Management Report
3.3 MaterialScience
| Key Data – MaterialScience | [Table 3.13] |
|---|
| | 2009 | 2010 | Change |
| € million | € million | % | Fx & p adj.% |
| Sales | 7,520 | 10,154 | +35.0 | +30.1 |
| Change in sales | | | | |
| Volume | -12.4% | +23.8% | | |
| Price | -12.3% | +6.3% | | |
| Currency | +1.6% | +4.9% | | |
| Portfolio | +0.3% | 0.0% | | |
| Sales by business unit | | | | |
| Polyurethanes | 3,783 | 5,024 | +32.8 | +27.8 |
| Polycarbonates | 1,873 | 2,791 | +49.0 | +42.9 |
| Coatings, Adhesives, Specialties | 1,364 | 1,791 | +31.3 | +27.2 |
| Industrial Operations | 500 | 548 | +9.6 | +7.7 |
| Sales by region | | | | |
| Europe | 3,054 | 3,950 | +29.3 | |
| North America | 1,536 | 2,022 | +31.6 | |
| Asia/Pacific | 1,951 | 2,907 | +49.0 | |
| Latin America/Africa/Middle East | 979 | 1,275 | +30.2 | |
| EBIT | (266) | 780 | . | |
| Special items | (140) | 0 | | |
| EBIT before special items * | (126) | 780 | . | |
| EBITDA* | 341 | 1,356 | . | |
| Special items | (105) | 0 | | |
| EBITDA before special items * | 446 | 1,356 | . | |
| EBITDA margin before special items * | 5.9% | 13.4% | | |
| Gross cash flow ** | 319 | 1,058 | . | |
| Net cash flow ** | 849 | 763 | -10.1 | |
Fx & p adj. = currency- and portfolio-adjusted
* For definition see Chapter 4.2 "Calculation of EBIT(DA) Before Special Items."
** For definition see Chapter 4.5 "Liquidity and Capital Expenditures of the Bayer Group."
|
The positive business performance of MaterialScience in 2010 was driven by the marked recovery in the economy following the global financial and economic crisis. While business continued to be held back at the beginning of the year, sales in the final three quarters returned to pre-crisis levels. Sales in 2010 came in at €10,154 million, up 35.0% (Fx & portfolio adj. +30.1%) against the prior-year figure of €7,520 million. This substantial growth resulted from double-digit volume increases in all business units and regions due to considerably higher demand from all of our main customer industries. Volumes, too, thus regained pre-crisis levels. We also achieved higher selling prices overall compared with the previous year, implementing significant increases in the Asia/Pacific, Europe and Latin America/Africa/Middle East regions. Prices in North America were level with the previous year.
Sales of the Polyurethanes business unit advanced by 32.8% to €5,024 million (2009: €3,783 million). On a currency- and portfolio-adjusted basis, business improved by 27.8%. Growth was mainly attributable to significantly higher volumes in all product groups – diphenylmethane diisocyanate (MDI), toluene diisocyanate (TDI) and polyether – and in all regions. The largest increases in absolute terms were registered in Europe and Asia/Pacific, where we also significantly raised selling prices. As a result, we recorded a positive price effect overall despite price stagnation in Latin America/Africa/Middle East and North America.
Sales of the Polycarbonates business unit climbed by 49.0% (Fx adj. +42.9%) to €2,791 million (2009: €1,873 million). This was largely the result of the gratifying business trend in our granules product group, which saw substantial growth in volumes and selling prices in all regions. Sales of polycarbonate sheet/semi-finished products also increased. Here we benefited from higher volumes in all regions, which more than offset the overall drop in selling prices.
The Coatings, Adhesives, Specialties business unit posted sales of €1,791 million, up 31.3% (Fx adj. +27.2%) from the prior-year figure of €1,364 million. Growth was driven by significantly higher volumes in all product groups and regions, with rising demand in Asia/Pacific and Europe having a particularly positive effect. While selling prices were low in the first quarter, we were able to raise them as the year progressed, restoring prices for the year as a whole to 2009 levels.
Sales of Industrial Operations gained 9.6% (Fx adj. +7.7%) to €548 million (2009: €500 million). In the two primary regional markets – Europe and North America – we achieved significant volume increases that more than offset the drop in prices.
The markedly improved business situation was also reflected in earnings. EBIT rose to €780 million (2009: minus €266 million). There were no special items (2009: minus €140 million). EBITDA before special items came in well ahead of the prior year at €1,356 million (2009: €446 million), thanks mainly to substantial volume growth. We also benefited from increased selling prices for our products, which more than offset the price increases on the raw material markets. Efficiency improvements had a further positive impact.