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

Increase in Group sales (Fx & portfolio adj.);

forecast issued in February 2016: low-single-digit percentage increase to more than €47 billion

3.5% increase to €46.8 billion Low- to mid-single-digit percentage increase (Fx & portfolio adj.) to more than €49 billion

Increase in EBITDA before special items;

forecast issued in February 2016: mid-single-digit percentage increase

10.2% increase Mid-single-digit percentage increase

Increase in core earnings per share;

forecast issued in February 2016: mid-single-digit percentage increase

7.3% increase Mid-single-digit percentage increase
Innovation
Group: increase in R&D investment to €4.5 billion (2016) €4.7 billion Increase in R&D investment to €4.8 billion (2017)
Pharmaceuticals: transition of 10 new molecular entities (NMEs) into development (2016) 12 new molecular entities (NMEs) transferred Transition of 10 new molecular entities (NMEs) into development (2017)
Consumer Health: transition of 20 consumer-validated concepts into early development (2016) 30 new concepts transferred Transition of 25 consumer-validated concepts into early development (2017)
Crop Science: transfer of 3 new molecular entities (NMEs), plant traits or biologics into confirmatory technical proof-of-concept field studies (2016) Start of field studies on 4 new molecular entities (NMEs) and 1 new plant trait Transfer of 3 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) 98% Target unchanged
Evaluation of all potentially high-risk suppliers with significant Bayer spend (2020) 83% 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 2012: 8.86 MWh/t 6.77 MWh/t (24% improvement) Improvement of 10% in energy efficiency (2020); reference value 2015: 143 kWh/€1,000 external sales

Reduction of 15% in specific greenhouse gas emissions (2020);

reference value 2012: 1.88 t CO2 / t

1,54 t CO2 / t (– 18 %) Reduktion spezifischer Treibhausgas- Emissionen um 20 % (2020). Neuer Basiswert 2015: 54,5 kg CO2 / T € Außenumsatz
Establishment of water management at all sites in water-scarce areas (2017) 95% Target unchanged
Safety
Reduction of 35% in occupational safety incident rate (Recordable Incident Rate – RIR) (2020); reference value 2012: 0.50 RIR 0,40 (– 20 %) 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 0,17 (– 19 %) Target unchanged
Product stewardship
Conclusion of assessment of hazard potential of all substances (>99%) used in quantities exceeding one metric ton per annum (2020) 66% 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% 87% Target unchanged
Increase in the proportion of women in senior management to 35% (2020); reference value 2010: 21% 31% Target unchanged
Increase in the proportion of senior managers from outside the European Union, the United States or Canada to 25% (2020); reference value 2013: 18% 21% Target unchanged
1 All targets other than “Growth and Profitability” and R&D investment targets do not include Covestro.

The current status of our targets can be found in the Annual Report 2016.