Meet management 2014-06-05_ny_investor_handout_web_slideshare

Meet Management Conference

New York, June 5, 2014

Marijn Dekkers, CEO Bayer

Disclaimer

This 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.

• Bayer Investor Presentation • Meet Management • June 2014

Our Mission –Innovation and Customer Value

Bayer is an innovation company

With a strong “innovation portfolio”

Addressing new growth areas

Capable of identifying and using breakthrough innovations

Bayer is innovative in many ways: Products, technologies, processes, business models, strategies

Bayer products improve the quality of people’s lives

Bayer has an excellent understandingof human, animal and plant health, as well as of high-quality materials

Respect for people and nature is an essential part of our values

Science / Innovation Better Life

Science For A Better Life


Our Business Portfolio –Leading in Its Markets

Break-down excluding reconciliation

Sales 2013: €40.2bn

CropScienceChemical crop protection & biologicals global #2, seeds & traits

€8.8bn

MaterialSciencePolyurethanes and polycarbonates,global #1/2

€11.2bn

HealthCarePharmaceuticals €11.2bn,leading positions in core indications

Consumer Health €7.7bn,OTC #2, blood glucose meters #3, Animal Health #5, contrast media #1

€18.9bn

23%

29%

48%


We Generate Almost 90 Percent of our Earnings in the Life Sciences Businesses

Page 3*EBITDA before special items

23%

29%

45%

88% 12%

Sales 2013 Adj. EBITDA 2013*

HumanHealth

3%

Breakdown excluding Reconciliation

MaterialScience

Plant Health

AnimalHealth

LifeSciences

MaterialScience


• Bayer Investor Presentation • Meet Management • June 2014Page 4

2010-2013 –A Period of Significant Success

Delivered growth and performance

Unprecedented R&D productivity

Pharma launch product sales ahead of expectations

Executing successfully our OTC growth strategy

CropScience customer-centric strategy bearing fruit

Capital discipline at MaterialScience

2010-2013 – A Period of Significant Progress

Page 5

2010 2011 2012 2013

35.1 36.539.7 40.2

7.1 7.68.3 8.4

Sales 5%

Core EPS 10%

Adj. EBITDA 6%

4.19 4.835.30

5.61

Sales and adjusted EBITDA in € billion, core EPS in € CAGR 2010-2013


EBITin € million

+18%

2,0961,771

Salesin € million% currency & portfolio adj.

+8%

10,55510,266

EBITDAadjusted*in € million

+12%

2,7382,453

Core EPSin €

+15%

1.951.70

*before special items

Q1’14Q1’13 Q1’14Q1’13 Q1’14Q1’13 Q1’14Q1’13

Strong Momentum Continued in Q1 2014 Despite Significant Currency Headwind


FY 2014 Group Guidance Maintained –Targeting Further Sales and Earnings Growth

Page 7

2013 2014E*

Sales €40.2bn~5% to

~€41-42bn(neg. FX effect approx. -2%)

adj. EBITDA €8.4bnlow- to mid-single-digit % increase

(neg. FX effect approx. -5%)

core EPS €5.61mid-single-digit %

increase(neg. FX effect approx. -6%)

Sales ∆ Fx and portfolio adjusted, EBITDA before special items

*Assuming average Fx rates of Q4’13 (USD 1.36)Outlook depends on specific planning assumptions as detailed in the Annual Report• Bayer Investor Presentation • Meet Management • June 2014

2013 Sales CAGR 2016e

Pharma: Maximize Value of Launch Products


24 Successful Phase III Clinical Trials at Pharma since 2010

Page 9

Various indications incl. treatment of deep vein thrombosis/pulmonary embolism, stroke prevention in atrial fibrillation and secondary prevention of acute coronary syndrome

Wet age-related macular degeneration, diabetic macular edema, myopic choroidal neovascularization and central retinal vein occlusion

Metastatic colorectal cancer and metastatic gastrointestinal stromal tumors

Metastatic castration-resistant prostate cancer with symptomatic bone metastases

Pulmonary arterial hypertension and chronic thromboembolicpulmonary hypertension

Radioactive iodine refractory differentiated thyroid cancer

Prophylaxis in hemophilia A: Site-specific PEGylated Factor VIII with 5- or 7-days dosing intervals


BAY 94-9027

Major examples

Launch Products Drive Growth at Pharma


Sales in € billion; ∆% Fx & portf. adjusted

Pharma Sales / Launch Products Launch Products 2013

2010 2011 2012 2013

10.0 1.5

25%

949

197

333

3

41

Sales in € million

9.9

10.811.2

+1%+4%

+9%

Launch Products Expected to Contribute ~€2.8bn to Pharma Sales in 2014


Executing >100 launch events* in 2014

Continuous R&D investments in life-cycle management

Increased marketing and sales investments in emerging markets

Incremental marketing and R&D investments of €0.5bn in 2014e

* new indications and new countriesPage 11

Pharma – Peak Sales Potential of LaunchProducts was Raised in February to ≥€7.5bn

Continued successful launch exe-cution and life cycle management

Unchanged

Unchanged

Unchanged

~€3.5bn

≥€1.5bn

≥€1bn

≥€1bn

≥€0.5bn

>€2bn

≥€1bn

Old Current



Two Recent Steps Forward for Bayer’s Pharma Business


Acquisition of Algeta

Strategic Pharma sGC Collaboration

with Merck

Full control over Xofigo

Comprehensive life-cycle management program, including studies in earlier settings of prostate cancer, combination studies and other tumors

Complementing Bayer’s sGC franchise, including Adempas, with Merck’s cardiovascular capabilities

Leverage joint development capability to fully explore broad potential of sGCs

Building Bayer’s US presence in specialty pharma while leveraging Merck’s US strength

Page 13

Pharma – Maximizing the Value of Launch Products

Page 14

2013 Guidance2014

Aspiration2016

Sales Increase €11.2bn High-single digit %(neg. FX effect approx. -2%)

8% CAGR

Adj. EBITDA Increase €3.5bn Low- to mid-single digit %(neg. FX effect approx. -€150m)

Adj. EBITDA Margin 31.2% Level with prior year ≥33%

Assuming average FX rates of Q4‘13 (USD 1.36)

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



Aspire to Become the Leading OTC Company


Portfolio of some of the world’s most recognized brands

Outperforming market growth in past 7 out of 8 years

Successful expansion in EM focus markets, China, Brazil, and Russia

Selected bolt-on acquisitions in key countries: Steigerwald, Germany & Dihon, China

Acquisition of Merck’s Consumer Care business – a major step towards OTC leadership

3.43.5

3.9 3.9

2010 2011 2012 2013

+5%

+7%+6%

Consumer Care sales in € billion; ∆% Fx & portfolio adj.

*planned acquisition, closing expected in H2 2014

Successfully Executing OTC Growth Strategy


Acquisition of Merck’s Consumer Care Business Makes us #2 Globally and #1 in US

Highlights

$14.2bn investment, all cash, fully debt financed

Complementary portfolio offering scale in key categories and optimized geographic footprint

Full trademark ownership for Claritin

Market Positioning 2013*

*Pro-forma OTC sales 2013; after allowing for the Novartis/Glaxo deal and Bayer/Merck transaction;CC: Consumer Care

in € billion

Combination Offers Significant Synergy Potential


Cost synergies of ~$200m p.a. by 2017

Tax benefits from year 1 Asset purchase with significant future tax savings

Savings in marketing costs Savings in COGS, administration

Step-up of EBITDA margin pre-special items at Consumer Care by ~1pp and core EPS accretion of 2% already in the first year

Revenue synergies of already ~$400m by 2017 Incremental US sales Realize brand penetration opportunities ex-US

Revenue

Cost

Tax



CropScience: Further Growth at Benchmark Profitability

Delivering Growth And Performance at CropScience

6.8

7.3

8.48.8

2010 2011 2012 2013

2013 – the 3rd year in a row delivering strong sales growth at record margin

New product sales 2013 up 33% at €1.5bn*

Strong start to 2014 season with sales up 12%

Sales in € billion, ∆% Fx & portf. adjusted,Adj. EBITDA margin in %

19.0

24.2

25.5

22.8

+9%

+12%

Page 20 • Bayer Investor Presentation • Meet Management • June 2014

Customer-centric strategy bearing fruit

*Sales with Crop Protection products launched since 2006

+9%

Significant Contribution from New Crop Protection Products

• Bayer Investor Presentation • Meet Management • June 2014Page 21*Sales with Crop Protection products launched since 2006

1.1

1.5

1.8

2.6

2012 2013 2014e 2016e

+33%

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

Q1

0.6

(+16%) - Superior ‘all-in-one’ cereal fungicide with yield-boosting effect

herbicide (+14%) -Excellent weed control in corn and cereals, also in case of glyphosate resistance

(+75%) - Broad-spectrum insecticide with fast, long-lasting action

(+112%) - New fungicide now available in several key markets

Q1 2014 Highlights

Significant Investments in our Growth Platforms


BiologicalsSeeds

>€300m R&D investments p.a. to support leadership positions in cotton & oilseed and to develop position in soybean and wheat

Further selected acquisitions to strengthen portfolio and regional setup, esp. in Latin America

Launch of first soybean brand Credenz (2014e)

Launch of first wheat variety (2015e)

Successful market entry with nematode seed treatment Poncho/Votivo(sales 2013: ~€150m)

Acquisition of AgraQuest, global provider of innovative biological pest management solutions

Acquisition of Prophyta, a provider of well-established products, e.g. nematicideBioAct

Acquisition of Biagro* adds nitrogen inoculants & plant health promoters

*Subject to regulatory approvals

CropScience – Above Market Growth at Benchmark Profitability

Page 23

2013 Guidance2014

Aspiration2016

Sales Increase €8.8bn Mid- to high-single-digit %(neg. FX effect approx. -3%)

6% CAGR

Adj. EBITDA Increase €2.2bn Low-single-digit %(neg. FX effect approx. -€150m)

Adj. EBITDA Margin 25.5% - 24-25%





MaterialScience: Improve Returns


Macro-Economic Environment for MaterialScience Likely to Improve

Oil price expected to stabilize in 2014 (budget of Ø $110 per bbl*)

Supply & demand balances of key products improving with:

Long-term demand drivers intact

Limited net new capacity to come on stream

21%

18%

27%

19%

Automotive(+4%)

Electro /Electronic

(+6%)Construction

(+4%)

Furniture(+4%)

Others(incl. Chemicals)

15%

Sales by industry 2013 and expected 2014 growth

Key Customer Industries Outlook Additional Key Performance Drivers

*Ø 2013: $110 per bbl


Q1 2014 – MaterialScience: Demand Led Growth

Sales Earnings

**CAS: Coatings, Adhesives, Specialties;*** IO: Industrial Operations

CAS**0% (+7%)

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

*before special items;

MaterialScience €2,803m; +1% (+5%)

Price-3%

Volume+8%

Fx-3%

Portfolio-1%

1,510659

IO***-6% (-5%)

Q1‘13 Q1‘14 Q1‘13 Q1‘14

Adj.EBITDA*

Adj.EBIT*

204

366 +79%

43

221469

165

Polyurethanes+3% (+6%)

Polycarbonates-1% (+2%)

>100%

MaterialScience – Asset Utilization and Efficiency Measures to Drive Cash Returns


2013 Guidance2014

Aspiration2016

Sales Increase €11.2bn Mid-single-digit %(neg. FX effect approx. -2%)

Volume growth> global GDP

Adj. EBITDA Increase €1.1bn Increase(neg. FX effect approx. -€50m)

-

CFROI vs. WACC 5.5% < 6.9% - CFROI > WACC



Bayer –Optimistic About Future Developments

Peak sales potential of new pharma products of ≥€7.5bn

Track record of performance: Core EPS with 10% CAGR since 2010

Successful start to 2014 – full-year 2014 group guidance maintained

Page 28

Successfully executing on OTC growth strategy


Appendix


EBITin € million

+26%

4,9343,928

Salesin € million% currency & portfolio adj.

+5%

40,15739,741

EBITDAadjusted*in € million

+1%

8,4018,280

Core EPSin €

+6%

5.615.30


FY’13FY’12 FY’13FY’12 FY’13FY’12 FY’13FY’12

FY 2013 – Encouraging Performance Driven by Life Sciences


FY 2013 –Regional Performance

Page 31

Africa & Middle East

EasternEurope

Emerging Economies

EmergingEconomies¹

+7%

Others²+10%

USA+4%

Western Europe+2%

2013 Group Sales by Region

Group €40,157m; +5%

~5,100

+15%~5,800

+4%

~1,700

-1%~2,500

+7%

1: Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern Europe2: Others = Japan, Australia, New Zealand, Canada; 3: Emerging Asia = Asia w/o Japan, Australia, New Zealand

In € million, ∆% yoy Fx adjusted

38%

10%31%

21%

Latin America

Emerging Asia³


FY 2013 –HealthCare

Page 32*before special items

2013 Sales Earnings

Pharma+4% (+9%)

ConsumerHealth

-1% (+3%)36%

HealthCare €18,924m; +2% (+7%)

11,1887,736

Price+1%

Volume+6%

Fx-6%

Portfolio+1%


FY‘12 FY‘13 FY‘12 FY‘13

3,2323,490

1,887 1,844

+8%

-2%

5,1195,334 +4%

1,460 -3%

3,7873,973 +5%

2,327

1,421

Adj.EBITDA*

Adj.EBIT*

2,552 +10%


FY 2013 –CropScience

Page 33

Crop Protection+7% (+11%)

EnvironmentalScience

-4% (+1%)


Seeds+1% (+1%)

2013 Sales EarningsIn € million, ∆% yoy, () = Fx & portf. adjusted

CropScience €8,819m; +5% (+9%)

Price+3%

Volume+7%

Fx-5%

Portfolio+1%

7,194

FY‘12 FY‘13 FY‘12 FY‘13

2,0252,248 +11%

1,543

1,801 +17%

Adj.EBITDA*

Adj.EBIT*

651974


FY 2013 –MaterialScience

Page 34

2013 Sales Earnings In € million, ∆% yoy, () = Fx & portf. adjusted

MaterialScience €11,238m; -2% (0%)

Price0%

Volume+1%

Fx-2%

Portfolio0%

6,054

FY‘12 FY‘13 FY‘12 FY‘13

Adj.EBITDA*

Adj.EBIT*

1,263

1,072 -15%

613

429 -30%

Polycarbonates-6% (-5%)

CAS**-6% (-2%)

2,640

IO***-4% (-4%)

1,863

681


**CAS: Coatings, Adhesives, Specialties; *** IO: Industrial Operations

*before special items;• Bayer Investor Presentation • Meet Management • June 2014

FY 2013 –Cash Flow And Net Debt Development

Page 35

-€0.3bn 6.7

GCF oFCF

5,832

Invest-ments

2,157 3,014

∆y-o-y +28% +16%

NCF

5,171

+14% +12%Dec 31, 2012 Dec 31, 2013

7.0

FY 2013 Cash Flow Net Debt DevelopmentCash Flow in € million, Net Debt in € billion


On Our Way to OTC Leadership

Investor Handout – Meet Management

Acquisition of Merck & Co.’s Consumer Care Business

June 2014 – New York

Evolution of Bayer Consumer Care’s OTC Business

2008Acquisition of OTC brand portfolio from Sagmel(CEE) and Topsun (China)

1999Aspirin trademark centenary-worldwide sales > €500m

1899ASPIRIN introduced as an over-the-counter(OTC) medicine

1994Consumer Care business group created by the acquisition of North American OTC business of Sterling; Acquisition of the “Bayer Cross”Trademark in USA

2005Acquisition of Roche Consumer Health

2013Aspirin trademark sales of >€900m

Acquisition of Steigerwald (Germany)


2014Proposed acquisition of Merck’s Consumer Care business (US)

Transaction agreement signed with Dihon Pharmaceutical Group (China)


Growth Strategy

Maximize brand potential Global expansion of key brands

Exploit our innovation pipeline

Grow in emerging markets Increase commercial power

Bolt-on acquisitions to strengthen portfolio & regional set-up

3.43.5

3.9 3.9

2010 2011 2012 2013

+5%

+7%+6%


Bayer Consumer Care – Outperforming Markets in Past 7 Out of 8 Years

Merck’s Consumer Care Business Fits Perfectly With Bayer Consumer Care


Complementary Portfolio

Building on core competencies

Creation of a global leader in OTC Gaining scale in key categories CASF1, dermatology,

and gastrointestinal Optimizing footprint in North America

Strong track record of growing OTC brands Strong geographical presence to broaden Merck’s

portfolio globally Utilizing integration skills from past transactions

Page 39

Acquisition criteria fulfilled

Creating leadership positions in important consumer care categories and geographies

Increasing consumer care margin2 by ~1pp from year 1 Immediate core EPS accretion from year 13

1 cold, allergy, sinus, flu; 2 EBITDA pre-special items;3 transaction incl. sGC collaboration


Combined Portfolio Significantly Strengthens Global Positions

Gastrointestinal

Analgesics3

CASF2

Nutritionals

Dermatology1

Total

Others4

3,904 1,635 5,539

1,110 386

372 803

126 513

439 141

1,023

834

1 including sun care; 2 Cold, Allergy, Sinus, Flu; 3 including Cardio; 4 Foot Health, Women’s Health, Other

1,496

1,023

1,175

834

580

431

#1

#2

#3

#1

#2

Global position*2013 Sales in €m (pro-forma portfolio)

Note: Merck sales converted at average USD rate of 1.33 (FY 2013)

305

*After allowing for the Novartis/Glaxo deal; excluding Dihon acquisition in China; excluding Rx

MerckBayer


Combined Portfolio Significantly Strengthens Geographic Footprint

Note: Merck sales converted at average USD rate of 1.33 (FY 2013)*After allowing for the Novartis/Glaxo deal; excluding Dihon acquisition in China; excluding Rx

Latin America

Europe

North America

Total

Asia/Pacific

3,904 1,635 5,539

1,117 1,105

1,621 170

389513

141

777

2,222

1,791

946

580

#1

#1

#5

#2


191

169

MerckBayer

FY 2013 sales in € million (∆% yoy Fx-adj.)

321

310

232

214**

207

176

158

257

*Total Aspirin includes Aspirin Complex and Aspirin Cardio (Rx)**Total Alka-Seltzer includes Alka-Seltzer and Alka-Seltzer Plus

916*

= Rx Sales


Combined Top 10 Portfolio –Individual Brands with Annual Sales >€100m

576

Note: Merck sales converted at average USD rate of 1.33 (FY 2013); based on pro-forma FY 2013 net sales


Top Priorities To Be Executed Immediately After Closing of Transaction…

Ensure fast integration into operations Safeguard product supply Realize synergy potential

Prioritize brand strategies within combined portfolio Realize Merck brand penetration opportunities ex-US Define and execute individual brand strategies

Develop US scale advantage Strive for leadership with trade customers Provide a broader product portfolio

Critical massin US

Brand Roll-Out ex-US

Smooth integration


Clear Strategy For a Smooth Integration

2014 Q2 2014 Q42014 Q3 2015 (End State)

Smooth integration expected due to experienced management team

• Ensure effective integration into Consumer Care

• Safeguard on-going product supply

• Prioritize and execute identified brand development / expansion strategies

• Ensure sufficient future capacity for growth

• Capitalize on Merck’s innovation capabilities

• Achieve scale and revenue synergies

• Capture consolidation and efficiency synergies by 2017

Deal signing Deal closing Consolidation / Integration


Enhanced Scale and Broader Category Scope Improve Product Offerings

US Retail Sales CASF Benefits from Enhanced Scale

Co-promoting complementary brands

New item assortment and shelving opportunities

Improved merchandising efficiencies Bigger and more impactful trade

events Foster strategic partnerships with

retailers

FY 2013 retail sales in CASF in $ million*

$-

$200

$400

$600

$800

$1,000

$1,200

RB Bayer &Merck

J&J Merck &Co.

P&G Pfizer Chattem Bayer GSK

*Source: IRI; Latest 52WK; December 2013

Make Bayer Consumer Care Top Strategic Partner for US Retailers

Maximizing Brand Potential Through Global Expansion

Brand Sales by Major Region 2013 Expansion Plans


Analgesic~80% in North America

~95% in North America

Wound-healing~75% in Europe

Anti-fungal~75% in Europe & LatAm

Vitamins & minerals~50% in Europe

~80% in North AmericaCASF

Sun Care


Russia

Country OTC Market Sales Growth2013* Execution Plans

China

Global #2 Growing 2x the

global rate

Use investments in footprint, brand-building and sales capabilities to extend Claritinleadership

Build sun care category with Coppertone

Brazil

Global #7 Fastest growing

market in LATAM

Use investments in brand-building and channel capabilities to develop key new categories (sun care, foot care, allergy)

Revitalize Coppertone and Dr. Scholl’s brands

Russia

Global #4 Retail OTC is

largest healthcare segment

Focus on CASF brands using current position to roll-out extended offerings

Achieve #2 position

Execution Plan Focused on Key Brands in Key Emerging Markets

+38%

+26%

+14%

*Bayer Consumer Care sales, currency-adjusted

Consumer Care is Well-Positioned for Growth – Aspire to Clear OTC Leadership

OTC MarketAttractive

Bayer Has Strong #2 Position

Plans for Continued

Future Growth

Trends favor continued growth OTC market model based on long-term brand building OTC businesses becoming more valuable over time

Leader in key categories Multiple strong brands Track record of outperforming market growth

Globalize established brands & launch innovation pipeline Focus on emerging markets where most of growth will come Strategic acquisitions and alliances


Investor Handout – Meet ManagementBayer HealthCare


Leading Positions in Key Healthcare Markets


Pharma€11,188m Leading positions in key therapeutic categories

Consumer Care €3,904m Global #2 in OTC-pharmaceuticals

Medical Care €2,526m #1 in fluid injection systems, #1 in contrast media,

#3 in blood glucose meters

Animal Health €1,306m Global #5, #2 in parasiticides

Sales Split by Segment 2013

25%

59%

7%

21%

13%

HealthCare €18,924m

Page 50

FY 2013 –Growth Mainly Pharma Driven

• Bayer Investor Presentation • Meet Management • June 2014 *before special items

FY 2013 HealthCare Sales Earnings

Pharma+4% (+9%)

ConsumerHealth

-1% (+3%)36%

11,1887,736


FY 12 FY 13 FY 12 FY 13

3,2323,490

1,887 1,844

+8%

-2%

5,1195,334 +4%

1,460 -3%

3,7873,973 +5%

2,327

1,421

Adj.EBITDA*

Adj.EBIT*

2,552 +10%

HealthCare €18,924m; +2% (+7%)

Price+1%

Volume+6%

Fx-6%

Portfolio+1%

Page 51

FY 2013 –Top 10 HealthCare Product Performance

• Bayer Investor Presentation • Meet Management • June 2014 MI: Myocardial infarction

Sales in € million; ∆% y-o-y Fx adjusted

+6%

-12%

-1%

+3%

+2%

+10%

-1%

+2%

+211%

1,202

1,038

916

771

949

719

853

722

603

487

Hemophilia A

Multiple Sclerosis

Anticoagulation

Contraception

Cancer

Blood Glucose Meter

Contraception

Analgetic & sec. MI Prevention

Parasiticide

-13%

Hypertension

Page 52

FY 2013 – Strong Business Momentum in All Regions, Especially Emerging Markets


Emerging Economies

25%

FY 2013 HealthCare Sales

LatinAmerica

Eastern Europe


~2,190

+7%

~1,980

+10%

~1,140~880

+4%

24%

USA+5%

30%

33%

13%


EmergingEconomies¹+8%

Emerging Asia³

Western Europe +6%

Others²+12%

HealthCare €18,924m; +2% (+7%)

Page 53

+10%



Recently Launched PharmaProducts Drive Growth

Page 54

Q1 2014 – HealthCare: Recently Launched Products Drive Growth

Page 55*before special items

Sales Earnings

Pharma+9% (+15%)

ConsumerHealth

-5% (+1%)36%

HealthCare €4,572m; +3% (+9%)

2,7821,790

Price0%

Volume+9%

Fx-7%

Portfolio+1%


Q1‘13 Q1‘14 Q1‘13 Q1‘14

832 873

445 428

+5%

-4%

1,2771,301 +2%

343 -6%

953 946 -1%

610

321

Adj.EBITDA*

Adj.EBIT*

625 +2%


Q1 2014 –Top 10 HealthCare Product Performance

• Bayer Investor Presentation • Meet Management • June 2014 MI: Myocardial infarction


+133%

-6%

+14%

+12%

+239%

-12%

-1%

-22%

342

270

183

178

190

146

181

157

140

Hemophilia A

Multiple Sclerosis

Anticoagulation

Contraception

Cancer

Ophthalmology

Contraception

Analgetic & sec. MI Prevention

-3%

Hypertension

Page 56

Blood Glucose Meter

217 +6%

• Bayer Investor Presentation • Meet Management • June 2014 Page 57


Pharma: Maximize Value of Launch Products

2011 2012 2013 2014

Page 58

Pharma – Incremental Investments For A New Performance Level

* new indications and new countries; products include Xarelto, Eylea, Stivarga, Xofigo, Adempas• Bayer Investor Presentation • Meet Management • June 2014

Launch product sales in € bn

Launch product* sales target of ~€2.8bn in 2014 (old aspiration 2015: >€2.5bn)

Launch phase to continue with >100 new launch events*

Continuous R&D investments in life-cycle management

R&D investments in new drug candidates

Increased marketing and sales investments in emerging markets

Incremental marketing and R&D investments of €0.5bn planned in 2014

<0.10.4

1.5

~2.8

Stivarga

Xarelto

Eylea

Xofigo

Recently launchdPharma products*

Pharma – Additional Investments To Execute >100 Launch Events in 2014

• Bayer Investor Presentation • Meet Management • June 2014 Page 591: regulatory process ongloing, launch preparations assuming approval

DTC: Differentiated thyroid cancer; mCRC: Metastatic colorectal cancer ; mGIST: Metastatic gastrointestinal cancer; ACS: Acute coronary syndrome

~ 30 launches planned in secondary prevention of ACS

Market introduction planned in >20 countries

> 30 launches planned in mGIST1 in EU and other markets; continue roll-out in mCRC (examples include Spain, Italy, Turkey)

~ 15 launches planned, including wetAMD and additional indications (CRVO, mCNV1, DME1)

Launches1 planned in > 20 countries

> 30 launches planned in DTC1 in EU and other markets

Major Examples

> 30 launches planned


Peak Sales Potential of Launch Products Raised in February 2014

Peak Sales Potential*

* from 5 recently launched products: Xarelto, Eylea, Stivarga, Xofigo, AdempasPage 60

Pharma – Peak Sales Potential of LaunchProducts Raised in February to ≥ € 7.5bn*

*assuming approvals and launches as planned



Unchanged

Unchanged

Unchanged

~€3.5bn

≥€1.5bn

≥€1bn

≥€1bn

≥€0.5bn

>€2bn

≥€1bn

Old Current


Xarelto – Broadest Profile of Any Novel Oral Anticoagulant


Peak sales potential ~ €3.5bn

Oral Factor Xa inhibitor

Once-daily dosing advantage* First launches in EU for secondary

prevention of ACS underway

Two-dimensional approach in life-cyclemanagement:

Expansion into additional thromboembolic disease areas

Strengthening the clinical profile in approved indications and special patient populations

*exception 15mg BID dosing for treatment of acute DVT/PE or 2.5mg BID for ACS sec. prevention; ACS: Acute coronary syndromePage 62


Xarelto – Performance Exceeding Expectations

Page 63

World-class launch, achievedleading position in the novelanticoagulants segment in keymarkets

Uptake significantly exceedingexpectations

Sales target 2014: € 1.3-1.5bn131155

219

259

316342

Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14

Xarelto sales in million €

Expanding and Strengthening the Profile of Xarelto


Significant medical need in thromboembolic disease areas

Heterogeneous patient populations in existing indications deserve furthercharacterisation

Two-dimensional approach in life-cycle management

Expansion into addionalthromboembolic disease areas

Strenghtening the clinical profile in approved indications

Peripherial arterial disease / coronaryarterial disease

Chronic heart failure with coronaryarterial disease

Medically ill patients

Patients with percutaneus coronaryintervention

Patients who undergo cardioversion Patients undergoing ablation Evaluate 10mg /20mg dose vs. ASA in

secondary prevention of VTE

ASA: Acetylsalicylic acid, VTE: Venous thromboembolism

Eylea – Developed for the Treatment of Multiple Back-of-the-Eye-Diseases


Peak sales potential ≥ €1.5bn

Eylea is an anti-angiogenic therapy, formulated for injection into the eye

Strong adoption by retina community in wAMD based on convenient bimonthly dosing1 regimen

Comprehensive range of indications to address major eye diseases2: Launched in wAMD and CRVO; roll-out

ongoing Filed for DME (EU: 11/13; J: 02/14) Filed for mCNV in Japan (11/13) Filing planned for BRVO (in J, other

regions under evaluation)

1: after an initial phase of 3 consecutive monthly injections; 2: Bayer has marketing rights ex-US; wAMD: Wet age-related macular degeneration; CRVO: Central retinal vein occlusion; BRVO: Branched retinal vein occlusion; mCNV: Myopic choroidal neovascularization; DME: Diabetic macular edema

Page 65


Eylea – Excellent Launch Trajectory

Page 66

Excellent launch execution ahead of expectations

Market shares* > 45 % in Japan and Australia

Roll-out in Europe underway

Strong uptake in early launch markets Germany and Switzerland

Encouraging launch in France and UK

Positive NICE guidance for CRVO indication in UK obtained in 02/14

Progress with launch preparations for i) additional countries and ii) additional back-of-the-eye diseases**

*Market share as of December 2013 (Source IMS)** pending regulatory approval

14

49

7385

126

157

Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14

Eylea sales in million €

Stivarga – Developed as a Treatment forCancers of the Digestive Tract


Oral cancer drug, potently blocking multiple protein kinases

Launched for treatment of mCRC and mGIST in the US & Japan

Launched for treatment of mCRC (8/13) and filed for mGIST (9/13) in Europe

Encouraging initial uptake

Expanding to new indications Phase III in 2nd line liver cancer

ongoing Phase III in CRC (adjuvant therapy

after resection of liver metastases) ongoing

mCRC: Metastatic colorectal cancer GIST: Gastrointestinal stromal tumors

Peak sales potential ≥ €1bn

Page 67

Entering Additional Cancers of the Gastro-Intestinal Tract with Stivarga


Positive clinical data in metastatic colorectal cancer and 2nd-line hepatocellular carcinoma

Mode of action suggesting activity in a broad range of tumor types

Life-cycle management targets:

Phase III in 2nd-line hepatocellularcarcinoma

Phase III in colorectal cancer after resection of liver metastases

Signal generating early clinical studiesin various cancer types includinggastric cancer

HCC: Hepatocellular carcinomaCRC: Colorectal cancer

Expand in HCC and CRC Expand to additional tumor types


Xofigo – A New Treatment for CRPC Patients with Bone Metastases

First in class alpha-pharmaceutical

Treatment of CRPC with symptomatic bone metastases and no known visceral metastatic disease

Launched in the US (06/13)

Approved in Europe (11/13) – launch underway

High awareness among oncologists and urologists

Life-cycle program initiated (including combination studies in earlier settings of prostate cancer)

CRPC: Castration-resistant prostate cancer

Peak sales potential ≥ €1bn

Page 69

Addressing Multiple Life-Cycle Opportunitiesfor Xofigo (Radium-223 dichloride)


Life-CycleOpportunities

Repeat dosing in CRPC

Higher dose in CRPC

Earlier disease stagesof CRPC

Combination study in CRPC

Expansion into additional cancer types

Addressed Through

Phase II trial assessing the short and long-term safety of re-treatment

Phase II trial with dose higher than the approved 50 kBq/kg

Phase I and/or II studies in breast cancer, osteosarcoma and potentially in additional cancer types

Phase III combination trial with abiraterone / phase II combination with abiraterone or enzalutamide

CRPC: Castration resistant prostate cancer

Status

initiated

initiated

initiated

planned

Adempas – First-in-Class sGC Stimulator forTreatment of PAH and CTEPH


Oral soluble guanylate cyclase (sGC) stimulator approved for treatment of PAH and CTEPH

First and only drug receiving marketing authorization for the treatment of CTEPH

Launched in the US for treatment of PAH and CTEPH (10/13)

Launched in J for treatment of CTEPH (04/14) – filed for PAH (04/14)

Launched in first EU countries for CTEPH and PAH (04/14)

Collaboration with Merck & Co. announced in May 2014 - 50/50 cost/profit split, joint development and commercialization strategy

*for indications PAH and CTEPH; CTEPH; : Chronic thromboembolic pulmonary hypertension; PAH: Pulmonary arterial

hypertension

Peak sales potential ≥ €0.5bn*

Page 71

Adempas – Life Cycle Management Beyond PAH and CTEPH

• Bayer Investor Presentation • Meet Management • June 2014 PAH: Pulmonary arterial hypertension; CTEPH: Chronic thromboembolic

pulmonary hypertension; PH-ILD: Pulmonary hypertension due to interstitial lung disease

Page 72

Positive phase II data in PH-ILD prompt initiation of phase IIb in PH-IIP (a specific sub-segment of PH-ILD)

Majority of PH-IIP patients suffer from pulmonary hypertension due to idiopathic pulmonary fibrosis

No approved treatment option

Chronic systemic autoimmune disease characterized by fibrosis

No approved treatment

Strong preclinical antifibrotic data

Pulmonary hypertension with idiopathic interstitial pneumonia (PH-IIP)

Diffuse systemic sclerosis (SSc)

Accelerating the Development of 5 early/mid-stage Pipeline Assets


R&D

Five New Molecular Entities Selected For Accelerated Development


Project Mechanism Indication Status

Copanlisib(BAY 80-6946)

PI3-Kinase Inhibitor Cancer Phase II in NHL

ongoing

Finerenone(BAY 94-8862)

MR AntagonistChronic heart failure (CHF)Diabetic nephropathy (DN)

Phase IIb in CHF and phase II in DN ongoing

Molidustat(BAY 85-3934)

HIF-PH Inhibitor Anemia Phase IIb ongoing

Vericiguat(sGC-Stimulator BAY 1021189)

sGC Stimulator Worsening chronic heart failure

Phase IIb ongoing; collaboration with Merck & Co. Inc.

Vilaprisan (sPRM)(BAY 1002670)

Progesterone Receptor Antagonist

Symptomatic uterine fibroids Phase IIb ongoing

MR: Mineralocorticoid receptor; NHL: Non-Hodkin´s lymphomaHIF-PH: HIF prolyl hydroxylase; sGC: Soluble guanylate cyclase;

sPRM: Selective progesterone receptor modulator

Positive Proof-of-Concept Increases Confidence in NME-quality

• Bayer Investor Presentation • Meet Management • June 2014 Page 75NME: New molecular entityCHF: Chronic heart failure

EPO: Erythropoietin

Copanlisib

Finerenone

Molidustat

Vericiguat(sGC-Stimulator)

Vilaprisan(sPRM)

100% of patients (6/6) with follicular lymphoma achieveda partial response as best response in phase I

Phase II results in CHF patients suggest improved safety with at least similar efficacy compared to spironolactone

Improvement in important cardiological parameters observed in phase I

Significant increase in levels of endogeneous EPO andreticulocytes demonstrated in phase I

Phase IIa data demonstrated reversible induction of amenorrhea


Copanlisib (BAY 80-6946) –A PI3K-Inhibitor in Phase II in Cancer

● In most tumor cells, the PI3K-signaling cascade is activated and provides important tumor growth and survival signals

● Copanlisib is a pan class I PI3K-inhibitor with dominant activity

● Copanlisib has shown a broad anti-tumor spectrum in preclinical tumor models

● Phase II in Non-Hodgkin’s lymphoma is ongoing; completion expected 1H 2015

Phosphatidylinositol-3 kinases (PI3K) play a central role in cellular signal

transduction processes

Copanlisib


Copanlisib Has Shown Substantial Activity in Follicular Lymphoma

*Data from Patnaik A et al.; ASH 2012; 18FDG-PET: 18fluorodeoxyglucose -positron emission tomography

18FDG-PET scans of a follicular lymphoma patient with partial response

● Phase I trial successfully completed

● 100% of patients (6/6) with follicular lymphoma (FL) responded to therapy achieving a partial response as best response*

● Maximum response duration > 840 days

● Encouraging signals in diffuse large B cell lymphoma patients

● 18FDG-PET data suggest that Copanlisib has rapid antitumor activity

52-year-old female with FL, grade 1-2, diagnosed stage IVa


Selective Progesterone Receptor Modulation for Treatment of Uterine Fibroids

● Uterine fibroids are the most common benign tumors in women of reproductive age: 5-10% of premenopausal population suffers from symptomatic fibroids

● Symptoms may include heavy menstrual bleeding and tumor size related symptoms

● Current therapies include surgicalprocedures or short-term use of GnRHanalogs for estrogen depletion

● Growth of fibroids strongly depends on progesterone and estrogen

● Progesterone receptor modulation may offer long-term treatment of uterine fibroids without estrogen depletion side effects of GnRH analogs

GnRH: Gonadotropin-releasing hormonesPRM: Selective progesterone receptor modulator

PR

Transcription

Activation

Endometrial Modulation & Fibroid Growth

sPRM

Transcription

Endometrial Modulation & Fibroid Growth

PR


Vilaprisan (sPRM; BAY 1002670) – For the Treatment of Symptomatic Uterine Fibroids

● Vilaprisan is a novel oral, highly potent and selective progesterone receptor modulator

● Exhibits marked efficacy in an innovative humanized fibroid disease model1

● Phase IIa data (N=67) showed proof of concept including:● Reduction of bleeding: induced

amenorrhea (non-bleeding) in >60% of women treated with dosages >1mg/day

● Reversal of amenorrhea after treatment cessation

● No prohibitive safety findings

1 Wagenfeld et al. Hum Reprod. 2013 Aug;28(8):2253-64

Phase IIa data BAY VilaprisanDose effect curve for amenorrhea rate

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

010

2030

4050

6070

8090

100

Point estimate (median)90% Credible intervalObserved rateEfficacy threshold

Dose (mg)

Am

enor

rhea

rate

(%)


Renal Anemia is an Important Area of Unmet Medical Need

● Diseased kidneys do not produce sufficient levels of erythropoietin (EPO) in response to hypoxia, leading to anemia

● CKD/ESRD is the leading cause of anemia in industrialized countries

● Substitution with parenteral EPO is standard of care – however, un-physiologically high EPO doses correlate with significant side effects

● There is a need for novel therapies that lack the side effects of high doses of EPO-substitution

CKD: Chronic kidney disease ESRD: End-stage renal disease

Anemia

Low oxygenlevel (Hypoxia)

Normal kidneyfunction

Impaired kidneyfunction

EPO

Red blood cellformation

EPO

Normal red bloodcell count

Insufficientformation of

red blood cells


Molidustat – An Oral HIF-PH Inhibitor for Treatment of Renal Anemia

Increased red bloodcell production

Inhibition of HIF-PH increases the stability of HIF resulting in production of endogeneous EPO - potential novel therapeutic approach for the treatment of renal anemia

Under normal oxygen conditions, HIF gets hydroxylated by HIF-PH and then degraded

Under hypoxia conditions, HIF is activated and induces the synthesis of erythropoietin (EPO) in the kidneys which stimulates red blood cell formation

Nucleus

HIFHIF

Low oxygen levels

HIFHydroxylation

HIF

Normal oxygen levels

HIF-PHO2

hHIFhHIFDegradation

Degraded HIF

HIFHIF

Inhibition of HIF-PH in renal anemia

HIF-PHO2

EPO ↑

NucleusEPO ↑

Nucleus

Increased red bloodcell production

HIF: Hypoxia-inducible factorHIF-PH: HIF prolyl hydroxylase (enzyme)

hHIF: hydroxylated HIF


Molidustat (BAY 85-3934) –Proof of Concept Demonstrated

EPO: Erythropoietin HIF-PH: HIF prolyl hydroxylase

● Molidustat is a novel oral inhibitor of the enzyme HIF-PH

● In development for the treatment of anemia associated with chronic kidney disease

● Phase I in healthy subjects showed:

● Significant increase of EPO levels after ≥ 12.5 mg

● Significant increase of reticulocytes for doses ≥ 37.5 mg

● No prohibitive safety findings

Maximal EPO concentration after single dose administration of Molidustat (Phase I)

0

10

20

30

40

50

Placebo 5 mg 12,5 mg 25 mg 37,5 mg 50 mg

EP

O [U

/L]

Dose


MR-Inhibition is a Proven Principle in theTreatment of Heart Diseases

MR: Mineralocorticoid receptorHF: Heart failure

aldosterone / cortisol

OveractivatedMR

causing e.g.

Na+ and water retention K+ loss Hypertensive effects Vascular

inflammation/injury Myocardial/renal fibrosis Proteinuria

MR antagonist

KidneyHeart

MR has multiple functions: Regulation of salt, fluid homoestasis

and blood pressure Mediator of oxidative stress,

subsequent inflammation, fibrosis andcardiorenal disease

Steroidal MR antagonists spironolactoneand eplerenone have been shown to be effective in reducing cardiovascular mortality in patients with HF but areunderutilized due to the risk of hyperkalaemia, renal dysfunction andanti-androgenic / progestogenic side effects

Steroidal MR antagonists are notapproved for kidney diseases eg. diabetic nephropathy


Finerenone – A Novel Non-Steroidal and Selective MR-Antagonist

CHF: Chronic heart failure; CKD: Chronic kidney diseaseBNP: Brain natriuretic peptide;

B. Pitt et al., Eur. Heart J. 2013; doi:10.1093/eurheartj/eht187

Mean increases in serum potassium concentrationFinerenone10mg o.d.: 0.21 mmol/lSpironolactone: 0.45 mmol/l

P <0.001

Mean change in estimated glomerular filtration rateFinerenone10mg o.d.: -2.69 ml/min/1.73m²Spironolactone: -6.70 ml/min/1.73m²

P <0.05

Median change from baseline in NT-proBNPFinerenone 10mg o.d.: -193 pg/mLSpironolactone: -170 pg/mL

(descriptive analysis)

Decreased BNP/NT-proBNP – a key parameter for cardiac stress

Indicates lower incidence of hyperkalaemia

Indicates lower incidence of worsening of renal function

Phase II results suggest improved safety with at least similar efficacy on keycardiac and renal parameters compared to spironolactone

Data at Day 29 +/- 2 in part B of the study with 392 pts in total;Spironolactone was given at an initial dose of 25mg o.d. and uptitrated to 50mg o.d. on day 15±1 if sodium potassium concentration remained ≤4.8mmol/L; * eGFR 30-60 ml/min/1.73m²

Key phase II findings in patients with CHF and moderate* (part B) CKD :


sGC Modulation Has Significant Potential

Cardiovascular diseases to be the #2 therapeutic area by 2019**

Significant areas of unmet medical need including heart failure, forms of pulmonary hypertension, resistant hypertension, etc.

Recently discovered mechanism of sGC modulation holds promise to address several areas of unmet need

Unmet Medical Need in Cardiovascular DiseasessGC Modulation

*

sGC: Soluble guanylate cyclase; *cyclic guanosine monophosphate**DecisionResources 2014

Strategic Pharma sGC Collaboration with Merck & Co. Inc.

Maximize potential of all pipeline assets

Leverage R&D expertise in cardiovascular

Improve funding capabilities – thereby maximizing commercial potential of pipeline assets

Optimize combined marketing & sales power

Collaboration between Merck and Bayer on sGC modulation to

Page 86

Joint development and commercialization strategy with global 50-50 cost and profit sharing

Merck to pay Bayer up to $2.1bn, comprising $1.0bn up-front and up to $1.1bn in contingent milestone payments


Maximizing the Potential of sGC Modulation

Bayer has marketing rights in Americas; Merck in all other territories

Co-promotion option for both parties in territories of other party

Enables Bayer to build its commercial presence in US specialty pharma while maximizing value of Adempas

*scope defined by sGC mechanism

Adempas (Riociguat) Vericiguat (BAY 1021189)

Merck has marketing rights in Americas; Bayer in all other territories

Co-promotion option for both parties in territories of other party

Maximizes value of Vericiguat by leveraging Merck’s US strength

Early/Future Pipeline Assets*

Option to include other sGC pipeline assets (of both parties) that successfully complete Phase 1 in the next 5 years

Global 50/50 cost/profit split; joint development and commercialization strategy



sGC Stimulation to Address Unmet Medical Need in Patients with Heart Failure

● Worsening chronic heart failure is an established indication with high medical need

● Limitations of standard of care include tolerance, oxidative stress, endothelial dysfunction and venoselectivity

● sGC stimulation can improvehemodynamics via restoration of cardiac and vascular cGMP signaling

● sGC stimulation may provide a new principle to reduce event rates in patients with worsening chronic heart failure

Clin

ical

sta

tus

Patients who require hospitalization due to HF (worsening HF) have a poor prognosis with high

rates of re-hospitalization and death

sGC: Soluble guanylate cyclaseHF: Heart failure


Vericiguat (sGC Stimulator; BAY 1021189) –Improvement of Cardiovascular Function

sGC: Soluble guanylate cyclaseHF: Heart failure

Phase I of Vericiguat show improved cardiac output (n = 36)

Fi gure: Means and st andard devi at i ons f or i mpedance cardi ography over t i me f or Cardi ac Out put (L/ mi n) over t i me (val i d f or PD)

Day 1

0H 00M 1H 00M 2H 00M 3H 00M 4H 00M3. 0

3. 5

4. 0

4. 5

5. 0

5. 5

6. 0

6. 5

7. 0

Placebo 5 mg 7.5 mg 10 mg

0 1 2 3 4Time (h)

3 3

.5

44.

5 5

.0

5.5

6.0

6.

5 7

.0

Vericiguat is a novel sGC stimulatorsuitable for once-a-day dosing

Phase I successfully completed –improvement observed in important cardiological parameters, including:

Cardiac output / index (“volume of blood pumped by the heart”)

Systemic vascular resistance Stroke volume

No untoward safety findings in phase I

Collaboration with Merck & Co (50/50 cost/profit split), joint development and commercialization strategy

Car

diac

out

put (

L/m

in)

The New sGC Franchise is Strong in the Industry

Phase I Phase III Submitted LaunchedPhase IIIndicationProject

PAH/CTEPH

PH-IIP

dSSc

CF

wCHF

PH

PH-HF

Adempas

Vericiguat

MK 8892*

rHT

Research*

in preparation

in preparation

in preparation

Research/Preclin.


PH: Pulmonary hypertension; PAH:Pulmonary arterial hypertension; CTEPH: Chronic thrombmoembolic PH; PH-IIP: PH assoc. with interstitial idiopathic pneumonia; dSSc: Diffuse systemic sclerosis; CF: Cystic fibrosis; wCHF: Worsening

chronic heart failure; rHT: Resistant hypertension; HF: Heart failure

*Potential collaboration assets, subject to execution of options in the next 5 years after successful completion of Phase 1

BAY sGCstim*

BAY sGCact*

Raynaud’s

Major Expected Pharma Pipeline Newsflow2014/2015


Estimated primary study completion as of May 2014HCC: Hepatocellular carcinoma; NHL: Non-Hodkin‘s lymphoma;; MR: Mineralocorticoid receptor; HF: Heart failure; PI3-Kinase: Phosphatidylinositol-3 kinases, sGC :Soluble guanylate cyclase; HIF-PH: HIF prolyl hydroxylase

Page 91

2014

2015

BAY 85-8501 (Elastase Inhibitor) Completion of phase II in bronchiectasis

Copanlisib (PI3-Kinase Inhibitor) Completion of phase II in NHL

Stivarga Completion of phase III in 2nd-line HCC

Finerenone (MRAntagonist) Completion of phase II in diabetic nephropathy

Vericiguat Completion of phase II in worsening chronic HF

Molidustat (HIF-PH Inhibitor) Completion of phase II

Finerenone (MR Antagonist) Completion of phase II in worsening chronic HF

Nexavar Completion of phase III in breast cancer (RESILIENCE)

Vilaprisan (SPRM) Completion of phase II


Established Pharma Products

Page 92

2010 2011 2012 2013

Hemophilia Franchise –Stable Growth


Global # 2 in hemophilia A treatment

Competitive portfolio in hemophilia:

Positive phase III data with site-directed PEGylated long-acting Factor VIII (BAY 94-9027)

Product from plasma-free process (BAY 81-8973) – filing planned for 2014

Investment of € >500m planned to establish additional manufacturing capacities for recombinant FVIII products in development

Sales in € million; ∆% Fx adj.

299

705

290

785

332

850

US Rest of the world

1,0041,075

1,182+6%

Page 93

330

872

1,202

Prophylaxis in Hemophilia – Breakthrough in Prolonging Dosing Intervals


Prophylaxis can protect hemophilia patients more effective compared to on-demand treatment in terms of

Reducing frequency and severity of bleeding episodes

Preserving joint health/function and

Maintaining overall long-term health status

However, current standard in prophylaxis involves two to three infusions per week

A long-time goal in hemophilia prophylaxis has been to reduce the burden from frequent infusions

PROTECT VIII demonstrated evidence of reliable prophylaxis of bleeding in hemophilia A with dosing at every 5 and 7 day intervals

Expanding the Hemophilia Franchise – Long-Acting Site-directed PEGylated Factor VIII


Damoctocog alfa pegol (BAY 94-9027) is a B-domain–deleted recombinant factor VIII (BDD-rFVIII) with site-specific PEGylation

Attachment of PEG extends half-life without reducing FVIII activity

Positive PROTECT VIII phase III data

Filing US, EU and other regions planned for 2H’2015

Site-specificPEGylation toextend FVIII half life

B-domaindeletion

Damoctocog alfa pegol (BAY 94-9027) –Design of the PROTECT VIII Phase III Study


PROTECT VIII is a pivotal study assessing safety and efficacy of the site-directed PEGylated FVIII Damoctocog alfa pegol

Part A: On-demand and prophylactic treatment (completed)

Part B: Major surgery (ongoing)

6

Randomization

0 10 14 20 28weeks

2x/week 25 IU/kg (n 120)

2 or more breakthrough bleeds:

No or 1 breakthrough bleeds:

36

Screening

Screening

2

On‐demand therapy individual dosage n=20

2x/week 30 to 40 IU/kg n=24*

Every 5 days 45‐60 IU/kg n=43

Every 7 days 60 IU/kg n=43

* 13 assigned due to bleeding; 11 default/randomization arms full38

Damoctocog alfa pegol Phase III Results -Reduction of Infusion Frequency in Prophylaxis


Met primary objective of protection from bleeds with fewer infusions

Extending infusion intervals up to 7 days resulted in protection from bleeds

No inhibitors against FVIII developed during treatment period

Study ArmPatients (n)

remaining on treatment

Patients with no bleeding Median ABR

Prophylaxis: infusion2x/week n.a. n.a. 17.4 (reduction to 4.1 after

dose increase)Prophylaxis: infusion

every 5 days 43/43 44% 1.9

Prophylaxis: infusionevery 7 days 32/43

37%(incl. non-completers)

3.9 * (incl. non-completers)

On-demand treatment n.a. n.a. 23.0

ABR: Annualized bleeding rate

*Median ABR for the 32 (74%) completers was 0.96

The Leader in Women’s HealthCare


Yaz family

Sales ∆% y-o-y, () FX adj.

Women’s Healthcare 2013

€3,034m-7% (-1%)*

+6 (+10)Mirena

-23 (-16)Diane

-18 (-13)

+7 (+12)Qlaira

Other products +1 (+7)

-13 (-8)Microgynon

-2 (0)Valette

-13 (-8)Meliane

-7 (-1)Angeliq

Page 98* Fx & portf. adjusted growth -4% due to Essure with €74m sales in 2013


Strengthening Women‘s Health Business –Acquisition of Conceptus, Inc.

Bayer successfully completed the public tender offer to acquire all shares in Conceptus for a purchase price of €780m

US-based company developing the Essure® procedure, the leading non-surgical permanent birth control method proven by >700,000 procedures

Significant synergies expected from leveraging existing business power

Essure ®Permanent

Long-term

Short-term

No children Active family planning Family planning finalized

IUD (Mirena)

IUD (Skyla)

Oral contraceptives (e.g. YAZ)

Page 99

Mirena – The Leading Hormonal Long-Acting Contraceptive


Intrauterine device, containing levonorgestrel, for reversible long-term contraception

Life-cycle opportunities: Small low-dose long-acting (up to 3

years) device: Jaydess; launched in EU Skyla; launched in the US

Phase III for a long-acting (up to 5years), low-dose, small contraception device underway


2010 2011 2012 2013

285

254

313

268

385

292


539581

677+10%

Page 100

415

304

719

Betaseron – Long-term Experience in Multiple Sclerosis Treatment


First interferon launched in multiple sclerosis, introduced in 1993

Wealth of clinical experience

Demonstrating excellent efficacy and tolerability

21-year long-term follow-up study demonstrated significant survival advantage with Betaseron treatment

Launch of BETACONNECT (new electronic auto-injector) in Europe underway


2010 2011 2012 2013

473

733

447

670

578

638


1,2061,117

1,216 -12%

Page 101

499

539

1,038

Nexavar –Our Cornerstone in Oncology


Approved for kidney cancer (RCC), liver cancer (HCC) and radioactive iodine refractory differentiated thyroid cancer (DTC)

Only approved drug with overall survival benefit in HCC

Phase III trials in: Breast cancer RCC (adjuvant)


2010 2011 2012 2103

174

531

174

551

204

588


705 725792

+3%

Page 102

219

552

771

Aspirin –Sustainable for More Than A Century


One of the world’s most recognized brands

Available as OTC and Rx Aspirin

Bayer’s #1 product in Emerging Markets; 8% growth in China in 2013


2010 2011 2012 2013

358

418

404

471

476

494

Rx-Aspirin OTC-Aspirin

776875

970 -1%

Page 103

452

464

916


Aspire to Become the LeadingOTC Company

Evolution of Bayer Consumer Care’s OTC Business

2008Acquisition of OTC brand portfolio from Sagmel(CEE) and Topsun (China)

1999Aspirin trademark centenary-worldwide sales > €500m

1899ASPIRIN introduced as an over-the-counter(OTC) medicine

1994Consumer Care business group created by the acquisition of North American OTC business of Sterling; Acquisition of the “Bayer Cross”Trademark in USA

2005Acquisition of Roche Consumer Health

2013Aspirin trademark sales of >€900m

Acquisition of Steigerwald (Germany)


2014Proposed acquisition of Merck’s Consumer Care business (US)

Transaction agreement signed with Dihon Pharmaceutical Group (China)


Growth Strategy

Maximize brand potential Global expansion of key brands

Exploit our innovation pipeline

Grow in emerging markets Increase commercial power

Bolt-on acquisitions to strengthen portfolio & regional set-up

3.43.5

3.9 3.9

2010 2011 2012 2013

+5%

+7%+6%


Bayer Consumer Care – Outperforming Markets in Past 7 Out of 8 Years

Merck’s Consumer Care Business Fits Perfectly With Bayer Consumer Care


Complementary Portfolio

Building on core competencies

Creation of a global leader in OTC Gaining scale in key categories CASF1, dermatology,

and gastrointestinal Optimizing footprint in North America

Strong track record of growing OTC brands Strong geographical presence to broaden Merck’s

portfolio globally Utilizing integration skills from past transactions

Page 107

Acquisition criteria fulfilled

Creating leadership positions in important consumer care categories and geographies

Increasing consumer care margin2 by ~1pp from year 1 Immediate core EPS accretion from year 13

1 cold, allergy, sinus, flu; 2 EBITDA pre-special items;3 transaction incl. sGC collaboration


Combined Portfolio Significantly Strengthens Global Positions

Gastrointestinal

Analgesics3

CASF2

Nutritionals

Dermatology1

Total

Others4

3,904 1,635 5,539

1,110 386

372 803

126 513

439 141

1,023

834

1 including sun care; 2 Cold, Allergy, Sinus, Flu; 3 including Cardio; 4 Foot Health, Women’s Health, Other

1,496

1,023

1,175

834

580

431

#1

#2

#3

#1

#2


Note: Merck sales converted at average USD rate of 1.33 (FY 2013)

305

*After allowing for the Novartis/Glaxo deal; excluding Dihon acquisition in China; excluding Rx

MerckBayer