Press Release: HELM Group – 2017 Results

HELM improves earnings significantly

Hamburg, 22 May 2018

2017:

  • Global revenue: EUR 7.4 billion (up 7%)
  • EBITDA: EUR 46.7 million (up 131%)
  • Consolidated net profit: EUR 18.4 million (2016: EUR –15.6 million)

In 2017, the HELM Group generated a satisfactory result for the financial year from its core business before earnings from associated companies. Improved operating performance produced an increase in revenue of around half a billion euros.
Global revenues totalled EUR 7.4 billion (2016: EUR 6.9 billion).

A generally robust economy and favourable market conditions helped the positive development of the HELM Group. The oil price continued to recover and closed 2017 at about USD 66 per barrel. Prices for chemical products rose as a result.

The Group was again able to expand its trading margin, resulting in a considerably higher gross profit on products compared to the previous year. Of the business lines, Chemicals and Pharma made a major contribution to the improvement in earnings last year.

Overall, the satisfactory result of operations of the HELM Group was again diminished by losses from associated companies.

The Group closed the year with a net profit of EUR 18.4 million (2016: EUR –15.6 million).

Hans-Christian Sievers, chairman of the Executive Board of HELM AG, comments: ‘I am delighted to see the positive performance and improvement in earnings. We have demonstrated our ability to get quickly back on track after a hard year, as 2016 proved to be. And we have been able to drive our business lines forwards. With new contracts and collaborative agreements signed, I look to the coming years with optimism.’

Group result: performance in figures

- All figures in million EUR - 2017 2016 2015
REVENUES      
- Global revenues 7,445 6,935 8,498
  (+7%) (-18%)  
- External revenues 4,111 3,867 4,540
  (+6%) (-15%)  
PROFIT      
- EBITDA 46.7 20.2 70.6
  (+131%) (-71%)  
- Earnings before taxes 24.8 2.8 57.0
  (+786%) (-95%)  
- Consolidated net income 18.4 -15.6 35.5
- Cash flow from operations 100.0 19.2 70.9
  (+421%) (-73%)  
       

Europe was the HELM Group’s main sales market in 2017, with a share of 59.4%, followed by America with a share of 26.1% and Asia with 13.7%.

Equity amounted to EUR 727 million (2016: EUR 763 million). The decrease is solely due to exchange-rate effects, caused by the devaluation of the US dollar versus the euro. The Group has a very good equity ratio of 49.3% (2016: 51.8%). Its independence and stability are therefore assured.

Business area performance in summary

Chemicals: Feedstocks and Derivatives

Operating in a positive market environment with rising product prices, HELM was able to improve consolidated revenues to around EUR 2.6 billion in 2017 (2016: EUR 2.3 billion), equivalent to an increase of 13%. Higher margins proved possible for a number of products.

Feedstocks volumes, particularly methanol, decreased slightly, whereas propylene and ethylene glycol business performed well, enabling HELM to increase trading volumes. Overall, Feedstocks products generated good earnings.

Derivatives generated a satisfactory result in both solids and liquid chemicals. Performance by the Acids and Lyes business, which HELM has been expanding strongly since 2014, was particularly encouraging.

With its share of 63.8%, Chemicals contributes more to revenues than any other business line throughout the HELM Group.

Fertilizer

Last year, Fertilizer business was again challenged by very volatile product prices. Added to which, inclement weather conditions delayed the start of what turned out to be a poor spring season in the northern hemisphere.

Overall, HELM Fertilizer was able to increase trading volumes slightly. With prices weakening on the fertilizer market, however, revenue decreased by 5% to EUR 922 million (2016: EUR 973 million). Margins did not improve as well as expected.

On the positive side, capacity utilisation at HELM’s own blending facility in Howdendyke, UK, was good. HELM also continued to focus on steadily expanding its distribution business in 2017. These efforts included renting a new tank in Argentina.

With its share of 22.4%, Fertilizer is the second-largest contributor to revenues throughout the HELM Group.

Crop Protection

The Crop Protection business was faced with markets exhibiting weak growth momentum overall in 2017. Supply bottlenecks also occurred, caused by the shutdown of production facilities in China on grounds of environmental and safety regulations. HELM welcomes these moves towards stricter environmental standards.

In light of these developments, HELM Crop Protection performed satisfactorily. Revenue was on a par with the prior year at EUR 262 million (2016: EUR 260 million).

The main sales markets are Europe and North and South America.

Pharma

HELM Pharma again improved its result of operations despite slightly declining revenue. Revenues totalled EUR 192 million (2016: EUR 206 million).

The gratifying results achieved in Hamburg and by HELM de México are worthy of particular mention. Richter HELM Biologics – the joint venture that develops biosimilars – also produced a very good result.

HELM Pharma is focusing increasingly on expanding its portfolio by developing complex pharmaceuticals. In 2017, HELM secured its access to the inhalation segment.

HELM International

With over 100 subsidiaries in more than 30 countries, HELM is internationally structured. In the past financial year, the subsidiaries managed by the HELM International business unit generated very good, stable income. A sales office was opened in Bangkok, Thailand, in 2017.

Human resources

In 2017, the total number of employees in the global HELM organisation increased. As at 31 December 2017, HELM employed 627 (623) staff in Hamburg, 688 (684) in Germany and 1,521 (1,495) in total worldwide, including participations.

Outlook for 2018

HELM made a good start to the 2018 financial year, with a very positive performance in the first quarter. Overall, the economic climate is favourable, with a strong oil price keeping prices for chemicals stable.

Natgasoline LLC in Beaumont, Texas, USA – a methanol plant in which HELM owns a stake – will soon be starting up. As a result, HELM will be able to significantly increase its methanol volumes and further expand its already strong market position.

Associates are developing well. HELM expects business to progress satisfactorily, with a further improvement in earnings compared to 2017.

About HELM

HELM AG is a family-owned company based in Hamburg, Germany, that has been in business for over 117 years. As a multifunctional sales and distribution organisation, HELM is active in the chemicals industry (feedstocks and derivatives), the crop protection industry, the active pharmaceutical ingredients and pharmaceuticals industries, and in the fertilizer industry. HELM is one of the world’s largest chemicals marketing companies and guarantees access to the world’s key markets through its specific regional knowledge and over 100 subsidiaries, sales offices and participations in over 30 countries.

Sophie Saul

Sophie Saul

Head of Public Relations & Corporate Communications

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