Cognis Reports Q1 2009
Posted: May 27, 2009
In the first three months of 2009, Cognis saw its sales volumes decline by approximately 18% in comparison to the first quarter of 2008. Compared with the fourth quarter of 2008, volumes actually increased by 5%, driven by growth in North America and Asia. Lower volumes were partially offset by increased selling prices, and as a result, the total net external sales figure of €659 million represents a fall of 13.8% compared to the first quarter of 2008. On an organic basis (excluding foreign currency effects and the effects of acquisitions and divestments), sales fell by 13.9%. These falls were largely attributable to lower demand and destocking by Cognis’ customers, especially in Europe (down 23.5%). Cognis’ operating result (Adjusted EBITDA) fell by 19.3% to €73 million. In response to the sharp decline in sales volumes, the company implemented a cost optimization program, with a savings target of €70 million in 2009. Cognis is also taking action to increase efficiency and improve process speed across all business areas. At the same time, it expects to benefit from lower energy and transportation prices.
“Cognis is responding to this dramatic economic downturn in a determined and proactive way," said Antonio Trius, CEO, Cognis. "Our comprehensive cost reduction program is gathering momentum, and will help us counteract the effect of falling volumes. At the same time, we are starting to see a few positive signs, with the rate of volume decline slowing appreciably in March. Our goal is to further strengthen the leading position we enjoy in growth markets driven by the wellness and sustainability trends. The suitability of our strategy is borne out by the fact that these areas are more resilient to the economic downturn.”