Chemical Specialties – FoamPartner and 
Schmid Rhyner

In 2018, the Chemical Specialties segment generated net revenue of CHF 382.9 million, a year-on-year rise of 37.1% (previous year: CHF 279.2 million). On a comparable basis, revenue declined by 2.5%. The changes in the scope of consolidation considered here relate primarily to the FoamPartner business unit, namely Otto Bock Kunststoff, which was acquired as of September 1, 2017, and the 51% stake in the US joint venture, which was sold on July 1, 2017. The operating result amounted to CHF 5.8 million compared with CHF 24.8 million the previous year, which included a one-off gain of CHF 8.8 million from the aforementioned joint venture sale. The EBIT margin was 1.5%, down from 8.8% the year before, although after adjusting for the divestement gain, the EBIT margin the year before was 5.7%. The operating result was impaired by restructuring costs, local competitive pressure and the significant downturn in the mobility segment in the second half of the year. Net revenue increased at double-digit rates in all regions thanks to the significant strengthening of FoamPartner’s market position as a result of its acquisition.

2018 was a challenging year for FoamPartner, and the operating result was significantly lower than expected. The implementation of the new regional management structure, the development of regional business models and the merger with Otto Bock Kunststoff ran according to plan. This gave rise to integration and reorganization costs of CHF 5.5 million. These costs also include the closure of a North American site following the 2017 transaction. Raw material costs also had a adverse effect on the operating result compared with the previous year, despite the situation easing in the second half of the year. The automotive business declined over the course of the year due to market factors, in Europe because of the new test procedures applicable to the certification of vehicles, and in China because of the significant industry slowdown associated with the trade dispute with the USA as well as increased competitive pressure. In order to improve its competitive position, a prepolymer-based technology for ether foams was presented at trade fairs in the fourth quarter of 2018, and its market launch is proposed from 2019 onwards. With the help of innovative solutions for customers and extensive measures to improve operating efficiency, a concerted effort will be made over the next 24 months to significantly improve margins.