Specialty Chemicals (reported as discontinued operations)

Q3 2018:

  • Revenue up 6%, and up 9% in constant currencies, mainly due to positive price/mix
  • Adjusted operating income 7% lower at €145 million (2017: €156 million); strong pricing and productivity improvements were more than offset by environmental and other one-off items (totaling €35 million) and adverse currencies
  • ROS at 11.3% (2017: 12.9%): ROI at 16.4% (2017: 15.6%)
Investing to grow with our customers (photo)

Investing to grow with our customers
AkzoNobel Specialty Chemicals announced several more investments during the quarter to support the growth of customers. These include an upgrade of the company’s Rotterdam chlor-alkali plant to strengthen development of the local industrial cluster, as well as a second expansion of chloromethanes capacity at Frankfurt to serve customers in end-use markets including pharmaceuticals. In addition, the company broke ground for construction of a €90 million plant at Tianjin, China to produce organic peroxides, essential in the manufacture of a wide range of polymers including PVC and thermoset resins.

Q3 2018:

Revenue was up 6%, and 9% higher in constant currencies, driven by positive price/mix. All business units benefited from higher selling prices, as raw material price increases are being passed through. Industrial Chemicals continued to benefit from strong caustic market prices. Volume growth in Functional Chemicals and Pulp and Performance Chemicals was more than offset by lower volumes in Surface Chemistry.

Adjusted operating income was 7% lower, as strong pricing and productivity improvements were more than offset by adjustments to environmental provisions and other one-off items (totaling €35 million) and adverse currencies.

Revenue

Third quarter

 

January-September

2017

2018

∆%

∆% CC *

in € millions

2017

2018

∆%

∆% CC *

*

Change in constant currencies

437

476

9%

11%

Functional Chemicals

1,379

1,433

4%

9%

319

358

12%

13%

Industrial Chemicals

938

1,043

11%

12%

252

255

1%

6%

Surface Chemistry

818

758

(7%)

226

221

(2%)

5%

Pulp and Performance Chemicals

696

651

(6%)

2%

(25)

(23)

(8%)

 

Other/intragroup eliminations

(74)

(76)

 

 

1,209

1,287

6%

9%

Total

3,757

3,809

1%

7%

Revenue development Q3 2018

Specialty Chemicals – Revenue development Q3 2018 (bar chart)Specialty Chemicals – Revenue development Q3 2018 (bar chart)
Key financial figures

Third quarter

 

January-September

2017 1

2018

∆%

in € millions

2017 1

2018

∆%

1

Represented to present Specialty Chemicals business as discontinued operations

2

2017 figures include allocations from Other activities

156

145

(7%)

Adjusted operating income 2

488

470

(4%)

156

145

(7%)

Operating income 2

506

470

(7%)

12.9

11.3

 

ROS%

13.0

12.3

 

 

 

 

 

 

 

 

 

 

 

Average invested capital

3,667

3,599

 

 

 

 

ROI%

15.6

16.4

 

Functional Chemicals

Revenue in Q3 was up 9%, and 11% higher in constant currencies driven by volume growth and positive price/mix effects. Volumes were up 2%.

Industrial Chemicals

Revenue in Q3 was up 12%, and 13% higher in constant currencies due to strong positive price/mix effects, driven by the continued tight caustic soda market.

Surface Chemistry

Revenue in Q3 was 1% up, and 6% higher in constant currencies with positive price/mix effects partly offset by lower volumes.

Pulp and Performance Chemicals

Revenue in Q3 was down 2%, and up 5% in constant currencies. Volumes were 4% higher, and up in all segments. Demand in Brazil continued to be strong.