Global specialty chemicals supplier Cognis announces excellent preliminary operating results in the first quarter of 2010, significantly exceeding results of the first quarter of 2009. Cognis recorded double-digit sales growth of 10.6 percent to 728 million euros, mainly due to a pickup in business conditions leading to a recovery of sales volumes across all business units (plus 14.2 percent). Cognis also achieved a strong operating result (adjusted EBITDA) of 131 million euros which increased significantly by 79.6 percent compared to the first quarter of 2009. As a result, return on sales (adjusted EBITDA as a percentage of sales) improved by 6.9 percentage points to 17.9 percent. Net profit for the period also increased significantly, reaching 47 million euros compared to a net loss of 33 million euros in Q1 2009. Cognis’ free cash flow generation was 40 million euros despite the increased business activity and therefore necessary seasonal investments in trade working capital for the first quarter of 2010.
Care Chemicals achieved sales of 407 million euros, an increase of 10 percent compared to the first quarter of 2009. Adjusted EBITDA of Care Chemicals rose by 82.3 percent to 75 million euros. Nutrition & Health saw its sales increase by 5.2 percent to 88 million euros and its adjusted EBITDA increased by 29.5 percent to 19 million euros. Functional Products performed especially well with adjusted EBITDA increasing by 129.4 percent to 39 million euros and achieved sales of 229 million euros, representing an increase of 14.1 percent.
Business conditions improved due to a strong pickup in worldwide demand for the innovative products of Cognis and sales volumes returned approximately to first quarter 2008 levels. There was a strong recovery of demand and therefore sales volumes especially in Europe. Cognis benefited significantly from the positive business conditions due to a stable operating cost base and the increasing capacity utilization.
“We have had an excellent start in 2010. The positive development across all our business units and regions reflects our excellent position focusing on the wellness and sustainability trends. The excellent operating results contributed to a strong adjusted EBITDA of 422 million euros over the last twelve months period. We expect to further improve our business performance in 2010 by providing added value to the customer through our innovative portfolio of ‘green’ products”, comments Cognis CEO Antonio Trius.
Cognis will publish detailed figures on the first quarter performance in its quarterly report, which is due to be released on May 26, 2010.
Cognis is a worldwide supplier of specialty chemicals and nutritional ingredients, with a particular focus on the areas of wellness and sustainability. The company employs about 5,600 people, and it operates production sites and service centers in 30 countries. Cognis has dedicated its activities to a high level of sustainability and provides value adding solutions and products based on renewable raw materials. The company serves the food, nutrition and healthcare markets, and the cosmetics, detergents and cleaners industries. Another main focus is on products for a number of other industries, such as coatings and inks, lubricants, as well as agriculture and mining.
Cognis is owned by private equity funds advised by Permira, GS Capital Partners, and SV Life Sciences. In 2009, Cognis recorded sales of about 2.6 billion euros and an adjusted EBITDA (operating result) of 364 million euros.