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Sales

Group sales in the first quarter came to €2,388 million, up by a substantial €315 million, or 15.2%, from the same period a year ago. Sales were influenced by selling price adjustments made in response to rising raw material prices. There were also tangible revenue contributions from the acquisitions made in previous quarters, including, in particular, the Keltan EPDM business acquired from Dutch company Royal DSM N.V. After adjusting for currency and portfolio effects of plus 9.5%, sales grew by 5.7% due to price and volume increases. Higher raw material prices, especially in the Performance Polymers segment, were quickly passed along to the market. There was a positive price effect of 8.8% year on year across the Group, reflecting the continued success of our price-before-volume strategy. Volumes were 3.1% below the prior-year period. Positive portfolio effects of 7.1%, particularly from the Keltan EPDM business, were supported by currency effects of plus 2.4%.

Effects on Sales
   
% Q1 2012
   
Price 8.8
Volume (3.1)
Currency 2.4
Portfolio 7.1
  15.2

Our segment for synthetic rubber and high-tech plastics raised sales by 28.3% from the prior-year quarter, thus making the decisive contribution to the Group’s positive business development. This increase was largely attributable to selling price increases, which in turn were driven by raw material costs. The Keltan EPDM business acquired from DSM also made a notible contribution to sales, helped by a slightly positive movement in exchange rates. Slightly lower volumes had the opposite effect.

Our segment for chemical intermediates achieved sales growth of 3.1% due to price increases implemented in response to the higher raw material costs. The demand for agrochemicals remained brisk, but volumes receded slightly in other market segments, resulting in a small overall decrease in volumes from the high level of the previous year. This slightly negative volume effect was offset by positive currency effects.

Our segment for application-oriented process and functional chemicals posted sales just ahead of the prior-year period. Lower product volumes for certain applications were largely offset by selling price adjustments – which were mainly driven by raw material prices – and the positive revenue contributions resulting from the previous year’s acquisitions of the material protection businesses and the Darmex group. With sales improved by positive currency effects, the Performance Chemicals segment achieved modest growth of 0.4% for the quarter.

Sales by Segment
         
€ million Q1 2011 Q1 2012 Change % Proportion of Group sales %
         
Performance Polymers 1,084 1,391 28.3 58.2
Advanced Intermediates 416 429 3.1 18.0
Performance Chemicals 556 558 0.4 23.4
Reconciliation 17 10 (41.2) 0.4
  2,073 2,388 15.2 100.0

LANXESS grew sales in all regions, with increases well into double digits in some cases. The North America and Latin America regions saw the strongest growth, closely followed by Asia-Pacific. The main factor in this success was the considerable expansion in sales at Performance Polymers.

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