Bayer Ag · XETR:BAYN
Bayer — Investor Day (December 2018)
25 slides from Bayer's investor day presentation, Dec 5, 2018
Slide 1: Shaping the Future of Agriculture
Shaping the Future of Agriculture /////////// Capital Markets Day London, December 5, 2018 Liam Condon Head of the Crop Science Division
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: Need for Innovation Driven by Megatrends
Need for Innovation Driven by Megatrends Producing More with Less: A Fundamental Driver for our Crop Science Business Growing Population Pressure on Ecosystems +2.2bn +50% -20% Megatrends people1 more food and feed through 2050 required to meet -17% growing demand and 2016 2050 changing diets2 Harve
Slide 4: Trendline Demand Requires Substantive Yield Improvement
Trendline Demand Requires Substantive Yield Improvement Global Corn Yield Rate of Gain must More than Double and Soybean Yield Rate of Gain must Triple by 2030 Long-term Demand Trendlines1 Corn Soybean 65 20 60 CAGR = 2.6% CAGR = 3.2% 18 55 Billions of Bushels Billions of Bushels 16 50 CAGR = 3.9% 4
Slide 5: Shaping Agriculture to Benefit Farmers, Consumers and Our Planet
Shaping Agriculture to Benefit Farmers, Consumers and Our Planet As the Industry Leader Uniquely Positioned to Create Value and Pioneer Tailored Solutions Our Mission Seed & Traits Deliver Pioneer Set new Tailored world-class the digital standards of Solutions innovation transformation sustainabilit
Slide 6: The Established Leader in Crop Science
The Established Leader in Crop Science Grower Endorsement of Excellent Product Portfolio Evidenced by Industry Leading Sales Broadest Crop Science Product Portfolio Sales 2017 (€bn) Bayer Crop Science1 20.1 ChemChina Ag2 14.1 Corteva 12.7 BASF Ag3 7.9 Seeds & Traits Crop Protection Pro-forma acquire
Slide 7: Leading Position in All Major Categories
Leading Position in All Major Categories Crop Science Market2 Currently Valued at ~€90bn // ~3% Long-term CAGR Expected Corn Soybean Horticulture1 Cereals Digital Farming ~€20bn ~€15bn ~€15bn ~€10bn Climate FieldView market2 market2 market2 market2 Digital Platform #1 position #1 position #1 positio
Slide 8: World's Broadest Commercial Footprint in Agriculture
Drive operational excellence 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 20171: €20.1bn >400m acres (160m ha) ~ 5% ~ 5% ~ 45% ~ 10% ~ 45% ~
Slide 9: #1 R&D Platform in Crop Science
World-class Innovation Unmatched Investment in R&D Shaping the Future of Agriculture with Most Productive Innovation Platform in the Industry 2017 Ag R&D Investment (€bn)1 #1 R&D Platform in Crop Science 2.4 ~7,300 R&D employees >35 R&D sites 1.4 1.2 0.6 >175 breeding locations delivering innovation
Slide 10: Next Growth Opportunity: Convergence of Leading R&D Platforms
World-class Innovation 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 discover
Slide 11: Driving the Largest and Most Valuable R&D Pipeline in Ag
World-class Innovation Driving the Largest and Most Valuable R&D Pipeline in Ag Highly Effective in Converting Investment into Meaningful Products for Farmers Newly Combined Pipeline Scale Advancements Value Unmatched in the Industry Outpacing Competitors Up to €30bn Peak Sales1 >75 projects in seed
Slide 12: Expect €17bn in Peak Sales from Recent and Near-Term Launches
World-class Innovation Expect €17bn in Peak Sales from Recent and Near-Term Launches Recent Launches 2019-20201 2021-20221 Annual germplasm upgrades Annual germplasm upgrades Annual germplasm upgrades BioRise 2 microbial seed treatment Nemastrike™ Technology nematicide SmartStax PRO corn Corn Trecep
Slide 13: FieldView Platform Leads the Digital Transformation in Agriculture
Pioneer the Digital Transformation FieldView Platform Leads the Digital Transformation in Agriculture Provides Multiple Ways to Create Value for Farmers, the Industry and the Enterprise Today: Agronomic services Today: FieldView platform1 Applications that visualize, analyze and recommend 50+ partne
Slide 14: FieldView: The Leading Brand and Platform for Growers
Pioneer the Digital Transformation 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%
Slide 15: Opportunity for Digital Transformation and Tailored Solutions
Pioneer the Digital Transformation World-class Innovation Opportunity for Digital Transformation and Tailored Solutions Precise Resource Use and Innovation Required to Address Significant Demand Growth, Field Variability and Increased Pressure On Ecosystems Yield = f (g,e,p) g = Genetics e = Environ
Slide 16: Poised to Solve Grower Challenges and Capture the Opportunity
Pioneer the Digital Transformation World-class Innovation Poised to Solve Grower Challenges and Capture the Opportunity Leadership in Digital Tools and Innovation Accelerates the Transformation Significant opportunities ahead Digitally informed offerings Tailored solutions Data science drives more i
Slide 17: Base Case Targets at Least 30% EBITDA Margin by 2022
Drive operational excellence Base Case Targets at Least 30% EBITDA Margin by 2022 Upside Potential in Case of Commodity Cycle Recovery Indicative Target 2018e1, 2 Guidance 2019 2022 Sales/Sales growth ~€19.3bn ~4% CAGR >4% EBITDA/EBITDA margin €4.5bn (~23%) ~25% >30% 1 The unaudited Pro-forma data a
Slide 18: Target Greater than 4% Sales CAGR from 2018 to 2022
Drive operational excellence Target Greater than 4% Sales CAGR from 2018 to 2022 Leadership and Innovation Translate into Above Market Sales Growth €19.3bn1 8% Key Sales Growth Drivers Other 4% Vegetable Seeds 5% Environmental Science Deliver annual germplasm refresh across the seeds 7% Insecticides
Slide 19: Integration on Track and Culture Evolving to Serve our Customers
Drive operational excellence Integration on Track and Culture Evolving to Serve our Customers Leadership in Place and Very Positive Engagement Scores Noted Across Both Legacy Companies Cultural Integration Priorities Achievement-to-Date Highlights Customer: Leadership met >2,000 customers in 15 1 Bu
Slide 20: Targeted Synergies of ~€1bn ($1.2bn) as of 2022
Drive operational excellence Targeted Synergies of ~€1bn ($1.2bn) as of 2022 Cost Synergies Sales Synergies EBITDA Target1,2: ~€870m (~$1bn) as of 2022 EBITDA Target1: ~€170m (~$200m) as of 2022 Key Initiatives: Commercial and R&D Operations ~0.3bn Four countries to generate Support Functions & Coun
Slide 21: Sustainability Engagement to Increase with Broader Impact
Highest sustainability standards Sustainability Engagement to Increase with Broader Impact Focus on Access Programs and Reducing the Ecological Footprint Our Engagement Highlights Future Targets Empower >100 million smallholder farmers by 2030 Empowering smallholder farmers1 Access to reach their fu
Slide 22: Committed to Responsibility, Transparency and Dialogue
Committed to Responsibility, Transparency and Dialogue Living up to our Responsibility to Farmers, Consumers and our Planet Collaborative We set high ethical standards for ourselves and our partners. Transparent We serve farms of all sizes to make our innovations accessible. Inclusive We encourage d
Slide 23: Key Takeaways
Key Takeaways Shaping agriculture to benefit farmers, consumers and our planet 1 Successfully integrate Monsanto and strengthen leadership position in Crop Science 2 Deliver world class innovation from industry’s leading R&D pipeline 3 Pioneer the digital ag transformation with FieldView platform 4
Slide 24: Excited and Engaged Crop Science Executive Leadership Team
Excited and Engaged Crop Science Executive Leadership Team Working Together to Deliver Better Solutions for Growers, Consumers and the Planet Liam Condon President, Crop Science Brett Begemann Dirk Backhaus Bob Reiter Frank Terhorst Jesus Madrazo Michael Schulz Commercial Operations Product Supply R
Slide 25: Shaping the Future of Agriculture
Shaping the Future of Agriculture /////////// Capital Markets Day London, December 5, 2018 Liam Condon Head of the Crop Science Division