Note 4: Operating income
EBIT (operating income excluding Identified items)
Full-year EBIT at €905 million (2016: €928 million) was impacted by higher raw material costs, partly compensated by increased selling prices, continuous improvement and cost control.
- Decorative Paints EBIT was 2% lower, due to adverse currency effects. Steep increases in raw material costs were offset by increased selling prices, continuous improvement and cost control
- Performance Coatings EBIT was 12% lower, impacted by higher raw material costs and lower volumes, partly compensated by continuous improvement and cost control
- EBIT in Other activities improved due to lower corporate costs, including one-off items, as well as lower pension and insurance related costs
Operating income
Full-year operating income was negatively impacted by identified items totalling €80 million, mainly related to the transformation of the Paints and Coatings organization and legal items. The identified items impacted operating income in Other activities as well as Decorative Paints and Performance Coatings.
In 2016, operating income was negatively impacted by identified items totalling €5 million, including acquisition and integration costs related to the Industrial Coatings business, asset impairments and adjustments to post-retirement provisions.
in € millions |
Employee benefits |
Amor- |
Depre- |
Purchases |
Total |
Cost of sales |
(506) |
(2) |
(113) |
(4,757) |
(5,378) |
Selling expenses |
(885) |
(53) |
(48) |
(1,333) |
(2,319) |
General and administrative expenses |
(358) |
(12) |
(29) |
(382) |
(781) |
Research and development expenses |
(186) |
(7) |
(12) |
(65) |
(270) |
Other results |
– |
– |
– |
(39) |
(39) |
Total |
(1,935) |
(74) |
(202) |
(6,576) |
(8,787) |
in € millions |
Employee benefits |
Amor- |
Depre- |
Purchases |
Total |
||
|
|||||||
Cost of sales |
(476) |
(1) |
(111) |
(4,510) |
(5,098) |
||
Selling expenses |
(815) |
(48) |
(54) |
(1,419) |
(2,336) |
||
General and administrative expenses |
(336) |
(21) |
(29) |
(422) |
(808) |
||
Research and development expenses |
(167) |
(6) |
(12) |
(72) |
(257) |
||
Other results |
– |
– |
– |
(12) |
(12) |
||
Total |
(1,794) |
(76) |
(206) |
(6,435) |
(8,511) |
||
EBIT is operating income excluding identified items.
Operating income is defined in accordance with IFRS and includes the relevant incidentals.
Identified items are special charges and benefits, results on acquisitions and divestments, major impairment charges and charges related to major legal, anti-trust and environmental cases.