Leverkusen has right now?
Yeah, great, Bert. Thanks for the questions. So in terms of the total number so far, I don't have a precise estimate for that because last year we were still completing some changes from previous restructuring programs and things. The number of headcount was coming down already in the last six months of 2023, but I don't have a sort of precise cutoff of when did DSO start and when did others. Part of getting rid of bureaucracy is that we're not running around with lots of people with pieces of paper keeping note of each of these, you know, what's accountable for this and what's accountable for that and this. But I would say the focus you asked about, you know, where are the cuts happening?
It's everywhere in the world because the opportunity is everywhere in the world. There's not a country that we operate in, which is practically every country in the world, where we don't have a better, yeah, chance to meet our customers' needs faster. Yeah, the examples that we're seeing from teams everywhere I go, I've probably visited, I don't know, 15 countries in the last 9 months. Just the opportunity to hear from people, you know, what they're experiencing of this. Like, instead of spending 6 months trying to get permission to do something, which, by the way, means that most of the time they never even ask, do you know? If you think it's going to take 6 months to get permission, mostly what that means is you don't even bother.
So people are just amazed at how much more they can get done when they have the authority with their colleagues to make the decisions and move. A great example of this we've had already where we had prenatal vitamins from One A Day, our leading vitamin brand in the world. We had planned to launch around this time next year, but that was one of our frontrunner teams. They decided they could launch, instead of it taking, I think, 21 months, they could do it in 7 months. That's happened now. So that's a product that's available, and it's benefiting couples who want to get pregnant already instead of sometime next year. So that's what's going on there. In terms of the Leverkusen game on Saturday, yes, I do plan to be there.
Yeah, it's an exciting opportunity to have perhaps a first perfect season in the Bundesliga with no losses. So I know the team is really fired up and ready for it. Yes, I do plan to participate in the celebrations that we'll have because we did already win the championship, and now it's about finishing strong. Actually, we did the management board. We had a nice lunch recently with the athletic director, Simon Rolfes, and Xabi Alonso, who's the trainer for the team. We had a really interesting conversation about, you know, they had questions for us, and we had questions for them.
I think we can always learn from great leadership. If there's ever been a football club with great leadership, I think our football club is that. So congratulations to Fernando and to Xabi and Simon and all the team members and staff. It's a really great day for Leverkusen, for the town, and the club.
All right. And the next question comes from Daria Sukharchuk from Endpoints News. Daria, over to you.
Hello. Can you hear me?
Yes, we can hear you.
Okay, great. Thank you. I have just a small question I wanted to ask. Is there a plan when do you plan to file for approval of the hot flushes candidate, elinzanetant, in the US and in the EU?
Great. Yeah, thanks, Daria. We're working overtime right now to get all the documents ready. There's three phase III studies, so there's quite a bit of data gathering from the studies around the world. And we look forward to filing it in the coming months. So I don't think we're not communicating a precise date right now, but we're very much looking forward to it. And I hope you get to see the data presentation this Friday at the meeting in America.
Okay. And the next question comes from Tim Loh from Bloomberg. Tim, over to you.
Hi, thanks, guys. Yeah, I got two questions for you, Bill and Wolfgang. The first is I wanted to just the pharma unit in the quarter. There were a few things that you mentioned in the release that helped on the earnings there. One was the reduction in some costs on the latter stages of the pipeline. And the second was about the, I guess, reduction in some marketing costs on some of the older drugs.
Now, I guess my question here is how much of that, particularly the earlier part, has to do with the poor results of asundexian last year? And how much of this all, more broadly, is a function of the Dynamic Shared Ownership model kind of kicking into gear? That's my first question. And then I have a follow-up question, but I can wait for that.
Yeah, Tim, I'll take a crack at the pharma margin question. First of all, it's good to see that in pharma, the margin this year's Q1 was higher than in last year's Q1. It went from 25%-27%. Indeed, very diligent cost management is a major factor there. Stefan and the team have been on the job there for a couple of quarters now. R&D is indeed linked to asundexian , among other things that we're curtailing.
We're very, very focused on the pipeline there. We haven't given out a specific number, but it's rather significant, as you can imagine. On the marketing cost, it's actually predominantly linked to the newer products because you can imagine, as we introduced Nubeqa and Kerendia in particular in the U.S. market, but also in other markets, we ramped up the cost quite significantly last year. But now we can manage that a bit better as the products start getting a better foothold. I think you heard it in the prepared remarks.
We're at high speed in all divisions and the enabling functions, and pharma is no exception. And they make a major contribution to the EUR 500 million we want to achieve this year. And we see first results already in Q1 there in pharma that help there as well.
And Tim, you had a second question.
Yes. Have I been unmuted? Can you see me here?
Yes.
Okay, perfect. Okay, so I echo the congrats on the Bayer Leverkusen football, Fußball success. I hate to ask a potentially awkward question on this, but so you've just finished like a year of review about the company and portfolio, etc., etc. Nothing was off the table and has been. Obviously, European football teams can be worth a lot of money. Bayer Leverkusen is having the best season of all time, I guess. Has there been any consideration, and is there any consideration for potentially selling a stake in that team and/or selling it outright to try to bring in more money to handle some of the broken areas of the company that you have highlighted in the past?
Yeah. So Tim, first, let me say we're very proud of what the football team's accomplished. We spend at the management board, I think, since I arrived, the amount of time that we have spent talking about the football team is probably... Yeah, maybe 15 minutes. Maybe in the last year. So this is, again, they're doing a great job, but it really runs totally separately. And so this is not an object of attention of the management board. And Wolfgang, you probably are more qualified than I can, but there's very strict limitations on what can be done with German football clubs. This is not like the Premier League or other leagues around Europe where teams are sort of for sale. I don't know, Wolfgang, if you want to comment more on that.
Not really much more to say on that. We're proud of the team, obviously. You will know that, Tim, they're recorded in our recon column in the P&L. They're not the biggest business line, but hopefully we get a bit more revenue over time, and our great players appreciate in value. But that's probably all we can say at this point in time. There's no plan there.
But just to clarify, it's not even really an option. So yeah, your question, it's a very reasonable question, but the short answer is that's really not an option.
Gotcha.
Cool.
All right. Thank you.
Thanks, Tim. And the next question comes from Antje Höning, Rheinische Post. Antje, over to you.
Hello, to Leverkusen. Can you hear me?
Yes, we can hear you.
Okay. I have two questions. You mentioned the cut of 1,500 jobs. How many of them have been cut in Germany? And can you now predict if Bayer doesn't need termination, betriebsbedingte Kündigung, from 2026 on?
The second question, is it correct that Bayer is working with legal advisors to consider outsourcing the glyphosate lawsuits to a subsidiary that would then go bankrupt? Also, could the Texas two-step process be a way for you to solve the glyphosate lawsuit problem? Thank you.
Yeah, thanks, Antje. Actually, I don't think I have a precise breakdown on the 1,500, what % is Germany, but it wouldn't be greatly disproportional to our overall representation. As I said, the work we're doing with Dynamic Shared Ownership is going on in every country, and there's not a particular focus in Germany versus any other country. Where in the future the numbers could be lumpy is where if there's a facility in a country that's either divested or shut down, that would obviously, you know, if you had a major facility, but we don't have anything like that in these numbers.
And so I don't think there's anything particularly interesting to report there. And in terms of legal structure options for resolving litigation, as I've said, we're really examining every available means to protect our world-leading investment in agriculture technologies, in cancer therapies, in diseases like Parkinson's, and how we bring patients solutions. And yeah, the unfounded attacks on our company by the litigation industry, they need to stop. And so we're evaluating every possible alternative to make sure that we can keep delivering for patients and for farmers and for consumers around the world. And we're going to, yeah, we're going to continue to fight very hard on that. So thanks for your interest, Antje.
Thank you.
Thanks. And the next question is from Bernhard Vetter, Agrarzeitung. Bernhard, over to you. So let's see the unmute button. You get a pop-up window, if that works. So give it a second. So line should be open. Let's see. Okay. If that's not working, then let's move on. Next in line is Kevin Grogan from Scrip. Kevin, over to you.
Good morning, everybody. Yes, a couple of pharma questions, really. A bit on Eylea, you know, with the patent going off in the States later this week, I think. Now, there doesn't seem to be any competition, generic competition, coming just yet. But I'd just like an idea of how you see the Eylea franchise going. Obviously, there's a switch to Eylea HD. I'm interested in knowing whether there's many people being switched from Vabysmo as well, which is, you know, Bill, your old chums at Roche seem to be their stuff seems to be flying off the shelves there. So how are you coping with that?
I'm quite interested in what the strategy is for keeping Eylea as a big earner in the future. And one other thing is on radiopharmaceuticals. It's become a very hot area. There's a lot of people investing, and Bayer's traditionally been a big player there. How do you see that field going, and what are Bayer's plans? Maybe a bit of M&A, etc. Thanks very much.
Yeah, thanks, Kevin. So regarding Eylea, yeah, we're very encouraged by both the amazing data we saw in the 8 mg studies, but also the receptivity of physicians, really, in every country for this new product. And it's really a new day for Eylea with the 8 mg product. It's a different formulation that's specially formulated to allow that high dose in the eye.
It's providing really unprecedented ability for patients to have fewer trips to the doctor, fewer injections in the eye, which you can understand is actually very desirable and a great benefit for patients. So we see a strong future for the Eylea franchise in the coming years. Yeah, we think we'll perform very well radiopharmaceuticals, as you said, is historically an area of importance for Bayer. We've been a pioneer there. We've sort of learned the hard way with some of the kind of the early efforts.
Now we are very pleased to have some important programs that are in the clinic, including one that's in prostate cancer we're really excited about. We think radiopharmaceuticals, their day has arrived, and we're looking forward to being on the leading edge of that.
Okay. The next question comes from Jean-Philippe Lacour from Agence France-Presse. Jean-Philippe, over to you.
Now you can hear me.
Yes, we can hear you.
Okay, thanks a lot. Greetings from Frankfurt. So roughly all my questions were asked. But Bill, maybe can you describe us what are these kind of jobs that hinder the creativity within your company? Are those all administrative jobs? Sorry, the jobs, I mean. And to understand you well, Wolfgang, you said that you're expecting EUR 2 billion savings from 2026. So it will say that you have one-off restructuring cost of EUR 2 billion to bear until the end of 2025. Is it correct? And it will be roughly EUR 500 million alone this year. Do I understand you correct? Thanks.
Yeah. Thanks, Jean-Philippe. Yeah, so it's a great question you asked. Is it sort of administrative jobs that hold back people's creativity? And I would say I wouldn't think about it like that. And by the way, it's nobody's fault, or at least not the people in these jobs. It's not their fault that this is how the system works. I mean, when you have a hierarchical system with up to 10 or 11 layers, as we've had at Bayer and as most large companies in the world have, when you have that, it comes with a lot of collateral damage. And it's not like anybody wakes up in the morning and says, "Oh, hey, I'm going to work to be a bureaucrat today, and I'm going to hinder people's creativity." I mean, nobody thinks like that.
But it's just a fact of the system that if you have the people that are facing the customer or the people that are actually touching the product, whether it's in product development or manufacturing, when you have those people and they're unable to take their own decisions, but they're sort of subject to resource constraints and, frankly, permissions from the people up the chain of command, that is what hinders the creativity. And so then the question becomes, how do you achieve the thing you're trying to achieve with those 11 layers, which is predictability, control, sort of reliability? How do you achieve those things but without the 10 or 11 layers? And so that's what our system's all about. And so what we're doing is we're replacing, for example, vertical control with small teams.
We will have literally thousands of teams in the company by the end of this year. The teams actually, they can make decisions within the team about what resource to invest, about which actions to take next, what are the priorities. It's actually the team members among themselves that are the, if you will, they're the controllers, right? We're basically replacing the vertical hierarchy with peer feedback, peer review, and responsibility. As said, I invite you to come check it out sometime. But it's quite remarkable how it works.
Yeah, Jean-Philippe, I'll take the question on the savings and the one-time cost. Claire, do you ask again so we can clarify? On the basic coordinates, yes, we're targeting EUR 2 billion savings effective in 2026. That means you got to take all the actions by the end of 2025.
And yes, the one-time costs are about the same, about EUR 2 billion. Now, you got to separate when you record the special item in the P&L. Like I said earlier, that depends on whether you're making the firm decision about what you're doing in which part of the world and which organization at what point in time. I said there's a large range of outcomes for this year even. If we decide on most of it, it will be closer to EUR 2 billion this year. If we decide on less, it's closer to EUR 1 billion.
Of course, our objective is to move as fast as possible, as you can imagine. The cash effect is yet different from that. It depends on what program applies in what case. But to keep it simple, there could also be cash effects within the EUR 2 billion that go into 2026 or beyond.
If, for instance, somebody keeps an entitlement for a short or long-term incentive plan that pays out later, or if somebody has contributions to the pension plans that are made after 2026 or in 2026. So the recording of the expense earlier, the cash flow will extend beyond the period, like they have done it with other programs as well.
All right. We have two more questions. We start with a question from Ayisha Sharma from Endpoints News. Ayisha, over to you.
Hi. Thank you for taking my questions. Just two quick ones from me focused on pharma. So I saw that you mentioned the 1,500 full-time employees that you've reduced by the end of this quarter. I was curious if there's any breakdown of how many of those 1,500 were in pharma specifically.
And secondly, you note in the slides that in the pharma division, 100 customer and product teams were activated and 8 global product teams were established. I was just curious if you could share some more details about what those customer and product teams look like, what they do, and how they're sort of related and work together.
Great. Yeah, so Ayisha, we don't have a breakdown by division on the headcount. Again, yeah, we're in early days on implementation. But I think you could probably assume that it's roughly proportionate to our representation across the company. The teams, so there's 2, I guess, 2 main kinds that you just mentioned. So one are the customer-facing teams. And these are basically kind of autonomous teams that include different types of functions.
For example, you could have sales and medical and access people with those specialties all working together to support the customers in an area. And the idea is that they've got everything they need to bring the customers what they need to make sure that any obstacles to patients receiving our leading cancer therapies, cardiovascular therapies, other medicines, that.