Materials

Q3 2020

In the Materials segment, sales in both divisions declined considerably compared with the third quarter of 2019.

(XLSX:) XLS

Factors influencing sales in Q3 2020 – Materials

 

Materials

Performance Materials

Monomers

Volumes

(4%)

(3%)

(6%)

Prices

(7%)

(6%)

(9%)

Portfolio

7%

6%

9%

Currencies

(4%)

(3%)

(4%)

Sales

(8%)

(6%)

(10%)

Sales development was mainly driven by lower prices due to lower raw materials prices. In the Monomers division, prices decreased for polyamides and isocyanates in particular. In the Performance Materials division, the decline in price levels was primarily due to lower prices for Ultramid and polyurethane systems in Europe and Asia.

Sales were also reduced by slightly lower volumes as a result of weaker demand from key industries due to the effects of the coronavirus pandemic. In the Monomers division, weak demand from the automotive and textile industries led to lower polyamide and toluene diisocyanate (TDI) volumes. Higher methylene diphenyl diisocyanate (MDI) volumes, mainly in Asia, had an offsetting effect. The Performance Materials division saw lower demand, especially from the transportation and consumer industries.

Slightly negative currency effects also contributed to the sales decrease.

Portfolio effects from the acquisition of Solvay’s integrated polyamide business had a considerable, positive impact on sales in both divisions.

Income from operations (EBIT) before special items was considerably below the level of the prior-year quarter. This was driven by the significant decrease in EBIT before special items in the Monomers division, primarily due to lower polyamide margins as a result of declines in volumes and prices. Higher isocyanate margins as a consequence of lower raw materials prices and growth in MDI volumes only partly offset this. The Performance Materials division slightly increased EBIT before special items. This was mainly attributable to a positive contribution from the polyamide business acquired from Solvay.

EBIT for the third quarter of 2020 included special impairment charges due to a continued oversupply of isocyanates in particular and the resulting decrease in prices and margins.

The Materials segment considerably increased sales and EBIT before special items in both divisions compared with the previous quarter.

(XLSX:) XLS

Segment data – Materials (Million €)

 

Q3

January–September

 

2020

2019

+/–

2020

2019

+/–

Sales to third parties

2,657

2,894

(8%)

7,674

8,786

(13%)

of which Performance Materials

1,410

1,506

(6%)

4,012

4,615

(13%)

Monomers

1,247

1,388

(10%)

3,662

4,171

(12%)

Income from operations before depreciation, amortization and special items

439

452

(3%)

1,001

1,451

(31%)

Income from operations before depreciation and amortization (EBITDA)

430

449

(4%)

889

1,435

(38%)

Depreciation and amortizationa

976

187

422%

1,418

533

166%

Income from operations (EBIT)

(546)

262

.

(529)

902

.

Special items

(763)

(4)

.

(875)

(21)

.

EBIT before special items

217

266

(18%)

346

923

(63%)

Assets (September 30)

9,007

9,197

(2%)

9,007

9,197

(2%)

Investments including acquisitionsb

135

182

(26%)

1,641

503

226%

Research and development expenses

47

47

–

133

142

(6%)

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