Segment report

The PCC Group currently has more than 3,200 employees operating at 41 sites in 17 countries. The investment portfolio is divided into seven segments. The six segments Polyols & Derivatives, Surfactants & Derivatives, Chlorine & Derivatives, Silicon & Derivatives, Trading & Services and Logistics are allocated full operational responsibility. Assigned to these six segments are a total of 17 business units that are managed by our international companies and entities. The seventh segment, Holding & Projects, includes not only the holding company PCC SE but also other companies and entities that either function as intermediate holding companies or are still in the project development stage. These include PCG PCC Oxyalkylates Sdn. Bhd. (oxyalkylates project in Malaysia) and PCC Chemicals Corporation, Wilmington (Delaware, USA).

The pooling of the businesses into the six operating segments strengthens synergy effects and sharpens the profile of the individual units and entities, very much in keeping with PCC Group’s strategy of active investment portfolio management and ongoing optimization. The management of assets and investments, and the examination of further acquisitions with the aim of achieving competence-related diversification into new market segments are at the heart of Group policy. In the long term, this is intended to secure sustainable growth and continuously increase the enterprise value of PCC.

The Polyols & Derivatives segment comprises the Polyols, Polyurethane Systems and Alkylphenols business units. Polyols are the basic ingredients of polyurethane (PU) foams. They have a wide range of applications in a variety of sectors, from the PCC foam technology iPoltec® for high-comfort mattresses to PU foam systems for the effective and climate-friendly thermal insulation of buildings.

The Surfactants & Derivatives segment comprises the business units Anionic Surfactants, Non-ionic Surfactants, Amphoteric Surfactants (Betaines) and Household and Industrial Cleaners, Detergents and Personal Care Products. Because of their multiple effects in foaming, wetting, emulsifying and cleaning, surfactants are essential ingredients in many products. In toothpastes they generate the cleaning effect and foaming action, while in dishwashing products they ensure that dirt and grease are effectively dislodged from hard surfaces.

The Chlorine & Derivatives segment comprises the business units Chlorine, Chlorine Downstream Products, MCAA and Phosphorus and Naphthalene Derivatives. Chlorine is not only one of the most widely used basic substances in the chemical industry, it is also an indispensable part of many people’s everyday lives: In a swimming pool, for example, it acts as a disinfectant to protect against pathogens. Produced by the environmentally compatible membrane process, chlorine and downstream chlorine products manufactured by the PCC Group are also used in water treatment and in the petrochemical industry.

The Silicon & Derivatives segment is divided into the business units Quartzite and Silicon Metal. Silicon metal is used, among other things, in the aluminum industry as an alloying element for automotive production purposes and in the chemical industry, e.g. for the production of silicones, silanes, and polysilicon, the basic wafer material used in the manufacture of solar photovoltaic panels. Metallurgical grade silicon is heading for an appreciable long-term increase in demand due to the advent of new applications related to climate protection, such as the latest battery technology. The PCC Group uses electricity from 100 % renewable sources for silicon metal production, with the starting material quartzite being extracted by PCC in the Group’s own quartzite quarry in Zagórze, Poland.

The Trading & Services segment comprises the two business units Commodity Trading and Services. Its petrochemical and carbon commodities trading portfolio includes chemical raw materials, in particular coke oven by-products such as crude tar and crude benzene. The portfolio of the Services unit encompasses IT services and the Conventional Energies business area. The PCC Group’s combined heat and power plant at the Brzeg Dolny (Poland) chemicals site supplies the production facilities there with electricity and process steam, while also providing large parts of the town with district heating energy.

The Logistics segment comprises the Intermodal Transport and Road Haulage business units. The PCC Group is one of the leading providers of container transport services in Poland. Its logistics network extends from Eastern Europe to the Benelux countries and, via the New Silk Road, to China and other Asian hubs. The PCC Group has five Group-owned container terminals and rail licenses in Poland and Germany. The PCC tanker fleet specializes in the Europe-wide road haulage of liquid chemicals.

The Holding & Projects segment is divided into the two business units, Portfolio Management and Project Development. Assigned to this segment are entities that are in the planning and development phase – such as the construction of a production plant for oxyalkylates in Malaysia, a project being implemented in harness with PETRONAS Chemicals Group Berhad. Such investment projects are not assigned to the respective operating units until after the start of production. This relieves them of the burden of project management while also making effective use of the project experience of the Group’s corporate management. This segment is also responsible for management of our environmentally friendly small hydropower plants in the Renewable Energies business area.

The valuation principles for segment reporting are based on the valuation principles used in the consolidated financial statements. Intra-group transactions are generally treated as if they were conducted between third parties. In accordance with IFRS 8, operating segments are defined on the basis of internal reporting on the Group’s business areas whose operating results are regularly reviewed by the chief operating decision-maker for the purpose of allocating resources to the segments and in order to assess their performance. Information reported to the main decision-makers for the purpose of allocating resources to the operating segments of the Group and assessing their financial performance relates to the types of products manufactured and / or services provided.

Group sales amounted to € 993.6 million in fiscal 2023, down € 331.0 million or 25.0 % on the previous year’s revenue figure of € 1,324.7 million. With sales of € 275.6 million, the Chlorine & Derivatives segment was the main revenue generator. Compared to the previous year’s sales of € 388.5 million, this represents a decrease of € 112.9 million or 29.1 %. The share of Group sales fell to 27.7 % (previous year: 29.3 %). The Surfactants & Derivatives segment generated sales of € 206.6 million, down € 25.2 million or 10.9 % on the previous year’s figure of € 231.8 million. The share of total sales of the PCC Group increased by 3.3 percentage points to 20.8 % (previous year: 17.5 %). Sales of the Polyols & Derivatives segment amounted to € 191.1 million, down € 68.7 million or 26.4 % on the prior-year figure of € 259.8 million. The segment’s share of Group sales fell to 19.2 % (previous year: 19.6 %). Sales in the Silicon & Derivatives segment amounted to € 72.0 million, a decrease of € 40.4 million or 35.9 % year on year (previous year: € 112.4 million). The share of Group sales amounted to 7.2 % (previous year: 8.5 %). In the Trading & Services segment, revenue fell by € 73.9 million or 38.6 % to € 117.6 million (previous year: € 191.5 million). The share of total consolidated sales decreased by 2.7 percentage points to 11.8 %. The Logistics segment recorded a year-on-year decline in sales of € 10.2 million or 7.4 % to € 127.7 million in fiscal 2023 (previous year: € 137.9 million). The share of Group sales amounted to 12.9 % (previous year: 10.4 %).

As part of regular internal and external reporting, the business of the PCC Group is divided geographically into seven regions (Germany, Poland, Other EU Member States, Other Europe, USA, Asia and Other Regions). In fiscal 2023, the Group generated 19.5 % of its sales with customers in Germany (previous year: 21.1 %), while 38.0 % was attributable to customers in Poland (previous year: 34.3 %).

Overall, the PCC Group generated 86.3 % of its sales with customers in the member states of the European Union (previous year: 83.5 %), with Poland and Germany as the primary markets.

At € 800.2 million (previous year: € 1,012.6 million), Poland accounted for 80.5 % of Group sales to third parties in 2023, calculated by company domicile (previous year: 76.4 %). At € 378.0 million (previous year: € 454.2 million), the figure based on customer location was 38.0 % (previous year: 34.3 %). In Germany, sales decreased from € 279.5 million in the previous year to € 193.5 million in the reporting year based on customer location. By company domicile, sales fell from € 137.8 million in the previous year to € 80.1 million in the reporting year.

Capital expenditures increased in comparison to the previous year and totaled € 142.5 million (previous year: € 116.3 million). At € 123.6 million (previous year: € 129.4 million), the largest share of investments in fiscal 2023 was made in the Poland region. In addition to expenditure on container terminals, this also included investments in locomotives and platforms. Major progress was likewise made in the establishment of the new research and development center at the Brzeg Dolny site, all supplemented by ongoing replacement investments. Another aspect was investment in capacity expansions at the chemical plants accompanied by expenditures on modernization measures.