Cognis Reports Lower First-Quarter Results
May 28, 2009
MONHEIM, Germany – Global specialty chemicals supplier Cognis has reported first-quarter results for 2009, with sales volumes down compared to last year, but up in comparison to the fourth quarter of 2008.
In what was an extremely difficult market environment, the company saw its sales volumes decline by about 18 percent in comparison to the first quarter of 2008. Compared with the fourth quarter of last year, volumes actually increased by 5 percent, driven by growth in North America and Asia. Lower volumes were partially offset by increased selling prices, and as a result, the total net external sales figure of EUR 659 million represents a fall of 13.8 percent compared to the first quarter of 2008. On an organic basis, excluding foreign currency effects and the effects of acquisitions and divestments, sales fell by 13.9 percent. These falls were largely attributable to lower demand and destocking by Cognis’ customers, especially in Europe, which was down 23.5 percent.
Cognis’ operating result (adjusted EBITDA) fell by 19.3 percent to EUR 73 million. In response to the sharp decline in sales volumes, the company implemented a comprehensive cost optimization program, with a savings target of EUR 70 million in 2009. Cognis is also taking action to increase efficiency and improve process speed across all business areas. At the same time, it expects to benefit from lower energy and transportation prices.
Cognis CEO Antonio Trius commented, “Cognis is responding to this dramatic economic downturn in a determined and proactive way. Our comprehensive cost-reduction program is gathering momentum and will help us counteract the effect of falling volumes. At the same time, we are starting to see a few positive signs, with the rate of volume decline slowing appreciably in March. Our goal is to further strengthen the leading position we enjoy in growth markets driven by the wellness and sustainability trends. The suitability of our strategy is borne out by the fact that these areas are more resilient to the economic downturn.”
Looking forward, Trius said, “The trading environment remains highly uncertain and volatile. We expect our cost-saving measures to counteract lower sales. Most of the initiatives will materialize from April onwards. Together with our efforts on optimizing our costs, we will also stay focused on maintaining our healthy cash position.”