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Valued stockholders, stockholders' representatives, ladies and gentlemen, friends of Bayer,

On behalf of the Board of Management, I too would like to welcome you to our Annual Stockholders' Meeting, taking place this year here in Düsseldorf.

We are pleased that so many of you have accepted our invitation, and we hope you will find today's meeting an interesting one.

Maybe our new corporate image film can contribute to this. It's entitled "Elements of Fascination," and you can watch the premiere at the end of my presentation.

Ladies and gentlemen,
There can be no doubt that the current business situation is difficult. We are in the midst of the severest global economic crisis our generation has faced.

Nonetheless, Bayer is relatively confident about the future on the whole. After all, 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.

What's particularly important is that we are upholding the focus on our company's innovative capability even in these difficult times and continuing to invest heavily in research and development. A long-term, sustainable alignment is now more essential than ever – and that's what we stand for.

In times such as these, in which it is popular – or should I say populistic – to accuse corporate management of failure and of lacking moral fiber, we will adhere to our path of sustainable business management.

Ladies and gentlemen,
First I would like to comment on developments at Bayer in 2008. I will do this only briefly, as we have already reported extensively on last year's performance in the Annual Report, on the Internet and at our Spring Financial News Conference. I will then talk about the start to the new year and our prospects for 2009 as a whole.

So let's begin with last year.



While some politicians see fit to criticize companies for achieving competitive earnings levels, we are proud of what was operationally the most successful year in Bayer's long history. We again improved the key financial data for the Group compared with the prior year and met the earnings targets we had announced:

- Sales rose to EUR 32.9 billion. After adjusting for currency effects and portfolio changes, the increase came to 4.4 percent.

- EBITDA before special items advanced by 2.3 percent to reach a record high of EUR 6.9 billion.

- We met our profitability target, achieving a margin of 21.1 percent.

- We also improved EBIT before special items to the record level of EUR 4.3 billion.

- After special items, EBIT advanced by 12 percent to EUR 3.5 billion.

- As expected, the special items totaling minus EUR 800 million related chiefly to the acquisition of Schering, Berlin, Germany, and to the successful integration process, which is now very largely complete, as well as to restructuring at CropScience and MaterialScience.

Ladies and gentlemen,
There was another highlight as well: the cash flow return on investment of 13 percent was the highest in the company's history.

We exceeded the internal hurdle by EUR 1.2 billion. We therefore created significant value for our company and thus also for you, our stockholders.

These achievements were made possible by the outstanding dedication displayed by our more than 108,000 employees in the three subgroups, the service companies, the country organizations and the Corporate Center.

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.

I'm sure I also speak on your behalf as stockholders when I take this opportunity to thank our employees once again most sincerely for their dedication.

Ladies and gentlemen,
Let's now look at the performance of our three subgroups in 2008.

Let me say in advance that I will be talking here solely in terms of currency- and portfolio-adjusted growth rates, to make it easier to compare the figures.



Bayer HealthCare improved sales by 7 percent in 2008 to EUR 15.4 billion. Contributing to this increase was the positive business performance of both the Pharmaceuticals and Consumer Health segments.

We are particularly pleased that all divisions posted dynamic growth in sales, outperforming their respective markets.

The strongest growth took place in the Greater China region, where HealthCare sales rose by a nominal 42 percent.

Bayer is currently the largest health care company in China.

We are continuing to expand our presence in China – and the Asia/Pacific region as a whole – with a new global pharmaceutical research and development center in which we will invest EUR 100 million in the coming years.

The operating result of Bayer HealthCare also posted a further improvement due to the gratifying business performance and the synergies achieved from the Schering integration. EBITDA before special items rose by 10 percent to EUR 4.2 billion. We also achieved our margin target with an EBITDA margin before special items of 27 percent.

As you can see, 2008 was a strong year operationally for Bayer HealthCare.

A particular highlight was the first marketing authorizations for our oral anticoagulant Xarelto®, which is the theme of the illustration on the cover of the Annual Report you received today.

This drug can now be administered for prevention of venous thromboembolism following elective hip or knee-joint replacement surgery in adult patients.

Xarelto® is already in the final phase of clinical development for the remaining indications – including the important chronic indications.

We believe this innovative drug could achieve peak annual sales of more than EUR 2 billion.

Ladies and gentlemen,
In addition, we strengthened our business through further acquisitions and in-licensing.

These transactions in 2008 included:

- the acquisition of the U.S. medical equipment manufacturer Possis Medical;

- the purchase of the eastern European OTC business of Sagmel;

- the acquisition of Direvo Biotech AG in Cologne; and

- the acquisition of the hematology development portfolio of Maxygen and a preclinical oncology program from Nycomed.

Thus we have continued to successfully implement our long-term strategy – which includes external growth – even after the major acquisitions of recent years.

I can confirm that this remains our strategy, but for the time being we will give priority to safeguarding our liquidity and further reducing debt.

That's because we are convinced that we need to adopt a cautious approach regarding major acquisitions in view of the considerable uncertainties resulting from the financial and economic crisis.



Ladies and gentlemen,
That brings us to Bayer CropScience.

In 2008 this subgroup posted the best performance in the history of our crop protection business. CropScience raised sales by a substantial 14 percent to the record level of EUR 6.4 billion.

Conditions on the world's agricultural markets were highly favorable overall. Price levels for major agricultural products were very high, particularly in the first half of 2008.

The principal reasons for this were the steady growth in the world population, increasing nutritional requirements, low inventories worldwide and an increase in demand for plants as alternative energy sources.

This led to greater investment by farmers in high-quality seed and innovative crop protection products. We not only achieved robust volume growth, but also succeeded in implementing selling price increases – particularly in our crop protection business.
The key growth drivers were our young products that are based on active ingredients introduced since 2000. Sales of these products climbed by some 36 percent to EUR 1.8 billion.

Given the positive market environment and the high demand for innovative products, we anticipate that we will reach our sales target of EUR 2 billion for these young active ingredients this year. That would be two years earlier than originally planned.

In light of this success, we have already set ourselves a new goal: Between 2008 and 2012 we plan to launch new active ingredients with peak sales potential totaling over EUR 1 billion.

This underscores the success of our alignment toward the research and development of new crop protection products and our innovation leadership in this area.

Ladies and gentlemen,
Bayer CropScience achieved all-time highs in 2008 not just in terms of sales, but also earnings.

EBITDA before special items advanced by 21 percent to EUR 1.6 billion.

With an EBITDA margin before special items of 25 percent, we already achieved the target that had originally been set for 2009.

Ladies and gentlemen,
we would of course be even more pleased with what we achieved in 2008 if there had not been such a dramatic decline in business at MaterialScience at the end of the year.



Volumes in this subgroup slumped by nearly 30 percent in the fourth quarter of 2008, and capacity utilization also declined significantly.

The global financial and economic crisis impacted MaterialScience in nearly all product groups and regional markets. This situation was quite unprecedented.

Full-year sales of the subgroup were down by 5 percent to EUR 9.7 billion.

EBITDA before special items of MaterialScience receded by 32 percent to EUR 1.1 billion.

Earnings for the full year were weighed down not only by the aforementioned effects of the crisis, but also by an increase of half a billion euros in procurement prices for petrochemical raw materials and energies.

Selling price increases, the savings from our restructuring program and other countermeasures we adopted only partially offset the effects of the lower volumes and higher raw material costs.

The necessary measures – such as temporarily shutting down certain plants and cutting back production at others, bringing forward scheduled maintenance and making greater use of flextime arrangements – were introduced at MaterialScience at an early stage.

Despite the sharp drop in sales at the end of last year, MaterialScience clearly exceeded the internal hurdle and still achieved a value-creating earnings level.



Ladies and gentlemen,
Now let's take a look at the rest of Bayer's financial data:

Gross cash flow rose by 11 percent compared with the previous year, reaching EUR 5.3 billion thanks to the gratifying business performances of HealthCare and CropScience.

Net cash flow declined by 16 percent to EUR 3.6 billion, mainly because there was considerably more cash tied up in working capital.

Higher levels of receivables and inventories at HealthCare and CropScience – partly due to the growth in business – contributed to the increase in working capital.

Net debt as of December 31, 2008 was EUR 14.2 billion, compared with EUR 12.2 billion at the end of 2007. The increase was partly the result of the higher working capital and partly to a number of small acquisitions.

Group net income came in at EUR 1.7 billion.

By way of comparison, the much higher prior-year figure of EUR 4.7 billion included one-time non-cash tax income along with divestiture proceeds.

Earnings per share for 2008 came to EUR 2.22.

Ladies and gentlemen,
Since 2006 we have reported core earnings per share in addition to make it easier to compare performance.

Our dividend policy is also based on this indicator.

We plan for a dividend payout of between 30 and 40 percent of core earnings per share – and that remains our policy for the future. Core earnings per share last year rose from EUR 3.80 to EUR 4.17.

The Board of Management and the Supervisory Board are jointly proposing today that the dividend for 2008 be raised by 3.7 percent to EUR 1.40 per share. Subject to your approval, we will therefore pay out 34 percent of core earnings per share. This once again amounts to a total payout of more than EUR 1 billion – enabling you, our stockholders, to benefit from our strong business performance despite the more difficult conditions on the stock markets.



Of course, Bayer stock was unable to escape the general market trend, which was determined by the changing economic situation. Although the price of our stock dropped by 32 percent in 2008, it fell much less steeply than the DAX or the EURO STOXX 50. We should also keep in mind that long-term investors saw their Bayer shares post an average annual performance of 16.5 percent between 2004 and 2008. The DAX achieved an average annual return of less than 4 percent over the same period.

Ladies and gentlemen,
It is undoubtedly in your interests that our employees around the world also participate in the success of the Bayer Group.

We, at least, firmly believe that we should have due regard for the interests of all our stakeholders – and that this is a further way to strengthen the foundation for our long-term success. Bonuses for 2008 totaling some EUR 475 million are being paid out to employees under the Group-wide incentive program. I'm sure you will agree with me that this is a respectable figure.

Ladies and gentlemen,
I would like to take this opportunity to address one aspect in particular: To help safeguard jobs, our employees in Germany regularly make a solidarity contribution not exceeding 10 percent of their variable remuneration. 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.

This contribution, which for 2008 amounts to just under 2 percent of each employee's bonus, finances the salaries of employees whose jobs have been eliminated by structural measures and for whom new employment is not immediately available.

This approach has tradition at Bayer, and was decided years ago – long before the current crisis scenarios were apparent.

The solidarity pact is part of our 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.

In cooperation with the employees' representatives, which has proven successful in the past, we will be looking to arrive at an appropriate follow-on arrangement under the works council agreement. We clearly need more flexibility here regarding pay, worktime and work locations.

Ladies and gentlemen,
Let us take a quick look back: As you know, we have thoroughly reorganized our company in recent years, making it viable for the future. We have acquired or divested companies and businesses with a total value of EUR 43 billion.Today the Group is in an excellent position.

This entire reorganization process took place without business-related dismissals here in Germany – and yet the price of our stock still reached an all-time high prior to the crisis.

This shows that commercial success and socially responsible actions can be brought into balance. We regard this as a clear expression of our corporate social responsibility.

Yet social responsibility and social acceptance are closely linked. We are aware that society's acceptance of a company and its actions is important for its long-term success.
And of course we endeavor to communicate transparently and openly in order to achieve that acceptance.

Here it is not always easy to reach an expedient consensus of different opinions. This is also true of our plan to build a pipeline to transport carbon monoxide between our sites at Dormagen and Krefeld-Uerdingen, in other words here in this area.

The project continues to meet with incomprehension and concern among many residents along the route of the pipeline. Let me therefore assure you once more that we are convinced the pipeline is safe. We have developed a safety concept that exceeds the existing standards and even the legal requirements.

Ladies and gentlemen,
We believe a parliamentary vote is crucial to achieving social acceptance. I already pointed that out at our Annual Stockholders' Meeting a year ago.

We therefore welcome the further vote by the North Rhine-Westphalia state parliament, which in April of this year made a declaration in favor of dependable conditions and planning security for investments in major industrial and infrastructure projects. This positive signal encourages us to continue resolutely pursuing the construction and commissioning of the pipeline.

Now especially, ladies and gentlemen, at this time of severe economic crisis, we must take advantage of the opportunities and the strengths that locations such as North Rhine-Westphalia have to offer. We owe that to this state and its people.

Yet we must not forget that safeguarding jobs will continue to require more investment, particularly in production facilities. The competition between different locations for that investment will become even more intense. That's why we need more attractive and more competitive conditions, particularly here in Germany.

Furthermore, ladies and gentlemen, companies need to react quickly and appropriately to economic trends.

In view of the economic crisis, management and the employee representatives at MaterialScience have therefore jointly agreed to temporarily reduce working hours at the subgroup's German sites, coupled with a corresponding reduction in the collectively agreed rates of pay. Comparable measures have been introduced for managerial employees of MaterialScience. The aim of this solidarity-based solution is to help us overcome the difficult business situation at MaterialScience.

Ladies and gentlemen,
We set about improving the competitiveness of all our subgroups and service companies at an early stage.

In the years following our reorganization – in other words between 2002 and today – we have implemented efficiency improvement measures with a total volume of some EUR 4 billion. In this way we have continually strengthened the foundations for our long-term success. We will continue to observe and constantly analyze the trends – particularly in the market environment for MaterialScience.

Obviously there will be some restructuring in the market and consolidation of production capacities. Like other companies, we will be unable to escape these trends. But any future measures and adjustments at Bayer will be designed in such a way that they do not impair the sustainability of our business.

Ladies and gentlemen,
Sustainability requires sound business models, a responsible approach toward all interest groups, and investment in the future. In keeping with this principle, we plan to increase our research spending to EUR 2.9 billion in 2009. This is the highest R&D budget in our company's history.

In these turbulent times we could, of course, help to improve earnings in the short term by cutting back on research, for example. But that would be the wrong strategy, it would not be sustainable, and it would be short-sighted. After all, our investment in research and development is intended to produce groundbreaking innovations.

You can gain an impression of our diverse research activities from the exhibition in the hall next door.

Ladies and gentlemen,
Through innovation we safeguard growth – and with it jobs and prosperity – even if in most cases it will be many years before its success is apparent.

At Bayer, innovation and sustainability have always been linked. That is the basis of our business model. Because even in these far-from-easy times, we must not lose sight of the long-term challenges.

That's why the core question is: What changes in our global markets and in society will we have to adjust to in the future?

First of all, there is global population growth and the increasing demand for food and health care. The world's population is increasing by an estimated 80 million each year. At the same time, average life expectancy will rise by at least another six years in Germany alone by 2050.

30 years ago there were about 300 people in Germany who were over 100 years old. Today there are 10,000. And this age group is projected to comprise well over 100,000 people by 2050.

What does this mean for Bayer?

First: there will be some shifts of focus in health care research and development – particularly toward diseases that are more common among the elderly, such as cancer, cardiovascular disorders or dementia.

New diagnostic and treatment options must be developed for these conditions. And that can only be done by using the latest technologies in conjunction with the knowledge we have today.

Second: the demand for food and feed products and raw materials for renewable energies will continue to increase – while the land area under cultivation will remain constant at best. In fact, the amount of arable land per head of the population is likely to drop by more than 30 percent by 2050. Safeguarding harvests and increasing yields will therefore be one of the major tasks of the future across all climate zones.

Third: climate protection is going to remain at the top of the agenda. The demand is for products, production processes and concepts that help to make life more sustainable, safer and more comfortable and at the same time take even greater account of the need to protect the environment.

Bayer is the only European chemical and pharmaceutical company to be included in the Carbon Disclosure Leadership Index for the fourth consecutive year. This is the world's first climate protection index. The fact that we are listed there underscores the fact that we are on the right track in this regard as well.

Ladies and gentlemen,
Bayer is well positioned.

We have good answers in our portfolio that address long-term challenges and at the same time take advantage of related business opportunities for Bayer.

We continue to focus closely on these perspectives, even though the current economic environment is particularly challenging.



Ladies and gentlemen,
This brings us to our current business performance.

On April 29 we published our first-quarter figures.

The encouraging aspect is that our CropScience and Pharmaceuticals businesses remain on a path of growth.

By contrast, the slump in business at MaterialScience is leaving a distinct mark on sales and earnings of the Group as a whole.

Group sales were down by a nominal 7.5 percent from the record level of the prior-year period, to EUR 7.9 billion.

Sales of the HealthCare subgroup, however, climbed by 3 percent compared with the strong prior-year quarter, to EUR 3.8 billion.

And CropScience improved sales by 7 percent in a favorable market environment, to EUR 2.1 billion.

However, at MaterialScience the ongoing negative effects of the global economic crisis were reflected in a 35 percent decline in sales to EUR 1.6 billion.

As you can see, our subgroups turned in a widely varying performance as expected. Bayer Group EBITDA before special items dropped by 22 percent in the first quarter, to EUR 1.7 billion.

While earnings of HealthCare and CropScience increased, underlying EBITDA at MaterialScience came in at minus EUR 116 million, compared with plus EUR 407 million in the first quarter of last year.

This was due especially to lower volumes and selling prices, coupled with considerably lower capacity utilization at our production facilities.

The decline was tempered by savings from the restructuring program initiated in 2007.

The relative easing of prices on the raw material markets of importance to MaterialScience only had a slight positive effect on earnings, as the products sold in the first quarter of 2009 were still manufactured mainly from higher-priced raw materials.

The negative trend at MaterialScience in the fourth quarter thus continued in the new year.

As a result, Group EBIT before special items fell by 32 percent in the first quarter, to EUR 1 billion. Net income moved back by 44 percent to EUR 0.4 billion.

Yet there were also some positive developments in the key data for the Group, ladies and gentlemen. For example, we improved net cash flow by 31 percent to EUR 0.7 billion due to a considerable decline in working capital.

Net financial debt thus dropped to EUR 14 billion as of March 31, 2009, despite adverse currency effects.

One of our key goals for the coming months is to achieve a further significant reduction in debt.

We expect to reduce net financial debt toward EUR 10 billion in 2009, helped by the conversion of the mandatory convertible bond into equity when it matures in June and by an improvement in net cash flow. This forecast does not take into account any possible portfolio changes.



Ladies and gentlemen,
What are our operational targets for this year?

For HealthCare and CropScience we expect a positive trend in 2009, with growth in sales and EBITDA before special items.

In 2009 HealthCare plans to achieve currency-adjusted growth rates ahead of the market average in all divisions. We aim to further improve the EBITDA margin before special items in this subgroup toward 28 percent.

CropScience plans to continue expanding sales in a generally favorable market environment. Here we aim to maintain the EBITDA margin before special items at the high level of about 25 percent.

Sales and earnings at MaterialScience fell even more sharply than we expected in the first quarter of 2009.

However, sales stabilized at a low level in the first three months. In other words, the downturn seems to be bottoming out.

The first signs of a modest recovery in demand are appearing, although that does not yet signify a sustained improvement.

In the MaterialScience subgroup we expect sales and earnings to improve in the second quarter of 2009 compared to the first quarter – and are targeting positive EBITDA before special items for the full year.



Against this background, however, we believe our original aim of limiting the decline in Group EBITDA before special items to 5 percent to be increasingly demanding – though still achievable if there is a tangible recovery in the MaterialScience business.

We expect Group sales for the full year to be in the region of EUR 32 billion.

Ladies and gentlemen,
There can be no doubt that these key data are of major significance both for us and for you as stockholders.

Equally important, however, is how we serve people through our products – in keeping with our mission statement "Bayer: Science For A Better Life."

This is what constitutes the fascination of our company Bayer.

And that brings me to the premiere of our new corporate image film, which I announced earlier.

The title of the film – "Elements of Fascination" – stands for the ability of our researchers to work creatively and innovatively with the elements. Memorable images illustrate the key activities of Bayer as a global enterprise.

The film aims to show how products from the inventor company Bayer benefit people all over the world and help to improve the quality of life.

(Film)

Ladies and gentlemen,
This film will now be used worldwide in nine different language versions to convey the fascination of Bayer.

It is fundamentally important in this respect that we also live up to our role as a responsible corporate citizen.

I'm sure you'll agree with me that true success is measured by a company's total contribution to society. That's why, even in difficult times, there will be no let-up in our social commitment, which involves some 300 different projects around the world.

And we consider it part of our social responsibility to train young people and give them perspectives for the future. That's why, for many years, Bayer has provided vocational training for more young people than it will need for its own operations. In 2009 we aim to hire more than 800 trainees.

We are also supporting numerous school projects through the Bayer Science & Education Foundation. Particularly with regard to young people, it is important for us to live the principle of sustainability that forms an integral part of our mission statement.

Ladies and gentlemen,
Safeguarding the future also involves greater investment in education. Society at large needs to pay special attention to this important task. That's why I am sure that you also support our initiatives.

Valued stockholders,
Allow me to summarize my remarks:

- First: 2008 was the most successful year in Bayer's history from an operational viewpoint.

- Second: 2009 is dominated by uncertainty and will undoubtedly be a difficult year. Yet we believe we are well positioned, and we remain relatively confident.

- Third: we are optimistic that we will emerge from this crisis even stronger than before, and we believe the Group is on track for long-term success, thanks to the potential our portfolio holds for innovation and growth.

As you can see, we stand for sustainable success.

Valued stockholders,
I and my colleagues on the Board of Management would like to thank you for the trust you again placed in us in 2008.

We will continue to use our best efforts to ensure that Bayer remains on its successful path.

Thank you very much.



Forward-Looking Statements
This release may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayer's public reports which are available on the Bayer website at www.bayer.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.