Management Report

5.3 MaterialScience

Key Data – MaterialScience       [Table 11]
  2nd
Quarter
2014
2nd
Quarter
2015


Change
1st
Half
2014
1st
Half
2015


Change
  € million € million % Fx & p
adj. %
€ million € million % Fx & p
adj. %
Sales 2,864 3,185 +11.2 +0.6 5,667 6,199 +9.4 -0.7
Change in sales                
Volume +5.6% +7.0%     +6.6% +4.7%    
Price -2.0% -6.4%     -2.4% -5.4%    
Currency -3.6% +10.6%     -3.4% +10.1%    
Portfolio -0.4% 0.0%     -0.5% 0.0%    
Sales                
Polyurethanes 1,532 1,638 +6.9 -2.9 3,042 3,189 +4.8 -4.8
Polycarbonates 694 828 +19.3 +5.3 1,353 1,592 +17.7 +4.7
Coatings, Adhesives, Specialties 483 561 +16.1 +6.0 952 1,095 +15.0 +5.4
Industrial Operations 155 158 +1.9 -2.6 320 323 +0.9 -3.8
                 
  € million € million % Fx adj. % € million € million % Fx adj. %
Sales by region                
Europe 1,142 1,158 +1.4 +1.6 2,283 2,251 -1.4 -1.2
North America 646 766 +18.6 -4.2 1,242 1,484 +19.5 -2.5
Asia/Pacific 746 904 +21.2 -0.4 1,482 1,760 +18.8 -1.0
Latin America/Africa/
Middle East
330 357 +8.2 +8.8 660 704 +6.7 +4.8
                 
EBIT 109 278 +155.0   328 497 +51.5  
Special items (17) (59)     (19) (101)    
EBIT before special items1 126 337 +167.5   347 598 +72.3  
EBITDA1 256 448 +75.0   620 851 +37.3  
Special items (14) (58)     (16) (79)    
EBITDA before special items1 270 506 +87.4   636 930 +46.2  
EBITDA margin before special items1 9.4% 15.9%     11.2% 15.0%    
Gross cash flow2 214 359 +67.8   499 671 +34.5  
Net cash flow2 133 360 +170.7   89 523 .  
Fx & p adj. = currency- and portfolio-adjusted; Fx adj. = currency-adjusted
1 For definition see Chapter 6 “Calculation of EBIT(DA) Before Special Items.”
2 For definition see Chapter 8 “Financial Position of the Bayer Group.”

Sales of the MaterialScience subgroup in the second quarter of 2015, at €3,185 million, were level with the prior-year figures (Fx & portfolio adj.: +0.6%; reported +11.2%). Volumes expanded in all regions. Sales were diminished by negative price effects, particularly at Polyurethanes. Raw material prices were down steeply overall against the prior-year period.

MaterialScience Quarterly Sales

The Polyurethanes business unit saw sales fall by 2.9% (Fx & portfolio adj.) to €1,638 million. Higher volumes were not sufficient to offset the sharp decline in selling prices in the toluene diisocyanate (tdi) and diphenylmethane diisocyanate (mdi) product groups. For polyether (pet), on the other hand, a clear expansion of volumes coupled with only moderately lower prices led to an increase in sales. Business expanded in Latin America/Africa/Middle East, while the positive volume effects in the other regions were more than offset by lower selling prices.

The Polycarbonates business unit raised sales by 5.3% (Fx & portfolio adj.) to €828 million. This growth was due to much higher volumes in all regions, which resulted particularly from greater demand in the automotive industry. Selling prices were down overall compared with the prior-year period.

Sales in the Coatings, Adhesives, Specialties business unit moved forward by 6.0% (Fx & portfolio adj.) to €561 million, mainly as a result of higher volumes. Selling prices were down slightly overall compared with the prior-year period.

Sales of Industrial Operations receded by 2.6% (Fx & portfolio adj.) to €158 million due to slightly lower selling prices and volumes.

MaterialScience Quarterly EBIT and EBITDA Before Special Items

 ebit of MaterialScience in the second quarter of 2015 was well above the prior-year level at €278 million (+155.0%). This figure reflected special charges of €59 million (q2 2014: €17 million), chiefly for the consolidation of production sites and the planned stock market flotation of MaterialScience. ebit before special items climbed by a substantial 167.5% to €337 million. Ebitda before special items improved significantly by 87.4% to €506 million (q2 2014: €270 million). Considerably lower raw material prices more than offset the decline in selling prices. Earnings were additionally buoyed by higher volumes and positive currency effects of around €80 million.

Sales of MaterialScience in the first half of 2015 were level year on year at €6,199 million (Fx & port­folio adj. -0.7%). Lower selling prices at Polyurethanes and Polycarbonates were offset by higher volumes at Polycarbonates, Coatings, Adhesives, Specialties and Polyurethanes. We registered higher volumes and lower selling prices in all regions.

ebit advanced by a significant 51.5% to €497 million. ebitda before special items climbed by 46.2% to €930 million after about €130 million in positive currency effects.

Last updated: July 29, 2015  Copyright © Bayer AG
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