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Bayer MaterialScience
MaterialScience posted first-quarter sales of €2,512 million, down 3.7 percent compared to the same period of 2007. When adjusted for portfolio and currency effects, sales edged up by 0.6 percent, thanks to higher selling prices that were only partly offset by a slight decline in volumes due to lower sales of raw materials, particularly styrene. If raw material sales are disregarded, volumes rose slightly.
Regional trends varied. While sales in North America receded by about 6 percent on a currency-adjusted basis due to the slowdown in the U.S. economy, business in Asia-Pacific and Latin America/Africa/Middle East improved strongly. Adjusted for the lower raw material sales, business in Europe held steady year on year.
First-quarter EBITDA before special items came to €407 million, virtually matching the previous year’s level of €409 million. A significant earnings decline in Materials was compensated by a gratifying improvement in underlying EBITDA in Systems. For the subgroup as a whole, the selling price increases implemented and the first earnings contributions from the restructuring program launched at the end of last year offset the higher costs for raw materials and energies. EBIT before special items fell by 3.4 percent to €281 million. There were no special items in the quarter.
Regional trends varied. While sales in North America receded by about 6 percent on a currency-adjusted basis due to the slowdown in the U.S. economy, business in Asia-Pacific and Latin America/Africa/Middle East improved strongly. Adjusted for the lower raw material sales, business in Europe held steady year on year.
First-quarter EBITDA before special items came to €407 million, virtually matching the previous year’s level of €409 million. A significant earnings decline in Materials was compensated by a gratifying improvement in underlying EBITDA in Systems. For the subgroup as a whole, the selling price increases implemented and the first earnings contributions from the restructuring program launched at the end of last year offset the higher costs for raw materials and energies. EBIT before special items fell by 3.4 percent to €281 million. There were no special items in the quarter.
Systems
Sales in the Systems segment slipped 1.6 percent to €1,839 million (Q1 2007: €1,869 million), due mainly to the weak U.S. dollar. Adjusted for currency and portfolio changes, sales grew by 1.6 percent, thanks to selling price increases. By contrast, volumes were down slightly year on year as a result of much lower raw material sales. Sales performance varied by region, with business down in North America but substantially improved in Asia-Pacific and Latin America/Africa/Middle East. Disregarding raw material sales, sales in Europe showed a slight increase.
The Polyurethanes business unit had sales of €1,259 million, down 5.5 percent from the prior-year period. Even after adjusting for currency and portfolio effects, sales did not quite reach the prior-year level, declining by 1.2 percent.
Our Coatings, Adhesives, Specialties business unit improved sales by 7.6 percent to €423 million, or by 7.3 percent on a currency- and portfolio-adjusted basis.
Inorganic Basic Chemicals boosted sales by 10.4 percent (currency-adjusted: +13.6 percent) to €117 million, due primarily to higher volumes.
EBITDA before special items came in at €368 million, up 11.9 percent year on year. This earnings improvement was chiefly attributable to selling price increases that more than offset the higher costs for raw materials and energies. EBIT before special items advanced by 11.1 percent to €281 million.
The Polyurethanes business unit had sales of €1,259 million, down 5.5 percent from the prior-year period. Even after adjusting for currency and portfolio effects, sales did not quite reach the prior-year level, declining by 1.2 percent.
Our Coatings, Adhesives, Specialties business unit improved sales by 7.6 percent to €423 million, or by 7.3 percent on a currency- and portfolio-adjusted basis.
Inorganic Basic Chemicals boosted sales by 10.4 percent (currency-adjusted: +13.6 percent) to €117 million, due primarily to higher volumes.
EBITDA before special items came in at €368 million, up 11.9 percent year on year. This earnings improvement was chiefly attributable to selling price increases that more than offset the higher costs for raw materials and energies. EBIT before special items advanced by 11.1 percent to €281 million.
| Bayer MaterialScience | 1st Quarter 2007 | 1st Quarter 2008 | Change |
| € million | € million | % | |
| Sales | 2,608 | 2,512 | -3.7 |
| Systems | 1,869 | 1,839 | -1.6 |
| Materials | 739 | 673 | -8.9 |
| Sales by Region | |||
| Europe | 1,185 | 1,135 | -4.2 |
| North America | 631 | 521 | -17.4 |
| Asia/Pacific | 506 | 529 | +4.5 |
| Latin America/Africa/Middle East | 286 | 327 | +14.3 |
| EBITDA1 | 409 | 407 | -0.5 |
| Special items | 0 | 0 | |
| EBITDA before special items2 | 409 | 407 | -0.5 |
| EBITDA margin before special items | 15.7% | 16.2% | |
| EBIT1 | 285 | 281 | -1.4 |
| Special items | (6) | 0 | |
| EBIT before special items2 | 291 | 281 | -3.4 |
| Gross cash flow1 | 304 | 310 | +2.0 |
| Net cash flow1 | 37 | 146 | • |
1 for definition see Bayer Group Key Data
2 for definition see also Calculation of EBIT(DA) Before Special Items
2 for definition see also Calculation of EBIT(DA) Before Special Items
| Systems | 1st Quarter 2007 | 1st Quarter 2008 | Change |
| € million | € million | % | |
| Sales | 1,869 | 1,839 | -1.6 |
| Polyurethanes | 1,332 | 1,259 | -5.5 |
| Coatings. Adhesives. Specialties | 393 | 423 | +7.6 |
| Inorganic Basic Chemicals | 106 | 117 | +10.4 |
| Other | 38 | 40 | +5.3 |
| Sales by Region | |||
| Europe | 902 | 863 | -4.3 |
| North America | 482 | 401 | -16.8 |
| Asia/Pacific | 266 | 316 | +18.8 |
| Latin America/Africa/Middle East | 219 | 259 | +18.3 |
| EBITDA1 | 329 | 368 | +11.9 |
| Special items | 0 | 0 | |
| EBITDA before special items2 | 329 | 368 | +11.9 |
| EBITDA margin before special items | 17.6% | 20.0% | |
| EBIT1 | 247 | 281 | +13.8 |
| Special items | (6) | 0 | |
| EBIT before special items2 | 253 | 281 | +11.1 |
| Gross cash flow1 | 235 | 273 | +16.2 |
| Net cash flow1 | 62 | 63 | +1.6 |
1 for definition see Bayer Group Key Data
2 for definition see also Calculation of EBIT(DA) Before Special Items
2 for definition see also Calculation of EBIT(DA) Before Special Items
Materials
In the Materials segment, sales fell by 8.9 percent to €673 million (Q1 2007: €739 million). On a portfolio- and currency-adjusted basis, business shrank by 2.1 percent from the prior-year period. The main reason for the lower sales was a decline in volumes, while selling prices were steady. Adjusted sales were down in the Europe, North America and Asia-Pacific regions, but rose in Latin America/Africa/Middle East.
In an expectedly difficult market environment, sales of our Polycarbonates business unit fell by 10.7 percent to €610 million (currency- and portfolio-adjusted: -2.4 percent).
Sales of our Thermoplastic Polyurethanes business unit moved ahead 12.5 percent to €63 million (currency- and portfolio-adjusted: +2.6 percent).
EBITDA before special items of the Materials segment dropped by 51.3 percent to €39 million. This decline in earnings resulted from lower volumes and higher costs for raw materials and energies, which were not offset by selling price increases. EBIT before special items moved back to €0 million (Q1 2007: €38 million).
In an expectedly difficult market environment, sales of our Polycarbonates business unit fell by 10.7 percent to €610 million (currency- and portfolio-adjusted: -2.4 percent).
Sales of our Thermoplastic Polyurethanes business unit moved ahead 12.5 percent to €63 million (currency- and portfolio-adjusted: +2.6 percent).
EBITDA before special items of the Materials segment dropped by 51.3 percent to €39 million. This decline in earnings resulted from lower volumes and higher costs for raw materials and energies, which were not offset by selling price increases. EBIT before special items moved back to €0 million (Q1 2007: €38 million).
| Materials | 1st Quarter 2007 | 1st Quarter 2008 | Change |
| € million | € million | % | |
| Sales | 739 | 673 | -8.9 |
| Polycarbonates | 683 | 610 | -10.7 |
| Thermoplastic Polyurethanes | 56 | 63 | +12.5 |
| Sales by Region | |||
| Europe | 283 | 272 | -3.9 |
| North America | 149 | 120 | -19.5 |
| Asia/Pacific | 240 | 213 | -11.3 |
| Latin America/Africa/Middle East | 67 | 68 | +1.5 |
| EBITDA1 | 80 | 39 | -51.3 |
| Special Items | 0 | 0 | |
| EBITDA before special itemsn2 | 80 | 39 | -51.3 |
| EBITDA margin before special items | 10.8% | 5.8% | |
| EBIT1 | 38 | 0 | • |
| Special Items | 0 | 0 | |
| EBIT before special items2 | 38 | 0 | • |
| Gross cash flow1 | 69 | 37 | -46.4 |
| Net cash flow1 | (25) | 83 | • |
1 for definition see Bayer Group Key Data
2 for definition see also Calculation of EBIT(DA) Before Special Items
2 for definition see also Calculation of EBIT(DA) Before Special Items
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