Lubrizol | Strategy and Financial Highlights Information from ICIS

Edited from “To our shareholders” Annual Report 2008, “US Lubrizol expects to grow through 2010 – bank”, ICIS news and company website

Lubrizol states that it was “successful” operationally, strategically and financially. “I am pleased with our accomplishments, especially given the challenges we faced in the second half of 2008. Our technical expertise, global presence and financial discipline give us a unique industry position that will allow us to weather the tough economic conditions we expect to remain throughout 2009”, says chairman, president and chief executive officer, James Hambrick.

The key goal for Lubrizol has been to make it one of the world’s largest and profitable specialty chemical companies. The company has set itself a 2010 sales target of $5.3bn. Lubrizol plans to meet that goal by introducing new products, expanding to new locations, improving costs and productivity and acquiring companies.

The company's advanced materials division has a goal of increasing sales by $410m by 2010, a change of 6%. Lubrizol's core lubricant additives business, which makes up 64% of its sales, is expected to grow by 3% through 2010.

However, it is believed that the key risks to meet these targets include erosion in prices for lubricant additives and rising prices for base oils.

Lubrizol states that its key strategic focus is to achieve top line and earnings growth includes:

(1)   driving organic growth;

(2)   product innovation, new products and new applications;

(3)   geographic expansion;

(4)   improve operating profitability;

(5)   margin improvement;

(6)   productivity improvements; and

(7)   strengthening the portfolio and enhance market-leading positions via complementary acquisitions.

The company’s focus on selective acquisitions could add up to $500m in revenues. The acquisitions could be either in specialty chemicals or industrial fluids, complementing Lubrizol’s existing business lines. However, the company’s primary focus will be on organic growth.

Lubrizol states that it has set an acquisition criteria, this includes:

(1)   complementing the existing portfolio;

(2)   it has a strategic fit;

(3)   products: marketed on performance;

(4)   size: sufficient to make impact; and

(5)   scale economies: able to use existing commercial/technical infrastructure. 

Looking ahead, Lubrizol increased its guidance for earnings that was issued on 5 February 2009. The company's guidance for 2009 earnings is in the range of $3.83 to $4.23 per diluted share, including restructuring and impairment charges of $12 per diluted share, primarily related to cost reductions announced in the first quarter of 2009 and the closing of a Canadian additives blending facility.

ICIS Chemical Business magazine has unveiled the ICIS Top 100 Chemical Companies, with rankings based on 2008 sales.

A PDF of the ICIS Top 100 Chemical Companies is available for download on ICIS connect.

See the article and analysis of the ICIS Top 100 on ICIS news. 

Financial highlights: Lubrizol, year ended 31 December

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Lubrizol Company Structure

Lubrizol is a specialty chemical company involved in specialty additives for lubricating oils. The Lubrizol Corporation was founded in 1928, as a manufacturer of graphite oil products. In 2004, it acquired Noveon International.
More about Lubrizol Structure

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