Business News
ALTANA reports sales and earnings growth in the first half of 2008
Thursday 07. August 2008 - Sales: up 2 percent (4 percent operating growth) EBITDA: up 13 percent; EBITDA margin at high level Burdens due to exchange rate effect
The specialty chemicals Group ALTANA AG increased sales and earnings in the first half of 2008 in comparison to the prior year’s period. The Group achieved sales of 716.8 million in the first six months of the current business year, corresponding to an increase of about 11 million or 2% on the prior year. Adjusted for negative exchange rate effects of 4% and positive acquisition effects of 2%, the operating sales growth was 4%. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose disproportionately from 125.2 million to 141.4 million, an increase of 13%. At 19.7%, the EBITDA margin is in the upper region of ALTANA’s medium-term target range of 18% to 20%. In the prior year, the margin was 17.7%; it had been burdened by the two-tier holding structure which was maintained until mid-2007. Earnings before taxes (EBT) for the first six months of 2008 totaled 103.6 million, following
138.6 million in the prior year. However, the EBT for the first half of 2007 included the income from the investment of the purchase price for ALTANA Pharma, which was distributed to the shareholders in May 2007.
Development of the divisions
All four divisions of ALTANA AG posted operating growth in sales and earnings in the first six months of 2008. At the same time, business development was influenced group-wide by negative exchange rate effects (in particular the U.S. Dollar).
The BYK Additives & Instruments division was able to increase sales by 3% (operating growth: 6%), with sales growing from 229.6 million to 236.6 million. At 70.9 million, EBITDA remained almost unchanged following 70.5 million in the corresponding prior year’s period.
Sales in the ECKART Effect Pigments division grew clearly from 178.9 million in the prior year to 189.9 million. This corresponds to a nominal increase of 6%; the operating growth was 5%. EBITDA rose by 1%, from 43.9 million to 44.3 million.
Nominal sales in the ELANTAS Electrical Insulation division declined slightly by 2% to 178.6 million (prior year: 182.9 million). The operating sales growth was 2%. EBITDA declined slightly from 28.2 million to 27.5 million, a decrease of 3%.
The ACTEGA Coatings & Sealants division achieved sales of 111.7 million, following 114.3 million in the prior year’s period. In nominal terms this corresponds to a decrease of 2%; in operating terms the division achieved an increase of 1%. At 13.0 million, EBITDA were just over the prior year’s figure (12.9 million).
“We can look back at a positive first half-year 2008, in which we were able, in particular, to increase earnings disproportionately,” stated Dr. Matthias L. Wolfgruber, CEO of ALTANA AG. “In a difficult market environment and despite significant burdens due to the weak U.S. Dollar as well as increasing raw material costs, we have demonstrated that ALTANA is robustly positioned and able to successfully further develop its operating business. We therefore assume to achieve our earnings goals for the business year despite the weakening economic climate.”
Positive earnings outlook for 2008
In the course of the continuing worldwide financial crisis, the general economic outlook has become cloudy. This is especially true for the U.S., but softening business development is now also anticipated in Europe. Consequently, the economic setting has also changed for the ALTANA Group. Nevertheless, for the full business year we still expect an increasing demand for our specialty chemicals products. Due to the current developments we have revised our exchange rate expectations and adjusted them to a U.S. Dollar rate of 1.55 per Euro on an annual average.
In particular against the background of the adjusted exchange rate expectations, we update our previously given outlook as follows: For 2008, we expect a single-digit growth in sales to a level between 1.41 billion and 1.45 billion and an EBITDA growth to a level between 260 million and 280 million. Earnings before taxes (EBT) for the current business year should be lower than in 2007. The reason for this decrease is the absence of the income from the investment of the purchase price for ALTANA Pharma which was recorded until the distribution to the shareholders in May 2007 (55 million).