- Email: [email protected]
Chemtura's annual sales and earnings decline in 2015
FINANCIALS
exceptionals fell 13% to CHF313 million and the associated margin also declined, from 14% in 2014 to 12.8% last year. In 4Q 2015, Clariant’s sales were CHF1.526 billion, up 4% in local currencies but down 4% in Swiss franc terms. Volumes were up 4% compared to the previous year period. Growth was driven primarily by the Catalysis and Natural Resources BAs. With the exception of Asia, all regions posted increased sales in local currencies in 4Q 2015. For the Plastics & Coatings BA, sales were CHF586 million in 4Q 2015, an increase of 3% in local currencies and a decrease of 4% in Swiss francs. Latin America showed good growth in local currencies, whilst Europe and Asia showed low single-digit growth, Clariant reports. North America and the Middle East & Africa region were below the previous year. In Pigments, sales were impacted by a weak economic environment, particularly in the Asia Pacific and Europe. In Masterbatches, there was local currency sales growth in all regions in the quarter. Regionally, Latin America contributed most to the growth. Additionally, as in recent quarters, there was particular good growth in the Packaging and Medical Speciality segments. For Additives, sales were slightly above the 4Q 2014 level, which was driven by growth in Europe. Demand for flame retardants was below the previous year’s level but growth in polymer additives and waxes more than compensated for that. The BA’s EBITDA margin before exceptional items of 9.0% was below the previous year’s 12.6%. As of 1 January 2016, Plastics & Coatings has been transferred into a separate legal entity and will be steered towards higher absolute profitability and cash generation [see ADPO, October 2015]. The three businesses within the BA will generate value by lowering their cost base, gaining market share and by offering innovative solutions for their customers, according to Clariant. Pigments will focus on growth projects such as the forward integration with pigment preparations. Market penetration with innovative easy dispersible pigments (ED pigments) will continue, the company says. Masterbatches expects further growth by capacity expansion, such as the new Medical Masterbatches plant in Cuddalore, India, which is expected to be operational by 2017, Clariant reveals. In Additives, the AddWorks application-specific solutions [ibid., September 2013] are expected to provide additional growth, the company says. Contact: Clariant International Ltd, Muttenz, Switzerland. Tel: +41 61 469 6742, Web: www.clariant.com
10
Additives for Polymers
Chemtura’s annual sales and earnings decline in 2015
F
or the year ended 31 December 2015, Chemtura Corp reported net earnings from continuing operations on a GAAP basis of US$136 million on net sales of $1.745 billion. The annual sales figure was down 20% from $2.19 billion in 2014, which included Chemtura AgroSolutions before its divestment in late 2014, while earnings decreased substantially from $771 million the previous year. On a managed basis, the company’s net earnings from continuing operations increased by 26% to $101 million. In the fourth quarter of 2015, Chemtura achieved net sales of $399 million compared to $467 million in 4Q 2014. Quarterly net earnings from continuing operations on a GAAP basis were $66 million, down from the 4Q 2014 figure of $703 million, which included a gain on the sale of the AgroSolutions business and the release of a valuation allowance on the company’s US deferred tax assets. Acknowledging that it had faced a number of challenges during the year, including weaker-than-anticipated demand from some sectors, lower volumes, supply issues for some key raw materials, unfavourable currency translation effects and the fallout from China’s economic slowdown, the company said that it had addressed the issues by adopting a ‘manage what we can control’ approach, which had resulted in the successful implementation of a $62 million cost reduction initiative and consequent improvement in adjusted EBITDA across its core Industrial Performance Products (IPP), Industrial Engineered Products (IEP) and Corporate segments in 2015. Compared with the fourth quarter of 2014, Chemtura’s IPP segment posted lower net sales of $198 million (down from $234 million) and higher operating income of $30 million ($25 million) for 4Q 2015. The sales decline reflected unfavourable product mix, moderate volume declines, lower selling prices and unfavourable foreign exchange effects, the company reports. The year-over-year improvement in operating income in 4Q 2015 was due to lower raw material and manufacturing costs, which more than offset lower selling prices and unfavourable product mix, Chemtura says. Chemtura’s IEP segment posted net sales of $169 million in 4Q 2015, down from $184 million the previous year. Operating income was $17 million, compared to an operating loss of $1 million in 4Q 2014. Sales volume declined year on
May 2016
FINANCIALS
year due to the discontinued production of certain brominebased biocides and the continuing decline in demand for flame retardants used in furniture foams. Sales of flame retardants for electronic applications recovered somewhat from 3Q 2015 and demand for Emerald Innovation 3000™ in styrene insulation foam applications continued to grow. The company reports that, sequentially, it was able to create efficiencies within its plant to allow it to produce the polymeric flame retardant at higher rates. Although average selling prices were lower overall than in 3Q 2015, price increases for certain electronic flame retardants and other bromine-based products were sustained. The year-on-year increase in the segment’s operating income, despite the lower net sales and an inventory write-down, was the result of the cost reduction initiatives, increased selling prices and lower raw material costs, Chemtura says. Contact: Chemtura Corp, Philadelphia, PA, USA. Tel: +1 203 573 2000, Web: www.chemtura.com
Songwon Industrial achieves stable growth in 2015; appoints new CEO and board
S
outh Korean polymer stabilizers major Songwon Industrial posted sales of KRW654.4 billion (€495.5 million) in its financial year ended 31 December 2015, down 1.7% from KRW665.5 billion in 2014. The company reported a net profit of KRW28.6 billion in 2015 compared to a net loss of KRW13.4 billion in the previous year. All its key operational results ‘greatly improved’ throughout 2015, its 50th anniversary year, according to Songwon. The company achieved a gross profit of KRW140.6 billion in 2015, an increase of almost 60% year on year, and gross profit margin expanded by 8 percentage points to 21.5%. Operating profit was KRW49.4 billion, a 14-fold improvement compared to KRW3.4 billion in 2014, while EBITDA was
May 2016
KRW92.6 billion and the EBITDA margin increased to 14.1%. In 2015, sales were fairly stable and continued to grow in line with expectations. The constant improvement in margins experienced during the year was due to the positive impact of lower raw material costs combined with Songwon’s careful price/volume management, the company says. Throughout 2015, all of its manufacturing facilities operated steadily and at high utilization rates, which enabled Songwon to achieve acceptable margin results for the year. All of Songwon’s business lines performed well in 2015 with the exception of tin intermediates, which suffered particularly heavily from the continuous devaluation of the Japanese yen. Sales of polymer stabilizers (antioxidants and UV stabilizers) accounted for 69% of the company’s total, and grew slightly from KRW445.4 billion in 2014 to KRW450.6 billion last year in spite of negative currency developments in their key European and Japanese markets, Songwon reports. They also delivered a ‘great performance’ in terms of profitability, and remain a key area of focus in Songwon’s strategy as well as an engine of future growth, it says. The company continued to work on strengthening and consolidating its position as the world’s second largest producer of polymer stabilizers by ‘focusing on improving processes and cost position’, as well as expanding its global manufacturing footprint, Songwon reports. In 4Q 2015, Songwon achieved sales revenues of KRW166.5 billion, an increase of 1% from KRW164.8 billion in 4Q 2014. Net profit for the period was KRW10.6 billion compared to a net loss of KRW4.8 billion for the same quarter of 2014. In other news, Songwon has recently shuffled its top management as well as expanding its board of directors from four members to seven. Former CEO Jongho Park becomes chairman of the board, with Maurizio Butti, the chief operating officer since 2011, elected as the new CEO of Songwon Industrial Group. The newly elected board comprises three executive members – Butti, CFO Hans-Peter Wüest and Choong-Sik Kim – and four non-executive members – Park, Yung-Ku Ha, Dieter Morath and Gerhard Schlosser. Contact: Songwon Industrial Co, Ltd, Ulsan, Korea. Tel: +82 522 739 841, Web: www.songwon.com
Additives for Polymers
11
exceptionals fell 13% to CHF313 million and the associated margin also declined, from 14% in 2014 to 12.8% last year. In 4Q 2015, Clariant’s sales were CHF1.526 billion, up 4% in local currencies but down 4% in Swiss franc terms. Volumes were up 4% compared to the previous year period. Growth was driven primarily by the Catalysis and Natural Resources BAs. With the exception of Asia, all regions posted increased sales in local currencies in 4Q 2015. For the Plastics & Coatings BA, sales were CHF586 million in 4Q 2015, an increase of 3% in local currencies and a decrease of 4% in Swiss francs. Latin America showed good growth in local currencies, whilst Europe and Asia showed low single-digit growth, Clariant reports. North America and the Middle East & Africa region were below the previous year. In Pigments, sales were impacted by a weak economic environment, particularly in the Asia Pacific and Europe. In Masterbatches, there was local currency sales growth in all regions in the quarter. Regionally, Latin America contributed most to the growth. Additionally, as in recent quarters, there was particular good growth in the Packaging and Medical Speciality segments. For Additives, sales were slightly above the 4Q 2014 level, which was driven by growth in Europe. Demand for flame retardants was below the previous year’s level but growth in polymer additives and waxes more than compensated for that. The BA’s EBITDA margin before exceptional items of 9.0% was below the previous year’s 12.6%. As of 1 January 2016, Plastics & Coatings has been transferred into a separate legal entity and will be steered towards higher absolute profitability and cash generation [see ADPO, October 2015]. The three businesses within the BA will generate value by lowering their cost base, gaining market share and by offering innovative solutions for their customers, according to Clariant. Pigments will focus on growth projects such as the forward integration with pigment preparations. Market penetration with innovative easy dispersible pigments (ED pigments) will continue, the company says. Masterbatches expects further growth by capacity expansion, such as the new Medical Masterbatches plant in Cuddalore, India, which is expected to be operational by 2017, Clariant reveals. In Additives, the AddWorks application-specific solutions [ibid., September 2013] are expected to provide additional growth, the company says. Contact: Clariant International Ltd, Muttenz, Switzerland. Tel: +41 61 469 6742, Web: www.clariant.com
10
Additives for Polymers
Chemtura’s annual sales and earnings decline in 2015
F
or the year ended 31 December 2015, Chemtura Corp reported net earnings from continuing operations on a GAAP basis of US$136 million on net sales of $1.745 billion. The annual sales figure was down 20% from $2.19 billion in 2014, which included Chemtura AgroSolutions before its divestment in late 2014, while earnings decreased substantially from $771 million the previous year. On a managed basis, the company’s net earnings from continuing operations increased by 26% to $101 million. In the fourth quarter of 2015, Chemtura achieved net sales of $399 million compared to $467 million in 4Q 2014. Quarterly net earnings from continuing operations on a GAAP basis were $66 million, down from the 4Q 2014 figure of $703 million, which included a gain on the sale of the AgroSolutions business and the release of a valuation allowance on the company’s US deferred tax assets. Acknowledging that it had faced a number of challenges during the year, including weaker-than-anticipated demand from some sectors, lower volumes, supply issues for some key raw materials, unfavourable currency translation effects and the fallout from China’s economic slowdown, the company said that it had addressed the issues by adopting a ‘manage what we can control’ approach, which had resulted in the successful implementation of a $62 million cost reduction initiative and consequent improvement in adjusted EBITDA across its core Industrial Performance Products (IPP), Industrial Engineered Products (IEP) and Corporate segments in 2015. Compared with the fourth quarter of 2014, Chemtura’s IPP segment posted lower net sales of $198 million (down from $234 million) and higher operating income of $30 million ($25 million) for 4Q 2015. The sales decline reflected unfavourable product mix, moderate volume declines, lower selling prices and unfavourable foreign exchange effects, the company reports. The year-over-year improvement in operating income in 4Q 2015 was due to lower raw material and manufacturing costs, which more than offset lower selling prices and unfavourable product mix, Chemtura says. Chemtura’s IEP segment posted net sales of $169 million in 4Q 2015, down from $184 million the previous year. Operating income was $17 million, compared to an operating loss of $1 million in 4Q 2014. Sales volume declined year on
May 2016
FINANCIALS
year due to the discontinued production of certain brominebased biocides and the continuing decline in demand for flame retardants used in furniture foams. Sales of flame retardants for electronic applications recovered somewhat from 3Q 2015 and demand for Emerald Innovation 3000™ in styrene insulation foam applications continued to grow. The company reports that, sequentially, it was able to create efficiencies within its plant to allow it to produce the polymeric flame retardant at higher rates. Although average selling prices were lower overall than in 3Q 2015, price increases for certain electronic flame retardants and other bromine-based products were sustained. The year-on-year increase in the segment’s operating income, despite the lower net sales and an inventory write-down, was the result of the cost reduction initiatives, increased selling prices and lower raw material costs, Chemtura says. Contact: Chemtura Corp, Philadelphia, PA, USA. Tel: +1 203 573 2000, Web: www.chemtura.com
Songwon Industrial achieves stable growth in 2015; appoints new CEO and board
S
outh Korean polymer stabilizers major Songwon Industrial posted sales of KRW654.4 billion (€495.5 million) in its financial year ended 31 December 2015, down 1.7% from KRW665.5 billion in 2014. The company reported a net profit of KRW28.6 billion in 2015 compared to a net loss of KRW13.4 billion in the previous year. All its key operational results ‘greatly improved’ throughout 2015, its 50th anniversary year, according to Songwon. The company achieved a gross profit of KRW140.6 billion in 2015, an increase of almost 60% year on year, and gross profit margin expanded by 8 percentage points to 21.5%. Operating profit was KRW49.4 billion, a 14-fold improvement compared to KRW3.4 billion in 2014, while EBITDA was
May 2016
KRW92.6 billion and the EBITDA margin increased to 14.1%. In 2015, sales were fairly stable and continued to grow in line with expectations. The constant improvement in margins experienced during the year was due to the positive impact of lower raw material costs combined with Songwon’s careful price/volume management, the company says. Throughout 2015, all of its manufacturing facilities operated steadily and at high utilization rates, which enabled Songwon to achieve acceptable margin results for the year. All of Songwon’s business lines performed well in 2015 with the exception of tin intermediates, which suffered particularly heavily from the continuous devaluation of the Japanese yen. Sales of polymer stabilizers (antioxidants and UV stabilizers) accounted for 69% of the company’s total, and grew slightly from KRW445.4 billion in 2014 to KRW450.6 billion last year in spite of negative currency developments in their key European and Japanese markets, Songwon reports. They also delivered a ‘great performance’ in terms of profitability, and remain a key area of focus in Songwon’s strategy as well as an engine of future growth, it says. The company continued to work on strengthening and consolidating its position as the world’s second largest producer of polymer stabilizers by ‘focusing on improving processes and cost position’, as well as expanding its global manufacturing footprint, Songwon reports. In 4Q 2015, Songwon achieved sales revenues of KRW166.5 billion, an increase of 1% from KRW164.8 billion in 4Q 2014. Net profit for the period was KRW10.6 billion compared to a net loss of KRW4.8 billion for the same quarter of 2014. In other news, Songwon has recently shuffled its top management as well as expanding its board of directors from four members to seven. Former CEO Jongho Park becomes chairman of the board, with Maurizio Butti, the chief operating officer since 2011, elected as the new CEO of Songwon Industrial Group. The newly elected board comprises three executive members – Butti, CFO Hans-Peter Wüest and Choong-Sik Kim – and four non-executive members – Park, Yung-Ku Ha, Dieter Morath and Gerhard Schlosser. Contact: Songwon Industrial Co, Ltd, Ulsan, Korea. Tel: +82 522 739 841, Web: www.songwon.com
Additives for Polymers
11