February 28, 2013

New products create optimism for the future

Bayer: continuing growth momentum

Group targets achieved in 2012 - sales and earnings before special items increase in all subgroups / Sales increase by 8.8 percent to EUR 39,760 million / EBIT EUR 3,960 million (minus 4.6 percent) - Net income EUR 2,446 million (minus 1.0 percent) / Further accounting measures for legal claims / EBITDA before special items rises by 8.8 percent to EUR 8,284 million / Core earnings per share improve by 10.8 percent to EUR 5.35 / Encouraging growth in the emerging markets / Steady progress with innovation pipeline strengthens life-science businesses / Forecast for anniversary year 2013: continuing record development
Leverkusen, February 28, 2013 - 2012 was a very successful year for the Bayer
Group. "We continued to grow dynamically and achieved our targets for the
Group. All the subgroups posted gains in sales and earnings before special
items," said Bayer CEO Dr. Marijn Dekkers at the Financial News Conference in
Leverkusen on Thursday. The life-science businesses registered particularly
rapid growth and were strengthened by further progress in the innovation
pipeline. Moreover, Bayer sharply expanded business in the emerging markets.
Dekkers expressed his confidence for the company's future development: "We
expect to continue our record development in 2013 and beyond."

Sales of the Bayer Group grew by 8.8 percent in 2012, to EUR 39,760 million
(2011: EUR 36,528 million). "Sales thus reached the highest level in our
company's 150-year history," said Dekkers. Adjusted for currency and portfolio
effects (Fx & portfolio adj.), sales were up by 5.3 percent. The gain in the
emerging markets, at 7.4 percent (Fx & portfolio adj.), was twice as large as
in the industrialized countries. "In other words, our strategic focus on these
markets of the future - and the investments we are making there - are paying
off," Dekkers remarked.

EBIT declined by 4.6 percent to EUR 3,960 million (2011: EUR 4,149 million).
Special items totaled minus EUR 1,711 million (2011: minus EUR 876 million).
They included EUR 1,186 million in litigation expenses in connection with the
Yasmin/YAZ line of oral contraceptives. Of this figure, EUR 455 million was
taken in the fourth quarter of 2012, primarily in connection with further
provisions for the settlement in the United States of venous clot injury claims
of which Bayer is currently aware and anticipated future claims. Further
special charges for the year overall included EUR 396 million for restructuring
measures and EUR 289 million for impairment of intangible assets. An offsetting
effect came from gains of EUR 158 million from divestitures and EUR 114 million
in adjustments of benefit entitlements.

EBIT before special items increased by 12.9 percent to EUR 5,671 million (2011:
EUR 5,025 million). EBITDA before special items rose by 8.8 percent to EUR
8,284 million (2011: EUR 7,613 million). Contributing to this were a good
business performance and savings from the efficiency program successfully
completed in 2012. Earnings also benefited from positive currency effects
totaling about EUR 400 million. Net income declined slightly by 1.0 percent to
EUR 2,446 million (2011: EUR 2,470 million). Core earnings per share, however,
improved by 10.8 percent to EUR 5.35 (2011: EUR 4.83).

Gross cash flow fell by 11.1 percent to EUR 4,599 million (2011: EUR 5,172
million), while net cash flow declined by 10.4 percent to EUR 4,532 million
(2011: EUR 5,060 million). Net financial debt was level with December 31, 2011,
at EUR 7.0 billion. "This included additional funding of EUR 1.0 billion for
our pension fund in the fourth quarter of 2012," explained Chief Financial
Officer Werner Baumann. "Our outstanding financial liabilities have a balanced
maturity structure. We therefore intend to continue making repayments in the
coming years entirely from our available liquidity and current cash flows,"
Baumann added.

Good progress with products from the pharmaceuticals pipeline

Sales of the HealthCare subgroup increased by 8.4 percent (Fx & portfolio adj.
4.2 percent) in 2012 to EUR 18,612 million (2011: EUR 17,169 million). Both
segments - Pharmaceuticals and Consumer Health - contributed to this increase.

Business in the Pharmaceuticals segment improved by 4.2 percent (Fx & portfolio
adj.) to EUR 10,803 million. "At Pharmaceuticals, we made good progress with
the marketing of new products from our pipeline," Dekkers said. He explained
that sales in the emerging markets and North America had developed particularly
well, with growth rates of nearly 8 percent. In Europe, on the other hand,
business was restrained due to the adverse economic conditions and a difficult
health policy environment. Among the segment's top products, the anticoagulant
Xarelto achieved by far the highest growth rate (Fx adj. plus 265.9 percent)
following its market introduction in further countries and indications. Sales
of Aspirin Cardio to prevent heart attacks rose by 12.3 percent (Fx adj.),
largely thanks to the steady expansion of marketing activities in China.
Business with the hormone-releasing intrauterine device Mirena (Fx adj. plus
9.4 percent) developed positively in all regions, especially in the United
States due to higher volumes. Sales of the segment's two best-selling products
- the multiple sclerosis drug Betaferon/Betaseron (Fx adj. plus 4.2 percent)
and the blood-clotting product Kogenate (Fx adj. plus 5.2 percent) - also
increased further. Sales of the YAZ/Yasmin/Yasminelle line of oral
contraceptives receded by 5.0 percent (Fx adj.), primarily as a result of
generic competition in Western Europe. However, business with this product
group developed positively in the Asia/Pacific region.

Sales of the Consumer Health segment advanced by 4.2 percent (Fx & portfolio
adj.) to EUR 7,809 million, with all regions and divisions contributing to this
growth. Bayer's non-prescription medicines business (Consumer Care) performed
particularly positively, achieving above-market sales growth. The Bepanthen/
Bepanthol skincare line developed successfully, especially in Russia and
Brazil, moving forward by 13.9 percent (Fx adj.). Business with the antifungal
Canesten expanded by 7.8 percent (Fx adj.). The Medical Care Division raised
sales of the Contour line of blood glucose meters by 8.5 percent (Fx adj.).
However, sales of the contrast agent and medical equipment business matched the
prior year. The Animal Health Division benefited from the positive development
of the Advantage line of flea, tick and worm control products (Fx adj. plus
10.6 percent).

EBITDA before special items of HealthCare grew by 7.8 percent to EUR 5,068
million (2011: EUR 4,702 million), primarily as a result of the positive
business development in both segments and of currency effects.

Strong year for CropScience

"We were particularly successful in our agriculture business - our second
life-science area - in 2012," Dekkers said. CropScience increased sales by 15.5
percent (Fx & portfolio adj. 12.4 percent) to EUR 8,383 million (2011: EUR
7,255 million) in an attractive market environment. This growth was due largely
to good business with new products in Crop Protection and rapidly expanding
sales at Seeds. Environmental Science also developed favorably. The realignment
of marketing and distribution activities and streamlining of the product range
contributed to the gratifying performance. "These successes are impressive, as
2011 was already a very good year for CropScience," Dekkers emphasized.

All regions contributed to the growth in sales at Crop Protection. Moreover,
all business units achieved double-digit growth rates, headed by seed
treatments (SeedGrowth) at 17.2 percent (Fx & portfolio adj.). Insecticides
improved by 14.8 percent (Fx & portfolio adj.), while fungicides advanced by
13.2 percent (Fx & portfolio adj.) and herbicides by 10.1 percent (Fx &
portfolio adj.).

Thanks to growth in all regions, but particularly in North America, sales of
the Seeds business advanced by 14.1 percent (Fx & portfolio adj.). That
business achieved double-digit sales growth rates in each of the core crops
oilseed rape/canola, rice and cotton. By contrast, sales of vegetable seeds
declined slightly (Fx & portfolio adj.). Sales of the Environmental Science
business unit moved forward by 5.3 percent (Fx & portfolio adj.).

EBITDA before special items of CropScience improved by 21.4 percent to EUR
2,008 million (2011: EUR 1,654 million). This growth resulted above all from
significantly higher volumes and positive currency effects.

MaterialScience raises sales and earnings before special items

"Bayer MaterialScience also contributed to the very good full-year
performance," said Dekkers. Sales of the high-tech materials business rose by
6.2 percent (Fx & portfolio adj. 3.0 percent) to EUR 11,503 million (2011: EUR
10,832 million). While volumes were flat in Europe, the subgroup posted good
gains in the other regions. In addition, MaterialScience was able to slightly
raise prices in all regions except Asia/Pacific.

Business with raw materials for foams (Polyurethanes) improved by 7.9 percent
(Fx & portfolio adj.). Contributing to this increase were higher volumes and
prices in all product groups and regions. By contrast, high-tech plastics
(Polycarbonates) declined by 7.1 percent (Fx & portfolio adj.) due to lower
selling prices that resulted primarily from new production capacities on the
world market. However, volumes as a whole were level year on year. Sales in the
Coatings, Adhesives, Specialties business unit moved forward by 3.5 percent (Fx
& portfolio adj.) as a result of the higher volumes and prices achieved in
nearly all regions.

EBITDA before special items of MaterialScience advanced by 6.8 percent to EUR
1,251 million (2011: EUR 1,171 million). This increase was mainly the result of
higher volumes, savings achieved from efficiency improvement measures and
positive currency effects. By contrast, earnings were diminished by higher raw
material and energy costs.

Bayer very successful operationally in the fourth quarter of 2012

"Operationally, Bayer had a very successful fourth quarter overall," said CFO
Werner Baumann. Between October and December, Group sales advanced by 7.3
percent (Fx and portfolio adj. 5.5 percent) to EUR 9,862 million (Q4 2011: EUR
9,191 million). All three subgroups contributed to this expansion, and
especially CropScience. EBIT climbed by 16.9 percent to EUR 735 million (Q4
2011: EUR 629 million), while EBITDA before special items moved ahead by 18.4
percent to EUR 1,825 million (Q4 2011: EUR 1,541 million). Net income amounted
to EUR 374 million (Q4 2011: EUR 397 million), and core earnings per share were
EUR 1.00 (2011: EUR 0.97).

Bright prospects for 2013

"Last year's results were pleasing, and we are also optimistic for 2013," said
Dekkers. For 2013, Bayer anticipates currency- and portfolio-adjusted sales
growth of between 4 and 5 percent. This corresponds to Group sales of around
EUR 41 billion. The Group plans to increase EBITDA before special items by a
mid-single-digit percentage and core earnings per share by a high-single-digit
percentage.

Bayer expects to increase spending for research and development to around EUR
3.2 billion (2012: EUR 3.0 billion). The company has planned capital
expenditures of EUR 1.9 billion (2012: EUR 1.6 billion) for property, plant and
equipment and EUR 0.4 billion (2012: EUR 0.4 billion) for intangible assets.
Depreciation and amortization are expected to total about EUR 2.6 billion. As
regards Bayer's financial position, the company anticipates that net financial
debt will total less than EUR 7.0 billion at the end of 2013.

HealthCare's ongoing priority for 2013 is to successfully commercialize the new
pharmaceutical products. The subgroup expects sales to advance by a
mid-single-digit percentage on a currency- and portfolio-adjusted basis to
approximately EUR 19 billion, with an increase in EBITDA before special items.
Earnings growth is likely to be restrained by negative currency effects and
higher marketing expenses for the launch of new products. HealthCare aims to
slightly improve the EBITDA margin before special items.

In the Pharmaceuticals segment, sales are expected to move ahead in 2013 by a
mid-single-digit percentage on a currency- and portfolio-adjusted basis to
about EUR 11 billion. That segment plans to increase EBITDA before special
items and slightly improve the EBITDA margin before special items. HealthCare
predicts that sales of the Consumer Health segment will grow by a
mid-single-digit percentage on a currency- and portfolio-adjusted basis to
around EUR 8 billion. In addition, the company expects EBITDA before special
items of the segment to increase and the EBITDA margin before special items to
be level with the prior year.

CropScience predicts continued favorable market conditions for 2013. The
subgroup expects business growth to outpace the market, with sales advancing by
a high-single-digit percentage on a currency- and portfolio-adjusted basis
toward EUR 9 billion. CropScience also plans to raise EBITDA before special
items by a high-single-digit percentage.

For 2013 MaterialScience is planning a slight increase in sales on a currency-
and portfolio-adjusted basis to about EUR 12 billion. That subgroup intends to
further improve EBITDA before special items. For the first quarter of 2013,
MaterialScience anticipates a currency- and portfolio-adjusted sales increase
compared to the preceding quarter. The subgroup expects EBITDA before special
items to come in at the level of the preceding quarter.

Life-science businesses achieve important progress in their pipeline

In the life-science businesses, Bayer made further, very significant progress
with the development candidates in its pipeline, Dekkers explained. "We
continued to strengthen our position as a world-class innovation company,
improving many people's lives with innovative products and solutions,"
emphasized the Management Board Chairman. "In particular, we received many
marketing authorizations for our new products."

Dekkers said Bayer is particularly pleased with the progress made in its
pharmaceuticals pipeline. "Not only are we happy to see the first sales
generated by products recently introduced to the market. We are also happy that
these products are giving doctors and patients new treatment options." For
example, Bayer made further progress in cardiology with the anticoagulant
Xarelto, he said. Xarelto is now registered in more than 120 countries in a
variety of acute and chronic indications.

Dekkers also outlined the potential of further important development candidates
from the pharmaceuticals pipeline, such as riociguat to treat two serious,
life-threatening forms of pulmonary hypertension. In oncology, Bayer also has
high hopes for its medicines Stivarga to treat advanced colorectal cancer and
gastrointestinal stromal tumors, and radium-223 dichloride (Alpharadin) to
treat bone metastases in prostate cancer. In the field of ophthalmology,
Dekkers explained, EYLEA is also making progress in the treatment of wet
age-related macular degeneration, for example. Overall, the company believes
these five products have peak annual sales potential in excess of EUR 5.5
billion, with Xarelto alone planned to achieve sales of more than EUR 2
billion.

"As in HealthCare, we are also successful with innovations in our CropScience
subgroup," Dekkers continued. Bayer has development pipelines in both crop
protection and seed technology that are well stocked with promising projects,
the Management Board Chairman said. He explained that products with estimated
launch dates between 2011 and 2016 have a peak sales potential exceeding EUR 4
billion. "These products have properties that benefit farmers and consumers,"
Dekkers underscored. He demonstrated this by describing the specific advantages
of selected new developments in various applications ranging from tolerance to
saline soils and flooding in rice cultivation through the enhancement of yields
in major field crops to longer storability of fruit and vegetables.

Ambitious aspirations for 2015

Dekkers said Bayer is also optimistic for its further development, thanks
mainly to its innovative life-science products. The company therefore has
ambitious aspirations for the period through 2015, he explained.

Bayer wants to accelerate its growth momentum at HealthCare through 2015. The
driving factors here are the five major new pharmaceutical products, which
should contribute more than EUR 2.5 billion to sales in 2015, pending the
respective approvals. In light of that, Bayer expects to see this subgroup grow
by an average of about 6 percent (Fx & portfolio adj.) a year toward EUR 22
billion in 2015, while Pharmaceuticals would expand by an even more substantial
approximately 7 percent (Fx & portfolio adj.) toward EUR 13 billion.
Additionally, the EBITDA margin before special items of HealthCare is planned
to grow from 27.2 percent last year toward 29 percent by 2015.

At CropScience, Bayer aims to grow faster than the market and improve sales
toward EUR 10 billion by 2015. The crop protection products Bayer has
introduced since 2006 or will launch in the future are intended to contribute
about EUR 1.9 billion to this figure. For CropScience overall, this means
average growth of about 6 percent (Fx & portfolio adj.) annually and an EBITDA
margin before special items of around 24 percent, which would continue to be a
leading level of profitability.

In the MaterialScience business, Bayer anticipates that it will be able to
achieve a volume-driven expansion in business beyond the growth rate of the
global economy. The current high capacities on the world market are likely to
be absorbed by rising global demand in the coming years. Bayer nonetheless
intends to respond to the commoditization of the business through further
efficiency measures that should contribute 1.5 percentage points to the EBITDA
margin before special items by 2015.

Note:
Below you will find tables containing the key data of the Bayer Group and its
subgroups for the full year and the fourth quarter of 2012.

The complete Annual Report 2012 is available on the Internet at
www.investor.bayer.com

Supplementary material at www.investor.bayer.com includes:
- Live webcast of the News Conference from approx. 10:00 a.m. CET
- Notice of the Annual Stockholders' Meeting 2013 from approx. 12:00 noon CET
- Presentation charts for the Investor Conference Call at 12:00 noon CET
- Live webcast of the Investor Conference Call from approx. 2:30 p.m. CET
- Recording of the Investor Conference Call from approx. 6:30 p.m. CET


Forward-looking statements

This release 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.