February 26, 2015

Fiscal 2014:

Bayer: strong business momentum continues and portfolio transformation underway

Group portfolio to focus on Life Sciences / All subgroups contribute to record sales and earnings / Recently launched products drive growth momentum / Group sales EUR 42,239 million (plus 5.2 percent / Fx & portfolio adj. plus 7.2 percent) / EBIT advances by 11.6 percent to EUR 5,506 million / EBITDA before special items up by 4.9 percent to EUR 8,812 million / Net income increases 7.4 percent to EUR 3,426 million / Core earnings per share up 7.3 percent to EUR 6.02 / Forecast for 2015: further sales growth and clear improvement in earnings
Leverkusen, February 26, 2015 - Bayer had a very successful year in 2014, both
operationally and strategically. The company set new records for sales and for
EBITDA before special items. "Contributing to this in particular was the
continuing growth momentum in our Life Science businesses, and especially the
pleasing development of our recently launched products," Management Board
Chairman Dr. Marijn Dekkers said on Thursday at the Financial News Conference
in Leverkusen. MaterialScience also registered encouraging gains in sales and
earnings before special items. Bayer also set the course in 2014 for the
company to focus on the Life Science businesses - HealthCare and CropScience.
MaterialScience is to be floated on the stock market as a separate company by
mid-2016 at the latest. The Life Science businesses were additionally
strengthened through important acquisitions. Dekkers said the company is
targeting further sales growth and a significant rise in earnings in 2015.

Group sales rose by 5.2 percent in 2014, to EUR 42,239 million (2013: EUR
40,157 million). Adjusted for currency and portfolio effects (Fx & portfolio
adj.), sales grew by 7.2 percent. All subgroups contributed to this increase.
EBIT improved by 11.6 percent to EUR 5,506 million (2013: EUR 4,934 million).
Earnings were diminished by special charges of EUR 438 million (2013: EUR 839
million). EBIT before special items advanced by 3.0 percent to EUR 5,944
million (2013: EUR 5,773 million). EBITDA before special items increased by 4.9
percent to EUR 8,812 million (2013: EUR 8,401 million), despite negative
currency effects of around EUR 410 million or 4 percent. The good sales
development was accompanied by higher R&D and selling expenses. Net income
moved forward by 7.4 percent to EUR 3,426 million (2013: EUR 3,189 million) and
core earnings per share by 7.3 percent to EUR 6.02 (2013: EUR 5.61).

Gross cash flow climbed by 16.9 percent to EUR 6,820 million (2013: EUR 5,832
million), while net cash flow rose by 12.4 percent to EUR 5,810 million (2013:
EUR 5,171 million). Net financial debt increased by EUR 12.9 billion to EUR
19.6 billion compared with December 31, 2013. CFO Johannes Dietsch explained
that Bayer last year had placed several bonds on the market, some of them with
a large volume, to finance the company's acquisitions. He explained that the
success of such bond issues is not automatic. "The fact that we were so
successful in these financing activities is also evidence of Bayer's good
reputation on the capital market," remarked Dietsch.

HealthCare: strong growth in sales of recently launched pharmaceutical products

Business in the HealthCare subgroup expanded by 5.6 (Fx & portfolio adj. 7.5)
percent in 2014 to EUR 19,975 million (2013: EUR 18,924 million). This increase
was mainly driven by the Pharmaceuticals business, while sales at Consumer
Health came in slightly ahead of the prior year.

Sales at Pharmaceuticals rose by a substantial 11.2 percent (Fx & portfolio
adj.) to EUR 12,052 million. The recently launched products - the anticoagulant
Xarelto™, the eye medicine Eylea™, the cancer drugs Stivarga™ and Xofigo™, and
Adempas™ for the treatment of pulmonary hypertension - contributed
significantly to this very good development with total sales of EUR 2,908
million (2013: EUR 1,522 million). "These products have played a crucial role
in making us one of the fastest-growing large companies in the pharmaceutical
industry," said Dekkers. Among the leading established products, sales of the
Mirena™ family of hormone-releasing intrauterine devices advanced by 15.1
percent on a currency-adjusted (Fx adj.) basis. Business with Aspirin™ Cardio
for secondary prevention of heart attacks also developed positively (Fx adj.
plus 12.4 percent). However, sales of the blood-clotting medicine Kogenate™
receded by 5.6 percent (Fx adj.), due partly to the temporary use of production
capacities to develop the next generation of hemophilia medicines. Sales of the
multiple sclerosis drug Betaferon™/Betaseron™ fell by 19.6 percent (Fx adj.),
mainly because of increased competition in the United States. Overall, the
Pharmaceuticals business saw pleasing growth in all regions on a
currency-adjusted basis, particularly in China, the United States and Western
Europe.

Sales in the Consumer Health segment increased by 2.1 percent (Fx & portfolio
adj.) to EUR 7,923 million. The Consumer Care and Animal Health divisions
achieved sales gains, especially in the Emerging Markets. Consumer Care
benefited particularly from the positive development of the Bepanthen™/
Bepanthol™ line of skincare products (Fx adj. plus 18.3 percent) and the
analgesic Aleve™ (Fx adj. plus 10.1 percent). At Animal Health, the Advantage™
family of flea, tick and worm control products grew sales by 3.1 percent (Fx
adj.). By contrast, sales of the Medical Care business were down, particularly
in the United States and Europe. Sales of the Diabetes Care business declined
overall, despite positive development in the Emerging Markets. Sales of
contrast agents and medical equipment in the Radiology business were flat with
the prior-year period on a currency-adjusted basis.

EBITDA before special items of HealthCare rose by 2.8 percent overall to EUR
5,484 million (2013: EUR 5,334 million). This was attributable to the
gratifying business development in Pharmaceuticals, while earnings in Consumer
Health posted a slight decline. Earnings were diminished by higher research and
development spending in Pharmaceuticals, increased selling expenses in both
segments, and negative currency effects of approximately EUR 360 million.

CropScience with gains in all business groups and regions

Sales of the agriculture business (CropScience) increased 7.7 percent (Fx &
portfolio adj. 11.2 percent) in 2014 to EUR 9,494 million (2013: EUR 8,819
million). "CropScience gained market share, with all business groups and
regions contributing to the subgroup's pleasing performance," said Dekkers. The
subgroup registered the strongest growth in Latin America/Africa/Middle East,
where sales were up by 20.6 percent (Fx adj.). Business in North America also
expanded by a double-digit percentage (plus 10.2 percent) on a
currency-adjusted basis, followed by Europe and Asia/Pacific at 7.4 percent (Fx
adj.) and 5.5 percent (Fx adj.), respectively.

The positive development of Crop Protection was driven above all by new
products (launched since 2006), sales of which climbed by around 23 percent on
a reported basis to more than EUR 1.8 billion. Fungicides posted double-digit
growth of 15.9 percent (Fx & portfolio adj.). Gratifying development was also
registered by Herbicides (Fx & portfolio adj. plus 8.5 percent), Insecticides
(Fx & portfolio adj. plus 7.6 percent) and SeedGrowth (Fx & portfolio adj. plus
8.4 percent). Sales in the Seeds business also rose substantially (Fx &
portfolio adj. plus 19.5 percent). Business with cotton seed saw especially
positive development. Sales of Environmental Science advanced by 6.9 percent
(Fx & portfolio adj.).

EBITDA before special items of CropScience improved by 5.0 percent to EUR 2,360
million (2013: EUR 2,248 million). The earnings contributions from the very
positive business development - marked by considerable volume gains and higher
selling prices - were partially offset by higher R&D and selling expenses¬ and
negative currency effects of around EUR 50 million.

MaterialScience benefits from increased volumes

Sales of the high-tech polymer materials business (MaterialScience) rose by 3.7
percent (Fx & portfolio adj. plus 4.8 percent) to EUR 11,651 million (2013: EUR
11,238 million). This growth was due to higher volumes for Polycarbonates;
Polyurethanes; and Coatings, Adhesives, Specialties. However, selling prices
declined slightly overall.

Sales of foam raw materials (Polyurethanes) grew by 4.9 percent (Fx & portfolio
adj.) thanks to improved demand in nearly all the main customer industries.
Sales of the high-tech plastics business (Polycarbonates) advanced by 7.2
percent (Fx & portfolio adj.), due mainly to increased demand from customers in
the automotive, electrical/electronics and construction industries. Sales of
raw materials for coatings, adhesives and specialties improved by 5.5 percent
(Fx & portfolio adj.). This increase resulted from higher volumes in all
regions. Selling prices in this business unit were level year on year. Sales of
Industrial Operations receded by 7.2 percent (Fx & portfolio adj.) due to lower
volumes and selling prices overall.

EBITDA before special items of MaterialScience improved by 10.7 percent to EUR
1,187 million (2013: EUR 1,072 million). This was particularly due to higher
volumes, efficiency improvement measures and lower raw material and energy
costs. However, earnings were held back by lower selling prices. Currency
effects as a whole were neutral to earnings.

All three subgroups post sales growth in the fourth quarter

Group sales increased by 11.6 percent (Fx & portfolio adj. 6.9 percent) in the
fourth quarter of 2014 to EUR 11,039 million (Q4 2013: EUR 9,888 million). All
three subgroups contributed to this expansion. EBIT declined by 14.4 percent to
EUR 561 million (Q4 2013: EUR 655 million). EBITDA before special items rose in
the fourth quarter of 2014 by 4.4 percent to EUR 1,846 million (Q4 2013: EUR
1,769 million), mainly as a result of higher volumes in all subgroups.¬
Earnings were held back by higher R&D and selling expenses. Net income declined
to EUR 224 million (Q4 2013: EUR 455 million), while core earnings per share
increased to EUR 1.19 (Q4 2013: EUR 1.10).

Transformation into a pure Life Science company initiated

Dekkers stressed that 2014 had also been a very successful year for Bayer from
a strategic viewpoint. "We last year set a course that will shape the future of
our company for the long term. We decided to demerge the MaterialScience
business and thus initiated our transformation into a pure Life Science
company." According to the Bayer CEO, the stock market flotation of
MaterialScience - planned for mid-2016 at the latest - is proceeding on
schedule. He said the design phase had since been completed. The legal and
organizational structures of the new company have been decided and important
management positions filled. The economic and legal separation of
MaterialScience, also known as the carve-out, is to be completed by August 31,
2015. In the second half of this year, the company intends to decide whether
MaterialScience will be floated on the stock market through an IPO or a
spin-off.

"Furthermore, we have expanded the Life Science businesses through important
acquisitions," Dekkers said. The business with non-prescription products in
particular was substantially strengthened through the acquisitions of the
consumer care business of Merck & Co., Inc., United States, and Chinese-based
Dihon Pharmaceutical Group Co. Ltd., the Bayer CEO explained. The integration
of these two businesses is proceeding according to plan. The acquisition of
Norwegian company Algeta ASA, with which Bayer had been collaborating since
2009 in the development and commercialization of the cancer drug Xofigo™, was
successfully completed.

Substantial increase in earnings anticipated for 2015

"We remain optimistic about the future," said Dekkers. Bayer is planning sales
in the region of EUR 46 billion for 2015. This corresponds to a currency- and
portfolio-adjusted increase in the low single digits. The company expects
positive currency effects on sales of about 3 percent compared with the
previous year. Bayer plans to raise EBITDA before special items by a low- to
mid-teens percentage, allowing for expected positive currency effects of about
2 percent. Bayer aims to increase core earnings per share by a low-teens
percentage, allowing for expected positive currency effects of around 3
percent.

The company is anticipating special charges in the region of EUR 700 million in
2015, mainly due to the integration of the acquired consumer care businesses
and the planned stock market listing of MaterialScience. Bayer intends to
increase research and development spending by about 10 percent in 2015 to more
than EUR 4.0 billion. The company has budgeted capital expenditures of about
EUR 2.3 billion for property, plant and equipment and EUR 0.3 billion for
intangible assets. Depreciation and amortization are estimated at about EUR 3.0
billion, including EUR 1.6 billion in amortization of intangible assets. Bayer
expects net financial debt to be below EUR 18 billion at the end of 2015.

HealthCare expects to achieve sales of approximately EUR 23 billion,
corresponding to a mid-single-digit percentage increase on a currency- and
portfolio-adjusted basis. The subgroup plans to raise EBITDA before special
items by a mid-teens percentage. In the Pharmaceuticals segment, Bayer expects
sales to move ahead by a mid- to high-single-digit percentage on a currency-
and portfolio-adjusted basis to approximately EUR 13 billion. The company
intends to raise sales of the segment's recently launched products in 2015
toward EUR 4 billion. It also plans to improve EBITDA before special items in
the Pharmaceuticals segment by a low-teens percentage, allowing for an
additional EUR 300 million of investment in research and development.
HealthCare therefore expects Pharmaceuticals to slightly improve the EBITDA
margin before special items. In the Consumer Health segment, Bayer expects
sales to increase toward EUR 10 billion, including those of the acquired
consumer care businesses. It plans to grow that segment's sales by a
mid-single-digit percentage on a currency- and portfolio-adjusted basis. The
company expects to raise EBITDA before special items in the Consumer Health
segment by a mid-to-high-twenties percentage, with the acquired consumer care
businesses contributing to the increase.

CropScience expects to continue growing faster than the market and to raise
sales by a low- to mid-single-digit percentage on a currency- and
portfolio-adjusted basis to approximately EUR 10 billion. It is planned to
raise EBITDA before special items by a low- to mid-single-digit percentage.

MaterialScience is planning further volume growth in 2015 accompanied by
declining selling prices, leading to lower sales. However, the company expects
to see a significant increase in EBITDA before special items. MaterialScience
aims to return to earning the full cost of capital in 2015. For the first
quarter of 2015, the subgroup expects sales to remain flat with the preceding
quarter and EBITDA before special items to gain significantly.

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 2014.
The complete Annual Report 2014 is available on the Internet at
www.investor.bayer.com

Supplementary material at www.investor.bayer.com includes:
- Live webcast of the Financial News Conference from approx. 10:00 a.m. 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. 7:00 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.