Bayer AG · XETR:BAYN
Bayer — Bernstein 4th Annual Agriculture Conference 2017
31 slides from Bayer's conference presentation, May 19, 2017
Slide 1: Investor Handout – Crop Science
Investor Handout – Crop Science Bernstein 4th Annual Agriculture Conference May 19, 2017
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: FY 2016 – Crop Science Successful in a Difficult Market Environment
FY 2016 – Crop Science Successful in a Difficult Market Environment Sales Regions EBITDA in € million; ∆% yoy, Fx & portfolio adj. Sales in € million, ∆% yoy, Fx adj. before special items, in € million; ∆% yoy 10,128 9,915 0% Environm. 580 Science 598 +4% 1,277 Seeds 1,356 +8% Europe / Middle East /
Slide 4: Q1 2017 - Performance on Track
Q1 2017 - Performance on Track Sales Regions EBITDA in € million; ∆% yoy, Fx & portfolio adj. Sales in € million, ∆% yoy, Fx adj. before special items, in € million; ∆% yoy 3,120 +3% 2,936 147 117 Environm. +21% Science 722 +8% Europe / Middle East / 637 Seeds 1,462 +2% 1,089 1,115 +2% Seed Africa 2
Slide 5: FY 2017 Crop Science Guidance
FY 2017 Crop Science Guidance Sales ∆ Fx & portfolio adjusted 2016 2017 Sales €9.9bn Low-single-digit % increase to > €10bn EBITDA before special items €2.4bn At prior-year level Assuming end 2016 Fx rates (USD 1.05); Outlook depends on specific planning assumptions as detailed in the Annual Report
Slide 6: Mid-Term Aspirations
Mid-Term Aspirations 2015 Aspiration (incl. Monsanto)(1) Sales +1.7% to €10.1bn Above market growth Adj. EBITDA 23.8% > 30% after year 3 post closing margin Sales ∆ Fx & portf. adjusted, EBITDA before special items; 2015 figures restated Outlook depends on specific planning assumptions outlined in t
Slide 7: Current Ag Market Downturn Driven by Supply – Demand Steadily Growing
Current Ag Market Downturn Driven by Supply – Demand Steadily Growing • Demand is steadily growing as long-term drivers are intact World Corn Supply / Use (mMt)(2) Production Stocks-to-use ratio • Several strong harvests in a row hiked global stocks of key Consumption 21% 22% 21% commodities 18% 18%
Slide 8: Ag Market Expected to Stabilize Over 2017
Ag Market Expected to Stabilize Over 2017 • 2017 Seed and crop protection market growth projection: +1% • Market environment expected to remain volatile • Recovery in Latin America foreseen to a certain extent (farmer economics are favorable, larger planting acres anticipated for corn and soybean) •
Slide 9: Crop Science Delivers Growth and Robust Margins Over the Ag Cycle
Crop Science Delivers Growth and Robust Margins Over the Ag Cycle 12.4% 11.2% 8.9% 9.4% Crop Science Sales growth 1.7% yoy cpa(1) (2) 0.1% >10% >10% 6% Ag Market 5% yoy growth(4) 0% -1% 25.5% 24.9% Crop Science 24.2% 24.4% adj. EBITDA ~23-25% 23.8% margin(2) (3) 22.8% 2011 2012 2013 2014 2015 20
Slide 10: Highly Attractive Agriculture Industry Benefiting from Macro Trends
Highly Attractive Agriculture Industry Benefiting from Macro Trends ~10bn -17% €120bn United Nations 2015 Nelson(1) / FAO(2) People on the planet by 2050 Biophysical effect of climate change shocks on yields by 2050 -17% +50% from ~€86bn in 2016(4) Estimated agriculture inputs market size by 2025 Fr
Slide 11: Delivering Enhanced Solutions for Next Generation of Farming
Delivering Enhanced Solutions for Next Generation of Farming Increase Efficiency • Overcome increasing gap of demand and availability of skilled labor Optimize • Raise yield given the environmental conditions by taking right decisions on genetics, Yield agronomic practices and input factors Ensure S
Slide 12: Creating a Global Leader in Agriculture
Creating a Global Leader in Agriculture 2016 Pro Forma Sales (in € billion) Crop Protection Seeds & Traits (1) (2) 22.5 (3) ~52% 14.2 14.2 (2) 12.6 9.9 5.6 ~48% Pro forma Pro forma Pro forma ChemChina Ag DuPont Ag BASF Ag Syngenta Dow Ag Based on company information and internal calculations (at avg
Slide 13: Targeting Above-Market Growth and Industry Leading Profitability
Targeting Above-Market Growth and Industry Leading Profitability Broad Truly Global Product Portfolio Footprint Integrated Innovation Solutions Engine Substantial Synergy Potential Combined company expected to deliver above market growth and underlying EBITDA margin of > 30% after year 3 post closin
Slide 14: Attractive Offering Across All Relevant Product Segments
Attractive Offering Across All Relevant Product Segments 2016 Pro Forma Sales (in € billion)(1) Bayer CS Monsanto Seeds & Traits 10.8 Herbicides 5.7 Fungicides 3.0 Insecticides 1.4 SeedGrowth 1.0 Env. Science 0.6 141 Total 9.9 12.6 22.5 (1) Based on company information and internal calculations (at
Slide 15: A Truly Global Footprint of the Combined Business
A Truly Global Footprint of the Combined Business 2016 Pro Forma Sales (in € billion)(1) 2016 Sales Split(1) Bayer CS Monsanto North America 10.5 47% Latin America 5.5 24% Europe / Middle East / Africa 4.5 20% Asia Pacific 1.9 9% Total 9.9 12.6 22.5 (1) Based on company information and internal calc
Slide 16: Successful Integrated Solutions Need Best-in-Class Technology
Successful Integrated Solutions Need Best-in-Class Technology Seeds & Traits • Superior germplasm • Strong genetics and breeding capabilities Crop Protection incl. Biologics Integrated • Innovative chemistry for weed, pest and disease control Solutions • Strong Biologics portfolio Digital Farming •
Slide 17: Advancing from Combined Offering to Integrated Solutions
Advancing from Combined Offering to Integrated Solutions From short-term to long-term Combined Offering Integrated Solutions • Ability to offer a broad • Smart combination • Innovation of differentiated variety of seed and and optimized usage systems based on chemical products of products technologi
Slide 18: Combined Offering to Fully Address Farmers' Needs
Combined Offering to Fully Address Farmers’ Needs The Soybean Brazil Example(1) Seeds Seed Weed Pest Disease Treatment Management Management Management + Soybean plants with higher yield potential + Advanced and comprehensive technology input leveraged with season-long advice (1) Pro forma combined
Slide 19: Combined Technologies Enable Customized Solutions
Combined Technologies Enable Customized Solutions Corn and Soy Example Market • Broad-acre crops corn and soy account for ~40% of global ag market value(1) • Key growing regions are North/Latin America (~40% of corn and ~80% of soy global planted acres)(2), thereof > 85% of corn and soy acres is bio
Slide 20: Digital Farming Provides Data-Based Insights to Optimize Decision-Making
Digital Farming Provides Data-Based Insights to Optimize Field Specific Decision-Making 40+ Major Decisions to be Taken Through Agronomic Decision Engine Captures … And Makes Recommendations for Each Planting Season and Analyzes Data… Each Step of the Way Satellite and "On-the-Ground" Historical Cro
Slide 21: Digital Farming Potential of Combined Portfolio
Digital Farming Potential of Combined Portfolio Combining Advanced Digital Farming Capabilities • Leading pest, weed, disease modelling and analytics – increasing resource efficiency • Hyper-localized decision support tools – optimizing use of Crop Protection products • Seeds & Planting scripts crea
Slide 22: Strong Innovators are Needed to Step-up the Pace in Agriculture R&D
Strong Innovators are Needed to Step-up the Pace in Agriculture R&D • The Pharma industry spends ~$150bn(1) per year on R&D to enhance health, whilst the Agricultural industry spends only ~$8bn(2) per year on R&D to enhance food security, which is the basis for good health • United Nations FAO(3) se
Slide 23: Accelerating Innovation Through Joint R&D Forces in Combined Entity
Accelerating Innovation Through Joint R&D Forces in Combined Entity • Innovation in agrochemicals, seeds & traits has become more costly and takes longer(1) due to higher regulatory demands • New unmet needs and challenges (e.g. climate change, resistances) require break-through innovation based on
Slide 24: Building Integrated Systems Based on Synergistic Technology Application
Building Integrated Systems Based on Synergistic Technology Application New types of products Data • Resistance-breaking herbicide systems based on innovative traits and Data Sciences chemistry Sciences & Engineering & and data Ag equipment • Novel macromolecules selectively targeting pests (e.g., s
Slide 25: Combined Company Has a Broad Pipeline
Combined Company Has a Broad Pipeline Soybean Example Soybean projects Pro forma (1) Late Research Development Life Cycle Mgmt. (3) Crop Protection YIELD & STRESS (2) Breeding Biotech GERMPLASM Breeding new varieties ≥ 3 projects Crop Protection ≥ 3 projects PEST ≥ 3 projects CONTROL Biotech ≥ 3 pro
Slide 26: Combined Entity Expected to Deliver Synergies of Approx. $1.5bn After Year Three
Combined Entity Expected to Deliver Synergies of Approx. $1.5bn After Year Three Cost Synergies Breakdown Synergy Breakdown (Net EBITDA Impact (1)) • ~70% stemming from SG&A savings ‒ Integration of country platforms / IT land-scape ‒ Public company expenses Total Cost Synergies ~$1.2bn ‒ Overlappin
Slide 27: Substantial Longer-Term Synergies from Integrated Solutions Anticipated
Substantial Longer-Term Synergies from Integrated Solutions Anticipated From Combined Offering to Net EBITDA Impact of Synergies Integrated Solutions Bottom line impact of enhanced • Creates an enhanced agricultural offering solution benefits expected to increase to address broad range of farmer nee
Slide 28: Agreed Monsanto Acquisition – Achievements
Agreed Monsanto Acquisition – Achievements All-cash offer to Monsanto’s Signing of definitive Pre-merger planning phase Board of Management merger agreement May 2016 September 2016 October 2016 - today • April 18, 2016: Private meeting • July 1, 2016: Offer increased to $125 • Q4 2016: Regulatory fi
Slide 29: Combined Crop Science Company Well Positioned to Deliver Excellent Performance
Combined Crop Science Company Well Positioned to Deliver Excellent Performance A Global Leader in Global Leader in Agriculture with broad product portfolio Agriculture and an integrated agricultural offering Integrated Solutions Fully leverage smart combinations and optimized usage of products based
Slide 30: Reporting Events
Reporting Events Date Event Publication Thursday, Investor Conference Call Q2 2017 Interim Report July 27, 2017 Thursday, Investor Conference Call Q3 2017 Interim Report October 26, 2017 Wednesday, Investor Conference Call 2017 Annual Report February 28, 2018 Thursday, Investor Conference Call Q1 20
Slide 31: Contacts
Contacts Oliver Maier Dr. Jürgen Beunink Phone: +49-214-30-81013 Phone: +49-214-30-65742 E-Mail: oliver.maier@bayer.com E-mail: juergen.beunink@bayer.com Peter Dahlhoff Judith Nestmann Phone: +49-214-30-33022 Phone: +49-214-30-66836 E-mail: peter.dahlhoff@bayer.com E-mail: judith.nestmann@bayer.com
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