Tough year for Ciba

Armin Meyer said �higher raw material, energy and pension costs added up to almost SF400m.�

Sales for the year were SF7.4bn, up 6% in Swiss francs, and 4% in local currencies, reflecting sales price increases, strong growth in Asia-Pacific and the acquisition of Raisio Chemicals. Asia-Pacific now represents 29% of Ciba�s sales. Sales growth in both mainland China and India were double digit. Sales in Europe were higher, mainly due to the Raisio acquisition, and flat in the Americas. Overall volumes were 2% lower.

Ciba said gross profit margin slipped to 28.5% of sales from the 30.9% achieved in 2004. The drop was mainly the result of a 10% increase in raw material cost during the year, in addition to substantially higher energy and social benefits costs.

In the second half of the year, hurricane Katrina in the US and a fire at the Grenzach plant in Germany impacted profit with over SF25m in additional costs. On the other side, there were gains of SF68m from the sale of fixed assets.

Total energy-related cost increases in production and in selling, general and administrative expenses amounted to SF40m more, while extra costs related to higher social benefits were SF60m for the year.

Ciba made savings of over SF60m for the year from efficiencies and headcount reductions.