Merck KGaA · XETR:MRK

Merck KGaA — Goldman Sachs Fifth German Corporate Conference 2016

85 slides from Merck KGaA's conference presentation, Sep 19, 2016

1. Slide 1: Merck – Goldman Sachs Fifth German Corporate Conference

   MERCK – GOLDMAN SACHS FIFTH GERMAN CORPORATE CONFERENCE Stefan Oschmann, CEO Marcus Kuhnert, CFO Munich, September 19, 2016

2. Slide 2: Disclaimer

   Disclaimer Cautionary Note Regarding Forward-Looking Statements and financial indicators This communication may include “forward-looking statements.” Statements that include words such as “anticipate,” “expect,” “should,” “would,” “intend,” “plan,” “project,” “seek,” “believe,” “will,” and other wor

3. Slide 3: Agenda

   Agenda Business overview & strategy recap Healthcare – Funding for success Life Science – Focusing on profitable growth Performance Materials – Strength and innovation Business and financial review H1 2016 Outlook 3

4. Slide 4: Business Overview & Strategy Recap

   BUSINESS OVERVIEW & STRATEGY RECAP

5. Slide 5: Portfolio of three high-tech businesses

   Merck Group Portfolio of three high-tech businesses Healthcare Performance Life Science Materials Leading in specialty Leading life science Market leader in pharma markets company display materials • Biologics and small-molecules • Tools and services for biotech • Innovative display materials resear

6. Slide 6: Strong businesses with attractive margins

   Merck Group Strong businesses with attractive margins % of net sales Margin1 % of EBITDA pre 46% 31.8% 45% Q2 2016 Q2 2016 net sales: EBITDA pre2: €3,805 m €1,158 m 29.2% 33% 38% 22% 16% 44.1% Healthcare Life Science Performance Materials 6

7. Slide 7: Merck has added scale and strengthened its portfolio

   Merck Group Merck has added scale and strengthened the attractiveness of its portfolio 2007: ~€7 bn sales Transformation volume 20153: ~€15 bn sales Consumer Health merged + Healthcare 1 Ethicals Serono Generics - ~€7 bn ~€31 bn + Life Science Millipore & 2 Life Science Solutions Sigma-Aldrich merge

8. Slide 8: We have created three leading businesses

   Merck Group We have created three leading businesses Healthcare Life Science Performance Materials Serono Millipore AZ Sigma • Leading biotech company • No. 2 in the world market • World market leader • Global footprint • Broad and global product portfolio • Technology and innovation leader • Strong

9. Slide 9: Each business sector has its specific priorities

   Merck Group Each business sector has its specific priorities Funding for success ~40% • Invest in pharma pipeline Healthcare EBITDA pre* • Prepare for launches • Maintain cost discipline Focusing on profitable growth ~35% • Sustain top-line momentum Life Science EBITDA pre* • Drive underlying earnin

10. Slide 10: Healthcare – Funding for Success

    HEALTHCARE – FUNDING FOR SUCCESS

11. Slide 11: Healthcare is set to deliver on promising pipeline candidates

    Healthcare Healthcare is set to deliver on promising pipeline candidates Stable existing business to fuel slight organic growth Deliver Solid pipeline of oncology, immuno-oncology and on organic growth immunology molecules Transformation of R&D operating model ongoing Focus on pipeline Competitive R

12. Slide 12: Delivered organic sales growth, committed to future performance

    Healthcare Delivered organic sales growth, committed to future performance Stable to slight organic growth m€ 1.754 Q2 2016 +7.3% 1.803 Consumer Health 1.646 +5.4% Q1 2016 1.686 1.737 +2.6% Q4 2015 1.717 1.708 +1.9% Q3 2015 1.684 1.803 +1.5% Q2 2015 1.651 Current year Prior-year Defending the existi

13. Slide 13: Pipeline highlights

    Healthcare Pipeline highlights Immunology Immuno-Oncology Oncology Phase I • BTK inhibitor (SLE) • Avelumab (solid tumors) • Tepotinib (solid tumors) • M9241 (NHS-IL12) • DNA-PK inhibitor (solid tumors) • M7824 (bifunctional immunotherapy) Phase II • Atacicept (SLE) • Avelumab (mMCC) • Tepotinib (HC

14. Slide 14: Pipeline opportunities will lead to rising investments

    Healthcare Pipeline opportunities will lead to rising investments 1 Stable to slightly growing sales until 2018 Should pipeline catalysts materialize, investments confirmed will lead to considerable payback as of 2018+ Long-term Investment Growth initiatives EBITDA pre phase and pipeline upside Rebi

15. Slide 15: Life Science – Focusing on Profitable Growth

    LIFE SCIENCE – FOCUSING ON PROFITABLE GROWTH

16. Slide 16: Serving customers across the life science industry

    Life Science Serving customers across the life science industry RESEARCH PROCESS APPLIED  Academic and  Pharmaceutical companies  Diagnostic manufacturers government institutions  Small biotech  Clinical testing labs  Biopharma R&D  Contract manufacturing  Food & Beverage  Industry R&D orga

17. Slide 17: Sustainable value based on strong strategic levers

    Life Science We create sustainable value that is based on strong strategic levers Wide, innovative Balanced Geographic Industry-leading portfolio Footprint Capabilities  A combined portfolio of +300,000  Increased presence in North America  Outstanding supply chain products management (Ability to

18. Slide 18: Life Science delivers synergies and integrates as planned

    Life Science Life Science delivers synergies and integrates as planned synergies + Integration On track to deliver 2016 synergy Smooth integration ongoing with early target of €90 m: achievements: • HQ measures complete • Organization structure implemented • 50% of headcount targets met • High engag

19. Slide 19: Expected synergies identified and fully confirmed

    Life Science Expected synergies identified and fully confirmed Sources of synergies (3rd full year 2018) Timing of expected synergies and related costs [€m] ~5 ~90 ~170 ~260 ~ 40% ~ 30% 2015 2016 2017 2018 ~30% -100 -170 -100 -30 Production & Manufacturing Marketing & Selling Production & Manufactur

20. Slide 20: We aim to be the profitability champion of the sector

    Life Science We aim to be the profitability champion of the sector New sales breakdown as of Q2 2016 Above industry margin levels Profitability champion including synergies* Applied Solutions Research Solutions Mid single digit growth Low single digit growth Company A 26% 36% Millipore Sigma SIAL MM

21. Slide 21: Performance Materials – Strength and Innovation

    PERFORMANCE MATERIALS – STRENGTH AND INNOVATION

22. Slide 22: The four pillars are set for future profitable growth

    Performance Materials The four pillars are set for future profitable growth ~50-60% of total sales, − liquid crystals (LC) and photoresists for TVs, smartphones and Display Materials tablet computers − other display and non-display applications (e.g. LC Windows) ~15-20% of total sales, Pigments and

23. Slide 23: Innovation leadership is the backbone of future profitability

    Performance Materials Innovation leadership is the backbone of future profitability and growth Evolutionary Revolutionary Incremental product adjustments - only minor investments Fundamental research - more substantial investments needed LC New singles for PSVA technology, new mode LC Smart windows,

24. Slide 24: Sound platform to deliver high earnings

    Performance Materials Sound platform toMaterials Our Performance deliver high earnings Business is based on 4 pillars 1 Four-pillar platform diversifies earnings stream Balanced sales and consistently high earnings  Liquid Crystals remain key earnings contributor  AZ* expertise is being leveraged

25. Slide 25: Long-term growth and profitability drivers are intact

    Performance Materials Long-term growthMaterials Our Performance and profitability Businessdrivers areon is based intact 4 pillars 3 Macroeconomics and electronics remain buoyant Display market opportunities continue to evolve1 USD bn  Global consumer electronics market expected to 170 Transparent d

26. Slide 26: Business and Financial Review H1 2016

    BUSINESS AND FINANCIAL REVIEW H1 2016

27. Slide 27: Life Science and Healthcare drive growth and profitability

    Life Science and Healthcare drive growth and profitability H1 2016 YoY net sales • Growth in Healthcare driven by strong Fertility, GM* as well as Xalkori commissions Organic Currency Portfolio Total • Strong organic growth in Life Science driven Healthcare 6.4% -7.9% -1.0% -2.6% by Process Solution

28. Slide 28: H1 2016: Overview

    H1 2016: Overview Key figures Comments [€m] H1 2015 H1 2016 Δ • EBITDA pre & margin increase driven Net sales 6,261 7,470 19.3% by Sigma, organic performance and end of Rebif commission expenses EBITDA pre 1,752 2,242 27.9% • EPS pre grows in line with EBITDA pre Margin (in % of net sales) 28.0% 30.

29. Slide 29: Healthcare: Good organic growth and product mix drive profitability

    Healthcare: Good organic growth and product mix drive profitability Healthcare P&L Comments [€m] H1 2015 H1 2016 • Rebif still impacted by ramp-up of competition in Europe, while U.S. pricing, Russian tender and PDP* in Brazil support performance Net sales 3,490 3,400 • Erbitux shows solid organic g

30. Slide 30: Life Science: A strong first half of 2016

    Life Science: A strong first half of 2016 Life Science P&L Comments [€m] H1 2015 H1 2016 • Very strong growth of Process Solutions driven by increasing biopharma production and single-use demand across all regions Net sales 1,511 2,826 -477 -833 • Applied Solutions shows moderate organic growth, dri

31. Slide 31: Performance Materials: Healthy profitability amid destocking

    Performance Materials: Healthy profitability amid destocking of display industry inventories Performance Materials P&L Comments [€m] H1 2015 H1 2016 • LC impacted by volume declines of mature TN-TFT and indicated inventory correction in supply chain, expected to continue into H2 Net sales 1,260 1,24

32. Slide 32: Outlook

    (©) S OUTLOOK DARREK

33. Slide 33: Merck is well set for profitable and sustainable growth

    Merck Group Merck is well set for profitable and sustainable growth Maximize growth of existing franchises Deliver on pipeline Healthcare Focus on seamless integration and deliver cost synergies Leverage strategic capabilities for value creation Life Science Drive innovation and technology leadershi

34. Slide 34: Upgrade of full-year 2016 guidance

    Merck Group Upgrade of full-year 2016 guidance Merck guidance for 2016 Net sales: ~ €14.9 – 15.1 bn EBITDA pre: ~ €4,250 – 4,400 m EPS pre: ~ €5.85 – 6.10 34

35. Slide 35: Slide 35

36. Slide 36: Appendix

    Appendix Guidance details Healthcare Life Science Financial details 36

37. Slide 37: Guidance Details

    ) GUIDANTE DETAILS Sa aan DARREK

38. Slide 38: 2016 business sector guidance

    2016 business sector guidance Healthcare Performance Life Science Materials Net sales Net sales Net sales • Solid organic growth • Mid to high single-digit • Moderate organic decline • Organic Rebif decline organic growth • Improving macro signals amid • Strong growth in Fertility • Main driver Proc

39. Slide 39: Additional financial guidance 2016

    Additional financial guidance 2016 Further financial details Corporate & Other EBITDA pre ~ -€370 – -400 m Interest result ~ -€270 – -300 m Intangibles amortization from Sigma PPA ~ €250 – 300 m p.a. Underlying tax rate ~23% to 25% Capex on PPE ~€750 – 800 m 2016 & 2017 hedge ratio ~40%-45% Hedging/

40. Slide 40: Strong focus on cash generation to ensure swift deleveraging

    Strong focus on cash generation to ensure swift deleveraging Net debt and leverage development Focus on deleveraging [Net debt/ EBITDA pre] • Commitment to swift deleveraging to 4x ensure a strong investment grade rating and financial flexibility • Strong cash flow will be used to drive 3x 3.5x down

41. Slide 41: Clear financial priorities for the next two years

    Merck Group Merck has clear financial priorities for the next two years  Strong cash flow will be used to drive down gearing to <2x net debt / EBITDA pre in 2018 Focus on cash flow and deleveraging  Larger acquisitions (>€500m) ruled out for the next two years (or financed by divestments)  Divide

42. Slide 42: High cost base in strong currencies and hedging losses

    High cost base in strong currencies and hedging losses partially offset FX tailwinds Healthcare Performance Life Science Materials Sales Sales Sales • Global presence • Balanced regional sales split • ~80% of sales in Asia-Pacific between EU, NA and RoW • ~40% of sales in Europe • Industry is USD-dr

43. Slide 43: Sustainable dividend development

    Sustainable dividend development Dividend1 development 2011-2015 2015 dividend and policy • Dividend of €1.05 per share proposed2 for 2015 • Last year’s dividend constitutes 1.05 the minimum level3 1.00 0.95 0.85 • Development of dividends in line 0.75 with business performance and earnings progress

44. Slide 44: Strategic agenda 2018 – milestones achieved

    Merck Group Strategic agenda 2018 – milestones achieved ~2012 - 2013 > 2014 Restructuring Growth initiatives Organic Portfolio/Alliances Innovation  Potential pharma Early pipeline Repatriation projects AZ Electronic Materials launches ramp-up Leverage regional New advanced Sigma-Aldrich OLED platf

45. Slide 45: Profitability improved fundamentally

    Merck Group Profitability improved fundamentally Acquisition of Acquisition of AZ Sigma-Aldrich 1 Electronic Materials €m Margins Acquisition of Millipore ~15 bn 14.000 35% Acquisition of Serono 12,845 12.000 Divestment of Generics 11.363 10.756 10.735 9.922 30% 10.000 8.951 30% 29% ~29% 7.202 ~28%

46. Slide 46: Healthcare

    fe) 2 HEALTHCARE DARREK

47. Slide 47: Portfolio management: differentiating across diverse business models

    Portfolio management: Differentiating across diverse business models Oncology & Immunology General Medicine portfolio Biologicals portfolio innovation portfolio • Limited risk with high cash • Moderate risk and reward profile • High reward at high risk generation • Economies of scale due to state- •

48. Slide 48: The road to maximizing existing franchises is clear

    The road to maximizing existing franchises is clear Continue to drive front-line mCRC share by increasing patient testing and expanding head and neck coverage Capitalize on strong efficacy and new smart devices to maximize differentiation and defend franchise 1 Build on No.1 position and ART channel

49. Slide 49: Merck pipeline

    Merck pipeline Phase I Phase II Phase III Registration Tepotinib M2736 (ATX-MS-1467) Avelumab – Anti-PD-L1 mAb Cladribine Tablets5 – c-Met kinase inhibitor Immune tolerizing agent Non-small cell lung cancer 1L2 Lymphocyte targeting agent Solid tumors Multiple sclerosis Relapsing-remitting multiple s

50. Slide 50: Avelumab plays in attractive and differentiated niches

    Avelumab plays predominantly in attractive and differentiated niches avelumab NSCLC 80 Number of trials per indication 65 Melanoma Gastric/Esophageal 40 Head & Neck RCC 30 CRC Breast Pancreas Bladder NHL 20 Ovarian Glioblastoma HL 10 Prostate SCLC Multiple Myeloma AML Liver / HCC Mesothelioma CLL MC

51. Slide 51: Avelumab differentiation strategy by indication and market

    Avelumab – Differentiation strategy varies according to chosen target indication and market Ambition: Smart leader • Indications (Merkel cell) or markets (Asia for gastric) 1 • Quick to market strategy, e.g. BTD for MCC Unsaturated in November 2015 and / or niche • Small, but less crowded markets an

52. Slide 52: The alliance initiated 8 Phase III studies

    The alliance initiated 8 Phase III studies 1 Ovarian Plat res/ref 2 Bladder 1L maint. 3 Gastric 1L maint. 4 Gastric 3L • Estimated patient • Estimated patient • Estimated patient • Estimated patient enrolment: 550 enrolment: 668 enrolment: 668 enrolment: 330 • Comparator: Pegylated • Comparator: Bes

53. Slide 53: MCC 2L: clinical results support avelumab

    MCC 2L: Clinical results support avelumab as potential therapeutic option – planned to apply for marketing authorization in H2 2016 Encouraging response rates1 Potential for differentiation • ORR: 31.8% • Largest international multicenter, open-label study of anti-PD- L1/PD-1 reported in this patien

54. Slide 54: Avelumab combinations will drive differentiation strategy

    Going forward, avelumab combinations will drive differentiation strategy Combinations • Phase III, RCC 1L (avelumab + Inlyta) • Phase Ib/II, NSCLC 1L ALK+ (avelumab + Xalkori/lorlatinib) Monotherapy • Phase I/II (avelumab + 4-1BB) • Phase Ib/II, ovarian (avelumab + Entinostat; Syndax collaboration)

55. Slide 55: Cladribine tablets – MAA submission accepted by EMA

    Cladribine tablets – MAA submission accepted by EMA in July 2016 Background Potential for differentiation • Targets lymphocytes (both B and T cells), integral to MS pathogenesis • Two Phase III and one Phase IIIb extension studies conducted in RRMS and early MS1,2,3; Phase II study in patients faili

56. Slide 56: PD-L1–TGF-beta potential beyond checkpoint inhibitors

    PD-L1–TGF-beta indicates potential to move beyond checkpoint inhibitors Four focus areas for exploration Status and next steps • Novel, first-in-class bifunctional immunotherapy Replace Identify • Bifunctional mode should result in broader application current opportunities vs. respective mono-functi

57. Slide 57: Update on selected assets (1/2)

    Update on selected assets (1/2) • Binds to receptors of two cytokines regulating maturation, function, and survival of B cells (B-lymphocyte stimulator (BLyS) & a proliferation-inducing ligand (APRIL)) • ADDRESS II (Ph IIb) in SLE patients aiming to show reduction in disease activity – 279 patients

58. Slide 58: Update on selected assets (2/2)

    Update on selected assets (2/2) • M3814 is a selective and potent inhibitor of DNA-PK, a kinase mediating DNA double strand break repair1 • Preclinical PoC showing complete responses and/or increased PFS in combination with radiotherapy in several Analysis of Phase I data DNA-PK xenograft models (SC

59. Slide 59: Outlook – MCC submission planned in H2 2016

    Outlook – MCC submission planned in H2 2016 Avelumab (MCC 2L) Expected submission H2 2016 Atacicept Phase III decision H2 2016 BTK Start three Phase II trials H2 2016 PD-L1–TGF-beta Signals of activity in cohorts H1 2017 DNA-PK inhibitor Analysis of Phase I data H2 2017 Tepotinib Analysis of Phase I

60. Slide 60: Investments in future growth

    Healthcare Investments in future growth  Immuno-Oncology: avelumab and ramp-up of earlier pipeline projects +€150-200m cost increase in 2016 R&D*  Oncology/Immunology, e.g. tepotinib, BTK • Cost discipline remains inhibitor: mid to high double-digit €m cost high on the agenda increase in 2016 • St

61. Slide 61: Healthcare is well set for future growth

    Healthcare is well set for future growth Stable existing Business and market specific initiatives in place business to maximize existing business franchises Diversified but focused pipeline with high quality assets Strong R&D in the areas Immuno-Oncology, Oncology and Immunology pipeline healthily s

62. Slide 62: Life Science

    fe) 3 LIFE STIENTE DARREK

63. Slide 63: A balanced portfolio and geographic presence

    A balanced portfolio and geographic presence Sales by business unit Sales by region North Applied Research America Europe 36% 36% FY 2015 26% pro-forma* Q2 2016 sales: 34% Q2 2016 €5.3 bn 23% 38% 5% Asia-Pacific 2% Middle East Process Africa Latin America 63

64. Slide 64: Life Science is an attractive market

    Life Science is an attractive market RESEARCH PROCESS APPLIED ~€42 bn ~€38 bn ~€45 bn Low single digit High single digit Mid single digit  Growth in volume of experiments  Drug volume growth  Volume growth from  Mild growth in academic funding − from biologics − Population growth  Investment in

65. Slide 65: Success driven by portfolio breadth and world-class capabilities

    Success driven by portfolio breadth and differentiation, a customer-centric approach and world-class capabilities RESEARCH PROCESS APPLIED Broad, relevant and Developed market: Customized workflows innovative portfolio Deep expertise in each for specific applications unit operation Simple customer A

66. Slide 66: Our end-to-end portfolio for manufacturing mAbs

    Process Solutions Our end-to-end portfolio for manufacturing mAbs MAKE Produce antibodies PURIFY Remove cell debris, virus, etc. FORMULATE Final drug product EX-CELL® Advanced™ Viresolve® Pro Pellicon® Clarisolve ® FlexReady ® CHO Fed-batch solution cassette filters clarification chromatography Medi

67. Slide 67: #1 website in research life science industry

    #1 website in research life science industry Industry leading e-commerce platform and supply chain capability SEARCH CONTENT ORDER Hundreds of Online leader in thousands of scientific content: products at your articles, protocols Real-time pricing Convenient and simple fingertips and peer reviewed a

68. Slide 68: Financial Overview

    OU FINANCIAL OVERVIEW DARREK

69. Slide 69: Organic growth in all regions

    Organic growth in all regions Regional breakdown of net sales [€ m] Regional development Europe +2.7% • Organic growth in Europe driven by org. robust demand in Process Solutions 31% • North America benefits from strong Fertility business, Rebif pricing and demand for Process Solutions products Nort

70. Slide 70: Life Science and Healthcare drive increase in EBITDA pre

    Life Science and Healthcare drive increase in EBITDA pre Q2 2016 YoY net sales • Growth in Healthcare driven by strong Fertility, GM* as well as Xalkori commissions Organic Currency Portfolio Total • Process Solutions continues to drive strong Healthcare 7.3% -9.0% -1.0% -2.7% organic growth in Life

71. Slide 71: Q2 2016: Overview

    Q2 2016: Overview Key figures Comments [€m] Q2 2015 Q2 2016 Δ • EBITDA pre & margin increase driven Net sales 3,219 3,805 18.2% by Sigma, organic performance and end of Rebif commission expenses EBITDA pre 889 1,158 28.8% • EPS pre up due to EBITDA pre Margin (in % of net sales) 27.9% 30.4% increase

72. Slide 72: Healthcare: Strong organic growth, EBITDA pre and profitability

    Healthcare: Strong organic growth, EBITDA pre and profitability Healthcare P&L Comments [€m] Q2 2015 Q2 2016 • Rebif organically stable; ramp-up of competition in Europe partially offset by tender in Russia; in U.S. pricing offsets declining volumes Net sales 1,803 1,754 • Solid organic growth of Er

73. Slide 73: Healthcare organic growth by franchise/product

    Healthcare organic growth by franchise/product Q2 2016 organic sales growth [%] H1 2016 organic sales growth [%] by key product [€ m] by key product [€ m] 441 863 0% -1% 461 891 232 438 +7% +5% 233 438 Consumer 212 0% Consumer 427 +3% Health 248 Health 479 209 +23% 396 +20% 177 341 108 214 +2% +3% 1

74. Slide 74: Rebif: Relief in the U.S., competitive ramp-up in Europe

    Rebif: Relief in the U.S. – competitive ramp-up in Europe ongoing Rebif sales evolution Rebif performance North America Q2 drivers • Rebif sales of €441 m in Q2 2016 [€ m] reflect flat organic performance amid Price 0.0% org. increase Price negative FX effects from LatAm & EU 300 increase Price • Ma

75. Slide 75: Erbitux: A challenging market environment

    Erbitux: A challenging market environment Erbitux sales by region Erbitux performance 6.8% Q2 YoY • Sales increase to €232 m due to [€ m] organic growth solid volume development especially in 250 growth markets 2.4% • Europe stable in ongoing tough 200 environment (price and competition) 13.1% • Asi

76. Slide 76: Strong organic growth in Fertility, General Medicine and Endocrinology

    Strong organic growth in Fertility, General Medicine and Endocrinology Sales evolution Q2 drivers Fertility [€ m] • Gonal-f continues to benefit from 300 competitive situation in U.S. and 260 Organic strong demand in China 220 22.6% org. 180 • Sales drop in Endocrinology reflects Q2 2015 Q3 2015 Q4

77. Slide 77: Life Science: Another strong quarter while integration on track

    Life Science: Another strong quarter while integration on track Life Science P&L Comments [€m] Q2 2015 Q2 2016 • Double-digit growth of Process Solutions driven by increasing production of large molecules across global and regional accounts Net sales 773 1,430 -244 -413 • Applied Solutions shows mod

78. Slide 78: Performance Materials: Strong profitability amid ongoing destocking

    Performance Materials: Strong profitability amid ongoing destocking Performance Materials P&L Comments [€m] Q2 2015 Q2 2016 • LC declining as ongoing supply chain destocking & volume declines of mature TN-TFT outweighs volume increase in PS-VA and IPS Net sales 643 621 -53 -59 • Destocking is expect

79. Slide 79: Reported figures reflect strong business performance

    Reported figures reflect strong business performance Reported results Comments [€m] Q2 2015 Q2 2016 Δ • EBIT reflects increased EBITDA pre EBIT 501 550 9.8% amid integration costs, Sigma D&A and Xalkori impairment (~€70 m) Financial result -41 -121 >100% • Financial result contains Sigma Profit befo

80. Slide 80: Balance sheet – deleveraging in progress after Sigma acquisition

    Balance sheet – deleveraging in progress after Sigma acquisition Assets [€ bn] Liabilities [€ bn] 38.0 37.0 37.0 38.0 Cash & marketable securities 1.1 0.8 2.7 3.0 Receivables 2.6 2.6 12.9 12.9 Net equity Inventories Intangible assets 25.3 24.4 13.7 Financial debt 13.3 1.8 1.9 Payables 1.8 2.5 Proper

81. Slide 81: Well-balanced maturity profile

    Well-balanced maturity profile reflects capital market transactions related to Sigma-Aldrich Maturity profile as of June 30, 2016 2.4% 4.5% Coupon 2.95% [€ m/US $] 750 1.375% 3.25% L+35bps 4.25% 2.625% E+23bps 0.75% 1,000 250 70 1,600 1,350 3.375% 1.7% 1,000 4.0% 700 800 400 550 500 60 2016 2017 201

82. Slide 82: Healthy underlying operating cash flow

    Healthy underlying operating cash flow Q2 2016 – cash flow statement Cash flow drivers [€m] Q2 2015 Q2 2016 Δ • D&A increases due to Sigma and Profit after tax 346 314 -32 Xalkori impairment D&A 343 519 176 • Higher tax payments burden changes in other assets/liabilities Changes in provisions -70 -6

83. Slide 83: Exceptionals in Q2 2016

    Exceptionals in Q2 2016 Exceptionals in EBIT [€m] Q2 2015 Q2 2016 Exceptionals thereof D&A Exceptionals thereof D&A Healthcare 21 2 70 71 Life Science 30 0 74 0 Performance Materials -3 0 7 0 Corporate & Other 9 0 10 0 Total 56 2 160 71 83

84. Slide 84: Financial calendar

    Financial calendar Date Event October 13, 2016 Capital Market Day - 2016 November 15, 2016 Q3 2016 Earnings release March 9, 2017 Q4 2016 Earnings release April 28, 2017 Annual General Meeting May 18, 2017 Q1 2017 Earnings release 84

85. Slide 85: Investor Relations contacts

    CONSTANTIN FEST SVENJA BUNDSCHUH ALESSANDRA HEINZ Head of Investor Relations Assistant Investor Relations Assistant Investor Relations +49 6151 72-5271 +49 6151 72-3744 +49 6151 72-3321 [email protected] [email protected] [email protected] ANNETT WEBER NILS V

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