MONHEIM, Germany - In the first nine months of 2009, global specialty chemicals supplier Cognis saw its sales volumes fall by 11.8 percent compared with the same period in 2008. Compared to the first nine months of 2008, the total net external sales figure of EUR 1,957 million represents a fall of 15.0 percent, with the highest decrease in Europe. However, in comparison with the second-quarter 2009, global sales volumes increased by 5.1 percent in the third quarter. This indicates a continuation of the upward trend Cognis has already observed since the second quarter.
Cognis’ operating result (adjusted EBITDA) increased by EUR 6 million to EUR 270 million compared to the same period in 2008 (up 2.1 percent). Return on sales (adjusted EBITDA as a percentage of sales) increased by 2.3 percentage points to 13.8 percent. The 2009 third-quarter operating result of EUR 102 million was up by EUR 7 million (7.8 percent) on the second-quarter figure of EUR 95 million. And compared to the third quarter of last year, the increase was even EUR 14 million or 15.7 percent (organic 17.9 percent). This positive development was mainly attributable to Cognis’ product portfolio with a favorable product mix and effective cost management, which compensated for a downward trend of selling prices. Thanks to a comprehensive cost-optimization program, the company achieved savings of approximately EUR 79 million in the first nine months of 2009.
Earnings before interest and taxes (EBIT) decreased by EUR 18 million to EUR 138 million, mainly due to higher restructuring costs. The company announced a pre-tax profit of EUR 35 million, showing an increase of EUR 21 million compared to the same period in 2008, mainly due to lower interest expenses and foreign currency gains primarily on the U.S. dollar borrowings. Consequently, net profit of continuing operations reached EUR 1 million, representing an increase of EUR 20 million on the first nine months of the previous year. In the third quarter, the net profit even reached EUR 21 million.
Operating cash flow in the first nine months increased by EUR 233 million to EUR 387 million, primarily due to an improvement in working capital position. Overall, Cognis’ cash position improved substantially to EUR 328 million. Taking advantage of the recent conditions in capital markets, Cognis was able to continue buying back PIK loans without compromising its liquidity. As a result, the net debt of the Cognis Group including Cognis Holding GmbH stood at EUR 1,876 million, or EUR 386 million less than on Dec. 31, 2008.
Cognis CEO Antonio Trius commented, “Our innovative product portfolio has shown itself to be highly resilient to the effects of the crisis. In the face of this year’s challenging economic environment, our wellness and sustainability-based strategy has proven itself as one of the strongest drivers of success for all our businesses. In addition the significant savings achieved through our global cost optimization program enabled us to improve our operating result. Sales volumes are still relatively low, but they continue to move in an upward direction.”
Looking forward, Trius said, “The economic situation has further stabilized and slightly improved over the last months, as global demand and businesses start to recover, although the situation remains volatile.”
The Functional Products division achieved sales of EUR 591 million, representing a fall of 18.9 percent (down 19.5 percent on an organic basis). The business unit saw its sales decrease due to lower demand. However, compared to the second quarter of 2009, sales volumes stabilized in the third quarter.