Sales and profits

The Adhesive Technologies business sector continued its profitable growth in 2012. Despite economic activity slowing overall during the course of the year, we increased sales above the 8 billion euro mark for the first time, reaching a new high of 8,256 million euros. Organic sales growthGrowth in revenues after adjusting for effects arising from acquisitions, divestments and foreign exchange differences – i.e. “top line” growth generated from within.
– i.e. adjusted for foreign exchange and acquisitions/ divestments – was 3.6 percent, supported by price and volume increases. The ongoing alignment of our portfolio toward innovative customer solutions was a key factor in this solid performance. We managed to increase volume slightly in 2012 – in spite of the increased use of more efficient adhesive systems and the deliberate exit from less profitable businesses, such as part of the emulsion business in Asia.

In the following, we comment on our organic sales performance.

We once again recorded strong sales growth in emerging markets. The Africa/Middle East region accounted for the largest increase, with sales growing at a double-digit rate. Sales performance was also very strong in Eastern Europe. We posted strong sales growth in Asia (excluding Japan), and also Latin America showed solid growth. Sales performance was positive overall in the mature markets, with especially large contributions from our businesses in North America. Here we generated strong sales growth that more than compensated for the effects of the negative economic conditions in Western Europe, particularly in the countries of Southern Europe.

Operating profit (EBIT) increased to 1,191 million euros, driven once again by strict optimization of our cost structures and further improvements to our product portfolio. Adjusted operating profit reached a new high of 1,246 million euros. Adjusted return on sales rose by 1.2 percentage points versus the prior year, reaching another high of 15.1 percent. Ongoing measures to reduce costs and enhance efficiency in both production and supply chainEncompasses purchasing, production, storage, transport, customer services, requirements planning, production scheduling and supply chain management.
also helped to further increase our gross marginIndicates the percentage by which a company’s sales exceed cost of sales, i.e. the ratio of gross profit to sales.
and compensate for the increased cost of materials.

Net working capitalNet balance of inventories, trade accounts receivable, and trade accounts payable.
improved significantly to 11.9 percent of sales. The return on capital employedCapital invested in company assets and operations. Equity + interest-bearing liabilities.
(ROCEReturn on Capital Employed (ROCE)) rose by 1.9 percentage points to 16.5 percent. Economic value added (EVA®)The EVA concept reflects the net wealth generated by a company over a certain period. A company achieves positive EVA when the operating result exceeds the weighted average cost of capital. The WACC corresponds to the yield on capital employed expected by the capital market. EVA is a registered trademark of Stern Stewart & Co.
increased by 81 million euros to 363 million euros.

+3.6 %organic sales growthGrowth in revenues after adjusting for effects arising from acquisitions, divestments and foreign exchange differences – i.e. “top line” growth generated from within.
.