Cognis Issues Stable Results for 2008
March 29, 2009
MONHEIM, Germany - In 2008, global specialty chemicals supplier Cognis increased its net external sales by 5.5 percent to EUR 3.001 billion. On an organic basis, excluding foreign currency effects and the effects of acquisitions and divestments, sales grew by 9.2 percent. All strategic business units, Cognis Care Chemicals, Nutrition & Health, and Functional Products, contributed to this growth.
The operating result (adjusted EBITDA) fell slightly by 2.6 percent to EUR 351 million. This was due to higher raw material and energy costs, as well as unfavorable exchange rates and a decline in volumes, which started in the fourth quarter. On an organic basis, the operating result was almost at the same level as 2007, down by 0.3 percent. Cognis was able to offset its increased raw material costs to a large extent by raising selling prices and by continuing to optimize its cost structures and improve efficiency in all areas.
Return on sales (adjusted EBITDA as a percentage of sales) was at 11.7 percent. Due to lower restructuring charges, earnings before interest and taxes (EBIT) increased by EUR 5 million to EUR 209 million. Earnings before tax and special items decreased by EUR 55 million to -3 million euros due to non-cash effective revaluation of interest derivatives and U.S. dollar debts. Net loss including special items stood at EUR 63 million, representing an improvement of EUR 57 million compared to 2007. The net loss of 2007 had been influenced by refinancing costs and the German tax reform. Overall, Cognis’ cash position increased substantially to EUR 226 million, mainly due to cash proceeds from the divestments of Cognis’ 50-percent stake in the Cognis Oleochemicals joint venture and the sale of Pulcra Chemicals. The company has a revolving credit facility of which EUR 221 million remains undrawn. Cognis also took advantage of the current conditions in the capital markets. So far, Cognis bought back PIK loans amounting to a face value of EUR 112 million in open market transactions, resulting in an improvement of Cognis’ financing costs, net debt and equity.
Cognis CEO Antonio Trius commented, “Despite an extremely difficult environment in 2008, we successfully managed to strengthen our position in our key markets. Consumers’ growing desire for personal wellbeing and heightened awareness of environmental sustainability are increasingly converging in the ‘new green’ lifestyle, which in turn is reaffirming and validating our strategy. By consistently focusing our core businesses on serving these market demands, Cognis has systematically laid the groundwork for future success.”