Investor Handout Q April 2012 I Leverkusen

Transcription

1 Investor Handout Q April 2012 I Leverkusen

2 Science For A Better Life 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 forward-looking statements or to conform them to future events or developments. Disclaimer

3 Bayer Science For A Better Life Market leading positions in vast majority of portfolio New product pipeline strength in Pharma, CropProtection & BioScience Strong and profitable growth in emerging markets, especially China Unique opportunity at the interfaces of human, animal and plant health Group wide excellence initiatives to further boost earnings and free-up growth resources Incentive systems aligned to business specific challenges Mid-term targets show significant further value generation potential Page 1 Investor Handout Q st Quarter 2012 Encouraging Start To The Year Sales in million % currency & portfolio adj. EBIT in million EBITDA adjusted* in million Core EPS in 9,415 10,056 1,637 2,232 2, ,148 Q1 11 Q1 12 Q1 11 Q1 12 Q1 11 Q1 12 Q1 11 Q % +43% +9% +16% Page 2 Investor Handout Q *before special items

4 A Period of Significant Progress Sales ( billion) EBITDA before special items margin* (%) EBITDA before special items* ( billion) Core earnings per share* ( ) Page 3 Investor Handout Q * from continuing operations Consistent Strong Cash Generation Gross Cash Flow* ( billion) Trade working capital to sales ratio (%) Net Cash Flow* ( billion) Net financial debt** ( billion) Page 4 Investor Handout Q * from continuing operations ** year-end data

5 2012 Financial Outlook Page 5 Investor Handout Q Outlook 2012 Planning Assumptions 2011 Group sales break-down in %, growth estimates in % Expected 2012 Global Market Development 27% Rx-pharma Mid-single digit growth, driven by emerging markets 10% OTC-pharma Low- to mid-single digit growth 3%Diabetes care low-single digit growth 3%Animal Health Moderate growth 15% Others 20% Agrochemicals/Seeds Positive development 5%Furniture/wood Ongoing recovery, small growth 6 % Construction Ongoing recovery 5%Electro/electronic Robust growth 6%Automotive Robust growth Page 6 Investor Handout Q1 2012

6 Fiscal 2012 Outlook Projects Further Growth And Higher Earnings Sales Fx and portfolio adjusted, EBITDA before special items 2011 vs E Sales 36.5bn +6% +~3% or ~ 37bn* Adj. EBITDA 7.6bn +7% Slightly improve Core EPS % Slightly improve Page 7 Investor Handout Q *Assuming Fx rate of $1.40 per Outlook depends on specific planning assumptions as detailed in the Annual Report Fiscal 2012 Guidance By Subgroup HealthCare Expect sales to increase by low- to mid-single-digit percentage. Plan to slightly improve adj. EBITDA. Pharma Consumer Health CropScience MaterialScience Expect sales to remain stable or move slightly higher, and adj. EBITDA to approx. match prior year level. Anticipate mid-single-digit percentage growth of sales and adj. EBITDA. Plan to grow above market. Guidance (issued in February) projects an increase of sales and adj. EBITDA by mid-singledigit percentages. Up-date with publication of Q2 results depending on future business development. Expect sales and adj. EBITDA to remain level with prior year. Q2 12: Expect an improvement in sales and significantly higher adj. EBITDA compared to Q1 12. Page 8 Investor Handout Q Sales Fx and portfolio adjusted, EBITDA before special items Outlook depends on specific planning assumptions as detailed in the Annual Report

7 Strategic Priorities Page 9 Investor Handout Q Building A World-Class Innovation Company Portfolio Growth Productivity Enhance competitive position Strengthen LifeSciences Intensify cooperation & licensing activities Exploit synergy potential of human, animal and plant health Invest in innovation capabilities Maximize value of new product pipeline strength Leverage competitive advantage of new TDI gas phase technology Realize emerging market opportunity Decomplex structures and processes Implement two-year group restructuring plan Further adjust business processes at MaterialScience to ongoing commoditization Page 10 Investor Handout Q1 2012

8 Two Distinct Business Models LifeSciences MaterialScience Product innovation, R&D-ratio ~11% of sales Process innovation, capital intensive COGS relatively low, selling & distribution relatively high High profitability, adj. EBITDA-margins 23-27%* Increasing generic competition & government intervention 31% 69% 16% 84% COGS high (~79%) marketing & selling relatively low (SAARE** ~11%) Lower profitability, adj. EBITDA margins ~11%* Few competitors, new entrants from Asia, Middle East Structural risk: approvals, meta-analysis, product liability Sales 2011 Adj. EBITDA 2011 Cyclical risk: demand and supply fluctuations Page 11 Investor Handout Q Breakdown excl. Reconciliation *EBITDA before special items in % of sales, 2011 **Selling, administration and R&D Mid-term Targets Page 12 Investor Handout Q1 2012

9 HealthCare Building Growth Momentum Priority Target 2014 Accelerate growth Pharma: Successfully commercialize late-stage pipeline and realize emerging markets (EM) opportunity Consumer Health: Aspire to become world-leading OTC company Improve profitability HealthCare sales of ~ 20bn Sales of ~ 11.5bn High-single to low-double-digit % EM growth Sales of ~ 8.5bn HealthCare margin* of 28% Pharma margin* of >30% Consumer Health margin* of ~25% Page 13 Investor Handout Q *EBITDA before special items to sales in % CropScience Propelling Future Growth Priority Target 2014 (normal market conditions) Above market growth Translate R&D effectively into sales Extend BioScience footprint > 8bn sales New crop protection product sales (=launched since 2006) of ~ 1.5bn Aspiration to grow business in-line with average of last 3 years, i.e. CAGR ~20% p.a. Improve profitability Generate adj. EBITDA* margin of ~24% Page 14 Investor Handout Q *EBITDA before special items to sales in %

10 MaterialScience Earn A Premium Over Cost of Capital Priority Growth Leadership Leverage competitive advantage of TDI gas-phase technology Closely monitor timing and necessity of capital investments Earn a premium over cost of capital Performance Targets Grow business (volume) above global GDP Defend #1 market positions in polycarbonates and MDI Increase market share of TDI business (2011: 23-24%*) CapEx (PPE) budget of 1.5-2bn until 2014 Expand Caojing, China site Establish world-scale facilities in Germany CFRoI after reproduction > WACC Page 15 Investor Handout Q *by volume New Incentive Scheme Reflects Business Specific Challenges Individual Subgroup Group Performance + Performance + Performance Individual Business Targets HealthCare Sales growth & adj. EBITDA* margin, innovation CropScience Sales growth & adj. EBITDA* margin; relative performance vs. peers, innovation MaterialScience CFRoI vs. cost of capital, process innovation Core EPS Page 16 Investor Handout Q *before special items

11 Innovation Page 17 Investor Handout Q Pharma Pipeline Significant Progress Achieved Since 2011 Project Indication Peak Sales Potential Xarelto Cardiology / Anticoagulation VEGF Trap- Eye Ophthalmology / Inhibition of blood vessel growth Status & Targets > 2bn SPAF: launched (US, EU, J, others) DVT treatment and sec. prevention: launched VTE prev. ORS: launched in US Sec. prev. ACS: filed PE treatment and sec. VTE prevention: filed (EU) 1bn Filed for wet AMD in EU and Japan Phase III for DME and wet AMD (China) initiated Positive phase III data in CRVO Alpharadin Oncology / Targeting of bone metastases Regorafenib Oncology / Oral multi-kinase inhibition Page 18 Investor Handout Q bn CR prostate cancer: 44% improvement of OS Fast track designation by FDA Filing target: mid bn Metastatic colorectal cancer: 29% improvement of OS Fast track designation by FDA Filing target: 1H 2012 Phase III study in mgist met primary efficacy endopoint ACS: acute coronary syndrome; AMD: age-related macular degeneration; CR: castration refractory; CRVO: central retina vein occlusion; DME: diabetic macular edema; DVT: deep vein thrombosis; mgist: metastatic gastrointestinal stromal tumor; ORS: orthopedic surgery; OS: overall survival; PE: pulmonary embolism; SPAF: stroke prevention in atrial fibrillation; VTE: venous thromboembolism

12 Crop Protection Pipeline with 2bn Sales Potential Sales in bn from launches e Launches e* ~ 2.0 Fungicide Seed Treatment Herbicide Fungicide ~ 0.2 Sivanto Seed Treatment Insecticide 2011 Peak sales potential Triafamone Herbicide Page 19 Investor Handout Q * subject to regulatory approval New LifeSciences Technologies Allow For A Stronger Cross-Fertilization From a species-oriented research to a multi-species research approach Human Health Animal Health Plant Health Human Health Animal Health Plant Health New Technologies New Perspectives Paradigm: Mammals and crops differ substantially from each other Strong silo mentality in research Paradigm: There is more common ground between mammals and crops than assumed before Growing interest of researchers in different species ( cross fertilization ) Page 20 Investor Handout Q1 2012

13 Opportunity Emerging Markets Page 21 Investor Handout Q Emerging Markets Sales Growth Well Above Global Average In million, % yoy Fx adjusted FY2011 Group Sales by Region Emerging Economies USA +3% 19% 36% Emerging Economies¹ +9% +5% ~5, % ~4,300 34% 11% +12% ~2,100 +9% ~1,800 Western Europe +4% Group 36,528m; +6% Others² +4% Emerging Asia³ Latin America Eastern Europe Africa & Middle East Page 22 Investor Handout Q 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

14 Emerging Markets All Subgroups Have Strong Foothold FY 2011 Group sales breakdown; % yoy Fx adjusted HealthCare CropScience MaterialScience 43% 32% 42% +10% +11% +7% = Developed Markets = Emerging Markets 1 Page 23 Investor Handout Q ¹ Emerging markets: Latin America; Asia/Pacific w/o Japan, Australia, New Zealand; Africa and Middle East incl. Turkey; Eastern Europe All BRIC-Countries in Our Most Important Country Portfolio FY 2011 sales in billion; % yoy Fx adjusted +3% +5% % % +13% % +1% +5% +5% +10% -2% +15% +11% +14% * Page 24 Investor Handout Q * Greater China includes PR China, Hong Kong, Macau and Taiwan

15 Bayer in Greater China Key Facts Sales Bayer FY 2011 In million 36,528m 8% China: 2,957m 58% BMS 2,957m 37% BHC 5% BCS Employees Bayer Greater China (FTE) Sales Development Bayer Greater China (in billion) 8,350 10,001 10, Page 25 Investor Handout Q Greater China: PR China, Hongkong, Macao, Taiwan Efficiency Page 26 Investor Handout Q1 2012

16 Restructuring Program Fully On Track Contribution by Subgroup Holding & Admin. ~34% CropScience ~12% 800m HealthCare ~54% Target: 800m annual cost savings by 2013 Reinvestment of ~50% One-time-charges of approx. 1bn of which 842m booked until end Q1 12 Plans include staff reductions of 4,500 2,500 new hires in growth and innovation, particularly in emerging markets Measures with 649m annualized savings already implemented until end Q1 12 Page 27 Investor Handout Q Full Year 2012 R&D And CapEx Budgets R&D 2012e: ~ 3.0bn CapEx (PPE) 2012e: ~ 1.5bn HealthCare 2.0bn thereof Pharma 1.5bn 8% MaterialScience 0.2bn CropScience 0.8bn 25% 24% HealthCare 0.5bn 33% MaterialScience 0.5bn 34% 66% 67% 1% 13% 20% Reconciliation 0.05bn Reconciliation 0.2bn CropScience 0.3bn Page 28 Investor Handout Q1 2012

17 Appendix Page 29 Investor Handout Q Financial Performance Q Page 30 Investor Handout Q1 2012

18 1 st Quarter 2012 Encouraging Start To The Year ( ) = Fx & portfolio adjusted Q1 11 Q1 12 % million million Sales 9,415 10, (+5) EBITDA - reported 1,866 2, adjusted* 2,232 2, EBIT - reported 1,148 1, adjusted* 1,590 1, Net income 684 1, NCF ofcf EPS - reported core Highlights of Financial Results Organic sales growth of +5%, reported EBIT up 43%, Core EPS +16% Strong start to the season at CropScience, increases at HealthCare, continuing margin pressure at MaterialScience Continued innovation pipeline progress Outlook for 2012 reiterated Page 31 Investor Handout Q *before special items 1 st Quarter 2012 HealthCare: Increase In All Divisions In million, % yoy, () = Fx & portf. adjusted Consumer Health +4% (+3%) Q1 12 Sales 1,825 36% 2,517 Pharma +4% (+2%) Adj. EBITDA* 1,140 Earnings 1,181 +4% Adj. EBIT* % % Price 0% HealthCare 4,342m; +4% (+2%) Volume +2% Fx +2% Portfolio 0% % % % Q1 11 Q1 12 Q1 11 Q1 12 Page 32 Investor Handout Q *before special items

19 1 st Quarter 2012 CropScience: Good Start To The Season In million, % yoy, () = Fx & portf. adjusted Environmental Science +5% (+3%) Q1 12 Sales Crop Protection 36% +16% (+15%) 1,937 Adj. EBITDA* 745 Earnings % 624 Adj. EBIT* % BioScience +21% (+17%) CropScience 2,610m; +16% (+14%) Price +1% Volume +14% Fx +2% Portfolio -1% Q1 11 Q1 12 Q1 11 Q1 12 Page 33 Investor Handout Q *before special items 1 st Quarter 2012 MaterialScience: Continuing Margin Pressure In million, % yoy, () = Fx & portf. adjusted Polycarbonates -1% (-4%) Q1 12 Sales 706 Polyurethanes 36% +7% (+5%) 1,443 Adj. EBITDA* Earnings Adj. EBIT* CAS** 0% (+4%) IO*** +13% (+9%) MaterialScience 2,788m; +4% (+3%) % % Price 0% Volume +3% Fx +2% Portfolio -1% Q1 11 Q1 12 Q1 11 Q1 12 Page 34 Investor Handout Q *before special items **CAS: Coatings, Adhesives, Specialties *** IO: Industrial Operations

20 1 st Quarter 2012 Cash Flow And Net Debt Development Cash Flow in million, Net Debt in billion, Q1 12 Cash Flow Net Debt Development GCF NCF cont. Investments ofcf - 162m , % y-o-y Q4 11 Q1 12 Page 35 Investor Handout Q1 2012

21 Science For A Better Life Date Event Publication Tuesday, June 12, 2012 Tuesday, July 31, 2012 Tuesday, October 30, 2012 Wednesday, November 21, 2012 Thursday, February 28, 2013 Thursday, April 25, 2013 Friday, April 26, 2013 Meet Management in New York Investor Conference Call Investor Conference Call Meet Management in Tokyo Investor Conference Call Investor Conference Call Annual General Meeting Investor Conference Second Quarter 2012 Results Stockholders Newsletter Third Quarter 2012 Results Stockholders Newsletter Investor Conference 2012 Annual Report First Quarter 2013 Results Stockholders Newsletter Reporting Events and AGM

22 Science For A Better Life Dr. Alexander Rosar Head of Investor Relations Phone: alexander.rosar@bayer.com Dr. Jürgen Beunink Phone: juergen.beunink@bayer.com Ute Menke Phone: ute.menke@bayer.com Peter Dahlhoff Phone: peter.dahlhoff@bayer.com Judith Nestmann Phone: judith.nestmann@bayer.com Fabian Klingen Phone: fabian.klingen@bayer.com Dr. Olaf Weber Phone: olaf.weber@bayer.com Investor Relations Contacts