In the Chemicals segment, we anticipate a considerable increase in income from operations before depreciation, amortization and special items (EBITDA before special items) in 2024 despite the continued difficult environment. Expected volume growth in both divisions will contribute to this. However, higher fixed costs, mainly in connection with the construction of the new Verbund site in Zhanjiang, China, and scheduled turnarounds, will have an offsetting effect. Compared with 2023, we expect a considerable decline in the segment cash flow: This will be caused by expected turnarounds as well as higher investment expenditure.
Compared with 2023, we anticipate a slight growth in EBITDA before special items for the Materials segment. This will be attributable to targeted volume and margin growth in both divisions. However, in the Monomers division, EBITDA before special items is expected to decrease slightly overall. The main reason for this will be considerably higher fixed costs, as positive one-time effects from the previous year will not occur. Compared with the prior-year figure, we expect a considerable decline in the segment cash flow, particularly as a result of a lower cash inflow from working capital.
The Industrial Solutions segment is expected to considerably increase EBITDA before special items compared with 2023. This will be driven by higher volumes and margins in both divisions, in particular as a result of the expected global economic recovery in the second half of 2024. However, margin growth for Dispersions & Resins will be dampened by increasingly competitive market conditions. Despite the increase in earnings, segment cash flow is anticipated to be considerably below the previous year, as planned growth will lead to more cash being tied up in receivables and inventories.
The Surface Technologies segment’s EBITDA before special items in 2024 is expected to be at the prior-year level. A slight increase in earnings in the Catalysts division as a result of expected volume growth in the battery materials business should offset the expected slight decline in earnings in the Coatings division. Cash flow in both divisions is expected to decline considerably. In the Catalysts division, planned investments and a higher amount of cash tied up in working capital, especially in the battery materials business, is expected to lead to lower cash flow. Cash flow in the Coatings division will probably decline, mainly as a result of higher expenditure on efficiency measures.
In the Nutrition & Care segment, we expect a considerable increase in EBITDA before special items, in particular due to higher volumes and margins. Both divisions are aiming for volume growth above the market average. Higher fixed costs, mainly as a result of the construction of our new Verbund site in China, are likely to dampen earnings development. Cash flow in both divisions is expected to be considerably below the prior-year level. In the Care Chemicals division, this will be mainly attributable to a higher amount of cash tied up in working capital compared with 2023. Cash flow in the Nutrition & Health division will decline mainly as a result of increasing investment expenditures for aroma ingredients in Ludwigshafen, Germany, and in Zhanjiang, China.
In the Agricultural Solutions segment, we expect EBITDA before special items to decline slightly in 2024. This will be mainly driven by higher fixed costs due to inflation as well as negative currency effects, which can only be partially offset by higher sales volumes. In addition, the receipt of a one-time payment had a positive impact on earnings in 2023. Segment cash flow is expected to be considerably lower in 2024 compared with the prior-year figure, mainly due to a higher amount of cash tied up in working capital.
Million € |
EBITDA before special itemsa |
Segment cash flowa | ||
| 2023 | 2024 forecast | 2023 | 2024 forecast | |
| Chemicals | 1,167 | Considerable increase | -936 | Considerable decrease |
| Materials | 1,650 | Slight increase | 1,369 | Considerable decrease |
| Industrial Solutions | 965 | Considerable increase | 1,292 | Deutlicher Rückgang |
| Surface Technologies | 1,520 | At prior-year level | 1,488 | Considerable decrease |
| Nutrition & Care | 565 | Considerable increase | 503 | Considerable decrease |
| Agricultural Solutions | 2,270 | Slight decrease | 1,746 | Considerable decrease |
| a For EBITDA before special items and cash flow, “slight” represents a change of 0.1%–10.0%, while “considerable” applies to changes of 10.1% and higher. “At prior-year level” indicates no change (+/-0.0%). | ||||