Bayer Ag · XETR:BAYN
Bayer — Merger or Acquisition (June 2018)
39 slides from Bayer's merger presentation, June 2018
Slide 1: Monsanto Acquisition Update
Monsanto Acquisition Update /////////// June 2018
Slide 2: Cautionary Statements Regarding Forward-Looking Information
Cautionary Statements Regarding Forward-Looking Information Certain statements contained in this communication may constitute "forward-looking statements". Actual results could differ materially from those projected or forecast in the forward-looking statements. The factors that could cause actual r
Slide 3: Key Investment Highlights
Key Investment Highlights Acquisition of Monsanto to be completed on June 7, 2018 Strong value creation through Monsanto acquisition $1.2bn annual synergies (net EBITDA impact before special items) targeted as of year 2022 Expected to be accretive to core EPS in 2019 Integration has been diligently
Slide 4: Strategy
Strategy 4 /// Bayer Investor Presentation /// June 2018 /// Monsanto Acquisition Update
Slide 5: Our Strategic Priorities
Our Strategic Priorities Group Strategic Priorities Divisional Focus Positioning businesses to mega-trends 1 Contribution to Health and Nutrition (1) Crop Science (2) Create a leading innovation engine that transforms agriculture Developing a leading portfolio 2 Leadership in our relevant markets Ph
Slide 6: Bayer Evolves to Leader in Life Science with a Balanced Portfolio
Bayer Evolves to Leader in Life Science with a Balanced Portfolio Animal Health Other/Reconciliation The New Crop Science Consumer Health Crop Science Attractive long-term growth market A leader with broad and complementary agricultural offering and geographic footprint 50% TOTAL: 44% pro forma €45.
Slide 7: Agriculture Market
Agriculture Market 7 /// Bayer Investor Presentation /// June 2018 /// Monsanto Acquisition Update
Slide 8: Growth in Agriculture Driven by Long-term Megatrends
Growth in Agriculture Driven by Long-term Megatrends Demand Supply Significant increase in agricultural productivity is required to meet future demand Innovation enables productivity increase while ha of agricultural (1) land lost annually protecting natural resources Innovation helps farmers delive
Slide 9: Attractive Growth Across the Cycle
Attractive Growth Across the Cycle Annual market growth rates (1) Crop Protection market Key Drivers Seeds & Traits market Total market (CP + Seeds & Traits) Commodity prices 20% Weather fluctuations Pest and disease pressure Economic development 10% Channel inventory levels Energy markets / biofuel
Slide 10: The New Crop Science
The New Crop Science 10 /// Bayer Investor Presentation /// June 2018 /// Monsanto Acquisition Update
Slide 11: Creating a Global Leader Committed to Transforming Agriculture
Creating a Global Leader Committed to Transforming Agriculture 2017 Pro Forma Sales (in € billion) (1) 19.7 (2) 14.1 12.7 (3) 7.9 (4) 3.4 Pro forma ChemChina Ag Corteva BASF Ag FMC Ag (Syngenta + ADAMA) (DowDuPont Ag) + Bayer divestments to BASF AgChem Seeds & Traits AgChem includes Crop Protection
Slide 12: Well Positioned to Develop Advanced Customized Agronomic Solutions
Well Positioned to Develop Advanced Customized Agronomic Solutions Bayer Monsanto Outstanding crop Outstanding seeds & protection portfolio traits portfolio Focus on plant and soil Focus on yield health Breeding and trait > Excellence in chemistry development focus Biologics platform Advanced digita
Slide 13: A Leading Combined R&D Infrastructure for Faster and More Efficient Development
A Leading Combined R&D Infrastructure for Faster and More Efficient Development of Innovative Solutions for Farmers Algorithm Development Genome Editing Analytics Next Generation Sequencing >35 >175 >70 Chemical Synthesis Transcriptomics €2.4bn pipeline DMPK Physics Genomics RNAi R&D sites breeding
Slide 14: Example: Potential Future Agronomic Solution for U.S. Corn Farmer
Example: Potential Future Agronomic Solution for U.S. Corn Farmer Yield Establishment Yield Protection Secure Yield / Value Choice of crop Choice of seed + Soil / fertility Water Weed Pest Disease Harvest Post harvest to plant treatment Management Management Management Management Management Manageme
Slide 15: Value Creation
Value Creation 15 /// Bayer Investor Presentation /// June 2018 /// Monsanto Acquisition Update
Slide 16: Strong Value Creation through Monsanto Acquisition
Strong Value Creation through Monsanto Acquisition Positive development of Monsanto stand-alone business since merger announcement Implied LTM EBITDA multiple of 15.0x(1) vs. 18.6x at announcement Combined agriculture business aspires to grow above market Expected to be accretive to core EPS already
Slide 17: Transaction-related Divestments of Bayer Assets to BASF
Transaction-related Divestments of Bayer Assets to BASF ~€6.1bn net proceeds expected(1) Crop Protection Seeds & Traits Digital Farming Global glufosinate-ammonium Essentially the total Soybean business Digital Farming business herbicide business Essentially the total Canola business (Bayer will rec
Slide 18: Annual Cost Synergies of ~$1bn Targeted as of Year 2022
Annual Cost Synergies of ~$1bn Targeted as of Year 2022 Net EBITDA impact before special items(1) Divestment requirements reduce cost base originally targeted for synergy generation Cost synergies (~$1bn) and One Time Costs (~$1.5bn) to achieve synergies have been validated through a comprehensive b
Slide 19: Examples for Cost Synergy Levers
Examples for Cost Synergy Levers Support Functions and Procurement and Product IT Infrastructure Country Integration Supply Consolidation into one shared Integration of Monsanto support Supplier consolidation IT platform and reduction of IT functions into existing Bayer infrastructure cost (e.g. net
Slide 20: Annual Sales Synergies of ~$200m Targeted as of Year 2022
Annual Sales Synergies of ~$200m Targeted as of Year 2022 Net EBITDA impact before special items Validation of target synergies conducted through comprehensive bottom-up analysis across regions and crop portfolios Initial sales synergies expected from Broader product portfolio Greater geographic foo
Slide 21: Integration
Integration 21 /// Bayer Investor Presentation /// June 2018 /// Monsanto Acquisition Update
Slide 22: New Crop Science Executive Leadership Team in Place
New Crop Science Executive Leadership Team in Place Commercial Digital Farming / Operations Climate Corporation The best leadership and expertise from both Brett Begemann Michael Stern organizations Research & Commercial Operations structured by regions Development Robert Reiter Two main sites: Crop
Slide 23: Day 1 has been Diligently Prepared
Day 1 has been Diligently Prepared Integration Workstreams Functional Business continuity is crucial to Tier 1 countries Integration Planning secure deal value USA Country integration to happen in Brazil Country Integration tiers (1-3) Planning Canada Initial top-level personnel Argentina Organizati
Slide 24: Evolving our Culture to Win Together
Evolving our Culture to Win Together Cultural Assessment conducted and communicated: 1 Build on similarities BAYER CULTURAL JOURNEY Long-term view: Driven to create lasting stakeholder value e.g. highly innovative MONSANTO CULTURAL JOURNEY Entrepreneurial view: Driven to create new markets 2 Bridge
Slide 25: Living up to Our Heightened Responsibility
Living up to Our Heightened Responsibility We will apply the same rigor to achieving our sustainability targets as we do to our financial targets We are fully committed to upholding the highest ethical and responsibility standards We will seek to make a greater contribution to improving health and n
Slide 26: Planned Investor Events 2018
Planned Investor Events 2018 Financials Timeframe(1) Closing June 7 Preparation of combined results July - August Bayer Q2 2018 results // Update FY 2018 guidance combined September 5 Bayer Q3 2018 results combined November 13 Meet Management Conference combined December (1) Subject to change 26
Slide 27: Appendix: 2017 Pro Forma Financials
2017 Pro Forma Financials Appendix 27 /// Bayer Investor Presentation /// June 2018 /// Monsanto Acquisition Update
Slide 28: Pro forma Financial Information
Pro forma Financial Information Key Figures (Income Statement FY 2017; Financial Position as of March 31, 2018)(1) Pro Forma Net sales adjustments predominantly reflect the €2.2bn Adjust- Financial sales related to the BASF divestitures Bayer Monsanto ments Information EBIT adjustments consist mainl
Slide 29: Pro forma Financial Information
Pro forma Financial Information Income Statement FY 2017(1) Historical Financials Pro forma Pro forma Pro forma Less Plus Adjustments Adjustments Financials Bayer Covestro Monsanto Aggregated Covestro Monsanto € million € million € million € million € million € million € million Net sales 35,015 - 1
Slide 30: Pro forma Financial Information
Pro forma Financial Information Financial Position as of March 31, 2018 – Assets(1) Historical Financials Pro forma Pro forma Pro forma Less Adjustments Adjustments Bayer Covestro Monsanto Aggregated Covestro Monsanto Financials € million € million € million € million € million € million € million N
Slide 31: Pro forma Financial Information
Pro forma Financial Information Financial Position as of March 31, 2018 – Equity and Liabilities(1) Historical Financials Pro forma Pro forma Pro forma Less Adjustments Adjustments Bayer Covestro Monsanto Aggregated Covestro Monsanto Financials € million € million € million € million € million € mil
Slide 32: Appendix: Bayer Group Financials
Bayer Group Financials Appendix 32 /// Bayer Investor Presentation /// June 2018 /// Monsanto Acquisition Update
Slide 33: Fiscal 2017 – Key Data by Segments
Fiscal 2017 – Key Data by Segments in € million Sales EBITDA before special items Other / Reconciliation Pharmaceuticals 1,158 16,847 6000 5,711 +4.3%* Animal 5000 Health 3% 48% 1,571 5% 4000 +2.0%* 35,015 3000 27% 2,043 2000 1,231 17% 1000 381 Consumer 0 Crop Science Health Pharma- Consumer Crop An
Slide 34: Bayer Group Key Data
Bayer Group Key Data Fiscal 2017 Change from € million 2016 2017 2016 in % Sales 34,943 35,015 +0.2 EBITDA 8,801 8,563 -2.7 EBITDA before special items 9,318 9,288 -0.3 EBITDA margin before special items 26.7% 26.5% EBIT 5,738 5,903 +2.9 EBIT before special items 6,826 7,130 + 4.5 Income before inco
Slide 35: Pharmaceuticals – Key Data
Pharmaceuticals – Key Data Fiscal 2017 € million 2016 2017 Change % Sales 16,420 16,847 +2.6 (+4.3*) Change in sales Volume +9.0% +5.2% Price -0.3% -0.9% Currency -1.4% -1.7% Portfolio 0.0% 0.0% EBITDA 5,084 5,576 +9.7 Special items (167) (135) EBITDA before special items 5,251 5,711 +8.8 EBITDA mar
Slide 36: Consumer Health – Key Data
Consumer Health – Key Data Fiscal 2017 € million 2016 2017 Change % Sales 6,037 5,862 -2.9 (-1.7*) Change in sales Volume +0.6% -3.0% Price +2.9% +1.3% Currency -4.1% -1.2% Portfolio 0.0% 0.0% EBITDA 1,296 1,145 -11.7 Special items (115) (86) EBITDA before special items 1,411 1,231 -12.8 EBITDA marg
Slide 37: Crop Science – Key Data
Crop Science – Key Data Fiscal 2017 € million 2016 2017 Change % Sales 9,915 9,577 -3.4 (-2.2*) Change in sales Volume -1.3% +0.3% Price +1.4% -2.5% Currency -2.3% -1.2% Portfolio +0.1% 0.0% EBITDA 2,280 1,716 -24.7 Special items (141) (327) EBITDA before special items 2,421 2,043 -15.6 EBITDA margi
Slide 38: Animal Health – Key Data
Animal Health – Key Data Fiscal 2017 € million 2016 2017 Change % Sales 1,523 1,571 +3.2 (+2.0*) Change in sales Volume +2.6% +0.4% Price +2.2% +1.6% Currency -2.6% -0.9% Portfolio 0.0% +2.1% EBITDA 343 352 +2.6 Special items (6) (29) EBITDA before special items 349 381 +9.2 EBITDA margin before spe
Slide 39: Investor Relations
Oliver Maier Phone: +49-214-30-81013 E-Mail: oliver.maier@bayer.com Dr. Jürgen Beunink Contacts Phone: +49-214-30-65742 E-mail: juergen.beunink@bayer.com Investor Peter Dahlhoff Phone: +49-214-30-33022 E-mail: peter.dahlhoff@bayer.com Relations /////////// Oliver Luckenbach Phone: +49-214-30-20836 E