Science For A Better Life

Transcription

1 Science For A Better Life Bayer Cheuvreux German Corporate Conference Frankfurt, January 18, 2011 Werner Baumann, CFO

2 Science For A Better Life This presentation may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup 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 The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments. Disclaimer

3 Who are we? Bayer Investor Presentation Cheuvreux German Corporate Conference Page 5 Bayer A Science Based Business Model Science For A Better Life Culture & Capabilities 12,400 people in R&D 3.1bn R&D budget in 2010 Global footprint Network with leading institutions Innovation Transformational latestage pharma pipeline Agchem pipeline with combined peak sales potential of 1.25bn New applications at MaterialScience Value Performance Customers Shareholders Employees Bayer Investor Presentation Cheuvreux German Corporate Conference Page 6 3

4 Bayer A Leader in Its Markets 16.0bn HealthCare Pharmaceuticals 10.5bn, leading positions in key categories 25% Consumer Health 5.5bn, OTC pharmaceuticals, blood glucose meters and veterinary medicines, global #2-4 53% 22% 6.5bn CropScience Agrochemicals and seeds & traits, global #2 in agrochemicals 7.5bn MaterialScience Polyurethanes and polycarbonates, global #1 Sales 2009: 31.2bn Break-down excluding reconciliation Bayer Investor Presentation Cheuvreux German Corporate Conference Page 7 Bayer Truly Global Footprint Jan-Sep 2010 sales by market 13% 3.4bn domestic sales 87% 26.1bn foreign sales Bayer Investor Presentation Cheuvreux German Corporate Conference Page 8 4

5 Bayer Our Most Important Markets bn % yoy Fx adjusted Sales by country Jan-Sep % +7% % % % +4% -6% 0% % +3% +7% +26% +10% +1% * Bayer Investor Presentation Cheuvreux German Corporate Conference Page 9 *Greater China includes PR China, Hongkong, Macau and Taiwan Bayer Track Record of Performance Underlying EBIT in million Underlying EBITDA-margin in % 1, , , , ,287 4, Bayer Investor Presentation Cheuvreux German Corporate Conference Page , Highlights Group sales of 31.2bn (-5.3%) EBITDA before special items of 6.5bn (-6.6%); 3rd highest ever Net income of 1.4bn (-20.9%) Net cash flow significantly improved to 5.4bn (+49.0%) Net financial debt reduced by 4.5bn to 9.7bn Unchanged DPS of 1.40 Group targets largely achieved * % vs As reported in respective year 2002 as reported in as reported in excluding H.C. Starck and Wolff Walsrode margin in 2002 as reported 5

6 9M 2010 Bayer Lifts Sales And Earnings Sales in million % portfolio & currency adj. EBITDA pre-special items in million Core EPS in 23,296 26,076 4,959 5, M 09 9M 10 +8% 9M 09 9M % 9M 09 9M % HealthCare Small sales growth and flat earnings CropScience Improvement in Q3 after tough 1H 10 MaterialScience Impressive recovery, sales and earnings significantly up Bayer Investor Presentation Cheuvreux German Corporate Conference Page 11 Bayer Significant Investment Opportunities 1 HealthCare Product launches including Xarelto, VEGF-Trap Eye, Beyaz Pipeline development Emerging markets 2 CropScience BioScience (seeds & traits) Emerging markets 3 MaterialScience Capacity increase, in particular China Restructuring program launched to free-up resources and address performance issues at HealthCare and CropScience Bayer Investor Presentation Cheuvreux German Corporate Conference Page 12 6

7 Redirection of Resources to Improve Efficiencies And Cut Costs Contribution by Subgroup Savings Initiative Holding & Admin. ~12% ~34% CropScience HealthCare ~54% Savings and efficiency initiative at HealthCare, CropScience and corporate level Annual cost savings of 800m starting 2013, reinvestment of ~50% One-time-charges of around 1bn by end of 2012, Plans include layoff of 4,500 people Bayer Investor Presentation Cheuvreux German Corporate Conference Page 13 We innovate Bayer Investor Presentation Cheuvreux German Corporate Conference Page 14 7

8 Pharma Pipeline Maturing What it does Status Cardiology Xarelto Riociguat inhibits blood clot formation lowers blood pressure in the lung 1st indication launched/ filed; phase III phase III Oncology Nexavar Regorafenib Alpharadin inhibits enzymes important for tumor growth inhibits enzymes important for tumor growth targeted treatment of bone metastases in prostate cancer launched, additional indications in phase II/III phase III phase III Eye Diseases VEGF Trap-Eye inhibits formation of new blood vessels phase III Imaging Florbetaben detects amyloid-betaplaques (Alzheimer s disease) phase III Bayer Investor Presentation Cheuvreux German Corporate Conference Page 15 Make Xarelto a success Bayer Investor Presentation Cheuvreux German Corporate Conference Page 16 8

9 Xarelto Blockbuster Opportunity in Anticoagulation Therapy 2009 estimated treatment days (market for anticoagulants) ~0.1bn ~0.35bn Primary VTE prevention excl. orthopedic surgery VTE prevention in adult patients after hip or knee replacement Acute indications Prevention of VTE in medically ill patients Secondary prevention of ACS Chronic indications Stroke prevention in atrial fibrillation Treatment and secondary prevention of VTE ~0.2bn ~0.4bn Bayer Investor Presentation Cheuvreux German Corporate Conference Page 17 ~1.6bn VTE: Venous thrombo-embolism ACS: Acute coronary syndrome In All 7 Phase III Studies Reported Xarelto Demonstrated an Excellent Clinical Profile Indication Study Clinical Trial Results # VTE prevention after orthopedic surgery Extended sec. prevention of VTE DVT treatment ,729 patients, Xarelto vs enoxaparin 1,197 patients, Xarelto vs placebo 3,449 patients, Xarelto vs enoxaprin followed by VKA Superior efficacy: 52% relative risk reduction* Rates of major bleeding low. No statistically significant difference Superior efficacy: 82% reduction of recurrent VTE Low incidence of major bleeding. No stat. significant difference Non-inferior efficacy - significantly improved net clinical benefit ** Composite of major and clinically relevant non major bleeding similar with numerically lower major bleedings Stroke prevention in atrial fibrillation 14,269 patients, Xarelto vs VKA Non-inferiority vs. warfarin in ITT and per-protocol population. Active treatment superior to warfarin in reducing the risk of stroke and non- CNS embolism in the safety population. Composite of major and clinically relevant non major bleeding similar #) Selection, for full data see publications: RECORD data published in NEJM and Lancet, EINSTEIN-Ext. presented at ASH 2009, EINSTEIN-DVT presented at ESC 2010; ROCKET-AF presented at AHA 2010 *) Symptomatic VTE + all-cause mortality in pooled analysis of RECORD 1-4 **) Secondary outcome defined as composite of primary efficacy endpoint plus major bleeding VTE: Venous thrombo-embolism; DVT: Deep vein thrombosis; VKA: Vitamin K antagonist; AF: Atrial fibrillation; ITT: Intention to treat Bayer Investor Presentation Cheuvreux German Corporate Conference Page 18 9

10 Xarelto Expected Upcoming Newsflow Data of MAGELLAN phase III trial in VTE prevention in medically ill patients Early 2011e Completion of phase III EINSTEIN-PE in VTE treatment and sec. prevention Summer 2011e Completion of phase III ATLAS TIMI 51 in secondary prevention of ACS Summer 2011e Filing for VTE prevention in medically ill patients / for secondary prevention of ACS Target: 2011 Bayer Investor Presentation Cheuvreux German Corporate Conference Page 19 ACS: Acute coronary syndrome PE: Pulmonary embolism VTE: Venous thromboembolism Strong data VEGF-Trap Eye Bayer Investor Presentation Cheuvreux German Corporate Conference Page 20 10

11 VEGF-Trap Eye Indication Study Clinical Trial Results # Wet AMD vs. Lucentis Primary efficacy endpoint met, non-inferiority demonstrated One year data demonstrated potential for less frequent dosing with comparable vision maintenance CRVO vs. sham control injection Primary efficacy endpoint met, demonstrating significant improvement in vision 56% of patients on VEGF-Trap Eye showed an improvement of vision of at least 15 letters after 6 months (vs. 12% in control) DME vs. laser treatment Encouraging Phase II data: primary endpoint met Visual acuity gains over 24 weeks were maintained or numerically improved up to completion of the study at week 52 #) Selection, for published details see BAYER press releases from November 22 and December 20, Further data planned to be presented at Angiogenesis Conference, Miami, Florida, February AMD: Age-related Macular Degeneration CRVO: Central Retinal Vein Occlusion DME: Diabetic Macular Edema Bayer Investor Presentation Cheuvreux German Corporate Conference Page 21 VEGF-Trap Eye Expected Upcoming News Flow Data from the CRVO phase III program 1H 2011e Filing for wet AMD 1H 2011e Full data from wet AMD phase III VIEW program 2011e AMD: Age-related Macular Degeneration CRVO: Central Retinal Vein Occlusion Bayer Investor Presentation Cheuvreux German Corporate Conference Page 22 11

12 Innovation Bioscience Bayer Investor Presentation Cheuvreux German Corporate Conference Page 23 Innovation Leadership in Agrochemicals, Promising BioScience Pipeline 23 new agrochemical active ingredients launched, generated sales of 2bn in Six new agrochemical substances with sales potential of more than 1bn to be launched E Expect 18 new BioScience products to be launched E Numerous early-stage research and early development projects in Crop Protection and BioScience Bayer Investor Presentation Cheuvreux German Corporate Conference Page 24 12

13 Grow BioScience Sales to 1.4bn by 2018 Planned sales development in million CAGR 12% >1,000 CAGR 11% > ~1,400 Key growth drivers Fast growing established business in cotton, canola, rice and vegetables Regional expansion and introduction of new varieties Exploit traits potential through licensing agreements Extension of our crop-portfolio Significant R&D investment (~ 130m in 2009; 200+m in 2012E) R&D capacities strengthened through acquisition of Athenix (2009) 2002* E 2015 E 2018 E *2002 sales pro-forma Bayer + Aventis CropScience First nine months adj. sales up 26% Bayer Investor Presentation Cheuvreux German Corporate Conference Page 25 New capacities in China Bayer Investor Presentation Cheuvreux German Corporate Conference Page 26 13

14 Pronounced Volume Recovery Drove Q3 MaterialScience Sales Above Pre-Crisis Level pre-crisis During 2009 lower selling prices reduced sales by 1.2bn Sales in billion % yoy, Fx adj. Volumes % yoy Prices % yoy uebitda* margin Q3 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Bayer Investor Presentation Cheuvreux German Corporate Conference Page 27 * = EBITDA pre-special items Economic Recovery Accelerated Business Shift to Asia MaterialScience Sales in Asia/Pacific in % 21% bn sales (1-9) 28% 2.1bn sales Bayer Investor Presentation Cheuvreux German Corporate Conference Page 28 14

15 1bn New Investments to Support Future Growth Asia/Pacific is leading the recovery China already is the world s largest PCS market China is set to become the world s largest PUR market by 2015 Commitment to growth in China 2.1bn investment program in integrated polymer site in Shanghai, China until 2012 New investment of approx. 1bn in Shanghai by 2016 to Increase MDI capacity to 1,000kt/year More than double PCS capacity to 500kt/year Increase HDI capacity, new 50kt/year line planned Transfer of PCS Headquarters from Leverkusen to Shanghai Increasing downstream presence (investment of 110m by 2012) Bayer Investor Presentation Cheuvreux German Corporate Conference Page 29 PCS = Polycarbonates PUR = Polyurethanes Focus Emerging markets Bayer Investor Presentation Cheuvreux German Corporate Conference Page 30 15

16 Performance of Top 15 Large Pharma Companies in The Pharmerging Markets Bayer shows: Best ability to adapt to local markets 35% 30% Superior local execution capabilities A stable senior leadership team Continuous investments in mature products (Glucobay or Adalat) % CAGR % 20% 15% 10% 5% AZ J&J LILLY MERCK WYETH ABBOTT ROCHE BMS PFIZER GSK B-I NOVARTIS S-P S-A BAYER 0% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% % 2009 Revenue (Bubble size shows Pharmerging market sales)* Source : IMS Health Incorporates Pharmerging shake-up 2010 Bayer Investor Presentation Cheuvreux German Corporate Conference Page 31 Bayer is One of The Leading International HealthCare Companies in China HealthCare m +26% y-o-y (Fx-adj.) Impressive growth Driven by both Pharma (+23%) and Consumer Health (+35%) Pharma portfolio includes innovative products like Nexavar, Scilin Insulin and Xarelto Significant investment commitment Top products Glucobay Adalat Approx. 4,500 employees 100m over 5 years to set-up a global R&D center in China Avelox Aspirin Cardio Ultravist Nexavar 5% 10% 15% 20% 25% 30% 35% 70% Beijing manufacturing site expansion (~ 45m through 2015) Partnership with Tsinghua University (joint drug discovery, student support) Bayer Investor Presentation Cheuvreux German Corporate Conference Page 32 All growth rates are Fx-adj. Greater China includes PR China, Hongkong, Macau and Taiwan 16

17 CropScience in Brazil Strong Growth in One of the World s Largest Agchem Markets In million Brazil is the 2nd largest market for CropScience Bayer is one of the leading suppliers and growing strongly (20% CAGR between 2006 and 2009) Risk management systems in place to limit the potential impact of reduced credit availability CropScience sales CAGR +20% (+20%) Barter business expanded Bayer Investor Presentation Cheuvreux German Corporate Conference Page 33 Emerging Markets Drive Growth And Contribute Significantly to Group Sales In million, % yoy Fx adjusted 9M 10 Group sales by region Emerging Economies +29% USA +2% 21% 35% Emerging Economies¹ +17% ~3, % ~2, % +11% 34% 10% ~1,500 ~1,200 Western Europe +4% Others² +5% Group 26,076m; +8% Emerging Asia³ Latin America Eastern Europe Africa & Middle East Bayer Investor Presentation Cheuvreux German Corporate Conference Page 34 ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern Europe ² Others = Japan, Australia, New Zealand, Canada ³ Emerging Asia = Asia minus Japan, Australia, New Zealand 17

18 Progress Outlook Bayer Investor Presentation Cheuvreux German Corporate Conference Page 35 Full Year 2010 Group Outlook Projects Strong Growth Over 2009 Sales Fx and portfolio adjusted E Q3 Update Sales 31.2bn -6% >5% confirmed uebitda 6.5bn -7% > 7bn confirmed Core EPS % >15% confirmed Bayer Investor Presentation Cheuvreux German Corporate Conference Page 36 Outlook depends on planning assumptions as detailed in the 2009 annual report 18

19 2010 A Year of Significant Progress New management Performance challenges in HealthCare and CropScience addressed Pharma pipeline maturing Xarelto demonstrated excellent clinical profile in important chronic indications Strong emerging markets growth - new investment program for MaterialScience in China First 9 month group performance solid, 2010 outlook projects strong growth over 2009 Optimistic for future developments Bayer Investor Presentation Cheuvreux German Corporate Conference Page 37 More Information? Join Our Meet Management Conference Bayer Analyst and Investor Day in Leverkusen Start: Tuesday, March 22, 2011 at 6:30 p.m. CET End: Wednesday, March 23, 2011 at approx. 3:30 p.m. CET. Program: Tuesday evening: Dinner hosted by Marijn Dekkers, CEO of Bayer AG Wednesday: Meet representatives of the Bayer AG and subgroup management boards. The focus will be on dialogue and open discussions in small groups without formal presentations. Meet Management 2011 Bayer Investor Presentation Cheuvreux German Corporate Conference Page 38 19

20 Reporting Events and AGM Date Monday, February 28, 2011 Thursday, April 28, 2011 Friday, April 29, 2011 Monday, May 02, 2011 Thursday, July 28, 2011 Thursday, October 27, 2011 Event Investor Conference Call Investor Conference Call Annual General Meeting Payment of Dividend Investor Conference Call Investor Conference Call Publication Full Year 2010 Results Annual Report First Quarter Results Stockholders Newsletter Second Quarter Results Stockholders Newsletter Third Quarter Results Stockholders Newsletter Bayer Investor Presentation Cheuvreux German Corporate Conference Page 39 Investor Relations Contacts Dr. Alexander Rosar Head of Investor Relations Phone: Dr. Jürgen Beunink Phone: Judith Nestmann Phone: Peter Dahlhoff Phone: Dr. Olaf Weber Phone: Fabian Klingen Phone: Bayer Investor Presentation Cheuvreux German Corporate Conference Page 40 20