Business Development by Segment
Polyurethanes
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4th quarter 20181 |
4th quarter 2019 |
Change |
20181 |
2019 |
Change |
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€ million |
€ million |
% |
€ million |
€ million |
% |
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Core volume growth2 |
+2.4% |
+3.6% |
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+0.8% |
+2.3% |
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Sales |
1,597 |
1,336 |
–16.3 |
7,362 |
5,779 |
–21.5 |
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Change in sales |
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Volume |
+2.5% |
–0.2% |
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+0.9% |
+1.5% |
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Price |
–17.6% |
–16.9% |
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+1.9% |
–24.7% |
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Currency |
+0.2% |
+1.5% |
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–3.1% |
+1.8% |
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Portfolio |
0.0% |
–0.7% |
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0.0% |
–0.1% |
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Sales by region |
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EMLA |
678 |
546 |
–19.5 |
3,182 |
2,487 |
–21.8 |
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NAFTA |
474 |
394 |
–16.9 |
1,947 |
1,680 |
–13.7 |
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APAC |
445 |
396 |
–11.0 |
2,233 |
1,612 |
–27.8 |
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EBITDA |
111 |
123 |
+10.8 |
1,763 |
648 |
–63.2 |
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EBIT |
27 |
24 |
–11.1 |
1,412 |
250 |
–82.3 |
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Operating cash flows |
393 |
282 |
–28.2 |
1,386 |
575 |
–58.5 |
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Cash outflows for additions to property, plant, equipment and intangible assets |
171 |
168 |
–1.8 |
414 |
543 |
+31.2 |
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Free operating cash flow |
222 |
114 |
–48.6 |
972 |
32 |
–96.7 |
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In fiscal 2019, core volumes in Polyurethanes rose by 2.3% over the prior-year period. An increase in volumes sold in the furniture and construction industries and in the electrical, electronics and household appliances industry more than offset weaker demand, especially from the automotive industry.
The Polyurethanes segment’s sales were down 21.5% to €5,779 million (previous year: €7,362 million). The decrease in average selling prices reduced sales by 24.7%. In contrast, the growth in total volumes sold and exchange rate movements increased sales by 1.5% and 1.8%, respectively. Moreover, the portfolio effect from the sale of the European systems house business in the fourth quarter of 2019 had a negative effect of 0.1% on sales.
Sales in the EMLA region declined by 21.8% to €2,487 million (previous year: €3,182 million) on account of significantly lower average selling prices. However, total volumes sold increased somewhat. Changes in exchange rates and the aforementioned portfolio effect had no notable impact on sales. The NAFTA region’s sales fell by 13.7% to €1,680 million (previous year: €1,947 million). Considerably lower selling prices and a minor decrease in total volumes sold combined to negatively affect sales. Conversely, exchange rate movements improved sales slightly. The APAC region’s sales declined by 27.8% to €1,612 million (previous year: €2,233 million) due to a clear drop in average selling prices. The increase in total volumes sold and changes in exchange rates had a mildly positive effect on sales.
Polyurethanes quarterly sales
€ million
Polyurethanes quarterly EBITDA
€ million
1 Reference information was not restated, see note 2.1 “Financial reporting standards applied for the first time in the reporting period.”
EBITDA was down by 63.2% from the prior-year period to €648 million (previous year: €1,763 million). Lower selling prices cut deeply into margins despite a decline in raw material prices. In contrast, higher volumes sold had a positive effect on EBITDA. Moreover, insurance reimbursements were recognized in other operating income in the amount of €63 million. Gains from the sale of the European systems house business totaling €34 million served to increase earnings.
EBIT declined to €250 million (previous year: €1,412 million).
Free operating cash flow was down by 96.7% year over year to €32 million (previous year: €972 million), mostly due to a decrease in EBITDA and increase in cash outflows for property, plant and equipment. In addition, increased working capital freed up had a positive effect.