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Sigma-Aldrich Q4 Profits Up 7.4%; Plans Emerging Market Expansion
Posted: February 8, 2013
Sigma-Aldrich Corp.'s fourth-quarter profits rose 7.4% as The Asia-Pacific, Latin America region emerged as its largest growing region.
The company, which recently realigned itself into three business units, also plans for further expansion in Russia, the Middle East and Africa.
For the fourth-quarter, Sigma-Aldrich posted earnings of $116 million compared to $108 million a year earlier. Revenue increased 7.4% to $655 million. Organic sales rose 3%, with research and Sigma-Aldrich Fine Chemicals (SAFC) having organic sales growth of 2% and 5%, respectively.
During a conference call with investors, CFO Jan Bertsch said foreign exchange rates pressured margins, although the company has hedged for this and Sigma-Aldrich expects improved margins for the full-year 2013.
The SAFC unit grew 5% in the fourth quarter, which is the same amount as in the third quarter. SAFC sales growth was at the low end of the company’s expectations, as supply solution sales to industrial customers were softer than expected, Bertsch said. Although the company expects further improvement going forward.
By region, North American sales were flat. Europe Middle East and Africa sales improved and approached mid single-digit organic sales growth—posting its best quarter of the year. The Asia-Pacific, Latin America region, including Japan, was the largest growing region with mid-single digit sales growth.
Rakesh Sachdev, the company's President and CEO, said the company has benefited from its e-business channels and it plans for further expansion in Russia, the Middle East and Africa.
For 2013, Sigma-Aldrich expects organic sales growth in the low to mid-single digits for 2013.
"We begin the year cautiously optimistic that 2013 will be better than 2012," Sachdev told investors. "However, we acknowledge that macroeconomic uncertainty continues to persist in our research and industrial markets," he added.