Business Review
At a glance
- Segment sales decline mainly due to considerably lower prices and volumes
- Significant decrease in EBIT before special items
Compared with the previous year, sales to third parties in the Materials segment declined by €4,294 million to €14,149 million. Sales in the Monomers division decreased by €2,971 million to €6,905 million. In the Performance Materials division, sales were €1,323 million lower at €7,244 million.
|
Materials |
Performance Materials |
Monomers |
|---|---|---|---|
Volumes |
–6.6% |
–6.2% |
–7.0% |
Prices |
–14.3% |
–6.5% |
–21.0% |
Currencies |
–2.4% |
–2.8% |
–2.1% |
Portfolio |
– |
– |
– |
Sales |
–23.3% |
–15.4% |
–30.1% |
Significantly lower prices due to very weak demand and lower raw materials prices were the main reasons for the decline in sales in both divisions. In the Monomers division, prices fell in all business areas, especially in the ammonia and polyamide value chains. In the Performance Materials division, prices decreased in all business areas.
Declining demand over the course of the year led to significantly lower volumes, especially in Europe. Volume growth in the Monomers division in Asia Pacific, mainly as a result of considerably higher isocyanate volumes, had an offsetting effect.
Negative currency effects, mainly relating to the Chinese renminbi, also weighed down the sales performance of the segment.
|
|
2023 |
2022 |
+/– |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sales to third parties |
|
14,149 |
18,443 |
–23.3% |
||||||||||
of which Performance Materials |
|
7,244 |
8,567 |
–15.4% |
||||||||||
Monomers |
|
6,905 |
9,877 |
–30.1% |
||||||||||
Intersegment transfers |
|
864 |
1,742 |
–50.4% |
||||||||||
Sales including transfers |
|
15,013 |
20,186 |
–25.6% |
||||||||||
Income from operations before depreciation, amortization and special items |
|
1,650 |
2,686 |
–38.6% |
||||||||||
Income from operations before depreciation and amortization (EBITDA) |
|
1,523 |
2,660 |
–42.7% |
||||||||||
EBITDA margin before special items |
% |
11.7 |
14.6 |
– |
||||||||||
Depreciation and amortizationa |
|
1,146 |
884 |
29.6% |
||||||||||
Income from operations (EBIT) |
|
378 |
1,776 |
–78.7% |
||||||||||
Special items |
|
–449 |
–63 |
–608.6% |
||||||||||
EBIT before special items |
|
826 |
1,840 |
–55.1% |
||||||||||
Investments including acquisitionsb |
|
1,083 |
880 |
23.1% |
||||||||||
Segment cash flow |
|
1,369 |
2,363 |
–42.1% |
||||||||||
Assets |
|
9,716 |
10,864 |
–10.6% |
||||||||||
Return on capital employed (ROCE) |
% |
3.6 |
14.9 |
– |
||||||||||
Research and development expenses |
|
185 |
201 |
–7.7% |
||||||||||
|
||||||||||||||
Materials – sales
By division
At €826 million, income from operations (EBIT) before special items of the segment was €1,013 million below the figure of 2022. EBIT before special items declined considerably in the Monomers division due to lower polyamide and ammonia margins. The slight decline in earnings in the Performance Materials division was driven by lower margins and volumes. Considerably reduced fixed costs in both divisions, primarily as a result of lower production costs, were unable to compensate for this.
EBIT decreased by €1,399 million to €378 million. This included special charges amounting to €464 million, mainly for impairments on intangible assets and production plants in Europe, for costs in connection with adaptations to the production structures at the Verbund site in Ludwigshafen, Germany, and 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 €) |
|---|---|---|---|---|---|
Performance Materials |
35.7% |
25.1% |
34.2% |
5.0% |
7,244 |
Monomers |
42.8% |
21.3% |
31.1% |
4.8% |
6,905 |