FY / Q4 2012 Investor Conference Call Presentation

FY/Q4 2012 ResultsInvestor Conference Call

February 28, 2013 / Marijn Dekkers, CEO

DisclaimerThis presentation may contain forward-looking statements based on currentassumptions and forecasts made by Bayer Group or subgroup management.

Various known and unknown risks, uncertainties and other factors could lead tomaterial 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 areavailable on the Bayer website at www.bayer.com.

The company assumes no liability whatsoever to update these forward-lookingstatements or to conform them to future events or developments.

• FY/Q4 2012 Investor Conference Call • Marijn Dekkers

2012 Has Been a Very Successful Year For Bayer


Operationally, a record year driven by strong execution and currency tailwind

All subgroups contributed to top and bottom line improvement

5% organic sales growth to ~€40bn, driven by LifeSciences

Special charges of €1.7bn, mainly further provisions for litigation resulted in reported EBITDA / net income on prior-year level

Adj. EBITDA up 9% at €8.3bn, core EPS up 11%, group targets achieved, proposed DPS of €1.90 up 15% (payout ratio 35.5%)

Excellent innovation pipeline progress strengthens LifeScience businesses

Encouraging growth (+7%) in the emerging markets (37% of group sales, up by ~80 basis points)

Q4 – strong finish to a very successful year

Outlook 2013 projects continuing record performance in anniversary year

4th Quarter 2012 –Strong Finish to a Very Successful Year


EBITin € million

+17%

735629

Salesin € million% currency & portfolio adj.

+6%

9,8629,191

EBITDAadjusted*in € million

+18%

1,825

1,541

Core EPSin €

+3%

1.000.97

*before special items

Q4’12Q4’11 Q4’12Q4’11 Q3’12Q4’11 Q4’12Q4’11


4th Quarter 2012 –All Subgroups With Higher Sales and EarningsSales & adjusted EBITDA ∆ in € million, sales ∆% y-o-y Fx and portfolio adjusted

HealthCare

Pharma

Consumer Health

CropScience

MaterialScience

∆ Sales Y-o-Y ∆ Adj. EBITDA Y-o-Y

69+9%

93+22%

16+6%

149+141%

162+14%

187+5%

141+5%

180+9%

165+5%

328+5%

4th Quarter 2012 –Performance Driven by Emerging Markets


Western Europe

+1%

~1,560

~1,420

+14%

~460

-1%~520

+12%

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, Canada³ Emerging Asia = Asia w/o Japan, Australia, New Zealand

Q4’12 Group Sales by Region Emerging EconomiesIn € million, ∆% yoy Fx adjusted

Group €9,862m; +5%

Emerging Asia³

LatinAmerica

EasternEurope

Africa & Middle East

EmergingEconomies¹

+9%

Others²+2%

USA+5%

40%

30%

20%

10%

+7%

Full Year 2012 –All Targets Achieved


Sales ∆ Fx & portf. adjusted, EBITDA before special items2012

Outlookoriginal

2012actual

∆ vs.2011 Comments

Sales +~3% or €37bn €39.8bn +5% Raised to 4-5% or

€39-40bn in Q2

adj. EBITDA

slightlyimprove €8.3bn +9% Raised to a high-single-

digit % increase in Q2

Core EPS

slightlyimprove €5.35 +11% Raised to ~10% in Q2


2013 – 2015:Aspirations by

Subgroup


Priority 2012 Target 2013*

Aspiration 2015

HealthCare: Accelerate sales growth €18.6bn

Pharma: Successfully commercialize new products and realize emerging markets (EM) opportunity New product sales¹ EM growth

Consumer Health: Aspire to become #1 OTC company €7.8bn ~€9bn

HealthCare: Improve margins Pharma Consumer Health

27.2%29.6%23.9%

slightly upslightly up

at level

towards 29%≥31%~25%

HealthCare –Building Growth Momentum, Improving Margins

¹ Xarelto, Eylea, Stivarga, Radium-223-Dichloride and Riociguat; subject to regulatory approval*Assuming Fx rate of $1.29 per €

Outlook depends on specific planning assumptions as detailed in the Annual Report

€10.8bn

€368m7.5%

mid-single-digit % to ~€11bn

~€1bnhigh-single

digit %

CAGR ~7% towards €13bn

>€2.5bnhigh-single

digit %




Sales ∆ Fx & portf. adjusted, margin = EBITDA before special items to sales

Pharma – New Products Drive Growth and Rejuvenate Portfolio


86

368

~1,000

>2,500

2011 2012 2013e 2015e

Sales from new Pharma pipeline in € m

Xarelto 322Eylea 14Stivarga 32

Successful launch, 2012 sales above target –important countries with outstanding uptake, disappointing so far in Japan

Encouraging early feedback on first launches

Positive early indications on commercial launch in the US, approved for GIST in the US, CHMP opinion expected 1H 2013

Submitted for treating bone metastases in patients with CRPC (Dec. 2012)

Radium-223- Dichloride

Submitted for PAH and CTEPH (Feb. 2013)


Pharma Aspiration – Targeting High-Single Digit Emerging Market Growth

Developed Markets

+2%


² Others = Japan, Australia, New Zealand, Canada

2012 Pharma Sales by Region Highlights Emerging EconomiesIn € million, ∆% yoy Fx adjusted

Total €10,803m; +4%

EmergingEconomies¹

+7.5%

36%64%

Portfolio of established brands and innovative medicines further expanding

Sales CAGR of 11% in EM for the last 5 years

Women’s Health business growing 8%

PR China sales above €1bn, up 23%

Consumer Health –Aspire to Become #1 OTC Company


2,634

3,020 3,0803,371

3,5343,853

2007 2008 2009 2010 2011 2012

+6%

* Only Aspirin CC

€494m (+1%)

Product Highlights 2012

€323 (+5%)

€269 (+14%)

€250 (+8%)

€196 (+4%)

*

Sales Consumer Care in € million; ∆% Fx & portfolio adj.


CropScience – Above Market Growth at Benchmark Profitability

Priority 2012 Target 2013*

Aspiration 2015

Above-market sales growth +12.4% to €8.4bn

high-single digit %

towards €9bn


Translate R&D effectively into new product sales (CP products launched since 2006)

€1.1bn ~€1.4bn ~€1.9bn

Extend seeds footprint +14%

Maintain industry leading profitability level 24.0% slight improvement ~24%


double-digit % growth p.a.

CP: Crop Protection*Assuming Fx rate of $1.29 per €


double-digit % growth

CropScience – Translate R&D Effectively into New Product Sales


Sales from new Crop Protection products launched since 2006 in € bn∆% y-o-y, () Fx adj.

Xpro (+61%) - New cereal fungicide with yield-boosting effect

Adengo family (+85%) - Excellent weed control in corn and cereal crops, also in case of glyphosate resistance

Belt (+54%) – Broad-spectrum insecticide with fast and long-lasting action

Launch of Luna fungicide in the US

First launch of new SeedGrowth family EverGol/Emesto in Canada0.02

0.3

0.7

1.1

~1.4

~1.9

2007 2009 2011 2012 2013e 2015e

+60%

2012 Highlights

High demand for InVigor in Canada; launch of conventional oilseed rapein Europe

Expansion of cotton seed business driven by US and Brazil

Growing rice seed business in Asia(esp. India)

About 70 new vegetable seed varietieslaunched

Successful launch of Bayer soybean seed in the US

Build-up of global wheat seed business continued with new research cooperations

Seeds – Double-Digit Growth in All Our Broad-Acre Crops in 2012


299 304

227 311

1791994047

2011 2012 2015e

820962

Sales in € million; ∆% y-o-y, () Fx & portfolio adj.

2012 Highlights

+14%

Vegetables (-2%)

Rice (+23%)

Oilseeds (+33%)

Soybean (+83%)

Cotton (+10%)

Other

+14%+14%

Double-digit % CAGR expected



*Assuming Fx rate of $1.29 per €#after reproduction


MaterialScience – Higher Asset Utilization & Efficiency Measures Are Driving Performance

2012 Target 2013 Aspiration 2015

Sales +3.0% to €11.5bn (volumes +2%)

Adj. EBITDA +7% to €1,251m

CFROI# 5.6% < WACC 7.1%

Sales to slightly increase to ~€12bn

Adj. EBITDA to further improve

Q1‘2013 vs Q4‘2012: Sales to further increase and adj. EBITDA at same level

Grow business (volume) above global GDP

Defend market leading positions in PCS and PUR

Realize 150 bp margin contribution through new efficiency initiative

Optimize asset structure in Germany

CFROI# > WACC


Group Outlook

Full Year 2013 –R&D And CapEx Budgets


2%

MaterialScience~€0.2bn

HealthCare~€2.1nthereof Pharma~€1.7bn

MaterialScience~€0.6bn

HealthCare~€0.6bn

Reconciliation~€0.1bn

65%

26%

7%

Reconciliation~€0.3bn

CropScience~€0.8bn

CropScience~€0.5bn

CapEx (PPE) 2013e: ~€1.9bn (+24%)R&D 2013e: ~€3.2bn (+7%)

32%

25%

28%

14%

Full Year 2013 Outlook Projects Further Growth And Higher Earnings


2012 ∆ vs. 2011 2013E

Sales €39.8bn +5% +4-5% to~€41bn*

adj. EBITDA €8.3bn +9% mid-single-digit % increase

Core EPS €5.35 +11% high-single-digit % increase

Sales ∆ Fx and portfolio adjusted, EBITDA before special items

*Assuming Fx rate of $1.29 per €Outlook depends on specific planning assumptions as detailed in the Annual Report

FY/Q4 2012 ResultsInvestor Conference Call

February 28, 2013 / Marijn Dekkers, CEO


Appendix

Q4’2012 –Cash Flow and Net Debt Development


+€223m 7.0GCF oFCF

755

Invest-ments

743 160

∆ %y-o-y -25 -63

NCFcont.

903

-22 +2Q3´12 Q4´12

6.8

Q4’12 Cash Flow Net Debt DevelopmentCash Flow in € million, Net Debt in € billion

Net debt increase of €1bn due to pension funding, partly offset by positive cash generation

Q4’2012 –HealthCare

• FY/Q4 2012 Investor Conference Call • Marijn Dekkers *before special items

Q4’12 Sales Earnings

Pharma+7% (+5%)

ConsumerHealth

+7% (+5%)36%

HealthCare €4,923m; +7% (+5%)

2,8672,056

Price0%

Volume+5%

Fx+2%

Portfolio0%

In € million, ∆% yoy, () = Fx & portf. adjusted

Q4‘11 Q4‘12 Q4‘11 Q4‘12

758827

422515

+9%

+22%

1,180

1,342 +14%

317 +28%

8151,001 +23%

498

407

Adj.EBITDA*

Adj.EBIT*

594 +19%

Q4’2012 –CropScience


Crop Protection+12% (+11%)

EnvironmentalScience

+18% (+16%)


Seeds-10% (-11%)

Q4’12 Sales Earnings In € million, ∆% yoy, () = Fx & portf. adjusted

CropScience €1,856m; +11% (+9%)

Price0%

Volume+9%

Fx+2%

Portfolio0%

1,540

Q4‘11 Q4‘12 Q4‘11 Q4‘12

273289 +6%

145162 +12%

Adj.EBITDA*

Adj.EBIT*

174142

Q4’2012 –MaterialScience

• FY/Q4 2012 Investor Conference Call • Marijn Dekkers **CAS: Coatings, Adhesives, Specialties*** IO: Industrial Operations

Polyurethanes+11% (+9%)

Polycarbonates0% (-3%)

CAS**+3% (+5%)

Q4’12 Sales Earnings In € million, ∆% yoy, () = Fx & portf. adjusted


MaterialScience €2,761m; +6% (+5%)

Price+2%

Volume+3%

Fx+2%

Portfolio-1%

1,473669

IO***0% (-1%)

Q4‘11 Q4‘12Q4‘11

Q4‘12

Adj.EBITDA*

Adj.EBIT*

106

255 +141%

-48

93 +294%451

168

FY’2012 –Cash Flow and Net Debt Development


+€15m 7.0GCF oFCF

4,599

Invest-ments

1,929 2,603

∆ %y-o-y -11 -24

NCFcont.

4,532

-10 +19FY´11 FY´12

7.0

2012 Cash Flow Net Debt DevelopmentCash Flow in € million, Net Debt in € billion

Net debt constant, despite €1bn pension funding in Q4’2012

FY’2012 –Regional Performance


Africa & Middle East

EasternEurope

Emerging Economies

EmergingEconomies¹

+7%

Others²+4%

USA+9%

Western Europe0%

2012 Group Sales by Region

Group €39,760m; +5%

~4,900

+12%~5,700

+5%

~1,800

0%~2,400

+10%


² Others = Japan, Australia, New Zealand, Canada³ Emerging Asia = Asia w/o Japan, Australia, New Zealand

In € million, ∆% yoy Fx adjusted

37%

11%31%

21%

Latin America

Emerging Asia³

FY’2012 –HealthCare

• FY/Q4 2012 Investor Conference Call • Marijn Dekkers *before special items

2012 Sales Earnings

Pharma+9% (+4%)

ConsumerHealth

+8% (+4%)36%

HealthCare €18,612m; +8% (+4%)

10,8037,809

Price0%

Volume+4%

Fx+4%

Portfolio0%

In € million, ∆% yoy, () = Fx & portf. adjusted

FY‘11 FY‘12 FY‘11 FY‘12

2,9723,203

1,7301,865

+8%

+8%

4,7025,068 +8%

1,325 +9%

3,3673,736 +11%

2,042

1,438

Adj.EBITDA*

Adj.EBIT*

2,298 +13%

FY’2012 –CropScience


Crop Protection+16% (+13%)

EnvironmentalScience

+9% (+5%)


Seeds+17% (+14%)

2012 Sales Earnings In € million, ∆% yoy, () = Fx & portf. adjusted

CropScience €8,383m; +16% (+12%)

Price+1%

Volume+12%

Fx+4%

Portfolio-1%

6,741

FY‘11 FY‘12 FY‘11 FY‘12

1,654

2,008 +21%

1,168

1,526 +31%

Adj.EBITDA*

Adj.EBIT*

680962

FY’2012 –MaterialScience

• FY/Q4 2012 Investor Conference Call • Marijn Dekkers **CAS: Coatings, Adhesives, Specialties*** IO: Industrial Operations

2012 Sales Earnings In € million, ∆% yoy, () = Fx & portf. adjusted


MaterialScience €11,503m; +6% (+3%)

Price+1%

Volume+2%

Fx+4%

Portfolio-1%

5,995

FY‘11 FY‘12 FY‘11 FY‘12

Adj.EBITDA*

Adj.EBIT*

1,1711,251 +7%

589629 +7%

Polycarbonates-2% (-7%)

CAS**+3% (+4%)

2,823

IO***+8% (+6%)

1,972

713

Polyurethanes+12% (+8%)

MaterialScience –Planning Assumptions 2013


20%

17%

28%

19%

Automotive(+2%)

Electro /Electronic

(+5%)

Construction(+4%)

Furniture(+5%)

Others(incl. Chemicals)

2.5

0.1 0.4

1.7

5.1

4

3

2

1

5

GDP growth % prev. year

16%

*Assuming Fx rate of $1.29 per €Outlook depends on specific planning assumptions as detailed in the Annual Report

Sales by industry 2012 and expected 2013 growth

Global Economic GDP Outlook Key Customer Industries Outlook

FY / Q4 2012 Investor Conference Call Presentation

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