Press Room

 

August 14, 2003

German Version

Cognis Group maintains last year’s figures – cost reductions counteract negative economic trend and currency impact

For the first half of 2003, the Cognis Group achieved net external sales of approximately 1.5 billion Euro. The organic growth for the global supplier of specialty chemicals amounted to 3.4 million Euro (+0.2 percent). The influence of the weak US dollar, effecting the export dependent chemicals industry since the fourth quarter of 2002, has continued to worsen between April and June of this year and has burdened sales of the company by -8.5 percent.

For the second half of 2003, Cognis anticipates only a slight improvement to the overall eco-nomic situation. Further growth impetus is expected from opening up new market segments. „The consistent strategic concentration on our developing markets with the global trends of well-ness and sustainability will also help us in the future. On this sector we have been able to in-crease our sales during the first six months of 2003 despite the difficult economic environment,“ explains Joachim Söhngen, CFO of Cognis. Additionally, Cognis intensified its cost reduction campaigns which could partly counteract the negative trend.

Results of the various business units
In the Oleochemicals division, the organic growth of sales remained relatively constant with the first half of 2002 with a variance of -0.2 percent, despite the difficult economic environment. Cognis achieved sales of 495 million Euro (-46 million Euro). The Iraq crisis in particular has impacted the business in chemicals used in the production and processing of crude oil and has burdened the figures for this unit.

The Care Chemicals business unit shows the strongest growth in the Cognis group with an increase of 5.4 percent. The business unit that supplies ingredients for cosmetics, cleaning and care products for personal hygiene and the home, was able to do well in an economically difficult environment. However, due to the weaker US dollar, sales were still down by 3.9 million Euro to around 282 million Euro – 1.4 percent less than in the first six months of the previous year.

After considering the currency impact and the exceptional items related to acquisitions and di-vestments, the business unit Nutrition & Health was able to record an organic growth of 1.9 percent for the first half of 2003 over figures recorded for the same period in 2002. The health-improving food supplement Tonalin conjugated linoleic acid has contributed to this success for the first time, and Xangold natural lutein esters, which have already been sold in the USA are now launched in the European market, too. Cognis distributes these naturally produced supple-ments exclusively throughout the world. In order to expand its sales to the pharmaceutical indus-try, Cognis has combined its range of pharmaceutical auxiliary substances in the product range „PharmaLine“. Under this name Cognis provides quality standards that are valid worldwide. The sales figures in the Nutrition & Health business unit decreased by 8.2 million to 140.5 million Euro.

The Functional Products business unit profited from the takeover of Laporte Performance Chemicals in the spring of this year. Even without this influence, the first half year shows an organic growth rate of 2.7 percent over the same period last year. Sales totalled approximately 348 million Euro, roughly 9 million Euro less than twelve months ago. In order to expand the business in coatings and inks, Cognis started up a new production plant in Düsseldorf last quar-ter in which environmentally friendly emulsifiers, dispersants and wetting agents are manufac-tured in accordance with the latest production standards.

The business unit Process Chemicals experienced a 15.5 percent decrease in sales for the first six months of this year over the same period in 2002, down 40.8 million Euro to 221.5 million. This business unit continues to suffer from the stagnating textile industry and weak demand in the plastics sector. Its organic result dropped from January to June 2003 by 7.2 percent.

Sales figures in various regions
As in the first quarter, the impact of the weak US dollar in the first half year of 2003 was particu-larly noticeable in the various regions. North America (sales of 383 million Euro) and Latin A-merica (sales of 76 million Euro) experienced a 15 to 16 percent drop in net external sales and the Asia-Pacific region (sales of 177 million Euro) suffered a decrease of 10 percent. Disre-garding the negative currency impact, Cognis was still able to expand in all three regions. Whereas in Europe, where the impact of the exchange rate is less relevant, sales decreased by only 1.6 percent, to 875 million Euro.

Summary:

About Cognis:
Cognis is a worldwide supplier of innovative specialty chemicals and nutritional ingredients with almost 9,000 employees in close to 50 countries. The company has dedicated its activities to a high level of sustainability and delivers natural source raw materials and ingredients for food, nutrition and healthcare markets, and the cosmetics, detergents and cleaners industries. Addi-tionally, Cognis provides solutions for a number of other industries, such as coatings and inks, lubricants, textiles and plastics, as well as agriculture and mining. Cognis is owned by private equity funds advised by Permira, GS Capital Partners, and Schroder Ventures Life Sciences. In 2002, Cognis recorded sales of 3.1 billion Euros.

Contact:
Joachim Söhngen, Chief Financial Officer
Cognis Deutschland GmbH & Co. KG
Phone: +49-211-7940-5359
e-mail: joachim.soehngen@cognis.com
Internet: www.cognis.com

Susanne Sengel, Corporate Communications Manager,
Cognis Deutschland GmbH & Co. KG
Phone: +49-211-7940-5431
e-mail: susanne.sengel@cognis.com
Internet: www.cognis.com