Development by regions Audited

From a geographic perspective, Emerging Markets generated sales of € 1,218 million in 2012 (2011: € 998 million), or 73% of the division’s sales, reflecting the high concentration of liquid crystals customers in Asia. Divisional sales in this region showed a strong 13.9% organic increase also as a result of strong demand from the emerging Chinese display industry. As a result, Merck’s liquid crystals sales to China more than doubled, elevating China to the number three single market in terms of sales – behind South Korea and Taiwan – overtaking Japan. The sales decline in Japan, which is part of the Rest of World region, was due to the difficult market environment faced by the Japanese display and electronic industry in 2012. As a result, sales of Performance Materials in the Rest of World region declined organically by 15.2% to € 206 million (2011: € 226 million), accounting for 12% of the division’s sales.

In the regions of Europe and North America, Performance Materials generates sales almost exclusively with products from the Pigments & Cosmetics business unit. Sales in Europe declined 4.2% organically to € 160 million (2011: € 167 million), or 10% of divisional sales due to both slowing automotive production in this region as well as softer sales to customers in the cosmetics industry. In contrast, sales in North America recorded a high growth rate similar that of the Emerging Markets. Sales grew 13.7% organically to € 90 million (2011: € 74 million), driven primarily by sales of Xirallic® pigments for automotive coatings as well as strong demand for the division’s active ingredients for cosmetics.

Performance Materials | Sales by region – 2012