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Ciba's sales & profitability impacted by collapse in demand in Q4
12
Mar '09
Ciba announced the financial results for full year 2008. Brendan Cummins, Chief Executive Officer comments: “We faced some significant challenges in 2008, with raw material costs reaching unprecedented levels in the first half and a dramatic drop in demand towards the end of the year, as the economic downturn took hold."

"We have acted quickly to mitigate the effect of these factors; reducing capacity and inventory levels, as well as limiting capital expenditure and keeping costs to a minimum. Despite these difficult business conditions, we are well ahead with our Operational Agenda program and have been able to reduce costs throughout the organization. We have also substantially increased sales prices, which have offset much of the impact of higher raw material costs experienced in the first half of the year.”

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Update on the offer from BASF to acquire Ciba: In September 2008, the Board of Directors recommended a CHF 50 per share public offer from BASF to shareholders to acquire Ciba Holding Inc. The offer was accepted by shareholders in November – more than 95 percent of the Company's shares are tendered to, or have been acquired by, BASF.

In addition, the shareholder voting restrictions were lifted at the Extraordinary General Meeting on December 2, 2008, on condition that the offer is settled. There are still outstanding regulatory approvals from the competition authorities required before BASF can take full control of Ciba, but these are expected to come through in time to close the transaction in the first quarter of 2009.

Outlook
Brendan Cummins, Chief Executive Officer comments: “The outlook for the economy over the next few months is very unclear. Raw material costs have started to ease, but we are not expecting market demand to show any meaningful recovery until late in 2009 at the earliest. Our focus is to make sure our production capacity is well balanced with the reduced demand, and that the fundamental structures of our business are fully optimized. We will also continue to focus on maximizing our innovation potential and making sure our businesses are well positioned in their customer markets for an upturn in demand whenever it may come.”

Ciba


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