Abstract
Our roundup of composites-related financial reports over the last two months.
Chemicals company BASF noted that its Q1 2020 sales increased by 7% compared with the same period in 2019, to €16.8 billion.
According to the company this increase was mainly driven by a 4% increase in volumes. Income from operations (EBIT) before special items was €1.6 billion, down by 6% compared with the first quarter of 2019, due to lower contributions from BASF’s Chemicals, Materials and Other segments.
‘The first quarter of 2020 was not a normal quarter,’ said Dr Martin Brudermüller, BASF chairman. ‘The same will be true for the second quarter and likely for the entire year. The coronavirus has turned the world upside down.
‘BASF’s diversified portfolio offers advantages, especially in difficult times,’ he added. ‘Not all of our customer industries are equally affected by the pandemic. They show different degrees of resilience in this environment. For example, pharma, detergents and cleaners, or food. At the moment, they are even experiencing additional demand. Other customer industries, however, are intensely experiencing the consequences of the pandemic. They are hampered by the low demand from final customers. Moreover, there are production shutdowns and supply chain disruptions. The transportation and automotive sector is seeing the strongest declines right now.’
BASF also noted that its sales and earnings forecast for the 2020 business year provided on 28 February 2020 will not be able to be met, so the company is withdrawing its outlook for 2020.
‘It is currently impossible to reliably estimate both the length and the further spread of the coronavirus pandemic, as well as future measures to contain it,’ a press release. ‘BASF expects to be severely impacted by the economic consequences of the global weakness in demand and drop in production, in particular as a result of the ongoing production stoppages in the automotive industry. The effects of the coronavirus pandemic will also impact other customer industries. As a result, the company anticipates a considerable decline in sales volumes in the second quarter of 2020. BASF currently expects a slow recovery for the third and fourth quarters of 2020; how the situation develops is, however, extremely uncertain and not predictable at this point in time.’
DSM published a ‘solid’ Q1, with material sales down 8% from the same period of last year.
‘Covid-19 has led to unprecedented global challenges,’ said Geraldine Matchett and Dimitri de Vreeze, Co-CEOs. ‘We saw good underlying business conditions in Nutrition, with momentum increasing through the quarter, and with an overall small increase in demand from Covid-19. At the same time, trading conditions in Materials deteriorated rapidly at the end of Q1 as customers’ operations were impacted by Covid-19 restrictions, especially in Europe and North America. While these are uncertain times, we are taking all necessary actions to address recent challenges in end markets.’
Exel Composites says that its Q1 revenue increased by 2.6% to €27.8 million, up from €27.1 million. Q1 orders increased by 22.6% to €34.5 million, up from €28.2 million in the same period of 2019.
The company noted that ‘as a consequence of increased uncertainty and poor short-term predictability due to the Covid-19-pandemic’ it would withdraw its current guidance and specify new guidance for 2020 later during the year when a more reliable estimate can be made.
‘We live in unprecedented times where the Covid-19-pandemic is a serious concern worldwide,’ said president and CEO, Riku Kytömäki. ‘In the first quarter of 2020, the main impact from the Covid-19 outbreak was on Exel Composites’ business in China. Production was halted for four weeks in total, including the prolonged Chinese New Year’s break, but was gradually ramped up to full capacity by mid-March. Despite this negative impact, group revenue and adjusted operating profit improved compared to last year.’
Gurit reported net sales of CHF 136.1 million in Q1 2020, an increase of 0.9% compared to Q1 2019.
The company says that the divestment of its Automotive business in February 2020 had a negative sales impact of CHF 3.1 million or 2.1% on net sales comparing with Q1/2019, while the coronavirus pandemic affected its Asian business significantly. All its business units, especially Tooling, suffered travel and supply chain restrictions, the company said, with Tooling showing a significant decline in sales by 46.0% from CHF 36.1 million in the previous year to CHF 19.5 million in Q1/2020.
Composite Materials achieved net sales of CHF 66.2 million for the first quarter of 2020, an increase of 9.1% compared to net sales of CHF 60.7 million in the first quarter of 2019, while Kitting recorded solid sales of 48.1 million CHF in Q1/2020, an increase of 39.9% compared to the previous year. Aerospace revenues saw a decline of 6.8% to CHF 13.4 million, while Gurit’s discontinued Composite Components reportec a 68.0% decline CHF 1.4 million.
‘The coronavirus situation caused customer project installation delays, product handover inspections not occurring, coupled with transportation issues which altogether had a very significant negative impact on the business,’ said the company in a press release. ‘We did not encounter project cancelations of relevant size, but significant re-scheduling of customer projects into Q2 and Q3/2020. As the situation normalizes in China we are now catching up.’
Nouryon showed growth its full-year 2019 financial results, despite challenging conditions in several end markets. Adjusted EBITDA increased by 5%, and revenues were slightly up, the company said, from €5064 million to €5082 million.
‘This is another solid set of results,’ said chairman and CEO Charlie Shaver. ‘Our commercial excellence and operational improvement initiatives along with our cost discipline have shown that we can deliver improvements in profitability even when market conditions are challenging.’
Shaver said that the company planned to invest in capacity expansions and bolt-on acquisitions in 2020.
Glass fiber company Owens Corning reported consolidated net sales of US$1.6 billion, a decrease of 4% or US$66 million compared with 2019.
First-quarter 2020 net loss attributable to the company was US$917 million, or US$8.43 per diluted share, compared with net earnings attributable to Owens Corning of US$44 million, or US$0.40 per diluted share, in 2019, the company said.
‘I’m very proud of our team’s strong execution and ability to deliver our first-quarter results in the face of the Covid-19 pandemic,’ said Chairman and CEO Brian Chambers. ‘Our long-standing commitment to safety remains at the forefront of everything we do while serving the needs of our customers, our communities, and other key stakeholders. Going forward, the continued resilience of our team, along with our strong customer connections, operating discipline, and balance sheet, position us well to manage through this crisis and gain momentum once our markets begin to recover.’
BASF; www.basf.com
DSM; www.dsm.com
Exel Composites; www.exelcomposites.com
Gurit; www.gurit.com
Nouryon; www.nouryon.com
Owens Corning; www.owenscorning.com
For many companies, the Covid-19 pandemic has led to unprecedented global challenges.