News release

Annual Stockholder's MeetingWednesday, May 31, 2006

_____________________________

Address by

Dr. Axel C. Heitmann,

Chairman of the Board of Management

"Our team is in place.We have the right tactics.

And we have the right chemistry."

(Please check against delivery)

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LANXESS AGContact:Hans Graf von HochbergCorporate CommunicationsFinancial Communications51369 LeverkusenGermany

Phone +49 214 30-82895Fax +49 214 30-50691hans.hochberg@lanxess.com

Good morning, ladies and gentlemen, and welcome to the AnnualStockholders' Meeting of LANXESS AG here in Düsseldorf. May I alsowelcome the representatives of the media.

If you visit LANXESS at our headquarters in Leverkusen, there's anenormous poster you really can't miss: it measures 48 meters by 22meters and covers nearly the entire side of a production building in thechemical park. It pictures 15 employees to represent the activities ofour 15 business units.

There can hardly be a better way to summarize the results of LANXES-S's development to date than the text on this poster.

Just like a soccer team that has a new line-up and has trained hard,LANXESS too is in excellent form in time for the World Cup.

And just like soccer, LANXESS is all about performance.

And the objective is the same, too: we want to take the title, or at leastbe among the world leaders.

1.: SUCCESSES AND RESULTS IN 2005

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Now that the new team has been put to the test in various ways since thecompany´s stock market listing early last year, things don't look bad at all.

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On the contrary, the LANXESS team has prepared the ground verywell, achieving impressive results in 2005 and again in the first monthsof this year.

Let me start with our operating performance:

- Sales of LANXESS grew by nearly 6 % in 2005, to about EUR 7.2 bil-lion.- EBITDA pre exceptionals for the year grew by 30 % to EUR 581million, from EUR 447 million in 2004. - The EBITDA margin pre exceptionals was 8.1 %, compared to 6.6 %in the previous year.

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- We reduced the number of loss-making businesses, and at the sametime the proportion of businesses with adequate profitability rose to 45%.- Our balance sheet was stronger overall, with net financial debt downby 40 %, from more than EUR 1.1 billion the year before to EUR 680million at the end of 2005.- The operating cash flow doubled year on year to EUR 624 million.- LANXESS has already initiated all previously announced restructuringprograms, and many of these activities have proceeded faster thanplanned.- Three portfolio adjustments have been rapidly brought to a successfulconclusion.

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Second: LANXESS shares performed very well on the stock exchange.

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- By the end of 2005, the price of our shares had increased from EUR15.75 on the first day of trading to about EUR 27 - a gain of more than70 % in only 11 months!- That means LANXESS more than doubled its market capitalizationover this period. A contributory factor here was the repurchase of amandatory convertible bond of Bayer AG and the successful placementof the new shares on the capital market.- LANXESS stock was thus one of the most successful new issues in2005.

Third: LANXESS has also performed well in its markets.

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- This is particularly evident in Asia, where business expanded byabout 21 % compared to 2004, against growth of about 16 % in theprevious year. Asia now accounts for a 17 % share of Group sales, or 2%age points more than in 2004.- Within Asia, China is our biggest market, with sales there climbing bya full 50 % in 2005.- In keeping with this trend, LANXESS made its exhibition debut inChina at the end of April this year with a stand at Asia's biggest plasticsfair in Shanghai. This was our first all-round trade-fair appearance as anew and independent company.

And fourth, performance also means having product innovations thatpay off.

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Such products are strengthening our leading positions both in materialprotection and in rubber.

- One example is LANXESS's chemical-based surveillance system forsimply and effectively protecting large areas of land.- Another example is Preventol CD 601, a disinfectant found to be high-ly effective against the bird flu virus.- And then there is the newly developed rubber Buna 8955 forautomotive tire treads, which increases tire mileage, gives a better rideand also reduces fuel consumption, which is now becoming more andmore important.

Ladies and gentlemen, LANXESS today is not only a new company.

LANXESS today is an international, value-creating brand in thechemical industry.

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Both inside and outside the company, the new name LANXESS andour unmistakable corporate design have helped people to becomemore aware of our company and to identify with it.

Here, at our Annual Stockholders' Meeting, you can see how we arepresenting the brand.

You can also see this at many other public appearances by ourcompany - such as last year's image campaign.

This investment in our brand is a direct expression of our firm intentionto establish the LANXESS name as a synonym for successful,profitable chemical operations - in Germany, and of course in othercountries too.

As you can see:

We have improved our performance in all crucial respects. LANXESStoday is in a much better position than at the beginning of last year.

You'll find detailed information about last year in our 2005 AnnualReport, which has been available on the Internet since early April.There are printed copies here for you to take with you today, or of cour-se we can mail them to you if you prefer.

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Ladies and gentlemen, the numbers for the first quarter of this yearalso clearly show that we are on track for a further steady improvementin performance.

2.: RESULTS FOR THE FIRST QUARTER OF 2006

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- Group sales improved by 6.2 % year on year in the first quarter of2006, to more than EUR 1.8 billion.

- EBITDA pre exceptionals once again rose strongly, increasing by 13.3% to EUR 205 million. The EBITDA margin pre exceptionals thusimproved from 10.5 % a year ago to 11.2 %.

- Net income climbed by 17.1 %, from EUR 70 million to EUR 82million.

- We are rigorously implementing our restructuring measures, whichwill already give us cost savings of about EUR 45 million in 2006. By2008 we will be saving over EUR 200 million a year altogether.

- And just a few weeks ago, Fitch, one of the leading internationalrating agencies, gave us a "BBB flat" rating, and Standard & Poor'supgraded us from "stable" to "positive".

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In light of this trend in the first three months and also in the currentquarter, we are confident that we can achieve all our key earningstargets this year.

Sales from our continuing operations will show a moderate increase.

We expect to achieve EBITDA pre exceptionals in 2006 of betweenEUR 640 million and EUR 680 million. This guidance is within theupper half of the 9 to 10 % margin range, calculated on 2004 sales,that was communicated in 2004.

And the goal for the full year is to achieve positive net earnings. Thatwould open up the possibility of letting you, our stockholders,participate in the company's success in the form of a dividend payment,quite apart from the increase in the share price. Of course theconditions for this would have to be right.

In 2007 we will then strive for further improvements that should bringprofitability closer to benchmark level, provided that the businessenvironment remains supportive.

3.: FOUR-PHASE STRATEGY

As you can see from these numbers:

It pays to be consistent!

After all, the measurable success of the past 15 months is the result ofthe consistency with which we have implemented our four-phasecorporate strategy.

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As you will remember, phase one was aimed at reducing costs andimproving our performance. In practice this meant and still means,among other things, implementing our price-before-volume strategyand achieving qualitative growth in high-margin businesses. And that isprecisely what we will continue to aim for in the future.

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Phase two involves targeted restructuring.

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The main points here are:

The successful launch of two packages of measures designed to give asustained EUR 160 million reduction in our annual cost base by 2008.The implementation of these packages already proved very successfulin 2005.

We are pressing ahead with the targeted restructuring of low-earningbusinesses. Although the profitable share of our sales has risensignificantly, about 55 % of our businesses remain unprofitable orunsatisfactory.

So despite all the success we have achieved, there is still much to bedone.

We certainly cannot afford to lessen the pace of our restructuring.

That's why at the beginning of April, LANXESS decided on a thirdpackage of measures that will produce annual savings of EUR 50million by 2009. The package involves the Styrenic Resins,Polybutadiene Rubber, Butyl Rubber and Inorganic Pigments businessunits.

These additional measures inevitably involve the elimination of up to250 positions outside of Europe. I can assure you, however, that wewill work together with the employees' representative bodies to jointlyfind solutions for the affected employees, as we have done in the past.

Targeted restructuring is also the aim for our global styrenics business.

Worldwide competition in this business grew even fiercer last year, andthat means a viable business model and viable structures are neededto make styrenics profitable for the long term.

In Europe we scored our first successes last year with the repositioningof our styrenics activities. Now we have to do this on the global level aswell.

To this end, LANXESS has deployed a project team comprised of inter-nal and external experts who will work to develop proposals as quicklyas possible. We intend to find sustainable solutions for Styrenic Resins,too, although it's still too early to talk about specifics.

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The third phase of our strategy involves portfolio adjustments.

Here I would reiterate that there are two possible solutions for thosebusinesses that cannot achieve satisfactory earnings under theLANXESS umbrella in the foreseeable future:

Either we will look for partners for them or we will divest them entirely.

Last year we successfully initiated three portfolio improvements thathave since been completed: the divestiture of the Paper and Fibersbusiness units and of the Rhein Chemie subsidiary iSL Chemie. In allthree cases, strategic investors had presented convincing concepts forsuccessfully continuing these businesses.

All of our businesses and processes worldwide will remain underscrutiny. As I said a few weeks ago, we are presently focusing on theTextile Processing Chemicals business unit. Recent global marketdevelopments mean that further action is needed with regard to thisbusiness.

The Management Board has therefore decided to divest theseactivities. We are confident that we will complete this process by theend of the year.

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Ladies and gentlemen, the fourth phase of our strategy is acquisitions -or what you might call 'strategic growth.'

We are now preparing for that phase.

We have already done our homework to the point where we will soonbe in a position to actively participate as a self-confident player inreshaping the chemical market. This is in keeping with our mission:

We aim to occupy a leading position in the chemical market in themedium term.

To achieve this we have to further increase our company's relevanceand its value.

And we must redouble our efforts and open up new potential in order toclose the earnings gap that exists between us and our competitors.

So it will also be important in the future to find partners or businessesthat enable LANXESS to create additional value in what are already itskey competency areas.

In doing this we will proceed just as prudently and systematically as wehave done in the past.

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Our decision to make acquisitions part of our future strategy issupported by global market trends.

Consolidation in the chemical industry goes on unabated, supported bythe continued strength of the economy. Low interest rates and theenormous cash reserves of many companies are driving this consolida-tion and putting everyone under pressure to act.

We cannot afford to simply stand by and watch all this happen. On thecontrary, we - the Board of Management of LANXESS AG - intend tobe among the people shaping this development. We will drive it forwardat a pace that is right for us.

We are convinced that acquisitions are one of the keys to sustainedsuccess in the future.

4.: EXPERTISE

At the same time, however, growth requires substance. Or to put itanother way, tall buildings require particularly strong foundations.

We've been paying special attention to those foundations ever sinceLANXESS was first established, and as a result, we now have a solidfoundation of expertise comprising three main elements:

- management expertise,- business design expertise and - market expertise.

Management expertise means that what began rather more than a yearago with our stock-market listing - a challenging restructuring taskburdened with difficulties, a project, a mission - is now an independent,new global enterprise.

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The employees, the management team, the members of theSupervisory Board, and the Management Board have built acompletely new enterprise while at the same time successfullymanaging ongoing operations. Since the summer of 2004, we havecreated structures that no longer have anything to do with what weinherited.

LANXESS now comprises 15 operationally independent business unitsthat are managed separately and judged according to their economicperformance.

Or, if you like, 15 enterprises in one!

But the remarkable thing is this, and it's something we're particularlyproud of:

We've accomplished this transformation of the Group without harmingour operating performance. On the contrary - business as a whole hasimproved considerably.

For example, while building and restructuring the company we alreadyboosted EBITDA by 30 % in the first year; we reduced debt by 40 %;and we eliminated or mitigated a number of the risks transferred fromBayer to LANXESS at the time of the spin-off.

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That shows once again what great achievements the global LANXESSteam is capable of.

And it gives all of us even more courage for the future!

Ladies and gentlemen: Apart from restructuring the Group and boostingour operating performance, we've achieved something else as well:

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We've established the basis for a new, strong corporate culture andalready brought this to life with our "Formula X."

Developed at the first international managers' meeting last year,"Formula X" denotes the cornerstones of LANXESS's value system:"Seek solutions - not problems"; "Take ownership"; "Keep it simple";and "Think new - act fast". The actions of all our employees are alignedto this formula.

And there are already numerous examples of how this theory works inpractice throughout the world:

- We have significantly reduced the number of management levels andgiven each of the remaining levels considerably greater decision-making freedom, so decisions can now be taken faster and moreindependently.

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- And instead of having countless different job descriptions around theglobe, we have now combined similar positions worldwide into "jobfamilies". This makes for clarity and transparency.

- LANXESS also stands for practical human resources developmentwith an eye to the new growth markets.

- We are convinced that our relationship to China in particular shouldnot be a one-way street. It must be a two-way process, which is whyLANXESS is running a special training program for young Chinesehere in Germany.

- Just a few months ago, the successful participants in a rigorousselection procedure began their two- to three-year job training inGermany. After that they will return to China as junior managers to helpdrive forward LANXESS's activities in China in their own language.

- And LANXESS also stands for social solidarity. After hurricane Rita inthe United States, for example, we set up the LANXESS Foundation,which collects donations from employees all over the world and usesthem directly to help LANXESS employees and their families who wereaffected by the hurricane.

But management expertise also means restructuring a companysmoothly based on consensus between the Management Board andthe employees' representative bodies, and that's something everyoneinvolved is proud of.

The restructuring of our enterprise has caused the workforce to shrinkfrom 20,000 to about 17,000. However,

- There were no dismissals for operational reasons.- There were no strikes.- There were no unfair confrontations.

The repositioning of our company placed heavy demands on allemployees, the management team and the Management Board.

Last year was anything but easy.

And yet, the workforce of LANXESS is counting on this companyhaving a successful future. Their participation in the LANXESS stock

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program shows this quite clearly. Nearly 60 % of the employees havealready purchased shares in "their" company.

Surely nothing better demonstrates the commitment of LANXESSemployees and their willingness to shape the company's future.

Ladies and gentlemen, this makes LANXESS a shining example ofhow entrepreneurial success stories can be written in Germany.

It is possible - but only through consensus.

On behalf of my colleagues on the Board of Management, I wouldtherefore like to say a very special word of thanks to all our employeesfor their personal commitment, as well as to the employees'representative bodies, who have played such a constructive role in thisdifficult process.

My thanks are also due, of course, to the members of the SupervisoryBoard. They, too, have also done much to enable LANXESS to moveforward as a self-confident enterprise.

The second part of the foundation I mentioned is business designexpertise.

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Nowhere is this more evident than at Saltigo, our new fine chemicalscompany. Not just LANXESS, but many of our competitors have for along time been complaining about the situation in the fine chemicalsbusiness: declining or non-existent margins, a lack of innovations, anda saturated international market.

All this is true.

But it's also true that the fine chemicals industry has good products.They are synthetic active ingredients for industries such as pharmaceu-ticals and agrochemicals. And the global market for these products willgrow again in the future.

However, not every company will benefit from this growth, because notevery company will withstand the competition in this market.

Companies have to change in order to survive. They need newmanagement methods, new decision-making freedom for managers,the deployment of risk capital, streamlined consultation processes, newways for employees to share in their success and, above all, differentorganizational structures.

LANXESS has given its fine chemicals business all these things byestablishing Saltigo.

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Instead of closing down these operations, LANXESS placed the bestemployees in what was one of our weakest businesses. And they haveturned it into a new, legally separate enterprise. One that will prove thatchemicals can be profitably managed. Right here in Germany, the birth-place of the chemical industry.

Ladies and gentlemen, the success is already evident. Previously, aspart of Bayer, our fine chemicals business received 70 % of its ordersfrom within the Bayer Group.

Today, Bayer's purchases account for only about 40 % of sales.Saltigo's customer base now comprises the blue chips of the chemicaland pharmaceutical industry.

Metaphorically speaking:

Saltigo means that the fine chemicals business of LANXESS, insteadof bringing up the rear, will be at the forefront of developments in thisfield.

The successful example of Saltigo illustrates that change is essentialfor success, and that LANXESS, too, will have to continue changing.We will take into account the trends in the industry and the marketworldwide. Or even better: we will stay ahead of these trends.

This brings me to the third component of our foundation: marketexpertise.

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As you all know, ladies and gentlemen, the growth markets of thefuture are to be found particularly in Asia. China alone accounts formore than 10 % of the global demand for chemicals, and consumptionthere is growing at a rate of 12 % a year.

Only a few days ago I returned from a four-day trip to China, where Iwas pleased to accompany the German Chancellor along with otherrepresentatives of German industry. And this impression was confirmedonce again:

Yes, tremendous opportunities exist in China for German companies,but there are risks involved too.

LANXESS is familiar with these risks, because LANXESS knows theChinese market. That's why we have consistently invested only wherelocal conditions favor our projects:

- Such as in the new facility for polymer-bound chemicals at theQingdao site. This production unit has been in operation since March,doubling our local capacities.

- Or in our site at Wuxi, near Shanghai, where we have brought onstream a new production facility for high-tech engineering plastics. TheEUR 20 million facility has a capacity of 20,000 tons per year, whichcan be quickly expanded.

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- Or in the LANXESS joint venture at Tongling in Anhui province, whereLANXESS is scheduled to begin producing an antioxidant for rubber atthe end of 2006. We will be among the first foreign suppliers to do so.

- Or our world-scale facility in Weifang. We will shortly bring this planton stream together with our joint venture partner, becoming China'sleading producer of hydrazine hydrate. As you know, this has been ourboldest project to date: we shipped an entire chemical plant from theUnited States to China, where it is now being reassembled.

Ladies and gentlemen, in view of global industry trends, market experti-se doesn't just involve strategic investment in growth regions.

It also means, first of all, investing systematically in research and deve-lopment while at the same time increasing efficiency.

And secondly, it means concentrating on the most profitable links in thevalue chain.

As far as R&D is concerned, LANXESS in the future will focus primarilyon innovative, high-quality products and processes. Further objectivesare to shorten times to market, make increased use of licensing andenter into even more specific research alliances.

All this amounts to driving forward the innovation process withincreased efficiency.

Hybrid technology is the best example of what LANXESS means byconcentrating on the most profitable parts of the value chain. Thistechnology enables metal and plastics to be joined, combining theadvantages of both materials. LANXESS has filed a patent applicationfor this technology and is thus in an excellent competitive position toexploit it in the automotive supply industry, for example.

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5.: OUTLOOK

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Ladies and gentlemen, LANXESS is on the right track. We haveachieved a great deal since we became independent and have laid asolid, independent foundation upon which the new company will nowbe built floor for floor:

- We have increased profitability and reduced debt;- We have achieved a further rise in our share price and our marketcapitalization;- We have fully achieved our ambitious goals and thus built confidence;- And we have opened up options for future action.

But foundations are not ends in themselves. They require commitment,dedication and courage because they are the basis for creatingsomething new.

The stability of the entire structure depends on them. For this reason:

- We must not slacken the pace. The new house is still far fromfinished.- We will continue to rigorously implement our corporate strategy andrealize our plans as announced.- We will further develop the architecture and, together, we will watchthe building get taller.

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And as good architects, we are also aware that the LANXESS housedoes not stand alone. Others are building around us, and still othersare looking over their blueprints and asking: should we build here orelsewhere?

In this context, LANXESS also represents a contribution tosafeguarding and expanding the chemical industry's production base inGermany. After all, ladies and gentlemen, the chemical industry hasbeen and remains the fourth pillar of our national economy, after theautomotive, electrotechnology and mechanical engineering industries.

Some people have forgotten this, and it's time we remembered

- That more than 140 years ago, the modern chemical industry wasborn here in Germany, and it has grown up here.- That since that time, it has been a key and a core competency foraffluence in this country.- That in 2004 the chemical industry invested nearly EUR 6 billion inGermany.- That Germany is the world's third largest producer of chemicalproducts.- That in Germany nearly half a million people work for chemicalcompanies, including more than 110,000 directly here in North Rhine-Westphalia alone.- And that this makes the chemical industry the second-largestemployer in North Rhine-Westphalia.

And that's the way I believe things should stay in the future!

Germany is not only the host of the Soccer World Cup, with what wehope will prove to be a strong national soccer team. Germany is alsohome to the highest-performing chemicals team.

- We therefore must not allow a sell-out of the German chemicalindustry.- We must not allow chemical production in this country to becomeunprofitable.- And we must not allow the history of the German chemical industry tobecome a dead end. The industry itself must prevent this by treadingnew paths.

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Ladies and gentlemen, LANXESS is just such a new path.

And I am certain it is a path with a future.

Thank you.

Forward-looking StatementsThis news release contains forward-looking statements based on current assumptions andforecasts made by LANXESS AG management. Various known and unknown risks,uncertainties and other factors could lead to material differences between the actual futureresults, financial situation, development or performance of the company and the estimatesgiven here. The company assumes no liability whatsoever to update these forward-lookingstatements or to conform them to future events or developments.

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