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Fueling our Strategy
for Sustainable Success
CEO Sandra Peterson


September 2012, Monheim
Forward-Looking Statements

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.
We continue to operate in a challenging
and opportunity-rich landscape




Page 3 • Fueling our Strategy for Sustainable Success • September 2012
Farmers are at the center of our efforts to turn
global challenges into opportunities


                 Our farmer focus
      EMPOWERING farmers to become
      “agripreneurs” with tools & training

      ENABLING progress by investing
      in innovation and technology

      ENHANCING partnerships by
      collaborating from seed to shelf



Page 4 • Fueling our Strategy for Sustainable Success • September 2012
We continue to serve customers worldwide
with our expanding global footprint

Global network of 34 manufacturing, 13 R&D and 18 major seed processing sites


                               Seeds HQ
                               RTP*                                                                                     Global HQ (inc. Crop Protection)
                                                                             Belgium                                    Monheim
                                                                                       Denmark
              Canada                                                                    Germany
                                                                  Netherlands
                                                                                    Switzerland                                   South Korea
                     USA                                             Spain       France       Turkey                      China
                                                                                                 Pakistan                                   Japan
                                                                                                                    Bangladesh

                    Mexico                                                                                                  Thailand
                    Guatemala                                                                               India                    Philippines
                                            Colombia                                                                       Vietnam
                       Costa Rica
                                                                                                                             Singapore

                                                                                                                    Indonesia
                                              Brazil                  Environmental Science HQ
    Manufacturing sites                                               Lyon                                                           Australia

    Major R&D sites                                                                          South Africa

    Major seed                                    Argentina
    processing sites


*Research Triangle Park


 Page 5 • Fueling our Strategy for Sustainable Success • September 2012
In 2011, we launched a four-pillar strategy
to pave the way for sustainable success
1                                          2                             3                        4




Rejuvenate                               Reinvent customer-              Rebalance and            Extend Seeds
the core Crop                            centricity along                refocus innovation       footprint in
Protection business                      value chain                                              focused crops

• Streamlining and                        • Driving commercial               Striving for 50:50   • Strengthening
    enhancing our                             excellence in                  in R&D for Seeds/        position in
    Crop Protection                           marketing and sales            Biologics and            established crops
    portfolio                                                                Chemistry by 2016
                                          • Customizing                                           • Extending portfolio
• Focusing on                                 offerings and                  Innovating               in e.g. soy, wheat,
    flexibility and                           developing                     convergence              oilseeds
    efficiency                                differentiated                 between chemistry
                                              solutions                      and biology



Page 6 • Fueling our Strategy for Sustainable Success • September 2012
Our strategic focus is reaping rewards,
as seen in our H1 sales and profits

H1 2012 Sales                                                                     H1 2012 EBITDA before special items
In € million; Δ% yoy; ( ) Δ% yoy fxp*                                             In € million; Δ% yoy


Bayer CropScience
total: 4,886                                                                                                        1,530
+16% (+14%)
                                                                                                 1,216
                                                 376
Seeds**                                                                                                   +25.8 %
+21% (+18%)
                                      723

Crop Protection
+17% (+14%)

                                                       3787
                                                                                                H1 2011         H1 2012
Environmental
Science                                                                                 EBITDA margin before special items
                                                                                            DA                       item
+3% (+0%)
                                                                                                  29.0%             31.3%

*fxp = foreign exchange and portfolio adjusted     **Formerly called BioScience


 Page 7 • Fueling our Strategy for Sustainable Success • September 2012
Following positive business development
in H1, we raised our full year guidance

Business outlook 2012



        Sales to advance by approximately 10% on a currency-
        and portfolio-adjusted basis


        EBITDA before special items to improve by
        approximately 20%


                 ket
        Above-market growth




Page 8 • Fueling our Strategy for Sustainable Success • September 2012
In the midterm, sales will be driven by above-
market growth and an expansion in Seeds




                                                                         7255
                                                        6830


     Total sales in € million
     Portion of business in:
     Seeds
                                                                                         ~20%
     Crop Protection/
                                                        10%              11%    ~13%
     Environmental Science
                                                         2010            2011   E.2012   E.2016


Page 9 • Fueling our Strategy for Sustainable Success • September 2012
Looking ahead: We continue to see
opportunity-rich market dynamics




                Environmental challenges…
                calling for sustainable crop solutions

                Rapidly-advancing technology…
                demanding differentiated answers

                Increasing market volatility…
                requiring flexible and strategic adaptation




Page 10 • Fueling our Strategy for Sustainable Success • September 2012
We’re leveraging the full potential
of these opportunities




               To beat expectations for sustainable answers…
               we’re aiming to lead the way in
               Sustainable Crop Solutions

               In response to demands for differentiation…
               we’re heavily investing in robust R&D technologies

               To thrive despite increasing market volatility…
               we’re building up world-class Product
               Supply




Page 11 • Fueling our Strategy for Sustainable Success • September 2012
Leading in Sustainable Crop Solutions:
Sustainability in food production is a future mega trend

Customers expect safer and “sustainable” food

   Customers expect safer and “sustainable” food
Global retailers have more stringent residue
reduction targets
   Global retailers have more stringent residue
   reduction targets
Tougher regulations and registration of synthetic products;
higher demand for biologics
   Tougher regulations and registration of synthetic products;
      higher demand for biologics
Biologics often effective in very small quantities
   Biologics often effective in very small quantities

Green Products market forecast to triple to triple
   The broader biologics market forecast
to almost 4 bn bn USD by 2020
   to almost 4 USD by 2020




Page 12 • Fueling our Strategy for Sustainable Success • September 2012
With AgraQuest, we have all competencies
to lead in Sustainable Crop Solutions

    Depending on specific market                                                      Molecular Biology, Small
    conditions, individual solutions for                                              Molecules and Biologics can
    customer needs can be made                                            Molecular   be efficient solution-providers for
    available through different                                           Biology     unmet customer needs - each
    technology platforms                                                              requiring a different expertise




                                                                   Customer Needs
                                                                    Disease control
                                                                     Weed control
                                                                     Pest control
                                Synthetic                             Plant health
                                                                                            Biologics
                                Chemistry



Page 13 • Fueling our Strategy for Sustainable Success • September 2012
Investment of €5 bn in R&D from 2011-2016
will fuel delivery of new global R&D strategy
             Sustainability                                                       Plant Health
              Delivering sustainable                                             Exploiting expertise in Seeds,
              crop solutions to beat                                             Biologics and Small
              customer expectations                                              Molecules to build a unique
                                                                                 position in plant health




                                                                  World-class
                                                                 R&D portfolio
Rebalancing
 Innovation                                                                                    Collaboration
       Investing equally in Seeds /                                                Expanding network of
       Biologics and Chemistry to                                                  collaborations to
       create integrated &                                                         leverage full potential
       effective global R&D                                                        of open innovation
       organization


Page 14 • Fueling our Strategy for Sustainable Success • September 2012
We are ensuring world-class Product Supply
by investing € 2bn from 2011 to 2016

Optimizing supply chain model to increase flexibility and thrive despite volatility


        Building up capacity for top Crop Protection brands including:




        Expanding infrastructure for                                          Accelerating our Capital Expenditures*
                                                                                celerating             Expenditures
        Seeds business (breeding stations
                                                                                                            CAPEX   (in € million)
        and seed production facilities)
                                                                            400
                                                                            300

        Continuing to defend cost                                           200
        leadership by focusing on                                           100
        Operational Excellence                                                           2011        2012   2013    2014       2015   2016




Page 16 • Fueling our Strategy for Sustainable Success • September 2012   *Property, plant and equipment
Bayer CropScience summary




                • We significantly raised guidance for 2012 (in July)
                • We aspire to double the share of our Seeds business by 2016
                • We are investing ~ €5 bn in R&D*
                • We are investing ~ €2 bn in CAPEX*
                • Our pipeline* has a combined peak sales potential of > €4 bn


*2011-2016


Page 17 • Fueling our Strategy for Sustainable Success • September 2012

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BCS annual press conference 2012_sandra_peterson

  • 1. Fueling our Strategy for Sustainable Success CEO Sandra Peterson September 2012, Monheim
  • 2. Forward-Looking Statements 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. We continue to operate in a challenging and opportunity-rich landscape Page 3 • Fueling our Strategy for Sustainable Success • September 2012
  • 4. Farmers are at the center of our efforts to turn global challenges into opportunities Our farmer focus EMPOWERING farmers to become “agripreneurs” with tools & training ENABLING progress by investing in innovation and technology ENHANCING partnerships by collaborating from seed to shelf Page 4 • Fueling our Strategy for Sustainable Success • September 2012
  • 5. We continue to serve customers worldwide with our expanding global footprint Global network of 34 manufacturing, 13 R&D and 18 major seed processing sites Seeds HQ RTP* Global HQ (inc. Crop Protection) Belgium Monheim Denmark Canada Germany Netherlands Switzerland South Korea USA Spain France Turkey China Pakistan Japan Bangladesh Mexico Thailand Guatemala India Philippines Colombia Vietnam Costa Rica Singapore Indonesia Brazil Environmental Science HQ Manufacturing sites Lyon Australia Major R&D sites South Africa Major seed Argentina processing sites *Research Triangle Park Page 5 • Fueling our Strategy for Sustainable Success • September 2012
  • 6. In 2011, we launched a four-pillar strategy to pave the way for sustainable success 1 2 3 4 Rejuvenate Reinvent customer- Rebalance and Extend Seeds the core Crop centricity along refocus innovation footprint in Protection business value chain focused crops • Streamlining and • Driving commercial Striving for 50:50 • Strengthening enhancing our excellence in in R&D for Seeds/ position in Crop Protection marketing and sales Biologics and established crops portfolio Chemistry by 2016 • Customizing • Extending portfolio • Focusing on offerings and Innovating in e.g. soy, wheat, flexibility and developing convergence oilseeds efficiency differentiated between chemistry solutions and biology Page 6 • Fueling our Strategy for Sustainable Success • September 2012
  • 7. Our strategic focus is reaping rewards, as seen in our H1 sales and profits H1 2012 Sales H1 2012 EBITDA before special items In € million; Δ% yoy; ( ) Δ% yoy fxp* In € million; Δ% yoy Bayer CropScience total: 4,886 1,530 +16% (+14%) 1,216 376 Seeds** +25.8 % +21% (+18%) 723 Crop Protection +17% (+14%) 3787 H1 2011 H1 2012 Environmental Science EBITDA margin before special items DA item +3% (+0%) 29.0% 31.3% *fxp = foreign exchange and portfolio adjusted **Formerly called BioScience Page 7 • Fueling our Strategy for Sustainable Success • September 2012
  • 8. Following positive business development in H1, we raised our full year guidance Business outlook 2012 Sales to advance by approximately 10% on a currency- and portfolio-adjusted basis EBITDA before special items to improve by approximately 20% ket Above-market growth Page 8 • Fueling our Strategy for Sustainable Success • September 2012
  • 9. In the midterm, sales will be driven by above- market growth and an expansion in Seeds 7255 6830 Total sales in € million Portion of business in: Seeds ~20% Crop Protection/ 10% 11% ~13% Environmental Science 2010 2011 E.2012 E.2016 Page 9 • Fueling our Strategy for Sustainable Success • September 2012
  • 10. Looking ahead: We continue to see opportunity-rich market dynamics Environmental challenges… calling for sustainable crop solutions Rapidly-advancing technology… demanding differentiated answers Increasing market volatility… requiring flexible and strategic adaptation Page 10 • Fueling our Strategy for Sustainable Success • September 2012
  • 11. We’re leveraging the full potential of these opportunities To beat expectations for sustainable answers… we’re aiming to lead the way in Sustainable Crop Solutions In response to demands for differentiation… we’re heavily investing in robust R&D technologies To thrive despite increasing market volatility… we’re building up world-class Product Supply Page 11 • Fueling our Strategy for Sustainable Success • September 2012
  • 12. Leading in Sustainable Crop Solutions: Sustainability in food production is a future mega trend Customers expect safer and “sustainable” food Customers expect safer and “sustainable” food Global retailers have more stringent residue reduction targets Global retailers have more stringent residue reduction targets Tougher regulations and registration of synthetic products; higher demand for biologics Tougher regulations and registration of synthetic products; higher demand for biologics Biologics often effective in very small quantities Biologics often effective in very small quantities Green Products market forecast to triple to triple The broader biologics market forecast to almost 4 bn bn USD by 2020 to almost 4 USD by 2020 Page 12 • Fueling our Strategy for Sustainable Success • September 2012
  • 13. With AgraQuest, we have all competencies to lead in Sustainable Crop Solutions Depending on specific market Molecular Biology, Small conditions, individual solutions for Molecules and Biologics can customer needs can be made Molecular be efficient solution-providers for available through different Biology unmet customer needs - each technology platforms requiring a different expertise Customer Needs Disease control Weed control Pest control Synthetic Plant health Biologics Chemistry Page 13 • Fueling our Strategy for Sustainable Success • September 2012
  • 14. Investment of €5 bn in R&D from 2011-2016 will fuel delivery of new global R&D strategy Sustainability Plant Health Delivering sustainable Exploiting expertise in Seeds, crop solutions to beat Biologics and Small customer expectations Molecules to build a unique position in plant health World-class R&D portfolio Rebalancing Innovation Collaboration Investing equally in Seeds / Expanding network of Biologics and Chemistry to collaborations to create integrated & leverage full potential effective global R&D of open innovation organization Page 14 • Fueling our Strategy for Sustainable Success • September 2012
  • 15. We are ensuring world-class Product Supply by investing € 2bn from 2011 to 2016 Optimizing supply chain model to increase flexibility and thrive despite volatility Building up capacity for top Crop Protection brands including: Expanding infrastructure for Accelerating our Capital Expenditures* celerating Expenditures Seeds business (breeding stations CAPEX (in € million) and seed production facilities) 400 300 Continuing to defend cost 200 leadership by focusing on 100 Operational Excellence 2011 2012 2013 2014 2015 2016 Page 16 • Fueling our Strategy for Sustainable Success • September 2012 *Property, plant and equipment
  • 16. Bayer CropScience summary • We significantly raised guidance for 2012 (in July) • We aspire to double the share of our Seeds business by 2016 • We are investing ~ €5 bn in R&D* • We are investing ~ €2 bn in CAPEX* • Our pipeline* has a combined peak sales potential of > €4 bn *2011-2016 Page 17 • Fueling our Strategy for Sustainable Success • September 2012