Bayer to take impairment charges of about €2.2 billion

The Bayer Group plans to take a total of about €2.2 billion in asset impairment charges in the fourth quarter of 2003. The charges are related to the decision to strategically realign the portfolio, the planned stock-exchange listing of NewCo and changes in the operating conditions for the future Bayer MaterialScience subgroup. The impact of these special items on EBIT is expected to be about €2 billion, while the non-operating result should be diminished by some €200 million. In the polymers and chemicals businesses, these charges should amount to €1.7 billion, the major part of which relates to the activities to be transferred to the future NewCo. The figure also includes expenses for facilities consolidation as part of the ongoing efficiency programs. Bayer emphasise that the impairment charges are non-cash items. They therefore affect neither cash flows nor Bayer AG's dividend potential. In light of the planned impairment charges, the Bayer Group expects to post negative EBIT and a net loss for the full year 2003. Bayer continue to predict that EBIT before these special items will increase by a double-digit percentage as previously forecast.