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Performance Polymers

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Performance Polymers
  Q2 2011 Q2 2012 Change HJ 2011 HJ 2012 Change
  € million Margin % € million Margin % % € million Margin % € million Margin % %
Sales 1,281   1,427   11.4 2,365   2,818   19.2
EBITDA pre exceptionals 229 17.9 257 18.0 12.2 428 18.1 512 18.2 19.6
EBITDA 229 17.9 256 17.9 11.8 428 18.1 510 18.1 19.2
Operating result (EBIT) pre exceptionals 191 14.9 207 14.5 8.4 356 15.1 414 14.7 16.3
Operating result (EBIT) 191 14.9 206 14.4 7.9 356 15.1 412 14.6 15.7
Cash outflows for capital expenditures1) 72   85   18.1 112   148   32.1
Depreciation and amortization 38   50   31.6 72   98   36.1
Employees as of June 30 (previous year: as of Dec. 31) 4,977   5,187   4.2 4,977   5,187   4.2
1) Intangible assets and property, plant and equipment

Our Performance Polymers segment continued its positive business development in the second quarter of 2012. Sales rose by €146 million, or 11.4%, to €1,427 million from the already high level of the prior-year quarter. Continued inflation in raw material costs compared to the previous year, particularly in the case of butadiene and isobutylene, was offset by timely price increases, giving a positive price effect of 6.3%. Volumes retreated by 5.6% year on year. A positive portfolio effect of 3.1% from the acquisition of the Keltan EPDM business in the previous year along with favorable currency effects of 7.6% also made a substantial contribution to sales.

The demand trends in this segment’s individual business units continued to vary in the second quarter of 2012. The Butyl Rubber business unit increased volumes and also benefited 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 OEM tire markets, posted a decrease in volumes because of production shutdowns and weaker demand for standard-quality rubber grades. The demand for high-performance rubber grades, however, remained strong. The High Performance Materials (formerly Semi-Crystalline Products) business unit, which generates a substantial portion of its sales with customers in the automotive and electrical/electronics industries, also saw a slight drop in volumes, especially in Europe. The Technical Rubber Products business unit benefited from a strong contribution by the Keltan EPDM business acquired in the previous year, which much more than offset lower volumes in other product groups. From a regional viewpoint, Asia-Pacific proved to be a key growth engine, posting the largest sales gains in absolute and relative terms.

The Performance Polymers segment’s EBITDA pre exceptionals grew somewhat faster than sales, rising by €28 million to €257 million and confirming the continued strength of our market position. Higher raw material costs were passed along to the market in full in all business units. Product mix effects were also accretive to earnings. Capacity utilization was below the level of the prior-year quarter due to lower volumes and to expansion and maintenance shutdowns. The Keltan EPDM business, which was acquired in the previous year, yielded a positive portfolio effect. Changes in exchange rates had a positive impact on earnings as well. The EBITDA margin came in at 18.0% for the second quarter, following 17.9% a year ago.

Segment sales in the first half advanced by a substantial 19.2% to €2,818 million. Higher raw material costs were passed along to the market, giving a price increase of 10.0%. Volumes were down by 3.6% from the high level of the prior-year period. The Keltan EPDM business acquired in the previous year made a positive portfolio contribution of 7.3%. In addition, shifts in exchange rates augmented sales by 5.5%.

The segment achieved EBITDA pre exceptionals of €512 million in the first half of 2012, compared with €428 million in the same period a year ago. Its EBITDA margin improved from 18.1% to 18.2% for the half-year.

The exceptional charges of €2 million in this segment’s first-half EBITDA arose from minor integration measures at various Group locations.