Ad hoc announcements
A solid result and a promising outlook
The CPH Group with its remaining Chemistry and Packaging divisions reported net sales of CHF 176.9 million for the first half of 2024. EBITDA for the period amounted to CHF 30.2 million, giving an EBITDA margin of 17.1 %. The net result for the Group’s remaining divisions amounted to CHF 21.1 million. With results for the spun-off Paper Division included, the net result stood at CHF ‑ 8.7 million. The Group has confirmed its outlook for 2024.
Perlen, 18 July 2024 – In addition to its entry into the Indian market, business developments in the first six months of 2024 for the newly named CPH Group AG (formerly CPH Chemie + Papier Holding AG) were marked above all by the successful spin-off of its paper manufacturing activities and its real-estate assets at the Perlen industrial site into the newly founded Perlen Industrieholding AG. Shareholders approved the creation of the two independent companies at their Extraordinary General Meeting of 20 June 2024. The shares of Perlen Industrieholding AG have been traded over the counter on off-exchange platforms since 25 June 2024.
Overall, the CPH Group with its remaining Chemistry and Packaging divisions reported net sales for the first six months of 2024 of CHF 176.9 million, an 6.9 % decline on the prior-year period that is attributable to lower materials costs. At constant currency and net of acquisition effects, the decline amounted to 5.0 %. EBITDA for the period amounted to CHF 30.2 million, giving an EBITDA margin of 17.1 %. EBIT for the period amounted to CHF 23.5 million, and the net result for the remaining divisions totalled CHF 21.1 million.
Chemistry Division: entry into the Indian pharmaceutical market
The acquisition of Sorbead India and Swambe Chemicals in April 2024 gave the Chemistry Division its own presence in the Indian chemistry and pharmaceutical markets. The acquired companies now trade under the Sorbchem India Pvt. Ltd. name. The division’s manufacturing facilities in Rüti, China and the USA were well utilized in the first half-year. Deuterated products for use in laboratory analyses and OLED displays and high-value molecular sieves used in the production of ethanol were in particularly strong demand, while weak activity in the construction sector depressed the demand for molecular sieve powders. The cost of lithium saw a substantial decline. This in turn reduced net sales, as the lower production costs are passed on to the customer. New order volumes were above prior-year levels overall, and net first-half sales were raised to CHF 62.0 million, an increase of 7.7 % on the prior-year period (and of 8.0 % at constant currency and net of acquisition effects). EBITDA was slightly up at CHF 10.4 million, giving an EBITDA margin of 16.7 %.
Packaging Division: capacities well utilized worldwide
As expected, the Packaging Division saw its very high order volumes of 2023 return to their lower pre-COVID levels in the first half of 2024. A tendency among customers to reduce safety stocks and a decline in the demand for dietary supplements depressed first-half sales volumes. But these declines were largely offset for the period by a highly favourable product mix and its corresponding benefits in pricing terms. The prices of raw materials (PVC in particular) continued to return to more normal levels. Disruptions to logistics chains such as in the Red Sea shipping route prompted rises in transport costs. The division’s manufacturing facilities were well utilized worldwide. The new plant in Brazil further ramped up production and began supplying customers with coated PVC films. These serial deliveries are steadily being expanded. With the lower sales volumes combining with lower raw materials prices, the Packaging Division saw its net first-half sales decline to CHF 114.9 million, down 13.3 % on the prior-year period (and ‑ 10.7 % at constant currency). EBITDA totalled CHF 20.4 million and the EBITDA margin was 17.8 %, which was just below the previous year’s figure.
Paper Division: continuing pricing pressures
The result of the spun-off Paper Division reached CHF -29.8 million. This is attributable largely to a non-cash-effective expense of CHF 22.3 million deriving from its spinning-off. The division also reported a negative EBITDA before spin-off effects of CHF -5.6 million, owing primarily to continuing paper pricing pressures and increases in materials and energy costs. Competitors announced plant closures, which should lead to a more balanced supply and consumption ratio. The ongoing optimisation and cost-saving measures will continue unabated.
Equity ratio remains solid
The CPH Group took on new financial liabilities totalling CHF 28.9 million to finance the spinning-off of the Paper Division and the Sorbead India and Swambe Chemicals acquisition. This left the Group with net cash of CHF 1.0 million. With an equity ratio of 57.9 %, however, the post-spin-off CPH Group remains in sound financial health.
Confirmation of the outlook for the full year 2024
Business prospects for the second half of 2024 are cautiously positive, though the overall climate remains volatile in the light of economic and geopolitical developments. “For the CPH Group with its remaining Chemistry and Packaging divisions we expect to report an EBITDA in the mid-double-digit millions. Despite the negative net first-half result of CHF -29.8 million for the spun-off Paper Division, we expect to report a positive net result for the year as a whole,” says Peter Schildknecht, CEO of CPH Group AG.
The spinning-off of the Paper Division has changed the profile of the new CPH Group. The Group is now active in the chemistry and packaging segments, which both show sizeable potential for further growth. The CPH Group is already very well positioned with its strong Zeochem (chemistry) and Perlen Packaging (packaging) brands; and it can now focus more firmly on these to take full advantage of the above-average growth opportunities offered in niche markets worldwide.