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Performance by Subgroup and Segment
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Management Report
Bayer MaterialScience
The MaterialScience subgroup grew sales in the third quarter of 2007 by 1.1 percent to €2,625 million (Q3 2006: €2,596 million). Adjusted for currency and portfolio effects, sales advanced by 3.5 percent year on year. This increase was largely due to higher prices than in the prior-year quarter in nearly all regions. We also achieved a small increase in volumes, with a slight overall decline in Europe and North America being more than offset by steadily rising demand in Asia and Latin America.
EBITDA before special items in the third quarter of 2007 came to €421 million (+10.5 percent). This marked the first time in fiscal 2007 that we were able to improve quarterly underlying earnings year on year. We compensated for the rise in raw material and energy costs, mainly through higher selling prices. EBIT before special items rose by 11.7 percent to €295 million. After special items, EBIT improved by 25.9 percent to €292 million.
EBITDA before special items in the third quarter of 2007 came to €421 million (+10.5 percent). This marked the first time in fiscal 2007 that we were able to improve quarterly underlying earnings year on year. We compensated for the rise in raw material and energy costs, mainly through higher selling prices. EBIT before special items rose by 11.7 percent to €295 million. After special items, EBIT improved by 25.9 percent to €292 million.
| Bayer MaterialScience | 3rd Quarter 2006 | 3rd Quarter 2007 | Change | First Nine Months 2006 | First Nine Months 2007 | Change |
| € million | € million | % | € million | € million | % | |
| Net sales | 2,596 | 2,625 | +1.1 | 7,629 | 7,856 | +3.0 |
| EBITDA1 | 352 | 419 | +19.0 | 1,211 | 1,217 | +0.5 |
| Special items | (29) | (2) | (159) | (22) | ||
| EBITDA before special items2 | 381 | 421 | +10.5 | 1,370 | 1,239 | -9.6 |
| EBITDA margin before special items | 14.7% | 16.0% | 18.0% | 15.8% | ||
| EBIT1 | 232 | 292 | +25.9 | 861 | 843 | -2.1 |
| Special items | (32) | (3) | (162) | (33) | ||
| EBIT before special items2 | 264 | 295 | +11.7 | 1,023 | 876 | -14.4 |
| Gross cash flow1 | 239 | 326 | +36.4 | 883 | 923 | +4.5 |
| Net cash flow1 | 256 | 378 | +47.7 | 780 | 693 | -11.2 |
2006 figures restated
1 for definition see Bayer Group Key Data
2 for definition see also Calculation of EBIT(DA) Before Special Items
1 for definition see Bayer Group Key Data
2 for definition see also Calculation of EBIT(DA) Before Special Items
Materials
Sales in the Materials segment rose by 3.2 percent in the third quarter of 2007, to €767 million (Q3 2006: €743 million). After adjusting for currency and portfolio effects, business increased by 5.8 percent, with the Polycarbonates and Thermoplastic Polyurethanes business units posting adjusted sales gains of 5.3 percent and 12.4 percent, respectively. We achieved slight increases in both volumes and selling prices.
Third-quarter EBITDA before special items came in 3.9 percent above the prior-year period, at €80 million, with higher selling prices and growth in volumes offsetting increases in raw material and energy costs. EBIT before special items, however, fell by 15.8 percent to €32 million due to higher write-downs. There were no special items.
Sales of the Materials segment in the first three quarters of 2007 advanced to €2,263 million (currency- and portfolio-adjusted: +7.7 percent). EBITDA before special items came in at €231 million (-40.2 percent), while EBIT before special items fell to €99 million (-63.5 percent). There were no special items.
Third-quarter EBITDA before special items came in 3.9 percent above the prior-year period, at €80 million, with higher selling prices and growth in volumes offsetting increases in raw material and energy costs. EBIT before special items, however, fell by 15.8 percent to €32 million due to higher write-downs. There were no special items.
Sales of the Materials segment in the first three quarters of 2007 advanced to €2,263 million (currency- and portfolio-adjusted: +7.7 percent). EBITDA before special items came in at €231 million (-40.2 percent), while EBIT before special items fell to €99 million (-63.5 percent). There were no special items.
| Materials | 3rd Quarter 2006 | 3rd Quarter 2007 | Change | First Nine Months 2006 | First Nine Months 2007 | Change |
| € million | € million | % | € million | € million | % | |
| Net sales | 743 | 767 | +3.2 | 2,176 | 2,263 | +4.0 |
| Polycarbonates | 695 | 706 | +1.6 | 2,021 | 2,092 | +3.5 |
| Thermoplastic Polyurethanes | 48 | 61 | +27.1 | 155 | 171 | +10.3 |
| EBITDA1 | 77 | 80 | +3.9 | 386 | 231 | -40.2 |
| Special items | 0 | 0 | 0 | 0 | ||
| EBITDA before special items2 | 77 | 80 | +3.9 | 386 | 231 | -40.2 |
| EBITDA margin before special items | 10.4% | 10.4% | 17.7% | 10.2% | ||
| EBIT1 | 38 | 32 | -15.8 | 271 | 99 | -63.5 |
| Special items | 0 | 0 | 0 | 0 | ||
| EBIT before special items2 | 38 | 32 | -15.8 | 271 | 99 | -63.5 |
| Gross cash flow1 | 62 | 69 | +11.3 | 293 | 193 | -34.1 |
| Net cash flow1 | 45 | 103 | +128.9 | 168 | 103 | -38.7 |
2006 figures restated
1 for definition see Bayer Group Key Data
2 for definition see also Calculation of EBIT(DA) Before Special Items
1 for definition see Bayer Group Key Data
2 for definition see also Calculation of EBIT(DA) Before Special Items
Systems
The Systems segment posted third-quarter sales of €1,858 million, virtually in line with the prior-year period (Q3 2006: €1,853 million). Currency- and portfolio-adjusted sales improved by 2.6 percent. Our Coatings, Adhesives, Sealants and Inorganic Basic Chemicals business units contributed to this improvement with growth of 10.6 and 8.1 percent, respectively. By contrast, currency- and portfolio-adjusted sales of our Polyurethanes business unit were level year on year (+0.0 percent). The slight growth in sales of the Systems segment resulted from selling price increases.
Third-quarter EBITDA before special items in the Systems segment advanced by 12.2 percent to €341 million. The higher selling prices offset increases in raw material and energy costs. EBIT before special items moved ahead by 16.4 percent to €263 million. After special charges of €3 million (Q3 2006: €32 million), EBIT improved by 34.0 percent to €260 million.
The Systems segment saw sales rise by 2.6 percent to €5,593 million in the first three quarters of 2007, with the currency- and portfolio-adjusted increase amounting to 5.8 percent. EBITDA before special items improved by 2.4 percent to €1,008 million, while EBIT before special items increased by 3.3 percent to €777 million. EBIT after special items rose by 26.1 percent to €744 million.
Third-quarter EBITDA before special items in the Systems segment advanced by 12.2 percent to €341 million. The higher selling prices offset increases in raw material and energy costs. EBIT before special items moved ahead by 16.4 percent to €263 million. After special charges of €3 million (Q3 2006: €32 million), EBIT improved by 34.0 percent to €260 million.
The Systems segment saw sales rise by 2.6 percent to €5,593 million in the first three quarters of 2007, with the currency- and portfolio-adjusted increase amounting to 5.8 percent. EBITDA before special items improved by 2.4 percent to €1,008 million, while EBIT before special items increased by 3.3 percent to €777 million. EBIT after special items rose by 26.1 percent to €744 million.
| Systems | 3rd Quarter 2006 | 3rd Quarter 2007 | Change | First Nine Months 2006 | First Nine Months 2007 | Change |
| € million | € million | % | € million | € million | % | |
| Net sales | 1,853 | 1,858 | +0.3 | 5,453 | 5,593 | +2.6 |
| Polyurethanes | 1,328 | 1,299 | -2.2 | 3,898 | 3,944 | +1.2 |
| Coatings, Adhesives, Sealants | 385 | 415 | +7.8 | 1,134 | 1,218 | +7.4 |
| Inorganic Basic Chemicals | 101 | 107 | +5.9 | 307 | 317 | +3.3 |
| Others | 39 | 37 | -5.1 | 114 | 114 | 0.0 |
| EBITDA1 | 275 | 339 | +23.3 | 825 | 986 | +19.5 |
| Special items | (29) | (2) | (159) | (22) | ||
| EBITDA before special items2 | 304 | 341 | +12.2 | 984 | 1,008 | +2.4 |
| EBITDA margin before special items | 16.4% | 18.4% | 18.0% | 18.0% | ||
| EBIT1 | 194 | 260 | +34.0 | 590 | 744 | +26.1 |
| Special items | (32) | (3) | (162) | (33) | ||
| EBIT before special items2 | 226 | 263 | +16.4 | 752 | 777 | +3.3 |
| Gross cash flow1 | 177 | 257 | +45.2 | 590 | 730 | +23.7 |
| Net cash flow1 | 211 | 275 | +30.3 | 612 | 590 | -3.6 |
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
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