Mixed earnings outlook in Europe for 1969 ICI and Shell say it Profits up average 24% on 19% higher sales in 1968 for 20 major West European chemical companies
won't be a bad year;
Millions of dollars
BASF, Bayer, and
Sales 1968
Hoechst predict growth With few exceptions, the chemical industry in western Europe had a good year in 1968. On average, sales rose more than 19% and profits jumped a healthy 24%, according to results in C&EN's listing (see table). But how the chemical industry will perform during 1969 isn't so clear. And for two main reasons. First, European companies are gen erally tight-lipped, compared to their U.S. counterparts: The Europeans rarely make projections of substance, at least, in public. Second, some com panies in western Europe are still wrestling with annual reports of the previous year when many U.S. com panies have issued their first-quarter results. Large international companies, such as Imperial Chemical Industries, Shell, and West Germany's Big Three, tend to be more forthcoming than the average European company. Both ICI and Shell think 1969 won't be a bad year, but neither will it be a good year. Badische, Bayer, and Hoechst are all predicting good growth in 1969. ICI's sales should increase by $240 million or 8.1% during I960, accord ing to chairman Sir Peter Allen. Prof its will go up too, but not as much as last year's 50% increase, he adds. As for Shell, earnings in the U.S. and Canada will be less than 10% above last year. Outside North America, the value of oil sales may well grow less than 7%, says David Barran, chairman of Shell Transport and Trading Co., Ltd. In addition, the group net in come is unlikely to increase as much as it did last year (24% ). For some U.K. companies, the out look is less than good. Mining and chemicals group Rio Tinto-Zinc antic ipates no change in profits for 1969. Earnings fell about 2% last year. Albright and Wilson also paints a lackluster picture for the current year. Profits in 1968 only just topped the previous year's figure. Trading profits may be up in 1969, but the stock holders won't see the cash because of higher interest and tax charges. Mean while, fibers company Courtaulds (whose year ends March 31) estimates 24 C&EN MAY 5, 1969
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$ 269 Albright & Wilson (U.K.) 215a AKU (Netherlands) l,395b BASF (West Germany) 1,931e Bayer (West Germany) d 154 Beecham (U.K.) 4,990 BP(U.K.) 617 Ciba (Switzerland) 1,200e Courtaulds (U.K.) 304 DSM (Netherlands) 635 Geigy (Switzerland) l,999 cf Hoechst (West Germany) 2,970 ICI (U.K.) 910 Monte Ed iso η (Italy) 698 Rio Tinto-Zinc (U.K.) 1,209 Rhone-Poulenc (France) 510 Sandoz (Switzerland) 13,000 Shell (U.K./Netherlands) 654 Solvay (Belgium) 639 Ugine-Kuhlmann (France) Unilever (U.K./Netherlands) 5,530
Per cent rise over 1967
Profits 1968
Per cent rise over 1967
6% 20 19 20 33 25 14 27 12 17 20 26 6 47 13 11 24 12 6 14
$ 7.7 22 85 89 15 243 11 96e 24 7.4 80 226 66 87 28 10 864 ΝΑ 15 206
Less than 1 % 96a 30 33 21 58 7.5 12 46 17 42 50 Less than 1 -2 12 12 35 20 -1 7.5
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a Parent company results; profits up 35% on 1966. b Sales less sales tax. c Sales plus value-added tax. f d Half-year results; year ends March 31. e Company forecasts; year ends March 31. Sales of parent plus controlled interests. Figures in bold face are consolidated results; all others are unconsolidated.
sales up more than 25%, yielding a profit ris,e of some 12% for 1968-69. But the outlook for the remainder of 1969 is shadowed by a shortage of ae rylonitrile in the U.K. Dutch State Mines in the Nether lands is fast moving out of mining into chemicals and petrochemicals— and making it pay. Profits in 1968 improved 46% on 12% higher sales, compared with the previous year. Performance for the first few months of 1969 gives cause for satisfaction, says Dr. A. C. J. Rottier, chairman of the managing directors' board. Re sults for the whole year are expected to be equally favorable, he adds, par ticularly for chemicals. DSM is in creasing sales of chemicals at a rate of 20% annually. Dutch fibers group Algemene Kunstzijde Unie will be very disappointed if this year's profit is not the same as the 1968 level, according to chairman Nic Soesbeek. AKU profits leapt 96% last year, and were 3 5 % above the 1966 level. But the static conditions of 1966-67 could return in the future, he says. Considerable capacity exten sions will be completed worldwide, as well as by AKU, at the end of this year and during 1970, Mr. Soesbeek adds.
First-quarter 1969 world sales of West Germany's Hoechst climbed 21.7% over the same period in 1968 to about $544 million. But Hoechst cannot expect to maintain this same high level throughout 1969, cautions president Karl Winnacker. World sales for the whole year will probably be up about 12%, he predicts. Off to a fast start, too, in 1969 were Bayer and Badische. Bayer posted group sales of $537 million in the first quarter, up 18.2%, while earnings of the parent company rose 19% to 23.5 million. The sales in crease for the entire year should be 12 to 15%, according to Bayer president Kurt Hansen. Badische group sales leaped 50.8% the first three months of this year to about $482 million—albeit in large part because of the acquisition of Wintershall last fall (C&EN, Nov. 18, 1968, page 18). Growth in sales ex cluding Wintershall amounts to 20.5%. Earnings, meanwhile, increased 23.3% to some $22 million. For the year Badische sees an increase of group sales of more than 40%. The in crease will largely come on the strength of the Wintershall acquisition. France's major chemical companies —Ugine-Kuhlmann, Rhône-Poulenc,
AffliHNOi SPECIAL F.D.A. CLEARED COMPOUNDS and Pechiney-Saint Gobain-are looking for a good year too in 1969, after coming off surprisingly well in 1968 in light of strikes by students and industrial workers that brought much of the French industry to a grinding halt last May. First-quarter nonconsolidated sales of Ugine-Kuhlmann amount to about $183 million, up 12%, and the firm is anticipating a 10% rise in sales for 1969. Rhône Poulenc hasn't released its first-quarter figures and says only that they were "very satisfactory." As for the year, the chemicals and fibers firm is anticipating a rise in sales and earnings similar to last year's-about 12 to 1 3 % . Pechiney-Saint Gobain, with nonconsolidated sales up 5.6% in 1968 to about $330 million, says only that it hopes for a better year in 1969. The firm hasn't revealed its 1968 earnings figures yet and doesn't give quarterly results. Italy, meanwhile, is one big question mark. Montecatini Edison's performance in 1968, particularly in the profit column, was somewhat less than spectacular. Critics of the chemical giant cite an increase of 6.3% in sales and less than 1% rise in profits as further evidence of the company's serious management problems and the need for the Italian government's intervention last year (C&EN, Nov. 25, 1968, page 11). No first-quarter figures» are available. Anic, petrochemical subsidiary of Italy's government-owned oil and chemical firm Ente Nazionale Idrocarburi, had net sales in 1968 of about $240 million, up 10%. Earnings increased about 6%. E N I doesn't give quarterly figures. Neither MonteEd nor ENI is commenting on the outlook for 1969. None of Switzerland's Big Three chemical firms-Ciba, Geigy, and S andoz—reveal quarterly results although Geigy and Sandoz do release semiannual figures. Ciba tells C&EN it expects sales growth in 1969 to be about the same as in 1968 (up 1 4 % ) . As for profits, "We hope to hold the line." Geigy is forecasting an increase in sales of about 11%. Sandoz says only that it is "rather optimistic" about this year.
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