Business Review
At a glance
- Segment sales growth of 21.2% mainly driven by higher prices
- EBIT before special items considerably lower in both operating divisions
The Materials segment increased sales to third parties by €3,229 million year on year to €18,443 million in 2022, with both operating divisions contributing. Sales in the Monomers division rose by €1,954 million to €9,877 million. In the Performance Materials division, sales were €1,275 million higher at €8,567 million.
|
Materials |
Performance Materials |
Monomers |
|---|---|---|---|
Volumes |
–5.7% |
–2.3% |
–8.7% |
Prices |
21.3% |
14.1% |
28.0% |
Portfolio |
–0.1% |
0.0% |
–0.2% |
Currencies |
5.6% |
5.7% |
5.6% |
Sales |
21.2% |
17.5% |
24.7% |
Sales growth was primarily driven by significantly higher prices as a result of the jump in raw materials prices. The Monomers division raised prices in all business areas, especially in the ammonia value chain. The Performance Materials division mainly raised prices for polyurethane systems and engineering plastics in Europe and North America.
Currency effects, mostly relating to the U.S. dollar and the Chinese renminbi, had a clearly positive impact on sales development in both divisions.
Significantly lower volumes on the back of declining demand over the course of the year had an offsetting effect. In the Monomers division, sales volumes decreased mainly in Europe for methylene diphenyl isocyanate (MDI), propylene oxides and polyols, and polyamide 6.6. Volumes in the Performance Materials division decreased in Asia Pacific and Europe in particular due to weaker demand from the consumer goods industry. Customer demand from the European construction industry also declined.
|
|
2022 |
2021 |
+/– |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sales to third parties |
|
18,443 |
15,214 |
21.2% |
||||||||||
of which Performance Materials |
|
8,567 |
7,292 |
17.5% |
||||||||||
Monomers |
|
9,877 |
7,922 |
24.7% |
||||||||||
Intersegment transfers |
|
1,742 |
1,250 |
39.4% |
||||||||||
Sales including transfers |
|
20,186 |
16,464 |
22.6% |
||||||||||
Income from operations before depreciation, amortization and special items |
|
2,686 |
3,208 |
–16.3% |
||||||||||
Income from operations before depreciation and amortization (EBITDA) |
|
2,660 |
3,162 |
–15.9% |
||||||||||
EBITDA margin |
% |
14.4 |
20.8 |
− |
||||||||||
Depreciation and amortizationa |
|
884 |
817 |
8.2% |
||||||||||
Income from operations (EBIT) |
|
1,776 |
2,345 |
–24.3% |
||||||||||
Special items |
|
–63 |
–73 |
13.3% |
||||||||||
EBIT before special items |
|
1,840 |
2,418 |
–23.9% |
||||||||||
Return on capital employed (ROCE) |
% |
14.9 |
22.8 |
− |
||||||||||
Assets |
|
10,864 |
11,286 |
–3.7% |
||||||||||
Investments including acquisitionsb |
|
880 |
709 |
24.1% |
||||||||||
Research and development expenses |
|
201 |
193 |
4.0% |
||||||||||
|
||||||||||||||
Materials – sales
By division
At €1,840 million, income from operations (EBIT) before special items was €579 million below the 2021 figure. EBIT before special items declined considerably in both operating divisions, especially in the Monomers division due to lower MDI and polyamide 6.6 margins. The decline in earnings in the Performance Materials division was driven by lower volumes and higher fixed costs caused by currency effects, inflation and higher manufacturing costs. This could only be partially offset by higher margins.
EBIT decreased by €569 million to €1,776 million. This included special charges of €66 million, largely from changes to the production network for thermoplastic polyurethanes and the discontinuation of our business activities in Russia.
Divisions |
Europe |
North America |
Asia Pacific |
South America, Africa, Middle East |
Total (million €) |
|---|---|---|---|---|---|
Performance Materials |
37% |
23% |
35% |
5% |
8,567 |
Monomers |
49% |
21% |
25% |
5% |
9,877 |