FY / Q4 2012 Investor Conference Call Presentation

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FY / Q4 2012 Investor Conference Call Presentation

  1. 1. Investor Conference CallFY/Q4 2012 ResultsFebruary 28, 2013 / Marijn Dekkers, CEO
  2. 2. DisclaimerThis presentation may contain forward-looking statements based on currentassumptions and forecasts made by Bayer Group or subgroup management.Various known and unknown risks, uncertainties and other factors could lead tomaterial 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 areavailable on the Bayer website at www.bayer.com.The company assumes no liability whatsoever to update these forward-lookingstatements or to conform them to future events or developments.Page 2 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  3. 3. 2012 Has Been a Very SuccessfulYear For Bayer Operationally, a record year driven by strong execution and currency tailwind All subgroups contributed to top and bottom line improvement 5% organic sales growth to ~€40bn, driven by LifeSciences Special charges of €1.7bn, mainly further provisions for litigation resulted in reported EBITDA / net income on prior-year level Adj. EBITDA up 9% at €8.3bn, core EPS up 11%, group targets achieved, proposed DPS of €1.90 up 15% (payout ratio 35.5%) Excellent innovation pipeline progress strengthens LifeScience businesses Encouraging growth (+7%) in the emerging markets (37% of group sales, up by ~80 basis points) Q4 – strong finish to a very successful year Outlook 2013 projects continuing record performance in anniversary yearPage 3 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  4. 4. 4th Quarter 2012 –Strong Finish to a Very Successful YearSales EBIT EBITDA Core EPSin € million adjusted*% currency & portfolio adj. in € million in € million in € 9,862 9,191 1,825 1,541 0.97 1.00 735 629 Q4’11 Q4’12 Q4’11 Q4’12 Q4’11 Q3’12 Q4’11 Q4’12 +6% +17% +18% +3% *before special items Page 4 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  5. 5. 4th Quarter 2012 –All Subgroups With Higher Sales and EarningsSales & adjusted EBITDA ∆ in € million, sales ∆% y-o-y Fx and portfolio adjusted ∆ Sales Y-o-Y ∆ Adj. EBITDA Y-o-Y 328 162HealthCare +5% +14% 187 69Pharma +5% +9%Consumer 141 93Health +5% +22% 180 16CropScience +9% +6% 165 149MaterialScience +5% +141%Page 5 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  6. 6. 4th Quarter 2012 –Performance Driven by Emerging MarketsIn € million, ∆% yoy Fx adjusted Q4’12 Group Sales by Region Emerging Economies +14% Emerging +7% USA ~1,560 Economies¹ +5% ~1,420 +9% 20% 40% +12% 30% Western ~520 -1% 10% Others² Europe +2% ~460 +1% Group €9,862m; +5% Emerging Latin Eastern Africa & Asia³ America Europe Middle East ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern EuropePage 6 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers ² Others = Japan, Australia, New Zealand, Canada ³ Emerging Asia = Asia w/o Japan, Australia, New Zealand
  7. 7. Full Year 2012 –All Targets AchievedSales ∆ Fx & portf. adjusted, EBITDA before special items 2012 Outlook 2012 ∆ vs. Comments actual 2011 original +~3% or  Raised to 4-5% or Sales €37bn €39.8bn +5% €39-40bn in Q2 adj. slightly  Raised to a high-single- €8.3bn +9% EBITDA improve digit % increase in Q2 Core slightly €5.35 +11%  Raised to ~10% in Q2 EPS improvePage 7 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  8. 8. 2013 – 2015: Aspirations by SubgroupPage 8 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  9. 9. HealthCare –Building Growth Momentum, Improving MarginsSales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales Target Aspiration Priority 2012 2013* 2015 mid-single-digit CAGR ~6% HealthCare: Accelerate sales growth €18.6bn % to ~€19bn towards €22bn Pharma: Successfully commercialize new CAGR ~7% €10.8bn mid-single-digit products and realize emerging markets % to ~€11bn towards €13bn (EM) opportunity  New product sales¹ €368m ~€1bn >€2.5bn  EM growth 7.5% high-single high-single digit % digit % Consumer Health: Aspire to become #1 mid-single-digit €7.8bn ~€9bn OTC company % to ~€8bn HealthCare: Improve margins 27.2% slightly up towards 29%  Pharma 29.6% slightly up ≥31%  Consumer Health 23.9% at level ~25% ¹ Xarelto, Eylea, Stivarga, Radium-223-Dichloride and Riociguat; subject to regulatory approvalPage 9 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers *Assuming Fx rate of $1.29 per € Outlook depends on specific planning assumptions as detailed in the Annual Report
  10. 10. Pharma – New Products Drive Growth andRejuvenate PortfolioSales from new Pharma pipeline in € m >2,500  Successful launch, 2012 sales above target – important countries with outstanding uptake, disappointing so far in Japan Xarelto 322 Eylea 14  Encouraging early feedback on first launches Stivarga 32  Positive early indications on commercial launch ~1,000 in the US, approved for GIST in the US, CHMP opinion expected 1H 2013 Radium-223- Dichloride 368  Submitted for treating bone metastases in patients with CRPC (Dec. 2012) 86 2011 2012 2013e 2015e  Submitted for PAH and CTEPH (Feb. 2013)Page 10 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  11. 11. Pharma Aspiration – Targeting High-SingleDigit Emerging Market GrowthIn € million, ∆% yoy Fx adjusted 2012 Pharma Sales by Region Highlights Emerging Economies  Portfolio of established brands and Developed Emerging innovative medicines further expanding Markets Economies¹ +2% +7.5%  Sales CAGR of 11% in EM for the last 5 years 64% 36%  Women’s Health business growing 8%  PR China sales above €1bn, up 23% Total €10,803m; +4% ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia,Page 11 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers New Zealand, Africa and Middle East incl. Turkey, Eastern Europe ² Others = Japan, Australia, New Zealand, Canada
  12. 12. Consumer Health –Aspire to Become #1 OTC CompanySales Consumer Care in € million; ∆% Fx & portfolio adj. Product Highlights 2012 +6% * €494m (+1%) 3,853 3,534 3,371 3,080 €323 (+5%) 3,020 2,634 €269 (+14%) €250 (+8%) €196 (+4%) 2007 2008 2009 2010 2011 2012 * Only Aspirin CCPage 12 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  13. 13. CropScience – Above Market Growth atBenchmark ProfitabilitySales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales Target Aspiration Priority 2012 2013* 2015 high-single CAGR ~6% +12.4%  Above-market sales growth digit % towards to €8.4bn towards €9bn €10bn  Translate R&D effectively into new €1.1bn ~€1.4bn ~€1.9bn product sales (CP products launched since 2006) double-digit % double-digit %  Extend seeds footprint +14% growth growth p.a. slight  Maintain industry leading profitability level 24.0% ~24% improvement CP: Crop ProtectionPage 13 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers *Assuming Fx rate of $1.29 per € Outlook depends on specific planning assumptions as detailed in the Annual Report
  14. 14. CropScience – Translate R&D Effectivelyinto New Product SalesSales from new Crop Protectionproducts launched since 2006 in € bn ~1.9 2012 Highlights∆% y-o-y, () Fx adj.  Xpro (+61%) - New cereal fungicide with yield-boosting effect ~1.4  Adengo family (+85%) - Excellent weed control in corn and cereal crops, also in 1.1 case of glyphosate resistance +60%  Belt (+54%) – Broad-spectrum 0.7 insecticide with fast and long-lasting action  Launch of Luna fungicide in the US 0.3  First launch of new SeedGrowth family 0.02 EverGol/Emesto in Canada 2007 2009 2011 2012 2013e 2015ePage 14 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  15. 15. Seeds – Double-Digit Growth in All OurBroad-Acre Crops in 2012Sales in € million; ∆% y-o-y, () Fx & portfolio adj. 2012 Highlights Double-digit %  High demand for InVigor in Canada; CAGR expected launch of conventional oilseed rape +14% in Europe +14%  Expansion of cotton seed business +14% 962 driven by US and Brazil Other 820 Soybean (+83%)  Growing rice seed business in Asia 47 Rice (+23%) (esp. India) 40 199 Cotton (+10%) 179  About 70 new vegetable seed varieties launched 311 Oilseeds (+33%)  Successful launch of Bayer soybean 227 seed in the US  Build-up of global wheat seed business 299 304 Vegetables (-2%) continued with new research cooperations 2011 2012 2015ePage 15 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  16. 16. MaterialScience – Higher Asset Utilization &Efficiency Measures Are Driving PerformanceSales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales  Grow business (volume) above global GDP  Defend market leading positions in PCS and PUR  Sales to slightly increase  Realize 150 bp margin to ~€12bn contribution through new  Sales +3.0% to €11.5bn  Adj. EBITDA to further efficiency initiative (volumes +2%)  Optimize asset structure improve  Adj. EBITDA +7% to  Q1‘2013 vs Q4‘2012: in Germany €1,251m Sales to further increase  CFROI# > WACC  CFROI# 5.6% < WACC and adj. EBITDA at same 7.1% level 2012 Target 2013 Aspiration 2015 *Assuming Fx rate of $1.29 per €Page 16 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers #after reproduction Outlook depends on specific planning assumptions as detailed in the Annual Report
  17. 17. Group OutlookPage 17 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  18. 18. Full Year 2013 –R&D And CapEx Budgets R&D 2013e: ~€3.2bn (+7%) CapEx (PPE) 2013e: ~€1.9bn (+24%) HealthCare MaterialScience HealthCare MaterialScience ~€2.1n ~€0.2bn ~€0.6bn ~€0.6bn thereof Pharma 7% ~€1.7bn CropScience 28% ~€0.8bn 32% 26% 65% 14% 2% Reconciliation 25% ~€0.1bn Reconciliation CropScience ~€0.3bn ~€0.5bnPage 18 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  19. 19. Full Year 2013 Outlook Projects FurtherGrowth And Higher EarningsSales ∆ Fx and portfolio adjusted, EBITDA before special items 2012 ∆ vs. 2011 2013E +4-5% to Sales €39.8bn +5% ~€41bn* mid-single-digit % adj. EBITDA €8.3bn +9% increase high-single-digit % Core EPS €5.35 +11% increase *Assuming Fx rate of $1.29 per €Page 19 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers Outlook depends on specific planning assumptions as detailed in the Annual Report
  20. 20. Investor Conference CallFY/Q4 2012 ResultsFebruary 28, 2013 / Marijn Dekkers, CEO
  21. 21. AppendixPage 21 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  22. 22. Q4’2012 –Cash Flow and Net Debt DevelopmentCash Flow in € million, Net Debt in € billion Q4’12 Cash Flow Net Debt Development GCF NCF Invest- oFCF +€223m 7.0 cont. ments 6.8 755 903 743 160 ∆% y-o-y -25 -22 +2 -63 Q3´12 Q4´12 Net debt increase of €1bn due to pension funding, partly offset by positive cash generationPage 22 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  23. 23. Q4’2012 –HealthCareIn € million, ∆% yoy, () = Fx & portf. adjusted Q4’12 Sales Earnings Consumer Adj. Adj. 36% Pharma Health EBITDA* EBIT* +7% (+5%) +7% (+5%) 2,056 2,867 1,342 +14% 1,180 1,001 +23% 827 +9% 815 758 594 +19% 498 515 +22% HealthCare €4,923m; +7% (+5%) 422 407 +28% 317 Price Volume Fx Portfolio 0% +5% +2% 0% Q4‘11 Q4‘12 Q4‘11 Q4‘12 *before special itemsPage 23 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  24. 24. Q4’2012 –CropScienceIn € million, ∆% yoy, () = Fx & portf. adjusted Q4’12 Sales Earnings Environmental Crop Protection Adj. Adj. Science +12% (+11%) EBITDA* EBIT* +18% (+16%) 174 1,540 142 289 +6% 273 162 +12% 145 Seeds -10% (-11%) CropScience €1,856m; +11% (+9%) Price Volume Fx Portfolio 0% +9% +2% 0% Q4‘11 Q4‘12 Q4‘11 Q4‘12 *before special itemsPage 24 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  25. 25. Q4’2012 –MaterialScienceIn € million, ∆% yoy, () = Fx & portf. adjusted Q4’12 Sales Earnings Polycarbonates Polyurethanes Adj. Adj. 0% (-3%) +11% (+9%) EBITDA* EBIT* 1,473 255 +141% 669 CAS** +3% (+5%) 451 106 93 +294% IO*** 168 0% (-1%) MaterialScience €2,761m; +6% (+5%) Q4‘11 Price Volume Fx Portfolio Q4‘11 Q4‘12 Q4‘12 +2% +3% +2% -1% -48 *before special itemsPage 25 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers **CAS: Coatings, Adhesives, Specialties *** IO: Industrial Operations
  26. 26. FY’2012 –Cash Flow and Net Debt DevelopmentCash Flow in € million, Net Debt in € billion 2012 Cash Flow Net Debt Development GCF NCF Invest- oFCF 7.0 +€15m 7.0 cont. ments 4,599 4,532 1,929 2,603 ∆% y-o-y -11 -10 +19 -24 FY´11 FY´12 Net debt constant, despite €1bn pension funding in Q4’2012Page 26 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  27. 27. FY’2012 –Regional PerformanceIn € million, ∆% yoy Fx adjusted 2012 Group Sales by Region Emerging Economies +5% USA Emerging +9% Economies¹ ~5,700 +7% +12% 21% ~4,900 37% +10% ~2,400 0% 31% ~1,800 11% Western Europe Others² 0% +4% Emerging Latin Eastern Africa & Group €39,760m; +5% Asia³ America Europe Middle East ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern EuropePage 27 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers ² Others = Japan, Australia, New Zealand, Canada ³ Emerging Asia = Asia w/o Japan, Australia, New Zealand
  28. 28. FY’2012 –HealthCareIn € million, ∆% yoy, () = Fx & portf. adjusted 2012 Sales Earnings Consumer Adj. Adj. 36% Pharma Health EBITDA* EBIT* +9% (+4%) +8% (+4%) 7,809 10,803 5,068 +8% 4,702 3,736 +11% 3,203 +8% 3,367 2,972 2,298 +13% 2,042 1,865 +8% HealthCare €18,612m; +8% (+4%) 1,730 1,438 +9% 1,325 Price Volume Fx Portfolio 0% +4% +4% 0% FY‘11 FY‘12 FY‘11 FY‘12 *before special itemsPage 28 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  29. 29. FY’2012 –CropScienceIn € million, ∆% yoy, () = Fx & portf. adjusted 2012 Sales Earnings Environmental Crop Protection Adj. Adj. Science +16% (+13%) EBITDA* EBIT* +9% (+5%) 680 6,741 962 2,008 +21% 1,654 1,526 +31% Seeds 1,168+17% (+14%) CropScience €8,383m; +16% (+12%) Price Volume Fx Portfolio +1% +12% +4% -1% FY‘11 FY‘12 FY‘11 FY‘12 *before special itemsPage 29 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers
  30. 30. FY’2012 –MaterialScienceIn € million, ∆% yoy, () = Fx & portf. adjusted 2012 Sales Earnings Polycarbonates Polyurethanes Adj. Adj. -2% (-7%) +12% (+8%) EBITDA* EBIT* 5,995 2,823 1,251 +7% 1,171 CAS** 629 +7% +3% (+4%) 1,972 589 IO*** 713 +8% (+6%) MaterialScience €11,503m; +6% (+3%) Price Volume Fx Portfolio FY‘11 FY‘12 FY‘11 FY‘12 +1% +2% +4% -1% *before special itemsPage 30 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers **CAS: Coatings, Adhesives, Specialties *** IO: Industrial Operations
  31. 31. MaterialScience –Planning Assumptions 2013 Global Economic GDP Outlook Key Customer Industries OutlookGDP growth % prev. year Sales by industry 2012 and expected 2013 growth Others Automotive 5 5.1 (incl. (+2%) Chemicals) 28% 20% 4 3 2 2.5 16% 1.7 1 Electro / 17% 0.1 0.4 Furniture 19% Electronic (+5%) (+5%) Construction (+4%) *Assuming Fx rate of $1.29 per €Page 31 • FY/Q4 2012 Investor Conference Call • Marijn Dekkers Outlook depends on specific planning assumptions as detailed in the Annual Report

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