LANXESS Oddo Midcap Forum 2011 A solid growth story

Transcription

1 LANXESS Oddo Midcap Forum 2011 A solid growth story Investor Relations Lyon, January 6-7, 2011

2 Safe harbor statement This presentation contains certain forward looking statements, including assumptions, opinions and views of the company or cited from third party sources. Various known and unknown risks, uncertainties and other factors could cause the actual results, financial position, development or performance of the company to differ materially from the estimations expressed or implied herein. The company does not guarantee that the assumptions underlying such forward looking statements are free from errors nor do they accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecasted developments. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, none of the company or any of its parent or subsidiary undertakings or any of such person s officers, directors or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. Chart 2

3 Agenda Strategy recap LANXESS positioned to benefit from global growth trends Financial overview Q Outlook/Guidance Chart 3

4 LANXESS A leading specialty chemicals company based on three powerful segments LANXESS Energizing Chemistry Performance Polymers Advanced Intermediates Performance Chemicals Globally No. 1-3 Europe No. 1-2 No. 1-4 in niches Global technology leader in synthetic rubber and polyamide based engineering plastics Leading suppliers of custom synthesis and intermediate building blocks (agrochem-related) Application-orientated specialty chemicals Strong brands and technology leader Megatrend Mobility Megatrend Agro Megatrend Urbanization Megatrend Water Competitiveness across the portfolio * pre exceptionals Chart 4

5 Portfolio management has continuously strengthened the company bn of sales divested Fibers Divested Acquired Date 2005 Leadership Position Weak Cyclicality High Profitability Expectation Paper Textile Processing Chem. Lustran Polymers CISA Moderate Weak Good Good Moderate Moderate High Low Medium Medium Low High Petroflex 2007 Good Low High Jinzhuo Chemicals (IPG) 2008 Good Moderate High Gwalior Chemicals (BAC) 2009 Good Low High Jiangsu Polyols (BAC) 2009 Good Low High DSM EPDM (TRP) 2010 Good Moderate High Low Chart 5

6 LANXESS Improvement trend of financials, based on strategy implementation In m EBITDA * ~900 Net financial debt 1,429 1, Net fin. debt / EBITDA * 4.6x 2.5x 1.2x 0.8x 0.6x 1.2x 1.7x Gearing 128% 101% 54% 36% 30% 65% 55% Underlying EPS ** pro forma data only >4.24 Continued performance improvement * pre exceptionals ** EPS pre exceptionals, based on actual taxrate 2008 data adjusted for change in pension accounting Chart 6

7 Acquisition of DSM Elastomers global player with a leading technology and strong brand Deal characteristics Product portfolio Ethylen-Propylen-Dien-Monomer, part of DSM s Base Chemicals and Materials segment Globally number three in EPDM Technology New catalyst (ACE*) technology Allows modified EPDM for high value applications Financials 2010e sales: ~ 380 m Purchase price: 310 m (EV); ~6x EBITDA pre** Cash and debt free; Financing out of existing liquidity EPS accretive as of 2011 Closing expected in the first months of 2011, subject to approval by anti-trust authorities * Advanced Catalysis EPDM technology ** Based on expected 2010 EBITDA Chart

8 Further strengthening position in BRIC market EPDM - estimated production volume* [kt] Exxon Mobil Dow DSM EPDM Orange, US Geleen, NL Marl, GE Dormagen, GE Leverkusen, GE LANXESS Mitsui Chemicals La Wantzenau, FR Lion Copolymer Polimeri Kumho JV JSR Others Triunfo, BR LANXESS Technical Rubber Products DSM EPDM production site Sources: LANXESS estimates based on CMAI and SRI, 2009, * Including captive use, 2009 numbers 2717 Chart 8

9 Agenda Strategy recap LANXESS positioned to benefit from global growth trends Financial overview Q Outlook/Guidance Chart 9

10 Great untapped potential in Asia Car ownership and population Asia compared to Europe and US Passenger cars per 1,000 inhabitants Dynamics There are ~300m Americans Population in millions 796 2,900 In the US, of every 1000 people ~800 own a car 548 There are ~3bn Asians In Asia of every 1000 people ~40 own a car Western Europe United States Asia Solid long-term growth potential from Asia Source: Michelin estimates Chart 10

11 Tire producers are reacting swiftly Bridgestone Thailand: plus ~2.0 m tires/year China: plus ~1.3 m tires/year India: plus ~3.6 m tires/year plus ~1.1 m truck tires/year New plant in China ~ 52 m investment ~2.1 m tires/year New plant in China ~ 72 m investment ~2.0 m tires/year Russia: ~4.2m tires/year Romania: expanding capacity by 60% China: doubling car tire capacity, truck tire capacity +20% LatAm: car tire capacity +20%, truck tire capacity +25% New plant in China 185 m investment ~4.0 m tires/year New plant in Hungary: 230 m investment 10.0 m tires/year Investments in China and Brazil New plant in China ~ 230 m investment ~10.8 m tires/year Taiwan: ~5.5 m tires/year Additional increases in China, Thailand and Vietnam Source: Companies websites Chart 11 New plants in China and India ~ 1,300 m investment New plant in Brazil 300 m investment Increase capacity in Russia 2.0 m tires/year

12 New EU tire legislation will increase transparency of tire performance and thus reinforce high performance tire trend Labeling regulations EU: as of November 2012, new tires will be labeled for - fuel efficiency - wet grip - noise performance Labeling classes from A to G will influence consumer behavior Japan: leading tire producers with voluntary commitment for labeling in 2010 South Korea with voluntary labeling program in 2011 U.S.: legislative initiatives Tire producers preparing for new requirements Grip Safety Rolling resistance Fuel efficiency Nd-PBR gaining importance in PBR sales Durability Source: Press release European Parliament Chart 12

13 Share of high performance tires to grow further 2 Performance tires with solid growth prospects Global tire production [bn units] Standard tires (High-)performance tires Acceleration of growth of high performance tires Increase by 53% of share of high performance tires in next five years 1 ~ +25% ~ +53% e 2015e Solid demand for tires Sources: JD Power; Chart 13

14 Strengthening butyl with a world-scale production facility in Singapore and smart debottlenecking in Belgium Performance Polymers Advanced Intermediates Performance Chemicals Facts BTR greenfield plant and debottlenecking Greenfield BTR plant, Singapore, ~200 employees Capacity: 100 kt/a Start of production: Q Debottlenecking in Belgium, capacity increase 14 kt/a Market perspective Market growth stronger than GDP growth Supply / demand balanced to tight New world-scale plant needed every ~3 years Rationale Strengthening market position among top leaders Most competitive BTR site Ideal infrastructure / raw material supply CAPEX ~ 420 m Expected sales Sales multiple > 330 m 1.3x Attractive tax regime Improving natural hedge against FX fluctuations Project ROCE* above group average * ROCE in average profitability year Chart 14

15 BU PBR debottlenecking for Nd-PBR as efficient option to expand into a growing market Performance Polymers Advanced Intermediates Performance Chemicals Facts Debottlenecking of ~50 kt Nd-PBR in Cabo, Brazil; Dormagen, Germany and Orange, USA Capacities on stream between Q and Q Project CAPEX: ~ 20 m only Market perspective Market growth ~10% Supply / demand balanced to tight Rationale Nd-PBR as global standard for high-performance tires Underpins LANXESS leading position in merchant rubber market Attractive payback time of investment <5 years Orange +15 kt Nd-PBR Cabo +20 kt Nd-PBR CAPEX ~ 20 m Project ROCE* Debottlenecking of Nd-PBR Pt. Jérôme SSBR Expected sales Dormagen +15 kt Nd-PBR Sales multiple ~ 70 m ~0.3x above group average * ROCE in average profitability year Chart 15

16 BU SCP Investing in upstream-integration to strengthen focus on high-tech plastics end-compounds Performance Polymers Advanced Intermediates Performance Chemicals Facts Investments in - compounding in Wuxi, China and Jhagadia, India - caprolactam and KA-oil in Antwerp, Belgium Capacities on stream in 2011 Total CAPEX of projects: ~ 50 m Market perspective Market growth of high-tech plastics expected >6% Supply / demand balanced to tight Rationale Expansion of upstream-integration secures efficient raw material supply Expansion of compounding in India and China serves rapidly growing demand CAPEX ~ 50 m Project ROCE* SCP investments into growth Expected sales Sales multiple ~ 80 m ~0.6x above group average * ROCE in average profitability year Chart 16

17 Investing in mega trend clean water ensures long-term growth for ION Population growth in Asia Increasing urbanization Rising energy consumption Growing demand trend for clean water Purification of available water is mandatory to satisfy future demand New plant in Germany 30 m investment in new ION facility in Bitterfeld Pioneering of new membrane filtration technology Creation of 200 jobs First products to be launched in course of 2011 New plant in India 30 m investment in new ION plant in Jaghadia Construction well on schedule, completion in workers employed by LANXESS on site Most modern plant of its kind in Asia Strong commitment to strategic water treatment business Chart 17

18 Organic growth through ongoing targeted investments Investment projects (scheduled to come on stream) Growth projects End 2010 ION: New ion exchange resins plant, Jhagadia, IN End 2010 FCC: Expansion of Mesamoll, Krefeld, GE 2011 SCP: New compounding plant, Jhagadia, IN Add. compounding capacities, Wuxi, CN Q4 2010/ 2011 IPG: Expansion of iron oxides, Shanghai, CN Porto Feliz, BR Q Q Nd-PBR: Debottlenecking, Dormagen, GE, Port Jérôme, FR, Orange, US & Cabo, BR Start 2011 RCH: New plant for rubber additive, N. Novgorad, RU Acquisition of selected parts of Flexsys accelerators business Q BAC: New Formalin plant, Uerdingen, GE Q ION: New membrane plant, Bitterfeld, GE Q BTR: Debottlenecking, Antwerp, BE H TRP / TSR JV: New NBR plant, Nantong, CN Q BTR: New world scale plant, Singapore H TRP: Debottlenecking of EVM, Dormagen, GE Chart 18

19 Agenda Strategy recap LANXESS positioned to benefit from global growth trends Financial overview Q Outlook/Guidance Chart 19

20 Q financial overview: another growth quarter [ m] Q Q Q yoy in % Sales EBITDA pre except. margin Net income Capex* 1, % , % ,096 1, % , % 70.6% >100% >100% [ m] % vs. FY Net financial debt Net working capital 864 1, % 35.5% Q3 sales on Q2 level and increased 35% year on year EBITDA held back vs. Q2 due to maintenance turnarounds and reduced Challenge09-12 support Working capital increase in line with current business activity, inventory pricing and currency development Slight rise in headcounts due to announced growth projects Employees 14,797 14,338 14, % Literally no summer softening leads to a solid and continued performance * Net of projects financed by customers and finance lease Chart 20

21 Price-before-volume strategy successful Q3 yoy sales variances Price Volume Currency Portf. Total Performance Polymers 30% 11% 9% 0% Advanced Intermediates 6% 4% 4% 4% Performance Chemicals 4% 10% 7% 0% 50% 18% 21% Simultaneous price and volume increases in tandem in all segments Operational growth of 26% LANXESS 17% 9% 7% 1% 35% Q3 yoy EBITDA bridge [ m] Q Volume Price Input costs Others Q Timely implementation of price increases overcompensates rise in input costs Other costs contain currency benefit, overcompensated by absence of savings from Challenge09-12 Chart 21

22 Agenda Strategy recap LANXESS positioned to benefit from global growth trends Financial overview Q Outlook/Guidance Chart 22

23 Full year guidance increased to ~ 900 m EBITDA pre Current macro view Global markets continue their recovery, highest momentum remains in emerging markets Good business environment expected to continue, however macroeconomic risks from high fiscal debt levels and currency volatilities remain LANXESS expects 2010 well ahead of pre-crisis year 2008 Challenge09-12 compensation payment to workforce for exceptional 2010 recovery (~ 20 m) EBITDA pre FY 2010 is expected to be roughly 900 m assuming continued positive macroeconomic development Chart 23

24 Achievement of all targets set in the past Med ia/a Good Start in 2004 Good Start in 2004 Targets Conf nalyst Realistic Short-term N Realistic Short-term Targets ovem erence ber Target*** 2004 Target*** 2006 Target*** 2006 Target*** EBITDA* Margin EBITDA* Margin < 5% < 5% ~ 7% ~ 7% 9-10% 9-10% CapEx / Sales CapEx / Sales ~ 5% ~ 5% 4-5% 4-5% ~ 4% ~ 4% Net Financial Debt** Net Financial Debt** / EBITDA* / EBITDA* ~ 4.5 ~ 4.5 <3 <3 < 2.5 < 2.5 * spin-off target achieved in 2006 Excluding exceptionals ** Net debt excluding pensions: financial obligations (including convertible) less cash * financial Excluding exceptionals & cash equivalents ** Net financial debt excluding pensions: financial obligations (including convertible) less cash *** The financial targets do not include any impact of potential divestments & cash equivalents *** The financial targets do not include any impact of potential divestments Analyst Conference LANXESS Chart-No. 10 Analyst Conference LANXESS Chart-No. 10 and LANXESS will deliver on new ambitious targets Med ia/an a LANXESS EBITDA* margin: Peer group profitability in 2009 (currently 12-14%) Business Finance 9 No business < 5 % EBITDA* margin in Investment grade rating 9 lyst Con Nove ference mbe r CMD target achieved in 2008 * EBITDA figures pre exceptionals; excluding acquisitions Chart 24

25 In 2015 LANXESS will strive for an EBITDA of ~ 1.4 billion New EBITDA target bridge [ m] Performance Polymers BTR Singapore and debottlenecking PBR debottlenecking of Nd-PBR SCP caprolactam and compounding Advanced Intermediates BAC expansions ~ 1,100 ~ 1,400 Additional EBITDA will be the result of: - announced CAPEX projects - additional organic and external growth over next five years ~800 Performance Chemicals ION India and Germany 2010 * Additional organic and external growth 2015 Reaching a new profit level References to EBITDA are pre exceptionals; projects are exemplary * As communicated at LANXESS capital markets day Chart 25

26 Chart 26

27 Additional financial guidance Additional financial information for 2010 Capex : ~ m Hedging 2010 : ~40% at USD / EUR 2011 : ~30% at USD / EUR Tax rate : 20 to 25% Exceptionals : ~ 20 m P&L expenses / one time costs Cash outs : ~ 40 m for restructuring Challenge09-12 : additional expenses of ~20 m in H2 2010, ~ 50 m in 2011 vs Chart 27

28 Portfolio management allows for regrouping of LANXESS businesses along chemical segmentation Performance Polymers Advanced Intermediates Performance Chemicals Butyl Rubber Performance Butadiene Rubbers Technical Rubber Products Semi-Crystalline Products Basic Chemicals Saltigo Material Protection Products Inorganic Pigments Functional Chemicals Leather RheinChemie Rubber Chemicals Sales: > 500 mn Sales: 200 mn 500 mn Sales: < 200 mn Ion Exchange Resins Chart 28

29 LANXESS has a broad customer portfolio with varying demand patterns LANXESS sales distribution by industry, 2009 Others Tires Construction Agro Chemicals Automotive Consumer Goods Chart 29

30 Strongest growth in Latin America Sales by region [%] Regional development of sales [ m] 1,847 Operational development* LatAm 15 Asia 22 North America 18 Germany 18 EMEA (without Germany) 27 Asia LatAm North America EMEA (excl. Germany) Germany 408 1, % % % % % 340 Q Q % 68% 45% 22% 22% * Currency and portfolio adjusted Chart 30

31 Performance Polymers: strong price increases and solid volumes EBITDA held back by maintenance turnarounds [ m] Sales EBIT Depr. / Amort. EBITDA EBITDA pre exceptionals Margin Capex * Q Q % 14.6% All BUs manage successful price increases, Risen raw material prices, especially Butadiene, fully pushed through Volumes higher in almost all BUs Some support from currencies vs Planned maintenance turnarounds in BTR and PBR have respective cost and margin impact on segment level Capex rises on new BTR plant, notable increase also planned for Q4 Sales by BU Sales bridge year on year [ m] BTR PBR +30% +11% +9% +0% SCP TRP Q (approximate numbers) Price Volume Currency Portfolio Q * Net of finance lease Chart 31

32 Advanced Intermediates: strong performance despite agro weakness [ m] Q Q Sales EBIT Depr. / Amort. EBITDA EBITDA pre exceptionals Margin Capex * % % 24 Sales by BU SGO Overall, prices and volumes increased Demand from agro end-markets remains soft albeit with some light at the end of the tunnel, however no relief before beginning of next year Positive view on underlying agrochemical trends intact Portfolio effect reflects Gwalior & Jiangsu Polyols acquisitions New BAC cresol capacities contribute to earnings Segment EBITDA and margins continue stable development Capex increase mainly due to formalin project in BAC Sales bridge year on year [ m] +6% +4% +4% +4% BAC * Net of projects financed by customers Q (approximate numbers) Price Volume Currency Portfolio Q Chart 32

33 Performance Chemicals: EBITDA improvement and solid margin based on price and volume increases [ m] Q Q Sales EBIT Depr. / Amort. EBITDA EBITDA pre exceptionals Margin Capex % % 25 Sales strongly improved on solid volumes as well as good pricing with further support from currencies All businesses with operational sales growth LEA, RUC and FCC with highest contribution to EBITDA improvement, almost no seasonal effects IPG with solid growth, beating a soft construction market LEA business benefits from chrome ore pricing Capex mainly reflects expansion projects of BU ION as well as expansion of Mesamoll production in BU FCC Sales by BU RUC ION MPP RCH LEA FCC IPG Sales bridge year on year [ m] +4% +10% +7% +0% (approximate numbers) Q Price Volume Currency Portfolio Q Chart 33

34 Balance sheet a strong financial backbone [ m] Dec 31, 2009 Sep 30, 2010 Dec 31, 2009 Sep 30, 2010 Non-current Assets 2,382 2,546 Intangible assets Property, plant & equipment 1,809 1,898 Equity investments Other investments 1 8 Other financial assets Deferred taxes Other non-current assets Current Assets 2,686 3,034 Inventories 849 1,096 Trade accounts receivable Other financial assets Other current assets Near cash assets Cash and cash equivalents Total Assets 5,068 5,580 Stockholders Equity 1,445 1,710 thereof minority interest Non-current Liabilities 2,504 2,547 Pension & post empl. provis Other provisions Other financial liabilities 1,462 1,327 Tax liabilities Other liabilities Deferred taxes Current Liabilities 1,119 1,323 Other provisions Other financial liabilities Trade accounts payable Tax liabilities Other liabilities Total Equity & Liabilities 5,068 5,580 Working capital increase in line with stronger business activity Overall, foreign currencies with inflationary influence on balance sheet positions (USD and Brazilian Real) Increase in pension provisions due to lowered discount rates for Germany (5.00% to 4.50%) Chart 34

35 Solid business performance provides strong cash flow [ m] 9M M 2010 Profit before Tax Depreciation & amortization Gain from sale of assets Result from equity investments Financial (gains) losses Cash tax payments / refunds Changes in other assets and liabilities Operating cash flow before changes in WC Changes in working capital Operating cash flow Investing cash flow thereof capex Financing cash flow Solid cash generation Profit before tax above previous year due to significantly improved demand situation Cash outs for tax payments due to higher profit before tax Outflow for working capital in line with business recovery and higher raw material prices Almost unchanged net working capital and business activity versus Q PY investing cash flow contains investment in near cash assets Chart 35

36 A solid year of business recovery 9M yoy sales variances Price Volume Currency Portf. Total Performance Polymers 29% 34% 4% 0% Advanced Intermediates 5% 6% 2% 6% Performance Chemicals 0% 27% 4% 0% LANXESS 14% 25% 3% 1% 9M yoy EBITDA bridge [ m] 321 9M Volume Price Input Costs Others 9M % 19% 31% 44% Solid pick up in volumes in tandem with prices Positive portfolio effect after acquisitions of Gwalior and Jiangsu Polyols Substantial price and volume increases drive earnings Price before volume intact Other costs increase on hedging expenses and absence of Challenge09-12 Chart 36

37 Strong demand meets a flexible and adjusted cost structure [ m] 9M M 2010 yoy in % Sales 3,665 (100%) 5,288 (100%) 44% Cost of sales -2,884 (79%) -3,960 (75%) 37% Selling -386 (11%) -470 (9%) 22% G&A -171 (5%) -197 (4%) 15% R&D -75 (2%) -89 (2%) 19% EBIT 106 (3%) 529 (10%) >100% Net income 26 (1%) 353 (7%) >100% EPS >100% EBITDA 300 (8%) 733 (14%) >100% thereof exceptionals -21 (1%) -13 (0%) -38% EBITDA pre exceptionals 321 (9%) 746 (14%) >100% Delivering a solid performance Strong sales increase on the back of significant volumes (+25%) and good pricing (+14%) as well as supporting currency (+3%) and portfolio (+1%) effects Operational expenses increase with risen business activity but disproportionately to sales Strong EBITDA pre due to good demand as well as flexible and adjusted cost base Chart 37

38 Performance Polymers: on the growth track [ m] 9M 2009 Sales 1,663 EBIT 26 Depr. / Amort. 99 EBITDA 125 EBITDA pre exceptionals 136 Margin 8.2% Capex * 81 9M , % 106 All BUs manage successful price increases, motivated by higher raw material prices especially Butadiene Some support from currencies Volumes higher in all BUs Risen raw material prices fully pushed through Leadership positions of businesses lead to attractive margins Capex rises on new BTR plant, increase also planned for Q4 Sales by BU Sales bridge year on year [ m] SCP BTR 29% 34% 4% 0% 2,772 1,663 TRP PBR 9M 2009 (approximate numbers) Price Volume Currency Portfolio 9M 2010 * 2009 net of finance lease Chart 38

39 Advanced Intermediates: strong performance despite agro weakness [ m] 9M M 2010 Sales EBIT Depr. / Amort. EBITDA EBITDA pre exceptionals Margin Capex * % % 35 Sales increase on the back of positive effects from volume, portfolio and pricing Portfolio effect reflects acquisitions in BU BAC Demand from agro end-markets remains soft albeit with some light at the end of the tunnel, however no relief before beginning of next year New BAC cresol capacities contribute to earnings Segment EBITDA and margins continue stable development Positive view on underlying agrochemical trends intact Sales by BU SGO Sales bridge year on year [ m] 5% 6% 2% 6% BAC * Net of projects financed by customers 9M 2009 (approximate numbers) Price Volume Currency Portfolio 9M 2010 Chart 39

40 Performance Chemicals: volume-driven recovery of specialty chemicals [ m] 9M M 2010 Sales EBIT Depr. / Amort. EBITDA EBITDA pre exceptionals Margin Capex 1, % 51 1, % 57 Sales improved on strong volumes and some support by currency effects All businesses with operational sales growth as markets continue their recovery Strong performance in absolute EBITDA IPG, LEA and RUC with highest contribution to yoy EBITDA improvement Capex contains expansion projects of BU ION RUC Sales by BU ION MPP IPG Sales bridge year on year [ m] 27% 4% 0% 0% 1,507 1,148 RHC LEA FCC 9M 2009 (approximate numbers) Price Volume Currency Portfolio 9M 2010 Chart 40

41 Lean cost structure maintained amid higher business activity [ m] Q Q yoy in % Sales 1,373 (100%) 1,847 (100%) 35% Cost of sales -1,050 (76%) -1,387 (75%) 32% Selling -135 (10%) -166 (9%) 23% G&A -57 (4%) -70 (4%) 23% R&D -26 (2%) -34 (2%) 31% EBIT 64 (5%) 169 (9%) >100% Net income 23 (2%) 118 (6%) >100% EPS >100% EBITDA 130 (10%) 238 (13%) 83% thereof exceptionals -13 (1%) -6 (0%) -54% EBITDA pre exceptionals 143 (10%) 244 (13%) 71% Strong Q3 sales - on Q2 level, withstanding typical seasonal pattern Sales increased yoy on higher prices (+17%) and volumes (+9%) as well as currency (+7%) and portfolio (+1%) effects Cost of sales, selling and G&A expenses show effects of ongoing cost discipline in a recovery environment Strong improvement in EBITDA pre due to ongoing healthy demand in all segments Chart 41

42 Strong cash flow based on solid business performance [ m] Q Q Profit before Tax Depreciation & amortization Gain from sale of assets 0 0 Result from equity investments Financial (gains) losses Cash tax payments / refunds 7-48 Changes in other assets and liabilities Operating cash flow before changes in WC Changes in working capital Operating cash flow Investing cash flow thereof capex Financing cash flow Solid cash generation Profit before tax above previous year due to significantly improved demand situation Cash outs for tax payments from higher profit before tax No significant effects from working capital due to unchanged business activity versus Q PY investing cash flow contains investment in near cash assets Chart 42

43 No major refinancing needs until 2012 Long term financing secured Long maturity profile Dependency on banks reduced Ample liquidity in place to finance growth projects (i.e. Singapore plant, etc.) Liquidity and maturity profile Short-term facilities Bond Bond Bond Synd. Credit Facility 1.4 bn Cash & Cash equivalents Near-cash assets Financial liabilities Access to unconditioned liquidity is a valuable asset Chart 43

44 Strict CAPEX allocation criteria ensure continuous improvement of profitability Performance Organic investment External growth Summary & conclusion [ m] [EBITDA* margin] > 15% 10-15% 5-10% < 5% CAPEX split by profitability of BUs ~25% ~20% ~35% ~20% ~40% ~30% ~25% ~5% ~55% ~40% ~5% * e* 70% CAPEX by type 40% e Expansion / others 60% 30% ROCE of historic CAPEX above 25% Maintenance * Based on average CAPEX and average EBITDApre margins by BU for respective time frame Chart 44

45 Strong focus on growth markets Performance Organic investment External growth Summary & conclusion Strategic development of asset base* to Asia and Latin America LANXESS sales 72% 61% 20% 13% North America 5% 14% 3% 12% EMEA Asia 10.1% 23.9% 2005 H Latin America e incl. Singapore Sales LANXESS Share of sales in BRIC Optimized regional asset base Share of sales in BRIC doubled since 2005 Chart 45

46 Business Unit Technical Rubber Products a leading supplier of specialty elastomers for the rubber industry TRP Facts EPDM end uses Business Unit Technical Rubber Products belongs to the Performance Polymers segment Production sites in: Germany, France, U.S. Annual sales: > 500 m Customers: > 600 Others 20% Cables & Wires 7% Polymer modifications 7% Oil additives 8% Automobile 38% Construction 20% 5 product groups with strong global brands in a global market: - EPDM: - CR: - NBR: - HNBR: - EVM: EPDM applications - Hoses - Seals - Belts - Polymer modifications Source: Global Insights, JD Powers, SRI EPDM 2009 Chart 46

47 DSM Elastomers global player with a leading technology and strong brand DSM Elastomers at a glance Product portfolio Ethylen-Propylen-Dien-Monomer, part of DSM s Base Chemicals and Materials segment Globally number three in EPDM Distributed under the brand name Keltan Technology New catalyst (ACE*) technology Allows modified EPDM for high value applications Figures 2010e sales: ~ 380 m Employees: ~420 Production sites DSM EPDM production in Geleen, NL EPDM capacity: ~160 kt/a Largest and most modern EPDM plant R&D facilities located at site ACE technology was introduced end of 2008 DSM EPDM production in Triunfo, BR EPDM capacity: ~40 kt/a Technology upgrade in 2008 Located next to LANXESS Elastômeros do Brasil assets * Advanced Catalysis EPDM technology Chart 47

48 Advanced Catalysis EPDM technology enables sustainable EPDM production for LANXESS Catalysis Producer Mitsui Ziegler-Natta Metallocene ACE KELTAN ACE technology Technology enables production of new innovative Keltan products: Dow Exxon Mobil - Higher throughput and lower energy consumption for reduced manufacturing costs Others LXS+DSM Substantial improvement of mediocre technology position - Reduction of peroxide: less bloom, odor & taste improvement of electrical properties and heat resistance 2717 Chart 48

49 Is LANXESS a swing producer? Tire manufacturers produce insufficient synthetic rubber for their captive use Rubber producing capabilities of selected tire manufacturers: Importance in LANXESS portfoilio Michelin Goodyear Bridgestone Continental Pirelli Hankook major major minor major major BTR none none none none none none PBR 1 little 2 none capable none none none S-SBR capable capable capable none none none E-SBR little capable capable none none none NBR none none none none none none LANXESS is not a swing producer 1 Nd-PBR 2 Know how present, licensing to others Chart 49

50 Does natural rubber cannibalize synthetic rubber? Risk of substitution Low substitution risk High substitution risk BTR PBR 1 S-SBR E-SBR NBR EPDM Overall, very limited substitution possibility 1 Nd-PBR Chart 50

51 Exceptional items incurred in Q and Q [ m] Q Q Exceptional thereof D&A Exceptional thereof D&A Performance Polymers Advanced Intermediates Performance Chemicals Reconciliation Total Chart 51

52 Exceptional items incurred in 9M 2009 and 9M 2010 [ m] 9M M 2010 Exceptional thereof D&A Exceptional thereof D&A Performance Polymers Advanced Intermediates Performance Chemicals Reconciliation Total Chart 52

53 Abbreviations Performance Polymers Advanced Intermediates BTR PBR TRP SCP Butyl Rubber Performance Butadiene Rubbers Technical Rubber Products Semi-Crystalline Products BAC SGO Basic Chemicals Saltigo Performance Chemicals MPP IPG FCC LEA RCH RUC ION Material Protection Products Inorganic Pigments Functional Chemicals Leather Rhein Chemie Rubber Chemicals Ion Exchange Resins Chart 53

54 Upcoming events 2011 Upcoming events FY results 2010 March 17, 2011 Q1 results 2011 May 11, 2011 AGM May 18, 2011 Q2 results 2011 August 11, 2011 Q3 results 2011 November 10, 2011 Chart 54

55 Contact detail Investor Relations Oliver Stratmann Head of Investor Relations Tel. : Fax. : Mobile : Oliver.Stratmann@lanxess.com Verena Simiot Assistant Investor Relations Tel. : Fax. : Mobile : Verena.Simiot@lanxess.com Tanja Satzer Constantin Fest Joachim Kunz Private Investors / AGM Tel. : Fax. : Mobile : Tanja.Satzer@lanxess.com Institutional Investors / Analysts Tel. : Fax. : Mobile : Constantin.Fest@lanxess.com Institutional Investors / Analysts Tel. : Fax. : Mobile : Joachim.Kunz@lanxess.com Chart 55