Coatings, Adhesives, Specialties

Second Quarter of 2021

In the second quarter of 2021, core volumes sold in the Coatings, Adhesives, Specialties segment rose by 133.5% over the prior-year quarter. The initial consolidation of the Resins & Functional Materials (RFM) business contributed 100.6% of this figure. Moreover, volumes sold increased in the main customer industries, especially in the EMLA region, where demand recovered in contrast to the prior-year quarter adversely affected by the coronavirus pandemic. At the same time, raw material bottlenecks ongoing since the first quarter of 2021 continued to limit product availability in the Coatings, Adhesives, Specialties segment in the second quarter of 2021 and impeded our organic growth opportunities.

In the second quarter of 2021, the segment’s sales more than doubled, growing to €926 million (previous year: €443 million). The portfolio effect stemming from the acquisition of RFM had a positive effect on sales of 67.9%. Likewise, growth in total volumes sold and higher selling prices also increased sales by 34.4% and 13.2%, respectively. However, exchange rate movements reduced sales by 6.5%.

In the EMLA region, sales more than doubled over the prior-year quarter, amounting to €434 million (previous year: €188 million). Key drivers here were the aforementioned portfolio effect and an increase in total volumes sold, both of which massively increased sales. Higher average selling prices also had a significantly positive effect on sales. Exchange rate developments were neutral overall in terms of sales. Sales in the NA region were up by 96.0% to €198 million (previous year: €101 million). Both the aforementioned portfolio effect and an increase in total volumes sold substantially boosted sales. At the same time, a rise in the selling price level had a significant positive impact on sales, whereas exchange rate changes reduced sales considerably. In the APAC region, sales climbed by 90.9% to €294 million (previous year: €154 million). The above-mentioned portfolio effect, a positive trend in total volumes sold, and higher average selling prices strongly increased sales. In contrast, exchange rate movements had a clearly negative effect on sales.

In the second quarter of 2021, EBITDA in the Coatings, Adhesives, Specialties segment more than doubled over the prior-year period, growing to €134 million (previous year: €60 million). The increase in total volumes sold was the key factor in this development. At the same time, a higher selling price level led to improved margins despite an increase in raw material prices, which in turn buoyed earnings. However, higher provisions for variable compensation reduced earnings. Nonrecurring expenses in the low double-digit million range resulting from the RFM acquisition also had a negative effect on earnings.

EBIT was up, increasing to €81 million (previous year: €28 million).

In the second quarter of 2021, free operating cash flow rose to €89 million (previous year: €65 million). Higher EBITDA had a positive effect here, whereas a decrease in funds freed up from working capital and higher cash outflows for additions to property, plant and equipment each had a negative effect on free operating cash flow.

First Half of 2021

In the first half of 2021, core volumes sold in the Coatings, Adhesives, Specialties segment were up by 62.4% over the prior-year period. This was chiefly due to the aforementioned RFM acquisition and growth in volumes sold across all main customer industries as a result of the recovery in demand since the prior-year quarter, which had felt the impact of the coronavirus pandemic. At the same time, persistent raw material bottlenecks and the resulting limited availability of products curbed our organic growth potential.

Sales of Coatings, Adhesives, Specialties were up by 49.9% to €1,521 million in the same period (previous year: €1,015 million). The above-mentioned portfolio effect and higher total volumes sold increased sales by 29.7% and 18.1%, respectively. Average selling prices also increased, which gave sales a 7.1% lift, but exchange rate movements reduced sales by 5.0%.

In the first half of 2021, EBITDA grew by 30.5% to €248 million over the prior-year period (previous year: €190 million), mainly due to the increase in total volumes sold. In addition, higher selling prices led to improved margins despite an increase in raw material prices, which had a positive effect on earnings. However, higher provisions for variable compensation had a negative effect on EBITDA. At the same time, nonrecurring effects in the low double-digit million range in connection with the RFM acquisition also reduced earnings.

EBIT increased by 29.7% to €166 million (previous year: €128 million).

Free operating cash flow rose by 38.8% in the first half of 2021 to €111 million (previous year: €80 million). The rise in EBITDA more than offset higher cash outflows for additions to property, plant, equipment and intangible assets and an increase in funds tied up in working capital.