July 29, 2015

Second quarter of 2015:

Bayer significantly improves earnings

Very good business development at HealthCare / CropScience performance steady in a weaker market environment / MaterialScience posts robust earnings growth / Group sales increase to EUR 12,090 million (plus 18.2 percent / Fx & portfolio adj. plus 3.7 percent) / EBITDA before special items improves by 33.2 percent to EUR 2,899 million / EBIT advances by 27.7 percent to EUR 1,833 million / Net income increases 20.9 percent to EUR 1,152 million / Core earnings per share up 33.8 percent to EUR 1.98 / Group forecast 2015 for operational performance of continuing operations confirmed and adjusted for currency effects
Leverkusen, July 29, 2015 - The Bayer Group continued to grow sales in the
second quarter of 2015 and significantly increased earnings. "All three
subgroups contributed to the gratifying improvement in earnings," said Bayer
CEO Dr. Marijn Dekkers when the interim report was published on Wednesday.
HealthCare posted considerable sales and earnings gains that were attributable
to the further gratifying expansion of business with the recently launched
pharmaceutical products and to the positive sales development at Consumer
Health. At CropScience, sales matched the strong level of the prior-year
quarter, while earnings improved. At MaterialScience, sales were level with the
prior-year quarter. Earnings of this subgroup, however, posted a sharp
improvement of almost 90 percent, mainly as a result of the improved demand
situation and lower raw material costs. The preparations for the planned stock
market flotation of MaterialScience are on schedule. Dekkers expressed his
continued optimism for the year as a whole: "We are confirming our Group
forecast for the operational performance of continuing operations." The Group
forecast has been adjusted to take account of the changes in exchange rates as
of June 30, 2015.

Following the signing of the divestiture agreement with Panasonic Healthcare
Holdings Co., Ltd. in June 2015, the Diabetes Care business is no longer
included in continuing operations. The prior-year figures are restated. Sales
of the Bayer Group moved ahead in the second quarter of 2015 by 18.2 percent to
EUR 12,090 million (Q2 2014: EUR 10,228 million). After adjusting for currency
and portfolio effects (Fx & portfolio adj.), the increase was 3.7 percent.
EBITDA before special items rose by 33.2 percent to EUR 2,899 million (Q2 2014:
EUR 2,176 million). This good sales development was accompanied by higher R&D
and selling expenses. Positive currency effects buoyed earnings by about EUR
260 million. EBIT of the Bayer Group climbed by a substantial 27.7 percent to
EUR 1,833 million (Q2 2014: EUR 1,435 million) after net special charges of EUR
255 million (Q2 2014: EUR 48 million). The special charges mainly resulted from
the revaluation of other receivables, the integration of acquired businesses,
the planned stock market flotation of MaterialScience, efficiency improvement
measures and the consolidation of production facilities. Net income advanced by
20.9 percent to EUR 1,152 million (Q2 2014: EUR 953 million) and core earnings
per share from continuing operations by 33.8 percent to EUR 1.98 (Q2 2014: EUR
1.48).

Gross cash flow from continuing operations advanced by 30.5 percent to EUR
2,173 million (Q2 2014: EUR 1,665 million) due to the improvement in EBITDA.
Net cash flow (total) rose by 22.4 percent to EUR 1,959 million (Q2 2014: EUR
1,601 million) despite an increase in cash tied up in working capital. Net
financial debt declined slightly, from EUR 21.3 billion on March 31, 2015, to
EUR 21.1 billion on June 30, 2015, following the EUR 1.86 billion dividend
payment made in May.

HealthCare: further dynamic growth for recently launched pharmaceutical products

Sales of HealthCare increased by 28.0 percent (Fx & portfolio adj. 8.3 percent)
to EUR 5,908 million in the second quarter (Q2 2014: EUR 4,615 million). "This
increase was largely due to the gratifying sales performance of our recently
launched pharmaceutical products," Dekkers explained. "In the Consumer Health
segment, too, we achieved solid organic growth to which all divisions
contributed." The considerable reported increase was chiefly attributable to
sales of products acquired from Merck & Co., Inc., United States, and to
currency effects.

Sales of the Pharmaceuticals segment rose by a substantial 10.7 percent (Fx &
portfolio adj.) to EUR 3,492 million. The recently launched products - the
anticoagulant Xarelto™, the eye medicine Eylea™, the cancer drugs Stivarga™ and
Xofigo™, and Adempas™ to treat pulmonary hypertension - continued to experience
dynamic growth, posting combined sales of EUR 1,051 million (Q2 2014: EUR 702
million). Sales of Xarelto™ rose by 42.6 percent (Fx adj.) thanks to
substantial volume increases in all regions. Eylea™ posted further robust
gains, with sales up by 49.1 percent (Fx adj.). Among the established
best-selling products, the 14.3 percent (Fx adj.) improvement in sales of the
blood-clotting drug Kogenate™ was chiefly attributable to shifts in order
patterns. The hormone-releasing intrauterine devices of the Mirena™ product
family posted encouraging development, with sales up by 11.1 percent (Fx adj.).
Sales of the multiple sclerosis drug Betaferon™/Betaseron™ were down by 8.8
percent (Fx. adj.) overall, due partly to increased competition in Europe and
the United States. The Pharmaceuticals business as a whole grew in all regions
on a currency-adjusted basis.

Sales of the Consumer Health segment rose by 4.0 percent (Fx & portfolio adj.)
to EUR 2,416 million. At Consumer Care, business with the products acquired
from Merck & Co., Inc., United States, totaled EUR 528 million. The Bepanthen™/
Bepanthol™ line of skincare products also developed positively, with sales up
by 6.9 percent (Fx adj.). The Seresto™ flea and tick collar made a significant
contribution to growth in the Animal Health Division. Sales of the Advantage™
family of flea, tick and worm control products increased by 3.9 percent (Fx
adj.). In the contrast agents and medical equipment business (Medical Care),
the MRI contrast agent Gadovist™/Gadavist™ posted significant growth of 12.1
percent (Fx adj.) following its registration in additional indications.

EBITDA before special items of HealthCare increased by a substantial 27.5
percent to EUR 1,675 million (Q2 2014: EUR 1,314 million) thanks to the
continued very good business development at Pharmaceuticals and Consumer
Health, which at Consumer Care was due mainly to the acquired businesses. There
were also positive currency effects of approximately EUR 110 million. Earnings
were held back mainly by an increase in research and development expenses at
Pharmaceuticals.

CropScience improves earnings despite difficult conditions in Latin America

Sales of the agriculture business (CropScience) increased by 10.2 percent to
EUR 2,723 million (Q2 2014: EUR 2,470 million). After adjusting for currency
and portfolio effects, sales were level with the strong prior-year quarter
(minus 0.6 percent). "CropScience held its own in what remained a difficult
market environment, particularly in Latin America," said Dekkers. The subgroup
achieved its highest sales growth in the Asia/Pacific region, at 4.9 percent
(Fx adj.). Business grew by 2.0 percent (Fx adj.) in North America and 0.9
percent (Fx adj.) in Europe. Sales in the Latin America/Africa/Middle East
region moved back by 8.8 percent (Fx adj.).

In Crop Protection, business in the Herbicides unit grew by 5.6 percent (Fx &
portfolio adj.). The 11.0 percent (Fx & portfolio adj.) increase in sales of
the Seeds unit was due to positive development for vegetables and rice in
particular. By contrast, sales at Insecticides showed a considerable decline of
17.7 percent (Fx & portfolio adj.). The SeedGrowth (seed treatments) and
Fungicides units also saw their sales decline by 5.1 and 2.4 percent (Fx &
portfolio adj.), respectively. On the other hand, sales at Environmental
Science advanced by 6.6 percent (Fx & portfolio adj.), mainly as a result of
robust growth in products for professional users.

EBITDA before special items of CropScience came in 19.2 percent above the
prior-year period at EUR 733 million (Q2 2014: EUR 615 million). This increase
was driven by a positive currency effect of about EUR 70 million.

Improved demand and lower raw material prices at MaterialScience

Sales of the high-tech polymers business (MaterialScience) rose by 11.2 percent
in the second quarter to EUR 3,185 million (Q2 2014: EUR 2,864 million). After
adjusting for currency and portfolio effects, sales were flat with the
prior-year quarter (plus 0.6 percent). "Volumes at MaterialScience expanded in
all regions. On the other hand, there were negative price effects, particularly
for Polyurethanes," Dekkers explained. Raw material prices were down steeply
overall against the prior-year period.

Sales of the Polyurethanes unit (foam raw materials) fell by 2.9 percent (Fx &
portfolio adj.). Volume increases did not fully offset the sharp decline in
selling prices. The Polycarbonates unit (high-tech plastics) raised sales by
5.3 percent (Fx & portfolio adj.) thanks to considerably higher volumes in all
regions, which mainly resulted from improved demand in the automotive industry.
Selling prices fell overall compared with the prior-year period. Sales in the
Coatings, Adhesives, Specialties business unit moved forward by 6.0 percent (Fx
& portfolio adj.) as a result of higher volumes. Selling prices as a whole were
somewhat below the level of the prior-year period. Sales in the Industrial
Operations area receded by 2.6 percent (Fx & portfolio adj.) due to slightly
lower selling prices and volumes.

EBITDA before special items of MaterialScience improved significantly by 87.4
percent to EUR 506 million (Q2 2014: EUR 270 million). Appreciable falls in raw
material prices more than offset the drop in selling prices. Earnings were
additionally buoyed by higher volumes and positive currency effects of around
EUR 80 million.

All subgroups post first-half earnings growth

Sales of the Bayer Group increased by 16.5 percent (Fx & portfolio adj. 3.2
percent) to EUR 23,969 million (H1 2014: EUR 20,580 million). HealthCare was
the driver of this growth, while CropScience and MaterialScience matched the
prior-year levels. EBITDA before special items increased by a significant 19.7
percent to EUR 5,840 million (H1 2014: EUR 4,879 million), with all subgroups,
particularly HealthCare and MaterialScience, contributing to this improvement.
EBIT climbed by 7.9 percent to EUR 3,777 million (H1 2014: EUR 3,500 million)
and net income by 3.3 percent to EUR 2,455 million (H1 2014: EUR 2,376
million). Core earnings per share rose by 18.2 percent to EUR 4.02 (H1 2014:
EUR 3.40).

EBITDA before special items targeted to rise by a high-teens percentage in 2015

With respect to the second half of 2015, Bayer is now basing its forecast on
the exchange rates prevailing on June 30, 2015. The Diabetes Care business is
no longer included in continuing operations and therefore is also not included
in the updated forecast. The prior-year figures are restated. Bayer is now
planning sales in the region of EUR 47 billion (previously: in the region of
EUR 48 billion to EUR 49 billion, of which discontinued operations accounted
for approximately EUR 0.9 billion). This still corresponds to a
low-single-digit percentage increase on a currency- and portfolio-adjusted
basis. The Bayer Group expects currency effects to boost sales by approximately
7 percent (previously: approximately 9 percent) compared with the prior year.
It remains the aim to raise EBITDA before special items by a high-teens
percentage, allowing for expected positive currency effects of about 5 percent
(previously: around 8 percent). Bayer continues to target a high-teens
percentage increase in core earnings per share, allowing for expected positive
currency effects of around 5 percent (previously: around 7 percent).

Bayer now expects to take special charges in the region of EUR 900 million,
with the integration of the acquired consumer care businesses, the planned
stock market listing of MaterialScience and the optimization of production
structures accounting for most of this amount. As before, Bayer expects net
financial debt at year end to be below EUR 20 billion.

HealthCare now expects sales from continuing operations to rise to
approximately EUR 23 billion (previously: over EUR 24 billion). This
corresponds 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 low-twenties percentage. In the Pharmaceuticals segment, Bayer
continues to expect sales to move ahead to approximately EUR 14 billion. This
corresponds to a mid- to high-single-digit percentage increase on a currency-
and portfolio-adjusted basis. It is planned to raise sales of the segment's
recently launched products to over EUR 4 billion and its EBITDA before special
items by a mid-teens percentage. In the Consumer Health segment, Bayer now
expects sales of over EUR 9 billion (previously: over EUR 10 billion),
including those of the acquired consumer care businesses but excluding the
Diabetes Care business. Sales of this segment are planned to grow by a
mid-single-digit percentage on a currency- and portfolio-adjusted basis. Here,
EBITDA before special items is anticipated to rise by a mid-thirties
percentage, with the acquired consumer care businesses contributing to the
increase.

CropScience expects to continue growing faster than the market and aims to
raise sales to approximately EUR 10.5 billion (previously: around EUR 11
billion). This corresponds to a low-single-digit percentage increase
(previously: a low- to mid-single-digit percentage increase) on a currency- and
portfolio-adjusted basis. In view of the weakened market environment,
CropScience now plans to improve EBITDA before special items by a mid- to
high-single-digit percentage (previously: a low- to mid-teens percentage).

MaterialScience continues to plan further volume growth in 2015 accompanied by
declining selling prices. This will lead to lower sales on a currency- and
portfolio-adjusted basis. However, the subgroup continues to expect to see a
significant increase in EBITDA before special items and aims to return to
earning the full cost of capital in 2015. After adjusting for currency and
portfolio effects, MaterialScience expects sales in the third quarter of 2015
to come in below the level of the prior-year quarter and expects EBITDA before
special items to be above the level of the prior-year quarter but below the
preceding quarter.

Note:

The tables below contain the key data for the Bayer Group and its subgroups for
the
second quarter and first half of 2015.

The full report for the second quarter is available for online viewing and
download at www.investor.bayer.com.

Supplementary features at www.investor.bayer.com:
- presentation charts for the investor conference call at 12:00 noon CEST
- live webcast of the investor conference call from approximately 2:00 p.m. CEST
- recording of the investor conference call from approximately 6:00 p.m. CEST.


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.