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Performance Polymers

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  Q3 2011 Q3 2012 Change 9M 2011 9M 2012 Change
                     
  € million Margin % € million Margin % % € million Margin % € million Margin % %
                     
Sales 1,433   1,192   (16.8) 3,798   4,010   5.6
EBITDA pre exceptionals 213 14.9 152 12.8 (28.6) 641 16.9 664 16.6 3.6
EBITDA 211 14.7 151 12.7 (28.4) 639 16.8 661 16.5 3.4
Operating result (EBIT) pre exceptionals 168 11.7 99 8.3 (41.1) 524 13.8 513 12.8 (2.1)
Operating result (EBIT) 166 11.6 98 8.2 (41.0) 522 13.7 510 12.7 (2.3)
Cash outflows for capital expenditures1) 88   93   5.7 200   241   20.5
Depreciation and amortization 45   53   17.8 117   151   29.1
Employees as of September 30
(previous year: as of Dec. 31)
4,977   5,317   6.8 4,977   5,317   6.8
1) Intangible assets and property, plant and equipment

The positive business development seen in the Performance Polymers segment in the first half of 2012 did not continue in the third quarter. Sales decreased by 16.8% to €1,192 million against the strong prior-year quarter. Selling prices were reduced by 12.0% due to the drop in raw material procurement prices, especially for butadiene. Volumes receded by 10.8% due to the lower demand, while currency factors had a 6.0% positive effect.

The lower prices and the drop in volumes affected all of the segment’s business units. In the Performance Butadiene Rubbers business unit, there was less demand for standard-quality rubber grades, especially in Latin America. Demand for high-performance rubber grades, however, remained robust. The Butyl Rubber business unit, which like Performance Butadiene Rubbers has close ties to the tire industry and therefore to the replacement tire and OEM tire markets, experienced a drop in prices and volumes, particularly in Asia. The Technical Rubber Products business unit registered lower demand from the automotive industry. 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, posted a slight decrease in volumes, especially in Europe. However, the demand in Asia and the United States had a mitigating effect. Segment sales receded in all regions.

EBITDA pre exceptionals in the Performance Polymers segment fell by a substantial €61 million to €152 million, mainly because of the idle capacity costs related to the lower demand and the expenses for scheduled maintenance shutdowns. All business units were affected. Capacity utilization was below the level of the prior-year quarter due to the factors mentioned. Lower raw material costs led to an adjustment in selling prices at the segment level. Exchange rate developments had a positive effect on earnings. The segment’s third-quarter EBITDA margin was down from 14.9% to 12.8%.

The exceptional charges of €1 million in EBITDA – like the €2 million figure for the third quarter of 2011 – related to corporate transactions.

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