Business Review

• Sales 14% below previous year at €11,466 million, mainly as a result of lower prices
• EBIT before special items of €1,003 million; 58% year-on-year decrease primarily due to lower isocyanate margins

Sales to third parties in the Materials segment declined by €1,804 million compared with the previous year to €11,466 million. This was mainly attributable to the Monomers division, where sales decreased considerably by €1,351 million year on year to €5,402 million. The Performance Materials division also recorded a considerable sales decrease of €453 million to €6,064 million.

The sales decrease was primarily driven by significantly lower prices for isocyanates in the Monomers division due to higher market supply. Price levels for polyamides also declined. In the Performance Materials division, sales were slightly reduced by lower sales prices as a result of lower raw materials prices for methylene diphenyl diisocyanate (MDI).

Sales volumes also declined in the Performance Materials division. The sales decrease here was driven by significantly lower demand for our products from key industries, particularly the automotive industry. In the Monomers division, volumes were at the prior-year level. Higher isocyanate volumes were offset by lower polyamide volumes due to weaker demand from key industries.

Currency effects had a slightly positive impact in both divisions.

In the Performance Materials division, sales to the automotive industry were considerably below the previous year due to lower volumes, primarily reflecting the significant drop in automotive manufacturers’ production figures. Sales volumes were also negatively impacted by tighter environmental protection requirements in our growth markets in Asia and political uncertainty. Sales in the consumer goods industry were likewise down from the prior-year level. The main driver was weak demand caused by political uncertainty in Europe and Asia, which dampened developments in our thermoplastic polyurethanes business in particular. By contrast, our biodegradable plastics business developed positively on the back of stronger demand and the favorable regulatory environment. Sales to the construction industry were considerably lower compared with the previous year, mainly due to lower sales prices, especially in Europe and Asia. Sales volumes also declined, largely as a result of lower demand for polyurethane systems in Europe, Asia and North America.

Performance Materials – Sales by region

Location of customer

Monomers – Sales by region

Location of customer

At €1,003 million, income from operations (EBIT) before special items was €1,397 million below the prior-year level. Both divisions contributed to the considerable decline in EBIT before special items, but in particular Monomers. The decrease in the Monomers division was mainly due to lower isocyanate margins. Lower volumes and prices in the polyamide value chain also had a negative effect. Volumes also declined in the Performance Materials division.

In addition, fixed costs in the Monomers division were slightly higher than in the previous year. This was primarily attributable to the insurance refunds received in the third quarter of 2018.

EBIT declined by €1,401 million year on year to €973 million. Special charges arose in 2019, mainly from preparations for the integration of the Solvay businesses acquired on January 31, 2020, and in connection with the Excellence Program.