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Performance Chemicals

Performance Chemicals
  Q1 2011 Q1 2012 Change
  € million Margin % € million Margin % %
Sales 556   558   0.4
EBITDA pre exceptionals 90 16.2 83 14.9 (7.8)
EBITDA 90 16.2 83 14.9 (7.8)
Operating result (EBIT) pre exceptionals 72 12.9 62 11.1 (13.9)
Operating result (EBIT) 72 12.9 62 11.1 (13.9)
Cash outflows for capital expenditures1) 14   11   (21.4)
Depreciation and amortization 18   21   16.7
Employees as of March 31 (previous year: as of Dec. 31) 5,819   5,999   3.1
1) Intangible assets and property, plant and equipment

Sales in the Performance Chemicals segment rose by 0.4% to €558 million in the first quarter, while volumes were down by 7.2%. Selling prices, which rose by 2.9% because of the increase in raw material prices, and a positive portfolio effect that also came to 2.9% offset part of this decline. The latter was attributable to the acquisitions made in the previous year. Additionally, changes in exchange rates had a positive effect of 1.8%. From a regional perspective, North America was the primary growth driver in this segment.

Volumes receded on the segment level from the high level of the prior-year quarter. However, the picture was mixed across the business units. The Ion Exchange Resins business unit raised volumes compared to the same period a year ago and experienced a positive price-volume development overall. This applied to the Rhein Chemie and Material Protection Products business units as well, with the latter additionally registering a positive portfolio effect from the biocide businesses acquired in the prior year. The Inorganic Pigments business unit – despite showing a distinct recovery compared to the fourth quarter of 2011 – posted lower volumes than a year ago. This was attributable to softer demand for pigments, particularly in the European construction industry. The Rubber Chemicals business unit also saw volumes decline. Weaker demand from the electronics industry adversely affected volumes in the Functional Chemicals business unit. The Leather business unit succeeded in keeping volumes at the level of the prior-year quarter despite production being restricted by a shortage of feedstocks.

EBITDA pre exceptionals in the Performance Chemicals segment receded by €7 million from €90 million in the prior-year period to €83 million. Raw material cost increases in the segment’s various business units were passed along to the market in full. Capacity utilization, however, was below the prior-year quarter’s high level, impacting earnings accordingly. The lower utilization rate resulted from the lower demand and production shutdowns. The positive portfolio effects from the acquisitions made in the previous year and favorable currency effects were accretive to earnings. The segment’s EBITDA margin decreased from 16.2% to 14.9%.