Bayer AG - Stockholders' Newsletter Second Quarter 2007

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Performance by Region

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Bayer’s global sales expanded in the second quarter of 2007 by €1,481 million from the prior-year period, to €8,217 million. Adjusted for shifts in exchange rates, business rose by 24.9 percent. The increase was mainly due to the inclusion of Schering, Berlin, Germany. Adjusted for both currency and portfolio effects, sales gained 5.4 percent.

The largest increases in absolute terms were recorded in Europe, where second-quarter sales rose by €686 million to €3,697 million. On a currency-adjusted basis, business grew by 22.6 percent. Europe thus accounted for 45.0 percent of Group sales in the second quarter, with all subgroups posting year-on-year improvements. Adjusted for currency and portfolio changes, business in Europe grew by 4.1 percent, mainly as a result of substantial increases in the Consumer Health; Environmental Science, BioScience; and Systems segments. Sales in Germany climbed by 13.1 percent to €1,199 million, giving a 2.7 percent increase after adjusting for portfolio changes.

Sales in North America advanced to €2,140 million, or by 25.5 percent when adjusted for currency changes. Currency- and portfolio-adjusted sales were level with the prior-year quarter (+ 0.3%). The Consumer Health segment in North America developed particularly well. The CropScience and MaterialScience subgroups, however, experienced a decline in business.

In Asia/Pacific we expanded business by a substantial, currency-adjusted 30.6 percent. Adjusted for currency and portfolio changes, sales rose by 15.6 percent. In the HealthCare subgroup, we improved sales of both our Pharmaceuticals and Consumer Health businesses. Sales of CropScience in this region posted a small increase of 2.9 percent on a currency-adjusted basis. MaterialScience again registered substantial growth in Asia/Pacific in the second quarter, with currency-adjusted sales up 19.9 percent.

Sales in the Latin America/Africa/Middle East region climbed by 30.2 percent when adjusted for currency effects. Currency- and portfolio-adjusted sales advanced by 7.7 percent. CropScience sales in the region rose by 4.6 percent (currency-adjusted), due primarily to good business with crop protection products. We also generated higher sales in HealthCare (+ 7.8 percent currency- and portfolio-adjusted) and in the MaterialScience subgroup (+ 9.1 percent currency-adjusted).