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CIECH Group has summarised 2019: better results and stable financial foundations for demanding times

The CIECH Group, the second largest producer of sodium carbonate in Europe and the largest Polish manufacturer of plant protection products (PPPs) and evaporated salt, published its results for 2018. The Group's revenues amounted to PLN 3,548.9 million, adjusted EBITDA to PLN 663.3 million, and net profit to PLN 116.4 million. The increase of the adjusted EBITDA profit, year-on-year, is the effect of an improvement in the operating result, while the net profit was burdened mainly with issues related to operations in Romania – write-offs for impairment of assets and the voluntary redundancy programme at the Group's Romanian factory . Thanks to the changes introduced in 2019, the Group strengthened its financial foundations, as reflected by the level of available cash, which amount to approximately PLN 700 million at the end of the first quarter of 2020. This improves the level of business security during a period of high uncertainty related to the economic situation worldwide.

  • The consolidated revenues of the CIECH Group for 2019 amounted to PLN 3,548.9 million (a decrease by 3.4% y/y). In 2019, adjusted EBITDA amounted to PLN 663.3 million (an increase by 4.7% y/y), and net profit was PLN 116.4 million (an increase by 3.5% y/y). In the fourth quarter of 2019, the adjusted EBITDA result, which demonstrates the ability to generate profits from business operations with the exclusion of one-off events, increased by 15% y/y.
  • 2019 saw the strengthening of CIECH's financial foundations: compared to 2018, the Group increased its operating cash flows by PLN 78 million to PLN 532 million, working capital decreased by PLN 90 million (the company released this amount compared to 2018), and free cash flows increased by PLN 297 million, year-on-year, to PLN 124 million.
  • As of September 2019, the Romanian soda factory did not operate due to the termination of the contract by the only available process steam supplier. The suspension of production affected the level of the Group's revenues and the sales of soda ash on overseas markets. In addition, the Group's result was burdened with write-offs for impairment of assets and implementation of a voluntary redundancy programme at a Romanian factory.

- In 2019, our priority was to improve business efficiency and strengthen the financial foundations of the Group. We obtained additional financing, optimised working capital, increased liquidity – we take into account the risks related the coronavirus pandemic in our plans. In the coming weeks, we will focus especially on protecting our employees, maintaining production continuity, securing liquidity and further consistent implementation of our strategy - says Dawid Jakubowicz, President of the Management Board of CIECH S.A.

 

Despite suspended production at the Romanian plant, which was associated with a decrease in revenues, in the soda segment, the adjusted EBITDA profit was higher than in 2018, which was due to the good situation on the soda and salt market. The (adj.) EBITDA margin in this segment was nearly 24 percent in 2019, compared to 22 percent in 2018. In the area of salt, investment in the new evaporated salt plant in Stassfurt was continued, and the salt product portfolio was expanded.

 

In 2019, there were changes in the organisation of the organic segment, involving the preparation of the division of CIECH Sarzyna into a part operating on the market of plant protection products (CIECH Sarzyna) and resins (CIECH Żywice). As part of the plant protection products business, a strategy was prepared to offer comprehensive protection for selected crops on the home markets of this business: in Poland and Spain. At the same time, foreign sales (outside home markets) are expected to continue to grow and, according to the strategy, account for approx. 40 percent of total sales at the end of 2021. Today, plant protection products offered by the Group reach about 50 countries around the globe. What is more, research and registration of new products will be accelerated by the GLP certificate to be obtained by our laboratory in Warsaw.

 

In the area of resins, operating as a separate company from the beginning of 2020, strong competition from Asian manufacturers was observed throughout the year, nevertheless, work continued on modern and specialised products for the sanitary and transport industries. Despite market challenges, the polyurethane foam production business conducted intensive commercial operations in order to acquire new customers.

 

The silicate and glass packaging segment had a higher adjusted EBITDA margin, mainly due to the increase in silicate prices on the market and the possibility of entering new markets thanks to investments in the development of production capacity in previous years. The CIECH Group is currently the largest supplier of silicates in Europe.

 

In 2019, long-term measures were taken, including predominantly initiatives to reduce CO2 emissions in production processes (modernisation of the energy sector in the soda business and partial transition to gas fuel, innovative solutions developed with scientists), increased production efficiency (initiatives related to the introduction of predictive maintenance, optimisation of production processes and parameters due to the support of IT systems) and activities related to the introduction of innovative solutions in the area of new products and future business of the Group.

 

 

Contact:

Mirosław Kuk, Spokesperson

miroslaw.kuk@ciechgroup.com, tel. +48 723 66 86 86.

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