Press Release: HELM Group – 2019 Results

HELM Group reports stable revenues. Earnings burdened by external factors and losses from associated companies.

Sophie Oldenburg

Sophie Oldenburg

Corporate Communications

sophie.oldenburg@helmag.com vCard

Hamburg, 9 June 2020

Full financial year results 2019:

  • External revenues: EUR 5.0 bn
  • Pharma Business Line launches a total of seven new generic medications in the market
  • Regional presence in North America decisively bolstered by acquisition in fertilizer sector

The HELM Group was not able to continue its growth trajectory in 2019. External revenues remained stable at EUR 5.016 bn, however.

Positive forecasts for 2019 were significantly dampened by a sharp drop in chemical prices in the first quarter. The escalating trade war between the USA and China over the course of last year, compounded by volatile oil prices, also had clearly negative impacts on HELM Group 2019 earnings. Both Business Lines Fertilizer and Crop Protection had to contend with exceptional circumstances due to climatic conditions. In addition, production issues at the Natgasoline Methanol plant in Beaumont, Texas (USA), coupled with extraordinary write-downs of the participations in Trinidad and Tobago, lead to an overall unsatisfactory result for the HELM Group.

Stephan Schnabel, co-owner of the company and Chairman of the HELM Group Executive Board as of April 2020, nevertheless emphasises that there still was the one or the other positive development during the past year: “Despite the challenging circumstances we succeeded in further strengthening the foundation for long-term growth in the Group. Our enduring business relationships and partnerships are a keystone for our business going forward.”

“One example of this is an acquisition in the USA that will significantly increase HELM’s access to the world’s largest sales region for fertilizers and which will also have a positive impact on our Crop Protection business. In the Pharma Business Line, amongst others the partnership with our participation Phargentis S.A. will be a core success driver”, Stephan Schnabel adds.

Consolidated result: performance in figures

- All figures in million EUR -201920182017
Revenues
- External revenues5,016
(-2%)
5,106
(+24%)
4,111
(+6%)
Earnings
- EBITDA- 29.8
(-127%)
112.3
(+140%)
46.7
(+131%)
- Earnings before taxes- 66.0
(-170%)
95.5
(+285%)
24.8
(+786%)
- Consolidated net income- 66.866.118.4

Europe was the HELM Group’s main sales market in 2019, with a share of 52.9% of revenues, followed by America with a share of 29.6% and Asia with 16.8%.

A slight decrease in equity was reported due to the negative consolidated result and amounted to EUR 692 million (previous year: EUR 779 million). The Group continues to have a very healthy equity ratio of 41%, thus assuring its continued independence and stability.

Business Line performance overview

Chemicals: Feedstocks, Derivatives, and Methanol

The Business Line Chemicals contributes more to revenues than any other business line throughout the HELM Group. Despite a very challenging market environment resulting from extremely low price levels, HELM was able to further expand volume sales and thus its market share, generating revenues of EUR 3.7 billion (previous year: EUR 3.7 billion), which corresponds to the previous year. Nevertheless, the earnings of the Business Line Chemicals declined sharply due to the fall in prices.

On the product level, however, Chemicals can point to individual successes. For example, the 2019 financial year was the HELM Group’s best year on record in Europe for the Acids and Lyes product line. Here, further investments were made in logistics and warehousing in Europe.

Crop Protection

The overall economic environment for the Crop Protection Business Line remained difficult throughout the past year. Due to various extreme weather phenomena in the USA and Brazil, these markets’ respective crop protection business seasons shifted, or were in some cases completely absent. These external influences meant that the Business Line Crop Protection was unable to drive business satisfactorily and generated sales revenues of EUR 267 million (previous year: EUR 290 million), thus remaining close to the previous year's level.

Despite the challenging environment, the Crop Protection business went well in Brazil and Mexico. Both country markets reported an increase in revenue thanks to new product approvals and the expansion of business with existing customers. The deepening of the cooperation with Japanese business partners was particularly encouraging, with whom HELM launched two further innovative products in the market: the herbicide Tolpyralat in Mexico, and the insecticide Flonicamid in Colombia. HELM thus continues to position itself as an innovative solution provider.

Fertilizer

The 2019 financial year once again presented the fertilizer industry with great challenges. This is particularly true in the USA, the most important single market, where the largest floods in recent decades have led to a significant drop in demand. However, the Business Line Fertilizer was able to maintain sales revenues at the previous year's level of EUR 737 million (previous year: EUR 760 million) through functional distribution business.

HELM continued to expand its fertilizer business last year. In May 2019, the fertilizer business of CGB Enterprises, Inc. in the USA was acquired. With this acquisition HELM expanded its fertilizer business by eight additional terminals. HELM is now one of the market leaders for fertilizer distribution in the USA with a warehouse capacity of 760,000 metric tonnes.

Pharma

HELM Pharma again improved its operating results, with sales revenues totalling EUR 226 million (previous year: EUR 202 million).

HELM successfully launched a total of seven new generic medications in 2019 together with its partners. Among the highlights was the European launch of HELM’s first biosimilar, a generic version of a biotechnologically produced (‘biologic’) drug with Teriparatide as the active ingredient, an effective medication for patients with severe osteoporosis.

A total of EUR 42 million was invested in this 7-year development. The market launches in Japan and Korea will take place in 2020.

HELM's development pipeline of generic drugs is well stocked for the coming years. In the field of respiratory diseases alone there are currently four highly specialised products in development as a result of cooperation with HELM's participation Phargentis S.A. (Lugano, Switzerland).

Human Resources

In 2019, the average total number of employees in the global HELM organisation increased slightly. HELM employed 662 (2018: 631) people in Hamburg and a global total of 1,684 (2018: 1,663), including participations.

Outlook for 2020

The general economic outlook for 2020 is uncertain. Due to the prevalent pandemic and massive restrictions in almost all areas, which are increasingly impacting economic developments worldwide and which have never before occurred in this form, a forecast for the coming financial year is very difficult to determine. Our expectations for the upcoming financial year are therefore very conservative.

Under these circumstances HELM is acting especially prudently, with the focus on transacting existing business in a reliable way. In this difficult market environment, the HELM Group's experience as a global marketer with detailed local knowledge, alongside the broad positioning of its products and markets, offers significant opportunities in comparison with its competitors.

About HELM

HELM AG is a family-owned company headquartered in Hamburg, Germany and with a 120-year business tradition. As a multifunctional marketing organization HELM is active in the chemicals industry, in crop protection, in pharmaceuticals and in fertilizers. Today HELM is one of the world’s largest chemicals marketing companies and secures access to the world’s key markets through its specific regional knowledge and over 100 subsidiaries, Sales Offices and participations in over 30 countries.