The Urethane Blog
April 29, 2019
Results influenced by challenging environment as expected
Covestro confirms full year guidance after first quarter
Core volumes slightly down (–1.8%)
Group sales around EUR 3.2 billion (–16.0%)EBITDA at EUR 442 million in line with expectations (–58.4%)
Net income of EUR 179 million below previous year (–72.2%)
Free operating cash flow at minus EUR 45 millionGuidance for fiscal 2019 confirmed
As expected, higher competitive pressure influenced the first quarter 2019 results of DAX-listed Covestro. Despite an overall solid demand, core volumes decreased slightly by 1.8%, mainly due to lower volumes in the Polycarbonates segment. A marked drop in selling prices led to a reduction in Group sales by 16.0% to EUR 3.2 billion. The Group’s EBITDA at EUR 442 million (–58.4%), a contrast to the exceptionally positive prior-year results, was in line with the forecast. As a result, net income also fell to EUR 179 million (–72.2%). At minus EUR 45 million, free operating cash flow (FOCF) was negativecompared with the previous year (EUR 364 million) due to reduced cash flows from operating activities and increased investments. Although on the whole significantly below the outstanding resultsof the prior year’s quarter, results remain in the expected range and Covestro confirms targets set for the year as a whole.
“The first quarter was in line with our guidance and confirms our subdued expectations for the full year,” explains CEO Dr. Markus Steilemann. “It is therefore even more important to now set the right course for our future growth with investments and efforts to improve efficiency. After all, demand for our innovative and sustainable materials remains intact.”
Covestro confirms targets for fiscal year 2019Dr. Thomas Toepfer, CFO of Covestro,compares the results of the first quarter against the same period in 2018: “The prior-year quarter was influenced by exceptionally high margins in a number of product groups. In line with our expectations, our results therefore fell below those of the same period of last year. In anticipation of continued challenging environment influencing results throughout the year, we are especially focusing on efficient production and processes and targeted investments.”
Consistent with this focus, Covestro raised its stake to 80% in the joint venture DIC Covestro Polymer in Japan effective April 1, 2019, expanding its promising global thermoplastic polyurethanes business. Covestro plans total investments of over EUR 900 million this year to refurbish and expand its production plants and extend into growth areas such as specialty films. Efficiency measuresare expected to deliver cost savings of EUR 350 million per year over the medium term.For fiscal2019, Covestro continues to project core volume growth to be in the low-to mid-single-digit percentage range. FOCF is expected to be between EUR 300 million and EUR 700 million, with ROCE between 8% and 13%. EBITDA for the fiscal year is forecast to be between EUR 1.5 billion and EUR 2.0 billion, with the second quarter EBITDA expected to be around the level of first quarter 2019.Strategic initiatives making headway.
Strategic initiatives to advance digitalization and innovation made progress in the first quarter. The new digital B2B trading platform Asellion was successfully launched at the end of March, enabling Covestro customers to order products online and do business around the clock and with just a few clicks at the link covestro.asellion.com.
Covestro has also joined forces with the US-based biotechnology company Genomatica to research and develop high-performance materials on the basis of renewable raw materials. This collaboration aims to reduce the use of fossil-based resources such as crude oil through the use of sustainable raw materials instead.Sales and earnings growth in Coatings, Adhesives, Specialties segment.
Core volumes in the Polyurethanes segment remained largely stable (–0.2%) in the first quarter of 2019. Sales in this segment declined by 24.3% to EUR 1,476 million due to lower selling prices, with all three regions posting lower sales. EBITDA fell to EUR157 million (–75.4%) due to lower margins.
Driven by weaker demand from the automotive industry, core volumes in the Polycarbonates segment decreased by 6.3%. Sales in this segment declined by 16.7%toEUR 860million, due also to lower selling prices. With falling margins and stable raw material prices, EBITDA declined to EUR 155 million (–48.8%).
In the Coatings, Adhesives, Specialties segment, core volumes saw virtually no change versus the prior-year quarter (–0.1%). Sales in this segment increased by 5.9% to EUR 627 million, boosted by increased selling prices on average and exchange rate movements. EBITDA rose 7.4% to EUR 146 million.
https://news.covestro.com/news.nsf/id/B6AAF2E730B71136C12583E800488AAE/%24File/2019-064E.pdf?open&mod=29.04.2019_07:21:54
April 29, 2019
Results influenced by challenging environment as expected
Covestro confirms full year guidance after first quarter
Core volumes slightly down (–1.8%)
Group sales around EUR 3.2 billion (–16.0%)EBITDA at EUR 442 million in line with expectations (–58.4%)
Net income of EUR 179 million below previous year (–72.2%)
Free operating cash flow at minus EUR 45 millionGuidance for fiscal 2019 confirmed
As expected, higher competitive pressure influenced the first quarter 2019 results of DAX-listed Covestro. Despite an overall solid demand, core volumes decreased slightly by 1.8%, mainly due to lower volumes in the Polycarbonates segment. A marked drop in selling prices led to a reduction in Group sales by 16.0% to EUR 3.2 billion. The Group’s EBITDA at EUR 442 million (–58.4%), a contrast to the exceptionally positive prior-year results, was in line with the forecast. As a result, net income also fell to EUR 179 million (–72.2%). At minus EUR 45 million, free operating cash flow (FOCF) was negativecompared with the previous year (EUR 364 million) due to reduced cash flows from operating activities and increased investments. Although on the whole significantly below the outstanding resultsof the prior year’s quarter, results remain in the expected range and Covestro confirms targets set for the year as a whole.
“The first quarter was in line with our guidance and confirms our subdued expectations for the full year,” explains CEO Dr. Markus Steilemann. “It is therefore even more important to now set the right course for our future growth with investments and efforts to improve efficiency. After all, demand for our innovative and sustainable materials remains intact.”
Covestro confirms targets for fiscal year 2019Dr. Thomas Toepfer, CFO of Covestro,compares the results of the first quarter against the same period in 2018: “The prior-year quarter was influenced by exceptionally high margins in a number of product groups. In line with our expectations, our results therefore fell below those of the same period of last year. In anticipation of continued challenging environment influencing results throughout the year, we are especially focusing on efficient production and processes and targeted investments.”
Consistent with this focus, Covestro raised its stake to 80% in the joint venture DIC Covestro Polymer in Japan effective April 1, 2019, expanding its promising global thermoplastic polyurethanes business. Covestro plans total investments of over EUR 900 million this year to refurbish and expand its production plants and extend into growth areas such as specialty films. Efficiency measuresare expected to deliver cost savings of EUR 350 million per year over the medium term.For fiscal2019, Covestro continues to project core volume growth to be in the low-to mid-single-digit percentage range. FOCF is expected to be between EUR 300 million and EUR 700 million, with ROCE between 8% and 13%. EBITDA for the fiscal year is forecast to be between EUR 1.5 billion and EUR 2.0 billion, with the second quarter EBITDA expected to be around the level of first quarter 2019.Strategic initiatives making headway.
Strategic initiatives to advance digitalization and innovation made progress in the first quarter. The new digital B2B trading platform Asellion was successfully launched at the end of March, enabling Covestro customers to order products online and do business around the clock and with just a few clicks at the link covestro.asellion.com.
Covestro has also joined forces with the US-based biotechnology company Genomatica to research and develop high-performance materials on the basis of renewable raw materials. This collaboration aims to reduce the use of fossil-based resources such as crude oil through the use of sustainable raw materials instead.Sales and earnings growth in Coatings, Adhesives, Specialties segment.
Core volumes in the Polyurethanes segment remained largely stable (–0.2%) in the first quarter of 2019. Sales in this segment declined by 24.3% to EUR 1,476 million due to lower selling prices, with all three regions posting lower sales. EBITDA fell to EUR157 million (–75.4%) due to lower margins.
Driven by weaker demand from the automotive industry, core volumes in the Polycarbonates segment decreased by 6.3%. Sales in this segment declined by 16.7%toEUR 860million, due also to lower selling prices. With falling margins and stable raw material prices, EBITDA declined to EUR 155 million (–48.8%).
In the Coatings, Adhesives, Specialties segment, core volumes saw virtually no change versus the prior-year quarter (–0.1%). Sales in this segment increased by 5.9% to EUR 627 million, boosted by increased selling prices on average and exchange rate movements. EBITDA rose 7.4% to EUR 146 million.
https://news.covestro.com/news.nsf/id/B6AAF2E730B71136C12583E800488AAE/%24File/2019-064E.pdf?open&mod=29.04.2019_07:21:54
April 29, 2019
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| Press Release of Recticel – 29 April 2019 |
Trading update for 1st quarter 2019
Olivier Chapelle (CEO): “As previously announced, our net sales have decreased in 1Q2019 due to a combination of adverse Automotive and Comfort markets affecting the volumes, and of selling price erosion in the Flexible Foams and Insulation segments as a consequence of falling MDI and TDI raw material prices.
The evolution of our order books points towards progressive volume and net sales increases, and we remain focused on the execution of our innovation and growth plans, among which the ramp-up of our new Insulation factory in Finland.
In parallel of executing our announced industrial footprint reduction in Germany, the Group continues to implement operating cost reductions.
While the process has become more challenging over the last 8 months due to the rapidly changing Automotive market conditions, the Group continues to actively pursue the divestment of its Automotive Interiors division.” OUTLOOK In a highly volatile economic and geopolitical environment, we are well positioned to adapt quickly to changing market conditions, and we remain focused on the execution of our plans. Having anticipated an adverse market environment in the first half of 2019, we expect an improvement in the second half of the year, and confirm our guidance of a 2019 Adjusted EBITDA above the level of 2018 on a like-for-like basis. |
April 29, 2019
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| Press Release of Recticel – 29 April 2019 |
Trading update for 1st quarter 2019
Olivier Chapelle (CEO): “As previously announced, our net sales have decreased in 1Q2019 due to a combination of adverse Automotive and Comfort markets affecting the volumes, and of selling price erosion in the Flexible Foams and Insulation segments as a consequence of falling MDI and TDI raw material prices.
The evolution of our order books points towards progressive volume and net sales increases, and we remain focused on the execution of our innovation and growth plans, among which the ramp-up of our new Insulation factory in Finland.
In parallel of executing our announced industrial footprint reduction in Germany, the Group continues to implement operating cost reductions.
While the process has become more challenging over the last 8 months due to the rapidly changing Automotive market conditions, the Group continues to actively pursue the divestment of its Automotive Interiors division.” OUTLOOK In a highly volatile economic and geopolitical environment, we are well positioned to adapt quickly to changing market conditions, and we remain focused on the execution of our plans. Having anticipated an adverse market environment in the first half of 2019, we expect an improvement in the second half of the year, and confirm our guidance of a 2019 Adjusted EBITDA above the level of 2018 on a like-for-like basis. |
April 26, 2019
SPI Joins the VersaFlex Family of Specialty Coatings Companies |
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Kansas City, Kansas – April 25, 2019 – Specialty Products (“SPI”), a Washington-based premier manufacturer of spray-applied polyurea elastomers, polyurethane foams and custom plural component equipment, has joined the VersaFlex family of companies.
Headquartered in Lakewood, Washington, SPI is a leading manufacturer of specialty polyurea and polyurethane foams coatings with over 45 years of experience formulating high-performance solutions.
“This is an exciting opportunity for employees and customers of SPI. Building on the 45 year success of SPI under the direction and leadership of Dan Helton and Curt Josaitis, merging with VersaFlex will allow SPI and its customers to reach new levels of success with a broader product offering and innovation support ” –Robert Jamieson, EVP M&A and Integration VersaFlex.
SPI joins VersaFlex, Raven Lining Systems, Milamar Coatings, Bridge Preservation and Vanberg Specialized Coatings as part of a growing portfolio of specialty coating solutions across an array of markets and industries.
“We’re excited to join forces with SPI. This move allows us to broaden our specialty coatings portfolio and increase our focus on polyurea coating and foam solutions. We look forward to leveraging the increased scale this acquisition provides.” –Tom Verghese, CEO VersaFlex.
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About Specialty Products (SPI)
Specialty Products, is a premier manufacturer of spray-applied polyurea elastomers, polyurethane foams and custom plural component equipment. Headquartered in Lakewood, Washington, SPI also has operation centers in Rowlett Texas, Chicago Illinois, and Anchorage Alaska. SPI is a founding member of the Polyurea Development Association (PDA). With a technical staff of a combined total of 180 years of experience, SPI is your trusted source for polyurea coatings, foam products and spray application equipment.
About VersaFlex
VersaFlex is an industry leader in 100% solids pure polyurea based technology, which is used in the protection and repair of a wide variety of industrial, commercial and maintenance environments. This includes the Bridge Preservation, which focuses on the protection and rehabilitation of highways, bridges, tunnels and rail infrastructure; SL™ series joint filler for commercial and industrial flooring applications, and FlexTain™ pre-sprayed liners for secondary containment.
About Raven Lining Systems
Raven Lining Systems is an industry leader in high build 100% solids epoxy linings for the protection and rehabilitation of wastewater, water and storm-water infrastructure for over 30 years. Their portfolio includes a broad range of specialty innovative engineered solutions, for the industrial, OEM and oil & gas markets. Raven’s innovative products are delivered through an exclusive network of certified applicators, to assure the end customers receive the highest levels of quality and performance protection.
About Milamar
Milamar manufactures high-performance epoxy and urethane coating systems designed for the protection, repair and restoration of a variety of substrates across markets and industries. Offering a comprehensive portfolio of solutions, Milamar’s technical representatives are dedicated to cultivating long-term relationships through its network of certified applicators and distributors, which extends throughout North America, Central America, South America, and Europe.
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