Communication between first to 3 Quarter of 2010
Süd-Chemie Group is in the 3rd Quarter of 2010, positive earnings
growth after a weak start to the year continues: • Sales increase
after nine months of 2010 compared to the same period by 13.2 percent
to 896.4 million € • To adjusted for nonrecurring items (EBIT) after
three quarters of 2010 compared to 2009 by 22.1 percent increased to
77.3 million euros • Confirmation of Earnings Forecast for FY 2010
Performance in the first three quarters of 2010
General economic trends
The global economy has recovered from the slump caused by the
financial crisis faster than expected. The strong expansion of
production, which had begun about the middle of 2009, sat down after
the turn of the year continued in the first nine months of 2010.
Driven by high demand from emerging markets for industrial products,
especially the benefit of the export-oriented countries with a
competitive industry expanded, the world economy by the third Quarter
of 2010 strong. In almost all countries, continued normalization of
the continued capacity utilization, showed only in the U.S. at last
signs of a slowdown in economic dynamics. Total linked the emerging
markets in the first nine months of 2010 to its previous growth path
and developed much more dynamic than developed nations. As drivers of
global growth continues to prove itself, especially China, India and
South Korea, Brazil. In industrialized countries, the increase in
overall production has been toned down slightly overall. In the U.S.
and Japan slowed the pace of expansion. In Europe, however, won the
recovery momentum, this development had a significant influence on the
export-led manufacturing growth in Germany. Also, the volume of world
trade has benefited from the economic recovery and as a result of
significantly higher demand in emerging and developed countries in the
first nine months of 2010 continued to advance.
In this environment, the upswing in the global chemical industry has
continued. Meanwhile, the chemical industry has overcome the effects
of the economic crisis largely. The most important for Süd-Chemie
customer industry is developing very satisfactory. Especially in the
emerging Asian countries like India and China, the growth momentum at
a high level, but recently slowed - partly because of the expiry of
government stimulus measures. However, Japan could benefit from the
growth of neighboring countries and has, after a temporary decline in
the first quarter of 2010, chemical production expanded again,
reaching almost pre-crisis levels. In the U.S., however, the upturn in
the chemical industry is intact but still fragile, and the level
before the economic slump has not been reached. It looks better in
Latin America. Especially in Brazil, the chemical industry produces
more now than before the crisis. In Europe, driven by the dynamics of
export-driven economies such as Germany, reached the pre-crisis levels
in many parts of the chemicals business. However, let the dynamics of
the continuing solid growth last much after, as many customers have
been good again filled chemical warehouses. In Germany, reached the
capacity utilization of chemical plants again the usual level for the
industry. Engine of growth was the strong demand from abroad, but also
in the domestic chemical business with industrial customers going
well. The speed with which the industry is growing but has slowed
recently. This was expected since the chemical benefited early on as a
supplier of raw materials for many other industries from an economic
recovery. The uptrend remains unchanged.
Development of organizational structure
In light of our strategic focus and business, we regularly review our
organizational structure. This year we have the following two changes
made in our corporate structure. So we divided the rapidly expanding
industry group of plastic additives from 1 January 2010, the Packaging
Business Unit, and arranged them organizationally to the Adsorbents
and Additives Business, which helps us to realize synergies in our
plant in Moosburg. Also for the first January 2010, we streamlined our
structures in South Africa for this purpose, we transferred the
business of the Süd-Chemie Water & Process Technologies (Pty) Ltd,
Chloorkop, and Süd-Chemie Adsorbents SA (Pty) Ltd, Chloorkop, the
Süd-Chemie SA ( Pty) Ltd, Chloorkop. By transferring, we reduce the
one hand reduce the complexity of our organizational structure and on
the other hand our annual administrative costs in South Africa.
In mid-July 2010, we have conversations with our long-time joint
venture partner in the European foundry market Ashland Chemical Inc.,
Covington, Kentucky / USA, for the concentration of the global foundry
chemicals business of both companies successfully completed. We assume
that the closing occurred, and thus the joint venture agreement later
this year in force.
In September 2010, we have decided to end the production of protective
packaging tubes for the pharmaceutical and dietary supplement
industry, Süd-Chemie (Switzerland) AG in Romont / Switzerland due to
continued losses and close the site until late 2010. Also in the
Packaging Business Unit, we already had in the spring of 2010, the
closure of the plant in New Milford / USA decided and shifted
production to the existing site in Belen / USA.
Business Süd-Chemie Group
The ongoing recovery in the world chemical markets has been
significant positive impact on the business of the Süd-Chemie Group in
2010. After the business was started at the beginning of slow, it has
picked up significantly as the year progresses. Especially in the core
businesses, we strengthened our competitive position through targeted
regional expansion projects and led a new and improved products on the
market. This upward trend is reflected in the sales and earnings.
Group sales rose in the first nine months of 2010 compared to the same
period to € 104.5 million, or 13.2 percent to 896.4 million €.
Exchange rate effects had a € 42.6 million in the last quarter of 2009
and the recent acquisitions and newly formed joint ventures with € 5.2
million positive impact on sales. The recovery is due primarily to the
dynamic development of the economic crisis in the severely affected
areas of foundry chemicals, plastic additives and environmental
catalysts. Now, however, the high-yield and relatively resistant to
economic fluctuations business with industrial catalysts has increased
significantly: After a weak start to the year had sales of this area
after six months, well below the previous year, while the area after
nine months the previous year's sales already easily.
Süd-Chemie Group key figures
€ million 1st-3rd Quarter 2010 2009 1st-3rd Quarter 2009 2008 Turnover
896.4 791.9 1071.6 1190.8 121.1 163.8 120.0 165.7 EBITDA EBIT 72.5
103.5 76.5 116.9 6494 6485 6442 6156 Employees (number at End of
Period)
The world economy is also reflected in significantly improved in the
positive group result (EBIT) down. Although we could achieve with a
net profit of EUR 72.5 million, EBIT of the three previous quarters in
the amount of 76.5 million euros not quite, although it should be
remembered that last year's results included a gain related to the
acquisition of catalyst plant in Nanjing / China in the amount of 15.8
million includes €. Adjusted for all special items EBIT increased
significantly compared to the corresponding period last year by 22.1
percent and amounts to € 77.3 million. This improvement in operating
earnings resulted from the increase in sales and in comparison to the
corresponding period last year improved asset utilization. In
addition, EBIT benefited in the first nine months of 2010 from a more
profitable product mix, cost savings and price increases. Had a
negative impact the continued high costs for start-up businesses
battery materials and bio-catalysis effect on our earnings. However,
earnings before interest, taxes, depreciation and amortization
(EBITDA) for the same period by 1.1 million euros to 121.1 million
euros. Süd-Chemie Group had on 30 September 2010 a total of 6494
employees, 9 more than the balance sheet date 2009th
Adsorbents and Additives
Of Adsorbents and Additives Business consists of the five industry
groups, food and feed additives, foundry additives, detergents, paper
and specialty additives, specialty civil engineering and plastic
additives.
Ratios Adsorbents and Additives Business
€ million 1st-3rd Quarter 2010 2009 1st-3rd Quarter 2009 2008 Turnover
226.8 238.7 178.2 269.1 EBITDA 37.1 34.8 27.0 40.4 EBIT 27.0 24.0 18.8
30.0 1689 1649 1627 1607 Employees (number at End of Period)
Of Adsorbents and Additives scored in the first nine months of 2010
sales of EUR 226.8 million euros, while an increase of 48.6 million
euros or 27.2 percent compared to the same period. The operating
result (EBIT) also developed positively: it rose faster than sales of
8.2 million euros or 43.6 percent, reaching 27.0 million euros. Sales
and earnings are due primarily to the cyclical rise in business volume
and the associated higher equipment utilization. In addition, a more
profitable product mix improved the result. Most clearly was the
revival of business in the two industrial groups foundry additives and
plastic additives, especially the business of foundry additives
recorded after the 2010 recession-related drop in demand last year a
strong pick. The business had on 30 September 2010 a total of 1689
employees, which is due to the reclassification of the plastics
additives industry group 40 more than the balance sheet date 2009th
Foundry Products and Specialty Resins
The Foundry Products and Specialty Resins is divided into two industry
groups foundry products and specialty resins.
Key Figures Foundry Products and Specialty Resins
€ million 1st-3rd Quarter 2010 2009 1st-3rd Quarterly revenues 150.9
162.8 2009 2008 129.5 241.8 EBITDA 11.6 25.4 EBIT 8.7 6.8 6.7 1.9 1.8
20.2 824 823 819 913 Employees (number at End of Period)
After the Foundry Products and Specialty Resins behave the year had
started, the business situation improved steadily since March 2010
under the economic recovery. Revenue grew in the first nine months of
2010, particularly due to a surge in demand from the automotive
industry compared to the same period by 21.4 million euros or 16.5
percent to 150.9 million €. It should be noted that we focus in this
business since the beginning consistently on its core business and
pursue some lower-margin non-core activities any further. Accordingly,
earnings from operations (EBIT) in the first nine months,
significantly faster than revenues and put in comparison to the same
period 4.9 million to € 6.7 million €. In addition to the higher
sales, higher asset utilization impacted primarily by the cost savings
in the previous closure of a French production facility was a positive
effect on earnings from; impact on the result, however by rising raw
material costs, the delayed price rises, was able to be passed on to
our customers. In the business end of September 2010 a total of 824
employees, and thus one more than at the end of 2009.
Packaging Business
The Business Unit is made up of two industry groups, pharmaceutical
and diagnostics, electronics and logistics.
Figures Packaging Business
€ million 1st-3rd Quarter 2010 2009 1st-3rd Quarter 2009 2008 Turnover
97.0 93.8 126.3 124.0 EBITDA 18.9 23.3 EBIT 18.1 23.8 11.0 15.0 12.1
17.4 665 682 678 671 Employees (number at End of Period) The
Performance Packaging Business volume of business could be in the
first nine months of 2010 compared to the same period by 3.2 million
euros or 3.4 percent, to expand, reaching a turnover of 97.0 million
euros. The business reflects the increased demand, especially in the
semiconductor industry and logistics in the course of recovering world
trade, but also the continued stable development in the pharmaceutical
and diagnostics sectors. By contrast, the profit on ordinary
activities (EBIT) of € 1.1 million or 9.1 percent to 11.0 million €.
The result is a decline in the third Quarter incurred restructuring
expenses of € 3.1 million for the closure of production facilities in
Romont / Switzerland and the location in New Milford / USA
attributable. Excluding these special items, the division achieved in
the first nine months, a strong EBIT growth due to efficiency and
quality improvements and better capacity utilization with desiccants.
The Packaging Business Unit employed on 30 September 2010 a total of
665 employees, 17 fewer than at the balance sheet date 2009th
Water Treatment Business
The water treatment division is composed of the two industry groups,
as well as drinking water treatment and wastewater treatment.
Metrics Water Treatment Business
€ million 1st-3rd Quarter 2010 2009 1st-3rd Quarter 2009 2008 Turnover
62.3 67.6 49.5 66.7 EBITDA 10.3 10.4 EBIT 8.9 6.4 9.3 7.8 5.5 9.2 303
307 300 327 Employees (number at End of Period)
The water treatment division exceeded both business volume and
earnings from operations (EBIT) for the requirements of the first nine
months of last year. Revenue increased due to the strong market
position in a market environment characterized by increasing demand by
12.8 million euros or 25.9 percent to 62.3 million euros. Due to lower
raw material prices and targeted measures to increase margins, EBIT
for the same period than sales of 3.8 million euros or 69.1 percent to
9.3 million €. At the end of the 3rd Quarter, there were 303 employees
in the business employs fewer than four of 31 December, 2009.
Catalytic Technologies Business
The Catalytic Technologies Business Unit includes the four industry
groups, chemical, petrochemical, refinery and olefin polymerization.
Ratios Catalytic Technologies Business
€ million 1st-3rd Quarter 2010 2009 1st-3rd Quarter 2009 2008 Turnover
320.1 441.2 318.5 443.7 EBITDA 67.7 114.5 78.7 101.4 EBIT 48.4 87.8
59.9 81.2 2400 2420 2420 2067 Employees (number at End of Period)
The Catalytic Technologies Business Unit has developed satisfactorily
in the first nine months of the year. After a weak start to the year
2010, the trend in sales and orders in the business of catalysts for
the chemical and petrochemical industry from the second Quarterly
better continuously, especially in the last three months of the
reporting period, the bustling business significantly. Thus, the sales
in the first three quarters of 2010 compared to the same period by 1.6
million euros or 0.5 percent to 320.1 million €. The operating result
(EBIT) decreased compared to the corresponding period last year by
11.5 million euros to 48.4 million €, but adjusted for the 3rd Quarter
of 2009, realized capital gain in connection with the acquisition of
the catalyst plant in Nanjing / China in the amount of 15.8 million
euros, EBIT due to better capacity utilization and increased orders by
4.3 million euros or 9.8 percent to 48.4 million €. The order backlog
increased since the end of 2009 by 18.4 percent to 177.9 million €.
The Catalytic Technologies Business Unit employed on 30 September 2010
a total of 2,400 employees, 20 fewer than at the end of 2009.
Energy and Environment
The Energy and Environment is divided into three groups of industrial
air cleaning, fuel cell technology and battery materials.
Energy and Environment Business indicators million € 1.-3. Quarter
2010 2009 1st-3rd Quarter 2009 2008 Turnover 39.3 35.0 22.4 45.5 -3.6
-8.6 -7.9 1.0 EBITDA EBIT -5.7 -11.3 -9.7 -0.6 employee 186 175 175
165 (number at end of period) The Energy and Environment is now
rapidly recovering from the recession-induced decline in demand in
fiscal year 2009. In particular, the
cyclical nature of the environmental catalysts moved in 2010 compared
to same period last year to clear, and the sales of battery materials
industry group grew noticeably, albeit still at low levels. During the
reporting period, the division's sales increased significantly
compared to the same period by 16.9 million euros or 75.4 percent to
39.3 million euros. The positive performance is characterized in
earnings from operations (EBIT), although high, but the planned
start-up costs for building our future battery materials business made
a positive contribution of business nor prevent. Despite a significant
increase in sales due to strong demand for lithium iron phosphate,
which is in the production of cathode for high-performance lithium ion
batteries used in particular in the automotive sector increasingly,
the business registered with battery materials remain high start-up
losses, which impacted the outcome of the division during the
reporting period. As at 30 September 2010, the division 186 employees,
11 more than at 31 December, 2009.
Central Functions
In support functions, we record the cross-divisional organizational
units of the Süd-Chemie AG. They serve the efficient steering of
Süd-Chemie Group and its subsidiaries and associated companies at home
and abroad. Also present at the subsidiaries, the local operating
divisions not directly attributable to the functions of central
functions are allocated. Moreover, here the costs of corporate
management, including centralized services and expenses of centralized
strategic research and development are recorded.
Figures central functions
€ million 1st-3rd Quarter 2010 2009 1st-3rd Quarterly EBITDA -20.9
-17.8 2009 2008 -36.7 -9.1 -24.2 -21.7 -11.9 -40.5 EBIT 427 429 423
406 Employees (number at end of period)
Compared to the same period, the increased cost of central functions
in the first three quarters of 2010, € 12.3 million to 24.2 million €.
The elimination of the income generated in the previous year due to
currency hedging and commodity hedging transactions and the rise in
performance-based management fees for the current fiscal year have
influenced the development costs of the central functions of the
reporting period is negative. In addition, reflected in the increasing
costs also reflect higher expenses for strategic research in the field
of biocatalysis. On 30 September 2010, we employed in the central
functions of a total of 427 employees and less than 2 to 31 December
2009, it had 298 employees (including 54 trainees) at Süd-Chemie AG
and 129 employed by the Group companies.
Share price development Süd-Chemie AG
From January to September 2010, the share of Süd-Chemie AG has
developed very positively. In a generally stable market environment,
the spot price rose in the first three quarters, up 14.0 percent,
closing on 30 September 2010 with € 104.50. The trading volume was
still low.
At the beginning of our securities started with € 91.70, before it
subsequently - on 17 - apparently spurred by market rumors February
2010 on the previous year high of 109.00 euros rose. Following the
share price is calmed and settled down to values around the € 93.00.
On 11 May 2010 he fell on his year-low in the amount of € 86.50. Of
course this level, our stock quickly rebounded, however, and passed
within the next three weeks, again the 100 euro mark. From early June
to mid July 2010 the rate fluctuated in a range between 92.00 € and
100.00 € before the stock price on 15 July 2010 but rose again over €
100.00 and up to the end of the third Quarter remained consistently
above that mark. So ended the securities, the first three quarters of
2010 with a price of € 104.50 €. Thus, the market capitalization at
the end of the third Quarter of € 1.24 billion, a significant increase
in the amount of € 152 million at year-end price 2009th
This course development, Süd-Chemie shares the benchmark indexes DAX
30 index and chemistry in the previous fiscal year 2010, left behind.
From the beginning to 30 September 2010, the DAX 30 index rose
moderately by 4.6 percent, the chemical index rose by 6.3 percent
after all.
Outlook for the full year 2010
The outlook for the global economy have deteriorated a little last
though, seems a relapse into recession, as much for the world economy
as a whole and for the major economies in the industrialized countries
at present unlikely. Become economic expansion in emerging countries
seems even now a major economic engine in the world to be and not to
depend much more on developments in the industrialized nations. The
domestic economic buoyancy of emerging markets should remain until the
end of the year remains intact, especially since monetary policy will
probably continue to be expansionary. The current slowdown of the
boom-to-read results primarily in the industrialized countries from
the expiry of the temporary stimulus programs and less from the fear
of a relapse into recession underlying trend. Although there are a
number of industrialized countries wachstumsverlangsamende factors
such as high unemployment and consequent weakness of household
consumption, but the positive global economic sentiment and the
expansionary monetary policy argue against an imminent slide into
another recession. In line with the predictions of the Chemical
Industry Association (VCI), we expect full-year 2010 with an increase
in world economic output by at least 3.5 percent. For the
manufacturing value added, which moves in the South mostly chemistry,
we expect a growth rate of around 10 percent. Growth will be driven by
each of the dynamic development of Asia. World trade will continue to
grow, we expect a growth of over 10 percent.
In FY 2010, the chemical production will grow strong. The capacity
utilization of the facilities now moves back to the normal level for
the industry. Even if the growth rate at the end probably subside
slightly, is the world's chemical production was in 2010 - according
to the VCI forecast - can grow by over 7 percent. The growth rate in
2010 of the European Union (EU) should just lie about the growth of
chemical production in Germany much more than about 10 percent.
We remain committed to our successful strategy. It is based on the
steady increase in innovative capacity, strengthening customer
orientation, the optimization of business processes and expanding our
business portfolio. In the years before the recession and the
recession it has proven itself. With our effective and efficient
structure, internal processes, we continuously optimize our corporate
program, SC EXCELLENCE, we will leverage our leading global market
positions and opportunities which we use consistently.
The course of the first nine months of this year - and especially the
past three months - shows that we need our fix at the beginning of
2010 made sales forecast for fiscal year 2010 upwards: we deliver
goods in March 2010, still from a total annual turnover around € 1.125
billion expected, we now expect revenue for fiscal year 2010 of around
1.2 billion €. This corresponds to the previous year, an increase of
over 10 percent. The shift from license revenues in the coming year we
expect, despite the higher sales forecast unchanged with an increase
in adjusted EBIT for special items of around 10 percent. In addition,
we expect later this fiscal year included a gain in the low
double-digit million range in connection with the formation of joint
ventures in the global foundry chemical sector with Ashland Inc.,
Covington, Kentucky / USA, should the deal as planned in the 4th
Quarter of 2010 made.
Forward-looking statements
This report contains forward-looking statements based on management's
current estimates of future developments. Such statements are subject
to uncertainties and risks that lie with respect to outside the
possibilities of South-chemistry of a check or estimate precisely,
such as future market and economic conditions, the behavior of other
market participants, the successful integration of acquired businesses
and realize expected synergies governmental measures. If any of these,
or several other factors of uncertainty or should assumptions
underlying any of these statements prove incorrect, actual results
could differ materially from such statements expressed or implied by
such results. It is of the Süd-Chemie neither intends nor does the
Süd-Chemie any obligation to update any forward-looking statements to
reflect events or circumstances after the date of this report.