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Ferro's 2013 earnings gains show benefits of business realignment
FINANCIALS
FINANCIALS Ferro’s 2013 earnings gains show benefits of business realignment
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or full-year 2013, Ferro Corp reported substantial gains in its annual earnings, posting net income attributable to the company of US$71.9 million, reversing a net loss of $374 million in 2012. The company attributes the increase in profitability to the successful execution of its value creation strategy. Ferro’s 2013 net sales were $1.64 billion, down almost 6% from $1.74 billion in 2012. According to the company, its value-added sales, which exclude precious metals, decreased 2%, to $1.5 billion in 2013. The ‘deselection’ of phthalate products in the Polymer Additives Segment adversely impacted its annual sales by approximately $22 million, Ferro reports. Excluding this impact and that of business lines that have been exited, sales for the underlying businesses increased by nearly 1%, it says. The company’s adjusted EBITDA (net income before the effects of discontinued operations, interest, income taxes, depreciation and amortization, and various restructuring and other special charges) was approximately $138 million for 2013, compared with $90 million in 2012. In 2013, Ferro recorded $42 million of restructuring and impairment charges compared with $226 million in 2012; the company says these charges are related to its ongoing efforts to restructure operations and exit underperforming assets. Ferro’s president and CEO Peter Thomas says that the company has ‘accomplished a great deal over the last year’ in adjusting its business portfolio, realigning its business operations and reducing its cost base. Ferro is now more competitive and more profitable, and better positioned for future growth, he states. Full-year 2013 cost savings are estimated to have exceeded $47 million with an estimated year-end run rate of $70 million, and the company expects to accomplish its goal of greater than $100 million of cost reductions by the end of 2015, Thomas reports. In 2013, Ferro’s Polymer Additives segment posted net sales of $292 million, a decline of almost 9% compared with the segment’s net sales in 2012 of $321 million. Gross profit also fell by 9% year on year to $27 million in
May 2014
2013. The Pigments, Powders and Oxides segment posted a 32% drop in net sales from $279 million in 2012 to $190 million last year. However, its gross profit improved by 7.6% to $34 million. For the fourth quarter of 2013, Ferro reported net sales of $374 million, compared with net sales of $400 million in 4Q 2012. Gross profit was $79 million for the 2013 fourth quarter, up from $57 million the previous year. The company’s net income attributable to common shareholders for the quarter ended 31 December 2013 was $61 million, compared with a net loss of $64 million in 4Q 2012. Adjusted EBITDA was $31 million in 4Q 2013, compared with $12 million in the same period of 2012. In 4Q 2013, Polymer Additives achieved net sales of $63 million, down 9% from $69.5 million in 4Q 2012. The decline was attributed to the reduction in sales of certain phthalate products. The segment’s gross profit was $6.5 million in 4Q 2013, more than double the figure of $3 million achieved in 4Q 2012. The Pigments, Powders and Oxides segment reported net sales of $34.4 million in 4Q 2013, a fall of more than 40% from $59.6 million a year earlier. Gross profit was $8.3 million compared to $3.4 million in 4Q 2012. Looking ahead, Ferro expects the adverse impact from phthalate deselection to continue into 2014 and predicts that revenue losses as a result could be as much as $30 million over the current year. The company reports that it is investing a significant proportion of its anticipated 2014 capex of $65 million in manufacturing capacity for non-phthalate, dibenzoate-based plasticizers in Belgium [ADPO, August 2013]. The 28 000 tonnes/year of new capacity is expected to come on stream in the second half of this year. Contact: Ferro Corp, Mayfield Heights, OH, USA. Tel: +1 216 875 5600, Web: www.ferro.com
Songwon concludes ‘steady’ 2013 with strong fourth quarter growth
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outh Korean polymer additives major Songwon Industrial Group reported sales and profits growth in both full-year 2013 and its final quarter. Net profits of KRW22. 9 billion (c. E16.4 million) for the 12-month period showed an
Additives for Polymers
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FINANCIALS Ferro’s 2013 earnings gains show benefits of business realignment
F
or full-year 2013, Ferro Corp reported substantial gains in its annual earnings, posting net income attributable to the company of US$71.9 million, reversing a net loss of $374 million in 2012. The company attributes the increase in profitability to the successful execution of its value creation strategy. Ferro’s 2013 net sales were $1.64 billion, down almost 6% from $1.74 billion in 2012. According to the company, its value-added sales, which exclude precious metals, decreased 2%, to $1.5 billion in 2013. The ‘deselection’ of phthalate products in the Polymer Additives Segment adversely impacted its annual sales by approximately $22 million, Ferro reports. Excluding this impact and that of business lines that have been exited, sales for the underlying businesses increased by nearly 1%, it says. The company’s adjusted EBITDA (net income before the effects of discontinued operations, interest, income taxes, depreciation and amortization, and various restructuring and other special charges) was approximately $138 million for 2013, compared with $90 million in 2012. In 2013, Ferro recorded $42 million of restructuring and impairment charges compared with $226 million in 2012; the company says these charges are related to its ongoing efforts to restructure operations and exit underperforming assets. Ferro’s president and CEO Peter Thomas says that the company has ‘accomplished a great deal over the last year’ in adjusting its business portfolio, realigning its business operations and reducing its cost base. Ferro is now more competitive and more profitable, and better positioned for future growth, he states. Full-year 2013 cost savings are estimated to have exceeded $47 million with an estimated year-end run rate of $70 million, and the company expects to accomplish its goal of greater than $100 million of cost reductions by the end of 2015, Thomas reports. In 2013, Ferro’s Polymer Additives segment posted net sales of $292 million, a decline of almost 9% compared with the segment’s net sales in 2012 of $321 million. Gross profit also fell by 9% year on year to $27 million in
May 2014
2013. The Pigments, Powders and Oxides segment posted a 32% drop in net sales from $279 million in 2012 to $190 million last year. However, its gross profit improved by 7.6% to $34 million. For the fourth quarter of 2013, Ferro reported net sales of $374 million, compared with net sales of $400 million in 4Q 2012. Gross profit was $79 million for the 2013 fourth quarter, up from $57 million the previous year. The company’s net income attributable to common shareholders for the quarter ended 31 December 2013 was $61 million, compared with a net loss of $64 million in 4Q 2012. Adjusted EBITDA was $31 million in 4Q 2013, compared with $12 million in the same period of 2012. In 4Q 2013, Polymer Additives achieved net sales of $63 million, down 9% from $69.5 million in 4Q 2012. The decline was attributed to the reduction in sales of certain phthalate products. The segment’s gross profit was $6.5 million in 4Q 2013, more than double the figure of $3 million achieved in 4Q 2012. The Pigments, Powders and Oxides segment reported net sales of $34.4 million in 4Q 2013, a fall of more than 40% from $59.6 million a year earlier. Gross profit was $8.3 million compared to $3.4 million in 4Q 2012. Looking ahead, Ferro expects the adverse impact from phthalate deselection to continue into 2014 and predicts that revenue losses as a result could be as much as $30 million over the current year. The company reports that it is investing a significant proportion of its anticipated 2014 capex of $65 million in manufacturing capacity for non-phthalate, dibenzoate-based plasticizers in Belgium [ADPO, August 2013]. The 28 000 tonnes/year of new capacity is expected to come on stream in the second half of this year. Contact: Ferro Corp, Mayfield Heights, OH, USA. Tel: +1 216 875 5600, Web: www.ferro.com
Songwon concludes ‘steady’ 2013 with strong fourth quarter growth
S
outh Korean polymer additives major Songwon Industrial Group reported sales and profits growth in both full-year 2013 and its final quarter. Net profits of KRW22. 9 billion (c. E16.4 million) for the 12-month period showed an
Additives for Polymers
9