The EBITDA margin stood at 14.1%
Specialty chemicals group Altana reported an 11 per cent decline in sales to €1,393 million in the first half of 2023 as a result of the general economic deceleration. This is predominantly attributable to a decrease in demand across diverse industrial sectors. Earnings before interest, taxes, depreciation and amortization (EBITDA) reached €196 million, 27 per cent below the previous year’s figure. In addition to lower sales volumes, this was ascribed to the persistent elevated material costs. The EBITDA margin stood at 14.1 per cent (previous year: 17.0 per cent).
In spite of the high level of uncertainty in the market, Altana again increased its research and development expenditure by 5 per cent to €99 million in the first six months of the current year. The specialty chemicals group augmented its investments, particularly in site expansion and further digitization, by 52 percent compared to the corresponding period last year. Altana also fortified its market standing through strategic acquisitions. "Especially in times of economic fluctuations, the significance of continued targeted investments in the future is paramount,” remarked Martin Babilas, CEO of Altana AG. "We keep on pushing forward innovative solutions aimed at addressing the critical challenges of our time – drawing on our own resources and by acquiring promising ventures.”
Just a few weeks ago, Altana announced the acquisition of Von Roll Holding, based in Breitenbach, Switzerland. The transaction is the second largest acquisition in the company’s history. It encompasses the purchase of a majority stake from the previous owning family, alongside a public tender offer for the residual shares that are still traded on the Swiss stock exchange. In 2022, Von Roll generated net sales of 228 million Swiss francs with around 1,000 employees at 14 sites worldwide.
Von Roll is a leading specialist in electrical insulation systems. The company’s technologies and products are used in wind turbines, electric cars, and industrial plants, for example. The company’s novel insulation systems and special resins for the high-voltage sector are particularly future-oriented. Von Roll is to be integrated into the ELANTAS division. “We are combining the innovative strength of both companies to drive forward the expansion of electromobility and renewable energies,” says Altana CEO Martin Babilas.
Altana also announced an additional acquisition at the beginning of August. The specialty chemicals group is acquiring the business of the U.S. company Imaginant Inc. to further strengthen its portfolio of testing and measuring instruments in the BYK division.
Economic weakness felt in all divisions
The prevailing economic fragility reverberated across all divisions. The largest division, BYK, recorded a 14 per cent decrease in sales to € 625 million. Adjusted for acquisition and exchange rate effects, sales were 13 per cent below the previous year’s level. The acquisition of the business of Imaginant Inc. will take effect in the second half of 2023. The effect pigments specialist ECKART achieved sales of € 181 million, corresponding to a 15 per cent decline in sales (both nominal and operating). ELANTAS, a supplier of electrical insulation materials, recorded sales of € 324 million, down 8 per cent (6 per cent in operational terms) from the prior-year figure. ACTEGA's sales fell by 8 percent (nominally and operationally), amounting to € 262 million.
Europe remains strongest region in terms of sales
During the first half of 2023, all geographical regions were affected by the decreasing global demand as a consequence of the economic weakness. Europe, which remains the strongest region in terms of sales, garnered revenues of € 543 million, marking an 8 percent decline (both nominally and operationally). Sales in Germany were down 12 per cent (13 per cent operationally). In the Americas, sales fell by 8 per cent (10 percent operationally), aggregating to € 403 million. The U.S. market decreased by 9 per cent (10 percent operationally). Asia bore the most substantial impact, with sales declining by 19 per cent (15 per cent operationally), resulting in total sales of € 419 million. This decline was predominantly driven by the Chinese market, which contracted by 22 per cent (18 percent operationally) within the same timeframe.
Altana does not anticipate a substantial recovery in the global economy during the second half of the year and, on this basis, foresees a decrease in sales in the upper single-digit percentage range for the full year 2023. To stabilize both earnings and cash flow Altana is implementing targeted measures. “Given our financial and innovative strength, the agreed acquisitions, and in particular the resilience demonstrated by our business model across numerous years, Altana is strongly positioned to navigate the challenges of the present landscape and capitalize on emerging prospects in a manner that generates value,” said Altana’s CFO, Stefan Genten.
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