Press Room

May 20, 2005

German Version

Cognis’ first quarter results: slight increase in sales, earnings impacted by higher raw material costs and one-off effects

In the first three months of 2005, global specialty chemicals supplier Cognis increased its net external sales by 0.4 percent to 780 million euros, despite unfavorable currency exchange rates impact and a decrease in revenues due to a divestment. Adjusted EBITDA fell by 6.8 percent to 96 million euros, with a profit margin of 12.3 percent. Comments Antonio Trius, CEO of Cognis: “The first quarter result for 2005 was a strong one. We have to take into account that the first quarter of last year was one of the strongest in Cognis’ history.”

Cognis’ organic sales (sales adjusted for the effects of currency fluctuations, acquisitions and divestments) grew by 3.3 percent, with the Strategic Business Units (SBUs) Care Chemicals, Functional Products and Oleochemicals achieving significant growth. The company’s Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization and exceptional items) fell from 103 to 96 million euros (-6.8 percent), due to a number of reasons, including labor action in the USA and higher raw material costs.

Sales by Strategic Business Unit (SBU)
With sales up 5.7 percent at 309 million euros, Care Chemicals, Cognis’ largest SBU, achieved strong growth.

Compared to last year’s extraordinarily strong first quarter figures, Nutrition & Health’s sales fell moderately, down 1.2 percent to 75 million euros. Cognis continues to see strong growth of the branded ingredients, specifically Vegapure® sterol esters, Tonalin® conjugated linoleic acid (CLA) and Xangold® lutein esters.

At 197 million euros, Functional Products achieved a significant rise in sales of 3.0 percent. The increase was driven by the rapid expansion of the synthetic lubricants business, which continues to grow in the US transportation market, and the agricultural business.

Sales of Process Chemicals stood at 86 million euros, 18.7 percent lower than in the same period in 2004. This is largely due to the divestment of the PVC stabilizers business effective July 1, 2004. Organically, sales decreased 7.3 percent as a result of a drop in revenues from the textile technology businesses, where production is moving to Asia even more quickly since China joined the WTO. The plastics technology and leather technology businesses’ sales remained comparatively stable.

The upward trend in Cognis’ Oleochemicals base stock division continued into the first three months of 2005, with sales rising 1.9 percent to 107 million euros.

About Cognis
Cognis is a worldwide supplier of innovative specialty chemicals and nutritional ingredients. The company employs about 8,100 people, and it operates production sites and service centers in 30 countries. Cognis 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. Additionally, 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 SV Life Sciences. In 2004, Cognis recorded sales of 3.07 billion euros and an Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization and exceptional items) of 362 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.

Contact:
Susanne Marell, Vice President Corporate Communications
Cognis Deutschland GmbH & Co. KG
Phone: +49-2173-4995-222
E-mail: susanne.marell@cognis.com
Internet: www.cognis.com

Susanne Sengel, Senior Communications Manager
Cognis Deutschland GmbH & Co. KG
Phone: +49-2173-4995-220
E-mail: susanne.sengel@cognis.com
Internet: www.cognis.com