Polyurethanes

In the third quarter of 2020, core volumes sold in Polyurethanes rose by 4.3% over the prior-year quarter. Volumes sold were up primarily in the furniture and wood processing industry, driven by increased demand in the NAFTA and APAC regions. This was also true in the electrical, electronics and household appliances industry thanks to stronger demand in the EMLA and NAFTA regions.

Sales in the Polyurethanes segment decreased by 11.0% to €1,315 million in the third quarter of 2020 (previous year: €1,478 million). The change in average selling prices impacted sales, which declined by 11.5% largely due to the decline in selling prices in the previous year caused by an increase in competition and lower raw material price levels in effect since the second quarter of 2020. Furthermore, exchange rate movements resulted in a 3.8% decrease in sales, but total volumes gave sales a 5.3% lift. The portfolio effect from the sale of the European systems house business in the fourth quarter of 2019 negatively affected sales by 1.0% in the third quarter of 2020.

Sales in the EMLA region were down by 11.3% from the prior-year quarter to €558 million (previous year: €629 million), mainly on account of a significant drop in selling prices. In addition, the aforementioned portfolio effect and the change in exchange rates both decreased sales slightly. This stood in contrast to a sharp uptick in total volumes sold. In the NAFTA region, sales fell by 15.8% to €363 million (previous year: €431 million). The key drivers here were significantly lower selling prices and sharply negative exchange rate developments. Total volumes also pushed sales down somewhat. The APAC region's sales slid by 5.7% to €394 million (previous year: €418 million), primarily due to a substantial decline in selling prices. In addition, exchange rate movements had a slightly negative effect on sales, but higher total volumes gave sales a modest boost.

EBITDA in the Polyurethanes segment increased by 12.2% from the prior-year quarter to €220 million in the third quarter of 2020 (previous year: €196 million). The positive effect of volumes sold and reduced price levels as a result of cost-cutting measures increased earnings.

EBIT rose by 17.5% to €114 million in the third quarter of 2020 (previous year: €97 million).

In the third quarter of 2020, free operating cash flow tripled to €114 million (previous year: €38 million). This is mainly the result of the reduced cash outflows for additions to property, plant and equipment compared with the prior-year quarter, an increase in EBITDA as well as an overall increase in funds freed up from working capital.