Ciba Specialty Chemicals: solid results despite global downturn
In the first nine months of 2001, Ciba specialty chemicals achieved solid results in a difficult environment that was influenced by the worsening global slowdown and a continuing escalation of the Swiss franc in the third quarter against most major currencies. Sales were 3 percent lower in local currencies and 5 percent lower in Swiss francs, to total CHF 5.664 billion. The EBITDA margin (16.9 percent of sales) was almost at the first-half year level, reflecting 13 percent lower selling and general administrative costs. Operating income was CHF 604 million. Net income rose 9 percent in local currencies, but fell 8 percent in Swiss francs, to CHF 303 million. Strong cash flow management brought inventories and receivables lower and further reduced net debt. Current indications are that full year sales, EBITDA and net income will be somewhat below the levels in 2000.
Ciba Specialty Chemical’s Chairman and Chief Executive Officer Armin Meyer commented, “We have outperformed the market through the first nine months of the year while facing some very challenging circumstances. I consider our results and the further improved financial position to be solid. Our early actions to create a leaner and more customer-focused organization and to reduce costs have enhanced our position for the future.”
Sales for the first nine months of 2001 were 3 percent lower in local currencies than the record sales levels of the same period last year. In Swiss francs, sales were 5 percent lower, totalling CHF 5.664 billion.
Sales were influenced by the spreading general economic slowdown that started toward the end of 2000 in the NAFTA region and, during 2001, increasingly affected Europe and Asia. Following the September 11 attacks in the United States, trading conditions in the NAFTA region, as well as in Europe and Asia, deteriorated further, reflecting a very cautious buying pattern by the Company’s customers. All five Segments of Ciba were affected by these changes in sales patterns.
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