USA: The first-quarter results demonstrate a notable upsurge from the fourth quarter, exhibiting the company's persistent commercial prowess in pricing and the benefit of reduced costs for raw materials and energy. Despite challenging global economic conditions caused by above-normal customer inventory destocking, lacklustre demand primarily in consumer durables and building and construction end-markets, and an unfavourable impact from foreign currency exchange rates, the company delivered excellent performance.

The company maintains its confidence in the resilience of its portfolio and the sustainable strong cash flow in the future. The company is making progress in circular economy initiatives, and significant milestones for the platform are expected to be achieved throughout the year.

The decrease in sales revenue by 11% can be attributed to various factors. Firstly, the sales volume/mix was 9% lower, which had a significant impact. Secondly, the divested business had an unfavourable impact of 6%, further contributing to the decline. Lastly, there was a 2% unfavourable impact from foreign currency. Despite these factors, there was some relief as the higher selling prices partially offset the decline by 6%.

Most product lines saw a lower sales volume/mix due to weak primary demand and the continuous customer inventory destocking in numerous end markets. The end markets served include consumer durables, building and construction, personal care, and water treatment. Although there was a weakness in these markets, the growth in the automotive industry, particularly for advanced interlayers and performance films, partially offset it. The selling prices increased in Fibers and Advanced Materials, as these sectors had solid price gains in 2022 to recover from significantly higher raw material, energy, and distribution costs.

In Q2 2021, EBIT experienced a decrease due to various factors, including lower sales volume/mix, increased pension expense, adverse impacts from foreign currency, and continued investment in growth. Nonetheless, there were some positive factors that partially offset the decline, such as increased selling prices which exceeded higher variable costs and lower manufacturing expenses. Also, in the advanced materials sector, sales revenue remained relatively stable with a 10% rise in selling prices mostly compensated by a 6% reduction in sales volume/mix and a 3% adverse impact from foreign currency. Looking ahead to 2022, the selling prices for advanced interlayers and specialty plastics have significantly increased due to inflation.

However, the sales volume/mix for specialty plastics remained low owing to weak demand and customer inventory destocking in consumer durables and consumables markets. The good news is that the lower sales volume/mix was partially compensated by improved automotive demand and higher sales of premium products like paint protection film and premium interlayers for electric vehicles.

Thanks to the lower manufacturing costs and higher selling prices, the EBIT increased even with the higher variable costs. Nonetheless, the unfavourable impact from foreign currency and lower sales volume/mix partially offset these gains.

The sales revenue of Additives & Functional Products segment witnessed a 13% decrease. The decrease in revenue was mainly caused by a 15% decrease in sales volume/mix. However, the impact of this reduction was partially mitigated by a 4% increase in selling prices.

The decreased sales volume/mix was mainly due to weak demand, along with customer inventory destocking in the building and construction, water treatment, and personal care end markets. However, the higher selling prices for functional amines and care additives partially made up for the loss. This was a result of significant levels of inflation in 2022.

Furthermore, the EBIT was adversely affected by the lower sales volume/mix. The higher selling prices offset the effect of higher variable costs and slightly lower manufacturing costs.

In the chemical intermediates segment, the sales revenue has experienced an 18% decrease, primarily resulting from lower sales volume/mix, which decreased by 12%, and lower selling prices, which decreased by 5%. The decrease in sales volume/mix in plasticizers and olefins can be attributed to weak end-market demand, particularly in building and construction, consumer durables, and industrial sectors. The selling prices have reduced due to lower raw material prices. Overall, the earnings before interest and taxes (EBIT) have decreased due to lower sales volume/mix and lower spreads. The spreads surpassed the mid-cycle levels in the period of one year prior.