Business Review
At a glance
- Considerable decline in sales mainly due to decreases in volumes and prices
- EBIT before special items significantly reduced, mainly as a result of lower volumes and margins
Sales to third parties in the Industrial Solutions segment declined by €1,983 million compared with 2022 to €8,010 million in 2023. Sales in the Dispersions & Resins division decreased by €1,098 million to €4,921 million, while they declined by €885 million to €3,088 million in the Performance Chemicals division.
|
Industrial Solutions |
Dispersions & Resins |
Performance Chemicals |
|---|---|---|---|
Volumes |
–10.4% |
–9.3% |
–12.0% |
Prices |
–5.3% |
–6.2% |
–4.0% |
Currencies |
–2.3% |
–2.5% |
–2.0% |
Portfolio |
–1.8% |
–0.3% |
–4.2% |
Sales |
–19.8% |
–18.2% |
–22.3% |
The main reason for this was considerably lower sales volumes in almost all business areas and all regions due to lower demand.
Lower raw materials prices in particular led to considerably lower prices overall. Price levels in the Dispersions & Resins division decreased in almost all business areas. In the Performance Chemicals division, prices decreased mainly for plastic additives.
In addition, slightly negative currency effects, largely relating to the Chinese renminbi and the U.S. dollar, burdened sales performance.
Portfolio effects also dampened sales performance slightly, mainly as a result of the divestiture of the kaolin minerals business in the Performance Chemicals division as of September 30, 2022.
|
|
2023 |
2022 |
+/– |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sales to third parties |
|
8,010 |
9,992 |
–19.8% |
||||||||||
of which Dispersions & Resins |
|
4,921 |
6,019 |
–18.2% |
||||||||||
Performance Chemicals |
|
3,088 |
3,973 |
–22.3% |
||||||||||
Intersegment transfers |
|
436 |
507 |
–14.0% |
||||||||||
Sales including transfers |
|
8,445 |
10,499 |
–19.6% |
||||||||||
Income from operations before depreciation, amortization and special items |
|
965 |
1,437 |
–32.8% |
||||||||||
Income from operations before depreciation and amortization (EBITDA) |
|
1,010 |
1,443 |
–30.0% |
||||||||||
EBITDA margin before special items |
% |
12.0 |
14.4 |
– |
||||||||||
Depreciation and amortizationa |
|
349 |
346 |
0.9% |
||||||||||
Income from operations (EBIT) |
|
660 |
1,097 |
–39.8% |
||||||||||
Special items |
|
35 |
6 |
480.4% |
||||||||||
EBIT before special items |
|
625 |
1,091 |
–42.7% |
||||||||||
Investments including acquisitionsb |
|
285 |
322 |
–11.5% |
||||||||||
Segment cash flow |
|
1,292 |
852 |
51.6% |
||||||||||
Assets |
|
5,576 |
6,318 |
–11.7% |
||||||||||
Return on capital employed (ROCE) |
% |
11.0 |
16.0 |
– |
||||||||||
Research and development expenses |
|
150 |
172 |
–13.0% |
||||||||||
|
||||||||||||||
Industrial Solutions – sales
By division
At €625 million, income from operations (EBIT) before special items of the segment was €466 million below the prior-year figure. Earnings in the Performance Chemicals division decreased in particular due to lower volumes and margins, negative currency effects and the missing earnings contributions from the divested kaolin minerals business. In the Dispersions & Resins division, the decline in earnings was mainly a result of volume-related lower margins.
Reduced fixed costs, primarily due to lower personnel costs had a positive effect in both operating divisions.
EBIT declined by €436 million compared with 2022 to €660 million. In 2023, this included special income, mainly due to a payment in connection with a plant closure in China in 2019, as well as special charges, primarily for measures in the context of the cost savings program focusing on Europe.
Divisions |
Europe |
North America |
Asia Pacific |
South America, Africa, Middle East |
Total (million €) |
|---|---|---|---|---|---|
Dispersions & Resins |
37.5% |
25.4% |
29.9% |
7.2% |
4,921 |
Performance Chemicals |
35.3% |
26.5% |
26.0% |
12.3% |
3,088 |