Chemicals

1st Quarter 2015

• Declining prices lead to sales decrease
• Higher margins considerably improve earnings

Sales in the Chemicals segment were considerably below the level of the previous first quarter. This was largely a consequence of falling prices in some business areas on account of a sharp drop in raw material prices. Sales volumes were slightly down in the Petrochemicals and Monomers divisions. Portfolio measures in the Petrochemicals division additionally reduced sales. Positive currency effects helped support sales development (volumes −1%, prices −16%, currencies 8%, portfolio −3%). Through improved margins for a range of product lines, especially in Europe, we were able to considerably raise our income from operations before special items.

Petrochemicals

Sales in the Petrochemicals division fell considerably, primarily because of declining sales prices in all product lines. These followed significant drops in raw material prices, especially of naphtha. Also reducing sales was the disposal of our share in the Ellba Eastern Private Ltd. joint operation in Singapore at the end of 2014. Despite otherwise positive development in sales volumes, volumes were nevertheless slightly down as a result of a plant outage at the site in Moerdijk, Netherlands, at the beginning of June 2014. Positive currency effects helped support sales. Significantly increased margins for steam cracker products as well as for ethylene oxide and glycols, especially in Europe, more than compensated for weaker earnings in acrylic monomers. Earnings were therefore considerably above the level of the previous first quarter.

Monomers

Sales grew slightly in the Monomers division. This was largely the result of positive currency effects, which were able to more than compensate for lower prices in polyamides and isocyanates due to falling raw material costs. Because our customers adjusted their inventory management in expectation of lower raw material prices, sales volumes were down slightly. In addition, the plant outage at the Moerdijk, Netherlands, site has resulted in lower sales volumes of polyols since June 2014. We were able to considerably raise earnings, predominantly through improved margins for MDI and ammonia in Europe.

Intermediates

Sales rose slightly in the Intermediates division. This was mainly due to positive currency effects, supported by slight growth in sales volumes. We raised sales volumes worldwide in our business with amines. In North America and especially Asia, we achieved higher volumes in the polyalcohol and acetylene derivative business. Declining sales prices resulting from lower raw material costs put a strain on sales development. Quarter-on-quarter, we were able to considerably improve our margins, and thus also our earnings.