Report on Economic Position – Performance of the Segments

Solutions & Specialties

Sales in the Solutions & Specialties segment were up 13.3% to €8,558 million in fiscal 2022 (previous year: €7,554 million). A rise in the selling price level had an increasing effect on sales amounting to 9.4%. At the same time, exchange rate movements and the portfolio effect resulting from the acquisition of the Resins & Functional Materials (RFM) business from Koninklijke DSM N.V., Heerlen (Netherlands), in the year 2021 both had a positive impact, increasing sales by 6.0% and 4.2% respectively. In contrast, a decline in volumes sold had a decreasing effect on sales amounting to 6.3%.

Sales in the EMLA region were up by 12.8% to €3,198 million (previous year: €2,835 million). This was largely driven by the increase in average selling prices and the aforementioned portfolio effect, both factors that increased sales significantly. This was set against a drop in volumes sold, which had a considerable negative effect on sales. Exchange rate movements had no notable effect on sales overall. The NA region grew sales by 34.3% to €2,140 million (previous year: €1,594 million). Exchange rate movements and the higher selling price level both drove up sales considerably. At the same time, the aforementioned portfolio effect had a slight positive effect on sales, while the change in volumes sold remained stable compared with the prior-year period. Sales in the APAC region were up 3.0% to €3,220 million (previous year: €3,125 million). This is primarily due to exchange rate movements, which drove up sales significantly, and the aforementioned portfolio effect, which had a slight impact. In contrast, a drop in total volumes sold had a significant negative effect on sales. Average selling prices remained stable compared with the prior-year period.

Solutions & Specialties
Quarterly sales

€ million

Solutions & Specialties
Quarterly EBITDA

€ million

In fiscal 2022, EBITDA in the Solutions & Specialties segment was up 9.9% on the prior-year period, rising to €825 million (previous year: €751 million). Lower provisions for short-term variable compensation, exchange rate movements, and the share of business development subsidies received in China attributable to the segment were factors contributing to the increase in EBITDA. In connection with the acquisition of RFM, lower nonrecurring expenses and higher positive synergy effects than in the previous year, thanks in particular to an efficiency boost in sales, administration, and procurement activities, both had a positive effect on earnings in the mid-double-digit million euro range. A rise in raw material and energy prices was largely offset by higher selling prices, and this led to slightly lower margins. A decrease in total volumes sold additionally reduced earnings.

EBIT declined 8.3% to €461 million (previous year: €503 million). Impairment losses of €76 million recognized primarily as a result of impairment tests weighed on the EBIT of Solutions & Specialties in the year under review.

Free operating cash flow increased by 34.5% year over year to €195 million (previous year: €145 million). This was driven in particular by the rise in EBITDA, while a larger amount of cash was tied up in working capital.