Presentation for Bayer's Q1 2020 Investor Con-ference Call on April 27, 2020

Presentation for Bayer's Q1 2020 Investor Con-ference Call on April 27, 2020

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  /////////// Investor Conference Call Q1 2020Results April 27, 2020 Werner Baumann, CEO Wolfgang Nickl, CFO Pictures to be updated
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  Cautionary Statements RegardingForward-Looking Information Bayer Q1 2020 Investor Conference Call2 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 actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayer’s public reports which are available on the Bayer website at http://www.bayer.com/. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments. Guidance at constant currencies, not including portfolio divestitures if not mentioned differently.
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  /////////// Business Update Werner Baumann,CEO Q1 2020 Results
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  Bayer Q1 2020Investor Conference Call4 Status Quo 1 2 3 1 Employee Health 2 Business Continuity 3 Humanitarian Efforts  Securing health and safety of employees  Safeguarding supply, production, logistics and business operations  Health for all, hunger for none – using our expertise in health and nutrition in global crisis COVID-19 affects activities
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  Q1 2020 FinancialPerformance Focused on business continuity Bayer Q1 2020 Investor Conference Call5 Sales €12,845m EBITDA Before special items Core EPS €4,391m €-793m Free Cash Flow €2.67 +6% yoy* +10% yoy +10% yoy * ∆% yoy, Fx & portfolio adj Note: All 2019 figures were re-based to reflect the change in cost allocations from enabling functions to the divisions effective Jan. 1, 2020.
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  Volume 6% Q1'19 Q1'20 2,301 2,611 Sales In million€, ∆% yoy, Fx & portfolio adj. EBITDA* In million €, ∆% yoy, before special items Q1'19 Q1'20 6,444 6,834 Currency 0% Price 0% Portfolio 0% Crop Science off to a good start +6% +14% 6 + + + Bayer Q1 2020 Investor Conference Call 38.2%35.7% EBITDA Margin before special items  6% cpa sales growth, with contributions from all regions  Good growth across insecticides, fungicides, corn seed & traits and herbicides  Soybean seed & traits continue to decline due to competition  Strong increase of EBITDA before special items due to volume increases and cost synergies *2019 figures are restated
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  Q1'19 Q1'20 1,485 1,594 Sales Inmillion €, ∆% yoy, Fx & portfolio adj. EBITDA* In million €, ∆% yoy, before special items Q1'19 Q1'20 4,354 4,546 Pharmaceuticals performance driven by Xarelto +4% +7%  Xarelto (+19%) as main growth contributor  Eylea (+1%) impacted by phasing  China with softer growth partly due to phasing in anticipation of volume-based procurement introduction  Solid increase in EBITDA before special items  EU approval for darolutamide and pre-filled syringe for Eylea  Positive phase III data for Vericiguat (VICTORIA) and Xarelto (VOYAGER PAD) 7 Bayer Q1 2020 Investor Conference Call Volume 7% Currency 1% Price 3% Portfolio 0% + + - 35.1%34.1% EBITDA Margin before special items *2019 figures are restated
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  Q1'19 Q1'20 290 301 Sales Inmillion €, ∆% yoy, Fx & portfolio adj. EBITDA* In million €, ∆% yoy, before special items Q1'19 Q1'20 1,395 1,398 Strong demand for Consumer Health products in all regions  All regions with elevated demand primarily related to the COVID-19 epidemic  Strong growth across categories, especially in Nutritionals (+34%), Pain and Cardio (+20%) and Allergy & Cold (+15%)  Margin expansion driven by sales growth offsetting negative portfolio effect and higher marketing expenses  Positive effect on earnings by growth acceleration program (“Fit to Win”) +14% +4 % 8 Bayer Q1 2020 Investor Conference Call Volume 11% Currency 0% Price 2% Portfolio 13% + + - 21.5%20.8% + EBITDA Margin before special items *2019 figures are restated
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  /////////// Wolfgang Nickl, CFO Financials& Outlook Q1 2020 Results
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  Bayer Q1 2020Investor Conference Call Q1'19 Q1'20 EBITDA In million €, before special items Q1'19 Q1'20Q1'19 Q1'20 Q1 2020 Result Sales In million €, ∆% yoy, Fx & portfolio adj. Core EPS In €, Cont. Operations 12,252 12,845 2.43 2.67 3,983 4,391 Positive FX effect of €44 million Positive FX effect of €41 million +5% (+6%cpa) 10 +10% Core financial result went from -€352 million to -€493 million Q1'19 Q1'20 Free Cash Flow In € million 508 -793 +10% 34.2%32.5% Within expectations, due to phasing and special effects (Xarelto payment) *2019 figures are restated * Q1‘20 EBITDA Margin before special items
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  Bridge: Core EPSto EPS (Q1 2020) Bayer Q1 2020 Investor Conference Call11 in € Core EPS Q1'2020 Armortization / Write-down of IP and PPE Special items (EBITDA relevant) Special items financial result/ taxes Tax effect on adjustments EPS (Continuing Operations) Q1'2020 Discontinuing Operations EPS (total) Q1'2020 EPS (total) Q1'2019 2.67 -0.86 -0.16 -0.63 0.37 2.6 2.4 2.2 2 1.8 1.6 1.4 1.2 1 0.8 0.2 0.6 0 0.4 1.52 0.13 1.39 1.27
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  Net financial debtlargely unchanged Bayer Q1 2020 Investor Conference Call12 Gross Financial Debt 31.12.2019 Bonds / FX Bank Liabilities Other Financial Liabilities Gross Financial Debt 31.03.2020 Cash / Other Financial Assets Net Financial Debt 31.03.2020 Net Financial Debt 31.12.2019 243 -201 39,641 -4,242 35,399 39,018 581 34,068 0 5,000 30,000 35,000 40,000 in € million ~60% of financial debt denominated in US$ ±1% change of US$ vs € = ±€200m
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  Outlook: Impact variablesof COVID-19 situation Bayer Q1 2020 Investor Conference Call13 CS: Demand for bio-fuel and access to seasonals workers Demand Dynamics Cost management Acceleration of digitalization Role of science in society CS: Demand for bio-fuel and access to seasonals workers Demand patterns, e.g. stockpiling Impact on elective treatments Bio-fuel demand & seasonal labor Clinical trials and regulatory processes Financial Markets Production and Supply Stability of entire supply chain Inventory / Safety stock Logistics, also impact on costs Debt market access / interest rates Payment behavior of customers and solvency of suppliers FX volatility Trends / Opportunities
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  Focus areas 2020 14 1 Maintain operational targets; adapt as necessary from COVID-19  Continued focus on cash flow 3  Progress with pipeline developments, launch new indications / products  Continue with integration  Focus on pipeline execution 2 4 Group Pharmaceuticals Crop Science Consumer Health  Continue to drive growth acceleration program Bayer Q1 2020 Investor Conference Call Efficiency / Bayer 2022 Portfolio Measures  Closing of Animal Health sale, expected by mid 2020  Follow through with efficiency improvement program and realize synergies 5 6
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  /////////// Investor Conference Call Pictures tobe updated Q1 2020 Results (Annex) April 27, 2020 Werner Baumann, CEO Wolfgang Nickl, CFO
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  Key KPIs –Bayer Group 16 Mainly related to acquisition and integration costs, restructuring costs and legal costs Amortization mainly resulting from acquisitions Tax rate FY guidance unchanged at ~23% Bayer Q1 2020 Investor Conference Call [€ million] Q1 2019 Q1 2020 % y-o-y Consensus1 Net Sales 12,252 12,845 4.8 / 6.0* 12,611 EBITDA before special items 3,983 4,391 10.2% 4,102 Special items -1,044 -615 -237 Reported EBITDA 2,939 3,776 28.5% Depreciation & Amortization -1,159 -1,277 10.2% Reported EBIT 1,780 2,499 40.4% Amortization and impairment losses / loss reversals on intangible assets 702 767 9.3% Special items (EBITDA) 1,044 615 Other -2 80 Core EBIT 3,524 3,961 12.4% Core financial result (before special items) -352 -493 40.1% Core EBT 3,172 3,468 9.3% Taxes (before special items) -799 -845 5.8% Core tax rate 25.1% 24.4% Minorities 5 0 Core Net income 2,378 2,623 10.3% No. of shares (m) 980.2 982.4 Core EPS (€) 2.43 2.67 9.9% 2.58 Income from cont. Operations (after income taxes) 1,124 1,368 21.7% Income from discont. Operations (after income taxes) 112 120 7.1% Net income 1,236 1,488 20.4% 1,765 EPS from cont. and discont. Operations (€) 1.27 1.52 19.7% Delta Working Capital -1,430 -3,932 Operating Cash Flow (cont. operations) 1,045 -189 Free cash flow 508 -793 CapEx and leasing, cont. Operations -395 -391 -1.0% 2019 figures restated 1 Consensus from April 21st 2020
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  Key KPIs bydivision Bayer Q1 2020 Investor Conference Call17 Crop Science Pharmaceuticals Consumer Health Reconciliation Group [€ million] Q1'19 Q1'20 Q1'19 Q1'20 Q1'19 Q1'20 Q1'19 Q1'20 Q1'19 Q1'20 Sales 6,444 6,834 4,354 4,546 1,395 1,398 59 67 12,252 12,845 Sales by region: Europe / Middle East / Africa 1,764 1,894 1,675 1,799 460 490 54 55 3,953 4,238 North America 3,524 3,713 925 1,009 603 583 4 12 5,056 5,317 Asia / Pacific 388 416 1,529 1,504 206 192 0 0 2,123 2,112 Latin America 768 811 225 234 126 133 1 0 1,120 1,178 EBITDA 1,685 2,410 1,469 1,342 263 289 -478 -266 2,939 3,776 Special items -616 -201 -16 -252 -27 -11 -385 -151 -1,044 -615 EBITDA before special items 2,301 2,611 1,485 1,594 290 300 -93 -115 3,983 4,391 EBITDA margin before special items 35.7% 38.2% 34.1% 35.1% 20.8% 21.5% • • 32.5% 34.2% EBIT 978 1,500 1,181 1,088 181 263 -560 -352 1,780 2,499 Special items -616 -279 -16 -252 -27 43 -384 -151 -1,044 -639 EBIT before special items 1,594 1,779 1,197 1,340 208 220 -176 -201 2,823 3,138 EBIT margin before special items 24.7% 26.0% 27.5% 29.5% 14.9% 15.7% • • 23.0% 24.4% Operating cash flow, continuing -485 -1,761 1,270 957 239 147 21 468 1,045 -189 D&A and Write-downs -707 -910 -288 -254 -82 -26 -83 -87 -1,160 -1,277 Employees at end of period 35,298 32,785 38,190 39,747 10,765 10,630 22,949 19,039 107,202 102,201
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  Pharma: Major Pharmadevelopment portfolio projects in clinical Phase I to III (as of April 2020) Bayer Q1 2020 Investor Conference Call 18 Others Oncology Cardiovascular &Kidney Diseases Selitrectinib (TRK Inhibitor, formerly LOXO-195) Rogaratinib (pan-FGFR Inhibitor) PTEFb Inhibitor ATR Inhibitor DHODH Inhibitor Copanlisib (PI3K Inhibitor) Regorafenib (multi-Kinase Inhibitor) Anetumab Ravtansine (Mesothelin-ADC) Thorium (227Th) Anetumab Corixetan (Mesothelin-TTC) PSMA-TTC (PSMA-Targeted Thorium Conjugate) Radium-223 Dichloride combi Pembrolizumab Tinurilimab (CEACAM6 fb Antibody) ILDR2 fb Antibody AhR Inhibitor Anti-FXI Antibody Runcaciguat (sGC Activator 1) sGC Activator 2 Vasopressin V1a Receptor Antagonist P2X4 Antagonist BDKRB1 Receptor Antagonist FVIII Gene Therapy sGC Activator 3 PEG-ADM Inhale PREP Inhibitor P2X3 Antagonist IRAK4 Inhibitor 1 IRAK4 Inhibitor 2 Urothelia Cancer /// Rogaratinib (pan-FGFR Inhibitor) Colorectal Cancer (mCRC) /// Regorafenib* (combination Nivolumab) Thrombosis /// FXI Antisense (IONIS) Thrombosis /// Osocimab (anti-FXIa Antibody) Stroke prevention /// FXIa Inhibitor Heart Failure /// Pecavaptan (Dual Vasopressin Receptor Antagonist) Chronic Kidney Disease (CKD) /// Fulacimstat (Chymase Inhibitor) Endometriosis /// Vilaprisan (S-PR Modulator) Contraception /// Combi IUS: LNG (Progestin) + Indometh. (NSAID) Chronic Cough /// P2X3 Antagonist Age-related Macula Degeneration (AMD) /// Aflibercept High Dose Obstructive Sleep Apnea /// TASK Channel Blocker Prostate Cancer (mHSPC) /// Darolutamide Non-Hodgkin Lymphoma /// Copanlisib (PI3K Inhibitor) Glioblastoma /// Regorafenib* (multi- Kinase Inhibitor) Peripheral Artery Disease /// Rivaroxaban (FXa Inhibitor) Heart Failure reduced EF /// Vericiguat (sGC Stimulator) CKD in Type 2 Diabetes /// Finerenone (nst MR Antagonist) Sympt. Uterine Fibroids /// Vilaprisan (S- PR Modulator) Retinopathy of Prematurity /// Aflibercept (VEGF Inhibitor) Multi-Indication . Phase III (8)Phase I (27) Phase II (12) Gynecology Additions:  Phase I trial With Ra-223 dichloride in combination with Pembrolizumab (Merck´s Keytruda) in NSCLC Terminations:  P2X3 antagonist 2: Phase I in multi-indications and Phase II in chronic cough  Phase II with vericiguat in heart failure with preserved ejection fraction (HFpEF) – data to be presented at an upcoming congress Phase Transitions:  Molidustat for the treatment of anemia has been submitted in Japan and was thus deleted from Phase III