3Rs principle (replace, reduce, refine)

Replace: prior to each project, Bayer checks whether an approved method is available that does not rely on animal studies and then applies it. Reduce: in case no alternative method exists, only as many animals are used as are needed to achieve scientifically meaningful results based on statutory requirements. Refine: Bayer ensures that animal studies are performed in a way that minimizes the animals’ suffering.


are substances and products that control pests such as insects, mice and rats, as well as algae, fungi and bacteria.


Abbreviation for compound annual growth rate

Capital invested

(CI) Capital invested comprises the assets on which the company must obtain a return by generating an appropriate cash inflow; in some cases, the cost of ultimately reproducing the assets must be earned in addition.

Cash flow

Key indicator for assessing a company’s financial strength; in addition to gross cash flow, the statement of cash flows also reports the cash flow from operating activities (net cash flow), which shows the amount of funds available from operating activities for financing investments, repaying debts or distributing dividends. The cash flows from investing and financing activities are also reported.

Cash flow return on investment

(CFROI) The CFROI is the difference between the gross cash flow in the reporting period and the cost of reproducing depletable assets, divided by the capital invested. The CFROI is thus a measure of the return on capital employed in the reporting period.

Cash value added

(CVA) This is the difference between the gross cash flow and the gross cash flow hurdle. It is therefore the amount by which the gross cash flow exceeds the return and reproduction requirements. If CVA is positive, the investors’ return and reproduction requirements have been satisfied and value has been created for the company.


(formerly Carbon Disclosure Project) is an independent, not-for-profit organization that works on behalf of analysts and investors to promote the transparent reporting of greenhouse gas emissions and water use (Water Disclosure Report) by companies. CDP publishes two climate rankings each year: the Climate Disclosure Leadership Index (CDLI) rates the extent and quality of the disclosure of climate-relevant data, while the best-rated companies are additionally listed in the Climate Performance Leadership Index (CPLI).


Tailored optimization of plastic properties through admixture of fillers and additives

Conflict minerals

are those mined in conflict regions. They include tin, tungsten and tantalum ores, gold or their derivatives. Among the regions in which armed conflicts over the control of these resources occur are the eastern part of the Democratic Republic of Congo and neighboring countries.

Continuing operations

Revenue and earnings reporting for continuing operations pertains only to business operations that are expected to remain in the company’s portfolio for the foreseeable future; opposite of discontinued operations.

Core earnings per share

Earnings per share, plus / minus amortization and impairment losses / impairment loss reversals of intangible assets and impairment losses / impairment loss reversals on property, plant and equipment, plus special charges, minus special gains (other than amortization and impairment losses / impairment loss reversals), plus / minus the related tax effects and the share of the adjustments attributable to noncontrolling interest; this indicator facilitates the comparability of performance over time. It is not defined in the International Financial Reporting Standards.

(Corporate) compliance

comprises the observance of statutory and company regulations on lawful and responsible conduct.

Corporate governance

comprises the long-term management and oversight of the company in accordance with the principles of responsibility and transparency. The German Corporate Governance Code sets out basic principles for the management and oversight of listed companies.

Credit default swaps

(CDS) are tradable insurance contracts used to hedge against the default of a borrower.


is the bacterial breakdown of nitrate into nitrogen and oxygen through certain microorganisms known as denitrifiers. The process is used in biological wastewater treatment to break down nitrogen compounds.

Discontinued operations

Business operations already divested or earmarked for divestiture in the near future; opposite of continuing operations


designates the variation within the workforce in terms of gender, origin, nationality, age, religion and physical capability.


Income after income taxes, plus income taxes, plus financial result; EBIT is not defined in the International Financial Reporting Standards.

EBIT before special items

EBIT plus special charges, minus special gains; this indicator is not defined in the International Financial Reporting Standards.


EBIT plus the amortization of intangible assets and the depreciation of property, plant and equipment, plus impairment losses and minus impairment loss reversals, recognized in profit or loss during the reporting period; this indicator is not defined in the International Financial Reporting Standards.

EBITDA before special items

EBITDA plus special charges, minus special gains; this indicator is not defined in the International Financial Reporting Standards.

EBITDA margin before special items

The EBITDA margin before special items is calculated by dividing EBITDA before special items by sales. This indicator is not defined in the International Financial Reporting Standards.

EMTN program

The multicurrency European Medium Term Notes (EMTN) program is a documentation platform that enables Bayer to raise capital by quickly issuing debt on the global capital market. Maturities, currencies and conditions can be very flexibly designed.

FGD gypsum

is a by-product of flue-gas desulfurization (FGD).

Foreign exchange

Claims for payments in foreign currencies traded on foreign stock exchanges, usually in the form of assets held in foreign banks or bills of exchange or checks payable abroad; banknotes and coins denominated in foreign currencies are not considered to be foreign exchange.

Fx & p adj.

Abbreviation for currency- and portfolio-adjusted

GHG Protocol

The Greenhouse Gas Protocol Corporate Standard is an internationally recognized standard for the recording and reporting of greenhouse gas emissions. It covers direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions relating to a company’s value-added chain, as well as emissions resulting from third-party and acquired upstream services (Scope 3). Dual reporting was introduced in 2015 with the updating of the GHG guidelines for Scope 2. Indirect emissions have now to be reported using both the location-based and the market-based methods. The location-based method uses regional or national average emissions factors, while the market-based method applies provider- or product-specific emissions factors based on contractual instruments.

Global commercial paper program

Commercial paper (CP) issued under Bayer’s program is a short-term, unsecured debt instrument normally issued at a discount and redeemed at nominal value. It is a flexible way of obtaining short-term funding on the capital market. Bayer’s commercial paper program allows the company to issue commercial paper on both the U.S. and European markets.


is a globally recognized quality assurance system in the agriculture industry that is focused on food safety and good agricultural practice. It employs modular and customer-specific solutions for the certification and inspection of agricultural enterprises and the establishment of training programs. GLOBALG.A.P standards focus on product safety, environmental compatibility and the health, safety and well-being of people and animals.

GRI (Global Reporting Initiative)

is a nonprofit organization that works to promote the dissemination and optimization of sustainability reporting. The GRI guidelines are considered the most frequently used and internationally most recognized standard for sustainability reporting. These guidelines are evolved in a multi-stakeholder process. GRI was established in 1997 by CERES (Coalition for Environmentally Responsible Economies) and UNEP (United Nations Environment Programme).

Gross cash flow

Income after income taxes, plus income taxes, plus financial result, minus income taxes paid or accrued, plus depreciation, amortization and impairment losses, minus impairment loss reversals, plus / minus changes in pension provisions, minus gains / plus losses on retirements of noncurrent assets, minus gains from the remeasurement of already held assets in step acquisitions; the change in pension provisions includes the elimination of noncash components of ebit. It also contains benefit payments during the year. This indicator is not defined in the International Financial Reporting Standards.

Gross cash flow hurdle

The GCF hurdle is the gross cash flow that needs to be generated to satisfy investors’ return and reproduction requirements.


is a collective term for all guidelines that govern “good working practice” and are particularly relevant for the fields of medicine, pharmacy and pharmaceutical chemistry. The “G” stands for “Good” and the “P” for “Practice,” while the “x” in the middle is replaced by the respective abbreviation for the specific area of application – such as Good Manufacturing Practice (GMP), Good Laboratory Practice (GLP), Good Clinical Practice (GCP) or Good Agricultural Practice (GAP). These guidelines are established by institutions such as the European Medicines Agency or the U.S. Food and Drug Administration.


stands for health, safety, environment and quality.

Hybrid bond

A hybrid bond is a corporate bond with equityequivalent properties, usually with either no maturity date or a very long maturity. Due to its subordination, it has a lower likelihood of repayment than a normal bond in the event of issuer bankruptcy.

ILO core labor standards

The eight core labor standards of the ILO (International Labour Organization) that define the minimum requirements for humane working conditions are internationally recognized “qualitative social standards.” They represent universal human rights that are deemed valid in all countries regardless of their economic development status.

Innovative Medicine Initiative

(IMI) is a public-private partnership developed by the European Commission and the European Federation of Pharmaceutical Industries and Associations (EFPIA) with the goal of promoting biomedical research in Europe. IMI finances research projects aimed at overcoming the major bottlenecks in the research and development of new pharmaceuticals. The partnership provides funding to project participants from academic institutes, small and medium-sized businesses, patient organizations and other institutions. The pharmaceutical industry contributes to these projects by donating capacities and resources.

Life Sciences

Field of activities comprising particularly health care and agriculture; at Bayer this refers to the activities of the Pharmaceuticals, Consumer Health and Crop Science divisions and the Animal Health business unit.


Chemical class of systemic insecticides


At Bayer, OTC (over-the-counter) medicines are those obtainable without a prescription. In finance, OTC represents trade between financial market participants outside of an organized exchange. OTC transactions are nevertheless subject to securities trading laws.


is defined as the science of, and activities related to, the identification, assessment, comprehension and prevention of side effects or other problems associated with pharmaceutical products.

Phase I-IV studies

are clinical phases in the development of a drug product. The active ingredient candidate is generally tested in healthy subjects in Phase I, and in patients in Phases II and III. The studies test the therapeutic tolerability and efficacy of active ingredients in a specific indication. Phase IV studies are conducted following the approval of a new drug product to monitor its safety and efficacy over an extended period of time. The studies are subject to strict legal requirements and documentation procedures.

Price / cash flow ratio

The price / cash flow ratio is the ratio of the share price to gross cash flow per share. It shows how long it would take for the company’s cash flow to cover the share price.

Price / EPS ratio (price / earnings ratio)

This is the ratio of the current share price to earnings per share (EPS). A high price / earnings ratio indicates that the market assigns a high value to the stock in the expectation of future earnings growth.

RE-DISS (Reliable Disclosure Systems for Europe)

is a project aimed at the Europe-wide coordination of electricity disclosure information to avoid double counting.

Short Term Incentive program (STI program)

is a variable income component for all managerial staff.

Significant locations of operation

A selection of countries that account for about 68% of total Bayer Group sales (United States, Puerto Rico, Germany, China, Brazil, Japan, Canada, Italy, U.K., Ireland, Mexico, Poland, Czech Republic, Slovakia, Hungary, Spain, Portugal)

Syndicated credit facility

Credit line agreed with a group of banks; generally used for extensive financing requirements, such as when making an acquisition, to increase available liquidity or as security for the issuance of debt instruments. The credit facility can be utilized and repaid flexibly, either in full or in portions, during its term.

UNGC (United Nations Global Compact)

The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anticorruption. By doing so, business – as a primary driver of globalization – can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere. By committing to the UNGC, companies agree to document each year their efforts to uphold the ten principles.

Weighted average cost of capital

(WACC) The weighted average cost of capital (WACC) represents the return expected by investors on the capital invested in the company. It is computed as a weighted average of the cost of equity and debt. The cost of equity is derived from capital market information and represents the return expected by stockholders, while the cost of debt represents the conditions at which the company can borrow money over the long term.

Working capital

is the difference between short-term current assets and short-term liabilities; it is calculated by deducting short-term liabilities from current assets (excluding cash and cash equivalents). In financial accounting, the change in working capital is one of the variables used to assess a company’s financial health. The objective of working capital management is to reduce working capital by minimizing the “financing gap” caused by the time lapse between the disbursement of funds (= payment for necessary raw materials) and the receipt of funds for the finished product.