Annual Report 2015DEEN

Glossary

Technical terms


Accident frequency (occupational safety indicator)

Number of accidents involving Evonik employees and contractors’ employees under Evonik’s direct supervision per 1 million working hours.

Active packaging

Active packaging improves the storage conditions for food. For example, oxygen absorbers remove oxygen from the atmosphere, thereby increasing the shelf-life of packaged food through reduced oxidation and maintaining its quality (e.g. color, taste). Evonik is developing VISPARENT, a portfolio of oxygen absorbers for a wide range of end-uses, including transparent packaging.

Amino acids

Amino acids are building blocks for proteins that are used in animal nutrition. They are used to ensure that the amino acid content of animal feed is optimally aligned to requirements. As a result, livestock needs less feed. That also reduces excretion of nitrogen and undigested nutrients, which improves the carbon footprint of livestock farming and reduces overfertilization of the soil. Evonik markets all four major essential amino acids for animal nutrition, i.e. DL-methionine (MetAMINO), L-lysine (Biolys), L-threonine (ThreAMINO) and L-tryptophan (TrypAMINO). Evonik also produces amino acids and their derivatives in pharmaceutical quality for use in infusion solutions for parenteral nutrition, as starting products for animal cell cultures, and in the manufacture of active ingredients.

Anti-fouling

Special paints protect ships from fouling: algae, mussels and barnacles that adhere to the vessel and greatly increase drag as they sail. Anti-fouling coatings therefore bring substantial fuel-savings. Evonik’s specialty ingredients provide particularly long-lasting protection.

Biodiesel

Biodiesel is mainly produced from renewable raw materials. In many countries, it is already mandatory to add a proportion of biodiesel to mineral diesel fuel. Higher percentages are expected to improve climate protection and reduce dependence on imports. Evonik produces alkoxides which are used as catalysts for efficient high-yield production of biodiesel. Using Evonik’s catalysts, biodiesel can be manufactured in a water-free process. As a result, fewer unwanted by-products are generated, leading to less contamination, so separation and processing are facilitated.

Butadiene

Butadiene is mainly used in synthetic rubber, for example for the manufacture of tires. It also has a wide range of applications in elastomers and plastics. For example, it enhances the resistance of rubber gloves and is an important precursor for the production of latex mattresses.

C4 chemistry

C4 crack is a by-product of crude oil refining. It is produced in a steam cracker when naphtha is split into ethylene and propylene. After isolation, Evonik processes the C4 hydrocarbons and places them on the market, for example as butadiene for tires and butene-1 for the plastics industry. Isobutene is processed into methyl tertiary butylether (MTBE), which is used as an anti-knock agent in fuel. In further processing steps, it manufactures high-chain alcohols and plasticizers for flexible PVC. Evonik’s integrated C4 technology platform ensures excellent product yields. All hydrocarbons contained in C4 crack are processed cost-effectively.

Composites

Composites are composed of at least two different materials, for example a matrix material reinforced with fibers. By combining the properties of the materials carefully, it is possible to produce components that are very light yet extremely tough.

Cosmetic ingredients for hair care products

Evonik produces a wide range of cosmetic ingredients such as conditioning agents, surfactants and thickening agents for shampoos and conditioners, and active ingredients to repair damaged hair. Surfactants provide cleansing properties, while thickeners give the products the right viscosity and rheology. The conditioning additives improve the smoothness and structure of hair, making it easier to comb. They can also provide additional protection against heat, UV irradiation and static charge.

Diversity

We define diversity not simply as the best possible balance between male and female employees, but also between different educational backgrounds, experience of working in different organizational units and functional areas, a broad age range and a variety of nationalities, in other words, diversity in all its facets.

Greenhouse Gas Protocol (GHG Protocol)

The Greenhouse Gas Protocol is regarded as the most widespread voluntary international standard for calculating and compiling data on greenhouse gas emissions from industry. It was developed by the World Business Council for Sustainable Development (WBCSD) and the World Resource Institute (WRI).

High performance polymers

Evonik is a specialist for high performance polymers. These have particularly high strength, making them a welcome alternative to metals in many fields, for example in lightweight structures, medical implants and industrial applications. Depending on where they are used, such materials have to withstand high temperatures, aggressive chemicals and significant mechanical strain.

Hydrogen peroxide

Hydrogen is one of the cleanest and most versatile chemicals. Because of its positive properties it is used in a wide range of applications. Traditionally, hydrogen peroxide has been used as an environmentally benign bleaching agent in the pulp and textile industries. It is also used for antiseptic packaging, to clean silicon wafers in the manufacture of printed circuit boards and as an active ingredient in pharmaceuticals. Thanks to the innovative Hydrogen Peroxide to Propylene Oxide (HPPO) process developed by Evonik and ThyssenKrupp Industrial Solutions, this environment-friendly oxidation agent is also used in the direct chemical synthesis of propylene oxide, which is an important starting product for polyurethanes.

Incident frequency (plant safety indicator)

This indicator is based on the process safety performance indicator defined by the European Chemical Industry Council (Cefic). Analogously to the accident frequency indicator for occupational safety, it covers incidents involving the release of substances, fire or explosion, even if there is little or no damage. It is calculated from the number of incidents per 1 million working hours in the segments’ production facilities.

Integrated technology platforms

Integrated technology platforms allow efficient use of product streams and thus high added value by utilizing by-products from one production process as starting products for others. That saves resources, reduces CO2 emissions and leverages cost-efficiency. Examples of integrated technology platforms in the Evonik Group are isophorone and silicon.

Isophorone/isophorone diamine/isophorone diisocyanate

Isophorone is used as a solvent, for example in the paints and coatings industry. It is also used to produce the derivatives isophorone diamine and isophorone diisocyanate. Isophorone diamine is an important curing agent for epoxy resin systems, for example to strengthen rotor blades. Isophorone diisocyanate is used to produce light- and weather-resistant polyurethanes, for example, for coating instrument panels and other plastic components.

Monomers

Monomers are low-molecular-weight, reactive molecules that can build polymers.

Oil additives

As a leading global supplier of oil additives, Evonik develops innovative technologies that improve the operational efficiency of engines, gears and hydraulic systems. Specific and customized improvements in the flow properties of lubricants over a wide temperature range play an important role. Depending on the application, Evonik markets these technologies as DRIVONTM, NUFLUXTM and DYNAVIS.

PEEK

Polyetherether ketones (PEEK) are partially crystalline high-performance polymers with outstanding mechanical properties and very good temperature resistance. In view of their exceptionally high mechanical, thermal and chemical properties, they are mainly used in functional compo-nents and assemblies in automotive engineering, aviation, electronics and medical products.

Plasticizers

Plasticizers are chemical compounds that make PVC plastics flexible. Alongside conventional products, Evonik markets phthalate-free plasticizers.

Plastic glazing

Glazing made of PLEXIGLAS is up to 50 percent lighter than glass. That makes it attractive for automotive engineering. PLEXIGLAS also has excellent transparency, very good resistance to weathering, pleasant acoustic properties and outstanding moldability, which opens up completely new design options compared with conventional glazing.

PMMA

Abbreviation for polymethylmethacrylate. This is a colorless polymer (acrylic glass) that can be colored in a range of shades. Properties: high light transmittance, good moldability, exceptionally high weather resistance. Applications: automotive and aviation engineering, architecture, lighting, design, electronics and communications technology. Best-known brand: PLEXIGLAS, which is marketed as ACRYLITE in the Americas. Form supplied: thermoplastic molding compounds, cast or extruded semi-finished goods (sheet, film, tubes, rods).

Polyimides

Polyimide fibers are mainly used in filter media to remove particulates from hot flue gases in coal-fired power plants, waste incinerators and cement plants.

Polymers

Long-chain, short-chain or crosslinked molecules (macromolecules) produced by linking smaller molecules (monomers).

Polyurethane (PUR)

Polymers with excellent thermal and sound insulating properties and a very broad spectrum of applications. Flexible, foamed PUR is used for cushions, mattresses and interior trims. Applications for rigid PUR include automotive engineering, construction and refrigerators.

REACH

REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) is the European chemicals regulation.

Responsible Care

Responsible Care is a global initiative of the chemical industry. Its goals are a continuous improvement in health, safety and environmental performance. It therefore makes an important contribution to sustainability.

Silanes

Silanes are a group of chemical compounds, comprising silicon and hydrogen. Evonik produces three types of silanes:
– Organofunctional silanes have at least one functional hydrocarbon group. They are used to produce high-performance additives that improve the properties of inorganic particles, resins and polymers. For example, they enhance the bonding properties of adhesives, make plastics heatresistant, and add flame-retardant properties to cables.
– Sulfur-functional silanes have revolutionized the production of tires, where they are used with precipitated silicas to improve key properties such as rolling resistance and wet grip.
– Chlorosilanes are important precursors, for example for the semiconductor and optical fiber sectors.

Silicas

Evonik manufactures both precipitated silicas using a wet route and fumed silicas which are produced by a flame process. Silicas are also known as silicon dioxide. These ultra-fine particles are used in a wide range of applications, including the life sciences (pharmaceuticals and cosmetics), construction, adhesives and sealants, paints and coatings, furniture manufacture and electronics applications such as polishing computer chips and the production of toners for digital printing. They also play a key role in energy-saving tires with low rolling resistance (“green” tires).

Silica-Silan-System

Silicas are used in combination with silanes to reinforce the tread of modern tires. The silica-silane system greatly reduces rolling resistance, resulting in fuel savings of up to 8 percent compared with conventional auto tires. It also improves grip on wet and wintry roads.

Structural foams

Structural foams are popular for lightweight construction because they are light and stable. ROHACELL is the brand name for Evonik’s polymethacrylimide (PMI) structural foams, which have been used for many years in planes and helicopters. Now they are increasingly being used in sandwich structures in the automotive industry.

Superabsorbents

Crosslinked polymers that are insoluble in water and can absorb and store large quantities of aqueous liquid through a mechanism that causes them to swell and form hydro gels. The liquid is not released even under pressure. Consequently, these polymers are mainly used in diapers. Special forms of superabsorbents are used in agriculture to regulate the moisture in soil. They can absorbe large quantities of water, and release it to the plants during dry periods.

Sustainability

Sustainability is based on the need to balance the economic, ecological and social dimensions. Sustainable development is a commitment to the perspectives for the lives of future generations, as expressed in the Vision 2050 published by the World Business Council for Sustainable Development (WBCSD) and the United Nations’ 17 goals for sustainable development. At the same time, sustainable development is an opportunity to establish a successful long-term corporate strategy that combines business success with social and societal responsibility and protection of the environment.

UN Global Compact

The United Nations Global Compact is the biggest and most important global initiative for responsible business management. Signatories are committed to align their business operations and strategies to ten universally recognized principles relating to human rights, labor, environmental protection and fighting corruption.

VISIOMER specialty methacrylates

Evonik markets the VISIOMER brand of specialty methacrylates as important precursors for adhesive formulations and sealing compounds. Applications include automotive engineering and boat building as well as pressure-sensitive and anaerobic adhesives which allow application-specific optimization of bonding properties.

Vision 2050

For the Vision 2050 project 29 corporate members of the World Business Council for Sustainable Development (WBCSD) developed a common agenda for a world geared to sustainability by 2050 and pathways to achieve this vision. Evonik was involved in this project and is committed to the Vision 2050 which is expressed as “9 billion people living well within the limits of the planet”.

World-scale facility

A large-scale production facility. World-scale facilities are often more economical because fixed costs per metric ton decline as output increases.

Financial and economic terms


Adjusted EBIT

Earnings before financial result and taxes, after adjustments. Earnings parameter showing Evonik’s operating earnings performance irrespective of the structure of its assets.

Adjusted EBITDA

Earnings before financial result, taxes, depreciation and amortization, after adjustments. Earnings parameter showing Evonik’s operating earnings performance irrespective of the structure of its assets and its investment profile. This is a cash flow-related parameter which is used in particular in the adjusted EBITDA margin to show the relationship to sales as a basis for comparison with competitors.

Adjustments

Evonik adjusts its operating earnings to take account of non-operating income and expense items that are one-off or by nature rare. Consequently, these items do not form part of adjusted EBIT and adjusted EBTIDA. The adjustments mainly comprise income and expenses relating to the acquisition and divestment of business operations, impairment losses/reversals of impairment losses and restructuring expenses.

Compliance

Compliance refers to all activities to ensure that the conduct of the company, its governance bodies and its employees respect all applicable mandatory standards such as legal provisions, statutory provisions and prohibitions, in-house directives and voluntary undertakings entered into by Evonik.

Corporate Governance

Corporate governance comprises all principles underlying the management and oversight of a company. As an expression of good and responsible management of the company, it is therefore a central element in a company’s management philosophy. The principles of corporate governance relate mainly to collaboration within the Executive Board and Supervisory Board and between these two boards and the shareholders, especially at Shareholders’ Meetings. They also relate to the company’s relationship with other people and organizations with which it has business dealings.

CTA

Abbreviation for contractual trust arrangement. This is a model used by Evonik to transfer some of its pension obligations to a trust established especially for this purpose: Evonik Pensionstreuhand e. V., Essen (Germany). The assets transferred to this trust secure employees’ pensions.

EVA

Abbreviation for economic value added. Indicator used for value-oriented management of the Evonik Group. EVA is calculated from the difference between adjusted EBIT and the cost of capital employed. If EVA is positive, value is created.

Hedge Accounting

This refers to accounting for hedging transactions and the associated hedged items as a single valuation unit. The purpose of hedge accounting is to synchronize the otherwise different periods in which the hedged item and hedge impact on earnings.

Hedging

Hedging is the strategy used to offset the exposure of business transactions to risks such as changes in exchange rates, interest rates and raw material prices. The company enters into an additional transaction whose profile is exactly opposite to the profile of the hedge transaction. Derivative financial instruments such as forward contracts, swaps and options are used as hedging instruments.

IFRS

Abbreviation for International Financial Reporting Standards. Since 2005 companies listed on stock exchanges in the European Union have been required to prepare consolidated financial statements in accordance with IFRS.

Rating

In the financial community, a rating is an assessment of the creditworthiness of a debtor. Ratings are generally awarded by specialized rating agencies. The probability of default is calculated on the basis of specific criteria and debtors are assigned to rating classes that are indicated by rating codes. Ratings are also awarded for corporate and government bonds. A rating indirectly affects the debtor’s business activity. Normally a better rating enables a debtor to obtain favorable terms for borrowing.

ROCE

The return on capital employed is a measure of the profitability of capital employed. It is calculated by dividing adjusted EBIT by the average capital employed in the reporting period.

Stakeholders

In a corporate context, the term stakeholders refers to all natural or legal persons with an interest in the development of an enterprise. Stakeholders range from owners and employees through customers and suppliers to the state and general public.

Swaps (currency swaps, interest rate swaps)

Derivative financial instruments used to hedge currency or interest rate risks by swapping cash flows. Currency swaps entail swapping payments in different currencies, while interest rate swaps comprise swapping fixed interest rates are variable rates.

Venture capital

Venture capital is risk capital that is made available to fund innovative concepts and ideas, generally at high-growth small and mid-sized enterprises. Through Evonik Venture Capital GmbH, Evonik aims to invest up to €100 million in promising start-ups and leading specialized venture capital in the mid term.

Volatility

Volatility is a measure of the fluctuation in the price of traded goods, e.g. shares, currencies, interest rates, in a given period. It expresses the standard deviation of relative changes in prices over a given period (e.g. a year). The term is often used to denote the fluctuation in prices or interest rates on entire markets.