Business review

Performance Products

At €15,648 million, sales to third parties in the Performance Products segment in 2015 were €215 million above the level of the previous year. Positive currency effects in all divisions were able to more than compensate for lower sales prices and weaker volumes (volumes –1%, prices –4%, portfolio –1%, currencies 7%). Decreased volumes were mainly brought about by lower volumes of pigments and weak demand in the oilfield chemicals business in connection with the price of oil, as well as the unscheduled shutdown of a polyisobutene plant in Antwerp, Belgium. The market environment for paper chemicals remained difficult. Our prices were also negatively impacted by factors such as intense competition in the hygiene business and vitamin E, along with lower raw material costs.

Income from operations before special items declined by €89 million to €1,366 million owing to higher fixed costs. These resulted from negative currency effects and the startup of new plants – such as those in Camaçari, Brazil, and Freeport, Texas – as well as inventory reductions. Income from operations fell by €77 million to €1,340 million. Special charges were predominantly attributable to restructuring measures. By contrast, special income arose mainly from the sale of our textile chemicals business, as well as parts of our pharmaceutical ingredients and services business.

In a market environment that continues to be challenging, we expect sales in 2016 to match the prior-year levels, despite lower prices. We want to increase sales volumes in all divisions. Factors supporting this endeavor include new production capacities in the Dispersions & Pigments and Care Chemicals divisions. Income from operations before special items should rise slightly above 2015 levels, bolstered by strict cost discipline and measures to increase competitiveness in all divisions.