investor handout meet management 2014 in leverkusen

Meet Management Conference

Leverkusen, March 12, 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.

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

• Bayer Investor Presentation • Meet Management • March 2014

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 • March 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 Operational 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


24 Successful Phase III Clinical Trials at Pharma since 2010

Page 6

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-/ 7-days dosing intervals


BAY 94-9027

Major examples

2010-2013 –Building Growth Momentum 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%


2010-2013 – Successfully Executing OTC Growth Strategy

Portfolio of some of the world’s most recognized brands

Key brands build equity for decades

Continuous expansion into emerging markets, with focus on China, Brazil, and Russia

Bolt-on acquisitions Steigerwaldand Dihon* to strengthen portfolio

3.43.5

3.9 3.9

2010 2011 2012 2013

+5%

+7%+6%

Aspire to become the leading OTC company

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

*planned acquisition, closing expected in H2 2014

2010-2013 – Delivering Growth AndPerformance 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 business expansion in seeds over the last 3 years

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

19.0

24.2

25.5

22.8

+9%

+12%

Page 9 • Bayer Investor Presentation • Meet Management • March 2014

Customer-centric strategy bearing fruit

*Sales with Crop Protection products launched since 2006

+9%

2010-2013 – Cash Generation in Excess of Own Investment Needs at MaterialScienceIn € million

2010 2011 2012 2013

763

CapEx (cash-relevant)Net Cash Flow Free Operating Cash Flow

775 735

977

418

210114

265


498 565 621

559

and beyond

Incremental Investments To Achieve New Performance Level


FY 2014 Group Guidance –Further Sales and Earnings Growth

Page 12

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 • March 2014

€1.2bn Incremental Investments to Achieve New Performance Level

Securing growth momentum in particular

for new products

Sustainability of innovation model

Meeting futuredemand

Marketing & Sales R&D CapEx

(PPE)

2013: €10.1bn €3.2bn €1.8bn

∆ € bn:

2014e: €10.7bn €3.5bn €2.1bn

~0.6 ~0.3 ~0.3 • Bayer Investor Presentation • Meet Management • March 2014

2013 Sales CAGR 2016e

Pharma: Maximize Value of Launch Products


Pharma – Peak Sales Potential of LaunchProducts Raised 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 New



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

• Bayer Investor Presentation • Meet Management • March 2014Page 161: 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

Launch Products – Comprehensive Life-Cycle Management Program Underway


Phase III trials in new indications (incl. secondary prevention of major adverse cardiac events in patients with coronary/peripheral artery disease)

Additional research to strengthen profile in SPAF and VTE treatment

Program to position Eylea in AMD subtypes planned Early clinical program initiated to study combination with PDGFR-

Phase III trials in 2nd-line liver cancer and adjuvant mCRC Evaluate potential for additional cancers of the gastro-intestinal tract

Studies in earlier settings of prostate cancer including combination studies and studies in other tumors (such as breast cancer and osteosarcoma) planned

Realize the potential beyond PAH and CTEPH: studies in new disease areas like systemic sclerosis and pulmonary hypertension with idiopathic interstitial pneumonia planned

Major Examples

SPAF: Stroke prevention in atrial fibrillation; VTE: Venous thromboembolism; PDGFR-: Platelet-derived growth factor receptor beta; AMD: Age-related macular degeneration; mCRC: Metastatic colorectal cancer; PAH: Pulmonary arterial hypertension; CTEPH: chronic thromboembolic pulmonary hypertension

Pharma – Maximizing the Value of Launch Products

Page 18

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


#2 in the OTC Market - Executing Successfully on Growth Strategy

Consumer Care Growth Strategy

4.4%

J & J Bayer Novartis Cons Sanofi Cons Pfizer GSK

Boehringer I. Reckitt Ben. Taisho Takeda Others

*based on internal syndicated database

OTC Market 2013 by Player*

€98.5bn

Maximize brand potential

Exploit our innovation pipeline

Grow in emerging markets

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


Maximizing Brand Potential Through Global Expansion

Brand Sales by Major Region 2013 Expansion Plans

Analgesic~80% in North America

Wound-healing~75% in Europe

Anti-fungal~75% in Europe & LatAm

Vitamins & minerals~50% in Europe

Pregnancy Supplement~55% in Asia Pacific


Emerging Market Strategies Paying Off in Double-Digit Growth

*currency-adjusted

Country Strategic Plans Sales Growth 2013*

China

Brazil

Russia

Expand sales force from 30 cities to >130 cities, covering 75% of OTC market

Extend geographic footprint by launching global brands in China

Expand sales force from 7,000 to 12,000 retail outlets, covering 73% of OTC market

Accelerate innovation through consumer insights and portfolio extension

Extend portfolio into attractive categories Leverage leadership position in pharmacy

chains to drive growth at point of sales

+38%

+26%

+14%

Consumer Health – Aspire to Become the Leading OTC Company

Page 23

2013 Guidance2014

Aspiration2016

Sales Increase €7.7bn Low- to mid-single digit %(neg. FX effect approx. -3%)

3% CAGR

Adj. EBITDA Increase €1.8bn Slightly below PY(neg. FX effect approx. -€100m)

Adj. EBITDA Margin 23.8% - ~24%



Strong performance projected in Consumer Care and Animal Health, a more challenging environment expected for Diabetes Care


HealthCare – Building Growth Momentum, Improving Margins

Page 24

2013 Guidance2014

Aspiration2016

Sales Increase €18.9bn Mid-single digit %(neg. FX effect approx. -2%)

6% CAGR

Adj. EBITDA Increase €5.3bn Slight increase(neg. FX effect approx. -€250m)

Adj. EBITDA Margin 28.2% - ~30%






CropScience: Further Growth at Benchmark Profitability

CropScience is an Innovation-Driven Business Model

1.1

1.5

~1.8

2.6

2012 2013 2014e 2016e

+33%

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

• Bayer Investor Presentation • Meet Management • March 2014Page 26*Sales with Crop Protection products launched since 2006

2013 sales of new crop protection products* above target

Key brands with double-digit sales performance (e.g. Xpro +17% vs. PY, Adengo +36% vs. PY)

Innovation target: Transfer of at least 6 new molecular entities and traits into confirmatory technical proof-of-concept field studies in 2014

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

Planned Biagro acquisition adds nitrogen inoculants & plant health promoters

CropScience – Above Market Growth at Benchmark Profitability

Page 28

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(+5%)

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

MaterialScience Continues to Focus on Capital and Cost Efficiency


Fresh savings realized as expected – plus ~50bps in 2013 margin*

Projects / Examples 2013

Reorganization of system house landscape in Europe, North America, Asia

Integration of Canada organization into US organization

Portfolio optimization (e.g. exit of carbon nanotubes business)

Optimization of trade working capital

* Adjusted EBITDA margin

Strong focus on capital discipline and working capital management resulted in operating FCF increase of €304m to €418m in 2013

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




Complement Organic Growth with Targeted Bolt-On Acquisitions

Bolt-on Acquisitions to Strengthen LifeScience Portfolio

Region Product / Portfolio

Health Care

Prophyta (Q1’13) - €25m Germany Fungicides (Biologicals)

Crop Science

Conceptus (Q2’13) - €780m USA Permanent birth control

Wehrtec, Wehrmann (Q1’13)€34m + milestones

Steigerwald (Q3’13) - €218m Germany Herbal medicines (pharmacy-only)

Brazil Soybean (Seeds, Germplasm)

Algeta (Q1’14) Successful tender offer - ~€1.9bn

Norway Oncology product Xofigo

Dihon* (H2’14e) Signing agreement

China Local OTC brands

Company


FN Semillas* (Q4’13) - €25m Argentina Soybean (Seeds)

* Pending

Biagro* - Signing agreement Argentina Seed treatment (Biologicals)

Optimistic About Future Performance Level

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

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

Aspirations 2016 reflecting new performance level

Page 35

Substantial investment opportunities: >€18bn in R&D and CapEx 2014-2016


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

*before special items

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

FY 2013 – Encouraging Performance Driven by Life Sciences

Page 37 • Bayer Investor Presentation • Meet Management • March 2014

FY 2013 –Regional Performance

Page 38

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 Europe

² Others = Japan, Australia, New Zealand, Canada³ 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 39*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%

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

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 40

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 41

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

Polyurethanes+1% (+4%)

**CAS: Coatings, Adhesives, Specialties *** IO: Industrial Operations*before special items• Bayer Investor Presentation • Meet Management • March 2014

FY 2013 –Cash Flow And Net Debt Development

Page 42

-€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


Investor Handout – Meet ManagementBayer HealthCare

March 2014 – Leverkusen

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 44

FY 2013 –Growth Mainly Pharma Driven

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

FY 2013 HealthCare Sales Earnings

Pharma+4% (+9%)

ConsumerHealth

-1% (+3%)36%

11,1887,736

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

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 45

FY 2013 –Top 10 HealthCare Product Performance

• Bayer Investor Presentation • Meet Management • March 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

Paraciticide

-13%

Hypertension

Page 46

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%

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

EmergingEconomies¹+8%

Emerging Asia³

Western Europe +6%

Others²+12%


² Others = Japan, Australia, New Zealand, Canada³ Emerging Asia = Asia without Japan, Australia, New Zealand

HealthCare €18,924m; +2% (+7%)

Page 47

+10%

HealthCare – Building Growth Momentum, Improving Margins

• Bayer Investor Presentation • Meet Management • March 2014 Page 48

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




Pharma: Maximize Value of Launch Products

2011 2012 2013 2014

Page 50

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 • March 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 • March 2014 Page 511: 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

Peak Sales Potential*

* from 5 recently launched products: Xarelto, Eylea, Stivarga, Xofigo, AdempasPage 52

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

*assuming approvals and launches as planned



Unchanged

Unchanged

Unchanged

~€3.5bn

≥€1.5bn

≥€1bn

≥€1bn

≥€0.5bn

>€2bn

≥€1bn

Old New


Xarelto – Broadest Profile of Any Novel Oral Anticoagulant


Peak sales potential ~ €3.5bn

Oral Factor Xa inhibitor

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

prevention of ACS planned in Q2’14

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 54


Xarelto – Outperforming Competition, Exceeding Expectations

Page 55*Source IMS MIDAS

1 Oral anticoagulant; 2 Exception 15mg BID dosing for treatment of acuteDVT/PE or 2.5mg BID for ACS sec. prevention

20

15

10

5

23.0%

15.0%

2.7%

Xarelto

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

Uptake significantly exceedingexpectations

New sales target 2014: € 1.3-1.5bn

Broadest label of novel oral anticoagulants with once-daily-dosing advantage2

Sales market share in % (retail & hospital combined)*

01/2012 12/2013

apixaban

dabigatran

Xarelto – Leading Novel OAC1

Globally

25

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

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 57


Eylea – Excellent Launch Trajectory

Page 58

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

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

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

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 59

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 metaseases

Signal generating early clinical studiesin various cancer types

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

Studies in earlier settings of prostate cancer, including combination studies and studies in other tumors (such as breast cancer and osteosarcoma) planned

CRPC: Castration-resistant prostate cancer

Peak sales potential ≥ €1bn

Page 61

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

planned

planned/initiated

planned

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


Oral soluble guanylate cyclase (sGC) stimulator with exciting phase III results in two forms of pulmonary hypertension: PAH and CTEPH

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

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

Encouraging early launch feedback

Approved in J for treatment of CTEPH (01/14) – launch planned for Q2’14

Pos. CHMP opinion for CTEPH and PAH in EU (01/14)

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

Peak sales potential ≥ €0.5bn*

Page 63

Adempas – Life Cycle Management Beyond PAH and CTEPH

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

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

Page 64

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 IIa 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

sGC-Stimulator(BAY 1021189)

sGC Stimulator Worsening chronic heart failure Phase IIb ongoing

sPRM (S-PRAnt)(BAY 1002670)

Progesterone Receptor Antagonist

Symptomatic uterine fibroids Phase I completed

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 • March 2014 Page 67NME: New molecular entityCHF: Chronic heart failure

EPO: Erythropoietin

Copanlisib

Finerenone

Molidustat

sGC-Stimulator

sPRM (S-PRAnt)

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 I data demonstrated reversible induction ofamenorrhea


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 IIa in Non-Hodgkin’s lymphoma is ongoing; completion expected end of 2014

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


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

● BAY 1002670 is a novel oral, highly potent and selective progesterone receptor modulator

● Exhibits marked efficacy in an innovative humanized fibroid disease model1

● Phase I 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 I data BAY 1002670 Dose 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


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 cyclase; HF: Heart failure


sGC Stimulator (BAY 1021189) –Improvement of Cardiovascular Function

sGC: Soluble guanylate cyclase; HF: Heart failure

Phase I of BAY 1021189 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

BAY 1021189 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

BAY 1021189 may offer a new treatment modality for HF

Car

diac

out

put (

L/m

in)


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 :

Major Expected Pharma Pipeline Newsflow2014/2015


Estimated primary study completion as of December 2013HCC: 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 79

2014

2015

Nexavar Completion of phase III in breast cancer (RESILIENCE)

Completion of phase III in adjuvant HCC (STORM)

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

Amikacin inhale Completion of phase III in gram neg. pneumonia

Nexavar

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 worsening chronic HF

Finerenone (MR Antagonist) Completion of phase II in diabetic nephropathy

Molidustat (HIF-PH Inhibitor) Completion of phase II

sGC Stimulator Completion of phase II worsening chronic HF


Established Pharma Products

Page 80

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

Sales in € million; ∆% Fx adj.

299

705

290

785

332

850

US Rest of the world

1,0041,075

1,182+6%

Page 81

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


B-domain–deleted recombinant factor VIII (BDD-rFVIII) with site-specific PEGylation (BAY 94-9027)

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

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 BAY 94-9027

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

Phase III Results Show Reduction of Infusion Frequency in Prophylaxis with BAY 94-9027


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

Detailed data planned to be presented at WFH congress, Melbourne, May 2014

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

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 86* 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 87

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; launch underway 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 88

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


2010 2011 2012 2013

473

733

447

670

578

638


1,2061,117

1,216 -12%

Page 89

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)

Pos. CHMP opinion for DTC (02/14) Only approved drug with overall

survival benefit in HCC Phase III trials in:

Breast cancer RCC (adjuvant) HCC (adjuvant)


2010 2011 2012 2103

174

531

174

551

204

588


705 725792

+3%

Page 90

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

Aspirin grew 8% in 2013 in China


2010 2011 2012 2013

358

418

404

471

476

494

Rx-Aspirin OTC-Aspirin

776875

970 -1%

Page 91

452

464

916


Aspire to Become the LeadingOTC Company


Bayer is #2 Player in a Highly Fragmented OTC Market

*based on internal syndicated database

4.4%

OTC Market 2013 by Player*

J & J Bayer Novartis Cons Sanofi Cons Pfizer GSK

Boehringer I. Reckitt Ben. Taisho Takeda Others

OTC market is very fragmented and grew ~5% versus 2012

Top 10 players have ~30% share of the OTC market

Bayer is ranked #2 with 4.4% share of the OTC market behind J&J

€98.5bn


Good Growth Across All OTC Categories

Global OTC Market 2013*

36%

42%

4%

20%

32%

43%

5%

12%

22%

15%18%

13%

19%#

€98.5bn

OTC Growth 2013

+8%

+6%

+5%

+4%

+6%

Dermatology

Cough, Cold, Sinus, Allergy, & Asthma

Analgesics1

Nutrition

Gastrointestinal

*based on internal syndicated database1Analgesics includes Cardio

# Others


We Aspire to Become the Global Leader in the OTC Market

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

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

3,080

3,3713,534

3,853 3,904

2009 2010 2011 2012 2013

+5%


Brands Years Old 2013 Sales €m 3-Year CAGR

114 916* 6%

82 214# 14%

79 108 5%

69 310 14%

45 138 12%

41 257 7%

20 321 6%

Strong Consumer Brands Build Equity for Decades

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


Innovation at OTC – New Product Development with Bepanthen

212235

269

310

2010 2011 2012 2013

Sales in €m, ∆% Fx-adjusted

+11%+14%

+20%


Maximizing Brand Potential Through Global Expansion

Brand Sales by Major Region 2013 Expansion Plans

Analgesic~80% in North America

Wound-healing~75% in Europe

Anti-fungal~75% in Europe & LatAm

Vitamins & minerals~50% in Europe

Pregnancy Supplement~55% in Asia Pacific


One A Day Vita CravesComplete adult multivitamin in great tasting gummy format

2010 2011 2012 2013 2015e

Robust Innovation Pipeline

*sales of new products launched during a 4-year window

Share of Sales from New Products*

RedoxitosRecommended children’s vitamin C daily dose for strengthening immunity

Canesten Nail SetComplete 6-7 week fungal nail infection treatment

Bepanthen Anti-Scar GelSilicone Gel with unique massage device to approve appearance of scars

~13%

4%5%

8%

New Product Examples

11%


Emerging Market Growth Strategies

Russia

Country MarketCharacteristics Plans 2013 Progress

China

#2 global OTC market

€30bn in size by 2015e

Expand sales force from 30 cities to >130 cities, covering 75% of OTC market

Extend geographic footprint by launching global brands in China

Sales growth: +14%

Successful geographic expansion achieving target of 75% of OTC Market

Brazil


Fastest growing market in LATAM

~50% of LATAM market

Expand sales force from 7,000 to 12,000 retail outlets, covering 73% of OTC market

Accelerate innovation through consumer insights and portfolio extension

Sales growth: +38%

Successful line extension launches: Bepanthol Lip Cream, Redoxitos and relaunch of Flanax and retail coverage expansion

Russia


Retail OTC is the largest healthcare segment

Extend portfolio into attractive categories

Leverage leadership position in pharmacy chains to drive growth at point of sales

Sales growth: +26%

Successful expansion of Win in Store Retail initiative

Doubled Bepanthen sales and restaged Supradyn

Sales ∆% Fx adj.


Strengthening Consumer Health Through Selected Acquisitions

Significant sales synergies expected due to Bayer’s complementary

Consumer Care business

Germany-based specialist in pharmacy-only herbal medicines, bringing in a leading herbal expertise

Sales 2013*: €66m

Transaction value: €218m

Steigerwald:Herbal medicines

Significant synergies expected from complementary OTC business

Transaction agreement signed on February 26, 2014

Regulatory approval process prepared

Closing expected in H2 2014

Portfolio of well-known local consumer brands

Sales 2013#: €123m

Dihon Pharmaceutical Group:Chinese OTC brands

*proforma sales#not audited


Animal Health – Operating in an Attractive Market Environment


Demonstrating a Solid, Long-Term Sales Growth TrajectorySales in € million; ∆% Fx & portfolio adj.

Overall global #5 and global #2 in parasiticides

Ranked #3 in CAP (~60% of sales) Sector driven by: Emotional relationships to pets Infectious and chronic diseases

Ranked #7 in FAP (~40% of sales) Sector driven by: Increasing customer/consumer

awareness Food safety & disease transmission Globalization in farm exports

Highlights

977

1,1201,186

1,303 1,306

2009 2010 2011 2012 2013

+4%


Aspiring Further Sustainable Growth

6%

AH Market 2013 by Player

Zoetis Merck Merial Elanco Bayer

Boehringer I. Novartis Virbac CEVA Others

€21bn

Growth Strategy

Expand market share of existing portfolio while delivering innovation

Strengthen and expand 2013 acquired TEVA US AH business

Drive research & development at a 10% sales ratio

Explore M&A opportunities for further growth


New Innovative Product Examples –Recent Launch Highlights

New benchmark for flea and tick protection

Outstanding efficacy based on combination of active ingredients

Up to 8 months protection due to innovative polymer matrix technology

Pradofloxacin, the new generation fluoroquinolone

Extended spectrum vs. previous fluoroquinolones

Greater potential to limit selection for resistance

Convenient formulations for dogs and cats

1st combined endopara-siticide against roundworm and coccidiain dogs

Easy and convenient once daily oral treatment

Can be used at 2-weeks old


Innovative Life-Cycle Management –Example of Advantage Family

Highlights

2002 2013

202

487


Successful franchise through: Brand building – investments in

direct-to-consumer for brand awareness

Channel diversification – meeting consumers where they are

Life Cycle Management (LCM) –ongoing with new claims


Selected R&D Activities

Newformulations Antimicrobials Pharmaceutical

SpecialtiesParasiticides

Focus to improve:

Convenience

Efficacy

Safety

Antibiotics (Quinolones)

Dairy Health

RespiratoryDiseases

Products

Allergy & Inflammation

Chronic KidneyDisease

Ecto-parasiticides

Endo-parasiticides

Endecto-parasiticides

R&D Investment approx. 10% of turnover


Medical Care – Diabetes Care and Radiology & Interventional

DC R&I


Radiology & Interventional

DiabetesCare

Sales Split 2013

Medical Care €2,526m; -5% (0%)

40% 60%

Diabetes Care: Comprises self testing blood

glucose monitoring devices

Radiology & Combines our Contrast

Media, Injector, Informatics and Interventional businesses

Interventional:

Medical Care – Strong Legacies in Diabetes Care and Radiology & InterventionalIn € million, ∆% yoy, () = Fx & portf. adjusted


Diabetes Care –Global Player in Blood Glucose Meters

HighlightsSales in € million; ∆% Fx & portfolio adj.

1,000 993 1,0021,047

1,007

2009 2010 2011 2012 2013

-1% Global #3 in blood glucose meters

Stable business performance despite difficult market conditions

Market characterized by growth in prevalence, but pricing pressure

Latest innovation products include CONTOUR® Next and Next Link MULTIPULSE technology ensures high

accuracy blood glucose measurements

Wireless transmission of results to Medtronic insulin devices


1,363

1,474 1,498

1,6061,519

2009 2010 2011 2012 2013

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

0%

Radiology & Interventional – Combining Medical Devices and Contrast Media

Integrated subsidiary Medrad Inc. and our Pharma contrast media business

The business comprises: Contrast media: Xray, MRI Contrast media injectors: Medrad brand Informatics Interventional: Artherectomy devices Services

Synergies through focus on similar centers / physicians

Bayer has leading positions among different segments

Highlights

Investor Handout – Meet ManagementBayer CropScience


18%

25%

11%11%

7%

28%

Sales 2013: €8,819m

Insecticides€1,622mMarket position:

Fungicides€2,195m3Market position:

SeedGrowth€921m1-2Market position:

Herbicides €2,456m3-4Market position:

Env. Science €651m1Market position:

Seeds €974m7Market position:

Page 113

CropScience –A Leader in Chemical Crop Protection


1

Market positions preliminary, based on company reportings

25%

22%14%

12%

8%

6%6%4%3%

Fruits & Vegetables

CerealsOilseeds

Soy

Corn

Cotton

Rice

Sugar Crops

* by major crop groups excluding industrial business and non-agricultural solutions

CropScience Sales 2013*

Other

Fruits, Vegetables and Cereals –A Major Part of Our Portfolio


Leading the Way in Integrated Crop Solutions

Integrated Crop Solutions

Chemical Crop

Protection

BiologicalCrop

Protection

Seeds

Herbicides Fungicides Insecticides SeedGrowth

Microorganisms Microbial

extracts

Canola, cotton, rice, vegetables, soy, wheat

Conventionalseeds

GMO seeds Traits

Weed, pest & disease control

Stress tolerance

Better harvestwith improved: Yield Quality Processability Sustainability

GMO: Genetically modified organism• Bayer Investor Presentation • Meet Management • March 2014Page 115


Strong Growth at Record Margin

FY 2013 –Strong Growth at Record Margin

Page 117

Crop Protection+7% (+11%)

EnvironmentalScience

-4% (+1%)


Seeds+1% (+1%)

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

CropScience €8,819m; +5% (+9%)

Price+3%

Volume+7%

Fx-5%

Portfolio0%

7,194

FY‘12 FY‘13 FY‘12 FY‘13

2,025

2,248 +11%

1,543

1,801 +17%

Adj.EBITDA*

Adj.EBIT*

651974

24.2% 25.6%Margin


2,456+8%

2,195+15%

1,622+14%

921+ 7%

Insecticides

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

FY 2012 Nominal growth FY 2013


SeedGrowth

FY 2013 – Crop Protection Growth Driven by All Segments

Page 118

Herbicides

Fungicides

Robust growth in North America

Liberty benefitting from glyphosate resistance

Strong performance in all regions

Fox in Brazil and Xpro especially contributing

Solid growth in North America with products for corn and soybean

Poncho family a major driver

Exceptional increase in LatAm

Sales of Belt and Movento grew significantly


FY 2013 – Seeds Growth Held Back by Decline in Cotton and Oilseeds

Page 119

331+9%

279- 10%

176- 7%

58+ 54%

Soybean

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

FY 2012 Nominal growth/decline FY 2013

Rice

Vegetables

Oilseeds

Cotton

52+ 19%

Growth in all regions

Helped by acquired melon business

Reduced canola acreage in Canada

Reduced cotton acreage in the U.S.

Strong business expansion in Brazil

Step-up of soybean presence in Latin America through acquisitions

Pleasing performance in the U.S.

Business expansion in Asia Pacific continued, esp. in India

Emerging Economies

25%

CropScience Sales in FY 2013

CropScience €8,819m; +5% (+10%)Latin

AmericaEastern Europe


Emerging Asia³

~900

+11% ~2,200

+27%

~600

+9%

~300

+4%



Page 120

17%

USA+3%

25%

45%

13%

EmergingEconomies¹+18%

Western Europe +3%

Others²+6%

FY 2013 –Strong Growth in Emerging EconomiesSales in € million, ∆% yoy Fx adjusted



Customer-Centric StrategyPays Off

Customer-Centric Strategy Pays Off

Strengthen Customer Centricity

Lead the Way in Innovation

Enhance Crop Protection &

Environmental Science

Striving for first- and best-in-class solutions

Exploiting expertise in seeds, breeding, and chemical and biological crop protection

Driving commercial excellence in marketing and sales

Connecting partners in the value chain through integrated Go-to-Market practices

Improving portfolio through focused and integrated crop solutions

Increasing flexibility and efficiency

ExpandSeeds Business

Further strengthening position in vegetables, rice, oilseed rapeand cotton

Extending portfolioby building up business in soybean and wheat


FY 2013 Sales from New Crop Protection Products Exceeded Expectations

1.11.4

1.5

1.8

2.6

2012 2013e 2013 2014e 2016e

+33%

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


(+17%) - Superior ‘all-in-one’ cereal fungicide with yield-boosting effect

herbicide (+36%) -Excellent weed control in corn and cereals, also in case of glyphosate resistance

(+48%) - Broad-spectrum insecticide with fast, long-lasting action

- New fungicide now available in several key markets

FY 2013 Highlights

2013 target

2013 actual

Page 123

Xpro – New Cereal Fungicide with Yield-Boosting Effect

Pyrazole fungicide from a new generation of SDHI* for foliar use in cereals

Combined formulation of Bixafen and Prothioconazole leading to superior "all-in-one" cereal fungicide Xpro

Excellent control of key cereal diseases including strobilurin-resistant Septoria

Boosting yield through long-lasting disease control and positive impact on plant physiology

Global peak sales potential of more than €300m

* SDHI: Succinate dehydrogenase inhibitor• Bayer Investor Presentation • Meet Management • March 2014Page 124

Luna – Outstanding Fungicide for Managing Problematic Crop Diseases

New SDHI* fungicide for use in foliar application and seed treatment on more than 70 horticultural and industrial crops

Control for a broad range of problematic diseases including Alternaria blight, scab, powdery mildew and white mold

Benefits for the food chain through better storability and longer shelf-life of harvested produce

Available since 2012 planting season in several key markets

Global peak sales potential of more than €250m

* SDHI: Succinate dehydrogenase inhibitor• Bayer Investor Presentation • Meet Management • March 2014Page 125

Adengo Family – Highly Effective Weed Control in Corn

Thiencarbazone-methyl is a new sulfonyl-amino-carbonyl-triazolinone (SACT) herbicide

Additional crop selectivity in combination withHPPD inhibitor Isoxaflutole and safener Cyprosulfamide

Grower benefits:

Controls annual grasses and broad leaved weeds in corn including those that are resistant to glyphosate

Offering flexibility in application timing

Strong enough to achieve one-pass weed control

Rapid burndown, long-lasting residual control


Peak sales potential of more than €350m

Belt Insecticide - Preserve Yield Potential

Flubendiamide is a phthalic acid diamide

Acts as ryanodine receptor modulator, larvae loses muscle control

Grower benefits:

Controls lepidoptera pests in a wide range of crops, including soybeans, corn and cotton

Fast action, larvae stops feeding immediately

Rainfast with excellent residual activity

Provides minimal risk to beneficial insects

Excellent resistance management tool


Peak sales potential of more than €300m

Sustainable Alternatives to Fight Glyphosate Weed Resistance


Weed resistance to glyphosate increasingly impacting crop production; almost 50% of U.S. growers are affected

Our LibertyLink is currently the only non-selective herbicide solution to glyphosate resistant weeds

Significant expansion of production capacity for Liberty planned

We are committed to develop new and more sustainable weed management solutions

Highly effective pre-emergent and selective herbicide portfolio launched

100

200

300

400

2010 2011 2012 2013

Liberty/Basta Sales in €m

Future Market Potential of Biologicals Expected to Increase Significantly

Biologicals are products derived from naturally-occurring living organisms or materials from plants or microorganisms

Increasing demand from consumers for safe and sustainably produced food, especially in fruits & vegetables area

Global retailers have more stringent residue reduction targets

Currently lower regulatory hurdles and faster registration process for biologicals compared to chemicals

Grower benefits from short pre-harvest and re-entry intervals and thus high flexibility on application timing

When used in combination or rotation with chemicals, biologicals provide new tools in resistance management


Market potential expected to triple from $1.2bn in 2010 to $4bn in 2020

Further Growth Opportunities in Biologicals with Bolt-On Acquisitions

Successful market entry with nematode seed treatment Poncho/Votivo in 2011 (Sales 2013: €150m)

AgraQuest acquired in Q3 2012 for €375m including milestone payments.Global provider of innovative biological pest management solutions based on natural microorganisms

Prophyta acquired in Q1 2013, a provider of well-established products, e.g. nematicide BioAct

Planned Biagro acquisition adds nitrogen inoculants and plant health promoters

We aim to become the world leader in integrated crop solutions


Acquisition of Biagro to Strengthen our Soybean Business in Latin America

Agreement signed in Q1 2014 to acquire Argentinean company Biagro*

Biagro portfolio includes seed-applied biofertilityinoculants and plant growth-promoting microorganisms

Acquisition will be a further milestone to become a leader in biological seed treatments

Provides soybean growers in Latin America with innovative offerings to substantially improve productivity

Nitrogen essential for plant growth and soybean seed production

Biagro inoculants are a very effective and cost-efficient method of supplying nitrogen to soybeans and other legume crops

• Bayer Investor Presentation • Meet Management • March 2014Page 131* Acquisition subject to clearance by Antitrust Authority in Argentina

Inoculants containinghigh-quality Rhizobiumbacteria strains enableplant roots to fix nitrogenfrom the atmosphere,resulting in enhancedplant growth, morevigorous root structureand greener plant foliage

Customer Centricity Along the Entire Value Chain


Bayer CropScience

Our offers GrowersDis

trib

utor

s /

seed

com

pani

es

Ret

aile

rs

Adv

isor

s

Providing Seed-to-Shelf Solutions

Trad

ers

Food

pro

cess

ors

Food

reta

ilers

Consumers

Around 240 food chain partnerships covering most of the main fruit & vegetable crops and rice

Premium seeds and effective crop protection products to maximize yield

Consistent and high harvest quality for efficient food processing

Meeting highest food safety standards

Better product quality for the consumer

Serving Grower Needs Beyond Crop Protection and Seeds


Services Examples

Providing agronomic support Crop advice Expert trainings

On-farm trials Field days

Optimizing yield and quality by offering diagnostic and prediction tools

Weather forecast Pest prediction Disease diagnosis

Resistance risk calculator

Assessment of quality indicators

Helping to optimize application process and seeding

Application collaborating with machinery providers

Seed treatment equipment checks

Creating transparency by offering tracking / documentation support

Field documentation RoI calculation

Certification support

Improving farm management by financing and insurances

Ag input financing Barter business

Crop price insurance


Translating R&D Effectively into Sales

From to €

Pipeline Peak Sales Potential €4bn from Products Launched 2011 - 2016*


Crop Protection

Life Cycle Management

SeedsCotton

Canola

Wheat

Soybean

Rice

2013

~110 launches in vegetables & broad acre crops

Roundup Ready Hybrid Canola

FungicideSerenade Optimum

Bayer Oilseed Mustard Hybrids

Seed Varieties

2014

Canola Yield Increase

Numerous launches in vegetables & broad acre crops

Verango / VelumInsecticide

Insect Resistant Hybrid Rice

TwinLink + GlyTol Cotton

Seed Varieties

20162015

*estimated and subject to regulatory approval2 joint project with MS TechnologiesPage 135

Constant Life Cycle Management through new formulations and mixtures that also includes Biologicals

Disease Resistant + Salinity Tolerant Hybrid Rice

Insect + Disease Resistant Hybrid Rice

Improved Canola Oil Profile

Dual Herbicide Tol. + Novel Insect Resistant Cotton

InsecticideBiologicals

Seed VarietiesNumerous launches in vegetables & broad acre crops

GlyTol + HPPDTolerantSoybeans2

Biologicals Fungicide

Bayer Wheat Seed

LibertyLink + Roudup Ready Hybrid Canola

CouncilHerbicide

Disease Resistant + Submergence Tol. Hybrid Rice

Seed VarietiesNumerous launches in vegetables & broad acre crops

SivantoInsecticide

Sivanto – Innovative and User-friendly Insecticide Against Sucking Pests

Active ingredient: flupyradifurone (novel insecticide class butenolides)

Control of sucking pests such as aphids, hoppers and whiteflies

Intended for use in fruits, vegetables, and broad acre crops

Favorable safety profile

Launch planned 2015*

• Bayer Investor Presentation • Meet Management • March 2014* first registrations for foliar application; SeedGrowth use

planned to follow subsequentlyPage 136

Biological Crop Protection for Mite Control

Mites can significantly reduce yields and quality

Leading to rejection of produce along the value chain and lower sales

Microbial acaricide with new mode of action

Season-long effectiveness: curative, eradicant, protective

Registration expected in the U.S. in 2016*

• Bayer Investor Presentation • Meet Management • March 2014Page 137* subject to regulatory approval

Two-spotted spider mite under scanning electron microscope (SEM)

Build up a Global Wheat Seed Business

Largest broad-acre crop worldwide

Market value still small, but major potential seen with productivity improvement

Hybrids provide opportunity for both yield increase and improved yield stability


The Market* Our Efforts Our Goals

• 7 breeding centers• Numerous collaborations• Significant R&D investments

The Market

• 226m ha of wheat acres, majority is farm-saved seed

• Current market of €0.2bn (royalties only)

• Slow productivity increase

• Yield increase• Nitrogen use efficiency• Water use efficiency• Heat tolerance

Market Entry• Launch of first variety

planned in 2015• Suitable for western and

central regions of the Ukraine• Open pollinated variety

* Source: FAO, Context Networks 2012 (seed co level)

Corn: 60.7 EUR/ha Wheat: 0.9 EUR/ha

The Market

Acquisitions in Latin America Broadenour Portfolio in Soybean Seed

Building up proprietary seed business with high quality germ-plasm pool

Establishing best-in-class breeding platform

Leveraging the potential of our trait platform through out-licensing

Launch of Bayer soybean brand Credenz planned late 2014

Integrated business model combining seeds & crop protection

• Bayer Investor Presentation • Meet Management • March 2014Page 139* subject to clearance by Antitrust Authority in Argentina

2013 FN Semillas*soybean seed company Buenos Aires, Argentina

2011 Soytechsoybean seed company Goiânia, Goiás

2013 Wehrtecsoybean seedcompanyCristalina, Goiás

2013 Agropastorilsoybean germplasmbankCascaval, Paraná

2010 CVRplant breedingRio Verde, Goiás

Strategic Progress Achieved

EnhanceCrop Protection & Env. Science

Strengthen Customer Centricity

Lead the Way in Innovation

Expand Seeds Business

● €1.5bn sales in 2013 with products launched since 2006● Biologicals strengthened further with Prophyta and Biagro*● Expansion of supply capacities for key active ingredients

● Support to increase productivity of small-scale farmers● Improved channel management practices● Broadened food chain partnership business model

● Pipeline Peak Sales Potential** €4bn● Increased investment in Seeds R&D● Innovating at the interface between chemistry and biology

● Strengthened presence in Latin American soybean market● Further investments done in wheat and vegetables● Development of innovative traits

• Bayer Investor Presentation • Meet Management • March 2014Page 140* Acquisition subject to clearance by Antitrust Authority in Argentina

** from products launched between 2011-2016



Further Growth at Benchmark Profitability

Global Trends in Agriculture


GLOBAL FOOD PRODUCTION

CLIMATE CHANGE

-322 kg rice per hectare

Yields under pressure

+1°CFARMLAND PER CAPITA (ha)

1950 : 0.522010 : 0.202050 : 0.15

INSUFFICIENT STORAGE

Up to 40% of fruit and vegetables lost in India

Equivalent to the annual consumption in UK

CHANGING CONSUMPTION PATTERNS

Increasing demand for protein

Need for a sustainable productivity increase

By 2050

+70%

HUNGER

1 in 8 goes hungry today

POPULATION GROWTH

7 billion people on the planet today

9.6 billion people in 2050

Crop Commodity Prices Declined in 2013, But Are Still At Relatively High Levels

• Bayer Investor Presentation • Meet Management • March 2013Page 143Source: Bloomberg

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

0

100

200

300

400

500

600

700

800

900

1.000

Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14

Soybeans(LS)

Corn (LS)

Wheat(LS)

Canola(LS)

Rice (RS)

Cotton(RS)

USD/ton USD/ton

Seed and Crop Protection Market Expected to Grow 5% in 2014


In many growing regions farmer income level is healthy after 3 good years

Commodity prices still above critical threshold for farmers, triggering investment in high-value seeds and crop protection

Steady expansion of soybean farming in Latin America

Expansion of agricultural production in Asia/Pacific continues

DESPITE Prices for agricultural commodities expected to be below 2013 levels

Global stocks-to-use ratios for key crop commodities on upward trend

Promising 2014 Outlook

We expect to grow faster than the market

We plan to raise sales by a mid- to high-single-digit percentage on a currency- and portfolio-adjusted basis We anticipate negative currency effects of about 3%

We plan to increase EBITDA before special items by a low single-digit percentage, allowing for negative currency effects of approx. €150m

• Bayer Investor Presentation • Meet Management • March 2014Page 145Assuming average FX rates of Q4‘13 (USD 1.36)

CropScience – Above Market Growth at Benchmark Profitability

Page 146

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%




Increasing demand for innovative and sustainable agricultural solutions

Expansion of production capacity of for herbicide glufosinate-ammonium

Broadening seeds infrastructure for soybean and wheat

Expanding and modernizing R&D facilities

CAPEX expansion to €2.4bn for 2013 - 2016

Stepping Up Investment Plans to Fuel Future Growth


Capital Expenditures (PPE only, in €m)

303

453

~620

2012 2013 2014e

Investor Handout – Meet ManagementBayer MaterialScience


MaterialScience –Leading Positions in All Segments

• Bayer Investor Presentation • Meet Management • March 2014* aliph. isocyanates

MaterialScience €11,238m

Polyurethanes€6,054m #1-2; approx. 19-24% market share

54% 6%

23%

17%


Polycarbonates€2,640m #1; approx. 27% market share

Coatings, Adhesives, Specialties€1,863m #1; >40% market share*

Industrial Operations €681m

Sales Split by Segment 2013

Page 149

MaterialScience –Global Production Network

• Bayer Investor Presentation • Meet Management • March 2014Page 150*Market share based on estimated sales following self-assessment

# Europe, Middle East & Africa

HeadquartersMajor Production SitesDownstream Businesses

Position*

Americas

# 1 # 2 # 1 PUR PCS CAS

Position*

EMEA#

# 1 # 1 # 1 PUR PCS CAS

Position*

Asia/Pacific

# 2-3 # 1-2 # 1 PUR PCS CAS


Automotive

Other industries*

Construction Furniture / Wood Electro / Electronics

19% 18% 15%21%

MaterialScience –Sales By Key Customer IndustriesBayer MaterialScience sales by industry in 2013

= 73% +Chemicals

*sports/leisure, cosmetics, health

10% 17%

MaterialScience as an Integrated Solution Provider


Megatrends offer business opportunities worldwide, with the emerging economies at the forefront

Ongoing urbanization

New and improved

transportation systems

Need for better energy

efficiency

Higher living

standards

Proportion of city dwellers expected to increase from 50% in 2010 to 70% in

2050*

Lightweight carsNew energy vehicle

development High-speed rail trans-

portation networks

EcoConstruction with high thermal insulation

standardsCold-chain efficiency

Over 40m people enter the middle class

every yearImproved housing

standards

Source: Steria, The Future Report 2012


Performance Below Expectations


FY 2013 –Operating Performance

25%

6,054 2,640

Polycarbonates -6% (-5%)

Polyurethanes+1% (+4%) Adjusted

EBITDA*

* before special items

AdjustedEBIT*

FY 2013 Sales Earnings

1,863

681

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

Coatings, Adhesives, Specialties -6% (-2%)

IndustrialOperations

-5% (-4%)

Price0%

Volume+1%

Fx-2%

Portfolio0%

MaterialScience €11,238m; -2% (0%)

Page 154

FY 12 FY 13 FY 12 FY 13

1,263

1,072 -15%

613

429 -30%

FY 2013 –Regional Sales Development


Emerging EconomiesFY 2013 Sales

MaterialScience €11,238m; 0%Latin

AmericaEastern Europe


Emerging Asia³

~2,670

-1%

~870

+0.5%

~680

+1.5%

~530

-7%



USA+3%

36%

42%

EmergingEconomies¹-1%

4%Others²+7%

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

20%

33%

42%

5%

Page 155

Western Europe -1%


Aspire to Earn a Premium Over Cost of Capital


Cash Generation in Excess of Own Investment Need…

2002 and 2003 as reported in 2004 excluding acquisitions or divestments

In € million

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

902

1,108

464

1,113

332

498

715

1,388

690

1,281

870

672

1,147

782

504 498565

775763849

621

735

CapEx (cash-relevant)

Net Cash Flow

~€4bn Free Operating Cash Flow in 12 years Free Operating Cash Flow

206 649

166

673592

277

110345

265 210 114

559

977 418


…But Selling Price Increases & Savings Not Sufficient to Protect Earnings

Market growth trends intact, key products on average with mid-single digit volume growth

High raw material prices and significant capacity additions led to global overcapacities and margin pressure

Going forward demand & supply balance expected to improve

Anticipated margin improvement supported by fresh savings from running efficiency initiative

2010 2011 2012 2013Sales Adj. EBITDA Raw Mat. & Energy Costs CFROI

In € bn

10.210.8

11.5

5.46.2 6.5

1.4 1.2 1.3

6%8%

11.2

6.6

1.1

6%6%


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

Higher Asset Utilization & Efficiency Measures to Drive Performance

2013

Target 2014*

Aspiration 2016

*Assuming average FX rates of Q4‘13 (USD 1.36)#after reproduction

Sales +0.4% to €11.2bn (volumes +1%)

Adj. EBITDA -15% to €1,072m

CFROI# 5.5% < WACC 6.9%

Sales: mid-single-digt % growth (cpa.)

Adj. EBITDA: increase (incl. -€50m from FX)

Q1‘2014 vs Q1‘2013: sales to increase and adj. EBITDA to gain significantly

Grow business (volume) above global GDP

Defend market leading positions in PCS and PUR

Realize 150bp margin contribution through new efficiency initiative (by 2015)

Optimize asset structure in Germany

CFROI# > WACC

Planning Assumptions for 2014 –Economy and Key Customer Industries

21%

18%

27%

19%

Automotive(+5%)

Electro /Electronic

(+6%)

Construction(+4%)

Furniture(+4%)

Others(incl. Chemicals)

3.3

1.31.8

2.7

5.3

4

3

2

1

5

GDP growth % prev. year

15%

Sales by industry 2013 and expected 2014 growth

Global Economic GDP Outlook Key Customer Industries Outlook


Brent crude oil is budgeted at an average of $110 per bbl for 2014


Profitability Improvement Through New Efficiency Initiative Until 2015

New efficiency initiative, started in 2013, targets to improve cost structure and to increase adjusted EBITDA margin by 150bp

Initiative comprises more than 100 measures across the entire value chain

Fresh savings realized as expected – plus ~50bps in 2013 margin*

Examples

Business Units Consolidation of system houses Pricing excellence programs

Organization Optimization of regional structures (e.g. Canada & US)

Production Further initiatives to improve asset productivity (e.g. maintenance schedules, engineering setup)

Supply Chain Optimization of logistics services

Selling & Administration

Further reduce costs by leveraging established global ERP platform and standardized processes

ERP: enterprise resource planning* adjusted EBITDA margin

Process Technology Advances Lower Cost & Save Energy


Proc

ess

Ben

efits

*St

atus

TDI Gas Phase Phosgenation

Adiabatic Aniline Production

ODC Technology for Chlorine Production

*Compared with conventional technologyODC: Oxygen depolarized cathode

Uses up to 60% lessenergy

Requires 80% less solvent

CapEx reduced by 20%

Uses 25% less energy

20% less CO2 emissions

CapEx reduced by 30%

Uses 30% less energy

Reduces indirect CO2emissions

World-scale facilitysince 2011 in Shanghai, China

Technology to be used in new TDI plant in Dormagen

Pilot plant in Antwerp, Belgium

Plant in Shanghai since 2010

Demo facility in Krefeld-Uerdingen

External marketing started mid 2013

Page 162


Focus on Capital Discipline

DepreciationCapEx (PPE only)

813

600 598

460

599 601

2008 2012 2013 2014e

In € million

CapEx vs Depreciation CapEx Strategy

Investment focus on utilization improvement

Investment in efficiency is the basis for future profitable growth

CapEx brought successfully down on depreciation level

Target to stay around this level for the foreseeable future


Capitalizing on Global Megatrends

1990 2000 2020e 2050e

5.36.1

7.79.2 billion people


Our High-tech Materials Meet Key Customer Industry Needs

Poly-carbonates

Poly-urethanes

& CAS

Low weight for better energy efficiency in transportation High mechanical strength enables product durability Transparency for optical applications and architectural glazing High heat resistance and reliable electrical insulation properties Excellent design flexibility that goes beyond that of glass

Outstanding thermal insulation properties Versatility allowing full spectrum of flexible to rigid foam applications Excellent abrasion resistance and rebound resilience Durability for reliable protective coatings

AutomotiveConstruction Electro / Electronics

CAS: Coatings, Adhesives, Specialties

Increased Energy Efficiency in Cars Through Polycarbonates


Growth drivers

Polycarbonates Heat stability and optical quality enable new

LED-based lighting systems

Flame-retardant polycarbonate blends protect batteries used in future cars with hybrid engines

Car body parts made from polycarbonate blends reduce weight

Automotive glazing out of polycarbonate combines high weight saving potential with outstanding thermal insulation

Broad global political initiatives promoting e-mobility

Increasing use of electrical devices requires flame retardancy of plastics

Polycarbonate glazing offers a weight advantage of 30-50% compared to real glass

84m light vehicles* produced globally in 2013, estimated CAGR until 2018: ~5%

*includes cars and light commercial vehicles up to a weight of 6tPage 166

Polyurethane-based Insulation for Residential & Commercial Buildings


PUR Isoboards for Thermal Insulation

Growth drivers EU: From 2020 on, new

buildings have to be constructed as “nearly zero-energy buildings”

US: New standard requires 30% less energy use for renovated homes and commercial buildings

1 kg polyurethane saves 360 to 755 kg CO2 emissions*

PUR insulation in construction in 2013 approx. €6bn, esti-mated CAGR until 2018: ~8%

*Additional insulation, savings over entire product life-cycle of 50 years, including production and end-of-life stages; PUR: polyurethane

External Thermal Insulation Composite Systems (ETICS) save >25% energy compared with other insulation materials

Joint solution development with key industry players to fulfill high industry requirements

PUR Metal Sandwich Panels Prefabricated and mainly applied for industrial

and commercial buildings as well as cold storage

Easy handling and fast site assembly

Page 167


Polyurethane-based Insulation in Cold Chain

Growth drivers Globally more stringent energy

saving regulations Increasing demand for trans-

porting temperature sensitive goods

Increasing standard of living in emerging markets triggers continuously growing demand for appliances

PUR in refrigerator industry 2013: approx. €2.7bn, estimated average growth rate of ~6% p.a.

Refrigerators Refrigeration accounts on average for 20% of

a household’s electricity consumption

Replacing all old refrigerators with A++ appliances could cut annual CO2 emissions in the EU by 22 million metric tons

PUR insulation increased energy efficiency of refrigerators by 65% from 1950-2005

BMS’s innovative Baytherm® Microcell foam: Reduces pore size of foam up to 40% Reduces thermal conductivity up to 10%

PUR: polyurethane

PU-Dispersion PU Leather Production


4 billion square meters of PU leather produced worldwide using solvent-based (DMF) process

Global apparel & footwear brands have strong focus on finding best chemistry to minimize impact on people & the environment

First projects moved into commercial trial stage, launch in the market expected in 2014

DMF: dimethyl formamidePage 169

PU leather is an important class of material used in footwear, apparel & accessory for fashion and sportswear as well as in automotive seating

Impranil® PUD are polyurethane resins supplied in water instead of solvent

They enable a new PU leather production process also with no solvent and significantly reduced water and energy consumption

Status & growth drivers

PU-Dispersion as a Key Component for Earthquake Wallpaper


Status & growth drivers Development together with the

Karlsruhe Institute of Technology (KIT) and KAST (manufacturer of the “wallpaper”)

Patent filed and granting pending

1.3bn people live in regions at risk for earthquakes

System developed to retrofit existing buildings (e.g. hospitals and schools)

First commercial sales expected in 2014

Page 170

The EQ-Top system features a tear-resistant woven fabric applied with an adhesive directly to the wall, forming a permanent bond

In the event of an earthquake, the “wallpaper” holds large areas of the masonry together

The key component of the system is the adhesive formulated with our Dispercoll® U, a waterborne polyurethane dispersion

investor handout meet management 2014 in leverkusen

Investor Relations