Q3 2012 Investor Conference Call Presentation
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This document summarizes Bayer's Q3 2012 results and provides an outlook for fiscal year 2012. Key points include: 1) Bayer's HealthCare and CropScience divisions continued their upward trends in Q3 2012, though reported earnings were impacted by special charges. 2) The company's innovation pipeline made significant progress and strategic acquisitions were completed in Q3. 3) Financial outlook for 2012 is reiterated, with core EPS expected to increase approximately 10% over 2011.
Q3 2012 Investor Conference Call Presentation
- 1. Investor Conference Call Q3 2012 Results October 30, 2012 / Marijn Dekkers, CEO
- 2. Disclaimer This presentation may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayer’s public reports which are available on the Bayer website at www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments. Page 2 • Investor Handout • Q3 2012
- 3. 3rd Quarter 2012 – On Track for a Successful 2012 Upward trend at HealthCare and CropScience continued Reported earnings impacted by high special charges Innovation pipeline with significant progress Further strategic progress with the acquisitions of Schiff, Teva’s US Animal Health business and AgraQuest Financial Outlook 2012 reiterated: Core EPS expected to increase by about 10% Page 3 • Investor Handout • Q3 2012
- 4. 3rd Quarter 2012 – On Track for a Successful 2012 Sales EBIT EBITDA Core EPS in € million adjusted* % currency & portfolio adj. in € million in € million in € 9,665 8,670 1,845 1,805 1.20 1.12 1,099 838 Q3’11 Q3’12 Q3’11 Q3’12 Q3’11 Q3’12 Q3’11 Q3’12 +5% -24% +2% +7% *before special items Page 4 • Investor Handout • Q3 2012
- 5. Regional Performance – Growth Led By USA and Emerging Economies In € million, ∆% yoy Fx adjusted Q3’12 Group Sales by Region Emerging Economies Emerging +7% USA Economies¹ ~1,530 +9% +7% 21% +11% 39% ~1,330 +10% 30% Western 10% ~500 -1% Others² Europe +2% ~430 +1% Group €9,665m; +5% Emerging Latin Eastern Africa & Asia³ America Europe Middle East ¹ Emerging economies include: Latin America, Asia w/o Japan, Australia, New Zealand, Africa and Middle East incl. Turkey, Eastern Europe Page 5 • Investor Handout • Q3 2012 ² Others = Japan, Australia, New Zealand, Canada ³ Emerging Asia = Asia w/o Japan, Australia, New Zealand
- 6. 3rd Quarter 2012 – Cash Flow and Net Debt Development Cash Flow in € million, Net Debt in € billion Q3’12 Cash Flow Net Debt Development GCF NCF Invest- oFCF cont. ments 7.9 -€1,106m 6.8 1,023 1,989 486 1,503 ∆% y-o-y -23 +26 +37 +23 Q2´12 Q3´12 Page 6 • Investor Handout • Q3 2012
- 7. HealthCare – Gained Further Growth Momentum In € million, ∆% yoy, () = Fx & portf. adjusted Q3’12 Sales Earnings Consumer Adj. Adj. 36% Pharma Health EBITDA* EBIT* +13% (+6%) +12% (+5%) 1,985 2,734 1,297 +6% 1,226 972 +7% 827 +8% 909 768 549 613 +12% HealthCare €4,719m; +12% (+5%) 458 470 +3% 360 359 0% Price Volume Fx Portfolio +1% +4% +7% 0% Q3‘11 Q3‘12 Q3‘11 Q3‘12 *before special items Page 7 • Investor Handout • Q3 2012
- 8. Strengthening Consumer Health – Acquisition of Schiff Nutrition International, Inc. Schiff, headquartered in Utah, USA, is an NYSE listed company and projects fiscal year 2013 sales above $370m Product portfolio comprises nutrition supplements with well known brands The acquisition is a significant strengthening of strategic meaningful and strong growing sectors of the nutrition supplements market in the US Cardiovascular Joint Care Immune Support Digestive Support BHC-CC OTC Solutions SHF Nutrition Supplements Purchase price: $1.2bn, closing targeted before year-end Transaction values Schiff’s business at 17.8 times consensus fiscal year 2013 EBITDA Accretive by 3 Eurocents to 2013 core EPS, dilutive to reported EPS by 2 Eurocents in 2013, expected to be accretive thereafter Page 8 • Investor Handout • Q3 2012
- 9. CropScience – Growth Momentum Continued In € million, ∆% yoy, () = Fx & portf. adjusted Q3’12 Sales Earnings Environmental Crop Protection Adj. Adj. Science +18% (+12%) EBITDA* EBIT* +14% (+9%) 130 97 1,414 189 +15% 165 68 +48% Seeds +49% (+39%) 46 CropScience €1,641m; +19% (+13%) Price Volume Fx Portfolio +1% +12% +7% -1% Q3‘11 Q3‘12 Q3‘11 Q3‘12 *before special items Page 9 • Investor Handout • Q3 2012
- 10. MaterialScience – Further Sales Growth In € million, ∆% yoy, () = Fx & portf. adjusted Q3’12 Sales Earnings Polycarbonates Polyurethanes Adj. Adj. -4% (-11%) +16% (+10%) EBITDA* EBIT* 720 1,572 348 333 -4% CAS** +4% (+3%) 512 196 177 -10% IO*** 188 +9% (+5%) MaterialScience €2,992m; +8% (+3%) Price Volume Fx Portfolio 0% +3% +6% -1% Q3‘11 Q3‘12 Q3‘11 Q3‘12 *before special items Page 10 • Investor Handout • Q3 2012 **CAS: Coatings, Adhesives, Specialties *** IO: Industrial Operations
- 11. Fiscal 2012 – Group Outlook Reiterated Sales ∆ Fx & portf. adjusted, EBITDA before special items ∆ vs. 2012E 2012E 2011 2010 Original Actual ~3% or 4-5% to Sales €36.5bn +6% ~€37bn €39-40bn* High single-digit Adj. EBITDA €7.6bn +7% Slightly improve % increase Core EPS €4.83 +15% Slightly improve ~10% *Assuming Fx rates end of Q3’2012 Page 11 • Investor Handout • Q3 2012 Outlook depends on specific planning assumptions as detailed in the Annual/Quarterly Report
- 12. Fiscal 2012 – Guidance By Subgroup Sales to increase 3% to 4%. HealthCare Adj. EBITDA to grow by mid- to high-single-digit percentage. Sales to increase slightly. Pharma Adj. EBITDA to grow mid-single-digit percentage. Consumer Sales to increase mid-single-digit percentage. Health Adj. EBITDA to grow high-single-digit percentage. Sales to increase by ~10%. CropScience Adj. EBITDA to grow by ~20%. Small increase in sales versus prior year. Adj. EBITDA to remain level with prior year. MaterialScience Q4’12: Sales and adj. EBITDA significantly above weak Q4’11 Sales ∆ Fx & portf. adjusted, EBITDA before special items Page 12 • Investor Handout • Q3 2012 Outlook depends on specific planning assumptions as detailed in the Annual/Quarterly Report
- 13. Investor Conference Call Q3 2012 Results October 30, 2012 / Marijn Dekkers, CEO