Coatings, Adhesives, Specialties

In the 2020 fiscal year, core volumes sold in Coatings, Adhesives, Specialties were down by 8.9% from the prior year. The main factors behind this trend were pandemic-related developments in core volumes sold, especially in the automotive and transportation industry, and in the construction industry, particularly in the EMLA and NAFTA regions. Core volumes sold were down in the first six months of fiscal 2020, chiefly because demand crashed as a result of the coronavirus pandemic. By the end of the year, demand had recovered and, as a result, core volumes sold in the fourth quarter of the 2020 fiscal year exceeded the prior-year figures.

Sales in the Coatings, Adhesives, Specialties segment slid by 13.9% to €2,039 million (previous year: €2,369 million). This was largely due to a downturn in total volumes sold, which in turn reduced sales by 9.0%. Lower average selling prices and exchange rate developments had negative effects on sales of 4.2% and 1.0%, respectively. The change in the portfolio increased sales by 0.3%.

In the EMLA region, sales fell by 13.7% to €908 million (previous year: €1,052 million). This was chiefly due to a decrease in total volumes sold, which had a significant negative effect on sales, and to a lower selling price level, which pushed sales down somewhat. Sales were not noticeably affected by exchange rate movements. In the NAFTA region, sales were down by 16.5% to €469 million (previous year: €562 million), primarily due to a substantial decline in total volumes sold. Lower average selling prices and exchange rate developments both exerted a mildly negative effect on sales. Sales in the APAC region declined by 12.3% to €662 million (previous year: €755 million). Lower selling prices had a strong negative effect on sales. The decline in total volumes sold and exchange rate changes in turn reduced sales slightly. The portfolio effect had no notable impact with regard to sales.

Coatings, Adhesives, Specialties
Quarterly sales

€ million

Coatings, Adhesives, Specialties
Quarterly EBITDA

€ million

EBITDA fell by 27.3% compared with the prior-year period, coming in at €341 million (previous year: €469 million). Lower total volumes sold and margins reduced earnings. Moreover, expenses for the announced acquisition of the Resins & Functional Materials (RFM) business from Koninklijke DSM N.V., Heerlen (Netherlands), resulted in a €33 million decrease in earnings, of which €1 million were general administration expenses. This contrasts with a low cost level thanks to cost-cutting measures, which had a positive effect on EBITDA. EBITDA in the prior-year period was affected by a one-time gain of €19 million from the remeasurement of the shares of DIC Covestro Polymer Ltd., Tokyo (Japan), previously reported according to the equity method.

EBIT was down by 38.9% to €215 million (previous year: €352 million).

Free operating cash flow decreased by 1.0% to €189 million (previous year: €191 million). The low EBITDA had a negative effect. Funds were tied up in working capital in the previous year, but freed up in the reporting year, which had a positive effect, as did lower outflows for additions to property, plant, equipment, and intangible assets.