Presentation for the Bayer AG Investor Conference Call on 2014-09-18: Transforming Bayer into a Pure Life Science Company - Exit of MaterialScience

1. Transforming Bayer into a
Pure Life Science Company -
Exit of MaterialScience
September 18, 2014 / Marijn Dekkers, CEO
Page 1 • Investor Conference Call • Marijn Dekkers • September 18, 2014

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.
Page 2 • Investor Conference Call • Marijn Dekkers • September 18, 2014

3. Transforming Bayer Into a Pure Life Science
Company
 Bayer to focus its strategy on being a global leader in the
Life Sciences
 Planned capital-market exit of MaterialScience within next
12-18 months
 MaterialScience has the potential to deliver significant value
as a stand-alone business
 Demerger will strengthen both Bayer’s and MaterialScience’s
capabilities to adequately invest and develop their portfolios
Page 3
• Investor Conference Call • Marijn Dekkers • September 18, 2014

4. Life Science Businesses Dominate Portfolio
With Almost 90% Earnings Contribution
Sales in EUR bn1 Adjusted EBITDA in EUR bn1
Material
Science
39.0
11.2
8.8
18.9
2013
31.1
10.4
5.8
14.8
2007
8.7
1.1
2.2
5.3
2013
1 Excluding Reconciliation; adjusted = pre special items
6.7
1.6
1.3
3.8
2007
Page 4
Share of
66% 71% Life Sciences 76% 88%
Crop
Science
Health
Care
Material
Science
Crop
Science
Health
Care
• Investor Conference Call • Marijn Dekkers • September 18, 2014

5. In Recent Years We Have Built a
World-Class Life Science Business
Developed and successfully
launched 5 new products,
strengthened R&D and
commercial capabilities
One of the fastest-growing
global
pharma companies
Slow-growing pharma
business, potentially
transformational
pipeline
Maintaining OTC
leadership in a
consolidating industry
Top-line performance
at CropScience
Execution of emerging
market focus strategy
and Merck & Co., Inc.
(USA) CC* acquisition
New go-to-market approach,
significant R&D and seed
investments
Gained market
share and defended
strong #2 position
3½ years in a row
with almost double-digit
sales growth
Page 5 • Investor Conference Call • Marijn Dekkers • September 18, 2014
*Consumer Care; pending
Challenges in 2010 Measures taken Today
CropScience HealthCare

6. Going Forward It Will Be Increasingly Challenging To
Adequately Resource Both Businesses In One Group
LifeSciences MaterialScience
• High and further increasing
investment requirements in
R&D and commercialization
• Funding needs for inorganic
growth to participate
in industry consolidation
• Significant investments into
capacity expansions
Page 6
• Continuous need for
significant capacity
expansions to maintain scale
• Need for further production
process improvements to
maintain cost leadership
• Opportunity for more active
portfolio management
Funding of high investment needs in Life Sciences, with consistently better
returns, limits the availability of resources for MaterialScience to develop its own
leadership position and portfolio
• Investor Conference Call • Marijn Dekkers • September 18, 2014

7. Stand-Alone Solution Enables Material
Science to Leverage Competitive Edge
Page 7
 Ability to further develop own portfolio
 Autonomous funding capability
 Opportunity to develop a culture
fitting with the business
 Tailored business processes and
incentive systems
Strong fundamentals for successful
operations…
 Leading #1 & #2 positions in
attractive, growing markets
 Broad customer base
 Global production network providing
customer proximity
 State-of-the art process technology
 Significant investments in new plants
during recent years
MaterialScience has the potential to deliver significant value creation
as a stand-alone business
• Investor Conference Call • Marijn Dekkers • September 18, 2014
... better leveraged as a separate
company

8. Design of Planned Capital-Market Exit
H2 2014 2015 H1 2016
 09/18 Supervisory
Board Decision -
Exit MaterialScience
 Preparation of pro-forma financials
 Design of MaterialScience New
 Legal carve-out
 Expected first trading day
of MaterialScience New
shares
• Targeted time frame for capital-market exit: 12-18 months
• Timing and structure of capital-market exit option depending on future
market environment
• Investment of any potential proceeds mainly in Life Science businesses/
reduction of net debt
Page 8
Unhindered business operations safeguarded during exit preparation
• Investor Conference Call • Marijn Dekkers • September 18, 2014

9. Key Financial Metrics
Key metrics
(2013 preliminary pro-forma estimates) Bayer New MaterialScience New
Page 9
• Investor Conference Call • Marijn Dekkers • September 18, 2014
€ bn € bn
Sales 29.3 11.3
EBITDA pre-special items 7.3 1.0
EBITDA margin pre-special items 24.8% 9.1%
R&D 3.0 0.2
FTE (approx.) 99,000 16,800

10. The Demerger of MaterialScience Will
Secure a Successful Future for Both…
Page 10
MaterialScience New
… as a Continued Market
Leader Under New Ownership
… as an Innovation and
Life Science Company
 Build further on 150 years of success
in Science and Innovation
 Address attractive markets with high
growth rates and profitability
 Leverage broad product portfolio with
strong brand reputation
 Focus management on Life Sciences
 All prerequisites given to succeed
 Staffed with required know-how
 Autonomous access to capital
 Competitive edge better leveraged
outside the group with tailored
processes and portfolio decisions
• Investor Conference Call • Marijn Dekkers • September 18, 2014

11. Transforming Bayer into a
Pure Life Science Company -
Exit of MaterialScience
September 18, 2014 / Marijn Dekkers, CEO
Page 11 • Investor Conference Call • Marijn Dekkers • September 18, 2014