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1、 Annual Report Bayer Annual Report 2022 Five-Year Summary 2Five-Year Summary million 200212022Bayer Group financial KPIs Sales 36,74243,54541,40044,08150,739EBITDA1 9,6959,529(2,910)6,40913,515EBITDA before special items1 8,96911,47411,46111,17913,513EBITDA margin before special items1 24

2、.4%26.3%27.7%25.4%26.6%EBIT1 3,4544,162(16,169)3,3537,012EBIT before special items1 6,0136,9757,0957,2959,257Income before income taxes 1,8862,853(17,250)2,0464,670Net income(from continuing and discontinued operations)1,6954,091(10,495)1,0004,150Earnings per share(from continuing and discontinued o

3、perations)()1 1.804.17(10.68)1.024.22Core earnings per share(from continuing operations)()1 5.606.386.396.517.94Free cash flow 4,6524,2141,3431,4153,111Net financial debt 35,67934,06830,04533,13731,809Capital expenditures(newly capitalized)2,3682,9203,1383,0043,639Return on capital employed(ROCE)(%)

4、4.03.716.53.87.7 Bayer AG Total dividend payment 2,6112,7511,9651,9652,358Dividend per share()2.802.802.002.002.40 Bayer Group nonfinancial KPIs2 Number of smallholder farmers in low-and middle-income countries supported by products,services and partnerships(million)42454952Number of women in low-an

5、d middle-income countries who have their need for modern contraception satisfied due to interventions supported by Bayer(million)38404144Number of people in underserved3 communities whose self-care is supported by interventions from Bayer(million)41434649Scope 1 and 2 greenhouse gas emissions(millio

6、n metric tons)3.763.583.173.03Scope 3 greenhouse gas emissions from relevant categories(million metric tons)8.828.227.918.90Off-setting of remaining Scope 1 and 2 greenhouse gas emissions in 2030(million metric tons)0.000.200.300.45 Innovation Research and development expenses4 5,1055,3017,1265,4126

7、,572Ratio of R&D expenses to sales Crop Science(%)5 13.011.310.410.510.1Ratio of R&D expenses to sales Pharmaceuticals(%)5 15.515.615.516.117.3Ratio of R&D expenses to sales Consumer Health(%)5 4.13.93.83.73.6 Employees Number of employees6(Dec.31)107,894103,82499,53899,637101,369Personnel expenses(

8、including pension expenses)(million)10,77811,7889,76911,79812,619 Safety&environmental protection Recordable Incident Rate(RIR)for Bayer employees 0.400.460.320.380.37Process Safety Incident Rate(PSI-R)0.100.080.080.11Total energy consumption(petajoules)28.939.235.934.835.5Energy efficiency(kWh/1,00

9、0)7 2194Hazardous waste generated(thousand metric tons)3033Water use(million m)4259575553 2021 figures restated;figures for 2018 2020 as last reported 1 For definition see A 2.3“Alternative Performance Measures Used by the Bayer Group.”2 For more information see A 1.2.1.3 Econo

10、mically or medically 4 The increase in R&D expenses in 2020 was mainly due to special charges in connection with impairment charges at Crop Science.5 R&D expenses before special items 6 Employees calculated as full-time equivalents(FTEs)7 Quotient of total energy consumption and external sales Bayer

11、 Annual Report 2022 At a Glance 3 Fiscal 2022 Bayer:Significant growth in sales and earnings/Group sales:50.7 billion(Fx&p adj.+8.7%)/EBITDA before special items rises substantially to 13.5 billion(+20.9%),largely driven by exceptionally strong performance at Crop Science /Pharmaceuticals increases

12、sales and earnings /Consumer Health maintains dynamic growth/Core earnings per share advance to 7.94(+22.0%)/Net income:4.2 billion /Free cash flow increases to 3.1 billion,net financial debt down to 31.8 billion /Increased dividend of 2.40 per share(+20%)proposed/New products post significant growt

13、h/Encouraging developments in the research pipeline/Major progress made toward achieving our long-term sustainability targets/Outlook for 2023:Increase in sales(Fx&p adj.);EBITDA before special items and core earnings per share below exceptionally strong prior year as inflation remains high Contents

14、Bayer Annual Report 2022 4 Contents A Combined Management Report 1.Fundamental Information About the Group _ 30 1.1 Corporate Profile and Structure _ 30 1.1.1 Corporate Profile _ 30 1.1.2 Corporate Structure _ 30 1.2 Strategy and Management _ 34 1.2.1 Strategy and Targets _ 34 1.2.2 Sustainability M

15、anagement _ 45 1.2.3 Management Systems _ 47 1.3 Focus on Innovation _ 48 1.4 Commitment to Employees _ 69 1.5 Procurement and Supplier Management _ 74 1.6 Product Stewardship _ 75 1.7 Environmental Protection and Safety _ 79 2.Report on Economic Position _ 83 2.1 Overview of Business Performance _

16、83 2.1.1 Economic Position and Target Attainment _ 83 2.1.2 Key Events_ 84 2.1.3 Economic Environment _ 86 2.2 Earnings;Asset and Financial Position of the Bayer Group _ 87 2.2.1 Earnings Performance of the Bayer Group _ 87 2.2.2 Business Development by Division _ 92 2.2.3 Value-Based Performance _

17、101 2.2.4 Asset and Financial Position of the Bayer Group _ 102 2.3 Alternative Performance Measures Used by the Bayer Group _ 107 3.Report on Future Perspectives and on Opportunities and Risks _ 110 3.1 Future Perspectives _ 110 3.1.1 Economic Outlook _ 110 3.1.2 Corporate Outlook _ 111 3.2 Opportu

18、nity and Risk Report _ 112 3.2.1 Group-wide Opportunity and Risk Management System _ 112 3.2.2 Opportunity and Risk Status _ 117 3.2.3 Overall Assessment of Opportunities and Risks by the Board of Management _ 127 4.Corporate Governance Report _ 128 4.1 Declaration by Corporate Management Pursuant t

19、o Sections 289f and 315d of the German Commercial Code _ 128 4.2 Compliance _ 134 4.3 Disclosures Pursuant to Sections 289b Through e and 315b and c of the German Commercial Code _ 136 4.4 Takeover-Relevant Information _ 137 5.Information on Bayer AG _ 139 5.1 Earnings Performance of Bayer AG_ 139 5

20、.2 Asset and Financial Position of Bayer AG _ 142 5.3 Forecast,Opportunities and Risks for Bayer AG _ 144 5.4 Nonfinancial and Other Disclosures by Bayer AG _ 145 To our Stockholders Chairmans Letter _ 6 Board of Management _ 12 Report of the Supervisory Board _ 13 Investor Information _ 23 About th

21、is Report _ 28 ContentsBayer Annual Report 2022 5 25.Trade accounts payable _ 211 26.Other liabilities _ 211 27.Financial instruments _ 212 27.1 Financial instruments by category _ 212 27.2 Maturity analysis _ 219 27.3 Information on derivatives _ 220 28.Leases _ 223 29.Contingent liabilities and ot

22、her financial commitments _ 225 30.Legal risks _ 226 Notes to the Statements of Cash Flows _ 231 31.Net cash provided by(used in)operating,investing and financing activities _ 231 Other Information _ 233 32.Audit fees _ 233 33.Related parties _ 233 34.Total compensation of the Board of Management an

23、d the Supervisory Board,advances and loans _ 234 35.Events after the end of the reporting period _ 235 Responsibility Statement _ 236 Independent Auditors Report _ 237 Limited Assurance Report of the Independent Practitioner Regarding the Additional Non-Financial Information of the Group in the Comb

24、ined Management Report _ 247 Bayer Group Consolidated Income Statements _ 146 Bayer Group Consolidated Statements of Comprehensive Income _ 147 Bayer Group Consolidated Statements of Financial Position _ 148 Bayer Group Consolidated Statements of Changes in Equity _ 149 Bayer Group Consolidated Stat

25、ements of Cash Flows _ 150 Notes to the Consolidated Financial Statements of the Bayer Group _ 151 1.General information _ 151 2.Effects of new financial reporting standards _ 151 3.Reporting policies,methods and critical accounting estimates _ 152 4.Segment reporting _ 166 5.Scope of consolidation;

26、subsidiaries and affiliates _ 171 5.1 Changes in the scope of consolidation _ 171 5.2 Business combinations and other acquisitions _ 171 5.3 Discontinued operations,assets and liabilities held for sale,and divestments _ 172 Notes to the Income Statements _ 174 6.Net sales _ 174 7.Other operating inc

27、ome _ 175 8.Other operating expenses _ 176 9.Personnel expenses and employee numbers _ 176 10.Financial result _ 177 10.1 Income(loss)from investments in affiliated companies _ 177 10.2 Net interest expense _ 178 10.3 Other financial income and expenses _ 178 11.Taxes _ 179 12.Income/losses attribut

28、able to noncontrolling interest _ 182 13.Earnings per share _ 182 Notes to the Statements of Financial Position _ 183 14.Goodwill and other intangible assets _ 183 15.Property,plant and equipment _ 188 16.Investments accounted for using the equity method _ 189 17.Other financial assets _ 190 18.Inve

29、ntories _ 191 19.Trade accounts receivable _ 192 20.Other receivables _ 194 21.Equity _ 195 22.Provisions for pensions and other post-employment benefits _ 197 23.Other provisions _ 206 24.Financial liabilities _ 209 B Consolidated Financial Statements D Further Information Governance Bodies _ 291 F

30、inancial Calendar and Masthead _ 294 C Compensation Report 1.Foreword by the Chairman of the Supervisory Board 251 2.Overview of Compensation in 2022 _ 254 3.Compensation Report _ 255 4.Compensation of the Supervisory Board _ 282 5.Development of Financial Performance and Annual Change in Compensati

31、on Comparative Overview _ 286 Report of the Independent Auditor on the Audit of the Compensation Report _ 289 To our StockholdersChairmans LetterBayer Annual Report 2022 6 Chairmans Letter Strong foundations,outstanding prospects:Bayer delivers excellent performance in challenging times Last year wa

32、s without doubt a very eventful year,dominated as it was by the war in Ukraine and its repercussions.For many observers,2022 marked the end of an era,and it is no exaggeration to say that we are living through a time of major upheavals.Nonetheless,it must also be said that for Bayer,2022 was a very

33、successful year.In times like these in particular,it is very clear for all to see that the way we are set up with world-leading life science businesses is highly robust,and our innovations are extremely relevant for human health and nutrition,in line with our vision:Health for all,hunger for none.He

34、alth and nutrition are without doubt the most pressing issues of our times,and their significance will only increase in the future.The global population passed the eight billion mark last fall and is set to hit almost ten billion by 2050.All these people need to be fed on a sustainable basis.At the

35、same time,there are many diseases that still cannot be treated adequately.Whats more,the population is ageing,which is leading to certain diseases becoming more prevalent.To our StockholdersChairmans LetterBayer Annual Report 2022 7 These megatrends show that we are working and conducting research i

36、n the right areas.The pandemic had placed healthcare right at the top of the agenda;now the war in Ukraine one of the worlds breadbaskets has also put global food supplies center stage.Our staff in Ukraine have done an astonishing job in maintaining the supply of our essential products under the mos

37、t difficult of conditions.Our workforce is likewise helping wherever it can:for example,with an emergency aid fund and donations of seed products and essential medicines.My sincere thanks go to them all and the entire Bayer team all over the world.Despite these huge challenges,we were able to delive

38、r outstanding performance in 2022.A very good year operationally and strategically Lets look first at what we achieved on an operational level.Our sales increased by 9%last year on a currency-and portfolio-adjusted basis,to 51 billion.EBITDA before special items came in at 13.5 billion,which was a g

39、ood 20%higher than the prior-year level.Core earnings per share came in at 7.94,up 22%year on year.We also made clear progress on a strategic level,for instance through the sale of the Environmental Science Professional business,which represented an important milestone for us in our portfolio optimi

40、zation efforts.Bayer CEO Werner Baumann To our StockholdersChairmans LetterBayer Annual Report 2022 8 We want you,our stockholders,to share commensurately in last years commercial success,which is why we have decided on the basis of these results to propose to the Annual Stockholders Meeting that a

41、dividend of 2.40 per share be paid.In comparative terms,Bayers stock performed well last year.It ended the year up and thus significantly outperformed both the DAX and the EURO STOXX 50.Nonetheless,our market capitalization lies well below the actual value of our company,and we will continue to work

42、 hard to close this gap.Another issue that occupied us last year was the Monsanto litigations in the United States,and we are continuing to make progress in resolving these lawsuits.With regard to the glyphosate litigation,for example,we have won the last six trials and are continuing to pursue our

43、five-point plan.In the US litigations concerning PCBs,we have finalized a class action settlement with about 2,500 cities and municipal government entities and also reached an individual settlement with the US State of Oregon.Monsanto has broad indemnity agreements with its former PCB customers,and

44、we are seeking to enforce our rights.To this end,we have filed a complaint and could potentially reach agreements through discussions.Above all,however,we are devoting all our energy into charting a course for the future.After all,a new era is dawning in the world of science and technology as well p

45、articularly where the life sciences are concerned.Thanks to cutting-edge data science and artificial intelligence,the worlds of biology and chemistry are converging at an ever faster pace.Organizations that embrace these trends will benefit from fantastic long-term opportunities.Major progress in th

46、e ongoing development of our pipelines In recent years,we have increasingly been turning our attention to precisely that.Last year,we invested 6.6 billion in research and development a figure more than 20 percent higher than in the year before.Let us take a closer look at the innovative progress we

47、have made in our three divisions.At Pharmaceuticals,we have further expanded our development portfolio in the areas of cell and gene therapies.It currently contains seven projects at different stages of clinical development,including programs that address indications where there is a high level of u

48、nmet medical need,such as Parkinsons disease,Pompe disease and congestive heart failure.To our StockholdersChairmans LetterBayer Annual Report 2022 9 We also made considerable progress in developing our late-stage pharma-ceutical pipeline and our launches of promising medicines.We believe that the m

49、ajor growth drivers in our Pharmaceuticals portfolio currently have a peak sales potential amounting to over 12 billion.They include our Factor XIa inhibitor asundexian,which could potentially prevent the formation of blood clots(thrombosis)and ischemic stroke,our development candidate elinzanetant

50、in womens healthcare,our cancer drug Nubeqa,and Kerendia for the treatment of heart and kidney disease.In the case of Nubeqa,we secured approval last year in the United States for an additional indication in patients with a specific type of prostate cancer.Furthermore,Kerendia was successfully launc

51、hed in the United States,Europe and Japan and obtained marketing authorization in China.The Crop Science Division also made great progress last year in securing approval for new products and launching them onto the market.For example,our latest corn product VT4PRO was granted regulatory approval in

52、the United States.It contains several modes of action to protect against pests such as the corn rootworm,which is also known as the“billion-dollar bug”because of the enormous damage it causes.Our new short-stature corn was able to demonstrate what it can do in the field last year,and is due to be la

53、unched onto the North American market shortly.The technology behind it gives the corn better standability,which helps to considerably reduce crop failures caused by extreme weather conditions such as high winds.We have also further expanded our Crop Science research network.For example,together with

54、 the Boston-based biotech company Ginkgo Bioworks,we have restructured our work to develop alternatives to nitrogen fertilizers and innovative approaches to carbon sequestration.Our majority holding in CoverCress likewise focuses on similar goals.CoverCress has developed a namesake cover crop which

55、helps farmers improve their soils nutrient quality and carbon sequestration.Whats more,the harvested crop serves as a raw material for the production of biofuel,giving farmers an additional source of income.We also forged ahead with important innovations at Consumer Health last year.In the second ha

56、lf of 2022,we launched Astepro Allergy in the United States as an over-the-counter medicine.This antihistamine nasal spray,which was previously only available on prescription,starts working in just 30 minutes.It is the first OTC product of its kind for allergy sufferers To our StockholdersChairmans

57、LetterBayer Annual Report 2022 10 in the United States.Furthermore,we also reinforced our nutritional supple-ments Berocca,Redoxon and Supradyn with a new formulation that supports immunity.Our Leaps by Bayer impact investment arm is playing an increasingly important role in our work to expand our t

58、echnological possibilities.Leaps expanded its portfolio with the addition of seven companies last year and participated in a further 15 rounds of financing for already established portfolio companies.Since 2015,we have invested a total of over US$1.7 billion in more than 55 companies through Leaps.E

59、ach of these investments has the potential to change established paradigms for the better.Bayer is system-relevant for achieving climate and sustainability goals Our work at Bayer has enormous relevance for the worlds efforts to achieve the United Nations Sustainable Development Goals.For example,de

60、carbonization of the food chain can only succeed if we play our part and provide farmers all over the planet with new solutions.These new solutions will be equally important when it comes to safeguarding the food supply for a growing world population.We have set ourselves ambitious targets and achie

61、ved a lot in 2022,as you will discover if you read our Sustainability Report.We are also making very good progress with our own carbon footprint to make the company carbon-neutral by 2030.For example,we are continuing to invest in climate-smart production facilities.Germanys Federal Chancellor Olaf

62、Scholz attended last years topping-out ceremony for our new pharmaceuticals facility in Leverkusen,which incorporates a state-of-the-art geothermal system that reduces CO2 emissions by 70%compared with conventional plants.Social targets,such as our goal of supporting 100 million smallholder farmers

63、through initiatives that are tailored to their needs,also form part of our sustainability efforts.To do that,we are further expanding our product and service portfolio,with innovative business models and digital solutions for the entire growing system.Our commitment to sustainability is gaining ever

64、 greater recognition.For instance,last year,the ratings agency MSCI upgraded its ESG score for Bayer from“BB”to“A”,which represents a key milestone in bolstering our ESG profile.To our StockholdersChairmans LetterBayer Annual Report 2022 11 Extremely well set up for the future All in all,we can look

65、 back on a very successful year.We have delivered outstanding business figures under difficult conditions.We have successfully launched new products and invested extensively in research,innovation and sustainability and thus in the long-term success of Bayer.The popular claim that crises often bring

66、 opportunities as well as risks has rarely been as accurate as it is right now.We are looking at both sides of the coin.We are mitigating risks by actively taking countermeasures and putting in place preventive measures.More importantly,however,we are also seizing the opportunities with both hands a

67、nd charting the ideal course to ensure we emerge from the crisis in a stronger position for the future.We are doing that by continuously expanding our technological options,driving change,becoming more digital,sustainable and inclusive,and by continuing to attract and retain the best and most talent

68、ed employees.Dear friends and shareholders,After seven years in charge of Bayer,my term of office will come to an end this year.For 35 years,it has been my pleasure to serve Bayer with dedication and passion.There were major challenges to overcome and we also had to weather some disappointments.None

69、theless,the fact is that Bayer today is built on extremely strong and robust foundations with world-leading,flourishing life science businesses,highly innovative products for farmers,patients and consumers,and outstanding prospects.We have demonstrated our operational strength as well,with these ext

70、remely good results for fiscal 2022.On June 1,2023,my successor Bill Anderson will take charge of a company with an excellent strategic set-up and an outstanding,highly motivated workforce.I wish him and the entire Bayer team every success and all the best for the future.I am convinced that on this

71、basis,Bayer has a great future ahead of it.Thank you once again for your continued support for Bayer.Sincerely,Werner Baumann Chairman of the Board of Management of Bayer AG To our StockholdersBoard of ManagementBayer Annual Report 2022 12Board of Management Heiko Schipper Consumer Health After comp

72、leting his studies in business economics in Rotter-dam,Heiko Schipper acquired experience at Heineken before joining Nestl in 1996,where he held various sales and marketing roles in Bangladesh,Indonesia and Switzerland.Schipper took on general management roles with increasing responsibility in the P

73、hilippines and Greater China.He was later appointed CEO of Nestl Nutrition and a member of the Nestl Group Executive Board.Schipper has been a member of the Bayer Board of Management since March 2018.Stefan Oelrich Pharmaceuticals Stefan Oelrich joined Bayer as a commercial trainee.After quali-fying

74、 as a commercial assistant,he held a number of positions of increasing responsibility in Bayers HealthCare business.In 2011,Oelrich joined Sanofi,where he held numerous roles before being appointed Executive Vice President Diabetes&Cardiovascular in the companys Executive Committee.Oelrich has serve

75、d as a member of the Bayer Board of Management and head of the Pharmaceuticals Division since November 2018.Rodrigo Santos Crop Science Rodrigo Santos studied Agri-cultural Engineering in So Paulo and received his MBA in Ohio.He joined Monsanto in 1999 and recently served as Chief Operating Officer

76、at Bayers Crop Science Division.During those years he held different positions in sales,marketing,and strategy,among others,leading organi-zations in Latin America,Eu-rope and in the United States.Santos has served as a mem-ber of the Bayer Board of Management and head of the Crop Science Division s

77、ince January 2022.Sarena Lin1 Chief Transformation and Talent Officer Sarena Lin studied Computer Science at Harvard University and later received her MBA in Strategy and a masters degree in Interna-tional Relations from Yale Univer-sity.She worked at McKinsey from 1998 to 2011 and held roles such a

78、s Managing Partner in Taipei as well as Partner in New York.From 2011 to 2017,she worked at Car-gill in Minneapolis,United States.She then joined Elanco,where she served as President,Elanco USA as well as Executive Vice President of Corporate Strategy and Global Marketing.She has been a mem-ber of B

79、ayers Board of Manage-ment since February 2021.Werner Baumann Chairman Werner Baumann studied economics in Aachen and Cologne,joining Bayer AG in 1988.After holding positions of increasing responsibility in Spain and the United States,he became a member of the Board of Management of Bayer HealthCare

80、.He was appointed to the Bayer Board of Management in 2010,first as Chief Financial Officer and then as Chief Strategy and Portfolio Officer.Baumann has been Chairman of the Bayer Board of Management since May 2016.Alongside this role,he became Bayers Chief Sustainability Officer in January 2020.Lab

81、or Director Wolfgang Nickl Finance Wolfgang Nickl studied busi-ness administration in Stuttgart and Los Angeles.Following numerous roles in Europe and the United States at Western Digital Corporation,Nickl was appointed Chief Financial Officer in 2010.In 2013,he joined Netherlands-based ASML N.V.as

82、Executive Vice President and Chief Financial Officer.Nickl has been a member of the Bayer Board of Management since April 2018.Bayer Annual Report 2022 To our Stockholders Report of the Supervisory Board 13Report of the Supervisory Board During 2022,the Supervisory Board monitored the conduct of the

83、 companys business by the Board of Management on a regular basis with the aid of detailed written and oral reports received from the Board of Management,and also acted in an advisory capacity.In addition,the Chairman of the Supervisory Board maintained a constant exchange of information with the Cha

84、irman and the other members of the Board of Management.Furthermore,the Chairman of the Supervisory Board and the Chairman of the Audit Committee were regularly in direct contact including outside the meetings with the heads of the Law,Patents,Insurance,Compliance and Data Privacy unit,Internal Audit

85、,and the Taxes,Treasury and Accounting unit.In addition,the Chairman of the Audit Committee was regularly in direct contact with the head of the Global Compliance and Data Privacy department.In this way,the Supervisory Board was kept continuously informed about the companys intended business strateg

86、y,corporate planning(including financial,investment and human resources planning),earnings performance,the state of the business and the situation in the company and the Group.Where Board of Management decisions or actions required the approval of the Supervisory Board,whether by law or under the Ar

87、ticles of Incorporation or the rules of procedure,the draft resolutions were inspected by the members at the meetings of the full Supervisory Board,sometimes after preparatory work by the committees,or approved on the basis of documents circulated to the members.The Supervisory Board was involved in

88、 decisions of material importance to the company.We discussed at length the business trends described in the reports from the Board of Management and the prospects for the development of the Bayer Group as a whole,the divisions and important markets.Changes on the Supervisory Board The employee repr

89、esentatives Dr.Thomas Elsner,Robert Gundlach,Petra Reinbold-Knape,Michael Schmidt-Kieling and Oliver Zhlke stepped down from the Supervisory Board when their respective terms expired at the 2022 Annual Stockholders Meeting.The other employee representatives were reelected to the Supervisory Board th

90、rough the employee elections.Dr.Barbara Gansewendt,Francesco Grioli,Claudia Schade,Heinz Georg Webers and Michael Westmeier were newly elected to the Supervisory Board to replace the members who had stepped down.Reiner Hoffmann stepped down from the Supervisory Board effective September 26,2022.The

91、competent court appointed Yasmin Fahimi,Chairwoman of the German Trade Union Confederation(DGB),to succeed him on the Supervisory Board.Dr.Fei-Fei Li stepped down from the Supervisory Board effective August 31,2022,for medical reasons.The competent court appointed Kimberly Mathisen to succeed her.Ma

92、thisen has held executive functions in the consumer goods,pharmaceutical and IT industries and currently serves as CEO of an independent nonprofit foundation.She has many years of experience in digitalization and artificial intelligence,technology,branded consumer goods and the pharmaceuticals busin

93、ess,as well as sustainability.Her appointment helps to fulfill the Supervisory Boards stated goals with regard to the expertise and experience of its membership that need to be taken into account when candidates are proposed for appointment as stockholder representatives.Bayer Annual Report 2022 To

94、our Stockholders Report of the Supervisory Board 14 An extensive onboarding program was organized for the new members appointed to the Supervisory Board in 2022,during which they were able to meet individually with the Chairman of the Supervisory Board,the members of the Board of Management and repr

95、esentatives from the second management level to receive information on the companys organizational structure,its strategy,the legal framework for their duties,and the status of the principal litigations,along with additional information depending on their intended committee membership.Work of the Su

96、pervisory Board The Supervisory Board convened for 13 meetings in 2022,some of which were combined into two-or three-day meeting blocks.The attendance rate of the individual Supervisory Board members at the meetings of the Supervisory Board and its committees is disclosed at the end of this Report.T

97、he members of the Board of Management generally attended the meetings of the Supervisory Board.However,the Supervisory Board also met regularly without the Board of Management or with only the Chairman of the Board of Management present.Each ordinary meeting formally includes an“executive session”as

98、 a separate agenda item,during which no Board of Management members are present.Starting in the fourth quarter,the Audit Committee meetings now also include exe-cutive sessions that involve the Audit Committee consulting with the auditor without the presence of the Board of Management.The employee r

99、epresentatives and the stockholder representatives each held preparatory discussions prior to the ordinary meetings of the Supervisory Board.The deliberations of the Supervisory Board in 2022 primarily related to Bayers strategy,portfolio and business activities,along with the composition of the Sup

100、ervisory Board and Board of Management.The work of the Supervisory Board focused on the following areas in particular,each of which was discussed at multiple meetings:(1)individual corporate acquisitions and divestments;(2)material litigations,including in particular those involving glyphosate and P

101、CBs,which the full Supervisory Board and also the Audit Committee dealt with intensively;(3)the effects of the war in Ukraine on the workforce and business activities in Ukraine and Russia;(4)matters relating to Board of Management compensation and compensation reporting,which the Supervisory Board

102、and also the Human Resources and Compensation Committee dealt with in detail;and(5)the succession planning for the Chairman of the Board of Management,which the Supervisory Board and the Human Resources and Compensation Committee dealt with in depth at several meetings.Outside of the meetings of the

103、 Supervisory Board and the respective committees,these issues were also the subject of in-depth dialogue between the Chairman of the Supervisory Board and the Chairman of the Board of Management,as well as further members of the Board of Management.At its individual meetings,the Supervisory Board fo

104、cused mainly on the following topics and passed the following written resolutions:1.At the February meetings,the Supervisory Board addressed the 2021 Annual Report,the Compensation Report and the Notice of the 2022 Annual Stockholders Meeting.It dealt with the regular risk report and discussed matte

105、rs relating to Board of Management compensation,including in particular target attainment and the short-term variable compensation of the members of the Board of Management for 2021 along with the targets for 2022.In addition,the Supervisory Board adopted a resolution on the refinancing of a hybrid

106、bond.Prof.Dr.Norbert Winkeljohann,Chairman of the Supervisory Board of Bayer AG Alexander Englert Bayer Annual Report 2022 To our Stockholders Report of the Supervisory Board 152.At an extraordinary meeting in March,the Supervisory Board approved the planned divestment of Crop Sciences Environmental

107、 Science Professional business following an extensive discussion.3.In March,the Supervisory Board adopted a resolution as part of a written procedure to issue a joint statement with the Board of Management regarding a countermotion for the Annual Stockholders Meeting.4.At an extraordinary meeting in

108、 April,the Supervisory Board dealt with critical statements by stockholders ahead of the Annual Stockholders Meeting.5.At another extraordinary meeting in April,the Supervisory Board discussed the situation of the employees in Ukraine and the business situation in Ukraine and Russia against the back

109、drop of the war in Ukraine.The Supervisory Board also dealt with the results of an investor study it had commissioned and the findings of analysis conducted by an external corporate consulting firm that had examined the Group and divisional strategies,as well as their impact on Bayers rating and any

110、 possible strategic conclusions to be drawn.These matters were initially discussed together with the members of the Board of Management,and then also in detail during an executive session.6.At its ordinary meeting in April prior to the Annual Stockholders Meeting,the Supervisory Board discussed the

111、business performance in the year to date,focusing particularly on the effects of the war in Ukraine and the ongoing glyphosate and PCB litigations.In addition,the Supervisory Board approved the acquisition of Natsana,a leading supplier of high-quality nutritional products,and dealt with matters rela

112、ting to the upcoming Annual Stockholders Meeting.7.At the inaugural meeting of the newly composed Supervisory Board following the Annual Stockholders Meeting,the Supervisory Board elected Heike Hausfeld as Vice Chairwoman and held elections for the committees.8.By way of a written resolution in May,

113、the Supervisory Board approved the implementation of a financing transaction.9.At a meeting in June,the Supervisory Board dealt with the events of the Annual Stockholders Meeting,particularly the Compensation Report being rejected by the Annual Stockholders Meeting,and discussed the course of action

114、 to take.As a first step,this would involve holding discussions with major investors to gain a better understanding of the reasons why the Compensation Report had been rejected.As a second step,external compensation consultants would be brought on board to discuss the implications for compensation r

115、eporting and the target-setting process,including the role of the Human Resources and Compensation Committee,as well as potential changes to the Board of Management compensation system.In addition,the Supervisory Board once again discussed the situation in Ukraine and Russia,as well as the status of

116、 the glyphosate and PCB litigations,and approved the planned conclusion of a settlement with the US state of Oregon as part of the PCB litigations.The Supervisory Board also dealt with the planned divestment of the business with Nebido,a long-acting injectable testosterone replacement therapy.The Su

117、pervisory Board approved the planned divestment in principle and delegated responsibility for approving the details of the divestment,which at the time of the Supervisory Board resolution were not yet finalized,to the Presidial Committee.10.During an executive session in July,the Supervisory Board d

118、ealt once again with the glyphosate and PCB litigations,focusing on the most recent developments in these lawsuits.The Supervisory Board commissioned a legal review examining the Board of Managements duty of care obligations as part of the Monsanto acquisition with respect to the due diligence perfo

119、rmed on the potential legal risks stemming from the PCB litigations.Bayer Annual Report 2022 To our Stockholders Report of the Supervisory Board 1611.By way of a written resolution in July,the Supervisory Board approved the acquisition of a majority interest in CoverCress,an agricultural technology

120、company that has developed a novel winter oil plant,and options to purchase the remaining shares at a later point in time.12.In September,the Supervisory Board held meetings on three consecutive days in St.Louis,Missouri,where the US Crop Science business is headquartered.At these meetings,the Super

121、visory Board discussed the status of the project to select a successor to the Chairman of the Board of Management,which had commenced in mid-2022,during an executive session.Likewise during the executive session,the Supervisory Board also dealt with the results of the investor conversations held in

122、the wake of the Compensation Report having been rejected by the Annual Stockholders Meeting,and addressed the conclusions drawn from these conversations.Further agenda items included a report on Bayers US business and a detailed discussion of the Group and divisional strategies along with the commun

123、ications strategy.The Supervisory Board also dealt in detail with the status of the various litigations,and especially the glyphosate and PCB litigations.Together with John H.Beisner,the independent legal advisor to the Supervisory Board,it deliberated on how the status and development of the litiga

124、tions were to be assessed and also discussed the results of the legal review examining the appropriateness of the due diligence conducted prior to the Monsanto acquisition with respect to the legal risks related to PCBs.This expert opinion had confirmed the appropriateness of the due diligence perfo

125、rmed,and thus that the Board of Management had fulfilled its duty of care obligations.Finally,the Supervisory Board dealt with the status of the Bayer 2022 transformation program and corporate financing.In conjunction with the meetings,the Supervisory Board toured the Crop Science research facilitie

126、s at the St.Louis site,received a report on the divisions innovation pipeline,and met with executives based at that location.13.By way of a written resolution in December,the Supervisory Board reapproved the planned settlement agreement with the US state of Oregon as part of the PCB litigations foll

127、owing the negotiation of further adjustments.14.At its December meeting,the Supervisory Board again dealt in detail with the search for a successor to the Chairman of the Board of Management as part of an executive session.The Supervisory Board once again extensively discussed the conclusions drawn

128、from the Compensation Report having been rejected by the Annual Stockholders Meeting.These included expanding the Human Resources and Compensation Committee and significantly increasing its involvement in reviewing the targets,along with the monitoring of Board of Management compensation on an ongoi

129、ng basis.Finally,the Supervisory Board adopted its regular resolution on the adjustment of the pensions of the former members of the Board of Management.The Supervisory Board discussed and approved the operational planning for 2023 and the scope of Bayers external financing.It approved the extended

130、scope of a capital expenditure project in the United States and received an update on progress in the areas of transformation and talent development.At this meeting,the Supervisory Board additionally resolved on the awarding of the audit contract for the Compensation Report,the amendment of the Supe

131、rvisory Boards rules of procedure,and the declaration of compliance with the German Corporate Governance Code.It also held committee elections.In conjunction with the meeting,the Supervisory Board toured the Crop Science research facilities at the Monheim site and met with executives based there.15.

132、By way of a written resolution in December,the Supervisory Board approved a capital expenditure project designed to simplify and standardize the most important corporate processes and how they are mapped in IT processes.Bayer Annual Report 2022 To our Stockholders Report of the Supervisory Board 17C

133、ommittees of the Supervisory Board In 2022,the Supervisory Board had a Presidial Committee,an Audit Committee,a Human Resources and Compensation Committee,a Nominations Committee,an Innovation Committee and an ESG Committee.The current membership of the committees is shown in the“Further Information

134、”section under“Governance Bodies.”The meetings and decisions of the committees,and especially the meetings of the Audit Committee,were prepared on the basis of reports and other information provided by the Board of Management.Reports on the committee meetings were presented at the meetings of the fu

135、ll Supervisory Board.Presidial Committee:This comprises the Chairman and Vice Chairwoman of the Supervisory Board along with a further stockholder representative and a further employee representative.The Presidial Committee serves primarily as the mediation committee pursuant to the German Codetermi

136、nation Act.It has the task of submitting proposals to the Supervisory Board on the appointment of members of the Board of Management if the necessary two-thirds majority is not achieved in the first vote at a full Supervisory Board meeting.In addition,certain decision-making powers in connection wit

137、h capital measures,including the power to amend the Articles of Incorporation accordingly,have been delegated to this committee.The Supervisory Board can also delegate certain responsibilities to the Presidial Committee on a case-by-case basis.Furthermore,the Presidial Committee may undertake prepar

138、atory work for meetings of the full Supervisory Board.No meeting of the Presidial Committee had to be convened in 2022.In June,the Presidial Committee approved the exact terms of the divestment of the Nebido business as part of a written procedure,after having been delegated this task by the full Su

139、pervisory Board.Audit Committee:The Audit Committee comprises three stockholder representatives and three employee representatives.The Chairman of this committee,Horst Baier,satisfies the statutory requirements concerning expertise in the field of accounting,and Supervisory Board Chairman Norbert Wi

140、nkeljohann,who is also a member of this committee,satisfies the requirements concerning expertise in the field of auditing.The Audit Committee meets regularly four times a year.Its tasks include,in particular,examining the financial reporting and monitoring the financial reporting process,the effect

141、iveness and appropriateness of the internal control system and the risk management system,the effectiveness of the internal audit system,the compliance system and the audit of the financial statements.It also addresses relevant topics in the tax,finance and treasury areas.The Audit Committee prepare

142、s the resolutions of the Supervisory Board concerning the financial statements and management report of Bayer AG,the proposal for the use of the distributable profit,the consolidated financial statements and the management report of the Bayer Group(including the mandatory CSR reporting).Further task

143、s include holding discussions with the Board of Management on the half-year financial reports and any quarterly reports or quarterly statements to be issued prior to their publication.This committee prepares the auditor selection process and submits a reasoned proposal to the Supervisory Board regar

144、ding the appointment of the auditor.It also prepares the agreements with the auditor(dealing in particular with the awarding of the audit contract,the determination of the main areas of focus for the audit and the audit fee agreement)and takes appropriate measures to determine and monitor the audito

145、rs independence.The Audit Committee regularly assesses the quality of the audit and resolves on the approval of any other contracts awarded to the auditor,paying special attention to any potential implications for the auditors independence.The Audit Committee also discusses the assessment of the aud

146、it risk,the audit strategy and audit planning,and the audit results with the auditor.Furthermore,the Chairman of the Audit Committee regularly discusses the progress of the audit with the auditor and reports on this topic to the committee.Bayer Annual Report 2022 To our Stockholders Report of the Su

147、pervisory Board 18In addition,the Audit Committee monitors the internal process for assessing whether transactions with related parties are executed in the ordinary course of business and on market terms.It resolves on behalf of the Supervisory Board on the approval of related-party transactions pur

148、suant to Sections 111a to 111c and Section 107 of the Stock Corporation Act where such transactions require Supervisory Board approval and the Supervisory Board has not entrusted the approval decision to any other committee.The Chairman of the Board of Management and the Chief Financial Officer regu

149、larly attended the meetings of the Audit Committee.Representatives of the auditor were also present at all the meetings and reported in detail on the audit work and the audit reviews of the half-year report and quarterly statements.Starting in the fourth quarter,the Audit Committee now regularly con

150、sults with the auditor at each ordinary meeting without the presence of the Board of Management.The Audit Committee discussed developments in the area of corporate compliance and the latest reports from Internal Audit at each of its meetings,where necessary.The individual Audit Committee meetings al

151、so focused mainly on the following topics:1.At the February meeting,the Audit Committee discussed the financial statements of Bayer AG and the consolidated financial statements of the Bayer Group.It also carefully considered the risk report,which covers the risk early warning system and other aspect

152、s,and the report on the internal control system(ICS).The Audit Committee also dealt with the yearly compliance report and the developments in compliance and legal cases.Other topics were the yearly report by Internal Audit,a report on the companys insurance situation,and a report on the procedure fo

153、r recording related-party transactions.2.The May meeting focused on the quarterly statement for the first quarter.The Audit Committee also dealt with the quality of the audit of the financial statements and the main areas of focus for the audit of the annual financial statements.3.At an extraordinar

154、y meeting in July,the Audit Committee dealt extensively with the status of the PCB litigations,the other material litigations and their financial assessment,and how to account for the special developments in the second quarter in the financial market communication.4.At its August meeting,the Audit C

155、ommittee dealt with the half-year report and the business performance at Pharmaceuticals.The committee also discussed the effectiveness and further development of the risk management system and the internal control system for financial reporting.In addition,current developments relating to ESG repor

156、ting were addressed.Finally,the Audit Committee discussed the yearly report of the tax function at the meeting.5.At its November meeting,the Audit Committee extensively discussed the quarterly statement for the third quarter and deliberations concerning the further development of the structure of th

157、e Groups holdings.Other topics were the audit planning by Internal Audit,the yearly report of the treasury function including the audit conducted pursuant to Section 32 of the German Securities Trading Act(WpHG)(EMIR),and the audit budget for the auditor of the financial statements for 2023.Finally,

158、the Audit Committee discussed the topics of data security and cyber security at the meeting and also addressed the current status and a simulation of the variable compensation of the Board of Management for 2022.Bayer Annual Report 2022 To our Stockholders Report of the Supervisory Board 19Human Res

159、ources and Compensation Committee:The Human Resources and Compensation Committee has parity of representation between stockholders and employees.At the beginning of the year,it consisted of the Chairman of the Supervisory Board and three other Supervisory Board members.In December,the Supervisory Bo

160、ard expanded this committee to six members while maintaining parity of representation and changed its name to the Human Resources and Compensation Committee(previously:Human Resources Committee).In December,the Vice Chairwoman of the Supervisory Board and the Chairman of the Audit Committee were ele

161、cted as additional members of this committee.The Human Resources and Compensation Committee prepares the personnel decisions of the full Supervisory Board,which resolves on appointments or dismissals of members of the Board of Management,and monitors the development of Board of Management compensati

162、on on an ongoing basis.The committee resolves on behalf of the Supervisory Board on the service contracts of the members of the Board of Management.However,it is the task of the full Supervisory Board to resolve on the total compensation of the individual members of the Board of Management,the respe

163、ctive compensation components and the compensation system,as well as to regularly review the compensation system on the basis of recommendations submitted by the Human Resources and Compensation Committee.The Human Resources and Compensation Committee also discusses the long-term succession planning

164、 for the Board of Management.The Chairman of the Board of Management regularly attended the meetings of the Human Resources and Compensation Committee where the matters discussed did not relate to him personally(including the succession planning for the CEO position).The Human Resources and Compensa

165、tion Committee convened for four meetings.In each case,the meetings involved deliberations and the adoption of resolutions relating to the compensation of the Board of Management and the service contracts of Board of Management members,as well as compensation reporting.The Human Resources and Compen

166、sation Committee also dealt in depth with the succession planning for the CEO position and the conclusions drawn from the Compensation Report having been rejected by the Annual Stockholders Meeting,the target-setting and performance evaluation processes,and the Board of Management compensation syste

167、m.Nominations Committee:This committee carries out preparatory work when an election of stockholder representatives to the Supervisory Board is to be held.It suggests suitable candidates for the Supervisory Board to propose to the Annual Stockholders Meeting for election.The committee comprises the

168、Chairman of the Supervisory Board,who serves as its chairman,and three further stockholder representatives.The Nominations Committee convened twice in 2022.At a meeting in January,it resolved without the members in question voting on the resolution to recommend to the Supervisory Board that Dr.Paul

169、Achleitner,Dr.Norbert Bischofberger,and Colleen A.Goggins be proposed to the Annual Stockholders Meeting for reelection to the Supervisory Board.At a meeting in August,the committee resolved to recommend to the competent court that Kimberly Mathisen be appointed to succeed Dr.Fei-Fei Li,who stepped

170、down from the Supervisory Board for medical reasons.Innovation Committee:The Innovation Committee is primarily concerned with the innovation strategy and innovation management,the strategy for the protection of intellectual property,and major research and development programs at Bayer.Within its are

171、a of responsibility,the committee advises and oversees management and prepares any Supervisory Board decisions to be made.The Committee comprises the Chairman of the Supervisory Board and seven other members of the Supervisory Board,with parity of representation between stockholder and employee repr

172、esentatives.The meetings of the Innovation Committee are regularly attended by the Chairman of the Board of Management,as well as by further members of the Board of Management depending on the topics for discussion.Bayer Annual Report 2022 To our Stockholders Report of the Supervisory Board 20The In

173、novation Committee convened twice in 2022.1.At its meeting in February,it dealt with the outlook for research,development and innovation in the Pharmaceuticals Division.2.At its meeting in May,the Innovation Committee dealt with transformative RNA-based strategies and discussed their significance fo

174、r the individual divisions and for Leaps by Bayer.ESG Committee:Established at the beginning of 2022,the ESG Committee consists of the Chairman of the Supervisory Board and seven other members,with parity of representation between stockholders and employees.It deals with sustainable corporate govern

175、ance and the companys business activities in the areas of environmental protection,social issues and corporate governance(ESG).This mainly pertains to the way sustainability is incorporated into the business strategy;the establishment of sustainability targets;nonmandatory ESG reporting and the audi

176、ting thereof,if applicable;opportunities and risks;and organizational structures and processes in ESG areas,provided the Audit Committee is not already responsible for these matters.Within its area of responsibility,the committee advises and oversees the management and prepares any Supervisory Board

177、 decisions to be made.The ESG Committee convened twice in 2022:1.At its first meeting in February,the committee initially dealt with how it would go about its duties in the future.It then discussed Bayers sustainability performance in 2021,as well as ESG benchmarks and controversies,and looked ahead

178、 to the ESG priorities for 2022.2.At its meeting in August,the committee discussed the Bayer Sustainability Councils focal topics for 2022 with the Co-Chairs of that body.The committee discussed the status of the sustainability targets,benchmarks and strategies,and dealt in depth with Bayers contrib

179、ution to climate protection.In June,the Supervisory Board conducted a training session focused on digitalization and its impact on Bayer.This was the first of a three-part series of training sessions dealing with these issues.Corporate governance The Supervisory Board considered the principles of co

180、rporate governance at Bayer.In particular,at its December meeting,it dealt with the declaration of compliance with the German Corporate Governance Code and resolved to amend its rules of procedure.During Supervisory Board meetings,the Chairman of the Supervisory Board also summarized the dialogue he

181、 had engaged in with investors during investor discussions in September and October concerning Board of Management compensation and compensation reporting,as well as during a number of individual conversations.Disclosure of meeting participation on an individual basis The members attendance rate in

182、the meetings of the full Supervisory Board and the committees was 92%.This was largely attributable to the long-term illness of one member of the Supervisory Board.The attendance rate of the other Supervisory Board members was just under 95%.In view of the special circumstances relating to the COVID

183、-19 pandemic and as part of an endeavor to hold the meetings in more contemporary and sustainable formats,the meetings in 2022 took place not only as in-person meetings,but also as virtual meetings via video-conferencing or as in-person meetings with the option of participation in virtual form(hybri

184、d meetings).None of the meetings took place as a telephone conference call.The participation of the individual Supervisory Board members in the meetings of the Supervisory Board and its committees is shown below:Bayer Annual Report 2022 To our Stockholders Report of the Supervisory Board 21 Supervis

185、oryBoardAudit Committee Human Resources and Compensation CommitteeInnovation CommitteeESG CommitteeNominations CommitteeNumber of meetings/participation rate(%)Number%Number%Number%Number%Number%Number%Prof.Dr.Norbert Winkeljohann Chairman 13/13 100%5/5 100%4/4 100%2/2 100%2/2 100%2/2 100%Heike Haus

186、feld Vice Chairwoman 11/13 85%3/4 75%since April 2022 1/1 100%until April 2022 0/1 100%since April 2022 2/2 100%Dr.Paul Achleitner 12/13 92%1/1 100%until April 2022 2/2 100%1/1 100%since April 2022Dr.Simone Bagel-Trah 13/13 100%3/3 100%since April 2022 2/2 100%Horst Baier 13/13 100%5/5 100%Dr.Norber

187、t W.Bischofberger 12/13 92%2/2 100%Andr van Broich 12/13 92%3/4 75%2/2 100%2/2 100%Ertharin Cousin 13/13 100%2/2 100%2/2 100%Dr.Thomas Elsner (until April 2022)6/6 100%1/1 100%Yasmin Fahimi (since October 2022)1/1 100%Dr.Barbara Gansewendt (since April 2022)7/7 100%4/4 100%Colleen A.Goggins 13/13 10

188、0%2/2 100%2/2 100%Francesco Grioli(since April 2022)7/7 100%Robert Gundlach(until April 2022)5/6 83%1/1 100%Reiner Hoffmann(until October 2022)11/12 92%1/1 100%Fei-Fei Li(until August 2022)0/9 0%Frank Lllgen 10/13 77%5/5 100%1/2 50%Kimberly Mathisen(since September 2022)4/4 100%Petra Reinbold-Knape(

189、until April 2022)6/6 100%Andrea Sacher 13/13 100%3/3 100%since April 2022 1/1 100%since April 2022 1/1 100%until April 2022Claudia Schade (since April 2022)7/7 100%Michael Schmidt-Kieling (until April 2022)6/6 100%Heinz Georg Webers(since April 2022)7/7 100%1/1 100%Alberto Weisser 10/13 77%5/5 100%1

190、/1 100%since April 2022Michael Westmeier (since April 2022)7/7 100%Prof.Dr.Otmar D.Wiestler 12/13 92%2/2 100%Oliver Zhlke(until April 2022)6/6 100%1/1 100%1/1 100%1/1 100%Financial statements and audits The financial statements of Bayer AG were prepared according to the requirements of the German Co

191、mmercial Code and Stock Corporation Act.The consolidated financial statements of the Bayer Group were prepared according to the International Financial Reporting Standards(IFRS)as endorsed by the European Union.The applicable further requirements of Section 315a Bayer Annual Report 2022 To our Stock

192、holders Report of the Supervisory Board 22of the German Commercial Code were also taken into account.The combined management report was prepared according to the German Commercial Code.The auditor,Deloitte GmbH Wirtschaftsprfungsgesellschaft,Munich,has audited the financial statements of Bayer AG,th

193、e consolidated financial statements of the Bayer Group and the combined management report.The auditor responsible for the audit was Michael Mehren.The conduct of the audit is explained in the auditors reports.The auditor finds that Bayer has complied,as appropriate,with the German Commercial Code,th

194、e German Stock Corporation Act and/or the International Financial Reporting Standards endorsed by the European Union,and issues an unqualified opinion on the financial statements of Bayer AG,the consolidated financial statements of the Bayer Group and the combined management report.The financial sta

195、tements of Bayer AG,the consolidated financial statements of the Bayer Group,the combined management report and the audit reports were submitted to all members of the Supervisory Board.They were discussed in detail by the Audit Committee and at a meeting of the full Supervisory Board.The auditor sub

196、mitted a report on both occasions and was present during the discussions.We examined the financial statements of Bayer AG,the proposal by the Board of Management for the use of the distributable profit,the consolidated financial statements of the Bayer Group and the combined management report.While

197、examining the combined management report,we also examined in particular the nonfinancial statement,which is fully integrated into the management report and was also examined by the auditor.We have no objections,thus we concur with the result of the audit.We have approved the financial statements of

198、Bayer AG and the consolidated financial statements of the Bayer Group prepared by the Board of Management.The financial statements of Bayer AG are thus confirmed.We are in agreement with the combined management report and,in particular,with the assessment of the future development of the enterprise.

199、We also concur with the dividend policy and the decisions concerning earnings retention by the company.We assent to the proposal by the Board of Management for the use of the distributable profit,which provides for payment of a dividend of 2.40 per share and the allocation of the remaining amount to

200、 other retained earnings.The Supervisory Board would like to thank the Board of Management and all employees for their dedication and hard work in 2022.Leverkusen,February 24,2023 For the Supervisory Board Prof.Dr.Norbert Winkeljohann Chairman Bayer Annual Report 2022 To our StockholdersInvestor Inf

201、ormation23Investor Information Positive performance in a challenging environment 2022 was a challenging year for major equity markets due to increasing inflation,rising interest rates,recessionary concerns and the effects of Russias war in Ukraine for Europe in particular.By the end of the year,the

202、DAX had lost approximately 12%and the EURO STOXX 50 had declined by almost 10%.In this difficult environment,the Bayer share consistently outperformed both indices,closing the year with a plus of 3%.Including the dividend of 2.00,paid at the beginning of May,this represented a total return of 6%and

203、an outperformance of around 19 percentage points compared to the DAX.The share price developed particularly strongly at the beginning of the year,gaining up to 47%against declining markets and reaching its high of 67.73 in mid-April.In the second half of the year,the share price showed a higher corr

204、elation to the general market development,closing the year at 48.33.In regard to business performance,our nutrition-and health-focused portfolio proved its resilience in a tough environment,and we exceeded the core earnings per share guidance that we had upgraded in August.We were able to compensate

205、 significant cost inflation with pricing leverage in our Crop Science and Consumer Health businesses.While our Pharmaceuticals Division has limited pricing flexibility,we saw promising pipeline results and increasing growth contributions from our launch products in 2022.Sell-side analysts viewed the

206、 Bayer stock more positively in 2022 compared to 2021.The average target price was 77.30(as of the end of December 2022)compared to 64.80 a year earlier.Of the 23 analyst recommendations at the end of the year,18 were positive,5 were neutral and none was negative.1 1 9008070130140DJ EURO

207、STOXX 50 9.5%(Performance Index)Bayer+6.2%DAX 12.3%Performance of Bayer Stock in 2022Indexed;100=Xetra closing price on December 31,2021Jan.Feb.MarchAprilMayJuneJulyAug.Sept.Oct.Nov.Dec.1 Source:VARA Research(Bayer does not assume any responsibility for these studies nor for any recommendations or a

208、ssessments made as part of such studies)Bayer Annual Report 2022 To our StockholdersInvestor Information242 Bayer Stock Data 20212022Earnings per share from continuing and discontinued operations 1.024.22Core earnings per share from continuing operations1 6.51 7.94Free cash flow per share 1.44 3.17E

209、quity per share 33.76 39.62Dividend per share 2.00 2.40 Year-end price 47.00 48.33High for the year 57.30 67.73Low for the year 44.26 47.68 Total dividend payment million1,965 2,358Number of shares entitled to the dividend(Dec.31)million shares982.42 982.42Market capitalization(Dec.31)billion46.2 47

210、.5Average daily share turnover on German stock exchanges million shares3.3 3.4 Price/EPS 46.211.2Price/core EPS 7.2 6.1Price/free cash flow 32.6 15.2Dividend yield%4.3 5.01 For details on the calculation of core earnings per share,see Combined Management Report,A 2.3 2 Xetra closing prices(source:Bl

211、oomberg)Dividend payout increased substantially After two years of stable dividends,the Board of Management and the Supervisory Board propose to increase the dividend payout to 2.40 per share for 2022(2021:2.00 per share).This represents an absolute increase of 20%year on year,in line with our stron

212、g operational performance.The dividend payment corresponds to 30%of 2022 core EPS(2021:31%).Based on the Bayer stock price at the end of 2022,the dividend yield is 5.0%(2021:4.3%).3 Dividends Per Share and Total Dividend Payment1.01.52.02.50.53.00.0Total dividend payment(million)Dividend per share()

213、2.102.252.502.702.802.802.80202220001920202021 2.001,965 million2.002,751 million1,737 million1,861 million2,067 million2,233 million1,965 million2,402 million2,611 million2,358 million2.40 Bayer Annual Report 2022 To our StockholdersInvestor Information25Bayer stock included i

214、n important indices The Bayer stock is listed on the DAX and numerous other key European indices,including the EURO STOXX 50,the FTSE Euro 100 and the S&P Europe 350.At the end of the year,Bayer was ranked 7th in the DAX 40 according to market capitalization.Bayer stock is also included in the impor

215、tant sustainability indices FTSE4Good,STOXX Global ESG Impact,STOXX Europe Sustainability,DAX 50 ESG and MSCI ACWI Low Carbon Target Index.International ownership structure Our companys global presence is also reflected in our international ownership structure.The biggest share of our capital stock

216、is held by investors in North America,accounting for 35.5%,up 5.7 percentage points year on year.German-based stockholders remain a key group of investors,holding 22.5%of Bayer stock,while shareholders in the United Kingdom account for 13.8%.Irrespective of geographic distribution,some 15%of our sha

217、res are held by private stockholders.In addition,Bayer employees hold about 1%of our capital stock through participation programs.According to our share register,we had approximately 586,000 stockholders at the end of 2022.Bayer has a 100%free float as defined by Deutsche Brse,the operator of the Fr

218、ankfurt Stock Exchange.4 3.1%France,Italy,Spain 4.5%Other countries10.2%Not covered by survey35.5%United States,Canada22.5%GermanySource:CMi2iShareholder Composition Regional Allocation2.7%Switzerland0.8%Japan4.1%Singapore13.8%United Kingdom2.8%Norway,Denmark,Sweden Intensified investor dialogue acr

219、oss multiple offerings We consider our ongoing dialogue with analysts and investors an important communication channel in order to receive their input and feedback and to inform them about the latest developments at our company.Our capital market communications in 2022 focused on progress with innov

220、ations and our business performance.We advanced our successful virtual formats introduced during the COVID-19 pandemic and at the same time again increased in-person interaction with our investors.In total,Investor Relations participated in more than 500 engagements in 2022,both in-person and via vi

221、rtual venues.The events were regularly attended by members of the Board of Management and other top executives.Bayer Annual Report 2022 To our StockholdersInvestor Information26In particular,we held four investor webinars,two with a Pharmaceuticals focus following key late-stage asset milestones for

222、 our cancer drug Nubeqa and our Factor XIa inhibitor asundexian,one Crop Science Annual Pipeline Update and one Consumer Health Portfolio Update.As a major in-person event,we hosted the Crop Science Field Technology Showcase at our Jerseyville Agronomy Center in the United States,during which top te

223、chnical experts guided the attendees through our latest technologies live in the field and participants experienced the convergence of cutting-edge technology in crop protection chemistry,breeding,biotechnology,digital agriculture and sustainability in full-system demonstrations.We also kept the suc

224、cessful virtual format of our Annual Stockholders Meeting,providing shareholders with best-in-class options to exercise their stockholder rights in a virtual setting,including the ability to ask follow-up questions during the event through our Stockholders Portal and to submit text and video stateme

225、nts ahead of the meeting which were then published on our website.Video statements were also played during the Annual Stockholders Meeting and transcripts of the speeches by Werner Baumann and Prof.Dr.Norbert Winkeljohann were published in advance so that targeted questions could be submitted.Based

226、on our experience with virtual Annual Stockholders Meetings from the past few pandemic years and the new legislation,we will in principle offer the same rights as in a physical Annual Stockholders Meeting in a virtual setting starting from 2023.The new form of the virtual Annual Stockholders Meeting

227、 supports the direct exchange with stockholders during the event by way of video communication.In particular,shareholders have the right to submit motions and election proposals during the virtual Annual Stockholders Meeting as well as to speak.In addition,the shareholders have the right to submit q

228、uestions and obtain feedback during the event.Important improvements in ESG ratings The capital markets interest in environmental,social and governance(ESG)topics is higher than ever before.Besides our sustainability strategy,our targets and our climate protection activities,we see increasing releva

229、nce in the areas of biodiversity,product stewardship and human rights.We increased transparency in several bilateral investor interactions,conferences and roadshows and proactively addressed controversies in several reports:The United Nations(UN)Global Compact Adherence Report outlines our commitmen

230、t to the 10 UN Global Compact principles and the Genetically Modified Crops Report as well as the Crop Science Sustainability Progress Report describe our contribution to sustainable agriculture and environmental impact reduction.Highlights of our engagement included the removal of the red flag and

231、the alleged UN Global Compact breach by MSCI ESG Research and the subsequent rating improvement from BB to A.We also improved our Access to Medicine Index(ATMI)ranking by four places to rank nine.Bayer Annual Report 2022 To our StockholdersInvestor Information27Successful hybrid bond refinancing in

232、a challenging market environment Central banks increased target interest rates worldwide as a reaction to increasing inflation due to pandemic-related supply chain disruptions.For the euro area,which is heavily dependent on energy imports from Russia,the start of Russias war in Ukraine in February f

233、urther fueled inflationary pressures and pushed the European Central Bank to act.Consequently,long-term interest rates also sharply increased in 2022 following almost a decade of all-time lows.This volatile interest rate environment in combination with high geopolitical uncertainty led to extraordin

234、arily cautious debt investor behavior.Therefore,issuance windows were closed for long periods throughout 2022.Despite this challenging market environment,we were able to successfully refinance our hybrid bond with a 2022 call date in March in a one-day execution.The issuance day was one of the rare

235、periods throughout the year in which the hybrid bond market was able to absorb any new issuances at all.The issuance volume of 1.3 billion was split into two tranches with non-call periods of 5.5 years and 8.5 years.The achieved pricing was highly attractive as benchmark rates and credit spreads inc

236、reased heavily over the course of the year.Being able to realize such a significant volume in the hybrid bond market,especially in times of market distress,shows the support Bayer enjoys with investors.Concurrent with the new issue,we offered investors early repayment of the outstanding hybrid bond

237、with a 2022 call date.Since more than 80%of investors accepted the tender offer,we were subsequently able to make use of the clean-up call by repurchasing the remaining approximately 20%of the hybrid bond at par value.Through this tender offer,we were able to reduce hybrid bond refinancing costs to

238、an optimal level.In addition,we redeemed maturing bonds of US$250 million,1.75 billion and JPY10 billion over the course of the year.Bayer Annual Report 2022 About this Report 28About this Report This integrated Annual Report combines our financial reporting and material sustainability information.O

239、ur aim is to elucidate the interactions between financial,ecological and societal factors and underline their influence on our companys long-term success.All information required by commercial law is combined and referenced in our nonfinancial statement.In addition to the Annual Report,we publish a

240、separate Sustainability Report with additional detailed nonfinancial information to meet the informational needs of all stakeholders to the greatest possible extent.Legal principles and reporting standards The consolidated financial statements of the Bayer Group as of December 31,2022,comply with th

241、e International Financial Reporting Standards(IFRS),as adopted by the EU,valid at the closing date and with the provisions of the German Commercial Code in conjunction with German financial reporting standards(DRS).With due regard to these provisions,the combined management report provides an accura

242、te overview of the financial position and results of operations of the Bayer Group.The Corporate Governance Report also conforms with the German Stock Corporation Act and the recommendations of the German Corporate Governance Code.The nonfinancial statement(Sections 289b et seq.and 315b et seq.of th

243、e German Commercial Code)is integrated into the combined management report and covers data for the Bayer Group and Bayer AG as the parent company.As a framework for this,we apply the GRI Standards(Section 289d of the German Commercial Code).We also use,for example,the international recommendations a

244、nd guidelines of the OECD and ISO 26000 as a guide for defining and selecting nonfinancial indicators and in our reporting.When selecting and measuring our key data,we take into account the recommendations of the Greenhouse Gas Protocol with respect to greenhouse gas emissions and those of the Europ

245、ean Federation of Financial Analysts Societies,the World Business Council for Sustainable Development and the European Chemical Industry Council with respect to other nonfinancial indicators.The legality,accuracy and expediency of the nonfinancial statement have been verified by the Supervisory Boar

246、d.The Annual Report is available online as a PDF.Furthermore,contents subject to the statutory disclosure requirement are published in the Federal Gazette under consideration of the specifications of the European Single Electronic Format(ESEF)Regulation.Data collection and reporting thresholds In ac

247、cordance with IFRS 5(Non-current Assets Held for Sale and Discontinued Operations),financial indicators are given for continuing operations unless otherwise explicitly indicated.The same logic applies principally to HR,procurement and HSE(health,safety and environment)information and to our social d

248、ata.Reporting of the Groups HSE data includes all fully consolidated companies in which we hold at least a 50%interest.Data on occupational injuries is collected at all sites worldwide.Environmental indicators are measured at all environmentally relevant production,research and administration sites.

249、Bayer Annual Report 2022 About this Report 29External verification The auditing company Deloitte GmbH Wirtschaftsprfungsgesellschaft,Munich,Germany,has audited the consolidated financial statements of Bayer AG,Leverkusen,and the combined management report for the fiscal year from January 1,2022,to D

250、ecember 31,2022,and has issued an unqualified opinion.The audit,which is conducted to obtain reasonable assurance,also includes the disclosures pertaining to the nonfinancial statement in the management report.Exempted from this are Table A 1.2.1/2 and the indented passages pertaining to the nonfina

251、ncial Group targets in Chapter 1.2.1,as well as the section on the EU Taxonomy,which were reviewed on a limited assurance basis in 2022.Our information on Scope 3 emissions was also subject to a limited assurance review.In addition,our Opportunity and Risk Report contains certain disclosures concern

252、ing the description of the risk management system and the internal control system pursuant to Section 91,Paragraph 3 of the AktG that do not normally form part of the management report.These disclosures are provided in indented passages within the text.The Compensation Report was subject to a reason

253、able assurance review and appears in a separate chapter outside of the Management Report.The declaration of compliance with the German Corporate Governance Code has not been audited by the auditor.Additional information As the indicators in this report are stated in accordance with commercial roundi

254、ng principles,totals and percentages may not always be exact.Since inclusion and diversity forms an integral part of our corporate culture,we have employed gender-neutral language throughout this Annual Report where possible while maintaining legibility,clarity and accuracy.Bayer Annual Report 2022

255、A Combined Management Report1.1 Corporate Profile and Structure 30 1.Fundamental Information About the Group 1.1 Corporate Profile and Structure We promote health and safeguard the food supply Our strategy targets both economic growth and sustainability 1.1.1 Corporate Profile We are a life science

256、company and a global leader in healthcare and nutrition.Our innovative products support efforts to overcome the major challenges presented by a growing and aging global population.We help prevent,alleviate and treat diseases.We also aim to ensure the world has a reliable supply of high-quality food,

257、feed and plant-based raw materials.As part of this endeavor,the responsible use of natural resources is always a top priority.In line with our vision,“Health for all,hunger for none”,we aim to put an end to hunger and help everyone lead a healthy life,while at the same time protecting ecosystems.Tha

258、t is what we aspire to achieve,guided by our purpose,“Science for a better life.”We aim to continuously enhance our companys earning power and create value for customers,patients,shareholders,employees and society.Innovation,growth and sustainability are integral parts of our strategy,while our corp

259、orate values of Leadership,Integrity,Flexibility and Efficiency,or LIFE for short,lay the foundation for the way we operate.These values shape our culture and ensure a common identity throughout the Bayer Group.1.1.2 Corporate Structure Corporate structure as of December 31,2022 As the parent compan

260、y of the Bayer Group,Bayer AG represented by its Board of Management performs the principal management functions for the entire enterprise.This mainly comprises the Groups strategic alignment,resource allocation,and the management of financial affairs and managerial staff,along with the management o

261、f the Group-wide operational business of the Crop Science,Pharmaceuticals and Consumer Health divisions.The enabling functions support the operational business.Combined Management Report of the Bayer Group and Bayer AG as of December 31,2022 Bayer Annual Report 2022 A Combined Management Report1.1 C

262、orporate Profile and Structure 31RESTRICTEDA 1.1.2/1Bayer Group Structure in 2022Board of ManagementCrop SciencePharmaceuticalsConsumer HealthEnabling functions The following changes have occurred within our organization:Rodrigo Santos was appointed to the Board of Management effective January 1,202

263、2,and became head of the Crop Science Division.His predecessor Liam Condon stepped down from the Board of Management effective December 31,2021.The Supervisory Board of Bayer AG has appointed Bill Anderson to become CEO of Bayer,effective June 1,2023.He will join Bayer as a member of the Board of Ma

264、nagement on April 1,2023.Current CEO Werner Baumann will retire at the end of May 2023.Our divisions are active in the following areas:Crop Science is the worlds leading agriculture enterprise,with businesses in crop protection,seeds and traits,and digital farming.We offer a broad portfolio of high-

265、value seeds,improved plant traits,innovative chemical and biological crop protection products,digital solutions and extensive customer service for sustainable agriculture.We market these products primarily via wholesalers and retailers or directly to farmers.In addition,we market pest and weed contr

266、ol products and services to professional users outside the agriculture industry.Most of our crop protection products are manufactured at the divisions own production sites.Numerous decentralized formulation and filling sites enable the company to respond quickly to the needs of local markets.The bre

267、eding,propagation,production and/or processing of seeds,including seed dressing,take place at locations close to our customers,either at our own facilities or under contract.Pharmaceuticals concentrates on prescription products,especially for cardiology and womens healthcare,and on specialty therape

268、utics focused on the areas of oncology,hematology,ophthalmology and,in the medium term,cell and gene therapy.We have established a strategic unit for cell and gene therapy spanning the entire value creation chain from research and development to marketing and patients.The division also comprises the

269、 radiology business,which markets diagnostic imaging equipment and digital solutions together with the necessary contrast agents.Our portfolio includes a range of key products that are among the worlds leading pharmaceuticals for their indications.The prescription products of our Pharmaceuticals Div

270、ision are primarily distributed through wholesalers,pharmacies and hospitals.Consumer Health is a leading supplier of nonprescription(OTC=over-the-counter)medicines,nutritional supplements,medicated skincare products and other self-care solutions in the categories of pain,cardiovascular risk prevent

271、ion,dermatology,digestive health,allergy,and cough&cold.The products are generally sold by pharmacies and pharmacy chains,supermarkets,online retailers and other large and small retailers.The enabling functions,such as Group Finance,Information Technology and Human Resources,serve as Group-wide comp

272、etence centers and bundle business support processes and services for the divisions.Our Leaps by Bayer unit,which invests in disruptive innovations,also forms part of the enabling functions.Bayer Annual Report 2022 A Combined Management Report1.1 Corporate Profile and Structure 32More information on

273、 the divisions products and activities is contained in the following table:A 1.1.2/2 Products and Activities of the Divisions Indication/application/business Core activities and markets Main products and brands1 Crop Science Herbicides Chemical crop protection products to control weeds Adengo,Alion,

274、Atlantis,Conviso,Laudis,Roundup,Sakura,XtendiMax Corn Seed&Traits Seeds and traits for corn Dekalb,RIB Complete,SmartStax,Vitala,VT Double PRO,VT Triple PRO,VTPRO4 Soybean Seed&Traits Seeds and traits for soybeans Asgrow,Intacta RR2PRO,Intacta 2 Xtend,Roundup Ready 2 Xtend,Roundup Ready 2 Yield,Xten

275、dFlex Fungicides Biological and chemical products to protect crop plants from fungal diseases Antracol,Delaro Complete,Fox,Infinito,Luna,Nativo,Prosaro,Serenade,Xivana,Xpro Insecticides Biological and chemical products to protect crop plants from harmful insects and their larvae BioAct,Confidor,Curb

276、ix,Movento,Sivanto,Vayego,Velum/Verango,Vynyty Citrus Environmental Science2 Products for professional pest control,vector control,forestry,golf courses and parks,railway tracks,products for consumer lawn and garden use Esplanade,Ficam,Fludora Fusion,K-Othrine,Maxforce Vegetable Seeds Vegetable seed

277、s DeRuiter,Seminis Digital Agriculture Digital applications for agriculture Climate FieldView,ForGround Other Seeds and traits for cotton,oilseed rape/canola,rice and wheat as well as biological and chemical seed treatment products to protect against fungal diseases and pests Bollgard 3 XtendFlex,De

278、ltapine,Gaucho,TruFlex,ThryvOn Pharmaceuticals Cardiology Hypertension,pulmonary hypertension,heart attack and stroke,thrombosis,coronary artery disease(CAD),peripheral artery disease(PAD),symptomatic chronic heart failure,chronic kidney disease and type 2 diabetes Xarelto,Adalat,Aspirin Cardio,Adem

279、pas,Verquvo,Kerendia Oncology Liver cancer,renal cell carcinoma,thyroid carcinoma,prostate cancer,colorectal cancer,gastrointestinal stromal tumors(GIST),follicular lymphoma,solid tumors with NTRK gene fusions Nexavar,Nubeqa,Xofigo,Stivarga,Aliqopa,Vitrakvi Ophthalmology Visual impairment due to age

280、-related macular degeneration(AMD),diabetic macular edema(DME)or retinal vein occlusion(RVO)Eylea Hematology Hemophilia A Kogenate/Kovaltry/Jivi Womens health Contraception,gynecological therapy Mirena product family,Yaz product family,Visanne Infectious diseases Bacterial infections Avalox/Avelox,C

281、ipro,Ciprobay Radiology Contrast agents;diagnostic imaging equipment for use with contrast agents Gadovist,Ultravist,Medrad Spectris Solaris,Medrad Stellant Neurology Multiple sclerosis Betaferon/Betaseron Consumer Health Dermatology Wound care,skin care,skin and intimate health Bepanthen,Canesten N

282、utritionals Multivitamin products,dietary supplements One A Day,Elevit,Berocca,Supradyn,Redoxon Pain and Cardio General pain relief and cardiovascular risk prevention Aspirin,Aleve Digestive Health Digestive health complaints Alka-Seltzer,MiraLAX,Rennie,Iberogast Allergy,Cough&Cold Allergies,cough a

283、nd cold Claritin,Aspirin,Alka-Seltzer,Afrin 1 The order of the products listed is no indication of their importance.2 We completed the sale of our Environmental Science Professional business to international investment firm Cinven in early October.Bayer Annual Report 2022 A Combined Management Repor

284、t1.1 Corporate Profile and Structure 33Our company has a global footprint.As of December 31,2022,the Bayer Group comprised 354 consolidated companies in 83 countries.A 1.1.2/3 Selected Bayer Sites in 2022 Selected sites based on number of employees(FTEs)Administrative sites Research and development

285、sites Crop Science Chesterfield,USA Frankfurt am Main,Germany Monheim am Rhein,Germany Pharmaceuticals Berlin,Germany Whippany,USA Wuppertal,Germany Consumer Health Basel,Switzerland Gaillard,France Whippany,USA Basel,Switzerland Berlin,Germany Leverkusen,Germany(headquarters)Monheim am Rhein,German

286、y St.Louis,USA Production sites Crop Science Dormagen,Germany Luling,USA Vapi,India Pharmaceuticals Bergkamen,Germany Berlin,Germany Leverkusen,Germany Consumer Health Grenzach,Germany Lerma,Mexico Myerstown,USA Bayer Annual Report 2022 A Combined Management Report1.2 Strategy and Management 341.2 S

287、trategy and Management Sustainable,profitable growth in focus Innovative business activities contribute to“Health for all,hunger for none”Ambitious sustainability targets for the entire Group 1.2.1 Strategy and Targets Group strategy A growing and aging world population and the increasing strain on

288、natures ecosystems are among the major challenges facing humanity.As one of the worlds leading companies in the fields of health and nutrition,we are able to play a key role in devising solutions to tackle these challenges.The COVID-19 crisis and Russias invasion of Ukraine have reminded us of the i

289、mportance of health and nutrition and underlined our systemic relevance.Guided by our purpose“Science for a better life”,we deliver breakthrough innovations in healthcare and agriculture.We contribute to a world in which diseases are not only treated but effectively prevented or cured,in which peopl

290、e can take better care of their own health needs,and in which enough agriculture products are produced while conserving our planets natural resources.Thats because at Bayer,growth and sustainability go hand in hand.In short,we are working to make our vision of“Health for all,hunger for none”a realit

291、y.Our strategy operationalizes our vision,as we look to achieve long-term profitable growth and make a positive contribution to society and the environment.We focus on four strategic levers:/We develop innovative products and solutions and leverage cutting-edge research to address unmet societal cha

292、llenges.We are also continuing to drive the digitalization of our entire value chain./We drive the operational performance of our business by optimizing our resource allocation and cost base./Sustainability is an integral part of our business strategy,operations and compensation system.Through our b

293、usinesses,we contribute significantly to achieving the United Nations Sustainable Development Goals(SDGs).We also pursue resolute,science-based climate action along our entire value chain./As a global leader in health and nutrition,we continue to develop our business.We create value with strategy-ba

294、sed resource allocation focused on profitable growth.We are active in regulated and highly profitable businesses that are driven by innovation and in which we have the objective to grow ahead of the competition.These four value levers underpin the strategies of our divisions.Bayer Annual Report 2022

295、 A Combined Management Report1.2 Strategy and Management 35Strategies of the divisions Crop Science The landscape is changing in agriculture:Increased pressures due to climate change combined with a growing population have created a pivotal moment in how our customers provide food,fuel and textile f

296、ibers for a world that needs to learn to live within planetary boundaries.These challenges have spurred rapid,disruptive changes in the industry,intensifying competition across the value chain,creating new players and opening up new sales opportunities.Our mission is to transform agriculture and dri

297、ve a more sustainable food system.The differentiators in this dynamic environment are clear:the speed and scale of innovation and a focus on sustainable results for our customers.With a leading innovation pipeline across Seeds&Traits,Crop Protection and Digital Farming,a deep digital ecosystem,a glo

298、bal footprint,and a multitude of partnerships,we are currently the market leader and are very well positioned moving forward.At the same time,we are evaluating the opportunities for expansion into attractive new business fields.Our digital connectivity strengthens our proximity to our customers,acce

299、lerating innovation,automating processes and increasing the productivity of our R&D pipeline.We are digitally connecting farms,optimizing input use and creating an industry-wide ecosystem aimed at unlocking new income streams for our customers and our own business by pioneering new,sustainable busin

300、ess models.We provide smart and integrated approaches to our customers in order to meet the requirements of the future.Our goal is to grow faster than the market and deliver superior returns to our competitors through tailored solutions such as the Smart Corn System.Moreover,we aim to achieve digita

301、lly enabled sales by the end of the decade.We are pursuing ambitious sustainability targets.By 2030,we aim to reduce the environmental impact of Bayers crop protection by 30%globally,decrease field greenhouse gas emissions by 30%in the most emitting cropping systems that we serve,and improve the liv

302、elihoods of 100 million smallholders.Supported by our digital application FieldView,the Bayer Carbon Initiative Program rewards customers such as farmers for adopting climate-smart practices,sequestering carbon at scale and creating new on-farm revenue streams.We are evolving our approach for a more

303、 sustainable ecosystem for example with the launch of“ForGround”in the United States.“ForGround”offers a suite of resources and decision support tools to help users introduce or expand regenerative agricultural practices to make fields more weather-resilient and productive.Smallholder farmers are bo

304、th a fast-growing market that we are committed to serving and a critical lever to ensure food security and quality of life in their communities.Thats why we continue to expand the Better Life Farming program:With around 2,500 centers operating in India,Bangladesh,Indonesia,Mexico and Honduras,these

305、centers provide smallholder farmers with products,education,financing and support to help their businesses thrive.As our work with smallholder farmers continues,it will underpin our growing business with this customer segment.Pharmaceuticals Throughout the world,an aging population continues to driv

306、e the incidence of chronic diseases and the increased occurrence of multiple conditions affecting patients quality of life.The convergence of biology and data science will be a key element for innovation at Pharmaceuticals.Digital technologies can transform the way healthcare is delivered,while cell

307、 and gene therapy has the potential to cure severe diseases.Bayer Annual Report 2022 A Combined Management Report1.2 Strategy and Management 36We are helping to drive medical progress through our focus on researching,developing and marketing innovative medicines.Our short-and mid-term growth will be

308、 further fueled by key products such as Eylea,Nubeqa,Verquvo and Kerendia,as well as late-stage R&D pipeline candidates,including elinzanetant and asundexian.We are enhancing the benefits for patients and generating added value in our product portfolio with a series of life cycle management activiti

309、es,including the development of a high-dose formulation for Eylea.To safeguard long-term growth,we continue to invest in R&D.We are continuously strengthening our technology platforms.Building on our acquisitions of the US companies BlueRock Therapeutics LP,and Asklepios BioPharmaceutical,Inc.(AskBi

310、o),we are further expanding our cell and gene therapy activities.By entering a partnership with US-based Mammoth Biosciences Inc.,we have secured access to novel gene-editing technology complementing our existing technology platforms.Last years acquisition of Vividion Therapeutics,Inc.,also in the U

311、nited States,strengthens our drug discovery capabilities.We are also enhancing our technological capabilities through the targeted expansion of our digital R&D infrastructure.Moreover,we are expanding our efforts to access external innovation through research collaborations and in-licensing,capturin

312、g continued growth opportunities in biologics and novel technologies.In Oncology,we continue to build our integrated Research&Early Development organization.With our new precision molecular oncology research center in Boston-Cambridge,we will drive the development of novel targeted cancer therapies

313、for people with unmet medical needs.Located in the Boston scientific hub,the new center will foster close collaboration with the research world and enhance our global network of academic,hospital and industry partners.Our ambitious sustainability agenda includes improving access to medicines.We impr

314、oved our ranking in the Access to Medicine Index to 9th place in 2022(2021:13th place),underlining our commitment to ensuring fairer access to medicines.Another focus is on improving womens health and strengthening their role in society by helping to promote gender equality and womens economic parti

315、cipation.As part of this endeavor,we are leveraging our leading position in womens health to be able to provide 100 million women in low-and middle-income countries with access to modern contraception by 2030.In addition,we are committed to combating neglected tropical diseases and noncommunicable d

316、iseases.Consumer Health Rising healthcare costs,changing demographics and increasing health awareness among consumers continue to fuel attractive long-term growth in the consumer healthcare market.A more prominent consumer focus on self-care,prevention and convenience further sharpened during the pa

317、ndemic is expected to continue to drive consumption across all core Consumer Health categories and accelerate channel shifts towards e-commerce.We provide consumers with products,services and information that empower them to improve their everyday health.Our strategy focuses on our core categories,a

318、s well as the transition of prescription medicines to nonprescription status.Our profitable growth is driven by world-class,science-based innovation with our trusted,consumer-preferred brands as well as new product launches.We are also continuously driving cost and cash productivity across the entir

319、e value chain.Bayer Annual Report 2022 A Combined Management Report1.2 Strategy and Management 37We continue to accelerate our digital transformation efforts across all areas of our operations,in marketing,sales,supply chain and R&D,to improve engagement with consumers,customers and healthcare profe

320、ssionals while driving productivity,flexibility and resilience across our value chain.We leverage an agile innovation model and collaborate with external partners to provide consumers with innovative solutions that best address their everyday health needs.Through acquisitions and partnerships,we hav

321、e gained access to new business models and capabilities to provide personalized diagnostics and treatment solutions.We pursue ambitious sustainability targets.By 2030,we aim to expand access to self-care for 100 million people in economically or medically underserved communities.We are executing thi

322、s ambition by fully embedding sustainability across our operations to offer solutions that best serve consumers,in particular those for whom self-care is the primary form of care.Climate action and decarbonization We have a far-reaching decarbonization program in place across the company,contributin

323、g in this way to meeting the target of limiting global warming to 1.5C.The targets and measures we pursue as part of our decarbonization program have been confirmed by the Science Based Targets initiative(SBTi).To reduce emissions by more than 42%by the end of 2029 compared with the 2019 baseline,we

324、 are implementing energy efficiency measures at our sites,and are aiming to purchase 100%of our electricity from renewable sources.To support the decarbonization,we joined the EV100 initiative in 2022 with the aim to switch our fleet to electric vehicles by 2030.We have committed to becoming climate

325、-neutral in our own operations by 2030 by offsetting all other emissions through the purchase of certificates from certified climate protection projects that satisfy externally recognized quality standards.We have further enhanced transparency by disclosing climate-related risks and opportunities as

326、 part of our TCFD reporting and by publishing a detailed report on the subject.We are also cooperating with our suppliers and customers to reduce our greenhouse gas emissions along the upstream and downstream value chain by at least 12.3%by 2029 compared with the 2019 baseline.The aforementioned in-

327、field decarbonization efforts of our Crop Science Division and its innovations to enhance climate resilience supplement these commitments and should make significant contributions in the value chains of the agricultural industry.Targets and key performance indicators To advance and measure the imple

328、mentation of our strategy,we have set ambitious Group targets.A 1.2.1/1 Financial Group Targets Target(based on closing rates as of June 30,2022)Target attainment in 2022Target for 2023(currency-adjusted)Target for 2023(at closing rates)Group sales(Fx&p adj.change);Revised 2022 outlook:increase by a

329、pprox.8%(Fx&p adj.)to 50 to 51 billion 50.7 billion+8.7%51 to 52 billionFx&p adj.:+2 to 3%50 to 51 billionFx&p adj.:+2 to 3%EBITDA margin before special items;Revised 2022 outlook:26 to 27%26.6%Core earnings per share;Revised 2022 outlook:approx.7.70 7.947.20 to 7.407.20 to 7.40Free cash flow;Revise

330、d 2022 outlook:approx.2.5 billion 3.1 billionapprox.3.0 billionapprox.3.0 billion Fx&p adj.=currency-and portfolio-adjusted See A 2.1.1“Economic Position and Target Attainment”for further information on the attainment of our Group financial targets,and A 3.1.2“Corporate Outlook”for our financial tar

331、gets for 2023.Bayer Annual Report 2022 A Combined Management Report1.2 Strategy and Management 38A 1.2.1/2 Nonfinancial Group Targets Through 2030 Target1 Base year 201920212022Target for 2030Number of smallholder farmers in low-and middle-income countries(LMICs)supported by products,services and pa

332、rtnerships 42 million49 million52 million100 millionNumber of women in low-and middle-income countries(LMICs)who have their need for modern contraception satisfied due to interventions supported by Bayer 38 million41 million44 million100 millionNumber of people in underserved2 communities whose self

333、-care is supported by interventions from Bayer 41 million46 million49 million100 millionScope 1 and 2 greenhouse gas emissions3(million metric tons of CO2 equivalents)(%change compared to base year)3.763.17(15.7%)3.03(19.5%)42%4,6Scope 3 greenhouse gas emissions from relevant7,8 categories(million metric tons of CO2 equivalents)(%change compared to base year)8.827.91(10.2%)8.90(+1.0%)12.3%5,6Off-s