Given the prospects for the global economy in 2016, growth in the general chemical sector is expected to be slightly higher than in the previous year. The American Chemistry Council (ACC) forecasts that worldwide chemical produc- tion will increase by 3.3 % in 2016, after an expected 2.8 % last year. However, this growth will be driven solely by the chemical industry in the emerging countries. The latter’s man- ufacture of chemical products is expected to be 4.8 % higher in 2016, whereas industry growth in the established countries is expected to remain at the previous year’s level of 2.6 %. We assume that in this market environment general demand on the markets relevant for ALTANA will basically remain stable, although the regions will show different developments. The extent to which changes in storage levels along the value chain will influence the actual demand for the products of our divisions largely depends on the expected short- to medium-term development. Stock-level changes can lead to significant effects. The development of crude-oil prices cannot be predict- ed reliably due to the high volatility in recent months and on account of the current geopolitical conflicts. The availabil- ity, pricing, and consumption volume of chemical products are subject to the influence of the crude-oil market, albeit to different extents. In addition, the expectations of market participants in terms of the future development of oil prices can result in significant changes in the level of storage along the value chain in the chemical industry. As in the previous years, the volatility of the exchange- rate relations important for ALTANA will continue in 2016. The development of regional interest rates and economic output, as well as political influences can be of decisive importance for exchange-rate fluctuations. Since the inten- sity and direction of the exchange rates cannot be predict- ed, it is not possible to make concrete statements about the influence. Expected Earnings, Asset, and Financial Situation Expected Sales and Earnings Performance On the basis of the expected growth for the global economy, we expect the demand for our products and services to exhibit a positive development in the new fiscal year. We ex- pect our operating sales growth, i. e. sales growth adjusted for exchange-rate and acquisition effects, to range from 2 to 5 %. An increase in the sales volume should be the main growth driver, while the price effect based on lower crude-oil prices might even be negative. The increase in nominal sales can deviate from the op- erating sales development due to exchange-rate changes and possible acquisitions or portfolio adjustments. For the most part, operating sales in the divisions should grow at a similar pace to Group operating sales. In terms of the important cost factors, we do not expect significant shifts of cost ratios in relation to sales. We ex- pect the materials cost ratio to generally develop stably. For the growth of personnel expenses and other fixed cost figures, we expect a relative increase at the same level as or slightly lower than sales growth. We expect the EBITDA to increase disproportionately to the sales development, primarily due to the non-recurrence of the restructuring-related special expenses that existed in 2015. We therefore anticipate that the EBITDA margin will lie in the upper half of our long-term target range of 18 to 20 %. After 2016, we expect slightly stronger growth mo- mentum with roughly the same or even slightly improved profitability. Expected Asset and Financial Situation We do not expect any significant shifts in the balance-sheet structure in 2016. Our capital expenditure for property, plant and equipment and intangible assets should remain within our long-term target range of 5 to 6 %. The de- 58 Expected Developments
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