Press Release: HELM Group – 2015 Results

2015 results: HELM steady in volatile market environment

Hamburg, 18 May 2016:

Full financial year results 2015:

  • Revenues: € 8.5 billion
  • Equity: € 789 million (plus 4 %)
  • Traded volumes almost on previous year’s level
  • Regional Head Office opened in Singapore
  • New central function Strategic Projects scores initial successes

2015 was a challenging year for the HELM Group on the operative side. Stagnating global growth and a sharp fall in the price of crude oil dragged prices down in the petrochemical and fertilizer industries. Nevertheless, within this demanding environment HELM was able to maintain traded volumes almost at the previous year’s level. Falls in revenue can therefore be attributed to the general price decline.

The constantly high trading volumes are thanks to the diversification of the Group. Hans-Christian Sievers, Chairman of the Executive Board of HELM AG, explains further: “2015’s volatile markets once again confirmed to us that the HELM Group’s broad product range and global structure provide a sound foundation for our company. While we have not seen such sharp price falls for many years, we have successfully proved that HELM can continue to trade high volumes even in a very volatile market environment, generating good revenues and a satisfactory operating result.”

“Furthermore, HELM is growing on a very firm foundation. To ensure this continues, we will further strengthen the unique business model structures of our individual business units. In Pharma and Crop Protection HELM is investing above all in the research and development of generic products. In the Chemicals and Fertilizer business units HELM is extending the supply chain right through to production.”

Global revenues before consolidation and including agency sales revenues declined due to generalised price falls to € 8.5 billion (2014: € 9.8 billion).

External revenues fell by 10 % to € 4.5 billion (2014: € 5.0 billion).

EBITDA dropped by € 116 million in 2015 to € 70.6 million (2014: € 186.1 million).

The consolidated result after tax was € 35.5 million (2014: € 141.6 million).

Hans-Christian Sievers puts the consolidated result in context: “The decline in earnings should be viewed against the overall economic background. Our performance in 2015 was strongly influenced by the slide in the oil price, which triggered price falls in all related product sectors and was compounded by volatile markets. On top of this, major extraordinary factors had a positive effect on our result in 2014, and an equally negative result in 2015. In view of this we have achieved a sound and satisfactory result in my opinion.”

The HELM Group’s main sales market in 2015 was Europe with a share of 65 %, followed by America with 24 % and Asia with 10 %.

In 2015 HELM took a number of strategic decisions for the current and future direction of the Group:

Focus on growth in Asia

With the inauguration of a regional Head Office in Singapore, HELM shifted decision-making competency to the Asian region in order to achieve better regional market penetration from that location.

Investments in strategic projects

By establishing the new Strategic Projects central function at the beginning of 2015, HELM is emphasizing the importance of participations in chemical production facilities. This central function’s core task is to identify and enter into long-term participations and partnerships.

Consistent strengthening of Group equity

Even in challenging years, HELM consistently pursues its policy of reinvesting earnings to strengthen the Company’s own equity; this enables the HELM Group to act independently and in its own time. As at the reporting date, equity rose by € 30.6 million to reach € 789 million (2014: € 758 million). With an equity ratio of 52.6 % (2014: 48.8 %) the Group reports a very healthy balance sheet structure, with financial assets of € 357 million and equity of € 789 million.

Consolidated result: business development key figures

- All figures in million EUR - 2015 2014 2013
REVENUES
- Global revenues 8,498 9,764 9,666
(-13%) (+1%)
- Foreign revenues 4,540 5,054 5,018
(-10%) (+1%)
PROFIT
- EBITDA 70.6 186.1 120.5
(-62%) (+55%)
- Earnings before taxes 57.0 170.8 109.7
(-67%) (+56%)
- Consolidated net income 35.5 141.6 82.2
(-75%) (+72%)

Development overview by business unit

Chemicals: Feedstocks and Derivatives

Despite stable trading volumes, the Chemicals business unit reported a decline in revenues of 11 % as a result of the generalised lower price environment in petrochemical products following the fall in the oil price.

Nevertheless, the Feedstocks business was able to access new supply sources of propylene and glycol, while the Derivatives business raised glass fibre and melamine sales volumes significantly.

The Chemicals business unit represents the HELM Group’s largest contributor to overall sales revenues, with a share of 60 %.

Fertilizer:

In 2015 the Fertilizer business unit implemented a planned reduction of trading volumes and pursued a cautious strategy overall. Driving this approach was the highly volatile fertilizer market, which harboured significant commercial risks. As a result of this deliberate reduction in volumes and a clear fall in prices, total revenues and earnings were below those of previous years.

Nevertheless, this business unit scored several successes in the fertilizer market in 2015: the UAN and Urea business in Europe and America was expanded and the distribution business in Europe was progressively enlarged, with new warehouse capacity in France, Spain, and at three locations in Great Britain supporting this development.

The Fertilizer business unit represents the second-largest contributor to the overall revenues of the HELM Group, at 27%.

Crop Protection:

In 2015 the Crop Protection business unit was able to gain market share in the worldwide crop protection business. The local distribution business in Europe, the USA and Latin America was successfully expanded, despite major impacts on the South American markets due to their financial crises. The investments in innovative products are showing pleasing results. This business unit’s focus was on the USA and South America in 2015, where it is expanding product sales and product development in both regions.

Pharma:

HELM Pharma once again improved its operating result, supported by the strategic realignment that this business unit has carried out in recent years. In 2015 this Unit achieved a slight increase in the volumes of main products it placed with key business partners in its core markets. Licensing agreements for new products were concluded above all in Europe, which will lead to further market launches in the short and mid-term.

HELM-International:

In 2015 the subsidiaries grouped under HELM-International reported another very successful year. This global structure and positioning is underpinning the continual very good earnings performance, above all in America and Europe.

Human Resources:

In 2015 the global headcount across the entire HELM organization remained almost unchanged. As at 31.12.2015, 631 (2014: 639) employees were working at HELM in Hamburg, and 694 (698) in Germany. Worldwide, including our participations, 1,489 (1,501) employees worked for HELM as at the reporting date.

Outlook for 2016

In the first quarter of 2016 HELM is seeing the first visible success of the central Strategic Projects unit. Together with long-term partner PROMAN, HELM has taken a 50 % stake in a methanol plant in Texas, USA, on the Gulf of Mexico. The plant is under construction and is scheduled to come on stream as early as 2017. HELM acts as an investor here and will also receive 1.75 million mt of methanol a year. By extending the supply chain all the way to the chemical production stage, HELM is further sharpening the profile of its Fertilizer and Chemicals business units. The combined investment volume with PROMAN totals USD 680 million, with HELM investing USD 170 million.

Hans-Christian Sievers comments: “In 2016 we will continue to face low price levels and prices appear set to stay there for the time being. In 2016 we will therefore continue to rely on HELM’s power of innovation, new product formulations, an adjusted supply chain and services that we can provide locally to our customers thanks to our global network of company sites. We have just opened a Sales Office in Houston and this puts us right at the heart of the American petrochemicals market.”

About HELM

HELM AG is a family-owned company based in Hamburg, Germany, with a business tradition over 115 years old. As a multifunctional sales and distribution organization, HELM is active in the chemicals industry through its Feedstocks and Derivatives business units, in the crop protection industry, in active pharmaceutical ingredients, pharmaceuticals and medical products, and in the fertilizer industry. HELM is one of the world’s largest chemicals marketing companies and secures access to the world’s key markets through its specific regional knowledge and more than 100 subsidiaries, sales offices and participations in over 30 countries.

Sophie Wehofsich

Head of Public Relations & Corporate Communications

Tel +49 40 2375-1853

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