Strategy

Targets and Performance Indicators

Our strategy is aimed at achieving economic growth balanced with our responsibility for the environment and society. We measure our progress in this on the basis of ambitious Group targets along the value chain. These targets are in the areas of growth and profitability, innovation, sustainability and employees.

In this way, we aim to make clear the challenges we have identified in our core business in the context of sustainable development, and at the same time to highlight the continuous improvements we are committed to making throughout the Group. The current status of our progress in these areas is documented in the following table.

Target Target attainment (as of 2016) New or adjusted target
Growth and Profitability

Group sales (Fx & portfolio adj. change); revised forecast in October 2017: low-single-digit-percentage increase to €35 billion to €36 billion

1.5 % increase to €35.0 billion Increase by a low- to mid-single-digit percentage to around €35 billion

EBITDA before special items; revised forecast in October 2017: slightly above the level of the previous year

At the prior-year level (– 0.3%) At the prior-year level

Core earnings per share; revised forecast in October 2017: low-single-digit percentage decrease

1.0% increase At the prior-year level
Innovation
Group: Increase in R&D investment to €4.8 billion (2017) €4.5 billion R&D investment of around €4.1 billion (2018)
Pharmaceuticals: transition of 10 new molecular entities (NMEs) into development (2017) 10 new molecular entities (NMEs) transferred Transition of nine new molecular entities (NMEs) and one new indication or one new formulation project into development (2018)
Consumer Health: transition of 25 consumer-validated concepts into early development (2017) 47 new concepts transferred Transition of 25 consumer-validated concepts into early development (2018)
Crop Science: transfer of three new molecular entities (NMEs), plant traits or biologics into confirmatory technical proof-ofconcept field studies (2017) Start of field studies on two new molecular entities (NMEs) Transfer of three to four new molecular entities (NMEs), plant traits or biologics into confirmatory technical proof-ofconcept field studies
Sustainability
Supplier management
Evaluation of all strategically important suppliers (2017) 99.5% Target achieved Bayer will conduct a new stakeholder survey and materiality analysis in 2018. This will be used to define new Group targets.
Evaluation of all potentially high-risk suppliers with significant Bayer spend (2020) 93% Target unchanged
Development and establishment of a new sustainability standard for our supply base (2020) In implementation Target unchanged
Resource efficiency
Improvement of 10% in energy efficiency (2020); reference value 2015: 143 kWh/€1,000 external sales 125 kWh / €1,000 external sales (12.6% improvement) Target unchanged

Reduction of 20% in specific greenhouse gas emissions (2020); new reference value 2015: 55.7 kg CO2e / €1,000 external sales

46.3 kg CO2e /€1,000 external sales (– 16.9%) Target unchanged
Establishment of water management at all sites in water-scarce areas (2017) 100% Target achieved Bayer will conduct a new stakeholder survey and materiality analysis in 2018. This will be used to define new Group targets.
Safety
Reduction of 35% in occupational safety incident rate (Recordable Incident Rate – RIR) (2020); reference value 2012: 0.50 RIR 0.45 (– 10%) Target unchanged
Reduction of 30% in process and plant safety incidents (Loss of Primary Containment Incident Rate – LoPC-IR) (2020); reference value 2012: 0.21 LoPC-IR 0.13 (– 38%) Target unchanged
Product stewardship
Conclusion of assessment of hazard potential of all substances (>99%) used in quantities exceeding one metric ton per annum (2020) 76% Target unchanged
Compliance
Annual compliance training for virtually 100% of Bayer managers 97% Target unchanged
Employees
Continuous improvement in employee engagement; reference value 2012: 85% 79%1 Continuous improvement in employee satisfaction; new reference value 2017: 79%
Increase in the proportion of women in senior management to 35%; (2020); reference value 2010: 21% 32% Target unchanged
Increase in the proportion of senior managers from outside the European Union, the United States or Canada to 25% (2020); reference value in 2013: 18% 21 21% Target unchanged
1 The figures are not comparable due to a change in the methodology used in the employee survey.

The current status of our targets can be found in the Annual Report 2017.