Business review

Performance Products

At €15,433 million, sales to third parties in the Performance Products segment in 2014 were €101 million below the prior-year level. We were able to raise sales volumes despite an increasingly gloomy market environment over the course of the year. With prices stable, sales were negatively impacted by currency effects (volumes 1%, prices 0%, currencies −2%). Restructuring measures helped reduce our fixed costs compared with 2013. As a result, we were able to raise income from operations before special items by €90 million to €1,455 million. Nearly every division contributed to this slight increase. Income from operations grew considerably, up by €317 million to €1,417 million compared with the previous year. This was largely on account of lower special charges, which were primarily related to restructuring measures, as well as special income from the sale of our PolyAd Services business in 2014.

We want to considerably increase sales in 2015, mainly through organic growth. In the Dispersions & Pigments and Care Chemicals divisions, this endeavor will be supported by factors like new production capacities. We anticipate a considerable volumes increase in the Nutrition & Health division, including for products for animal feed and for flavors and fragrances. Sales prices are likely to remain under pressure, however. In the Performance Chemicals division, we plan on increasing sales volumes. We are particularly striving to gain additional market share in the fuel and lubricant additives business area. We will also continue expanding our water treatment, oilfield and mining solutions business in attractive growth markets, such as enhanced oil recovery and membrane filtration. The textile chemicals business will be sold to Archroma during the first half of 2015. Income from operations before special items is expected to considerably exceed the level of 2014, supported in all divisions by strict cost discipline and measures to increase competitiveness.

Segment data (in million €)

 

 

 

2014

2013

Change in %

1

Previously conducted in the Performance Chemicals division, our business with pigments in the plastic additives business area was allocated to the Dispersions & Pigments division at the beginning of 2014. The 2013 figures for both divisions have been adjusted accordingly to ensure better comparability.

Sales to third parties

 

 

15,433

15,534

(1)

Thereof Dispersions & Pigments1

 

 

3,869

3,851

0

Care Chemicals

 

 

4,835

4,871

(1)

Nutrition & Health

 

 

2,029

2,088

(3)

Paper Chemicals

 

 

1,371

1,442

(5)

Performance Chemicals1

 

 

3,329

3,282

1

Intersegmental transfers

 

 

489

489

Sales including intersegmental transfers

 

 

15,922

16,023

(1)

Income from operations before depreciation and amortization (EBITDA)

 

 

2,232

1,987

12

EBITDA margin

 

%

14.5

12.8

Income from operations (EBIT) before special items

 

 

1,455

1,365

7

Income from operations (EBIT)

 

 

1,417

1,100

29

Income from operations (EBIT) after cost of capital

 

 

(143)

(447)

68

Assets

 

 

14,502

13,614

7

Research expenses

 

 

369

377

(2)

Additions to property, plant and equipment and intangible assets

 

 

849

1,497

(43)