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Rohm and Haas reports 7% sales rise, announces restructuring plan
FINANCIALS
segments will continue but the company is convinced it is ‘on the right track’. On the demand side, the expectation is for North America to be weak and Europe is also being watched closely as the latter part of the third quarter indicated a softening in demand, Lilley reports. The negative effects of raw material costs continue and the company is raising prices to attempt to cover these increasing costs. Despite the ‘headwinds’ of softening demand and increasing costs, Cytec is on target to achieve estimated full-year earnings, concludes Lilley. Contact: Cytec Industries Inc, West Paterson, NJ, USA. Tel: +1 973 357 3100, Web: www.cytec.com
Rohm and Haas reports 7% sales rise, announces restructuring plan
F
or the third quarter of 2007, Rohm and Haas Co reported sales of US$2.204 billion, a 7% increase over the same period in 2006. The increase reflects strong performance across all business segments and in all regions outside North America, particularly in rapidly developing economies, the company says. 3Q 2007 earnings from continuing operations were $129 million, down 32% from $189 million in 3Q 2006. The quarter’s earnings were affected by charges of about $15 million relating to a recently announced restructuring plan (see below) and a one-time pension charge of $65 million before tax. R&D expenses of $72 million were up about 4% for the period.
For 3Q 2007, sales in North America of $1.039 billion were level with the same period last year, reflecting a slight decrease in demand due to weaker housing-related markets, offset by improved pricing. Sales in Europe of $549 million were up 8%, primarily the result of favourable currencies and increased demand, while Asia Pacific sales of $515 million were up 21%, reflecting a strong increase in demand across all businesses in the region. Latin American sales of $101 million were up 13%. In rapidly developing economies (which Rohm and Haas defines as all countries in Latin America, Central and Eastern Europe, plus Turkey and the Asia Pacific region excluding Japan, Australia
December 2007
and New Zealand), sales were up 23% for the quarter, reflecting the pay-off of the company’s efforts to accelerate growth in these areas, supported by building its sales, research and manufacturing infrastructure, it says. The company’s Specialty Materials Group posted net sales up 5%. Sluggish demand in North America was more than offset by strong demand in all other regions. Earnings for the group were $122 million, down 11% from 2006, largely due to poor operating performance at the Houston monomer plant, higher raw material, energy and freight costs, and lower pricing on third-party monomer sales. This was partially offset by favourable currencies and strong demand outside North America. Within this group, the Packaging and Building Materials business unit, which includes the company’s polymer additives product lines, achieved 3Q 2007 sales of $460 million, up 4% over the same quarter in 2006. The rapidly developing economies of Asia, Eastern Europe and Latin America delivered strong year-over-year growth; however, this growth was insufficient to offset the impact of weaker demand in Western Europe. Demand in North America stabilized compared to earlier quarters and was essentially flat versus last year. Earnings of $32 million were down from $33 million in 3Q 2006, with higher raw material costs offset by higher prices and favourable currencies. As part of its on-going efforts to reposition its business portfolio for accelerated growth [ADPO, December 2006], Rohm and Haas approved a further restructuring plan in September. This latest initiative includes the exiting of a small digital imaging business line, manufacturing efficiencies broadly dispersed across several major business segments, a small repositioning of R&D positions to faster growth regions outside North America, as well as efficiencies in administrative and business service operations. Charges related to this initiative include asset impairment, as well as cash severance and employee separation benefits affecting approximately 200 positions, the company says. The restructuring plan is expected to be fully completed in mid-2008 and to thereafter result in annual cost savings of approximately $15 million after tax. Contact: Rohm and Haas Co, Philadelphia, PA, USA. Tel: +1 215 592 3000, Web: www.rohmhaas.com
Additives for Polymers
9
segments will continue but the company is convinced it is ‘on the right track’. On the demand side, the expectation is for North America to be weak and Europe is also being watched closely as the latter part of the third quarter indicated a softening in demand, Lilley reports. The negative effects of raw material costs continue and the company is raising prices to attempt to cover these increasing costs. Despite the ‘headwinds’ of softening demand and increasing costs, Cytec is on target to achieve estimated full-year earnings, concludes Lilley. Contact: Cytec Industries Inc, West Paterson, NJ, USA. Tel: +1 973 357 3100, Web: www.cytec.com
Rohm and Haas reports 7% sales rise, announces restructuring plan
F
or the third quarter of 2007, Rohm and Haas Co reported sales of US$2.204 billion, a 7% increase over the same period in 2006. The increase reflects strong performance across all business segments and in all regions outside North America, particularly in rapidly developing economies, the company says. 3Q 2007 earnings from continuing operations were $129 million, down 32% from $189 million in 3Q 2006. The quarter’s earnings were affected by charges of about $15 million relating to a recently announced restructuring plan (see below) and a one-time pension charge of $65 million before tax. R&D expenses of $72 million were up about 4% for the period.
For 3Q 2007, sales in North America of $1.039 billion were level with the same period last year, reflecting a slight decrease in demand due to weaker housing-related markets, offset by improved pricing. Sales in Europe of $549 million were up 8%, primarily the result of favourable currencies and increased demand, while Asia Pacific sales of $515 million were up 21%, reflecting a strong increase in demand across all businesses in the region. Latin American sales of $101 million were up 13%. In rapidly developing economies (which Rohm and Haas defines as all countries in Latin America, Central and Eastern Europe, plus Turkey and the Asia Pacific region excluding Japan, Australia
December 2007
and New Zealand), sales were up 23% for the quarter, reflecting the pay-off of the company’s efforts to accelerate growth in these areas, supported by building its sales, research and manufacturing infrastructure, it says. The company’s Specialty Materials Group posted net sales up 5%. Sluggish demand in North America was more than offset by strong demand in all other regions. Earnings for the group were $122 million, down 11% from 2006, largely due to poor operating performance at the Houston monomer plant, higher raw material, energy and freight costs, and lower pricing on third-party monomer sales. This was partially offset by favourable currencies and strong demand outside North America. Within this group, the Packaging and Building Materials business unit, which includes the company’s polymer additives product lines, achieved 3Q 2007 sales of $460 million, up 4% over the same quarter in 2006. The rapidly developing economies of Asia, Eastern Europe and Latin America delivered strong year-over-year growth; however, this growth was insufficient to offset the impact of weaker demand in Western Europe. Demand in North America stabilized compared to earlier quarters and was essentially flat versus last year. Earnings of $32 million were down from $33 million in 3Q 2006, with higher raw material costs offset by higher prices and favourable currencies. As part of its on-going efforts to reposition its business portfolio for accelerated growth [ADPO, December 2006], Rohm and Haas approved a further restructuring plan in September. This latest initiative includes the exiting of a small digital imaging business line, manufacturing efficiencies broadly dispersed across several major business segments, a small repositioning of R&D positions to faster growth regions outside North America, as well as efficiencies in administrative and business service operations. Charges related to this initiative include asset impairment, as well as cash severance and employee separation benefits affecting approximately 200 positions, the company says. The restructuring plan is expected to be fully completed in mid-2008 and to thereafter result in annual cost savings of approximately $15 million after tax. Contact: Rohm and Haas Co, Philadelphia, PA, USA. Tel: +1 215 592 3000, Web: www.rohmhaas.com
Additives for Polymers
9