Specialty Chemicals (reported as discontinued operations)

Full-year:

  • Revenue up 4% (up 5% excluding currency impact), mainly due to positive volume and price/mix effects, partly offset by adverse currencies
  • Volumes up 3%, with positive developments in all business units and regions, for particularly Europe, Asia and Latin America
  • EBIT up 10%, with higher volumes and cost control more than compensating adverse currencies and raw material price inflation
  • ROS at 13.8% (2016: 13.2%); ROI at 19.1% (2016: 17.9%)

Q4:

  • Revenue up 5% (up 9% excluding currency impact) due to positive volume and price/mix effects more than offsetting adverse currencies
  • Volumes up 5%, with strong development in all regions and business units
  • EBIT up 40% due to increased volumes, price/mix developments and cost control, despite adverse currencies
  • ROS at 13.4% (2016: 10.1%)

Growing with our customers (Photo)

Growing with our customers
During 2017, Specialty Chemicals announced or completed a further 14 capacity expansions to support customer growth. These include investments in Brazil, China (pictured), Denmark, Germany, the Netherlands, Sweden and the US, as well as a joint arrangement with Atul to produce monochloroacetic acid in India.

Full-year:

Revenue was up 4% (up 5% excluding currency impact), due to positive volume developments and price/mix effects, partly offset by adverse currencies. Volumes were up in all business units and all regions. Europe, Asia and Latin America showed particularly strong growth during the whole year, while North America suffered most from supply chain disruptions such as Hurricane Harvey.

EBIT was up 10%, with higher volumes and cost control more than compensating for inflation and raw material price increases not yet fully passed on in the first part of the year.

Q4:

Revenue was up 5% (up 9% excluding currency impact) due to positive volume developments and price/mix effects, partly offset by adverse currencies. Volumes were up in all regions and business units. In Europe, the business benefited from good demand and strong caustic pricing, while Asia continued a strong year and Latin America ended with a very strong quarter. Positive price/mix reflects the successful pass through of raw material price inflation.

EBIT was up 40%, with favorable volumes, price/mix developments and cost control improving the result significantly versus last year.

Revenue

Fourth quarter

 

January-December

2016

2017

∆%

in € millions

2016

2017

∆%

*

ROS% = EBIT/Revenue. ROI (in %) = 12 months EBIT/12 months average invested capital

413

443

7

Functional Chemicals

1,718

1,822

6

296

336

14

Industrial Chemicals

1,202

1,274

6

244

247

1

Surface Chemistry

1,030

1,065

3

238

225

(5)

Pulp and Performance Chemicals

921

921

(22)

(23)

 

Other/intragroup eliminations

(88)

(97)

 

1,169

1,228

5

Total

4,783

4,985

4

 

 

 

 

 

 

 

118

165

40

EBIT

629

689

10

118

165

40

Operating income

629

689

10

10.1

13.4

 

ROS% *

13.2

13.8

 

 

 

 

 

 

 

 

 

 

 

Average invested capital

3,507

3,598

 

 

 

 

ROI (in %) *

17.9

19.1

 

 

 

 

 

 

 

 

128

122

 

Capital expenditures

356

363

 

 

 

 

Number of employees

9,000

9,000

 

Revenue development 2017

Specialty Chemicals – Revenue development 2017 (bar chart)Specialty Chemicals – Revenue development 2017 (bar chart)

Revenue development Q4 2017

Specialty Chemicals – Revenue development Q4 2017 (bar chart)Specialty Chemicals – Revenue development Q4 2017 (bar chart)

Functional Chemicals

Revenue was up 6%, mainly due to strong volume growth. Volumes were up 5% despite supply chain disruptions during the year, including Hurricane Harvey. Volumes in Asia were impacted by industry-wide inspections in China driven by enforcement of environmental regulations. This was more than compensated by strong underlying demand, mainly driven by the ethylene value chain and the contribution of our new organic peroxides facility in China.

In Q4, revenue was up 7%, mainly due to strong volumes and positive price/mix effects, partly offset by adverse currency effects. Volumes were up 7% and higher in all regions, especially Europe.

Industrial Chemicals

Revenue was up 6%, mainly due to positive price/mix effects throughout the business. Volume was up 1%, with strong underlying demand impacted by supply chain disruptions in the Rotterdam cluster in the first half of the year. The global supply and demand balance for caustic continued to tighten, leading to strengthening of caustic prices.

In Q4, revenue was up 14% due to strong price/mix effects and increased volumes. Demand in Europe and Asia continued to be strong.

Surface Chemistry

Revenue was up 3%, driven by higher volumes and positive price/mix effects. Volumes were adversely impacted by industry-wide supply chain disruptions as a result of Hurricane Harvey. The Americas delivered strong growth as a result of the continued recovery of oil related segments.

In Q4, revenue was up 1% due to strong price/mix effects and higher volumes, mostly offset by adverse currencies.

Pulp and Performance Chemicals

Revenue for the year was flat. Positive volume developments, driven by strong demand for bleaching chemicals in Brazil and performance products, were partly offset by the planned ending of manufacturing agreements related to the divestment of the Paper Chemicals business in 2015.

In Q4, revenue was down 5%, mainly due to adverse currencies. Volume development was positive due to continued strong demand for bleaching chemicals in Brazil and performance products.