Performance Chemicals

Overview of Key Data
  2012 2013 Change
  € million Margin % € million Margin % %
Sales 2,203   2,132   (3.2)
EBITDA pre exceptionals 281 12.8 231 10.8 (17.8)
EBITDA 264 12.0 181 8.5 (31.4)
Operating result (EBIT) pre exceptionals 196 8.9 139 6.5 (29.1)
Operating result (EBIT) 177 8.0 54 2.5 (69.5)
Cash outflows for capital expenditures 135   111   (17.8)
Depreciation and amortization 87   127   46.0
Employees as of Dec. 31 6,031   5,837   (3.2)

Sales in our Performance Chemicals segment declined by €71 million, or 3.2%, to €2,132 million in 2013. The decrease was mainly attributable to negative currency effects of 3.0%, additionally exacerbated by slightly negative price and volume effects. These were mitigated by a small portfolio effect of 0.5% related to businesses that had been acquired for our Material Protection Products, Functional Chemicals and Rhein Chemie business units.

Overall, the segment’s volumes and selling prices were below the prior-year level although the individual business units trended differently. The Functional Chemicals, Rhein Chemie and Liquid Purification Technologies business units saw a positive volume effect. In the Liquid Purification Technologies business unit, the business with water treatment products posted pleasing development. The Rhein Chemie business unit benefited particularly from increased volumes on the Asian market. By contrast, the Material Protection Products, Inorganic Pigments and Leather business units were hampered by negative volume trends. Our Rubber Chemicals business unit was able to grow prices, thus compensating for lower volumes. Currency effects had a negative impact in all of the segment’s business units. The percentage sales decrease was largest in Latin America and Germany.

EBITDA and EBITDA Margin Pre Exceptionals
Graphic: Performance Chemicals - EBITDA and EBITDA Margin Pre Exceptionals

EBITDA pre exceptionals for the Performance Chemicals segment receded by €50 million, or 17.8%, from the prior year to €231 million. This decline was attributable above all to increased production costs and slightly higher raw material prices alongside decreasing volumes and lower selling prices. A small portfolio effect was more than offset by adverse exchange rate movements. The EBITDA margin pre exceptionals receded from 12.8% to 10.8%.

The segment recorded exceptional items of €85 million in the reporting year, €35 million of which did not impact EBITDA. They were mostly accounted for by impairment charges recognized by the Rubber Chemicals business unit. The exceptional charges that impacted EBITDA related especially to measures associated with the Advance program.