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Cognis, Nordson Post Record-Setting Financials

Tuesday, August 31, 2010

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Industrial equipment maker Nordson Corp. and specialty chemicals supplier Cognis are both toasting record-breaking financial showings—Nordson for its third quarter and Cognis for the first half of the year.

Nordson: ‘We are Winning’

Nordson Corp. reported strongly improved third-quarter sales, compared to the same period a year ago, as well as all-time quarterly records for operating profit, net income and diluted earnings per share.

For the quarter ending July 31, 2010, sales were $279 million—a 35 percent increase over sales in the prior year’s third quarter. The sales improvement included a 38 percent increase in volume partially offset by unfavorable currency translation effects.

Third-quarter operating profit was $68 million, and net income was $55 million. Diluted earnings per share were $1.61—more than double that of the previous year’s third quarter.

“Our outstanding performance in the quarter clearly demonstrates that we are winning in the marketplace, capturing returning demand, and serving our customers with a more efficient model,” said Nordson president and CEO Michael F. Hilton. “Our global team continued to execute in every segment and every region and delivered the highest quarterly level of operating profit and net income in Nordson’s history.”

Nordson makes precision dispensing equipment for applying industrial liquid and powder coatings, adhesives, and sealants; test and inspection equipment; and curing and surface preparation systems.

Hilton singled out the performance of the company’s Industrial Coating Systems, which   “generated sales volume that was 54 percent higher than in the third quarter a year ago. Our leaner business model generated an operating margin of 12 percent, an improvement of more than 17 percentage points from a year ago.”

The Adhesive Dispensing segment showed a 23 percent increase in sales volume over the prior year’s third quarter.

Order rates increased by more than 30 percent overall, and the first nine months of fiscal year 2010 showed “an unprecedented level of profitability” by the company, based in Westlake, Ohio, and founded in  1954.

Cognis: ‘Real Growth’

Cognis’ second-quarter showing continued its excellent performance from the first quarter; the company announced the best half-year results in its history. Sales rose by 16.3 percent to 1.5 million euros (about $1.9 million U.S.), due to a steady improvement in demand. Sales volumes increased by 12.6 percent, reaching the level of the first half of 2008. All regions contributed to this positive development, with Asia-Pacific showing the most dynamic growth rates.

Cognis reported an operating result (Adjusted EBITDA) of 281 million euros ($356.8 million U.S.) in the first half of 2010—a 67.5 percent increase on the previous year. Return on sales (Adjusted EBITDA as a percentage of sales) reached 18.5 percent—due largely, the company said, to “higher sales volumes, a further shift in the product portfolio towards high-value specialties, and better capacity utilization.”

Improved cost management and improving foreign exchange movements were also noted.

Cognis CEO Antonio Trius predicted a “record full-year result” and said the company’s strong performance “indicates not just a recovery, but real growth in consumer and industrial markets.”

Cognis, created in 1999 from the chemicals business of Henkel, is a leading supplier of specialty chemicals for coatings and inks, lubricants, agriculture and mining. The company, based in Monheim, Germany, employs about 5,500 people and operates production sites and service centers in 30 countries. In June, BASF SE announced that it had reached an agreement to acquire Cognis for an equity purchase price of about $887.3 million. That transaction is expected to close by November.

   

Tagged categories: Cognis; Earnings reports; Funding; Nordson

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