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Ferro reports 17% sales growth in the second quarter of 2008
FINANCIALS
Describing the results as ‘unquestionably disappointing’, Ciba’s CEO Brendan Cummins explains that the company experienced intense margin pressure from the escalation of raw material and energy costs, which went up 10% in the second quarter alone, with the heaviest impact in April and May. By mid June, Ciba was able to offset these higher costs with sales prices increases and this has continued into the third quarter, he says. The company is undertaking ‘significant action’ to reshape its portfolio and focus on areas of technological core strength in plastics, coatings and water, Cummins continues. A number of options are being evaluated for the paper and publication inks businesses, which are not performing in line with expectations, while the Middle East joint venture for plastics additives [ADPO, October 2008] and acquisitions by the coatings effects business will enhance the market positions in these segments. Ciba also plans to implement a new industryfocused operating model early in 2009 [though the subsequently announced takeover bid by BASF (see p. 3) may affect such planned strategic measures] to better exploit its core competencies and develop highermargin market potential. Among the planned changes, all the plastics businesses – which currently comprise Base Polymers and Polymer Products in the Plastic Additives segment, along with Pigments for Plastics in Coating Effects – will become one unit. There will also be a new growth platform, where a number of small, high-potential businesses will be brought together with embryonic projects and technologies. Contact: Ciba Inc, Basel, Switzerland. Tel: +41 61 636 4444, Web: www.ciba.com
Ferro reports 17% sales growth in the second quarter of 2008
O
hio-based Ferro Corp posted net sales of US$650.4 million for the quarter ended 30 June 2008, up 17% from sales of $553.7 million in 2Q 2007. Income from continuing operations for the quarter was $9.4 million, more than double the $4.6 million figure reported in 2Q 2007 as a result of the combined effects of higher gross profit driven by increased net sales, lower
November 2008
selling, general and administrative expenses and reduced interest expense, partially offset by higher restructuring charges.
Price increases and changes in foreign exchange were the most significant drivers of sales growth during the quarter, Ferro says. Changes in foreign currency exchange rates accounted for approximately 40% of the sales increase. Higher sales volumes also contributed to the sales increase, though sales volumes declined in Polymer Additives and Specialty Plastics. Gross profit percentage was 19.0% of sales for 2Q 2008, compared with 19.4% of sales in 2Q 2007. Selling, general and administrative (SG&A) expenses were $81.2 million or 12.5% of sales, down from $84.4 million (15.2% of sales) in 2Q 2007. Restructuring charges were $9.0 million for the 2008 second quarter, an increase from $0.3 million in the prior-year period. In value terms, second-quarter sales by the Polymer Additives segment grew 16% to $98.7 million, up from $85.2 million in 2Q 2007, primarily as a result of higher product pricing. Increased income in the segment was driven by product price improvements that offset raw material cost increases and improved product mix, the company says. Segmental income for 2Q 2008 was $4.6 million, up 13.5% from $4.05 million for the same period a year earlier. Ferro CEO James F. Kirsch described the results as ‘outstanding’, coming as they did in spite of slowing economic growth and unprecedented cost increases for a number of raw materials. Efforts to improve business operations and restructure manufacturing assets are generating results, and the company is making sustainable progress towards its long-term profitability goals, Kirsch says. Contact: Ferro Corp, Cleveland, OH, USA. Tel: +1 216 641 8580, Web: www.ferro.com
PolyOne achieves improved performance in 2Q 2008
F
or the second quarter of 2008, US-based polymer materials specialist PolyOne Corp has reported net income of US$8.8 million on revenues of $748.1 million, up 8.6%. The company posted a loss of $5.4 million on revenues of $688.8 million in 2Q 2007.
Additives for Polymers
9
Describing the results as ‘unquestionably disappointing’, Ciba’s CEO Brendan Cummins explains that the company experienced intense margin pressure from the escalation of raw material and energy costs, which went up 10% in the second quarter alone, with the heaviest impact in April and May. By mid June, Ciba was able to offset these higher costs with sales prices increases and this has continued into the third quarter, he says. The company is undertaking ‘significant action’ to reshape its portfolio and focus on areas of technological core strength in plastics, coatings and water, Cummins continues. A number of options are being evaluated for the paper and publication inks businesses, which are not performing in line with expectations, while the Middle East joint venture for plastics additives [ADPO, October 2008] and acquisitions by the coatings effects business will enhance the market positions in these segments. Ciba also plans to implement a new industryfocused operating model early in 2009 [though the subsequently announced takeover bid by BASF (see p. 3) may affect such planned strategic measures] to better exploit its core competencies and develop highermargin market potential. Among the planned changes, all the plastics businesses – which currently comprise Base Polymers and Polymer Products in the Plastic Additives segment, along with Pigments for Plastics in Coating Effects – will become one unit. There will also be a new growth platform, where a number of small, high-potential businesses will be brought together with embryonic projects and technologies. Contact: Ciba Inc, Basel, Switzerland. Tel: +41 61 636 4444, Web: www.ciba.com
Ferro reports 17% sales growth in the second quarter of 2008
O
hio-based Ferro Corp posted net sales of US$650.4 million for the quarter ended 30 June 2008, up 17% from sales of $553.7 million in 2Q 2007. Income from continuing operations for the quarter was $9.4 million, more than double the $4.6 million figure reported in 2Q 2007 as a result of the combined effects of higher gross profit driven by increased net sales, lower
November 2008
selling, general and administrative expenses and reduced interest expense, partially offset by higher restructuring charges.
Price increases and changes in foreign exchange were the most significant drivers of sales growth during the quarter, Ferro says. Changes in foreign currency exchange rates accounted for approximately 40% of the sales increase. Higher sales volumes also contributed to the sales increase, though sales volumes declined in Polymer Additives and Specialty Plastics. Gross profit percentage was 19.0% of sales for 2Q 2008, compared with 19.4% of sales in 2Q 2007. Selling, general and administrative (SG&A) expenses were $81.2 million or 12.5% of sales, down from $84.4 million (15.2% of sales) in 2Q 2007. Restructuring charges were $9.0 million for the 2008 second quarter, an increase from $0.3 million in the prior-year period. In value terms, second-quarter sales by the Polymer Additives segment grew 16% to $98.7 million, up from $85.2 million in 2Q 2007, primarily as a result of higher product pricing. Increased income in the segment was driven by product price improvements that offset raw material cost increases and improved product mix, the company says. Segmental income for 2Q 2008 was $4.6 million, up 13.5% from $4.05 million for the same period a year earlier. Ferro CEO James F. Kirsch described the results as ‘outstanding’, coming as they did in spite of slowing economic growth and unprecedented cost increases for a number of raw materials. Efforts to improve business operations and restructure manufacturing assets are generating results, and the company is making sustainable progress towards its long-term profitability goals, Kirsch says. Contact: Ferro Corp, Cleveland, OH, USA. Tel: +1 216 641 8580, Web: www.ferro.com
PolyOne achieves improved performance in 2Q 2008
F
or the second quarter of 2008, US-based polymer materials specialist PolyOne Corp has reported net income of US$8.8 million on revenues of $748.1 million, up 8.6%. The company posted a loss of $5.4 million on revenues of $688.8 million in 2Q 2007.
Additives for Polymers
9