Functional Materials & Solutions

3rd Quarter 2015

• Sales match prior third-quarter levels due to positive currency effects
• Earnings rise considerably, thanks mainly to contribution from Performance Materials

In the Functional Materials & Solutions segment, sales matched the level of the third quarter of 2014. Positive currency effects counteracted lower prices and a slight decline in volumes. Continuing high demand from the automotive and construction industry was not able to fully offset lower sales volumes in precious metal trading (volumes –1%, prices –5%, currencies 6%). Income from operations before special items grew considerably. This was mainly an effect of the earnings increase in the Performance Materials division.

Catalysts

Despite increased sales volumes of mobile emissions catalysts and positive currency effects, sales in the Catalysts division fell considerably compared with the previous third quarter, especially as result of the decline in precious metal trading. Sales in precious metal trading saw a price and volumes-related decline to €538 million (third quarter of 2014: €685 million). This, together with higher fixed costs arising in part from the startup of new plants, led to a considerable earnings decrease.

Construction Chemicals

Compared with the third quarter of 2014, we achieved a considerable sales increase in the Construction Chemicals division, driven by volumes and currencies. Positive currency effects led to significant sales growth in North America. Sales also rose considerably in the region South America, Africa, Middle East. We achieved considerably higher sales volumes in the Middle Eastern countries in particular. Volumes and prices were slightly up in Europe. In Asia, positive currency effects and slightly higher volumes compensated for declining prices. Thanks to the volumes growth as well as to positive currency effects, earnings improved considerably.

Coatings

Sales in the Coatings division grew slightly compared with the third quarter of 2014. This was largely the result of higher prices and positive currency effects. Volumes were slightly down year-on-year. We achieved a considerable sales increase in the automotive OEM coatings business, primarily through higher volumes in Europe and North America and currency effects. Sales in the automotive refinish coatings business declined slightly owing to lower volumes. The industrial coatings business saw a slight increase in sales. The depreciation of the Brazilian real, together with weaker demand, considerably reduced sales in the decorative paints business in Brazil. Earnings declined slightly, as South America observed lower volumes and negative currency effects in all business areas.

Performance Materials

In the Performance Materials division, positive currency effects in North America and Asia resulted in a slight sales increase. Sales prices declined due to lower raw material costs, while volumes remained stable overall. Our business with the automotive industry improved considerably, while sales decreased to the construction industry. We achieved considerable earnings growth compared with the previous third quarter. This was partly attributable to the positive development of our specialties businesses.