Chemicals

2nd Quarter 2016

• Sales considerably down year-on-year due to price developments
• Lower margins result in considerable earnings decline

Sales in the Chemicals segment were considerably below the level of the previous second quarter (volumes 4%, prices –17%, portfolio 0%, currencies –2%). This was mainly due to the lower price levels in all divisions brought about by falling raw material costs. Slightly negative currency effects additionally dampened sales development. We were able to increase sales volumes in all divisions, especially in Intermediates. Income from operations (EBIT) before special items saw a considerable, margin-related decline. We held fixed costs to the prior second-quarter level.

Petrochemicals

In the Petrochemicals division, sales decreased considerably. Lower raw material costs, particularly for naphtha, led to reduced sales prices in all product lines. Volumes growth was predominantly driven by higher sales volumes from our acrylic acid production complex in Camaçari, Brazil, as well as by the resumption of operations at the plant in our Ellba C.V. joint operation in Moerdijk, Netherlands. Primarily as a result of lower margins for steam cracker products in North America, EBIT before special items was considerably below the high level of the prior second quarter. Increased margins in Europe and Asia, especially for steam cracker products as well as alkylene oxides and glycols, were not able to compensate for this. Fixed costs shrank slightly.

Monomers

Sales in the Monomers division fell considerably year-on-year, largely because of lower prices brought about by decreased raw material costs. Higher sales volumes of MDI in all regions were responsible for a boost in volumes. Reduced margins for products from the polyamide value chain, and the scheduled turnaround of the ammonia plant in Antwerp led to a considerable decline in EBIT before special items. Fixed costs rose slightly through increased expenses from the gradual startup of our new production facilities.

Intermediates

We also observed a considerable sales decline in the Intermediates division, mainly as a result of lower prices weighed down by falling raw material costs. All product lines achieved higher sales volumes, especially polyalcohols and amines. A favorable product mix led to slightly higher EBIT before special items compared with the previous second quarter. Yet ongoing market overcapacity decreased margins for butanediol and its derivatives. Fixed costs were brought down slightly.