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Economic Crisis Burdens Growth Course of ALTANA in 2008


Sales and earnings decline slightly as fourth quarter overshadows full year results

The specialty chemicals group ALTANA recorded a slight decline in sales and earnings for the business year 2008.

“As of the fourth quarter of 2008, the far-reaching economic crisis has also had a significantly negative impact on our business,“ stated Dr. Matthias L. Wolfgruber, CEO of ALTANA AG, at the company’s press conference in Wesel. Despite its robust business model, which covers many industries, customers and regions, Dr. Wolfgruber continued, ALTANA, too, had been caught in the maelstrom of the worldwide economic crisis.

“In the new business year, we focus on margins and cash flow, and at the same time continue to invest in future-related and innovation projects,” said Dr. Wolfgruber. “”Thus, during this crisis, we are preparing the prerequisites for profitable growth for when the economic climate improves.”

Sales and earnings below prior year

In the business year 2008, ALTANA achieved sales of €1,341.7 million, which is about 3% or €38 million less than in 2007. Sales diminished in all regions. With sales at €664.8 million, corresponding to nearly half of the company’s total sales, Europe reported a decrease of 2%. In the Americas sales were down by 7%; adjusted for exchange rate effects, however, the decrease was only 3%, with sales at €305.9 million. At €325.7 million, corresponding to a decrease of 1%, sales in Asia almost reached the prior-year level: the development in this region was burdened by the higher than average sales decrease in China (- 6%), primarily in the fourth quarter of 2008.

Earnings before interest, taxes, depreciation and amortization (EBITDA) diminished by 2% from €248.5 million to €242.9 million. Despite the decrease in sales and EBITDA, the EBITDA margin was 18.1% and thus within the medium-term target range of 18% to 20%. As of December 31, 2008, the ALTANA Group employed 4,791 people; in 2007 the number of employees was 4,646. This increase includes 33 employees from the acquisition of Dick Peters on December 30, 2008. At €107.9 million, investments in 2008 were significantly higher than in 2007 (€91.4 million).

Economic crisis affects all divisions

The BYK Additives & Instruments division was able to increase sales in 2008 by
1% to €450.5 million. EBITDA amounted to €127.6 million, a decrease of 4% compared to the prior year (€132.6 million).ECKART Effect Pigments sales fell by 3% to €350.7 million. EBITDA went down to €67.2 million (previous year: €79.7 million). Sales of ELANTAS Electrical Insulation dropped 7%, from €350.8 million. EBITDA decreased by 6% to €49.7 million. The ACTEGA Coatings & Sealants division achieved sales of €214 million in 2008, corresponding to a decrease of 3% on the prior year. EBITDA went down by 8%, from €26.7 million to €24.5 million.

Against the background of the economic crisis the dividend proposal is oriented not only to giving shareholders an appropriate share in the company’s development, but also to the overall economic environment. For this reason, the Management and Supervisory Boards will propose to the Annual General Meeting on May 12 in Duisburg to distribute a dividend of 10 cent per share. At 13%, the payout ratio would be significantly lower than that of the previous year (33%), but the company would strengthen its financial stability.

Concrete outlook for 2009 not possible

ALTANA expects a difficult market environment for the current business year. The company had already prepared itself for this situation in the late summer of 2008 with a set of measures to improve efficiency and cut costs. The first weeks of the business year 2009 confirm the negative trend. However, the company still foresees good growth prospects for its markets in the medium and long term. Against the background of the continuing uncertainty on the worldwide markets, however, ALTANA cannot provide a concrete outlook for the current business year.