HELM GROUP 2008
OUTLOOK 2009
PRESS RELEASE 12. May 2009
In its 2008 annual financial statements, the HELM GROUP managed to achieve the highest sales revenues and earnings in its 108-year corporate history.
The already very good results in recent years were once again exceeded despite the fact that increases in prices, volumes and margins had come to an end in the 3rd quarter of 2008. Business collapsed across the board, causing prices to melt down in all product divisions except for the pharmaceuticals segment; the financial markets were paralysed, with all commercial logic being suspended.
The trend in figures:
| - in EUR million - | 2008 | 2007 | 2006 | % change from 2007 to 2008 |
| SALES REVENUES | ||||
| - Global sales revenues | 9,121 | 7,751 | 5,811 | + 18 |
| - External sales revenues | 5,050 | 4,094 | 3,158 | + 23 |
| EARNINGS | ||||
| - EBITDA | 169 | 118 | 77 | + 43 |
- Earnings before taxes |
145 | 94 | 47 | + 54 |
| - Consolidated earnings after taxes | 103 | 66 | 31 | + 56 |
These results made it possible to raise the level of equity of the HELM Group to EUR 336 million, achieving a capital ratio of 37%.
The reason for the immense surge in sales revenues were the price increases in the first nine months of the year in almost all business units, particularly fertilizer, and the extension of distribution operations in the Helm-International business unit.
The size of the workforce increased from 1,285 employees to 1,324 worldwide, excluding joint production ventures.
The strategy of HELM AG of diversifying into various product areas in the field of chemicals has fully paid off. Liquefied and solid-state chemicals, fertilizer, crop protection, pharmaceuticals and nutrition all contributed to the record results achieved by the Group. This was the first time that no problem fields arose in all business units taken as a whole.
While the 4th quarter of 2008 was weaker on the whole than the previous quarters, positive contributions to earnings were nevertheless achieved. Weaker sales revenues and margins became evident across the globe.
In agreement with the Supervisory Board and the Executive Board, the family-owned joint stock company (shareholders: Hermann and Dieter Schnabel) retains its present strategy with regard to international marketing activities in the field of chemicals, both in terms of its structure and business policy. The model for distribution, logistics, joint production ventures and technical service to complement its international marketing activities remains in place unchanged.
To document the conglomerate’s strength and continuity, its share capital amounting to EUR 50 million was increased from equity with retroactive effect as at 1 January 2009, to EUR 100 million.
The global financial and economic crisis, which began as early as the 4th quarter of 2008, is still under way in the chemicals division, resulting in massive price declines:
Liquefied chemicals product division
- Methanol from USD 700/t to USD 180/t at present
- Glycols from EUR 1,200/t to EUR 500/t from December 2008 to date
- Bisphenol A from USD 2,000/t to USD 750/t
- Glyphosates from USD 16/kg to USD 4.50/kg
- Saccharin sodium from USD 30/kg in 2008 to USD 7/kg today
- Vitamin C from USD 23 to USD 8/kg in 2008
It was only possible to counteract the widespread reluctance to purchase (encountered not only in Germany but across the globe) to a certain extent by offering rock-bottom prices to boost sales.
An end to this trend in sales cannot be identified as yet. However, an absolute lower limit to a general level of prices is already discernible in many product areas.
For 2009, we anticipate substantial declines in sales revenues based both on lower prices in comparison with last year and on the absence of long-term procurement agreements. Contracts on an annual basis are virtually non-existent.
Nevertheless, for the 1st half of 2009 we anticipate satisfactory results in the circumstances, at a level ranging between 2005 and 2006.
Our joint production ventures in recent years, with investments in Trinidad & Tobago and Saudi-Arabia, will generate a positive impact for the first time in the 2nd half of the year with additional production volumes coming on stream once the relevant plants are completed. These are:
- 180,000 tons p.a. of acetic acid from Saudi-Arabia
- 240,000 tons p.a. of vinyl acetate monomers from Saudi-Arabia
- 1.4 million tons of urea ammonium nitrite solution from Trinidad & Tobago
- 60,000 tons p.a. of melamine from Trinidad & Tobago
Taking account of the current global scenario of reduced loans, a rising number of insolvencies, lower price levels and, accordingly, more modest profits, HELM AG is satisfied and retains its positive outlook for the remainder of 2009.
The HELM GROUP does not intend to follow the general tendency of attempting to turn around the poor and frequently negative business trend by imposing radical cost cuts. Instead, we perceive a necessity to counteract poor sales figures by intensifying our customer contacts, personal negotiations and travel activities across the globe rather than saving costs by cutting down on travel at the expense of preventing business from being generated. The current battle for reduced orders will not be won behind a desk.
The high level of equity in excess of 37%, a highly motivated team – after all, there will be no staff cuts – as well as a good mix of various chemical mainstays will give the HELM GROUP a strong position in an extremely difficult market environment.
We have decided to leave the record years of 2007 and 2008 behind us in conceptual terms, since we have returned to a “back-to-normal level”.
Modesty is the order of the day in the business-related and personal environment within the HELM GROUP.
HELM and its global workforce have a confident outlook for the future.
12 May 2009 H E L M A G