Downturn affected demand for Cognis ingredients
The German chemical company, which is tipped to be sold or floated, has reported net profit of €25m in 2009, compared to a loss of €49m in 2008. Group sales were down 13.9 per cent, however, to €2584m. These comparisons are based on restated figures following the 2008 divestment of Pulcra Chemicals and the 50 per cent stake in Cognis Oleochemicals.
The sales decrease is being blamed on the global economic crisis in early 2009, but global demand – and Cognis sales volumes – picked up in the second half.
CEO Antonio Trius also said the company had handled the crisis well, acting “swiftly and decisively”.
But although Trius said all three of the company’s divisions had “proved themselves resilient and agile”, they did all report a decrease in sales. In its care chemicals segment sales dropped 13.4 per cent on last year to €1,457m mainly attributed to weak global economic conditions.
However, the company said personal care and home care market segments were more resilient and volumes remained stable. Key factors in care chemicals were seen to be an innovative product mix, more awareness of the green trend, and reduced operating costs.
In nutrition and health, this decrease was 6.3 per cent on last year to 3255, mainly attributed to weak consumer demand.
“Businesses serving the dietary supplements and food ingredients were particularly affected by the global downturn,” the company said. However the pharmaceutical and health side of the business managed to attract some new customers, and come away with sales growth.
Cognis’ functional products, serving industrial, construction and automotive industries, also saw a big dip in sales of 17.1 per cent to €786m.
Sale or IPO?
The results announcement has not shed any new light on recent reports that private equity-owned Cognis is still being offered for sale by Permira and Goldman Sachs, even though plans are already underway for an IPO.
Offers to buy the food ingredients and care chemicals company in 2006 were turned down as they were deemed to be too low at that time. The wheels are in motion for an IPO in the second half of this year, but according to Reuters some financial commentators are saying a sale is now more likely.
An IPO, they report, could be “a potentially drawn-out exit fraught with uncertainty”.
Chemical firms Lanxess and Evonik are said to be amongst the potential buyers, but no comments have been made on the possibility.
The current owners bought Cognis in 2001 for €2.5 billion, but possible price tags now being bandied about are as low as €1.6bn.
