Bayer Ag · XETR:BAYN
Bayer — Investor Presentation (February 2022)
58 slides from Bayer's investor presentation, February 2022
Slide 1: A Global Leader in Health & Nutrition
Science for a Better Life A Global Leader in Health & Nutrition /////////// Investment Case February 2022 / Bayer AG 1 /// Bayer AG /// Investment Case /// February 2022
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: Bayer: A Global Leader in Health and Nutrition
Group Overview Winning Portfolio Bayer: A Global Leader in Health and Nutrition Well Positioned to Create Value in Growing Markets using Science to Address Societal Megatrends Market Size Crop Science Bayer Group Sales ~€100bn1 #3 OTC Player Consumer #1 in Sales and Health Profitability & R&D Crop S
Slide 4: Global Megatrends in Health & Nutrition
Group Overview Global Megatrends in Health & Nutrition Attractive Macro Drivers of Our Strategy and Underpin the Need for Innovation Pharma/Consumer Health Crop Science Aging Population Growing Population Pressure on Ecosystems Megatrends People 60+ +2.2bn +50% -20% more than people1 through -17% do
Slide 5: Leadership and Innovation Set the Course for Our Future Growth
Group Overview Leadership and Innovation Set the Course for Our Future Growth Key Growth Drivers Long-term megatrend tailwinds are propelling growing demand in the Life Sciences Number one position in Ag inputs and leading positions in key Pharma and Consumer categories World-class innovation: techn
Slide 6: Profitable Growth Expected in the Mid-Term
Group Overview Profitable Growth Expected in the Mid-Term Anticipate €43-45bn Sales and €5bn in Annual Free Cash Flow by 2024 for the Group At constant currencies1 At ,month-end June’21 rates² At ,month-end Dec’ 20 rates3 43 - 45 ~44 ~43 41.4 1 Enable Sales growth in €bn 7.00 - 7.50 6.39 6.40 - 6.60
Slide 7: New Transformation Program with Gross Contributions of >€1.5bn
Group Overview New Transformation Program with Gross Contributions of >€1.5bn Expect Partial Reinvestment to Drive New Opportunities; Remainder to Drive Margin Expansion Transformation programs Delivery €2.6bn • Implementation of Bayer 2022 ahead of plan > €1.5bn • We accelerate our transformation t
Slide 8: Focus on Cash Generation Now Embedded in Incentive Plans
Group Overview Focus on Cash Generation Now Embedded in Incentive Plans Improvements Expected from Sales Growth, Working Capital & Divestments; Litigation Pay-outs and One- Time Costs for Transformation Mitigating Factors Improve Free Cash Flow Adapt incentive scheme Free Cash Flow integrated as a k
Slide 9: Disciplined Capital Allocation to Delever, Pay Dividends and Invest
Group Overview Disciplined Capital Allocation to Delever, Pay Dividends and Invest Expect Net Debt to Increase in 2021 with Planned Settlements and Return to €28-30bn by 2024 Capital allocation priorities Net financial debt development In €bn ~36 Rating target: 30 28-30 Deleveraging A category Free
Slide 10: Ambitious Measurable Targets for Sustainable Development
Group Overview Ambitious Measurable Targets for Sustainable Development 2030 Targets in Line with UN SDGs and Our Vision; Health for All, Hunger for None Help more PEOPLE thrive: Drive growth in Decrease ECOLOGICAL footprint: Drive underserved regions growth through sustainable resource use Climate
Slide 11: Investment Thesis
Key Takeaways Group Overview Investment Thesis Key Takeaways 1 We are a global leader in Health & Nutrition that addresses societal megatrends 2 We are well-positioned to shape disruption in the bio-revolution 3 We expect to translate innovation into profitable mid-term growth 4 We expect to improve
Slide 12: Shaping the Future of Agriculture
Science for a Better Life Shaping the Future of Agriculture /////////// Investment Case February 2022 / Bayer AG 12 /// Bayer AG /// Investment Case /// February 2022
Slide 13: Shaping the Future of Agriculture
Shaping the Future of Agriculture 1 Market & Position 5 Digital Transformation 2 Strategy 6 New Standards in Sustainability 3 Operational Performance 7 Financial Targets 4 World-Class Innovation 13 /// Bayer AG /// Investment Case /// February 2022
Slide 14: The Established Leader in Crop Science
1 Market & Position The Established Leader in Crop Science Industry Leading Sales, Profitability and Unmatched Investment in R&D to Fund Future Growth Largest in Sales Highest Profitability Total Sales1 (€bn) EBITDA1 (€bn) / EBITDA1 Margin (%) 10.2 8.6 18,8 4,5 24.1% Syngenta 16,2 Syngenta 3,2 19.6%
Slide 15: Global #1 in Seed & Traits with Leading Crop Protection Portfolio
1 Market & Position Global #1 in Seed & Traits with Leading Crop Protection Portfolio Sales by Region – Bayer Crop Science Market Positions1 Product areas – Bayer Crop Science In %, based on sales 2020 €18.8bn In %, in 2020 €18.8bn Corn S&T #1 Other Soybean S&T #1 Vegetable Seeds Corn Seed & North 2
Slide 16: Megatrends Drive Market Growth and Need for Innovation
1 Market & Position Megatrends Drive Market Growth and Need for Innovation Ag Market Remains Attractive with Expected ~3% CAGR1 to 2030 Expected 10 Yr. Global Ag Input Market Growth Rate Demand Supply 50% 17% Harvest losses 3% More food, feed from climate CAGR & biofuel2 needed change2 2020E Global
Slide 17: Win by being more grower centric
2 Strategy Purpose Shaping agriculture for the benefit of farmers, consumers and the planet Strategic Perform Transform Ambition Grow above market and deliver Achieve 100% digitally enabled strong returns sales by 2030 Pillars Operational Excellence World Class Innovation Digital Transformation New
Slide 18: A Clear Plan to Accelerate Growth and Outperform the Market
3 Operational Performance A Clear Plan to Accelerate Growth and Outperform the Market 2021: Transition 2022-2024: Acceleration Sales Growth1 EBITDA Margin2 Sales Growth1 EBITDA Margin3 ~ 7% ~23% 3% to 5% 27% to 29% 2024e 1 Deliver growth in crop protection sales through new products, integrated offe
Slide 19: Innovation, Integrated Offerings Drive Crop Protection Growth
3 New Standards Operational Performance in Sustainability Innovation, Integrated Offerings Drive Crop Protection Growth Herbicides Fungicides Insecticides 2020 Sales: €4.7bn €2.6bn €1.4bn Sales Growth by Region 2021-’241: 3 to 4% 6 to 7% 6 to 7% Sales Growth by Category 2020-24 2020-24 2020-24 2021-
Slide 20: Deploying >250 Corn Hybrids in 2021 to Expand Leading Position
3 4 Operational Performance Deploying >250 Corn Hybrids in 2021 to Expand Leading Position Foundational to Expected Growth in Our > €5bn Global Annual Corn Seed & Trait Sales Mid-Term Key Growth Drivers in Corn NEW Superior-performing Bayer branded hybrids capture #1 Launching CRW3 as a part of VTPr
Slide 21: Upgrading the Americas to Next-Gen Soybean Trait Technology
3 New Standards Operational Performance in Sustainability Upgrading the Americas to Next-Gen Soybean Trait Technology Expect 1-2%2 Soybean S&T Sales CAGR 2021-’24 United States and Canada Bayer Soybean Trait Offerings: # 1 Market Pos. LAUNCHED 2020 2021 2027 F HT4 1 South America Industry’s First #
Slide 22: Unmatched R&D Investment Powers Industry-Leading Portfolio
5 4 World-Class Leadership Innovation Unmatched R&D Investment Powers Industry-Leading Portfolio Ag R&D Investment (€bn) 2,0 #1 R&D Platform in Crop Science 1,2 1,0 0,8 >7,100 R&D employees3 Bayer Crop Science 1 Syngenta + Adama 2 Corteva BASF Ag >100 key Ag Chem Seed & Traits collaborations; partne
Slide 23: Pipeline with Up to €30bn Peak Sales Potential Delivering for Farmers
4 World-Class Innovation Pipeline with Up to €30bn Peak Sales Potential Delivering for Farmers Eight Projects Advance, Eight New Formulations Launch and Hundreds of Seed Deployments in 2021 Value of Up to €30bn >300 New crop in Cumulative Peak Sales Potential1 >500 protection ~50% Incremental regist
Slide 24: Short-Stature Corn Offers Transformational Shift in Production
4 World-Class Innovation Short-Stature Corn Offers Transformational Shift in Production Anticipated Fit on >220m Acres and Estimated Incremental Peak Sales Potential of ~€1bn for NA Field Plots Around the Globe Demonstrate Key Features and Benefits of Short-Stature Corn Game-Changing Innovation Digi
Slide 25: Biologicals Create New Value; Enable Crop Management Benefits
4 World-Class Innovation Biologicals Create New Value; Enable Crop Management Benefits Leveraging the Power and Sustainability Derived from Microbes Bayer is the #1 Trusted Brand in Biologicals by Growers4 SeedGrowth Foliar & Soil applied Crop Soilborn Performance Corn Yield Soy Yield Nematicide Fun
Slide 26: Digital Farming Solutions Underpin and Enhance Our Ability
5 Digital data science Transformation Digital Farming Solutions Underpin and Enhance Our Ability to Bring Transformational Solutions to Agriculture Our Positive Impact on Agriculture Three Core Value Drivers • Increase yield and improve profitability Franchise Value • Leverage information to manage
Slide 27: Climate FieldView Provides Unmatched Visualization, Analysis and Insights
5 Digital data science Transformation Climate FieldView Provides Unmatched Visualization, Analysis and Insights to Enable Growers to Enhance Productivity Climate FieldView • >180m subscribed acres • Largest database of grower and field trial seed • #1 brand in digital ag1 performance data in industr
Slide 28: Digital Unlocks Scalable Climate-Smart Business Models
5 Digital data science Transformation Digital Unlocks Scalable Climate-Smart Business Models Carbon Markets Valued at >$200bn/year1 and Growing with Consumers' Demand for Sustainability has the potential to Carbon Initiative streamline the way carbon is measured, verified and reported, to enable sca
Slide 29: Enabling New Digital Platforms in Ag
5 Digital data science Transformation Enabling New Digital Platforms in Ag Opens Access to Participate in Broader B2B AgTech Value Pools; Expanding into Digital Marketplaces Orbia: First Digital Ag-Marketplace Collaboration • JV between Bayer and Bravium1 • Connects growers, input providers and grai
Slide 30: Setting the Standard for Sustainability and Biodiversity in Agriculture
6 New Standards in Sustainability Setting the Standard for Sustainability and Biodiversity in Agriculture Bayer’s 2030 Sustainability Commitments Advancing a carbon-zero future for agriculture 30 Reduction of field • Climate-smart practices: • No-tillage Highly Productive Crops • Cover Crops Precisi
Slide 31: Crop Science Mid-Term Targets
7 Financial Targets Financial Targets Crop Science Mid-Term Targets A Clear Plan to Outperform the Market and Expand Industry-Leading Profitability Sales / Sales Growth Divisional Drivers At month-end CAGR cpa Actual cpa Dec. 20 rates2 2020-’243 Sales: 2020 2021e* 2022-‘24e 3-4% • Herbicides: Xtendi
Slide 32: Transforming Pharma to Deliver Sustainable Long-term Growth
Science for a Better Life Transforming Pharma to Deliver Sustainable Long-term Growth /////////// Investment Case February 2022 / Bayer AG 32 /// Bayer AG /// Investment Case /// February 2022
Slide 33: Transforming Pharma to Deliver Sustainable Long-Term Growth
Transforming Pharma to Deliver Sustainable Long-Term Growth 1 Market & Position 4 Innovation 2 Strategy 5 Sustainability 3 Growth Drivers 6 Financial Targets 33 /// Bayer AG /// Investment Case /// February 2022
Slide 34: Pharma: Focused on Therapeutic Areas with High Unmet Needs
1 Market & Position Pharma: Focused on Therapeutic Areas with High Unmet Needs Sales development EBITDA margin development Sales by region In €m In %, before special items In %, in 2020 17,962 17,243 16,420 16,847 16,746 North 33.9 34.9 America 22 33.4 32.0 32.6 40 EMEA Latin 5 America 33 2016 2017
Slide 35: We are Operating in a Rapidly Changing but Attractive Market Environment
1 Market & Position We are Operating in a Rapidly Changing but Attractive Market Environment Driven by Megatrends and the Bio Revolution Pharma Market Market Dynamics Market Size 20201 Opportunities Japan • Aging and growing population megatrends China 7% • Rising life expectancy and increased acces
Slide 36: The Transformation of Pharma is Underway
2 Strategy The Transformation of Pharma is Underway Management team focused on improving existing structures and processes Realize full potential of products and pipeline to mitigate LoE impact and return to growth Re-allocate resources and shape financial profile to post LoE future Capitalize and b
Slide 37: Our Transformation is Guided by Five Strategic Focus Areas
2 Strategy Our Transformation is Guided by Five Strategic Focus Areas Strategic Focus Areas Portfolio and Digital Health Cell & Gene Oncology China & US Pipeline Therapy Key Priorities Maximize the value of the current portfolio and manage the loss of exclusivity for Xarelto & Eylea Deliver thre
Slide 38: Bayer´s Long-Term Sales Projection Reveals Limited LoE Impact
3 Growth Drivers Bayer´s Long-Term Sales Projection Reveals Limited LoE Impact and Return to Sustainable Long-term Growth Value maximization Xarelto LoE Return to sustainable growth Trough 2020 expected in Bayer Pharma Sales: €17.2bn 2024 Sales Projection Margin1: 35% 2020 2021 2022 2023 2024 2025 2
Slide 39: We Laid The Foundation for Long-term Growth at Pharma
3 Growth Drivers We Laid The Foundation for Long-term Growth at Pharma Main Building Blocks of Post LoE Growth Late-stage Pipeline 1 Elinzanetant in CV & WH (KaNDy NT-814) PSP ~ €0.5bn PSP ≥ €1.0bn PSP ≥ €1.0bn 2 Oncology Pipeline eg. EGFRexon20 inhib., ATR inhib., TTCs PSP ≥ €1bn PSP > €0.75bn C>
Slide 40: Kerendia may Become a Foundational Cardio-renal Disease Modifier
3 Growth Drivers Kerendia may Become a Foundational Cardio-renal Disease Modifier with a Strong Scientific and Clinical Base • Chronic Kidney Disease in Type-2-Diabetes Today o 160 mio patients Mid- to long-term CKD dedicated treatment with o Shortens life expectancy by 16 years Cardio-renal disease
Slide 41: Global Roll-out of Launch-Products Underway
3 Growth Drivers Global Roll-out of Launch-Products Underway Darolutamide (AR-Antagonist)1 Larotrectinib (TRK-inhibitor) Vericiguat (sGC-stimulator)2 • Launched in nmCRPC - global roll- • First and only selective TRK • Launched in the US for the out underway inhibitor treatment of chronic heart fail
Slide 42: Targeting to Significantly Expand our Presence in Select Areas of Oncology
3 Growth Drivers We are Targeting to Significantly Expand our Presence in Select Areas of Oncology where One Blockbuster can Build a Franchise Key elements to achieve our growth aspiration • Realize blockbuster potential of NUBEQA • Expand prostate franchise with NUBEQA and Xofigo • Continue to exec
Slide 43: Highlighting Late-/Mid-stage Pipeline Opportunities and Early R&D Assets
4 Innovation Highlighting Late-/Mid-stage Pipeline Opportunities and Scientifically Appealing Early R&D Assets Late-/Mid-Stage Opportunities1 Scientifically Appealing Early Assets1 Finerenone Precision Molecular Oncology • Non-diabetic CKD • EGFRex20 inhibitor • Heart Failure • ATR inhibitor Factor
Slide 44: External Innovation to Accelerate Replenishment of Pipeline
4 Innovation External Innovation to Accelerate Replenishment of Pipeline and Broaden Modalities Selected High-Level Overview Momentum Significantly Increased >25 Transactions signed in 2020 • Deals covering the entire spectrum from equity investments (with LEAPS), over licensing agreements to acquis
Slide 45: Our Cell & Gene Therapy Strategy Builds on Four Integrated Platforms
4 Innovation Our Cell & Gene Therapy Strategy Builds on Four Integrated Platforms to Drive the Next Wave of Innovation at Pharma Gene Augmentation Stem Cells Allogeneic Cell Therapy Collaboration with Atara Biotherapeutics • Industry-leading AAV • Creating induced • Next-generation, vector gene plur
Slide 46: Sustainability is Fully Embedded in our Strategy
5 Sustainability Sustainability is Fully Embedded in our Strategy Providing 100m women in LMIC1 with access to modern contraception Bayer Capacity • “Health for All - Hunger for None” are core to Products building2 our raison d´être at Pharma 100 • Measurable targets linked to incentive scheme ~ 38
Slide 47: Mid-term Targets for Pharma Reflect Limited Impact from the LoE for Xarelto
Financial FinancialsTargets Mid-term Targets for Pharma Reflect Limited Impact from the LoE for Xarelto Sales / Sales Growth Divisional Drivers act At constant At month-end Dec’ 20 rates² currencies1 2020 2021e* 2022/2023e 2024e • Top-line trough due to Xarelto LoE expected in 2024 - returning to Ph
Slide 48: Winning in Consumer Health
Science for a Better Life Winning in Consumer Health /////////// Investment Case February 2022 / Bayer AG 48 /// Bayer AG /// Investment Case /// February 2022
Slide 49: Winning in Consumer Health
Winning in Consumer Health 1 Market & Position 2 Strategy 3 Sustainability 4 Financial Targets 49 /// Bayer AG /// Investment Case /// February 2022
Slide 50: Consumer Health: A Leading Global OTC Player
1 Market & Position Consumer Health: A Leading Global OTC Player Sales development EBITDA margin development Sales by region: €5.1bn In €m / % yoy cpa In %, before special items In %, in 2020 FINANCIALS 22,0% North 5.2% 34 EMEA 20,9% America 42 20,1% 2.6% -0.7% 11 13 2018 2019 2020 Asia / Pacific La
Slide 51: A Multifaceted Plan to Drive Further Growth
2 Strategy A Multifaceted Plan to Drive Further Growth AMBITION Grow ahead of the market and increase margins WHERE Winning & Balanced Portfolio TO PLAY Growth Modern Optimized HOW focused Innovation Cost & Cash Marketing & Sales TO WIN (esp. in powerbrands) (e.g. precision marketing) (with focus on
Slide 52: Driving Disproportionate Growth in Attractive Segments and Markets
2 Strategy: Growth-Focused Capital Allocation Driving Disproportionate Growth in Attractive Segments and Markets Strong positions in 7 out of Top 10 OTC markets Top 5 position Accelerate growth in fast-growing and profitable markets USA CHINA India South-East Asia 52 /// Bayer AG /// Investment Case
Slide 53: Accelerating Growth from Innovation
5 Strategy: Growth-Focused Innovation Accelerating Growth from Innovation Iconic Global and Local Brands Built over Decades 1898 1930 1934 1940 1943 1950 1983 1992 Note: xx = Year of brand launch 53 /// Bayer AG /// Investment Case /// February 2022
Slide 54: Modernizing Our Brand Building and Sales Capabilities
2 Strategy: Modernized Marketing & Sales Modernizing Our Brand Building and Sales Capabilities Brands with Purpose From Mass to Precision Marketing % Precision 25% 50% 80% marketing1 2018 2020 2024 - Ambition Accelerating E-commerce 3% 7% 15%+ % Net Sales2 2018 2020 2024 - Ambition 1 Percentage of d
Slide 55: Taking Bold Steps on Sustainability
3 Sustainability Taking Bold Steps on Sustainability Expand access to everyday health for 2030 Goal 100 million underserved consumers Societal Environmental Health Literacy Accessible Products Carbon Neutral Production Sustainable Products Partnerships & brand purpose Affordable formats, innovations
Slide 56: Consumer Health: Sustainable Profitable Growth
Consumer Health: Sustainable Profitable Growth Sales / Sales Growth Divisional Drivers At constant At month-end Dec’ 20 rates² act currencies1 2020 2021e* 2022-‘24e • Net Sales to grow above market Consumer €5.1bn 3 to 4% 3 to 5% Health • cEBITDA improvement through growth acceleration and continued
Slide 57: Investment Thesis
Key Takeaways Group Overview Investment Thesis Key Takeaways 1 We are a global leader in Health & Nutrition that addresses societal megatrends 2 We are well-positioned to shape disruption in the bio-revolution 3 We expect to translate innovation into profitable mid-term growth 4 We expect to improve
Slide 58: A Global Leader in Health & Nutrition
Science for a Better Life A Global Leader in Health & Nutrition /////////// Investment Case February 2022 / Bayer AG 58 /// Bayer AG /// Investment Case /// February 2022