Cognis Reports 7.1 Percent Sales Growth for Nutrition & Health

Nutrition & Health saw its sales increase by 7.1 percent to 265 million euros (up 2.8 percent on an organic basis), reflecting higher demand in all market segments in almost all regions.

25 Nov 2010 --- In the first nine months of 2010, global specialty chemicals supplier Cognis continued the dynamic development from the first half, and again recorded excellent results. Sales increased by 18.2 percent to 2,314 million euros, due to higher sales volumes driven by an increased demand and a favorable product mix. Sales volumes increased by 10.0 percent.

Cognis’ operating result (Adjusted EBITDA) increased by 153 million euros to 423 million euros compared to the same period in 2009 (up 56.9 percent). Return on sales (Adjusted EBITDA as a percentage of sales) reached 18.3 percent. These excellent results were largely related to higher sales volumes due to an increased demand, a further shift in the product portfolio towards high-value specialties as well as better capacity utilization.

Earnings before interest and taxes (EBIT) rose by 207 million euros to 345 million euros. Net profit for the period reached 184 million euros, representing an increase of 183 million euros on the first nine months of the previous year.

Cognis generated a strong operating cash flow of 231 million euros, although investment in working capital amounted to 146 million euros due to the high level of commercial activity in the first nine months of 2010. Overall, Cognis’ cash position improved to 388 million euros.

The net debt of the Cognis Group including Cognis Holding GmbH slightly decreased to 1,831 million euros at the end of Q3. Due to the strong operating result the leverage ratio (ratio of net debt to Adjusted EBITDA) for the whole group including Cognis GmbH fell from 5.1 in December 2009 to 3.5.

Comments Cognis CEO Antonio Trius: “Also in the third quarter of 2010 our business remained dynamic. We were again able to take full advantage of high consumer demand due to our strategy of offering innovative products that are aligned with the wellness and sustainability trends. Our excellent performance was largely driven by our improved product mix, along with higher sales volumes and higher capacity utilization.”

“Due to the excellent performance of the first nine months of 2010, we expect to achieve a record full-year result,” says Trius.

Nutrition & Health saw its sales increase by 7.1 percent to 265 million euros (up 2.8 percent on an organic basis), reflecting higher demand in all market segments in almost all regions. Adjusted EBITDA increased by 36.0 percent to 52 million euros. This was driven by higher sales volumes, a good product mix, and better plant utilization. Efficiency gains from the 2009 acquisition of Phyto-Source L.P., a state of the art producer of phytosterols, also significantly contributed to the improvement.