Company News
October 12, 2022
BASF Initiates Cost Cutting Program
BASF Group releases preliminary figures for the third quarter of 2022 and announces cost savings program
- Sales, EBIT before special items and EBIT slightly above average analyst estimates
- Net income expected to be €909 million (Q3 2021: €1,253 million) due to non-cash-effective impairments, considerably below the prior-year quarter and considerably below analyst consensus
- Cost savings program of €500 million annually with focus on Europe and particularly Germany due to deteriorating framework conditions
- Outlook for the business year 2022 remains unchanged
Ludwigshafen – October 12, 2022 – BASF has released preliminary figures for the third quarter of 2022. Sales, income from operations (EBIT) before special items and EBIT are slightly above average analyst estimates.
Net income of BASF Group is expected to amount to €909 million. This is considerably below the prior-year quarter figure (Q3 2021: €1,253 million) and the average analyst estimates for the third quarter of 2022 (Vara: €1,105 million). Net income contains non-cash-effective impairments on the shareholding in Wintershall Dea in the amount of about €740 million. These result from the partial write-down of Wintershall Dea’s participation in Nord Stream AG, which operates the Nord Stream 1 pipeline.
Sales increased by 12 percent in the third quarter of 2022 to €21,946 million (Q3 2021: €19,669 million). This was mainly driven by higher prices. Currency effects, primarily relating to the U.S. dollar, had a positive effect as well. Volumes declined compared with the prior-year quarter. Sales thus slightly exceeded average analyst estimates for the third quarter of 2022 (Vara: €21,076 million).
EBIT before special items amounted to an expected €1,348 million in the third quarter of 2022, considerably below the level of the prior-year quarter (Q3 2021: €1,865 million) and slightly above the analyst consensus for the third quarter of 2022 (Vara: €1,313 million). Increased prices for raw materials and energy could only partly be passed on through higher selling prices.
EBIT amounted to an expected €1,294 million in the third quarter of 2022, considerably below the figure for the prior-year quarter (Q3 2021: €1,822 million) and slightly above the analyst consensus for the third quarter of 2022 (Vara: €1,285 million).
The outlook published by the BASF Group for the 2022 business year in July remains unchanged. EBIT before special items continues to be expected between €6.8 billion and €7.2 billion.
Cost savings program of €500 million annually
Against the background of significantly weaker earnings in Europe – especially in Germany, where earnings in the third quarter of 2022 were negative – as well as the deteriorating framework conditions in the region, BASF has initiated a cost savings program focusing on Europe and particularly Germany to be implemented from 2023 to 2024. Cost savings possible in the short term will be implemented immediately. Upon completion, the program is expected to generate annual cost savings of €500 million in non-production areas. More than half of the cost savings are to be realized at the Ludwigshafen site. Operating, service and research & development divisions as well as the corporate center are to be streamlined.
Further measures to structurally adjust BASF’s production Verbund in Europe in the medium and long term are currently being developed and are expected to be communicated in the first quarter of 2023.
Employee representatives in the relevant bodies will be involved regarding the different measures.
October 11, 2022
Slowing Mattress Sales in September
Tempur Sealy, mattress stocks tumble on soft sales survey
Oct. 11, 2022 11:09 AM ETTempur Sealy International, Inc. (TPX), SNBR, PRPLBy: Kevin P. Curran, SA News Editor1 Comment
Mattress manufacturers Tempur Sealy International (NYSE:TPX), Sleep Number (NASDAQ:SNBR), Purple Innovation (NASDAQ:PRPL) slid on Tuesday after Piper Sandler signaled slowing September sales.
Equity analyst Peter Keith pointed to a survey conducted by his firm that reflected a 5% decline in sales amongst the group from 2021. The drop comes only about a month after sales rose sharply surrounding the Labor Day holiday.
“While this was an improvement from prior months (on a mean basis), it suggests a notable drop-off for the 2nd half of September following Labor Day weekend,” Keith told clients.
Shares of Tempur Sealy International (TPX) fell 4.12% and Sleep Number (SNBR) slid 3.68%. Purple Innovation (PRPL), by contrast, see-sawed between positive and negative territory.
Elsewhere, Leggett & Platt shares plummeted after the company cut its guidance.
October 11, 2022
Slowing Mattress Sales in September
Tempur Sealy, mattress stocks tumble on soft sales survey
Oct. 11, 2022 11:09 AM ETTempur Sealy International, Inc. (TPX), SNBR, PRPLBy: Kevin P. Curran, SA News Editor1 Comment
Mattress manufacturers Tempur Sealy International (NYSE:TPX), Sleep Number (NASDAQ:SNBR), Purple Innovation (NASDAQ:PRPL) slid on Tuesday after Piper Sandler signaled slowing September sales.
Equity analyst Peter Keith pointed to a survey conducted by his firm that reflected a 5% decline in sales amongst the group from 2021. The drop comes only about a month after sales rose sharply surrounding the Labor Day holiday.
“While this was an improvement from prior months (on a mean basis), it suggests a notable drop-off for the 2nd half of September following Labor Day weekend,” Keith told clients.
Shares of Tempur Sealy International (TPX) fell 4.12% and Sleep Number (SNBR) slid 3.68%. Purple Innovation (PRPL), by contrast, see-sawed between positive and negative territory.
Elsewhere, Leggett & Platt shares plummeted after the company cut its guidance.
October 10, 2022
L&P Lowers Guidance
LEGGETT & PLATT LOWERS FULL-YEAR GUIDANCE AND ANNOUNCES RECENT ACQUISITIONS
Oct. 10, 2022 4:10 PM ETLeggett & Platt, Incorporated (LEG)
CARTHAGE, Mo., Oct. 10, 2022 /PRNewswire/ —
- Full year 2022 sales guidance lowered to $5.1–$5.2 billion
- Full year 2022 EPS guidance reduced to $2.30–$2.45
- Acquired a Hydraulic Cylinders business and two Textiles businesses
Diversified manufacturer Leggett & Platt (LEG) lowered its full-year 2022 guidance:
- Sales guidance now $5.1 to $5.2 billion (vs prior $5.2–$5.4 billion)
- Decrease is primarily due to lower volume than previously expected
- EPS guidance now $2.30 to $2.45 (vs prior $2.65–$2.80)
- Decrease is primarily from lower volume, reduced production, slower than anticipated cost recovery in Automotive, and operational inefficiencies in Specialty Foam
- Expect sequential improvement from 3Q to 4Q
- Based upon this guidance, EBIT margin range should be 9.5% to 10.0% (vs prior 10.5%–10.7%)
- Cash from operations expected to be $400 to $450 million (vs prior $550–$600 million)
President and CEO Mitch Dolloff commented, “The increasingly challenged global economic environment and consumer backdrop is expected to result in lower than previously anticipated sales and earnings in the third and fourth quarters of 2022. Demand in the U.S. bedding market is fairly stable but remains at relatively weak levels as industry headwinds persist, including inflationary and monetary policy impacts on consumer spending and consumer sentiment as well as higher inventory levels. Given the bedding demand environment and slowing market for steel generally, we are cutting production in our Rod and Wire businesses to reduce inventory.
“Our Specialty Foam business has experienced larger demand impacts as a result of previous pandemic-related supply issues and channel specific pressures. Lower demand in Specialty Foam in combination with operational inefficiencies, which are being addressed by continuing integration work, are taking longer than originally expected to resolve.
“Demand in International Bedding has declined more significantly amid geopolitical and macroeconomic disruptions in Europe. Home Furniture demand has softened significantly in the last few months with slower consumer demand and excess inventory at retail.
“Volume and cost recovery are improving sequentially in Automotive, but at a slower rate than anticipated. While improving year-over-year, industry production forecasts remain dynamic as supply chain and geopolitical impacts bring continued volatility.
“We continue to focus on things we can control and are taking action to mitigate the impact of these challenges by aligning costs, production levels, and inventory with demand; evaluating near-term opportunities with our customers and working with them on new product developments; and continuing to build out our existing businesses through acquisitions. Our strong balance sheet and cash flow give us confidence in our ability to navigate challenging markets while investing in long-term opportunities.”
In late August, Leggett & Platt acquired a leading global manufacturer of hydraulic cylinders for heavy construction machinery. The company has manufacturing facilities in Eschwege, Germany and Ningbo, China and a distribution facility in Halifax, Pennsylvania with combined 2021 sales of approximately $65 million. Also, in late August, the Company acquired a converter of construction fabrics for the furniture and bedding industries located in Shannon, Mississippi. On October 3, Leggett & Platt acquired a distributor of geo components located in Ottawa, Canada. Each of these Textiles businesses have annual sales under $10 million.
October 10, 2022
L&P Lowers Guidance
LEGGETT & PLATT LOWERS FULL-YEAR GUIDANCE AND ANNOUNCES RECENT ACQUISITIONS
Oct. 10, 2022 4:10 PM ETLeggett & Platt, Incorporated (LEG)
CARTHAGE, Mo., Oct. 10, 2022 /PRNewswire/ —
- Full year 2022 sales guidance lowered to $5.1–$5.2 billion
- Full year 2022 EPS guidance reduced to $2.30–$2.45
- Acquired a Hydraulic Cylinders business and two Textiles businesses
Diversified manufacturer Leggett & Platt (LEG) lowered its full-year 2022 guidance:
- Sales guidance now $5.1 to $5.2 billion (vs prior $5.2–$5.4 billion)
- Decrease is primarily due to lower volume than previously expected
- EPS guidance now $2.30 to $2.45 (vs prior $2.65–$2.80)
- Decrease is primarily from lower volume, reduced production, slower than anticipated cost recovery in Automotive, and operational inefficiencies in Specialty Foam
- Expect sequential improvement from 3Q to 4Q
- Based upon this guidance, EBIT margin range should be 9.5% to 10.0% (vs prior 10.5%–10.7%)
- Cash from operations expected to be $400 to $450 million (vs prior $550–$600 million)
President and CEO Mitch Dolloff commented, “The increasingly challenged global economic environment and consumer backdrop is expected to result in lower than previously anticipated sales and earnings in the third and fourth quarters of 2022. Demand in the U.S. bedding market is fairly stable but remains at relatively weak levels as industry headwinds persist, including inflationary and monetary policy impacts on consumer spending and consumer sentiment as well as higher inventory levels. Given the bedding demand environment and slowing market for steel generally, we are cutting production in our Rod and Wire businesses to reduce inventory.
“Our Specialty Foam business has experienced larger demand impacts as a result of previous pandemic-related supply issues and channel specific pressures. Lower demand in Specialty Foam in combination with operational inefficiencies, which are being addressed by continuing integration work, are taking longer than originally expected to resolve.
“Demand in International Bedding has declined more significantly amid geopolitical and macroeconomic disruptions in Europe. Home Furniture demand has softened significantly in the last few months with slower consumer demand and excess inventory at retail.
“Volume and cost recovery are improving sequentially in Automotive, but at a slower rate than anticipated. While improving year-over-year, industry production forecasts remain dynamic as supply chain and geopolitical impacts bring continued volatility.
“We continue to focus on things we can control and are taking action to mitigate the impact of these challenges by aligning costs, production levels, and inventory with demand; evaluating near-term opportunities with our customers and working with them on new product developments; and continuing to build out our existing businesses through acquisitions. Our strong balance sheet and cash flow give us confidence in our ability to navigate challenging markets while investing in long-term opportunities.”
In late August, Leggett & Platt acquired a leading global manufacturer of hydraulic cylinders for heavy construction machinery. The company has manufacturing facilities in Eschwege, Germany and Ningbo, China and a distribution facility in Halifax, Pennsylvania with combined 2021 sales of approximately $65 million. Also, in late August, the Company acquired a converter of construction fabrics for the furniture and bedding industries located in Shannon, Mississippi. On October 3, Leggett & Platt acquired a distributor of geo components located in Ottawa, Canada. Each of these Textiles businesses have annual sales under $10 million.
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