Chemicals

Q3 2020

In the Chemicals segment, sales1 in both divisions were down considerably compared with the prior-year quarter.

1 For sales, “slight” represents a change of 1–5%, while “considerable” applies to changes of 6% and higher. “At prior-year level” indicates no change (+/–0%). For earnings, “slight” means a change of 1–10%, while “considerable” is used for changes of 11% and higher. “At prior-year level” indicates no change (+/–0%).

(XLSX:) XLS

Factors influencing sales in Q3 2020 – Chemicals

 

Chemicals

Petrochemicals

Intermediates

Volumes

(11%)

(15%)

(1%)

Prices

(13%)

(15%)

(7%)

Portfolio

0%

0%

0%

Currencies

(3%)

(2%)

(4%)

Sales

(27%)

(32%)

(12%)

The sales decrease was driven by lower prices and volumes. Prices declined in the Petrochemicals division, in particular for steam cracker products, styrene monomers and ethylene glycols, due to higher product availability on the market and lower raw materials prices. Price levels also decreased significantly in the Intermediates division as a result of higher product availability on the market.

The decline in sales volumes was mainly attributable to the unplanned outage at the steam cracker in Port Arthur, Texas. This significantly reduced sales volumes of steam cracker products in the Petrochemicals division. The Intermediates division recorded slightly lower sales volumes overall, primarily owing to the decrease in the acids and polyalcohols business. This was mainly due to the effects of the coronavirus pandemic.

Sales were also reduced by slightly negative currency effects.

Income from operations (EBIT) before special items was down considerably from the third quarter of 2019 in both divisions, but especially in the Petrochemicals division. The decrease was mainly due to lower margins as a result of higher product availability on the market and lower sales volumes in both divisions. This could only be partly offset by lower fixed costs in the Intermediates division.

EBIT for the third quarter of 2020 included special impairment charges due to a prolonged oversupply of basic chemicals and the resulting decrease in prices and margins.

Compared with the second quarter of 2020, sales in the Chemicals segment were at the level of the previous quarter. Both divisions recorded a considerable quarter-on-quarter improvement in EBIT before special items.

(XLSX:) XLS

Segment data – Chemicals (Million €)

 

Q3

January–September

 

2020

2019

+/–

2020

2019

+/–

Sales to third parties

1,783

2,429

(27%)

5,924

7,157

(17%)

of which Petrochemicals

1,169

1,731

(32%)

3,981

4,997

(20%)

Intermediates

614

698

(12%)

1,943

2,160

(10%)

Income from operations before depreciation, amortization and special items

258

447

(42%)

865

1,238

(30%)

Income from operations before depreciation and amortization (EBITDA)

249

444

(44%)

845

1,215

(30%)

Depreciation and amortizationa

753

196

284%

1,197

702

71%

Income from operations (EBIT)

(504)

248

.

(352)

513

.

Special items

(550)

(3)

.

(570)

(163)

.

EBIT before special items

46

251

(82%)

218

676

(68%)

Assets (September 30)

7,860

9,157

(14%)

7,860

9,157

(14%)

Investments including acquisitionsb

169

269

(37%)

682

841

(19%)

Research and development expenses

23

27

(15%)

72

80

(10%)

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