Science For A Better Life. Investor Handout Q V Oct 08

Transcription

1 Science For A Better Life Investor Handout Q V Oct 08

2 Important Information 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 The company assumes no liability whatsoever to update these forwardlooking statements or to conform them to future events or developments.

3 Bayer Has Clearly Defined Its Aspirations Focus portfolio on growth and innovation driven businesses All businesses are growing at or above market and are capable of achieving benchmark performance Strengthen HealthCare and become one of the world s leading diversified HealthCare companies Develop new growth opportunities and safeguard the sustainability of the business Maintain / regain credit ratios which support a single A-rating Outlook 2008 reiterated: higher sales, underlying EBITDA and margin Outlook 2009 projects further growth and higher underlying EBITDA Bayer follows a clear strategy to deliver against these aspirations Investor Presentation Q October 2008 Page 1 The New Bayer A Leader in its Markets Pharmaceuticals 10.3bn Rx pharmaceuticals, global # 6 in specialties with leading position in key categories 34% 33% 18% 19% 33% CropScience 5.8bn agrochemicals and seeds business, global # 1 in agrochemicals Consumer Health 4.5bn OTC pharmaceuticals, blood glucose meters and veterinary medicines, global # 2-4 Investor Presentation Q October 2008 Page 2 14% 15% 34% Group 32.4bn 2007 sales Material Science 10.4bn polyurethanes and polycarbonate business, global # 1 Break-down excluding reconciliation sales

4 Bayer s Transformation A Period of Significant Progress In Sales Sales 29.6bn 29.6bn EBIT 823m EBIT* underlying 828m EBITDA 12% margin* 12% bn 4,287m 21% 5-fold higher underlying EBIT Margin up by 9 percentage points Attractive returns over cost of capital Achieved all group targets CFROI 8% 8% 12% *pre special items Investor Presentation Q October 2008 Page 3 Bayer is Well Positioned And Investing For Growth M&A Portfolio Management Strategic investment focus is on HealthCare R&D Organic Growth Innovation Pipeline progresses dynamically BRIC Emerging Markets Market leading positions in strongly growing markets Investor Presentation Q October 2008 Page 4

5 Six Years of Increasing Focus for Growth Transaction Volume > 42bn since Sales 30.3bn 2007 Sales 32.4bn HealthCare CropProtection Polymers H.C. Starck Wolff Walsrode Diagnostics Plasma Bayer generics Household insecticides PolymerLatex divested divested Divestitures 14bn Acquisitions 28bn Schering AG Roche OTC Direvo Biotech Possis Medical TopSun Sagmel Aventis CropScience + Stoneville Cotton Seeds + Gustafson Seed Treatment + HealthCare CropScience Lanxess spun-off Haarmann & Reimer divested Agfa stake divested GE Bayer Silicones divested Real estate divested Investor Presentation Q October 2008 Page 5 Major examples only MaterialScience Headcount 116,900 Transaction volume Headcount 106,200 Improved Portfolio and Higher Margins in All Businesses In million Sales EBIT underlying EBITDA margin reported*/ underlying 14,807 14,079 3,304 Chemicals 10,435 9, ,492 Investor Presentation Q October 2008 Page 6 4,697 5,826 14* 26 11* 23 12* , HealthCare CropScience Industrials Material Science 10,775 Polymers

6 Bayer s Strategic Investment Focus Is on HealthCare Focus Rationale Historic examples Global Pharma / Consumer Product purchases / pipeline / technologies HealthCare adjacencies Strengthen HealthCare Round-up portfolio Leverage expertise, capabilities and platforms into new business areas Schering Roche OTC Citracal Amikacin Inhaled Recothrom VEGF Trap-Eye Maxygen Hematology Direvo Biotech Possis Medical Emerging markets Exploit above-average growth opportunities Sagmel TopSun Investor Presentation Q October 2008 Page 7 Powerful Portfolio Management Aiming at Generating Value Execution Track record of managing large scale transactions successfully Integrated Aventis CropScience, Roche OTC and Schering Pharma without business disruptions Timelines and synergy targets have been met Demonstrated financial discipline Financing Balanced mix of debt, equity and portfolio if needed Maintaining single A credit rating target Probable Timing Constant monitoring and active approach Due to the excellent positions we have built, however, we feel no pressure and can wait for the right opportunity to arise at the right price Investor Presentation Q October 2008 Page 8

7 Bayer is Well Positioned And Investing For Growth M&A Portfolio Management Strategic investment focus is on HealthCare R&D Organic Growth Innovation Pipeline progresses dynamically BRIC Emerging Markets Market leading positions in strongly growing markets Investor Presentation Q October 2008 Page 9 Pharma Pipeline Promises Accelerated Growth After 2009 Launch Nexavar Xarelto A franchise building opportunity Potentially transformational, 1 st approvals in Europe, Canada Recothrom Approved for surgical hemostasis in US, submitted in EU Late-stage VEGF Trap-Eye Alemtuzumab Phase III in wet AMD underway Phase III in multiple sclerosis Riociguat Amikacin Inhale Investor Presentation Q October 2008 Page 10 Phase II in pulmonary hypertension Phase II in pneumonia, innovative delivery technology *soluble Guanylate Cyclase

8 Nexavar A Franchise Building Opportunity Sales in million +89%* First targeted therapy in kidney cancer (RCC) 330 Only approved drug with overall survival benefit in primary liver cancer (HCC) m 74m 234m 96m ROW U.S. Fast track designation for HCC approval in Japan Peak sales potential: approx. 500m in approved indications (NA, EU, J) >200 clinical trials underway to explore the potential 9M 07 9M 08 *Currency adjusted Investor Presentation Q October 2008 Page 11 Comprehensive Late-Stage Development Program for Xarelto in Place Market Study Facts Phase II Phase III Filing Acute Indications >12,000 patients vs. standard therapy (enoxaparin) VTE prevention after orthopedic surgery ~8,000 patients vs. standard therapy (enoxaparin) VTE prevention in medically ill patients 2011e Chronic Indications ~7,500 patients vs. standard therapy (enoxaparin & warfarin) VTE treatment and secondary prevention 2010e ~14,000 patients noninferiority vs. standard therapy (warfarin) Stroke prevention in atrial fibrillation 2010e Phase II: ~3,500 patients in addition to standard therapy Secondary prevention ACS 2011/ 2012e Investor Presentation Q October 2008 Page 12

9 An Emerging New Class of Assets in the Field of Cardiovascular Diseases Pioneering research in the field of soluble Guanylate Cyclase (sgc) targeting a broad range of cardiovascular diseases sgc stimulator RIOCIGUAT PH II in Pulmonary hypertension sgc activator CINACIGUAT PH II in acute heart failure sgc stimulator BAY PH II in acute heart failure First phase II data for Riociguat presented at ERS in October 2008 Riociguat expected to enter phase III clinical trials in Q Investor Presentation Q October 2008 Page 13 Women s HealthCare Pipeline: Life Cycle Management at its Best Valette Plus OC YAZ Flex OC Qlaira (DUB-OC) Dysfunctional uterine bleeding OC-DHEA OC Mirena Menorrhagia (US) YAZ Dysmenorrhea E2-DRSP OC LCS Contraception YAZ / Yasmin Plus OC Qlaira (DUB-OC) OC (EU) FC-Patch Contraception Visanne Endometriosis Angeliq low-low (HRT) E2/LNG (HRT; Japan) Valette, Meliane etc. Phase II Phase III Submitted Launched Investor Presentation Q October 2008 Page 14 OC: oral contraception LCS: intrauterine levonogestrel releasing contraceptive system HRT: hormon replacement therapy

10 Upcoming Pipeline Newsflow Xarelto ATLAS-results (phase II in ACS) To be presented at AHA, Nov 10, 2008 Xarelto Acute coronary syndrome Phase III initiation end 2008 Xarelto Pooled analysis of RECORD 1-4 To be presented at ASH December, 2008 Nexavar Phase III results melanoma study (ECOG) End of 2008/ early 2009 Amikacin inhale Gram-neg. pneumonia in intubated patients Phase III initiation 2H 08 Riociguat (sgc Stimulator) Pulmonary hypertension Phase III initiation 2H 08 Sagopilone (ZK-EPO) Solid tumors Transition decision Q4 08 Cinaciguat (sgc Activator) Acute decompensated heart failure Phase III initiation 2H 09 Investor Presentation Q October 2008 Page 15 CropScience Strong Track Record of Innovation Sales of new active ingredients launched since 2000 Excellent momentum with 2-3 new molecules launched p.a. on average Sales objective of 2 billion expected to be reached 2 years earlier than targeted, with 23 A.I.s launched by then 9M 08 new product sales up 44% (Fx adj.) E 2009E Investor Presentation Q October 2008 Page 16 bn

11 We Intend to Grow BioScience Sales to About 1bn by 2015 Accelerate Growth CAGR 2002*-2007 in million ~ 1 bn BioScience overall 10 % CAGR 10% CAGR 12% Rice 42 % Cotton 18 % Canola 22 % Vegetables 6 % 2002* Target * 2002 sales pro-forma combined sales of Bayer and Aventis CropScience Investor Presentation Q October 2008 Page 17 Capitalize on Global Market Trends and Spur Future Growth Scarce resources Energy savings Lightweight construction Climate change Energy efficiency Fuel efficiency Mobility Lightweight transportation Growing wealth Increasing living standards Demand for entertainment MaterialScience contributions Building insulation Insulation along the cold chain Lightweight roofing Materials for solar modules Lightweight materials for cars Waterborne Coatings Automotive glazing Foam mattresses Blends for electro/electronic housing PCS sheets in large-frame screens Major product examples only Investor Presentation Q October 2008 Page 18

12 Bayer is Well Positioned And Investing For Growth M&A Portfolio Management Strategic investment focus is on HealthCare R&D Organic Growth Innovation Pipeline progresses dynamically BRIC Emerging Markets Market leading positions in strongly growing markets Investor Presentation Q October 2008 Page 19 BRIC Countries Bayer is Well Positioned And Capturing Significant Growth 2007 Sales by market; % Fx adj. RUSSIA Sales: 0.4bn +49% BRAZIL Sales: 1.1bn + 24% INDIA Sales: 0.4bn +32% CHINA* Sales: 1.8bn +30% *includes PR China, Hongkong, Macau and Taiwan Investor Presentation Q October 2008 Page 20

13 Within Only a Couple of Years China Has Become Our 3rd Biggest Market Business well positioned #1 international Healthcare company growing 45% in 2007 Market leader in CropScience gaining share (+19% in 2007) MaterialScience is one of the majors, growing 31% All growth rates are Fx adj. Sales 2007* 1.8bn +30% *includes PR China, Hongkong, Macau and Taiwan Significant investment commitment Bayer s largest fully integrated polymer site TopSun acquisition of domestic OTC business Infrastructure investments incl. marketing & sales to now >6,500 employees Investor Presentation Q October 2008 Page 21 Construction of Bayer s Largest, Fully Integrated Polymer Site Under Way Strengthen our regional competitiveness through local production in China Shanghai Sales bn +18% PUR MDI 80 kt in 2006 (crude MDI splitter) 350 kt in 2008* +50 kt thereafter** TDI 250 kt in 2010* +50 kt thereafter** *under construction **planned All numbers are name plate capacities Dates refer to availability on stream PCS PCS 40 kt in 2005 (PC compounding) PCS 100 kt in kt in 2009* CAS HDI 30 kt in kt thereafter** Desmodur N 17 kt in 2003/08 25 kt in 2009* Desmodur L/IL 25 kt in 2004/08 20 kt PUD in 2008 BMS sales include PR China, Hongkong, Macau and Taiwan Investor Presentation Q October 2008 Page 22

14 Q3 08 Bayer continues on a path of growth Investor Presentation Q October 2008 Page 23 Q Bayer Continues on a Path of Growth Key Figures Underlying EBITDA by Subgroup In million, Δ% y-o-y Sales 7,948 EBITDA* 1,493 EBIT* 891 Core EPS 0.85 MaterialScience 17% HealthCare Δ% + 2% - 4% ² - 7% + 5% CropScience 14% 68% Δ% Adj. ** + 5% 1% Reconciliation * Before special items ** Currency & portfolio adjusted Investor Presentation Q October 2008 Page 24

15 HealthCare Strongest Quarter in Terms of Sales Since Acquisition of Schering Q3 08 Sales Earnings In million, Δ% y-o-y Consumer Health +5% (+7%) Pharma +3% (+6%) Underlying EBITDA 953 1,018 +7% Underlying EBIT 1, % % 2, % % % HealthCare 3,802m; +3% (+6%) Q3 07 Q3 08 Q3 07 Q3 08 ( ) Currency & portfolio adjusted Investor Presentation Q October 2008 Page 25 CropScience On Track For Record Performance in 2008 Q3 08 Sales Earnings In million, Δ% y-o-y Environmental Science +2% (+7%) Bio Science +16% (+21%) Crop Protection +8% (+15%) Underlying EBITDA % Underlying EBIT 1, % % % CropScience 1,248m; +8% (+14%) Q3 07 Q3 08 Q3 07 Q3 08 ( ) Currency & portfolio adjusted Investor Presentation Q October 2008 Page 26

16 MaterialScience Weaker Demand Aggravated by Transportation Ban And Texas Plant Closure Q3 08 Sales Earnings In million, Δ% y-o-y Systems 0% (0%) 1, Materials -9% (-2%) Underlying EBITDA % 30-63% -34% Underlying EBIT % -44% -10 MaterialScience 2,549m; -3% (-0.5%) Q3 07 Q3 08 Q3 07 Q3 08 ( ) Currency & portfolio adjusted Investor Presentation Q October 2008 Page 27 Currencies And Acquisitions Caused Higher Net Debt Q3'08 Cash Flow Net Debt Development In million In billion GCF NCF cont. Investments ofcf ,171 1, Δ % y-o-y +1% -24% +2% -35% Q2 08 Q3 08 Investor Presentation Q October 2008 Page 28

17 Optimistic about future developments Investor Presentation Q October 2008 Page Outlook Reiterated, 2009 Outlook Projects Further Growth And Higher Underlying EBITDA 2008 sales and earnings expectations and 2009 Group Fx adj. sales increase > 5% Increase in underlying EBITDA and margin* HealthCare Fx adj. growth in all divisions at or above market Margin* increase toward 27% CropScience Fx adj. growth by well over 10% Margin* increase to approx. 25% MaterialScience Higher volumes and good, value-creating earnings level, but well below Q4 08 underlying EBITDA below Q3 08 level. Group Further increase in underlying EBITDA HealthCare Continued growth, underlying EBITDA margin of approx 28% CropScience Continued growth, underlying EBITDA margin in the range of 25% MaterialScience Further underlying EBITDA decline Investor Presentation Q October 2008 Page 30 * Underlying EBITDA margin

18 The New Bayer Clear Strategy, Clear Targets, Focus is on Execution Active portfolio management: transaction volume > 42bn Strategic investment focus is on HealthCare: 20bn to grow the business to almost 50% of group sales Increased underlying EBIT from 828m in 2002 to 4.3bn in 2007 Delivered on commitments and achieved financial targets Strong performance continued in 2009 Intend to pay-out 30 40% of Core EPS as dividend 2008 outlook targets further growth and higher margins Outlook 2009 projects further growth and higher underlying EBITDA Investor Presentation Q October 2008 Page 31 Reporting Events and AGM Date Event Publication Tuesday, March 3, 2009 Wednesday, April 29, 2009 Tuesday, May 12, 2009 Wednesday, July 29, 2009 Tuesday, October 27, 2009 Investor Conference Call Investor Conference Call Annual General Meeting Investor Conference Call Investor Conference Call 2008 Annual Report First Quarter Results Stockholders Newsletter Second Quarter Results Stockholders Newsletter Third Quarter Results Stockholders Newsletter Investor Presentation Q October 2008 Page 32

19 Investor Relations Contacts Dr. Alexander Rosar Head of Investor Relations Phone: Dr. Jürgen Beunink Phone: Ilia Kürten Phone: Judith Nestmann Phone: Peter Dahlhoff Phone: Ute Menke Phone: Dr. Olaf Weber Phone: Investor Presentation Q October 2008 Page 33