INEOS Enterprises Holdings Limited (“INEOS Enterprises”) reports its trading performance for the second quarter 2021.
Based on unaudited management information, INEOS Enterprises’ EBITDA before Special Items (“EBITDA”) for the second quarter 2021 was €127M. This compares to an EBITDA of €117M for the second quarter 2020 and €93M in the prior quarter.
INEOS Enterprises has continued to operate all sites with Covid-19 compliant processes in place. Given our importance to supporting the fight against Covid-19, resources have been made available to ensure the safety of our people and preserve the continuity across the business.
During this quarter, INEOS Enterprises delivered additional cost savings of c.€5M, bringing cumulative cost savings in our acquired businesses to date to c.€100M. These savings represent underlying operational improvements to the businesses and do not include any temporary effects from Covid-19.
In Q2 Solvents’ EBITDA was €42M, compared to €65M in Q2 2020 and €36M in Q1 2021. The Solvents division had a strong quarter driven by our BDO business which continues to benefit from a healthy global demand and pricing increases, assisted by competitor supply issues in Europe. Other solvents were more balanced, with supply and demand stabilising in the Ethanol and IPA markets impacting pricing, and margins also impacted due to rising feedstock prices relative to the second quarter 2020.
Composites’ Q2 EBITDA was €44M, compared to €19M in Q2 2020 and €32M in Q1 2021. Composites saw strong demand across all regions during the quarter, continuing the trend seen since late 2020. Some supplier production issues impacted raw material availability, limiting sales volumes achieved, particularly in North America. European results reached a record high, reflecting strong margins and demand across all segments. Demand remains strong across engineered stone, sanitary and residential construction, with volume growth also seen in marine and anti-corrosion applications.
Pigments reported Q2 2021 EBITDA of €32M, compared to €28M in Q2 2020 and €29M in Q1 2021. Pigments had strong demand with the market remaining tight throughout the quarter across North America and Europe, reflecting both strong underlying market demand and seasonal factors. Sales volumes were limited by product availability driven by production shortfalls due to a temporary unplanned shutdown in Ashtabula. Margins improved across the quarter, reflecting continuing price increases.
Chemical Intermediates reported Q2 2021 EBITDA of €16M compared to €7M in Q2 2020 and €5M in Q1 2021. Our Chemical Intermediates businesses had a strong quarter, recovering from quarter one production outages. Joliet experienced improving market conditions with positive margin development across all products and strong demand. Volumes in the quarter were however limited by unplanned repairs to the MAN unit; the unit now being fully operational. Compounds’ demand was strong across all sectors, particularly medical, and margin remained strong despite continued raw material price pressures.
We continue to invest in our Hygienics business with development of brand awareness and marketing. We continue to deliver new retail opportunities for sanitisation products and automated dispenser sales. EBITDA loss for the quarter, including marketing and investments, was €(7)M.
In line with our conservative financial policy, we have maintained a prudent capital position with continued control over our operating cost base. At the end of the quarter we report cash balances of €347M and net debt of €969M, resulting in a net debt leverage of 2.4x. Our €300M securitisation facility was undrawn at quarter end. In July 2021, INEOS Enterprises made a voluntary repayment of the Shareholder loan of €100M. Pro forma for this payment, net debt would have been €1,069M and leverage would have been 2.6x. In July 2021, we also disposed of our Sulphur Chemicals business based in Bilbao, Spain, for approximately €44m.