Expected Earnings, Asset, and Financial Situation
Expected Sales and Earnings Performance
On the basis of the growth anticipated for the global economy,
we expect the demand for our products and services
to exhibit a positive development in the new fiscal year. We
expect our operating sales growth, i. e. sales growth ad-
justed 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 / mix effect might be
slightly negative.
Nominal sales in 2017 should grow at a higher pace
due to the acquisitions agreed upon at the end of 2016 and
the beginning of 2017 and can be additionally influenced
by exchange-rate changes. For the most part, operating sales
in the divisions should grow at a similar pace to Group op-
erating sales. In the ELANTAS division, we expect low-level
operating sales growth. We anticipate positive growth impetus
from the acquisition of the insulating resins business
of Belgian chemical group Solvay, which was agreed upon
at the end of 2016.
In terms of the important cost factors, we do not
foresee significant shifts of cost ratios in relation to sales. We
expect the materials cost ratio to increase.
For personnel expenses and other fixed cost figures,
we project a relative increase at the same level as or slightly
lower than sales growth.
Against the background of the disproportionately grow-
ing material costs, we anticipate that the EBITDA margin
will be closer to our long-term target range of 18 % to 20 %
after the very high level in 2016.
After 2017, we expect slightly higher growth momentum
with basically the same or even slightly increasing profitability.
68 Expected Developments
Against the background of the global economic outlook, we
expect the general chemical sector in 2017 to expand more
than in the previous year. The American Chemistry Council
(ACC) forecasts that worldwide chemical production will
increase by 2.9 % in 2017, after an expected 2.2 % last year.
This growth will be driven by the chemical industry in the
emerging countries and in the established economic nations.
We assume that in this market environment general
demand on the markets relevant for ALTANA will basically be
positive, 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 predicted
reliably. We expect the price level to increase in the next
few years. The availability, 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 exchange-rate relations
important for ALTANA may continue to show pronounced
volatilities in 2017. 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 intensity and direction of the exchange rates cannot
be predicted, it is not possible to make concrete statements
about the influence.