Werner Wenning:

“Corporate strategy proves effective in a difficult environment”

Leverkusen. The Bayer Group once again improved its key financial data in 2008 compared to the previous year and met the earnings targets it had announced. "We are proud of what was operationally the most successful year in Bayer’s long history," said Management Board Chairman Werner Wenning on Tuesday at the Annual Stockholders’ Meeting in Düsseldorf.

Chairman Werner Wenning during his address to the stockholders.

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Chairman Werner Wenning during his address to the stockholders.

The company intends the stockholders to benefit from this gratifying performance through a proposed dividend of EUR 1.40 per share. This corresponds to an increase of 3.7 percent and gives a total payout of EUR 1.07 billion. In the first quarter of 2009, the performance of Bayer’s businesses varied widely as expected. While CropScience and Pharmaceuticals remained on a path of growth, the slump in business at MaterialScience left a distinct mark on sales and earnings of the Group as a whole. Wenning said Bayer remains relatively confident about the future overall despite the severe global economic crisis. “Our corporate strategy is proving effective even in a difficult environment. We are benefiting from the Group’s alignment toward the life-science businesses, which are less dependent on global economic development.”

Satisfied with the course of the Stockholders’ Meeting (from left): Dr. Manfred Schneider and Werner Wenning.

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Satisfied with the course of the Stockholders’ Meeting (from left): Dr. Manfred Schneider and Werner Wenning.

Wenning began his presentation with a review of fiscal 2008. Group sales came in at EUR 32.9 billion, up 4.4 percent year on year on a currency- and portfolio-adjusted basis. Group earnings before interest, taxes, depreciation and amortization (EBITDA), before special items, improved by 2.3 percent to a record EUR 6.9 billion. “We met our profitability target, achieving a margin of 21.1 percent,” Wenning commented. EBIT before special items also reached an all-time high of EUR 4.3 billion. Group net income came in at EUR 1.7 billion. Wenning also highlighted the cash flow return on investment, which at 13 percent was the highest in the company’s history. The internal hurdle was exceeded by EUR 1.2 billion, which means significant value was created for the company, Wenning explained.

These achievements were made possible by the more than 108,000 employees in the three subgroups, the service companies, the country organizations and the Corporate Center, Wenning pointed out. “It is they who research, develop, manufacture and market our products around the world. Once more, they impressively demonstrated their innovative spirit, drive and customer orientation.”

At the ballot distribution (from left): Britta Finke with Reinhard and Edith Wahsner.

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At the ballot distribution (from left): Britta Finke with Reinhard and Edith Wahsner.

The employees shared in the company’s success through bonuses totaling some EUR 475 million that were paid out under the Group-wide incentive program. To help safeguard jobs, Bayer’s employees in Germany made a solidarity contribution of just under 2 percent of each employee’s bonus. “This solidarity pact applies not just to payscale employees, but also to managerial staff all the way to the members of the Board of Management,” Wenning stressed. The contribution finances the salaries of employees whose jobs have been eliminated by structural measures and for whom new employment is not immediately available. The solidarity pact has tradition at Bayer and is part of an agreement with the works council on safeguarding jobs, under which dismissals for operational reasons in Germany are ruled out – currently until the end of 2009. Wenning announced that the company will be starting talks to arrive at an appropriate follow-on arrangement. “We clearly need more flexibility here regarding pay, worktime and work locations,” the Bayer CEO explained.