Performance Products

2nd Quarter 2016

• Sales considerably down, mostly due to price developments and divestitures
• Considerable improvement in EBIT before special items in all divisions

Sales in the Performance Products segment decreased considerably year-on-year (volumes 2%, prices –3%, portfolio –3%, currencies –2%). A drop in prices was particularly attributable to the oil-price-related decline in raw material costs, in addition to ongoing pressure on prices in the hygiene business. Negative currency effects, the divestiture of parts of our pharmaceutical ingredients and services business, and the sale of our businesses with textile chemicals and paper hydrous kaolin in 2015 also dampened sales development. We achieved volumes growth. As a result of reduced fixed costs, improved margins in all divisions, and higher volumes, we were able to considerably boost income from operations (EBIT) before special items.

Dispersions & Pigments

In the Dispersions & Pigments division, sales were slightly below the level of the previous second quarter. This was essentially due to lower prices on account of decreased raw material costs, coupled with negative currency effects. Higher sales volumes of pigments, dispersions and additives supported growth, and more than compensated for the slight volumes decline in our businesses with resins and paper chemicals. Improved margins overall enabled us to considerably increase EBIT before special items.

Care Chemicals

Sales in the Care Chemicals division were slightly down compared with the second quarter of 2015. This was predominantly the result of price declines brought about by lower raw material costs, although intense competition in our hygiene business was also a factor. Negative currency effects additionally dampened sales. Sales volumes were particularly boosted by substantially higher volumes of ingredients for the detergents and cleaners industry, as well as by greater demand for oleochemical surfactants and fatty alcohols. Higher volumes, stronger margins and reduced fixed costs allowed us to considerably improve EBIT before special items.

Nutrition & Health

Sales in the Nutrition & Health division saw a considerable year-on-year decline, mainly due to the sale of parts of the pharmaceutical ingredients and services business. A slight dip in sales volumes was mostly attributable to lower demand in the remaining pharmaceutical business and in the human nutrition business, whereas volumes rose for animal nutrition. Currency effects additionally dampened sales. We were able to raise price levels by sharply increasing vitamin prices in the animal nutrition business. Improved margins and substantially reduced fixed costs – thanks especially to restructuring measures – led to a considerable rise in EBIT before special items.

Performance Chemicals

The Performance Chemicals division posted a considerable sales decline, largely on account of the divestiture of the textile chemicals business and the sale of the paper hydrous kaolin activities. Decreased sales prices brought about by a sharp drop in raw material prices, along with negative currency effects, also dampened sales development. Volumes matched the level of the previous second quarter. We were primarily able to increase sales volumes in the fuel and lubricant additive business, as well as in plastic additives, whereas demand declined in, for example, oilfield and mining chemicals. EBIT before special items considerably surpassed the level of the second quarter of 2015. This was mostly due to significantly reduced fixed costs thanks to restructuring measures and strict fixed cost management, as well as to improved margins.