Sales and earnings forecast for the segments

Despite the planned volumes growth, sales in the Chemicals segment are expected to decline slightly in 2018 due to price factors. Overall, we anticipate lower sales prices in the isocyanates business as a result of additional capacities, especially in the Middle East and Asia, which will increase competitive pressure. EBIT before special items will presumably be considerably below the high 2017 level. The earnings contribution from higher sales volumes is not expected to compensate for the lower margins in the isocyanates business in particular.

In the Performance Products segment, we expect sales to be up slightly on the prior-year level in 2018. We plan to increase sales through volumes growth in the Dispersions & Pigments, Care Chemicals and Performance Chemicals divisions and are forecasting higher average prices overall. Sales will be dampened by the absence of the leather chemicals business, which was transferred to the Stahl group at the end of the third quarter of 2017, as well as the anticipated negative currency effects and the limited product availability of citral-based flavors and fragrances as well as vitamins. We are aiming for a considerable year-on-year increase in EBIT before special items with higher volumes and margins as well as strict cost discipline.

Sales in the Functional Materials & Solutions segment will presumably rise slightly in 2018. Higher overall prices and volumes growth in all divisions – due to factors such as the startup of new production capacities – should contribute to this. Our forecast is supported by the expectation of continuing good demand from the automotive and construction industries. Despite the continued challenging market environment and higher fixed costs from new plants, we anticipate a considerable increase in EBIT before special items, mainly as a result of volumes growth and higher margins.

In the Agricultural Solutions segment, our aim is to exploit positive market momentum, especially in the emerging markets, significantly increase sales volumes with innovative solutions and raise our prices. This should more than offset the expected negative currency effects. In this way, we plan to considerably increase sales. Excluding the agreed transaction with Bayer, we would expect a slight improvement in earnings, mainly from the planned volumes growth and innovative new products amid continued strict cost management. However, negative earnings effects from the timing of the acquisition, the seasonality of the businesses to be taken over and the anticipated integration costs will probably lead to a slight decline in EBIT before special items.

Our forecast for the Oil & Gas segment does not take into account the intended merger of our oil and gas activities with the business of DEA Deutsche Erdoel AG and its subsidiaries. Planning for the 2018 business year is based on an average price for Brent blend crude oil of $65 per barrel. Gas prices are likely to be on a level with 2017. We are forecasting considerable growth in sales and EBIT before special items in the Oil & Gas segment, driven by positive price effects and the start of production at fields in Norway in particular.

Sales in Other are expected to increase slightly in 2018, primarily as a result of higher sales from raw materials trading. We anticipate a slight improvement in EBIT before special items as against 2017.