Debt Investor Information - Status: March 31, 2020 - Bayer Investor Relations
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Debt Investor
Information
///////////
Status: March 31, 2020
Cautionary Statements Regarding Forward-Looking Information
Forward-Looking Statements
This release may contain forward-looking statements based on current assumptions and forecasts made by Bayer 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.
2 /// Bayer Debt Investor Relations /// Status: March 31, 2020
Our Business Areas
Crop Science Pharmaceuticals Consumer Health
Innovative chemical & biological Prescription products for cardio- Non-prescription medicines in the
crop protection, seeds & traits, logy, women’s health care, categories of dermatology, nutritional
digital technologies & services oncology, hematology, ophthalm- supplements, pain, cardiovascular risk
ology, radiology and other areas prevention, digestive health, allergy,
and cough & cold.
3 /// Bayer Debt Investor Relations /// Status: March 31, 2020
Our Strategic Levers are Set to Deliver Benefits for our Society and
Attractive Returns for our Shareholders
We develop a global leader in health and nutrition. We create value with
Shape a leader strategy-based resource allocation focused on profitable growth. We position
ourselves in attractive areas, in which we can achieve leading positions1.
We innovate at scale to address unmet societal challenges in health and
Deliver world-class
nutrition. We broaden our sources of good ideas, drive disruptive
innovation innovation and push the digitalization of our value chain
We see sustainability as an integral part of our business strategy and
Generate sustainable
operations. Our 2030 targets are in line with the UN Sustainable
impact Development Goals and the Paris Climate Agreement
Drive operational We consistently deliver against our financial targets with a focus on
performance profitable growth and returns
1. The Life Science fields of health and nutrition are characterized by an above-GDP growth trend, being innovation-driven, highly regulated and having a high profitability. We position ourselves in areas, in which we have
the ability to achieve leading positions and margins while growing ahead of competition.
4 /// Bayer Debt Investor Relations /// Status: March 31, 2020
Our Business: Global Megatrends in Health & Nutrition
Aging Population Growing Population Pressure on Ecosystems
People 60+ +2.2bn +50% -20%
Megatrends
more than people1
through -17%
doubling1 more food and feed
2050 required to meet Harvest losses from 2016 2050
growing demand2 climate change3
Significant loss in
>20% of total population1 arable land per capita4
Societal Preserve and Secure sufficient Use natural resources more
Needs restore health supply of quality food efficiently and responsibly
Our We are guided by our purpose, Science for a Better Life, striving to prevent and cure disease,
Mission improve everyday health and help feed a growing population.
In short: we contribute to health for all, hunger for none.
1 UNDESA 2017 (United Nations Department of Economic and Social Affairs, Population Division (2017). World Population Prospects: The 2017 Revision)
2 FAO 2017, (FAO Global Perspective Studies)
3 Nelson et. al, (2014); FAO 2016 “Climate change and food security”
4 FAOSTAT (accessed Oct 30, 2018) for 1961-2016 data on land, FAO 2012 for 2030 and 2050 data on land, and UNDEDA 2017: World Population Prospects for world population data
5 /// Bayer Debt Investor Relations /// Status: March 31, 2020
Bayer Key Financials
2019 Sales in €bn Capital Research & 2019 EBITDA before Special Items
Sales
Expenditures Development Expenses
Other 2019 2019
€0.2 €5.3bn
€6.0bn
Consumer
Health €4.8bn
€5.5
€2.9bn
Pharma
Group €18.0
€43.5 €1.1bn
Crop
Science CAPEX R&D Pharma Consumer Health Crop Science
€19.8
Net Financial Debt in €bn
8 Free Cash Flow in €bn
40 35.7
5.8 34.1
6 5.2
4.7 30
4.2
3.8
4 17.5
20
3.7 11.8
2 2.8
2.2 10
2.0
1.6
3.6
0 0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
FCF FCF net Dividend
6 /// Bayer Debt Investor Relations /// Status: March 31, 2020
Group Targets – Value Creation from Strengthened Base
20191 Guidance 20202 Target 20223
Sales 43.5 44-45 ~52
FX and portfolio adjusted in €bn
EBITDA 11.5 12.3-12.6 ~16
before special items in €bn
Core EPS 6.404 7.00-7.20 ~10
in €
Free Cash Flow ~5 ~8
4.2
in €bn
Net Financial Debt ~27 ~26-28
34.1
in €bn
1 As reported
2 Annual report 2019
3 Last Capital Markets Day end of 2018
4 From continuing operations
7 /// Bayer Debt Investor Relations /// Status: March 31, 2020
Bayer Pursues Conservative Financial Policy…
Financing instruments
// Syndicated credit facilities
Key objectives
Ensure liquidity and
// Global Commercial Paper program
creditworthiness
Long term target of
investment grade rating in
single A category
// Multi-currency bonds
Sustained increase in
enterprise value
// Hybrid bonds
// Equity-linked instruments
Prudent debt management with excellent access to diverse sources of liquidity
8 /// Bayer Debt Investor Relations /// Status: March 31, 2020
Ratings updated after announcement of settlement agreements
… and Remains Committed to Rating in Single A Target Category
Development of Ratings and Leverage1
Schering2 Monsanto2
4.2x 4.4x3
Merck OTC2
3.5x
3.4x
2.9x
2.5x Proven track record of
2.4x
2.6x 2.1x 2.7x3
disciplined deleveraging
2.5x 1.9x 1.9x 1.8x
1.6x
1.0x
(Net Financial Debt + Pensions – 50% of Hybrid Volume) / reported EBITDA before special items
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E LT- ST-
Agency Outlook
Agency Long Term Rating over time Rating Rating
S&P A BBB+ A- BBB S&P BBB Stable A2
Moody’s A3 Baa1 Moody’s Baa1 Stable P2
Fitch4 BBB+ A- A A- BBB+ Fitch4 BBB+ Stable F2
1 Figures as reported in the respective year’s annual report without restatements
2 Ratios of years were closing of acquisition took place are not fully comparable as EBITDA before special items of acquired business is only considered for months after closing
3 Full year 2018 multiple results in 3.7x instead of 4.4x if based on 2018 unaudited pro forma EBITDA of combined business as shown on Capital Markets Day in December 2018; Pensions 2020 flat at 2019 level
4 Solicited since 2018
9 /// Bayer Debt Investor Relations /// Status: March 31, 2020Bayer’s Maturity Profile is Well Balanced
Bond and Loan Maturity Profile1 (€bn) Currency Exposure incl. Derivatives2
as of March 31, 2020 as of March 31, 2020
Hybrid (first Call Dates)
7
Exchangeable Bond
Other
EUR Senior Bonds JPY
6 EUR
JPY Private Placements
USD RegS/144a
5 USD Term Loan
4 €35.4bn
Net Financial
3
Debt
2
1 USD
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 >=2030
1 Converted at EURUSD 1.10 and EURJPY 119
2 Based on quarter-end FX rates
10 /// Bayer Debt Investor Relations /// Status: March 31, 2020Overview of Bayer‘s Funding Structure
Net Financial Debt1 Nominal Volume of Mayor Instruments (bn)
Net Financial Debt1 as of March 31, 2020
Dec. 31, 2018 Dec. 31, 2019 March 31, 2020 Senior EUR Bonds €6.3
€ million € million € million
1 Senior USD Bonds $24.7
Bonds and notes / promissory notes 35,402 33,569 34,150
of which hybrid bonds2 4,537 4,528 4,529 JPY Private Placements ¥20.0
Liabilities to banks3 4,865 4,062 4,305 2 Exchangeable Bond €1.0
Lease Liabilities 399 1,251 1,216
Liabilities from derivatives4 172 123 113
3 Hybrid EUR Bonds €4.5
Other financial liabilities 556 89 228
Receivables from derivatives4 (137) (76) (371)
4 USD Term Loan $3.8
Financial debt 41,257 39,018 39,641
Cash and cash equivalents (4,052) (3,185) (2,289)
Current financial assets5 (930) (1,281) (1,628)
5 Other Sources of Liquidity
Shares in Covestro6 (596) (483) (325)
Net financial debt 35,679 34,068 35,399 Syndicated Loan Facility €4.5
1 For definition see Annual Report 2019, A 2.3 “Alternative Performance Measures Used by the Bayer Group.”
2 Classified as debt according to IFRS Commercial Paper Program $8.0
3 These include both financial and nonfinancial liabilities
4 These include the market values of interest-rate and currency hedges of recorded transactions
5 These include short-term receivables with maturities between 3 and 12 months outstanding from banks and other companies as well as financial
investments in debt and equity instruments that were recorded as current on first-time recognition
6 Covestro shares are held for risk management purposes relating to the exchangeable bond issued in 2017 that matures in 2020
11 /// Bayer Debt Investor Relations /// Status: March 31, 20201 Main Issuing Entities at Bayer Group
Bayer AG
Germany
Hybrid EUR
Bonds Bonds
Bayer US Finance LLC USD Bayer Holding Ltd. Bayer Capital Corp. B.V.
USA Bonds Japan Netherlands
Bayer US Finance II LLC JPY EUR
USD
Bonds Bonds
USA Bonds
Bayer Corp. USD
USA Bonds
Monsanto Company USD
USA Bonds
Instruments issued or
guaranteed by Bayer AG
Indirect Hold through other
entities
12 /// Bayer Debt Investor Relations /// Status: March 31, 20203 Hybrid Bonds at Bayer
2014 2015 2019 2020 2022 2024 2025 2027 2074 2075 2079
NC10 Issuance Jul 14 1st Call Date Jul 24 Maturity Jul 74
NC7.5 Issuance Apr 15 1st Call Date Oct 22 Maturity Jul 74
NC8 Issuance Nov 19 1st Call Date Aug 27 Maturity May 79
NC5.5 Issuance Nov 19 1st Call Date Feb 25 Maturity May 79
Hybrid Bond Coupon ( in%) Outstanding Volume (in bn €) Initial Credit Spread 1st Step-Up 2nd Step-Up
NC10 3.75 1.5 230 bps spread + 5Y Swap1 +25 bps/Jul 24 +75 bps/Jul 44
NC7.5 2.45 1.3 200.7 bps spread + 5Y Swap1 +25 bps/Oct 27 +75 bps/Jul 42
NC8 3.125 0.75 310.8 bps spread + 5Y Swap1 +25 bps/Nov 32 +75 bps/Nov 47
NC5.5 2.375 1 264.7 bps spread + 5Y Swap1 +25 bps/May 30 +75 bps/May 45
1 Swap is reset every fifths year starting with the first call date
13 /// Bayer Debt Investor Relations /// Status: March 31, 20204 $56.9bn Monsanto Acquisition Loan Facilities
Transaction Value
at Closing Acquisition Facilities
$63bn $56.9bn
Net Debt
$6bn
Bridge Loan Tranche Final Initial Outstanding in $bn
Equity Value Maturity Amount Dec. 31 Dec. 31
$46.9bn in $bn 2018 2019
$57bn
Loan A1 Jun. 2019 39.9 - -
Loan A2 Jun. 2020 7.0 - -
Term Loan Loan B1 Jun. 2020 4.0 - -
$10bn Loan B2 Sep. 2021 6.0 4.9 3.8
14 /// Bayer Debt Investor Relations /// Status: March 31, 20206 Other Sources of Liquidity
Syndicated Loan Facility Commercial Paper Program
The multicurrency Syndicated Loan Facility can be used for general corporate Commercial Paper (CP) is a short-term unsecured debt instrument. CP are
purposes and is primarily a back-up line. Thus, it is not intended to be drawn in normally issued at a discount and redeemed at nominal value. The term of CP
the course of ordinary business. The participating banks form Bayer’s global generally lie between 1 and 364 days. Bayer’s CP program allows the
banking group. Last renewed in December 2018, the credit facility was self- company to issue in both the U.S. market (USCP) and the Euro market
arranged. (ECP). It is structured as a SEC regulation’s section 4(a)(2) program so that
there are no restrictions related to the use of proceeds.
Bayer AG, Germany Bayer AG, Germany
Borrower Issuer
Bayer Corporation, USA Bayer Corporation, USA
Total Amount €4.5bn, thereof €1.5bn/$1.5bn Swingline Guarantor Bayer AG
Signing December 2018 Total Amount $8bn or equivalent
5Y + two 1Y extension options (first extension option ECP: Barclays, Bayerische Landesbank, Citigroup,
Initial Tenor
already used) Goldman Sachs, ING
Dealer
USCP: Barclays, Bank of New York Mellon,
Syndicate Size 23 Banks Citigroup, J.P. Morgan, Wells Fargo
Purpose General Corporate Purposes Issue and ECP: The Bank of New York Mellon, London Branch
Paying Agent USCP: The Bank of New York Mellon
15 /// Bayer Debt Investor Relations /// Status: March 31, 2020Event Calendar 2020
Date Event/ Publication
Thursday, February 27, 2020 Annual Report 2019
Monday, April 27, 2020 Q1 2020 Quarterly Statement
Tuesday, April 28, 2020 Annual Stockholders’ Meeting
Tuesday, August 4, 2020 Half-Year Report 2020
Tuesday, November 3, 2020 Q3 2020 Quarterly Statement
Please note that the event calendar might be subject to changes
16 /// Bayer Debt Investor Relations /// Status: March 31, 2020Contacts at Bayer
Dr. Sven Vorstius
Head of Capital Markets Building W 11
E-Mail: Sven.Vorstius@bayer.com D-51368 Leverkusen
Dr. Jürgen Beunink
Senior Manager Investor Relations Building W 11
E-Mail: Juergen.Beunink@bayer.com D-51368 Leverkusen
17 /// Bayer Debt Investor Relations /// Status: March 31, 2020You can also read
