Structure of the statement of financial position

As of June 30, 2014, the LANXESS Group had total assets of €7,196 million, up €385 million, or 5.7%, from €6,811 million on December 31, 2013. This was mainly attributable to the seasonal increase in working capital and to capital expenditures for property, plant and equipment. The equity ratio increased to 32.3%, particularly as a result of the capital increase in the second quarter.

Non-current assets rose during the first half-year by €125 million to €3,717 million, with intangible assets and property, plant and equipment increasing by €93 million to €3,319 million. Cash outflows for purchases of property, plant and equipment and intangible assets in the first half of 2014 were €262 million, slightly ahead of the prior-year level of €252 million. Depreciation and amortization in the first half of 2014 totaled €202 million and was thus below the prior-year level despite capital expenditures, mainly because of the lower depreciation and amortization base following impairments of intangible assets and property, plant and equipment at year end 2013. The ratio of non-current assets to total assets was 51.7%, down from 52.7% on December 31, 2013.

Current assets increased by €260 million, or 8.1%, compared with December 31, 2013 to €3,479 million. The inventory growth of €178 million, or 13.7%, to €1,477 million was largely volume-related, partly against the background of shutdowns planned for the second half of the year. Trade receivables were €82 million, or 7.7%, higher at €1,152 million. The ratio of current assets to total assets was 48.3%, against 47.3% as of December 31, 2013.

The LANXESS Group has significant internally generated intangible assets that are not reflected in the statement of financial position in light of accounting rules. These include the brand equity of LANXESS and the value of other brands of the Group. A variety of measures was deployed in the reporting period to continually enhance these assets and help maintain the sound positions our business units hold in their respective markets.

Our established relationships with customers and suppliers also constitute a significant intangible asset. These long-standing, trust-based partnerships with customers and suppliers, underpinned by consistent service quality, enable us to compete successfully even in a more challenging business environment. Our competence in technology and innovation, also a valuable asset, is rooted in our specific knowledge in the areas of research and development and custom manufacturing. It enables us to generate significant added value for our customers.

The know-how and experience of our employees are crucial factors for our corporate success. In addition, we have sophisticated production and business processes that create competitive advantages for us in the relevant markets.

Equity amounted to €2,324 million, up by €424 million or 22.3% compared with December 31, 2013. This increase resulted particularly from the 10% capital increase in the second quarter and from the total comprehensive income in the reporting period. The dividend payment reduced equity. The ratio of equity to the Group’s total assets was 32.3% as of June 30, 2014, against 27.9% as of December 31, 2013.

Non-current liabilities increased by €252 million to €3,281 million as of June 30, 2014. Provisions for pensions and other post-employment benefits rose by €140 million compared with the end of 2013, to €1,083 million. The increase resulted particularly from the change in the interest rates used for measurement. Other non-current financial liabilities amounted to €1,774 million, up by €125 million against December 31, 2013. This increase resulted primarily from the pro-rata refinancing of the €500 million Eurobond issued in 2009 that matured in the reporting period. The ratio of non-current liabilities to total assets was 45.6%, up from 44.5% as of December 31, 2013.

Current liabilities came to €1,591 million, down by €291 million or 15.5% from December 31, 2013. This decline resulted especially from the repayment of the aforementioned Eurobond issued in 2009. Trade payables, at €694 million, were level with the end of 2013. Other current provisions increased by €32 million to €387 million. The ratio of current liabilities to total assets was 22.1% as of June 30, 2014, against 27.6% at the end of 2013.