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Performance Polymers

Overview of Key Data
           
  2011 2012 Change
           
  € million Margin % € million Margin % %
           
Sales 5,059   5,176   2.3
EBITDA pre exceptionals 768 15.2 817 15.8 6.4
EBITDA 759 15.0 808 15.6 6.5
Operating result (EBIT) pre exceptionals 607 12.0 608 11.7 0.2
Operating result (EBIT) 598 11.8 599 11.6 0.2
Cash outflows for capital expenditures1) 437   434   (0.7)
Depreciation and amortization 161   209   29.8
Employees as of Dec. 31 4,977   5,348   7.5
1) Intangible assets and property, plant and equipment

Our Performance Polymers segment posted a very solid performance compared to the strong prior year. Sales increased slightly by 2.3% to €5,176 million. Compared to the previous year, raw material prices were volatile and displayed differing trends, which led to timely adjustments in selling prices. The price for butadiene, in particular, one of this segment’s key raw materials, trended sharply higher in the first half of the year, before declining significantly to below its initial price for the period, which resulted in a negative but insignificant price effect of 0.3% for the full year. Lower demand attributable to the weaker development of the automotive industry led to a decrease in volumes, especially in the second half of the year. This resulted in a volume decline of 5.5% for the full year. Positive currency effects of 4.7% and a portfolio effect of 3.4% lifted sales.

All of the segment’s business units saw declining demand from their principal customer industries. Our Butyl Rubber and Performance Butadiene Rubbers business units, which are closely allied with the tire industry, posted slight declines in volumes in light of the weak sales in the automotive industry. In the Technical Rubber Products business unit, volumes decreased significantly for nearly all products because of restrained demand, especially in Asia. The High Performance Materials (formerly Semi-Crystalline Products) business unit reported largely unchanged volumes compared to the prior year. Sales declined, in part substantially, in nearly all reporting regions. In the Asia-Pacific region, we were able to slightly expand business.

EBITDA and EBITDA Margin Pre Exceptionals
Chart: EBITDA and EBITDA Margin Pre Exceptionals

EBITDA pre exceptionals in the Performance Polymers segment rose by €49 million, or 6.4%, to €817 million. The price adjustments resulting from the change in raw material prices contributed a positive earnings effect at segment level. A drop in marginal income due to the decrease in volumes tangibly depressed earnings. Positive currency effects, particularly relating to the U.S. dollar, lifted earnings and offset rising production costs and increased research expenditures. Portfolio effects from the Keltan EPDM business acquired in May of the previous year were also accretive to earnings. The segment’s EBITDA margin pre exceptionals rose from 15.2% to 15.8%.

The exceptional charges of €9 million that fully impacted the segment’s EBITDA included expenses relating to the integration of acquired business activities. The exceptional charges of €9 million from the previous year that also fully impacted EBITDA related to corporate transactions and remediation measures at our site in Canada.

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Key Figure Analyser