Sales and earnings forecast for the segments

Sales in the Chemicals segment are likely to decline slightly in 2016. Higher volumes in the Monomers and Intermediates divisions due to the startup of plants will not be able to offset the lower prices resulting from decreased raw material costs. We continue to anticipate intense competitive pressure, especially in the markets for MDI, TDI, acrylic acid and caprolactam. Income from operations before special items is expected to fall considerably. We foresee higher fixed costs in the Monomers and Intermediates divisions from plant startups and shrinking margins, especially in the Petrochemicals division.

In an environment that remains challenging, we plan on sales in the Performance Products segment that match prior-year levels, despite lower prices. We want to raise sales volumes in all divisions. Factors supporting this endeavor include new production capacities in the Dispersions & Pigments and Care Chemicals divisions. Income from operations before special items should slightly exceed the level of 2015, supported by strict cost discipline and measures to increase competitiveness in all divisions.

In the Functional Materials & Solutions segment in 2016, we expect demand to remain high from our key customer sectors, the automotive and construction industries, and aim to raise sales volumes in all divisions. We nevertheless foresee negative effects from the continuing decrease in precious metal prices and overall sales that remain at a prior-year level. We aim to slightly raise our income from operations before special items.

For 2016, we are anticipating continued slow market growth in the Agricultural Solutions segment and high exchange rate volatility in some of our key growth markets. Despite this difficult economic environment, we aim to increase our sales volumes, especially of innovative herbicides. Through increased sales and continued strict cost management, sales and income from operations before special items should both improve slightly.

The Oil & Gas segment is likely to see expanded production, but a considerable drop in sales and income from operations before special items compared with 2015. Lower prices for oil and gas, together with the divestiture of our gas trading and storage business, are the major factors behind this forecast. Moreover, we will achieve lower sales and earnings from our share in the Yuzhno Russkoye natural gas field: In 2016, the excess amounts produced over the last ten years will be compensated, as contractually agreed with our partner, Gazprom.

In Other, sales are likely to decline considerably due to supply contracts in Asia that expired at the end of 2015. A considerable rise is expected in income from operations before special items, which should result in part from an improved currency result.