CSM: meeting the challenge of a tough environment

Diemen / NL. (csm) The first half-year results demonstrate the increasing strength of CSM in its major markets, the company said in a press release. Underlying sales growth was eleven percent, and price increases fully offset the impact of higher raw material costs. Purac in particular performed well. EBITA was held back by adverse currency movements and further restructuring costs, which masked an underlying improvement in profitability. Key Facts First Half 2008:

• Net sales increased from 1’206,5 million EUR to 1’247,2 million EUR (at constant exchange rates an increase of 11,4 percent). Autonomous sales growth was 11,2 percent.
• EBITA from continuing operations before exceptional items amounted to 68,8 million EUR compared with 69,7 million EUR in the first half of 2007 (at constant exchange rates: 75,1 million EUR, an increase of 7,7 percent).
• Further restructuring in Germany and in North America has slowed down the growth in profitability. CSM´s restructuring is going beyond its 3-S Program and will go deeper and take additional time.
• The 3-S Program savings in the first half of 2008 were 14 million EUR higher than in the same period last year, bringing the total run-rate savings to 112 million EUR, already exceeding the 2008 target of 110 million EUR.
• The result before taxes from continuing operations increased by 6,2 percent to 49,7 million EUR.
• As a result of the positive outcome of a dispute with a foreign tax authority, a tax provision of 38,7 million EUR has been released.
• Implementation of the Purac manufacturing footprint and bio-plastics strategy is on schedule.
• In a generally difficult financial climate, an additional financing arrangement of 385 million USD was concluded with a syndication of banks at attractive conditions, to finance further growth.
• Worse than expected economic and market conditions invalidate ROS comparisons and delay attainment of the company´s Roce target.

«I am pleased with the progress CSM has made in this volatile economic climate. We have been able to meet the short term challenges whilst working on our longer term strategic initiatives», stated Gerard Hoetmer, CEO of CSM (press release).