Lanxess continued to grow in the second quarter. EBITDA pre exceptionals rose by 6.8 % year-on-year to €362 million. Sales advanced by 8.1 % to €2.42 billion. "We believe these results confirm our view of the seasonal development, and we are therefore adhering to our target of raising EBITDA pre exceptionals by 5 to 10 % for the full year," said Lanxess CEO Axel C. Heitmann. "Our focus on megatrends and growth regions, combined with our technological expertise, provide stability in an increasingly challenging environment."

Sales improved mainly as a result of currency effects and selling price increases. Raw material cost increases were fully passed on to the market in all segments. The EBITDA margin pre exceptionals, at 14.9 %, was level with the previous year. Net income fell slightly by 3 % to €176 million due to reorganization measures in the Performance Chemicals segment.

Business development by region
Sales of Lanxess in Asia-Pacific rose by nearly 24 % to €608 million, bringing the region's share of Group sales to 25 %. The Performance Polymers segment turned in a strong performance, with significant growth in the double-digit range. Substantial impetus in this region continued to come from Greater China, where sales advanced by 31 %.

In North America, Group sales rose by more than 19 % to €439 million and accounted for 18 % of Group sales, with all segments posting growth rates in the low single digits. The United States was the main factor for the development of business in this region.

Sales rose by nearly 8 % year-on-year to €331 million in Latin America, which again accounted for 14 % of Group sales. Brazil continued to be the most important country in the region.

EMEA (Europe excluding Germany, Middle East, Africa) remained the strongest region, contributing 27 % to Group sales. Sales receded by more than 2 % compared with the prior-year period, to €650 million, with business declining particularly in Italy and Spain. Russia, by contrast, saw encouraging growth.

In Germany, sales fell by less than 4 % year-on-year to €396 million and thus accounted for 16 % of Group sales.

In the five BRICS countries (Brazil, Russia, India, China and South Africa), sales advanced by more than 14 % year-on-year to €597 million. These countries represented nearly 25 % of Group sales.

Business development by segmentThe Performance Polymers segment registered a year-on-year sales increase of over 11 % in the second quarter of 2012, to €1.43 billion. Rising raw material costs, especially for butadiene and isobutylene, were quickly passed on to the market through selling price increases. A positive portfolio effect from the acquisition of the Keltan EPDM business, along with favorable currency effects, contributed significantly to higher sales. The Asia-Pacific region proved a particularly strong growth driver. EBITDA pre exceptionals for the segment rose by more than 12 % to €257 million.

Supported by strong demand for agrochemicals, sales in the Advanced Intermediates segment edged up by 1 % in the second quarter, to €399 million. Demand from the construction and coatings industries, however, remained weak. Higher raw material costs were passed on to the market in full. North America acted as a growth driver, posting a particularly strong sales gain in absolute figures. EBITDA pre exceptionals showed a substantial year-on-year increase of 22 % to €79 million.

Sales in the Performance Chemicals segment rose by more than 4 % against the same period of last year to €585 million. Here too, higher raw material costs were passed on to the market in full. EBITDA pre exceptionals receded by nearly 18 % to €78 million. Earnings were diminished by a decline in orders from the construction and electrical/electronics industries, as well as by maintenance shutdowns in a number of business units.

Outlook
Lanxess continues to anticipate a typically seasonal business pattern for the business year 2012. Consequently, the company expects the EBITDA contributions of the first half of the year in relation to the second half in a ratio of 60:40. In view of increasing economic challenges, Lanxess does not expect to see any further momentum in the second half of the year. "We therefore expect the operating result in the second half of 2012 to be approximately at the prior-year level," said Heitmann. For Europe, Lanxess continues to predict weak economic development as a result of the euro debt crisis. The company anticipates moderate economic growth in Asia and Latin America. The U.S. economy will probably continue to expand, though possibly at a slower pace.

Raw material and energy costs are expected to remain volatile in the second half of the year. Lanxess will strictly adhere to its pricebefore- volume strategy. In addition, Lanxess has successfully launched further strategic investment projects in its growth markets in the first half of the year. As a result, the company now expects capital expenditures of €650 million to €700 million in 2012 in comparison to the €600 million originally planned.

"Our performance is reflected against a very strong previous year and we are on the way to achieving an even better result in 2012 after our strong second quarter," added Heitmann.