Q1-2/2006 at a Glance
è NET SALES GROWTH: +11%
è OPERATING PROFIT: +20% (adjusted for one-time effects)
è BETAFERON®: +17%
è BAYER HOLDS 92.4% OF SCHERING AG SHARES (as of July 12, 2006)
In the first six months of 2006, the Schering AG Group achieved an organic net sales growth of 11%.
Furthermore, net sales were affected by positive currency effects and adverse structure effects. In total, net sales increased by 11% to €2,824m in comparison to the previous year’s figure.
The operating profit for the first six months was €410m, 12% below the previous year’s figure. After adjusting for one-time effects of €149m in connection with divestitures and takeover-related expenses,
the operating profit increased by 20% to €559m. Including these one-time effects, net profit declined by 6% to €301m. Earnings per share also decreased by 6% to €1.58.
Cash flows from operating activities amounted to €534m, 27% above the first six months of 2005. The net cash position (net of cash and cash equivalents, marketable securities and borrowings) was €1,154m in comparison to €954m at the end of 2005.

Financial position
The balance sheet total was €5,879m on June 30, 2006, 4% below the figure as of December 31, 2005.
Non-current assets decreased by 8% to €2,313m. Current assets decreased slightly by 1% to €3,566m.
The increase in cash and cash equivalents by €376m was partly offset by a decrease in inventories, receivables and other assets and current securities. Furthermore, the assets relating to our radiopharmaceuticals business which were classified as held for sale as of December 31, 2005 have been disposed of following the closing of the sale in the second quarter of 2006.
Total equity amounted to €3,443m, an increase of 5% compared to December 31, 2005. The increase resulted from the net profit of €301m and actuarial gains from defined benefit plans of €129m recognized directly in equity. This was partly offset by currency translation adjustments of €–110m as well as dividend payments of €229m. Furthermore, treasury shares amounting to €49m were
purchased during the reporting period, and treasury shares amounting to €108m were sold in order to settle stock options plans. The equity ratio improved to 58.6% compared to 53.8% at the end of 2005.
Non-current liabilities decreased by 23% to €892m due to lower pension liabilities. This decrease mainly resulted from actuarial gains arising from the adjustment of the discount rate to the actual interest rate development. Current liabilities decreased by 7% to €1,544m, due to the disposal of the
liabilities associated with the radiopharmaceuticals business.

Outlook
For the fiscal year 2006, we expect an organic net sales growth in the high single-digit range for the Schering AG Group. We expect that our top-selling product, Betaferon®, will grow in the double-digit range currency adjusted. For Yasmin®, we expect a continued, strong double-digit net sales growth.
Based on a continued positive business development and positive effects resulting from the ongoing program to increase our efficiency (FOCUS), we expect that the operating margin for 2006 will be in the range of 18.5 to 19 percent (excluding effects from acquistions or divestitures of business activities as well as takeover-related expenses).