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CIECH Group results for Q2 2017: Higher y/y revenue; Increase in the product portfolio

In Q2 2017 the CIECH Group achieved very solid financial results. Owing to its strategy based on the development of the corporate product portfolio, the use of new production capacity and geographic expansion, the Group's revenue in Q2 2017 amounted to 883 million PLN (compared to 867 million a year ago), and its normalised (N) EBITDA – 192 million PLN (compared to 228 million a year ago). At the moment, the Group is implementing a number of investment projects focused on customer service excellence and the manufacturing of specialised products for the most promising market segments. 

  • Consolidated revenue of the CIECH Group for Q2 2017 amounted to 883 million PLN (compared to 867 million PLN a year ago).
  • Its normalised (N) EBITDA amounted to 192 million PLN (compared to 228 million PLN a year ago), and the net profit was 93 million PLN (compared to 162 million PLN a year ago).
  • The ratio of net debt to (N) EBITDA for the Group reached 1.3 at the end of Q2 2017.
  • Current investment projects: new products in the salt area (CIECH Soda Polska), increasing the production capacity as regards baking soda (CIECH Soda Deutschland), R&D activities (mainly for CIECH Sarzyna), logistic infrastructure (CIECH Soda Polska, CIECH Pianki) and environmentally friendly systems (CIECH Soda Polska).
  • International expansion: at the moment the CIECH Group products are available on approx. 100 world markets, including Europe, Asia and Africa. Proceeds from foreign sales (i.e. in the countries where CIECH has no production plants) account for approx. 50% of the Group revenue.

Compared to the situation in the previous year, in the second quarter we felt the effect of higher prices of energy-producing raw materials and slightly lower prices of some of our products. However, in spite of difficult market conditions, we have managed to achieve solid results. This is because of our cost discipline and effective broadening of our product portfolio coupled with the ongoing efforts of our sales forces and international expansion. At the same time we are also pursuing a long-term strategy: to build a diversified chemical concern with a global presence that will offer the highest quality products to be used by millions of customers worldwide,says Maciej Tybura, President of the Board of CIECH S.A.

Owing to successful contracting for 2017, we have managed to market the production volumes of all the plants that manufacture soda ash. A continuous expansion of the CIECH Group's logistic competences strengthens its relationships with customers. Apart from railway transport assignments that are now handled by a subsidiary (CIECH Cargo), the Group is also developing its competences in maritime transport and warehousing services (in the company own or customer facilities).

In the salt production area, we have greatly benefited from restructuring our product portfolio: resignation from wet salt and selling dry salt instead. At the moment, the Group sells dry salt in the form of tablets for water treatment applications or in 1 kg packaging to be sold by the largest retail chains. The CIECH Group is one of the leaders in the rapidly growing market of salt products in the CEE and Scandinavia.

In the organic segment (AGRO business, resins, PUR foams), we have increased sales of glyphosate-based plant protection products, which are sold mainly in the second quarter every year. In the area of PUR foams and resins, higher prices of raw materials were reflected in the results, although this adverse effect was partially offset by effective sales efforts. CIECH Pianki SA recorded higher sales than a year ago, as it was able to benefit from the still growing demand among manufacturers of upholstered furniture and mattresses. The Company is still working to expand its product portfolio and increase its production capacity. In the area of resins, the process of switching CIECH Sarzyna plants to the production of specialised products with higher margins is underway, including those used in the manufacture of boats, yachts and other means of transport.

- In each of our production segments, we focus on long-term customer relationships that are based on excellent product quality and high level of service. Rather than a product alone, we offer the real added value for the business of our customers: global concerns, including the largest glass producers, the FMCG industry entities and retail chains. Activities aimed at broadening the product portfolio and building stronger relationships with customers were reflected in our financial results, -   says Artur Osuchowski, Member of the Management Board of CIECH.

Below you will find a table with financial highlights of the CIECH Group for Q2 2017:

[PLN million]Q2 2017Q2 2016y/y
EBITDA margin21,7%28,9%-7,2 p.p.
EBITDA (N)192228-15,8%
EBITDA (N) margin21,7%26,3%-4,4 p.p.
Net profit/loss93162-42,6%

Mirosław Kuk, CIECH Group Spokesman, tel. +48 723 66 86 86.

CIECH is an international, professionally-managed group with Polish roots, with a well-established position of a chemical sector leader in Central and Eastern Europe. It manufactures products which are used in the production of articles necessary in everyday life for people all over the world – state-of-the-art products of the highest quality. Taking advantage of the support of a reliable strategic investor (Kulczyk Investments), it implements the strategy of global development, extending its sales in world markets. At the same time, it combines the modern approach to business with a production tradition which dates back to 1882. 

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