Skin care product sales up at Cognis

Sales of care chemicals were up 3 per cent in the first half of
this year at German company Cognis, which said the increase to €577
million was driven largely by the skin care and fatty alcohol
businesses.

The unit, which made more than a third of the group's sales, also targets the hair care, body cleansing, oral care and detergents markets. It has recently launched an ingredient for men with sensitive skin.

However the improvement in sales was partially offset by higher raw material costs, said Cognis, and this trend will continue to affect results for the coming year.

The firm, owned by private equity groups, is also facing "uncertain global economic growth…and volatility in the US-dollar/euro exchange rate", it warned.

Other units, including Nutrition & Health and Functional Products saw good growth (functional products sales were up 12.7 per cent), but recent restructuring measures took their toll on earnings. Compared to the previous year's first half, EBITDA decreased 10.2 per cent to €167 million, although the 2003 six-month period did include €24 million made on the sale of the fragrances business to Kao last year.

Excluding the impact of currency effects - put at €6 million - adjusted EBITDA came to €197 million with a profit margin rising from 11.5 per cent to 12.6 per cent, according to the group.

Dr Antonio Trius, chief executive officer of Cognis, commented: "While supported by an improved trading environment in America and Asia, the results also show that our restructuring initiatives are bearing fruit."