Solutions & Specialties
| Solutions & Specialties key data | ||||||
|---|---|---|---|---|---|---|
| 2nd quarter 2023 | 2nd quarter 2024 | Change | 1st half 2023 |
1st half 2024 |
Change | |
| Sales (external) | €1,872 million | €1,810 million | –3.3% | €3,755 million | €3,577 million | –4.7% |
| Intersegment sales | €7 million | €6 million | –14.3% | €15 million | €13 million | –13.3% |
| Sales (total) | €1,879 million | €1,816 million | –3.4% | €3,770 million | €3,590 million | –4.8% |
| Change in sales (external) | ||||||
| Volume | –4.7% | 4.8% | –10.1% | 5.3% | ||
| Price | –6.6% | –7.7% | –3.5% | –9.0% | ||
| Currency | –2.2% | –0.4% | –0.8% | –1.0% | ||
| Sales by region (external) | ||||||
| EMLA | €736 million | €679 million | –7.7% | €1,491 million | €1,389 million | –6.8% |
| NA | €487 million | €457 million | –6.2% | €972 million | €901 million | –7.3% |
| APAC | €649 million | €674 million | 3.9% | €1,292 million | €1,287 million | –0.4% |
| EBITDA1 | €221 million | €174 million | –21.3% | €386 million | €382 million | –1.0% |
| EBIT1 | €149 million | €75 million | –49.7% | €212 million | €210 million | –0.9% |
| Cash flows from operating activities | €205 million | €88 million | –57.1% | €200 million | €141 million | –29.5% |
| Cash outflows for additions to property, plant, equipment and intangible assets | €55 million | €52 million | –5.5% | €98 million | €83 million | –15.3% |
| Free operating cash flow | €150 million | €36 million | –76.0% | €102 million | €58 million | –43.1% |
1 EBITDA and EBIT include the effect on earnings of intersegment sales.
Second Quarter of 2024
Sales in the Solutions & Specialties segment were down 3.3% to €1,810 million in the second quarter of 2024 (previous year: €1,872 million). Contributing factors were above all a demand induced decline in selling price levels, combined with lower raw material prices, which were passed on to customers; these factors had a diminishing effect on sales of 7.7%. An increase in volumes sold, on the other hand, had a positive impact on sales of 4.8%. At the same time, exchange rate movements had a negative effect on sales of 0.4%.
In the EMLA region, sales fell by 7.7% to €679 million (previous year: €736 million). In particular, a drop in the selling price level had a significant adverse impact on sales. In contrast, the expansion of volumes sold had a slight positive effect on sales. However, exchange rate movements had a neutral impact on sales. Sales in the NA region went down by 6.2% to €457 million (previous year: €487 million), mainly because of lower average selling prices, which had a significant adverse impact on sales. A drop in volumes sold had an additional, slightly negative effect on sales. On the other hand, exchange rate movements drove sales slightly upward. In the APAC region, sales increased by 3.9% to €674 million (previous year: €649 million), mainly because of a rise in volumes sold, and this boosted sales significantly. In contrast, a decline in the selling price level had a considerable negative effect on sales, while the impact of exchange rate movements was slightly negative.
In the second quarter of 2024, the Solutions & Specialties segment’s EBITDA was down 21.3% on the prior-year quarter, declining to €174 million (previous year: €221 million). The comparative prior-year quarter had in this context been affected by a non-recurring positive effect from the sale of the additive manufacturing business, which had increased prior-year earnings by €35 million. In connection with the "STRONG" transformation program, expenses in the low double-digit million euro range were additionally incurred for the implementation of the program in the second quarter of 2024. Another negative factor weighing on earnings was the decline in margins, although lower raw material and energy prices partially offset the demand-induced reduction in selling prices. The rise in volumes sold, in contrast, had the effect of boosting earnings, while changes in exchange rates had no notable impact on EBITDA.
EBIT dropped by 49.7% to €75 million (previous year: €149 million). This included impairment losses of €21 million on property, plant and equipment, primarily plant installations and machinery, as a result of the planned closure of the production site in Augusta, Georgia (United States).
Free operating cash flow fell to €36 million (previous year: €150 million), largely driven by higher funds tied up in working capital and a decline in EBITDA.
First Half of 2024
Sales in the Solutions & Specialties segment were down 4.7% to €3,577 million in the first half of 2024 (previous year: €3,755 million). A demand induced reduction in average selling prices combined with a decline in raw material prices, which was passed on to customers, had a diminishing effect on sales of 9.0%. An increase in volumes sold, on the other hand, had a positive impact on sales of 5.3%. Exchange rate movements also had a decreasing effect of 1.0% on sales.
EBITDA in the Solutions & Specialties segment declined by 1.0% in the first half of 2024, declining to €382 million (previous year: €386 million). This decrease was attributable in particular to the above-mentioned non-recurring effect from the sale of the additive manufacturing business in the previous year as well as to expenses for implementing the transformation program “STRONG.” Furthermore, lower margins and adverse exchange rate movements had a negative impact on EBITDA. The rise in volumes sold, on the other hand, had a positive effect on EBITDA and almost completely offset the above-mentioned negative factors.
EBIT dropped by 0.9% to €210 million (previous year: €212 million). This included impairment losses of €21 million on property, plant and equipment, primarily plant installations and machinery, as a result of the planned closure of the production site in Augusta, Georgia (United States).
Free operating cash flow fell to €58 million (previous year: €102 million), largely driven by higher funds tied up in working capital. This was set against a decrease in cash outflows for additions to property, plant, equipment and intangible assets.