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Sales

Group sales in the first quarter came to €2,095 million, down €293 million or 12.3% from the same period a year ago. The drop in business was mainly attributable to declining volumes caused by lower demand, mainly from the rubber processing, auto and construction industries, which depressed sales by 6.4%. On top of this came the 5.5% negative effect of lower selling prices. A small positive portfolio effect from the acquisitions made in the previous year was more than offset by somewhat adverse exchange rate developments. Adjusted for the 0.4% negative balance of these currency and portfolio effects, sales showed an 11.9% decline based on prices and volumes.

Effects on Sales
   
% Q1 2013
   
Price (5.5)
Volume (6.4)
Currency (0.7)
Portfolio 0.3
  (12.3)

Sales in our Performance Polymers segment receded by a substantial 18.5% compared to the prior-year quarter. This was a major factor in the Group’s negative business development. The decrease was mainly due to lower selling prices, some of which were attributable to lower prices for raw materials such as butadiene. Compared to the extremely strong prior-year quarter, there were also volume declines resulting from lower demand, particularly from the European automotive industry. A positive portfolio effect from the acquisition of Bond-Laminates GmbH was offset by slightly negative currency developments.

Our Advanced Intermediates segment, by contrast, grew sales by 0.9% against the prior-year period. Increased costs for raw materials such as benzene and cyclohexane were quickly passed along to the market through selling-price adjustments. While the demand for agrochemical precursors and products for the aromatics industry developed favorably, the markets for coatings and construction additives were weak, resulting in slightly lower volumes overall compared with the same period of last year. Exchange rates also had a slight negative effect.

Sales in the Performance Chemicals segment decreased by 6.8%. This was due to lower volumes, which were partly the result of the weak development of the European construction industry as well as supply bottlenecks for a production facility in South Africa. Minor positive portfolio effects from the acquisition of Tire Curing Bladders, LLC in the prior year partially offset the slightly negative currency effect.

Sales by Segment
         
€ million Q1 2012 Q1 2013 Change % Proportion of Group sales %
         
Performance Polymers 1,391 1,134 (18.5) 54.1
Advanced Intermediates 429 433 0.9 20.7
Performance Chemicals 558 520 (6.8) 24.8
Reconciliation 10 8 (20.0) 0.4
  2,388 2,095 (12.3) 100.0

LANXESS sales decreased by – in some cases substantial – double-digit percentages in all regions except Asia-Pacific. The key factor in this development was the absolute and relative sales performance of the Performance Polymers segment.

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