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Comparison of forecast and actual business

Comparison of Forecast and Actual Business in 2012
  Forecast for 2012 in Annual Report 2011 & Q1 Interim Report Forecast for 2012 in H1 Interim Report Q3 Interim Report 9M 2012
Raw material prices volatile, long-term trend upward volatile, long-term trend upward returned to level of early 2012
Research and development      
Research and development expenses +40% +40% 9M: +40%
Business development: segments
Performance Polymers solid business performance solid business performance 9M: Sales +6%
Advanced Intermediates solid business performance solid business performance 9M: Sales +4%
Performance Chemicals solid business performance solid business performance 9M: Sales +4%
Business development: Group
EBITDA pre exceptionals 5% to 10% increase 5% to 10% increase 9M: €986 million
Financial condition: Group      
Cash outflows for capital expenditures €600 million €650 – 700 million 9M: €381 million

Based on the assumption that the general trend toward higher procurement costs, especially for petrochemical raw materials, could continue even beyond 2012, we had forecast volatile raw material prices. While raw material prices rose in the first months of the year, the trend reversed toward the end of the second quarter and led to declining raw material prices in the third quarter as well. Butadiene accounted for a large part of this volatility. Developments thus far are therefore consistent with our initial assumptions. We still expect raw material prices to continue increasing over the long term.

In light of our targeted research and development activities, designed to enable us to generate our own customer- and market-oriented innovations and process improvements, expenditures in this area increased by 40% so far this year. This is the same percentage increase as we expect for the full year. The emphasis was on the Performance Polymers segment, which accounted for around 58% of R&D spending.

The year-to-date performance of our segments shows a positive sales trend that has been fueled by positive price and currency effects and negative volume effects. Based on our assessment and with our price-before-volume strategy intact, the performance of our business remains solid.

In the half-year financial report, we confirmed the forecast we had issued after the first quarter for an increase in EBITDA pre exceptionals in 2012 compared with 2011. We also estimated that we would achieve EBITDA pre exceptionals in the second half of 2012 on the level of the second half of 2011. Earnings of €986 million were recorded in the first nine months, slightly above the level of the prior-year period. As usual, our current guidance for the year can be found in the Outlook section of this interim management report.