Functional Materials & Solutions
1st Quarter 2016
- Sales slightly down, mainly due to lower sales prices
- Slight earnings increase through higher contributions from Performance Materials and Construction Chemicals divisions
Sales in the Functional Materials & Solutions segment declined slightly compared with the previous first quarter, mainly due to lower sales prices that were weighed down primarily by declining prices in precious metal trading. Currency effects also negatively impacted sales. We raised our sales volumes, particularly as a result of higher demand from the automotive and construction industries (volumes 5%, prices –7%, portfolio 0%, currencies –2%). Income from operations before special items grew slightly. Improved contributions from the Performance Materials and Construction Chemicals divisions were able to more than offset declines in the Catalysts and Coatings divisions.
Sales
Change compared with 1st quarter 2015
−4%
EBIT before special items
(Change compared with 1st quarter 2015)
Million €
456 (+25)
Catalysts
We posted a considerable year-on-year sales decline in the Catalysts division, mainly because of lower precious metal prices. Currency effects also weighed down sales. We were
able to raise our volumes overall. Demand increased for mobile emissions catalysts in particular, as well as for battery materials, while sales volumes declined for chemical catalysts.
Despite higher volumes in precious metal trading, sales in this business fell to €499 million (first quarter of 2015: €612 million) on account of lower precious metal prices. Earnings fell considerably, primarily owing to the smaller contribution from the chemical catalysts business.
Construction Chemicals
Sales rose considerably in the Construction Chemicals division. Significantly higher sales volumes were able to more than offset negative currency effects and slightly lower prices. With prices stable in North America, we achieved considerable volumes – and thus sales – growth there. We also saw a volumes-driven sales increase in Europe, although it was slowed by negative currency effects. Substantially higher volumes in the Middle East contributed particularly to positive development in the region South America, Africa, Middle East. In Asia, negative currency effects and lower prices led to a considerable sales decline, with demand increasing slightly. We considerably improved earnings compared with the previous first quarter as a result of higher volumes and stronger margins.
Coatings
Sales in the Coatings division fell considerably compared with the first quarter of 2015. This resulted predominantly from negative currency effects in all business areas and especially from the depreciation of the Brazilian real. Our sales volumes were slightly below the level of the previous first quarter. In the decorative paints business, the difficult macroeconomic environment in Brazil led to a sharp decline in volumes. In the automotive refinish coatings business, volumes shrank slightly. We were able to raise our sales volumes of automotive OEM coatings, particularly in North America. Our prices remained stable overall. The considerable decline in earnings resulted primarily from a less favorable product mix and the lower volumes.
Performance Materials
The slight sales decline in the Performance Materials division resulted primarily from decreased sales prices on account of falling raw material costs. Currency effects and portfolio measures additionally reduced sales. Sales volumes showed positive development, largely supported by our businesses with styrene foams, thermoplastic polyurethanes, biopolymers and Cellasto®. We were able to increase our sales volumes to the automotive industry and in the consumer goods sector. Sales to the construction industry declined, due primarily to the divestiture of our white expandable polystyrene (EPS) business in North and South America. Driven especially by margins, earnings grew considerably, despite higher fixed costs from the startup of production plants.
|
|
1st Quarter | ||
---|---|---|---|---|
|
|
2016 |
2015 |
Change % |
Sales to third parties |
|
4,408 |
4,584 |
(4) |
Thereof Catalysts |
|
1,467 |
1,589 |
(8) |
Construction Chemicals |
|
533 |
503 |
6 |
Coatings |
|
738 |
789 |
(6) |
Performance Materials |
|
1,670 |
1,703 |
(2) |
Income from operations before depreciation and amortization (EBITDA) |
|
594 |
600 |
(1) |
Income from operations (EBIT) before special items |
|
456 |
431 |
6 |
Income from operations (EBIT) |
|
452 |
464 |
(3) |
Assets (as of March 31) |
|
13,462 |
14,291 |
(6) |
Research expenses |
|
96 |
92 |
4 |
Additions to property, plant and equipment and intangible assets |
|
130 |
281 |
(54) |