Innovation – a key driving force, even in a crisisWerner BreuersMember of the Board of Management of LANXESS AGAmerican Chamber of Commerce, NY, January 2010

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Innovation means rethinking something you already know

“All intelligent thoughts have already been thought; what is necessary is only to try to

think them again”

Johann Wolfgang von Goethe

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Creativity and innovation are key to securing a viable future – particularly in times of crisis

“There's no bad time to innovate. You should

be doing it when times are good and when times are

tough. […] it’s such a deep-seated belief,

I'm not sure we have a choice.” Jeff Bezos,

founder of Amazon.com

Source: Business Week, April 17, 2008

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Innovative strength does not depend on the size of the budget

Performance Disconnect

No direct correlation between R&D expenditure and commercial success

Source: The Booz Allen Hamilton Global Innovation 1000, 2005

Of the 1,000 companies with the highest R&D budgets, less than 10% achieved significantly better performance per dollar spent on R&D than other companies in the same sector.

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A vibrant corporate culture drives innovation

Corporate culture and working principles at LANXESS

Pinpoint simple working principles to promote a vibrant culture of innovation

Ensure these principles are developed consistently as part of the day-to-day working environment

- Space for creativity

- The courage to make decisions quickly

- More individual responsibility

Takeownership

Keep itsimple

Seek solutions, not problems

Think new,act fast

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At LANXESS, we support innovation by improving our creative culture!

Innovation networkTrust

Integration

Open communicationTransparent innovationInterdisciplinary

approach

Support from top management Strategy Responsibility Trust

Implementation of R&D

Integration of business units Focus on market needs

Innovation processes Stage Gate Project management Idea generation

Innovation culture

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LANXESS – blazing a new trail in chemistry

Proactive crisis management Challenge09 and Challenge12

initiatives Savings of around EUR 360 million

by 2012

Global success 46 sites in 23 countries 14,400 employees Sales in 2008: EUR 6,576 million

History Independent company following

spin-off from Bayer in 2004 Stock market listing

in January 2005

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Cost-efficiency is the decisive factor in all R&D activities

R&D setup at LANXESS

Central coordination department for boosting interaction and knowledge sharing between the business units

First-class support departments to ensure optimal implementation

Industry-oriented R&D in each of the business units for maximum customer and market proximity

Integration of existing development networks

Optimized project management for maximum added value with a reduced workload

80% of R&D projects are market-ready within two years

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Targeted investment in innovation

Further 10 % increase in R&D budget in 2009

110 R&D projects implemented in 2008, with a further 100 projects in the pipeline

Number of new patents granted quadrupled between 2006 and 2008

Numerous successful innovations e.g. the high-performance rubber additive Nanoprene®

Sustainable program of innovation

R&D expenditure [EUR million]

+ 10 %+ 10 %

20092008

97

2007

88

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Innovation at LANXESS – Nanoprene®

Nanoprene® – a rubber additive Improves the properties of tires:

- Improves wet grip and abrasion resistance

- Increases service life

- Reduces rubber particle emissions

Increases the efficiency of engines as a component in fuel cells:

- Increases the reaction temperature from 60 ° to 200 °C

Innovation in response to the increasing demand for mobility

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Innovation at LANXESS – Baynox®

Baynox® – an additive for modern biofuels Prevents the formation of insoluble polymers in

biodiesel

Stabilizes biofuels for long-term storage and transportation

Enables cooking oil and other spent oils to be processed into biodiesel

Innovation in response to the increasing demand for energy

incl. Baynox®

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Innovation at LANXESS – Therban AT®

High-performance elastomer Therban AT®

More effective and efficient oil field exploitation through optimized drilling technology :

- Improved oil and abrasion resistance of drilling heads

- Longer service life of drilling materials through improved adhesion to metals

Innovative contribution to efficient extraction of energy reserves

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Label clearly detailing their fuel efficiency as of 2012

Cut CO2 and noise emission and protects the environment

Positive boost to the innovative tire industry

Business driven by innovation

Tire labelling – Initiativeof the European Union

Agreement on tire labeling

Tire labeling adopted by theEuropean Commission

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Innovation is a key factor in achieving success in a globalized world

Establishment of structures and conditions that promote innovation

Global R&D projects to heighten the worldwide profile further still

Cutting-edge R&D and technology centers in growth markets

Creativity is capital

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