Performance Products

1st Quarter 2016

• Considerable sales decline, primarily due to price developments and divestitures
• Earnings improve slightly through reduced fixed costs and higher volumes

Despite higher volumes, sales in the Performance Products segment decreased considerably year-on-year (volumes 1%, prices –4%, portfolio –2%, currencies –1%) mainly as a result of lower sales prices. These were largely an effect of oil-price-related declines in raw material costs, although ongoing pressure on prices in the hygiene business was additionally responsible. Sales development was slightly slowed by the divestiture of parts of our pharmaceutical ingredients and services business, the sale of the textile chemicals business and paper hydrous kaolin activities, and negative currency effects. Thanks to reduced fixed costs and higher volumes, we were able to slightly raise income from operations before special items.

Dispersions & Pigments

In the Dispersions & Pigments division, sales in the first quarter of 2016 were slightly below prior first-quarter levels. This was essentially due to lower prices on account of decreased raw material costs. Currency effects also had a negative impact on sales. Higher sales volumes in the pigments, dispersions and additives businesses boosted growth, and more than compensated for the slight volumes decline in our businesses with paper chemicals and resins. We were able to considerably increase our earnings through higher overall volumes, improved margins, and reduced fixed costs.

Care Chemicals

Compared with the first quarter of 2015, sales in the Care Chemicals division declined considerably, primarily due to lower prices on account of decreased raw material costs. Intense competition, especially in the hygiene business, also contributed substantially to this development. Negative currency effects and slightly reduced sales volumes additionally weighed down sales. We posted lower volumes in the hygiene business in particular. Earnings saw a considerable margin-related decline compared with the strong first quarter of 2015. We held fixed costs to the prior first-quarter level.

Nutrition & Health

Sales declined slightly in the Nutrition & Health division, primarily as a result of the disposal of parts of our pharmaceutical ingredients and services business. We were able to raise volumes in all business areas, especially in the remaining pharmaceuticals business, more than compensating for lower prices and negative currency effects. The lower prices were mainly a consequence of falling raw material costs for aroma chemicals. The successful implementation of restructuring measures enabled us to reduce fixed costs. This, combined with increased volumes, allowed us to considerably improve earnings.

Performance Chemicals

Sales in the Performance Chemicals division were considerably below the level of the previous first quarter. This was largely attributable to the sale of the textile chemicals business and paper hydrous kaolin activities, as well as to declining prices as a result of a sharp drop in raw material costs. Negative currency effects and slightly lower volumes additionally reduced sales. The lower price of oil led to particular volumes decreases in oilfield chemicals. We were able to raise volumes in other areas, such as plastic additives. Strict fixed cost management enabled us to achieve slight growth in earnings.