In the first six months of 2008, Cognis increased the net sales of its core businesses by 7% over the same period in 2007 to reach €1.533 billion. On an organic basis, sales grew by 12%. All three strategic business units that focus on the innovation-driven wellness and sustainability markets—care chemicals, nutrition & health, and functional products—contributed to the growth. The company also benefited from various initiatives to optimize its cost structures and further improve its efficiency, and was able to partially compensate its increased raw material costs by increasing its prices. The operating result of the core businesses (adjusted EBITDA) was at €176 million (down 5.1%) due to a rise in raw material, transportation and energy costs and unfavorable exchange rates.
“In spite of the tough general market conditions, all our core business areas strengthened their position and recorded increased sales. Our successful efforts to optimize our processing and manufacturing costs, and more especially the sale of our Pulcra and Oleochemicals businesses, represent major steps forward for Cognis in terms of its strategic direction and prospects for further profitable growth,” said Antonio Trius, CEO, Cognis. “Cognis continues to improve its efficiency, and sees the necessity to further increase its prices in light of high raw material costs and the weak U.S. dollar. Concentrating on highly innovative, natural-based solutions for markets driven by the global wellness and sustainability trends will help us to add further value to our company in 2008.”
In July, Cognis announced the sale of its 50% stake in the Cognis / Oleochemicals joint venture and its wholly owned subsidiary Pulcra Chemicals. These transactions, which are expected to be completed in the fourth quarter of 2008, reflect the company’s strategy of concentrating on its three core businesses.
Care chemicals recorded sales growth of 10.2% to €860 million (organic sales growth of 14.0%), primarily driven by higher sales of the specialty and innovative products in the performance ingredients business, as well as the good performance of the care surfactants and alcohols business segment. Nutrition & health achieved total sales of €182 million, a 6.0% rise (organic sales growth of 8.6%), largely attributable to the growth of major product lines for the food ingredients business segment and the vitamin E business.
Functional Products saw sales rise by 3.3% to €480 million (organic sales growth of 11.2%). The result reflects good market conditions and strong demand for environmentally sound agricultural products as well as for synthetic lubricants. However, sales growth in North America was mitigated by weaker housing and automotive markets as well as negative influences of the U.S. dollar.