Glossary

C

Capital employed

This is defined as total assets less deferred tax assets and interest-free liabilities.

Cash flow

Inflows and outflows of cash and cash equivalents.

CLP

CLP is the abbreviation for classification, labeling and packaging. The E.U. CLP Regulation contains new provisions for the classification, labeling and packaging of substances and mixtures. It was announced on December 31, 2008 and has already entered into force.

This new regulation is based on the Globally Harmonized System of Classification and Labeling of Chemicals – or GHS for short – which ensures that hazards are labeled in the same way all over the world. The use of internationally agreed classification criteria and labeling elements is aimed at making things easier for distributors and at protecting people and the environment worldwide from the hazards that may be caused by chemicals.

Compounding facility

A facility for processing and finishing engineering plastics to enhance their functional properties.

Corporate governance

Responsible corporate management and oversight aligned with long-term value creation. It comprises the observance of laws, regulations, recognized standards and recommendations as well as the implementation and application of company guidelines and management and control structures.

D

Deferred taxes

Tax expense or tax income that is likely to arise in the future from temporary differences between the carrying amount used in the annual financial statements and the taxable value of assets and liabilities and tax income that is likely to arise in future from unused loss carryforwards or tax credits.

Due diligence

The careful investigation and analysis of a company, particularly in respect of its economic, legal, tax and financial condition and its performance in the areas of technology and the environment. It is undertaken especially by potential purchasers involved in acquisition projects.

E

EBIT

Earnings before interest and taxes: the operating result before deduction of interest and income taxes.

EBITDA

Earnings before interest, taxes, depreciation and amortization: the operating result before deduction of interest and income taxes plus depreciation and impairment losses on property, plant and equipment and amortization and impairment losses on intangible assets.

Elastomere

Stable yet elastic and formable polymers that are used to manufacture tires, rubber bands and sealing rings, for example.

EMEA

Europe, Middle East, Africa region

Equity method

Accounting method that sets the interests in affiliated companies against the acquisition costs, with the result that any changes in the stakeholder’s interest lead to an adjustment in the net assets of the affiliated company.

Euro Benchmark Bond

Bond Bond issued in euros which, on account of its issue volume, can be used as a reference value for comparable issuers.

Exclusive synthesis

Synthesis is a process in which chemical elements are used to manufacture a new substance. In the case of exclusive synthesis, substances are produced individually and exclusively for a certain customer – in contrast to catalog business.

F

Fermentation process

Generally speaking, fermentation characterizes the conversion of organic substances by bacteria or enzymes. However, industrial chemicals such as acetone or butanol can also be produced by fermentation.

Financial covenants

Clauses or (side) agreements in loan agreements and term sheets. These are contractually binding promises by the borrower or obligor during the term of the loan agreement, for example, that net financial liabilities will not exceed a defined multiple of an earnings indicator such as EBITDA pre exceptionals.

G

GDP

Gross domestic product: the sum of all goods and services produced by an economy over the period of one year and destined for consumption.

GHS

CLP is the abbreviation for classification, labeling and packaging. The E.U. CLP Regulation contains new provisions for the classification, labeling and packaging of substances and mixtures. It was announced on December 31, 2008 and has already entered into force. This new regulation is based on the Globally Harmonized System of Classification and Labeling of Chemicals – or GHS for short – which ensures that hazards are labeled in the same way all over the world. The use of internationally agreed classification criteria and labeling elements is aimed at making things easier for distributors and at protecting people and the environment worldwide from the hazards that may be caused by chemicals.

Goodwill

Intangible assets from the acquisition of a company. This is measured as the excess of the cost of acquisition over the fair value of the net assets acquired.

H

Hedging

An investment position intended to limit or offset certain clearly identified risks such as exchange rate fluctuations or interest rate changes.

Hot Commissioning

This is a phase in the start-up of a production plant. In contrast to cold commissioning, the plant is tested under real operating conditions and all operating, threshold and nominal parameters are set before starting trial operation.

I

IAS

International Accounting Standards/International Financial Reporting Standards. These are uniform international accounting regulations issued by the International Accounting Standards Board with the aim of ensuring the global comparability of financial statements and the publication of information of relevance to decisions.

IFRS

International Accounting Standards/International Financial Reporting Standards. These are uniform international accounting regulations issued by the International Accounting Standards Board with the aim of ensuring the global comparability of financial statements and the publication of information of relevance to decisions.

ISO 14001

International standard which supports organizations in introducing an environmental policy, formulating environmental targets and implementing these with the aid of an environmental management system.

ISO 50001

International standard which defines requirements for systematic energy management to help organizations reduce energy costs, greenhouse gas emissions and other environmental impacts.

ISO 9001

International standard which defines minimum requirements for quality management systems.

J

Joint venture

A contractual agreement between two or more partners concerning an economic activity which they manage jointly.

N

Net financial liabilities

Calculated as the sum of current and non-current financial liabilities (adjusted for liabilities for accrued interest) less cash, cash equivalents and near-cash assets.

Net working capital

The sum of all inventories and trade accounts receivable less trade accounts payable.

O

Off-spec products

Products which do not meet the manufacturer’s own specifications or customer requirements.

P

Polyamide

A synthetic polymer with very good mechanical and electrical properties and high resistance to chemicals and wear.

Purchase price allocation

Distribution of the cost of an acquisition to the acquired assets, liabilities and contingent liabilities.

R

Rating

Assessment of a debtor’s credit standing. Ratings are issued by, for example, the world’s leading rating agencies such as Standard & Poor’s, Moody’s Investors Service and Fitch Ratings, but also by banks applying their own criteria.

REACH

Abbreviation for the Registration, Evaluation, Authorization and Restriction of Chemicals. The E.U. REACH Regulation stipulates the registration, assessment and approval of chemicals before marketing. It imposes a duty on manufacturers and importers to determine the hazardous characteristics of substances and estimate their impact on health and the environment.

ROCE

Return on capital employed: ROCE is the ratio of EBIT pre exceptionals to capital employed and a measure of profitability.

S

Sell-side analysts

Sell-side analysts work for banks and brokerages. They produce industry-specific analyses of listed companies. These are used to assess the stock of the companies analyzed and to make investment recommendations. Published in the form of research studies, these recommendations are targeted at external users, especially institutional investors, and are intended to provide investment ideas.

Steam cracker

A facility that uses steam to produce chemical raw materials for manufacturing plastics, coatings, solvents and crop protection products.

Synthetic rubber

Synthetic rubber is the term used for elastic polymers produced from petrochemical raw materials. It is the starting product for rubber production. With a 50 to 60 percent share of production volume, styrene-butadiene rubber is the most important of the synthetic rubbers. It is used especially in the manufacture of car tires.

V

VOC emissions

Volatile organic compounds is the collective term for organic carbon compounds that evaporate easily or already become gaseous at low temperatures.

Vulcanization

Vulcanization is a process that applies heat and pressure over time to make rubber more durable. It destroys the plastic properties of the rubber or rubber blend and makes it elastic.