Results of Operations
|
|
|
|
|||
|
2017 |
2018 |
Change |
|||
|
€ million |
€ million |
% |
|||
Sales |
14,138 |
14,616 |
+3.4 |
|||
Cost of goods sold |
(9,308) |
(9,918) |
+6.6 |
|||
Selling expenses |
(1,352) |
(1,408) |
+4.1 |
|||
Research and development expenses |
(274) |
(276) |
+0.7 |
|||
General administration expenses |
(481) |
(491) |
+2.1 |
|||
Other operating expenses (–) and income (+) |
85 |
57 |
–32.9 |
|||
EBIT |
2,808 |
2,580 |
–8.1 |
|||
Financial result |
(150) |
(104) |
–30.7 |
|||
Income before income taxes |
2,658 |
2,476 |
–6.8 |
|||
Income taxes |
(641) |
(647) |
+0.9 |
|||
Income after income taxes |
2,017 |
1,829 |
–9.3 |
|||
of which attributable to noncontrolling interest |
8 |
6 |
–25.0 |
|||
of which attributable to Covestro AG stockholders (net income) |
2,009 |
1,823 |
–9.3 |
Group sales in the reporting year rose 3.4% to €14,616 million (previous year: €14,138 million).
There was a 6.6% increase in the cost of goods sold to €9,918 million (previous year: €9,308 million). The ratio of the cost of goods sold to sales increased to 67.9% (previous year: 65.8%).
Selling expenses were up 4.1% to €1,408 million (previous year: €1,352 million), yielding a ratio of selling expenses to sales of 9.6% (previous year: 9.6%). Research and development (R&D) expenses of €276 million were at the prior-year level (previous year: €274 million). The ratio of R&D expenses to sales was 1.9%, as in the previous year. The assets were used mainly for developing new application solutions for our products and improving products and process technologies. The R&D projects are aligned to sustainability aspects.
General administration expenses saw an increase of 2.1% to €491 million (previous year: €481 million). Other operating income exceeded other operating expenses by €57 million (previous year: €85 million). This development was primarily driven by the proceeds from the sale of the U.S. sheet business in the Polycarbonates segment totaling €36 million.
In the reporting period, EBIT amounted to €2,580 million, down 8.1% (previous year: €2,808 million). As a result, the EBIT margin decreased to 17.7% (previous year: 19.9%).
The financial result of minus €104 million (previous year: minus €150 million) was influenced mainly by the net interest expense of minus €47 million (previous year: minus €99 million). Including the financial result, income before income taxes declined 6.8% to €2,476 million (previous year: €2,658 million). The income tax expense of €647 million hovered around the prior-year level (previous year: €641 million). After taxes and noncontrolling interests, net income was down 9.3% and amounted to €1,823 million (previous year: €2,009 million).