Functional Materials & Solutions

3rd Quarter 2018

In the Functional Materials & Solutions segment, sales rose slightly compared with the third quarter of 2017. This was primarily attributable to higher prices in all divisions, especially in Catalysts and Performance Materials. Volumes also increased, while sales were weighed down by currency effects. Despite volumes growth, income from operations (EBIT) before special items was considerably below the level of the prior-year quarter, mainly due to higher fixed costs and lower margins in almost all divisions. However, we increased earnings from quarter to quarter over the course of 2018 and continuously reduced the gap to the prior-year quarter.

Factors influencing sales, Functional Materials & Solutions 3rd quarter 2018

Catalysts

Sales in the Catalysts division grew considerably year on year due to higher prices and volumes. The higher selling prices were mainly a consequence of the increase in precious metal prices. Volumes grew in precious metal trading as well as for chemical catalysts, battery materials and refining catalysts. In precious metal trading, sales rose to €719 million (third quarter of 2017: €532 million) due to higher prices and volumes. EBIT before special items improved considerably as against the third quarter of 2017, mainly as a result of volumes growth.

Construction Chemicals

The Construction Chemicals division recorded a slight increase in sales compared with the prior-year quarter. This was attributable to volumes growth, higher prices and the acquisition of Grupo Thermotek, Monterrey, Mexico, in September 2017. Negative currency effects had an offsetting impact. We achieved slight sales growth in Europe and in the region South America, Africa, Middle East as a result of higher volumes and prices. Sales rose considerably in North America due to the acquisition of Thermotek as well as higher volumes and prices but remained at the prior-year level in Asia. Income from operations (EBIT) before special items was considerably lower as a result of higher fixed costs and the increase in raw materials prices.

Coatings

Sales in the Coatings division declined slightly as against the third quarter of 2017. Negative currency effects could not be offset by slightly higher prices and sales volumes. We recorded volumes growth for surface treatments and decorative paints in particular; sales volumes of automotive refinish coatings also rose slightly. EBIT before special items decreased considerably year on year, primarily due to higher fixed costs and raw materials prices.

Performance Materials

In the Performance Materials division, sales improved slightly compared with the prior-year quarter. This was due to higher sales prices, particularly for engineering plastics and polyurethane systems in all regions. Currency effects had a negative impact. Sales volumes also declined slightly, largely as a result of much weaker demand for polyurethane systems. EBIT before special items was slightly below the figure for the third quarter of 2017. This was mainly attributable to higher fixed costs.