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ALTANA: Sales and Earnings Below Prior Year Levels Despite Noticeable Upturn in Business


Significant recovery occurred in the second half of the year

ALTANA recorded considerable declines in sales and earnings in the business year 2009.

“Despite our comparatively robust setup, the global economic crisis has taken a toll on ALTANA,” stated Dr. Matthias L. Wolfgruber, CEO of ALTANA AG. “Nevertheless, 2009 was not a lost year for us. We were able to further consolidate our position in the worldwide specialty chemicals markets. We have used 2009 to operate even more efficiently and to further optimize our structures; and we were drawn even closer together. These strengths, along with ALTANA‘s role as technology leader and our attractive product portfolio are the decisive factors to successfully continue our profitable growth course after the economic crisis is overcome.”

Despite the pronounced upturn in business in the second half of 2009, ALTANA remained below the sales and earnings levels of 2008. Sales decreased by 12% from €1,341.7 million to €1,181.7 million. Adjusted for positive exchange rate as well as acquisition effects, the operating sales decrease was 15%. While sales in the first half of 2009 decreased nominally by 25% compared to the prior year, sales in the second half of the year were up by 3% on the prior year figure, which had been burdened by the crisis as well.

At €555.1 million, the strongest decline in sales was reported in Europe, where sales were down by 17%. Sales in the American regions were down by 12% to €267.7 million.

While, at €317.9 million, the Asian region also recorded a decrease in sales of 2% for the year as a whole, it showed the strongest recovery in the second half of 2009. However, it was not possible to completely compensate for the weak sales figures of the first six months of the business year. With regards to China alone, the 2009 sales figure increased by 7%, from €152.9 million to €164.3 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) declined by 16% to €204.1 million (prior year: €242.9 million). The EBITDA margin contracted only slightly from 18.1% to 17.3 %. In addition to decreasing raw materials costs, this development was also positively influenced by extensive measures to enhance efficiency and optimize costs, which led to savings of €55 million in 2009.

As of December 31, 2009, the ALTANA Group employed 4,789 people worldwide, almost the same number as at the end of 2008 (4,791). This includes 140 employees of the Water Ink Technologies’ business, which was acquired in October 2009. Due to the postponement of projects on account of the economic crisis, capital expenditures totaled €54.0 million and were therefore significantly lower than in the prior year (€107.9 million). At €71.6 million, the company’s research and development expenditure remained at the high level of 2008 (€72.1 million), underlining the great importance ALTANA attributes to innovation.

Compared to the other divisions, the global economic crisis caused the most
significant decrease in sales in the Effect Pigments division. In addition, the division’s recovery in the second half of 2009 started at a later point in time and was less dynamic. The sluggish development in ECKART’s important markets, particularly the automotive industry, had a negative effect. This is why ALTANA revised its earnings forecast for Effect Pigments downwards in the course of 2009.

The BYK Additives & Instruments division achieved sales of €419.9 million in 2009 following €450.5 million in 2008; this is a decrease of 7%. The earnings losses resulting from the sales decline could largely be offset, so that the division’s EBITDA was only 6% down to €119.9 million (prior year: €127.6 million).

At €282.3 million (prior year: 350.7 million), sales in the ECKART Effect Pigments division fell by about 20%. Despite positive effects from measures to cut costs, EBITDA also decreased significantly from €67.2 million to €27.4 million.

Sales of ELANTAS Electrical Insulation dropped by about 16% on the prior year and amounted to €272.7 million in 2009, following €326.5 million in 2008. On account of the successfully implemented measures to cut costs and a reduced materials usage ratio, the division’s EBITDA rose to €52.0 million following €49.7 million in the prior year; this is an increase of 5%.

Sales of the ACTEGA Coatings & Sealants division remained the most stable, decreasing by only 3% to €206.8 million, following €214.0 million in 2008. The division’s EBITDA rose by 21%, from €24.5 million to €29.6 million.

Despite visible signs of a recovery of the global economy, ALTANA expects an environment that is still marked by high uncertainty. A stabilization of the economic recovery should give rise to a growing demand of ALTANA’s products in 2010 and thus to an increase in sales and earnings compared to the business year 2009. However, the company expects to return to the pre-crisis business level in 2011 at the earliest. Not least due to the experience gained in the past business year, ALTANA is confident in its ability to react appropriately to all conceivable and possible development scenarios. ALTANA is well-positioned to take advantage of opportunities arising from a recovering economy.