2. Disclaimer
This presentation may contain forward-looking statements based on current
assumptions and forecasts made by Bayer Group or subgroup management.
Various known and unknown risks, uncertainties and other factors could lead to
material differences between the actual future results, financial situation,
development or performance of the company and the estimates given here.
These factors include those discussed in Bayer’s public reports which are
available on the Bayer website at www.bayer.com.
The company assumes no liability whatsoever to update these forward-looking
statements or to conform them to future events or developments.
Page 2 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
3. Full Year 2011 –
Record Sales And EBIT
Very good year overall, Group targets – that were raised after Q1 –
achieved, proposed DPS of €1.65
Mixed business performance in Q4 – HealthCare and CropScience in line,
MaterialScience below expectations
Excellent innovation pipeline progress: 4 potential blockbuster products
currently launching or expected to be launched near-term at pharma, crop
protection pipeline with €2bn combined peak-sales potential (2011-2015)
Continued Emerging Markets growth: 9% organic business expansion
Productivity largely improved: measures with annualized savings of €543
million implemented
Confident for 2012: Expect higher sales and earnings
Page 3 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
4. 4th Quarter 2011 –
Mixed Business Performance
Q4‘10 Q4‘11 ∆% Highlights of Financial Results
€ million € million
Top-line driven by ConsumerHealth and
Sales 9,012 9,191 +2 (+2)
CropScience
EBITDA
Emerging Markets sales up 5%
- reported 1,510 1,415 -6
- adjusted 1,689 1,541 -9 Improvement of reported EBIT due to
EBIT lower special charges
- reported 51 629 •
Adj. EBITDA declined due to a sharp
- adjusted 1,005 844 -16 drop at MaterialScience
Net income -145 397 •
NCF 1,941 1,152 -41 Net cash flow impacted by payments in
connection with LL Rice (€484m)
oFCF 1,417 427 -70
EPS
- reported -0.18 0.48 •
- core 0.95 0.97 +2
( ) = Fx & portfolio adjusted
Page 4 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
6. Full Year 2011
Targets Achieved
Page 6 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
7. Full Year 2011 –
All Group Targets Achieved
Sales ∆ Fx and portfolio adjusted, EBITDA pre-special items
2011 Outlook 2011 2011
Comments
original actual ∆
4-6% to Raised to 5-7% or €36-37bn
Sales €36.5bn +6%
€35-36bn in Q1
increase
adj.
towards €7.6bn +7% Raised to >€7.5bn in Q1
EBITDA
€7.5bn
Increase by
Core EPS €4.83 +15% Raised to ~15% in Q1
~10%
Net Debt reduce €7.0bn -€0.9bn Record GCF
Page 7 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
8. Full Year 2011 –
Subgroup Performance vs. Targets
2011 Outlook 2011
in € million adj. ∆ Comments
original actual
HealthCare
Targets achieved or exceeded
Sales low/mid single-digit 17,169 +2%
Top-line driven by Consumer
increase
Health
Adj. EBITDA* small improvement 4,702 +7% Pharma margin up 140 bpts.
CropScience
≥ mid-single digit
Sales 7,255 +9%
increase Achieved or exceeded all targets
grow at higher rate
Adj. EBITDA* 1,654 +28%
than sales
MaterialScience Sales growth above, bottom-line
mid single-digit clearly below expectations
Sales 10,832 +8%
increase Pressure from higher raw
grow at higher rate material prices and deteriorating
Adj. EBITDA* 1,171 -14% business environment
than sales
Page 8 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers *Adj. EBITDA = pre-exceptional items
9. Full Year 2011
Significant Progress
Page 9 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
10. Pharma Pipeline –
2011 – Significant Progress Achieved
Project Indication Peak sales Status & Targets
potential
Xarelto Cardiology / > €2bn SPAF: launched (US, EU, others)
Anticoagulation DVT treatment and sec. prevention: launched
DVT prev. ORS: launched in US
Sec. prev. ACS: filed
VEGF Trap- Ophthalmology / ≥ €1bn Filed for wet AMD in EU and Japan
Eye Inhibition of blood Phase III for DME and wet AMD (China)
vessel growth initiated
Positive phase III data in CRVO
Alpharadin Oncology / ≥ €1bn CR prostate cancer: 44% improvement of OS
Targeting of bone Fast track designation by FDA
metastases Filing target: mid 2012
Regorafenib Oncology / ≥ €1bn Metastatic colorectal cancer: 29%
Oral multi-kinase improvement of OS
inhibition Fast track designation by FDA
Filing target: 1H 2012
SPAF: stroke prevention in atrial fibrillation; DVT: deep vein thrombosis; ORS: orthopedic surgery;
ACS: acute coronary syndrome; AMD: age-related macular degeneration; DME: Diabetic macular edema
CRVO: central retina vein occlusion; CR: castration refractory; OS: overall survival
Page 10 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
12. Emerging Markets –
Sales Growth Well Above Global Average
Full Year 2011 Group sales by region Emerging Economies
+5%
USA Emerging
+3% Economies¹ ~5,100
+9% +12%
19% 36%
~4,300
+12%
~2,100
+9%
34% 11% ~1,800
Western Europe Others²
+4% +4%
Group €36,528m; +6% Emerging Latin Eastern Africa &
Asia³ America Europe Middle East
¹ Emerging economies include: Latin America, Asia w/o Japan, Australia,
In € million, ∆% yoy Fx adjusted 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
Page 12 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
13. Emerging Markets –
Realizing The Opportunity
Fx & portfolio adjusted
Examples 2011 sales development 2011
Hired add. ~1,000 sales reps in China
Relocated primary care headquarter to China
HealthCare Established 50/50 JV w. Zydus Cadila in India
In-licensed Tedizolid antibiotic from Trius for
+10%
several EM markets, incl. China
Opened new “seed treatment application
CropScience center” in Brazil
Approval of LibertyLink soybean, Argentina
+11%
Opened new world-scale TDI plant in China
MaterialScience with innovative gas-phase phosgenation
Moved polycarbonates headquarters to China
+7%
Page 13 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
14. Restructuring Program Fully On Track
Contribution by Subgroup Target: €800m annual cost savings by
2013
Reinvestment of ~50%
Holding & HealthCare
Admin. ~12% One-time-charges of approx. €1bn of
which €803m booked in 2010/11
~54%
Plans include staff reductions of 4,500
€800m
2,500 new hires in growth and
34% innovation, particularly in emerging
markets
CropScience
Measures with €543m annualized
savings already implemented by end
of 2011
Page 14 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
15. Full Year 2012
Financial Outlook
Page 15 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
16. Outlook 2012 –
Planning Assumptions
GDP growth by regions Global economic/political risks
in % vs previous year remain high
5 Outlook for economic growth
5.1
4
4.8 marked by uncertainty
3 3.3 Positive signals for North America,
2 2.6 in Europe we expect slower
1.7 expansion in 2012 than 2011
1
0.7
Asian emerging markets continue to
drive growth
$/€ 1.40, 1% appreciation of Euro
lowers sales by ~€76m and EBITDA
by ~€23m
Crude oil: average $110/bbl
Page 16 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
17. Outlook 2012 –
Planning Assumptions
Expected 2012 Global Market Development
2011 Group sales 10 % OTC-pharma
break-down in % Low- to mid-single digit growth
3 % Diabetes care
low-single digit growth
27 % Rx-pharma
Mid-single digit growth, driven by
emerging markets
3 % Animal Health
Moderate growth
20 % Agrochemicals/Seeds
Positive development
15 % Others
5 % Furniture/wood 6 % Automotive
Robust growth
Ongoing recovery,
small growth
6 % Construction 5 % Electro/electronic
Ongoing recovery Robust growth
Page 17 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
18. Full Year 2012 Outlook Projects Further
Growth And Higher Earnings
Sales ∆ Fx and portfolio adjusted, EBITDA pre-special items
2011 ∆ vs. 2010 2012E
Sales +~3% or
€36.5bn +6%
(Fx & portf. adjusted) ~€37bn*
adj. EBITDA €7.6bn +7% Slightly improve
Core EPS €4.83 +15% Slightly improve
*Assuming Fx rate of $1.40 per €
Outlook depends on specific planning assumptions
as detailed in the Annual/ Quarterly Report
Page 18 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers
19. Full Year 2012 –
Guidance By Subgroup
Expect sales to increase by low- to mid-single-digit
HealthCare percentage. Plan to slightly improve adj. EBITDA .
Expect sales to remain stable or move slightly higher, and adj.
Pharma EBITDA to approx. match prior year level.
Consumer Anticipate mid-single-digit percentage growth of sales and
Health adj. EBITDA.
Plan to grow above market and to increase sales and adj.
CropScience EBITDA by mid-single-digit percentages.
Expect sales and adj. EBITDA to remain level with prior year.
Should market develop more favorably than anticipated, we
MaterialScience expect sales and earnings to increase accordingly.
Q1’12: Expect sales to be roughly level with Q4’11 and adj.
EBITDA to be well above Q4’11 but below Q1’11.
Sales ∆ Fx and portfolio adjusted, EBITDA pre-special items Outlook depends on specific planning assumptions
Page 19 • FY/Q4 2011 Investor Conference Call • Marijn Dekkers as detailed in the Annual/ Quarterly Report