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Bayer MaterialScience
Sales of MaterialScience in the third quarter of 2008 came in at €2,549 million (Q3 2007: €2,625 million), down 2.9 percent from the prior-year period. When adjusted for portfolio and currency effects, sales were level (-0.5 percent) with the corresponding period of 2007. We almost completely offset a decline in volumes through higher selling prices. Our business in North America was heavily impacted by Hurricane Ike. Due to transport problems and the severely restricted supply of raw materials at our largest U.S. site in Baytown, Texas, we had to temporarily halt production and declare force majeure. All major product groups were affected.
EBITDA before special items in the third quarter was down 39.4 percent to €255 million. Earnings were greatly hampered by raw material and energy price increases totaling over €200 million. Selling price increases and cost savings from our restructuring program only partly offset these effects. EBIT before special items dropped by 53.2 percent to €138 million. After special charges of €5 million (Q3 2007: €3 million) for our restructuring program, EBIT fell by 54.5 percent to €133 million.
EBITDA before special items in the third quarter was down 39.4 percent to €255 million. Earnings were greatly hampered by raw material and energy price increases totaling over €200 million. Selling price increases and cost savings from our restructuring program only partly offset these effects. EBIT before special items dropped by 53.2 percent to €138 million. After special charges of €5 million (Q3 2007: €3 million) for our restructuring program, EBIT fell by 54.5 percent to €133 million.
Systems
Sales in the Systems segment remained level year on year at €1,850 million (-0.4 percent). Included for the first time in the third quarter were the sales of our new systems house joint venture BaySystems Baulé in France and the systems house Resina acquired in the Netherlands in the second quarter. Business remained at the previous year’s level on a currency- and portfolio-adjusted basis (+0.3 percent). We succeeded in significantly raising prices for our key end products, while volumes declined.
Sales in the Polyurethanes business unit came in at €1,269 million, down 2.3 percent against the prior-year figure of €1,299 million. Business was down by 1.0 percent on a currency- and portfolio-adjusted basis. Sales of diphenylmethane diisocyanate (MDI) posted a slight overall decline. Business with this product expanded in North America and Europe, but was down in the Asia-Pacific region. By contrast, we saw a gratifying increase in sales of toluene diisocyanate (TDI). While TDI sales in the Latin America/Africa/Middle East and North America regions moved higher, business in the Asia-Pacific region suffered particularly from the effects of the four-week ban on TDI shipments in China in connection with the Olympic Games. Polyether (PET) sales shrank due to lower volumes, particularly in Europe and North America.
Sales of our Coatings, Adhesives, Specialties business unit were almost level with the prior-year quarter at €412 million (-0.7 percent). Adjusted for currency and portfolio effects, business receded by 2.9 percent. Although sales of this business unit again posted encouraging growth in the Asia-Pacific region, this did not fully offset the declines in the European market.
Industrial Operations raised sales by 18.7 percent to €127 million (Q3 2007: €107 million). On a currency-adjusted basis, sales advanced by 22.5 percent. This was particularly attributable to the very good selling prices for sodium hydroxide solution on the German and U.S. markets.
EBITDA before special items in the Systems segment dropped by 34.0 percent to €225 million. The selling price increases implemented only partly offset the significantly higher raw material and energy costs and the lower volumes. EBIT before special items fell by 43.7 percent to €148 million. Special charges in the third quarter came to €4 million (Q3 2007: €3 million). EBIT moved back by 44.6 percent to €144 million.
Sales in the Systems segment in the first three quarters of 2008 came in at €5,624 million (9M 2007: €5,593 million). Adjusted for currency and portfolio effects, business expanded by 3.3 percent. This growth resulted from selling price increases, although volumes dipped slightly overall. EBITDA before special items fell by 7.7 percent to €930 million. EBIT before special items amounted to €687 million (9M 2007: €777 million). EBIT of the Systems segment fell by 9.0 percent year on year to €677 million.
Sales in the Polyurethanes business unit came in at €1,269 million, down 2.3 percent against the prior-year figure of €1,299 million. Business was down by 1.0 percent on a currency- and portfolio-adjusted basis. Sales of diphenylmethane diisocyanate (MDI) posted a slight overall decline. Business with this product expanded in North America and Europe, but was down in the Asia-Pacific region. By contrast, we saw a gratifying increase in sales of toluene diisocyanate (TDI). While TDI sales in the Latin America/Africa/Middle East and North America regions moved higher, business in the Asia-Pacific region suffered particularly from the effects of the four-week ban on TDI shipments in China in connection with the Olympic Games. Polyether (PET) sales shrank due to lower volumes, particularly in Europe and North America.
Sales of our Coatings, Adhesives, Specialties business unit were almost level with the prior-year quarter at €412 million (-0.7 percent). Adjusted for currency and portfolio effects, business receded by 2.9 percent. Although sales of this business unit again posted encouraging growth in the Asia-Pacific region, this did not fully offset the declines in the European market.
Industrial Operations raised sales by 18.7 percent to €127 million (Q3 2007: €107 million). On a currency-adjusted basis, sales advanced by 22.5 percent. This was particularly attributable to the very good selling prices for sodium hydroxide solution on the German and U.S. markets.
EBITDA before special items in the Systems segment dropped by 34.0 percent to €225 million. The selling price increases implemented only partly offset the significantly higher raw material and energy costs and the lower volumes. EBIT before special items fell by 43.7 percent to €148 million. Special charges in the third quarter came to €4 million (Q3 2007: €3 million). EBIT moved back by 44.6 percent to €144 million.
Sales in the Systems segment in the first three quarters of 2008 came in at €5,624 million (9M 2007: €5,593 million). Adjusted for currency and portfolio effects, business expanded by 3.3 percent. This growth resulted from selling price increases, although volumes dipped slightly overall. EBITDA before special items fell by 7.7 percent to €930 million. EBIT before special items amounted to €687 million (9M 2007: €777 million). EBIT of the Systems segment fell by 9.0 percent year on year to €677 million.
| Bayer MaterialScience | 3rd Quarter 2007 | 3rd Quarter 2008 | Change | First Nine Months 2007 | First Nine Months 2008 | Change |
| € million | € million | % | € million | € million | % | |
| Sales | 2,625 | 2,549 | -2.9 | 7,856 | 7,683 | -2.2 |
| Systems | 1,858 | 1,850 | -0.4 | 5,593 | 5,624 | +0.6 |
| Materials | 767 | 699 | -8.9 | 2,263 | 2,059 | -9.0 |
| Sales by Region | ||||||
| Europe | 1,122 | 1,111 | -1.0 | 3,476 | 3,415 | -1.8 |
| North America | 596 | 558 | -6.4 | 1,840 | 1,627 | -11.6 |
| Asia/Pacific | 582 | 547 | -6.0 | 1,625 | 1,653 | +1.7 |
| Latin America/Africa/Middle East | 325 | 333 | +2.5 | 915 | 988 | +8.0 |
| EBITDA1 | 419 | 249 | -40.6 | 1,217 | 1,021 | -16.1 |
| Special items | (2) | (6) | (22) | (13) | ||
| EBITDA before special items2 | 421 | 255 | -39.4 | 1,239 | 1,034 | -16.5 |
| EBITDA margin before special items | 16.0% | 10.0% | 15.8% | 13.5% | ||
| EBIT1 | 292 | 133 | -54.5 | 843 | 658 | -21.9 |
| Special items | (3) | (5) | (33) | (14) | ||
| EBIT before special items2 | 295 | 138 | -53.2 | 876 | 672 | -23.3 |
| Gross cash flow1 | 326 | 197 | -39.6 | 923 | 785 | -15.0 |
| Net cash flow1 | 378 | 139 | -63.2 | 693 | 561 | -19.0 |
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 | 3rd Quarter 2007 | 3rd Quarter 2008 | Change | First Nine Months 2007 | First Nine Months 2008 | Change |
| € million | € million | % | € million | € million | % | |
| Sales | 1,858 | 1,850 | -0.4 | 5,593 | 5,624 | +0.6 |
| Polyurethanes | 1,299 | 1,269 | -2.3 | 3,944 | 3,879 | -1.6 |
| Coatings, Adhesives, Specialties | 415 | 412 | -0.7 | 1,218 | 1,267 | +4.0 |
| Industrial Operations | 107 | 127 | +18.7 | 317 | 357 | +12.6 |
| Other | 37 | 42 | +13.5 | 114 | 121 | +6.1 |
| Sales by Region | ||||||
| Europe | 846 | 852 | +0.7 | 2,628 | 2,608 | -0.8 |
| North America | 452 | 435 | -3.8 | 1,398 | 1,264 | -9.6 |
| Asia/Pacific | 315 | 297 | -5.7 | 874 | 969 | +10.9 |
| Latin America/Africa/Middle East | 245 | 266 | +8.6 | 693 | 783 | +13.0 |
| EBITDA1 | 339 | 220 | -35.1 | 986 | 921 | -6.6 |
| Special items | (2) | (5) | (22) | (9) | ||
| EBITDA before special items2 | 341 | 225 | -34.0 | 1,008 | 930 | -7.7 |
| EBITDA margin before special items | 18.4% | 12.2% | 18.0% | 16.5% | ||
| EBIT1 | 260 | 144 | -44.6 | 744 | 677 | -9.0 |
| Special items | (3) | (4) | (33) | (10) | ||
| EBIT before special items2 | 263 | 148 | -43.7 | 777 | 687 | -11.6 |
| Gross cash flow1 | 257 | 170 | -33.9 | 730 | 690 | -5.5 |
| Net cash flow1 | 275 | 118 | -57.1 | 590 | 420 | -28.8 |
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
Sales of the Materials segment in the third quarter of 2008 dropped by 8.9 percent to €699 million, and by 2.3 percent after adjusting for currency and portfolio effects.
Our Polycarbonates business unit saw sales recede by 9.6 percent to €638 million. Adjusted for currency and portfolio effects, sales were down by 2.8 percent. This reduction was chiefly attributable to volume-related declines in raw material sales. In the end-products field, we raised sales of polycarbonate sheet in all regions on a currency- and portfolio-adjusted basis. Sales of polycarbonate resins moved slightly lower overall.
Sales of the Thermoplastic Polyurethanes business unit were level year on year at €61 million, but rose by 2.9 percent on a currency-adjusted basis. This was mainly due to selling price increases implemented in all regions.
EBITDA before special items of the Materials segment fell by 62.5 percent to €30 million. This was due above all to significantly higher raw material and energy costs, coupled with lower volumes and a slight decline in prices. Savings from the cost structure program we initiated partly offset these effects. EBIT before special items amounted to minus €10 million (Q3 2007: plus €32 million). After special items of minus €1 million, EBIT amounted to minus €11 million.
Sales of the Materials segment declined by 9.0 percent in the first nine months of 2008, to €2,059 million. On a currency- and portfolio-adjusted basis, sales decreased by 2.1 percent. EBITDA before special items fell by 55.0 percent to €104 million. EBIT before special items amounted to minus €15 million (9M 2007: €99 million). After special items of minus €4 million, EBIT came in at minus €19 million.
Our Polycarbonates business unit saw sales recede by 9.6 percent to €638 million. Adjusted for currency and portfolio effects, sales were down by 2.8 percent. This reduction was chiefly attributable to volume-related declines in raw material sales. In the end-products field, we raised sales of polycarbonate sheet in all regions on a currency- and portfolio-adjusted basis. Sales of polycarbonate resins moved slightly lower overall.
Sales of the Thermoplastic Polyurethanes business unit were level year on year at €61 million, but rose by 2.9 percent on a currency-adjusted basis. This was mainly due to selling price increases implemented in all regions.
EBITDA before special items of the Materials segment fell by 62.5 percent to €30 million. This was due above all to significantly higher raw material and energy costs, coupled with lower volumes and a slight decline in prices. Savings from the cost structure program we initiated partly offset these effects. EBIT before special items amounted to minus €10 million (Q3 2007: plus €32 million). After special items of minus €1 million, EBIT amounted to minus €11 million.
Sales of the Materials segment declined by 9.0 percent in the first nine months of 2008, to €2,059 million. On a currency- and portfolio-adjusted basis, sales decreased by 2.1 percent. EBITDA before special items fell by 55.0 percent to €104 million. EBIT before special items amounted to minus €15 million (9M 2007: €99 million). After special items of minus €4 million, EBIT came in at minus €19 million.
| Materials | 3rd Quarter 2007 | 3rd Quarter 2008 | Change | First Nine Months 2007 | First Nine Months 2008 | Change |
| € million | € million | % | € million | € million | % | |
| Sales | 767 | 699 | -8.9 | 2,263 | 2,059 | -9.0 |
| Polycarbonates | 706 | 638 | -9.6 | 2,092 | 1,873 | -10.5 |
| Thermoplastic Polyurethanes | 61 | 61 | 0.0 | 171 | 186 | +8.8 |
| Sales by Region | ||||||
| Europe | 276 | 259 | -6.2 | 848 | 807 | -4.8 |
| North America | 144 | 123 | -14.6 | 442 | 363 | -17.9 |
| Asia/Pacific | 267 | 250 | -6.4 | 751 | 684 | -8.9 |
| Latin America/Africa/Middle East | 80 | 67 | -16.3 | 222 | 205 | -7.7 |
| EBITDA1 | 80 | 29 | -63.8 | 231 | 100 | -56.7 |
| Special items | 0 | (1) | 0 | (4) | ||
| EBITDA before special items2 | 80 | 30 | -62.5 | 231 | 104 | -55.0 |
| EBITDA margin before special items | 10.4% | 4.3% | 10.2% | 5.1% | ||
| EBIT1 | 32 | (11) | • | 99 | (19) | • |
| Special items | 0 | (1) | 0 | (4) | ||
| EBIT before special items2 | 32 | (10) | • | 99 | (15) | • |
| Gross cash flow1 | 69 | 27 | -60.9 | 193 | 95 | -50.8 |
| Net cash flow1 | 103 | 21 | -79.6 | 103 | 141 | 36.9 |
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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