Materials financial results 2020

In response to the sudden drop in demand at the end of the first quarter owing to the pandemic, DSM acted promptly to minimize capex and operating costs. After the summer a new costs savings program started, which is part of an ongoing wider structuring initiative to leverage synergies and increase operating agility.

At the same time, Materials continued to develop innovative solutions aimed at addressing Sustainable Living challenges, to create higher-growth, high margin opportunities for its specialty activities.

In the third quarter of 2020, DSM announced an agreement to sell DSM Resins & Functional Materials, including DSM Niaga^®, DSM Additive Manufacturing and the coatings activities of DSM Advanced Solar to Covestro AG for an Equity Value of €1.6 billion. The transaction is expected to close during the first half of 2021 and DSM expects to receive approximately €1.4 billion net in cash following closing. As of the third quarter of 2020, the divested businesses are classified as ‘held for sale’ and the net result from these discontinued operations is separately reported in the income statement.

Materials’ performance was significantly impacted by COVID-19, resulting in -6% volume development in 2020. Demand deteriorated abruptly at the end of the first quarter. Following a slow recovery over the summer, Materials saw a strong improvement from September onwards, especially in Engineering Materials, directly related to demand for automotive.

Prices were down 6%, mainly reflecting lower input costs in DSM Engineering Materials.

Full year Adjusted EBITDA was -27% compared to previous year. This was driven by a negative operational leverage and particularly lower volumes in high margin specialties which recorded a strong performance in same period last year. Foreign exchange had a small negative impact.

The Adjusted EBITDA margin was 17.9% compared to 21.3% in 2019.

Net sales bridge 2020

x € million