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. Page 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
• Bayer Investor Presentation • Meet Management • March 2014
4. Page 2
Our Business Portfolio –
Leading in Its Markets
Break-down excluding reconciliation
Sales 2013: €40.2bn
CropScience
Chemical crop protection & biologicals
global #2, seeds & traits
€8.8bn
MaterialScience
Polyurethanes and polycarbonates,
global #1/2
€11.2bn
HealthCare
Pharmaceuticals €11.2bn,
leading positions in core indications
Consumer Health €7.7bn,
OTC #2, blood glucose meters #3, Animal
Health #5, contrast media #1
€18.9bn
23%
29%
48%
• Bayer Investor Presentation • Meet Management • March 2014
5. We Generate Almost 90 Percent of our
Earnings in the Life Sciences Businesses
Page 3
*EBITDA before special items
23%
29%
45%
88% 12%
Sales 2013 Adj. EBITDA 2013*
Human
Health
3%
Breakdown excluding Reconciliation
Material
Science
Plant Health
Animal
Health
Life
Sciences
Material
Science
• Bayer Investor Presentation • Meet Management • March 2014
6. • Bayer Investor Presentation • Meet Management • March 2014Page 4
2010-2013 –
A Period of Significant Success
Delivered growth and performance
Unprecedented R&D productivity
Pharma launch product sales ahead of expectations
Executing successfully our OTC growth strategy
CropScience customer-centric strategy bearing fruit
Capital discipline at MaterialScience
7. 2010-2013 –
A Period of Significant Operational Progress
Page 5
2010 2011 2012 2013
35.1
36.5
39.7 40.2
7.1
7.6
8.3 8.4
Sales 5%
Core EPS 10%
Adj. EBITDA 6%
4.19
4.83
5.30
5.61
Sales and adjusted EBITDA in € billion, core EPS in €
CAGR 2010-2013
• Bayer Investor Presentation • Meet Management • March 2014
8. 24 Successful Phase III Clinical Trials
at Pharma since 2010
Page 6
Various indications incl. treatment of deep vein thrombosis/pulmonary
embolism, stroke prevention in atrial fibrillation and secondary prevention
of acute coronary syndrome
Wet age-related macular degeneration, diabetic macular edema, myopic
choroidal neovascularization and central retinal vein occlusion
Metastatic colorectal cancer and metastatic gastrointestinal stromal tumors
Metastatic castration-resistant prostate cancer with symptomatic bone
metastases
Pulmonary arterial hypertension and chronic thromboembolic
pulmonary hypertension
Radioactive iodine refractory differentiated thyroid cancer
Prophylaxis in hemophilia A: Site-specific PEGylated Factor VIII with
5-/ 7-days dosing intervals
• Bayer Investor Presentation • Meet Management • March 2014
BAY 94-9027
Major examples
9. 2010-2013 –
Building Growth Momentum at Pharma
• Bayer Investor Presentation • Meet Management • March 2014Page 7
Sales in € billion; ∆% Fx & portf. adjusted
Pharma Sales / Launch Products Launch Products 2013
2010 2011 2012 2013
10.0 1.5
25%
949
197
333
3
41
Sales in € million
9.9
10.8
11.2
+1%
+4%
+9%
10. • Bayer Investor Presentation • Meet Management • March 2014Page 8
2010-2013 – Successfully Executing OTC
Growth Strategy
Portfolio of some of the world’s
most recognized brands
Key brands build equity for
decades
Continuous expansion into
emerging markets, with focus on
China, Brazil, and Russia
Bolt-on acquisitions Steigerwald
and Dihon* to strengthen portfolio
3.4
3.5
3.9 3.9
2010 2011 2012 2013
+5%
+7%
+6%
Aspire to become the leading
OTC company
Consumer Care sales in € billion; ∆% Fx & portfolio adj.
*planned acquisition, closing expected in H2 2014
11. 2010-2013 – Delivering Growth And
Performance at CropScience
6.8
7.3
8.4
8.8
2010 2011 2012 2013
2013 – the 3rd year in a row
delivering strong sales growth at
record margin
New product sales 2013 up 33% at
€1.5bn*
Strong business expansion in seeds
over the last 3 years
Sales in € billion, ∆% Fx & portf. adjusted,
Adj. EBITDA margin in %
19.0
24.2
25.5
22.8
+9%
+12%
Page 9 • Bayer Investor Presentation • Meet Management • March 2014
Customer-centric strategy
bearing fruit
*Sales with Crop Protection products launched since 2006
+9%
12. Page 10
2010-2013 – Cash Generation in Excess of
Own Investment Needs at MaterialScience
In € million
2010 2011 2012 2013
763
CapEx (cash-relevant)Net Cash Flow Free Operating Cash Flow
775
735
977
418
210
114
265
• Bayer Investor Presentation • Meet Management • March 2014
498 565
621
559
13. Page 11
and beyond
Incremental Investments To
Achieve New Performance Level
• Bayer Investor Presentation • Meet Management • March 2014
14. FY 2014 Group Guidance –
Further Sales and Earnings Growth
Page 12
2013 2014E*
Sales €40.2bn
~5% to
~€41-42bn
(neg. FX effect approx. -2%)
adj. EBITDA €8.4bn
low- to mid-single-
digit % increase
(neg. FX effect approx. -5%)
core EPS €5.61
mid-single-digit %
increase
(neg. FX effect approx. -6%)
Sales ∆ Fx and portfolio adjusted, EBITDA before special items
*Assuming average Fx rates of Q4’13 (USD 1.36)
Outlook depends on specific planning assumptions as detailed in the Annual Report• Bayer Investor Presentation • Meet Management • March 2014
15. Page 13
€1.2bn Incremental Investments to Achieve
New Performance Level
Securing growth
momentum in particular
for new products
Sustainability of
innovation model
Meeting future
demand
Marketing
& Sales
R&D CapEx
(PPE)
2013: €10.1bn €3.2bn €1.8bn
∆ € bn:
2014e: €10.7bn €3.5bn €2.1bn
~0.6 ~0.3 ~0.3
• Bayer Investor Presentation • Meet Management • March 2014
16. Page 14
2013 Sales CAGR 2016e
Pharma: Maximize Value of
Launch Products
• Bayer Investor Presentation • Meet Management • March 2014
17. Page 15
Pharma – Peak Sales Potential of Launch
Products Raised to ≥€7.5bn
Continued successful launch exe-
cution and life cycle management
Unchanged
Unchanged
Unchanged
~€3.5bn
≥€1.5bn
≥€1bn
≥€1bn
≥€0.5bn
>€2bn
≥€1bn
Old New
• Bayer Investor Presentation • Meet Management • March 2014
Continued successful launch exe-
cution and life cycle management
18. Pharma – Additional Investments To
Execute >100 Launch Events in 2014
• Bayer Investor Presentation • Meet Management • March 2014Page 16
1: regulatory process ongloing, launch preparations assuming approval
DTC: Differentiated thyroid cancer; mCRC: Metastatic colorectal cancer ;
mGIST: Metastatic gastrointestinal cancer; ACS: Acute coronary syndrome
~30 launches planned in secondary prevention of ACS
Market introduction planned in >20 countries
>30 launches planned in mGIST1 in EU and other markets; continue
roll-out in mCRC (examples include Spain, Italy, Turkey)
~15 launches planned, including wetAMD and additional indications
(CRVO, mCNV1, DME1)
Launches1 planned in >20 countries
>30 launches planned in DTC1 in EU and other markets
Major Examples
>30 launches planned
19. Launch Products – Comprehensive Life-
Cycle Management Program Underway
• Bayer Investor Presentation • Meet Management • March 2014Page 17
Phase III trials in new indications (incl. secondary prevention of major
adverse cardiac events in patients with coronary/peripheral artery disease)
Additional research to strengthen profile in SPAF and VTE treatment
Program to position Eylea in AMD subtypes planned
Early clinical program initiated to study combination with PDGFR-
Phase III trials in 2nd-line liver cancer and adjuvant mCRC
Evaluate potential for additional cancers of the gastro-intestinal tract
Studies in earlier settings of prostate cancer including combination
studies and studies in other tumors (such as breast cancer and
osteosarcoma) planned
Realize the potential beyond PAH and CTEPH: studies in new disease
areas like systemic sclerosis and pulmonary hypertension with
idiopathic interstitial pneumonia planned
Major Examples
SPAF: Stroke prevention in atrial fibrillation; VTE: Venous thromboembolism; PDGFR-: Platelet-derived growth factor receptor beta;
AMD: Age-related macular degeneration; mCRC: Metastatic colorectal cancer; PAH: Pulmonary arterial hypertension; CTEPH: chronic
thromboembolic pulmonary hypertension
20. Pharma – Maximizing
the Value of Launch Products
Page 18
2013
Guidance
2014
Aspiration
2016
Sales Increase €11.2bn High-single digit %
(neg. FX effect approx. -2%)
8% CAGR
Adj. EBITDA Increase €3.5bn Low- to mid-single digit %
(neg. FX effect approx. -€150m)
Adj. EBITDA Margin 31.2% Level with prior year ≥33%
Assuming average FX rates of Q4‘13 (USD 1.36)
Sales ∆ % Fx & portf. adjusted, margin = EBITDA before special items to sales
• Bayer Investor Presentation • Meet Management • March 2014
21. • Bayer Investor Presentation • Meet Management • March 2014Page 19
Aspire to Become the Leading
OTC Company
22. • Bayer Investor Presentation • Meet Management • March 2014Page 20
#2 in the OTC Market - Executing
Successfully on Growth Strategy
Consumer Care Growth Strategy
4.4%
J & J Bayer Novartis Cons Sanofi Cons Pfizer GSK
Boehringer I. Reckitt Ben. Taisho Takeda Others
*based on internal syndicated database
OTC Market 2013 by Player*
€98.5bn
Maximize brand potential
Exploit our innovation pipeline
Grow in emerging markets
Bolt-on acquisitions to strengthen
portfolio & regional set-up
23. • Bayer Investor Presentation • Meet Management • March 2014Page 21
Maximizing Brand Potential
Through Global Expansion
Brand Sales by Major Region 2013 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
~55% in Asia Pacific
24. • Bayer Investor Presentation • Meet Management • March 2014Page 22
Emerging Market Strategies Paying Off in
Double-Digit Growth
*currency-adjusted
Country Strategic Plans Sales Growth 2013*
China
Brazil
Russia
Expand sales force from 30 cities to >130
cities, covering 75% of OTC market
Extend geographic footprint by launching
global brands in China
Expand sales force from 7,000 to 12,000 retail
outlets, covering 73% of OTC market
Accelerate innovation through consumer
insights and portfolio extension
Extend portfolio into attractive categories
Leverage leadership position in pharmacy
chains to drive growth at point of sales
+38%
+26%
+14%
25. Consumer Health – Aspire to Become the
Leading OTC Company
Page 23
2013
Guidance
2014
Aspiration
2016
Sales Increase €7.7bn Low- to mid-single digit %
(neg. FX effect approx. -3%)
3% CAGR
Adj. EBITDA Increase €1.8bn Slightly below PY
(neg. FX effect approx. -€100m)
Adj. EBITDA Margin 23.8% - ~24%
Assuming average FX rates of Q4‘13 (USD 1.36)
Sales ∆ % Fx & portf. adjusted, margin = EBITDA before special items to sales
Strong performance projected in Consumer Care and Animal Health,
a more challenging environment expected for Diabetes Care
• Bayer Investor Presentation • Meet Management • March 2014
26. HealthCare – Building
Growth Momentum, Improving Margins
Page 24
2013
Guidance
2014
Aspiration
2016
Sales Increase €18.9bn Mid-single digit %
(neg. FX effect approx. -2%)
6% CAGR
Adj. EBITDA Increase €5.3bn Slight increase
(neg. FX effect approx. -€250m)
Adj. EBITDA Margin 28.2% - ~30%
Assuming average FX rates of Q4‘13 (USD 1.36)
Sales ∆ % Fx & portf. adjusted, margin = EBITDA before special items to sales
• Bayer Investor Presentation • Meet Management • March 2014
27. Page 25 • Bayer Investor Presentation • Meet Management • March 2014
2013 Sales CAGR 2016e
CropScience: Further Growth at
Benchmark Profitability
28. CropScience is an Innovation-Driven
Business Model
1.1
1.5
~1.8
2.6
2012 2013 2014e 2016e
+33%
Sales from new Crop Protection products
launched since 2006 in € billion
∆% y-o-y, () Fx adj.
• Bayer Investor Presentation • Meet Management • March 2014Page 26
*Sales with Crop Protection products launched since 2006
2013 sales of new crop protection
products* above target
Key brands with double-digit sales
performance (e.g. Xpro +17% vs.
PY, Adengo +36% vs. PY)
Innovation target:
Transfer of at least 6 new
molecular entities and traits into
confirmatory technical proof-of-
concept field studies in 2014
29. Significant Investments in our
Growth Platforms
• Bayer Investor Presentation • Meet Management • March 2014Page 27
BiologicalsSeeds
>€300m R&D investments p.a. to
support leadership positions in cotton
& oilseed and to develop position in
soybean and wheat
Further selected acquisitions to
strengthen portfolio and regional
setup, esp. in Latin America
Launch of first soybean brand
Credenz (2014e)
Launch of first wheat variety
(2015e)
Successful market entry with nematode
seed treatment Poncho/Votivo
(sales 2013: ~€150m)
Acquisition of AgraQuest, global provider
of innovative biological pest management
solutions
Acquisition of Prophyta, a provider of
well-established products, e.g. nematicide
BioAct
Planned Biagro acquisition adds nitrogen
inoculants & plant health promoters
30. CropScience – Above Market Growth at
Benchmark Profitability
Page 28
2013
Guidance
2014
Aspiration
2016
Sales Increase €8.8bn Mid- to high-single-digit %
(neg. FX effect approx. -3%)
6% CAGR
Adj. EBITDA Increase €2.2bn Low-single-digit %
(neg. FX effect approx. -€150m)
Adj. EBITDA Margin 25.5% - 24-25%
Assuming average FX rates of Q4‘13 (USD 1.36)
Sales ∆ % Fx & portf. adjusted, margin = EBITDA before special items to sales
• Bayer Investor Presentation • Meet Management • March 2014
32. • Bayer Investor Presentation • Meet Management • March 2014Page 30
Macro-Economic Environment for
MaterialScience Likely to Improve
Oil price expected to stabilize in
2014 (budget of Ø $110 per bbl*)
Supply & demand balances of key
products improving with:
Long-term demand drivers
intact
Limited net new capacity to
come on stream
21%
18%
27%
19%
Automotive
(+5%)
Electro /
Electronic
(+6%)
Construction
(+4%)
Furniture
(+4%)
Others
(incl.
Chemicals)
15%
Sales by industry 2013 and expected 2014 growth
Key Customer Industries Outlook Additional Key Performance Drivers
*Ø 2013: $110 per bbl
33. MaterialScience Continues to Focus on
Capital and Cost Efficiency
• Bayer Investor Presentation • Meet Management • March 2014Page 31
Fresh savings realized as expected – plus ~50bps in 2013 margin*
Projects / Examples 2013
Reorganization of system house landscape in Europe, North America, Asia
Integration of Canada organization into US organization
Portfolio optimization (e.g. exit of carbon nanotubes business)
Optimization of trade working capital
* Adjusted EBITDA margin
Strong focus on capital discipline and working capital management
resulted in operating FCF increase of €304m to €418m in 2013
34. MaterialScience – Asset Utilization and
Efficiency Measures to Drive Cash Returns
• Bayer Investor Presentation • Meet Management • March 2014Page 32
2013
Guidance
2014
Aspiration
2016
Sales Increase €11.2bn Mid-single-digit %
(neg. FX effect approx. -2%)
Volume growth
> global GDP
Adj. EBITDA Increase €1.1bn Increase
(neg. FX effect approx. -€50m)
-
CFROI vs. WACC 5.5% < 6.9% - CFROI > WACC
Assuming average FX rates of Q4‘13 (USD 1.36)
Sales ∆ % Fx & portf. adjusted, margin = EBITDA before special items to sales
35. • Bayer Investor Presentation • Meet Management • March 2014Page 33
Complement Organic Growth
with Targeted Bolt-On
Acquisitions
36. Page 34
Bolt-on Acquisitions to Strengthen
LifeScience Portfolio
Region Product / Portfolio
Health
Care
Prophyta (Q1’13) - €25m Germany Fungicides (Biologicals)
Crop
Science
Conceptus (Q2’13) - €780m USA Permanent birth control
Wehrtec, Wehrmann (Q1’13)
€34m + milestones
Steigerwald (Q3’13) - €218m Germany Herbal medicines (pharmacy-only)
Brazil Soybean
(Seeds, Germplasm)
Algeta (Q1’14)
Successful tender offer - ~€1.9bn
Norway Oncology product Xofigo
Dihon* (H2’14e)
Signing agreement
China Local OTC brands
Company
• Bayer Investor Presentation • Meet Management • March 2014
FN Semillas* (Q4’13) - €25m Argentina Soybean (Seeds)
* Pending
Biagro* - Signing agreement Argentina Seed treatment (Biologicals)
37. Optimistic About Future Performance Level
Peak sales potential of new pharma products of ≥€7.5bn
Track record of performance:
Core EPS with 10% CAGR since 2010
Aspirations 2016 reflecting new performance level
Page 35
Substantial investment opportunities:
>€18bn in R&D and CapEx 2014-2016
• Bayer Investor Presentation • Meet Management • March 2014
39. EBIT
in € million
+26%
4,934
3,928
Sales
in € million
% currency & portfolio adj.
+5%
40,15739,741
EBITDA
adjusted*
in € million
+1%
8,4018,280
Core EPS
in €
+6%
5.61
5.30
*before special items
FY’13FY’12 FY’13FY’12 FY’13FY’12 FY’13FY’12
FY 2013 – Encouraging Performance
Driven by Life Sciences
Page 37 • Bayer Investor Presentation • Meet Management • March 2014
40. FY 2013 –
Regional Performance
Page 38
Africa &
Middle East
Eastern
Europe
Emerging Economies
Emerging
Economies¹
+7%
Others²
+10%
USA
+4%
Western Europe
+2%
2013 Group Sales by Region
Group €40,157m; +5%
~5,100
+15%~5,800
+4%
~1,700
-1%~2,500
+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 w/o Japan, Australia, New Zealand
In € million, ∆% yoy Fx adjusted
38%
10%
31%
21%
Latin
America
Emerging
Asia³
• Bayer Investor Presentation • Meet Management • March 2014
46. Leading Positions in Key Healthcare
Markets
• Bayer Investor Presentation • Meet Management • March 2014
Pharma
€11,188m
Leading positions in key therapeutic categories
Consumer Care
€3,904m
Global #2 in OTC-pharmaceuticals
Medical Care
€2,526m
#1 in fluid injection systems, #1 in contrast media,
#3 in blood glucose meters
Animal Health
€1,306m
Global #5, #2 in parasiticides
Sales Split by Segment 2013
25%
59%
7%
21%
13%
HealthCare €18,924m
Page 44
48. FY 2013 –
Top 10 HealthCare Product Performance
• Bayer Investor Presentation • Meet Management • March 2014
MI: Myocardial infarction
Sales in € million; ∆% y-o-y Fx adjusted
+6%
-12%
-1%
+3%
+2%
+10%
-1%
+2%
+211%
1,202
1,038
916
771
949
719
853
722
603
487
Hemophilia A
Multiple Sclerosis
Anticoagulation
Contraception
Cancer
Blood Glucose Meter
Contraception
Analgetic & sec.
MI Prevention
Paraciticide
-13%
Hypertension
Page 46
49. FY 2013 – Strong Business Momentum in
All Regions, Especially Emerging Markets
• Bayer Investor Presentation • Meet Management • March 2014
Emerging Economies
25%
FY 2013 HealthCare Sales
Latin
America
Eastern
Europe
Africa &
Middle East
~2,190
+7%
~1,980
+10%
~1,140
~880
+4%
24%
USA
+5%
30%
33%
13%
Sales in € million; ∆% y-o-y Fx adjusted
Emerging
Economies¹
+8%
Emerging
Asia³
Western
Europe +6%
Others²
+12%
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
HealthCare €18,924m; +2% (+7%)
Page 47
+10%
50. HealthCare – Building Growth Momentum,
Improving Margins
• Bayer Investor Presentation • Meet Management • March 2014Page 48
Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales
Assuming average FX rates of Q4‘13 (USD 1.36)
51. • Bayer Investor Presentation • Meet Management • March 2014Page 49
2013 Sales CAGR 2016e
Pharma: Maximize Value of
Launch Products
52. 2011 2012 2013 2014
Page 50
Pharma – Incremental Investments For
A New Performance Level
* new indications and new countries; products include Xarelto, Eylea,
Stivarga, Xofigo, Adempas• Bayer Investor Presentation • Meet Management • March 2014
Launch product sales in € bn
Launch product* sales target of ~€2.8bn
in 2014 (old aspiration 2015: >€2.5bn)
Launch phase to continue with >100
new launch events*
Continuous R&D investments in life-
cycle management
R&D investments in new drug
candidates
Increased marketing and sales
investments in emerging markets
Incremental marketing and R&D
investments of €0.5bn planned in 2014
<0.1
0.4
1.5
~2.8
Stivarga
Xarelto
Eylea
Xofigo
Recently launchd
Pharma products*:
53. Pharma – Additional Investments To
Execute >100 Launch Events in 2014
• Bayer Investor Presentation • Meet Management • March 2014Page 51
1: regulatory process ongloing, launch preparations assuming approval
DTC: Differentiated thyroid cancer; mCRC: Metastatic colorectal cancer ;
mGIST: Metastatic gastrointestinal cancer; ACS: Acute coronary syndrome
~ 30 launches planned in secondary prevention of ACS
Market introduction planned in >20 countries
> 30 launches planned in mGIST1 in EU and other markets; continue
roll-out in mCRC (examples include Spain, Italy, Turkey)
~ 15 launches planned, including wetAMD and additional indications
(CRVO, mCNV1, DME1)
Launches1 planned in > 20 countries
> 30 launches planned in DTC1 in EU and other markets
Major Examples
> 30 launches planned
55. Page 53
Pharma – Peak Sales Potential of Launch
Products Raised to ≥ € 7.5bn*
*assuming approvals and launches as planned
Continued successful launch exe-
cution and life cycle management
Continued successful launch exe-
cution and life cycle management
Unchanged
Unchanged
Unchanged
~€3.5bn
≥€1.5bn
≥€1bn
≥€1bn
≥€0.5bn
>€2bn
≥€1bn
Old New
• Bayer Investor Presentation • Meet Management • March 2014
56. Xarelto – Broadest Profile of Any Novel Oral
Anticoagulant
• Bayer Investor Presentation • Meet Management • March 2014
Peak sales potential ~ €3.5bn
Oral Factor Xa inhibitor
Once-daily dosing advantage*
First launch in EU for secondary
prevention of ACS planned in Q2’14
Two-dimensional approach in life-cycle
management:
Expansion into additional
thromboembolic disease areas
Strengthening the clinical profile in
approved indications and special
patient populations
*exception 15mg BID dosing for treatment of acute DVT/PE or 2.5mg
BID for ACS sec. prevention; ACS: Acute coronary syndromePage 54
57. • Bayer Investor Presentation • Meet Management • March 2014
Xarelto – Outperforming Competition,
Exceeding Expectations
Page 55
*Source IMS MIDAS
1 Oral anticoagulant; 2 Exception 15mg BID dosing for treatment of acute
20
15
10
5
23.0%
15.0%
2.7%
Xarelto
World-class launch, achieved
leading position in the novel
anticoagulants segment in key
markets
Uptake significantly exceeding
expectations
New sales target 2014: € 1.3-1.5bn
Broadest label of novel oral
anticoagulants with once-daily-
dosing advantage2
Sales market share in % (retail & hospital combined)*
01/2012 12/2013
apixaban
dabigatran
Xarelto – Leading Novel OAC1
Globally
25
58. Expanding and Strengthening the Profile
of Xarelto
• Bayer Investor Presentation • Meet Management • March 2014Page 56
Significant medical need in thromboembolic disease areas
Heterogeneous patient populations in existing indications deserve further
characterisation
Two-dimensional approach in life-cycle management
Expansion into addional
thromboembolic disease areas
Strenghtening the clinical profile in
approved indications
Peripherial arterial disease / coronary
arterial disease
Chronic heart failure with coronary
arterial disease
Patients with percutaneus coronary
intervention
Patients who undergo cardioversion
Patients undergoing ablation
Evaluate 10mg /20mg dose vs. ASA in
secondary prevention of VTE
ASA: Acetylsalicylic acid, VTE: Venous thromboembolism
59. Eylea – Developed for the Treatment of
Multiple Back-of-the-Eye-Diseases
• Bayer Investor Presentation • Meet Management • March 2014
Peak sales potential ≥ €1.5bn
Eylea is an anti-angiogenic therapy,
formulated for injection into the eye
Strong adoption by retina community in
wAMD based on convenient bimonthly
dosing1 regimen
Comprehensive range of indications to
address major eye diseases2:
Launched in wAMD and CRVO; roll-out
ongoing
Filed for DME (EU: 11/13; J: 02/14)
Filed for mCNV in Japan (11/13)
Filing planned for BRVO (in J, other
regions under evaluation)
1: after an initial phase of 3 consecutive monthly injections; 2: Bayer has marketing rights ex-US; wAMD: Wet age-related macular degeneration; CRVO:
Central retinal vein occlusion; BRVO: Branched retinal vein occlusion; mCNV: Myopic choroidal neovascularization; DME: Diabetic macular edema
Page 57
60. • Bayer Investor Presentation • Meet Management • March 2014
Eylea – Excellent Launch Trajectory
Page 58
Excellent launch execution ahead of
expectations
Market shares* > 45 % in Japan and
Australia
Roll-out in Europe underway
Strong uptake in early launch markets
Germany and Switzerland
Encouraging launch in France
Positive NICE guidance for CRVO
indication in UK obtained in 02/14
Progress with launch preparations for
i) additional countries and ii) additional
back-of-the-eye diseases**
*Market share as of December 2013 (Source IMS)
** pending regulatory approval
14
49
73
85
126
Q4'12 Q1'13 Q2'13 Q3'13 Q4'13
61. Stivarga – Developed as a Treatment for
Cancers of the Digestive Tract
• Bayer Investor Presentation • Meet Management • March 2014
Oral cancer drug, potently blocking multiple
protein kinases
Launched for treatment of mCRC and
mGIST in the US & Japan
Launched for treatment of mCRC (8/13)
and filed for mGIST (9/13) in Europe
Encouraging initial uptake
Expanding to new indications
Phase III in 2nd line liver cancer
ongoing
Phase III in CRC (adjuvant therapy
after resection of liver metastases)
ongoing
mCRC: Metastatic colorectal cancer
GIST: Gastrointestinal stromal tumors
Peak sales potential ≥ €1bn
Page 59
62. Entering Additional Cancers of the
Gastro-Intestinal Tract with Stivarga
• Bayer Investor Presentation • Meet Management • March 2014Page 60
Positive clinical data in metastatic colorectal cancer and 2nd-line
hepatocellular carcinoma
Mode of action suggesting activity in a broad range of tumor types
Life-cycle management targets:
Phase III in 2nd-line hepatocellular
carcinoma
Phase III in colorectal cancer after
resection of liver metaseases
Signal generating early clinical studies
in various cancer types
HCC: Hepatocellular carcinoma
CRC: Colorectal cancer
Expand in HCC and CRC Expand to additional tumor types
63. • Bayer Investor Presentation • Meet Management • March 2014
Xofigo – A New Treatment for CRPC
Patients with Bone Metastases
First in class alpha-pharmaceutical
Treatment of CRPC with symptomatic bone
metastases and no known visceral
metastatic disease
Launched in the US (06/13)
Approved in Europe (11/13) – launch
underway
High awareness among oncologists and
urologists
Studies in earlier settings of prostate cancer,
including combination studies and studies in
other tumors (such as breast cancer and
osteosarcoma) planned
CRPC: Castration-resistant prostate cancer
Peak sales potential ≥ €1bn
Page 61
64. Addressing Multiple Life-Cycle Opportunities
for Xofigo (Radium-223 dichloride)
• Bayer Investor Presentation • Meet Management • March 2014Page 62
Life-Cycle
Opportunities
Repeat dosing in CRPC
Higher dose in CRPC
Earlier disease stages
of CRPC
Combination study in CRPC
Expansion into additional
cancer types
Addressed Through
Phase II trial assessing the short
and long-term safety of re-
treatment
Phase II trial with dose higher
than the approved 50 kBq/kg
Phase I and/or II studies in breast
cancer, osteosarcoma and
potentially in additional cancer
types
Phase III combination trial with
abiraterone / phase II combination
with abiraterone or enzalutamide
CRPC: Castration resistant prostate cancer
Status
initiated
planned
planned/
initiated
planned
65. Adempas – First-in-Class sGC Stimulator for
Treatment of PAH and CTEPH
• Bayer Investor Presentation • Meet Management • March 2014
Oral soluble guanylate cyclase (sGC)
stimulator with exciting phase III results in
two forms of pulmonary hypertension:
PAH and CTEPH
First and only drug receiving marketing
authorization for the treatment of CTEPH
Approved in the US for treatment of PAH
and CTEPH (10/13)
Encouraging early launch feedback
Approved in J for treatment of CTEPH
(01/14) – launch planned for Q2’14
Pos. CHMP opinion for CTEPH and PAH
in EU (01/14)
*for indications PAH and CTEPH; CTEPH: Chronic thromboembolic
pulmonary hypertension; PAH: Pulmonary arterial hypertension
Peak sales potential ≥ €0.5bn*
Page 63
66. Adempas – Life Cycle Management Beyond
PAH and CTEPH
• Bayer Investor Presentation • Meet Management • March 2014
PAH: Pulmonary arterial hypertension; CTEPH: Chronic thromboembolic
pulmonary hypertension; PH-ILD: Pulmonary hypertension due to
interstitial lung disease
Page 64
Positive phase II data in PH-ILD prompt initiation of phase IIb in PH-IIP (a specific sub-
segment of PH-ILD)
Majority of PH-IIP patients suffer from pulmonary hypertension due to idiopathic
pulmonary fibrosis
No approved treatment option
Chronic systemic autoimmune disease characterized by fibrosis
No approved treatment
Strong preclinical antifibrotic data
Pulmonary hypertension with idiopathic interstitial pneumonia (PH-IIP)
Diffuse systemic sclerosis (SSc)
67. Page 65
Accelerating the Development
of 5 early/mid-stage Pipeline
Assets
• Bayer Investor Presentation • Meet Management • March 2014
R&D
68. Five New Molecular Entities Selected For
Accelerated Development
• Bayer Investor Presentation • Meet Management • March 2014Page 66
Project Mechanism Indication Status
Copanlisib
(BAY 80-6946)
PI3-Kinase Inhibitor Cancer
Phase IIa in NHL
ongoing
Finerenone
(BAY 94-8862)
MR Antagonist
Chronic heart failure (CHF)
Diabetic nephropathy (DN)
Phase IIb in CHF
and phase II in DN
ongoing
Molidustat
(BAY 85-3934)
HIF-PH Inhibitor Anemia Phase IIb ongoing
sGC-Stimulator
(BAY 1021189)
sGC Stimulator
Worsening chronic heart
failure
Phase IIb ongoing
sPRM (S-PRAnt)
(BAY 1002670)
Progesterone Receptor
Antagonist
Symptomatic uterine
fibroids
Phase I completed
MR: Mineralocorticoid receptor; NHL: Non-Hodkin´s lymphoma
HIF-PH: HIF prolyl hydroxylase; sGC: Soluble guanylate cyclase;
sPRM: Selective progesterone receptor modulator
69. Positive Proof-of-Concept Increases
Confidence in NME-quality
• Bayer Investor Presentation • Meet Management • March 2014Page 67
NME: New molecular entity
CHF: Chronic heart failure
EPO: Erythropoietin
Copanlisib
Finerenone
Molidustat
sGC-Stimulator
sPRM (S-PRAnt)
100% of patients (6/6) with follicular lymphoma achieved
a partial response as best response in phase I
Phase II results in CHF patients suggest improved safety
with at least similar efficacy compared to spironolactone
Improvement in important cardiological parameters
observed in phase I
Significant increase in levels of endogeneous EPO and
reticulocytes demonstrated in phase I
Phase I data demonstrated reversible induction of
amenorrhea
70. • Bayer Investor Presentation • Meet Management • March 2014Page 68
Copanlisib (BAY 80-6946) –
A PI3K-Inhibitor in Phase II in Cancer
● In most tumor cells, the PI3K-signaling
cascade is activated and provides
important tumor growth and survival
signals
● Copanlisib is a pan class I PI3K-inhibitor
with dominant activity
● Copanlisib has shown a broad anti-
tumor spectrum in preclinical tumor
models
● Phase IIa in Non-Hodgkin’s lymphoma
is ongoing; completion expected end of
2014
Phosphatidylinositol-3 kinases (PI3K)
play a central role in cellular signal
transduction processes
Copanlisib
71. • Bayer Investor Presentation • Meet Management • March 2014Page 69
Copanlisib Has Shown Substantial Activity in
Follicular Lymphoma
*Data from Patnaik A et al.; ASH 2012; 18FDG-PET: 18fluorodeoxyglucose -
positron emission tomography
18FDG-PET scans of a follicular lymphoma
patient with partial response
● Phase I trial successfully completed
● 100% of patients (6/6) with
follicular lymphoma (FL)
responded to therapy achieving a
partial response as best response*
● Maximum response duration > 840
days
● Encouraging signals in diffuse
large B cell lymphoma patients
● 18FDG-PET data suggest that
Copanlisib has rapid antitumor activity
52-year-old female with FL, grade 1-2, diagnosed stage IVa
72. • Bayer Investor Presentation • Meet Management • March 2014Page 70
Selective Progesterone Receptor Modulation
for Treatment of Uterine Fibroids
● Uterine fibroids are the most common
benign tumors in women of reproductive
age: 5-10% of premenopausal population
suffers from symptomatic fibroids
● Symptoms may include heavy menstrual
bleeding and tumor size related symptoms
● Current therapies include surgical
procedures or short-term use of GnRH
analogs for estrogen depletion
● Growth of fibroids strongly depends on
progesterone and estrogen
● Progesterone receptor modulation may
offer long-term treatment of uterine fibroids
without estrogen depletion side effects of
GnRH analogs
GnRH: Gonadotropin-releasing hormone
sPRM: Selective progesterone receptor modulator
PR
Transcription
Activation
Endometrial
Modulation &
Fibroid Growth
sPRM
Transcription
Endometrial
Modulation &
Fibroid Growth
PR
73. • Bayer Investor Presentation • Meet Management • March 2014Page 71
sPRM (BAY 1002670) – For the Treatment
of Symptomatic Uterine Fibroids
● BAY 1002670 is a novel oral, highly
potent and selective progesterone
receptor modulator
● Exhibits marked efficacy in an
innovative humanized fibroid disease
model1
● Phase I data (N=67) showed proof of
concept including:
● Reduction of bleeding: induced
amenorrhea (non-bleeding) in >60%
of women treated with dosages
>1mg/day
● Reversal of amenorrhea after
treatment cessation
● No prohibitive safety findings
1 Wagenfeld et al. Hum Reprod. 2013 Aug;28(8):2253-64
Phase I data BAY 1002670
Dose effect curve for amenorrhea rate
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
0102030405060708090100
Point estimate (median)
90% Credible interval
Observed rate
Efficacy threshold
Dose (mg)
Amenorrhearate(%)
74. • Bayer Investor Presentation • Meet Management • March 2014Page 72
Renal Anemia is an Important Area of Unmet
Medical Need
● Diseased kidneys do not produce
sufficient levels of erythropoietin (EPO)
in response to hypoxia, leading to
anemia
● CKD/ESRD is the leading cause of
anemia in industrialized countries
● Substitution with parenteral EPO is
standard of care – however, un-
physiologically high EPO doses
correlate with significant side effects
● There is a need for novel therapies that
lack the side effects of high doses of
EPO-substitution
CKD: Chronic kidney disease;
ESRD: End-stage renal disease
Anemia
Low oxygen
level (Hypoxia)
Normal kidney
function
Impaired kidney
function
EPO
Red blood cell
formation
EPO
Normal red blood
cell count
Insufficient
formation of
red blood cells
75. • Bayer Investor Presentation • Meet Management • March 2014Page 73
Molidustat – An Oral HIF-PH Inhibitor for
Treatment of Renal Anemia
Increased red blood
cell production
Inhibition of HIF-PH increases the
stability of HIF resulting in production of
endogeneous EPO - potential novel
therapeutic approach for the treatment
of renal anemia
Under normal oxygen conditions, HIF
gets hydroxylated by HIF-PH and then
degraded
Under hypoxia conditions, HIF is
activated and induces the synthesis of
erythropoietin (EPO) in the kidneys
which stimulates red blood cell
formation
Nucleus
HIFHIF
Low oxygen levels
HIF
Hydroxylation
HIF
Normal oxygen levels
HIF-PH
O2
hHIFhHIF
Degradation
Degraded HIF
HIFHIF
Inhibition of HIF-PH in renal anemia
HIF-PH
O2
EPO ↑
Nucleus
EPO ↑
Nucleus
Increased red blood
cell production
HIF: Hypoxia-inducible factor
HIF-PH: HIF prolyl hydroxylase (enzyme)
hHIF: hydroxylated HIF
76. • Bayer Investor Presentation • Meet Management • March 2014Page 74
Molidustat (BAY 85-3934) –
Proof of Concept Demonstrated
EPO: Erythropoietin
HIF-PH: HIF prolyl hydroxylase
● Molidustat is a novel oral inhibitor of the
enzyme HIF-PH
● In development for the treatment of
anemia associated with chronic kidney
disease
● Phase I in healthy subjects showed:
● Significant increase of EPO levels
after ≥ 12.5 mg
● Significant increase of reticulocytes
for doses ≥ 37.5 mg
● No prohibitive safety findings
Maximal EPO concentration after single
dose administration of Molidustat (Phase I)
0
10
20
30
40
50
Placebo 5 mg 12,5 mg 25 mg 37,5 mg 50 mg
EPO[U/L]
Dose
77. • Bayer Investor Presentation • Meet Management • March 2014Page 75
sGC Stimulation to Address Unmet Medical
Need in Patients with Heart Failure
● Worsening chronic heart failure is an
established indication with high medical
need
● Limitations of standard of care include
tolerance, oxidative stress, endothelial
dysfunction and venoselectivity
● sGC stimulation can improve
hemodynamics via restoration of
cardiac and vascular cGMP signaling
● sGC stimulation may provide a new
principle to reduce event rates in
patients with worsening chronic heart
failure
Clinicalstatus
Patients who require hospitalization due to HF
(worsening HF) have a poor prognosis with high
rates of re-hospitalization and death
sGC: Soluble guanylate cyclase;
HF: Heart failure
78. • Bayer Investor Presentation • Meet Management • March 2014Page 76
sGC Stimulator (BAY 1021189) –
Improvement of Cardiovascular Function
sGC: Soluble guanylate cyclase;
HF: Heart failure
Phase I of BAY 1021189 show improved
cardiac output (n = 36)
Fi gur e: Means and st andard devi at i ons f or i mpedance cardi ography over t i me f or Cardi ac Out put (L/ mi n) over t i me (val i d f or PD)
Day 1
0H 00M 1H 00M 2H 00M 3H 00M 4H 00M
3. 0
3. 5
4. 0
4. 5
5. 0
5. 5
6. 0
6. 5
7. 0
Placebo
5 mg
7.5 mg
10 mg
0 1 2 3 4
Time (h)
33.544.55.05.56.06.57.0
BAY 1021189 is a novel sGC stimulator
suitable for once-a-day dosing
Phase I successfully completed –
improvement observed in important
cardiological parameters, including:
Cardiac output / index (“volume of
blood pumped by the heart”)
Systemic vascular resistance
Stroke volume
No untoward safety findings in phase I
BAY 1021189 may offer a new treatment
modality for HF
Cardiacoutput(L/min)
79. • Bayer Investor Presentation • Meet Management • March 2014Page 77
MR-Inhibition is a Proven Principle in the
Treatment of Heart Diseases
MR: Mineralocorticoid receptor
HF: Heart failure
aldosterone / cortisol
Overactivated
MR
causing e.g.
Na+ and water retention
K+ loss
Hypertensive effects
Vascular
inflammation/injury
Myocardial/renal fibrosis
Proteinuria
MR antagonist
KidneyHeart
MR has multiple functions:
Regulation of salt, fluid homoestasis
and blood pressure
Mediator of oxidative stress,
subsequent inflammation, fibrosis and
cardiorenal disease
Steroidal MR antagonists spironolactone
and eplerenone have been shown to be
effective in reducing cardiovascular
mortality in patients with HF but are
underutilized due to the risk of
hyperkalaemia, renal dysfunction and
anti-androgenic / progestogenic side
effects
Steroidal MR antagonists are not
approved for kidney diseases eg. diabetic
nephropathy
80. • Bayer Investor Presentation • Meet Management • March 2014Page 78
Finerenone – A Novel Non-Steroidal and
Selective MR-Antagonist
CHF: Chronic heart failure; CKD: Chronic kidney disease
BNP: Brain natriuretic peptide;
B. Pitt et al., Eur. Heart J. 2013; doi:10.1093/eurheartj/eht187
Mean increases in serum potassium concentration
Finerenone10mg o.d.: 0.21 mmol/l
Spironolactone: 0.45 mmol/l
P <0.001
Mean change in estimated glomerular filtration rate
Finerenone10mg o.d.: -2.69 ml/min/1.73m²
Spironolactone: -6.70 ml/min/1.73m²
P <0.05
Median change from baseline in NT-proBNP
Finerenone 10mg o.d.: -193 pg/mL
Spironolactone: -170 pg/mL
(descriptive analysis)
Decreased BNP/NT-proBNP – a key
parameter for cardiac stress
Indicates lower incidence of
hyperkalaemia
Indicates lower incidence of worsening
of renal function
Phase II results suggest improved safety with at least similar efficacy on key
cardiac and renal parameters compared to spironolactone
Data at Day 29 +/- 2 in part B of the study with 392 pts in total;Spironolactone was given at an initial dose of 25mg o.d. and uptitrated to 50mg o.d.
on day 15±1 if sodium potassium concentration remained ≤4.8mmol/L; * eGFR 30-60 ml/min/1.73m²
Key phase II findings in patients with CHF and moderate* (part B) CKD :
81. Major Expected Pharma Pipeline Newsflow
2014/2015
• Bayer Investor Presentation • Meet Management • March 2014
Estimated primary study completion as of December 2013
HCC: Hepatocellular carcinoma; NHL: Non-Hodkin‘s lymphoma;; MR: Mineralocorticoid receptor; HF: Heart failure;
PI3-Kinase: Phosphatidylinositol-3 kinases, sGC :Soluble guanylate cyclase; HIF-PH: HIF prolyl hydroxylase
Page 79
2014
2015
Nexavar Completion of phase III in breast cancer (RESILIENCE)
Completion of phase III in adjuvant HCC (STORM)
BAY 85-8501 (Elastase Inhibitor) Completion of phase II in bronchiectasis
Amikacin inhale Completion of phase III in gram neg. pneumonia
Nexavar
Copanlisib (PI3-Kinase Inhibitor) Completion of phase II in NHL
Stivarga Completion of phase III in 2nd-line HCC
Finerenone (MRAntagonist) Completion of phase II in worsening chronic HF
Finerenone (MR Antagonist) Completion of phase II in diabetic nephropathy
Molidustat (HIF-PH Inhibitor) Completion of phase II
sGC Stimulator Completion of phase II worsening chronic HF
82. • Bayer Investor Presentation • Meet Management • March 2014
Established Pharma Products
Page 80
83. 2010 2011 2012 2013
Hemophilia Franchise –
Stable Growth
• Bayer Investor Presentation • Meet Management • March 2014
Global # 2 in hemophilia A treatment
Competitive portfolio in hemophilia:
Positive phase III data with site-
directed PEGylated long-acting
Factor VIII (BAY 94-9027)
Product from plasma-free
process (BAY 81-8973) – filing
planned for 2014
Sales in € million; ∆% Fx adj.
299
705
290
785
332
850
US Rest of the world
1,004
1,075
1,182
+6%
Page 81
330
872
1,202
84. Prophylaxis in Hemophilia – Breakthrough in
Prolonging Dosing Intervals
• Bayer Investor Presentation • Meet Management • March 2014Page 82
Prophylaxis can protect hemophilia patients more effective compared to on-
demand treatment in terms of
Reducing frequency and severity of bleeding episodes
Preserving joint health/function and
Maintaining overall long-term health status
However, current standard in prophylaxis involves two to three infusions per
week
A long-time goal in hemophilia prophylaxis has been to reduce the burden
from frequent infusions
PROTECT VIII demonstrated evidence of reliable prophylaxis of bleeding in
hemophilia A with dosing at every 5 and 7 day intervals
85. Expanding the Hemophilia Franchise – Long-
Acting Site-directed PEGylated Factor VIII
• Bayer Investor Presentation • Meet Management • March 2014Page 83
B-domain–deleted recombinant
factor VIII (BDD-rFVIII) with site-
specific PEGylation (BAY 94-9027)
Attachment of PEG extends half-life
without reducing FVIII activity
Positive PROTECT VIII phase III
data
Filing US, EU and other regions
planned for 2H’2015
Site-specific
PEGylation to
extend FVIII
half life
B-domain
deletion
86. BAY 94-9027 – Design of the PROTECT VIII
Phase III Study
• Bayer Investor Presentation • Meet Management • March 2014Page 84
PROTECT VIII is a pivotal study assessing safety and efficacy of the site-
directed PEGylated FVIII BAY 94-9027
Part A: On-demand and prophylactic treatment (completed)
Part B: Major surgery (ongoing)
6
Randomization
0 10 14 20 28weeks
2x/week 25 IU/kg (n 120)
2 or more breakthrough bleeds:
No or 1 breakthrough bleeds:
36
Screening
Screening
2
On‐demand therapy individual dosage n=20
2x/week 30 to 40 IU/kg n=24*
Every 5 days 45‐60 IU/kg n=43
Every 7 days 60 IU/kg n=43
* 13 assigned due to bleeding; 11 default/randomization arms full
38
87. Phase III Results Show Reduction of Infusion
Frequency in Prophylaxis with BAY 94-9027
• Bayer Investor Presentation • Meet Management • March 2014Page 85
Met primary objective of protection from bleeds with fewer infusions
Extending infusion intervals up to 7 days resulted in protection from bleeds
No inhibitors against FVIII developed during treatment period
Detailed data planned to be presented at WFH congress, Melbourne, May 2014
Study Arm
Patients (n)
remaining on
treatment
Patients with no
bleeding
Median ABR
Prophylaxis: infusion
2x/week
n.a. n.a.
17.4 (reduction to 4.1 after
dose increase)
Prophylaxis: infusion
every 5 days
43/43 44% 1.9
Prophylaxis: infusion
every 7 days
32/43
37%
(incl. non-completers)
3.9
(incl. non-completers)
On-demand treatment n.a. n.a. 23.0
ABR: Annualized bleeding rate
88. The Leader in Women’s HealthCare
• Bayer Investor Presentation • Meet Management • March 2014
Yaz family
Sales ∆% y-o-y, () FX adj.
Women’s Healthcare 2013
€3,034m
-7% (-1%)*
+6 (+10)Mirena
-23 (-16)Diane
-18 (-13)
+7 (+12)Qlaira
Other products +1 (+7)
-13 (-8)Microgynon
-2 (0)Valette
-13 (-8)Meliane
-7 (-1)Angeliq
Page 86
* Fx & portf. adjusted growth -4% due to Essure with €74m sales in 2013
89. • Bayer Investor Presentation • Meet Management • March 2014
Strengthening Women‘s Health Business –
Acquisition of Conceptus, Inc.
Bayer successfully completed the public tender offer to acquire all shares in
Conceptus for a purchase price of €780m
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)
Page 87
90. Mirena – The Leading Hormonal Long-
Acting Contraceptive
• Bayer Investor Presentation • Meet Management • March 2014
Intrauterine device, containing
levonorgestrel, for reversible long-
term contraception
Life-cycle opportunities:
Small low-dose long-acting (up to 3
years) device:
Jaydess; launch underway in
EU
Skyla; launched in the US
Phase III for a long-acting (up to 5
years), low-dose, small
contraception device underway
Sales in € million; ∆% Fx adj.
2010 2011 2012 2013
285
254
313
268
385
292
US Rest of the world
539
581
677
+10%
Page 88
415
304
719
91. Betaseron – Long-term Experience in
Multiple Sclerosis Treatment
• Bayer Investor Presentation • Meet Management • March 2014
First interferon launched in multiple
sclerosis, introduced in 1993
Wealth of clinical experience
Demonstrating excellent efficacy and
tolerability
21-year long-term follow-up study
demonstrated significant survival
advantage with Betaseron treatment
Sales in € million; ∆% Fx adj.
2010 2011 2012 2013
473
733
447
670
578
638
US Rest of the world
1,206
1,117
1,216 -12%
Page 89
499
539
1,038
92. Nexavar –
Our Cornerstone in Oncology
• Bayer Investor Presentation • Meet Management • March 2014
Approved for kidney cancer (RCC),
liver cancer (HCC) and radioactive
iodine refractory differentiated thyroid
cancer (DTC)
Pos. CHMP opinion for DTC (02/14)
Only approved drug with overall
survival benefit in HCC
Phase III trials in:
Breast cancer
RCC (adjuvant)
HCC (adjuvant)
Sales in € million; ∆% Fx adj.
2010 2011 2012 2103
174
531
174
551
204
588
US Rest of the world
705 725
792
+3%
Page 90
219
552
771
93. Aspirin –
Sustainable for More Than A Century
• Bayer Investor Presentation • Meet Management • March 2014
One of the world’s most recognized
brands
Available as OTC and Rx Aspirin
Bayer’s #1 product in Emerging
Markets
Aspirin grew 8% in 2013 in
China
Sales in € million; ∆% Fx adj.
2010 2011 2012 2013
358
418
404
471
476
494
Rx-Aspirin OTC-Aspirin
776
875
970 -1%
Page 91
452
464
916
94. • Bayer Investor Presentation • Meet Management • March 2014Page 92
Aspire to Become the Leading
OTC Company
95. • Bayer Investor Presentation • Meet Management • March 2014Page 93
Bayer is #2 Player in a Highly Fragmented
OTC Market
*based on internal syndicated database
4.4%
OTC Market 2013 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 ~5% versus 2012
Top 10 players have ~30% share of
the OTC market
Bayer is ranked #2 with 4.4% share
of the OTC market behind J&J
€98.5bn
96. • Bayer Investor Presentation • Meet Management • March 2014Page 94
Good Growth Across All OTC
Categories
Global OTC Market 2013*
36%
42%
4%
20%
32%
43%
5%
12%
22%
15%18%
13%
19%#
€98.5bn
OTC Growth 2013
+8%
+6%
+5%
+4%
+6%
Dermatology
Cough, Cold,
Sinus, Allergy,
& Asthma
Analgesics1
Nutrition
Gastrointestinal
*based on internal syndicated database
1Analgesics includes Cardio
# Others
97. • Bayer Investor Presentation • Meet Management • March 2014Page 95
We Aspire to Become the Global Leader in
the OTC Market
Growth Strategy
Maximize brand potential
Global expansion of key brands
Exploit our innovation pipeline
Grow in emerging markets
Increase commercial power
Bolt-on acquisitions to strengthen
portfolio & regional set-up
Consumer Care sales in € million;
∆% Fx & portfolio adj.
3,080
3,371
3,534
3,853 3,904
2009 2010 2011 2012 2013
+5%
98. • Bayer Investor Presentation • Meet Management • March 2014Page 96
Brands Years Old 2013 Sales €m 3-Year CAGR
114 916* 6%
82 214# 14%
79 108 5%
69 310 14%
45 138 12%
41 257 7%
20 321 6%
Strong Consumer Brands Build Equity for
Decades
*Total Aspirin includes Aspirin Complex and Aspirin Cardio (Rx)
#Total Alka-Seltzer includes Alka-Seltzer and Alka-Seltzer Plus
99. • Bayer Investor Presentation • Meet Management • March 2014Page 97
Innovation at OTC – New Product
Development with Bepanthen
212
235
269
310
2010 2011 2012 2013
Sales in €m, ∆% Fx-adjusted
+11%
+14%
+20%
100. • Bayer Investor Presentation • Meet Management • March 2014Page 98
Maximizing Brand Potential
Through Global Expansion
Brand Sales by Major Region 2013 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
~55% in Asia Pacific
101. • Bayer Investor Presentation • Meet Management • March 2014Page 99
One A Day Vita Craves
Complete adult multivitamin in
great tasting gummy format
2010 2011 2012 2013 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-Scar Gel
Silicone Gel with unique massage
device to approve appearance of
scars
~13%
4%
5%
8%
New Product Examples
11%
102. • Bayer Investor Presentation • Meet Management • March 2014Page 100
Emerging Market Growth Strategies
Russia
Country
Market
Characteristics
Plans 2013 Progress
China
#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
Sales growth: +14%
Successful geographic
expansion achieving target
of 75% of OTC Market
Brazil
#5 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
Sales growth: +38%
Successful line extension
launches: Bepanthol Lip
Cream, Redoxitos and
relaunch of Flanax and retail
coverage expansion
Russia
#4 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
Sales growth: +26%
Successful expansion of Win
in Store Retail initiative
Doubled Bepanthen sales
and restaged Supradyn
Sales ∆% Fx adj.
103. • Bayer Investor Presentation • Meet Management • March 2014Page 101
Strengthening Consumer Health Through
Selected Acquisitions
Significant sales synergies expected
due to Bayer’s complementary
Consumer Care business
Germany-based specialist in pharmacy-
only herbal medicines, bringing in a
leading herbal expertise
Sales 2013*: €66m
Transaction value: €218m
Steigerwald:
Herbal medicines
Significant synergies expected from
complementary OTC business
Transaction agreement signed on
February 26, 2014
Regulatory approval process prepared
Closing expected in H2 2014
Portfolio of well-known local consumer
brands
Sales 2013#: €123m
Dihon Pharmaceutical Group:
Chinese OTC brands
*proforma sales
#not audited
104. • Bayer Investor Presentation • Meet Management • March 2014Page 102
Animal Health – Operating in an
Attractive Market Environment
105. • Bayer Investor Presentation • Meet Management • March 2014Page 103
Demonstrating a Solid, Long-Term Sales
Growth Trajectory
Sales in € million; ∆% Fx & portfolio adj.
Overall global #5 and global #2 in
parasiticides
Ranked #3 in CAP (~60% of sales)
Sector driven by:
Emotional relationships to pets
Infectious and chronic diseases
Ranked #7 in FAP (~40% of sales)
Sector driven by:
Increasing customer/consumer
awareness
Food safety & disease transmission
Globalization in farm exports
Highlights
977
1,120
1,186
1,303 1,306
2009 2010 2011 2012 2013
+4%
106. • Bayer Investor Presentation • Meet Management • March 2014Page 104
Aspiring Further Sustainable Growth
6%
AH Market 2013 by Player
Zoetis Merck Merial Elanco Bayer
Boehringer I. Novartis Virbac CEVA Others
€21bn
Growth Strategy
Expand market share of existing
portfolio while delivering innovation
Strengthen and expand 2013 acquired
TEVA US AH business
Drive research & development at a 10%
sales ratio
Explore M&A opportunities for further
growth
107. • Bayer Investor Presentation • Meet Management • March 2014Page 105
New Innovative Product Examples –
Recent Launch Highlights
New benchmark for flea
and tick protection
Outstanding efficacy
based on combination of
active ingredients
Up to 8 months protection
due to innovative polymer
matrix technology
Pradofloxacin, the new
generation fluoroquinolone
Extended spectrum vs.
previous fluoroquinolones
Greater potential to limit
selection for resistance
Convenient formulations
for dogs and cats
1st combined endopara-
siticide against
roundworm and coccidia
in dogs
Easy and convenient
once daily oral treatment
Can be used at 2-weeks
old
108. • Bayer Investor Presentation • Meet Management • March 2014Page 106
Innovative Life-Cycle Management –
Example of Advantage Family
Highlights
2002 2013
202
487
Sales in € million
Successful franchise through:
Brand building – investments in
direct-to-consumer for brand
awareness
Channel diversification – meeting
consumers where they are
Life Cycle Management (LCM) –
ongoing with new claims
110. • Bayer Investor Presentation • Meet Management • March 2014Page 108
Medical Care – Diabetes Care
and Radiology & Interventional
DC R&I
111. • Bayer Investor Presentation • Meet Management • March 2014Page 109
Radiology &
Interventional
Diabetes
Care
Sales Split 2013
Medical Care €2,526m; -5% (0%)
40% 60%
Diabetes Care:
Comprises self testing blood
glucose monitoring devices
Radiology &
Combines our Contrast
Media, Injector, Informatics
and Interventional
businesses
Interventional:
Medical Care – Strong Legacies in Diabetes
Care and Radiology & Interventional
In € million, ∆% yoy, () = Fx & portf. adjusted
112. • Bayer Investor Presentation • Meet Management • March 2014Page 110
Diabetes Care –
Global Player in Blood Glucose Meters
Highlights
Sales in € million; ∆% Fx & portfolio adj.
1,000 993 1,002
1,047
1,007
2009 2010 2011 2012 2013
-1%
Global #3 in blood glucose meters
Stable business performance despite
difficult market conditions
Market characterized by growth in
prevalence, but pricing pressure
Latest innovation products include
CONTOUR® Next and Next Link
MULTIPULSE technology ensures high
accuracy blood glucose measurements
Wireless transmission of results to Medtronic
insulin devices
113. • Bayer Investor Presentation • Meet Management • March 2014Page 111
1,363
1,474 1,498
1,606
1,519
2009 2010 2011 2012 2013
Sales in € million; ∆% Fx & portfolio adj.
0%
Radiology & Interventional – Combining
Medical Devices and Contrast Media
Integrated subsidiary Medrad Inc. and
our Pharma contrast media business
The business comprises:
Contrast media: Xray, MRI
Contrast media injectors: Medrad brand
Informatics
Interventional: Artherectomy devices
Services
Synergies through focus on similar
centers / physicians
Bayer has leading positions among
different segments
Highlights
120. 2,456
+8%
2,195
+15%
1,622
+14%
921
+ 7%
Insecticides
Sales in € million; ∆% y-o-y Fx & portfolio adj.
FY 2012 Nominal growth FY 2013
• Bayer Investor Presentation • Meet Management • March 2014
Seed
Growth
FY 2013 – Crop Protection Growth Driven
by All Segments
Page 118
Herbicides
Fungicides
Robust growth in North America
Liberty benefitting from glyphosate
resistance
Strong performance in all regions
Fox in Brazil and Xpro especially
contributing
Solid growth in North America with
products for corn and soybean
Poncho family a major driver
Exceptional increase in LatAm
Sales of Belt and Movento grew
significantly
121. • Bayer Investor Presentation • Meet Management • March 2014
FY 2013 – Seeds Growth Held Back by
Decline in Cotton and Oilseeds
Page 119
331
+9%
279
- 10%
176
- 7%
58
+ 54%
Soy
bean
Sales in € million; ∆% y-o-y Fx & portfolio adj.
FY 2012 Nominal growth/decline FY 2013
Rice
Vegetables
Oilseeds
Cotton
52
+ 19%
Growth in all regions
Helped by acquired melon business
Reduced canola acreage in Canada
Reduced cotton acreage in the U.S.
Strong business expansion in Brazil
Step-up of soybean presence in
Latin America through acquisitions
Pleasing performance in the U.S.
Business expansion in Asia Pacific
continued, esp. in India
122. Emerging Economies
25%
CropScience Sales in FY 2013
CropScience €8,819m; +5% (+10%)
Latin
America
Eastern
Europe
Africa &
Middle East
Emerging
Asia³
~900
+11% ~2,200
+27%
~600
+9%
~300
+4%
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
Page 120
17%
USA
+3%
25%
45%
13%
Emerging
Economies¹
+18%
Western
Europe +3%
Others²
+6%
FY 2013 –
Strong Growth in Emerging Economies
Sales in € million, ∆% yoy Fx adjusted
• Bayer Investor Presentation • Meet Management • March 2014
123. • Bayer Investor Presentation • Meet Management • March 2014Page 121
Customer-Centric Strategy
Pays Off
124. Customer-Centric Strategy Pays Off
Strengthen
Customer Centricity
Lead the Way
in Innovation
Enhance
Crop Protection &
Environmental Science
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 • March 2014Page 122
125. FY 2013 Sales from New Crop Protection
Products Exceeded Expectations
1.1
1.4
1.5
1.8
2.6
2012 2013e 2013 2014e 2016e
+33%
Sales from new Crop Protection products
launched since 2006 in €bn
∆% y-o-y, () Fx adj.
• Bayer Investor Presentation • Meet Management • March 2014
(+17%) - Superior ‘all-in-one’
cereal fungicide with yield-boosting
effect
herbicide (+36%) -
Excellent weed control in corn and
cereals, also in case of glyphosate
resistance
(+48%) - Broad-spectrum
insecticide with fast, long-lasting
action
- New fungicide now
available in several key markets
FY 2013 Highlights
2013
target
2013
actual
Page 123
126. 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 Xpro
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
• Bayer Investor Presentation • Meet Management • March 2014Page 124
127. 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 • March 2014Page 125
128. Adengo Family – Highly Effective Weed
Control in Corn
Thiencarbazone-methyl is a new sulfonyl-amino-
carbonyl-triazolinone (SACT) herbicide
Additional crop selectivity in combination with
HPPD inhibitor Isoxaflutole and safener Cyprosulfamide
Grower benefits:
Controls annual grasses and broad leaved weeds in
corn including those that are resistant to glyphosate
Offering flexibility in application timing
Strong enough to achieve one-pass weed control
Rapid burndown, long-lasting residual control
• Bayer Investor Presentation • Meet Management • March 2014Page 126
Peak sales potential of more than €350m
129. Belt Insecticide - Preserve Yield Potential
Flubendiamide is a phthalic acid diamide
Acts as ryanodine receptor modulator, larvae loses
muscle control
Grower benefits:
Controls lepidoptera pests in a wide range of crops,
including soybeans, corn and cotton
Fast action, larvae stops feeding immediately
Rainfast with excellent residual activity
Provides minimal risk to beneficial insects
Excellent resistance management tool
• Bayer Investor Presentation • Meet Management • March 2014Page 127
Peak sales potential of more than €300m
130. Sustainable Alternatives to Fight Glyphosate
Weed Resistance
• Bayer Investor Presentation • Meet Management • March 2014Page 128
Weed resistance to glyphosate increasingly impacting crop production;
almost 50% of U.S. growers are affected
Our LibertyLink is currently the only non-selective herbicide solution to
glyphosate resistant weeds
Significant expansion of production capacity for Liberty planned
We are committed to develop new and more sustainable weed
management solutions
Highly effective pre-emergent and selective herbicide portfolio launched
100
200
300
400
2010 2011 2012 2013
Liberty/Basta Sales in €m
131. Future Market Potential of Biologicals
Expected to Increase Significantly
Biologicals are products derived from naturally-occurring living organisms or
materials from plants or microorganisms
Increasing demand from consumers for safe and sustainably produced food,
especially in fruits & vegetables area
Global retailers have more stringent residue reduction targets
Currently lower regulatory hurdles and faster registration process for
biologicals compared to chemicals
Grower benefits from short pre-harvest and re-entry intervals and thus high
flexibility on application timing
When used in combination or rotation with chemicals, biologicals provide new
tools in resistance management
• Bayer Investor Presentation • Meet Management • March 2014Page 129
Market potential expected to triple from $1.2bn in 2010 to $4bn in 2020
132. Further Growth Opportunities in Biologicals
with Bolt-On Acquisitions
Successful market entry with nematode seed treatment Poncho/Votivo in 2011
(Sales 2013: €150m)
AgraQuest acquired in Q3 2012 for €375m including milestone payments.
Global provider of innovative biological pest management solutions based
on natural microorganisms
Prophyta acquired in Q1 2013, a provider of well-established products,
e.g. nematicide BioAct
Planned Biagro acquisition adds nitrogen inoculants and plant health
promoters
We aim to become the world leader in integrated crop solutions
• Bayer Investor Presentation • Meet Management • March 2014Page 130
133. Acquisition of Biagro to Strengthen our
Soybean Business in Latin America
Agreement signed in Q1 2014 to acquire Argentinean
company Biagro*
Biagro portfolio includes seed-applied biofertility
inoculants and plant growth-promoting microorganisms
Acquisition will be a further milestone to become a leader
in biological seed treatments
Provides soybean growers in Latin America with
innovative offerings to substantially improve productivity
Nitrogen essential for plant growth and soybean seed
production
Biagro inoculants are a very effective and cost-efficient
method of supplying nitrogen to soybeans and other
legume crops
• Bayer Investor Presentation • Meet Management • March 2014Page 131
* Acquisition subject to clearance by Antitrust Authority in Argentina
Inoculants containing
high-quality Rhizobium
bacteria strains enable
plant roots to fix nitrogen
from the atmosphere,
resulting in enhanced
plant growth, more
vigorous root structure
and greener plant foliage
134. Customer Centricity Along the Entire
Value Chain
• Bayer Investor Presentation • Meet Management • March 2014Page 132
Bayer CropScience
Our offers Growers
Distributors/
seedcompanies
Retailers
Advisors
Providing Seed-to-Shelf Solutions
Traders
Foodprocessors
Foodretailers
Consumers
Around 240 food chain partnerships covering most of the
main fruit & vegetable crops and rice
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
135. Serving Grower Needs Beyond
Crop Protection and Seeds
• Bayer Investor Presentation • Meet Management • March 2014Page 133
Services Examples
Providing agronomic support
Crop advice
Expert trainings
On-farm trials
Field days
Optimizing yield and quality by
offering diagnostic and prediction
tools
Weather forecast
Pest prediction
Disease diagnosis
Resistance risk
calculator
Assessment of quality
indicators
Helping to optimize application
process and seeding
Application
collaborating with
machinery providers
Seed treatment
equipment checks
Creating transparency by offering
tracking / documentation support
Field documentation
RoI calculation
Certification support
Improving farm management by
financing and insurances
Ag input financing
Barter business
Crop price insurance
136. • Bayer Investor Presentation • Meet Management • March 2014Page 134
Translating R&D Effectively
into Sales
From to
€
137. Pipeline Peak Sales Potential €4bn
from Products Launched 2011 - 2016*
• Bayer Investor Presentation • Meet Management • March 2014
Crop Protection
Life Cycle Management
Seeds
Cotton
Canola
Wheat
Soybean
Rice
2013
~110 launches in vegetables &
broad acre crops
Roundup Ready
Hybrid
Canola
Fungicide
Serenade Optimum
Bayer Oilseed
Mustard
Hybrids
Seed Varieties
2014
Canola Yield
Increase
Numerous launches in
vegetables & broad acre crops
Verango / Velum
Insecticide
Insect Resistant
Hybrid Rice
TwinLink +
GlyTol Cotton
Seed Varieties
20162015
*estimated and subject to regulatory approval
2 joint project with MS TechnologiesPage 135
Constant Life Cycle Management through new formulations and mixtures that also includes Biologicals
Disease Resistant
+ Salinity Tolerant
Hybrid Rice
Insect + Disease
Resistant
Hybrid Rice
Improved Canola
Oil Profile
Dual Herbicide Tol.
+ Novel Insect
Resistant Cotton
Insecticide
Biologicals
Seed Varieties
Numerous launches in
vegetables & broad acre crops
GlyTol + HPPD
Tolerant
Soybeans2
Biologicals
Fungicide
Bayer
Wheat Seed
LibertyLink +
Roudup Ready
Hybrid Canola
Council
Herbicide
Disease Resistant +
Submergence Tol.
Hybrid Rice
Seed Varieties
Numerous launches in
vegetables & broad acre crops
Sivanto
Insecticide
138. 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 2015*
• Bayer Investor Presentation • Meet Management • March 2014
* first registrations for foliar application; SeedGrowth use
planned to follow subsequentlyPage 136
139. Biological Crop Protection for Mite Control
Mites can significantly reduce
yields and quality
Leading to rejection of produce
along the value chain and
lower sales
Microbial acaricide with new
mode of action
Season-long effectiveness:
curative, eradicant, protective
Registration expected in the U.S.
in 2016*
• Bayer Investor Presentation • Meet Management • March 2014Page 137
* subject to regulatory approval
Two-spotted spider mite under scanning electron microscope (SEM)
140. Build up a Global Wheat Seed Business
Largest broad-acre crop worldwide
Market value still small, but major potential seen with productivity improvement
Hybrids provide opportunity for both yield increase and improved yield stability
• Bayer Investor Presentation • Meet Management • March 2014Page 138
The Market* Our Efforts Our Goals
• 7 breeding centers
• Numerous collaborations
• Significant R&D investments
The Market
• 226m ha of wheat acres,
majority is farm-saved seed
• Current market of €0.2bn
(royalties only)
• Slow productivity increase
• Yield increase
• Nitrogen use efficiency
• Water use efficiency
• Heat tolerance
Market Entry
• Launch of first variety
planned in 2015
• Suitable for western and
central regions of the Ukraine
• Open pollinated variety
* Source: FAO, Context Networks 2012 (seed co level)
Corn: 60.7 EUR/ha Wheat: 0.9 EUR/ha
The Market
141. Acquisitions in Latin America Broaden
our Portfolio in Soybean Seed
Building up proprietary seed
business with high quality germ-
plasm pool
Establishing best-in-class
breeding platform
Leveraging the potential of our trait
platform through out-licensing
Launch of Bayer soybean brand
Credenz planned late 2014
Integrated business model
combining seeds & crop protection
• Bayer Investor Presentation • Meet Management • March 2014Page 139
* subject to clearance by Antitrust Authority in Argentina
2013 FN Semillas*
soybean seed
company
Buenos Aires, Argentina
2011 Soytech
soybean seed
company
Goiânia, Goiás
2013 Wehrtec
soybean seed
company
Cristalina, Goiás
2013 Agropastoril
soybean germplasm
bank
Cascaval, Paraná
2010 CVR
plant breeding
Rio Verde, Goiás
142. Strategic Progress Achieved
Enhance
Crop Protection
& Env. Science
Strengthen
Customer
Centricity
Lead the Way
in Innovation
Expand Seeds
Business
● €1.5bn sales in 2013 with products launched since 2006
● Biologicals strengthened further with Prophyta and Biagro*
● Expansion of supply capacities for key active ingredients
● Support to increase productivity of small-scale farmers
● 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 presence in Latin American soybean market
● Further investments done in wheat and vegetables
● Development of innovative traits
• Bayer Investor Presentation • Meet Management • March 2014Page 140
* Acquisition subject to clearance by Antitrust Authority in Argentina
** from products launched between 2011-2016
143. Page 141 • Bayer Investor Presentation • Meet Management • March 2014
2013 Sales CAGR 2016e
Further Growth at Benchmark
Profitability
144. Global Trends in Agriculture
• Bayer Investor Presentation • Meet Management • March 2014Page 142
GLOBAL FOOD
PRODUCTION
CLIMATE CHANGE
-322 kg rice per hectare
Yields under pressure
+1°C
FARMLAND PER CAPITA (ha)
1950 : 0.52
2010 : 0.20
2050 : 0.15
INSUFFICIENT STORAGE
Up to 40% of fruit
and vegetables
lost in India
Equivalent to the annual
consumption in UK
CHANGING CONSUMPTION
PATTERNS
Increasing demand for protein
Need for a sustainable
productivity increase
By 2050
+70%
HUNGER
1 in 8 goes hungry today
POPULATION GROWTH
7 billion people
on the planet today
9.6 billion people in 2050
145. Crop Commodity Prices Declined in 2013,
But Are Still At Relatively High Levels
• Bayer Investor Presentation • Meet Management • March 2013Page 143
Source: Bloomberg
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
0
100
200
300
400
500
600
700
800
900
1.000
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Soybeans
(LS)
Corn (LS)
Wheat
(LS)
Canola
(LS)
Rice (RS)
Cotton
(RS)
USD/ton USD/ton
146. Seed and Crop Protection Market Expected
to Grow 5% in 2014
• Bayer Investor Presentation • Meet Management • March 2014Page 144
In many growing regions farmer income level is healthy after 3 good years
Commodity prices still above critical threshold for farmers, triggering
investment in high-value seeds and crop protection
Steady expansion of soybean farming in Latin America
Expansion of agricultural production in Asia/Pacific continues
DESPITE
Prices for agricultural commodities expected to be below 2013 levels
Global stocks-to-use ratios for key crop commodities on upward trend
147. Promising 2014 Outlook
We expect to grow faster than the market
We plan to raise sales by a mid- to high-single-digit percentage on a
currency- and portfolio-adjusted basis
We anticipate negative currency effects of about 3%
We plan to increase EBITDA before special items by a low single-digit
percentage, allowing for negative currency effects of approx. €150m
• Bayer Investor Presentation • Meet Management • March 2014Page 145
Assuming average FX rates of Q4‘13 (USD 1.36)
148. CropScience – Above Market Growth at
Benchmark Profitability
Page 146
2013
Guidance
2014
Aspiration
2016
Sales Increase €8.8bn Mid- to high-single-digit %
(neg. FX effect approx. -3%)
6% CAGR
Adj. EBITDA Increase €2.2bn Low-single-digit %
(neg. FX effect approx. -€150m)
Adj. EBITDA Margin 25.5% - 24-25%
Assuming average FX rates of Q4‘13 (USD 1.36)
Sales ∆ % Fx & portf. adjusted, margin = EBITDA before special items to sales
• Bayer Investor Presentation • Meet Management • March 2014
149. Increasing demand for innovative and
sustainable agricultural solutions
Expansion of production capacity of
for herbicide glufosinate-ammonium
Broadening seeds infrastructure for
soybean and wheat
Expanding and modernizing R&D
facilities
CAPEX expansion to
€2.4bn for 2013 - 2016
Stepping Up Investment Plans to Fuel
Future Growth
• Bayer Investor Presentation • Meet Management • March 2014Page 147
Capital Expenditures (PPE only, in €m)
303
453
~620
2012 2013 2014e
151. MaterialScience –
Leading Positions in All Segments
• Bayer Investor Presentation • Meet Management • March 2014
* aliph. isocyanates
MaterialScience €11,238m
Polyurethanes
€6,054m
#1-2; approx. 19-24% market share
54% 6%
23%
17%
Sales in € million
Polycarbonates
€2,640m
#1; approx. 27% market share
Coatings, Adhesives, Specialties
€1,863m
#1; >40% market share*
Industrial Operations
€681m
Sales Split by Segment 2013
Page 149
152. MaterialScience –
Global Production Network
• Bayer Investor Presentation • Meet Management • March 2014Page 150
*Market share based on estimated sales following self-assessment
# Europe, Middle East & Africa
Headquarters
Major Production Sites
Downstream Businesses
Position*
Americas
# 1 # 2 # 1
PUR PCS CAS
Position*
EMEA#
# 1 # 1 # 1
PUR PCS CAS
Position*
Asia/Pacific
# 2-3 # 1-2 # 1
PUR PCS CAS
153. • Bayer Investor Presentation • Meet Management • March 2014Page 151
Automotive
Other industries*
Construction Furniture / Wood Electro / Electronics
19% 18% 15%21%
MaterialScience –
Sales By Key Customer Industries
Bayer MaterialScience sales by industry in 2013
= 73% +
Chemicals
*sports/leisure, cosmetics, health
10% 17%
154. MaterialScience as an Integrated Solution
Provider
• Bayer Investor Presentation • Meet Management • March 2014Page 152
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
157. FY 2013 –
Regional Sales Development
• Bayer Investor Presentation • Meet Management • March 2014
Emerging EconomiesFY 2013 Sales
MaterialScience €11,238m; 0%
Latin
America
Eastern
Europe
Africa &
Middle East
Emerging
Asia³
~2,670
-1%
~870
+0.5%
~680
+1.5%
~530
-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
USA
+3%
36%
42%
Emerging
Economies¹
-1%
4%
Others²
+7%
Sales in € million; ∆% y-o-y Fx adjusted
20%
33%
42%
5%
Page 155
Western
Europe -1%
158. • Bayer Investor Presentation • Meet Management • March 2014Page 156
Aspire to Earn a Premium Over
Cost of Capital
159. • Bayer Investor Presentation • Meet Management • March 2014Page 157
Cash Generation in Excess of Own
Investment Need…
2002 and 2003 as reported in 2004 excluding acquisitions or divestments
In € million
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
902
1,108
464
1,113
332
498
715
1,388
690
1,281
870
672
1,147
782
504 498
565
775763
849
621
735
CapEx (cash-relevant)
Net Cash Flow
~€4bn Free Operating Cash Flow in 12 years
Free Operating Cash Flow
206 649
166
673
592
277
110
345
265 210
114
559
977 418
160. • Bayer Investor Presentation • Meet Management • March 2014Page 158
…But Selling Price Increases & Savings Not
Sufficient to Protect Earnings
Market growth trends intact, key
products on average 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
running efficiency initiative
2010 2011 2012 2013
Sales Adj. EBITDARaw Mat. & Energy Costs CFROI
In € bn
10.2
10.8
11.5
5.4
6.2 6.5
1.4 1.2 1.3
6%
8%
11.2
6.6
1.1
6%6%
161. • Bayer Investor Presentation • Meet Management • March 2014Page 159
Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales
Higher Asset Utilization & Efficiency
Measures to Drive Performance
2013
Target 2014*
Aspiration 2016
*Assuming average FX rates of Q4‘13 (USD 1.36)
#after reproduction
Sales +0.4% to €11.2bn
(volumes +1%)
Adj. EBITDA -15% to
€1,072m
CFROI# 5.5% < WACC
6.9%
Sales: mid-single-digt %
growth (cpa.)
Adj. EBITDA: increase
(incl. -€50m from FX)
Q1‘2014 vs Q1‘2013:
sales to increase and
adj. EBITDA to gain
significantly
Grow business (volume)
above global GDP
Defend market leading
positions in PCS and PUR
Realize 150bp margin
contribution through new
efficiency initiative (by
2015)
Optimize asset structure
in Germany
CFROI# > WACC
162. Planning Assumptions for 2014 –
Economy and Key Customer Industries
21%
18%
27%
19%
Automotive
(+5%)
Electro /
Electronic
(+6%)
Construction
(+4%)
Furniture
(+4%)
Others
(incl.
Chemicals)
3.3
1.3
1.8
2.7
5.3
4
3
2
1
5
GDP growth % prev. year
15%
Sales by industry 2013 and expected 2014 growth
Global Economic GDP Outlook Key Customer Industries Outlook
• Bayer Investor Presentation • Meet Management • March 2014Page 160
Brent crude oil is budgeted at an average of $110 per bbl for 2014
163. • Bayer Investor Presentation • Meet Management • March 2014Page 161
Profitability Improvement Through New
Efficiency Initiative Until 2015
New efficiency initiative, started in 2013, targets to improve cost structure and to
increase adjusted EBITDA margin by 150bp
Initiative comprises more than 100 measures across the entire value chain
Fresh savings realized as expected – plus ~50bps in 2013 margin*
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
* adjusted EBITDA margin
164. Process Technology Advances Lower Cost &
Save Energy
• Bayer Investor Presentation • Meet Management • March 2014
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
started mid 2013
Page 162
165. • Bayer Investor Presentation • Meet Management • March 2014Page 163
Focus on Capital Discipline
DepreciationCapEx (PPE only)
813
600 598
460
599 601
2008 2012 2013 2014e
In € million
CapEx vs Depreciation CapEx Strategy
Investment focus on utilization
improvement
Investment in efficiency is the basis
for future profitable growth
CapEx brought successfully down on
depreciation level
Target to stay around this level for
the foreseeable future
166. • Bayer Investor Presentation • Meet Management • March 2014Page 164
Capitalizing on Global
Megatrends
1990 2000 2020e 2050e
5.3
6.1
7.7
9.2 billion people
167. • Bayer Investor Presentation • Meet Management • March 2014Page 165
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
168. Increased Energy Efficiency in Cars Through
Polycarbonates
• Bayer Investor Presentation • Meet Management • March 2014
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
84m light vehicles* produced
globally in 2013, estimated
CAGR until 2018: ~5%
*includes cars and light commercial vehicles up to a weight of 6t
Page 166
169. Polyurethane-based Insulation
for Residential & Commercial Buildings
• Bayer Investor Presentation • Meet Management • March 2014
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 insulation in construction
in 2013 approx. €6bn, esti-
mated CAGR until 2018: ~8%
*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
Page 167
170. • Bayer Investor Presentation • Meet Management • March 2014Page 168
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
2013: approx. €2.7bn, 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