The CIECH Group, a leading manufacturer of, among others, soda and salt in Europe, in the first quarter of 2021 recognised an annual increase in revenues (by 9%) and adjusted EBITDA profit (by 59%). At the same time, fixed expenses remained under control (-3% y/y) despite growing inflation pressure, and the level of debt dropped to 2.20 (net debt to EBITDA ratio), compared to almost 2.57 a year earlier. The revenues and profits of the smaller segments (Foams, Agro, Silicates) grew dynamically, whereas in the core soda segment, the key event was the completion of the main construction work at the new evaporated salt plant in Stassfurt – an investment of PLN 600 million. In May, the first batch of wet salt and salt tablets for water treatment was manufactured there.

• Consolidated revenues of the CIECH Group for the first quarter of 2021 were PLN 861 million, i.e. they were higher by 9% on a year on year basis.
• (Adj.) EBITDA amounted to PLN 222 million, compared to PLN 140 million a year earlier, and the net profit - PLN 184 million¹. The sale of CO2 certificates of the Romanian factory had a positive impact on the (adj.) EBITDA result (+PLN 49 million). The (adj.) EBITDA margin was 25.8%, i.e. it was higher by 8.1 percentage points on a year on year basis.
• Smaller businesses generated higher revenues and adjusted EBITDA result than a year ago: in the case of Foams, the growth was 58% and 138%, Agro by 28% and 119%, and Silicates by 23% and 40% respectively.
• The increasingly better effects of business transformation are reflected in the growing difference between cash flows and capital expenditure. In the first quarter, the cash flow ratio for the last 12 months was PLN 972 million, and the capital expenditure – PLN 739 million.
• In the first quarter, the Group obtained financing of over PLN 2 billion on very good terms, which will enable CIECH to develop in the years to come.
• The Management Board recommended to the General Meeting that a dividend of PLN 3 per share (PLN 158 million) be paid from the profit for 2020. The proposal received a positive recommendation of the Supervisory Board.

- Despite the continuing serious pandemic situation and persisting economic restrictions, in the first quarter, we generated good results testifying to the strength of our business. This is the result of the implemented initiatives to optimise key processes within the group, as well as the flexibility and commitment of our employees. Good condition and market prospects for smaller segments, completion of the main construction work in the new salt plant worth PLN 600 million, securing financing for further development in the amount of PLN 2.1 billion – these are the most significant events of the first quarter that allow for further, dynamic implementation of the Group strategy – says Dawid Jakubowicz, President of the Management Board of CIECH S.A.

In the soda segment, the most important event was the successful launch of the initial commissioning phase at the evaporated salt plant in Stassfurt. According to the schedule, commercial sales, the attainment of the target production capacity, as well as the launch of a full range of salt products are to take place gradually from the third quarter of 2021. This should coincide with a full economic recovery, especially in terms of the activity of the Horeca industry, which is an important recipient of salt. In the first quarter, the revenues of the salt business increased by 6% on a year on year basis. In the case of sodium carbonate, a product necessary for numerous segments of the economy, revenues dropped by approx. 7%, but at the end of the quarter, the improvement in the pandemic situation in Europe, the acceleration of the vaccination programme and the improving macro data translated into better moods of soda recipients. In the case of sodium bicarbonate, revenues increased by 15% - this is a result of, among others, the operation of the pharmaceutical-grade soda production line in Stassfurt, which can be applied as an active substance in medicines and medical products (due to the obtained GMP certificate and its entry into the European database of active substances).

The plant protection products business had yet another excellent quarter. Revenue increase by 28% and (adj.) EBITDA profit by as much as 119%, is the result of both the changes introduced in recent quarters in the area of business processes, as well as the regularly expanded product portfolio and international expansion. In spring, a new product, Halvetic, based on a patented technology that maintains its effectiveness while reducing the dose of the active substance, also had its debut. After it is introduced for sale in Poland, Halvetic will become a global brand of CIECH Sarzyna in the future.

The Foam business recognised a very good quarter. Despite the limitations related to the availability of raw materials, the (adj.) EBITDA profit increased by as much as 138%, which was the result of proactive measures of the sales team in developing the pricing policy. The silicates segment also achieved better annual results (23% increase in revenues and 40% increase in (adj.) EBITDA), which was the result of economic revival and increased activity, among others, of customers supplying the automotive segment. In the packaging business, the (adj.) EBITDA margin remained at the level of the first quarter of last year.

In the first three months of 2021, carbon dioxide emissions from our production processes were 5% lower, and in the case of energy production, they were slightly higher (+1%), which was associated with weather conditions. Compared to 2019, the level of CO2 emissions was 5% lower. According to the ESG strategy published in May, CIECH is to reduce carbon dioxide emissions by 33 % by 2026, compared to 2019; in 2033, it is to stop using coal for energy production, and in 2040 – to achieve climate neutrality.

1 Net profit from continued and discontinued operations.