- Solid operational performance with differentiated demand picture from business to business, strong headwind from currencies; Catalysis & Energy with the expected pick-up in sales.
- Q3 sales up 25% in local currency and 9% in Swiss francs, driven by acquisitions and higher sales prices.
- Q3 EBITDA before exceptional items at CHF 216 million, down from CHF 232 million in the previous-year period, negative currency impact of CHF 73 million.
- Q3 EBITDA margin before exceptional items reached 11.6% compared to 13.6% a year ago; 13.4% at constant currencies.
- Q3 cash flow from operations turned positive at CHF 105 million compared to CHF -101 million in Q2 2011 and CHF 173 million in Q3 2010.
- Outlook: Clariant expects a similar trading environment to the third quarter until year-end 2011, characterized by further softening demand, volatile currencies and stable raw material costs. For the full-year 2011, Clariant confirms its guidance, with sales between CHF 7.0 and 7.2 billion and an EBITDA margin of 12.8% to 13.2%.
CEO Hariolf Kottmann commented: "In the first nine months of 2011, Clariant has further progressed in making the achievements of the last two years sustainable, despite strong headwinds from currency markets and a softening global economy. We have managed to improve underlying profitability by consistently applying strict performance management while at the same time shifting management focus toward profitable growth. From the solid base achieved - both operationally and financially - we will move forward in our strategy implementation and continue to transform Clariant in the coming years to achieve our ambitious 2015 targets."
Key Financial Data
| Third quarter | Nine months | ||||||||
| in CHF million | 2011 a | 2010 | % CHF | % LC | 2011 b | 2010 | % CHF | % LC | |
| Sales | 1 865 | 1 709 | 9 | 25 | 5 452 | 5 420 | 1 | 15 | |
| EBITDA before exceptional items c | 216 | 232 | -7 | 16 | 734 | 731 | 0 | 17 | |
| - margin | 11.6% | 13.6% | 13.5% | 13.5% | |||||
| EBIT before exceptional items c | 144 | 182 | -21 | 2 | 552 | 576 | -4 | 14 | |
| - margin | 7.7% | 10.6% | 10.1% | 10.6% | |||||
| EBIT | 110 | 137 | -20 | 8 | 474 | 335 | 41 | 69 | |
| Net income | 81 | 109 | - | - | 241 | 144 | - | - | |
| Operating cash flow | 105 | 173 | 21 | 365 | |||||
| Number of employees | 22 2171 | 16 1762 | |||||||
a including Süd-Chemie b 2011 includes Süd-Chemie figures consolidated for five months (May-Sept)
c 2011 "exceptional items" include an additional charge of CHF 11 mn as a result of the sale of Süd-Chemie inventories revalued to
fair value less cost to sell
1 as of 30 September 2011 2 as of 31 December 2010
Clariant Q3, 2011 Performance
Muttenz, 31 October 2011 - Clariant, a world leader in specialty chemicals, today announced sales of CHF 1.865 billion in the third quarter 2011, compared to CHF 1.709 billion in the previous year. This includes Süd-Chemie (SC) sales of CHF 356 million. In local currencies, sales growth amounted to 25%. In Swiss francs, year-on-year sales were only 9% higher as the Swiss franc continued to strengthen against most major currencies especially in the first half of the third quarter.
Sales growth was driven by higher prices and the acquisition of Süd-Chemie. The less cyclical Business Units Additives, Catalysis & Energy, Functional Materials, Industrial & Consumer Specialties and Oil & Mining Services - accounting for roughly 50% of group sales - showed the most dynamic growth. By contrast, the slowdown in demand in the more cyclical businesses already observed in June has spread along the plastics value chain and into the coatings business. Regionally, the traditional markets of Europe and North America outpaced Asia/Pacific, Latin America and the Middle East & Africa. In the emerging markets a slow-down in the dynamic growth of the last few quarters has been observed.
Excluding Süd-Chemie, sales increased by 5%, driven by a 9% increase in sales prices, while volumes decreased 4% compared to the previous-year period as a result of a combination of softening demand in some businesses and the deliberate loss of unprofitable contracts.
The gross margin fell to 26.1% from 27.9% a year ago, mainly due to the negative currency impact and volume effects. In a slower global economic growth environment, commodity prices stabilized during the quarter. As a consequence, raw material costs remained flat compared to the second quarter 2011, but were 13% higher than in the previous-year period. As expected, increased raw material costs were fully absorbed by higher sales prices, both year-on-year and sequentially.
EBITDA before exceptional items fell to CHF 216 million (margin 11.6%) from CHF 232 million (margin 13.6%) a year ago. This was mainly the result of unfavorable currency developments which peaked in the third quarter. Operating profit (EBIT) before exceptional items stood at CHF 144 million (margin 7.7%) compared to CHF 182 million (margin 10.6%) in the third quarter of 2010. Both EBITDA and EBIT before exceptional items were negatively impacted by CHF 73 million (EBITDA) and CHF 63 million (EBIT) respectively from currencies. Net income was CHF 81 million compared to CHF 109 million in the previous-year period.
Cash flow from operations improved to CHF 105 million, below last year's CHF 173 million, but clearly above the CHF -101 million reported in the second quarter of 2011. Due to lower sales, Net Working Capital as a percentage of sales increased to 21.3% compared to 19.7% in the previous-year period, but is on track to meet the year-end 2011 target of below 20% of sales.
Due to the acquisition of Süd-Chemie, net debt increased to CHF 1 812 million from CHF 126 million at year-end, resulting in a gearing (net debt divided by equity) of 62% at the end of the third quarter of 2011. The cash position was strong with CHF 1.029 billion in cash and cash equivalents at quarter-end. The extension of the maturity profile is underway with the issuance of bonds totaling CHF 300 million in the Swiss francs market since May. After the reporting period, another EUR 365 million in certificates of indebtedness with terms of three years and four and a half years have been raised in October.
Süd-Chemie delivers, integration on track
In the first full quarter of consolidation into Clariant, the two new Süd-Chemie Business Units - Catalysis & Energy and Functional Materials - developed according to plan, with the Catalysts business picking-up in the third quarter as expected. Catalysis & Energy reported an EBITDA before exceptionals of CHF 41 million (margin 21.6%), and Functional Materials CHF 18 million (margin 10.8%).
The integration of Süd-Chemie is progressing as planned with all project teams fully operational. Based on current insights and integration experience, the anticipated EUR 75-95 million EBITDA improvements to 2013 are confirmed. Integration synergies and functional excellence efforts are expected to lead to redundancy for some 700 FTE worldwide, primarily in G&A functions but also from improvement measures in production. The implementation of the measures is expected in the timeframe from 2012 to 2014 with a focus on 2012/13 once the squeeze-out becomes effective.
Going forward, the focus will be on the continued delivery of the business objectives of Süd-Chemie while progressing with the integration and the squeeze-out process.
Outlook 2011
At the beginning of 2011, Clariant shifted its focus from restructuring to continuous improvement and profitable growth. While the continuous improvement initiative "Clariant Excellence" will make the competitive cost basis sustainable, the company is now focusing on creating value by investing in future profitable growth.
In the fourth quarter, Clariant expects the general slow-down in economic activity to continue, with clear signs of further weakness in demand in some regions and industries, especially in Europe. Exchange rates for the major currencies are expected to remain volatile. Commodity prices look set to stabilize at the level of the third quarter, leading to an increase in raw material costs in the mid-teens in 2011 compared to 2010.
For 2011, Clariant - including eight months of consolidated Süd-Chemie figures - expects sales in the range of CHF 7.0 to 7.2 billion and an EBITDA margin before exceptional items of 12.8% to 13.2%.
-end-
Contacts
| Media Relations | ||
| Ulrich Nies | Phone: | +41 61 469 61 58 |
| E-mail: | ulrich.nies@clariant.com | |
| Investor Relations | ||
| Ulrich Steiner | Phone: | +41 61 469 67 45 |
| E-mail: | ulrich.steiner@clariant.com | |
| Siegfried Schwirzer | Phone: | +41 61 469 67 49 |
| E-mail: | siegfried.schwirzer@clariant.com |
Clariant - Exactly your chemistry.
Clariant is a global leader in the field of specialty chemicals. Strong business relationships, commitment to outstanding service and wide-ranging application know-how make Clariant a preferred partner for its customers.
Clariant, which is represented on five continents with over 100 group companies, employs around 16,200 people as of year-end 2010. Head-quartered in Muttenz near Basel, Switzerland, it generated sales of
CHF 7.1 billion in 2010. Clariant is organized into 12 Business Units: Additives; Catalysis & Energy; Detergents & Intermediates; Emulsions; Functional Materials; Industrial & Consumer Specialties; Leather Services; Masterbatches; Oil & Mining Services; Paper Specialties; Pigments; and Textile Chemicals.
Clariant is committed to sustainable growth, which is derived from its own innovative strength. Clariant's world-class products and services play a key role in its customers' manufacturing processes and add value to their end products. The company's success is based on the know-how of its people and their ability to identify new customer needs at an early stage and to work together with customers to develop innovative, efficient solutions.
www.clariant.com
