Business Review Sales rise 27% to €16,659 million due to growth in the Catalysts division, mainly as a result of significantly higher precious metal prices EBIT before special items 33% lower at €484 million due to decreases in both divisions Sales to third parties in the Surface Technologies segment rose by €3,517 million to €16,659 million in 2020. This was due to considerably higher sales in the Catalysts division, which rose by €4,174 million year on year to €13,570 million. In the Coatings division, sales declined by €657 million to €3,089 million. (XLSX:) XLS Factors influencing sales – Surface Technologies Surface Technologies Catalysts Coatings Volumes –1% 5% –14% Prices 32% 43% 1% Portfolio 0% 0% 0% Currencies –4% –4% –5% Sales 27% 44% –18% Sales growth was largely driven by the strong increase in precious metal prices in the Catalysts division. In precious metal trading, sales rose to €7,612 million, mainly as a result of higher prices (2019: €4,585 million). The Coatings division also achieved slightly higher prices, primarily in the decorative paints and surface treatments businesses. Negative currency effects had an offsetting impact in both divisions. (XLSX:) XLS Segment data – Surface Technologies (Million €) 2020 2019 +/– Sales to third parties 16,659 13,142 27% of which Catalysts 13,570 9,396 44% Coatings 3,089 3,746 –18% Intersegment transfers 203 212 –4% Sales including transfers 16,862 13,354 26% Income from operations before depreciation, amortization and special items 966 1,173 –18% Income from operations before depreciation and amortization (EBITDA) 900 1,120 –20% EBITDA margin % 5.4 8.5 – Depreciation and amortizationa 1,487 457 225% Income from operations (EBIT) –587 663 . Special items –1,071 –59 . EBIT before special items 484 722 –33% Return on capital employed (ROCE) % –4.8 5.7 – Assets 11,691 11,773 –1% Investments including acquisitionsb 585 565 4% Research and development expenses 246 214 15% a Depreciation and amortization of property, plant and equipment and intangible assets (including impairments and reversals of impairments) b Additions to property, plant and equipment and intangible assets Sales developments was also weighed down by slightly lower volumes overall. This was largely the result of weaker demand from the automotive and aviation industries due to the effects of the coronavirus pandemic, which significantly depressed volumes development in the Coatings division. Sales volumes declined significantly here, especially in the automotive OEM coatings, surface treatments and automotive refinish coatings businesses. Higher volumes in the Catalysts division for mobile emissions catalysts in Asia and in precious metal trading were unable to compensate for this. Sales volumes declined for chemical catalysts and refining catalysts in particular. Catalysts – Sales by region Location of customer Coatings – Sales by region Location of customer Income from operations (EBIT) before special items amounted to €484 million, €238 million below the prior-year level due to lower earnings in both divisions. In the Coatings division, this was mainly attributable to the development of volumes. Lower fixed costs and lower raw materials prices were unable to compensate for this. EBIT before special items declined in the Catalysts division, mainly as a result of higher fixed costs, driven in particular by growth initiatives for battery chemicals. This could not be offset by a significant improvement in earnings in precious metal trading. EBIT decreased by €1,250 million to –€587 million. EBIT included special charges, mainly for goodwill impairments of €786 million in the surface treatments cash-generating unit, and for property, plant and equipment, primarily in the Catalysts division in Europe. This largely reflected significantly weaker demand due to the effects of the coronavirus pandemic as well as the expected slow recovery in the automotive and aviation industries. Outlook for 2021 back next