Note 3: Operating income

  • Decorative Paints’ results include the gain of €198 million on the divestment of Building Adhesives. Margins improved due to margin management and lower raw material prices, both for the full year and the fourth quarter. Performance improvement programs and restructuring measures have lowered the cost base. Restructuring charges were below the previous year
  • In Performance Coatings, margins were stable despite higher restructuring costs
  • Specialty Chemicals’ results include a non-cash impairment charge of €139 million on a business held for sale. Focus on cost control and margin management was maintained in all businesses, with a comprehensive performance improvement program being implemented at Functional Chemicals

Full-year average raw material costs were down, having stabilized during the year.

Performance improvement program

The performance improvement program announced in October 2011 has exceeded targets and achieved €545 million in EBITDA for the period 2011 through 2013. This successfully completes the performance improvement program a year ahead of schedule. Further efficiency and cost reduction measures have been identified as part of continuous improvement initiatives which are integrated in the regular business activities.

Full-year restructuring costs were €348 million (2012: €292 million) with €204 million in Q4 (2012: €115 million).

Costs per category

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

2013

In € millions

 

Employee benefits

 

Amor-
tization

 

Depre-
ciation

 

Inci-
dentals

 

Employee benefits

 

Amor-
tization

 

Depre-
ciation

 

Inci-
dentals

Cost of sales

 

(991)

 

(6)

 

(329)

 

(20)

 

(998)

 

(7)

 

(343)

 

Impairment

 

 

 

 

(2,106)

 

 

 

 

(149)

Selling expenses

 

(1,090)

 

(118)

 

(78)

 

 

(943)

 

(94)

 

(75)

 

General and administrative expenses

 

(722)

 

(30)

 

(38)

 

 

(772)

 

(36)

 

(36)

 

(15)

Research and development expenses

 

(244)

 

(8)

 

(18)

 

 

(237)

 

(7)

 

(18)

 

Other operating income/(expenses)

 

29

 

 

 

(44)

 

 

 

 

225

Subtotal

 

(3,018)

 

(162)

 

(463)

 

(2,170)

 

(2,950)

 

(144)

 

(472)

 

61

Discontinued operations

 

 

(26)

 

(40)

 

 

 

 

 

Total

 

(3,018)

 

(188)

 

(503)

 

(2,170)

 

(2,950)

 

(144)

 

(472)

 

61

Revenue and cost by nature

 

 

 

 

 

In € millions

 

2012

 

2013

Revenue

 

15,390

 

14,590

Variable selling cost

 

(709)

 

(714)

Materials and energy

 

(7,552)

 

(6,959)

Amortization and depreciation

 

(625)

 

(616)

Employee benefits

 

(3,018)

 

(2,950)

Impairment

 

(2,106)

 

(139)

Other costs

 

(2,578)

 

(2,254)

Operating income

 

(1,198)

 

958