Cinkarna Celje Publishes Summary of the 2024 Business Plan, 2023 Performance Estimate & 2024-2028 Strategy

Today, we are bringing you a detailed overview of the 2023 business performance estimate, 2024 business plan of Cinkarna Celje, as well as the company’s development strategy for 2024 – 2028.

The Company noted that in 2023, the year was marked by a decrease in the selling prices of pigment. They managed to minimize the impact on their business by taking swift and effective action. However, their influence is limited in global trade, mainly in the expansion of pigment capacity in China. The factors where the company’s influence is limited continue to be present in global trade, notably the expansion of pigment capacities in China and their placement in the EU.

Cinkarna estimates that the pigment industry is moving towards the bottom of the cycle, which is likely to be reached in 2024. On the purchase side, the company is facing above-average price levels for titanium-bearing raw materials. Lower demand for pigment from various industrial segments, pressure from customers to adjust selling prices and high input prices for key energy-intensive raw materials have led to a greater reduction in margin on both operating and bottom-line levels.

Based on the above description of the situation in the carrier industry, the company enters 2024 with caution. Taking into account the current market conditions, the outlook for the titanium dioxide industry and projections of macroeconomic conditions in the global economy, Cinkarna has set a roadmap for 2024 that the company believes is realistic.

The margin will be at a similar level as in 2023, but with uncertain macroeconomic conditions and lower demand for pigment, Cinkarna anticipates that it will not be possible to fully utilize production capacity in 2024. Irrespective of market conditions, their focus remains on maximising production capacity utilization and improving our sales structure. In titanium dioxide pigment, Cinkarna will reallocate a flexible part of our sales volumes to the most profitable markets on an ongoing basis. Achieving a lower average selling price level for pigment and a higher level of volume sales are taken into account. The pigment market is considered to be quite volatile.

Finally, Cinkarna expects for energy market prices gradually moderate in 2024. Cinkarna expects titanium-bearing raw material procurement prices to stabilize at slightly lower levels. The bargaining power of suppliers remains high, mainly due to low competition or a low number of suppliers in the titanium-bearing raw materials markets.

In 2024, the company plans investment volumes that exceed the average of previous years. Investments will be made on a program-by-program basis, according to need, capacity and prospects. Inventories will be lower than in the previous year. The volume of receivables will be higher due to higher sales. In 2024, Cinkarna will gradually start to use external funding for key investment projects. Overall, the company expects for 2024 to be at a similar operating level to that in 2023.

Cinkarna Celje 2023 estimate and 2024 plan key performance indicators

wdt_ID Name of item 2023 Estimate 2024 Plan
1 Revenue (EUR) 170733270 186624080
2 EBITDA (EUR) 16984070 19026810
3 Net profit (EUR) 5045530 4035020
4 Investments (EUR) 16259420 19798950
5 EBITDA margin (%) 9,9% 10%
6 Net profit margin (%) 3% 2,2%
7 Return on equity (%) 2,1% 2%
8 Return on assets (%) 1,8% 1,7%

Source: Cinkarna Celje, InterCapital Research

Besides all the aforementioned, Cinkarna also published its 2024 – 2028 development strategy. In the strategy, it is emphasized that the main focus will remain on European markets. Mainly, the company’s presence will be strengthened in a key strategic business area – Titanium Dioxide. Further optimization of the staffing structure is foreseen through the redeployment and recruitment of new young and technically qualified staff. Investment in development, training and further improvement of the working environment for employees will also continue.

The new five-year strategic period 2024-2028, which takes into account the 2028 cycle peak, has the following strategic objectives:

• average sales revenues of € 228.9 million,

• average EBITDA of € 36.9 million,

• average net profit of € 16.8 million.

The dividend policy will be stable. 50% of net profit will be paid as dividends.

Category : Flash News

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