Business Development by Segment
Coatings, Adhesives, Specialties
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4th quarter 20181 |
4th quarter 2019 |
Change |
20181 |
2019 |
Change |
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€ million |
€ million |
% |
€ million |
€ million |
% |
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Core volume growth2 |
–2.2% |
+6.2% |
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+2.3% |
–1.0% |
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Sales |
534 |
533 |
–0.2 |
2,361 |
2,369 |
+0.3 |
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Change in sales |
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Volume |
+0.3% |
+0.1% |
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+3.5% |
–2.1% |
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Price |
0.0% |
–4.2% |
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+0.6% |
–1.1% |
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Currency |
+0.6% |
+1.9% |
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–2.6% |
+2.3% |
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Portfolio |
0.0% |
+2.0% |
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0.0% |
+1.2% |
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Sales by region |
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EMLA |
240 |
224 |
–6.7 |
1,117 |
1,052 |
–5.8 |
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NAFTA |
129 |
129 |
0.0 |
519 |
562 |
+8.3 |
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APAC |
165 |
180 |
+9.1 |
725 |
755 |
+4.1 |
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EBITDA |
63 |
62 |
–1.6 |
464 |
469 |
+1.1 |
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EBIT |
39 |
32 |
–17.9 |
371 |
352 |
–5.1 |
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Operating cash flows |
107 |
170 |
+58.9 |
309 |
349 |
+12.9 |
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Cash outflows for additions to property, plant, equipment and intangible assets |
36 |
55 |
+52.8 |
106 |
158 |
+49.1 |
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Free operating cash flow |
71 |
115 |
+62.0 |
203 |
191 |
–5.9 |
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In the 2019 fiscal year, core volumes in Coatings, Adhesives, Specialties were down 1.0% from the prior year. This development was driven primarily by weaker automotive industry demand for coating precursors.
At €2,369 million, the Coatings, Adhesives, Specialties segment’s sales remained stable year over year (previous year: €2,361 million). A decrease in total volumes sold and lower selling prices had negative effects on sales of 2.1% and 1.1%, respectively. In contrast, exchange rate movements had a positive impact of 2.3%. The step acquisition of shares and subsequent full consolidation of Japan-based DIC Covestro Polymer Ltd. also gave sales a 1.2% boost.
Sales in the EMLA region dropped by 5.8% to €1,052 million (previous year: €1,117 million) as a result of a sharp decline in total volumes sold. Changes in average selling prices and exchange rates collectively had no notable effect on sales. In the NAFTA region, sales grew by 8.3% to €562 million (previous year: €519 million). The growth in total volumes sold and higher selling price levels resulted in a slight improvement in sales. In addition, exchange rate fluctuations had a significant positive impact on sales. Sales in the APAC region increased by 4.1% to €755 million (previous year: €725 million). A modest positive effect from total volumes sold and exchange rate movements compensated for the minimal decrease in average selling prices. Moreover, the portfolio effect from the step acquisition of shares and subsequent full consolidation of Japan-based DIC Covestro Polymer Ltd. improved sales slightly.
Coatings, Adhesives, Specialties
quarterly sales
€ million
Coatings, Adhesives, Specialties
quarterly EBITDA
€ million
1 Reference information was not restated, see note 2.1 “Financial reporting standards applied for the first time in the reporting period.”
EBITDA was up by 1.1% from the prior-year period to €469 million (previous year: €464 million). Lower selling prices were not balanced out by a decline in raw material prices and therefore cut into margins. Lower volumes likewise adversely influenced EBITDA. Conversely, exchange rate effects and the portfolio effect of the step acquisition of shares of Japan-based DIC Covestro Polymer Ltd. improved sales. In addition, the one-time gain from the remeasurement of shares of DIC Covestro Polymer Ltd. in Japan previously accounted for under the equity method had a positive effect on EBITDA of €19 million.
EBIT sank by 5.1% to €352 million (previous year: €371 million).
Free operating cash flow decreased by 5.9% to €191 million (previous year: €203 million). The main reason for this was the increase in cash outflows for additions to property, plant and equipment, which stood in contrast to the overall lower funds tied up in working capital.