Specialty Chemicals – Overview

• Full-year revenue increased 4 percent, primarily due to favorable currencies
• Demand weakened in some segments, with volumes down 1 percent for the year
• Full-year EBITDA down 2 percent to €889 million, due to unfavorable market conditions in Functional Chemicals
• Integration of Boxing Oleochemicals on track
• Divestment of Chemicals Pakistan completed in Q4

Specialty Chemicals made a good start to 2012, but demand started to weaken in the second half of the year, particularly in Europe. Demand was also more volatile. Besides the direct effect on our revenue from construction-related products (performance additives, polysulfides), in polymer catalysts and bleaching chemicals, the weakening demand also resulted in more imbalance in supply/demand, particularly for ethylene amines in Functional Chemicals. Nevertheless, Specialty Chemicals delivered a robust performance in the year on the back of margin management, cost control measures and strong market and technology leadership positions. Surface Chemistry and Pulp and Performance Chemicals delivered strong results, while Industrial Chemicals repeated solid performance. Functional Chemicals was below previous years due to the lagging demand and reduced margins.

Revenue in Q4 was 3 percent higher, mainly due to favorable currencies. However, performance in the last quarter was unfavorably impacted by the general slowdown in demand (especially in Functional Chemicals) and production-related issues at our customers.

Revenue development 2012

Revenue development Q4 2012