Science For A Better Life. Morgan Stanley Consumer Health Symposium. Gary Balkema President, Consumer Care Bayer HealthCare

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1 Science For A Better Life Morgan Stanley Consumer Health Symposium Gary Balkema President, Consumer Care Bayer HealthCare January

2 Important Information This presentation may contain forward-looking statements which are 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 which are available on our website. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

3 Key Messages Consumer Health / over-the-counter medicine is an attractive business Bayer HealthCare is committed to a diversified healthcare portfolio Bayer Consumer Care is a top-tier OTC player Have a track record of success of growing sales above market Growth through building strong brands Well-positioned for future growth faster than market Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 1 The New Bayer A Leader in its Markets HealthCare 14.5bn (pro forma) Rx specialty pharmaceuticals, global # 6, Consumer Health global #2-#4 34% 48% 14% 19% 19% 33% 33% Group 31.7bn 2006 pro-forma sales CropScience 5.7bn agrochemicals and seeds business, global # 1 in agrochemicals Material Science 10.2bn polyurethanes and polycarbonate business, global # 1 Break-down excluding reconciliation sales Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 2

4 Global Leader in Specialty Pharmaceuticals and Consumer Health Pharmaceuticals 10.2bn (pro forma) Rx specialty pharmaceuticals, # 6 with leading positions in key therapeutic categories 71% 17% 6% 6% Consumer Care 2.5bn OTC pharmaceuticals; # 2 with some of the world s most recognized brands Diabetes Care 800m blood glucose meters # 3-4 with new and improved products Animal Health 900m veterinary medicines # 4 leading growth and profitability HealthCare 14.5bn 2006 pro-forma sales Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 3 Transforming Consumer Care into a Leading OTC Player Focus on strategic target to be a top-tier OTC player Acquisition and divestiture plus healthy organic growth Sales in m 3,000 2,500 2,000 OTC CAGR 11% + Sterling Drug acquisition + Roche JV in US + Brand acquisitions UK, US, DE, MX + Roche Consumer Health acquisition 2,531 1,500 1,000 1, Other Household - Divestiture of Natreen, Delial Divestiture of Household business OTC OTC Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 4

5 Bayer Consumer Care is a Top-tier OTC Player 2006 Global OTC company sales ranking Company OTC Sales in bn 1 J&J (including Pfizer) Bayer Consumer Care GlaxoSmithKline Wyeth Novartis Sanofi-Aventis Boehringer-Ingelheim 1.1 From a mid-tier player in 1990s to top-tier now Consistently outpace market growth: 8 out of last 10 years One of fastest growing major players Bayer Consumer Care growth +8%* in 2006, equivalent to twice market growth Market outperformance continued in 2007: + 7%* in first 9 months of Reckitt Benckiser Procter & Gamble Taisho 1.0 Source: Company reports, IMS, IRI, Bayer estimates Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 5 * Currency adjusted Consumer Health is an Attractive Part of a Healthcare Portfolio Attractive underlying trends Aging population and increasing life expectancy Shifting costs to consumers: OTC affordable alternate Emerging markets: OTC growth due to accessibility and lower cost Health becoming more consumer-centric Evolution from passive patient to pro-active consumer Consumer expertise becoming a required competency for success Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 6

6 Consumer Health is an Attractive Part of a Healthcare Portfolio Consumer business financially attractive Predictable sales Attractive growth Consistent, attractive profit at modest risk Consumer investments build long-term sustainable brands Not patent dependent Less R&D and capital intensive Strong consumer brands have extremely long lifetimes The heart of a strong consumer business is strong brands Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 7 Consumer Health Attractive Growth Opportunities Driving growth of strong brands Estimated 80% of market growth will be behind existing brands Consumer knowledge, marketing strength and building brand relevance is key to winning Winners will outpace the market Consumer Care has consistently demonstrated this as a strength Expect growth of our core brands to be our primary growth engine into the future Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 8

7 Strong brands = Strong Business with Long-term Growth Potential Enviable portfolio of strong, enduring consumer OTC brands Approximately 30 brands account for more than 80% of sales 8 brands with sales over 100 million each Deep range of very strong consumer brands Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 9 Growing a Portfolio of Strong Brands First 9 months 2007 sales growth Brand (launch or switch % y-o-y* year) One-A-Day (1940) + 17 Canesten (1973) + 15 Rennie (1930s) + 13 Aleve (1994) Bepanthen (1944) Supradyn (1959) + 5 Alka-Seltzer (1931) + 3 Aspirin (1899) + 0 * Currency adjusted Total portfolio significantly exceeded market growth 8 of last 10 years YTD September 2007 ahead of market growth Top brands consistently performing well Long-term, well-established brands with vitality! Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 10

8 Consumer Health Attractive Growth Opportunities Central & Eastern Europe (including Russia) High growth Latin America High growth Asia/Pacific (excluding Japan) Above-average growth With CC global footprint, we can focus on growth regions while also leveraging strength in established markets Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 11 Consumer Health Attractive Growth Opportunities Rx / OTC switches For overall market, switches estimated to drive approximately 0.5% market CAGR Viable add-on growth pillar to core brand building Acquisition and licensing Continue to be opportunities to acquire strong brands and relevant technologies Bayer will consider opportunities that are financially attractive and strategically relevant Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 12

9 Bayer Consumer Care: Proven Record of Success and Well-positioned for the Future Consumer Health and OTCs are attractive and an integral part of a balanced healthcare portfolio Bayer HealthCare is committed to a diversified healthcare business with pharmaceuticals and consumer health Bayer is a top-tier player in the attractive OTC market Track record of success of growing sales above market Growth through building strong brands and their relevance to consumers Historically outperformed market and expect to outpace market growth of 3 4% by 2 percentage points Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 13 Investor Relations Contacts Dr. Alexander Rosar Head of Investor Relations Phone: alexander.rosar@bayer-ag.de Dr. Jürgen Beunink Phone: juergen.beunink@bayer-ag.de Peter Dahlhoff Phone: peter.dahlhoff@bayer-ag.de Ilia Kürten Phone: ilia.kuerten@bayer-ag.de Ute Menke Phone: ute.menke@bayer-ag.de Judith Nestmann Phone: judith.nestmann@bayer-ag.de Dr. Olaf Weber Phone: olaf.weber@bayer-ag.de Morgan Stanley Consumer Health Symposium New York January 25, 2008 Gary Balkema Slide 14