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| | 03/31/2009 - Süd-Chemie considerably increases revenue and earnings in 2008 and expects moderate development in 2009
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- After the record-year of 2008 Süd-Chemie views 2009 with cautious confidence in light of the difficult economic environment
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- 2008 consolidated financial statements: revenue rose to €1.191 billion (+11%), EBIT exceeds earnings target and climbs to €117.1 million (+16%), profit for the period increased to €57.8 million (+22%)
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-Outlook for 2009: revenue of between €1.15 and €1.2 billion, EBIT between €95 and €100 million
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In 2008, Süd-Chemie AG, Munich continued its profitable growth of recent years in spite of a sharp overall economic downturn in industrial production during the fourth quarter. As a global leader in the sectors of adsorbents, additives and catalysts, the speciality chemicals company increased consolidated revenue by €116.3 million or 10.8% compared with 2007, reaching €1.191 billion. At the beginning of 2008, revenue was forecast to rise to between €1.15 and €1.2 billion. Revenue of €18.3 million was attributable to companies newly-acquired in 2008. Adjusted for currency translation effects accruing mainly from the weak dollar and South African rand, revenue increased by €155.4 million or 14.5%. As a result of international business expansion, both the Adsorbents and Catalysts Divisions made equal contributions to this positive performance. The only segments reporting a downturn at year-end in the wake of falling global demand for chemical products were foundry chemicals for the automobile industry and additives for the construction and plastics sectors.
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Outperforming sales growth and rising stronger than originally forecast, the Group´s operating profit (EBIT), increased by 16.2% to €117.1 million. At the beginning of 2008, a figure of between €110 and €115 million had been forecast. In line with this growth the EBIT margin increased by 0.4 percentage points to 9.8%. This significant upturn in earnings was largely the result of the positive global business performance, higher capacity utilization in the production plants, the launch of new, improved products and extraordinary effects. The operating result before interest, taxes and depreciation (EBITDA) rose by 17.0% to €166.4 million. Profit for the year increased by 21.9% compared with 2007, reaching €57.8 million. The Supervisory Board and Managing Board will be proposing an unchanged dividend of €1.10 per share at the Annual General Meeting to be held on 20 May 2009.
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During 2008, Süd-Chemie continued its innovation and investment drive. Expenditure on research and development climbed by 14.6% to €53.5 million, resulting in a research and development ratio of 4.5%. Based on the Group´s leading position on the global market, capital expenditure reached a new record level of €124.4 million in 2008 (2007: €111.6 million). This represented an investment ratio of 10.4%. The equity ratio fell by 4.9 percentage points to 33.6%, due mainly to additions to non-current assets in the wake of acquisitions and higher provisions for retirement benefits.
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Largely as a result of acquisitions, the number of Group employees increased significantly by 1,482 to reach 6,513 at 31 December 2008. In Germany, the number of employees rose by 274 to a total of 1,669.
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A sudden dip in the demand for industrial products at the end of 2008 has developed into a recession in 2009 across all economic sectors and in every region, by which Süd-Chemie activities have meanwhile been affected. To secure its earnings and financial strength in the long term, the company introduced cost-cutting measures already at the end of 2008. In addition, the capital expenditure budgeted for 2009 has been reduced by 40% to ease the liquidity situation. Customer-related operations and research and development activities will however not be affected by the cost-saving measures. Süd-Chemie will continue to closely monitor ongoing developments in its markets and react adequately to any possible further decline in demand.
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Following the marked downturn in worldwide chemical production at the beginning of this year, Süd-Chemie´s Managing Board is expecting the demand for chemical products to stabilize during the second half of 2009. Provided that economic situation develops accordingly, the Managing Board anticipates a further strengthening of Süd-Chemie's leading global positions during this year, based on the Group's outstanding technology platform and the acquisitions and high level of investment realized over the past two years. Consolidated revenue is expected to reach between €1.15 and €1.2 billion in 2009, representing a drop of not more than 4%. The EBIT is likely to decrease to between €95 and €100 million, which would be a drop of around 20% compared to 2008.
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Dr. Günter von Au, Managing Board Chairman of Süd-Chemie AG, said: "In spite of the sharp economic downswing, we are viewing the current year with rather cautious confidence. We expect to largely alleviate the impact of lower sales in cyclical markets by focusing on business activity in our growth segments and in areas relatively resistant to the economic situation. The acquisitions made last year will also cushion any shortfall in revenue. Once the recession comes to an end, Süd-Chemie will quickly revert to its course of strong profitable growth, emerging from the crisis in a generally stronger position."
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Süd-Chemie AG's consolidated financial statements for the year 2008 can be accessed at www.sud-chemie.com. The annual press conference will take place in Munich on 2 April 2009.
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Statements relating to future events
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This report contains statements relating to future events based on current estimates made by the management with respect to prospective developments. Such statements are subject to uncertainties and risks which Süd-Chemie is neither able to control nor accurately assess, including for instance future market conditions and the economic environment, the behaviour of other market participants or governmental measures. Should any one of these or other uncertain or imponderable factors take effect, or should assumptions on which the statements are based prove to be incorrect, the actual results may differ significantly from those explicitly defined or implicitly contained in these statements. Süd-Chemie neither intends nor undertakes a specific obligation to update statements relating to future events in order to adjust these in line with events or developments occurring after the date of this report.
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Süd-Chemie AG (www.sud-chemie.com) is a publicly quoted (Security Identification Number ISIN: DE0007292005; WKN: 729 200) specialty chemicals company headquartered in Munich, Germany and operating on a worldwide scale. Key markets served by its Adsorbents Division include the consumer-goods, packaging and foundry industries, as well as water treatment. Products manufactured by the Catalysts Division offer solutions for the chemical, petrochemical and refinery industries, for energy storage and hydrogen production, as well as off-gas purification. The common denominator of all its products and innovations is the efficient and sparing use of natural resources to enhance the quality of life for humans and the environment. Süd-Chemie generated group sales of €1.191 billion in 2008, approx. 80% of these outside Germany. At the end of 2008, the group employed more than 6,500 people at 80 sales and production companies worldwide.
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