Business Review

  • Sales growth of 2% to €6,075 million largely driven by higher volumes in the Nutrition & Health division
  • Slight increase in EBIT before special items by €57 million to €793 million due to significant improvement in the Care Chemicals division

Sales to third parties in the Nutrition & Care segment amounted to €6,075 million in 2019, €135 million above the prior-year figure. This was the result of considerable sales growth of €261 million to €1,957 million in the Nutrition & Health division. By contrast, sales were slightly lower in the Care Chemicals division, declining by €126 million compared with 2018 to €4,118 million.

Factors influencing sales – Nutrition & Care

 

Nutrition & Care

Care Chemicals

Nutrition & Health

Volumes

2%

(3%)

16%

Prices

(2%)

(2%)

(3%)

Portfolio

0%

0%

0%

Currencies

2%

2%

2%

Sales

2%

(3%)

15%

Segment data – Nutrition & Care (Million €)

 

 

2019

2018

+/–

a

Amortization of intangible assets and depreciation of property, plant and equipment (including impairments and reversals of impairments)

b

Additions to intangible assets and property, plant and equipment

Sales to third parties

 

6,075

5,940

2%

of which Care Chemicals

 

4,118

4,244

(3%)

Nutrition & Health

 

1,957

1,696

15%

Intersegment transfers

 

490

470

4%

Sales including transfers

 

6,565

6,410

2%

Income from operations before depreciation and amortization and special items

 

1,214

1,128

8%

Income from operations before depreciation and amortization (EBITDA)

 

1,189

1,107

7%

EBITDA margin

%

19.6

18.6

Depreciation and amortizationa

 

545

392

39%

Income from operations (EBIT)

 

644

715

(10%)

Special items

 

(149)

(21)

.

EBIT before special items

 

793

736

8%

Return on capital employed (ROCE)

%

10.0

11.8

Assets

 

6,399

6,230

3%

Investments including acquisitionsb

 

595

298

100%

Research and development expenses

 

161

152

6%

The sales increase was mainly attributable to significantly higher volumes in the Nutrition & Health division, especially of citral-based products from our plants in Ludwigshafen, Germany, and Kuantan, Malaysia. This more than offset lower volumes in the Care Chemicals division.

Consistently positive currency effects in both divisions also lifted sales slightly.

By contrast, sales were weighed down by slightly lower prices in both divisions. In the Care Chemicals division, price levels declined in the oleo surfactants and alcohols business in particular. In the Nutrition & Health division, the animal nutrition business saw the biggest decline in prices.

Care Chemicals – Sales by region

Location of customer

Nutrition & Care – Care Chemicals – Sales by region (pie chart)
Nutrition & Health – Sales by region

Location of customer

Nutrition & Care – Nutrition & Health – Sales by region (pie chart)

We improved our income from operations (EBIT) before special items slightly by €57 million year on year to €793 million thanks to a significantly higher contribution from the Care Chemicals division. The increase in EBIT before special items in the Care Chemicals division was largely driven by higher margins, especially in the oleo surfactants and alcohols business and in the home care, industrial and institutional cleaning and industrial formulators business, and one-off contractual income in the personal care solutions business.

EBIT before special items in the Nutrition & Health division decreased considerably compared with 2018. This was mainly attributable to higher fixed costs. In 2018, fixed costs were partly offset by insurance refunds for production outages. Higher margins due to improved product availability in 2019 had an offsetting effect.

EBIT declined by €71 million year on year to €644 million. This included impairments in connection with the optimization of production sites within the Nutrition & Health division.

We produce citral, citronellol and menthol at our new aroma ingredients complex in Kuantan, Malaysia. We entered the market for natural flavors and fragrance ingredients with the acquisition of Isobionics, an innovation leader in biotechnology, and through a cooperation agreement with Conagen, a leader in biotechnology research.