8-Months Report 1999 of the EMS Group

8-Months Report 1999 of the EMS Group


With its companies combined in EMS-CHEMIE HOLDING AG, the EMS Group with its world-wide activities conducted in the fields of Performance Polymers, Fine Chemicals and Engineering was able to significantly close the gap to the previous years income level in the months of May to August. Whilst income from operations (EBIT) remained 8.2 % below the previous year in the first 4 months of the report year, the figure for the first 8 months of the year CHF 122 million (previous year CHF 126 million) remains just 3.2% short of the performance recorded for the correspond-ing period of the previous year. Consolidated net sales (CHF 700 million) dropped against the previous year by 2.5% and operational cash flow (EBITDA) of CHF 161 million (CHF 163 million) by 1.2%. Assuming an identical scope of consolidation, the decline in sales would amount to 5.8%.

This result is essentially attributable to contrary developments: on the one hand, the planned discontinuation of low-margin products in the Performance Polymers field (sales down by CHF 32 million) and the drop in sales in the Fine Chemicals field (sales reduced by approximately CHF 25 million) had a negative impact on sales; on the other hand, sales figures were boosted by the first-time consolidation of Karl Fischer Industrieanlagen GmbH Berlin - acquired 1998 - and of Pyrmo GmbH in Bad Pyrmont, Germany (by a total of + CHF 24 million), and as a result of an improved performance in the other fields.

The markets showed signs of improvement from May 1999 onwards: in particular, the situation continued to improve in Asia, and the general economic prospects in the USA remain bright.

Contrary to previous forecasts, the global automobile market - on which EMS directly and indirectly realises roughly one third of sales - developed better than expected.

The planned product streamlining process in the Performance Polymers field has been completed smoothly. Despite the introduction of substitute products in the Fine Chemicals field, the drop in volumes supplied caused by the unsuccessful market launch of pharma products by two EMS customers was not able to be compensated for in full. Although further replacement orders for the sales shortfall thus suffered are anticipated, they will not suffice to prevent an end-of-year drop in sales revenues.