Leverkusen - The Board of Management and the Supervisory Board of specialty chemicals company LANXESS AG today proposed to the stockholders at this year’s Annual Stockholders’ Meeting in Cologne that the dividend be significantly increased. According to the proposal, LANXESS’s dividend is to be quadrupled from 25 cents for 2006 to EUR 1.00 per share for 2007, putting it in line with those of other companies in the sector. At the same time, this substantial increase reflects the company’s successful strategy of profitable growth. The goal is to allow the stockholders, too, to share appropriately in the company’s successful performance in 2007, following the performance-oriented bonus payments received by the employees. The company plans to maintain this dividend policy in the future. “We want all our stockholders to benefit from the success of LANXESS in the coming years as well,” said Axel C. Heitmann, Chairman of the Board of Management of LANXESS AG, explaining the proposal.

Correct strategy enables raw material costs to be passed on
“We have set the right course for the future success of LANXESS,” continued Heitmann. “We will continue to consistently apply our successful price-before-volume strategy, which so far has enabled LANXESS to quickly pass on raw material price increases in full to its customers.”

The LANXESS Group’s good start to 2008 also shows that the company is strategically aligned in the right direction. Sales were up by 8.1 percent year on year in the first three months on a portfolio- and currency-adjusted basis. LANXESS improved net income by 13.2 percent to EUR 103 million and raised the EBITDA margin pre exceptionals considerably to 14.3 percent. “That sets us apart from our competitors in a positive sense, as the further increase in our EBITDA margin shows that we are continuing to catch up with the competition despite the increasingly difficult environment,” Heitmann commented.

Positive outlook for fiscal 2008 confirmed
Despite the slowdown in the economy, the company expects to post operational sales growth in 2008. “We anticipate that EBITDA pre exceptionals will exceed EUR 700 million in 2008,” Heitmann said, confirming the guidance for the full year. The company predicts that world economic growth will continue to weaken. The global chemical economy should remain stable, however, buoyed by strong demand in Asia-Pacific, Latin America, and Central and Eastern Europe. By contrast, prospects are increasingly gloomy for the chemical industry in North America. However, most of the customer sectors of importance to LANXESS – such as the tire industry – are expected to be much less affected by this trend. “LANXESS is correctly positioned and thus will already achieve in 2008 the ambitious goals that we had originally set for 2009,” Heitmann reported. For the full year 2008, he said the company aims to generate an EBITDA margin pre exceptionals in line with the industry average and achieve a margin of at least 5 percent in all business units. A further goal is to maintain the company’s investment-grade rating.