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Investor Handout Meet Management 2014 in Leverkusen
 

Investor Handout Meet Management 2014 in Leverkusen

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Investor Handout Meet Management 2014 in Leverkusen

Investor Handout Meet Management 2014 in Leverkusen

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    Investor Handout Meet Management 2014 in Leverkusen Investor Handout Meet Management 2014 in Leverkusen Presentation Transcript

    • Meet Management Conference Leverkusen, March 12, 2014 Marijn Dekkers, CEO Bayer
    • 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 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
    • 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
    • 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
    • • 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
    • 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
    • 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
    • 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%
    • • 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
    • 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%
    • 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
    • Page 11 and beyond Incremental Investments To Achieve New Performance Level • Bayer Investor Presentation • Meet Management • March 2014
    • 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
    • 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
    • Page 14 2013 Sales CAGR 2016e Pharma: Maximize Value of Launch Products • Bayer Investor Presentation • Meet Management • March 2014
    • 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
    • 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
    • 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
    • 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
    • • Bayer Investor Presentation • Meet Management • March 2014Page 19 Aspire to Become the Leading OTC Company
    • • 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
    • • 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
    • • 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%
    • 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
    • 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
    • Page 25 • Bayer Investor Presentation • Meet Management • March 2014 2013 Sales CAGR 2016e CropScience: Further Growth at Benchmark Profitability
    • 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
    • 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
    • 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
    • • Bayer Investor Presentation • Meet Management • March 2014Page 29 MaterialScience: Improve Returns
    • • 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
    • 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
    • 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
    • • Bayer Investor Presentation • Meet Management • March 2014Page 33 Complement Organic Growth with Targeted Bolt-On Acquisitions
    • 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)
    • 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
    • Page 36 Appendix • Bayer Investor Presentation • Meet Management • March 2014
    • 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
    • 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
    • FY 2013 – HealthCare Page 39 *before special items 2013 Sales Earnings Pharma +4% (+9%) Consumer Health -1% (+3%) 36% HealthCare €18,924m; +2% (+7%) 11,1887,736 Price +1% Volume +6% Fx -6% Portfolio +1% In € million, ∆% yoy, () = Fx & portf. adjusted FY‘12 FY‘13 FY‘12 FY‘13 3,232 3,490 1,887 1,844 +8% -2% 5,119 5,334 +4% 1,460 -3% 3,787 3,973 +5% 2,327 1,421 Adj. EBITDA* Adj. EBIT* 2,552 +10% • Bayer Investor Presentation • Meet Management • March 2014
    • FY 2013 – CropScience Page 40 Crop Protection +7% (+11%) Environmental Science -4% (+1%) *before special items Seeds +1% (+1%) 2013 Sales Earnings In € million, ∆% yoy, () = Fx & portf. adjusted CropScience €8,819m; +5% (+9%) Price +3% Volume +7% Fx -5% Portfolio +1% 7,194 FY‘12 FY‘13 FY‘12 FY‘13 2,025 2,248 +11% 1,543 1,801 +17% Adj. EBITDA* Adj. EBIT* 651 974 • Bayer Investor Presentation • Meet Management • March 2014
    • FY 2013 – MaterialScience Page 41 2013 Sales Earnings In € million, ∆% yoy, () = Fx & portf. adjusted MaterialScience €11,238m; -2% (0%) Price 0% Volume +1% Fx -2% Portfolio 0% 6,054 FY‘12 FY‘13 FY‘12 FY‘13 Adj. EBITDA* Adj. EBIT* 1,263 1,072 -15% 613 429 -30% Polycarbonates -6% (-5%) CAS** -6% (-2%) 2,640 IO*** -4% (-4%) 1,863 681 Polyurethanes +1% (+4%) **CAS: Coatings, Adhesives, Specialties *** IO: Industrial Operations*before special items • Bayer Investor Presentation • Meet Management • March 2014
    • FY 2013 – Cash Flow And Net Debt Development Page 42 -€0.3bn 6.7 GCF oFCF 5,832 Invest- ments 2,157 3,014 ∆ y-o-y +28% +16% NCF 5,171 +14% +12% Dec 31, 2012 Dec 31, 2013 7.0 FY 2013 Cash Flow Net Debt Development Cash Flow in € million, Net Debt in € billion • Bayer Investor Presentation • Meet Management • March 2014
    • Investor Handout – Meet Management Bayer HealthCare March 2014 – Leverkusen
    • 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
    • FY 2013 – Growth Mainly Pharma Driven • Bayer Investor Presentation • Meet Management • March 2014 *before special items FY 2013 HealthCare Sales Earnings Pharma +4% (+9%) Consumer Health -1% (+3%) 36% 11,1887,736 In € million, ∆% yoy, () = Fx & portf. adjusted FY 12 FY 13 FY 12 FY 13 3,232 3,490 1,887 1,844 +8% -2% 5,119 5,334 +4% 1,460 -3% 3,787 3,973 +5% 2,327 1,421 Adj. EBITDA* Adj. EBIT* 2,552 +10% HealthCare €18,924m; +2% (+7%) Price +1% Volume +6% Fx -6% Portfolio +1% Page 45
    • 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
    • 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%
    • 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)
    • • Bayer Investor Presentation • Meet Management • March 2014Page 49 2013 Sales CAGR 2016e Pharma: Maximize Value of Launch Products
    • 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*:
    • 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
    • • Bayer Investor Presentation • Meet Management • March 2014 Peak Sales Potential of Launch Products Raised Peak Sales Potential* * from 5 recently launched products: Xarelto, Eylea, Stivarga, Xofigo, Adempas Page 52
    • 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
    • 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
    • • 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
    • 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
    • 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
    • • 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
    • 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
    • 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
    • • 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
    • 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
    • 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
    • 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)
    • Page 65 Accelerating the Development of 5 early/mid-stage Pipeline Assets • Bayer Investor Presentation • Meet Management • March 2014 R&D
    • 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
    • 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
    • • 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
    • • 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
    • • 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
    • • 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(%)
    • • 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
    • • 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
    • • 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
    • • 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
    • • 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)
    • • 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
    • • 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 :
    • 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
    • • Bayer Investor Presentation • Meet Management • March 2014 Established Pharma Products Page 80
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • • 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
    • 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
    • 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
    • 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
    • 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
    • • Bayer Investor Presentation • Meet Management • March 2014Page 92 Aspire to Become the Leading OTC Company
    • • 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
    • • 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
    • • 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%
    • • 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
    • • 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%
    • • 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
    • • 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%
    • • 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.
    • • 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
    • • Bayer Investor Presentation • Meet Management • March 2014Page 102 Animal Health – Operating in an Attractive Market Environment
    • • 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%
    • • 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
    • • 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
    • • 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
    • • Bayer Investor Presentation • Meet Management • March 2014Page 107 Selected R&D Activities New formulations Antimicrobials Pharmaceutical SpecialtiesParasiticides Focus to improve:  Convenience  Efficacy  Safety  Antibiotics (Quinolones)  Dairy Health  Respiratory Diseases Products  Allergy & Inflammation  Chronic Kidney Disease  Ecto- parasiticides  Endo- parasiticides  Endecto- parasiticides R&D Investment approx. 10% of turnover
    • • Bayer Investor Presentation • Meet Management • March 2014Page 108 Medical Care – Diabetes Care and Radiology & Interventional DC R&I
    • • 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
    • • 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
    • • 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
    • Investor Handout – Meet Management Bayer CropScience March 2014 – Leverkusen
    • 18% 25% 11% 11% 7% 28% Sales 2013: €8,819m Insecticides€1,622m Market position: Fungicides€2,195m 3Market position: SeedGrowth€921m 1-2Market position: Herbicides €2,456m 3-4Market position: Env. Science €651m 1Market position: Seeds €974m 7Market position: Page 113 CropScience – A Leader in Chemical Crop Protection • Bayer Investor Presentation • Meet Management • March 2014 1 Market positions preliminary, based on company reportings
    • 25% 22% 14% 12% 8% 6% 6% 4%3% Fruits & Vegetables CerealsOilseeds Soy Corn Cotton Rice Sugar Crops * by major crop groups excluding industrial business and non-agricultural solutions CropScience Sales 2013* Other Fruits, Vegetables and Cereals – A Major Part of Our Portfolio • Bayer Investor Presentation • Meet Management • March 2014Page 114
    • Leading the Way in Integrated Crop Solutions Integrated Crop Solutions Chemical Crop Protection Biological Crop Protection Seeds  Herbicides  Fungicides  Insecticides  SeedGrowth  Microorganisms  Microbial extracts  Canola, cotton, rice, vegetables, soy, wheat  Conventional seeds  GMO seeds  Traits  Weed, pest & disease control  Stress tolerance Better harvest with improved:  Yield  Quality  Processability  Sustainability GMO: Genetically modified organism • Bayer Investor Presentation • Meet Management • March 2014Page 115
    • • Bayer Investor Presentation • Meet Management • March 2014Page 116 Strong Growth at Record Margin
    • FY 2013 – Strong Growth at Record Margin Page 117 Crop Protection +7% (+11%) Environmental Science -4% (+1%) *before special items Seeds +1% (+1%) 2013 Sales Earnings In € million, ∆% yoy, () = Fx & portf. adjusted CropScience €8,819m; +5% (+9%) Price +3% Volume +7% Fx -5% Portfolio 0% 7,194 FY‘12 FY‘13 FY‘12 FY‘13 2,025 2,248 +11% 1,543 1,801 +17% Adj. EBITDA* Adj. EBIT* 651 974 24.2% 25.6%Margin • Bayer Investor Presentation • Meet Management • March 2014
    • 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
    • • 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
    • 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
    • • Bayer Investor Presentation • Meet Management • March 2014Page 121 Customer-Centric Strategy Pays Off
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • • Bayer Investor Presentation • Meet Management • March 2014Page 134 Translating R&D Effectively into Sales From to €
    • 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
    • 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
    • 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)
    • 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
    • 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
    • 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
    • Page 141 • Bayer Investor Presentation • Meet Management • March 2014 2013 Sales CAGR 2016e Further Growth at Benchmark Profitability
    • 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
    • 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
    • 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
    • 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)
    • 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
    •  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
    • Investor Handout – Meet Management Bayer MaterialScience March 2014 – Leverkusen
    • 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
    • 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
    • • 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%
    • 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
    • • Bayer Investor Presentation • Meet Management • March 2014Page 153 Performance Below Expectations
    • • Bayer Investor Presentation • Meet Management • March 2014 FY 2013 – Operating Performance 25% 6,054 2,640 Polycarbonates -6% (-5%) Polyurethanes +1% (+4%) Adjusted EBITDA* * before special items Adjusted EBIT* FY 2013 Sales Earnings 1,863 681 In € million; ∆% y-o-y, () Fx & portfolio adj. Coatings, Adhesives, Specialties -6% (-2%) Industrial Operations -5% (-4%) Price 0% Volume +1% Fx -2% Portfolio 0% MaterialScience €11,238m; -2% (0%) Page 154 FY 12 FY 13 FY 12 FY 13 1,263 1,072 -15% 613 429 -30%
    • 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%
    • • Bayer Investor Presentation • Meet Management • March 2014Page 156 Aspire to Earn a Premium Over Cost of Capital
    • • 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
    • • 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%
    • • 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
    • 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
    • • 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
    • 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
    • • 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
    • • 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
    • • 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
    • 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
    • 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
    • • 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
    • PU-Dispersion PU Leather Production • Bayer Investor Presentation • Meet Management • March 2014  4 billion square meters of PU leather produced worldwide using solvent-based (DMF) process  Global apparel & footwear brands have strong focus on finding best chemistry to minimize impact on people & the environment  First projects moved into commercial trial stage, launch in the market expected in 2014 DMF: dimethyl formamide Page 169  PU leather is an important class of material used in footwear, apparel & accessory for fashion and sportswear as well as in automotive seating  Impranil® PUD are polyurethane resins supplied in water instead of solvent  They enable a new PU leather production process also with no solvent and significantly reduced water and energy consumption Status & growth drivers
    • PU-Dispersion as a Key Component for Earthquake Wallpaper • Bayer Investor Presentation • Meet Management • March 2014 Status & growth drivers  Development together with the Karlsruhe Institute of Technology (KIT) and KAST (manufacturer of the “wallpaper”)  Patent filed and granting pending  1.3bn people live in regions at risk for earthquakes  System developed to retrofit existing buildings (e.g. hospitals and schools)  First commercial sales expected in 2014 Page 170  The EQ-Top system features a tear-resistant woven fabric applied with an adhesive directly to the wall, forming a permanent bond  In the event of an earthquake, the “wallpaper” holds large areas of the masonry together  The key component of the system is the adhesive formulated with our Dispercoll® U, a waterborne polyurethane dispersion