Good morning, everyone, and welcome to our media update for the third quarter of 2024. Our CEO, Bill Anderson, will start with his perspective on business development in the year to date and the progress we've made towards our strategic objectives. Our CFO, Wolfgang Nickl, will then summarize our financial performance in the third quarter, the full year 2024 outlook, and high-level vectors for 2025. After that, you'll have the opportunity to ask your questions. Before starting, I would like to briefly draw your attention to the cautionary language included in our Safe Harbor Statement, and with that, I hand it over to you, Bill.
Thanks, Michael. Thanks to all of you for joining. And what you're going to hear from us is the excitement about the opportunities ahead, coupled with clarity about some headwinds and crosswinds that we have to navigate. And that's the tone we aim to establish with you in March. It reflects the way we're steering our businesses. We see great progress in some areas. We've had a good run of positive readouts in pharma. We've had great momentum on our launch assets. We see outstanding first results of our new operating model. But even as we see great progress in some areas, others require more attention. Regulatory challenges and generic pricing pressures in our crop protection business are two examples. Regardless of whether these things are entirely in our control, we need to manage them with resources and decisions that are in our control. That's part of doing business.
Sometimes you have to navigate twists and turns in the road and adjust. It's okay to do that as long as you're on the right path. We're confident that the course we've laid out for the company is the right one, and we intend to stay on it. Now, let me start by covering our year-to-date performance in 2024 and our full year outlook. As a group, we're going to deliver on nearly every parameter that we committed for 2024. We expect the agriculture market to decline around 2% this year. Given that, hitting those numbers is no small feat. Year-to-date, Pharmaceuticals is up, pacing with the guidance we upgraded last quarter. In fact, we're confident that we'll deliver at the upper end of that upgraded guidance in both sales and earnings.
Consumer Health is growing, though not at the rate we expected, given a slowdown in some markets, particularly the U.S. and China. Still, our performance in Pharmaceuticals and Consumer Health is offsetting some of the declines in Crop Science. Clean EBITDA will come in lower due to the headwinds I mentioned, but as a group, we're fully committed to hit our full year targets on sales growth, on core earnings per share, and free cash flow. Now, let's look at our performance business by business. In Crop Science, we're going to come in under our guidance for 2024. Latin America is a big business for us, and we expected big contributions from the region in the second half of the year, similar to what we saw last year. Weather challenges and disease pressure have led to corn acreage decline in Argentina and Brazil.
Compounded by soft commodity prices and generic crop protection pricing pressure, this led us to lower our 2024 targets. You've seen similar dynamics across the entire industry, and Rodrigo and team have shown that we can compete with and withstand market pressures thanks to our innovation edge, but ultimately, we aren't immune to them. Nonetheless, we've got to own the results for this year. There's definitely areas we can improve going forward. For 2025, we're cautious on the market environment. On top of that, we anticipate some impact to our crop protection portfolio due to extended product reviews and changing regulations. That makes the nuts and bolts of our operational performance really important, and Rodrigo and team are going to optimize the resources we have at our disposal to compete in a challenging context. As we do that, we'll also strengthen our midterm prospects.
We have industry-leading launches coming in 2027 and beyond, and we'll be ready to capitalize on them. In Pharmaceuticals, we upped our guidance last quarter. We've got two months to go, and we're confident that we will come in at the upper end of that guidance. We're happy with what we've seen from our launch products. Nubeqa has accelerated this year. Kerendia is showing excellent growth as well. That's important because we can expect the Xarelto loss of exclusivity impact to accelerate in the other direction. With that comes margin erosion, but we're focused on what we can control, moving assets through the pipeline and delivering successful launches. With Acoramidis and Elinzanetant, we're expecting the next two to come in 2025. And we have great momentum in renewing the top line, reinvigorating the pipeline, and building the base for continued profitable growth in the future.
In Consumer Health, you've gotten used to continued growth from us over the past five years. Julio and team have every intention of continuing that while recalibrating growth back towards volumes. With that comes a reorientation of investments behind our brands. They're shifting resources to the right brands in the right markets while addressing the key factors that weigh on our cost and cash. Our dermatology and digestive health categories are growing consistently, largely due to this approach. Now our team is translating it to the rest of the portfolio, and we expect it to fuel growth in 2025. On to our strategic progress, starting with innovation. I've highlighted where we stand with the Preceon Smart Corn in the last few quarters. The biotech version will be launched in 2027, and the breeding version has already been launched in three countries. In September, I got to see it for myself.
I walked a field with Jerry, a fourth-generation farmer in northeast Iowa. He was able to plant Preceon at a significantly higher density than his tall corn. The crop withstood heavy winds in July, up to 70 mi per hour. While his neighbors had to deal with broken crops and dramatically lower yields, his corn stood tall. Or I guess short is probably more appropriate. Ultimately, the crop delivered the best performance he's ever had on that field, 258 bushels per acre. Earlier, I mentioned some of the challenges we see in agriculture. That makes innovation like this even more important for farmers who want differentiated value from us. In Pharmaceuticals, Nubeqa crossed the blockbuster threshold in September and has achieved market-leading positions in its current indications. Our new model has helped turbocharge this growth.
Decisions about how to cover sales territories and how to allocate resources are now made by the people doing the work instead of being run up and down the hierarchy. This translates into more time with physicians and patients, faster, more focused work on things like filing dossiers and NDAs, and accelerated growth. In Consumer Health, teams on the ground tell me that they're cutting launch times nearly in half, particularly in our nutritional supplement business. We're going to keep shrinking the time from consumer insight to hitting the market and meeting a need. Now on to litigation. We remain true to our commitment to contain this issue over the coming two years. There will be continued news flow on trials, our legislative efforts, and speculation about other potential measures.
As I've said previously, we're exploring every possible avenue to contain the issue, but we will only comment on those plans when it's in the interest of the company. In the glyphosate litigation, we will now decide on which case we will request review by the U.S. Supreme Court. If the court accepts our case, we hope to obtain a ruling in the 2025-26 session. Outside of the courtroom, I see momentum among politicians, among farmers, and other stakeholders demanding American farmers get the legislative certainty they deserve. Further, companies like ours are standing up to the nebulous funding that often bankrolls the U.S. litigation industry. We recently joined more than 100 major companies across industries to petition the courts to mandate disclosure of third-party financing in lawsuits.
On PCBs, we also expect an important decision in the upcoming months, in this case by the Supreme Court in the state of Washington regarding the Erickson case. All in all, there remains a lot to do on the litigation front. This is a long road with no quick fix. We're focused on the bigger picture, and we're pursuing multiple avenues. We'll learn more about the Supreme Court in 2025, and we will continue working to significantly contain the risks. Now, Wolfgang is going to cover cash in his update, but as I said upfront, we're fully on track for the year. Now, finally, on Dynamic Shared Ownership, it was in our Q3 call last year that I first introduced our new operating model to you. At that time, we had just kicked off the journey. We had about 2,500 people who had been introduced to the system.
Today, we've scaled it to the vast majority of the Bayer organization, and we're seeing big changes as a result. We have 5,500 fewer jobs in the company since the beginning of the year, and a significant majority of those are managerial positions. Most importantly, we're seeing improvements in the way we run our business. I recently visited Garbagnate, a production site for our Pharma division outside of Milan. The team there created a cross-functional team to try to cut 10% off of the batch release time, which was approximately two to three weeks. They worked in three 90-day cycles. They had authority to make decisions on the spot, and they included factory floor operators on the team. At this point, they've cut the release time by almost 50%, with tangible benefits on lowering inventory, reducing waste, and improving cash flow.
That's mission impact for our people, quicker innovation for patients, and better cash conversion for investors. That's what we're going after. There's no doubt we have a lot more work to do in scaling this effort. We're at a critical phase of implementation right now. So as a management team, we're keeping our eye on the ball, making sure this overhaul doesn't go the way of more traditional, mostly ineffective restructurings. At first, when I'd ask about success stories, I kept hearing the same two or three examples, and then we'd get a new one maybe monthly. Now I'm hearing stories like the ones I told, basically on a daily basis. I'm confident that that is going to translate into results for our investors and a bright future for us and for our customers.
Well, before handing over to Wolfgang, I would just like to say that I'm very happy he's extending his contract. He originally planned to retire after his contract expired next year, but he's going to stay on board for an additional year to see through our three-year journey. Wolfgang, you've been a great partner to me. I'm very happy that you're staying on board. So thank you all for your attention. I'm going to turn it over to Wolfgang.
Thank you, Bill. I'd like to briefly talk about our Q3 results before I turn to our outlook for the full year and the vectors we see moving into next year, 2025. As always, sales growth comments are on a currency and portfolio-adjusted basis. In Q3, group sales increased slightly by 1% versus the prior year, with growth in Pharmaceuticals and Consumer Health offsetting a decline in Crop Science.
Our EBITDA before special items came in at EUR 1.3 billion, which is 26% or about EUR 430 million below the prior year quarter. The delta is largely driven by lower Pharma and Crop Science results. Foreign exchange remains a major drag this year, with nearly EUR 440 million headwind to our top line in Q3 and about EUR 1.2 billion year-to-date. On the bottom line, FX effect leads to a 40 basis point negative impact to the group margin in Q2, Q3, excuse me, and also the year-to-date results. Impacts on divisional margins differ significantly, which is largely driven by different geographic distribution of sales and the cost base. In line with the respective business performance and outlook, we see lower expenses from short-term incentive provisions for Crop Science and Consumer Health, whereas we see the opposite for Pharmaceuticals with increased provisions versus the prior year.
Core earnings per share of EUR 0.24 in Q3 are EUR 0.14 below prior year. Lower contributions from EBITDA before special items were partially compensated by a better core financial result. Reported earnings per share came in at EUR 4.26. The delta to core earnings per share is largely driven by the non-cash relevant impairment losses of approximately EUR 3.8 billion posted in our Crop Science division. Main drivers are reduced business prospects, especially in crop protection, FX, and the dicamba label uncertainty, whereas weighted average cost of capital were favorable. Our free cash flow came in at EUR 1.1 billion compared to EUR 1.6 billion in last year's quarter, mainly due to quarterly timing of customer payments in Crop Science. Year-to-date, our cash flow is at EUR 200 million. This compares to EUR 2.9 billion for the first nine months of the prior year.
The difference is mainly driven by lower incentive payouts and lower settlements. We anticipate strong cash contributions in Q4 to deliver on our full-year commitments. Net financial debt was reduced to EUR 35 billion by the end of Q3 due to the positive cash contribution in the quarter and an FX tailwind of about EUR 600 million. Let me now move on to the divisional guidance for 2024. For Crop Science, we now expect sales to decline from minus 3% to minus 1% in currency and portfolio-adjusted terms. This is driven by a revised outlook for our core business impacted by the challenges in LATAM, as well as intensified generic pricing pressure on crop protection. This also affects our margin outlook. The EBITDA margin before special items is now expected to come in between 18 and 20% at constant currencies.
For Pharmaceuticals, we confirmed the full-year guidance at constant currency, which we raised after the second quarter. However, we now anticipate coming in towards the higher end of the sales and margin guidance ranges. For Consumer Health, we anticipate moderately lower market growth for the rest of 2024. This is largely due to softening economic conditions in selected markets. U.S. consumers are becoming more cost-conscious, and there are early signals of a weaker-than-expected cough and cold season. In China, we see a deceleration of market growth. For Q4, we anticipate that our retailers will continue to optimize their working capital due to improved supply chains and product availability. From a full-year perspective, this affects our ex-factory net sales, while our sell-out performance remains consistent with market trends. Considering these factors, we now estimate full-year sales growth for 2024 between 1% and 3% on a currency and portfolio-adjusted basis.
With a clear focus on our operational efficiency programs and targeted price management, we expect our EBITDA margin still within the previously guided corridor. On group level, we are fully committed to achieving our sales growth, core EPS, free cash flow, and net financial debt targets for the year, all at constant currencies. Based on the updated divisional outlook, we lower the clean EBITDA outlook to -11% to -8% compared to previous year. We now expect a better core financial result of approximately EUR 2 billion versus -EUR 2.3 billion previously. This is, by the way, in line with the actual year-to-date performance. We have also updated our FX estimates based on September and spot rates. We now expect a stronger FX headwind on our sales of -3 to -4 percentage points.
On net debt, we see the opposite effect, now assuming no material FX impact versus a EUR 500 million increasing effect previously. Let me also take the opportunity here to summarize key business vectors for next year. For Pharmaceuticals, we expect continued strong growth dynamics of our launch brands. At the same time, we anticipate rising generic headwinds for Xarelto, which adds margin pressure compared to 2024. For Crop Science, we are cautious on the ag market outlook and anticipate muted growth. In addition, we foresee regulatory challenges in our crop protection business, leading to increased pressure on profitability. For Consumer Health, we expect market growth at similar levels like this year. Within that market, we expect to deliver robust growth with a focus on volumes. Based on current assumptions, FX is likely to remain a material headwind.
Overall, we expect a muted outlook on top and bottom line next year with likely declining earnings. We plan to accelerate our cost and efficiency measures to partially compensate and remain laser-focused on cash conversion. While we intend to provide some level of transparency on the main drivers for next year, our planning discussions are currently ongoing. We will provide specific 2025 guidance with our full-year results, and with that,
Bill, back over to you.
Thanks, Wolfgang. So all in all, I hope this presents a helpful snapshot of each of our businesses today and what we see when we look at 2025. Let me summarize before getting to your questions. On our 2024 guidance, we'll hit the numbers on sales growth, Core EPS, cash flow, and net debt. Strategically, we've made progress. We've rapidly scaled our new model. We've leveled up the Pharma Pipeline with great speed.
We'll also have more to do. We've got the litigation uncertainty to contain, and we have a team working 24/7 on it. We've got our operational performance, where we always strive to be more competitive. Rodrigo and his team are on the case in Crop Science. In Pharma, we're prepping two more important launches for next year. Consumer Health is unleashing more focused resources behind our brands. And all three of our businesses are becoming leaner, more entrepreneurial, and more dynamic. We're confident in the strategy and plans that we laid out in March. We have the right focus for our customers, for our company, and for our investors. Thanks for your attention, and over to Michael for the Q&A.
Thanks, Bill and Wolfgang, for your presentations, and with that, we'll 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 computer, as it might interfere with other programs and also 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 then open on your screen. And when you see this pop-up window, please unmute yourself and ask your question, and your camera will remain off, of course. So enough about the logistics for the Q&A session. Let's get started. Let's get into this. And the first question that we get is from Ludwig Burger from Reuters. Ludwig, over to you.
Thank you very much.
I hope you can hear me. Good morning. We can hear you. Great. So I'm referring to what you said about regulatory pressure. I think that applies to your 2025 outlook. There's mention of U.S. dicamba label 25 and Movento. Could you please just kind of specify what's going on there? Is this things that have happened or that you expect to happen? And just quickly, the generic pressure in crop protection, that's reference to Roundup/Glyphosate, correct? And then thirdly, if I can, please, a comment on how the U.S. presidential election outcome may impact your litigation in the United States. Thank you.
Thanks, Ludwig. So yeah, first off, on the regulatory pressure, what we're talking about there is that there's basically a delay in getting approval for our dicamba traits in our soy seeds.
This is challenging for farmers because dicamba is a very useful herbicide for use in soy, but this delay means that it has an effect on our sales of soy seeds with that trait, and so yeah, this is something that's going to affect us because we don't expect that this approval will come in time for the 2025 season, so this is basically kind of a one-year hit for us. We would hope that that will come back, but that's something that's basically out of our control, and then Movento, this is an insecticide that's available in the European Union today, but due to the European Green Deal, is basically going to be taken off the market, and so yeah, that's an additional hit on us. Your question about generic pressure on crop protection, so that's not limited to glyphosate.
I mean, that's certainly a factor on glyphosate, but basically, they're differentiated crop protection products, and we have many of those, probably the largest portfolio. But when there's extreme pressure on farmers because of low commodity prices, they're more apt to go with less differentiated generic products. Sometimes it's the same active ingredient. Often, it's not the same active ingredient, but because of price pressures, they're willing to settle for less. And so that has a knock-on effect on our products. And then your third question about how do we see the U.S. election results affecting litigation. I'm not sure there's a direct result on certainly on ongoing cases, but I do think that U.S. voters spoke very clearly, certainly on the economy and on inflation in particular. And we know probably one of the most frequently cited topics for consumers in the U.S.
When they talk about inflation, it's food prices. I mean, food prices in around 1970, food prices were 11% of average American household expenditures. Over the next 40 years, that share dropped from 11% down to 7%, and then in the last five years, all of the gains that were made in reducing food prices and food costs basically were lost and wiped out so that they were back at 11% of household expenditures, and so we would say our products, crop protection products like glyphosate, play a major role in holding down food inflation, ensuring that there's reliable and safe food supply, and so I think for either party, this has to be a priority, and we certainly heard that in talking to members of Congress of both parties and working in state legislatures, talking with farm groups.
So we have a positive outlook on the importance that American policymakers and American farmers associate with ensuring that reliable crop protection products remain available. So we think that, yeah, I would say the environment is conducive to progress, and we expect to see that progress in 2025.
Okay, so the next question comes from Jonas Jansen, Frankfurter Allgemeine Zeitung. Afterwards, we have Ayisha Sharma from Endpoints News. But first of all, over to Jonas Jansen. Hello and good morning. I also have a question regarding the U.S. and looking at the, again, rising litigation numbers with people who are, yeah, sorry, what's the English word? Klagen. I'm sorry.
So I want to know if there's also a change in your, or maybe a way how you want to play this out, looking at the Supreme Court, looking at the Farm Bill, maybe, which you can share with us some more details about your strategy in the U.S. regarding the litigation in general. Thank you. Sure. Yeah, so Jonas, I think, yeah, and you're talking about the plaintiffs and how do we handle that, that there's rising numbers.
I think for us, it's been pretty clear that there needs to be a solution where we have a really important product like glyphosate that's been demonstrated over more than four decades to be safe and effective, that's been reviewed and re-reviewed and re-reviewed by the European Food Safety Authority, by the U.S. EPA, by the Japanese safety authorities, and by regulators basically in every country, and found to be safe when used as directed, that there needs to be a protection in that case from these sorts of lawsuits. That's been our emphasis over the last 12 months, and that's going to continue to be. We have an opportunity now that there's a split in opinions between the Third Circuit Court and the Ninth and Eleventh Circuit Courts. We have an opportunity to ask for a Supreme Court review.
That's also something that the plaintiffs can ask for, and so that's something we are reviewing, the different cases and the potential cases. I'm sure they are as well. Petitions then can be made to the Supreme Court in 2025, and we would expect if the court accepts one of those positions or petitions, that they will make a decision on the matter and provide clarity in the 2025-26 session of the Supreme Court, but we're not stopping there. We also think that in law, that this needs to be codified, so for example, farmers, there's more than 300 farmer groups that have been working on this. There's language in the current House version of the Farm Bill. That's something that could get passed in the so-called lame duck session.
Otherwise, it's something that we would be taking up with Republicans and Democrats in the new Congress because we think that's really important for that regulatory clarity to be provided. And then we're also looking at state legislation because that's another area that this can be addressed. And we began that discussion in three states this year, and we expect to take that to more than that in the next legislative sessions that will begin in early 2025. So I think a range of efforts underway, and we think these are the ultimate way to contain this risk.
Okay, the next question comes from Ayisha Sharma from Endpoints News. And afterwards, we have Antje Höning from Rheinische Post. But Ayesha, first, over to you.
Morning, and thank you for taking my questions. Just two for me, both on pharma.
So there's been a lot of attention on pharma companies in China after some of AstraZeneca's executives recently came under probe there by local authorities. I was curious, how big is Bayer's investment and presence in China, and is the company having to take any measures to sort of avoid a similar situation? And secondly, there's been some controversy around Novo Holdings' planned acquisition of Catalent, with some stakeholders arguing the deal would have a negative impact on competition between drug makers, especially in the context of sort of cardiometabolic drugs. I was just wondering what's your take on this deal and these concerns about competition? Thank you.
Yeah, thanks, Ayesha. So regarding our efforts in China, China has been a very important country for Bayer for many, many years. I've been there twice this year talking with the major stakeholders and members of our team.
We have, let's see, we have production, we have R&D facilities, we have sales and marketing activities, clinical trial activities. We conduct all of these in full compliance with all the laws and regulations of China, as we do in every country. And so yeah, I think for us, we continue to do that. And for us, I think for every person at Bayer, compliance is sort of job one. There's nothing that happens if we don't protect our license to operate, and we take this very seriously. With regard to the controversy over the proposed acquisition of Catalent, I don't think we're really weighing in on that. We're relatively less dependent on third-party manufacturers. And so yeah, we're sort of not in that particular debate at the moment.
Okay, next question comes from Antje Höning, Rheinische Post. Afterwards, we have Kevin Grogan from Scrip. Antje, first, over to you.
Thank you. Wolfgang Nickl mentioned that you will now accelerate cost and efficiency measures. Will you cut more jobs and how many over DSO above? And my second question, the Bayer stock crashed today. What do you say to the disappointed investors? Thank you.
Yeah, Antje, I'll take at least the first part and let Bill also chime in on the second. As you know, as part of our plans that we communicated at the Capital Markets Day, we have said that we implement DSO, and that comes with several benefits. Of course, short term, you'd rather see a cost impact. We're targeting about EUR 2 billion effective by 2026. We're making very good progress on that. The real deal on DSO is really a growth acceleration program. As it relates to your specific question, we're, of course, trying to accelerate the cost saving as much as we can.
You see that we have made very, very significant progress on that. Year to date, we reduced by about 5,500 positions, most of them in management. You can also follow that by the amount of one-time cost that we are accruing to enable that. That's accelerating as well. We're right now going through our plans for next year and the period after that, and we'll not stop there. We will look at everything that we can do to accelerate that. I just also want to mention, obviously, we do the same thing as it relates to cash flow as well.
Antje, regarding your question about the stock, yeah, I think it's a very frustrating situation for investors. We outlined this in March.
We said we have these four topics that are really weighing on our company, on our company's performance, our company's delivery for our customers, and on shareholders, and we said we've got a two to three-year plan for sorting that out, and we're basically seven, eight months into a two to three-year plan, and so we're not done. I'm pleased we've made progress, but we're not done. If you look at pharma, for example, the outlook is very encouraging in the sense that we said we need to rebuild our top line because Xarelto is going away, and we're doing that, so here in a year where we have tremendous losses from Xarelto loss of exclusivity, we're actually able to grow in pharma. That's amazing. I don't think we would have predicted that a year ago.
The reason we're able to do that is because we have a new model that's allowing our teams in the field to be more successful with the launch brands, brands like Nubeqa and Kerendia. We also have had continued progress in the pipeline with Elinzanetant, our menopause drug. That's got really strong phase three data. It's been filed, and we're going to be launching that next year. Acoramidis, that's a new entry that we were able to source for a European launch for a major cardiovascular drug. That wasn't on the radar this time last year. So I think we've made a lot of gains in terms of the future, but I understand that the current numbers aren't that pretty because of the Xarelto loss. Likewise, in Crop Science, we have an amazing pipeline.
We have 10 blockbuster products that are going to start launching in 2027, two in 2027, and so that's great, but that's 2027, and we have to get there and in the meantime, we're in the midst of a big agriculture downturn, and I think that's very frustrating for people. So I understand, I think we understand the investor sentiment, but we remain very optimistic that we've got a strong future. We're taking the right steps today to ensure that strong future, and we look forward to, yeah, continuing this journey forward.
So the next question comes from Kevin Grogan from Scrip, and then we have Isabella Bufacchi from Il Sole afterwards. But first, Kevin, over to you.
Hello, good morning, everybody. Just a couple of pharma questions, please, first.
Now, given the rapid decline in Xarelto revenues, are you tempted to go and make a bid for a late-stage product similar to the Acoramidis deal to help fill that sort of revenue gap? And also, Bill, you said that you've leveled up the Pharma Pipeline with great speed, which suggests that rather a lot of projects have maybe been discontinued. Could you give us some details on that? And also, are you still hopeful that Asundexian will be a blockbuster? Thank you very much.
Yeah, thanks, Kevin, just capturing your questions. So first off, are we tempted to go out and try to make a big bid on something to fill the revenue gap? The short answer is no. I think in the pharma business, that's pretty much a, how do you say, that's worse than going to the casino, okay? I'll put it that way.
If you look at the track record, and I saw a headline this morning about a high single-digit billion acquisition that apparently has gone wrong for another pharma company. It's almost predictable that when companies pony up the big money to try to sort of fill the gap, that that fails. And so we're not interested in that. We think it's better for shareholders to ride out the difficult phase while we're losing Xarelto, we're rebuilding with new products that are going to be delivering revenues for the next 10 years and more. And so I think that's a better look for shareholders, even if it requires a bit more patience. With regard to, you asked whether we've discontinued more projects in Pharma. No, that's not part of what I mean by accelerating. That was actually work that was done mostly over the past three to four years.
I think we discontinued over 40% of the pipeline. And I really emphasize, hey, we are not going for pipeline charts. Our goal is not to have the prettiest pipeline charts in the industry. Our goal is to have Project A, Project B, Project C that are high-value projects that are right across the development spectrum. And we've made really good progress in moving stuff from preclinical to phase one, from phase one to phase two. And we've had excellent progress in phase three this year. And I think you should expect to see that continue from Bayer. And Asundexian, you asked whether it could still be a blockbuster. Simple answer is yes. We have a stroke trial, a trial in patients who've had a stroke. And this is actually an area of high unmet need because there's not a good anticoagulant available for these patients today.
That's very different than the study we had with Asundexian that was discontinued a year ago. In that study, it was Asundexian versus a very effective standard of care. In the post-stroke setting, there's not an effective standard of care. And so we actually are quite looking forward to seeing data on that study next year. So thanks for the question, Kevin.
Okay, and the next question, and for the time being, last in my system here, comes from Isabella Bufacchi from Il Sole. Isabella, over to you.
Good morning, and thank you for taking my questions. You mentioned a success story from Italy, Garbagnate, the production site of your Pharma division outside Milano, and they cut release time by almost 50%. What else can you say about your business and activities in Italy?
And my second question would be on relocation, as there is a big debate here in Germany that Germany is not so attractive anymore. And I see many similarities between Germany and Italy. So what are your thoughts about the need of relocation? Thank you.
Yeah, thanks for the questions, Isabella. So yeah, with regard to Italy, we actually have some quite important manufacturing going on in Italy. We have an excellent commercial business there. We're launching, I think I mentioned, we have Preceon Smart Corn. This is the short-stature corn in three countries in the world. One of those countries is Italy. And we've had a very productive relationship with both farmers and researchers in Italy.
Interesting, they're finding that the Preceon corn, not only is the corn able to deliver higher yield because it can be planted more densely, not only is it able to withstand more severe weather, but it turns out that the corn plant, so the stalks and other parts of the corn plant that are edible for dairy cattle, has lower lignin content, lower fiber content, is more nutritious, and so there's some interesting studies coming out of Italy on this topic. And so yeah, we're innovating in a number of fields. Our plant there is supplying medicines to people all over the world. We have a really, yeah, a really important plant for developing capsules and producing for the whole world. And so yeah, I think our outlook in Italy is quite strong, as is in Germany. So thanks for the questions.
We have gotten another question coming in from Bert Fröndhoff from Handelsblatt. Bert, over to you.
Good morning, everybody. I have a question about the status of the DSO project. What percentage of it has now been implemented or will be this year, at the end of this year, and will DSO bring more cost savings than expected in the coming year?
Yeah, thanks, Bert. So what percent implemented? We're getting to the stage now where it becomes harder to track it because it's so widespread. But I think we're estimating that 70%-80% of the structural changes will be implemented by, well, now. I guess we've got 70%-80% of the structural changes are done. Now, I say structural changes, so this is like job reductions, changes in alignment of teams, that sort of thing.
Some of those have been announced, but the actual change on the P&L or the headcount figures shows up somewhat later because of the timing of people's contracts and things. But in terms of how it feels in the organization, about 70%-80% of the structural measures are done now. There's a huge part of this that is really pull-through of the system because, as we've discussed many times, dynamic shared ownership isn't simply taking org charts and cutting out boxes. It's very much around building teams around the customer, around the product, around the process, and then working back from there. But it's also maybe even more than that. It's about putting decision-making with the people doing the work.
And so just because, for example, we take out 5,000 management positions, which we've already done, all right, just because you do that doesn't automatically mean that the decision-making flows to the team. You actually have to create the processes that allow the teams to make the decisions, that allow, let's say, a set of teams to share resources and to trade off, or for people to move flexibly between teams. And that's really the heavy work of the next 12 months. And so that's a major focus for management at Bayer and the people on the teams. So in terms of cost savings, our target of EUR 2 billion for 2026 stands. That's what we're still aiming for. I think we see really good progress towards that. And yeah, we continue that journey. So thanks again, Bert.
And we have one more question from Andrew Noel, Chemicals & ESG.
Andrew, over to you.
Hi, thank you for taking my question. Just a short one. BASF is lining up its ag business for an IPO down the line. There's a certain irony that a chunk of it is obviously ex-Bayer. I'm just curious, why do you think it works for BASF, that option, and not for Bayer? And I guess it's something that you're going to be watching perhaps closely to see how that pans out. Thank you.
Sure. Thanks, Andrew. Well, certainly, Bayer is no stranger to selling off or spinning off divisions or parts of the business. I mean, we've done that. I think we've had 13 major transactions since the year 2000, and many of those were businesses that we either sold or spun out. And that remains an option today.
So we've not said, "Oh, no, we're never going to do that," or, "We don't think that can be a good idea." We've simply said, "With the challenges we have and the opportunities we have, we want to focus all our energy on that." And I can assure you, whether it's BASF or someone else, they will have their energy focused on carve-outs. That's a very, yeah, it can be a very important work, but it's definitely all hands on deck. And we're choosing to put all hands on deck at our company right now on, yeah, the mission of getting faster innovation, more focused customer service, and delivering cash, a streamlined system. And that's our focus. Thank you.
Okay, so I have no more questions here in my system. And with that, we'd like to say thank you very much for your questions.
Thank you very much for your interest. This concludes now our call for today, and we wish all of you a great day. Thank you very much, and bye-bye.