UBS Global Life Sciences Conference Dr. Marijn Dekkers, CEO Bayer AG September 20, 2012
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 www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments. Disclaimer
1 st Half 2012 Strong Operating Performance Sales in million % currency & portfolio adj. EBIT in million EBITDA pre-special items in million Core EPS in 18,667 20,233 4,267 4,614 2.74 3.15 2,421 2,387 1H 11 1H 12 1H 11 1H 12 1H 11 1H 12 1H 11 1H 12 +5% -1% +8% +15% Page 1 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 2012 Outlook Projects Further Growth and Higher adj. EBITDA/Core EPS Sales ( billion) "4-5% organic growth" EBITDA before special items margin (%) 35.1 36.5 20.8 "increase" 20.2 2010 2011 2012E 2010 2011 2012E EBITDA before special items ( billion) Core earnings per share ( ) "High single digit % increase" "~10% increase" 7.6 4.83 7.1 4.19 2010 2011 2012E 2010 2011 2012E Page 2 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012
Building Growth Momentum in HealthCare Page 3 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 Bayer A Leader in Its Markets 50% 49% 20% 20% 31% 30% 17.2bn 7.3bn HealthCare Pharmaceuticals 9.9bn, leading positions in key categories Consumer Health 7.2bn, OTC pharmaceuticals, blood glucose meters and veterinary medicines, global #2-5 CropScience Agrochemicals and seeds & traits, global #2 in agrochemicals Sales 2011: 36.5bn 10.8bn MaterialScience Polyurethanes and polycarbonates, global #1/2 Page 4 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 Break-down excluding reconciliation
Bayer A Leader in Its Markets 28% 31% 9.9bn 3.5bn Pharma Leading positions in key therapeutic categories Consumer Care Global #2 in OTC-pharmaceuticals 10% 7% 4% 20% Sales 2011: 36.5bn 2.5bn 1.2bn Medical Care #1 in fluid injection systems #1 in contrast media #4 in blood glucose meters Animal Health Global #5 Page 5 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 Break-down excluding reconciliation HealthCare Mid-term Targets 2011 Target 2014 Priority billion Sales HealthCare 17.2 ~ 20bn Accelerate growth Pharma 9.9 ~ 11.5bn Consumer Health 7.2 ~ 8.5bn Margin* HealthCare 27.4% 28% Pharma 29.9% > 30% Consumer Health 24.4% ~ 25% Successfully commercialize latestage pipeline and realize Emerging Markets opportunity Aspire to become world-leading OTC company Further improve profitability Page 6 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 *EBITDA before special items to sales in %
1H 2012 HealthCare: Record Sales and Earnings Sales in million % currency & portfolio adj. yoy EBITDA before special items in million, % yoy 4,166 4,342 4,208 4,628 1,140 1,181 1,156 1,248 Q1 11 Q1 12 Q2 11 Q2 12 Q1 11 Q1 12 Q2 12 Q2 12 +2% +4% +4% +8% Page 7 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 1H 2012 - Strong Business Momentum in Emerging Markets Continued Sales in million; % y-o-y Fx adjusted 1H 2012 HealthCare Sales Emerging Economies USA +4% 25% ~33% Emerging Economies¹ +9% +12% +9% 24% 14% ~1,000 ~1,000 +6% +5% Western Europe -2% ~30% Others² 0% ~500 ~450 HealthCare 8,970m Emerging Asia³ Latin America Eastern Europe Africa & Middle East 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 without Japan, Australia, New Zealand Page 8 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012
4 Potential Blockbusters Launch Preparations Ongoing Page 9 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 Xarelto Effective Anticoagulation For More Patients 1) Clinical 1 Breadth of indications: met or exceeded primary efficacy endpoint in 11/11 phase III studies 2) Regulatory Filed in: VTE treatment and secondary prevention in US; PE treatment and secondary VTE prevention in EU; secondary prevention of ACS in Europe and US 3) Marketing Launched in 117 countries for VTE prevention following total knee/hip replacement surgery* Launched in 46 countries in SPAF* Launched in 42 countries DVT treatment* Peak sales potential > 2bn Euro Page 10 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 * as of August, 2012 SPAF: prevention of stroke and systemic embolism in patients with nonvalvular atrial fibrillation, DVT: deep vein thrombosis; VTE: Venous thromboembolism; ACS: Acute coronary syndrome
Xarelto - On Track For 2012 Sales Target of 250-270m Germany with outstanding launch performance; market share 1 ~18% vs. dabigatran ~10% US*: steady uptake with consistent positive indicators in cardiology Japan: launch activities on track; market share still low UK: reimbursed for SPAF, DVT treatment and VTE prevention 2 ; market share ~2%, growth in SPAF Brazil: strong uptake, 14% market share 1 ; starting to break warfarin loyalty (~29% of patients are switchers from warfarin) Canada: obtained reimbursement 3 ; market share 1 ~ 5% Roll-out for SPAF in France and Spain, Sept 2012 Status as of August 2012 SPAF: prevention of stroke and systemic embolism in patients with non-valvular Page 11 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 atrial fibrillation, 1: retail anticoagulants; ex manufacturer prices; 2 after hip or knee replacement surgery ;3 SPAF after VKA failure; *: marketed by J&J VEGF Trap-Eye A New Treatment Option For Various Retinal Diseases Expect first launches in wet AMD in Australia, Germany, Japan and UK end 2012 1 Launch team in place, staffing in various countries ongoing Co-promotion agreement with Santen, a leading ophthalmic pharmaceutical company in Japan established Regeneron reported encouraging uptake in the first year after launch in the US 2 Positive phase III data in CRVO - filing targeted 2H 2012 in Europe Late-stage clinical program underway addressing different back-of-the eye diseases including mcnv and DME Peak sales potential 1bn Euro ex-us AMD: age-related macular degeneration, CRVO: central retinal vein occlusion Page 12 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 mcnv: Myopic choroidal neovascularization; DME: Diabetic macular edema 1:subject to regulatory approval 2 :Marketed by Regeneron; Regeneron has exclusive rights in the US
Regorafenib A Novel Multi-Kinase Inhibitor Shows Potential in Different Forms of Cancer Filed for mcrc in the US and Europe on the basis of CORRECT trial where Regorafenib showed 29% improvement in Overall Survival vs. placebo Obtained priority review in the US Preparing for launch by end 2012 in the US and in Europe for early 2013 Phase III in mgist (GRID trial) showed improvement in Progression-free Survival versus placebo (73% reduction in the risk of progression or death) Filed for metastatic/unresectable GIST in the US; filing Europe 2013e Orphan drug status for GIST obtained in the US Clinical studies to explore efficacy in liver cancer (2 nd line) as well as colorectal cancer (adjuvant therapy after resection of liver metastases) under initiation Peak sales potential 1bn Euro Page 13 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 mcrc: Metastatic colorectal cancer; mgist: Metastatic gastrointestinal cancer;, Alpharadin Addressing Significant Unmet Need for Treating Cancer Bone Metastases Alpha-pharmaceutical (Radium-223 Dichloride, delivering highly energetic, short ranging radiation) - in-licensed from Algeta Radium as natural bone seeker targeting bone metastases ALSYMPCA (phase III) trial in symptomatic castration-resistant prostate cancer (CRPC) patients with bone metastases stopped early - Alpharadin demonstrated 44% improvement in overall survival Filing for treating bone metastases in patients with CRPC targeted 2H 2012 Broader clinical development program in preparation Tumor cells Newly formed bone Bone metastases Radium-223 deposition Peak sales potential 1bn Euro highly localized tumor cell killing Page 14 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 CRPC: Castration-resistant prostate cancer
Riociguat Two P III Studies Completed Page 15 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 Riociguat Clinical Program Study Facts Phase I Phase II Phase III Milestones 445 patients (treatment-naïve or pre-treated) vs.placebo (PATENT-1); Efficacy study and long-term extension Pulmonary Arterial Hypertension (PAH) completed ~ 260 patients vs.placebo (CHEST-1); Efficacy study and long-term extension Chronic Thromboembolic Hypertension (CTEPH) completed ~ 200 patients vs.placebo with left ventricular systolic dysfunction PH-LVD completed Data presentation for the phase III studies PATENT-1 and CHEST-1 planned at CHEST (Oct. 20-25, 2012; Atlanta) Data presentation for the phase II study LEPHT planned for 2H 2012 Page 16 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 PH: Pulmonary hypertension; PAH: Pulmonary arterial hypertension, CTEPH: Chronic thromboembolic pulmonary hypertension LVD: Left ventricular disease
Consumer Care A Leader in OTC-Pharmaceuticals Page 17 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 Consumer Care Consistent Strong Performance Sales in million; % Fx & portfolio adj. +7% 3,020 3,080 3,371 3,534 2,531 2,634 Performance Global #2 with a portfolio of some of the world s most recognized brands Track record of performance Continued market share gains 2006 2007 2008 2009 2010 2011 Acquired Roche OTC, Citracal, Sagmel and Topsun Page 18 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012
Consumer Care Strong Brands Matter Sales in million; % Fx adj. Brand 2011 Sales y-o-y Growth 440* +9% 285 +9% 235 +11% 224 +7% 174 +2% 140 +4% * Only Aspirin CC sales, excluding Rx Aspirin Cardio Page 19 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 Major Brands Have Further Penetration Opportunities Bepanthen Aleve ~75% ~ 80% US Europe Alka-Seltzer ~90% Americas Page 20 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012
Fiscal 2012 Guidance Raised End Q2 HealthCare Pharma Consumer Health Raised: Sales to increase 3% to 4%. Adj. EBITDA to grow by mid- to high-single-digit percentage. Raised: Sales to increase slightly. Adj. EBITDA to grow mid-single-digit percentage. Raised: Sales to increase mid-single-digit percentage. Adj. EBITDA to grow high-single-digit percentage. Page 21 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 Sales Fx & portf. adjusted, EBITDA before special items Outlook depends on specific planning assumptions as detailed in the Annual/Quarterly Report Bayer HealthCare Building Growth Momentum Market leading positions in key therapeutic categories New product pipeline strength in Pharma Strong and profitable growth in emerging markets Track record of performance in the Consumer Health businesses Strong operating performance during 1H2012 (Group) Outlook raised end Q2 on strong operating perfromance and FX Mid-term targets show significant further value generation potential Page 22 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012
Appendix Page 23 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 2 nd Quarter 2012 Strong Operating Performance Delivered record sales, lower reported EBIT due to high special charges but nicely improved adj. earnings Significant positive currency effects Strong operating momentum broadly based: HealthCare with best quarter ever CropScience at new record for 2 nd quarter performance MaterialScience with record quarterly sales and highest adj. EBITDA for a second quarter since 2007 Full year 2012 financial outlook raised significantly: 4-5% organic growth and core EPS up ~10% Page 24 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012
2 nd Quarter 2012 Strong Operating Performance ( ) = Fx & portfolio adjusted Q2 11 Q2 12 % million million Sales 9,252 10,177 +10 (+5) EBITDA - reported 1,906 1,561-18 - adjusted* 2,035 2,172 +7 EBIT - reported 1,273 750-41 - adjusted* 1,417 1,512 +7 Net income 747 494-34 NCF 1,530 1,369-11 ofcf 1,232 925-25 EPS - reported 0.90 0.60-33 -core 1.29 1.47 +14 Highlights of Financial Results Record sales, lower reported EBIT due to high special charges but nicely improved adj. earnings Significant positive currency effects Strong operating momentum broadly based among all subgroups Full year 2012 financial outlook raised significantly: 4-5% organic growth and core EPS up ~10% Page 25 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 *before special items HealthCare Record Operating Performance,Outlook Raised In million, % yoy, () = Fx & portf. adjusted Q2 12 Sales Earnings Consumer Health +9% (+4%) 36% Pharma +10% (+4%) Adj. EBITDA* Adj. EBIT* 1,943 2,685 1,156 1,248 +8% 722 809 +12% 837 902 +8% 502 571 +14% Price +1% HealthCare 4,628m; +10% (+4%) Volume +3% Fx +6% 434 439 +1% 335 331-1% Portfolio 0% Q2 11 Q2 12 Q2 11 Q2 12 Page 26 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 *before special items
CropScience Strong Momentum Continues, Outlook Raised In million, % yoy, () = Fx & portf. adjusted Q2 12 Sales Earnings Environmental Science +2% (-4%) 237 189 1,850 Crop Protection +18% (+14%) Adj. EBITDA* 471 549 +17% Adj. EBIT* 435 +23% 353 BioScience +22% (+21%) CropScience 2,276m; +17% (+13%) Price +2% Volume +11% Fx +5% Portfolio -1% Q2 11 Q2 12 Q2 11 Q2 12 Page 27 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 *before special items MaterialScience Further Improved In million, % yoy, () = Fx & portf. adjusted Q2 12 Sales Earnings Polycarbonates -4% (-10%) Polyurethanes +13% (+7%) Adj. EBITDA* Adj. EBIT* 728 1,547 372 385 +3% CAS** +3% (+3%) 507 236 232-2% IO*** +15% (+10%) 180 MaterialScience 2,962m; +6% (+2%) Price +1% Volume +1% Fx +5% Portfolio -1% Q2 11 Q2 12 Q2 11 Q2 12 Page 28 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 *before special items **CAS: Coatings, Adhesives, Specialties *** IO: Industrial Operations
2 nd Quarter 2012 Cash Flow And Net Debt Development Cash Flow in million, Net Debt in billion, Q2 12 Cash Flow Net Debt Development GCF 1,226 NCF cont. 1,369 Investments ofcf 444 925 6.9 + 1,060m 7.9 % y-o-y -20-11 +49-25 Q1 12 Q2 12 Page 29 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 Group Outlook Raised Significantly End Q2 on Strong Operating Performance and Fx Sales Fx and portfolio adjusted, EBITDA before special items 2011 vs. 2010 2012E Original 2012E Actual Sales 36.5bn +6% ~3% or ~ 37bn 4-5% to 39-40bn* Adj. EBITDA 7.6bn +7% Slightly improve High single-digit % increase Core EPS 4.83 +15% Slightly improve ~10% Page 30 UBS Gobal Life Sciences Conference Marijn Dekkers September 2012 *Assuming Fx rates end of Q2 2012 Outlook depends on specific planning assumptions as detailed in the Annual/Quarterly Report
Science For A Better Life Date Event Publication Tuesday, October 30, 2012 Wednesday, November 21, 2012 Thursday, February 28, 2013 Thursday, April 25, 2013 Friday, April 26, 2013 Wednesday, July 31, 2013 Thursday, October 31, 2013 Investor Conference Call Meet Management in Tokyo Investor Conference Call Investor Conference Call Annual General Meeting Investor Conference Call Investor Conference Call Third Quarter 2012 Results Stockholders Newsletter Investor Conference 2012 Annual Report First Quarter 2013 Results Stockholders Newsletter Second Quarter 2013 Results Stockholders Newsletter Third Quarter 2013 Results Stockholders Newsletter Reporting Events and AGM
Science For A Better Life Dr. Alexander Rosar Head of Investor Relations Phone: +49-214-30-81013 E-mail: alexander.rosar@bayer.com Dr. Jürgen Beunink Phone: +49-214-30-65742 E-mail: juergen.beunink@bayer.com Judith Nestmann Phone: +49-214-30-66836 E-mail: judith.nestmann@bayer.com Peter Dahlhoff Phone: +49-214-30-33022 E-mail: peter.dahlhoff@bayer.com Dr. Olaf Weber Phone: +49-214-30-33567 E-mail: olaf.weber@bayer.com Fabian Klingen Phone: +49-214-30-35426 E-mail: fabian.klingen@bayer.com Investor Relations Contacts