Archiv Investor Handout June 2002

Investor Handout
1st Quarter 2002 Results
Investor Handout June 2002
Safe Harbour
This presentation contains forward-looking statements based on current assumptions and forecasts made by Bayer Group 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 our public reports filed with the Frankfurt Stock Exchange and with the U.S. Securities and Exchange Commission (including our Form 20-F). The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.
1
.
A Far-Reaching Transformation
Focus Portfolio management Capital allocation Outcome Optimization of business mix
Strict capital discipline
Organization
Management holding structure
Efficiency improvement
Ideally prepared for next upswing
Corporate culture
Entrepreneurship, performance orientation
to significantly increase corporate value
2
.
Acceleration of Portfolio Management: Nearly 16 bn since 96

Sales in million
Bayer 7,500 Acquisitions1)
G G G G G G G G G G G
ACS2) 4,300 3) Flint 50 CSM 130 Sybron 230 Cytec paper chemicals 70 Polyols & PO j.v. 800 Gustafson (50%) 110 Chiron Diagnostics 500 Graphic Arts 450 Sheet business 200 Roche j.v. 200
Divestitures1) 8,300
G G G G G G G G G G G G G G
1) 2) 3) 4)
major examples since 1996 2001 sales; subject to regulatory approval 2004 estimate 300 pending
Household insecticides4) 390 Haarmann & Reimer4) 870 4) Rhein Chemie 300 PolymerLatex (50%)4) 200 4) Spandex fibers 220 Acrylic fibers 160 Erdlchemie 460 DyStar 400 Agfa 4,350 Titanium dioxide 210 Silicones 220 Citric acid 250 Enamels 100 Skin & body care 115
3
Ov.
Proactive Portfolio Management1)

million
1998
+ Chiron + Millennium
1999
+ Oncogene + Lion Bioscience Allergens +
2000
Rid Schein Myriad Tropon Basics
01/022)
+ CuraGen + Aventis Behring4) Generics Household insecticides2) + Mikado + ACS2) Acrylic fibers Rhein Chemie2) Polymer Latex2) Organic Pigments US2) Erdlchemie Covexx Films Haarmann & Reimer2) 7,450
Acqui sitions
1,300
HC
+ Gustafson + Seed treatment + PC shields
Ag
+ Pbi Home & Garden + PC shields + Laserlite + Elastochem
+ Flint + Misung Biologicals + Lyondell
8,500
2,900
Pol
Ch
Citric acid TiO2 Silicones Zeolites
DyStar
+ Sybron + CSM + Cytec paper chemicals Solar-grade Silicon 4,160
530
Acqui sitions
1) 2) 3) 4)
1,440
360
13,4003)
Major examples, acquisition prices rounded pending/subject to regulatory approval/as of Apr. 02 incl. Agfa & others Non-binding letter of intent, subject to relevant approvals
Portfolio Optimization Continues

Acquisitions/ Joint Ventures
Divestitures
2001 Jan
+ Mikado
2001 May
Erdlchemie Haarmann & Reimer2) PolymerLatex2) Rhein Chemie2) Generics2) (F, SA, E)
Dec Aug + Aventis CropScience1) 2002 Jan 2002 Feb + Aventis Behring3)
Real estate Organic pigments
Mar
Household insecticides2)
1) subject to relevant approvals 2) pending 3) Non-binding letter of intent to establish a joint venture, Subject to due
diligence, the negotiation of a final agreement, approval by the boards of both companies and regulatory authorities
5
.
Strategic Priorities
Health Care
Find strategic partner
CropScience
Successfully manage ACS integration
Gain market share Optimize regional presence Exploit full synergy potential Achieve margin target Develop position of Agbio
Polymers
Expand global leadership
Optimize business mix Concentrate on high-valueadded polymers Exploit growth potential in Asia Research new areas of applications Achieve specific efficiency improvements
Chemicals
Continue restructuring
Life cycle management of established products Successful launch of new products Build the pipeline Establish new business group Biologicals Achieve Diagnostics restructuring targets
Streamline portfolio rigorously Strengthen specialty business Consider all options for cooperations Achieve targeted cost savings Find long-term solutions for Basic, Fine and Specialty Chemicals
Bayer Health Care: Strong Presence in Main Areas of the Business

Sales 2001: 10.7 bn
Consumer Care G Aspirin G Alka-Seltzer G Canesten 20% Pharmaceuticals G Cipro G Adalat G Avelox G Trasylol 44%
19% 8% 9%
Diagnostics G Glucometer Elite G Advia Centaur G ACS
Animal Health* G Advantage G Baytril
Biologicals G Kogenate G Gamimune
* Animal Health business is part of Health Care effective January 1, 2002
Building a New Biologicals Company*

Bayer Biologicals Sales 2001: 945 m
G Combination of Bayers
Biologicals with Aventis Behring

G Bayer would own a substantial
Kogenate Others
249 26 % 121 13 % 101 11 % 131 14 % 343 36 %
majority interest
G Option of acquiring the
remaining interest at a later date

G Attractive long-term growth
prospects
G Reliable and steady plasma
supply
G Potential to optimize plasma
utilization Albumin Prolastin Gamimune

G Potential to increase efficiency
in quality assurance and manufacturing processes

G Stronger pipeline and
technology platform
in million euros * Non-binding letter of intent to establish a joint venture, subject to due diligence, the negotiation of a final agreement, approval by the boards of both companies and regulatory authorities
A World Class Drug Discovery Platform

Millennium CuraGen Myriad Genome Therap. Incyte Nova DX Affymetrix Dyax Onyx Oxford Glyco Science Lion Bioscience CyBio Novalon Receptron Pharmacopeia ArQule ComGenex Oxford Asymmetry Genzyme Genetics Institute Morphosys CuraGen
G Bioinformatics
G More than 1bn
Genomics
patho mechanism molecular target
investment committed
G US $ 465 million
Functional Genomics Proteomics Bioinformatics High Throughput Screening Combinatorial Chemistry Substance Libraries
genomics cooperation with Millennium alliance with Lion Bioscience

G First risk/reward
screening
optimization
sharing agreement with CuraGen
Toxicogenomics
Substantial Growth of the Pipeline

Research
Number of candidates/ stage 24 Number of candidates/ year
Development
1998 2001
20 13 9 5
13 9 5 2 5 4
97
99
01
04*
* objective
Preclinical
Phase I
Phase II
Phase III
Phase III / NDAs

G Vardenafil: G G G G
highly selective and potent PDE 5 inhibitor, filed in US, EU and Japan Cipro OD: innovative once daily formulation Acarbose IGT: new indication for Glucobay / Precose Repinotan: intravenous drug for the treatment of acute stroke Faropenem: new broad spectrum antibiotic
10
HC
Vardenafil: The New Blockbuster

G Peak sales potential > 1 bn G A highly selective and potent PDE 5 inhibitor G Significant improvement in key efficiency parameters irrespective of
age, severity and etiology G A very favorable safety profile G Global co-promotion partner (except Japan): GSK G NDA submission: 9/2001 US, Mexico 10/2001 Canada, South Africa 12/2001 Europe, Japan Improvement of erections after treatment with Vardenafil
% Yes General Population 80% 65% 85% 72% 57% 59% 65% Diabetics / Prostatectomized men
28% 13% 13%
Placebo 5 mg 10 mg 20 mg
Placebo
10 mg
20 mg
11
Health Care
CropScience
Polymers
Chemicals
12
ACS Acquisition Agreement*

million
Acquisition price
Sales (2001) StarLink
7,250 (incl. debt, 100% of shares) 4,300 Technology and potential liabilities remain with Aventis S.A. approx. 500 per year approx. 500 approx. 4,000 (over 12 years) June 03, 2002
Synergies Restructuring costs Goodwill**
Closing
* The acquisition of Aventis CropScience is subject to regulatory approval ** Potential reduction depending on divestment structure
13
Complementary Strengths: Bayer and ACS
Strengths Bayer
Strengths ACS
Product portfolio: Insecticides, Fungicides Technical competence Strong presence in Europe
Product portfolio: Herbicides, Insecticides Strong presence in all important regions and crops Biotechnology and Seed Good position with Environmental Science
Strong position in speciality markets: GPS, Seed Treatment High profitability
14
Bayer CropScience: Combination of Two Strong Companies

% of total* 2001 Sales: 6.5 bn Market Share: ~ 20 %
BioScience Environmental Science Insecticides Herbicides Fungicides (
3% 12 %
(24 % ms)
1 32 %
(26 % ms)
1 3
31 %
(14 % ms)
22 %
(22 % ms)
) market share
market ranking
* Pro-forma combination 2001 including Bayer`s Environmental Health business and including estimated post divestment impact
15
EU/FTC-Approval of the ACS-Acquisition

The European Commission and U.S. FTC approved the acquisition of Aventis CropScience < 10 percent of the combined business ( 650-700 m) to be divested
Insecticides Global business for fipronil based products for agrochemical applications. Option to license back ex USA and EU Business for certain specialty insecticides Fungicides EU business for ACS fungicides, mainly used for seed treatment Herbicides EU business for metamitron (Goltix), flucarbazone business (Everest)
Strategic rationale for the acquisition remains intact
16
.
Health Care
CropScience
Polymers
Chemicals
xx
Leading Ag Companies - Turnover 2001

million (including Seeds & Biotechnology) 1. Syngenta 2. Bayer CropScience* 3. Monsanto 4. DuPont 5. BASF 6. Dow 7. MAI 8. Sumitomo 9. FMC 10. Nufarm 876 818 729 589 4.291 3.478 3.174 7.062 7.011 5.821
* Pro-forma basis w/o divestments Source: Phillips McDougall
17
.
Customer Structure
Sales 2001: 14.5 bn (Polymers & Chemicals)
20 % Health Care* Polymers 13 % 39% 12 % 16 % 10% 13% Chemicals 25 % 8% 6%
Automotive Electronics Construction Chemicals Furniture Textile, Leather & Footwear Others
38%
CropScience*
* Animal Health business included in Health Care
18
.
Concentration on High-Value-Added Polymers

PVC
14%
PP
16%
PS 7% PE
28%
1% 3% 3%
PET 6% 4% 10% 4% 4% Thermosetting Resins

Others Coatings PU
Solid Rubber
Engineering Thermoplastics
Others PC ABS
World market polymers 01; Total 190m tons
19
.
Global Leadership in High-Value-Added Polymers

Sales 2001: 10.8 bn
Polycarbonates Styrenics sales% ms% 40 35 30 15 >5 > 20 > 20 # 2 2 6 2 2
Semicrystalline Thermoplastics 10 Fabricated Products 10 TPU 5
31% Plastics 20% Rubber 19% Coatings and Colorants 30% Polyurethanes
sales% ms% # TDI MDI Polyols sales% ms% Isocyanates Adhesives Colorants Others 38 14 25 23 > 50 34 24 # 1 1 1 17 33 43 25 26 26 1 1 1
ms = Market share # = Ranking
20
Health Care
CropScience
Polymers
Chemicals
21
Chemicals Business Portfolio and Operational Performance Substantially Improved

Sales 4,898 m Inorganics Organic Chemicals Specialty Products H.C. Starck EC Erdlchemie DyStar Haarmann & Reimer 1996 H-acid Solar-grade silicon Titanium dioxide Silicones Citric acid Enamels Abrasives & Refractory divested + CSM divested to be divested Divestitures 2,600 Headcount
* including 3,800 of H & R
Sales 3,748 m Basic & Fine Chemicals + Cytec + Sybron Specialty Products
H.C. Starck
regrouped
Wolff Walsrode 2001
Acquisitions 480 10,000*
22
Bayer Chemicals Attractive Opportunities in Specialist Applications

Sales 2001: 3.7 bn
H.C. Starck Metallic powders Mill products Ceramic powders Basic & Fine Chemicals Fine chemicals 27 % Basic chemicals 49 % Inorganic basic chemicals 22 % Others 2%
22% 12%
27%
39%
Specialty Products Leather chemicals Textile auxiliaries Paper chemicals Polymer additives Material protection Ion exchange
Wolff Walsrode Cellulose derivatives Plastic films
22 % 27 % 21 % 11 % 8% 10 %
23
Corp.
Strategic Priorities*
Sales (cont.) 2001: 28.938 m
Health Care Find strategic partner CropScience 10% 38% Successfully manage ACS integration
39% 13% Polymers Expand global leadership Chemicals Continue restructuring
* Animal Health business included in Health Care The acquisition of Aventis CropScience is subject to regulatory approval
24
Organization
Corporate culture
25
Strict Capital Spending Discipline Enforced

million
1.8
2,703
2,632
1.5
2,647
2,139
2,617
2,516
1,811 1,543
1.2 1.0 1.0
1998
1999
2000
2001
Plan
CapEx: Capital Expenditures D&A: Depreciation & Amortization
CapEx/D&A-Ratio
26
Organization
Corporate culture
27
Building a Highly Competitive Business Platform
G Stronger focus on markets, core competencies and business
performance
G Strengthen entrepreneurial approach, direct management and
direct responsibility for earnings

G Reduce complexity of corporate organization and governance G Achieve necessary flexibility for strategic partnerships and
integration of acquisitions
G Exploit cross-business-group synergies in business area
companies more efficiently

G Enhance visibility and competitive stance of service functions
28
The New Bayer

Principle of new corporate structure Most effective possible support for businesses and sufficient flexibility for mastering strategic challenges
Group Management Board Corporate CenterDepartments
Bayer Health Care AG
Bayer Crop Science AG
Bayer Polymers AG
Bayer Chemicals AG
Services Bayer Business Services GmbH Bayer Technology Services GmbH Bayer Standort Dienste GmbH & Co. OHG
29
The New Group Management Board

Werner Wenning Chairman
G G G G
Corporate Policy Corporate Coordination Communication Investor Relations
Dr. Richard Pott Strategy, Human Resources and Labor Director Klaus Khn Finance
Portfolio Management G Allocation of resources G Group HR policy G HR Management and development

G
Finance G Planning and Controlling G Tax and Legal G Mergers & Acquisitions
G
Dr. Udo Oels Technology and Environment Werner Spinner Marketing, Regions and Services
Technology Management G Innovation Management G Environmental and Safety Policy G Technology Excellence Initiatives
G
Business Excellence Initiatives G Regions G Business Services G Information and Knowledge Management
30
The New Bayer Holding Structure
Group Management Board
Corporate Center-Departments
Corporate Planning and Controlling Int. HR Management
Finance
Communications
Legal, Intellectual Properties, Insurances
Health, Safety and Environment Management
Investor Relations
Taxes
Corporate Auditing
31
Bayer HealthCare AG
Board of Management
Chairman Head of Animal Health Head of Pharma Administration Dr. F. Morich Prof. Dr. F. Berschauer Dr. W. Plischke W. Baumann
Global Executive Committee
Head of Biological Products G. Riemann Head of Diagnostics Head of Consumer Care Head of Strategy R. Classon G. Balkema N. N.
Animal Health
Biological Products
Consumer Care
Diagnostics
Pharma
Administr. & Services
Strategy
Germany
USA
USA
USA
Germany
Germany
USA
32
Bayer CropScience AG
Board of Management
Chairman Business Operations Technology Administration Dr. J. Wulff Dr. E. Zirakparvar Dr. B. Garthoff W. Scherf
Portfolio Management
Europe France
Environmental Science France BioScience USA France
Planning, Contr. & Coordination Accounting
Research
NAFTA
Information Technology Business Processes
Development
Cono Sur Brazil
Procurement Communications Legal & Patents
Industrial Operations
North-East Asia Japan
Supply Chain
International Germany
Human Resources
33
Bayer Polymers AG
Board of Management
Chairman Dr. H. Noerenberg
Global Executive Committee
Head of Europe
Dr. J. Dahmer
Innovation, Information, Services Dr. D. Hillenbrand Operations Dr. T. van Osselaer
Head of America I. Paterson Head of Asia Dr. A. C. Heitmann
Innovation
Product units
Europe
America
Asia
Germany
USA
Hong Kong
Services
Technology
34
Bayer Chemicals AG
Board of Management
Chairman Dr. U. Koemm
Technology, R & D, Services Dr. M. Wienkenhver Business Units Regions B. Olson
H. C. Starck
Research and Development
Units
Technology Planning, Contr., Reporting Business Services
Regions
35
Organization
Corporate culture
36
Productivity, Employees and Personnel Expenses

251 175 193 258 Sales per + 47 % employee (EUR thousands)
142.2 75.2
145.1 113.9 80.9 63.5 62.3 112.0
Employees (thousands) Total Foreign
21 % 17 %
67.0 1996 31
64.2 1998 29
50.4 2000* 25
49.7 2001* 26
Domestic
26 %
Personnel expenses (% of sales)
* Continuing operations
37
Efficiency Improvement Program

Planned savings of 1.8 bn by 2005
G Number of projects: G Total one-time charges: G Headcount reduction:
9 640 5,000
54 235 329
511 Identified Net Savings (after excep.)
1,734
605 9801 2002 2003 2004 2005 Total
million
38
Working Capital Initiative

Time Objective
Reduction of working capital
1 bn
End 01
Improvement of working capital processes and organization

G Receivables Management G Payables Management G Inventory Management End 02
11.5 bn
G Broadly based program initiated G Wide range of actions identified
39
Strong Working Capital Performance

million
% YoY
3,859
+24.8
Net cash flow Gross cash flow
2,923 1,821 1,067 768 534 297 766 235 770 441 1,175 936
187.2% 29.8
1,207 647
Change in net working capital
104
84
822
1,375
2,009
W. Cap. improvement (prev. year)
Q1
Q2
Q3
Q4
Year 2001
40
Organization
Corporate culture
41
Q102 Financial Highlights

million
Q102

Q101 7,901 7,440 848 912 126 722 438 442 0.61
% 8.5 6.5 0.9 45.9 24.6 5.4 + 19.6 + 18.3 + 18.0
Sales Sales (cont.) Operating income Operating income pre-exceptionals (cont.) Non-operating result Pre-tax income After-tax income Net income Earnings/share (Euro)
7,233 6,957 840 493 157 683 524 523 0.72
42
Components of Q1 Sales Trend

million
2001 Sales Discontinuing Continuing Acquisitions / Divestitures 7,901 461 7,440 299 4.0 Divestitures Baycol Covexx ChemDesign H-acid + 28 281 + 69 6,957 + 0.4 3.8 + 0.9 6.5 299 246 25 20 8 2002 7,233 276 % 8.5
+ Currencies Prices + Volumes Continuing
43
Q1 Comparable Operating Income

million
2002 OPI reported Segments Reconciliation Discontinuing operations H&R Fibers Erdlchemie OPI continuing Exceptional items (cont.) OPI underlying continuing operations 840 435 386 19 22 (3) 821 328 493 2001 848 872 (48) 24 24 (15) 15 824 (88) 912 0.4 % 0.9 50.1
45.9
44
Q1 Exceptional Items
2002
million HealthCare CropScience Polymers Chemicals
Reconciliation
Charge Gain Net Charge
2001
Gain Net %
14 0 102 6
0 0
14 0
14 0 18 51 5 88 17 105
0 0 0 0 0 0 0 0
14 0 18 51
0 0 84 + 45
0 102 0 6
2 + 452 + 450 124 + 452 + 328 0 0 0
5 + 455 88 + 416 17 + 17
Cont. Discont. Total
124 + 452 + 328
105 + 433
45
Q102 Sales by Region

Total 7,233 million, 8.5 % Continuing operations 6,957 million, 6.5 %
Germany 11.7 % 1,989 Europe 8.2 % 3,297 494 Latin America 6.8 % 900 2,266 North America 3.9 %
Far East/Asia/Pacific 6.5 %
point of origin
46
Q102 Business Performance

million
Total (cont.)
6,957 6.5% 840 0.1% 493 45.9%
HealthCare*
2,410
6.1%
230
37.2%
244
35.8%
Crop Science
866
+ 6.4% 144 32.4% 144 32.4%
Polymers
2,648
7.0%
10 71
104.7% 33.0%
92 77 64
60.0% 41.7% 45.4%
Chemicals
Reconciliation
847 186
17.2% 2.6%
386
Sales
Op. Income (reported)
Op. Income (underlying)
* Including Animal Health
47
Pharmaceuticals - Top 10 Products

million
Q102 (1) Ciprobay (2) Adalat (3) Kogenate (4) Gamimune (5) Glucobay (6) Avelox (7) Trasylol (8) Prolastin (9) Nimotop (10) Fraction V 407 207 84 76 74 68 44 42 33 21 % + 21 23 + 75 + 25 1 5 + 19 + 33 + 10 10
48
Q102 Non-Operating Result
million Non-operating result
Q102 157 + 3
Q101 126 + 31 88 68 + 17 18
% 24.6 90.3 + 29.5 + 1.5 16.7
Income (expenses) from affiliated companies net Interest expense net Interest portion pension provisions Exchange gain net Miscellaneous net
62 67 10 21
49
Q1 Overview by New Reporting Segments

Sales ( million) Pharma CC + DS Animal Health* HealthCare CropScience** KA + KU PU + LS Polymers Chemicals OPI pre-except. ( million) Pharma CC + DS Animal Health* HealthCare CropScience** KA + KU PU + LS Polymers Chemicals Q101 1,422 964 180 2,566 814 1,522 1,324 2,846 1,023 Q101 285 73 22 380 213 185 45 230 132 Q102 1,257 950 203 2,410 866 1,308 1,340 2,648 847 Q102 131 63 50 244 144 24 68 92 77 % 11.6 1.5 + 12.8 6.1 + 6.4 14.1 + 1.2 7.0 17.2 % 54.0 13.7 + 127.3 35.8 32.4 87.0 + 51.1 60.0 41.7
* Animal Health ex. Hygiene is part of HealthCare effective January 1, 2002 ** Hygiene business included in CropScience effective January 1, 2002
50
2001 Financial Highlights

million
Q4 G Sales G Sales (cont.) G Operating income G Operating income (cont.) G Operating income pre-exceptionals (cont.) G Non-operating result G Pre-tax income G After-tax income G Net income G Earnings/share G Dividend
Euro Euro
% 8.5 4.7 55.0 50.7 41.7 + 37.8 60.0 45.9 43.0 43.0
2001 30,275 28,938 1,611 1,242 1,855 496 1,115 961 965 1.32 0.90
% 2.2 + 1.1 51.0 59.5 42.2 67.0 62.7 47.8 46.9 47.0 35.7
7,372 7,115 256 251 356 79 177 139 142 0.19
51
Components of 2001 Sales Trend

million
2000 Sales Discontinuing Continuing + Acquisitions/ Divestitures 30,971 2,356 28,615 859 + 3.0
Acquisitions Lyondell CSM Flint Mikado Sybron Cytec Others Divestitures Covexx Biologicals (AH) H-acid Bayer Solar + + + + + + + + 983 202 133 104 46 206 83 209 124 61 30 18 15
2001 30,275 1,337
% 2.2
+ Currencies + Prices Volumes Continuing
81 298 915 28,938
+ 0.3 + 1.0 3.2 + 1.1
52
2001 Quarterly Sales Development*

million
2001 4th quarter G H&R G Fibers G EC G DyStar Continuing operations 3rd quarter G H&R G Fibers G EC G DyStar Continuing operations 2nd quarter G H&R G Fibers G EC G DyStar Continuing operations 1st quarter G H&R G Fibers G EC G DyStar Continuing operations
* completely restated
2000 8,053 213 124 162 88 7,466 7,680 219 131 162 85 7,083 7,907 222 128 149 93 7,315 7,331 211 123 162 84 6,751
% 8.5
7,372 209 48 7,115 6,931 217 63 6,651 8,071 224 58 57 7,732 7,901 222 63 176 7,440
4.7 9.8
6.1 + 2.1
+ 5.7 + 7.8
+ 10.2
53
2001 Comparable Operating Income

million
2001 OPI reported G Segments G Reconciliation G Discontinuing operations 1,611 1,504 (262) 369 2000 3,287 3,303 (239) 223 68 51 99 5 3,064 (145) 3,209 59.5 42.2 % 51.0 54.5
H&R 73 Fibers (37) Erdlchemie (OPI + Sale) 333 DyStar* OPI continuing 1,242 G Exceptional items (cont.) (613) OPI underlying continuing operations 1,855
* accounted as at equity since 2001
54
2001 Quarterly OPI Development*

million
4th quarter G H&R G Fibers G EC G DyStar G Exceptional items OPI underlying continuing operations 3rd quarter G H&R G Fibers G EC G DyStar G Exceptional items OPI underlying continuing operations 2nd quarter G H&R G Fibers G EC (OPI + Sale) G DyStar G Exceptional items OPI underlying continuing operations 1st quarter G H&R G Fibers G EC G DyStar G Exceptional items OPI underlying continuing operations
* completely restated
2001 256 15 (10) (105) 356 (316) 20 (8) (1) (373) 46 823 14 (4) 319 (47) 541 848 24 (15) 15 (88) 912
2000 569 16 4 46 (6) (102) 611 724 15 13 20 5 (21) 692 960 22 18 19 3 (18) 916 1,034 15 16 14 3 (4) 990
% 55.0
41.7 143.6
93.4 14.3
40.9 18.0
7.9
55
FY 2001 Exceptional Items
2001
million
Charge Gain Net Charge
2000
Gain Net Net
Health Care 420 Agriculture Polymers 0
+ 41 379 0 0
160 0
+ 21 139 + 26 + 26
240 26
181 81 19 701
+ 31 150 + 13 +3 68 16
97 7 0
+7 + 31 + 34
90 + 24 + 34
60 92 50 468
Chemicals
Reconciliation
Cont. Discont. Total
+ 88 613
264 +119 145 24 0
23 + 316 + 293 724 + 404 320
24 + 317 151
288 +119 169
56
2001 Non-Operating Result
million Non-operating result Income (expenses) from affiliated companies net Interest expense net Interest portion pension provisions Exchange gain net Miscellaneous net
Q4 79 + 26 67 65 + 21 +6
2001 496 + 54 349 274 + 49 + 24
YoY 199 229 38 2 + 70 0
57
2001 Sales by Region

Total 30,275 million, 2.2 % Continuing operations 28,938 million, + 1.1 %
Germany 0.2 % 8,116 Europe + 0.6 % 12,999 2,316 Latin America + 3.4 % 3,817 9,806 North America + 1.1 %
Far East/Asia/Pacific + 1.5 %
point of origin
58
2001 Segment Restatements

million
2001 Segments w/o restatements
Chemicals 4,618 (16 %)
Restatements*
G Animal Health (988), w/o Environmental Health (129) to Health Care G Environmental Health to Crop Science
2001 Segments restated

Chemicals 3,749 (13 %)
Polymers 10,788 (37 %)
G H & R (872) to Discontinuing Operations G Electronic Chemicals (40) from Basic and Fine Chemicals to H. C. Starck G PolymerLatex (200) and Rhein Chemie (300) remain in Polymers until divested
Polymers 10,788 (39 %)
Agriculture 3,696 (13 %)
CropScience 2,708 (10 %)
Health Care 9,833 (34 %)
Health Care 10,692 (38 %)
Segments sales 28,938

* Sales figures for FY 2001
Segments sales 27,937
59
Health Care Full Year 2001

million
FY 01 9,833 Q4 1-9 Q3 1H Q2 2,737 7,096
2.3%
1.9
0.9
771 392
13.9 70.8 25.6
47.8 27.4
379 67 308 302 469

55.8%
2,167 4,929
+3.8%
234 158
84.6%
2,543
284 441
+4.1 37.0%
187.7
24 445
38.7%
92.8 77.5
97 344
74.8
+10 14
87 358
+5.3 %
Q1
2,386
+3.5 %
+9.2 %
Sales
Exceptionals (net)
60
Pharmaceuticals Top 10 Products 2001

million
Q4 01 (1) Ciprobay (2) Adalat (3) Lipobay (4) Gamimune (5) Glucobay (6) Kogenate (7) Avelox (8) Trasylol (9) Prolastin (10) Nimotop 740 223 14 83 84 106 57 45 42 30 % + 36 16 33 +5 16 7 + 61 + 11 14 2001 1,964 975 367 343 312 249 181 136 131 120 % + 10 16 42 2 0 49 + 37 + 30 6 7
61
Agriculture Full Year 2001

million
FY 01 3,696 Q4 1-9 Q3 1H Q2 817 2,879
+2.3%
+7.0 +27.7
625
+9.0
+7.0
0 0 0
625 125 500

12.7%
+12.0
787 2,092
+0.0%
125 500
16.4%
47 453
5.8% +2.9
59.8
47 453
7.0%
45.3
1,098
218
+1.4
218
+1.0
Q1
994
3.0 %
235
11.7 %
235
13.3 %
Sales
Exceptionals (net)
62
Polymers Full Year 2001

million
FY 01 10,788 Q4 1-9 Q3 1H Q2 2,467 8,321
+3.7%
1.0 +17.8
285 125 410

47.8%
71.2 161.6
149 46
2,650 5,671
+8.7%
5.6
434 79 513
39.6%
59.7 134.6 68.0
18 392
31.7% +1.5
91.5
63
81 432
27.6%
2,825
180
31.6
22
202
27.1
Q1
2,846
+16.9 %
212
32.1 %
18
230
27.9 %
Sales
Exceptionals (net)
63
Chemicals Full Year 2001*

million
FY 01 3,749 Q4 1-9 Q3 1H Q2 833 2,916
+16.3% +9.9 7.5
271 204
+3.5 48.2 83.0
26.8 87.8
866 2,050
+22.6%
67 +8
9 262
11.5%
17 187
27.0% +18.6
7 255
+20.9%
91.8
1,028
5 182
28.3%
94.0
122
+23.2
100 Q1 1,022
+27.0
+1.0 26.0 %
22 133
+18.8 %
82
%
51 Exceptionals (net) Op. Income (underlying)
Sales
* completely restated (without H & R)
64
Full Year 2001 Overview by New Reporting Segments

Sales ( million) Pharma CC + DS Health Care Crop Protection Animal Health Agriculture KA + KU PU + LS Polymers Chemicals OPI pre-except. ( million) Pharma CC + DS Health Care Crop Protection Animal Health Agriculture KA + KU PU + LS Polymers Chemicals 278 62 340 240 31 271 137 182 319 112 318 68 386 148 68 216 123 154 278 99 254 80 334 35 51 86 148 105 253 85 315 101 416 22 7 15 151 77 228 74 286 73 358 210 25 235 186 44 230 133 + 2.9 + 17.7 + 5.3 12.5 19.4 13.3 + 35.8 75.8 27.9 + 18.8 29 57 87 160 59 218 131 72 202 122 90.9 16.2 77.5 + 8.1 13.2 + 0.9 + 6.5 53.2 27.3 23.2 100 139.4 124 + 55.0 24 92.8 11 131.4 58 + 13.7 47 45.3 44 37 81 7 70.3 64.8 68.0 91.8 168 134 302 94 31 125 72 7 79 9 46.7 + 32.7 27.4 + 342.9 147.7 109.1 134.6 87.8 Q1/ 2000 1,394 911 2,304 795 230 1,025 1,365 1,069 2,434 805 Q2/ 2000 1,467 975 2,442 783 284 1,067 1,446 1,337 2,783 867 Q3/ 2000 1,527 991 2,518 463 259 722 1,476 1,332 2,808 837 Q4/ 2000 1,752 1,011 2,763 414 226 640 1,528 1,338 2,866 902 Q1/ 2001 1,422 964 2,386 779 215 994 1,522 1,324 2,846 1,022 Q2/ 2001 1,510 1,034 2,543 830 268 1,098 1,468 1,357 2,825 1,028 Q3/ 2001 1,143 1,024 2,167 526 261 787 1,343 1,307 2,650 866 Q4/ 2001 1,654 1,083 2,737 573 244 817 1,249 1,218 2,467 833
% + 2.0 + 5.8 + 3.6 2.0 6.5 3.0 + 11.5 + 23.9 + 16.9 + 27.0
% + 2.9 + 6.1 + 4.1 + 6.0 5.6 + 2.9 + 1.5 + 1.5 + 1.5 + 18.6
% 25.1 + 3.3 13.9 + 13.6 + 0.8 + 9.0 9.0 1.9 5.6 + 3.5
% 5.6 + 7.1 0.9 + 38.4 + 8.0 + 27.7 18.3 9.0 13.9 7.6
65
R & D and CapEx. Budgets for 2002

million
CapEx.
Polymers 16% 37% 15% Central 6% 7% 7% 25% Health Care Chemicals 13% 16% Crop Science
R&D
Health Care
Chemicals 58%
Crop Science
Polymers
2,335 (cont.)
(8.5 % to 2001)
2,440 (cont.)
(1.9 % to 2001)
Animal Health included in CropScience
66
Outlook 2002
Health Care
Higher operating earnings (pre-exceptionals) expected
Agriculture
Closing of ACS acquisition decisive
Polymers & Chemicals
First half expected to remain difficult Economic recovery expected during second half of 2002
Distinct improvement in net income targeted

Archiv Investor Handout June 2002

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Investor Handout

1st Quarter 2002 Results

Investor Handout June 2002

Investor Handout June 2002

Strict capital discipline

Management holding structure

Ideally prepared for next upswing

Entrepreneurship, performance orientation

to significantly increase corporate value

Investor Handout June 2002

Acceleration of Portfolio Management: Nearly 16 bn since 96

Investor Handout June 2002

Proactive Portfolio Management1)

+ Pbi Home & Garden + PC shields + Laserlite + Elastochem

+ Flint + Misung Biologicals + Lyondell

Citric acid TiO2 Silicones Zeolites

+ Sybron + CSM + Cytec paper chemicals Solar-grade Silicon 4,160

Investor Handout June 2002

Portfolio Optimization Continues

Real estate Organic pigments

Investor Handout June 2002

Investor Handout June 2002

Bayer Health Care: Strong Presence in Main Areas of the Business

Diagnostics G Glucometer Elite G Advia Centaur G ACS

Animal Health* G Advantage G Baytril

Biologicals G Kogenate G Gamimune

* Animal Health business is part of Health Care effective January 1, 2002

Investor Handout June 2002

Building a New Biologicals Company*

Biologicals with Aventis Behring

remaining interest at a later date

utilization Albumin Prolastin Gamimune

in quality assurance and manufacturing processes

Investor Handout June 2002

A World Class Drug Discovery Platform

G More than 1bn

genomics cooperation with Millennium alliance with Lion Bioscience

sharing agreement with CuraGen

Investor Handout June 2002

Substantial Growth of the Pipeline

Phase III / NDAs

Investor Handout June 2002

Vardenafil: The New Blockbuster

28% 13% 13%

Investor Handout June 2002

Investor Handout June 2002

ACS Acquisition Agreement*

Synergies Restructuring costs Goodwill**

Investor Handout June 2002

Complementary Strengths: Bayer and ACS

Product portfolio: Insecticides, Fungicides Technical competence Strong presence in Europe

Strong position in speciality markets: GPS, Seed Treatment High profitability

Investor Handout June 2002

Bayer CropScience: Combination of Two Strong Companies

BioScience Environmental Science Insecticides Herbicides Fungicides (

Investor Handout June 2002

EU/FTC-Approval of the ACS-Acquisition

Strategic rationale for the acquisition remains intact

Investor Handout June 2002

Investor Handout June 2002

Leading Ag Companies - Turnover 2001

* Pro-forma basis w/o divestments Source: Phillips McDougall

Investor Handout June 2002