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Bayer MaterialScience
Sales of MaterialScience in the second quarter of 2008 came in at €2,622 million, which was level with the prior-year figure. When adjusted for portfolio and currency effects, sales improved by 5.3 percent, thanks to price and volume increases.
Despite the growth in business, EBITDA before special items decreased by 9.0 percent in the second quarter, to €372 million. The Systems segment matched its prior-year earnings, while our Materials segment saw earnings decline significantly as difficult market conditions continued. Earnings as a whole were greatly hampered by raw material and energy price increases exceeding €100 million year on year, and by negative currency effects. These were not fully offset by price and volume increases and savings from the cost structure programs. EBIT before special items fell by 12.8 percent to €253 million. Special charges of €9 million were taken in connection with the restructuring program launched in 2007. The prior-year figure contained special charges of €24 million. EBIT fell by 8.3 percent to €244 million.
Despite the growth in business, EBITDA before special items decreased by 9.0 percent in the second quarter, to €372 million. The Systems segment matched its prior-year earnings, while our Materials segment saw earnings decline significantly as difficult market conditions continued. Earnings as a whole were greatly hampered by raw material and energy price increases exceeding €100 million year on year, and by negative currency effects. These were not fully offset by price and volume increases and savings from the cost structure programs. EBIT before special items fell by 12.8 percent to €253 million. Special charges of €9 million were taken in connection with the restructuring program launched in 2007. The prior-year figure contained special charges of €24 million. EBIT fell by 8.3 percent to €244 million.
Systems
Sales in the Systems segment grew by 3.7 percent to €1,935 million (Q2 2007: €1,866 million). Adjusted for currency and portfolio changes, sales rose by 8.1 percent, thanks to higher volumes and selling prices. On a currency-adjusted basis, sales expanded in all regions. In Europe, sales edged up despite the declines for polymer raw materials, such as styrene. In North America, sales rose by a currency-adjusted 6.2 percent, with higher selling prices for certain products compensating for the overall volume decline due to the economic situation. We experienced good growth in the Asia-Pacific and Latin America/Africa/Middle East regions, primarily on account of higher volumes.
All units of the Systems segment succeeded in improving sales from the prior-year period. The Polyurethanes business unit saw sales rise by 2.9 percent to €1,351 million. On a currency- and portfolio-adjusted basis, business expanded by 8.7 percent. Sales of toluene diisocyanate (TDI), in particular, developed well in all regions.
Sales of our Coatings, Adhesives, Specialties business unit grew by 5.4 percent to €432 million. Adjusted for currency and portfolio changes, the increase was 5.2 percent. Sales growth took place primarily in the Asia-Pacific market.
Inorganic Basic Chemicals raised sales by 8.7 percent to €113 million. On a currency-adjusted basis, the increase was 12.6 percent. Growth in this business unit was due largely to higher selling prices for sodium hydroxide solution in the United States.
EBITDA before special items in the Systems segment held steady from the prior-year period, at €337 million (Q2 2007: €338 million). Here we succeeded in offsetting negative currency effects and price increases for raw materials and energies, which were substantial in some cases, through higher selling prices and volumes. EBIT before special items dipped by 1.1 percent to €258 million. Special charges in the second quarter came to €6 million. The figure for the prior-year period contained special charges of €24 million for the closure of our MDI plant in New Martinsville, West Virginia, United States. EBIT improved by 6.3 percent to €252 million.
Sales in our Systems segment in the first half of 2008, at €3,774 million, were up slightly year on year (+1.0 percent). Adjusted for shifts in exchange rates and portfolio changes, business expanded by 4.8 percent, thanks to higher volumes and selling prices. EBITDA before special items advanced by 5.7 percent to €705 million. EBIT before special items came in at €539 million (H1 2007: €514 million). EBIT advanced by 10.1 percent to €533 million.
In May 2008, Bayer acquired the polyurethane systems house Resina Chemie B.V., Netherlands, a supplier of rigid polyurethane foam systems for the refrigeration and construction industries. In addition, the cast elastomers businesses of Bayer MaterialScience AG and Michel Baulé SA were merged in July into a joint venture named Baulé SAS, in which each company holds a 50 percent interest.
All units of the Systems segment succeeded in improving sales from the prior-year period. The Polyurethanes business unit saw sales rise by 2.9 percent to €1,351 million. On a currency- and portfolio-adjusted basis, business expanded by 8.7 percent. Sales of toluene diisocyanate (TDI), in particular, developed well in all regions.
Sales of our Coatings, Adhesives, Specialties business unit grew by 5.4 percent to €432 million. Adjusted for currency and portfolio changes, the increase was 5.2 percent. Sales growth took place primarily in the Asia-Pacific market.
Inorganic Basic Chemicals raised sales by 8.7 percent to €113 million. On a currency-adjusted basis, the increase was 12.6 percent. Growth in this business unit was due largely to higher selling prices for sodium hydroxide solution in the United States.
EBITDA before special items in the Systems segment held steady from the prior-year period, at €337 million (Q2 2007: €338 million). Here we succeeded in offsetting negative currency effects and price increases for raw materials and energies, which were substantial in some cases, through higher selling prices and volumes. EBIT before special items dipped by 1.1 percent to €258 million. Special charges in the second quarter came to €6 million. The figure for the prior-year period contained special charges of €24 million for the closure of our MDI plant in New Martinsville, West Virginia, United States. EBIT improved by 6.3 percent to €252 million.
Sales in our Systems segment in the first half of 2008, at €3,774 million, were up slightly year on year (+1.0 percent). Adjusted for shifts in exchange rates and portfolio changes, business expanded by 4.8 percent, thanks to higher volumes and selling prices. EBITDA before special items advanced by 5.7 percent to €705 million. EBIT before special items came in at €539 million (H1 2007: €514 million). EBIT advanced by 10.1 percent to €533 million.
In May 2008, Bayer acquired the polyurethane systems house Resina Chemie B.V., Netherlands, a supplier of rigid polyurethane foam systems for the refrigeration and construction industries. In addition, the cast elastomers businesses of Bayer MaterialScience AG and Michel Baulé SA were merged in July into a joint venture named Baulé SAS, in which each company holds a 50 percent interest.
| Bayer MaterialScience | 2nd Quarter 2007 | 2nd Quarter 2008 | Change | 1st Half 2007 | 1st Half 2008 | Change |
| € million | € million | % | € million | € million | % | |
| Sales | 2,623 | 2,622 | +0.0 | 5,231 | 5,134 | -1.9 |
| Systems | 1,866 | 1,935 | +3.7 | 3,735 | 3,774 | +1.0 |
| Materials | 757 | 687 | -9.2 | 1,496 | 1,360 | -9.1 |
| Sales by Region | ||||||
| Europe | 1,169 | 1,169 | 0.0 | 2,354 | 2,304 | -2.1 |
| North America | 613 | 548 | -10.6 | 1,244 | 1,069 | -14.1 |
| Asia/Pacific | 537 | 577 | +7.4 | 1,043 | 1,106 | +6.0 |
| Latin America/Africa/ Middle East | 304 | 328 | +7.9 | 590 | 655 | +11.0 |
| EBITDA1 | 389 | 365 | -6.2 | 798 | 772 | -3.3 |
| Special items | (20) | (7) | (20) | (7) | ||
| EBITDA before special items2 | 409 | 372 | -9.0 | 818 | 779 | -4.8 |
| EBITDA margin before special items | 15.6% | 14.2% | 15.6% | 15.2% | ||
| EBIT1 | 266 | 244 | -8.3 | 551 | 525 | -4.7 |
| Special items | (24) | (9) | (30) | (9) | ||
| EBIT before special items2 | 290 | 253 | -12.8 | 581 | 534 | -8.1 |
| Gross cash flow1 | 293 | 278 | -5.1 | 597 | 588 | -1.5 |
| Net cash flow1 | 278 | 276 | -0.7 | 315 | 422 | +34.0 |
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 | 2nd Quarter 2007 | 2nd Quarter 2008 | Change | 1st Half 2007 | 1st Half 2008 | Change |
| € million | € million | % | € million | € million | % | |
| Sales | 1,866 | 1,935 | +3.7 | 3,735 | 3,774 | +1.0 |
| Polyurethanes | 1,313 | 1,351 | +2.9 | 2,645 | 2,610 | -1.3 |
| Coatings. Adhesives. Specialties | 410 | 432 | +5.4 | 803 | 855 | +6.5 |
| Inorganic Basic Chemicals | 104 | 113 | +8.7 | 210 | 230 | +9.5 |
| Other Systems | 39 | 39 | 0.0 | 77 | 79 | +2.6 |
| Sales by Region | ||||||
| Europe | 880 | 893 | +1.5 | 1,782 | 1,756 | -1.5 |
| North America | 464 | 428 | -7.8 | 946 | 829 | -12.4 |
| Asia/Pacific | 293 | 356 | +21.5 | 559 | 672 | +20.2 |
| Latin America/Africa/ Middle East | 229 | 258 | +12.7 | 448 | 517 | +15.4 |
| EBITDA1 | 318 | 333 | +4.7 | 647 | 701 | +8.3 |
| Special items | (20) | (4) | (20) | (4) | ||
| EBITDA before special items2 | 338 | 337 | -0.3 | 667 | 705 | +5.7 |
| EBITDA margin before special items | 18.1% | 17.4% | 17.9% | 18.7% | ||
| EBIT1 | 237 | 252 | +6.3 | 484 | 533 | +10.1 |
| Special items | (24) | (6) | (30) | (6) | ||
| EBIT before special items2 | 261 | 258 | -1.1 | 514 | 539 | +4.9 |
| Gross cash flow1 | 238 | 247 | +3.8 | 473 | 520 | +9.9 |
| Net cash flow1 | 253 | 239 | -5.5 | 315 | 302 | -4.1 |
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 fell by 9.2 percent in the second quarter of 2008, to €687 million (Q2 2007: €757 million). After adjusting for currency and portfolio effects, sales declined by 1.8 percent as a result of lower selling prices, with volumes remaining steady. Sales in Europe were at the prior-year level despite lower selling prices. Sales in Asia/Pacific came in below the previous year’s level due to a drop in business with raw materials. Volumes in the North American market shrank due to the economic situation, causing sales to move back by a currency-adjusted 7.5 percent. Sales in the Latin America/Africa/Middle East region did not match the prior-year period despite higher volumes.
Sales in our Polycarbonates business unit fell by 11.1 percent to €625 million in a difficult market environment. Adjusted for currency and portfolio effects, business was down by 2.3 percent, due largely to lower selling prices.
Our Thermoplastic Polyurethanes business unit saw sales expand by 14.8 percent to €62 million, with sales of the acquired Uretech business making a key contribution to growth. The currency- and portfolio-adjusted increase was 4.3 percent.
EBITDA before special items of the Materials segment fell by 50.7 percent to €35 million. The drop in earnings was largely attributable to lower selling prices and to higher raw material and energy costs. EBIT before special items declined to minus €5 million (Q2 2007: €29 million). EBIT came in at minus €8 million.
Sales of the Materials segment moved back by 9.1 percent in the first half of 2008, to €1,360 million. Adjusted for currency and portfolio effects, business shrank by 2.0 percent. EBITDA before special items fell by 51.0 percent in the first six months, to €74 million. EBIT before special items came in at minus €5 million (Q2 2007: plus €67 million). EBIT amounted to minus €8 million.
Sales in our Polycarbonates business unit fell by 11.1 percent to €625 million in a difficult market environment. Adjusted for currency and portfolio effects, business was down by 2.3 percent, due largely to lower selling prices.
Our Thermoplastic Polyurethanes business unit saw sales expand by 14.8 percent to €62 million, with sales of the acquired Uretech business making a key contribution to growth. The currency- and portfolio-adjusted increase was 4.3 percent.
EBITDA before special items of the Materials segment fell by 50.7 percent to €35 million. The drop in earnings was largely attributable to lower selling prices and to higher raw material and energy costs. EBIT before special items declined to minus €5 million (Q2 2007: €29 million). EBIT came in at minus €8 million.
Sales of the Materials segment moved back by 9.1 percent in the first half of 2008, to €1,360 million. Adjusted for currency and portfolio effects, business shrank by 2.0 percent. EBITDA before special items fell by 51.0 percent in the first six months, to €74 million. EBIT before special items came in at minus €5 million (Q2 2007: plus €67 million). EBIT amounted to minus €8 million.
| Materials | 2nd Quarter 2007 | 2nd Quarter 2008 | Change | 1st Half 2007 | 1st Half 2008 | Change |
| € million | € million | % | € million | € million | % | |
| Sales | 757 | 687 | -9.2 | 1,496 | 1,360 | -9.1 |
| Polycarbonates | 703 | 625 | -11.1 | 1,386 | 1,235 | -10.9 |
| Thermoplastic Polyurethanes | 54 | 62 | +14.8 | 110 | 125 | +13.6 |
| Sales by Region | ||||||
| Europe | 289 | 276 | -4.5 | 572 | 548 | -4.2 |
| North America | 149 | 120 | -19.5 | 298 | 240 | -19.5 |
| Asia/Pacific | 244 | 221 | -9.4 | 484 | 434 | -10.3 |
| Latin America/Africa/ Middle East | 75 | 70 | -6.7 | 142 | 138 | -2.8 |
| EBITDA1 | 71 | 32 | -54.9 | 151 | 71 | -53.0 |
| Special items | 0 | (3) | 0 | (3) | ||
| EBITDA before special items2 | 71 | 35 | -50.7 | 151 | 74 | -51.0 |
| EBITDA margin before special items | 9.4% | 5.1% | 10.1% | 5.4% | ||
| EBIT1 | 29 | (8) | -127.6 | 67 | (8) | -111.9 |
| Special items | 0 | (3) | 0 | (3) | ||
| EBIT before special items2 | 29 | (5) | -117.2 | 67 | (5) | -107.5 |
| Gross cash flow1 | 55 | 31 | -43.6 | 124 | 68 | -45.2 |
| Net cash flow1 | 25 | 37 | +48.0 | 0 | 120 | • |
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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