Performance of the Reportable Segments

Polycarbonates

Polycarbonates key data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4th quarter 2019

 

4th quarter 2020

 

Change

 

2019

 

2020

 

Change

 

 

€ million

 

€ million

 

%

 

€ million

 

€ million

 

%

Core volume growth1

 

+3.5%

 

+3.2%

 

 

 

+2.7%

 

–3.0%

 

 

Sales

 

814

 

803

 

–1.4

 

3,473

 

2,985

 

–14.1

Change in sales

 

 

 

 

 

 

 

 

 

 

 

 

Volume

 

0.0%

 

+7.4%

 

 

 

+2.4%

 

–2.3%

 

 

Price

 

–13.5%

 

–2.1%

 

 

 

–16.5%

 

–7.0%

 

 

Currency

 

+1.6%

 

–3.7%

 

 

 

+2.0%

 

–1.5%

 

 

Portfolio

 

0.0%

 

–3.0%

 

 

 

–2.2%

 

–3.3%

 

 

Sales by region

 

 

 

 

 

 

 

 

 

 

 

 

EMLA

 

270

 

244

 

–9.6

 

1,146

 

942

 

–17.8

NAFTA

 

160

 

154

 

–3.8

 

734

 

610

 

–16.9

APAC

 

384

 

405

 

+5.5

 

1,593

 

1,433

 

–10.0

EBITDA

 

95

 

200

 

>100

 

536

 

553

 

+3.2

EBIT

 

39

 

143

 

>200

 

300

 

332

 

+10.7

Operating cash flows

 

204

 

178

 

–12.7

 

613

 

484

 

–21.0

Cash outflows for additions to property, plant, equipment and intangible assets

 

84

 

61

 

–27.4

 

209

 

157

 

–24.9

Free operating cash flow

 

120

 

117

 

–2.5

 

404

 

327

 

–19.1

1

Reference values calculated on the basis of the definition of the core business effective March 31, 2020.

In fiscal year 2020, core volumes sold in Polycarbonates were down by 3.0% from the prior-year period. Key drivers were lower volumes sold in the automotive and transportation industry, mainly in the and regions, and in the electrical, electronics and household appliances industry, especially in the region. In contrast, demand from the construction industry increased. The coronavirus pandemic led to a sharp slide in demand, particularly in the first six months of fiscal 2020, which in turn resulted in a drop in core volumes sold. In the second half of the year, a robust recovery in demand pushed core volumes sold over the prior-year level.

Sales in the Polycarbonates segment fell by 14.1% in the year 2020 to €2,985 million (previous year: €3,473 million), mostly due to lower selling prices, which reduced sales by 7.0%. A decrease in total volumes sold and exchange rate movements had negative effects on sales of 2.3% and 1.5%, respectively. The portfolio effect from the sale of the European polycarbonate sheets business in the first quarter of fiscal 2020 adversely affected sales, which declined by 3.3%.

In the EMLA region, sales tumbled 17.8% to €942 million (previous year: €1,146 million). The aforementioned portfolio effect and a reduction in average selling prices each significantly lowered sales. Exchange rate developments also pushed sales down somewhat. Total volumes sold remained at the prior-year level, however. Sales in the NAFTA region declined by 16.9% to €610 million (previous year: €734 million). Lower total volumes sold and a lower selling price level both had a strong adverse effect on sales. Moreover, exchange rate changes reduced sales somewhat. The APAC region saw sales slide by 10.0% to €1,433 million (previous year: €1,593 million), largely driven by a sharp drop in average selling prices. At the same time, exchange rate movements had a mildly negative effect on sales. However, total volumes sold remained stable year over year.

Polycarbonates
Quarterly sales

€ million

Polycarbonates Quarterly sales (bar chart)

Polycarbonates
Quarterly EBITDA

€ million

Polycarbonates Quarterly EBITDA (bar chart)

In fiscal 2020, in the Polycarbonates segment grew by 3.2% over the prior-year period, rising to €553 million (previous year: €536 million). Lower raw material prices along with an improved cost level thanks to cost-cutting measures had a positive effect on earnings. However, reduced selling prices and a decline in total volumes sold adversely affected EBITDA. Moreover, the portfolio effect from the sale of the European polycarbonate sheets business in the first quarter of 2020 reduced sales.

increased by 10.7% to €332 million (previous year: €300 million).

was down by 19.1% to €327 million (previous year: €404 million). A decrease in funds released from working capital had a negative effect, whereas reduced cash outflows for additions to property, plant, and equipment had a positive effect.

EMLA
Comprises all countries in Europe, the Middle East, Africa and Latin America (excluding Mexico) in which Covestro is active
NAFTA
Region comprising the United States, Canada, and Mexico in which Covestro is active
APAC
Comprises all countries in the Asia and Pacific region in which Covestro is active
EBITDA/earnings before interest, taxes, depreciation and amortization
EBIT plus depreciation and amortization of property, plant, equipment, and intangible assets
EBIT/earnings before interest and taxes
Income after income taxes plus financial result and income tax expense
FOCF/free operating cash flow
Operating cash flows (pursuant to IAS 7) less cash outflows for additions to property, plant, equipment and intangible assets