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| | 10/28/2009 - Interim report on the first nine months of 2009: Süd-Chemie Group continues positive earnings trend after a weak start to this year of recession
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- Revenue down by 8.3% to EUR 792.1 million in the first nine months
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- Operating profit (EBIT) has recovered in the course of the year and at EUR 73.2 million, is 8.5% short of the 2008 figure
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- Profit forecast for full year 2009 reaffirmed
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In view of the drastic drop in demand for chemical products triggered by the global recession, Süd-Chemie AG, Munich continues to perform comparatively well. During the first nine months of 2009, consolidated revenue generated by the leading specialty chemicals company for adsorbents and catalysts fell by 8.3% to EUR 792.1 million compared with 2008. Currency effects had a positive influence on the nine-month figure, contributing EUR 16.1 million. Recording an 8.5% drop to EUR 73.2 million after the first nine months of 2009, operating profit (EBIT) has however shown a marked recovery in the course of the year, after also benefiting from positive extraordinary effects. At the end of three months, the EBIT was still 54.4% and after six months 26.4% below the comparative figure for 2008. Compared with same period last year, earnings before interest, taxes and depreciation (EBITDA) rose by as much as 3.8% to EUR 117.2 million during the first nine months of 2009. Thus, through an EBITDA margin of 14.8% achieved amid one of the most severe economic recessions, Süd-Chemie reaffirms the high financial power of its business portfolio with its leading global positions in attractive niche markets.
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On a year-on-year basis, the Adsorbents Division reported a 15.0% downturn in revenue to EUR 451.0 million, resulting mainly from a drop in business with additives and chemicals for the automobile-related foundry industry. Boosted largely by regional expansion in Asia and the Middle East, as well as a positive business performance in the refining and petrochemical industry, the Catalysts Division was able to increase revenue by 2.2% to EUR 341.1 million during the first nine months and gain additional market shares, in spite of the recession.
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Operating profit (EBIT) was adversely affected by falling revenue and the resulting idle production capacity, as well as depreciation accruing from high investment and acquisition activity in previous years. Positive effects arose both from measures introduced at the beginning of 2009 to safeguard earnings and from significantly lower raw material costs compared with 2008. On balance, extraordinary effects consisting of extraordinary income from an acquisition completed during the period, as well as negative effects on earnings as a result of structuring measures and inventory valuations made a positive earnings contribution of EUR 13.4 million to consolidated profit (EBIT).
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Profit forecast for full year 2009 reaffirmed
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There are currently increasing signs that the global economic crisis appears to have bottomed out during the third quarter of 2009. Any recovery in the global economy or business activity in the chemical industry occurring over the next few months is however expected to remain at an extremely low level. This restrained market outlook and the Group‘s performance during the first nine months of 2009 indicate that Süd-Chemie will have to slightly modify the revenue forecast issued in March 2009, amounting to between EUR 1.15 and EUR 1.2 billion for the full year of 2009, down to approximately EUR 1.1 billion. This represents a drop in revenue of some 8% compared with 2008. In the case of operating profit (EBIT), Süd-Chemie is however adhering to its annual forecast of between EUR 95 and EUR 100 million, largely as a result of introducing measures to cut costs and safeguard earnings at an early stage. This is equivalent to a drop of approximately 20% compared with 2008. The Süd-Chemie AG report on the nine months ended 30 September 2009 can be downloaded at www.sud-chemie.com.
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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 behavior of other market participants or governmental measures. Should any one of these, or other uncertain or unassessable 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 (www.sud-chemie.com) is a publicly quoted (Security Identification Number ISIN: DE0007292005; WKN: 729200) 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 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 Süd-Chemie products and services is the efficient and sparing use of natural resources to enhance the quality of life for humans and the environment. The Süd-Chemie Group generated sales of EUR 1.191 billion in 2008, approx. 80% of these outside Germany. At the end of September 2009, the group employed some 6,700 people in its 80 sales and production companies worldwide.
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