Bayer Ag · XETR:BAYN
Bayer — Non-Deal Roadshow (May 2019)
35 slides from Bayer's roadshow presentation, May 14, 2019
Slide 1: Bayer 2022: Delivering Value Creation
Bayer 2022: Delivering Value Creation /////////// Oliver Maier, Head of Investor Relations Laura Meyer, Senior Manager Investor Relations
Slide 2: Disclaimer
Disclaimer Cautionary Statements Regarding Forward-Looking Information This presentation contains forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events, but rather reflects Bayer’s current beliefs, expectations and assumptions re
Slide 3: Global Megatrends in Health & Nutrition
Global Megatrends in Health & Nutrition Attractive Macro Drivers of Our Businesses Aging Population Growing Population Pressure on Ecosystems People 60+ +2.2bn +50% -20% Megatrends more than people1 through -17% doubling1 more food and feed 2050 required to meet Harvest losses from 2016 2050 growing
Slide 4: Transformation into a Leader in Health & Nutrition
Transformation into a Leader in Health & Nutrition – Next Phase to Deliver Future Value Creation Past Today Pharma- Crop ceuticals, Biological Crop- Polyure- Science Products HealthCare Science thanes, Coatings, Fibres Group Consumer Care, Profile Diagnostics Animal Health Polymers Wolff Basic and F
Slide 5: We are a Global Leader in Health & Nutrition
We are a Global Leader in Health & Nutrition Well-Positioned Across Our Businesses ~€45bn 2018 Pro-forma Sales1 Crop Science Pharmaceuticals Consumer Health ~€19bn / ~43% of Group ~€17bn / ~38% of Group ~€5bn / ~12% of Group #1 Position #2 Position in Cardiovascular #2 Position Growing ahead of comp
Slide 6: FY 2018 – Sales Breakdown by Region
FY 2018 – Sales Breakdown by Region Europe / Middle North America Consumer Pharma East / Africa Health €16,746m €5,450m (42%*) (14%*) 29% 36% Group €39,586m Crop 20% Animal 15% Health Science €14,266m €1,501m (36%*) (4%*) Latin America Asia / Pacific in € million; Δ% yoy, Fx & portfolio adj.; *Sales
Slide 7: Pharma: Innovative Medicines in Areas of High Unmet Medical Need
Pharma Innovative Medicines in Areas of High Unmet Medical Need Global leadership in Therapeutic area focus Emerging markets exposure important therapeutic areas Other Emerging No. 1 in Retinal Diseases Markets Hematology Cardio- vascular 33% No. 1 in Women´s Health Sales 2018 Established Sales 2018
Slide 8: Crop Science: World's Broadest Commercial Footprint in Agriculture
Crop Science World’s Broadest Commercial Footprint in Agriculture ~7,800 Customer-facing Employees with Significant Opportunity to Optimize Portfolio Across Key Regions Seed & Trait Technology Acres 2017/20182: Sales 20181 >400m acres (160m ha) ~ 5% ~ 5% ~ 45% ~ 10% ~ 45% ~ ~ 20% ~ 45% €19.3bn Crop
Slide 9: The Established Leader in Crop Science
Crop Science The Established Leader in Crop Science Industry Leading Sales and Unmatched Investment in R&D Sales 2018 (€bn) 2018 Ag R&D Investment (€bn)1 2,3 Bayer Crop Science1 19.3 ChemChina Ag2 14.4 1,2 1,1 0,9 Corteva 12.1 BASF Ag3 7.6 Bayer Crop Corteva ChemChina Ag BASF Ag Science Seed & Trait
Slide 10: Consumer Health: Focus on Core OTC Categories
Consumer Health We Will Focus on our Core OTC Categories To Leverage our Science and Marketing Capabilities Sales Split 20181 Global Position2 Main Brands Allergy + Cough + Cold #5 Categories Nutritionals #2 to accelerate Dermatology €5,450m #2 Pain + Cardio #4 Digestive Health #2 Categories to exit
Slide 11: Next Phase to Deliver Value Creation
Next Phase to Deliver Value Creation Transformation Completed Next Phase Focused on … Crop 1 Growth ahead of competition in Health and Nutrition Science 2 Consistent profitability enhancement 3 Strong free cash flow generation 4 Disciplined capital allocation 11
Slide 12: We Focus on Growth in Attractive Markets
We Focus on Growth in Attractive Markets Market Bayer’s growth levers Size 2017 CAGR Using our leading positions in Agriculture, Pharmaceuticals and Self-care to Bayer 2018-2022 address societal needs and benefit from global megatrends Group Drive innovation Leading portfolio of seed & traits, crop
Slide 13: Bayer 2022 Synergy & Efficiency Programs
Bayer 2022 Synergy & Efficiency Programs Crop Science Consumer Health Pharmaceuticals Overall Realization of Crop Comprehensive Re-alignment of R&D Contribution Science sales and cost growth acceleration activities towards external ~€2.6bn2 synergies program innovation / Hemophilia ~€0.17bn (=$0.2bn
Slide 14: Targeting Significant Profitability Improvements Across All Divisions
Targeting Significant Profitability Improvements Across All Divisions Sales and EBITDA before special items (margin) development (in €bn, %) >4% p.a ~4% Crop Science >30% 19.3 ~25% ~4% ~4-5% p.a. Pharma- ceuticals 16.7 ~34% >35% Consumer ~1% ~2% p.a. Health 5.5 ~21% ~24%1 ~4-5% p.a. ~4% Bayer Group
Slide 15: Cash Flow Improvement Focusing on Capex and Working Capital
Cash Flow Improvement Focusing on Capex and Working Capital Optimization 3.1 2.5 1.9 2.2 Annual contribution of ~0.5bn EUR by 2022 Past and current levels impacted by single large-scale 1.5 Capex investments in fixed assets spend Licensing will continue to be an element to drive growth in €bn in % o
Slide 16: Group Targets - Value Creation from Strengthened Base
Group Targets - Value Creation from Strengthened Base Triple Leverage €bn 2018 PF Guidance 2019 Target 2022 CAGR 2018-222 Total Group 44.7 ~46 (~4%) ~52 ~4% Crop Science 19.3 ~4% >4% Sales1 Pharmaceuticals 16.7 ~4% ~4-5% Consumer Health 5.5 ~1% ~2% Total Group ~12.2 (~27%) ~16 (>30%) ~9% EBITDA Crop
Slide 17: We Have Clear Priorities for Capital Allocation
We Have Clear Priorities for Capital Allocation Focus on Shareholder Return, Innovation and Deleveraging Divestment Disciplined capital allocation proceeds Growing dividends Shareholder Consider share buy backs with parts of Return divestment proceeds Target range ~€26-28bn1 net financial debt by en
Slide 18: We Will Create Significant Value Through 2022 and Beyond
We Will Create Significant Value Through 2022 and Beyond Focus on Execution and Driving Sustained Profitable Growth… 1 We have completed Bayer’s portfolio transformation into a global leader in Health & Nutrition The next phase is focused on driving value creation through (i) growth ahead of competi
Slide 19: Q1 2019 & Outlook 2019
/////////// Q1 2019 & Outlook 2019
Slide 20: Q1 Results
Q1 Results Sales EBITDA Core EPS Free Cash Flow In million €, ∆% yoy, Fx & portfolio adj. In million €, before special items In €, Cont. Operations In € million Positive Fx effect of €108m Negative Fx effect of €110m - # of shares increased from 886m to 980m Expanded CS business working capital need
Slide 21: Divisional Q1 Results
Divisional Q1 Results In million €, ∆% yoy, Fx & portfolio adj. Crop Science Pharma Consumer Health +6% 6,444 +5% 1,409 -1% 1,395 4,075 4,354 Sales 2,861 Q1'18 Q1'19 Q1'18 Q1'19 Q1'18 Q1'19 In million €, ∆% yoy, before special items 2,322 1,512 1,415 313 >100% +7% –11% 279 EBITDA 1,042 36.4% 36.0% 3
Slide 22: FY 2019 Guidance Confirmed
FY 2019 Guidance Confirmed 20181 Group Forecast 2019 Δ 2018 – 2019 (at constant currencies) Sales €39.6bn ~€46bn +~16% Fx-sensitivity: (thereof +~12% portfolio) ± 1% change of the € vs all EBITDA €9.5bn ~€12.2bn +~28% other currencies = (before special items) ∓ ~€340m on Sales & Core EPS €5.94 ~€6.8
Slide 23: Progress in All Focus Areas
Progress in All Focus Areas Target Delivery Crop Science 1 Deliver on operational targets 2 Integration of acquired business to shape the future of agriculture 4 Consumer Health 3 Pharmaceuticals Further strengthening of pipeline and Drive performance improvement intensify external sourcing
Slide 24: Appendix
/////////// Appendix
Slide 25: FY 2019 Guidance: Further Growth Expected for All Segments
FY 2019 Guidance: Further Growth Expected for All Segments Sales 2018 EBITDA-margin 2018 Sales Growth 2019 EBITDA-margin (before special items) (cpa2) 2019 (before special items) (at constant currencies) Crop €14.3bn1 18.6% ~4% ~25% Science Pharma €16.7bn 33.4% ~4% ~34% Consumer €5.5bn 20.1% ~1% ~21
Slide 26: Xarelto – Continued Growth of a Leading Anticoagulant
Pharma Xarelto – Continued Growth of a Leading Anticoagulant Most broadly indicated anticoagulant for use in venous and arterial thromboembolic conditions Sales in €bn 3,6 3,3 A leading pharma brand with global sales of €5.2bn in 2018 incl. sales at Johnson & Johnson 2,9 2,3 New CAD/PAD indication l
Slide 27: Eylea – A Leader in Retinal Diseases
Pharma Eylea – A Leader in Retinal Diseases A leader in retinal diseases with global brand sales of €5.6bn in 2018 incl. sales at Regeneron1 Sales in €bn 2,2 Approved for the treatment of 5 retinal diseases: 1,9 wAMD, DME, BRVO, CRVO, mCNV 1,6 Treat and extend dosing regimen with injection intervals
Slide 28: Pharma Late-stage Pipeline with Progress in Oncology
Pharma Late-stage Pipeline with Progress in Oncology Darolutamide met Primary Endpoint in Phase III-trial and FDA-approval of Vitrakvi Vitrakvi Darolutamide Copanlisib Finerenone Vericiguat Indication TRK-fusion Prostate Cancer Lymphoma Diabetic Kidney Chronic Heart Cancer Disease Failure FDA approv
Slide 29: Consumer Health: Strong Consumer Brands Built up Over Decades
Consumer Health Strong Consumer Brands Built up Over Decades CAGR Brand Category Age Sales 2018 2014-2018 # of studies2 Pain, Cardio, Cough & Cold 120 €975m 3.0% 88 Allergy 261 €516m -1.0% 82 Dermatology 75 €371m 7.0% 116 Pain 431 €351m -0.9% 42 Digestive Health, 88 €225m -1.2% 7 Cough & Cold Nutrit
Slide 30: Consumer Health US Turnaround Plan
Consumer Health US Turnaround Plan Levers and key focus areas First actions Increase category and People & brand building experience Right-size the organization Q4 2018 Organization Drive leaner more agile New leadership team in place Q1 2019 organization Focus our resources Divested Rx Dermatology
Slide 31: Consumer Health Our Strategic and Operational Roadmap
Consumer Health Our Strategic and Operational Roadmap 2021 / 2022 2019 / 2020 2018 Acceleration phase Setting the Driving rigorous change foundation Put in new leadership team Execute portfolio choices Drive higher innovation level Make portfolio choices Right-size cost base Accelerate US growth mom
Slide 32: Crop Science: Leading Position in All Major Categories
Crop Science Leading Position in All Major Categories Crop Science Market2 Currently Valued at ~€90bn // ~3% Long-term CAGR Expected Corn Soybean Horticulture1 Cereals Digital Farming Climate ~€20bn ~€15bn ~€15bn ~€10bn FieldView market2 market2 market2 market2 Digital Platform #1 position #1 positi
Slide 33: Next Growth Opportunity: Convergence of Leading R&D Platforms
Crop Science Next Growth Opportunity: Convergence of Leading R&D Platforms Extensive Germplasm and Biotech Foundation, Combined with Leadership in Chemistry and Biologicals and Data Science Optimization, Serves As Innovation Engine To Accelerate Benefits Across The Industry Strong discovery platform
Slide 34: FieldView: The Leading Brand and Platform for Growers
Crop Science FieldView: The Leading Brand and Platform for Growers Our Value Creation is Supported by our Performance Trends; Paid Acres >7x Closest Competitor Global Paid Acres1 Brand Health2 (U.S.) 90m #1 platform in the #1 brand in the 77% digital Ag digital Ag space 60m 65% space >35m 44% 37% 33
Slide 35: Thank you
/////////// Thank you