Performance Chemicals

Performance Chemicals
  Q1 2013 Q1 2014 Change
  € million Margin% € million Margin% %
Sales 520   550   5.8
EBITDA pre exceptionals 51 9.8 68 12.4 33.3
EBITDA 50 9.6 58 10.5 16.0
Operating result (EBIT) pre exceptionals 30 5.8 48 8.7 60.0
Operating result (EBIT) 29 5.6 38 6.9 31.0
Cash outflows for capital expenditures 19   10   (47.4)
Depreciation and amortization 21   20   (4.8)
Employees as of March 31
(previous year: as of Dec. 31)
5,837   5,784   (0.9)

Sales in our Performance Chemicals segment rose by 5.8% in the first quarter of 2014, to €550 million. Due especially to the mild winter in Europe and the resulting good demand from the construction industry, volumes increased by 8.1% from the prior-year period. In addition, selling prices also edged up by 0.2%. The negative currency effect of 3.3% was only partially offset by the 0.8% positive portfolio contribution from the previous year’s acquisitions of PCTS Specialty Chemicals Pte. Ltd., Singapore, and the phosphorus chemicals business of Thermphos France S.A.R.L., Epierre, France.

All of the segment’s business units recorded volume increases. Selling prices, too, mostly exceeded the levels of the prior-year period. The acquisitions made in Singapore and France in 2013 produced a positive portfolio contribution in the Material Protection Products and Functional Chemicals business units, though this contribution was more than offset by negative currency effects at the segment level. The segment posted higher sales in the Asia-Pacific, EMEA (excluding Germany) and Germany regions, while business was down in North and Latin America due to exchange rates.

EBITDA pre exceptionals in the Performance Chemicals segment advanced by €17 million from the prior-year level of €51 million, to €68 million. This increase resulted particularly from the clearly positive volume development, which in turn was attributable to good demand from the construction industry and from the leather chemicals business following the commissioning of the CO2 concentration unit in South Africa. This development was supported by a slight positive price effect and minor portfolio and currency effects. However, earnings were held back by higher production costs. The segment’s EBITDA margin improved from 9.8% to 12.4%.

Exceptional items in the segment came to €10 million in the reporting period and fully impacted EBITDA. These charges were mainly taken in connection with the Advance program. Exceptional items in the prior-year period amounted to €1 million, which also fully impacted EBITDA.