Solutions & Specialties

Second Quarter of 2022

Sales in the Solutions & Specialties segment were up 11.0% to €2,165 million in the second quarter of 2022 (previous year: €1,951 million). A rise in the selling price level and exchange rate movements, impacted positively on sales, increasing them by 11.8% and 6.5% respectively. This was offset by a decline in volumes sold, which had the effect of decreasing sales by 7.3%. The drivers of this development include, e.g., the lockdown in Shanghai (China) in the second quarter of 2022 and the Russian war against Ukraine, which led, among other things, to logistical bottlenecks, especially in the EMLA and APAC regions.

In the EMLA region, sales were up 10.2% to €851 million (previous year: €772 million). A rise in the selling price level increased sales significantly. A decline in volumes sold, in contrast, resulted in a considerable decrease in sales. On aggregate, exchange rate changes did not have any notable effect on sales. Sales in the NA region were up 43.6% to €563 million (previous year: €392 million). Changes in exchange rates, higher average selling prices, and growth in the volumes sold each had the effect of driving up sales considerably. In the APAC region, sales were down 4.6% to €751 million (previous year: €787 million). The key driver here was a decline in volumes sold, which led to significantly lower sales. In contrast, exchange rate movements contributed considerably to higher sales, while a higher selling price level had a slightly positive impact on sales.

In the second quarter of 2022, the Solutions & Specialties segment’s EBITDA was down 10.1% on the prior-year quarter, declining to €213 million (previous year: €237 million). This was mainly caused by a decline in volumes sold and lower margins, with higher selling prices partially offsetting increased raw material and energy prices. However, lower provisions for short-term variable compensation and exchange rate movements both had a positive impact on earnings.

EBIT fell 18.2% to €139 million (previous year: €170 million).

Free operating cash flow was down, amounting to €–139 million (previous year: €29 million), largely due to higher funds tied up in working capital.

First Half of 2022

In the first half of 2022, sales in the Solutions & Specialties segment rose by 26.1% to €4,387 million (previous year: €3,480 million). A rise in average selling prices had a positive effect, increasing sales by 15.2%. The portfolio effect arising from the acquisition of the Resins & Functional Materials (RFM) business from Koninklijke DSM N.V., Heerlen (Netherlands), in the second quarter of 2021 as well as exchange rate movements drove up sales by 9.0% and 6.3% respectively. A decline in volumes sold had a decreasing effect on sales amounting to 4.4%.

EBITDA in the Solutions & Specialties segment increased 4.5% over the prior-year period in the first half of 2022, growing to €437 million in the first half of 2022 (previous year: €418 million). This is mainly attributable to a decline in provisions for short-term variable compensation, exchange rate movements, and the RFM acquisition. It was set against a drop in volumes sold, which had a negative effect on earnings. Lower margins reduced earnings, although a rise in the selling price level partially offset higher raw material and energy prices.

EBIT declined 5.5% to €291 million (previous year: €308 million).

Free operating cash flow amounted to €–285 million (previous year: €40 million), driven primarily by a year-on-year increase in funds tied up in working capital. Increased cash outflows for additions to property, plant, equipment and intangible assets also had a negative effect.