Full Year Results FEBRUARY 2019

Transcription

1 Full Year Results FEBRUARY 2019

2 2 Full Year Results 2018 Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. This presentation also includes forward-looking statements. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors that are beyond Clariant s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of governmental regulators and other risk factors such as: the timing and strength of new product offerings; pricing strategies of competitors; the Company's ability to continue to receive adequate products from its vendors on acceptable terms, or at all, and to continue to obtain sufficient financing to meet its liquidity needs; and changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, including currency fluctuations, inflation and consumer confidence, on a global, regional or national basis. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Clariant does not undertake any obligation to publicly release any revisions to these forwardlooking statements to reflect events or circumstances after the date of these materials.

3 3 Full Year Results 2018 Full Year 2018 Highlights SALES % in CHF m in LC* y-o-y EBITDA before exceptional items in CHF m + 5 % in CHF y-o-y 15.4 % margin EBITDA after exceptional items % in CHF m in CHF y-o-y 13.2 % margin NET INCOME % in CHF m in CHF y-o-y OPERATING CASH FLOW 530 in CHF m + 24 % in CHF y-o-y DIVIDEND proposed % CHF per share in CHF y-o-y *in local currency

4 4 Full Year Results 2018 Sales Development & Mix FY 2018 sales rose by 5 % in local currency, driven by both higher volumes and pricing FY 2018 SALES in CHF m + 3 % + 0 % - 1 % Strong organic growth amounted to 5 %, with positive contributions from all Business Areas, particularly Catalysis In Q4 2018, sales grew by 3 % in local currency year-on-year (y-o-y), driven by pricing + 2 % FY 2017 Volume Price M&A FX FY 2018 Organic growth was 3 % in Q4 2018, the foreign exchange (FX) impact was a negative 6 % Q SALES in CHF m + 4 % + 0 % - 6 % % Q Volume Price M&A FX Q4 2018

5 5 Full Year Results 2018 Sales Distribution by Region Emerging markets Mature markets In FY 2018, strong expansion in Latin America Growth in Asia underpinned by China and India North America with solid, mid-single-digit growth Europe and the Middle East & Africa grew in low single-digit In Q4 2018, Middle East & Africa expansion mainly driven by Catalysis while Latin America was supported by Oil & Mining Services North America and Asia contributed in single digits to sales expansion with a slowing in China Europe declined slightly, mainly impacted by the continued decline in Germany, which started in Q3 FY 2018 SALES CHF 6 623m in CHF m ASIA-PACIFIC / + 7 %* MEA 481 / + 2 %* LATIN AMERICA 775 / + 12 %* Brazil 321 / + 3 %* Q SALES CHF 1 629m in CHF m EUROPE / + 2 %* China 624 / + 14 %* Germany 778 / - 1 %* ASIA-PACIFIC 426 / + 2 %* MEA 146 / + 15 %* LATIN AMERICA 170 / + 9 %* Brazil 80 / - 6 %* NORTH AMERICA / + 5 %* EUROPE 546 / - 2 %* China 143 / - 3 %* Germany 182 / - 8 %* NORTH AMERICA 341 / + 3 %* *in local currency

6 6 Full Year Results 2018 Care Chemicals Strong FY 2018 sales increase of 7 % in LC* Consumer Care delivered high single-digit sales growth with positive contributions from all three Business Lines: Personal Care, Home Care and Crop Solutions; Industrial Applications grew in mid-single digits Q sales advanced 1 % in LC* supported by Consumer Care while Industrial Applications had a slightly negative growth FY 2018 EBITDA** margin increased to 19.0 % primarily resulting from operating leverage and an improved product mix Q EBITDA** margin softened to 17.7 % mainly attributable to the decline of the Aviation business in Europe during this period and some temporary capacity outages in Asia INNOVATIONS PERSONAL CARE Advanced hair care FY 2018 FY 2017 % CHF % LC* Sales in CHF m % + 7 % EBITDA b.e.i.** in CHF m % EBITDA b.e.i.** margin 19.0 % 18.4 % Q Q % CHF % LC* Sales in CHF m % + 1 % EBITDA b.e.i.** in CHF m % EBITDA b.e.i.** margin 17.7 % 19.4 % GENADVANCE * in local currency **before exceptional items

7 7 Full Year Results 2018 Catalysis Strong FY 2018 organic sales expansion of 8 % in LC* due to very strong demand in Syngas and good progression in Specialty Catalysts, while Petrochemicals remained flat y-o-y Sales growth benefited from good demand in Asia due to China, as well as in the Middle East & Africa and Latin America Q sales were stronger than anticipated as a result of a higher demand for Petrochemicals and some forward product shifts from Q As anticipated, FY 2018 EBITDA** margin declined to 23.1 %, reflecting the product mix with proportionally higher sales from Syngas and a dilutive impact from Biofuels & Derivatives Q4 2018, EBITDA** margin rose to an excellent 29.1 % due to the more favorable product mix towards the end of the year FY 2018 FY 2017 % CHF % LC* Sales in CHF m % + 11 % EBITDA b.e.i.** in CHF m % EBITDA b.e.i.** margin 23.1 % 25.8 % Q Q % CHF % LC* Sales in CHF m % + 9 % EBITDA b.e.i.** in CHF m % EBITDA b.e.i.** margin 29.1 % 28.6 % INNOVATIONS EMISSION CONTROL BIOFUELS & DERIVATIVES ENVICAT sunliquid * in local currency **before exceptional items

8 8 Full Year Results 2018 Natural Resources FY 2018 sales rose 8 % in LC*, reflecting accelerating growth in H2 versus H Oil & Mining Services with double-digit sales growth in LC* in a slowly improving market environment Functional Minerals sales expansion in single-digits in LC*, primarily driven by the Foundry business FY 2018 EBITDA** margin decreased to 12.8 %, still weighed down by unabated price consciousness of the oil market and a lower contribution from Functional Minerals Purification Q EBITDA** margin declined amid ongoing competitive oil industry environment and strong comparison base As anticipated, the second half of the year already showed an improvement in the margin versus the first half INNOVATIONS FY 2018 FY 2017 % CHF % LC* Sales in CHF m % + 8 % EBITDA b.e.i.** in CHF m % EBITDA b.e.i.** margin 12.8 % 15.3 % Q Q % CHF % LC* Sales in CHF m % + 11 % EBITDA b.e.i.** in CHF m % EBITDA b.e.i.** margin 12.9 % 18.1 % OIL SERVICES PURIFICATION OF EDIBLE OIL VERITRAX TM TONSIL * in local currency **before exceptional items

9 9 Full Year Results 2018 Plastics & Coatings In FY 2018 sales grew in single digits in LC* and Swiss francs against very strong comparison base Masterbatches sales mainly supported by Consumer Goods, Automotive and Healthcare Packaging Pigments sales were driven by Coatings and Plastic Applications Additives 2018 sales expansion driven by all Business Lines Softening in Asia and Europe, as already seen in Q3, as main reason for slowdown in Q FY 2018 EBITDA** expansion of 6 % in Swiss francs despite strong previous year, while Q absolute EBITDA** at comparable level y-o-y INNOVATIONS FY 2018 FY 2017 % CHF % LC* Sales in CHF m % + 1 % EBITDA b.e.i.** in CHF m % EBITDA b.e.i.** margin 15.2 % 14.5 % Q Q % CHF % LC* Sales in CHF m % - 3 % EBITDA b.e.i.** in CHF m % EBITDA b.e.i.** margin 11.6 % 10.8 % HEALTHCARE PACKAGING FLAME RETARDANTS DESICCANT SOLUTIONS EXOLIT * in local currency **before exceptional items

10 % 15.0 % 14.5 % 14.0 % 13.5 % 13.0 % 12.5 % 12.0 % 10 Full Year Results 2018 Full Year 2018 EBITDA b.e.i.* Development EBITDA b.e.i.* / margin in CHF m / in % of sales 14.2 % 14.7 % % 15.3 % 15.4 % FY 2018 EBITDA b.e.i.* rose 5 % y-o-y in Swiss francs, exceeding CHF 1 bn Improvement attributable to contributions from Care Chemicals, Catalysis and Plastics & Coatings EBITDA b.e.i.* EBITDA b.e.i.* by Business Area in % of Group CARE CHEMICALS 29 % CATALYSIS 18 % EBITDA b.e.i.* margin NATURAL RESOURCES 16 % PLASTIC & COATINGS 37 % Innovations and enhanced product portfolio promote profitability improvement Corresponding EBITDA b.e.i.* margin increased to 15.4 % EBITDA b.e.i.* margin expanded continually 9 years in succession *before exceptional items

11 % 15.4 % 15.2 % 15.0 % 14.8 % 14.6 % 14.4 % 14.2 % 14.0 % 13.8 % 11 Full Year Results 2018 Fourth Quarter 2018 EBITDA b.e.i.* Development EBITDA b.e.i.* / margin in CHF m / in % of sales 15.3 % 15.5 % Q EBITDA b.e.i.* with slight negative growth of 2 % in Swiss francs Softening as result of seasonal effects and a slowdown in China and Europe EBITDA b.e.i.* by Business Area in % of Group CARE CHEMICALS 27 % EBITDA b.e.i.* Q Q EBITDA b.e.i.* margin NATURAL RESOURCES 18 % EBITDA b.e.i.* margin advanced to 15.5 % driven by excellent profitability in Catalysis, which compensated for profitability softness in Care Chemicals and Natural Resources EBITDA was impacted by largely off-setting effects (sales recognition, high inflation in Latin America, devaluation of inventories and Stahl) CATALYSIS 28 % PLASTIC & COATINGS 27 % EBITDA b.e.i.* distribution by Business Area reflects the usual seasonal development *before exceptional items

12 Full Year Results 2018 Full Year 2018 Net Income NET INCOME in CHF m +13 % +18 % Net income progression by 18 % in Swiss francs to CHF 356 million due to Improvement in absolute EBITDA Lower one-off costs Lower effective tax rate Net income increased on average by more than 13 % p.a. between 2014 and

13 Full Year Results 2018 Full Year 2018 Operating Cash Flow OPERATING CASH FLOW in CHF m Operating cash flow climbed 24 % to CHF 530 million resulting from Absolute EBITDA progression Improved net working capital management Good development particularly noteworthy given the one-off tax settlement of CHF 83 million paid in H Adjusted for tax settlement, 2018 operating cash flow would have totalled CHF 613 million

14 Full Year Results 2018 Proposed dividend increase of 10 % to CHF 0.55 per share DIVIDEND in CHF per share Proposed dividend of CHF 0.55 per share to Annual General Meeting +9 % +10 % Dividend proposal reflects increase of 10 % y-o-y Dividend to be distributed from capital contribution reserve which is exempt from Swiss withholding tax Dividend increase by approx. 9 % p.a. on average since * Dividend policy unchanged: To increase or at least maintain absolute dividend in Swiss francs *dividend proposed to the Annual General Meeting

15 Clariant Insight

16 16 Full Year Results 2018 Clariant s Way Forward We strive to provide the best customer experience and fast, reliable customer fulfillment in the industry by setting the right priorities. Our aim is to make our customers more successful. Therefore, we constantly focus on Timely and rewarding innovations that address challenges and demands, incl. the requirement for more convenience, safety, health and efficiency, Products that are difficult to imitate, Sustainability, agility as well as ethical practices. Our focus is geared to effectively master such challenges and address these emerging demands and opportunities.

17 17 Full Year Results 2018 Identifying the Next Bestseller Concept Prior to Our Customers in Personal Care Natural, renewable ingredients to match trend for natural character, health and safety Exchange of one ingredient with a natural one often requires a change in the formulation of the product silicon-free sounds good, but exchange of silicon with a natural ingredient often requires that one has to add another synthetic ingredient to achieve same performance, texture and feel of product Thus no decline, but rather compensation with another additional synthetic ingredient in new formulation Genadvance products actually do address natural trend Actual reduction of synthetic ingredients by exchanging them with natural ones Maximizing natural ingredients, up to 100 %, without compromising & even exceeding performance of original product Outstanding ecological and sustainable profile INNOVATIONS PERSONAL CARE Advanced hair care GENADVANCE

18 18 Full Year Results 2018 Identifying the Next Bestseller Concept Prior to Our Customers in Personal Care GENADVANCE Hydra for hair hydration Natural moisturizer, improving the dry after-feel, especially on damaged hair 100 % naturally derived GENADVANCE Hydra Visibly smoother hair, feels moisturized & healthy Frizz and fly-always significantly reduced Natural rinse-off conditioner (branded) Silicone-free conditioning Biodegradable 2-3 times faster versus traditional formulation Reduced waste and lower carbon footprint Almost 200 customers testing this innovative ingredient 100 % natural, silicone-free mild products without compromising and even exceeding performance Significantly lower water requirement during production Innovative formats reducing volume and packaging INNOVATIONS PERSONAL CARE Advanced hair care GENADVANCE

19 19 Full Year Results 2018 Further Secrets of GENADVANCE and Identifying the Next Bestseller Concept Prior to Our Customers Smooth and less frizz with GENADVANCE REPAIR GENADVANCE LIFE GENADVANCE REPAIR Smooth, repaired hair Stronger hair Carbon footprint reduction Exceeds the performance of the original formulation, even with 20 % less actives Up to 25 % cost savings BTAC (behentrimonium chloride) Conditioner Soap Bar: Up to 95 % less water Less packaging due to smaller volume Reduced waste Lower carbon footprint Ideal for traveling

20 20 Full Year Results 2018 Agility and Ability of Fast Introduction of Rewarding, Innovative, Quality Products into the Market Putting ourselves into the shoes of our customers, anticipating their next and second next trend and needs Engaging not only with our customers but engaging with the customer of our customers using different channels Trendsetter in using social media by means of vloggers V-logs with Essence by Clariant show formulators and brand owners the possibilities to go "free from" and give consumers something they haven't experienced before Maximizing natural ingredients without compromising on performance Partially waterless formulations and formats reducing volume and packaging Prompt availability of products, formulations and formats for exciting luxury experience INNOVATIONS PERSONAL CARE Luxurious product line for men ESSENCE by Clariant Luxurious product line for women ESSENCE by Clariant

21 Outlook and Summary

22 22 Full Year Results 2018 Outlook 2021: Above-Market Growth, Higher Profitability and Stronger Cash Generation Clariant is a focused and innovative specialty chemical company. We aim to provide more than just customer-oriented products. We strive to provide the best customer experience and fast, reliable customer fulfillment in the industry by setting the right priorities. Our aim is to make our customers more successful. We therefore constantly focus on timely and rewarding innovations, products that are difficult to imitate, sustainability, agility as well as ethical practices. We will only be satisfied with the highest level of excellence in every function within the Group. Our success will be realized through the execution of our strategy. We confirm our 2021 guidance to achieve above-market growth, higher profitability and stronger cash generation.

23 % + 0 % - 5 % - 10 % - 15 % - 20 % % 15.0 % 14.5 % 14.0 % 13.5 % 13.0 % 12.5 % % 15.0 % 14.0 % 13.0 % 12.0 % 11.0 % 10.0 % 9.0 % 8.0 % 7.0 % 23 Full Year Results 2018 Summary SALES in CHF m / growth in LC* + 5 % + 3 % + 2 % + 9 % + 5 % EBITDA b.e.i.** / MARGIN in CHF m 15.2 % 15.3 % 15.4 % 14.7 % 14.2 % EBITDA / MARGIN in CHF m 15.1 % 13.2 % 13.4 % 12.7 % 13.2 % Sales growth in LC* EBITDA b.e.i.** EBITDA b.e.i.** margin EBITDA EBITDA margin OPERATING CASH FLOW in CHF m NET INCOME in CHF m DIVIDEND*** in CHF per share +13 % +9 % **** * in local currency **before exceptional items ****dividend paid in the year ****dividend proposed to the Annual General Meeting

24 Back-up Slides

25 25 Full Year Results 2018 Full Year 2018 Sales and EBITDA by Business Area Full Year Sales to 3rd parties EBITDA before exceptionals in CHF m % LC* % CHF Care Chemicals % % margin 19.0 % 18.4 % Catalysis % % margin 23.1 % 25.8% Natural Resources % % margin 12.8 % 15.3 % Plastics & Coatings % % margin 15.2 % 14.5 % Business Areas Total % Corporate Costs Group Total % % margin 15.4 % 15.3 % * in local currency

26 26 Full Year Results 2018 Full Year 2018 Key Financials CHF m % of sales CHF m % of sales Sales % % Local currency growth + 5 % + 9 % Organic growth* + 5 % + 6 % Acquisitions / divestures + 0 % + 3 % Currencies 1 % 0 % Gross profit % % EBITDA before exceptional items % % EBITDA % % EBIT before exceptional items % % EBIT % % Net income % % Operating cash flow * organic growth: volume and price effects excluding the impact of changes in foreign currency exchange rates and acquisitions / divestments

27 27 Full Year Results 2018 Full Year 2018 Consolidated Statements of Cash Flows CHF m Net income Depreciation, amortization and impairment Payments for restructuring Other* Cash flow before changes in working capital and provisions Changes in working capital and provisions Income taxes paid* Operating cash flow Cash flow from investing activities thereof: property, plant and equipment thereof: changes in current financial assets and short term deposits thereof: acquisitions, disposals and other Cash flow before financing * The line income taxes paid is reclassified under cash generated from operating activities. In previously published financial reviews, it was a part of cash flow before changes in working capital and provisions.

28 28 Full Year Results 2018 Debt Maturity Profile as of 31 December LIQUIDITY in CHF m 7* FINANCIAL DEBT MATURITIES in CHF m Derivatives Short-term loans & other liabilities 700 Certificate of Indebtedness CHF Bond Cash and short-term deposits Cash * financial derivatives with positive fair values reported under other current assets

29 29 Full Year Results 2018 Full Year 2018 Sales and Cost Structure* GLOBAL SALES DISTRIBUTION in % GLOBAL COST DISTRIBUTION in % EMERGING MARKETS 16 % JPY 3 % EUR 39 % EMERGING MARKETS 14 % JPY 2 % EUR 45 % CHF 0 % CHF 1 % USD 42 % USD 38 % * These distributions represent an approximation to total cash in- and out-flows and are closely linked to transaction exposures for FY 2018.

30 30 Full Year Results 2018 Full Year 2018 Top 20 Chemicals in Percentage of Total Raw Material Cost* TOP 5 CHEMICALS TOP 6-20 CHEMICALS 1 Ethylene 6 Propylene oxide 2 Propylene glycol 7 Sodium hydroxide 3 Ethylene oxide 8 Acetic acid 4 Titanium dioxide 9 Polypropylene 5 Polyethylene 10 Sodium hypophosphite 11 Phthalocyanine copper TOP 5 27 % OTHERS 61 % 12 Butene/ethene copolymer 13 Carbon black 14 Fatty acid 15 Wax, montan 16 Propylene 17 Hydrocarbon solvents TOP % 18 Carbon 19 Bayerite 20 Fatty alcohol * as of 31 December 2018

31 31 Full Year Results 2018 Clariant target portfolio for higher value specialties until 2021 Sales growth expectation p.a. 6-9 % Sales growth expectation p.a. 5-7 % Sales growth expectation p.a. 6-9 % Sales growth expectation p.a. 6-7 % Sales growth expectation p.a. GDP EBITDA margin ambition 2021E % EBITDA margin ambition 2021E % EBITDA margin ambition 2021E % EBITDA margin ambition 2021E % Steered for absolute EBITDA and cash flow generation HIGH PERFORMANCE MATERIALS CARE CHEMICALS CATALYSIS NATURAL RESOURCES PLASTICS & COATINGS Business Area (BA) High Performance Materials comprises the Additives, high value Masterbatches and high performance thermoplastics businesses. Major applications include smart electronics, health care, aerospace, automotive, robotics, additive manufacturing, renewable energy, as well as e-mobility. These applications demand differentiated fulfillment of customer specifications, which require exclusive technology and formulation know-how. BA Care Chemicals comprises the BU Industrial & Consumer Specialties (ICS), Food additives as well as the future Industrial Biotechnology business. It demonstrates a clear focus on highly attractive, highmargin and low-cyclicality segments. The BA follows a lifestyle-driven megatrend and strengthens Clariant s position as a supplier of green and sustainable products. BA Catalysis comprises the BU Catalysts and the Business Line Biofuels & Derivatives. It develops, manufactures and sells a wide range of catalyst products for the chemical and fuel industries, which contribute significantly to value creation in our customers operations, ensuring that finite raw materials and energy are used efficiently. In addition, Catalysis is at the forefront of new market developments such as the commercialization and licensing of bio-ethanol. BA Natural Resources comprises the BUs Oil & Mining Services and Functional Minerals. It is characterized by high growth and low cyclicality as well as a strong megatrend orientation. Main drivers are the rising demand for high-value-added specialty chemicals used in the oil, mining, food and packaging industries and the increased consumption of oil, gas and base metals, driven by the fast-growing economies. BA P&C comprises the Pigments business (pigments, preparations and dyes used primarily in coatings, plastics, printing and consumer goods), standard Masterbatches for the plastics industry and converters as well as Healthcare Packaging. The BA is typically subject to GDP growth and economic cycles due to its highly diversified end applications. Main drivers are the increasing use of plastic applications, as well as the steadily growing demand for more sustainable coating solutions.

32 32 Full Year Results 2018 Calendar of Upcoming Corporate Events 01 April 2019 Annual General Meeting 30 April 2019 First Quarter 2019 Reporting 25 July 2019 First Half 2019 Reporting 30 October 2019 Nine Months 2019 Reporting

33 33 Full Year Results 2018 IR Contacts Anja Pomrehn Phone: Head of Investor Relations Maria Ivek Investor Relations Officer Sonja Ritschard Junior Investor Relations Manager

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