ELANTAS Electrical Insulation

Wesel/Germany, April 29, 2008

ALTANA reports positive business performance in the first quarter of 2008

  • Sales: plus 3 percent (operating growth: plus 5 percent)
  • EBITDA: plus 16 percent
  • Positive earnings outlook confirmed


The business of the specialty chemicals Group ALTANA (ALT) continued its positive development over the first quarter of 2008. Compared to the prior year's period, sales as well as operating earnings increased in spite of the cloudier general economic conditions especially in the U.S. Sales amounted to €357.6 million following €348.6 million in the prior year, corresponding to an increase of 3%. Adjusted for negative exchange rate effects of 4% as well as positive acquisition effects of 2%, the operating sales growth in the first quarter was 5%. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose disproportionately to sales by 16% to €71.7 million (prior year: €61.6 million). At 20.1%, the EBITDA margin was at the upper end of ALTANA's medium-term target range of 18% to 20%. In the prior year's period the margin was 17.7%; it had been burdened by the two-tier holding structure, which was maintained until mid-2007. Earnings before taxes (EBT) totaled €52.9 million, following €78.4 million in the prior year's period. However, the first quarter 2007 EBT included the income from the investment of the purchase price for ALTANA Pharma which was distributed to the company's shareholders in May 2007.

Development of the divisions
The first quarter business performance of all divisions was influenced by negative exchange rate effects (in particular the U.S. Dollar).

The BYK Additives & Instruments division was able to increase sales by 7%, with sales growing from €112.7 million to €120.2 million. The operating growth was 9%. EBITDA rose by 5% from €35.3 million to €37.1 million.

At €93.9 million (prior year's period: €89.4 million), sales in the ECKART Effect Pigments division were up by 5%. The operating sales growth was 3%. At €21.0 million, EBITDA remained almost unchanged (prior year: €21.1 million).

Sales in the ELANTAS Electrical Insulation division decreased 2% from €89.7 million in the prior year to €88.1 million. The operating sales growth was 2%. EBITDA decreased by 7%, from €14.4 million to €13.4 million. The restrained business development is due primarily to the weaker U.S. business, which could not be completely compensated for by the sales and earnings development in Asia and Europe.

Sales in the ACTEGA Coatings & Sealants division were also slightly down to €55.4 million compared to €56.8 million in the prior year (a decrease of 3%). In operating terms, the division achieved a slight growth (1%). EBITDA rose by 2% from €6.3 million to €6.5 million due to the concentration on higher-margin products.

"Despite the more difficult market environment, especially in the U.S., we were able to once again increase sales and earnings in comparison to the excellent first quarter of 2007," stated Dr. Matthias L. Wolfgruber, CEO of ALTANA AG. The results proved that the company was very robustly positioned and was able to compensate for regional economic slowdowns through the dynamic development in other markets and regions. "We therefore still hold firm with our expectation of a positive business year 2008 and we are confident to achieve our earnings goals."

Positive earnings outlook for 2008 confirmed
The worldwide financial crisis has now also affected parts of the real economy, especially in the U.S. Despite the cloudy general economic setting we expect a continued positive development of the business year for ALTANA and an increasing demand for our specialty chemicals products. Raw materials prices should stabilize at a high level. Due to the current economic situation, we have revised our exchange rate expectations and adjusted it to a U.S. Dollar rate of 1.50 per Euro on an annual average.

On this basis, we expect for 2008 a mid-single digit growth in sales to a level between €1.42 billion and €1.47 billion and an EBITDA growth to a level between €260 million and €290 million. Earnings before taxes (EBT) for the current business year should be lower than in 2007. The reason for this decrease is the absence of the income from the investment of the purchase price for ALTANA Pharma which was recorded until the distribution to the shareholders in May 2007 (€55 million).

The medium-range growth target is set at an average sales growth of about 10% annually (thereof about 6% organic growth) while maintaining an above-average profitability with an EBITDA margin of 18% to 20%.

Key Figures first quarter 2008 

ALTANA Group

January to March 2008

January to March 2007

Change

 

 

 

 

 

in € million

in € million

in %

 

 

 

 

Sales

357.6

348.6

   3

 

 

 

 

Earnings before interest, taxes, depreciation and amortization (EBITDA)

71.7

61.6

 16

 

 

 

 

Operating income (EBIT)

53.8

42.6

 26

 

 

 

 

Earnings before taxes (EBT)

52.9

78.4

-33

 

 

 

 

Net income (EAT)

35.5

49.5

-28

 

 

 

 

Earnings per share (EPS) in €

0.26

0.36

-28

 

 

 

 

Research and development expenses

17.3

17.0

   2

 

 

 

 

Capital expenditure on intangible assets and property, plant and equipment

18.9

13.4

 41

 

 

 

 

Headcount (March 31)

4,692

4,532

   4

 

A conference call for analysts will take place today, April 29, 2008, at 3:00 p.m. (local time, CEST). More information on the relevant audio webcast, this press release, and the interim financial report is available here.

This press release contains forward-looking statements, i.e. current estimates or expectations of future events or future results. These statements are based on beliefs of ALTANA as well as assumptions made by and information currently available to ALTANA. Forward-looking statements speak only as of the date they are made. ALTANA does not intend, and does not assume any obligation, to update forward-looking statements to reflect facts, circumstances or events that have occurred or changed after such statements have been made.

About ALTANA:
ALTANA develops and produces high-quality innovative products in the specialty chemicals business. The ALTANA Group, with headquarters in Wesel/Germany, is a genuine “global player” with 83% of its sales generated by international activities. The ALTANA Group has four divisions: BYK Additives & Instruments, ECKART Effect Pigments, ELANTAS Electrical Insulation, and ACTEGA Coatings & Sealants. All of these divisions occupy a leading position in their target markets with respect to quality, product solution expertise, innovation and service.

ALTANA offers innovative, environmentally compatible solutions with the matching specialty products for coating manufactures, paint and plastic processors, the printing and cosmetic industries, and the electrical and electronic industry. The product range includes additives, special coatings and adhesives, effect pigments, sealants and compounds, impregnating resins & varnishes, and testing and measuring instruments.

At present, the ALTANA Group has 32 production facilities and 46 service and research laboratories worldwide. Throughout the group about 4,700 people work to ensure the success of ALTANA worldwide. In 2007, ALTANA achieved sales of about 1.4 billion euros. Its impressive earning power and high growth rate make ALTANA one of the most successful and innovative chemical groups worldwide.