MONHEIM, Germany—Cognis saw first quarter 2009 (1Q09) external sales slipped 14 percent year-over-year, but focused on the 5-percent growth in sales volume compared to fourth quarter 2008, in addition to successful cost-saving initiatives, a good cash position and decreased debt. The company attributed its decline in 1Q09 sales—which settled at 659 million euros ($918 million USD) to falling demand and customer restocking, especially in Europe; on the other hand, growth in North America and Asia was credited with the quarter-over-quarter growth.
Similarly, sales of Nutrition & Health slid 8.3 percent to 84 million euros ($117 million USD) but actually increased by nearly 4 percent from 4Q08, representing a gradual recovery; and functional product sales fell 16 percent to 201 million euros ($280 million USD) year-over-year, although declining sales in this segment appeared to reverse a bit compared to 4Q08. Overall, net loss for 1Q09 was 33 million euros ($46 million USD), a substantial decline from 10 million euros ($14 million USD) in profits a year ago.
On the bright side, Cognis' cash position increased to 241 euros ($336 million USD), and it held an untouched revolving credit facility worth 219 euros ($305 million USD). IN response to declining operating results, the company implemented a comprehensive cost optimization program, striving for a savings of 70 million euros during fiscal 2009. Cognis expects to benefit from lower energy and transportation prices during the coming year.
“Cognis is responding to this dramatic economic downturn in a determined and proactive way," said Antonio Trius, CEO. "Our comprehensive cost reduction program is gathering momentum and will help us counteract the effect of falling volumes. At the same time, we are starting to see a few positive signs, with the rate of volume decline slowing appreciably in March. Our goal is to further strengthen the leading position we enjoy in growth markets driven by the wellness and sustainability trends. The suitability of our strategy is borne out by the fact that these areas are more resilient to the economic downturn.”