Bayer Ag · XETR:BAYN
Bayer — Bankhaus Lampe German Conference 2019
37 slides from Bayer's conference presentation, Apr 4, 2019
Slide 1: Bayer 2022: Delivering Value Creation
Bayer 2022: Delivering Value Creation /////////// Bankhaus Lampe German Conference April 4th, 2019 Oliver Luckenbach & Simone Mörchen Bayer AG
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: 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 4: 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 4 // Bayer // Bankhaus Lampe - German Co
Slide 5: 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 6: 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 7: 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 8: 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 9: Cash Flow Improvement Focusing on Capex and Working Capital Optimization
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 10: 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 11: 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 12: 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 13: FY 2018 & Outlook 2019
/////////// FY 2018 & Outlook 2019
Slide 14: FY 2018 – Group Targets Achieved
FY 2018 – Group Targets Achieved 2017 Group Forecast 2018 2 2018 (as updated on 5 September 2018) Sales €35.0bn >€39.0bn €39.6bn ✓ EBITDA (before special items) €9.3bn Low-to-mid-single-digit % increase €9.5bn ✓ Core EPS €6.64 1 €5.70 - €5.90 €5.94 ✓ 1 Adjusted for the bonus element in the context o
Slide 15: FY 2018 – Sales Breakdown by Region
FY 2018 – Sales Breakdown by Region 24% Europe / Middle North America 34% 39% Consumer 42% Pharma East / Africa €16,746m Health +3% €5,450m -1% 6% 31% 11% 29% 13% 36% Group €39,586m +5% 26% 27% 33% 20% Animal Crop 15% Health 42% Science €14,266m €1,501m +6% 10% +1% 28% 13% Latin America Asia / Pacif
Slide 16: FY 2018 – Pharmaceuticals Driven by Xarelto & Eylea
FY 2018 – Pharmaceuticals Driven by Xarelto & Eylea Sales in € million; ∆% yoy, Fx & portfolio adj. Volume +6% Currency -4% 16,847 +3% 16,746 Price -2% Portfolio -0% Key growth products grew by 14%, top 15 products by 6%* Xarelto (+13%) & Eylea (+20%) with continued strong growth* FY'17 FY'18 New la
Slide 17: FY 2018 – Crop Science Global #1 in Agriculture
FY 2018 – Crop Science Global #1 in Agriculture Sales in € million; ∆% yoy, Fx & portfolio adj. 14,266 Volume +6% Currency -4% +6% Price +0% Portfolio +47% 5,288 9,577 2,273 1,471 Positive sales development in Latin America (+17%), North America (+8%) and Asia/Pacific (+10%)* FY'17 FY'18 Herbicides,
Slide 18: FY 2018 – Consumer Health Returned to Growth in H2
FY 2018 – Consumer Health Returned to Growth in H2 Sales in € million; ∆% yoy, Fx & portfolio adj. 5,862 -1% Volume -2% Currency -6% 5,450 Price +1% Portfolio -1% Business with sales swing in H2 (+1%)* Asia / Pacific (+4%) and Latin America (+4%) with growth* FY'17 FY'18 EBITDA EBITDA decline driven
Slide 19: FY 2019 Guidance in Line with Prior Indication
FY 2019 Guidance in Line with Prior Indication Going concern, i.e. announced portfolio measures not included 20181 Group Forecast 2019 ∆ 2019 – 2018 (at constant currencies) Sales €39.6bn ~€46bn +~16% (thereof +~12% portfolio) EBITDA €9.5bn ~€12.2bn +~28% (before special items) Core EPS €5.94 ~€6.80
Slide 20: Focus Areas for 2019
Focus Areas for 2019 Enhance Operating Performance and Drive Value Creation 1 Deliver on operational targets 2 Integrate Crop Science and further advance #1 industry platform 3 Execute efficiency improvement program and realize synergies 4 Continue vigorous defense in glyphosate litigation Further s
Slide 21: Appendix
/////////// Appendix
Slide 22: FY 2019 – Guidance by Segment
FY 2019 – Guidance by Segment Going concern, i.e. announced portfolio measures not included EBITDA-margin Sales Growth 2019 (cpa2) EBITDA-margin 2019 Sales 2018 2018 (before special items) (before special items) (at constant currencies) (at constant currencies) Pharma €16.7bn 33.4% ~4% ~34% Consumer
Slide 23: 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 Sales 2018 Ophthal- €1
Slide 24: Pharma: 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 25: Pharma: 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 26: 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 27: Consumer Health: Strong Consumer Brands Built up Over Decades
Consumer Health Strong Consumer Brands Built up Over Decades CAGR Brand Category Age Sales 2017 2013-2017 # of studies2 Pain, Cardio, Cough & Cold 119 €1,043m3 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 Nutrit
Slide 28: Consumer Health: Focus on our Core OTC Categories
Consumer Health 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 exit Divestm
Slide 29: 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 30: 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 31: Crop Science: The Established Leader in Crop Science
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-
Slide 32: Crop Science: Unmatched Investment in R&D
Crop Science 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 Partner o
Slide 33: 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 ~€20bn ~€15bn ~€15bn ~€10bn Climate FieldView market2 market2 market2 market2 Digital Platform #1 position #1 positi
Slide 34: 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 20171: €20.1bn >400m acres (160m ha) ~ 5% ~ 5% ~ 45% ~ 10% ~ 45% ~ ~ 20% ~ 45% Crop
Slide 35: Crop Science: 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 36: Crop Science: 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 37: Bayer 2022: Delivering Value Creation
Bayer 2022: Delivering Value Creation /////////// Bankhaus Lampe German Conference April 4th, 2019 Oliver Luckenbach & Simone Mörchen Bayer AG