Bayer Ag · XETR:BAYN
Bayer — Investor Presentation (May 2021)
53 slides from Bayer's investor presentation, May 2021
Slide 1: A Global Leader in Health & Nutrition
Science for a Better Life A Global Leader in Health & Nutrition /////////// Investment Case May 2021 / Bayer AG /// Bayer AG /// Investment Case /// May 2021
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 People 60+ +2.2bn +50% -20% Megatrends 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 Dec’ 20 rates² 43 - 45 42 - 43 40 - 41 41.4 1 Enable Sales growth in €bn 7.00 - 7.50 6.39 6.10 - 6.30 5.60 - 5.80 2 Drive
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 35-36 Rating target: 30 28-30 Deleveraging A category Fre
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 May 2021 / Bayer AG /// Bayer AG /// Investment Case /// May 2021
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 /// May 2021
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 More food, feed Harvest losses 3% CAGR 50% & biofuel2 needed 17% from climate change2 2020E Global
Slide 17: Four Core Pillars Anchor our Vision to Shape Agriculture
2 Strategy Four Core Pillars Anchor our Vision to Shape Agriculture Plan to Out-Perform the Market and Expand Leadership in Innovation, Digital and Sustainability 1 Accelerate operational performance 2 Deliver world-class innovation 3 Pioneer the digital transformation 4 Set new standards in sustain
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 Margin2 ~ 2% ~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 New Corn Hybrids and Traits to Grow Sales
4 3 Operational Performance Deploying New Corn Hybrids and Traits to Grow Sales Expect 3-4%2 Sales CAGR 2020-’24 in Corn Seed & Traits Mid-Term Key Growth Drivers in Corn Deploying >150 new hybrids annually around the globe to Launching CRW3 as a part of VTPro4 and SmartStax Pro stacked grow leading
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, After Stabilizing in 2021 Transition Year United States and Canada Bayer Soybean Trait Offerings: # 1 Market Pos. LAUNCHING 2020 2021 20
Slide 22: R&D Investment Powers Industry-Leading Portfolio
5 4 World-Class Leadership Innovation R&D Investment Powers Industry-Leading Portfolio Shaping the Future of Agriculture with Sector’s Most Productive Innovation Platform Ag R&D Investment (€bn)3 R&D Platform #1 in Crop Science 2.0 1.2 1.0 0.8 • Fueled by~7,100 R&D employees in >50 countries 2 1 Bay
Slide 23: Unmatched Innovation Pipeline is Set to Drive Growth
4 World-Class Innovation Unmatched Innovation Pipeline is Set to Drive Growth Total Pipeline Peak Sales Potential up to €30bn2; ~50% Incremental Other, Vegetable Seeds, Corn S&T Soybean S&T Herbicides Fungicides Insecticides Environmental Science Peak Sales Potential ~€10-11bn ~€4-5bn ~€3bn ~€3bn ~€
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 Enabled by Three Development Approaches Field Plots Around the Globe Demonstrate Key Features and Benefits of Short-Stature Corn Game-Changing Innovation Digitally Optimized System
Slide 25: Digital Platform is Core To Driving Growth
5 Digital Transformation Digital Platform is Core To Driving Growth Enabler of Tailored Solutions and New Business Models Expand • • ~150m subscribed acres in 2020 Largest database of grower 1 Industry- Leading Platform • #1 brand in digital ag and field trial seed performance data in industry • Ope
Slide 26: 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 27: Crop Science Mid-Term Targets
7 Financial Targets Enable Growth 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 rates1 2020-’242 Sales: 2020 2021e 2021e 2022-‘24e 3-4% • Herbicides: Xtend
Slide 28: Transforming Pharma to Deliver Sustainable Long-term Growth
Science for a Better Life Transforming Pharma to Deliver Sustainable Long-term Growth /////////// Investment Case May 2021 / Bayer AG 28 /// Bayer AG /// Investment Case /// May 2021
Slide 29: 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 29 /// Bayer AG /// Investment Case /// May 2021
Slide 30: 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 31: 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 32: 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 33: 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 34: 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% Market Estimate2 2020 2021 2022
Slide 35: 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 1 Late-stage Pipeline Elinzanetant Finerenone in CV & WH (KaNDy NT-814) PSP ~ €0.5bn PSP ≥ €1.0bn PSP ≥ €1.0bn Oncology Pipeline eg. EGFRexon20 inhib., ATR PSP ≥ €1bn inhib., TTCs PSP > €0.
Slide 36: Global Roll-out of Three Launch-Products Underway
3 Growth Drivers Global Roll-out of Three 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 hear
Slide 37: 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 38: 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 • CKD in T2 Diabetes Patients • EGFRex20 inhibitor • Heart Failure • ATR inhibi
Slide 39: 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 40: 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 41: 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 42: Mid-term Targets for Pharma Reflect Limited Impact from Xarelto LoE
6 # Financial FinancialsTargets Mid-term Targets for Pharma Reflect Limited Impact from Xarelto LoE Sales / Sales Growth Divisional Drivers act At constant At month-end Dec’ 20 rates² currencies1 2020 2021e 2021e 2022/2023e 2024e • Top-line trough due to Xarelto LoE 18.8 expected in 2024 - returning
Slide 43: Winning in Consumer Health
Science for a Better Life Winning in Consumer Health /////////// Investment Case May 2021 / Bayer AG 43 /// Bayer AG /// Investment Case /// May 2021
Slide 44: Winning in Consumer Health
Winning in Consumer Health 1 Market & Position 2 Strategy 3 Sustainability 4 Financial Targets 44 /// Bayer AG /// Investment Case /// May 2021
Slide 45: 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 46: 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 47: 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 47 /// Bayer AG /// Investment Case
Slide 48: 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 48 /// Bayer AG /// Investment Case /// May 2021
Slide 49: 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 50: 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 51: Sustainable Profitable Growth
4 Financials Targets Sustainable Profitable Growth Sales / Sales Growth Divisional Drivers act At constant At month-end Dec’ 20 rates² currencies1 2020 2021e 2021e 2022-‘24e • Net Sales to grow above market Consumer €5.1bn 18.8 2 to 3% ~€5bn 3 to 5% Health • cEBITDA improvement through growth accele
Slide 52: 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 53: A Global Leader in Health & Nutrition
Science for a Better Life A Global Leader in Health & Nutrition /////////// Investment Case May 2021 / Bayer AG /// Bayer AG /// Investment Case /// May 2021