2. • Bayer Investor Presentation • Meet Management • March 2013Page 2
Disclaimer
This presentation may contain forward-looking statements based on current
assumptions and forecasts made by Bayer Group or subgroup management.
Various known and unknown risks, uncertainties and other factors could lead to
material differences between the actual future results, financial situation,
development or performance of the company and the estimates given here.
These factors include those discussed in Bayer’s public reports which are
available on the Bayer website at www.bayer.com. The company assumes no
liability whatsoever to update these forward-looking statements or to conform
them to future events or developments.
3. • Bayer Investor Presentation • Meet Management • June 2013Page 1
Our Mission –
Innovation and Customer Value
Bayer is an innovation company
With a strong “innovation portfolio”
Addressing new growth areas
Capable of identifying and using
breakthrough innovations
Bayer is innovative in many ways:
Products, technologies, processes,
business models, strategies
Bayer products improve
the quality of people’s lives
Bayer has an excellent understanding
of human, animal and plant health,
as well as of high-quality materials
Respect for people and nature
is an essential part of our values
Science / Innovation Better Life
Science For A Better Life
4. • Bayer Investor Presentation • Meet Management • June 2013Page 2
Our Business Portfolio –
Leading in Its Markets
Break-down excluding reconciliation
Sales 2012: €39.7bn
CropScience
Chemical crop protection & biologicals,
global #2, seeds & traits
€8.4bn
MaterialScience
Polyurethanes and polycarbonates,
global #1/2
€11.5bn
HealthCare
Pharmaceuticals €10.8bn,
leading positions in core indications
Consumer Health €7.8bn,
OTC pharmaceuticals, blood glucose
meters, contrast media and veterinary
medicines, global #2-5
€18.6bn
22%
30%
48%
5. • Bayer Investor Presentation • Meet Management • June 2013Page 3
We are Generating the Vast Majority of our
Business in the Life-Sciences
22%
30%
45%
85% 15%
Sales 2012 Adj. EBITDA 2012*
Human
Health
3%
Breakdown excluding Reconciliation
Material
Science
Animal
Health
Life-
Sciences
Material
Science
*EBITDA before special items
Plant Health
6. • Bayer Investor Presentation • Meet Management • June 2013Page 4
¹ Emerging economies include: Latin America, Asia w/o Japan, Australia,
New Zealand, Africa and Middle East incl. Turkey, Eastern Europe
2012 Group Sales Highlights Emerging Economies
In € million, ∆% yoy Fx adjusted
BRIC
+13% with HealthCare +23%
and CropScience +20%
+16% driven by CropScience,
but also MaterialScience strong
+19% with both Consumer Health
and MaterialScience +25%
+7% driven by CropScience
and MaterialScience
+12% driven mainly by our Life-
Science businesses
Emerging
Economies¹
+7%
Developed
Economies
+3%
Group €39,741m; +5%
63%
Strong Presence in the Emerging Markets
37%
8. • Bayer Investor Presentation • Meet Management • June 2013Page 6
Life-Science Businesses Off To
A Good Start
9. Q1 2013 – Total Group:
Life-Sciences Commence Positively
• Bayer Investor Presentation • Meet Management • June 2013Page 7
EBIT
in € million
+9%
1,771
1,631
Sales
in € million
% currency & portfolio adj.
+4%
10,266
10,054
EBITDA
adjusted*
in € million
0%
2,4532,443
Core EPS
in €
+2%
1.701.67
*before special items
Q1’13Q1’12 Q1’13Q1’12 Q1’13Q1’12 Q1’13Q1’12
10. Full Year 2013 Outlook Projects Further
Growth And Higher Earnings
• Bayer Investor Presentation • Meet Management • June 2013Page 8
2012 ∆ vs. 2011 2013e
Sales €39.7bn +5%
+4-5% to
~€41bn*
adj. EBITDA €8.3bn +9%
mid-single-digit %
increase
Core EPS €5.30 +10%
high-single-digit %
increase
Sales ∆ Fx and portfolio adjusted, EBITDA before special items
*Assuming Fx rate of $1.29 per €
Outlook depends on specific planning assumptions as detailed in the Annual Report
11. • Bayer Investor Presentation • Meet Management • June 2013Page 9
Pharma: Sales Growth
Acceleration Driven by New
Products & Emerging Markets
2012 CAGR 2015e
12. Pharma – New Products Drive Growth and
Rejuvenate Portfolio
• Bayer Investor Presentation • Meet Management • June 2013Page 10
86
368
~1,000
>2,500
2011 2012 2013e 2015e
Sales from new Pharma pipeline in €m
Q1: 244
Xarelto: 155
Eylea: 49
Stivarga: 40
CTEPH: chronic thromboembolic pulmonary hypertension; CRVO: central retinal
vein occlusion; PAH: pulmonary arterial hypertension;
wAMD: wet age-related macular degeneration
Strong launch execution, targeting ~€600m
sales in 2013
Roll-out in wAMD underway, approval in
CRVO 2H 2013e
Launched in US and Japan, CHMP opinion
1H 2013e
Approved in the US, filed in EU (Dec. 2012)
Submitted for PAH and CTEPH (Feb. 2013),
priority review in the US
13. Xarelto –
Development in Selected Markets
• Bayer Investor Presentation • Meet Management • June 2013Page 11
Status as of mid May 2013
Germany: most successful launch ever in the cardiovascular market;
market share
1
at ~33% (dabigatran ~11%, apixaban ~1%)
Japan: 2-week prescription limitation lifted end of April 2013;
market share
2
at ~16% (market share as of 1
st
of April: 9%)
France: Xarelto maintained leadership over dabigatran;
market share1 increased to ~17% (dabigatran ~16%)
Brazil: successful launch; market share3 ~37% (dabigatran ~17%);
Xarelto with 45% new patients and 55% switchers
Switzerland: excellent launch performance, making Xarelto the No. 1 in the
retail market for anticoagulants; market share at ~34%
US4: steady uptake; surpassing warfarin in NBRx share in the cardiology AC
market: Xarelto at ~38% (warfarin ~36%, dabigatran ~12%, apixaban ~ 14%)
Source: IMS; 1 sales market share anticoagulants (AC) ex manufacturer prices, retail; 2
anticoagulants retail and hospitals, 3 sales market share AC , retail; 4:marketed by J&J;
14. • Bayer Investor Presentation • Meet Management • June 2013Page 12
Xofigo – A New Treatment for CRPC
Patients with Bone Metastases
Bone marrow
Osteoclast
α-particle
radiation
Global peak sales potential ≥ €1bn
~900,000 men diagnosed worldwide, up to
90% develop bone metastases1
First in class alpha-pharmaceutical delivering
high energy, short ranging alpha-particles
44% improvement in overall survival in phase
III trial
Demonstrated delay in time to first
skeletal-related event
Approved in the US for CRPC with
symptomatic bone metastases and no known
visceral metastatic disease
Submitted for CRPC in Europe (Dec 2012)
CRPC: castration-resistant prostate cancer;
1: GLOBOCAN 2008,World Health Organization
15. • Bayer Investor Presentation • Meet Management • June 2013Page 13
Strengthening Women‘s Health Business –
Acquisition of Conceptus, Inc.
Bayer successfully completed the public tender offer to acquire all shares in
Conceptus for $31/share (>90% tendered, transaction value of ~$1.1bn)
US-based company developing the Essure® procedure, the leading non-
surgical permanent birth control method proven by >700,000 procedures
Significant synergies expected from leveraging existing business power
Essure ®
Permanent
Long-
term
Short-
term
No children Active family planning Family planning finalized
IUD (Mirena)
IUD (Skyla)
Oral contraceptives (e.g. YAZ)
16. • Bayer Investor Presentation • Meet Management • June 2013Page 14
Aspire to Become the Leading
OTC Company
17. Consumer Care – Aspire to Become the
World-Leading OTC Company
• Bayer Investor Presentation • Meet Management • June 2013Page 15
2003 2011 2012
+6% Built global #2 position through
combination of organic growth and
targeted acquisitions
Track record of performance –
continued to gain share in 2012
Product portfolio of some of the
world‘s most recognized brands
Further growth opportunities in
selected emerging markets
Sales Development*
1.4
3.5
3.9
* Sales Consumer Care segment
Global #6 Global #2
In € billion, ∆% yoy Fx adjusted
18. Brands Years Old 2012 Sales €m 3-Year CAGR
113 970* 7%
81 197# 12%
78 101 1%
69 196 5%
68 269 12%
40 250 9%
19 323 12%
Strong Consumer Brands Build Equity for
Decades
• Bayer Investor Presentation • Meet Management • June 2013Page 16
*Total Aspirin includes Aspirin Complex and Aspirin Cardio (Rx)
#Total Alka-Seltzer includes Alka-Seltzer and Alka-Seltzer Plus.
19. Innovation at OTC – New Product
Development with Aspirin
• Bayer Investor Presentation • Meet Management • June 2013Page 17
20. • Bayer Investor Presentation • Meet Management • June 2013Page 18
Strengthening Our OTC Business –
Bayer to Acquire Steigerwald GmbH
Bayer launched an offer to acquire Steigerwald Arzneimittelwerk GmbH, with
closing expected at the beginning of July 2013*
Steigerwald generated net sales of €61.3m in 2012 (~90% in Germany)
Steigerwald produces herbal drugs, its 2 core brands make ~90% of sales
Significant sales synergies expected due to our complementary CC business
Iberogast®
Treatment of functional
dyspepsia & irritable
bowel syndrome
Laif®
St John’s wort based
medicine for treat-
ment of depression
* subject to regulatory approval
22. • Bayer Investor Presentation • Meet Management • June 2013Page 20
Leading the Way in Integrated
Crop Solutions
Integrated Crop Solutions
Chemical
Crop
Protection
Biological
Crop
Protection
Seeds
Herbicides
Fungicides
Insecticides
SeedGrowth
Microorganisms
Microbial
extracts
Canola, cotton,
rice, soy, wheat,
vegetables
Conventional
seeds
GMO seeds
Traits
Better harvest
with improved:
Yield
Quality
Processability
Sustainability
GMO: Genetically modified organism
Weed, pest &
disease control
Stress
tolerance
23. CropScience – Translate R&D Effectively
into New Product Sales
• Bayer Investor Presentation • Meet Management • June 2013Page 21
Xpro (+61%) - New cereal fungicide with
yield-boosting effect
Adengo herbicide family (+85%) -
Excellent weed control in corn and cereals,
also in case of glyphosate resistance
Belt (+54%) - Broad-spectrum insecticide
with fast and long-lasting action
Launch of Luna fungicide in the US
First launch of new SeedGrowth family
EverGol/Emesto in Canada
0.02
0.3
0.7
1.1
~1.4
~1.9
2007 2009 2011 2012 2013e 2015e
+60%
2012 Highlights
Sales from new Crop Protection
products launched since 2006 in €bn
∆% y-o-y, () Fx adj.
25. • Bayer Investor Presentation • Meet Management • June 2013Page 23
MaterialScience: Aspire to Earn
a Premium Over Cost of Capital
26. • Bayer Investor Presentation • Meet Management • June 2013Page 24
Selling Price Increases & Savings Not
Sufficient to Protect Earnings
Market growth trends intact, key
products with mid-single digit volume
growth
High raw material prices and
significant capacity additions led to
global overcapacities and margin
pressure
Going forward demand & supply
balance expected to improve
Anticipated margin improvement
supported by fresh savings from new
efficiency initiative
2010 2011 2012
Sales Adj. EBITDARaw Mat. & Energy Costs CFROI
In € bn
10.2
10.8
11.5
5.4
6.2
6.6
1.4 1.2 1.3
6% 6%
8%
27. Profitability Improvement Through New
Efficiency Initiative Until 2015
• Bayer Investor Presentation • Meet Management • June 2013Page 25
Examples
Business Units Consolidation of system houses
Pricing excellence programs
Organization Optimization of regional structures (e.g. Canada & US)
Production Further initiatives to improve asset productivity (e.g. maintenance
schedules, engineering setup)
Supply Chain Optimization of logistics services
Selling &
Administration
Further reduce costs by leveraging established global ERP
platform and standardized processes
ERP: enterprise resource planning
New efficiency initiative improves cost structure and increases adjusted EBITDA
margin by 150bp
Initiative comprises more than 100 measures across the entire value chain
28. • Bayer Investor Presentation • Meet Management • June 2013Page 26
… and Optimistic for Future
Developments
years
29. • Bayer Investor Presentation • Meet Management • June 2013Page 27
Solid Start to 2013 – Track Record of
Performance Expected to Continue
Business performance predominantly driven by HealthCare and CropScience
contributing 70% of sales and 85% of earnings
Significant new product opportunities at our Life-Science businesses
Continued strong emerging markets business momentum
Full-year 2013 group outlook projects higher sales and earnings
Aspire to grow HealthCare and CropScience by 6% CAGR until 2015
31. • Bayer Investor Presentation • Meet Management • June 2013Page 29
Priority 2012
Target
2013*
Aspiration
2015
HealthCare: Accelerate sales growth €18.6bn
Pharma: Successfully commercialize new
products and realize emerging markets
(EM) opportunity
New product sales¹
EM growth
Consumer Health: Aspire to become #1
OTC company
€7.8bn ~€9bn
HealthCare: Improve margins
Pharma
Consumer Health
27.5%
29.9%
24.2%
slightly up
slightly up
at level
towards 29%
≥31%
~25%
HealthCare –
Building Growth Momentum, Improving Margins
¹ Xarelto, Eylea, Stivarga, Radium-223 dichloride and Riociguat; subject to regulatory approval
*Assuming Fx rate of $1.29 per €
Outlook depends on specific planning assumptions as detailed in the Annual Report
€10.8bn
€368m
7.3%
mid-single-digit
% to ~€11bn
~€1bn
high-single
digit %
CAGR ~7%
towards €13bn
>€2.5bn
high-single
digit %
CAGR ~6%
towards €22bn
mid-single-digit
% to ~€8bn
mid-single-digit
% to ~€19bn
Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales
32. Q1 2013 – HealthCare: New Products and
Consumer Care Drive Growth
• Bayer Investor Presentation • Meet Management • June 2013Page 30
*before special items
Q1 2013 Sales Earnings
Pharma
+2% (+5%)
Consumer
Health
+3% (+5%)
36%
HealthCare €4,443m; +2% (+5%)
2,5641,879
Price
+1%
Volume
+4%
Fx
-3%
Portfolio
0%
In € million, ∆% yoy, () = Fx & portf. adjusted
Q1‘12 Q1‘13 Q1‘12 Q1‘13
740
832
441 445
+12%
+1%
1,181
1,277 +8%
341 +1%
861
953 +11%
520
343
Adj.
EBITDA*
Adj.
EBIT*
610 +17%
37. • Bayer Investor Presentation • Meet Management • June 2013Page 35
Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales
*Assuming Fx rate of $1.29 per €
#after reproduction
Outlook depends on specific planning assumptions as detailed in the Annual Report
MaterialScience – Higher Asset Utilization &
Efficiency Measures Are Driving Performance
2012 Target 2013 Aspiration 2015
Sales +2.9% to €11.5bn
(volumes +2%)
Adj. EBITDA +8% to
€1,262m
CFROI# 5.7% < WACC
7.1%
Sales to slightly increase
to ~€12bn
Adj. EBITDA to match
2012 figure
Q2‘2013 vs Q1‘2013:
Sales to increase and adj.
EBITDA to significantly
increase
Grow business (volume)
above global GDP
Defend market leading
positions in PCS and PUR
Realize 150 bp margin
contribution through new
efficiency initiative
Optimize asset structure
in Germany
CFROI# > WACC
40. • Bayer Investor Presentation • Meet Management • June 2013Page 38
Q1 2013 – Regional Performance: Growth
Led by USA and Emerging Economies
Africa &
Middle East
Eastern
Europe
Emerging Economies
Emerging
Economies¹
+7%
Others²
+8%
USA
+8%
Western Europe
-3%
Q1 2013 Group Sales by Region
Group €10,266m; +4%
~1,000
+8%
~1,400
+8%
~400
-7%~700
+13%
¹ Emerging economies include: Latin America, Asia w/o Japan, Australia,
New Zealand, Africa and Middle East incl. Turkey, Eastern Europe
² Others = Japan, Australia, New Zealand, Canada
³ Emerging Asia = Asia w/o Japan, Australia, New Zealand
In € million, ∆% yoy Fx adjusted
34%
12%32%
22%
Latin
America
Emerging
Asia³
41. Full Year 2012 –
Regional Performance
• Bayer Investor Presentation • Meet Management • June 2013Page 39
Africa &
Middle East
Eastern
Europe
Emerging Economies
Emerging
Economies¹
+7%
Others²
+4%
USA
+9%
Western Europe
0%
2012 Group Sales by Region
Group €39,741m; +5%
~4,900
+12%~5,700
+5%
~1,800
0%~2,400
+10%
¹ Emerging economies include: Latin America, Asia w/o Japan, Australia,
New Zealand, Africa and Middle East incl. Turkey, Eastern Europe
² Others = Japan, Australia, New Zealand, Canada
³ Emerging Asia = Asia w/o Japan, Australia, New Zealand
In € million, ∆% yoy Fx adjusted
37%
11%
31%
21%
Latin
America
Emerging
Asia³
42. • Bayer Investor Presentation • Meet Management • June 2013Page 40
Q1 2013 –
Cash Flow And Net Debt Development
+€491m 7.5
GCF oFCF
1,807
Invest-
ments
365 (38)
∆
y-o-y +13% -100%
NCF
327
+38% +43%
Dec 31, 2012 Mar 31, 2013
7.0
Q1 2013 Cash Flow Net Debt Development
Cash Flow in € million, Net Debt in € billion
43. Full Year 2012 –
Cash Flow and Net Debt Development
• Bayer Investor Presentation • Meet Management • June 2013Page 41
+€9m 7.0GCF oFCF
4,556
Invest-
ments
1,930 2,601
∆
y-o-y -12% -24%
NCF
4,531
-10% +20%
Dec 31, 2011 Dec 31, 2012
7.0
2012 Cash Flow Net Debt Development
Cash Flow in € million, Net Debt in € billion
44. Investor Handout – Meet Management
Bayer HealthCare
June 2013 – New York
45. Leading Positions in Key Healthcare
Markets
• Bayer Investor Presentation • Meet Management • June 2013Page 43
Pharma
€10,798m
Leading positions in key therapeutic categories
Consumer Care
€3,853m
Global #2 in OTC-pharmaceuticals,
~€0.3bn dermatology business
Medical Care
€2,650m
#1 in fluid injection systems, #1 in contrast media,
#4 in blood glucose meters
Animal Health
€1,303m
Global #5, #2 in parasiticides
Sales Split by Segment 2012
25%
58%
7%
21%
14%
HealthCare €18,604m
46. Full Year 2012 –
Growth in All Segments
• Bayer Investor Presentation • Meet Management • June 2013Page 44
*before special items
2012 Sales Earnings
Pharma
+9% (+4%)
Consumer
Health
+8% (+4%)
36%
HealthCare €18,604m; +8% (+4%)
10,7987,806
Price
0%
Volume
+4%
Fx
+4%
Portfolio
0%
In € million, ∆% yoy, () = Fx & portf. adjusted
2011 2012 2011 2012
2,972
3,233
1,730
1,886
+9%
+9%
4,702
5,119 +9%
1,325
+10%
3,367
3,788 +13%
2,042
1,460
Adj.
EBITDA*
Adj.
EBIT*
2,328 +14%
47. Full Year 2012 – Strong Business
Momentum in Emerging Markets
• Bayer Investor Presentation • Meet Management • June 2013Page 45
Emerging Economies
25%
2012 Sales
Latin
America
Eastern
Europe
Africa &
Middle East
~2,100
+12%
~2,100
+8%
~1,100
+9%
~900
+1%
24%
USA
+6%
29%
33%
14%
Sales in € million; ∆% y-o-y Fx adjusted
Emerging
Economies¹
+8%
Emerging
Asia³
Western
Europe -1%
Others²
+1%
HealthCare €18,604m
¹ Emerging economies include: Latin America, Asia w/o Japan, Australia,
New Zealand, Africa and Middle East incl. Turkey, Eastern Europe
² Others = Japan, Australia, New Zealand, Canada
³ Emerging Asia = Asia without Japan, Australia, New Zealand
48. • Bayer Investor Presentation • Meet Management • June 2013Page 46
New Products Drive Pharma
Growth and Rejuvenate Portfolio
Peak Sales Potential*
* from 5 new products
49. New Product Pipeline
• Bayer Investor Presentation • Meet Management • June 2013Page 47
*Combined peak sales potential for Xarelto, Stivarga, Eylea, Radium-223 dichloride
and Riociguat assuming approvals and launches planned
Combined* Peak Sales Potential >€5.5bn
First launches in first / main indication*
Rivaroxaban AfliberceptRegorafenib
Radium-223
dichloride
Riociguat
2011 2012 2012 2013 2013e
50. • Bayer Investor Presentation • Meet Management • June 2013Page 48
New Products Drive Growth and Rejuvenate
Portfolio
86
368
~1,000
>2,500
2011 2012 2013e 2015e
Sales from new Pharma pipeline in €m
Q1: 244
Xarelto: 155
Eylea: 49
Stivarga: 40
CTEPH: chronic thromboembolic pulmonary hypertension; CRVO: central retinal
vein occlusion; PAH: pulmonary arterial hypertension;
wAMD: wet age-related macular degeneration
Strong launch execution, targeting ~€600m
sales in 2013
Roll-out in wAMD underway, approval in
CRVO 2H 2013e
Launched in US and Japan, CHMP opinion
1H 2013e
Launched in the US, filed in EU (Dec. 2012)
Submitted for PAH and CTEPH (Feb. 2013),
priority review in the US
51. Xarelto –
Effective Anticoagulation For More Patients
• Bayer Investor Presentation • Meet Management • June 2013Page 49
Peak sales potential > €2bn
SPAF: prevention of stroke and systemic embolism in patients with non-
valvular atrial fibrillation; DVT: deep vein thrombosis; VTE: venous
thromboembolism; ACS: acute coronary syndrome
Peak sales potential > €2bn
Breadth of indications: met or exceeded primary
efficacy endpoint in 11/11 phase III studies
Further phase III trials initiated, for example in the prevention of major
adverse cardiac events in patients with coronary or peripheral artery
disease
1) Clinical
2) Regulatory
VTE prevention following total knee/hip replacement surgery
Stroke prevention in patients with atrial fibrillation (SPAF)
Treatment of DVT, PE and to reduce the risk of recurrent DVT and
PE
Approved for secondary prevention after ACS in Europe
Filed for sec. prevention of ACS in the US (Complete Response Letter March 2013)
3) Marketing
52. Xarelto –
Strong Launch Execution
• Bayer Investor Presentation • Meet Management • June 2013Page 50
Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13
272
23
US* Ex-US
31
Sales in € million; ∆% Fx adj.
8
34
42
8
57
68
11
67
81
14
109
131
22
*Bayer reporting, not reflecting in-market sales
Sales 2012: €322m, exceeded
target
Sales advanced strongly in all
regions following further product
launches and indication
expansions
Most successful launch ever in the
German cardiovascular market
Sales target 2013: ~€600m
22
133
155
53. Xarelto –
Development in Selected Markets
• Bayer Investor Presentation • Meet Management • June 2013Page 51
Status as of mid May 2013
Germany: most successful launch ever in the cardiovascular market;
market share
1
at ~33% (dabigatran ~11%, apixaban ~1%)
Japan: 2-week prescription limitation lifted end of April 2013;
market share
2
at ~16% (market share as of 1
st
of April: 9%)
France: Xarelto maintained leadership over dabigatran;
market share1 increased to ~17% (dabigatran ~16%)
Brazil: successful launch; market share3 ~37% (dabigatran ~17%);
Xarelto with 45% new patients and 55% switchers
Switzerland: excellent launch performance, making Xarelto the No. 1 in the
retail market for anticoagulants; market share at ~34%
US4: steady uptake; surpassing warfarin in NBRx share in the cardiology AC
market: Xarelto at ~38% (warfarin ~36%, dabigatran ~12%, apixaban ~ 14%)
Source: IMS; 1 sales market share anticoagulants (AC) ex manufacturer prices, retail; 2
anticoagulants retail and hospitals, 3 sales market share AC , retail; 4:marketed by J&J;
54. Xarelto Uptake
• Bayer Investor Presentation • Meet Management • June 2013Page 52
Source: IMS
1: Ex-Mnf Sales Market Share (incl. PI) in all dosage strengths and pack sizes,
2: Sales Market Share (Ret+Hosp) in %,
3: Retail Sales Market Share, marketed by J&J
Germany1 Japan2 United States3
Xarelto Pradaxa Eliquis
Jan
2012
34%
16%
<1%
June
2012
May
2013
May
2013
0%
10%
20%
30%
40%
50%
Jan
2012
33%
11%
1%
May
2013
20%
22%
1.5%
55. Eylea –
Targeting Different Eye Diseases
• Bayer Investor Presentation • Meet Management • June 2013Page 53
1: as measured on the Early Treatment Diabetic Retinopathy Scale; 2: Regeneron
has US marketing rights; AMD: age-related macular degeneration; CRVO: central
retinal vein occlusion; mCNV: myopic choroidal neovascularization
Bayer has marketing rights ex-US2, launched in first markets in wet
AMD end 2012
First launches in CRVO planned for 2H 2013
1) Clinical
2) Regulatory
3) Marketing
Positive phase III data in wet AMD and CRVO reported
Positive phase III in mCNV (mean improvement of 12 letters in best-corrected visual
acuity1 from baseline at week 24 vs. a loss of 2 letters in sham control (p<0.0001))
Data from phase III studies in DME 2H 2013e
Filed for CRVO in EU (Dec 2012) and Japan (Jan 2013)
Filing in mCNV 2H 2013e
Peak sales potential ≥ €1bn
56. Eylea – Developed for the Treatment of
Various Back of the Eye Diseases
• Bayer Investor Presentation • Meet Management • June 2013Page 54
Eylea has been in-licensed from Regeneron; Bayer has exclusive marketing rights ex-US
patient numbers are Bayer estimates
Wet age-related macular degeneration (wet AMD)
One of the leading cause of severe vision loss
Globally an estimated 12 million patients in the 50+ age group
Diabetic macular edema (DME)
The most frequent cause of blindness in young and mid-aged adults
Globally the treatable patient population for DME is estimated ~6.2 million
Central retinal vein occlusion (CRVO)
90% occur in patients aged ~50, it can affect all ages
A common retinal vascular disorder affecting ~2.5 million people globally
Myopic choroidal neovascularization (myopic CNV)
High prevalence in Asian population
In Japan and China treatable population of mCNV is approx. 2 million, with
approx. 0.2 million new cases/year
57. Stivarga –
Major Progress in Our Oncology Portfolio
• Bayer Investor Presentation • Meet Management • June 2013Page 55
mCRC: metastatic colorectal cancer; mGIST: metastatic gastrointestinal
stromal tumors; HCC: hepatocellular carcinoma
1) Clinical
Positive phase III data in mCRC and mGIST
Phase III in 2nd line HCC initiated (RESORCE) (May 2013)
Phase III in colorectal cancer (adjuvant therapy) expected to start 2H 2013
2) Regulatory
3) Marketing
Launched in mCRC (Sep 2012) / mGIST (Feb 2013) in the US
Launched in mCRC in Japan (May 2013)
Peak sales potential ≥ €1bn
Filed for mCRC in EU - CHMP opinion expected 1H 2013
Filing for mGIST in Europe planned after expected approval in mCRC
Filed for mGIST in Japan (priority review) (Feb 2013)
58. Stivarga –
Three Dimensional Mode of Action
• Bayer Investor Presentation • Meet Management • June 2013Page 56
Regorafenib is an oral tumor deactivation agent that potently blocks multiple protein
kinases, including kinases involved in:
Tumor angiogenesis (VEGFR1, -2, -3, TIE2)
Oncogenesis (KIT, RET, RAF-1, BRAF, BRAFV600E)
Tumor microenvironment (PDGFR, FGFR)
Inhibition of
neoangiogenesis
Inhibition of tumor
microenvironment signals
Inhibition of proliferation
of certain tumor cells
VEGFR: vascular endothelial growth factor receptor; TIE2: tyrosine kinase with
immunoglobulin-like and EGF-like domains ; PDGFR: platelet derived growth factor
receptor; FGFR: fibroblast growth factor receptor;
59. Xofigo – A New Treatment for Prostate
Cancer Patients with Bone Metastases
• Bayer Investor Presentation • Meet Management • June 2013Page 57
1) Clinical
Phase III study in CRPC patients with bone metastases stopped early on
success
Studies in earlier settings of prostate cancer, including combination
studies and studies in other tumors (such as breast cancer and
osteosarcoma) planned
2) Regulatory
3) Marketing
Launched in the US
Peak sales potential ≥ €1bn
Approved in the US for patients with CRPC and symptomatic bone
metastases
Submitted for treating bone metastases in patients with CRPC in Europe
CRPC: castration-resistant prostate cancer
60. Xofigo –
Unique Mode of Action
• Bayer Investor Presentation • Meet Management • June 2013Page 58
First in class alpha-pharmaceutical
delivering high energy, short ranging
alpha-particles
~900,000 men diagnosed worldwide, up
to 90% have radiological evidence of
bone metastases1
Demonstrated 44% improvement in
overall survival in phase III trial
Demonstrated delay in time to first
skeletal-related event
CRPC: castration-resistant prostate cancer
1: GLOBOCAN, World Health Organization
Bone marrowTumor cells
Osteoclast
Osteoblast
α-particle
radiation
Targets new bone,
e.g. bone metastases
Irradiates adjacent tumour cells leading
to highly localized tumor cell killing
Radium-223
deposition
Newly
formed bone
61. Riociguat – Addressing Unmet Medical
Need in Pulmonary Hypertension
• Bayer Investor Presentation • Meet Management • June 2013Page 59
6MWDT: 6 Minutes walking distance test , CTEPH: chronic thromboembolic pulmonary hypertension,
PAH: pulmonary arterial hypertension, sGC soluble guanylate cyclase
Peak sales potential > €500m
1) Clinical
Phase III in PAH (PATENT-1) successfully completed
Phase III in CTEPH (CTEPH) successfully completed showing Riociguat
to be the first ever drug demonstrating clinical efficacy in a placebo-
controlled trial
2) Regulatory
Submitted for PAH and CTEPH in the US - priority review granted (April
2013)
Submitted for PAH and CTEPH in Europe (Feb 2013)
62. • Bayer Investor Presentation • Meet Management • June 2013Page 60
Riociguat – Demonstrated Efficacy in PAH
and CTEPH
Sec. endpoints for 1) and 2): Pulmonary vascular resistance; N-terminal pro brain natriuretic peptide; World health organization functional class;
for 1) additionally: Time to clinical worsening; Borg dyspnea score
CHEST-1 enrolled patients with CTEPH either inoperable or with persistent or recurrent pulmonary hypertension after surgery
Phase III in PAH (PATENT-1)
● Primary efficacy endpoint met – 6MWD
improved by 36m from baseline after 12
weeks compared with placebo (p<0.0001)
● Statistical significant effect demonstrated
across sec. endpoints1 in both treatment-
naïve and pre-treated patients
● Riociguat was generally well tolerated
with a good safety profile
● A first analysis of the long-term extension
study (PATENT-2) showed that efficacy
benefits were improved and sustained
and that Riociguat was well tolerated with
a good long-term safety profile
Phase III in CTEPH (CHEST-1)
● Primary efficacy endpoint met – 6MWD
improved by 46m from baseline after 16
weeks compared with placebo (p<0.0001)
● Significant improvement observed in
relevant sec. endpoints2
● Riociguat was generally well tolerated
with a good safety profile
● First interim analysis of the long-term
extension study (CHEST-2) showed
further increase in 6MWD in former
Riociguat patients and in former placebo
patients compared to CHEST-1 baseline
CTEPH: chronic thromboembolic pulmonary hypertension,
PAH: pulmonary arterial hypertension,
6MWD: Six minute walking distance
63. Forms and Epidemiology of Pulmonary
Hypertension
• Bayer Investor Presentation • Meet Management • June 2013Page 61
CTEPH~20,000
PH owing to lung disease~410,0002
~30,000
PH-LVD~240,000
Pulmonary hypertension (PH) encompasses multiple disease subtypes but approved
treatments are only indicated for pulmonary arterial hypertension (PAH)
~700,000 patients diagnosed1 with diseases related to / including PH. Thereof ~300,000
patients potentially eligible for PH treatment
1Diagnoses estimated in 2009 in US, EU5, J;
2Thereof ~ <20% could be treated for PH
CTEPH: Chronic thromboembolic pulmonary hypertension
LVD: left ventricular disease
PAH
65. Top 10 Pharma Product Performance
in 2012
• Bayer Investor Presentation • Meet Management • June 2013Page 63
FY 2012 sales in € million (∆% yoy Fx-adj.)
YAZ-family
Betaseron
Kogenate
Adalat
Glucobay
Avelox
Nexavar
Mirena
Xarelto
Aspirin C.
+4%
+5%
-5%
+4%
+9%
-2%
-5%
+12%
+4%
+266%
1,216
1,182
1,045
677
322
486
792
670
476
408
Multiple Sclerosis
Hemophilia A
Contraception
Cancer
Contraception
Hypertension
Antiinfective
MI prevention
Diabetes
Anticoagulation
MI: Myocardial infarction
66. Leader in Women’s HealthCare
• Bayer Investor Presentation • Meet Management • June 2013Page 64
Yaz family
Sales ∆% y-o-y, () Fx adj.
Women’s Healthcare 2012
€3,154m
+5% (+2%)
+17 (+9)Mirena
+7 (+5)Diane
-2 (-5)
+37 (+35)Qlaira
Other products +13 (+10)
0 (-1)Microgynon
-31 (-31)Valette
-8 (-8)Meliane
+6 (+4)Angeliq
67. • Bayer Investor Presentation • Meet Management • June 2013Page 65
YAZ / Yasmin Product Family – A Changing
Competitive Environment
YAZ / Yasmin fully genericised in the
US
Ongoing genericization in Europe
expected to impact sales going
forward
Growth in Asia and Latin America only
partly compensating for the decline
Life-cycle management opportunities
with limited commercial potential
2013 sales target: mid-to-high single-
digit % decline
Sales in € million; ∆% Fx adj.
2010 2011 2012
265
846
179
891
190
855
US Rest of the world
1,111
1,070 1,045-5%
68. Mirena – The Leading Hormonal Long-
Acting Contraceptive
• Bayer Investor Presentation • Meet Management • June 2013Page 66
Intrauterine device, containing
levonorgestrel, for reversible long-term
contraception
Life-cycle opportunities:
Small low-dose long-acting (up to 3
years) device:
Jaydess: successful conclusion
of EU registration
Skyla: US-launch in Feb. 2013
Phase III underway for LCS 16 - a
long-acting (up to 5 years), low-dose,
small contraception device
2013 sales target: high-single to low-
double-digit % increase
Sales in € million; ∆% Fx adj.
2010 2011 2012
285
254
313
268
385
292
US Rest of the world
539
581
677+9%
69. 2010 2011 2012
Hemophilia Franchise –
Stable Growth
• Bayer Investor Presentation • Meet Management • June 2013Page 67
Global # 2 in hemophilia A treatment
Competitive development program in
hemophilia underway:
Phase III with long-acting Factor
VIII (BAY 94-9027)
Phase III with product from
plasma-free process (BAY 81-
8973)
2013 sales target: low-single-digit %
increase
Sales in € million; ∆% Fx adj.
299
705
290
785
332
850
US Rest of the world
1,004
1,075
1,182+5%
70. Betaseron – Long-term Experience in
Multiple Sclerosis Treatment
• Bayer Investor Presentation • Meet Management • June 2013Page 68
First interferon launched in multiple
sclerosis, introduced in 1993
Demonstrating excellent efficacy and
tolerability
21-year long-term follow-up study
demonstrated significant survival
advantage with Betaseron treatment
2013 sales target: high-single-digit %
decline
Franchise expected to erode further
due to increasing competition,
including new oral MS treatments
Sales in € million; ∆% Fx adj.
2010 2011 2012
473
733
447
670
578
638
US Rest of the world
1,206
1,117
1,216+4%
71. Nexavar –
Our Cornerstone in Oncology
• Bayer Investor Presentation • Meet Management • June 2013Page 69
Approved for kidney cancer (RCC)
and for liver cancer (HCC)
Only approved drug with overall
survival benefit in HCC
Positive phase III data in radioactive
iodine refractory differentiated thyroid
cancer (DECISION-trial)
Phase III trials in:
Breast cancer
RCC (adjuvant)
HCC (adjuvant)
2013 sales target: mid-single-digit %
increase
Sales in € million; ∆% Fx adj.
2010 2011 2012
174
531
174
551
204
588
US Rest of the world
705 725
792+4%
72. Nexavar –
Positive Phase III Results in Thyroid Cancer
• Bayer Investor Presentation • Meet Management • June 2013Page 70
RAI: radioactive iodine; DTC: differentiated thyroid cancer
HR: hazard ratio, CI: confidence interval; PR: partial response
Filing for RAI-refractory differentiated thyroid cancer planned for mid 2013
High unmet medical need in patients
with locally advanced, metastatic
RAI-refractory DTC
Met primary endpoint of improving
PFS vs. placebo
Response rate (all PR) in the
sorafenib vs. placebo arms was
12.2% and 0.5% (p<0.0001)
Safety and tolerability generally
consistent with known profile of
Nexavar
Placebo Sorafenib
5.8 months
Primary endpoint met
10.8 months
Medianprogression-freesurvival
HR: 0.587
CI 0.454-
0.758
p<0.0001
73. Aspirin –
More Than A Century of Growth
• Bayer Investor Presentation • Meet Management • June 2013Page 71
One of the world’s most recognized
brands
Available as OTC and Rx Aspirin
Bayer’s #1 product in Emerging
Markets
Aspirin grew 17% in 2012 in the
Emerging Markets
Aspirin grew 39% in 2012 in
China
Sales in € million; ∆% Fx adj.
2010 2011 2012
358
418
404
471
476
494
Rx-Aspirin OTC-Aspirin
776
875
970+6%
74. • Bayer Investor Presentation • Meet Management • June 2013Page 72
Global Leader in Consumer
Health
75. Consumer Care –
Best-Selling Products in 2012
• Bayer Investor Presentation • Meet Management • June 2013Page 73
FY 2012 sales in € million (∆% yoy Fx-adj.)
OTC portfolio includes 10 brand families with sales >€100m
323
269
250
196
146
130
122
101
+6%
+5%
+14%
+8%
+4%
+3%
+8%
+5%
+8%
+17%197#
*Total Aspirin includes Aspirin Complex and Aspirin Cardio (Rx)
#Total Alka-Seltzer includes Alka-Seltzer and Alka-Seltzer Plus.
970*
= Rx Sales
76. Consumer Care –
Gained Share in 2012
• Bayer Investor Presentation • Meet Management • June 2013Page 74
Global #2 with a portfolio of some of the
world’s most recognized brands
Track record of performance
Continued market share gains
Highlights
Sales in € million; ∆% Fx & portfolio adj.
3,020 3,080
3,371
3,534
3,853
2008 2009 2010 2011 2012
+6%
77. Animal Health –
A Top Player in an Attractive Market
• Bayer Investor Presentation • Meet Management • June 2013Page 75
Sales in € million; ∆% Fx & portfolio adj.
Global #5 in a growing market
#3 in companion animal products (CAP)
#6 in food animal products (FAP)
Leading parasiticide-portfolio
Broadened portfolio and marketing reach
by acquisition of Bomac and TEVA Animal
Health
Highlights
963 977
1,120
1,186
1,303
2008 2009 2010 2011 2012
+4%
78. Radiology & Interventional – Combining
Medrad and Diagnostic Imaging
• Bayer Investor Presentation • Meet Management • June 2013Page 76
Medrad:
Clear #1
Active in fluid injection systems for
contrast media and endovascular devices
Business strengthened around strategic
core through adjacent acquisitions of
Possis (thrombectomy) and Pathway
(mechanical atherectomy)
Diagnostic Imaging:
Market leader in contrast media
Synergy creation – similar
centers/physicians
Highlights
1,323 1,363
1,474 1,498
1,606
2008 2009 2010 2011 2012
Sales in € million; ∆% Fx & portfolio adj.
* pro forma sales
+1%
79. Diabetes Care –
Global Player in Blood Glucose Meters
• Bayer Investor Presentation • Meet Management • June 2013Page 77
Global #4 in blood glucose meters
Latest innovation products include
CONTOUR™ USB meter with
Plug & play technology for instant access to
patterns and trends
Patients can share data with their healthcare
professional
Highlights
Sales in € million; ∆% Fx & portfolio adj.
956
1,000 993 1,002
1,047
2008 2009 2010 2011 2012
+4%
81. HealthCare –
Building Growth Momentum, Improving Margins
• Bayer Investor Presentation • Meet Management • June 2013Page 79
Priority 2012
Target
2013*
Aspiration
2015
HealthCare: Accelerate sales growth €18.6bn
Pharma: Successfully commercialize new
products and realize emerging markets
(EM) opportunity
New product sales¹
EM growth
Consumer Health: Aspire to become #1
OTC company
€7.8bn ~€9bn
HealthCare: Improve margins*
Pharma
Consumer Health
27.5%
29.9%
24.2%
slightly up
slightly up
at level
towards 29%
≥31%
~25%
€10.8bn
€368m
7.3%
mid-single-digit
% to ~€11bn
~€1bn
high-single
digit %
CAGR ~7%
towards €13bn
>€2.5bn
high-single
digit %
CAGR ~6%
towards €22bn
mid-single-digit
% to ~€8bn
mid-single-digit
% to ~€19bn
Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales
¹ Xarelto, Eylea, Stivarga, Xofigo and Riociguat; subject to regulatory approval
*Assuming Fx rate of $1.29 per €
Outlook depends on specific planning assumptions as detailed in the Annual Report
82. • Bayer Investor Presentation • Meet Management • June 2013Page 80
Life-Cycle and Pipeline Opportunities
Require Additional R&D Investments
Target range for Pharma R&D to sales ratio
of 15-17%
Newly launched products will increase
maintenance costs (e.g. medical, regulatory,
safety) included in R&D
New Pharma products with significant life-
cycle opportunities e.g.:
Xarelto – Prevention of major adverse
cardiac events (COMPASS)
Stivarga – Adjuvant mCRC; 2nd line HCC
Xofigo – Earlier settings of prostate
cancer; other cancers
Sales and R&D in € billion
2011 2012
Sales R&D expenses
2.0
9.9
10.8
1.6 1.6
R&D to sales ratio
16%
14%
mCRC: metastatic colorectal cancer; HCC: hepatocellular carcinoma
83. Expected Major Pipeline Newsflow 2013
• Bayer Investor Presentation • Meet Management • June 2013Page 81
Pipeline
Project
Newsflow Timeframe
Eylea Phase III study in mCNV (MYRROR) Data expected 1H 2013
Phase III study in DME (VIVID-DME) Data expected 2H 2013
Xofigo Initiation of additional clinical studies 2013e
Regulatory decision mCRPC EU End 2013e / early 2014e
Riociguat Update on potential next steps in the development program 1H 2013e
Regulatory decision US 2H 2013e (PDUFA date in October)
Nexavar Phase III breast cancer (RESILIENCE) Data expected Q1 2014
Filing in thyroid cancer 2013e
Stivarga CHMP opinion mCRC EU 1H 2013e
Filing mGIST EU Planned after approval in mCRC in EU
BAY 94-9027 Phase III study in hemophilia A Data expected early 2014
84. Investor Handout – Meet Management
Bayer’s OTC Business
June 2013 – New York
85. Bayer’s Consumer Care Business
#2 player in large and growing global OTC market
2012 revenue: €3.9bn, thereof OTC €3.5bn
Strong portfolio of well-known consumer brands
− 10 brands with > €100m in revenue each
Proven track record of outperforming OTC market
− 5-year CAGR of ~6% versus market CAGR of 3-4%
Well-defined strategies to achieve #1 position in global OTC market
− Maximize brand potential via geographic expansion
− Focus on new product innovation
− Expand footprint in emerging markets
− Seek strategic acquisitions and alliances
• Bayer Investor Presentation • Meet Management • June 2013Page 83
86. Leading Positions in Key OTC
Categories
• Bayer Investor Presentation • Meet Management • June 2013
Cardio #1
Vitamins, Minerals #2
& Supplements
Analgesics #2
Dermatologicals #2
Gastrointestinals #6
Cold, Allergy, Sinus & Flu >#10
4%
30%
24%
22%
12%
8%
*Source: IMS; Rankings based on branded players
Bayer OTC Sales by Category 2012 Position by Category 2012*
€3.5bn
Page 84
87. Bayer is #2 Player in a Highly Fragmented
OTC Market
• Bayer Investor Presentation • Meet Management • June 2013
Source: IMS
3.7%
OTC Market 2012 by Player
J & J Bayer Novartis Cons Sanofi Cons Pfizer GSK
Boehringer I. Reckitt Ben. Taisho Takeda Others
OTC market is very fragmented and
grew ~4% versus 2011
Top 10 players have ~27% share of
the OTC market
Bayer is ranked #2 with 3.7% share
of the OTC market behind J&J with
4.0% share
€99.5bn
Page 85
88. Why are OTCs an Attractive
Business?
• Bayer Investor Presentation • Meet Management • June 2013Page 86
89. • Bayer Investor Presentation • Meet Management • June 2013
Large and Growing OTC Market
OTC Market Growth Development
2008 2009 2010 2011 2012 2022e
In € bn
86 89 92 96 100
>150
+3% +4% +4% +4%
Source: Bayer Internal estimates
*Source: IMS OTC Global Analysis
~4%
CAGR
Page 87
OTC market characterized by
steady, predictable growth – even
during economic downturns
OTC share of healthcare
spending increased from 10.6%
in 2007 to 11.3% in 2012*
90. Favorable Trends Drive Continued OTC
Market Growth
• Bayer Investor Presentation • Meet Management • June 2013
Aging & more
educated
population
Increasing
global
self-care
trends
Government
desire to
lower
healthcare
costs
Rx to OTC
Switches
Expanding
OTC access
via new
geographies,
channels
Traditional OTC Market Future OTC Market
Acute treatment
Symptomatic treatment
Chronic treatment
Preventive treatment
Asymptomatic with self-
testing / pre-diagnosis
Wellness
+
Page 88
92. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
OTC Model Based on Brand Building versus
Upfront Development Costs
• Bayer Investor Presentation • Meet Management • June 2013
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Discovery &
Development
Realization Increased
pricing
pressure
More me-too
products
OTC model based on brand asset building
Short investment cycle & long (but relatively smaller) revenue cycle
Usually profitable
within 1-2 years
Ongoing investments in
brand and innovation provides
attractive, long-term returns
Years1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Rx model reliant on blockbuster success
Long investment cycle & short (but attractive) revenue cycle
Years1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Page 90
93. Brands Years Old 2012 Sales €m 3-Year CAGR
113 970* 7%
81 197# 12%
78 101 1%
69 196 5%
68 269 12%
40 250 9%
19 323 12%
Strong Consumer Brands Build Equity for
Decades
• Bayer Investor Presentation • Meet Management • June 2013
*Total Aspirin includes Aspirin Complex and Aspirin Cardio (Rx)
#Total Alka-Seltzer includes Alka-Seltzer and Alka-Seltzer PlusPage 91
94. Increasing Transaction Multiples of OTC
Businesses
Year Seller Buyer
Sales
Multiple
2005 Roche OTC Bayer 2.4 x
2006 Pfizer (Zantac US OTC Rights) Boehringer Ingelheim 4.7 x
2006 Pfizer Consumer Healthcare Johnson & Johnson 4.3 x
2009 Chattem Sanofi-Aventis 4.9 x
2010 Paras Pharmaceuticals Reckitt Benckiser 8.2 x
2012 Schiff Reckitt Benckiser 5.4 x
• Bayer Investor Presentation • Meet Management • June 2013
Source: Press Releases, Company Filings
Page 92
95. • Bayer Investor Presentation • Meet Management • June 2013
Aspire to Become the #1 –
Path to OTC Leadership
Page 93
96. Evolution of Bayer Consumer Care’s OTC
Business
• Bayer Investor Presentation • Meet Management • June 2013
2008
Acquisition of OTC brand
portfolio from
Sagmel (CEE) and
Topsun (China)
1996
Sale of suncare, cosmetics
and sweetener businesses
to Sara Lee
1999
Aspirin trademark
centenary-worldwide
sales > €500m
1978
Bayer purchases
Miles Laboratories
1899
ASPIRIN introduced
as an over-the-counter
(OTC) medicine
1984
Self-Medication and
Consumer Products
created as independent
business group
1994
Consumer Care business
group created by the
acquisition of North American
OTC business of Sterling.
Acquisition of the
“Bayer Cross” Trademark
in USA
2005
Acquisition of Roche
Consumer Health
2011
New Bayer Advanced
Aspirin for faster pain
relief launched in US
2013
Expect Aspirin to hit
€1bn sales
Acquisition of
Steigerwald
Page 94
97. Strategy for Growth
• Bayer Investor Presentation • Meet Management • June 2013
2012 2015e
OTC Sales Target 2015*
€3.5bn
>€4.0bn
*assuming €/$ of 1.29
Organic growth
>4% CAGR
Growth Strategy
Maximize brand potential
Global expansion of key brands
Exploit our innovation pipeline
Double proportion of new products‘ sales
until 2015
Grow in emerging markets
Increase commercial power
Bolt-on acquisitions to strengthen
portfolio & regional set-up
Page 95
99. Strength of OTC Brands to Drive Organic
Growth
FY 2012 sales in € million (∆% yoy Fx-adj.)
OTC portfolio includes 10 brand families with sales >€100m
323
269
250
196
146
130
122
101
+6%
+5%
+14%
+8%
+4%
+3%
+8%
+5%
+8%
+17%197#
• Bayer Investor Presentation • Meet Management • June 2013
*Total Aspirin includes Aspirin Complex and Aspirin Cardio (Rx)
#Total Alka-Seltzer includes Alka-Seltzer and Alka-Seltzer Plus
970*
= Rx Sales
Page 97
100. Maximizing Brand Potential
Through Global Expansion
Brand Sales by Major Region 2012 Expansion Plans
Analgesic
~80% in North America
Wound-healing
~75% in Europe
Anti-fungal
~75% in Europe & LatAm
Vitamins & minerals
~50% in Europe
Pregnancy Supplement
• Bayer Investor Presentation • Meet Management • June 2013Page 98
~55% in Asia Pacific
101. Consumer Insights Drive Brand Innovation
and Growth
• Bayer Investor Presentation • Meet Management • June 2013
Sales in € million
2002 2004 2006 2008 2010 2012
One-A-Day Innovation History
58
112 109
142
167
176 Bayer Innovation includes:
New claims
Indications
Delivery forms
Line extensions
New packaging
New DTC campaigns
Rx-to-OTC Switch
DTC: Direct-to-consumer
Page 99
102. • Bayer Investor Presentation • Meet Management • June 2013Page 100
One A Day Vita Craves
Complete adult multivitamin in
great tasting gummy format
2010 2011 2012 2015e
Robust Innovation Pipeline
*sales of new products launched during a 4-year window
Share of Sales from New Products*
Redoxitos
Recommended children’s vitamin C
daily dose for strengthening immunity
Canesten Nail Set
Complete 6-7 week fungal nail
infection treatment
Bepanthen Anti-Stretch Mark
Moisturizing lotion keeping pregnant
women’s skin soft and elastic
~16%
4%
5%
8%
New Product Examples
103. We Need to be Where the Market is
Growing
• Bayer Investor Presentation • Meet Management • June 2013
* Source: IMS
11%
78%
44%
6%
45%
16%
Bayer OTC sales
2012 by region
OTC Mkt 2012
growth share by region*
China, Russia and Brazil
accounted for only 11% of Bayer
2012 OTC sales
78% of total OTC market growth in
2012 driven by China, Russia and
Brazil
Huge opportunity for Bayer OTC to
develop more in growth markets
China, Russia & Brazil US, Germany, France & Italy Rest of the world
Bayer OTC sales and market growth indexed
Page 101
104. Emerging Market Growth Strategies
(2013 – 2015)
• Bayer Investor Presentation • Meet Management • June 2013
Country Market Characteristics Plans
China
Brazil
Russia
#2 global OTC market
€30bn in size by 2015e
Expand sales force from 30 cities to >130
cities, covering 75% of OTC market
Extend geographic footprint by launching
global brands in China
#6 global OTC market
Fastest growing market
in LATAM
~50% of LATAM market
Expand sales force from 7,000 to 12,000
retail outlets, covering 73% of OTC market
Accelerate innovation through consumer
insights and portfolio extension
#5 global OTC market
Retail OTC is the largest
healthcare segment
Extend portfolio into attractive categories
Leverage leadership position in pharmacy
chains to drive growth at point of sales
Page 102
105. • Bayer Investor Presentation • Meet Management • June 2013
Strategic Acquisitions –
Steigerwald
Excellent strategic bolt-on entry into fast growing
herbals market, further strengthens Bayer’s
gastrointestinal position (currently #6 globally)
Excellent expansion potential into emerging markets like
Russia and other Eastern European markets
Steigerwald generated net sales of €61.3m in 2012
(~90% in Germany)
Iberogast®
For the treatment of
functional dyspepsia &
irritable bowel syndrome
Laif®
St John’s wort-based
medicine for treatment
of depression
#8 OTC product in Germany
~69% of 2012 sales
Strong position in its indication
~20% of 2012 sales
Page 103
106. • Bayer Investor Presentation • Meet Management • June 2013
Bayer is Well-Positioned for Growth –
Aspire to #1 Global Leadership
OTC Market
Attractive
Bayer Has
Strong #2
Position
Plans for
Continued
Future Growth
Trends favor continued growth
OTC market model based on long-term brand building
OTC businesses becoming more valuable over time
Leader in key categories
Multiple strong brands
Track record of outperforming market growth
Globalize established brands
Launch strong innovation pipeline
Focus on emerging markets where most of growth will come
Strategic acquisitions and alliances
Page 104
107. Investor Handout – Meet Management
Bayer CropScience
June 2013 – New York
108. Sales 2012: €8,383m
Insecticides€1,514m
Market position:
Fungicides€1,974m
3Market position:
SeedGrowth€897m
1Market position:
Herbicides €2,356m
4Market position:
Env. Science €680m
1Market position:
Seeds €962m
7Market position:
Page 106
CropScience –
A Leader in Chemical Crop Protection
• Bayer Investor Presentation • Meet Management • June 2013
1
Market positions based on company reportings and Cropnosis estimates
18%
24%
11%
11%
8%
28%
109. 26%
22%
13%
9%
9%
7%
6%
5% Fruits & Vegetables
CerealsOilseeds
Soy
Corn
Cotton
Rice
Sugar Crops
* by major crop groups excluding industrial business and non-agricultural solutions
CropScience Sales 2012*
Other
Fruits, Vegetables and Cereals –
A Major Part of Our Portfolio
• Bayer Investor Presentation • Meet Management • June 2013Page 107
110. Leading the Way in Integrated Crop
Solutions
Integrated Crop Solutions
Chemical
Crop
Protection
Biological
Crop
Protection
Seeds
Herbicides
Fungicides
Insecticides
SeedGrowth
Microorganisms
Microbial
extracts
Canola, cotton,
rice, vegetables,
soy, wheat
Conventional
seeds
GMO seeds
Traits
Weed, pest &
disease control
Stress
tolerance
Better harvest
with improved:
Yield
Quality
Processability
Sustainability
GMO: Genetically modified organism
• Bayer Investor Presentation • Meet Management • June 2013Page 108
111. • Bayer Investor Presentation • Meet Management • June 2013Page 109
Excellent Performance in
Positive Environment
113. Herbicides
Fungicides
Seeds
Growth in all regions, especially in the
US (new corn herbicides) and Brazil
Double-digit growth in several key
markets (e.g with Fox in Brazil)
Growth in all regions; phase-out of WHO
Class I products completed
Strong business expansion; high
demand for innovative Poncho/Votivo
Double-digit growth in all broad-acre
crops; slight decline in vegetable seeds
Products both for professional users
and consumers posting gains
2,356
+10%
1,974
+13%
1,514
+15%
897
+17%
680
+5%
962
+14%
Insecticides
Sales in € million; ∆% y-o-y Fx & portfolio adj.
FY 2011 Nominal growth FY 2012
Page 111 • Bayer Investor Presentation • Meet Management • June 2013
SeedGrowth
Env.Science
Full Year 2012 –
All Segments Contributing to Growth
114. High demand for InVigor in Canada;
launch of conventional oilseed rape
in Europe
Expansion of cotton seed business
driven by US and Brazil
Growing rice seed business in Asia
(esp. India)
Difficult market environment for
vegetable seeds
Successful launch of Bayer soybean
seed in the US
Build-up of global wheat seed business
continued with new research
cooperations
• Bayer Investor Presentation • Meet Management • June 2013Page 112
299 304
227
311
179
19940
47
2011 2012
820
962
Sales in € million; ∆% y-o-y, () Fx & portfolio adj.
2012 Highlights
Vegetables (-2%)
Rice (+23%)
Oilseeds (+33%)
Soybean (+83%)
Cotton (+10%)
Other
+14%
Seeds – Double-Digit Growth in All Our
Broad Acre Crops in 2012
115. Emerging Economies
25%
CropScience Sales in FY 2012
CropScience €8,383m; +16% (+12%)
Latin
America
Eastern
Europe
Africa &
Middle East
Emerging
Asia³
~900
+7%
~1,800
+15%
~600
+16%
~300
+7%
¹ Emerging economies include: Latin America, Asia w/o Japan, Australia,
New Zealand, Africa and Middle East incl. Turkey, Eastern Europe
² Others = Japan, Australia, New Zealand, Canada
³ Emerging Asia = Asia without Japan, Australia, New Zealand
18%
USA
+19%
25%
43%
14%
Emerging
Economies¹
+12%
Western
Europe +5%
Others²
+13%
Full Year 2012 –
Growth in All Regions
Sales in € million, ∆% yoy Fx adjusted
• Bayer Investor Presentation • Meet Management • June 2013Page 113
116. • Bayer Investor Presentation • Meet Management • June 2013Page 114
Translating R&D Effectively
into Sales
From to
€
117. Executing Our Strategic Roadmap
Strengthen
Customer Centricity
Lead the Way
in Innovation
Enhance
Crop Protection
Striving for first- and
best-in-class
solutions
Exploiting expertise
in seeds, breeding,
and chemical and
biological crop
protection
Driving commercial
excellence in
marketing and sales
Connecting partners
in the value chain
through integrated
Go-to-Market
practices
Improving portfolio
through focused
and integrated
crop solutions
Increasing
flexibility and
efficiency
Expand
Seeds Business
Further strengthening
position in
vegetables, rice,
oilseed rape
and cotton
Extending portfolio
by building up
business in soybean
and wheat
• Bayer Investor Presentation • Meet Management • June 2013Page 115
118. Translate R&D Effectively into
New Product Sales
• Bayer Investor Presentation • Meet Management • June 2013Page 116
Xpro (+61%) - New cereal fungicide with
yield-boosting effect
Adengo herbicide family (+85%) -
Excellent weed control in corn and
cereals, also in case of glyphosate
resistance
Belt (+54%) - Broad-spectrum
insecticide with fast and long-lasting
action
Launch of Luna fungicide in the US
First launch of new SeedGrowth family
EverGol/Emesto in Canada
0.02
0.3
0.7
1.1
~1.4
~1.9
2007 2009 2011 2012 2013e 2015e
+60%
2012 Highlights
Sales from new Crop Protection
products launched since 2006 in € bn
∆% y-o-y, () Fx adj.
119. Xpro – New Cereal Fungicide
with Yield-Boosting Effect
Pyrazole fungicide from a new generation of SDHI* for foliar use in cereals
Combined formulation of Bixafen and Prothioconazole leading to superior
"all-in-one" cereal fungicide
Excellent control of key cereal diseases including strobilurin-resistant Septoria
Boosting yield through long-lasting disease control and positive impact on
plant physiology
Global peak sales potential of more than €300m
* SDHI: Succinate dehydrogenase inhibitor
Page 117 • Bayer Investor Presentation • Meet Management • June 2013
120. Luna – Outstanding Fungicide for Managing
Problematic Crop Diseases
New SDHI* fungicide for use in foliar application and seed treatment on more
than 70 horticultural and industrial crops
Control for a broad range of problematic diseases including Alternaria blight,
scab, powdery mildew and white mold
Benefits for the food chain through better storability and longer shelf-life of
harvested produce
Available since 2012 planting season in several key markets
Global peak sales potential of more than €250m
* SDHI: Succinate dehydrogenase inhibitor
• Bayer Investor Presentation • Meet Management • June 2013Page 118
121. LibertyLink – A Sustainable Alternative to
Glyphosate to Fight Weed Resistance
• Bayer Investor Presentation • Meet Management • June 2013Page 119
Bayer CropScience
sustains the "Respect
the Rotation" initiative
to overcome weed
management challenges
HPPD: Hydroxyphenyl-pyruvate dioxygenase
MGI: Mesotrione, Glufosinate-ammonium and Isoxaflutole
Weed resistance to glyphosate increasingly impacting crop production
Our LibertyLink is currently the only non-selective herbicide solution to glyphosate
resistant weeds
Construction of a new world-scale glufosinate-ammonium plant in the US planned to
contribute to more than doubling global production capacity
We are committed to develop new and more sustainable weed management solutions
Innovation with new mode of action, HPPD herbicide tolerance, in soy and cotton
MGI triple stack herbicide-tolerance soybean trait submitted for approval
Highly effective pre-emergent and selective herbicide portfolio launched
122. Realising Further Growth Opportunities
in Biologics
Biologics are bio-based products, either consisting of naturally-occurring living
organisms or containing materials derived from plants, bacteria, fungi, yeasts or viruses
The market potential for Biologics is expected to triple from $1.2bn in 2010 to around
$4bn in 2020
AgraQuest acquired in Q3 2012 for €375m including milestone payments.
Leading global provider of innovative biological pest management solutions based
on natural microorganisms
German company Prophyta acquired in Q1 2013, provides customers well-established
products primarily based on biological control agents, e.g. nematicide BioAct.
Acquisitions strengthen strategically important fruit and vegetables business
We aim to become the world leader in integrated crop solutions
• Bayer Investor Presentation • Meet Management • June 2013Page 120
123. Customer Centricity Along the Entire
Value Chain
• Bayer Investor Presentation • Meet Management • June 2013Page 121
Bayer CropScience
Our offers Growers
Distributors/
seedcompanies
Retailers
Advisors
Providing Seed-to-Shelf Solutions
Traders
Foodprocessors
Foodretailers
Consumers
240 food chain partnerships covering most of the main fruit & vegetable crops
Premium seeds and effective crop protection products to maximize yield
Consistent and high harvest quality for efficient food processing
Meeting highest food safety standards
Better product quality for the consumer
124. Best-Practice Examples of our New
Go-To-Market Approach
• Bayer Investor Presentation • Meet Management • June 2013Page 122
Approach Achievement
Food chain partnerships in grapes in Brazil,
Chile, Italy and India
Market share in grapes in Brazil +5%
~ 60% market share in table grapes in
Chile (largest exporter worldwide)
"On demand" seed treatment system with a
global network of 10 SeedGrowth Centers
2012 SeedGrowth sales* +17%
Further roll-out of SeedGrowth franchise
in Asia Pacific (sales in China* +30%)
Combine innovative technology of Movento
insecticide with additional service offerings
2012 Movento sales* +49%
BayDir service in Germany offers tailored
and immediate information for farmers
through Internet and mobile phone apps
Further strengthened our position in the
German market
* Sales ∆% y-o-y Fx adj.
126. Sivanto – Innovative and User-friendly
Insecticide against sucking pests
Active ingredient: flupyradifurone (novel insecticide class butenolides)
Control of sucking pests such as aphids, hoppers and whiteflies
Intended for use in fruits, vegetables, and broad acre crops
Favorable safety profile
Launch planned 2014 / 2015 *
• Bayer Investor Presentation • Meet Management • June 2013Page 124
* first registrations for foliar application; SeedGrowth use
planned to follow subsequently
127. Restriction of Neonicotinoids Use in the EU -
Implications
The European Commission has adopted a proposal to restrict the use of certain
neonicotinoids (including clothianidin and imidacloprid) in summer cereals and bee-
attractive crops, including corn, oilseed rape and sunflower
Neonicotinoid-based products are safe for bees, when used according to label
instructions; registered in > 100 countries world-wide in a broad range of crops
Affected business of clothianidin and imidacloprid ~1% of total CropScience sales, gross
Net sales impact significantly less, as alternative products partly compensate
Restrictions will apply from Sept 30 (use of treated seeds until Dec 1, 2013) the latest
Restrictions expected to result in crop yield losses and loss of competitiveness for
European agriculture
U.S., Canadian and Brazilian regulatory agencies recognize that there are numerous
factors affecting honey bee health
Bee health more complex: diseases, parasitic mites, habitat loss, nutritional deficiencies
and hive management practices
• Bayer Investor Presentation • Meet Management • June 2013Page 125
128. 2010 2011 2012 2016e
Crop Protection/Environmental Science
Seeds
Increasing the R&D Share for Seeds
• Bayer Investor Presentation • Meet Management • June 2013Page 126
In € million
Seeds Fungicides Biologics
Insecticides SeedGrowth Herbicides
~1,200
~800~600
~500
~500
~400
Pipeline Peak Sales Potential €4bn
from Products Launched 2011 – 2016*
.
* Estimated and subject to regulatory approval
63%
37%35%
65%
70%
30%
722 723 782
Pipeline Value by SegmentR&D Split
129. Extending the Seeds Footprint
• Bayer Investor Presentation • Meet Management • June 2013Page 127
Build up a proprietary soybean
seed business
Build up a global wheat seed business
LibertyLink herbicide tolerance technology
broadly outlicensed
Acquisition of Hornbeck Seed Company in
the US
Bayer soybean seed launched in 2012
Presence in soybean market in Brazil
stepped up with bolt-on acquisitions
Broad germplasm pool and promising trait
pipeline
Next-generation trait technology licensed
from Monsanto
Significant investment into R&D of new
wheat varieties and traits
Focus on productivity, stress tolerance,
nutrient uptake
First new varieties expected by 2015
in Europe
Several agreements closed with wheat
players to establish a broad germplasm pool
Wheat breeding stations set-up in Europe,
US, Australia
130. Access to Next-Generation and Enabling
Trait Technologies for Soybeans
Cross-licensing agreement with Monsanto entered in April 2013
Monsanto will provide Bayer with royalty-bearing licenses to specified trait technologies
in soybeans, with stacking-rights under certain conditions
Licensed traits fit nicely with our own technology such as LibertyLink
Ability to offer additional pest control options and an all-inclusive weed resistance
package in soybeans
Bayer will grant Monsanto licenses to evaluate certain enabling technologies
• Bayer Investor Presentation • Meet Management • June 2013Page 128
Weed
control
Pest
control
Genuity® Roundup Ready 2 Yield®: glyphosate tolerance
Genuity® Roundup Ready 2 Xtend™: glyphosate & dicamba tolerance
Regions: United States and Canada
Intacta RR2 PRO™: first‐ever insect-protected trait in soybeans,
providing control of lepidopteran pests
Regions: Brazil, with an option to a royalty-bearing license in other
Latin-American countries in the future
Genuity® Roundup Ready 2 Yield®, Genuity® Roundup Ready 2 Xtend™
and Intacta RR2 PRO™ are trademarks of Monsanto
131. Strategic Progress Achieved
Enhance
Crop Protection
Strengthen
Customer
Centricity
Lead the Way
in Innovation
Expand Seeds
Business
● €1.1bn sales in 2012 with products launched since 2006
● All WHO class I insecticides removed from our portfolio
● Expansion of Biologics
● Increased grower orientation
● Improved channel management practices
● Broadened food chain partnership business model
● Pipeline Peak Sales Potential* €4bn
● Increased investment in Seeds R&D
● Innovating at the interface between chemistry and biology
● Strengthened positions in cotton, canola and rice
● Increased investments in soybean, wheat and vegetables
● Development of innovative traits
• Bayer Investor Presentation • Meet Management • June 2013Page 129
* from products launched between 2011-2016
133. Seed and Crop Protection Market Expected
to Grow 5% in 2013
• Bayer Investor Presentation • Meet Management • June 2013Page 131
Persistently high prices for agricultural commodities
Slightly weaker but nonetheless positive market development overall
Growth coming mainly from North and Latin American followed by
Eastern European markets
Asia / Pacific: cereals, rice and specialty crops fueling market growth
134. • Bayer Investor Presentation • Meet Management • June 2013Page 132
CropScience – Above Market Growth at
Benchmark Profitability
Priority 2012
Target
2013*
Aspiration
2015
Above-market sales growth
+12.4%
to €8.4bn
high-single
digit %
towards €9bn
CAGR ~6%
towards
€10bn
Translate R&D effectively into new
product sales (CP products launched since 2006)
€1.1bn ~€1.4bn ~€1.9bn
Extend seeds footprint +14%
Maintain industry leading profitability level 24.0%
slight
improvement
~24%
Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales
double-digit %
growth p.a.
CP: Crop Protection
*Assuming Fx rate of $1.29 per €
Outlook depends on specific planning assumptions as detailed in the Annual Report
double-digit %
growth
135. 303
~500 ~500 ~500
2012 2013e 2014e 2015e
Building up capacity for top Crop
Protection brands including herbicide
Liberty/Basta and fungicide product
families Nativo and Prosaro
€380m investment in construction of a
new glufosinate-ammonium production
plant in the US until end of 2015
Expanding our Seeds infrastructure
(breeding stations, greenhouses and
seed processing facilities)
Expanding and modernizing R&D
facilities (RTP/USA, Davis/USA,
Monheim/Germany)
We are Ensuring a World-Class Product
Supply by Further Investing
• Bayer Investor Presentation • Meet Management • June 2013Page 133
Capital Expenditures (PPE only, in €m)
136. Investor Handout – Meet Management
Bayer MaterialScience
June 2013 – New York
137. MaterialScience –
Leading Positions in All Segments
• Bayer Investor Presentation • Meet Management • June 2013
* aliph. isocyanates
MaterialScience €11,491m
Polyurethanes
€5,987m
#1-2; approx. 20-24% market share
52%
6%
25%
17%
Sales in € million
Polycarbonates
€2,819m
#1; approx. 27% market share
Coatings, Adhesives, Specialties
€1,972m
#1; >40% market share*
Industrial Operations
€714m
Sales Split by Segment 2012
Page 135
138. MaterialScience –
Global Production Network
• Bayer Investor Presentation • Meet Management • June 2013Page 136
Headquarter
Major Production Sites
Downstream Businesses
Position*
Americas
# 1 # 2 # 1
PUR PCS CAS
Position*
EMEA#
*Market share based on estimated sales following self-assessment
# Europe, Middle East & Africa
# 1 # 1 # 1
PUR PCS CAS
Position*
Asia/Pacific
# 2-3 # 1-2 # 1
PUR PCS CAS
139. MaterialScience –
Sales By Key Customer Industries
• Bayer Investor Presentation • Meet Management • June 2013
Others
(sports, leisure, footwear
packaging, medical, etc.)
Furniture/ Wood
AutomotiveChemicals
Electro/
Electronics
Construction
17%
28%
19%
20%
8%
20%
16%
Bayer MaterialScience sales by industry in 2012
Page 137
140. MaterialScience as an Integrated Solution
Provider
• Bayer Investor Presentation • Meet Management • June 2013Page 138
Megatrends offer business opportunities worldwide, with the emerging
economies at the forefront
Ongoing
urbanization
New and
improved
transportation
systems
Need for
better
energy
efficiency
Higher
living
standards
Proportion of city
dwellers expected to
increase from 50%
in 2010 to 70% in
2050*
Lightweight cars
New energy vehicle
development
High-speed rail trans-
portation networks
EcoConstruction with
high thermal insulation
standards
Cold-chain efficiency
Over 40m people
enter the middle class
every year
Improved housing
standards
Source: Steria, The Future Report 2012
143. Full Year 2012 –
Regional Sales Development
• Bayer Investor Presentation • Meet Management • June 2013
Emerging Economies2012 MaterialScience Sales
MaterialScience €11,491m; +2%
Latin
America
Eastern
Europe
Africa &
Middle East
Emerging
Asia³
~2,760
+1%
~920
+15%
~680
+7%
~575
-5%
¹ Emerging economies include: Latin America, Asia w/o Japan, Australia,
New Zealand, Africa and Middle East incl. Turkey, Eastern Europe
² Others = Japan, Australia, New Zealand, Canada
³ Emerging Asia = Asia without Japan, Australia, New Zealand
USA
+7%
36%
42%
Emerging
Economies¹
+3%
4%
Others²
+2%
Sales in € million; ∆% y-o-y Fx adjusted
20%
32%
43%
5%
Page 141
Western
Europe -2%
144. • Bayer Investor Presentation • Meet Management • June 2013Page 142
Selling Price Increases & Savings Not
Sufficient to Protect Earnings
Market growth trends intact, key
products with mid-single digit volume
growth
High raw material prices and
significant capacity additions led to
global overcapacities and margin
pressure
Going forward demand & supply
balance expected to improve
Anticipated margin improvement
supported by fresh savings from new
efficiency initiative
2010 2011 2012
Sales Adj. EBITDARaw Mat. & Energy Costs CFROI
In € bn
10.2
10.8
11.5
5.4
6.2
6.6
1.4 1.2 1.3
6% 6%
8%
145. 600
800
1000
1200
1400
1600
• Bayer Investor Presentation • Meet Management • June 2013Page 143
Price For Key Input Benzene Recently
Increasing Again
in $/t
Benzene vs Oil Price Development
Benzene and benzene derivatives
accounted for ~35% of raw material
exposure in 2012
Benzene price level near record
highs
Benzene price driven by lower
demand of main refinery products
Q4‘11 Q1‘12 Q2‘12 Q3‘12 Q4‘12 Q1‘13
Benzene Brent Crude Oil
146. • Bayer Investor Presentation • Meet Management • June 2013Page 144
Aspire to Earn a Premium Over
Cost of Capital
147. Cash Generation in Excess of Own
Investment Need
• Bayer Investor Presentation • Meet Management • June 2013
2002 and 2003 as reported in 2004 excluding acquisitions or divestments
In € million
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
902
1,108
464
1,113
332
498
715
1,388
690
1,281
870
672
1,147
782
504 498
565
775763
849
Page 145
621
735
CapEx (cash-relevant)
Net Cash Flow
~€3.6bn Free Operating Cash Flow in 11 years
Free Operating Cash Flow
206 649
166
673
592
277
110
345
265 210
114
148. • Bayer Investor Presentation • Meet Management • June 2013Page 146
Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales
Higher Asset Utilization & Efficiency
Measures Are Driving Performance
2012 Target 2013 Aspiration 2015
*Assuming Fx rate of $1.29 per €
#after reproduction
Outlook depends on specific planning assumptions as detailed in the Annual Report
Sales +2.9% to €11.5bn
(volumes +2%)
Adj. EBITDA +8% to
€1,262m
CFROI# 5.7% < WACC
7.1%
Sales to slightly increase
to ~€12bn
Adj. EBITDA to match
2012 figure
Q2‘2013 vs Q1‘2013:
Sales to increase and adj.
EBITDA to significantly
increase
Grow business (volume)
above global GDP
Defend market leading
positions in PCS and PUR
Realize 150 bp margin
contribution through new
efficiency initiative
Optimize asset structure
in Germany
CFROI# > WACC
149. • Bayer Investor Presentation • Meet Management • June 2013Page 147
Outlook 2013 –
Economy and Key Customer Industries
20%
17%
28%
19%
Automotive
(+2%)
Electro /
Electronic
(+5%)
Construction
(+4%)
Furniture
(+5%)
Others
(incl.
Chemicals)
2.6
0.0 0.4
1.8
5.3
4
3
2
1
5
GDP growth % prev. year
16%
*Assuming Fx rate of $1.29 per €
Outlook depends on specific planning assumptions as detailed in the
Annual /Quarterly Report
Sales by industry 2012 and expected 2013 growth
Global Economic GDP Outlook Key Customer Industries Outlook
150. • Bayer Investor Presentation • Meet Management • June 2013Page 148
Profitability Improvement Through New
Efficiency Initiative Until 2015
New efficiency initiative improves cost structure and increases adjusted EBITDA
margin by 150bp
Initiative comprises more than 100 measures across the entire value chain
Examples
Business Units Consolidation of system houses
Pricing excellence programs
Organization Optimization of regional structures (e.g. Canada & US)
Production Further initiatives to improve asset productivity (e.g. maintenance
schedules, engineering setup)
Supply Chain Optimization of logistics services
Selling &
Administration
Further reduce costs by leveraging established global ERP
platform and standardized processes
ERP: enterprise resource planning
151. Process Technology Advances Lower Cost &
Save Energy
• Bayer Investor Presentation • Meet Management • June 2013
ProcessBenefits*Status
TDI Gas Phase
Phosgenation
Adiabatic Aniline
Production
ODC Technology for
Chlorine Production
*Compared with conventional technology
ODC: Oxygen depolarized cathode
Uses up to 60% less
energy
Requires 80% less solvent
CapEx reduced by 20%
Uses 25% less energy
20% less CO2 emissions
CapEx reduced by 30%
Uses 30% less energy
Reduces indirect CO2
emissions
World-scale facility
since 2011 in Shanghai,
China
Technology to be used in
new TDI plant in Dormagen
Pilot plant in Antwerp,
Belgium
Plant in Shanghai since
2010
Demo facility in Krefeld-
Uerdingen
External marketing
planned from 2013
Page 149
152. • Bayer Investor Presentation • Meet Management • June 2013Page 150
Focus on Capital Discipline
DepreciationCapEx (PPE only)
813
462
600
460
527
599
2008 2010 2012 2013e
In € million
CapEx vs Depreciation CapEx Strategy
● Investment focus on utilization
improvement
● Investment in efficiency is the basis
for future profitable growth
● CapEx on depreciation level for 2013
and the foreseeable future
153. • Bayer Investor Presentation • Meet Management • June 2013Page 151
Capitalizing on Global
Megatrends
1990 2000 2020e 2050e
5.3
6.1
7.7
9.2 billion people
154. • Bayer Investor Presentation • Meet Management • June 2013Page 152
Our High-tech Materials Meet Key Customer
Industry Needs
Poly-
carbonates
Poly-
urethanes
& CAS
Low weight for better energy efficiency in transportation
High mechanical strength enables product durability
Transparency for optical applications and architectural glazing
High heat resistance and reliable electrical insulation properties
Excellent design flexibility that goes beyond that of glass
Outstanding thermal insulation properties
Versatility allowing full spectrum of flexible to rigid foam applications
Excellent abrasion resistance and rebound resilience
Durability for reliable protective coatings
AutomotiveConstruction Electro / Electronics
CAS: Coatings, Adhesives, Specialties
155. Polyurethane-based Insulation
for Residential & Commercial Buildings
• Bayer Investor Presentation • Meet Management • June 2013
PUR Isoboards for Thermal Insulation
Growth drivers
EU: From 2020 on, new
buildings have to be
constructed as “nearly zero-
energy buildings”
US: New standard requires
30% less energy use for
renovated homes and
commercial buildings
1 kg polyurethane saves 360 to
755 kg CO2 emissions*
PUR in construction industry in
2012: approx. €5.7bn,
estimated average growth rate
of ~8% p.a.
*Additional insulation, savings over entire product life-cycle of 50 years, including
production and end-of-life stages; PUR: polyurethane
External Thermal Insulation Composite
Systems (ETICS) save >25% energy
compared with other insulation materials
Joint solution development with key industry
players to fulfill high industry requirements
PUR Metal Sandwich Panels
Prefabricated and mainly applied for industrial
and commercial buildings as well as cold
storage
Easy handling and fast site assembly
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156. • Bayer Investor Presentation • Meet Management • June 2013Page 154
Polyurethane-based Insulation
in Cold Chain
Growth drivers
Globally more stringent energy
saving regulations
Increasing demand for trans-
porting temperature sensitive
goods
Increasing standard of living in
emerging markets triggers
continuously growing demand for
appliances
PUR in refrigerator industry
2012: approx. €2.6bn, estimated
average growth rate of ~6% p.a.
Refrigerators
Refrigeration accounts on average for 20% of
a household’s electricity consumption
Replacing all old refrigerators with A++
appliances could cut annual CO2 emissions in
the EU by 22 million metric tons
PUR insulation increased energy efficiency of
refrigerators by 65% from 1950-2005
BMS’s innovative Baytherm®
Microcell foam:
Reduces pore size of foam up to 40%
Reduces thermal conductivity up to 10%
PUR: polyurethane
157. Increased Energy Efficiency in Cars Through
Polycarbonates
• Bayer Investor Presentation • Meet Management • June 2013
Growth drivers
Polycarbonates
Heat stability and optical quality enable new
LED-based lighting systems
Flame-retardant polycarbonate blends protect
batteries used in future cars with hybrid
engines
Car body parts made from polycarbonate
blends reduce weight
Automotive glazing out of polycarbonate
combines high weight saving potential with
outstanding thermal insulation
Broad global political initiatives
promoting e-mobility
Increasing use of electrical
devices requires flame
retardancy of plastics
Polycarbonate glazing offers a
weight advantage of 30-50%
compared to real glass
81m light vehicles* produced
globally in 2012, estimated
average growth rate of 5-6%
p.a.
*includes cars and light commercial vehicles up to a weight of 6t
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