MONHEIM, Germany - In 2009, global specialty chemicals supplier Cognis proved its resilient operating performance in a challenging environment. Due to the global economic crisis and the consequent weak demand in some end markets in the first half of 2009, sales volumes decreased by 7.8 percent compared to the previous year. Sales decreased by 13.9 percent to EUR 2,584 million. In the second half of 2009, Cognis observed a continuing recovery in global demand – and as a result, in its own sales volumes – across most of its markets.
Compared to 2008, Cognis’ operating result (adjusted EBITDA) increased by EUR 13 million to EUR 364 million (plus 3.6 percent). Return on sales (adjusted EBITDA as a percentage of sales) increased by 2.4 percentage points to 14.1 percent. This positive development was mainly attributable to Cognis’ product portfolio. The company also benefited from the increasing importance of the global green trend, successful product launches and effective cost management. These factors compensated for the decline in volume. A fall in selling prices was driven by lower raw material costs.
Earnings before interest and taxes (EBIT) increased by EUR 3 million to EUR 195 million. Net profit from continuing operations improved significantly to EUR 25 million.
Operating cash flow in 2009 increased by EUR 260 million to EUR 488 million, due to strong operating performance and effective working capital management. Overall, Cognis’ cash position improved substantially to EUR 324 million.
Cognis took advantage of favorable conditions in capital markets to buy back PIK loans in open-market transactions since 2008, with a total face value of EUR 284 million. As a result, the net debt of the Cognis Group (including Cognis Holding GmbH) decreased to EUR 1,866 million, which is EUR 396 million less than on December 31, 2008.
The Care Chemicals business unit recorded sales of EUR 1,457 million in 2009, a decrease of 13.4 percent (down 12.6 percent on an organic basis) compared to the previous year. This was due to 4 percent lower sales volumes, reflecting weak global economic conditions and demand, especially from business segments with industrial applications.
The Nutrition & Health business unit saw its sales decrease by 6.3 percent to EUR 325 million in 2009 (down 5.5 percent on an organic basis), mainly due to weak consumer demand.
The Functional Products business unit achieved sales of EUR 786 million, representing a fall of 17.1 percent (down 16.7 percent on an organic basis). The global downturn affected all its business segments, but especially Coatings & Inks, and synthetic lubricants for industrial, construction and automotive applications. However, in the fourth quarter these businesses showed signs of a recovery in volumes.
Looking forward, Cognis CEO Antonio Trius commented, “We expect the markets to remain volatile in 2010, although we have made an excellent start to 2010. Assuming global economic conditions continue to recover, we expect to achieve an increase in sales volumes in 2010 and continue to exploit the growth potential offered by the wellness and sustainability trends, in both mature and emerging markets.”
