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Executives

Alexander Rosar - IR

Marijn Dekkers - CEO

Joerg Reinhardt - Chairman, HealthCare

Patrick Thomas - Chairman, MaterialScience

Werner Baumann - CFO

Sandra Peterson - Chairman, CropScience

Analysts

Fabian Wenner – UBS

Richard Vosser – JPMorgan

Sachin Jain - Merrill Lynch

Craig Maxwell - UniCredit

Michael Leuchten - Barclays Capital

Ronald Koehler - MainFirst Bank

Karen Jay - JPMorgan

Jo Walton - Credit Suisse

Andreas Heine – UniCredit

Jeremy Redenius - Sanford Bernstein

Florent Cespedes - Exane BNP Paribas

Christian Faitz - Maquarie

Cornelia Thomas - WestLB

Andrew Benson – Citi

Jean de Watteville - Nomura

Jack Scannell - Sanford Bernstein

Bayer Aktienges Ads (OTCPK:BAYRY) Q3 2010 Earnings Call October 28, 2010 4:30 PM ET

Operator

Ladies and Gentlemen and it’s a great pleasure for me to welcome on behalf of my colleagues to our conference call in which we will review our third quarter figures. With me on the call are Marijn Dekkers our new CEO and Werner Baumann our CFO. HealthCare will be represented by Reinhardt, CropScience by Sandra Peterson, and MaterialScience by Patrick Thomas. Mr. Dekkers start off our conference call with a brief summary of development for the quarter. We assume you have all received and reviewed of our newsletter, the recent documents and the slides with the addressed value for the main point.

Before handing over to Mr. Dekkers, I would like to draw your attention also to the Safe Harbor statements. Thank you

Marijn Dekkers

Thank you Alexander, good afternoon ladies and gentlemen. It’s also my pleasure to welcome you for the first time as CEO of Bayer. During the last nine months, I had the opportunity to work closely together with Mr. Wenning and develop a deep understanding of Bayer. I would like to take this opportunity to thank Mr. Wenning again for all the support he has given me personally as also for his excellent leadership of Bayer in the past eight and half years.

Let me now briefly review the quarter starting with the overview, we again increased sales and underlining EBITDA in the third quarter of this year mainly driven by MaterialScience. Emerging markets contributed 37% to group sales and continued strong business momentum. Our elevation pipeline continues to hold significant promise. We confirm our target we present the Xarelto ROCKET AF data during the upcoming American Heart Conference. Major progress was achieved in de-leveraging the balance sheet but not mention debt being reduced by EUR 1.6 billion in the quarter. Based on the development so far and our expectations for the remainder of the year we reiterate conclude full year financial outlook.

So let me now briefly look at the key data for the quarter and in my comments I will focus on the portfolio and currency adjusted sales figures variation. On slide 4 you see group sales of EUR 8.6 billion advanced by 60% in Euros or 8% in adjusted for currency exchange. Underlying growth was mainly driven by higher volume.

Volumes added almost 6% in selling price increases nearly 3% to the topline exchange rate. Underlying EBITDA was EUR 4.7 billion gained 10% due to the positive business trends at MaterialScience and positive currency effect. Currency effective group underlined EBITDA by EUR 150 million in the quarter. We increased our R&D investments by EUR 80 million in the quarter.

This on the scores of confidence in our new products and our new R&D pipeline. The quarter was hampered by special charges totaling EUR 436 million. These were related to litigations in the US. Of this amount, 386 million were mainly attributable to an intended settlement programs at CropScience in connection with litigations concerning genetically modified rice. Special charges of 50 million were taken at HealthCare in connection with litigations concerning Yaz and Yasmin.

Core earnings per share rose by 22% to EUR 95 spend. On slide five, you see some regional perspective the strongest growth was achieved in the emerging economy. In Western Europe, business gain 6% and in the United States business was up 3%. But the emerging markets accounted 37% of group sales. In these markets the extended hours of sales by 17% with a strongest growth achieved in the emerging aging market and in Eastern Europe.

These significantly re-demonstrates that we are well positioned in the emerging market and that our significant investments there are really paying off. On slide six, the gross cash flow declined by 25%. The decrease was mainly due litigation related provisions not reflected in net cash flow.

Net cash flow rose by nearly 3%, in more efficient working capital management also contributed through the increase. Pre-operating cash flows improved by 6% to almost EUR 1.2 billion. This allowed us to significantly reduce financial debt. Net debt at the end of the quarter was EUR 9.1 billion down by EUR 1.6 billion compared with the end of the second quarter. This was also helped by positive currency effect in total currency changes lower net debt to EUR 4 billion.

Now let’s look more closely at the trends in our individual business starting with HealthCare on slide seven. The third quarter performance of HealthCare namely impacted trend. Lower sales in the United States as the result of generic competition for YAZ, very solid expansion of pharmaceutical sales in other countries and further growth in consumer health. The aggregate effect of these diverging trends within HealthCare was a slight overall increase in sales, the slight shortfall in underlying EBITDA as compared to the prior year period. Pharmaceuticals achieved sales of EUR 2.7 billion in the quarter. Sales in the United States felled by 99% outside the United States, pharmaceutical segment is growing 5%. Business expanded remarkably in the emerging market for example in the Peoples Republic of China, represents by 31%. In Europe sales were basically flat.

Let’s move on the key pharma product, this is with better for own expenses slightly. Sales of the YAZ family showed a significant drop of 28% and due to sharply lower sales in the United States. However sales of the YAZ family outside the United States increased almost 9%. Kogenate formed very positively specially in America with sales up by nearly 7%. At plus 1% sales of Nexavar were up slightly over the very strong prior year quarter, we benefited from the products registration in Japan for the treatment of liver cancer in May 2009.

Mirena was up almost 21% benefiting from the selling price increases in March. Higher volumes particularly in China with significant expansion of business with Aspirin Cardio. Sales were up almost 13%. But Levitra grew 9% and Avelox sales were slightly above previous years. Sales in our consumer health segment rose by nearly 3% in the quarter.

Contributing to this performance were the businesses of consumer care and animal health. While at MedicalCare there was a slight drop in sales. Due to the business strengths I just described healthcare was not quite able to match the prior year level of underlying EBITDA. Here the figure was down by about 4%. Earnings were also diminished by the negative effects of HealthCare reforms.

We also increased marketing expense and invested more heavily in R&D. a contract currency effect and had a positive impact. So what does our performance so far in 2010 meant for the full year outlook have helped you. We continue to anticipate a slight increase in adjusted sales of healthcare and are still aiming for underlying EBITDA to reach at least the prior year level.

This is in view of the business performance so far and the appreciation of the euro, clearly an ambitious target but we are working hard to achieve it. Now well expected news flow from our key Pharma Pipeline assets. We are well aware well that what intrest due most right now is how things are going with Xarelto, and the pharmaceutical pipeline. So where do we stand on this? We are confident that we will be able to present the ROCKET at the American Heart Association Section on November 15.

Prior to that there will a headline findings release as promised as soon as the data have been evaluated. This publication is now eminent. I trust you will appreciate that we can not comment on the outcome of the trials today. And to prevent any speculations this is neither a positive or a negative statement. So what are our finding plans for Xarelto? We continue to target submission of Xarelto for regulatory approval in SPAS before the end of this year in the EU and the US.

Additionally, we continue to target the first filing in DVT treatment in Europe for this year. For no change in timeline here. For the US filing we are waiting for the EINSTEIN-PE trial which is expected to be completed in the summer of next year. Johnson & Johnson recently confirmed their filing target in 2012 or possibly late 2011 for the treatment setting including PE.

As the ATLAS TIMI Study 51 in secondary prevention of ACS progresses, we are gaining more visibility on the timelines and now expect to complete this study already in the summer of 2011. Filing in the ACS secondary prevention settings targeted for 2011. MAGELLAN phase III trial in which are studying Xarelto for prevention of CTE in medically ill hospitalized patients is now fully enrolled. They are expected in early 2011 and the filing date here is as well 2011.

We expect VEGF Trap-Eye data from the pivotal Phase III in web AMD the so called view program before the end of this year and we are targeting or filing in 2011. For riociguat the recruitment has been very challenging in the ongoing phase III studies. A filing for P8H and CPEPH in 2011, therefore seemed unlikely from today’s prospective.

So that concludes our pipeline update in pharma, let’s now move on to CropScience. The CropScience science sub-group had a solid third quarter with gratifying increases in sales and earnings. This resulted mainly from a much more favorable market environments with higher demand due impart significantly lower inventories in the distribution channel and higher commodity price. With selling prices stable overall, sales were up by 8%. Sales of crop protection in North America rose by 49%, albeit against an usually weak prior year quarter.

Our sales in Latin America grew by 8% due to the recovery of the Crop Protection market. Sales of our Crop Protection products in the Asia Pacific region rose by 5%. We registered gains for our insecticides and fungicide business. Only in the Europe region, business was slightly down. Sales were lower by 3% compared to the prior year quarter. The reason for this was the sharp decline for sea treatment products particularly in France and Germany. In our herbicide business however we saw positive start to the fall season, particularly for cereal herbicide. Sales of the BioScience business unit came in at EUR 86 million some 53% ahead of the prior year period.

In an overall positive market environment, we could grow in all segments and regions. This was particularly due to higher sales in cotton, canola and vegetable seeds. Sales of the Environmental Science business unit declined by 3.5%, business with product of prime consumers was weaker due mainly to unfavorable weather conditions in the United States. Underlying EBITDA of the CropScience sub group rose by nearly 17% in the third quarter, this was mainly because of the growth in business of Crop Protection and positive currency effects of selling increased expenditures for research and development as BioScience. Other any implications of the performance so far this year for the CropSciences outlook. In the currently positive market environment, we plan to grow fourth quarter adjusted sales at CropSciences compared to the prior year period.

Against the background of the week first have, we continue to anticipate that sales for the full year 2007 will come in slightly below the prior year levels. We expect the substantial year-on-year decline in underlining EBITDA. CorpSciences that’s now moved to material science, Material Science once again reported a strong quarter. Sales were almost EUR 2.7 billion which was 23% above the prior year quarter and almost exactly equal to the second quarter 2010. Underlying EBITDA improved significantly compared to both the prior year and quarter and the proceeding quarter.

So we met our sales target for the third quarter and in fact exceeded our EBITDA target. This growth followed some much higher demand in our main customer industry the biggest gains in absolute terms being in construction and the automotive sector. The higher demand boost volumes in all products groups and regions and volume growth lifted sales by 13%. Highest selling prices had a 10% both as effect on sales.

The markedly improved business situation was also reflected in earnings. Third quarter underlying EBITDA of material science rose significantly to EUR 409 million with higher volumes and selling prices offsetting the increase in raw material cost. As far as the outlook of MaterialScience is concerned we remained optimistic for our business in the fourth quarter as well. In this period which is normally weaker for seasonal reasons, we expect that sales in EBITDA before special items will be well below the strong third quarter of 2010, but significantly above the fourth quarter of last year.

For the full year 2010, we anticipate sales in the region of EUR 10 billion and roughly threefold growth in EBITDA before special items to more than EUR 1.3 billion. Overall, the MaterialScience business has recovered impressively and more quickly than expected. This makes it likely that we can meet our original target of returning to the pre-crisis level at MaterialScience by 2012, now much earlier than planned.

So let’s take a look at slide 11 with the outlook for the remainder of 2010. We remained optimistic for the full year 2010 and we confirm the full year guidance for the Bayer Group. We continue to target portfolio and currency adjusted sales growth of more than 5%. It remains our aim to increase EBITDA before special items to more than EUR 7 billion and we continue to expect a core earnings per share will improve by more than 15%.

So in summary, Bayer again increased sales and underlying EBITDA in the third quarter, mainly driven by the strong recovery of MaterialScience and positive currency effect and we are working on addressing the current challenges, business challenges particularly at healthcare and CropScience.

That concludes my remarks, we are now happy to enter question.

Question-and-Answer Session

Operator

(Operator Instructions). The first question comes from Mr. Fabian Wenner. Please state your name, company name, followed by your question.

Fabian Wenner – UBS

Marijn I wanted you to maybe qualify your quotation on Bloomberg as the market might have misinterpreted that. It says that you are seriously looking into M&A opportunities, and we remember from your presentation in September that you're being cautious about re-leveraging the company given the A- rating. Can you just maybe give a few words on that?

Marijn Dekkers

Glad you are asking that question, because the comment was taken, somewhat out of context. The top priority for Bayer is to drive growth from our new product and pipeline in the future. That’s the top priority, innovation is what we are all about and our business model is to innovate, develop new products and at such price growth and shareholder value. That doesn’t mean that selective acquisitions are not important and we certainly have our eyes open for when good opportunity come along, but I want to emphasize that acquisitions at the moment is not a priority for the Bayer Group. We do not feel with this portfolio we need to do something big for instance really fast and that’s what I’ve said before, so yes of course now we have over the next year’s financial room for acquisition, but it is not that we are sitting here wondering what we are going to buy tomorrow.

Fabian Wenner – UBS

Would you be willing to quantify that additional spend, the amount of money you are wiling to put in to Bolton.

Marijn Dekkers

No, that’s very hard to do as you know. We still have 9 billion of debt, which is a significant certain amount of money obviously and we are also very keen on our A rating. So I don’t really want to quantify what we could spend over what period of time. But as we are paying off our debt and it continues to successful our working management as we are doing. We’ll create more room for ourselves to be more ambitioned on the acquisition front.

Operator

The next question comes from Mr. Richard Vosser, please state your name, company name followed by your question

Richard Vosser – JPMorgan

Hi, it’s Richard Vosser from JPMorgan, thanks for taking my questions. Three questions please first question on the margin targets being taken essentially down slightly in the HealthCare. You have mentioned R&D and YAZ generics and obviously the currency impact. But I was just wondering if you could give more details on what has changed since the second quarter that caused you to be concerned? Is there any underlying changes like more R&D spend? Because you knew about R&D and YAZ generics in the second quarter. Second question, just on the YAZ genericization and the impacts on the launches of Natazia and YAZ Plus, I just wonder if you can give us an idea how you are seeing the reaction to those products given the generics going in the market for the market-leading YAZ? And then moving to a question just on MaterialScience, you've mentioned MaterialScience you would be able to reach the pre-crisis levels earlier than 2012. I just wondered if you could give us an early read on how the demand trends might be looking early into 2011 as you look from here. I understand obviously the visibility is not that great, but any color you can give going forward would be great.

Marijn Dekkers

Okay, so the first question you asked is on margins in health care so Joerg Reinhardt will answer that question.

Joerg Reinhardt

Thank you Marijn, there is no significant change in an underlying trend, I mean if you we are still aiming for the original target for healthcare, but as we stated it will be or it is increasingly ambitious to actually achieve that. But certainly we might not yet achieve that the end of the day.

What you are seeing is increases in expenditures in R&D and some market expenditures. There we obviously preparing for a number launches and we did prepare for example in the US for the Natazia launch and also the BS launch. But we also do significantly increase our presence for example in China that we believe that there still significant growth in the next few years and there we have seen that we might have to intensify our investments especially in the sales force and commercial sight a little bit.

Other than that I mean as you know we have a quite rich pipeline and especially for Xarelto, but only for Xarelto the expenditures in R&D will continue to be at a reasonably high level. But it’s no underlying or significant change in the underlying trend. With regard to the US and this was your second question, yes the generalization growth as you have seen we have launched Natazia in June and we are about to launch, we are currently launching BS, it will be too early to give any lets say concrete feedback or impact on how this products are going to do in the US, but we see a very positive and very open environment in the US most of them in Europe for BS I have to say.

So we are quite confident that we are able to gain back market share in the overall OC market in the US. But it is simply too early to quantify that to any further extent.

Marijn Dekkers

So the third question was would we dare to give an outlook for the next few months on the business environment and MaterialScience Patrick Thomas?

Patrick Thomas

As you know, its probably limited at the moment to two to three months until we can get customers at the moment very few of them talk beyond the end of this year to be honest. So I turn rather to sort of major market trends and what’s going on in terms of the changes for example in the government subsidiary program sort of being running through the crisis. What’s interesting in China is that the appliance industry program which in China is not as appliances to the country side is actually being extended for another year which means still run though to the end of 2011. And the EcoPoint program in Japan is also being extended further. So we are seeing some signs particularly in China that the automotive and the appliance industry which is two most important for us of being pushed hard they are tending to cool also bit on the construction industry.

So it’s a mix picture looking at the program support growth, the fundamental drivers is still in place. We drive through improved energy efficiency like what you are seeing in vehicles still remain trends, so I see no reason to doubt the customer will continue in the first quarter as they are now in the final quarter we are in.

Operator

The next question comes from Mr. Sachin Jain. Please state your name, company name, followed by your question.

Sachin Jain - Merrill Lynch

Sachin Jain from Merrill Lynch. Three pipeline-related questions, if I may. Firstly, obviously you are awaiting the AF data. Without kind of, I guess you would not give a peak sales estimate but I'm interested in your thoughts on how your peak sales potential splits AF versus non-AF indications, just percentage of each if you would be willing to discuss that. Secondly, we have had Pradaxa pricing released in the market recently. I wonder if you could provide some comments on that price relative to existing Xarelto prices and how much flex you think you may have around that depending on whatever data you see? And then finally on riociguat, I wonder if you could just provide some color on the extent of problems you're having in patient recruitment, how much of a delay we are looking at, and do you think that can be fixed?

Joerg Reinhardt

Regarding peak sale potential portfolio, I mean you will probably understand that for the time being when we don’t have all data in house so its actually very difficult to make any assessment or prediction as to how the potential of cargo will split between the different indications, but obviously as you, the AS indication is likely to have the biggest impact on overall weeks potential portfolio and that will to a large extent depend on the data that we ultimately get very soon and that hopefully look good.

On the other hand of course ATS is an interesting opportunity as well and as you have heard by the middle of next year we should be able to have those [better] actually when you look at 2011 its going to be a very rich year in terms of fining activity and our regular (inaudible) of their capabilities at the moment to actually be able to deal with all of the necessary activity $11 for product coming through. Regarding pricing yes, I mean of course you saw the product surprise which was at the high end of our expectations on the other hand its certainly setting an interest in president, the way you compare it to the Vice President (inaudible) then I would say this is certainly at par or may be even a little to tire so I mean we have not obviously decided on how their deal are going (inaudible) again, that will depend on the competitive that we have seen with all system come out soon.

Unidentified Company Representative

Regarding industry growth yes we have encountered significant issues with recruitment which has mainly to do with the fact that patients that have been or are on PD5 and EBITDA are excluded this has created more headwind than what we would have expected and has found it less to very close good recruitment in the number of countries we have in the mean time that (inaudible) the protocol, we have simplified the protocol. And we are optimistic that within the next four to months we have a better assessment as to how long this study will actually take. It’s too early to give you a deadline.

I would be willing to take this topic up again at the first quarter call, and we should have a better feeling as to how long the delay will really be.

Operator

The next question comes from Craig Maxwell please state your name company followed by your question.

Craig Maxwell - UniCredit

Couple of questions, firstly on HealthCare margins, I'm thinking slightly longer-term than just next quarter, but over the next couple of years in your planning for the Xarelto launch and some of the other major launches you have, I mean are we looking at significant incremental investment in sales and promotion for the HealthCare division? So are we looking at basically quite a substantial incremental level or meaningful increment? Then on the other side of the coin on R&D, you have still got significant studies ongoing, but there are some very large studies that are concluding as well over this year or next. So shouldn't we expect a reduction in the absolute R&D spend? And so, if we are not going to, I'm just wondering why. I guess just very quickly, you have got another difficult quarter for the diabetes monitoring franchise. So its really just like your outlook for that division now as that’s progressing. And then lastly, on Xarelto is it safe to assume on the headline press release that we will get information on both the primary end points of safety and the efficacy endpoints?

Joerg Reinhardt

Well thank you for your question, regarding margin and healthcare I believe your assessment of the situation is very accurate, on the one hand we are going to have to invest significantly in preparation of these launches and as you very well know it’s going to be very competitive market place in the next few years. So that from that perspective the level of investment in marketing and sales is probably going to go up a little bit that comparatively on the other hand, you are also right that from an R&D perspective we have significant programs that come to an end and however when you look a the product like Xarelto its not going to be over.

We certainly know that we will have to continue to investment even after [Google] of that product also in clinical trials continuously to keep for a new flow going. So all together I believe that there is no intention or no opportunity for any new guidance from healthcare margin, I believe that you will may see some shifts between marketing and sales and R&D going forward. But overall, we would like to stick to the guidance we gave before.

Regarding diabetes monitoring, yes we had another difficult quarter that especially in the US actually outside of the US (inaudible) is still nicely developing and growing. In the US we have seen continuous commoditization of the market, we see prices coming down and to some extent also volume coming down, which we are now addressing within crisis program in the next six months. So I hope that we will be able to stop or may be even convert this strength a little bit in the not too distant future.

But it’s something that we have on the top of our list and we monitor it very closely.

Regarding Xarelto headline, I mean it will be a very short headline. As you can probably expect, we will see what can finally released, but it’s going to be a very short and concise.

Operator

Your next question is from Michael Leuchten. Please state your name, company name, followed by your question.

Michael Leuchten - Barclays Capital

Two big kind of questions, please. One, you were kind enough to give us the currency impact on the group level EBITDA. Could you do the same for pharmaceuticals, please? And then the tax guidance now for the full year of less than 27% that may suggest that the tax rate in the fourth quarter is a little bit on the higher end. Is there any reason to believe that going forward the tax rate would be trending up, or is that just an anomaly because of the one-offs in the year?

Werner Baumann

First as it comes to your question and foreign exchange, I can give you the every time like on foreign exchange for healthcare segments that are not so pharmaceutical. Specifically in the third quarter it has been 88 million - 150 million (inaudible) before in his speech. Regarding tax guidance where we are through the first three quarters we have commented on and unusually low third quarter which was due to the regional distribution of our results and we expect that to normalize in quarter four, and at the same time, we do have a structural tax ratio of 28% to 30% in our overall business which will become what we are for this year. So you can expect that the come in below 27%, but I can’t give you any further guidance on that because again it also depends somewhat on the results that you will see in quarter four.

Operator

The next question is from Mr. Ronald Koehler please state your name, company name followed by your question.

Ronald Koehler - MainFirst Bank

Yes thank you its Ronald Koehler from MainFirst. The first question is actually to Bayer CropScience. Q3 was astonishingly on the pricing side for Bayer, whereas all the competitors have seen 6% to 7% price declines by posted cereal price declines. On the other hand, you were quite weak actually on the volumes with plus 9% where others had between 18% and 29% volume growth. Could you little bit elaborate on your price volume shifts and how do you see that evolving in the fourth quarter or potentially also little bit going forward here? And second question also CropScience or more specifically RICE litigation. You posted these special items, EUR 386 million for a settlement. Would that cover, let's say, almost 100% settlement, or is it, let's say, just the start of provisions you would expect here for RICE? And the third question is actually on currency again. Hedging policy, obviously some companies have used the significant dip to increase their overall hedging and the weaknesses of the Euro. Did you do the same, or how is your current hedging? Is it still, let' say, 50% of next 12 months or any favors on that would be appreciated?

Marijn Dekkers

The first question on pricing in CropScience which will be answered by Sandy Peterson. Sandy?

Sandra Peterson

Thanks for your question Ronald. I think that we are actually quite satisfied that we have been able to selectively increase pricing for some of our products around the globe which is an indication that our innovation is working in the marketplace. Clearly by being able to do that and it relates in the third quarter this year relative to the third quarter last year see that our prices are flat basically year-over-year except for Latin America where we actually start improvement in our pricing that in fact is obviously traded off with some of the volume projections that we’ve had in our portfolio is clearly different than our competitors and that has also had an impact on where we are seeing the volume increases being slightly below some of our competition. But net I think we are pretty pleased that we have been able to get the pricing in the marketplace for our organization.

Marijn Dekkers

Good and then the question on LLRICE reserves, Werner Baumann.

Werner Baumann

Okay. Ronald this is on our balance sheet. First one on the on the LLRICE litigation, through the course of the year we have to extend roughly EUR 500 million on the LLRICE complex. It is about 500 claims and 900 farmers which are covered with this place. Looking at what we are provided for in quarter three it is for a our best estimates on what needs for a settlement, I can’t however go into any more details regarding operation what type of coverage that would mean and I hope you understand. Next question on hedging policy we do hedge a 100% of our folk exposure and there has been no change for that policy recently in general looking at our forward exposure and the anticipated exposure on our business operations specifically had 50% of our foreign exchange from time-to-time and currency-by-currency. We might go over that limit we are hedged and a slightly higher ratio currently always on a 12 up to 24 months rolling forward in the yen and the dollar. We do have not speculate so there is more exchange on our rising policy based on lets say short term opportunities.

Operator

The next question comes Ms. Karen Jay. Please state your name, company name, followed by your question.

Karen Jay - JPMorgan

This is Karen Jay in for Cory Kasimov at JPMorgan. I just have a couple of Nexavar sales-related questions. First, I was wondering if you could provide the geographic breakdown in euros, and second comment on any nonrecurring sales such as the AVL purchase from the last quarter?

Joerg Reinhardt

What I can give you is a break down in terms of major geographies so we saw pretty flat quarter in the US for Nexavar.

Karen Jay – JPMorgan

Sorry, are you able to give me your euro values at all?

Werner Baumann

You want an exact value at the long term

Karen Jay - JPMorgan

If you could, that would be extremely helpful.

Werner Baumann

It’s around 1% you have ever come.

Karen Jay – JPMorgan

I'm sorry but in the actual euro value, rather than a percentage.

Marijn Dekkers

The percentage of the absolute value of sales

Karen Jay - JPMorgan

Absolutely.

Werner Baumann

So in the US it is 43 million in euros. In Europe it is 66 million in euros and in Asia Pacific where we saw a nice in Greece we have sales of EUR49 million. And that is as far as I can go. Overall we had third quarter sales of EUR175 which means that the rest, the delta is in the rest of the world.

Karen Jay – JPMorgan

Sorry, quickly are you able to break down Japan at all?

Werner Baumann

Yes, I can even give you Japan number which was EUR27 million.

Karen Jay – JPMorgan

Great. And then were there any nonrecurring drug sales such as the AVL purchase from last quarter?

Werner Baumann

I am afraid I give you that answer right now.

Operator

The question is from Jo Walton please state your name, company name followed by your question.

Jo Walton - Credit Suisse

Good afternoon it’s Jo Walton from Credit Suisse. I have got two questions. I wonder whether Sandra Peterson and Joerg Reinhardt, both having taken over their divisions relatively recently could give us their first impressions of those businesses, particularly where you feel that Bayer's strengths and weaknesses are? And secondly, I want to return to the longer-term margin theme on pharmaceuticals. Three of your biggest growth drivers -- mainly Nexavar, Xarelto and VEGF Trap -- are partnered with significant profit shares to your partners. As you go forward and those products become a bigger part of the total, how realistic is it for you to sustain the margins for the group? And a final, again, Pharma one I'm afraid, I wonder if you could give us an idea of the impact of the austerity measures on sales so far this year and what you think a full year of that impact would be next year?

Marijn Dekkers

You mean with austerity measures, you mean health care reform?

Jo Walton - Credit Suisse

Yes, European healthcare reform.

Marijn Dekkers

Okay. Good. Okay so lets with Sandy talking about her first impressions of BioScience.

Sandra Peterson

Thank you for your question. So I will just give you a couple of perspectives. Obviously these are very early press perspective insights just taken this role over officially a couple of weeks ago. The first thing I would say we diluted to actually and my answer to my last question is that Bayer continues and in this business in particular to have an incredibly strong pipeline of innovation. We have launched a number of products in a last couple of products in the last couple of years and we have a number of products in the pipeline that we were planning on marching over the two years and so our strength and innovation both in the chemical side of the business but also the other side of the business where we make decisions to focus on props and see in those areas where we focused, we have been quite successful I believe in actually in building a nice position in those categories and with the growers.

So I would say that I am not surprised at all but I have been very pleased to see that we continue our tradition of having incredibly smart capable innovative research and development engine in this business. The place where I believe we need to continue to focus our energies not very enthusiastic about doing this and to ensure that we have got the right commercial model and we are really thinking creatively on the ground and working with the growers around the globe and so I want to make sure we get the most out of our innovation pipeline that we possibly can going forward and so that’s the one area where I believe we can do more and I am looking forward to doing that.

Marijn Dekkers

Very good. Joerg impressions of the Healthcare?

Joerg Reinhardt

I mean what I immediately when I came here was a very good focus on a great pipeline potential that the company has. As you know we have quite a number of late paid assets that develop very nicely and will hopefully if they all come through and they all contribute as we expect will drive sales in this company quite significantly over the next few years. So pipeline is a strong focus, the other one is real good position in the emerging markets.

As you know everybody is fighting for positions in the emerging markets and as you all also know Bayer has a good tradition specially in China but in the number of other Asian markets as well also in Latin-America, Brazil, etcetera. So here we have starting point that is stronger than many other companies in the field and as you know most of the growth in the pharma industry over the next 5 to 10 years is going to come from exactly those markets, so strong starting point is wonderful.

I have also seen quite a range of very motivated energetic people here at Bayer that really want to do the best and they are part of working at Bayer which is a strong asset I believe that the company has it for. We believe we can do a little bit better is our infrastructure. I believe that we have a little bit of potential overlap here in some areas of bio healthcare which is something that I believe will have to be addressed and will be addressed in the next 12 months.

From an overall margin prospective, yes you are right that we have a number of safe drivers that are partnered, with we have never dealt though and I would expect that at the – when you look at the totality of the portfolio where you also need to keep in mind that we have a range of, let’s call, it product that keep on growing, they are specially driven through sales in emerging market which are highly profitable that you overall mix will enable us to come up with margin that are still very attractive and from that perspective I think the margin guidance that you have given so far is absolutely adequate. Even going forward with a number of partner products. Now healthcare reform was your question. I believe that from an overall yield perspective. We would expect this year to have an overall impact of EUR160 million maybe a little bit more than that.

When I look at quarter third quarter the impact is around EUR50 million to EUR60 million. Next year the full year impact could be a little bit stronger than I had just mentioned. But still a little bit to early maybe its going to be between EUR220 million to EUR250 million for next year.

Operator

The next question comes from Andreas Heine please state your name your company followed by your question.

Andreas Heine – UniCredit

Yes good afternoon it is Andreas Heine from UniCredit. The first question is, again, on the litigation. You had this litigation not only this year, but also recently there were several things. It is that the general risk in these businesses, that is CropScience or HealthCare is increasing, or has it to do that it can be followed more closely management-wise? The second question in Crop Protection price environment, you referred that you have a different product mix, which has an impact on the price trend. As far as I can see, there seems to be the highest, strongest price pressure on the fungi side. Is it that your portion and business in fungi science is less pronounced especially in the third quarter, and that makes a difference, or is it all over the place that you have a different view on the price trends? And last but not least on MaterialScience, polycarbonate prices came up nicely and probably that contributed also to the earnings improvement to Q3. Do you think that anything will change when the new plan of your competitor comes on stream next year, or is the market growing strong enough to absorb this capacity? Thank you for taking these questions.

Marijn Dekkers

Thank you, Andreas. I will answer the answer the first question on the levitation and whether or not the levitation is increasing and I think the levitation cases are tend to be the cases that run over very many years. And the LLRICE incident really occurs in 2000 at a time that offenses was still independent in CropScience so even before by both these business and here we are 10 years and it is still an actual situation.

So you have to almost think in five to 10 year periods with some of these levitations rather than whether or not a couple of intense last few quarters these are long lasting cases of some kinds that so point reach a point where they come to may be the settlements or may be not or a judgment in the course, and the question around the product mix in CropScience, Sandy can you?

Sandra Peterson

Sure, thanks for the question. I would say that generally speaking it is due to a difference in our product mix. So for example, we clearly were not directly impacted by the glycosides price declines whether some of our competitors do and on this the US offers specifically a question related to fungicides. Our fungicide portfolio we have been fortunate to be able to hold up our pricing in our fungicide portfolio probably better than some of our competitors, then as you mentioned there has been significant competition in that market place around the globe and in particular in some markets such as Latin-America but we have been able to sustain our pricing pretty well across the globe in that category and then clearly our insecticide portfolio is quite strong and robust and is appreciated by most of our competitors so I would say that it is somewhat due to a difference in product mix as well as strength in different markets around the globe that really has changes in the pricing mix but I would also hope as I had also said that it is because of our products are more greatly appreciated in the marketplace for what they do for the grower.

Andreas Heine – UniCredit

And then Patrick MaterialScience price 64 (Inaudible) new capacity is coming up.

Marijn Dekkers

I think you have seen that quarter two, it was in fact the strongest sales in our product government business in history and so as the price increases that have been put through on a fairly regular basis this year. I think you can also see that it is on 1 July, the price increase which we posted triggered some pre-buying in the second quarter which took away some volume in the third quarter and we did actually have some shutdowns of routine maintenance during the third quarter. So I think overall it represents very good result. Looking forward in terms of growth dynamics, I think historically this is a market that’s growing at 6 to 7%. During this year we will see growth well above 10%. And I expect that to continue into the next year in the range of 5 to 61%.

With those for the growth rate, new capacity can be absorbed relatively usually like with the market growth. And I think there is also some uncertainty around the timing of that new capacity coming on stream. We have announced that we would increase our capacity in Asia by 300,000 tons by 2015 that seems a prudent growth pattern before the following base upon the current development of the market.

Operator

The next question is from Jeremy Redenius please state your name your company followed by your question.

Jeremy Redenius - Sanford Bernstein

Hi this is Jeremy Redenius from Sanford Bernstein. I have three questions, one for each business. Going back to CropScience, having seen better pricing but less volume growth than peers recently, would you be comfortable seeing that similar type of development in future quarters, that is the price versus volume trade-off? Second, on MaterialScience, could you comment about inventory restocking this year? Has it been contributing significantly to this year's growth? And then third, on Bayer HealthCare, how far are you from Phase I trials for your next long-acting factor VIII candidates given registered Kogenate from attempts by Biogen and Novo to develop their own long-acting factor VIII products?

Marijn Dekkers

Okay crop dry falling.

Sandra Peterson

So obviously my answer to your question is we never like to trade of price and volumes and we would like given, given the focus on our innovation of our pipeline to able to get pricing in the market for the better quality of our products and what we are doing to increase our volumes significantly.

So I think this quarter it is hard say what the this is probably, who knows whether it is a trend in the market place long place term. There are number of things that have happened in dynamics, changes in prices and products. Some of our competitors and products becoming generic sort of clearly impacted the short term.

But we believe we need to catch healthy margins in our business and to do that we got to have the right pricing profile as well as continue to grow the business on a volume basis.

Marijn Dekkers

But material science is re-stocking.

Patrick Thomas

Yes Jeremy I think clearly there has been some inventory re-stocking effect although in our business you had an inventory that can be held is always very restricted. And I think most of the supply chains were feeding into a relatively lean and efficient anyway. So you think about the car industry there’s not a lot of stuff hold up in that industry any how. So I think fairly some effect you saw in course two is obviously been continuation in growth in quarter three and I think it effected largely.

Marijn Dekkers

With regard to the long acting factor VIII formulation, we are about to initiate a Phase I program with a new version, a new approach and we are actually at a range of new approaches which may lead to initialization in these one or two additional programs in the remainder 2011 as well.

So I pleased to really see the need to come up with something that develop quickly here and we will put all emphasis behind that.

Operator

The next question is from Florent Cespedes. Please state your name, your company followed by your question.

Florent Cespedes - Exane BNP Paribas

First of all, on Betaferon could we have an update of your view on the trend for 2011 on this product, and what are your plans to remain present on the MS market? And secondly, a question on the external growth opportunity in HealthCare. Could you share with us in which segments do you see the best opportunities? Is it in a small drug discovery area or more on the established specialty Pharma companies that would complement your portfolio?

Joerg Reinhardt

Obviously the market is going to be impacted by the introduction of (inaudible) also I believe regardless to whom you talk, its still a little bit early to predict exactly as to what the impact will be. what we certainly know from our lets call patient population is people are very happy with the efficacy and also the safety and tolerability profile of (inaudible) you may have seen recently publication of data that show that after 20 year period we do have significant improvement in mortality for those patient which of course further supports the confidence that patients have in this product.

Nevertheless, we have seen a high single digit decline this year across the world and I would not be surprised if that trend also continue, maybe a little bit stronger even in 2011, but I believe we will really have to see how (inaudible) fit in the overall picture, whether its going to actually expand the market as many people believe which I personally shared. I believe that they are still significant patients untreated that may benefit from on an oral treatment and to what extent this replacing maybe second and third line product will have to see as well.

So, overall we are determined to fight in this market. We have good product that have shown great long term data and is well accepted by the patients, so we will certainly not give away market share easily.

Florent Cespedes - Exane BNP Paribas

Do you have any plans to increase your presence by acquiring some products or partnerships in this area?

Joerg Reinhardt

This area is an attractive area and as you can imagine everybody out in the field is certainly looking after attractive assets all the time and so do we and I believe we will simply have to see how this developing over time. But at the moment I can’t give you any more comments on any concrete plans there. But we will certainly continue to beef up our efforts in terms of services that we provide to patients. Have we seen nice growth of the product in Asia Pacific in Latin American market.

Main impact is actually currently in the US and to some extent in Europe.

Florent Cespedes - Exane BNP Paribas

And maybe just to follow-up on the Asia-Pacific and Latin American performance? Do you believe that it is sustainable as the new products will be launched also in these regions?

Joerg Reinhardt

I mean there is something that we will have to see as I mentioned earlier. We have a very strong platform especially in markets like China and also fulfilled. We are least that we can capitalize on that presence and the good name the good prime name that have ask a global trend.

So I believe we are in a good position to defend but lets talk again in the year end lets see where we are.

Marijn Dekkers

Okay then Florent I will address your question about acquisitions. We already said in the past and we are consistent with that priorities for acquisitions for Bayer would be in the area of HealthCare and or CropScience and then a particularly on the Bayer Science’s side of CropScience. And I don’t want to speculate about would it then be this area of healthcare or the other because as you know acquisition a lot of that depends also what is for sale.

And in the end you can only buy what it is for sale and it is very hard to predict what it is going to be for sale. But we keep our eyes open and we are evaluating opportunities as they become available.

Operator

Our next question comes from Mr. Christian Faitz. Please state your name, company name followed by your question.

Christian Faitz - Maquarie

I have a couple of questions on CropScience and one on MaterialScience. In terms of CropScience, what is your best assessment of pricing power going into the first quarter of 2011? Also, in terms of how do you see channel inventories compared to last year, particularly in the US?

Would do you believe farmers are willing to accept higher prices given the recent rally in agricultural commodities? And then also I know from the past that your glufosinate products were priced at around about a 30% premium to glycosides. Is that still the case, or has there been an expansion simply because glufosinate didn’t fall as much as glyphosate?

In MaterialScience, just one simple question. What is driving the demand from construction? Is it purely insulation, or are there other materials their polyurethanes or polycarbonates that are used at present?

Marijn Dekkers

Okay. Pricing in the CropScience, Sandy.

Sandy Peterson

So I wish I had a crystal ball can answer this question, but I’ll just give you some general feeling of obviously with commodity prices where they are today and if they stay at that level, we are cautiously optimistic that we’ll be able to maintain pricing in the market place and potentially in certain cases be able to increase pricing in the marketplace going into 2011. But as you well know, its dependent upon lots of factors one of them being just whether commodity prices are going to stay at this level and obviously we can’t complete this call without re-mentioning the (inaudible) which is the weather we clearly have an impact on whether the growing season is what we think it might be next year. So we are cautiously optimistic on pricing going into 2011.

As it relates to your question around channel inventories. From everything we know at the moment in the US in particular, channel inventories look like they are at a pretty healthy level right now so that also makes us cautiously optimistic about the beginning of the growing season of 2011.

So that is I think I have answered your first set of questions. Your second question is around the pricing differential between glufosinate and glyphosate. We still do have a price premium in t he market place because we believe that is a product demand for price premium in the market place because of its ability to have a much broader impact on killing weeds were appropriate. So I cant specifically answer the question on a macro basis because its market by market specific but we have been able to maintain a price differential. In the US earlier this year, we did make one adjustment to our pricing of glufosinate to partly address some of the challenges we thought they decreased in pricing (inaudible) marketplace.

Christian Faitz - Maquarie

MaterialScience is the growth coming out of the construction for full year and also out of metrics.

Marijn Dekkers

You are right with the construction and to give you one example that construction growth is being triggered by a number of new break through in PIR systems, polyurethanes from systems which have very good far properties group have just managed to get approval from future mutual the big insurance group for use of 200 millimeter insulations panels for unlimited high construction which is a major by use of polyurethanes in tool buildings and opens up a new segment to the market, strictly in the US and as future mutual is the main insurer of the building that will be accepted around the world. Some of normal selection application is driven by regulation again in the US Congress part that comes to wood act which mitigates from older high from forming wood panels. This is particularly orientated strand board medium density fiber boat also partical board. That means you have to substitute US from all the high resins by NB high based would bind is.

And that means that non-president growth driver because your replacing it existing material in a very large market. And third area I would probably highlight which is beyond insolation is in the coaching area where the increase trend would clean the technologies low BOC, low content coaching’s in the constructions industry and in fuel coaching industry is also picking up well.

So again another substitutional effect where your taking (inaudible) salt and base coating and replacing with water bondage dispersions like that….

Operator

The next question is from Cornelia Thomas please state your name, company followed by your question.

Cornelia Thomas – WestLB

Hi it is Cornelia from WestLB here. I've only got one question left actually, and I wanted to doublecheck something which I could not quite hear during the conference call because there was such an echo on the line. It is about your plans for filing for Xarelto. Did I understand this correctly that you are planning to submit Xarelto for DVT treatment and stroke prevention in AS patients in the fourth quarter in Europe and that you will be waiting to submit these filings in the US until mid-2011?

Joerg Reinhardt

No, that is not right the intention is to file in Europe and in US before the end of the year and the common ratings for 2011 was related to the BTE to it prevention treatment made for the EINSTEIN-PE data that would only available but somehow next year but the ROCKET data will be submitted in Europe and in the US before the end of the year.

Cornelia Thomas - WestLB

Okay. But the filing for DVT prevention has now been postponed until mid-2011, is that right?

Joerg Reinhardt

Only in the US because in Europe it will still file before the end of the year. The difference is that in general we will file without the EINSTEIN-PE data in the US change in J&J has decided that they want to wait for those data. So that’s going into US filings with the EINSTEIN-PE data by second half of next year.

In Europe we will file without this data still this year.

Cornelia Thomas - WestLB

Okay. And just to confirm, was the initial plan to file for DVT prevention, wasn't that also by the end of this year?

Joerg Reinhardt

Yes, no change in plan.

Operator

The next question is from Martin Flueckiger. Please state your name, company name followed by your question.

Martin Flueckiger - Helvea Equity Research

Three questions, please. Firstly, on CropScience you were mentioning the W word as you call it interestingly enough. I was wondering whether you could give us an update on your impressions on weather and particularly on disease pressure in Latin America so far in the fourth quarter? And I realize it’s still early days, but maybe there are some interesting indications there.

And then on CropScience, again, I realize that it’s difficult to give exact forecasts for margin, through expected margins going forward. But I was just wondering whether you could specify your guidance on profitability in CropScience a little bit more and particularly whether you could indicate a margin range for 2010 for CropScience? And then finally my third question on MaterialScience, I would be very much interested also to see what kind of momentum we saw on a sequential basis in the sales price development if you could indicate a number there quarter on quarter? And also with regards to the development in the raw material price area whether you could provide us with a quarter-on-quarter increase rate, as well as an outlook on raw material prices going into Q4 and the full-year 2011, that would be very helpful.

Sandra Peterson

Great question, I wish I had a prospective on diseases in Latin-America through the end of the year but I really don’t, I mean what I can tell you which is clearly you already know is that the beginning of the third quarter was little dry but its been raining recently so I think we all are feel like that. There is no indication that we have that whether it will be problem till the end of this year in Latin-America but early days hard to tell.

As it relates to margin I cant give you a prospective on the 2010 where we are going to end up the year, clearly we are going to continue to work on having health margins in our business but long term our guidance has not changed our long term guidance for the business remained 23 to top 25% EBITDA margin.

Patrick Thomas

Martin’s first question was to deal with price momentum, of course its different in each of the sections business in and MDI price improvement is slowly and steadily moving so and I expect that to continue at the market timings. On TDI we saw cycles which was very tight in second quarter and seasonally. Less tight in third quarter and typically the prices followed that supply and demand relationship.

On our polyol business, for the polyurethane business, we have seen continuous price improvement. And on polycarbonate, the prices have continued to improve and will probably now stay at those sort of levels looking forward. On raw materials just in a very Macro sense if we look at full year 2010 we would expect to see overall raw material prices higher than 2009 and we currently expect that to be a negative value of about EUR0.3 billion of EUR300 million.

Operator

The next question comes from Jason Zhang please state your name, company name followed by your question.

Unidentified Analyst

Hi this is Angel for Jason Zhang from BMO Capital Market could you provide us some updates on Nexavar being personal progress in China and South Korea? Thank you.

Marijn Dekkers

Yes I can give you update on China, as you know we have filed for reimbursement some time ago, we are still waiting for the approval the decision is still pending. Off course we are hopeful that it happened somewhere in 2011 but I can’t exact date. And I am afraid on South Korea I am currently not in a position to give you an answer but it can certainly provide that at a later point.

Operator

The next question is from Andrew Benson please state your name company followed by your question.

Andrew Benson – Citi

Yes, thanks Andrew from Citi. Funny enough, most of my questions have been answered. The only one I have got left is in the MaterialScience. If you can give us an idea of the supply-side growth of those four key products into 2011? You mentioned you're bringing on 300,000 tons of polycarbonate in Asia. Over the next five years, but just into 2011, what the incremental size of additions are likely to be?

Patrick Thomas

Yes, Andrew. The polycarbonate side obviously Saudi Kayan facility which will come on stream some time in the 12 months we get. Those are not totally clear that’s too earlier. On the TDI side, we will bring on during middle of next year, the TDI facility in China up to 250 thousand tones is possible there might be another examples on the stream as it similar time in Hungary. But that again is not certain. MVI there are no real significant plans that we can see and on polyol things are relatively tight at the moment.

Operator

The next question is from Jean de Watteville. Please take your name, company name, followed by your questions.

Jean de Watteville - Nomura

Three questions on CropScience, please. Our first question is on the BioScience R&D expense increase that impacted margins this quarter. Can you just quantify the impact? And more importantly, can you just quantify the budget for R&D increase going forward?

Second question on the litigation, once again. You have a provision of approximately about $700 million, which is a big amount compared to the value of the US rice production. Can you just help us to understand how the compensations are calculated, please, just to measure the risk?

We obviously know that depending on the court decision that there is a very wide variety of numbers from $3.5 million to $20,000, but on what basis are they calculated would be useful.

The third question is on Crop Protection pricing, again. Sorry to ask the question once again. We clearly understand the difference of next year and the lack of glycosate and so on. But it seems that even excluding glycosate, your pricing is better. I just want to clarify, should we understand that you have been initiating price increases and that you have been the first one initiating price increases? And the reason you are confident of the success of these price strategies that your competitors are following you now. Just a clarification.

Marijn Dekkers

Our suggestion is to battle science R&D question and the pricing question so Crop Protection we will take first and then we will do LLRICE with things.

Sandra Peterson

If you know overall R&D expenditures across these prices are budgeted to be about EUR737 million and that number is a combination of things wanted there is a portfolio change from last year which has to do with the Phoenix Acquisition which represents about 23 million of that. And then in addition to that there is some slight other increases in the bioscience budget year-over-year that has impacted the business as well as there is some currency impact so there have been some impact from both of those things that have had a net impact on our margins to actually to the first three quarters of this year.

As it relates to the pricing question, I have absolutely no clue what my competitors are doing in the mark place specifically. What I would just tell you is that we have been trying to hold our pricing and we have as I’ve said earlier in cases where we are bringing new products to the market place, we have been successful in certain instances to actually be able to command a slightly higher price than we had in the past and that’s as much as I can say on price right now.

Joerg Reinhardt

Give you my answer in two pieces, one is what we had provided for during the year reflects our best assessment of the current exposure we have and what we believe we need to provide the exposure we had. When it comes your second part of the question on how these plays are decorated I think first of all I will say that off course we don’t agree at all this self claimed construction but at the same time people understand that there is a big business in the US and people are very creative in creating bigger and bigger claims, theories that what has happened during the course of the years and different elements such as impact on commodity markets off course the anchorage effect.

Off course the length of the effect people assume the construction of deadline.

Jean de Watteville – Nomura

All right. So I did not get the last part of it. It is the length of the…?

Joerg Reinhardt

It is the length of the effect people assume is this we seen in the market that is what people use among other. But these are the things the most important elements.

Jean de Watteville – Nomura

But the base of the calculation is lost revenue, right?

Joerg Reinhardt

Well I can’t go into more detail on it there are more elements than loss of revenue they have seen off course and (Inaudible). So there is quite a bunch of elements is of use in other constructive claims.

Operator

The next question is from Jack Scannel please sate your name, company name followed by your question.

Jack Scannell - Sanford Bernstein

Hi it is Jack Scannell - Sanford Bernstein. Just following up with a brief clarification request on your comments on the impact of health reform. The question you asked was posted in terms of austerity measures, which I think a lot of us apply to when thinking about European governments. You answer the question using the terminology of Healthcare reform which I think many of us apply to the legislation passed in the US. Can I just confirm the EUR220 million to EUR250 million range you alluded to includes both?

Marijn Dekkers

Yes.

Alexander Rosar

Okay. Ladies and gentlemen, dear friends also the half of my colleagues I would like to thank you for being with us on the call. Before closing please allow me to draw your attention to upcoming Investor Relations event. Firstly, we are planning to invite you to a conference call to discuss the ROCKET AS data after the presentation during the American hub session.

Secondly, our next mid-management conference is schedule for the 22 and 23 of March next year and we would appreciate if we would mark that already in your agenda. More details related to these events will be provided soon. We are now saying goodbye and it is our hope to meeting you soon again.

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