Coatings, Adhesives, Specialties
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3rd quarter 2019 |
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3rd quarter 2020 |
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Change |
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1st nine months 2019 |
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1st nine months 2020 |
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Change |
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€ million |
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€ million |
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% |
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€ million |
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€ million |
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% |
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Core volume growth1 |
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–4.0% |
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–6.9% |
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–3.0% |
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–12.5% |
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Sales |
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588 |
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495 |
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–15.8 |
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1,836 |
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1,510 |
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–17.8 |
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Change in sales |
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Volume |
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–4.7% |
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–8.3% |
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–2.7% |
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–13.9% |
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Price |
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–2.1% |
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–5.0% |
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–0.3% |
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–4.0% |
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Currency |
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+2.2% |
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–2.5% |
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+2.5% |
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–0.3% |
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Portfolio |
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+1.6% |
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0.0% |
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+1.0% |
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+0.4% |
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Sales by region |
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EMLA |
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257 |
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214 |
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–16.7 |
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828 |
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681 |
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–17.8 |
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NAFTA |
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145 |
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113 |
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–22.1 |
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433 |
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353 |
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–18.5 |
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APAC |
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186 |
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168 |
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–9.7 |
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575 |
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476 |
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–17.2 |
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EBITDA |
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111 |
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99 |
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–10.8 |
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407 |
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289 |
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–29.0 |
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EBIT |
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82 |
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68 |
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–17.1 |
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320 |
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196 |
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–38.8 |
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Operating cash flows |
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129 |
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80 |
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–38.0 |
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179 |
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214 |
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+19.6 |
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Cash outflows for additions to property, plant, equipment and intangible assets |
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39 |
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41 |
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+5.1 |
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103 |
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95 |
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–7.8 |
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Free operating cash flow |
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90 |
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39 |
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–56.7 |
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76 |
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119 |
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+56.6 |
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Core volumes sold in the Coatings, Adhesives, Specialties segment fell in the third quarter of 2020 by 6.9% compared with the prior-year quarter. This development was mainly due to a decline in volumes sold in the automotive and transportation industry as well as the construction industry caused by drops in demand in the EMLA and NAFTA regions.
In the Coatings, Adhesives, Specialties segment third quarter sales in 2020 were down 15.8% to €495 million (previous year: €588 million). A reduction in total volumes sold and lower average selling prices resulted in 8.3% and 5.0% declines in sales. In addition, exchange rate movements had a negative effect on sales of 2.5%.
In the EMLA region, sales decreased by 16.7% to €214 million (previous year: €257 million), principally on account of a sharp drop in total volumes sold. Furthermore, average selling prices decreased sales minimally, while exchange rate changes were neutral overall with respect to sales. Sales in the NAFTA region declined by 22.1% to €113 million (previous year: €145 million), chiefly due to a significant decrease in total volumes sold. Moreover, exchange rate developments and average selling price changes both caused sales to decline slightly. In the APAC region, sales were down 9.7% to €168 million (previous year: €186 million), mainly on account of a considerable drop in selling price level. Exchange rate movements also had a modest negative impact on sales, while an increase in total volumes sold improved sales substantially.
In the third quarter of 2020, EBITDA in the Coatings, Adhesives, Specialties segment decreased by 10.8% from the prior-year quarter, amounting to €99 million (previous year: €111 million). A negative effect exerted by volumes sold and a slight decline in margins caused earnings to decrease somewhat. Reduced costs as a result of cost-cutting measures were unable to compensate for these effects.
EBIT was down by 17.1% to €68 million in the third quarter of 2020 (previous year: €82 million).
Free operating cash flow dropped by 56.7% in the third quarter of 2020 to €39 million (previous year: €90 million). Although cash in working capital was freed up in the prior-year quarter, this quarter saw an increase in cash tied up, which adversely affected free operating cash flow. The decline in EBITDA also had a negative effect.