EANS-News: Oxea GmbH / Oxea Sarl reports robust third quarter results

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quarterly report/9-month report

Luxembourg (euro adhoc) - Third quarter highlights: >> Net sales were
EUR382.8 million, up 4% from the prior year period >> Adjusted EBITDA
was EUR48.6 million versus EUR50.8 million in the prior year period
>> Operating Profit was EUR 43.9 million versus EUR 82,0 million
(included EUR 39.7 million net gain from divestures) in the prior
year period >> Net Income was EUR 21.9 million versus EUR 50.5
million (incl. divestures) in the prior period

Oxea Sarl, a leading global supplier of Oxo intermediate and Oxo
Derivatives, today announced third quarter net sales of EUR382.8
million, an increase of 4% compared with the corresponding period of
the prior year.

After a very strong first half year of 2011 with record performance
in both revenues and EBITDA, Oxea´s third quarter performance was
affected by the general seasonality of the industry and the overall
softening of the world economy. Notwithstanding the weak economic
trend in the US and European regions as well as in China, Oxea
achieved an Adjusted EBITDA of EUR48.6 million and increased revenues
compared with the corresponding period of the prior year, which again
underlines the robustness of the business model. Operating Profit and
Net Income of the prior year period included a net gain of some
EUR39.7 million on divestures. Under consideration of this
exceptional item Operating Profit of EUR43.9 million and Net Income
of EUR21.9 million in the third quarter of 2011 traded in line with
the prior year period. Adjusted EBITDA for the nine months ended
September 2011 amounted to EUR170.7million reflecting an increase of
29% 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.
After the refinancing in July 2010 net debt has been reduced to
around 2.0x Adjusted EBITDA on an LTM basis as a result of strong
cash generation and excellent operating performance.

In EUR million - Unaudited

Three months ended Nine months ended
September 30, September 30,
2011 2010 2011 2010
Net Sales 382.8 367.2 1,150.9 1,014.1
Gross Profit 48.5 56.7 171.5 145.6
SG&A (8.4) (13.9) (27.6) (35.9)
R&D (1.6) (1.3) (4.6) (4.2)
Other operating
income/(expense) 5.4 40.4 8.5 39.3
Operating Profit 43.9 82.0 147.8 144.8
Net Income 21.9 50.5 68.3 86.8

Adjusted EBITDA 48.6 50.8 170.7 132.7

Sales

Sales for the three months ended September 30, 2011 were EUR382.8
million, an increase of 4% compared with the corresponding period of
the prior year. Lower volumes were more than offset by the pass
through of higher raw material costs in sales prices to customers.
Overall, volumes were some 4.3% lower than in the corresponding
period of the prior year. Oxo Intermediates volumes were some 3.7%
and Oxo Derivatives 5.6% lower than the corresponding period of the
prior year driven by production outages and lower volumes sold to
European regions. Of our revenues for the three months ended
September 30, 2011, EUR176.0 million resulted from sales in Europe,
EUR120.0 million in North America and EUR86.8 million in the rest of
the world compared to EUR181.4 million, EUR113.2 million and EUR72.6
million respectively in the prior year period.

Gross profit Gross profit for the three months ended September 30,
2011 amounted to EUR48.5 million compared with EUR56.7 million in the
corresponding period of the prior year. This development is due to
lower volumes and increased raw material costs such that gross profit
amounted to 12.7% of sales compared with 15.4% in the corresponding
period of the prior year.

Selling general & administration expense (SG&A) SG&A expense for the
three months ended September 30, 2011 decreased to EUR8.4 million
compared with EUR13.9 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 third quarter of 2010.

Other operating income/(expense) *) Net other operating income for
the three months ended September 30, 2011 amounted to EUR5.4 million
compared with a net other operating income of EUR40.5 million in the
corresponding period of the prior year. The decrease is primarily
attributable to a net gain of some EUR39.7 million on divestures in
the third quarter of 2010 partly offset by an increased income from
site services.

Operating result Operating result for the three months ended
September 30, 2011 was EUR43.9 million compared with EUR82.0 million
in the corresponding period of the prior year period primarily as a
result of the net gain on divestures in the prior year period.

Financial result *) Net financial expense decreased to EUR10.8
million compared with EUR28.3 million in the corresponding period of
the prior year primarily as a result of costs incurred in connection
with the refinancing in July 2010 in the prior year period.

*) 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
expense for the quarter ended September 30, 2010 has been reduced by
EUR4.3 million and net financial expense has been increased by EUR4.3
million.

Net income Net income was EUR21.9 million compared with EUR50.5
million in the corresponding period of the prior year primarily
attributable to net gains from divestures in the prior year period
and higher income taxes partly offset by lower net financial expense
as mentioned above.

Adjusted EBITDA Adjusted EBITDA at EUR48.6 million compared with
EUR50.8 million in the corresponding period of the prior year was
driven by lower gross profit partly offset by lower operating
expenses.

Cash Flow The company continued to generate positive free cash flow
and during the first nine months of 2011 Oxea generated EUR78.1
million in cash from operating activities compared with EUR44.8
million in the corresponding period of the prior year. Increased
earnings were partly offset by higher income tax payments.

Cash used in investing activities was EUR21.6 million compared with
an inflow of EUR57.4 million driven by proceeds from divestures in
the amount of EUR 79.0 million in the corresponding period of the
prior year.

Cash used in financing activities in the amount of EUR130.4 million
was mainly driven by the optional redemption of 5% of the Senior
Secured Notes and a payment to shareholders. In the corresponding
period of the prior year cash used in financing activities was
EUR175.8 million whereby proceeds of EUR505.7 million from the bond
issue in July 2010 were used to repay existing bank debt and
shareholder loans.

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 September 2011, 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