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Press release BoxID: 265436 (Nabaltec AG)
  • Nabaltec AG
  • Alustraße 50 - 52
  • 92421 Schwandorf
  • http://www.nabaltec.de
  • Contact person
  • Heidi Wiendl
  • +49 (9431) 53-202

Nabaltec AG: First Quarter 2009

(PresseBox) (Schwandorf, ) .
- Very difficult conditions in key industries affect Nabaltec AG's business
- Revenues down 35.8% in the first quarter of 2009, to EUR 16.3 million
- Cost-cutting measures yield EBIT of EUR -1.8 million
- Development of the new "Additives" business unit proceeding according to plan
- Outlook unchanged

In an extremely tough environment, Nabaltec Group's business took a step backwards and revenues were down by EUR 25.4 million, or 35.8%, to EUR 16.3 million. This development can be attributed to the general weakening in global demand, although the decline in revenues was mitigated by price and currency effects. "Demand in our market and in our key industries is very modest right now. Nevertheless, we believe that we have been able to emerge with our market position and market share fully intact" said Gerhard Witzany, a member of the Management Board of Nabaltec AG.

Nabaltec's two business divisions, "Functional Fillers" and "Technical Ceramics," were equally affected by the tough market conditions. Revenues of functional fillers, particularly halogen-free flame retardants, fell by 38.4% in the first quarter, due primarily to the worldwide slump in the construction and plastics industry, which affected Nabaltec in the form of weaker demand in the cable & wire and insulation industry. Revenues in the "Technical Ceramics" business division fell by 30.5%, due above all to sharply weaker demand in the refractory industry, which is itself determined primarily by global steel production.

Nabaltec's revenues fell at a particularly steep pace in Germany and other European countries, where the impact of the economic crisis was felt most acutely in the first quarter of 2009. Revenues decrease in the US and RoW was not as drastic. Overall, however, global sales were down by at least double digits, something which has never happened before in Nabaltec's entire history.

Nabaltec Group's gross profit (as a percentage of total performance) improved by 2.6% between the first quarter of 2008 and the first quarter of 2009, to 50.3% (up from 47.7%). A major reason for this improvement is Nabaltec's ability to cushion the blow of imminent supplier price increases by deliberately building up stocks of raw materials in advance in the fourth quarter of 2008, as well as raising its own prices. In absolute figures, gross profit fell from EUR 12.2 million to EUR 7.2 million.

Operating profit (EBIT) was affected by the steep decline in revenues, falling to EUR -1.8 million, down from EUR 1.6 million in the first quarter of 2008. Nabaltec has cut spending sharply in all major areas, and will continue its efforts to cut costs. Both business divisions contributed equally to the net loss, paralleling the revenues trend and sliding into the red. Earnings after taxes and minority interests were EUR -2.7 million in the first quarter of 2009, down from EUR 0.8 million in the first quarter of 2008.

Development of the new "Additives" business unit continues to proceed according to plan, as the scope of the construction work, investments and costs have all turned out as expected. Industrial-scale production and marketing of the additives are scheduled to begin in the fourth quarter of 2009. Net cash flow from investment activity was EUR -4.5 million, after setting off against pro rata investment grants. About one half of investments went towards construction of the Schwandorf CAHC production site, for the "Additives" business unit, and another 50% went towards production facilities and machinery for the business unit "Flame Retardants" and business division "Technical Ceramics".

A turnaround in demand for eco-friendly flame retardants, materials for technical ceramics and ceramic bodies is not yet in sight, although the worst may be over. The course of business at the start of the second quarter does not yet point to a sustained recovery, given that Nabaltec's key consumer industries are still in bad shape. In addition to cutting costs, Nabaltec will continue its long-running efforts to boost earnings. Depending on general market conditions, Nabaltec Group's goal continues to be to raise its EBIT margin into the double digits, but this will only be possible if the flame retardant and technical ceramics markets resume their long-term growth trends.

Nabaltec AG

Nabaltec AG, with registered office in Schwandorf, a chemicals business which has received multiple awards for innovativeness, manufactures, develops and distributes highly specialized products based on aluminum hydroxide ("ATH") and aluminum oxide, as well as other raw materials, on an industrial scale through its "functional fillers" and "technical ceramics" divisions. The company's product range includes flame-retardant fillers for the plastics industry, used e.g. in cables, tunnels, airports, high-rise buildings and electronic devices, as well as base materials for use in technical ceramics, the refractory industry and catalysis. Unlike halogenated flame-retardant fillers, the products manufactured by the company's "functional fillers" division contain no hazardous substances and do not require separate disposal. Rather, the company's flame-retardant fillers actually decrease the development of fumes hazardous to human health and the environment in the event of fire. Nabaltec maintains production sites in Germany and the US and plans to continue to consolidate its market position by expanding capacity, further optimizing processes and quality and making strategic extensions to its product range. On the strength of its specialty products, the company strives to attain not just the quality leadership, but also the market leadership in each segment.