Coatings, Adhesives, Specialties
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3rd quarter 20181 |
3rd quarter 2019 |
Change |
1st nine months 20181 |
1st nine months 2019 |
Change |
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€ million |
€ million |
% |
€ million |
€ million |
% |
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Core volume growth2 |
+7.2% |
–4.0% |
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+3.7% |
–3.0% |
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Sales |
606 |
588 |
–3.0 |
1,827 |
1,836 |
+0.5 |
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Change in sales |
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Volume |
+9.7% |
–4.7% |
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+4.3% |
–2.7% |
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Price |
–0.5% |
–2.1% |
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+0.8% |
–0.3% |
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Currency |
–0.4% |
+2.2% |
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–3.5% |
+2.5% |
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Portfolio |
0.0% |
+1.6% |
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0.0% |
+1.0% |
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Sales by region |
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EMLA |
280 |
257 |
–8.2 |
877 |
828 |
–5.6 |
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NAFTA |
131 |
145 |
+10.7 |
390 |
433 |
+11.0 |
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APAC |
195 |
186 |
–4.6 |
560 |
575 |
+2.7 |
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EBITDA |
126 |
111 |
–11.9 |
401 |
407 |
+1.5 |
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EBIT |
103 |
82 |
–20.4 |
332 |
320 |
–3.6 |
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Operating cash flows |
119 |
129 |
+8.4 |
202 |
179 |
–11.4 |
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Cash outflows for additions to property, plant, equipment and intangible assets |
26 |
39 |
+50.0 |
70 |
103 |
+47.1 |
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Free operating cash flow |
93 |
90 |
–3.2 |
132 |
76 |
–42.4 |
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In the third quarter of 2019, core volumes in the Coatings, Adhesives, Specialties segment were 4.0% lower than in the prior-year quarter. This development was mainly attributable to weaker demand for coating precursors from all key customer industries, particularly the automotive sector.
The Coatings, Adhesives, Specialties segment’s sales decreased 3.0% to €588 million (previous year: €606 million) in the third quarter of 2019. A negative effect on sales by 4.7% and 2.1% was due, respectively, to total volumes and the decrease in selling prices on average. In contrast, exchange rate movements had a positive effect on sales, which rose by 2.2%. The gradual acquisition of shares in Japan-based DIC Covestro Polymer Ltd. also bumped up sales by 1.6%.
The EMLA region’s sales dropped 8.2% to €257 million (previous year: €280 million) due to a considerable decline in total volumes. Average selling prices remained mostly stable, however. Exchange rate changes had no significant net effect on sales. In the NAFTA region, sales rose by 10.7% to €145 million (previous year: €131 million). The increase in total volumes, higher selling prices, and the effect of exchange rate movements were each responsible for the slight growth in sales. The APAC region’s sales were down 4.6% to €186 million (previous year: €195 million). Changes in total volumes and average selling prices had a significant negative impact on sales. Conversely, the effect of exchange rate movements and the portfolio effect from the gradual acquisition of shares in Japan-based DIC Covestro Polymer Ltd. gave sales a modest boost.
In the third quarter of 2019, EBITDA in the Coatings, Adhesives, Specialties segment decreased 11.9% from the prior-year quarter to €111 million (previous year: €126 million). This was primarily due to negative volume effects and lower margins.
EBIT was down by 20.4% in the same period, dropping to €82 million (previous year: €103 million).
Free operating cash flow decreased by 3.2% to €90 million in the third quarter of 2019 (previous year: €93 million).The decline in EBITDA and increase in cash outflows for additions to property, plant, equipment and intangible assets were not offset by the overall greater release of funds in working capital.