Bayer Ag · XETR:BAYN
Bayer — Investor Day (December 2018)
21 slides from Bayer's investor day presentation, Dec 5, 2018
Slide 1: Reinvigorating Our Leading OTC Position
Reinvigorating Our Leading OTC Position /////////// Capital Markets Day London, December 5, 2018 Heiko Schipper Head of Consumer Health
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: Consumer Health Market Remains Attractive
Consumer Health Market Remains Attractive +2.2bn People 60+ more Global Megatrend people1 than doubling1 OTC market dynamics2 through 2050: Growing & Aging >20% of total Long-term growth rates above GDP population1 and CPG industry at 3-4% p.a. Population Societal need: Preserve and restore health G
Slide 4: A Leading Player Globally
A Leading Player Globally Built up # 2 OTC Player Strong positions in 7 out of Top 10 OTC markets NA OTC OTC portfolio Merck ASPIRIN business of Sagmel & Consumer introduced Sterling Topsun Care 1899 1994 2008 2014 1978 2005 2013 2014 Top 10 OTC markets1 Miles Roche Steigerwald Dihon 1. USA 6. Russi
Slide 5: Strong Consumer Brands Built up Over Decades
Strong Consumer Brands Built up Over Decades CAGR Brand Category Age Sales 2017 2013-2017 # of studies2 Pain, Cardio, Cough & Cold 119 €1,043m 2.6% 88 Allergy 251 €585m 2.2% 82 Dermatology 74 €379m 9.7% 116 Pain 421 €375m 1.3% 42 Digestive Health, 87 €244m 4.4% 7 Cough & Cold Nutritionals 34 €189m 1
Slide 6: Building Leading Brands by Applying Science and Marketing Capabilities
Building Leading Brands by Applying Science and Marketing Capabilities 1999 2016 Sales > €500m Sales > €1bn ASPIRIN introduced as OTC medicine 1899 Cardio Fast melt Cough & Cold Faster pain relief 1977 1982 1985 1990 2018 Added to the Nobel Prize Approved for Recommended Scintigraphy study WHO’s fir
Slide 7: In Recent Years the Business has not Reached its Full Potential
In Recent Years the Business has not Reached its Full Potential Performance 2014-2018 Key issues Sales growth, yoy cpa1 in % Low level of innovation 6.1 Outdated marketing and sales approach 5.3 3.5 Regulatory issues in China 0.2 Temporary supply interruptions -1.8 -3.6 FY’14 FY’15 FY’16 H1’17 H2’17
Slide 8: New Leadership Team with Proven Track Record in OTC and CPG Companies
New Leadership Team with Proven Track Record in OTC and CPG Companies Heiko Schipper* President, Consumer Health Previous: Nestlé Patrick Lockwood-Taylor* Stefan Meyer Lance Yuen Arturo Sanchez Patricia Corsi* Commercial Operations NA Commercial Operations EMEA Commercial Operations APAC Commercial
Slide 9: Focused on Executing a Comprehensive Turnaround Plan
Focused on Executing a Comprehensive Turnaround Plan Accelerate Build high- Focus on growth-focused Modernize performing winning Portfolio Innovation Marketing & Sales Product Supply Leaner and more agile organization Lower cost base 88 /// Bayer Capital Markets Day /// London, December 5, 2018
Slide 10: We Will Focus on our Core OTC Categories To Leverage our Science and Marketing
Focus on winning portfolio We Will Focus on our Core OTC Categories To Leverage our Science and Marketing Capabilities Sales Split 20171 Global Position2 Main Brands Allergy + Cough + Cold #5 Categories Nutritionals #2 to accelerate Dermatology #2 Pain + Cardio #4 Digestive Health #2 Categories to e
Slide 11: Each Region has a Clear Roadmap for Success Coming from Different Starting Points
Focus on winning portfolio Each Region has a Clear Roadmap for Success Coming from Different Starting Points Sales 2017 in €m Past 2 Year CAGR Our Roadmap North America – 2,480 -2% Turnaround of largest and most important market Asia Pacific – 738 2% Rebuild China momentum following regulatory issue
Slide 12: US Turnaround Plan
Leaner and more agile organization 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 Dives
Slide 13: Accelerating Growth from Innovation
Accelerate growth-focused innovation Accelerating Growth from Innovation Ambition 2022 Double growth contribution from innovation (from 15% to 30% of our growth) Strengthen Accelerate Drive new Core Innovation Adjacent Innovation Switch Opportunities Planning - Pregnancy - Breastfeeding Drive consum
Slide 14: Modernizing our Brand Building and Sales Capabilities
Modernize Marketing & Sales Modernizing our Brand Building and Sales Capabilities Brands with Purpose Transforming Vulnerable Skin to Healthy Skin From Mass to Precision Marketing Advertising 18% 28% spend on digital 2016 2018e Accelerating e-commerce Growth 60% 37% YTD 2018 2018 93 /// Bayer Capita
Slide 15: Building Blocks of our Growth Aspiration in 2022
Building Blocks of our Growth Aspiration in 2022 Goal 2022 Accelerate growth to 3-4% % contribution to growth target Focus on a Divest Rx Dermatology, Sun- and Footcare Accelerate core OTC range ~35% winning Portfolio Selected bolt-on M&A Accelerate growth- Drive consumer-centric innovation Un-lock
Slide 16: Build High-Performing Product Supply
Build high-performing product supply Build High-Performing Product Supply Address immediate opportunities... ...building up high-performing product supply Upgrade the manufacturing network Regulatory issues ~30% less sites1 Upgraded GMP standards CAPEX investment 2017/2018e ~€60m Lower the portfolio
Slide 17: We Target Efficiencies of ~€500m Gross by 2022 to Reinvest in Growth
Lower cost base We Target Efficiencies of ~ €500m1 Gross by 2022 to Reinvest in Growth and Improve Margins Consumer Health measures Group measures Lean COGS Indirect cost Platform organization optimization optimization Adjustment Delayer to net FTE Reduce complexity Apply zero-based Adjust Bayer Cor
Slide 18: Our Strategic and Operational Roadmap
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 momentum Strategic
Slide 19: Our Comprehensive Turnaround Will Accelerate Growth and Profitability
Our Comprehensive Turnaround Will Accelerate Growth and Profitability Indicative Guidance Target CAGR ∆ 2022 2017 2018e 2019 2022 2018-2022 vs. 2017 Sales growth - 1.7% PY level ~1% 3 - 4% ~2% +500 bps. EBITDA margin 21% ~20% ~21% ~24% ~6%1 +300 bps. 2022 targets at constant currencies, including po
Slide 20: We Have the Right Team and Strategy in Place
Reinvigorating Our Leading OTC Position We Have the Right Team and Strategy in Place New leadership team with proven track record of success in 1 OTC and CPG companies 2 Focus on core OTC Portfolio 3 Accelerate innovation to drive growth 4 Modernize marketing and sales to charge our strong brands 5
Slide 21: Reinvigorating Our Leading OTC Position
Reinvigorating Our Leading OTC Position /////////// Capital Markets Day London, December 5, 2018 Heiko Schipper Head of Consumer Health