Bayer Ag · XETR:BAYN
Bayer — Investor Day (March 2024)
32 slides from Bayer's investor day presentation, Mar 5, 2024
Slide 1: Financials: Strengthen Cash Flow – Reduce Debt
///////////// Health for all, Hunger for none FINANCIALS Strengthen Cash Flow – Reduce Debt C A P I TA L M A R K E T S D AY 2 0 2 4 WOLFGANG NICKL Chief Financial Officer
Slide 2: Cautionary Statements Regarding Forward-Looking Information
Cautionary Statements Regarding Forward-Looking Information This presentation may contain forward-looking statements based on current assumptions and forecasts made by Bayer management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the ac
Slide 3: Summary
Summary Revised 2023 outlook achieved; implementation of new operating model started Outlook for 2024 muted in terms of growth and profitability; first DSO savings included Clear focus on strengthening cash flow by improving cash generation Prioritization in capital allocation towards debt reduction
Slide 4: FY 2023: Achieved Revised Outlook
FY 2023: Achieved Revised Outlook FY 2023 Outlook FY 2023 Actuals incl. FX impact as reported in €bn Net Sales 46.8 - 47.8 47.6 EBITDA 11.1 - 11.6 11.7 (before special items) Core EPS (in €) 6.20 - 6.40 6.39 Free Cash Flow1 ~ 0 1.3 Net Fin. Debt ~ 36 34.5 1Litigation related net payouts (settleme
Slide 5: Resilient Performance in a Volatile Macroeconomic Environment; Litigation Impacting Cash Flow
Resilient Performance in a Volatile Macroeconomic Environment; Litigation Impacting Cash Flow Net Sales (€bn), as rep1 50.7 47.6 43.5 41.4 44.1 • Solid growth across the portfolio, 2022 driven by CAGR ~+2% glyphosate pricing outperformance Incl. glyphosate • Material foreign exchange effects on topl
Slide 6: Cash Flow Mainly Used for Dividend and Litigation Related Payouts
Cash Flow Mainly Used for Dividend and Litigation Related Payouts Net Financial Debt Development in €bn, as reported Cash Generation Cash Usage 2019-2023 2019-2023 35.7 -24.4 3.4 34.5 11.7 13.0 -10.9 5.9 NFD Free Cash Flow Divestments Acquisitions Litigation Dividend FX, Leasing NFD 31.12.2018 befor
Slide 7: Outlook 2024: Key Drivers
Outlook 2024: Key Drivers EXPECTED TAILWINDS Crop Science Core business to grow +1% to +4% cpa Continued strong momentum of Nubeqa and Kerendia, strengthened US presence Continued broad-based growth anticipated for Consumer Health Ongoing cost optimization, first DSO related organizational cost savi
Slide 8: Outlook 2024: Divisions
Outlook 2024: Divisions 2023 2024 2024 as reported at constant FX1 estimated FX impact2 Net Sales €23.3bn -1% to +3%3 ~-2%pts EBITDA Margin 21.7% 20% to 22% not material Crop Science (before special items) Net Sales €18.1bn -4% to 0% ~-2%pts Pharmaceuticals EBITDA Margin 28.7% 26% to 29% ~-2%pts (be
Slide 9: Outlook 2024: Improved Free Cash Flow Despite Lower Profitability
Outlook 2024: Improved Free Cash Flow Despite Lower Profitability in €bn 2023 2024 2024 as reported at constant FX1 estimated FX impact2 Net Sales 47.6 -1% to +3% -2% to -3%pts EBITDA 11.7 ~-3%pts (before special items) -9% to -3% Core EPS (in €) 6.39 5.10 to 5.50 -0.10 to -0.20 Free Cash Flow 1.3 2
Slide 10: Outlook 2024: Muted Outlook for Core EPS
Outlook 2024: Muted Outlook for Core EPS Core Earnings per Share Development (in €) illustrative Savings, incl. DSO Operating Xarelto 6.39 Business Glyphosate 5.10 – 5.50 Merit/Inflation/ Incentives Core Core Tax Financial Result Core EPS Core EPS 2023 2024e1 1Reflects our 2024 guidance at constant
Slide 11: Through 2026: Enhance Performance and Regain Flexibility
Through 2026: Enhance Performance and Regain Flexibility CROP PHARMA CONSUMER GROUP SCIENCE HEALTH Implement dynamic Outgrow market in Support topline resilience Grow above market shared ownership to core business during LoE’s of major products Deliver profitability at improve performance Improve pr
Slide 12: Our New Operating Model is Key Enabler to Achieve our Ambitions
Our New Operating Model is Key Enabler to Achieve our Ambitions Sustainable Cost Growth through Growth through Efficiencies Customer Centricity Innovation Speed Materializing benefits Materializing benefits Illustrative Illustrative Illustrative Materializing benefits Time horizon Time horizon Time
Slide 13: We Improve Cash Generation and Manage Adverse Impacts
We Improve Cash Generation and Manage Adverse Impacts Driving Operational Performance and Strengthen Cash Flow Growth Drive profitable growth beyond Xarelto LoE Sales Focused spend and Growth Margin realization of savings Balance Sheet Working Capital Optimization Efficiency Focused CAPEX spend Dyna
Slide 14: Clear Focus on Working Capital Management and Capital Expenditure Prioritization
We Have a Clear Focus on Improving Working Capital Management and Prioritization of Capital Expenditures WoC Optimization Active Monitoring & Steering in €bn Close tracking and management of Trade WoC 27.6 26.9 Working Capital to Sales Ratio 24.6 24.9 24.5 development Trade WoC1 Improvement initiati
Slide 15: We Will Prioritize our Capital Allocation to Achieve a Step Down in Debt
We Will Prioritize our Capital Allocation to Achieve a Step Down in Debt Organic Investments Cash Generation Cash Usage (before Free Cash Flow) Minimum Dividend Ongoing and New Launches FREE CASH FLOW DEBT REDUCTION Focused R&D Investments Improve Towards Single A Category Rating Focused CAPEX Spend
Slide 16: Summary
Summary Revised 2023 outlook achieved; implementation of new operating model started Outlook for 2024 muted in terms of growth and profitability; first DSO savings included Clear focus on strengthening cash flow by improving cash generation Prioritization in capital allocation towards debt reduction
Slide 17: Appendix: Outlook
///////////// Health for all, Hunger for none APPENDIX Outlook 2024
Slide 18: Outlook 2024: Modeling Considerations
Outlook 2024: Modeling Considerations GROUP KEY DRIVER (€bn) 2024 at constant FX1 Special items (EBITDA) primarily driven by ongoing restructuring programs and DSO related severance payouts Special Items (EBITDA) -2.0 to -1.0 Core Financial Result affected by increased interest payments Core Depreci
Slide 19: Outlook 2024: Crop Science
Outlook 2024: Crop Science Core Business Expected to Outpace the Market 2023 In €bn 2024 at Key Assumptions & Drivers constant FX1 Net Sales 23.2 -1 to 3% cpa2 Industry-leading seed germplasm refresh and volume recovery in crop protection Core 20.3 1 to 4% cpa drive sales growth; U.S. planted acreag
Slide 20: Outlook 2024: Pharmaceuticals
Outlook 2024: Pharmaceuticals 2023 In €bn 2024 at Key Assumptions & Drivers constant FX1 Net Sales 18.1 -4% to 0% cpa2 • Robust base business with varying dynamics of individual franchises • China facing ongoing headwinds, particularly related to VBP 4.1 Double-digit % Ongoing pricing pressure, gene
Slide 21: Outlook 2024: Consumer Health
Outlook 2024: Consumer Health 2023 InIn€bn 2024 at 2024e Key Assumptions & Drivers 2023 €bn constant FX1 at constant FX1 Net Sales 6.0 +3% to +6% cpa2 Continued broad-based growth across regions and categories Innovation, pricing and volume increase will equally contribute to growth Uncertain Econom
Slide 22: Appendix: FY 23
///////////// Health for all, Hunger for none APPENDIX FY 2023
Slide 23: FY 2023: Group KPIs
FY 2023: Group KPIs NET SALES EBITDA CORE EPS FREE CASH FLOW in €m, ∆% yoy in €m, before special items in €, Cont. Operations in €m -1% cpa (-6% rep) -13% -20% -58% 50,739 47,637 13,513 7.94 3,111 11,706 6.39 26.6% 24.6% 1,311 FY'22 FY'23 FY'22 FY'23 FY'22 FY'23 FY'22 FY'23 Currency Mainly lower Dri
Slide 24: FY 2023: Core Net Income and Free Cash Flow
FY 2023: Core Net Income and Free Cash Flow [€ bn] FY 2022 FY 2023 [€ bn] FY 2022 FY 2023 Net Sales 50.7 47.6 Reported EBITDA 13.5 10.6 EBITDA before special items 13.5 11.7 Tax payments -2.0 -1.3 Core depreciation -1.6 -1.6 Delta pensions -0.1 -0.2 Core EBIT 11.9 10.1 Gains/Losses Div. -1.7 -0.2 Co
Slide 25: Crop Science Core Business +7%; Outpaces Market With Pricing
Crop Science Core Business +7%; Outpaces Market With Pricing Crop Science FY 2023 Net Sales Core Business EBITDA Volume Glyphosate €m, ∆% yoy €m, before special items +1% Currency & Portfolio EBITDA Margin before special items -4% cpa Price (-8% rep) 6,867 -5% 25,169 -27% 23,270 5,038 Currency -2% 2
Slide 26: Strong Pricing from Innovation in the Core Business Partially Compensates for Glyphosate Normalization
Strong Pricing from Innovation in the Core Business Partially Compensates for Glyphosate Normalization Crop Science FY 2023 Key Drivers Corn S&T: strong price increases across FY 2023 Sales by Strategic Business Entity all regions, higher volumes in NA and APAC €m ∆% cpa yoy Fungicides: exceptional
Slide 27: Launch Products and Eylea Largely Make up for Xarelto Decline and China Weakness
Launch Products and Eylea Largely Make up for Xarelto Decline and China Weakness Pharmaceuticals FY 2023 Volume Net Sales1 EBITDA +1% €m, ∆% yoy €m, before special items EBITDA Margin before special items -0% cpa Price (-6% rep) 5,873 -12% -1% 5,189 19,252 +3.2% -1.4% +0.9% -3.0%, Currency incl. 18,
Slide 28: Launch Assets Continue Strong Growth Momentum
Launch Assets Continue Strong Growth Momentum, Eylea and Radiology Playing Out Market Leadership Pharmaceuticals FY 2023 Key Drivers FY 2023 Sales by Key Products Xarelto: decline caused by competitive and pricing €m ∆% cpa yoy pressure, especially in China and UK; lower US royalties 4,081 Eylea: co
Slide 29: Continued Broad-Based Sales Growth and Significant Margin Expansion
Continued Broad-Based Sales Growth and Significant Margin Expansion Consumer Health FY 2023 Volume Net Sales EBITDA -3% €m, ∆% yoy €m, before special items EBITDA Margin before special items +6% cpa Price (-1% rep) +3% 6,080 6,027 1,367 1,411 +9% Currency -7% 22.5% 23.4% Portfolio -0% FY’22 FY’23 FY
Slide 30: Innovation in Dermatology and Strong, Balanced Remaining Portfolio, Driving Growth
Innovation in Dermatology and Strong, Balanced Remaining Portfolio, Driving Growth Consumer Health FY 2023 Key Drivers FY 2023 Sales by Category €m ∆% cpa yoy Nutritionals: Sales were on previous year level, especially due to temporarily decline of birth rates in China and a softer market environmen
Slide 31: FY 2023: Core EPS to EPS Bridge
FY 2023: Core EPS to EPS Bridge in € 6.39 -8.55 thereof impairment Crop Science -6.81 -1.09 -2.99 -0.37 +0.63 Core EPS Depreciation & Amortization Special Items Special Items Tax Effect on EPS (total) FY 2023 (on IP and PPE) (EBITDA) Financial Results/Taxes Adjustments FY 2023 31 /// Bayer Capital M
Slide 32: FY 2023: Key Financial Measures by Division
FY 2023: Key Financial Measures by Division Crop Science Pharmaceuticals Consumer Health Reconciliation Group [€ million, if not specified] FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 Sales 25,169 23,270 19,252 18,081 6,080 6,027 238 259 50,739 47,637 Sales by reg