Slide 1: Investor Conference Call FY/Q4 2018 Results
Investor Conference Call /////////// FY/Q4 2018 Results February 27, 2019 Werner Baumann, CEO Wolfgang Nickl, CFO
Slide 2: Cautionary Statements Regarding Forward-Looking Information
Cautionary Statements Regarding Forward-Looking Information This release 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 actual
Slide 3: Agenda
Highlights FY 2018 Financials Q4/FY 2018 & Outlook 2019 Focus Areas for 2019 Agenda Werner Baumann, CEO 3 Bayer FY/Q4 2018 Investor Conference Call
Slide 4: FY 2018 – Group Targets Achieved
FY 2018 – Group Targets Achieved 2017 Group Forecast 2018 2 2018 (as updated on 5 September 2018) Sales €35.0bn >€39.0bn €39.6bn ✓ EBITDA (before special items) €9.3bn Low-to-mid-single-digit % increase €9.5bn ✓ Core EPS €6.64 1 €5.70 - €5.90 €5.94 ✓ 1 Adjusted for the bonus element in the context o
Slide 5: FY 2018 – Key Developments
FY 2018 – Key Developments Crop Science with successful closing of acquisition – strong start of integration Pharmaceuticals driven by strong growth of Xarelto and Eylea Consumer Health returned to growth in H2 Strong Free Cash Flow generation, net debt reduction €3bn ahead of target Major efficienc
Slide 6: FY 2018 – Pharmaceuticals Driven by Xarelto & Eylea
FY 2018 – Pharmaceuticals Driven by Xarelto & Eylea Sales in € million; ∆% yoy, Fx & portfolio adj. Volume +6% Currency -4% 16,847 +3% 16,746 Price -2% Portfolio -0% Key growth products grew by 14%, top 15 products by 6%* Xarelto (+13%) & Eylea (+20%) with continued strong growth* FY'17 FY'18 New la
Slide 7: FY 2018 – Crop Science Global #1 in Agriculture
FY 2018 – Crop Science Global #1 in Agriculture Sales in € million; ∆% yoy, Fx & portfolio adj. 14,266 Volume +6% Currency -4% +6% Price +0% Portfolio +47% 5,288 9,577 2,273 1,471 Positive sales development in Latin America (+17%), North America (+8%) and Asia/Pacific (+10%)* FY'17 FY'18 Herbicides,
Slide 8: Update Glyphosate Litigation
Update Glyphosate Litigation We are convinced of Glyphosate’s safety profile 11 January 2019: Health Canada confirmed a re-evaluation decision on glyphosate in 2017: “After a thorough scientific review, we have concluded that the concerns raised by the objectors could not be scientifically supported
Slide 9: FY 2018 – Consumer Health Returned to Growth in H2
FY 2018 – Consumer Health Returned to Growth in H2 Sales in € million; ∆% yoy, Fx & portfolio adj. 5,862 -1% Volume -2% Currency -6% 5,450 Price +1% Portfolio -1% Business with sales swing in H2 (+1%)* Asia / Pacific (+4%) and Latin America (+4%) with growth* FY'17 FY'18 EBITDA EBITDA decline driven
Slide 10: Agenda
Highlights FY 2018 Financials Q4/FY 2018 & Outlook 2019 Focus Areas for 2019 Agenda Wolfgang Nickl, CFO 10 Bayer FY/Q4 2018 Investor Conference Call
Slide 11: Q4 2018 – Sales & EBITDA Positively Impacted by Acquisition
Q4 2018 – Sales & EBITDA Positively Impacted by Acquisition Sales EBITDA Core EPS in € million; ∆% yoy, Fx & portfolio adj. before special items; in € million cont. operations; in € Negative Fx impact of -€21m * Negative Fx impact of -€15m * Impacted by increased share count and incremental interest
Slide 12: FY 2018 – All Targets Achieved
FY 2018 – All Targets Achieved Sales EBITDA Core EPS in € million; ∆% yoy, Fx & portfolio adj. before special items; in € million cont. operations; in € Negative Fx impact of -€1,464m * Negative Fx impact of -€457m * Impacted by increased share count and incremental interest expense 1 39,586 6.64 +5
Slide 13: FY 2018 – Reconciliation Core EPS to Reported EPS
FY 2018 – Reconciliation Core EPS to Reported EPS in € 6.00 5.00 -1.89 4.00 -1.33 -1.65 -0.76 3.00 5.94 4.32 -0.82 2.00 -1.20 -0.64 1.09 1.00 -0.73 -0.53 1.80 0.00 13 Bayer FY/Q4 2018 Investor Conference Call
Slide 14: Strong Free Cash Flow Generation
Strong Free Cash Flow Generation FY 2017 FY 2018 € million € million Net cash provided by operating activities 6,611 7,917 Cash outflows for PPE and intangible assets -2,0831 -2,593 Interest and dividends received 168 247 Interest paid/received (incl. interest-rate swaps) -732 -919 Free Cash Flow 3,
Slide 15: Net Financial Debt Better than Expected
FY 2018 Net Financial Debt Better than Expected in € million 45,000 -214 40,000 4,331 -5,578 35,000 30,000 25,000 22,966 20,000 41,257 35,679 15,000 10,000 14,174 5,000 0 Gross Financial Bonds Liabilities Other Gross Financial Cash/Other Net Financial Debt 31.12.2017 Debt 31.12.18 Financial Assets D
Slide 16: Update Monsanto Purchase Price Allocation (PPA)
Update Monsanto Purchase Price Allocation (PPA) in € billion 50,0 40,0 19.7 19.2 26.9 30,0 48.0 20,0 1.0 1.7 6.8 0.2 10,0 24.5 0,0 Consideration Existing assets Existing Intangible Step-up Step-up Step-down Step-up Goodwill transferred without goodwill liabilities assets fixed assets inventories lia
Slide 17: Balance Sheet: Equity Ratio Still Solid
FY 2018 Balance Sheet: Equity Ratio Still Solid 31.12.2017 % 31.12.2018 % In €bn Goodwill 14.8 20 38.1 30 Other non-current assets 30.2 40 57.2 45 Current assets 30.1 40 31.0 25 Total assets 75.1 100 126.3 100 Equity 36.9 49 46.1 37 Financial liabilities (current and non-current) 14.4 19 41.4 33 Oth
Slide 18: FY 2019 Guidance in Line with Prior Indication
FY 2019 Guidance in Line with Prior Indication Going concern, i.e. announced portfolio measures not included 20181 Group Forecast 2019 ∆ 2019 – 2018 (at constant currencies) Sales €39.6bn ~€46bn +~16% (thereof +~12% portfolio) EBITDA €9.5bn ~€12.2bn +~28% (before special items) Core EPS €5.94 ~€6.80
Slide 19: FY 2019 – Guidance by Segment
FY 2019 – Guidance by Segment Going concern, i.e. announced portfolio measures not included EBITDA-margin Sales Growth 2019 (cpa2) EBITDA-margin 2019 (before special items) Sales 2018 2018 (before special items) (at constant currencies) (at constant currencies) Pharma €16.7bn 33.4% ~4% ~34% Consumer
Slide 20: Agenda
Highlights FY 2018 Financials Q4/FY 2018 & Outlook 2019 Focus Areas for 2019 Agenda Werner Baumann, CEO 20 Bayer FY/Q4 2018 Investor Conference Call
Slide 21: Focus Areas for 2019
Focus Areas for 2019 Enhance Operating Performance and Drive Value Creation 1 Deliver on operational targets 2 Integrate Crop Science and further advance #1 industry platform 3 Execute efficiency improvement program and realize synergies 4 Continue vigorous defense in glyphosate litigation Further s
Slide 22: Investor Conference Call FY/Q4 2018 Results
Investor Conference Call /////////// FY/Q4 2018 Results February 27, 2019 Werner Baumann, CEO Wolfgang Nickl, CFO
Slide 23: FY 2018 – Animal Health With Strong Finish in Q4
FY 2018 – Animal Health With Strong Finish in Q4 Sales in € million; ∆% yoy, Fx & portfolio adj. Volume +1% Currency -5% 1,571 +1% 1,501 Price -0% Portfolio 0% North America, Asia/Pacific and Latin America with positive development Seresto with strong double-digit growth (+29%)* FY'17 FY'18 EBITDA b
Slide 24: FY 2018 P&L: Key Developments
FY 2018 P&L: Key Developments P&L FY 2017 FY 2018 - Mainly BASF € million € million EBITDA before special items 9,288 9,547 thereof Special item divestment gains - 4,124 - €1.3bn inventory step-up - €0.8bn restructuring measures Special item expenses -725 -3,405 - €0.6bn other expenses Reported EBIT
Slide 25: FY 2018 – Sales Breakdown by Region
FY 2018 – Sales Breakdown by Region 24% Europe / Middle North America 34% 39% Consumer 42% Pharma East / Africa €16,746m Health +3% €5,450m -1% 6% 31% 11% 29% 13% 36% Group €39,586m +5% 26% 27% 33% 20% Animal Crop 15% Health 42% Science €14,266m €1,501m +6% 10% +1% 28% 13% Latin America Asia / Pacif
Slide 26: Q4 2018 – Segment Overview
Q4 2018 – Segment Overview Sales currency and portfolio adjusted, in € million; ∆% yoy; EBITDA before special items, in € million; ∆% yoy Pharma Crop Science Consumer Health Animal Health 4,215 +3% 4,291 4,661 1,399 -2% 322 +3% 330 1,331 +15% 2,546 2,570 Sales 2,263 522 Q4'17 Q4'18 Q4'17 Q4'18 Q4'17
Slide 27: Q4 2018 P&L: Key Developments
Q4 2018 P&L: Key Developments P&L Q4 2017 Q4 2018 thereof - €0.6bn inventory step-up € million € million - €0.7bn restructuring measures EBITDA before special items 1,783 2,065 - €0.6bn other expenses Special item divestment gains - - Special item expenses -323 -2,019 Reported EBITDA 1,460 46 thereo
Slide 28: Fx-Sensitivity by Currency
Fx-Sensitivity by Currency A 1% appreciation (depreciation) of the euro against all other currencies would decrease (increase) sales on an annual basis by some €340 million and EBITDA before special items by about €100 million. Sales ~ €340 milion Share of 1% sensitivity Sales Fx by division USD ~41
Slide 29: 2019 Guidance for other Key Data of the Group
2019 Guidance for other Key Data of the Group At constant currencies Special charges1 ~€2.0 billion R&D expenses ~€5.5 billion Capital expenditures ~€2.9 billion of which for intangible assets ~€0.8 billion Depreciation and amortization ~€4.3 billion of which for intangible assets ~€2.6 billion Core
Slide 30: Investor Conference Call FY/Q4 2018 Results
Investor Conference Call /////////// FY/Q4 2018 Results February 27, 2019 Werner Baumann, CEO Wolfgang Nickl, CFO