The New Bayer - Jefferies Group · 2015-06-11 · The New Bayer Transforming into a pure Life...

The New Bayer Transforming into a pure Life Science company

June 3rd 2015 / Marijn Dekkers, CEO

Jefferies Global Healthcare Conference, New York City

• Bayer Investor Presentation • June 2015

Disclaimer 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 www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.



ǀ Transforming into a pure Life Science company and exiting MaterialScience ǀ Executing a strategy of organic growth complemented by bolt-on acquisitions ǀ Generating strong growth with new product innovations ǀ Expecting important R&D pipeline progress during the next 12 – 18 months ǀ Targeting low single-digit % organic growth and high-teens % improvement in Core EPS in 2015

The New Bayer

Sales

+5% Core EPS

Track Record of Consistently Strong Performance


36.5 35.1

2011 2010 2014 2012 2013

39.8 40.2

42.2

4.83 4.19

2011 2010 2014 2012 2013

5.35 5.61 6.02

CAGR 2010-2014

+9% CAGR 2010-2014

in € billion

in €

EBIT in € million

-5%

1,998 2,096

Sales in € million % currency & portfolio adj.

+3%

12,117 10,555

EBITDA before special items in € million

+10%

3,000 2,738

Core EPS in €

+8%

2.10 1.95

Q1’15 Q1’14 Q1’15 Q1’14 Q1’15 Q1’14 Q1’15 Q1’14

Q1 2015 – Strong Start to the Year


Q1 2015 – Full-Year Group Guidance Raised Mainly Due to Fx

2014 2015 original guidance

2015 Update (April) Fx effect

Sales €42.2bn Low-single digit %

increase ~€46bn

Low-single digit % increase

€48 - 49bn ~ +9%

EBITDA before special items

€8.8bn Low-to-mid-teens % increase

High-teens % increase ~ +8%

core EPS €6.02 Low-teens % increase

High-teens % increase ~ +7%

Sales Δ% Fx and portfolio adjusted

Assuming end Q1’15 Fx rates Outlook depends on specific planning assumptions as detailed in the Annual Report • Bayer Investor Presentation • June 2015


4 Key Elements Constitute Our Successful Strategy

The New Bayer

1. Deliver growth and performance

Fast-Growing Global Pharma Business

in € billion; Δ% yoy Fx & portfolio adj. Sales

10.0 9.9 10.8 11.2

12.1

3.2

2010 2011 2012 2013 2014 Q1 2015

+9% Maximize the value of launch

products

Drive commercial excellence in marketing and sales

Advance early and mid-stage pipeline

Achieve phase III readiness for key phase II assets by mid-2016

Explore opportunities for partnerships, open innovation and bolt-on acquisitions

Plans for continued growth

+11%

+ 7 %


+1% +4%

Pharma Launch Products Drive Growth: Combined Peak Sales Potential of ≥€7.5bn


1Q 2015 Individual Sales

482

71

253

in € million, Δ% yoy Fx adj.

38 54

Total €898m

in € billion

2012 2013 2014 2015e

0.4

1.5

2.9

Collective Sales

> 4.0

Xarelto – Leading Novel Anticoagulant Sales in € million; Δ% Fx adj.

Global Market Sales Share*

• The world‘s leading novel anticoagulant with continued dynamic growth • >11 million patients treated to date • Comprehensive Life-cycle management program including peripheral artery disease and

chronic heart failure

Peak sales potential of ~€3.5bn reiterated *Anticoagulant market, as of Feb. 2015

322

949

1,679

482

2012 2013 2014 Q1 2015

+ 38%


32%

12% 12%

Xarelto Pradaxa Eliquis

Eylea – Gaining Share in Key Markets

• Successful roll-out, 2014 sales more than doubled in Europe

• Significant label expansion achieved in 2014. 2 new indications approved: DME and mCNV

• Life-cycle management incl. combination therapy with PDGFR-b antibody**

Marketed by Bayer ex-US only *Sales market share, Feb. 2015

**in collaboration with Regeneron

Japan

53% 46%

2015* 2013

DME: Diabetic macula edema mCNV: myopic Choroidal neovascularization

333

759

253

2012 2013 2014 Q1 2015

+ 55 %

Sales in € million; Δ% Fx adj.

Peak sales potential of ≥ €1.5bn reiterated


Europe 5 main countries + Switzerland

36%

22%

2015* 2013

Merck & Co. Consumer Care / Dihon

Leveraging Potential of OTC Leadership

Strong #2 position

Track record of outperforming market growth

Success in long-term brand building

Highly complementary acquisitions, incl. Merck & Co. Consumer Care

Globalize established brands

Launch innovation pipeline

Execute Emerging Markets focus strategies

Fully realize synergy potential from acquisitions

Target strategic acquisitions and alliances


Plans for continued growth Achievements Consumer Care Sales

€ billion, 2014 pro forma

2013 2014

€3.9

€5.6

http://www.masgrafx.com/masgrafxracing/images/jdownloads/screenshots/mgrfx_alkaseltzer.jpg

Q1 2015 – Consumer Care: Generated Strong Growth

36%

1,556


Sales in € million, Δ% yoy , Fx & portf. adj.

923

1,556*

Q1 2014 Q1 2015

+9%

+9%

+14%

+8%

Performance key brands Δ% yoy, Fx adj.

*including €495m from Merck

Delivering Strong Growth in CropScience

6.8 7.3 8.4 8.8

9.5

3.1

2010 2011 2012 2013 2014 Q1 2015

Strengthen portfolio through focused and integrated crop solutions

Drive commercial excellence in marketing and sales

Drive new product growth, invest in life-cycle management

Expand seeds portfolio by building business in soybeans and wheat

in € billion; Δ% Fx & portfolio adj.

Sales

Plans for continued growth

+1%


+11% +9%

+9% +12%

2. Develop new growth opportunities

Pharma R&D Focus Areas

• Cardiology / Hematology

• Oncology • Additional areas incl.

Opthalmology

Research and Early Pipeline

• Damoctocog alfa pegol • ODM-201 • Copanlisib • Finerenone • Vericiguat • Molidustat • Vilaprisan • ISIS-FXIRx

• Xarelto (Rivaroxaban) • Eylea (Aflibercept) • Xofigo (Radium-223

dichloride) • Stivarga (Regorafenib) • Adempas (Riociguat)

Life-cycle Management

Mid- and Late-stage Pipeline Projects



Mid- and Late-Stage Pharma Pipeline Progressing – Current Timelines

CHF: Chronic heart failure; CRPC: Castration-resistant prostate cancer; NHL: Non-Hodgkin‘s lymphoma; r/pEF: Reduced/preserved ejection fraction

Damoctocog alfa pegol Hemophilia A ODM-201 CRPC Copanlisib Cancer; NHL Finerenone Worsening CHF

Diabetic nephropathy

Vericiguat Worsening CHF rEF Worsening CHF pEF Molidustat Renal anemia Vilaprisan Uterine fibroids Endometriosis

Phase III (pediatric)

Phase III

Phase IIa Phase III

Phase IIb

Phase IIb Phase IIb

Phase IIb Phase IIb

2016 2015 2014

Phase IIb

Phase IIb Phase IIa

PH III decision

PH III decision PH III decision

PH III decision

PH III decision

reported

Continuous Flow of Product Innovation with Promising Potential at CropScience

Innovation

Chemicals Biologicals

Seeds&Traits LCM

Products launched

2011 - 2016* Peak sales

≥ €4bn

Execution Potential

8 Chemicals 2 Herbicides 2 Fungicides 2 Insecticides 2 SeedGrowth

15 Seeds/traits 3 Cotton 6 Oilseed 4 Rice 1 Soybean 1 Wheat

2 Biologicals 1 Fungicide 1 Insecticide

Seed varieties Several hundred new varieties in vegetables and broad acre crops

Life-cycle management New formulations and mixtures, incl. Biologicals

*Estimated and subject to regulatory approval • Bayer Investor Presentation • June 2015

3. Execute Portfolio Transformation • Integrate acquired businesses • Exit MaterialScience businesses • Adjust Group structures to reflect Life Science focus

Transforming Into a Pure Life Science Company - Transaction Volume >€47bn Since 2004*

2003 Sales €28.6bn

HealthCare

CropScience

MaterialScience

Chemicals

Major examples only

Pro-Forma 2014 Sales ~ €32bn

CropScience

HealthCare Divestitures €11bn

Acquisitions €36bn

Diagnostics Plasma

–

+ + +

Merck & Co. Consumer Care Dihon Algeta

Conceptus Steigerwald GmbH

Teva Animal Health Schering AG Roche OTC

+ +

+

+ +

AgraQuest Athenix

Stoneville Cotton Seed Gustafson Seed Treatment +

+ + +

Capital-market exit planned

*Transaction volume: acquisitions/divestments 2004 - 2014

–

–

Lanxess spin-off Bayer Silicones

– – – –


HC Starck Wolff Walsrode

Divested Divested

Life Science Transformation on Track

New Life Science Organization

New organization to best support Life Science strategy execution and commercial success

To be implemented by January 1, 2016

LS: Life Sciences

Demerger of MaterialScience

Targeted time frame for capital-market exit: latest mid-2016

Timing, structure and exit options depend on market environment; decision 2H 2015e

Potential proceeds re-invested in the business/ reduction of net debt

Merck Consumer Care Integration

Integration progressing as planned

Synergy tracking and integration teams in place

Confirmed 2017 synergy targets:

• USD400m top-line

• USD200m cost- synergies by 2017


4. Delever balance sheet and use cash efficiently

CapEx budget 2015 ~€2.3bn PP&E

R&D 2015e: >€4.0bn

Efficient Use of Cash

Fuel organic growth

M&A

Dividend policy

Pay down debt


Organic growth complemented by bolt-on acquisitions

Maintaining single-A credit rating category

Potential proceeds from MaterialScience exit

Pay out 30-40% of core EPS

Summary

The New Bayer - A World-Class Life Science Company

• Fast-growing global pharma business

• Leveraging potential of OTC leadership

• Aspiring for Crop Protection leadership

• Progressing innovation pipeline

• Setting trends in research-intensive areas in the field of human, animal and plant health

• Leveraging sales growth into value creation

• Excellence in R&D and commercialization

• Leveraging leading brands with decade-long brand equity

• Superior emerging-market presence

Performance

Capabilities

Value


More Information …

Bayer‘s TOP Executives Host Roundtable Discussions with Investors and Analysts with

● Marijn Dekkers, CEO ● Johannes Dietsch, CFO ● Kemal Malik, Member of the Board ● Werner Baumann, Member of the Board and CEO Bayer HealthCare ● Liam Condon, CEO Bayer CropScience

10 additional Senior Executives will be available for discussion as well

Meet Management in New York City Thursday, June 25th 2015


The New Bayer Transforming into a pure Life Science company

June 3rd 2015 / Marijn Dekkers, CEO

Jefferies Global Healthcare Conference, New York City


The New Bayer - Jefferies Group · 2015-06-11 · The New Bayer Transforming into a pure Life...

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