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IMCD N.V., a leading distributor of speciality chemicals and ingredients, today announces its full year 2021 results.
- Revenue growth of 24% to €3435M (+25% on constant currency basis)
- Gross profit growth of 29% to €836M (+30% on a constant currency basis)
- Operating EBITA increase of 54% to €374M (+55% on a constant currency basis)
- Net result for the year increase of 73% to €207M (+74% on a constant currency basis)
- Cash earnings per share increased by 53% to €4.64 (2020: €3.03)
- Dividend proposal of €1.62 in cash per share (2020: €1.02)
Piet van der Slikke, CEO: "I am pleased to report a year of record growth: operating EBITA increased by 54% and cash earnings per share by 53%. In 2021, all our regions and business segments showed strong growth, both organically and as the result of strategic acquisitions. I want to specifically mention the strengthening of our business in Mexico, Central America, China and Indonesia, that position us well to serve our customers and suppliers in these attractive markets. Our teams have worked tirelessly to maintain supply to our customers, overcoming challenges that persisted in 2021. The economic environment is still favourable for us and we are quite optimistic about further growth for our Group."
The year 2021 can be characterised as another challenging year, with strong growth in a dynamic environment. Although the pandemic continued to pose unprecedented challenges for our people and the communities where we operate, the dedication, resilience and flexibility of our teams and the solid fundamentals of our business model resulted in a strong performance. Compared with 2020, many of the economies we operate in showed a strong rebound in growth in 2021. Global shipping disruptions and input shortages kept the industry from expanding production in line with the rapid growth in demand for manufactured goods. The imbalance between strong demand and supply at the global levels, has intensified shortages and led to price volatility, affecting many countries and sectors.
Compared with 2020, revenue increased by 24% to €3435.3M in 2021. On a constant currency basis, revenue growth is 25% and consists of organic growth (+16%) and the impact of the first-time inclusion of acquisitions (+9%).
The overall organic revenue development was shaped by the balance of local macroeconomic circumstances, further strengthening of the product portfolio by adding new suppliers, expanding relationships with existing suppliers and increasing customer penetration by adding new products and selling more products to existing and new customers.
Gross profit, defined as revenue less cost of materials and inbound logistics, increased by 29% from €647.5M in 2020 to €836.3M in 2021. The increase in gross profit on a constant currency basis is 30% and consists of organic growth (21%) and the impact of the first-time inclusion of acquisitions (9%).
Gross profit as a % of revenue increased by 1.0%-point from 23.3% in 2020 to 24.3% in 2021. All regions contributed to the improved gross profit margin in 2021. Gross profit margins showed the usual level of differences in margins per region, per product and per product market combination. Differences between and within the regions are caused by local market circumstances, product mix variances, product availability, foreign currency fluctuations and the impact of newly acquired businesses.
Operating EBITA increased by €130.4M (54%) from €243.2M in 2020 to €373.6M in 2021. On a constant currency basis, the increase in operating EBITA is 55%, consisting of organic growth of 35% and the impact of the first-time inclusion of acquisitions completed in 2020 and 2021 of 20%.
Operating EBITA as a % of revenue increased by 2.1%-point from 8.8% in the 2020 to 10.9% in 2021.
Developments by operating segments
In 2021, the revenue in the EMEA region increased by 21% compared with 2020, consisting of organic revenue growth (+18%) and the impact of the first-time inclusion of acquisitions completed in 2020 and 2021 (+3%). The acquisition impact of 3% relates to Zifroni and Kokko-Fiber in 2020, and Ejder Kimya, Peak International and Siyeza in 2021. 4 In addition to the acquisitions completed 2021, on 22 December 2021 IMCD signed an agreement to acquire 100% of the shares in Polychem Handelsges.m.b.H. ("POLYchem”), a leading provider of chemical raw materials and additives in Austria and Southeast Europe. POLYchem offers a diverse portfolio of products for the coatings, construction, and composite industries. POLYchem has 65 employees and generated revenue of €25M in 2020. The transaction was closed on 8 February 2022.
Gross profit increased by 22%, from €337.4M in 2020 to €411.7M in 2021. The gross profit growth consists of organic growth (+20%) and the impact of the first-time inclusion of acquisitions (+2%). Despite the challenging market conditions, including the impact of the COVID-19 pandemic and supply chain issues, in many EMEA countries, IMCD successfully added new suppliers and further expanded its relationships with existing suppliers in new territories and with additional business lines.
In the Americas segment, revenue was €1119.6M in 2021 compared with €945.1M in 2020 (+18%). In 2021, organic revenue growth was 16% and growth as a result of acquisitions completed in 2020 (VitaQualy, Millikan and Banner Química) and 2021 (Siliconas, Andes Chemical and Maquimex) and the divestment of the Nutri Granulations business in the US, was 6%.
In 2021, the Americas segment reported a gross profit increase of €46.3M (+23%) to €250.5M, compared with €204.2M in 2020. On a constant currency basis, the increase in gross profit is 26%, consisting of organic growth (+21%) and the impact of the first-time inclusion of acquired companies (5%).
In Asia Pacific, revenue increased by 42% from €502.9M in 2020 to €714.1M in 2021. On a constant currency basis, revenue growth in 2021 was 39% which consists of organic growth of 9%, and 30% growth as a result of acquisitions completed in 2020 (Develing and Signet) and 2021 (Yuanhe).
IMCD continued to execute its selective acquisition strategy, which led to two acquisitions in the Asia Pacific region in 2021. In addition to the acquisition of the Yuanhe (China) completed in June 2021, IMCD acquired 70% of the shares in PT Megasetia Agung Kimia (”Megasetia”) on 21 December 2021. Megasetia is a distributor of speciality ingredients for the pharmaceutical industry, has 160 employees and generated revenue of approximately €80M in 2021. The remaining 30% of the shares in Megasetia will be acquired in 2025 by the latest. In additions to the two closed transactions in 2021, IMCD signed three acquisition agreements in the fourth quarter of 2021.
In 2021, gross profit increased by 64%. On a constant currency basis, gross profit growth was 61%, consisting of 19% organic growth and 42% growth as a result of the first time inclusion of businesses acquired in 2020 and 2021. The gross profit margin increased by 3.3%-point from 21.1% in 2020 to 24.4% in 2021. The gross profit margin increase is the result of gross margin improvement initiatives, changes in the product mix and the impact of the first time inclusion of acquired businesses with gross margins higher than IMCD’s average.
IMCD operates in different, often fragmented market segments in multiple geographic regions, connecting many customers and suppliers across a very diverse product range. In general, results are impacted by macroeconomic conditions and developments in specific industries.
Results can be influenced from period to period by, among other things, the ability to maintain and expand commercial relationships, the ability to introduce new products and start new customer and supplier relationships and the timing, scope and impact of acquisitions. IMCD’s consistent strategy and resilient business model has led to successful expansion over the years and IMCD remains focused on achieving earnings growth by optimising its services and further strengthening its market positions.
Despite the impact of the COVID-19 restrictions on the economic situation, IMCD delivered strong results in 2021. Unfortunately, the uncertainty about the duration of the COVID-19 crisis and its impact on the global economy continued for longer than expected and recovery comes with new challenges, such as volatile product availability and demand, and serious supply chain disruptions. Nevertheless, IMCD is a strong, resilient and well diversified business with a robust liquidity position and capital structure. IMCD’s people have shown great flexibility and creativity to counter the challenges that appeared and have proven their ability to achieve excellent results.
IMCD sees interesting opportunities to further increase its global footprint and expand its product portfolio both organically and by acquisitions.