EANS-News: Oxea GmbH / Oxea Sarl reports strong second quarter results

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3-month report

Luxembourg (euro adhoc) - Second quarter highlights:

>> Net sales were EUR391.2 million, up 9% from the prior
year period
>> Operating Result was EUR46.6 million versus EUR37.9 million
in the prior year period
>> Net Income was EUR16.4 million versus EUR23.3 million in
the prior year period
>> Adjusted EBITDA was EUR56.4 million versus EUR47.2 million
in the prior year period
>> Completed optional redemption of 5% of Senior Secured Notes

Oxea Sarl, a leading global supplier of Oxo Intermediates and Oxo
Derivatives, today announced second quarter net sales of EUR391.2
million, an increase of 9% compared with the corresponding period of
the prior year.

Oxea´s strong performance in the second quarter once again underlines
the robustness of the business model. Continued recovery in the US
and European regions more than offset lower export sales to Asia and
contributed to the strong set of results. Operating profit at EUR46.6
million was some 23% above the corresponding period of the prior
year. Q2 2011 Adjusted EBITDA at EUR56.4 million was some 19% above
the corresponding period of the prior year. Adjusted EBITDA for the
six months ended June 2011 amounted to EUR122.2 million reflecting an
increase of 49% from the corresponding period of the prior year and
underlines the continued excellent relationships with customers and
the contribution of Oxea´s employees to the success of the business.
Strong cash generation allowed Oxea to exercise an option to redeem
5% of the Senior Secured Notes and make a payment to shareholders.
After the refinancing in July 2010 net debt has been reduced to
around 2.0x Adjusted EBITDA on an LTM basis. LTM Adjusted EBITDA now
stands at EUR 218 million.

In EUR million - Unaudited

Three months ended Six months ended
June 30, June 30,
2011 2010 2011 2010
Net Sales 391.2 357.6 768.2 647.0
Gross Profit 54.9 54.8 123.0 88.9
SG&A (8.8) (14.4) (19.2) (22.1)
R&D (1.5) (1.4) (3.1) (2.9)
Other operating
income/(expense) 2.0 (1.1) 3.1 (1.1)
Operating Profit 46.6 37.9 103.8 62.8
Net Income 16.4 23.3 46.4 36.3

Adjusted EBITDA 56.4 47.2 122.2 81.9

Sales
Sales for the three months ended June 30, 2011 were EUR391.2 million, an
increase of 9% compared with the corresponding period of the prior year. Lower
volumes were more than offset by improved product mix and the pass through of
higher raw material costs in sales prices to customers. Overall, volumes were
some 1.1% lower than in the corresponding period of the prior year. Oxo
Intermediates volumes were some 2.8% lower than the corresponding period of the
prior year driven by production outages and lower Asian export volumes whilst
volumes in Oxo Derivatives increased by some 4.9%. Of our revenues for the three
months ended June 30, 2011, EUR212.3 million resulted from sales in Europe,
EUR116.7 million in North America and EUR62.2 million in the rest of the world
compared to EUR180.4 million, EUR99.3 million and EUR77.9 million respectively
in the prior year period.

Gross profit Gross profit for the three months ended June 30, 2011
amounted to EUR54.9 million compared with EUR54.8 million in the
corresponding period of the prior year. The impact of lower volumes
was offset by lower manufacturing fixed costs.

Selling general & administration expense (SG&A) SG&A expense for the
three months ended June 30, 2011 decreased to EUR8.8 million compared
with EUR14.4 million in the corresponding period of the prior year.
The decrease is primarily attributable to higher consulting fees in
relation to projects and higher personnel costs including accruals
for employee bonuses in the second quarter of 2010.

Other operating income/(expense) *) Net other operating income for
the three months ended June 30, 2011 amounted to EUR2.0 million
compared with a net other operating expense of EUR1.1 million in the
corresponding period of the prior year. The increase is primarily
attributable to an increased income from site services.

Operating result Operating result for the three months ended June 30,
2011 was EUR46.6 million compared with EUR37.9 million in the
corresponding period of the prior year period as a result of lower
SG&A expenses and increased income from site services.

Financial result *) Net financial expense increased to EUR16.8
million compared with EUR2.1 million in the corresponding period of
the prior year primarily as a result of higher interest expense from
the refinancing in July 2010 and lower net exchange gains.

*) Prior year numbers have been adjusted to reflect the
reclassification of net foreign exchange gains and losses from other
operating income to financial result. As a result, other operating
income for the quarter ended June 30, 2010 has been reduced by EUR2.8
million and net financial expense has been increased by EUR2.8
million.

Net income Net income was EUR16.4 million compared with EUR23.3
million in the corresponding period of the prior year. Improved
operating profit was more than offset by increased financial expense
and higher income taxes.

Adjusted EBITDA Adjusted EBITDA at EUR56.4 million compared with
EUR47.2 million in the corresponding period of the prior year driven
by lower operating expenses and improved other operating income.

Cash Flow The company continued to generate positive free cash flow
and during the first six months of 2011 Oxea generated EUR48 million
in cash from operating activities compared with EUR14 million in the
corresponding period of the prior year. Increased earnings and an
improved trade working capital position were partly offset by higher
income tax payments.

Cash used in investing activities was EUR12.5 million compared with
EUR14.5 million in the corresponding period of the prior year driven
by the timing of capital expenditure.

Cash used in financing activities was EUR104.5 million compared with
EUR35.4 million in the corresponding period of the prior year driven
by higher interest payments, the optional redemption of 5% of the
Senior Secured Notes and a payment to shareholders.

Oxea is a global manufacturer of Oxo Intermediates and Derivatives
such as alcohols, polyols, carboxylic acids, specialty esters and
amines. These products are sold in the merchant market (where sales
are to third party customers) and used for the production of
high-quality coatings, lubricants, cosmetic and pharmaceutical
products, flavorings and fragrances, printing inks and plastics. In
the 12 months ending June 2010, Oxea generated revenue of about
EUR1.5 billion with its approximately 1,350 employees in Europe, the
Americas and Asia.

Forward looking statements * This document contains financial
information regarding the businesses and assets of OXEA S.à r.l. (the
"Company") and its consolidated subsidiaries (the "Group"). Such
financial information has not been audited, reviewed or verified by
any independent accounting firm. The inclusion of such financial
information in this document or any related presentation should not
be regarded as a representation or warranty by the Company, any of
its respective affiliates, advisors or representatives or any other
person as to the accuracy or completeness of such information´s
portrayal of the financial condition or results of operations by the
Group. * This document may contain information, data and predictions
about our markets and our competitive position. While we believe this
data to be reliable, it has not been independently verified, and we
make no representation or warranty as to the accuracy or completeness
of such information set forth in this document. Additionally,
industry publications and reports from which such information, data
or predictions may be obtained generally state that the information
contained therein has been obtained from sources believed to be
reliable but that the accuracy and completeness of such information
is not guaranteed and in some instances state that they do not assume
liability for such information. We cannot therefore assure you of the
accuracy and completeness of such information and we have not
independently verified such information. In addition, we have made
statements in this document regarding our industry and position in
the industry based on our experience and our own investigation of
market conditions. We cannot assure you that the assumptions
underlying these statements are accurate or correctly reflect the
state and development of, or our position in, the industry, and none
of our internal surveys or information has been verified by any
independent sources. * Certain statements in this document are
forward-looking. By their nature, forward-looking statements involve
known and unknown risks and uncertainties because they relate to
events and depend on circumstances that may or may not occur in the
future. Forward-looking statements are not guarantees of future
performance. These factors include, among others: the cyclical and
highly variable nature of our business and its sensitivity to changes
in supply and demand; adverse and uncertain global economic
conditions; the highly variable nature of raw materials costs and any
loss of key suppliers or supply shortages or disruptions; the
competitive nature of our industry; the ability to comply with
current or future laws and regulations relating to environmental,
health and safety matters as well as the safety of our products,
related costs of maintaining compliance and addressing liabilities as
well as risks relating to compliance with antitrust and tax laws; our
reliance on a limited number of suppliers for certain of our key raw
materials; operational risks, including the risk of environmental
contamination and potential product liability claims; operational
interruptions at our facilities due to events that are outside of our
control such as severe weather conditions, unscheduled downtimes,
terrorist attacks, natural disasters or other events that may
interrupt or damage our operations or the impact of scheduled outages
on our results of operations; the risk that our insurance coverage
may not be sufficient to cover all risks; risks relating to the
global nature of our operations, including, among others,
fluctuations in exchange rates; the loss of major customers or key
customers for certain of our products; the loss of key personnel;
risks relating to acquisitions and dispositions, including any
impairment risks with respect to historical acquisitions, our ability
to successfully integrate acquired businesses, and unexpected
liabilities relating to such acquisitions or contingent liabilities
in connection with such dispositions; the requirement to make further
contributions to our pension schemes; the failure to protect our
intellectual property rights; limitations on our ability to adjust
the quality of certain products that we manufacture; and potential
conflicts of interests with our principal shareholder. * These and
other factors could adversely affect the outcome and financial
effects of the plans and events described herein. Forward-looking
statements contained in this document regarding past trends or
activities should not be taken as a representation that such trends
or activities will continue in the future. New risks can emerge from
time to time, and it is not possible for us to predict all such
risks, nor can we assess the impact of all such risks on our business
or the extent to which any risks, or combination of risks and other
factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Neither the Company nor
the Group undertakes any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. You should not place undue reliance on
forward-looking statements, which speak only as of the date of this
document.

Use of non IFRS financial information: * EBITDA is defined as net
income for the year before financial result, income taxes,
depreciation and amortization. EBITDA, is a supplemental measure of
our performance and liquidity that is not required by or presented in
accordance with IFRS. EBITDA is not a measurement of our financial
performance or liquidity under IFRS and should not be considered as
an alternative to profit for the period presented, results from
operating activities or any other performance measures derived in
accordance with IFRS or as an alternative to cash flow from operating
activities as a measure of our liquidity. We believe EBITDA
facilitates operating performance comparisons from period to period
and company to company by eliminating potential differences caused by
variations in capital structures (affecting interest expense), tax
positions (such as the impact on periods or companies of change in
effective tax rates or net operating losses) and the age and book
value and amortization of tangible and intangible assets (which have
an effect on related depreciation expense). We also present EBITDA
because we believe it is frequently used by securities analysts,
investors and other interested parties in the evaluation of similar
issuers, the majority of which present EBITDA when reporting their
results. Finally, we present EBITDA as a measure of our ability to
service our debt. * Adjusted EBITDA is defined as EBITDA adjusted to
remove the effects of certain non-cash and non-recurring expenses and
charges. Adjusted EBITDA is a supplemental measure of our performance
and liquidity that is not required by or presented in accordance with
IFRS. Adjusted EBITDA is not a measurement of our financial
performance or liquidity under IFRS and should not be considered as
an alternative to profit for the period presented, results from
operating activities or any other performance measures derived in
accordance with IFRS or as an alternative to cash flow from operating
activities as a measure of our liquidity. We believe Adjusted EBITDA
facilitates operating performance comparisons from period to period
and company to company by eliminating certain non-recurring expenses
and charges. We also present Adjusted EBITDA because we believe it is
frequently used by securities analysts, investors and other
interested parties in the evaluation of similar issuers. Finally, we
present Adjusted EBITDA as a measure of our ability to service our
debt.

Further inquiry note:
Bernhard Spetsmann
Managing Director (Finance, IT)
bernhard.spetsmann@oxea-chemicals.com

Birgit Reichel
Global Communications
birgit.reichel@oxea-chemicals.com

end of announcement euro adhoc
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company: Oxea GmbH
Otto-Roelen-Straße 3
D-46147 Oberhausen
phone: +49(0)208 693 3112
FAX: +49(0)208 693 3101
mail: birgit.reichel@oxea-chemicals.com
WWW: http://www.oxea-chemicals.com
sector: Chemicals
ISIN: XS0523636594
indexes:
stockmarkets: Open Market: Frankfurt
language: English