Bayer announced its plan to reduce its dividend and alter its dividend policy in an effort to decrease debt, the company revealed on Monday.
Dividend Cut
Following a reassessment of its capital allocation priorities, the German pharmaceutical and agricultural firm disclosed that it will be issuing a dividend of 0.11 euros (12 U.S. cents) per share for 2023, a significant drop from EUR2.40 for 2022.
Reasoning Behind Decision
The decision to cut dividends comes in light of the company’s substantial debt, combined with high interest rates and a challenging free cash flow situation.
New Dividend Policy
For the next three years, Bayer intends to pay the minimum allowable dividend, equivalent to 4% of the company’s share capital, according to a company spokesperson. Previously, the dividend policy reflected a range between 30% and 40% of the group’s earnings per share.
Proposal Presentation
The proposed measure will be put forth for shareholder approval at the upcoming annual meeting scheduled for April 26.
Company Restructuring
Alongside the dividend adjustments, Bayer is also moving forward with the implementation of a new operating model, which includes workforce reductions. These strategic changes aim to enhance the company’s agility and substantially enhance its operational performance.
