Materials for the 21st century

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Bayer MaterialScienceAt a glance

International, innovative and sustainablewith products and processes

One of the world's leading polymer producers

Pro

file

Polyurethanes Raw materials for rigid

and flexible foams

CoatingsRaw materials for coatings,

adhesives and specialties

Polycarbonates Granules and sheets for a wide variety of applications

Basic chemicalsChlorine production as the backbone for product manufactureS

truct

ure

Stra

tegy

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Materials and solutionsfor key industries and trends

Research and developmentfor the benefit of humanity

Sustainability and innovationDevelopment of environmentally consciousmanufacturing processes and innovative products

Excellence and safety State-of-the-art production plants for safety,

efficiency and quality

Close to the customerLocal presence with tailor-made solutions around the globe

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ChallengesC

halle

nges In 2030, computers will be millions of times

more powerful than todayBayer MaterialScience develops materials to improve efficiency, user friendliness, design and safety. Source: The world

Someone born in 2030 can potentially reach the age of 130Materials from Bayer MaterialScience promote health and well-being. Source: Knowledge and innovation network

The world gains one billion people every 14 yearsSolutions from Bayer MaterialScience to improve food supplies: refrigerators, drinking water containers, packaging. Source: Zeit.online

Natural resources are being depleted,global energy demand is rising Bayer MaterialScience develops solutions for economical cars, for energy-efficient houses and for renewable energies.

In 1960 there were two megacities – by 2015, there will be 27Products from Bayer MaterialScience help to improvethe housing situation and the supply of food and drinking water.Source: Megacities in the 21st century – Ernst Klett publishing company

The number of cars will quadruple by 2050 – and so will CO2 emissionsProducts from Bayer MaterialScience help with the construction of lightweight vehicles, reducing fuel consumption.Source: Environmental NEWS.de

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The world is facing big challengesBayer MaterialScience helps to master these challenges with innovative and sustainable solutions – improving people's lives.

Resourcedepletion

Urbanization Demographicchange

Mobility Digitalrevolution

Populationgrowth

Flexible foam

Rigid foam

Thermo- plastics

o  flexible o  hard-wearing o  lightweight o  readily moldable

o  upholstered furniture

o  mattresses o  car seats

o  insulating o  rigid o  lightweight

o  insulating materials for buildings and refrigerators

o  tough o  flexible o  resistant to cold and heat

o  sports and leisure o  automobile

components

Products and solutions

High-performance materials for a changing world. Bayer MaterialScience contributes to eco-friendly mobility, sustainability in building, and energy and resource efficiency.

Pol

yure

than

es

PolyurethanesIn 1937, Otto Bayer invented polyurethane chemistry.

Key markets: Automotive, construction, domestic appliances, furniture and mattresses.

The material can be rigid, soft, elastic or thermally moldable (thermoplastics). Bayer MaterialScience manufactures components for this applications: polyols and isocyanates such as MDI and TDI.

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Polyurethanes Coatings, adhesivesand specialties

Polycarbonates Basic chemicals

Sheets, films

o  break-resistant o  lightweight o  transparent o  dimensionally tough o  heat-resistant

Granules (Apec®,

Bayblend®, Makroblend®,

Makrolon®)

o  computers o  smartphones o  flat-panel displays o  DVD/CD

o  windows o  conservatories o  roof structures o  partition walls

o  automotive glazing o  bodywork parts

o  medical devices o  robotics

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Products and solutionsP

olyc

arbo

nate

s

Polycarbonates

In 1953, Hermann Schnell invented polycarbonate.

Key markets: Automotive, information technology (IT), electrical/electronics, construction, medical.

Polycarbonates are transparent, break-resistant and readily formable high-tech plastics.

Polycarbonates are marketed as granules (Apec®, Bayblend®, Makroblend®, Makrolon®), sheets and films.

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Raw materials for surface coatings

Raw materials

for adhesives and

sealants

Raw materials for specialties

o  durable o  protective o  high-gloss/matte

o  automotive/ transportation o  flooring o  furniture o  infrastructure

(corrosion protection)

o  gentle on the skin o  flexible o  functional

o  cosmetics o  medicine o  sports and leisure

o  easy to process o  low emissions o  widely adjustable

o  shoes, textiles o  furniture o  automotive/ transportation o  construction

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Products and solutionsC

oatin

gs, a

dhes

ives

, spe

cial

ties

Coatings, Adhesives, Specialities

In 1954, Kuno Wagner invented crosslinking agents for lightfast PU coatings – the Desmodur® N family.

Key markets: Automotive and transportation, corrosion protection and construction, electrical/electronics, wood and furniture, cosmetics, medical, sports and leisure.

Bayer MaterialScience manufactures raw materials for surface coatings, adhesives and sealants and specialties.

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Pho

togr

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r: A

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Sch

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r

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Bayer MaterialScience is among the world's leading chlorine producers.

Chlorine is needed for around 80 percent of the company's products.

Hydro- gen

Chlorine

Hydro- chloric acid

Nitric acid

Carbon mono- xide

Caustic soda

Chlorine production is energy-intensive. Bayer MaterialScience is driving the development of efficient processes.

Co-products such as caustic soda and hydrochloric acid are sold and used in a variety of industries (foodstuffs, metal, paper).

Products and solutionsB

asic

che

mic

als

– C

hlor

ine

Basic chemicals

Bayer MaterialScience offers the chemical industry numerous basic chemicals.

They include chlorine and its co-products.

The company's strength is the safe production and its ongoing development of process technologies.

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Customers

Economical cars, efficient houses, portable computers

Cus

tom

ers

– P

erce

ntag

e sa

les

Bayer MaterialScience serves numerous companies in many key industries.

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21%

Automotive/transport

Sports/leisure, cosmetics, health

in total

17%

19%

Construction

18%

Wood/furniture

15%

Electrical/electronics

Chemicals

10%

Automotive/transport Sports/leisure, cosmetics, health

Construction Wood/furniture Electrical/electronics Chemicals

Coatings made with polyurethane raw materials o  rigid or flexible, versatile, attractive, functional, protective o  for bodywork, interiors

Polycarbonates o  light, tough, transparent, easy to shape o  for headlamps, glazings, roof modules, bodywork parts

Polyurethanes o  soft, flexible, insulating, appealing o  for seating, interiors, bodywork

Thermoplastic polyurethanes o  rigid/flexible, versatile, attractive o  for car interiors

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CustomersA

utom

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e an

d tra

nspo

rt

Lighter vehicles consume less fuelHigh-performance products from Bayer MaterialScience make for light weight, design freedom, efficiency and comfort.

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Products

Rigid polyurethane foam o  well-insulating, lightweight o  for all parts of the building

Polycarbonates o  light, tough, transparent, readily formable o  for roof structures facade elements, sports facilities

Polyurethane raw materials for coatings o  protective, resistant, decorative o  for facades, walls, floors

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CustomersC

onst

ruct

ion

Buildings account for 40 percent of globalenergy consumptionSubstantial energy savings through rigid foam insulation from Bayer MaterialScience.

Source: TA Hydronics – Engineering advantage

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Products

,

Photographer: Antje Schröder

Polycarbonates o  transparent, light, formable o  for chairs

Flexible polyurethane foam o  flexible, light o  for upholstered furniture, mattresses

Rigid polyurethane foam o  well-insulating, lightweight o  for refrigeration equipment

Polyurethane raw materials for coatings o  protective, durable, eco-friendly o  for furniture, parquet flooring

Polyurethane raw materials for adhesives o  good adhesion, eco-friendly o  for furniture, parquet flooring

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CustomersW

ood

and

furn

iture

Wanted: convenience and comfortBayer MaterialScience combines both – with raw materials for upholstered furniture, mattresses and refrigerators as well as for environmentally friendly coatings and adhesives.

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Products

Polycarbonates o  light, tough, readily formable o  for computer casing, lighting technology

Plastic films o  personalized, difficult to forge o  for ID cards, credit cards

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CustomersE

lect

rical

and

ele

ctro

nics

Increasing data in an ever-smaller spaceBayer MaterialScience develops high-performance materials for efficient, visually pleasing and safe electronic products.

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Products

Polyurethanes o  flexible, compatible with the skin,

good moisture management o  for wound dressings

Polycarbonates o  light, readily formable, transparent,

break-resistant, heat-resistant o  for medical technology, robotics

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CustomersH

ealth

Increasing life expectancy requires individual medical careHigh-performance polycarbonate plastics and polyurethane foams are ideal for meeting these challenges.

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Products

Polyurethane raw materials for coatings and adhesives o  breathable, water-repellent, muscle-supporting o  for textiles, sports shoes

Polyurethanes o  lightweight, flexible o  insoles for modern sports, leisure and work shoes

Polycarbonates o  lightweight, tough o  for sports equipment such as

snowboards, helmets and eyewear

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Customers

Exercise for higher quality of lifeBayer MaterialScience supplies materials for functionality, design and safety in sports and leisure activities.

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Spo

rts a

nd le

isur

e

Products

Polyurethane raw materials o  water-based or powder o  free of preservatives o  for sun protection, skin care, hair care

and styling, decorative cosmetics

CustomersC

osm

etic

s

Glamorous mattersBayer MaterialScience supplies skin-compatible polyurethane raw materials for high-quality cosmetics.

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Products

7

Targ

ets

Helping the environment, conserving resourcesAs a technology leader, BMS insists on efficient and environmentally friendly production. The company's products and solutions contribute to the responsible use of resources and to climate protection.

Serving people• improve well-being• enhance safety• support social progress

Reducing CO2 emissions• responsible use of resources• improve product life cycles, • close material cycles

Creating value• need-based products and solutions for customers and markets• safeguarding growth, jobs

Sustainability

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People

Planet

Profit

Targets Products Production Alternative raw materials Recycling

SustainabilityP

rodu

cts

– R

enew

able

ene

rgy

sour

ces

Energy from sun, wind and water is the futureBayer MaterialScience develops new materials to drive the use of ‘renewables’.

Inspire windpowerBayer MaterialScience offers materials and solutions for wind turbines.

• robust, lightweight, efficient production, protection against wind and weather• for rotor blades, nacelles and masts

Sunny prospectsMaterials and solutions from Bayer MaterialScience support photovoltaics and solar thermal energy.

• robust, lightweight, efficient production, protection against wind and weather, durable• coatings for solar cells

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Wind power

Solar energy

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SustainabilityP

rodu

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– C

onst

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and

trans

porta

tion

High-performance materials for sustainable building and fuel-saving mobilityLightweight, efficiency and high functionality – thanks to products and solutions from Bayer MaterialScience.

Stronger togetherA global network of experts under the leadership of Bayer MaterialScience offers tailored solutions for sustainable building.

Examples• rigid polyurethane foam for heat and cold insulation• lightweight, tough and transparent polycarbonate sheets• components for durable and efficient solar energy systems• raw materials for eco-friendly coatings and adhesives

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Eco Commercial Building Programm

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Sustainability

Sun in the tankBayer MaterialScience sponsors the Solar Impulse project – flying without fuel.

Example

• ultra-lightweight polyurethane foams for the cockpit and other components

• polycarbonate films for cockpit glazings

• specialty adhesives for composite material

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Solar Impulse

Pro

duct

s –

Con

stru

ctio

n an

d tra

nspo

rtatio

nC

opyr

ight

: Fra

ncis

Dem

ange

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Sustainability

Bayer MaterialScience aims to reduce its specific CO2 emissions by 40% by 2020The company is constantly working to improve its production processes and increase its energy efficiency.

Eco-friendly productionBayer MaterialScience makes use ofhighly efficient technologies and processes.

Energy-saving processes• oxygen depolarized cathode technology for chlorine production• gas-phase technology for the production of isocyanates• melt process for polycarbonate production

Intelligent instrumentation and control• STRUCTese™ energy management system

Eco

-frie

ndly

pro

duct

ion

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SustainabilityA

ltern

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e ra

w m

ater

ials

– C

arbo

n di

oxid

e /

Bio

-bas

ed

From pollutant to raw materialBayer MaterialScience plans to integrate carbon dioxide into the production chain. The company is also working on the use of bio-based raw materials.

Making use of climate gasDream Production – Bayer MaterialScience wants to make use of CO2 for the production of polyol, a key precursor for polyurethane foam.

• carbon dioxide replaces some of the crude oil on which the polyol is normally entirely based • process proven in two-year test phase• CO2-based high-quality foam• company plans to build a plant for the production of polyol with CO2

Plastics made from plants

Bayer MaterialScience has also been using bio-based raw materials for a long time.

• use of e.g. vegetable raw materials• production primarily of polyols, a key component of polyurethane• objective: match or exceed the high quality level of conventional products

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Sustainability

Turning old into newOnce a water bottle, tomorrow a part of a car – many materials from Bayer MaterialScience can be recycled. Closed production cycles protect the environment.

More than one lifeWater bottles made of polycarbonate can be filled many times. Even then, their use has not come to an end.

• Polycarbonate can be recycled for such things as car bodywork parts and housings for laptops

• the quality of the recycled materials is not inferior to that of virgin material for the targeted application profile

Rec

yclin

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SustainabilityR

ecyc

ling

– C

losi

ng c

ycle

s

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Chemical Recycling

Thermical Recycling

Raw materials

Use Mechanical Recycling

New products

Use of CO2

Energy recovery

Application

Products

Production

Processing

oil-based bio-based fossil renewable

Material Energy

€ 0.21 bn

€ 1.1 bn € 11.2 bn

14.300

Key

dat

a 20

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Future-oriented with global presenceAs part of the Bayer Group, Bayer MaterialScience is among the largest polymer manufacturers and is represented worldwide.

Bayer MaterialScience

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Key data Main sites Innovation Safety Management

SalesProfit*

ResearchEmployees

*Earnings before interest, taxes, depreciation and amortization (EBITDA) excluding non-recurring items

Leverkusen

Brunsbüttel

Dormagen

Antwerp

Tarragona

Baytown

Belford Roxo

Shanghai

Map Ta Phut

Pittsburgh

Krefeld-Uerdingen

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Bayer MaterialScience

Production in all regions – close to the customerWorld-scale plants ensure efficient and reliable production. A local presence allows customized support and tailor-made solutions.

Mai

n si

tes

/ Reg

ions

Proportion of sales per region

39%27%

21% 13%

Europe Asia/Pacific

NorthAmerica

Latin-America,Africa,

Middle East

Bayer MaterialScience

Research for tomorrow´s worldGlobal teams of inventors at Bayer MaterialScience develop new applications for materials and participate to design the future.

A sparkling spirit of inventionInnovation is an important growth driver for Bayer MaterialScience.

• Around 1,000 researchers and developers are working at innovation centers around the world – from Leverkusen to Shanghai and Pittsburgh.

• EUR 208 million spending for research and development (2013)

• 222 patents on new applications (2013)

• cooperation with scientific institutions and partner companies

Inno

vatio

ns

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Bayer MaterialScience

Safety first!Production or products – Bayer MaterialScience is committed to safety in all areas.

Reliable and state of the artFor Bayer MaterialScience, safe and trouble-free production is of fundamental importance.

• worldwide standards and regulations

• production plants and processes under constant review

• learning from production problems and incidents

Saf

ety

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rodu

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Bayer MaterialScience

Safety does not end at the factory gate

Bayer MaterialScience accompanies its products throughout their life cycle.

• safety in handling, transport, further processing, use, recycling and disposal• product information over and above that required by law • comprehensive assessment of the health and environment risks

Saf

ety

– P

rodu

cts

/ em

ploy

ees

“Nothing we do is worth getting hurt for.”

The safety of the employees is paramount at Bayer MaterialScience.

• low accident rate compared with other companies: 0.34 accidents at work per 200,000 working hours (2013)• designing a safe work environment• safety programs and safety training to prevent accidents

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Bayer MaterialScienceM

anag

emen

t

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Patrick Thomas Chief Executive Officer

Dr. Tony Van Osselaer Head of Industrial Operations

Richard Northcote Head of Communications,

Public Affairs and Sustainability

Dr. Axel Steiger-Bagel Chief Financial Officer

Michael Bernhardt Head of Human Resources and

Labor Director

Daniel Meyer Head of Coatings, Adhesives,

Specialties Business Unit

Dr. Gabriel Harnier Head of Law, Patents & Compliance

Dr. Markus Steilemann Head of Polycarbonates

Business Unit

Dr. Joachim Wolff Head of Polyurethanes

Business Unit

Bayer GroupA global inventor company

Pro

file

/ fac

ts

Vintage 1863Bayer is a global company with core competencies in the fields of health care, agriculture and high-tech materials.

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• As an innovation company, it sets trends in research-intensive areas.

• Bayer's products and services are designed to benefit humanity and improve the quality of life.

• At the same time, the Group seeks to create value through innovation, growth and high earning power.

Bayer GroupA global inventor company

Stru

ctur

e

22%*

28%*

47%*

3% Expenditures and income

cannot be directly assigned to the segments.

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HealthCare

We helppatients all over the world: prevent, alleviate and cure diseases; improve diagnostic methods.

CropScience

We help providesufficient high-quality food

and feedstuffs.

MaterialScience

We makesignificant contributions in a variety of areas such as energy and resource efficiency, mobility, construction and housing.

* Percentage sales

€ 2,6 bn € 3,2 bn

113,200

€ 8.4 bn € 40.2 bn

Bayer Group

Sales

Profit*

Employees

Research Capital expenditures

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Bayer: Science For A Better LifeYou can find further information on our homepage www.materialscience.bayer.com or contact us: Bayer MaterialScience AG, 51368 Leverkusen, Germany

Bayer GroupA world-class innovation company

* Earnings before interest, taxes, depreciation and amortization (EBITDA) without special items

Bay

er G

roup

– K

ey d

ata

2013