Issue 22/2016 - 【Chemical giants third quarter results at a glance】

【List of chemical giants' third quarter results】

Editor's note: In 2016, the global economic situation is still not optimistic, chemical companies are struggling under the severe situation, under the influence of positive factors such as cost reduction measures and low crude oil prices, the sales revenue and profitability of most multinational chemical companies in the first three quarters have generally begun to improve
.
However, weak market demand due to sluggish economic growth, declining production margins and unplanned shutdowns of plants still make full-year expectations cautiously optimistic
.
This magazine lists the third-quarter results of some of the world's chemical giants and their expectations for future company development
.

Sales fell by 20 percent to €
14 billion during the statistical period due to the divestiture of the gas trading and storage business.
EBIT before special items declined by €87 million to €1.
5 billion, mainly due to a weaker
contribution from the Oil & Gas segment and other business areas.
Net income fell from €1.
2 billion to €888 million
.
BASF expects logistics and supply bottlenecks caused by the fire at the North Port of Ludwigshafen to have a negative impact on earnings for the fiscal year, but does not change the BASF Group's full-year outlook
for 2016.

Third-quarter sales of $12.
5 billion, up 4 percent from the same period last year, were up
in all segments except functional materials and chemicals.
Operating earnings before taxes, depreciation and amortization (EBITDA) increased 5% year-over-year to $2.
5 billion.

Excluding the impact of divestitures and acquisitions, consumer-driven demand drove a 6%
increase in sales in the third quarter.
Andrew N.
Liveris, Chairman and CEO of Dow Chemical, said, "Going forward, our team will continue to focus relentlessly on our priorities – achieving operational and financial initiatives through the implementation of sound margin and volume management, self-help and cost savings; Accelerate revenue growth and value creation by continuing to integrate Dow Corning; At the same time, the DowDuPont merger transaction
was successfully completed.
"

Affected by the decline in raw material prices, the prices of Evonik's products were further reduced
during the statistical period.
Group sales fell by 6% to EUR 3,164 million
.
Adjusted EBITDA decreased by 11 percent year-on-year to EUR 578 million
.
Adjusted EBITDA margin of 18.
3 percent
.
Adjusted earnings before interest and taxes (EBIT) declined by 16 percent to EUR 396 million
.
Adjusted net income declined by 17% to EUR 247 million
.
Net income rose by 19 percent to EUR 223 million
, thanks to reduced one-off effects.
In addition, the company maintained its expectations and expects full-year 2016 sales to decline
slightly compared to the previous year (EUR 13.
5 billion).
At the same time, the company confirmed its full-year adjusted EBITDA forecast for the first half of the year: adjusted EBITDA in 2016 is expected to reach a high level
of 2 billion ~ 2.
2 billion euros.

Adjusted EBITDA rose significantly by 21.
9 percent year-on-year to EUR 574 million
in the third quarter.
Covestro Group's total core business volumes (in kilometric tons) increased by 9.
1 percent
year-on-year.
Chief Executive Patrick Thomas said, "Adjusted EBITDA and free operating cash flow remain at fairly strong levels, so we are once again slightly raising our full-year 2016 growth forecast
.
"The company's core volume is expected to maintain mid- to high-single-digit percentage growth, free operating cash flow expectations are revised above last year's level (previously expected to be flat from last year), and return on capital employed (ROCE) is revised to significantly higher than last year's level (previously expected to be higher than last year's level).

EBITDA amounted to €257 million in the third quarter of 2016, up 9.
4 percent
from €235 million in the same quarter of the previous year.
The EBITDA margin increased from 12.
0% to 13.
4%
compared to the same period last year.
Net profit increased by 51.
2%
to €62 million from €41 million in the prior-year period.
Sales in the quarter fluctuated slightly by 1.
6 percent to EUR 1.
92 billion compared to EUR
1.
95 billion in the same period in 2015.
Higher volumes in all segments compensated for lower selling prices due to raw
material prices.
LANXESS has once again raised its Group's revenue forecast for 2016 and now expects its annual EBITDA to be between
960 million ~ 1 billion euros.
Previously, the company's revenue was expected to be 930 million ~ 970 million euros
.

During the quarter, WACKER's EBITDA rose by 14 percent
to €300.
9 million.
The EBITDA margin was 22.
4 percent, and the good cost level was the reason why EBITDA was significantly higher than the
same period last year.
EBIT amounted to EUR 115.
2 million in the same period, down 8 percent
year-on-year.
Net income for the reporting period amounted to €67.
5 million (Q3 2015: €58.
2 million) and earnings per share amounted to €1.
29 (Q3 2015: €1.
21).

In addition, the company's forecast for the full year 2016 remains unchanged
.

In local currency, sales in the third quarter of 2016 increased by 2 % year-on-year to CHF
1,400 million.
Sales volumes increased by 3%
compared to the same period last year.
EBITDA increased to CHF 208 million from CHF 207 million in the prior-year period
.
Clariant expects growth in local currency, improved operating cash flow and EBITDA margin
before exceptions.
Companies need to increase the EBITDA rate excluding special items to the range of 16%~19%, so that the return on investment (ROIC) is higher than the industry average
.

EBIT rose by 1 percent to EUR 442 million in the third quarter, while return on sales increased to 12.
3 percent (2015: 11.
6 percent).

Overall sales volumes were flat due to unfavorable currency effects and prices, with sales falling by 4 percent to EUR 3.
6 billion
.
ROI was 15.
2% (13% in the same period of 2015).

In the future, as the market environment is still uncertain, the markets of some countries and regions are still full of challenges, and deflationary pressures and unfavorable factors caused by exchange rates will continue
.
Therefore, the company will continue to follow the financial orientation
of 2016~2018.

PPG's net sales for the period were $3.
8 billion, up nearly 2%
year-over-year.
Total sales climbed 1.
6%
year-on-year.
Net loss from continuing operations for the same period was $201 million, and adjusted net income from continuing operations was $415 million
.
Looking ahead to the fourth quarter, the company believes global demand is still only slightly up, and year-over-year earnings growth is expected to be at the same or slightly higher
pace than in the third quarter.
PPG plans to spend $650 million in cash in the fourth quarter to meet its profitability-focused cash deployment goals
.

Adjusted earnings per share were $1.
83 per share and adjusted earnings per share were $1.
67 for the third quarter of 2016
.
Celanese delivered $304 million in operating cash flow and $237 million in free cash flow
during the quarter.
Mark Rohr, chairman and chief executive officer, said he did not expect significant changes
in the company's operating environment.
Line utilization in the acetyl chain is at an all-time low, especially in China, and growth rates in Europe and North America are not high
.
The company will continue to focus on business areas and productivity initiatives to create value in the current poor macroeconomic environment and aim to achieve an 8~10 percentage point
increase in adjusted earnings per share.

Sales revenue for the third quarter of 2016 was $2,287 million and operating income excluding non-core items was $416 million
.
Sales revenue declined
in the quarter due to lower selling prices and lower volumes in the Fibre business, which offset higher volumes in other businesses.
Higher volumes in the Specialty Materials business could not offset the negative impact of lower volumes in other businesses, resulting in an overall decline
in operating income.
Mark Costa, Eastman's chairman and chief executive officer, said its specialty chemicals strategy remains steady in
a challenging global business environment.
This is driven by Eastman's strong growth in high-value innovative products and proven cost reduction initiatives
.
On this basis, the company's adjusted earnings per share for the full year of 2016 are expected to increase to between
6.
70~6.
80 US dollars.