CIECH: higher profits despite the economic slowdown, with solid financial foundations

In the third quarter of 2020, the CIECH Group generated a higher adjusted (Adj.) EBITDA result than last year (PLN 144 million vs. PLN 132 million), once again making itself distinguished from the main competitors in the soda industry worldwide. At the same time, other smaller business segments (Agro, Foams or Silicates) reported better results, both on the quarterly and annual basis. Despite the economic slowdown, CIECH managed to maintain a high (Adj.) EBITDA margin both in the core soda segment and at the consolidated level (21 and 25 percent respectively). Solid financial foundations continue to be the Group’s strong asset - the Group generated PLN 71 million higher operating cash flows (y/y, for nine months they were cumulatively by PLN 278 million higher y/y), and also managed to decrease the level of debt, while maintaining a secure cash buffer of approx. PLN 850 million (including the available credit line facilities). In individual business areas, the Group continued with the construction of the evaporated salt plant in Germany, the product portfolio was expanded, among others, in the Agro business, and ambitious plans to reduce CO2 emissions and digitize the production process to improve the Group's business efficiency in the long term were implemented. The results of the third quarter corroborate the positive effects of the implemented CIECH strategy and its ability to generate profits in an unpredictable economic environment.

  • The consolidated recurring revenues of the CIECH Group for the third quarter of 2020 amounted to PLN 690 million, compared to PLN 693 million in the same period last year. The third quarter saw the slow down of the downward trend in revenues caused by the pandemic.
  • (Adj.) EBITDA on continued operations (i.e. after excluding the result of the shut plant in Romania and the Resins business) amounted to PLN 144 million, compared to PLN 132 million a year earlier, and the (Adj.) EBITDA margin calculated accordingly was 20.9%, compared to 19% a year ago.
  • As far as net results are concerned, the Group generated a profit of PLN 42.2 million, compared to PLN 0.4 million a year earlier, although it should be emphasized that the result in the third quarter of 2019 was negatively affected by the non-cash impairment losses on Romanian assets. At the end of Q3 this year, the Group recognized PLN 442 million in cash, and in the third quarter, it generated positive cash flows from operating activities of PLN 203 million, it released nearly PLN 100 million of working capital as a result of, among others, launched factoring, and managed to reduce net debt by PLN 24 million, while implementing an ambitious investment programme. After the nine months of 2020, the Group allocated PLN 465 million to investments (compared to PLN 220 million in the corresponding period of the previous year).
  • The net debt to EBITDA ratio continued at a safe level, lower than in the previous quarter, and amounted to 2.38 (calculated for the needs of loan covenants prior to the entry of IFRS 16).


- We managed to generate robust results at the level of adjusted EBITDA, despite the visible deterioration of the economic situation compared to the previous year. Proper preparation for the economic slowdown and our decisive response in the spring, secured the Group’s financial foundations and enabled it to continue its development activities. These activities include not only the construction of an evaporated salt plant in Germany, entering the attractive market of soda bicarbonate for pharmaceutical applications, but also, among others, the growing strength and geographic expansion of the PPP (plant protection products) business, which is a key element of the diversification of the Group's revenues. We should also mention an increase in the efficiency of production in the soda business and our measures aimed, among others, at reducing CO2 emissions at our plants in Kujawy. In its two years of implementation, our strategy allowed intensive business development and achievement of solid results, despite the significant slowdown in economic activity and unpredictable macroeconomic environment – says Dawid Jakubowicz, President of the Management Board of CIECH S.A.


As in the second quarter, in its core business - production and sale of soda ash - CIECH generated much better results in terms of revenues and volumes of soda sold than our European and US competitors. This is additionally supported by data on soda exports from the USA and Turkey, where the y/y declines were less severe than in the second quarter, although they continued at the two-digit level. In the area of soda bicarbonate, sales increased thanks to a new plant at CIECH’s German factory with a target capacity of 50k tons per year. Currently, CIECH is preparing for the expansion of the pharmaceutical-grade and dialysis soda market.


The margin of the soda segment, which also includes production and sale of salt, continued to be high, i.e. at a level of more than 25%. In the salt business, CIECH is regularly increasing the share of salt tablets and packaged salt sales, although these revenues are affected by the unfavourable situation on the HoReCa market and the restrictions for this industry related to the recurrence of the pandemic. The restrictions introduced in autumn do not currently affect the planned commissioning of a new evaporated salt plant in Germany (Q2 2021).


After the spring drop, during the summer holidays, there was a very strong rebound in the production and sale of polyurethane foams (revenue growth by 31% y/y and 53% q/q). For the plant protection products business, the third quarter is usually a period of lower activity and preparation for the next season sales. At the same time, the strategy to increase the product offer and expand geographically is being implemented (currently, our Agro business products are available in approx. 50 countries, and as planned, this number is soon to reach 60 countries).


The Silicate and Glass segment saw a year on year increase in revenues and EBITDA. In the silicate business, demand recovered after the weaker second quarter, and in the case of glass packaging, the pandemic situation did not have any significantly effect on the results achieved in the third quarter of 2020.


- Although outlooks for the situation in the coming quarters are still subject to high uncertainty, we look to the future with cautious optimism. Our forecasts of a U-shaped recovery in core businesses have been confirmed. We see further potential for the Agro business in Nowa Sarzyna, and we are analyzing the possibilities to increase production capacity in silicates. With the current macroeconomic assumptions, and taking into account the launch of our evaporated salt plant, taking advantage of the soda bicarbonate market potential and further increase in business efficiency thanks to the commitment of our employees, we believe that next year should be a bit better for the Group – adds Dawid Jakubowicz.


The table below presents basic data on the results of the CIECH Group for the third quarter of 2020.



[PLN million]Q3 2020Q3 2019y/y
Revenues (recurring, excluding revenues from soda of CIECH Soda Romania and Resins)690693-0.4 %
(Adj.) EBITDA (recurring))144132+9.1 %
(Adj.) EBITDA margin (recurring)20.9 %19 %+ 1,9 p.p.
Net result42,20,410 450 percent


Mirosław Kuk, Press Spokesperson of the CIECH Group, tel. +48 723 66 86 86


CIECH is an international, expanding chemical group, with a strong standing on European and global markets and with a stable strategic investor (Kulczyk Investments). The company exports its products to over 100 countries around the world, including soda ash, purified soda, salt, plant protection agents, epoxy and polyester resins, polyurethane foams, silicates, and glass packaging. CIECH manufactures products of the highest, world-class quality, which are further used to produce articles which are essential in the everyday life of people all over the world. At the same time, it combines a modern approach to business with the tradition of production which dates back to 1882. Since 2005, the company has been listed on the Warsaw Stock Exchange and, since 2016, on one of the largest stock exchanges in Europe: Börse Frankfurt. More information is available at

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