Welcome to LANXESS Annual Report 2012!

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Sales organization and customers

Sales

We sell our products all over the world, to several thousand customers in more than 150 countries across all continents. LANXESS’s long-standing customer base includes leaders in each of its user industries. We have well-established customer relationships in all sales regions. To meet our customers’ needs, we have set up very flexible marketing and sales structures. We manage our sales throughout the world through 49 companies owned by LANXESS itself. We continually extend our global presence so we are closer to our customers and can better evaluate strategic potential.

For example, in mid-2012 we established the new country company LANXESS Kimya Ticaret Limited Şirketi to conduct our business in Turkey, where LANXESS markets its entire range of products. Activities focus on high-performance rubber products, rubber chemicals and high-tech plastics for the automotive sector, as well as color pigments for the construction industry. In countries where we do not yet have our own company, we work with local sales partners.

To keep as close as possible to customers and ensure they receive individual support, each of our business units manages its own sales organization. Another competitive advantage is provided by our 49 production sites in 16 countries. Wherever possible, customers are supplied from production sites in the same region, which saves them both time and money.

Approximately 20% of all orders with external purchasing and sales partners were processed via e-business in fiscal 2012. Altogether, around 300,000 orders and the respective automated follow-up notices in these areas and logistics were handled as e business. This capability is provided by the LANXESS one Internet portal and the system-to-system connections via ELEMICA. We will continue to expand this process, which provides benefits for all involved, by adding additional partners and technical services, for example, by bringing our Brazilian companies online. The net sales invoice values accounted for by e-business came to approximately €1,690 million, an increase of about 7% on the previous year.

Selling costs for fiscal 2012 came to 8.4% of LANXESS Group sales, up 0.1 percentage points on the prior-year level of 8.3%.

The table below shows selling costs by segment over the last five years.

Selling Costs
           
  2008 2009 2010 2011 2012
           
Selling costs (€ million) 658 530 646 732 763
% of sales 10.0 10.5 9.1 8.3 8.4
Breakdown by segment          
Performance Polymers 228 178 216 262 284
Advanced Intermediates 110 92 122 127 125
Performance Chemicals 307 253 300 320 335
Reconciliation 13 7 8 23 19
 

Customers

Because of our broad offering, we have business relationships with a large number of customers all over the world. These customers need an individualized, well-focused approach, which we are able to provide because our sales organizations are managed through the business units. Individual sales and marketing strategies are reviewed on the basis of regular customer satisfaction surveys.

LANXESS serves the following industries in particular: tires, chemicals, automotive supply, plastics, electronics, agrochemicals, pharmaceuticals, food, water treatment, construction and furniture.

Shares of Sales by Industry Sector
   
% 2012
   
Tires ~ 25
Chemicals ~ 15
Automotive ~ 15
Construction, electrical/electronics, agrochemicals, leather/footwear in each case 3 –10
Others (cumulative share) ~ 15
 

In fiscal 2012, our top ten customers accounted for about 26% of total sales (2011: 28%). None of our customers accounted for more than 10% of Group sales. 50 (2011: 53) customers accounted for annual sales in excess of €20 million. The slight decrease in these figures is attributable to the declining volumes reflected in Group sales.

The number of customers in each segment varied widely. The Performance Polymers segment had some 3,300 customers in 2012 (2011: 3,100), while Advanced Intermediates and Performance Chemicals had about 3,000 (2011: 2,900) and 11,800 (2011: 12,000), respectively. This information is based on the number of customer accounts in each segment. Each segment includes all customer groups and sales categories. However, one customer may do business with more than one segment.

The comparatively low sales per customer in the Performance Chemicals segment, as well as its broad customer base, reflect the way in which its business often involves custom-tailored solutions in specialty chemicals. The substantially lower number of customers in the Performance Polymers segment, which generates relatively high sales, is likewise typical of the synthetic rubber products business. The extensive customer base means that no segment can be considered dependent on just a few customers.

Service

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