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Cognis sales and earnings increase significantly in first quarter of 2006

Published on 2006-05-31. Author : SpecialChem

Cognis has made a notable start in 2006. The global specialty chemicals supplier achieved net external sales of 875 million euros in the first three months. This represents an increase by 12.1 percent on the first quarter 2005. Adjusted EBITDA (earnings before net financial result, income taxes, depreciation, amortization and exceptional items) was up 17.4 percent at 113 million euros, and the company's profit margin increased to 12.9 percent. Comments Cognis CEO Dr. Antonio Trius: "Our first quarter performance represents a good start to the year. Those areas of our business which concentrate most strongly on serving the high-potential wellness and sustainability trends have seen above average growth, which shows that our strategic focus is right."

All of Cognis' strategic business units (SBUs) achieved sales growth, with Care Chemicals, Nutrition & Health and Functional Products seeing the biggest increases. The growth in the company's Adjusted EBITDA reflects strong sales and continued operational improvements. The profit margin (Adjusted EBITDA as a percentage of sales) rose across all SBUs, up from 12.3 to 12.9 percent.

Sales by strategic business unit (SBU)

With sales up 12.3 percent at 354 million euros, Care Chemicals, the company's largest SBU, achieved significant growth, mainly driven by increased volumes in performance ingredients and surfactants. The acquisition of Cosmetic Rheologies Ltd. in March 2006 was an important step to further strengthen Care Chemicals' position as full-range supplier of specialty chemicals to the cosmetics industry.

Sales in the Nutrition & Health SBU totaled 85 million euros and went up 13.6 percent on the same period in 2005. This is largely due to the growth of branded ingredients such as Tonalin conjugated linoleic acid (CLA) and Vegapure sterol esters, as well as to the growth in the pharma and health segment.

Functional Products reported an increase in sales of 16.4 percent to 220 million euros. While all Functional Products businesses performed well, the largest contributors to the sales growth were the synthetic lubricant business, the mining technologies business, which benefited from an increase in copper mining activities, and the agriculture business due to higher demand for environmentally friendly solvents.

Process Chemicals' sales grew by 8.3 percent to 64 million euros. Performance was particularly strong in the Asia-Pacific region, where Cognis has seen double-digit sales growth in both its textiles technology and leather technology businesses. With total sales of 139 million euros, Oleochemicals achieved sales growth of 2.2 percent, mainly driven by higher volumes of fatty acids, glycerine and plastics additives.

About Cognis

Cognis is a worldwide supplier of innovative specialty chemicals and nutritional ingredients, with a particular focus on the areas of wellness and sustainability. The company employs about 8,000 people, and it operates production sites and service centers in 30 countries. Cognis delivers natural source raw materials and ingredients for 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, textiles, as well as agriculture and mining. The company holds a 50-percent stake in the joint venture Cognis Oleochemicals, one of the world's leading manufacturers of oleochemicals.

Cognis is owned by private equity funds advised by Permira, GS Capital Partners, and SV Life Sciences. In 2005, Cognis recorded sales of 3.18 billion euros and an Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization and exceptional items) of 356 million euros.

Cautionary Statement

The statements we make in this release may include statements about our plans and future prospects for the company and the industry that are forward-looking statements. Our actual performance may differ materially from performance suggested by those statements. We urge you to review the cautionary statements in our financial statements for information on factors that could cause those differences.

Source: Cognis


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