Business review

Chemicals

Sales to third parties declined by €2,298 million to €14,670 million in the Chemicals segment in 2015. This was essentially due to lower prices on account of decreased raw material costs, especially in the Petrochemicals division (volumes –2%, prices –17%, portfolio –2%, currencies 7%). Sales were also reduced by the disposal of our share in the Singapore-based Ellba Eastern Private Ltd. joint operation. Income from operations before special items fell by €211 million to €2,156 million. This was primarily attributable to the declining TDI margins in the Monomers division as well as rising fixed costs from the startup of new production plants. Income from operations decreased by €265 million to €2,131 million. Special items had no material effect on earnings in 2015.

For 2016, we expect a slight decrease in sales. Higher sales volumes in the Monomers and Intermediates divisions from the startup of production plants will not be able to offset lower prices resulting from reduced 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 likely to decline considerably. We expect higher fixed costs in the Monomers and Intermediates divisions due to plant startups and foresee margin declines, especially in the Petrochemicals division.