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Cytec reports earnings growth in 3Q 2015 as merger with Solvay progresses
FINANCIALS
Or contact: Fortinbrás Comercial e Industrial Ltda, Rua Valdomiro Rovaron, 43, Capotuna, Jaguariúna, São Paulo, Brazil. Tel: +55 19 3867 4050, Web: www.fortinbras.com.br
Penn Color doubles masterbatch capacity in Europe
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olorant specialist Penn Color is expanding its European plant at Venray in the Netherlands in a move that doubles the facility’s production capacity for colour and additive masterbatches. According to the company, the expansion was necessitated as a result of its ‘continued rapid growth in Europe’. Penn Color has added a further 2000 m2 of space at the Venray site and installed new equipment, including a highoutput twin-screw extrusion line with multiple raw material blending and feeding options for maximum formulation flexibility. The building expansion was scheduled for completion in October, with the equipment becoming fully operational soon after. Additional investments in manpower are also underway to support this new expansion, the company says. According to Penn Color, this development will broaden its ability to supply a wider range of colorants in both liquid and solid formats, and enable the manufacture of its growing line of functional additive masterbatches. These additions will strengthen the company’s ability ‘to support the continuing globalization of the plastics industry, and in particular the plastic packaging market’, it says. This latest investment is the second expansion at the Penn Color International BV facility in the past five years. A major investment in 2010 added four compounding lines, application research and development equipment, and production and warehouse space at the Venray site. The company has also recently announced further expansions at two of its US manufacturing sites, at Milton in Wisconsin and Hatfield in Pennsylvania, the largest of Penn Color’s production facilities. In addition, it has installed new equipment this year at its Plastics R&D Center in Hatfield in support of its additive masterbatch development: a film line has been added, supplemented by a state-of-the-art coefficient of friction testing unit ‘to provide valuable data collection in the development of surface modifying additives’, and further analytical equipment. The company reports that it is also ‘actively pursuing additional acquisitions and expansions’ in Central and South America, India, China, and throughout Europe.
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Additives for Polymers
Founded in 1964, Penn Color is a privately held company with seven manufacturing facilities in the USA, Europe and India, as well as a sales office and research and development lab in China. It manufactures pigment dispersions and colour and additive masterbatches for all thermoplastic polymers, as well as for speciality and industrial coatings, printing inks, and cosmetics. The company has annual sales of more than US$200 million and ranks as one of North America’s 30 largest manufacturers of concentrates and compounds. Contact: Penn Color, Inc, 400 Old Dublin Pike, Doylestown, PA 18901, USA. Tel: +1 866 617 7366, Fax: +1 866 597 7366, Web: www.penncolor.com
FINANCIALS Cytec reports earnings growth in 3Q 2015 as merger with Solvay progresses
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or the third quarter of 2015, Cytec Industries Inc reported net earnings of US$59.5 million on net sales from continuing operations of $497 million. Excluding special items, net earnings from continuing operations were $65.8 million. By comparison, the company’s net earnings from continuing operations for 3Q 2014 were $53.8 million (or $54.2 million excluding special items) on net sales of $507 million. For the nine months ended 30 September 2015, Cytec achieved net sales of $1521 million, almost on a par with the total of $1523 million reported for the same period in 2014. Net earnings from continuing operations for the first three quarters of 2015 were $158.2 million, down from $172.1 million a year earlier. Shane Fleming, Cytec’s chairman, president and CEO, says he is pleased with both the three- and nine-month performances and confident in the company’s ability to deliver its full-year earnings growth commitment. ‘Overall, I am pleased with our ability to deliver volume growth in three of our four segments despite the uncertainty in the global economic environment, and then to translate the higher selling volumes into increased earnings across the company’, he
December 2015
FINANCIALS
says. As a result of tax benefits, Cytec is increasing its full-year guidance for adjusted diluted earnings per share to a range between $3.20 and $3.40. The company’s Additive Technologies segment posted net sales of $65.7 million in 3Q 2015, down 2.7% from $67.5 million a year earlier. Selling volumes were up by 3% year on year, related mainly to higher sales of polymer additive products sold to the automotive and agricultural film markets compared to the same quarter of the previous year. However, the volume increase was more than offset by 4% from negative foreign exchange and 2% from lower selling prices as the business focused on recapturing lost volumes, Cytec reports. Operating earnings increased by 29% from $8.4 million in 3Q 2014 to $10.8 million this year, due mainly to increased volumes, lower raw material costs and lower operating costs. For the nine months to the end of September, the Additive Technologies segment achieved net sales of $205.6 million, a decline of about 1% compared to 3Q 2014. Volumes were up 6% for the period, offset by 3% lower selling prices and a 4% negative foreign exchange effect. The segment’s operating earnings rose 10% to $29.5 million for the nine-month period. In July this year, Cytec entered into a merger agreement with Belgian company Solvay SA and its wholly owned subsidiary, Tulip Acquisition Inc [ADPO, September 2015], and Cytec provided a progress update with its 3Q results. The applicable waiting period under the USA’s HartScott-Rodino Antitrust Improvement Act expired on 24 September, satisfying one of the conditions for closing the deal. The transaction has been reviewed by the Committee on Foreign Investment in the United States (CFIUS) and the US Directorate of Defense Trade Controls, and Solvay and Cytec have also worked with the US Defense Security Service on a detailed plan to mitigate foreign ownership, control or influence. Applicable filings were made in Mexico and Ukraine in September, and in South Korea, Israel, Turkey and the European Union in October, with further filings in Brazil and Japan expected. At the time of writing, the closing of the merger deal was expected imminently before the end of December 2015. In related news, Solvay posted 3Q 2015 net sales of E2.71 billion, up 5% year on year despite a 1% fall in sales volumes. The increase was fully attributable to positive currency conversion effects, the company says. EBITDA for the quarter increased 14% to E524 million. Commenting on the Cytec merger, Solvay says it is ‘mobilizing’ for a rapid and effective integration process and synergy realization. ‘We are confident and enthusiastic about the value
December 2015
creation from this combination, which will drive the next phase of our growth’, the company says. Contact: Cytec Industries Inc, Woodland Park, NJ, USA. Tel: +1 973 357 3100, Web: www.cytec.com
Clariant posts mixed results for third quarter of 2015
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witzerland’s speciality chemicals group Clariant International Ltd reported sales of CHF1.41 billion (E1.30 billion) for the third quarter of 2015, a decline of 6% in Swiss franc terms from sales of CHF1.507 billion in 3Q 2014. However, the sales total represented growth of 2% in local currencies, with both volumes and prices up 1%, the company says. Net income from continuing operations was CHF60 million in 3Q 2015, up 3% from the previous year. The year-on-year decline in reported sales in the third quarter of 2015 was due to an 8% negative currency translation effect as a result of strongly volatile currencies, in particular the Brazilian real, according to Clariant. Lower growth came from the Asia Pacific and Middle East & Africa regions, the company reports. Sales in Asia Pacific decreased by 3% in local currencies and were affected by weak demand in China, which could not be compensated for by the stronger demand from smaller economies in Asia. In the Middle East & Africa region, sales were down 2% year on year in local currencies. European sales were 1% lower in local currencies, impacted by weaker end-market demand, but growth in the Americas continued to be strong in 3Q 2015, with sales in local currencies up 20% in Latin America and 2% in North America. The company’s EBITDA before exceptional items from continuing operations rose 8% in local currencies and reached CHF207 million in 3Q 2015, compared to CHF211 million in the previous year. The EBITDA margin was strengthened by 70 basis points to 14.7 %, above the previous year’s level of 14.0%. The margin expansion came predominantly from the Business Areas Care Chemicals, Catalysis and Natural Resources, which all significantly increased their EBITDA margins in 3Q 2015 compared to the previous year, Clariant says. In Plastic & Coatings, margins decreased slightly due to the challenging markets.
Additives for Polymers
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Or contact: Fortinbrás Comercial e Industrial Ltda, Rua Valdomiro Rovaron, 43, Capotuna, Jaguariúna, São Paulo, Brazil. Tel: +55 19 3867 4050, Web: www.fortinbras.com.br
Penn Color doubles masterbatch capacity in Europe
C
olorant specialist Penn Color is expanding its European plant at Venray in the Netherlands in a move that doubles the facility’s production capacity for colour and additive masterbatches. According to the company, the expansion was necessitated as a result of its ‘continued rapid growth in Europe’. Penn Color has added a further 2000 m2 of space at the Venray site and installed new equipment, including a highoutput twin-screw extrusion line with multiple raw material blending and feeding options for maximum formulation flexibility. The building expansion was scheduled for completion in October, with the equipment becoming fully operational soon after. Additional investments in manpower are also underway to support this new expansion, the company says. According to Penn Color, this development will broaden its ability to supply a wider range of colorants in both liquid and solid formats, and enable the manufacture of its growing line of functional additive masterbatches. These additions will strengthen the company’s ability ‘to support the continuing globalization of the plastics industry, and in particular the plastic packaging market’, it says. This latest investment is the second expansion at the Penn Color International BV facility in the past five years. A major investment in 2010 added four compounding lines, application research and development equipment, and production and warehouse space at the Venray site. The company has also recently announced further expansions at two of its US manufacturing sites, at Milton in Wisconsin and Hatfield in Pennsylvania, the largest of Penn Color’s production facilities. In addition, it has installed new equipment this year at its Plastics R&D Center in Hatfield in support of its additive masterbatch development: a film line has been added, supplemented by a state-of-the-art coefficient of friction testing unit ‘to provide valuable data collection in the development of surface modifying additives’, and further analytical equipment. The company reports that it is also ‘actively pursuing additional acquisitions and expansions’ in Central and South America, India, China, and throughout Europe.
8
Additives for Polymers
Founded in 1964, Penn Color is a privately held company with seven manufacturing facilities in the USA, Europe and India, as well as a sales office and research and development lab in China. It manufactures pigment dispersions and colour and additive masterbatches for all thermoplastic polymers, as well as for speciality and industrial coatings, printing inks, and cosmetics. The company has annual sales of more than US$200 million and ranks as one of North America’s 30 largest manufacturers of concentrates and compounds. Contact: Penn Color, Inc, 400 Old Dublin Pike, Doylestown, PA 18901, USA. Tel: +1 866 617 7366, Fax: +1 866 597 7366, Web: www.penncolor.com
FINANCIALS Cytec reports earnings growth in 3Q 2015 as merger with Solvay progresses
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or the third quarter of 2015, Cytec Industries Inc reported net earnings of US$59.5 million on net sales from continuing operations of $497 million. Excluding special items, net earnings from continuing operations were $65.8 million. By comparison, the company’s net earnings from continuing operations for 3Q 2014 were $53.8 million (or $54.2 million excluding special items) on net sales of $507 million. For the nine months ended 30 September 2015, Cytec achieved net sales of $1521 million, almost on a par with the total of $1523 million reported for the same period in 2014. Net earnings from continuing operations for the first three quarters of 2015 were $158.2 million, down from $172.1 million a year earlier. Shane Fleming, Cytec’s chairman, president and CEO, says he is pleased with both the three- and nine-month performances and confident in the company’s ability to deliver its full-year earnings growth commitment. ‘Overall, I am pleased with our ability to deliver volume growth in three of our four segments despite the uncertainty in the global economic environment, and then to translate the higher selling volumes into increased earnings across the company’, he
December 2015
FINANCIALS
says. As a result of tax benefits, Cytec is increasing its full-year guidance for adjusted diluted earnings per share to a range between $3.20 and $3.40. The company’s Additive Technologies segment posted net sales of $65.7 million in 3Q 2015, down 2.7% from $67.5 million a year earlier. Selling volumes were up by 3% year on year, related mainly to higher sales of polymer additive products sold to the automotive and agricultural film markets compared to the same quarter of the previous year. However, the volume increase was more than offset by 4% from negative foreign exchange and 2% from lower selling prices as the business focused on recapturing lost volumes, Cytec reports. Operating earnings increased by 29% from $8.4 million in 3Q 2014 to $10.8 million this year, due mainly to increased volumes, lower raw material costs and lower operating costs. For the nine months to the end of September, the Additive Technologies segment achieved net sales of $205.6 million, a decline of about 1% compared to 3Q 2014. Volumes were up 6% for the period, offset by 3% lower selling prices and a 4% negative foreign exchange effect. The segment’s operating earnings rose 10% to $29.5 million for the nine-month period. In July this year, Cytec entered into a merger agreement with Belgian company Solvay SA and its wholly owned subsidiary, Tulip Acquisition Inc [ADPO, September 2015], and Cytec provided a progress update with its 3Q results. The applicable waiting period under the USA’s HartScott-Rodino Antitrust Improvement Act expired on 24 September, satisfying one of the conditions for closing the deal. The transaction has been reviewed by the Committee on Foreign Investment in the United States (CFIUS) and the US Directorate of Defense Trade Controls, and Solvay and Cytec have also worked with the US Defense Security Service on a detailed plan to mitigate foreign ownership, control or influence. Applicable filings were made in Mexico and Ukraine in September, and in South Korea, Israel, Turkey and the European Union in October, with further filings in Brazil and Japan expected. At the time of writing, the closing of the merger deal was expected imminently before the end of December 2015. In related news, Solvay posted 3Q 2015 net sales of E2.71 billion, up 5% year on year despite a 1% fall in sales volumes. The increase was fully attributable to positive currency conversion effects, the company says. EBITDA for the quarter increased 14% to E524 million. Commenting on the Cytec merger, Solvay says it is ‘mobilizing’ for a rapid and effective integration process and synergy realization. ‘We are confident and enthusiastic about the value
December 2015
creation from this combination, which will drive the next phase of our growth’, the company says. Contact: Cytec Industries Inc, Woodland Park, NJ, USA. Tel: +1 973 357 3100, Web: www.cytec.com
Clariant posts mixed results for third quarter of 2015
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witzerland’s speciality chemicals group Clariant International Ltd reported sales of CHF1.41 billion (E1.30 billion) for the third quarter of 2015, a decline of 6% in Swiss franc terms from sales of CHF1.507 billion in 3Q 2014. However, the sales total represented growth of 2% in local currencies, with both volumes and prices up 1%, the company says. Net income from continuing operations was CHF60 million in 3Q 2015, up 3% from the previous year. The year-on-year decline in reported sales in the third quarter of 2015 was due to an 8% negative currency translation effect as a result of strongly volatile currencies, in particular the Brazilian real, according to Clariant. Lower growth came from the Asia Pacific and Middle East & Africa regions, the company reports. Sales in Asia Pacific decreased by 3% in local currencies and were affected by weak demand in China, which could not be compensated for by the stronger demand from smaller economies in Asia. In the Middle East & Africa region, sales were down 2% year on year in local currencies. European sales were 1% lower in local currencies, impacted by weaker end-market demand, but growth in the Americas continued to be strong in 3Q 2015, with sales in local currencies up 20% in Latin America and 2% in North America. The company’s EBITDA before exceptional items from continuing operations rose 8% in local currencies and reached CHF207 million in 3Q 2015, compared to CHF211 million in the previous year. The EBITDA margin was strengthened by 70 basis points to 14.7 %, above the previous year’s level of 14.0%. The margin expansion came predominantly from the Business Areas Care Chemicals, Catalysis and Natural Resources, which all significantly increased their EBITDA margins in 3Q 2015 compared to the previous year, Clariant says. In Plastic & Coatings, margins decreased slightly due to the challenging markets.
Additives for Polymers
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