Bayer CropScience Limited. — Interim / Quarterly Report 2022

Nov 11, 2021

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November 11, 2021

To, General Manager, DCS - Corporate Relationship Department BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001

SECURITY ID : BAYERCROP SECURITY CODE : 506285

Dear Sir,

Sub: Bayer CropScience Limited - Presentation at Investor Meet being held on November 11, 2021

In furtherance of our letter dated November 08, 2021, please find enclosed herewith the presentation that will be made at the Investor Meet of Bayer CropScience Limited being held on Thursday, November 11, 2021.

Request you to kindly take the said presentation on record.

Bayer CropScience Ltd. CIN: L24210MH1958PLC011173

Registered and Corporate Office: Bayer House Central Avenue Hiranandani Estate Thane (West) – 400 607 Maharashtra, India

Tel : +91 22 2531 1234 Fax : +91 22 2545 5063 www.bayer.in www.cropscience.bayer.com

Thanking you,

Yours faithfully, for Bayer CropScience Limited

NIKUNJKUMAR JAYSUKHLAL SAVALIYA

Digitally signed by NIKUNJKUMAR JAYSUKHLAL SAVALIYA DN: c=IN, st=Gujarat, 2.5.4.20=f4b6303c6a9fe05eb04e62759179373cbcf4b728c73ed8 032294e09b9e3e0c98, postalCode=390024, street=102 TITHI FLATS, BHADRAN NAGAR, NEW SAMA ROAD, CHHANI RD, VADODARA, serialNumber=d3cad62ac6fcdd76e7d78a49dee85262351ff6c69 d1c3b84d7669f10a495714a, o=Personal, cn=NIKUNJKUMAR JAYSUKHLAL SAVALIYA, pseudonym=edc1463c7f2e505c0cb80b5170d37433 Date: 2021.11.11 14:55:18 +05'30'

Nikunjkumar Savaliya

Company Secretary and Compliance Officer

Encl.: As above

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Bayer CropScience Limited Investors’ Meet

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Caution regarding forward-looking statements and Company Disclaimer

This presentation may contain forward-looking statements based on current assumptions and forecasts made by Bayer management.

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lead to
These
on the
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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 https://www.bayer.com/en/.

The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

/// BCSL Investor Meet /// November 11, 2021

Agenda

Sustainability at Bayer Adapting from pandemic BCSL: Business update Financial perspective Key Takeaways

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/// BCSL Investor Meet /// November 11, 2021

India is pivotal to Bayer reaching its 2030 sustainability commitment

Sustainable Rice Initiative[^]

Targeting to decrease water consumption by switching to resource efficient practices like Direct Seeded Rice (DSR) and Alternate Wetting & Drying working with 3 million farmers[*]

Bayer Carbon Farming[^]

Piloting projects that measurably decrease the methane and carbon emissions of agriculture, identifying opportunities to help farmers benefit from carbon markets

Better Life Farming[^]

Building an ecosystem of rural entrepreneurs that leverages partnerships to create value chains that will truly benefit smallholder farmers

*Covering 1 million hectares by 2025

Covid-19: Evolving perspectives

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Covid-19: Evolving perspectives

Fast Good forward to opportunity digital to innovate access

Online farmer connect through WhatsApp / MS Teams

Government of India approval for trials of spray by drones

Digital Marketing Efforts: Large number of farmer impressions through YouTube and Facebook

Advisory to farmers be observing date of sowing & weather patterns through remote sensing via Geo Potato & RIMpro (apples)

Virtual Crop Tours, Trainings and Workshops

Opportunity to upskill

Bayer Learning Centers for training & ROI demonstration

Model Farms associated with BLF Centers for farmer training & product demonstrations

Adoption of Digital Tools for demand generation planning & tracking, Sahbhaagi, finance tool for distributors, etc.

Stronger sense of community

Local community support groups set up for COVID help to team

Support to local communities: distribution of masks, PPE kits, conversion of plant to supply Oxygen to local hospital

Facilitating working from anywhere for employees

Challenges

Supply Chain disruptions

Logistic constraints, rising fuel cost

Increasing input costs

/// BCSL Investor Meet /// November 11, 2021

BCSL Business update

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/// BCSL Investor Meet /// November 11, 2021

Apr-Sep sales growth driven by Crop Protection (CP); challenging Kharif for Seeds portfolio

CP driving growth in-spite of Covid-19 restrictions in many parts of the country. Lower returns, timely placements & team’s agility to capitalize on opportunities contributed to sales growth. Seed faced head-winds in kharif due to a mix of external (acres & demand) and internal (supply constraints) challenges in Cotton, Corn, Rice & Millets.

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Sales

CP Liquidation higher than last year; registered growth across all businesses in Apr-Sep. Dry Spells during initial period of monsoon across the country and continued rains in Sep. led to loss of herbicides in Corn and plant protection activities in many crops, with major impact on Cotton liquidation.

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Liquidation

Overall South-west monsoon was normal but dry spells in early part and continuous rains towards the season end caused major loss of sprays in kharif. Slight delay in North-east monsoons led to delay in Tamil Nadu.

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Weather

Commodity price of oilseeds stayed strong; stable in Cotton & Rice and recovery in Corn. Volatility in commodity price of Vegetable with drop in some crops followed by recovery in the recent past. Commodity Price

Kharif acres of Corn lower with reductions in coarse grains, hybrid Rice and Cotton; increase in Soy linked to higher commodity prices. Good water availability expected to drive good Rabi acres of Veg & commodity price led increase in Mustard & Corn.

Acreages

/// BCSL Investor Meet /// November 11, 2021

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Crop Protection (CP) Sales not only covered Seed shortfall but also powered CS Growth in Apr-Sep

CP Portfolio

CP-Seed Contribution in Apr - Sep Net Sales

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SEEDS, 18% SEEDS, 15%
CP, 82% CP, 85%
FY 20 - 21 FY 21 - 22
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CP Portfolio continued the growth momentum of Jan-Mar Qtr. & covered for shortfall in Seeds Growth across portfolio in Insecticides, Fungicides, Herbicides and Seed Growth

Seed Business had a challenging Kharif

Acres challenge across crops:

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Reduction in Cotton acres due to lower ROI in South & West and delayed canal water in North Weather related shift out of hybrid Rice

Coarse grains lost acres with impact in Corn & Millets; shift to more profitable oilseeds

Internal Challenges impacted timely supply

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High dependence on fresh production led to just-in-time supply of rice resulting in a delay in some markets Production shortfall in Cotton and some hybrids in Corn

Dormancy in Millets reduced saleable inventory

CP Portfolio: Strategic actions driving growth

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EverGol Movento
Nativo Council Activ Movento OD
Xtend Energy
Luna
Oberon Velum Prime Infinito
Experience
/// BCSL Investor Meet /// November 11, 2021
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Portfolio Differentiation to target small-holders

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Buonos

Solomon

Fenos Quick

/// BCSL Investor Meet /// November 11, 2021

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Small-holder Farming: Creating an eco-system to serve Aginput needs of small-holder farmers

Digitally Connected eco-system enables accurate data collection and analytics to improve effectiveness

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Online Campaign planning and
real-time tracking
Leads generated by Sales Team in
demand generation activities
Good offtake through Sahbhaagi
& BLF centres in Apr-Sep
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~2250 Registered Partners (rural
entrepreneurs) across
230 Territories
Connected to Liquidation
Platform, earning incentive on
lead conversion
700+ Better Life Farming
Centres
Touch-point for ~500,000 farmers
~45,000 Bayer Retailers
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/// BCSL Investor Meet /// November 11, 2021

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Financial Perspective

/// BCSL Investor Meet /// November 11, 2021

Global Bayer Key Data : First Nine Months of 2021

in € Million

Key Financials

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SALES
32,963
(+9%)
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Highlights
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Crop Science:

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Solid performance in all regions with double digit growth in Latin America, North America and APAC; Strong contribution across entire portfolio with Fungicides, Herbicides and Seeds & Traits (Corn & Soy) being key drivers

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Pharmaceuticals:

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EBITDA before Special items 8,784 (-3%)

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Positive sales development, mainly driven by key product in ophthalmology, cardio-vascular and women’s healthcare segment; Good progress with new products as well

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Consumer Health:

*Adjusted for currency and portfolio effects

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Continued growth momentum across all regions and categories with nutritional supplements being the key driver and recovery seen in allergy and cold segment

/// BCSL Investor Meet /// November 11, 2021

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BCSL Financial Performance

Revenue from Operations

2020-21 2021-22

₹ millions

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27,810
26,094
-1%
13,816 13,651
H1 H1
Q2 Q2
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Growth driven by Crop Protection products and new product launches

Kharif Corn witnessed a drop in acreages

Unseasonal monsoon led to lower liquidation in Q2

Profit Before Exceptional Items and Tax

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6,098
5,395
-26%
2,960
2,195
23% 19% 21% 16%
H1 H1 Q2 Q2
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Higher material and logistics costs partially offset by product price increases

Unfavorable portfolio mix due to lower corn seeds sales

Operating costs returning to normal levels as compared to previous year (Covid-19 impact)

/// BCSL Investor Meet /// November 11, 2021

BCSL Balance Sheet

BCSL Balance Sheet
		₹ millions
As At	30-Sep-21	30-Sep-20
Assets
Fixed Assets	5,099	5,060
Inventories	12,122	9,288
Trade Receivable	13,551	12,216
Cash and Cash Equivalents	8,791	9,263
Other Assets	6,428	6,683
	45,991	42,510
PY Equity and Liabilities
Shareholders' Fund	28,462	25,319
Trade Payables	6,436	6,642
Provisions	1,665	1,619
Other Liabilities	9,428	8,930
	45,991	42,510

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PY - Previous Year, CY - Current Year

Inventory:

Built-up for upcoming season Lower sales of corn portfolio products

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Trade Receivables:

Increase in Kharif sales and reduced

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collection vs. previous year (DSO: CY 81 / CY PY 74)

/// BCSL Investor Meet /// November 11, 2021

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BCSL Cash Flow

		₹ millions
Half year ended	30-Sep-21	30-Sep-20
Operating profit before working capital changes	5,769	6,436
Net change in Working Capital	(6,474)	(1,916)
Taxes paid	(1,460)	(516)
Net cash from/ (used in) operating activities	(2,165)	4,004
Net cash from/ (used in) investing activities	131	(41)
Net cash used in financing activities	(1,220)	(5,369)
Decrease in Cash and Cash Equivalent	(3,254)	(1,406)

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PY - Previous Year, CY - Current Year

Inventory built-up and Lower sales of corn portfolio products Increase in Kharif sales and reduced collection vs. previous year Tax payment under Vivad Se Vishwas (VSV) Act

Interim Dividend payment of ₹ 4,045 millions in PY

/// BCSL Investor Meet /// November 11, 2021

FINANCIAL METRICS

Growth comparison between Pre-merger Proforma FY 2018-19 to FY 2020-21

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25% FY 2016-17 to 2018-19 (Pre-merger - Proforma) 22%
FY 2018-19 to 2020-21 (Post merger) PBT: Dividend Per
20% Earnings Per
2.5% points Share: Share:
15% 13%
improvement Grew from Increased
10%
from ~16% to ₹86 to ₹110 from ₹28 to
5% ~18.5% (CAGR 13%) ₹115
0%
-5%
-3%
-10% Revenue from Operations -7% PBT
Profit Before tax and exceptional items
Sustainability
Digital
Innovation
Portfolio
2020-21 acceleration &
Expand Farmer differentiation
reach through
2019-20
Transform new business
route to models
2018-19
Drive cost market
synergies
Organizational
integration
/// BCSL Investor Meet /// November 11, 2021
CAGR %
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Key Takeaways

/// BCSL Investor Meet /// November 11, 2021

Key Takeaways

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Managing tough Corn season and unfavorable cost development due to Covid-19 and local drivers in 2021

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Achieved strong top line growth since integration in 2018 and delivered synergies

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Strong long term market fundamentals for Agriculture led by our focus on improving smallholder incomes and sustainability

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BCSL strategy continues to focus on product as well as business model innovation further strengthened by impactful partnerships

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Financial discipline remains cornerstone for sustainable value creation

/// BCSL Investor Meet /// November 11, 2021

Thank You!

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