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Performance Polymers

Performance Polymers
  Q1 2011 Q1 2012 Change
  € million Margin % € million Margin % %
Sales 1,084   1,391   28.3
EBITDA pre exceptionals 199 18.4 255 18.3 28.1
EBITDA 199 18.4 254 18.3 27.6
Operating result (EBIT) pre exceptionals 165 15.2 207 14.9 25.5
Operating result (EBIT) 165 15.2 206 14.8 24.8
Cash outflows for capital expenditures1) 40   63   57.5
Depreciation and amortization 34   48   41.2
Employees as of March 31 (previous year: as of Dec. 31) 4,977   5,096   2.4
1) Intangible assets and property, plant and equipment

Business in our Performance Polymers segment developed positively in the first quarter of 2012. Sales rose by 28.3% from the prior-year quarter’s already high level to €1,391 million. Higher prices for strategic raw materials, particularly butadiene, isobutylene and cyclohexane, were offset by timely selling price increases, giving a 14.2% positive price effect on sales. Volumes edged down by 1.2% from the very strong level of the same period a year earlier. The Keltan EPDM business, acquired in the second quarter of the previous year, yielded a portfolio effect of 12.2%. A positive currency effect of 3.1% also contributed to the increase in sales.

Demand in this segment’s business units varied. The Butyl Rubber business unit posted a slight increase in volumes in light of steady demand from the tire industry, also benefiting from product mix effects. The Performance Butadiene Rubbers business unit, which likewise has close ties to the tire industry and thus to the replacement tire and original equipment manufacturer markets, held volumes at the solid level of the prior-year quarter despite scheduled production shutdowns. The High Performance Materials (formerly Semi-Crystalline Products) business unit, which has particularly close ties to the automotive and electrical/electronics industries, achieved a slight expansion in volumes compared to the same period a year ago. The Technical Rubber Products business unit benefited from a strong portfolio contribution by the Keltan EPDM business acquired in the previous year, which more than offset lower volumes for other products. From a regional viewpoint, Asia-Pacific proved to be a key growth engine, posting the largest sales gains in absolute terms. The other regions also registered growth in business.

The Performance Polymers segment’s EBITDA pre exceptionals rose a significant €56 million to €255 million, demonstrating the continued strength of our market position. All business units succeeded in passing along the raw material cost increases to the market in full. Product mix effects also contributed to the earnings improvement. Capacity utilization was below the level of the prior-year quarter, due especially to the decline in demand and to scheduled production shutdowns. This good earnings development in spite of lower volumes clearly shows that our price-before-volume strategy remains intact. Earnings were supported by a tangible contribution from the Keltan EPDM business acquired last year and by positive currency effects. The EBITDA margin for the first quarter came in at 18.3%, against 18.4% a year ago.

The exceptional charges of €1 million in this segment’s EBITDA arose from minor efficiency improvement measures at various Group locations.