Performance Polymers

Performance Polymers
    
  Q2 2013 Q2 2014 Change H1 2013 H1 2014 Change
  € million Margin
 %
€ million Margin
 %
% € million Margin
 %
€ million Margin
 %
%
           
Sales 1,178   1,036   (12.1) 2,312   2,099   (9.2)
EBITDA pre exceptionals 94 8.0 122 11.8 29.8 206 8.9 239 11.4 16.0
EBITDA 94 8.0 119 11.5 26.6 206 8.9 227 10.8 10.2
Operating result (EBIT) pre exceptionals 29 2.5 72 6.9 > 100 81 3.5 133 6.3 64.2
Operating result (EBIT) 29 2.5 68 6.6 > 100 81 3.5 120 5.7 48.1
Cash outflows for capital expenditures 85   112   31.8 143   188   31.5
Depreciation and amortization 65   51   (21.5) 125   107   (14.4)
Employees as of June 30
(previous year: as of Dec. 31)
5,379   5,239   (2.6) 5,379   5,239   (2.6)
   
   

In the second quarter too, business development in our Performance Polymers segment remained well below the level of the prior-year period. Sales decreased by 12.1% year on year, to €1,036 million. Development was significantly impacted by a negative price effect of 7.5% that resulted from a persistently difficult competitive situation and lower purchase prices for raw materials. Volumes were also down by a modest 1.3% compared with the prior-year period. This downturn was intensified by the unfavorable currency effect of 2.7% and a minor negative portfolio effect from the divestiture of the company’s interest in Perlon-Monofil GmbH, Dormagen, Germany.

All business units in this segment were impacted by declining market prices, whereas volumes developed differently. The Keltan Elastomers business unit and particularly the High Performance Materials business unit registered an increase in volumes. However, volumes developed negatively in all other business units in the segment. The decline in the Butyl Rubber business unit resulted partly from the strike in Belgium. Shifts in exchange rates had an adverse effect in all of the segment’s business units. Business receded in all regions.

EBITDA pre exceptionals in the Performance Polymers segment rose by €28 million to €122 million. A positive impact on earnings resulted especially from considerably lower manufacturing costs that were attributable in part to lower idle capacity costs. Lower selling prices resulting from a decline in purchase prices for raw materials had the opposite effect. The persistently difficult competitive situation for synthetic rubber also held back earnings. In addition, the development of volumes held back earnings at the segment level. Currency and portfolio effects did not have a significant impact. The EBITDA margin pre exceptionals came in at 11.8% for the second quarter, against 8.0% a year ago.

Segment sales in the first half of 2014 fell back by a significant 9.2% to €2,099 million. Price adjustments made in response to the market environment and to lower raw material costs resulted in a sales decline of 9.6%. Volumes were up 3.2% on the prior-year period. Unfavorable currency effects of 2.5% were compounded by a slightly negative portfolio effect of 0.3%.

The segment achieved EBITDA pre exceptionals of €239 million in the first half of 2014, compared with €206 million in the same period a year ago. The EBITDA margin pre exceptionals came in at 11.4% for the half-year, against 8.9% a year ago.

Exceptional charges for the segment amounted to €4 million in the second quarter and €13 million in the first half, of which €3 million and €12 million, respectively, impacted EBITDA. They mainly resulted from measures within the Advance program.