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Performance Chemicals

Performance Chemicals
  Q1 2012 Q1 2013 Change
  € million Margin % € million Margin % %
Sales 558   520   (6.8)
EBITDA pre exceptionals 83 14.9 51 9.8 (38.6)
EBITDA 83 14.9 50 9.6 (39.8)
Operating result (EBIT) pre exceptionals 62 11.1 30 5.8 (51.6)
Operating result (EBIT) 62 11.1 29 5.6 (53.2)
Cash outflows for capital expenditures 1) 11   19   72.7
Depreciation and amortization 21   21   0.0
Employees as of March 31 (previous year: as of Dec. 31) 6,031   5,978   (0.9)
1) Intangible assets and property, plant and equipment

Sales in our Performance Chemicals segment decreased by 6.8% to €520 million in the first quarter of 2013. Volumes receded by 5.9%, in part because of weak demand from the construction industry due to the long winter. Selling prices, by contrast, were stable at  0.2% below the prior-year quarter. Sales were also held back by negative currency effects of 1.2%. There was a positive portfolio effect of 0.5% from the previous year’s acquisition of Tire Curing Bladders, LLC in North America.

Volumes in this segment were down against the prior-year quarter. Negative volume effects were recorded in all business units except Functional Chemicals, which expanded its business with phosphorus chemicals. The Leather business unit suffered from a drop in volumes – attributable to continued instability in the supply of CO2 – and also from lower prices. Lower demand from the construction industry for weather-related reasons caused volumes to decline in the Inorganic Pigments business unit, with selling prices at the level of the year-earlier quarter. In the Rhein Chemie business unit, a positive portfolio effect from the acquisition made in the U.S. in the prior-year quarter did not fully offset the negative overall price-volume effect. Segment sales receded in all regions.

EBITDA pre exceptionals amounted to €51 million, which was €32 million below the year-earlier figure of €83 million. The low demand in the construction industry and temporary shutdowns led to a negative volume effect. Higher raw material prices were passed along to the market at the segment level and in nearly all of this segment’s business units. Shifts in exchange rates had no material impact on earnings. The segment’s EBITDA margin decreased from 14.9% to 9.8%.

The exceptional charges of €1 million in segment EBITDA arose from minor efficiency improvement measures at various Group locations.