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Meet management 2013-10-08_investor_handout_web_slideshare

  1. 1. Meet Management 2013 London, October 8, 2013 Investor Handout
  2. 2. Disclaimer This presentation may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayer’s public reports which are available on the Bayer website at www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.
  3. 3. • Bayer Investor Presentation • Meet Management • October 2013Page 1 Our Mission – Innovation and Customer Value  Bayer is an innovation company  With a strong “innovation portfolio”  Addressing new growth areas  Capable of identifying and using breakthrough innovations  Bayer is innovative in many ways: Products, technologies, processes, business models, strategies  Bayer products improve the quality of people’s lives  Bayer has an excellent understanding of human, animal and plant health, as well as of high-quality materials  Respect for people and nature is an essential part of our values Science / Innovation Better Life Science For A Better Life
  4. 4. • Bayer Investor Presentation • Meet Management • October 2013Page 2 Our Business Portfolio – Leading in Its Markets Break-down excluding reconciliation Sales 2012: €39.7bn CropScience Chemical crop protection & biologicals, global #2, seeds & traits €8.4bn MaterialScience Polyurethanes and polycarbonates, global #1/2 €11.5bn HealthCare Pharmaceuticals €10.8bn, leading positions in core indications Consumer Health €7.8bn, OTC pharmaceuticals, blood glucose meters, contrast media and veterinary medicines, global #2-5 €18.6bn 22% 30% 48%
  5. 5. • Bayer Investor Presentation • Meet Management • October 2013Page 3 Life-Sciences Generate Vast Majority of Group Sales and Earnings 22% 30% 45% 85% 15% Sales 2012 Adj. EBITDA 2012* Human Health 3% Breakdown excluding Reconciliation Material Science Animal Health Life- Sciences Material Science *EBITDA before special items Plant Health
  6. 6. Page 4 • Bayer Investor Presentation • Meet Management • October 2013 Business Highlights
  7. 7. Page 5 1H 2013 – Business Highlights • Bayer Investor Presentation • Meet Management • October 2013  Strong growth momentum at Life-Sciences  Full-year 2013 new pharma product sales target raised to ~€1.4bn  Weak performance at MaterialScience in a challenging environment  Full-year 2013 outlook maintained
  8. 8. EBIT in € million +29% 3,058 2,371 Sales in € million % currency & portfolio adj. +4% 20,62620,220 EBITDA adjusted** in € million +1% 4,6484,612 Core EPS in € +4% 3.243.12 *Prior-year figures restated **before special items 1H’131H’12* 1H’131H’12* 1H’131H’12* 1H’131H’12* 1H 2013 – Performance Driven by Life-Science Businesses • Bayer Investor Presentation • Meet Management • October 2013Page 6
  9. 9. FY 2013 Financial Outlook Maintained Even Though Increasingly Ambitious After Q2 Results Page 7 20121 2013E Sales €39.7bn +4-5% to ~€40-41bn* adj. EBITDA €8.3bn mid-single-digit % increase Core EPS €5.30 high-single-digit % increase Sales ∆ Fx and portfolio adjusted, EBITDA before special items *Assuming average Fx rates of H1 2013 Outlook depends on specific planning assumptions as detailed in the Annual Report 1 2012 figures restated • Bayer Investor Presentation • Meet Management • October 2013
  10. 10. Strategic Priorities Page 8 • Bayer Investor Presentation • Meet Management • October 2013 Pharma: Successfully commercialize new products, invest in life- cycle management and mid-early pipeline 1. 2. 3. 4. Consumer Health: Aspire to become #1 OTC company CropScience: Above market growth at benchmark profitability; expand production capacities MaterialScience: Improve returns
  11. 11. Page 9 • Bayer Investor Presentation • Meet Management • October 2013 2012 CAGR 2015e Pharma: Sales Growth Acceleration Driven by New Products
  12. 12. • Bayer Investor Presentation • Meet Management • October 2013Page 10 20 15 10 5 19.3% 15.4% 1.1% Xarelto 0 Xarelto – Outperforming Competition, Exceeding Expectations  Best-in-class launch in Germany, Brazil, Switzerland and Belgium  Uptake significantly exceeding expectations  New sales target 2013: >€800m (prev.: ~€600m)  Broadest label of novel oral anticoagulants with once-daily- dosing advantage2 Sales market share in % (retail & hospital combined) 01/2012 07/2013 apixaban dabigatran 1 Oral anticoagulant; 2 exception 15mg BID dosing for treatment of acute DVT/PE or 2.5mg BID for ACS sec. prevention Xarelto – Leading Novel OAC1 Globally
  13. 13. Pharma Launches in Full Swing Page 11 • Bayer Investor Presentation • Meet Management • October 2013 Commercial HighlightsCommercial Highlights  Market leadership in Japan and Australia with ~50% market share  Rapid adoption in switch and naïve patients in reimbursed markets  Strong momentum continues; ~15,000 patients treated1  Approval in EU for treatment of mCRC (08/13)  First commercialized alpha-radiopharmaceutical product  Positive early feedback from launch in the US (473 patient-ready centers2), positive CHMP opinion for approval in EU  Submitted for PAH and CTEPH  Positive FDA AdCom recommendation, approved in Canada (09/13) CTEPH: Chronic thromboembolic pulmonary hypertension; PAH: Pulmonary arterial hypertension 1 As of September 2, 2013; 2 As September 20, 2013
  14. 14. New Launch Products Have a Business Transforming Potential • Bayer Investor Presentation • Meet Management • October 2013 Combined* Peak Sales Potential >€5.5bn Rivaroxaban AfliberceptRegorafenib Radium-223 dichloride Riociguat 2011 2012 2012 2013 2013 *Combined peak sales potential for Xarelto, Stivarga, Eylea, Xofigo and Riociguat assuming approvals and launches plannedPage 12 >€2bn ≥€1bn ≥€1bn ≥€1bn ≥€500m Launch in first/main indication
  15. 15. Comprehensive Life-Cycle Management for New Launch Products  Two phase III trials in additional indications underway1  Additional research to strengthen profile in SPAF2 Table shows major examples Page 13 • Bayer Investor Presentation • Meet Management • October 2013  Strengthening of profile beyond wAMD  Evaluate potential for additional cancers of the gastro-intestinal tract  Phase III trial in 2nd-line liver cancer underway  Expanding Xofigo’s position in castration-resistant prostate cancer, i.e. combination with abiraterone, and to other cancers  Realize the potential beyond PAH and CTEPH  Evaluate the clinical profile in new disease areas like systemic sclerosis 1 Coronary artery disease / peripheral artery disease; chronic heart failure and coronary artery disease, 2 Atrial fibrillation with percutaneous coronary intervention; nonvalvular atrial fibrillation and cardioversion
  16. 16. Phase III Phase III Phase III Targeting to Progress Five New Pipeline Assets into Phase III by 2015 • Bayer Investor Presentation • Meet Management • October 2013Page 14 2013 2014 2015 Finerenone Phase IIb in worsening chronic heart failure and phase II in diabetic nephropathy Copansilib Phase II in indolent or aggressive non-hodgkin's lymphomas sGC- Stimulator Phase IIb program in heart failure sPRM Phase III in uterine fibroids Phase IIIMolidustat DIALOGUE phase IIb program in renal anemia Timeline reflects planned phase III initiation PI3-Kinase Inhibitor MR Antagonist HIF-PH Inhibitor S-PRAnt
  17. 17. • Bayer Investor Presentation • Meet Management • October 2013Page 15 Aspire to Become the Leading OTC Company
  18. 18. OTC – Strategy for Growth • Bayer Investor Presentation • Meet Management • October 2013 2012 2015e OTC Sales Target 2015* €3.5bn >€4.0bn *assuming €/$ of 1.29 Organic growth >4% CAGR Growth Strategy  Maximize brand potential  Global expansion of key brands  Exploit our innovation pipeline  Double proportion of new products‘ sales until 2015  Grow in emerging markets  Increase commercial power  Bolt-on acquisitions to strengthen portfolio & regional set-up Page 16
  19. 19. Strengthening HealthCare Through Selected Acquisitions Significant synergies expected from leveraging Bayer’s existing Women’s Healthcare business Significant sales synergies expected due to Bayer’s complementary Consumer Care business  US-based company providing the leading non-surgical permanent birth control method (Essure ®) proven by >700,000 procedures  Sales 2012: ~USD 140m*  Transaction value: €780m  Germany-based specialist in pharmacy- only herbal medicines, bringing in a leading herbal expertise  Sales 2012: €61.3m  Transaction value: €222m Conceptus: Permanent birth control Steigerwald: Herbal medicines • Bayer Investor Presentation • Meet Management • October 2013Page 17 *USD reporting
  20. 20. Page 18 • Bayer Investor Presentation • Meet Management • October 2013 2012 CAGR 2015e CropScience: Targeting Above Market Growth at Benchmark Profitability
  21. 21. Translating R&D Effectively into New Product Sales for CropScience Page 19 0.02 0.3 0.7 1.1 ~1.4 ~1.9 2007 2009 2011 2012 2013e 2015e +60% Sales from new Crop Protection products launched since 2006 in €bn ∆% y-o-y, () Fx adj. • Bayer Investor Presentation • Meet Management • October 2013  (+19%) - Superior ‘all-in-one’ cereal fungicide with yield-boosting effect  herbicide (+35%) - Excellent weed control in corn and cereals, also in case of glyphosate resistance  (+64%) - Broad-spectrum insecticide with fast, long-lasting action  - New fungicide now available in several key markets 1H 2013 Highlights
  22. 22. 303 ~520 ~620 ~660 600 2012 2013e 2014e 2015e 2016e  Increasing demand for innovative and sustainable agricultural solutions  Construction of US production plant1 for herbicide glufosinate-ammonium  Expanding seeds infrastructure for soybean and wheat  Expanding and modernizing R&D facilities  CAPEX expansion to €2.4bn for 2013 - 2016 Stepping Up Investment Plans for Capacity Expansion at CropScience • Bayer Investor Presentation • Meet Management • October 2013Page 20 1About €380m investment, start of production expected Q4 2015 Capital Expenditures (PPE only, in €m)
  23. 23. • Bayer Investor Presentation • Meet Management • October 2013Page 21 Bolt-on Acquisitions to Strengthen CropScience Portfolio Region Technology Product / Portf. Biologics  Hornbeck (04/11) €30m US Seeds, Breeding Germplasm Soybean Seeds  AgraQuest (07/12) ~€375m > 30 countries Biologics Fungicides Insecticides  Raps GbR (10/11) €26m  Wehrtec, Wehrmann (03/13) €37m + milestones Seeds Germplasm Soybean  Abbott & Cobb (07/12) ~€43m US Seeds Watermelon Melon  Prophyta (01/13) €25m (provisional) Germany Biologics Fungicides Nematicides Europe Seeds, Breeding Oilseed rape Brazil
  24. 24. • Bayer Investor Presentation • Meet Management • October 2013Page 22 MaterialScience: Aspire to Earn a Premium Over Cost of Capital
  25. 25. • Bayer Investor Presentation • Meet Management • October 2013Page 23 Selling Price Increases & Savings Not Sufficient to Protect Earnings  Market growth trends intact, key products with mid-single digit volume growth  High raw material prices and significant capacity additions led to global overcapacities and margin pressure  Going forward demand & supply balance expected to improve  Anticipated margin improvement supported by fresh savings from new efficiency initiative 2010 2011 2012 Sales Adj. EBITDARaw Mat. & Energy Costs CFROI In € bn 10.2 10.8 11.5 5.4 6.2 6.6 1.4 1.2 1.3 6% 6% 8%
  26. 26. • Bayer Investor Presentation • Meet Management • October 2013Page 24 Profitability Improvement Through New Efficiency Initiative Until 2015  New efficiency initiative improves cost structure and increases adjusted EBITDA margin by 150bp  Initiative comprises more than 100 measures across the entire value chain Examples Business Units  Consolidation of system houses  Pricing excellence programs Organization  Optimization of regional structures (e.g. Canada & US) Production  Further initiatives to improve asset productivity (e.g. maintenance schedules, engineering setup) Supply Chain  Optimization of logistics services Selling & Administration  Further reduce costs by leveraging established global ERP platform and standardized processes ERP: enterprise resource planning
  27. 27. Optimistic About Future Developments Excellent new product launch execution 1H 2013: Business performance driven by Life-Sciences FY 2013 Outlook Maintained • Bayer Investor Presentation • Meet Management • October 2013Page 25 Additional investments in R&D and production capacities
  28. 28. Page 26 Appendix • Bayer Investor Presentation • Meet Management • October 2013
  29. 29. Page 27 HealthCare – Building Growth Momentum, Improving Margins ¹ Xarelto, Eylea, Stivarga, Xofigo, Riociguat; subject to regulatory approval *Assuming Fx rates of 1H 2013 Outlook depends on specific planning assumptions as detailed in the Annual Report Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales • Bayer Investor Presentation • Meet Management • October 2013 Priority 2012 Target 2013* Aspiration 2015  HealthCare: Accelerate sales growth €18.6bn  Pharma: Successfully commercialize new products and realize emerging markets (EM) opportunity  New product sales¹  EM growth  Consumer Health: Aspire to become #1 OTC company €7.8bn ~€9bn  HealthCare: Improve margins  Pharma  Consumer Health 27.5% 29.9% 24.2% slightly up up below PY towards 29% ≥31% ~25% €10.8bn €368m 7.3% high-single-digit % to >€11bn ~€1.4bn high-single digit % CAGR ~7% towards €13bn >€2.5bn high-single digit % CAGR ~6% towards €22bn mid-single-digit % to ~€8bn mid-single-digit % to ~€19bn
  30. 30. Q2 2013 – HealthCare: New Products and Consumer Care Drive Growth Page 28 *before special items Q2 2013 Sales Earnings1 Pharma +6% (+10%) Consumer Health +1% (+4%) 36% HealthCare €4,800m; +4% (+8%) 2,8311,969 Price 0% Volume +7% Fx -4% Portfolio 0% In € million, ∆% yoy, () = Fx & portf. adjusted Q2‘12 Q2‘13 Q2‘12 Q2‘13 810 921 438 407 +14% -7% 1,248 1,328 +6% 330 -8% 902 987 +9% 572 302 Adj. EBITDA* Adj. EBIT* 685 +20% 1 Prior-year figures restated• Bayer Investor Presentation • Meet Management • October 2013
  31. 31. Full Year 2012 – HealthCare Page 29 2012 Sales Earnings1 Pharma +9% (+4%) Consumer Health +8% (+4%) 36% HealthCare €18,604m; +8% (+4%) 10,7987,806 Price 0% Volume +4% Fx +4% Portfolio 0% In € million, ∆% yoy, () = Fx & portf. adjusted FY‘11 FY‘12 FY‘11 FY‘12 2,972 3,233 1,730 1,886 +9% +9% 4,702 5,119 +9% 1,325 +10% 3,367 3,788 +13% 2,042 1,460 Adj. EBITDA* Adj. EBIT* 2,328 +14% • Bayer Investor Presentation • Meet Management • October 2013 *before special items 1 Prior-year figures restated
  32. 32. Page 30 CropScience – Above Market Growth at Benchmark Profitability Priority 2012 Target 2013* Aspiration 2015  Above-market sales growth +12.4% to €8.4bn high-single digit % towards €9bn CAGR ~6% towards €10bn  Translate R&D effectively into new product sales (CP products launched since 2006) €1.1bn ~€1.4bn ~€1.9bn  Extend seeds footprint +14%  Maintain industry leading profitability level 24.2% slight improvement ~24% Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales double-digit % growth p.a. CP: Crop Protection *Assuming Fx rates of 1H 2013 Outlook depends on specific planning assumptions as detailed in the Annual Report double-digit % growth • Bayer Investor Presentation • Meet Management • October 2013
  33. 33. Q2 2013 – CropScience: Continued Good Momentum Page 31 Crop Protection +6% (+8%) Environmental Science +2% (+6%) Seeds +4% (+2%) Q2 2013 Sales Earnings1 In € million, ∆% yoy, () = Fx & portf. adjusted CropScience €2,392m; +5% (+7%) Price +2% Volume +5% Fx -3% Portfolio +1% 1,953 Q2‘12 Q2‘13 Q2‘12 Q2‘13 549 624 +14% 435 514 +18% Adj. EBITDA* Adj. EBIT* 193 246 *before special items 1 Prior-year figures restated• Bayer Investor Presentation • Meet Management • October 2013
  34. 34. Full Year 2012 – CropScience Page 32 Crop Protection +16% (+13%) Environmental Science +9% (+5%) Seeds +17% (+14%) 2012 Sales Earnings1 In € million, ∆% yoy, () = Fx & portf. adjusted CropScience €8,383m; +16% (+12%) Price +1% Volume +12% Fx +4% Portfolio -1% 6,741 FY‘11 FY‘12 FY‘11 FY‘12 1,654 2,026 +22% 1,168 1,543 +32% Adj. EBITDA* Adj. EBIT* 680 962 • Bayer Investor Presentation • Meet Management • October 2013 *before special items 1 Prior-year figures restated
  35. 35. Page 33 Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales *Assuming Fx rates of 1H 2013 #after reproduction Outlook depends on specific planning assumptions as detailed in the Annual Report MaterialScience – Higher Asset Utilization & Efficiency Measures Are Driving Performance 2012 Target 2013* Aspiration 2015  Sales +2.9% to €11.5bn (volumes +2%)  Adj. EBITDA +8% to €1,262m  CFROI# 5.7% < WACC 7.1%  Grow business (volume) above global GDP  Defend market leading positions in PCS and PUR  Realize 150 bp margin contribution through new efficiency initiative  Optimize asset structure in Germany  CFROI# > WACC • Bayer Investor Presentation • Meet Management • October 2013  Sales: not quite reach prior-year figure  Adj. EBITDA: below prior- year figure  Q3‘2013 vs Q2‘2013: Sales and adj. EBITDA to increase
  36. 36. Q2 2013 – MaterialScience: Performance Down Year-Over-Year, Up Quarter-Over-Quarter Page 34 **CAS: Coatings, Adhesives, Specialties *** IO: Industrial Operations CAS** -6% (-4%) Q2 2013 Sales Earnings1 In € million, ∆% yoy, () = Fx & portf. adjusted *before special items MaterialScience €2,875m; -3% (-1%) Price -1% Volume 0% Fx -1% Portfolio 0% 1,546 664 IO*** -5% (-4%) Q2‘12 Q2‘13 Q2‘12 Q2‘13 Adj. EBITDA* Adj. EBIT* 383 274 -28% 223 112 -50% 493 172 1 Prior-year figures restated Polyurethanes +2% (+3%) Polycarbonates -9% (-8%) • Bayer Investor Presentation • Meet Management • October 2013
  37. 37. Full Year 2012 – MaterialScience Page 35 2012 Sales Earnings1 In € million, ∆% yoy, () = Fx & portf. adjusted MaterialScience €11,491m; +6% (+3%) Price +1% Volume +2% Fx +4% Portfolio -1% 5,987 FY‘11 FY‘12 FY‘11 FY‘12 Adj. EBITDA* Adj. EBIT* 1,171 1,262 +8% 589 613 +4% Polycarbonates -3% (-7%) CAS** +3% (+4%) 2,819 IO*** +8% (+6%) 1,972 714 Polyurethanes +12% (+8%) • Bayer Investor Presentation • Meet Management • October 2013 **CAS: Coatings, Adhesives, Specialties *** IO: Industrial Operations*before special items 1 Prior-year figures restated
  38. 38. Q2 2013 – Regional Performance: Growth Led By Emerging Economies Page 36 Africa & Middle East Eastern Europe Emerging Economies Emerging Economies¹ +6% Others² +12% USA +1% Western Europe +4% Q2 2013 Group Sales by Region Group €10,360m; +5% ~1,100 +16% ~1,500 +2% ~400 -1%~700 +3% ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern Europe ² Others = Japan, Australia, New Zealand, Canada ³ Emerging Asia = Asia w/o Japan, Australia, New Zealand In € million, ∆% yoy Fx adjusted 37% 11% 31% 21% Latin America Emerging Asia³ • Bayer Investor Presentation • Meet Management • October 2013
  39. 39. Full Year 2012 – Regional Performance Page 37 Africa & Middle East Eastern Europe Emerging Economies Emerging Economies¹ +7% Others² +4% USA +9% Western Europe 0% 2012 Group Sales by Region Group €39,741m; +5% ~4,900 +12%~5,700 +5% ~1,800 0%~2,400 +10% ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern Europe ² Others = Japan, Australia, New Zealand, Canada ³ Emerging Asia = Asia w/o Japan, Australia, New Zealand In € million, ∆% yoy Fx adjusted 37% 11% 31% 21% Latin America Emerging Asia³ • Bayer Investor Presentation • Meet Management • October 2013
  40. 40. Q2 2013 – Cash Flow And Net Debt Development Page 38 +€1.5bn 9.0 GCF oFCF 1,680 Invest- ments 502 1,034 ∆ y-o-y +37% +8% NCF 1,536 +10% +13% March 31, 2013 June 30, 2013 7.5 Q2 2013 Cash Flow Net Debt Development Cash Flow in € million, Net Debt in € billion • Bayer Investor Presentation • Meet Management • October 2013
  41. 41. Full Year 2012 – Cash Flow and Net Debt Development Page 39 7.0GCF oFCF 4,556 Invest- ments 1,930 2,601 ∆ y-o-y -12% -24% NCF 4,531 -10% +20% Dec 31, 2011 Dec 31, 2012 7.0 2012 Cash Flow Net Debt Development Cash Flow in € million, Net Debt in € billion • Bayer Investor Presentation • Meet Management • October 2013
  42. 42. Investor Handout – Meet Management Pharma Pipeline Update October 2013 – London
  43. 43. Maximizing the Value of New Launch Products • Bayer Investor Presentation • Meet Management • October 2013 Delivering Promising Pipeline Assets and Enhancing the Profile of New Products Page 41 ● Comprehensive life-cycle management program underway ● Adding new indications and refining the clincial profile to enhance the long-term growth potential Five New Molecular Entities Selected for Accelerated Development ● Positive proof-of-concept increases confidence in NME-quality ● Targeting to enter phase III by 2015 NME: New molecular entity
  44. 44. • Bayer Investor Presentation • Meet Management • October 2013Page 42 Cardiology  Acute Care Diseases  Vascular Diseases  Heart Diseases  Kidney Diseases Oncology  Cell Cycle / Survival Signaling  Immunotherapy / Antibody- Drug Conjugates  Tumor Metabolism/Hypoxia  Chromatin Modulation / OncoGenomics Hematology  Anemia and other blood diseases  LCM long acting factor VIII Gynecological Therapy  Endometriosis  Uterine Fibroids Common Mechanism Research & Other Areas  Leveraging the full potential of development compounds  Ophthalmology  Inflammation  LCM Fertility Control / Menopause-Management  Magnetic Resonance and Computed Tomography Contrast Media Research R&D Strategy Focusses on Innovation in Areas with High Unmet Medical Need Common Mechanism Research & Other Areas Hematology Gynecological Therapy Cardiology Oncology Research Areas at Pharma
  45. 45. Five New Pipeline Assets Selected for Accelerated Development • Bayer Investor Presentation • Meet Management • October 2013Page 43 Selection of major pharma pipeline projects in clinical phase I to III Phase I (12) Phase II (11) Phase III (15) Cancer BAY 1000394 (CDK-Inhibitor) Heart Failure BAY 1067197 (Part. Aden. A1 Agonist) Diabetic Nephropathy Finerenone (MR-Antagonist) Additional Indications Sorafenib Submental fat removal Sodium-Deoxycholate Breast Cancer Sorafenib Cancer BAY 94-9343 (Mesothelin-ADC) Heart Failure BAY 86-8050 (Vasopr. Rec. Antag.) CHF Finerenone (BAY 94-8862) (MR-Antagonist) Cancer Regorafenib Skin and Lung Infections Tedizolid Adjuvant HCC Sorafenib Anemia Molidustat (BAY 85-3934 (HIF-PH Inhibitor) Heart Failure BAY 1021189 (sGC Stimulator) NHL Copanlisib (BAY 80-6946) (PI3K-Inhibitor) PH.IIP Riociguat (sGC Stimulator) Hemophilia BAY 94-9027 (peg rFVIII) Adjuvant RCC Sorafenib Sympt. Uterine Fibroids BAY 1002670 (S-PRAnt) Endometriosis BAY 1026153 Bronchiectasis BAY 85-8501 Neutroph. Elastase Inhibit. Diffuse Systemic sclerosis Riociguat (sGC Stimulator) Gram-negative Pneumonia Amikacin inhale VV Atrophy Prasterone (Vaginorm) Cancer BAY 2010112 PSMA BiTE Antibody. Cancer BAY 1143572 PTEFb Inhibitor Cancer Refametinib (BAY 86-9766) Raynaud's phenomenon Riociguat (sGC Stimulator) Myopic CNV Aflibercept Contraception LCS 16 Cancer BAY 1179470 FGFR2 Ab Cancer BAY 1125976 Allosteric AKT 1/2 - I. Cancer Radium-223-Dichlorid DME Aflibercept Non-CF Bronchiectasis Cipro DPI MACE prevention Rivaroxaban HCC 2nd line Regorafenib CHF and CAD Rivaroxaban New molecular entities (NME) Life cycle management (LCM) Status as of September 2013
  46. 46. Five New Pipeline Assets Expected to Enter Phase III by 2015 • Bayer Investor Presentation • Meet Management • October 2013Page 44 MR: Mineralocorticoid receptor; NHL: Non-Hodkin´s lymphoma HIF-PH: HIF prolyl hydroxylase; sGC: Soluble guanylate cyclase; sPRM: Selective progesterone receptor modulator Project Mechanism Indication Status Milestones Copanlisib (BAY 80-6946) PI3-Kinase Inhibitor Cancer Phase IIa in NHL ongoing  Primary completion expected end 2014  Start phase II in add. tumor types mid 2014e Finerenone (BAY 94-8862) MR Antagonist Chronic heart failure (CHF) Diabetic nephropathy Phase IIb in CHF initiated  Primary completion expected early 2015 Molidustat (BAY 85-3934) HIF-PH Inhibitor Anemia Phase I completed  Start phase IIb expected Q4 2013 sGC-Stimulator (BAY 1021189) sGC Stimulator Worsening chronic heart failure Phase I completed  Start phase IIb expected Q4 2013 sPRM (S-PRAnt) (BAY 1002670) Progesterone Receptor Antagonist Symptomatic uterine fibroids Phase I completed  Start phase III expected 1H 2014
  47. 47. Copanlisib (BAY 80-6946) – A PI3K-Inhibitor in Phase II in Cancer • Bayer Investor Presentation • Meet Management • October 2013Page 45 ● 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
  48. 48. • Bayer Investor Presentation • Meet Management • October 2013Page 46 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
  49. 49. Selective Progesterone Receptor Modulation for Treatment of Uterine Fibroids • Bayer Investor Presentation • Meet Management • October 2013Page 47 ● 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
  50. 50. sPRM (BAY 1002670) – For the Treatment of Symptomatic Uterine Fibroids • Bayer Investor Presentation • Meet Management • October 2013Page 48 ● 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(%)
  51. 51. Renal Anemia is an Important Area of Unmet Medical Need • Bayer Investor Presentation • Meet Management • October 2013Page 49 ● 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
  52. 52. Molidustat – An Oral HIF-PH Inhibitor for Treatment of Renal Anemia • Bayer Investor Presentation • Meet Management • October 2013Page 50 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
  53. 53. • Bayer Investor Presentation • Meet Management • October 2013 Molidustat (BAY 85-3934) – Proof of Concept Demonstrated Page 51 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
  54. 54. • Bayer Investor Presentation • Meet Management • October 2013Page 52 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
  55. 55. sGC Stimulator (BAY 1021189) – Improvement of Cardiovascular Function • Bayer Investor Presentation • Meet Management • October 2013Page 53 sGC: Soluble guanylate cyclase; HF: Heart failure Phase I of BAY 1021189 show improved cardiac output (n = 36) Fi gur e: Means and st andar d devi at i ons f or i mpedance car di ogr aphy over t i me f or Car di 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 ● 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  Placebo  5 mg  7.5 mg  10 mg 0 1 2 3 4 Time (h) 33.544.55.05.56.06.57.0 Cardiacoutput(L/min)
  56. 56. MR-Inhibition is a Proven Principle in the Treatment of Heart Diseases • Bayer Investor Presentation • Meet Management • October 2013Page 54 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
  57. 57. Page 55 Finerenone – A Novel Non-Steroidal and Selective MR-Antagonist • Bayer Investor Presentation • Meet Management • October 2013 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) Finerenone was generally well tolerated 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 :
  58. 58. Major Expected Pharma Pipeline Newsflow 2014/2015 • Bayer Investor Presentation • Meet Management • October 2013 Estimated primary study completion as of October 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 56 2014 2015 BAY 94-9027 (Long-acting factor VIII) Phase III data in hemophilia A 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
  59. 59. Investor Handout – Meet Management Life-cycle Management for New Launch Products October 2013 – London
  60. 60. New Launch Products Have a Business Transforming Potential • Bayer Investor Presentation • Meet Management • October 2013 Combined* Peak Sales Potential >€5.5bn Rivaroxaban AfliberceptRegorafenib Radium-223 dichloride Riociguat 2011 2012 2012 2013 2013 *Combined peak sales potential for Xarelto, Stivarga, Eylea, Xofigo and Riociguat assuming approvals and launches as plannedPage 58 >€2bn ≥€1bn ≥€1bn ≥€1bn ≥€500m Launch in first/main indication
  61. 61. COMPASS – Coronary artery disease / peripheral artery disease1 Phase III VIVID- EAST – Diabetic macular edema study in China, Russia, Asia-Pacific1 Phase III combination study in metastatic prostate cancer2 Phase III in hepatocellular carcinoma, 2nd line1 Phase IIB – Pulmonary hypertension due to idiopathic interstitial pneumonia2 COMMANDER – Chronic heart failure and coronary artery disease1 Potential add. studies under evaluation Phase II combination study in metastatic breast cancer2 Phase III in colorectal cancer post metastectomy2 Phase IIB – Diffuse systemic sclerosis2 PIONEER-AF – Atrial fibrillation with percutaneous coronary intervention1 Phase I/II combination studies in additional cancer types2 Phase I combination studies to support programs in various cancer types2 RESPITE – Phase IIIB in PAH patients who did not respond to PDE5 inhibitors2 X-veRT – Nonvalvular atrial fibrillation and cardioversion1 Signal-generating studies in Raynaud's phenomenon1 and cystic fibrosis2 A Pipeline of its Own: Life-cycle Opportunities of New Products • Bayer Investor Presentation • Meet Management • October 2013 This summary represents a selection of projects 1: ongoing 2: planned Page 59
  62. 62. Expanding and Strengthening the Profile of Xarelto • Bayer Investor Presentation • Meet Management • October 2013Page 60  Broadest label among the new oral anticoagulants with 7 approved indications  Significant medical need in additional thromboembolic disease areas  Heterogeneous patient population with atrial fibrillation deserves further characterisation  Two-dimensional approach in life-cycle management Expansion into addional thromboembolic disease areas Strenghtening the clinical profile in patients with atrial fibrillation  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
  63. 63. Entering Additional Cancers of the Gastro-Intestinal Tract with Stivarga • Bayer Investor Presentation • Meet Management • October 2013Page 61  Exploiting new opportunities on the basis of positive clinical data in metastatic colorectal cancer and 2nd line hepatocellular carcinoma  3-dimensional mode of action suggesting activity in a broad range of tumor types  Life-cycle management targets:  Phase III in 2nd-line hepatocellular carcinoma underway  Phase III in colorectal cancer after resection of liver metaseases  Signal generating phase I studies in various cancer types HCC: Hepatocellular carcinoma CRC: Colorectal cancer GIST: Gastrointestinal stromal tumors Expand in HCC and CRC Expand to additional tumor types
  64. 64. Phase III Trial Design for Stivarga in Advanced HCC and in Adjuvant CRC • Bayer Investor Presentation • Meet Management • October 2013Page 62 HCC: Hepatocellular carcinoma; CRC: Colorectal cancer; OS: Overall survival; DFS: Disease-free survival  Status: enrolling  Primary completion 2H 2015e  Status: start of enrollment planned for end of 2013  Duration expected ~50 months 1. Phase III in liver cancer 2. Phase III in colorectal cancer
  65. 65. Addressing Multiple Life-Cycle Opportunities for Xofigo (Radium-223-dichloride) • Bayer Investor Presentation • Meet Management • October 2013Page 63 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 in chemo-naïve patients with asymptomatic or mildly symptomatic bone metastases CRPC: Castration resistant prostate cancer
  66. 66. Expanding Xofigo’s Position in Castration- Resistant Prostate Cancer Treatment • Bayer Investor Presentation • Meet Management • October 2013Page 64 For details on approved indications see respective product labels Zytiga is a trademark of Johnson & Johnson Zytiga (abiraterone) Potential new disease area for combination therapy Asymptomatic bone metastases Symptomatic bone metastases Metastatic castration-resistant prostate cancer Novel antihormonal agents (eg. Zytiga [abiraterone])  Combination therapy with abiraterone, an inhibitor of testosterone synthesis  Expansion to earlier disease stages enhances accessible patient population  A delay of skeletal-related events is of major clinical importance Potential new disease area for combination therapy Chemotherapy Xofigo (radium Ra 223 dichloride injection)
  67. 67. • Bayer Investor Presentation • Meet Management • October 2013Page 65 Radium-223-Dichloride – Design of Phase III Combination with Abiraterone mCRPC: Metastatic castration-resistant prostate cancer; SSE FS: Symptomatic skeletal event -free survival  Start of recruitment planned for 1H 2014  Secondary endpoints (selection): overall survival, pain, quality of life, radiographic progression-free survival  Timeline: primary study completion 2017e N~800
  68. 68. Potential of sGC Stimulation Goes Beyond Vasodilation • Bayer Investor Presentation • Meet Management • October 2013Page 66 sGC: Soluble guanylate cyclase cGMP: Cyclic guanosine monophosphate cGMP sGC - Stimulation Schlossmann J & Schinner E. Naunyn Schmiedebergs Arch Pharmacol 2012;doi:10.1007/s00210-012-0730-6. Stasch J-P et al. Circulation 2011;123:2263–73. Evgenov OV et al. Nature Rev Drug Disc 2006;5:755–68. Effect of riociguat on bleomycin- induced fibrosis in a mouse model (lung) Anti-fibrosis Vasodilation Anti-proliferation Anti-inflammation Evgenov OV et al. Poster presented at ATS, Denver, USA; 13–18 May 2011. *p<0.05 vs control; †p=0.05 vs bleomycin
  69. 69. Adempas – Life Cycle Management Beyond PAH and CTEPH • Bayer Investor Presentation • Meet Management • October 2013 PAH: Pulmonary arterial hypertension; CTEPH: Chronic thromboembolic pulmonary hypertension; PH-ILD: Pulmonary hypertension due to interstitial lung disease Page 67  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)
  70. 70. Summary • Bayer Investor Presentation • Meet Management • October 2013Page 68  Proven commitment and ability to innovate  Enhancing the profile of new products through life-cycle management  Accelerating development timelines for 5 NMEs to enter phase III by 2015  Addressing significant unmet medical need NME: New molecular entity
  71. 71. Investor Handout – Meet Management Bayer HealthCare October 2013 – London
  72. 72. Leading Positions in Key Healthcare Markets • Bayer Investor Presentation • Meet Management • October 2013Page 70 Pharma €10,798m  Leading positions in key therapeutic categories Consumer Care €3,853m  Global #2 in OTC-pharmaceuticals Medical Care €2,650m  #1 in fluid injection systems, #1 in contrast media, #4 in blood glucose meters Animal Health €1,303m  Global #5, #2 in parasiticides Sales Split by Segment 2012 25% 58% 7% 21% 14% HealthCare €18,604m
  73. 73. • Bayer Investor Presentation • Meet Management • October 2013Page 71 Building Growth Momentum in HealthCare 2012 CAGR 2015e* ¹ Sales ∆ Fx & portf. adjusted
  74. 74. HealthCare – Building Growth Momentum, Improving Margins • Bayer Investor Presentation • Meet Management • October 2013Page 72 Priority 2012 Target 2013* Aspiration 2015  HealthCare: Accelerate sales growth €18.6bn  Pharma: Successfully commercialize new products and realize emerging markets (EM) opportunity  New product sales¹  EM growth  Consumer Health: Aspire to become #1 OTC company €7.8bn ~€9bn  HealthCare: Improve margins  Pharma  Consumer Health 27.5% 29.9% 24.2% slightly up up below PY towards 29% ≥31% ~25% ¹ Xarelto, Eylea, Stivarga, Xofigo and Riociguat; subject to regulatory approval *Assuming Fx rates of H1 2013 Outlook depends on specific planning assumptions as detailed in the Annual Report €10.8bn €368m 7.3% high-single-digit % to >€11bn ~€1.4bn high-single digit % CAGR ~7% towards €13bn >€2.5bn high-single digit % CAGR ~6% towards €22bn mid-single-digit % to ~€8bn mid-single-digit % to ~€19bn Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales Published on Feb 28, 2013, Target 2013 as of July 31, 2013
  75. 75. 1H 2013 – Growth in All Segments • Bayer Investor Presentation • Meet Management • October 2013Page 73 *before special items 1H 2013 HealthCare Sales Earnings Pharma +4% (+8%) Consumer Health +2% (+4%) 36% 5,9353,848 In € million, ∆% yoy, () = Fx & portf. adjusted 1H‘12 1H‘13 1H‘12 1H‘13 1,550 1,753 879 852 +13% -3% 2,429 2,605 +7% 671 -4% 1,763 1,940 +10% 1,092 645 Adj. EBITDA* Adj. EBIT* 1,295 +19% HealthCare €9,243m; +3% (+6%) Price 0% Volume +6% Fx -3% Portfolio 0%
  76. 76. 1H 2013 – Top 10 HealthCare Product Performance • Bayer Investor Presentation • Meet Management • October 2013Page 74 MI: Myocardial infarction Sales in € million; ∆% y-o-y Fx adjusted +7% -11% -12% +2% +9% +2% +1% -1% +1% 607 523 421 373 444 359 374 367 312 271 Hemophilia A Multiple Sclerosis Anticoagulation Contraception Cancer Blood Glucose Meter Contraception Analgetic & MI Prevention Paraciticide >100% Hypertension
  77. 77. 1H 2013 – Strong Business Momentum in All Regions, Especially Emerging Markets • Bayer Investor Presentation • Meet Management • October 2013Page 75 Emerging Economies 25% 1H 2013 HealthCare Sales Latin America Eastern Europe Africa & Middle East ~1,110 +12% ~960 +9% ~560 +11% ~430 -3% 24% USA +5% 30% 33% 13% Sales in € million; ∆% y-o-y Fx adjusted Emerging Economies¹ +9% Emerging Asia³ Western Europe +4% Others² +10% ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern Europe ² Others = Japan, Australia, New Zealand, Canada ³ Emerging Asia = Asia without Japan, Australia, New Zealand HealthCare €9,243m; +3% (+6%)
  78. 78. • Bayer Investor Presentation • Meet Management • October 2013Page 76 New Products Drive Growth and Rejuvenate Portfolio Peak Sales Potential* * from 5 new products
  79. 79. • Bayer Investor Presentation • Meet Management • October 2013Page 77 Pharma – New Products Drive Growth and Rejuvenate Portfolio 86 368 ~1,400 >2,500 2011 2012 2013e 2015e Sales in €m 1H: 583 Xarelto: 374 Eylea: 122 Stivarga: 87 CTEPH: Chronic thromboembolic pulmonary hypertension; CRVO: Central retinal vein occlusion; PAH: Pulmonary arterial hypertension; wAMD: Wet age-related macular degeneration  World-class launch, achieved leading position in the novel anticoagulant segment in key markets  Strong uptake in first markets in wAMD, approved in CRVO in EU (08/13)  Successful launch in US and Japan, approved in Europe (08/13)  Launched in US, filed in EU (12/12)  Submitted for PAH and CTEPH (02/13), positive FDA AdCom recommendation
  80. 80. Xarelto – Broadest Profile of Any Novel Oral Anticoagulant • Bayer Investor Presentation • Meet Management • October 2013Page 78 Peak sales potential > €2bn  Oral Factor Xa inhibitor  Broadest label of novel oral anticoagulants with once-daily dosing advantage*  Recent EU approval for prevention of atherothrombotic events after acute coronary syndrome (05/13)  Two-dimensional approach in life-cycle management inititated:  Expansion into additional thromboembolic disease areas  Strenghtening the clinical profile in patients with atrial fibrillation *exception 15mg BID dosing for treatment of acute DVT/PE or 2.5mg BID for ACS sec. prevention
  81. 81. • Bayer Investor Presentation • Meet Management • October 2013Page 79 Xarelto – Development in Selected Markets Source: IMS 1: Ex-Mnf Sales Market Share (incl. PI) in all dosage strengths and pack sizes, 2: Sales Market Share (Ret+Hosp) in %, 3: Retail Sales Market Share, marketed by J&J Germany1 Japan2 United States3 Xarelto Pradaxa Eliquis Jan 2012 31% 22% <1% June 2012 Sep 2013 Sep 2013 0% 10% 20% 30% 40% 50% Jan 2012 38% 11% 2% Sep 2013 19% 27% 3%
  82. 82. Eylea – Developed for the Treatment of Multiple Back-of-the-Eye-Diseases • Bayer Investor Presentation • Meet Management • October 2013Page 80 Peak sales potential ≥ €1bn  Eylea is an anti VEGF therapy, formulated for an injection into the eye  Approved for fixed every-other-month dosing  Important treatment alternative for patients and phycisians  Comprehensive development program to address major eye diseases*:  Launched in wAMD; 2013 roll-out in Europe, Latin America and Asia  Approved in CRVO in Europe (08/13)  Positive phase III in mCNV (06/13) and DME (08/13) *Bayer has marketing rights ex-US; VEGF: Vascular endothelial growth factor; wAMD: Wet age-related macular degeneration; CRVO: Central retinal vein occlusion; mCNV: Myopic choroidal neovascularization; DME: Diabetic macular edema
  83. 83. • Bayer Investor Presentation • Meet Management • October 2013Page 81 Eylea – Successful Launch Performance in Australia and Japan Source: Quarterly IMS MIDAS data in Euros, Q3 2013
  84. 84. Stivarga – Developed as a Treatment for Cancers of the Digestive Tract • Bayer Investor Presentation • Meet Management • October 2013Page 82  Three-dimensional anti-cancer activity by inhibiting: neoangiogenesis, proliferation & signalling of tumor microenvironment  Successful introduction in US (mCRC, GIST) and Japan (mCRC)  Approved for GIST in Japan (08/13)  Approved for mCRC in Europe (08/13)  Expanding to new indications  Phase III in 2nd line liver cancer initiated  Start of phase III in CRC (adjuvant therapy after resection of liver metastases) 2H 2013e mCRC: Metastatic colorectal cancer GIST: Gastrointestinal stromal tumors Peak sales potential ≥ €1bn
  85. 85. • Bayer Investor Presentation • Meet Management • October 2013Page 83 Xofigo – A New Treatment for CRPC Patients with Bone Metastases  1st in class alpha-pharmaceutical delivering high energy, short ranging alpha-particles  44% improvement in overall survival in phase III trial demonstrated*  Launched in US (06/13) for treatment of CRPC with symptomatic bone metastases and no known visceral metastatic disease  473 centres patient-ready in the US#  Submitted for approval in Europe (12/12)  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; *Results supported by a delay in time to first symptomatic skeletal event #As of September 20, 2013 Peak sales potential ≥ €1bn
  86. 86. Adempas (Riociguat) – First-in-Class sGC Stimulator for Treatment of Hypertension • Bayer Investor Presentation • Meet Management • October 2013Page 84  Oral soluble guanylate cyclase (sGC) stimulator  Demonstrated efficacy in phase III in PAH and as the first drug ever in CTEPH  First approval in CTEPH obtained in Canada (09/13)  Filed in PAH/CTEPH in US/EU (02/13)  Recommended for approval in PAH and CTEPH by FDA’s Advisory Committee (06/13)  Comprehensive life cycle program under initiation *for indications PAH and CTEPH; CTEPH: Chronic thromboembolic pulmonary hypertension; PAH: Pulmonary arterial hypertension Peak sales potential ≥ €0.5bn*
  87. 87. • Bayer Investor Presentation • Meet Management • October 2013Page 85 Established Pharma Products
  88. 88. The Leader in Women’s HealthCare • Bayer Investor Presentation • Meet Management • October 2013Page 86 Yaz family Sales ∆% y-o-y, () Fx adj. Women’s Healthcare 2012 €3,154m +5% (+2%) +17 (+9)Mirena +7 (+5)Diane -2 (-5) +37 (+35)Qlaira Other products +13 (+10) 0 (-1)Microgynon -31 (-31)Valette -8 (-8)Meliane +6 (+4)Angeliq
  89. 89. • Bayer Investor Presentation • Meet Management • October 2013Page 87 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)
  90. 90. Mirena – The Leading Hormonal Long- Acting Contraceptive • Bayer Investor Presentation • Meet Management • October 2013Page 88  Intrauterine device, containing levonorgestrel, for reversible long-term contraception  Life-cycle opportunities:  Small low-dose long-acting (up to 3 years) device:  Jaydess: successful conclusion of EU registration  Skyla: US-launch in Feb. 2013  Phase III for a long-acting (up to 5 years), low-dose, small contraception device underway  2013 sales target: mid-to-high single- digit % increase Sales in € million; ∆% Fx adj. 2009 2010 2011 2012 272 218 285 254 313 268 385 292 US Rest of the world 490 539 581 677+9%
  91. 91. 2009 2010 2011 2012 Hemophilia Franchise – Stable Growth • Bayer Investor Presentation • Meet Management • October 2013Page 89  Global # 2 in hemophilia A treatment  Competitive development program in hemophilia underway:  Phase III with long-acting Factor VIII (BAY 94-9027)  Phase III with product from plasma-free process (BAY 81- 8973)  2013 sales target: low-single-digit % increase Sales in € million; ∆% Fx adj. 250 638 299 705 290 785 332 850 US Rest of the world 888 1,004 1,075 1,182+5%
  92. 92. Betaseron – Long-term Experience in Multiple Sclerosis Treatment • Bayer Investor Presentation • Meet Management • October 2013Page 90  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  2013 sales target: ~10% decline Sales in € million; ∆% Fx adj. 2009 2010 2011 2012 479 735 473 733 447 670 578 638 US Rest of the world 1,214 1,206 1,117 1,216+4%
  93. 93. Nexavar – Our Cornerstone in Oncology • Bayer Investor Presentation • Meet Management • October 2013Page 91  Approved for kidney cancer (RCC) and for liver cancer (HCC)  Only approved drug with overall survival benefit in HCC  Positive phase III data in radioactive iodine refractory differentiated thyroid cancer (DECISION-trial)  Phase III trials in:  Breast cancer  RCC (adjuvant)  HCC (adjuvant)  2013 sales target: mid-single-digit % increase Sales in € million; ∆% Fx adj. 2009 2010 2011 2012 154 450 174 531 174 551 204 588 US Rest of the world 604 705 725 792+4%
  94. 94. Aspirin – More Than A Century of Growth • Bayer Investor Presentation • Meet Management • October 2013Page 92  One of the world’s most recognized brands  Available as OTC and Rx Aspirin  Bayer’s #1 product in Emerging Markets  Aspirin grew 17% in 2012 in the Emerging Markets  Aspirin grew 39% in 2012 in China Sales in € million; ∆% Fx adj. 2009 2010 2011 2012 315 400 358 418 404 471 476 494 Rx-Aspirin OTC-Aspirin 715 776 875 970+6%
  95. 95. • Bayer Investor Presentation • Meet Management • October 2013Page 93 Driving Pharma Growth in Emerging Markets
  96. 96. • Bayer Investor Presentation • Meet Management • October 2013Page 94 Emerging Markets a Growth Driver for Our Pharma Business ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern Europe 2012 Pharma Sales Highlights Emerging Economies 2012 sales in € million, ∆% yoy Fx adjusted Emerging Economies¹ +7% Developed Economies +2% 64% 36% Pharma €10,798m; +9% (+4%)  Net increase of ~600 employees since end of 2011  Further investments in marketing & sales infrastructure  Exploiting opportunities of established portfolio  Development of specialty-medicine capabilities and expansion of new product reach
  97. 97. • Bayer Investor Presentation • Meet Management • October 2013Page 95 Exploiting Growth Opportunities of Established Portfolio in Emerging Markets MI prevention ~65% ~50% ~85% ~40% +12% +12% +26% +39% +16% Hypertension ~55% Diabetes Product Emerging Market Share Top EM Country / Growth Antiinfective 2012 sales in € million; ∆% y-o-y Fx adjusted Contraception EM: Emerging markets
  98. 98. • Bayer Investor Presentation • Meet Management • October 2013Page 96 Aspire to Become the Global Leader in OTC Pharmaceuticals
  99. 99. • Bayer Investor Presentation • Meet Management • October 2013Page 97 Bayer is #2 Player in a Fragmented OTC Market *Source: IMS 3.7% OTC Market 2012 by Player* J & J Bayer Novartis Sanofi Pfizer GSK Boehringer I. Reckitt Ben. Taisho Takeda Others €99.5bn Growth Strategy  Maximize brand potential  Global expansion of key brands  Exploit our innovation pipeline  Double proportion of new products‘ sales until 2015  Grow in emerging markets  Increase commercial power  Bolt-on acquisitions to strengthen portfolio & regional set-up
  100. 100. • Bayer Investor Presentation • Meet Management • October 2013Page 98 Brands Years Old 2012 Sales €m 3-Year CAGR 113 970* 7% 81 197# 12% 78 101 1% 69 196 5% 68 269 12% 40 250 9% 19 323 12% Strong Consumer Brands Build Equity for Decades *Total Aspirin includes Aspirin Complex and Aspirin Cardio (Rx) #Total Alka-Seltzer includes Alka-Seltzer and Alka-Seltzer Plus
  101. 101. Innovation at OTC – New Product Development with Aspirin • Bayer Investor Presentation • Meet Management • October 2013Page 99
  102. 102. Maximizing Brand Potential Through Global Expansion Brand Sales by Major Region 2012 Expansion Plans Analgesic ~80% in North America Wound-healing ~75% in Europe Anti-fungal ~75% in Europe & LatAm Vitamins & minerals ~50% in Europe Pregnancy Supplement • Bayer Investor Presentation • Meet Management • October 2013Page 100 ~55% in Asia Pacific
  103. 103. Consumer Insights Drive Brand Innovation and Growth • Bayer Investor Presentation • Meet Management • October 2013 Sales in € million 2002 2004 2006 2008 2010 2012 One-A-Day Innovation History 58 112 109 142 167 176 Bayer Innovation includes:  New claims  Indications  Delivery forms  Line extensions  New packaging  New DTC campaigns  Rx-to-OTC Switch DTC: Direct-to-consumer Page 101
  104. 104. • Bayer Investor Presentation • Meet Management • October 2013Page 102  One A Day Vita Craves Complete adult multivitamin in great tasting gummy format 2010 2011 2012 2015e Robust Innovation Pipeline *sales of new products launched during a 4-year window Share of Sales from New Products*  Redoxitos Recommended children’s vitamin C daily dose for strengthening immunity  Canesten Nail Set Complete 6-7 week fungal nail infection treatment  Bepanthen Anti-Stretch Mark Moisturizing lotion keeping pregnant women’s skin soft and elastic ~16% 4% 5% 8% New Product Examples
  105. 105. • Bayer Investor Presentation • Meet Management • October 2013Page 103 Emerging Market Growth Strategies (2013 – 2015) Country Market Characteristics Plans China Brazil Russia  #2 global OTC market  €30bn in size by 2015e  Expand sales force from 30 cities to >130 cities, covering 75% of OTC market  Extend geographic footprint by launching global brands in China  #6 global OTC market  Fastest growing market in LATAM  ~50% of LATAM market  Expand sales force from 7,000 to 12,000 retail outlets, covering 73% of OTC market  Accelerate innovation through consumer insights and portfolio extension  #5 global OTC market  Retail OTC is the largest healthcare segment  Extend portfolio into attractive categories  Leverage leadership position in pharmacy chains to drive growth at point of sales
  106. 106. • Bayer Investor Presentation • Meet Management • October 2013 Strategic Acquisitions – Steigerwald  Excellent strategic bolt-on entry into fast growing herbals market, further strengthens Bayer’s gastrointestinal position (currently #6 globally)  Excellent expansion potential into emerging markets like Russia and other Eastern European markets  Steigerwald generated net sales of €61.3m in 2012 (~90% in Germany) Iberogast®  For the treatment of functional dyspepsia & irritable bowel syndrome Laif®  St John’s wort-based medicine for treatment of depression  #8 OTC product in Germany  ~69% of 2012 sales  Strong position in its indication  ~20% of 2012 sales Page 104
  107. 107. • Bayer Investor Presentation • Meet Management • October 2013Page 105 Continued Growth in Animal Health and Medical Care
  108. 108. Animal Health – A Strong Player in an Attractive Market • Bayer Investor Presentation • Meet Management • October 2013Page 106 Sales in € million; ∆% Fx & portfolio adj.  Global #5 in a growing market  #3 in companion animal products (CAP)  #6 in food animal products (FAP)  Leading parasiticide-portfolio  New product launches driving growth  Growth complemented through external M&A (e.g. Bomac & TEVA Animal Health) Companion Animal Products Food Animal Products Sales Split 2012 Animal Health €1,303m; +10% (+4%) 40% 60% Highlights
  109. 109. Animal Health – New Products to Strengthen Business  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 • Bayer Investor Presentation • Meet Management • October 2013Page 107  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 already from 2 weeks of age
  110. 110. Well Positioned in Medical Care • Bayer Investor Presentation • Meet Management • October 2013Page 108 Radiology & Interventional Diabetes Care Sales Split 2012 Medical Care €2,650m; +6% (+2%) 40% 60% Highlights Diabetes Care:  Comprises self testing blood glucose monitoring devices  Global #4 in blood glucose meters Radiology & Interventional:  Comprises contrast media and media application devices and catheters for atherectomy  Clear global market leader in contrast media and media application devices
  111. 111. Investor Handout – Meet Management Bayer CropScience October 2013 – London
  112. 112. Sales 2012: €8,383m Insecticides€1,514m Market position: Fungicides€1,974m 3Market position: SeedGrowth€897m 1Market position: Herbicides €2,356m 4Market position: Env. Science €680m 1Market position: Seeds €962m 7Market position: Page 110 CropScience – A Leader in Chemical Crop Protection • Bayer Investor Presentation • Meet Management • October 2013 1 Market positions based on company reportings and Cropnosis estimates 18% 24% 11% 11% 8% 28%
  113. 113. 26% 22% 13% 9% 9% 7% 6% 5% Fruits & Vegetables CerealsOilseeds Soy Corn Cotton Rice Sugar Crops * by major crop groups excluding industrial business and non-agricultural solutions CropScience Sales 2012* Other Fruits, Vegetables and Cereals – A Major Part of Our Portfolio • Bayer Investor Presentation • Meet Management • October 2013Page 111
  114. 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 • October 2013Page 112
  115. 115. • Bayer Investor Presentation • Meet Management • October 2013 Dynamic Growth in Positive Environment Page 113
  116. 116. • Bayer Investor Presentation • Meet Management • October 2013 1H 2013 – CropScience Performance Crop Protection +7% (+9%) Environmental Science -5% (-2%) Seeds +2% (+1%) 1H 2013 Sales Earnings In € million, ∆% yoy, () = Fx & portf. adjusted CropScience €5,156m; +6% (+7%) Price +3% Volume +4% Fx -2% Portfolio 0% 4,064 1H‘12 1H‘13 1H‘12 1H‘13 1,533 1,705 +11% 1,299 1,483 +14% Adj. EBITDA* Adj. EBIT* 357 735 *before special items Page 114
  117. 117. Herbicides Fungicides Seeds Double-digit growth in NA and APAC; Liberty and new corn herbicides Growth in all regions; Strong start with Fox in Brazil Growth in Latin America nearly offset by decline in the US (low pest pressure) Higher demand in North America, esp. for our innovative Poncho/Votivo Lower cotton and canola acreages in North America; growth with vegetables Decline of consumer products in Europe Professional products grew in LAAME 1,647 +9% 1,330 +15% 716 +3% 371 +6% 357 - 2% 735 +1% Insecticides Sales in € million; ∆% y-o-y Fx & portfolio adj. 1H 2012 Nominal growth/decline 1H 2013 • Bayer Investor Presentation • Meet Management • October 2013 Seed Growth Env. Science 1H 2013 – Growth Driven by Herbicides and Fungicides Page 115
  118. 118. Emerging Economies 25% CropScience Sales in 1H 2013 CropScience €5,156m; +6% (+8%) Latin America Eastern Europe Africa & Middle East Emerging Asia³ ~460 +9% ~650 +23% ~540 +9% ~150 +1% 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 20% USA +3% 28% 35% 17% Emerging Economies¹ +13% Western Europe +4% Others² +10% 1H 2013 – Strong Growth in Emerging Economies Sales in € million, ∆% yoy Fx adjusted • Bayer Investor Presentation • Meet Management • October 2013Page 116
  119. 119. • Bayer Investor Presentation • Meet Management • October 2013 Translating R&D Effectively into Sales From to € Page 117
  120. 120. Executing Our Strategic Roadmap Strengthen Customer Centricity Lead the Way in Innovation Enhance Crop Protection  Striving for first- and best-in-class solutions  Exploiting expertise in seeds, breeding, and chemical and biological crop protection  Driving commercial excellence in marketing and sales  Connecting partners in the value chain through integrated Go-to-Market practices  Improving portfolio through focused and integrated crop solutions  Increasing flexibility and efficiency Expand Seeds Business  Further strengthening position in vegetables, rice, oilseed rape and cotton  Extending portfolio by building up business in soybean and wheat • Bayer Investor Presentation • Meet Management • October 2013Page 118
  121. 121. Translating R&D Effectively into New Product Sales Page 119 0.02 0.3 0.7 1.1 ~1.4 ~1.9 2007 2009 2011 2012 2013e 2015e +60% Sales from new Crop Protection products launched since 2006 in €bn ∆% y-o-y, () Fx adj. • Bayer Investor Presentation • Meet Management • October 2013  (+19%) - Superior ‘all-in-one’ cereal fungicide with yield-boosting effect  herbicide (+35%) - Excellent weed control in corn and cereals, also in case of glyphosate resistance  (+64%) - Broad-spectrum insecticide with fast, long-lasting action  - New fungicide now available in several key markets 1H 2013 Highlights
  122. 122. Xpro – New Cereal Fungicide with Yield-Boosting Effect  Pyrazole fungicide from a new generation of SDHI* for foliar use in cereals  Combined formulation of Bixafen and Prothioconazole leading to superior "all-in-one" cereal fungicide  Excellent control of key cereal diseases including strobilurin-resistant Septoria  Boosting yield through long-lasting disease control and positive impact on plant physiology  Global peak sales potential of more than €300m * SDHI: Succinate dehydrogenase inhibitor • Bayer Investor Presentation • Meet Management • October 2013Page 120
  123. 123. 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 • October 2013Page 121
  124. 124. Adengo Family – Highly Effective Weed Control in Corn  Thiencarbazone-methyl is a new sulfonyl-amino- carbonyl-triazolinone (SACT) herbicide  Residual and foliar herbicide family that combats annual grasses and broad leaved weeds in corn  Additional crop selectivity in combination with HPPD inhibitor Isoxaflutole and safener Cyprosulfamide  Offering flexibility in application timing (pre- to early post-emergence)  Low use rates  Launched in first key markets in 2009 • Bayer Investor Presentation • Meet Management • October 2013Page 122
  125. 125. Sustainable Alternatives to Fight Glyphosate Weed Resistance • Bayer Investor Presentation • Meet Management • October 2013 “Diversity is the Future” - The Bayer CropScience initiative against weed resistance HPPD: Hydroxyphenyl-pyruvate dioxygenase MGI: Mesotrione, Glufosinate-ammonium and Isoxaflutole  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  Construction of new US production plant for Liberty to more than double global capacity  We are committed to develop new and more sustainable weed management solutions  Innovation with new mode of action, HPPD herbicide tolerance, in soy and cotton  MGI triple stack herbicide-tolerance soybean trait submitted for approval  Highly effective pre-emergent and selective herbicide portfolio launched Page 123
  126. 126. 303 ~520 ~620 ~660 600 2012 2013e 2014e 2015e 2016e  Increasing demand for innovative and sustainable agricultural solutions  Construction of U.S. production plant1 for herbicide glufosinate-ammonium  Expanding seeds infrastructure for soybean and wheat  Expanding and modernizing R&D facilities  CAPEX expansion to €2.4bn for 2013 - 2016 Stepping Up Investment Plans for Capacity Expansion at CropScience • Bayer Investor Presentation • Meet Management • October 2013Page 124 Capital Expenditures (PPE only, in €m) 1About €380m investment, start of production expected Q4 2015
  127. 127. Further Growth Opportunities in Biologics  Biologics are products derived from naturally-occurring living organisms or materials from plants or microorganisms  The market potential for Biologics is expected to triple from $1.2bn in 2010 to around $4bn in 2020  AgraQuest acquired in Q3 2012 for €375m including milestone payments. Leading global provider of innovative biological pest management solutions based on natural microorganisms  Prophyta acquired in Q1 2013, a provider of well-established products, e.g. nematicide BioAct  Acquisitions strengthen strategically important fruit and vegetables business  We aim to become the world leader in integrated crop solutions • Bayer Investor Presentation • Meet Management • October 2013Page 125
  128. 128. Customer Centricity Along the Entire Value Chain • Bayer Investor Presentation • Meet Management • October 2013 Bayer CropScience Our offers Growers Distributors/ seedcompanies Retailers Advisors Providing Seed-to-Shelf Solutions Traders Foodprocessors Foodretailers Consumers  Food chain partnerships covering most of the main fruit & vegetable crops  Premium seeds and effective crop protection products to maximize yield  Consistent and high harvest quality for efficient food processing  Meeting highest food safety standards  Better product quality for the consumer Page 126
  129. 129. Best-Practice Examples of our New Go-To-Market Approach • Bayer Investor Presentation • Meet Management • October 2013 Approach Achievement Food chain partnerships in grapes in Brazil, Chile, Italy and India  Market share in grapes in Brazil +5 pp  ~60% market share in table grapes in Chile (largest exporter worldwide) "On demand" seed treatment system and a global network of 10 SeedGrowth Centers  2012 SeedGrowth sales* +17%  Further roll-out of SeedGrowth franchise in Asia Pacific (sales in China* +30%) Combine innovative technology of Movento insecticide with additional service offerings  2012 Movento sales* +49% BayDir service in Germany offers tailored and immediate information for farmers through Internet and mobile phone apps  Further strengthened our position in the German market * Sales ∆% y-o-y Fx adj. Page 127
  130. 130. Strong Integrated Pipeline with Promising Launches over the Next Four Years* • Bayer Investor Presentation • Meet Management • October 2013 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 128 Constant Life Cycle Management through new formulations and mixtures that also includes Biologics Disease Resistant + Salinity Tolerant Hybrid Rice Insect + Disease Resistant Hybrid Rice Improved Canola Oil Profile Dual Herbicide Tol. + Novel Insect Resistant Cotton Insecticide Biologics Seed Varieties Numerous launches in vegetables & broad acre crops GlyTol + HPPD Tolerant Soybeans2 Biologics 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
  131. 131. 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 • October 2013 * first registrations for foliar application; SeedGrowth use planned to follow subsequentlyPage 129
  132. 132. 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 • October 2013Page 130 * subject to regulatory approval Two-spotted spider mite under scanning electron microscope (SEM)
  133. 133. Restriction of Neonicotinoids Use in the EU - Implications  The European Commission has temporarily restricted (for 2 years) the use of certain neonicotinoids (including clothianidin and imidacloprid) in summer cereals and bee- attractive crops, including corn, oilseed rape and sunflower  Neonicotinoid-based products are safe for bees, when used according to label instructions; registered in > 100 countries world-wide in a broad range of crops  Affected business of clothianidin and imidacloprid ~1% of total CropScience sales, gross  Net sales impact significantly less, as alternative products partly compensate  Restrictions will apply from Sept 30 (use of treated seeds until Dec 1, 2013) the latest  Restrictions expected to result in crop yield losses and loss of competitiveness for European agriculture  U.S., Canadian and Brazilian regulatory agencies recognize that there are numerous factors affecting honey bee health incl. diseases, parasitic mites, habitat loss, nutritional deficiencies and hive management practices • Bayer Investor Presentation • Meet Management • October 2013Page 131
  134. 134. Protecting Pollinators and Improving Honey Bee Health  Varroa mites transmit viruses, bacteria and other pathogens to bees  One of the most damaging pests to honey bees in Europe and North America Interdisciplinary approach  Varroa Gate mechanical and chemical barrier to protect colonies from re-infestation  Collaboration with Bayer HealthCare Animal Health  Launch planned for 2017* • Bayer Investor Presentation • Meet Management • October 2013Page 132 * subject to regulatory approval
  135. 135. Extending the Seeds Footprint • Bayer Investor Presentation • Meet Management • October 2013 Build up a proprietary soybean seed business Build up a global wheat seed business  LibertyLink herbicide tolerance technology broadly outlicensed  Acquisition of Hornbeck Seed Company in the US  Bayer soybean seed launched in 2012  Presence in soybean market in Brazil stepped up with bolt-on acquisitions  Broad germplasm pool and promising trait pipeline  Next-generation trait technology licensed from Monsanto  Significant investment into R&D of new wheat varieties and traits  Focus on productivity, stress tolerance, nutrient uptake  First new varieties expected by 2015 in Europe  Several agreements closed with wheat players to establish a broad germplasm pool  Seven wheat breeding stations set-up in Europe, US, Australia Page 133
  136. 136. Acquisitions in Latin America Broaden our Portfolio in Soybean Seed  Building up proprietary seed business with high quality germplasm pool  Establishing best-in-class breeding platform  Developing modern, resistance-breaking solutions to key soybean problems  Proprietary & licensed trait platform  Leveraging the potential of our trait platform through out-licensing  Integrated business model combining seeds & crop protection  Launch of Bayer soybean brand Credenz planned late 2014 • Bayer Investor Presentation • Meet Management • October 2013Page 134 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 Main soybean research center • US: Morrisville, NC Network of soybean breeding stations • US: Champaign, IL / DeWitt, AR / Pikeville, NC • Puerto Rico: Sabana Grande • Brazil: Porto Nacional, TO / Cristalina, GO / Rio Verde, GO / Sinop, MT / Londrina, PR • Argentina: Tucuman, TU / Chacabuco, BA
  137. 137. Access to Next-Generation and Enabling Trait Technologies for Soybeans  Cross-licensing agreement with Monsanto entered in April 2013  Monsanto will provide Bayer with royalty-bearing licenses to specified trait technologies in soybeans, with stacking-rights under certain conditions  Licensed traits fit nicely with our own technology such as LibertyLink  Ability to offer additional pest control options and an all-inclusive weed resistance package in soybeans  Bayer will grant Monsanto licenses to evaluate certain enabling technologies • Bayer Investor Presentation • Meet Management • October 2013 Weed control Pest control  Genuity® Roundup Ready 2 Yield®: glyphosate tolerance  Genuity® Roundup Ready 2 Xtend™: glyphosate & dicamba tolerance  Regions: United States and Canada  Intacta RR2 PRO™: first‐ever insect-protected trait in soybeans, providing control of lepidopteran pests  Regions: Brazil, with an option to a royalty-bearing license in other Latin-American countries in the future Genuity® Roundup Ready 2 Yield®, Genuity® Roundup Ready 2 Xtend™ and Intacta RR2 PRO™ are trademarks of MonsantoPage 135
  138. 138. Strategic Progress Achieved Enhance Crop Protection Strengthen Customer Centricity Lead the Way in Innovation Expand Seeds Business ● €1.1bn sales in 2012 with products launched since 2006 ● All WHO class I insecticides removed from our portfolio ● Expansion of Biologics ● Increased grower orientation ● Improved channel management practices ● Broadened food chain partnership business model ● Pipeline Peak Sales Potential*  €4bn ● Increased investment in Seeds R&D ● Innovating at the interface between chemistry and biology ● Strengthened positions in cotton, canola and rice ● Increased investments in soybean, wheat and vegetables ● Development of innovative traits • Bayer Investor Presentation • Meet Management • October 2013 * from products launched between 2011-2016 Page 136
  139. 139. • Bayer Investor Presentation • Meet Management • October 2013 Targeting Above Market Growth at Benchmark Profitability 2012 CAGR 2015e Page 137
  140. 140. Global Trends in Agriculture • Bayer Investor Presentation • Meet Management • October 2013Page 138 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
  141. 141. Seed and Crop Protection Market Expected to Grow  5% in 2013 • Bayer Investor Presentation • Meet Management • October 2013  High price levels for agricultural commodities  Slightly weaker but nonetheless positive market development overall  Growth coming mainly from North and Latin American followed by Eastern European markets  Asia / Pacific: cereals, rice and specialty crops fueling market growth Page 139
  142. 142. Promising 2013 Outlook  We expect that business growth will outpace the market  Sales advancing by a high-single-digit percentage on a currency- and portfolio-adjusted basis toward €9 billion  We also plan to raise EBITDA before special items by a high-single-digit percentage • Bayer Investor Presentation • Meet Management • October 2013Page 140 Outlook depends on specific planning assumptions as detailed in the Annual Report Assuming Fx rates of H1 2013
  143. 143. Investor Handout – Meet Management Bayer MaterialScience October 2013 – London
  144. 144. MaterialScience – Leading Positions in All Segments • Bayer Investor Presentation • Meet Management • October 2013 * aliph. isocyanates MaterialScience €11,491m Polyurethanes €5,987m  #1-2; approx. 20-24% market share 52% 6% 25% 17% Sales in € million Polycarbonates €2,819m  #1; approx. 27% market share Coatings, Adhesives, Specialties €1,972m  #1; >40% market share* Industrial Operations €714m Sales Split by Segment 2012 Page 142
  145. 145. MaterialScience – Global Production Network • Bayer Investor Presentation • Meet Management • October 2013Page 143 Headquarter Major Production Sites Downstream Businesses Position* Americas # 1 # 2 # 1 PUR PCS CAS Position* EMEA# *Market share based on estimated sales following self-assessment # Europe, Middle East & Africa # 1 # 1 # 1 PUR PCS CAS Position* Asia/Pacific # 2-3 # 1-2 # 1 PUR PCS CAS
  146. 146. MaterialScience – Sales By Key Customer Industries • Bayer Investor Presentation • Meet Management • October 2013 Others (sports, leisure, footwear packaging, medical, etc.) Furniture/ Wood AutomotiveChemicals Electro/ Electronics Construction 17% 28% 19% 20% 8% 20% 16% Bayer MaterialScience sales by industry in 2012 Page 144
  147. 147. MaterialScience as an Integrated Solution Provider • Bayer Investor Presentation • Meet Management • October 2013Page 145 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
  148. 148. • Bayer Investor Presentation • Meet Management • October 2013Page 146 Weak Performance in Challenging Environment
  149. 149. • Bayer Investor Presentation • Meet Management • October 2013 1H 2013 – Operating Performance 25% 3,015 1,327 Polycarbonates -7% (-7%) Polyurethanes +2% (+4%) Adjusted EBITDA* * before special items Adjusted EBIT* 1H 2013 Sales Earnings 960 348 In € million; ∆% y-o-y, () Fx & portfolio adj. Coatings, Adhesives, Specialties -5% (-4%) Industrial Operations -3% (-2%) Price +2% Volume -2% Fx -1% Portfolio 0% MaterialScience €5,650m; -2% (-1%) Page 147 1H‘12 1H‘13 1H‘12 1H‘13 662 478 -28% 344 155 -55%
  150. 150. 1H 2013 – Regional Sales Development • Bayer Investor Presentation • Meet Management • October 2013 Emerging Economies1H 2013 Sales MaterialScience €5,650m; -1% Latin America Eastern Europe Africa & Middle East Emerging Asia³ ~1,320 -2% ~450 +5% ~330 +2% ~275 -5% ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern Europe ² Others = Japan, Australia, New Zealand, Canada ³ Emerging Asia = Asia without Japan, Australia, New Zealand USA +4% 36% 42% Emerging Economies¹ -1% 4% Others² +8% Sales in € million; ∆% y-o-y Fx adjusted 20% 33% 42% 5% Page 148 Western Europe -4%
  151. 151. • Bayer Investor Presentation • Meet Management • October 2013Page 149 Aspire to Earn a Premium Over Cost of Capital
  152. 152. Cash Generation in Excess of Own Investment Need… • Bayer Investor Presentation • Meet Management • October 2013 2002 and 2003 as reported in 2004 excluding acquisitions or divestments In € million 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 902 1,108 464 1,113 332 498 715 1,388 690 1,281 870 672 1,147 782 504 498 565 775763 849 Page 150 621 735 CapEx (cash-relevant) Net Cash Flow ~€3.6bn Free Operating Cash Flow in 11 years Free Operating Cash Flow 206 649 166 673 592 277 110 345 265 210 114
  153. 153. • Bayer Investor Presentation • Meet Management • October 2013Page 151 …But Selling Price Increases & Savings Not Sufficient to Protect Earnings  Market growth trends intact, key products with mid-single digit volume growth  High raw material prices and significant capacity additions led to global overcapacities and margin pressure  Going forward demand & supply balance expected to improve  Anticipated margin improvement supported by fresh savings from new efficiency initiative 2010 2011 2012 Sales Adj. EBITDARaw Mat. & Energy Costs CFROI In € bn 10.2 10.8 11.5 5.4 6.2 6.6 1.4 1.2 1.3 6% 6% 8%
  154. 154. • Bayer Investor Presentation • Meet Management • October 2013Page 152 Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales Higher Asset Utilization & Efficiency Measures Are Driving Performance 2012 Target 2013* Aspiration 2015 *Assuming Fx rates of H1 2013 #after reproduction Outlook depends on specific planning assumptions as detailed in the Annual Report  Sales +2.9% to €11.5bn (volumes +2%)  Adj. EBITDA +8% to €1,262m  CFROI# 5.7% < WACC 7.1%  Sales: not quite reach prior-year figure  Adj. EBITDA: below prior- year figure  Q3‘2013 vs Q2‘2013: Sales and adj. EBITDA to increase  Grow business (volume) above global GDP  Defend market leading positions in PCS and PUR  Realize 150 bp margin contribution through new efficiency initiative  Optimize asset structure in Germany  CFROI# > WACC
  155. 155. • Bayer Investor Presentation • Meet Management • October 2013Page 153 Profitability Improvement Through New Efficiency Initiative Until 2015  New efficiency initiative improves cost structure and increases adjusted EBITDA margin by 150bp  Initiative comprises more than 100 measures across the entire value chain Examples Business Units  Consolidation of system houses  Pricing excellence programs Organization  Optimization of regional structures (e.g. Canada & US) Production  Further initiatives to improve asset productivity (e.g. maintenance schedules, engineering setup) Supply Chain  Optimization of logistics services Selling & Administration  Further reduce costs by leveraging established global ERP platform and standardized processes ERP: enterprise resource planning
  156. 156. Process Technology Advances Lower Cost & Save Energy • Bayer Investor Presentation • Meet Management • October 2013 ProcessBenefits*Status TDI Gas Phase Phosgenation Adiabatic Aniline Production ODC Technology for Chlorine Production *Compared with conventional technology ODC: Oxygen depolarized cathode  Uses up to 60% less energy  Requires 80% less solvent  CapEx reduced by 20%  Uses 25% less energy  20% less CO2 emissions  CapEx reduced by 30%  Uses 30% less energy  Reduces indirect CO2 emissions  World-scale facility since 2011 in Shanghai, China  Technology to be used in new TDI plant in Dormagen  Pilot plant in Antwerp, Belgium  Plant in Shanghai since 2010  Demo facility in Krefeld- Uerdingen  External marketing planned from 2013 Page 154
  157. 157. • Bayer Investor Presentation • Meet Management • October 2013Page 155 Focus on Capital Discipline DepreciationCapEx (PPE only) 813 462 600 460 527 599 2008 2010 2012 2013e In € million CapEx vs Depreciation CapEx Strategy ● Investment focus on utilization improvement ● Investment in efficiency is the basis for future profitable growth ● CapEx on depreciation level for 2013 and the foreseeable future
  158. 158. • Bayer Investor Presentation • Meet Management • October 2013Page 156 Capitalizing on Global Megatrends 1990 2000 2020e 2050e 5.3 6.1 7.7 9.2 billion people
  159. 159. • Bayer Investor Presentation • Meet Management • October 2013Page 157 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
  160. 160. Polyurethane-based Insulation for Residential & Commercial Buildings • Bayer Investor Presentation • Meet Management • October 2013 PUR Isoboards for Thermal Insulation Growth drivers  EU: From 2020 on, new buildings have to be constructed as “nearly zero- energy buildings”  US: New standard requires 30% less energy use for renovated homes and commercial buildings  1 kg polyurethane saves 360 to 755 kg CO2 emissions*  PUR in construction industry in 2012: approx. €5.7bn, estimated average growth rate of ~8% p.a. *Additional insulation, savings over entire product life-cycle of 50 years, including production and end-of-life stages; PUR: polyurethane  External Thermal Insulation Composite Systems (ETICS) save >25% energy compared with other insulation materials  Joint solution development with key industry players to fulfill high industry requirements PUR Metal Sandwich Panels  Prefabricated and mainly applied for industrial and commercial buildings as well as cold storage  Easy handling and fast site assembly Page 158
  161. 161. • Bayer Investor Presentation • Meet Management • October 2013Page 159 Polyurethane-based Insulation in Cold Chain Growth drivers  Globally more stringent energy saving regulations  Increasing demand for trans- porting temperature sensitive goods  Increasing standard of living in emerging markets triggers continuously growing demand for appliances  PUR in refrigerator industry 2012: approx. €2.6bn, estimated average growth rate of ~6% p.a. Refrigerators  Refrigeration accounts on average for 20% of a household’s electricity consumption  Replacing all old refrigerators with A++ appliances could cut annual CO2 emissions in the EU by 22 million metric tons  PUR insulation increased energy efficiency of refrigerators by 65% from 1950-2005  BMS’s innovative Baytherm® Microcell foam:  Reduces pore size of foam up to 40%  Reduces thermal conductivity up to 10% PUR: polyurethane
  162. 162. Increased Energy Efficiency in Cars Through Polycarbonates • Bayer Investor Presentation • Meet Management • October 2013 Growth drivers Polycarbonates  Heat stability and optical quality enable new LED-based lighting systems  Flame-retardant polycarbonate blends protect batteries used in future cars with hybrid engines  Car body parts made from polycarbonate blends reduce weight  Automotive glazing out of polycarbonate combines high weight saving potential with outstanding thermal insulation  Broad global political initiatives promoting e-mobility  Increasing use of electrical devices requires flame retardancy of plastics  Polycarbonate glazing offers a weight advantage of 30-50% compared to real glass  81m light vehicles* produced globally in 2012, estimated average growth rate of 5-6% p.a. *includes cars and light commercial vehicles up to a weight of 6t Page 160

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