Clariant with good start into 2015, delivering on growth and cash flow

Transcription

1 Media Release FIRST QUARTER 2015 Page 1 of 9 Clariant with good start into 2015, delivering on growth and cash flow First quarter 2015 sales from continuing operations increased 4 % in local currencies. In Swiss francs, sales decreased 2 % to CHF billion from CHF billion EBITDA margin before exceptional items at previous year s level of 14.1 % Cash Flow improved to CHF 14 million compared to CHF -51 million in first quarter 2014 Net result from continuing operations at CHF 87 million compared to net loss of CHF 39 million 2015 outlook confirmed Clariant had a good start into the year with good volume growth, said CEO Hariolf Kottmann. We put the highest priority in 2015 on improving our cash flow generation and we delivered a substantial increase in the first quarter. We are well on track to achieve our growth and profitability targets despite an increased volatility in currencies, volatile raw material prices and a sluggish economic environment particularly in Europe and China.

2 Page 2 of 9 Key Financial Data Continuing operations: First Quarter In CHF million %CHF %LC Sales EBITDA before exceptional items margin 14.1 % 14.1 % EBIT before exceptional items margin 9.7 % 9.4 % EBIT Net result from continuing operations Net income/ loss Operating cash flow Number of employees * Discontinued operations: Sales 0 66 Net result from discontinued operations Total Group, including discontinued operations * As of 31 December 2014 First quarter 2015 Good sales growth driven by higher volumes Muttenz, Clariant, a world leader in specialty chemicals, today announced first quarter 2015 sales from continuing operations of CHF billion compared to CHF billion in the first quarter of This corresponds to an increase of 4 % in local currencies. The 4 % organic sales growth was driven by 5 % higher volumes and a decrease in prices of 1 %. Given the strong volatility of currencies in the first quarter 2015, in particular the yearon-year weaknesses of the euro, Brazilian real, and the Japanese yen, the good sales growth in local currencies translated into a 2 % sales reduction in Swiss francs. Clariant posted strong local currency sales growth of 23 % in Latin America. Sales in Asia/Pacific increased 8 % in local currencies, driven by smaller economies, as India and China did not contribute to growth in the first quarter. In the Middle East & Africa region, sales were 6 % lower year-on-year in local currencies compared to a higher basis in the first quarter in A strong demand in Catalysis as well as continued growth in Oil & Mining Services led to a growth of 3 % in local currencies in North America. Europe was 2 % lower in local currencies, mostly driven by regional weaknesses in Pigments and Functional Minerals.

3 Page 3 of 9 All Business Areas achieved underlying sales growth in local currencies for the first quarter. Care Chemicals recorded a like-for-like growth of 4 %. Reported growth, however, was flat year-on-year, exclusively due to the pruning of low-margin base products in Sales in Catalysis & Energy increased by 26 % in local currencies with strong growth in all of its businesses. Natural Resources revenues increased by 8 %, which was driven by Oil & Mining Services. In Plastics & Coatings, sales increased by 1 % as strong demand in March compensated for a weak start into At 30.8 %, the gross margin was above 28.9 % in the prior-year period benefitting from positive effects from higher volumes and slightly lower raw material costs. These effects overcompensated slight price decreases, a negative currency effect and inventory devaluations. The negative inventory effect is expected to reverse in the second quarter of The EBITDA before exceptional items from continuing operations rose 8 % in local currencies and reached CHF 206 million, close to the CHF 210 million recorded in the previous year. The corresponding EBITDA margin was at the previous year s level of 14.1 % despite the negative impact of currencies in the first quarter, primarily marked by the strong appreciation of the Swiss franc against the euro. Care Chemicals, Catalysis & Energy as well as Natural Resources had an increased absolute contribution to EBITDA in the first quarter of Plastics & Coatings was negatively affected by a slow start into the beginning of the quarter. However, profitability in Plastics & Coatings is expected to pick up in the coming months. Exceptional items including restructuring, impairment, and transaction-related costs decreased significantly to CHF 13 million compared to CHF 99 million in the first quarter of This was due to lower restructuring costs in the first quarter of 2015 and the inclusion of a CHF 84 million impairment charge related to the divestment of the ASK Chemicals joint venture in the first quarter of Net income from continuing operations was CHF 87 million compared to a net loss of CHF 39 million in the previous year. Operating cash flow improved to CHF 14 million versus CHF -51 million one year ago, on lower build-up of net working capital. This is a clear reflection on Clariant s priority to increase cash generation in Net debt stood at CHF billion compared to CHF billion recorded at year-end The gearing, reflecting net financial debt in relation to equity including noncontrolling interests, rose to 50 % from 46 % at the end of 2014.

4 Page 4 of 9 Outlook Confirmed Focus on Performance, Growth and Innovation Clariant expects an ongoing challenging environment characterized by an increased volatility in commodity prices and currencies. In emerging markets, the economic environment is expected to remain favorable, but at a lower level and with increased volatility. Moderate growth should continue in the United States. However, growth in Europe is expected to remain weak. The combined effect of the appreciation of the Swiss franc with the weakening of the euro will impact Clariant s sales and profitability in absolute terms, but it will be fairly neutral in terms of relative margins. In 2015 Clariant will improve its operational efficiency by implementing a lean service organization; it will further improve its marketing excellence and will continue to launch innovations that generate value for its customers. For 2015 Clariant expects low to mid-single digit sales growth in local currencies. The company will further increase its EBITDA margin before exceptional items above fullyear 2014 and increase cash flow generation. Clariant confirms its mid-term target to achieve a position in the top tier of the specialty chemicals industry. This corresponds to an EBITDA margin before exceptional items in the range of 16 % to 19 % and a return on invested capital (ROIC) above the peer group average.

5 Page 5 of 9 Business Discussion First Quarter Care Chemicals Business Area in CHF million Q Q % CHF % LC Sales EBITDA before exceptional items margin 17.9 % 16.1 % EBIT before exceptional items margin 14.8 % 13.2 % EBIT In the first quarter of 2015, sales in the Care Chemicals Business Area were flat in local currencies and decreased by 6 % in Swiss francs compared to the first quarter of As in the previous quarter this subdued growth was due to a reduction of the exposure to lower margin products in Excluding this effect, underlying sales growth was 4 % in local currencies. Like-for-like Care Chemicals grew in all businesses with growth being most pronounced in Personal Care, Crop Solutions and Aviation. The de-icing business benefitted from the slightly more favorable weather conditions in Europe and from the acquisition of Aerochem in Scandinavia. The volume growth in Care Chemicals was partially compensated through price reductions in Construction, Aviation and Base Products. The EBITDA margin before exceptional items, however, increased to 17.9 % from 16.1 % in the previous year. A positive mix-effect attributable to higher contributions from Personal Care, Crop Solutions and Aviation overcompensated the negative effect from the devaluation of inventories. For 2015, Care Chemicals expects continued solid sales growth in Personal Care, Crop Solutions and Home Care. The Aviation business will continue to benefit from the successful and smooth integration of Aerochem, which has leading market positions in supplying de-icing fluids to the aviation industry in Sweden, Norway and Denmark. Care Chemicals will continue to launch new and innovative products and sustainable solutions like GlucoTain, a sugar-based and sulfate-free surfactant range that presents innovative solutions for formulators to achieve mild and natural skin and hair care products.

6 Page 6 of 9 Catalysis & Energy Business Area in CHF million Q Q % CHF % LC Sales EBITDA before exceptional items margin 18.1 % 20.0 % EBIT before exceptional items margin 8.7 % 8.3 % EBIT Sales in the Catalysis & Energy Business Area increased by 26 % in local currencies and by 15 % in Swiss francs compared to the same period in This was due to good underlying demand and a shift of two orders from the second to the first quarter of Growth was most pronounced in North America, but all other regions demonstrated strong growth as well. As in the previous quarters, the fundamental demand pattern remained favorable in Catalysis despite growth rates varying substantially from region to region due to timing and size of shipments. In the first quarter of 2015, Specialty Catalysts, Petrochemicals and Syngas all recorded at least high single digit growth rates. Growth was most pronounced in Petrochemicals where the business was benefitting from supplying to new propane dehydrogenation (PDH) plants in the U.S. On 29 October 2014, Clariant agreed to dispose of its Energy Storage activities pertaining to the Business Area Catalysis & Energy to UK-based Johnson Matthey. The sale was closed on 28 February Starting with the second quarter of 2015, the Business Area Catalysis & Energy will be renamed Business Area Catalysis. The EBITDA margin before exceptional items of Catalysis & Energy decreased to 18.1 % in the first quarter of 2015 from 20.0 % in the same period of the previous year. The decline was due to several one-time effects which overcompensated the strong underlying performance. The business expects to achieve its targeted profitability in 2015 with a more evenly allocated EBITDA contribution throughout the year. Growth in 2015 will be driven by demand for Petrochemicals and particularly driven by several new projects in the United States, such as propane dehydrogenation (PDH) units and gas-based steam crackers. Additional, growth will be driven by offering customers value-adding innovations like the Heat Generating Material (HGM) concept, which was proven to significantly improve the efficiency of CATOFIN on-purpose olefin production units. In the first quarter of 2015, the HGM concept confirmed its excellent performance for PDH for the first time at the propane dehydrogenation (PDH) plant of Ningbo Haiyue New Material Co. Limited in Ningbo City, China.

7 Page 7 of 9 Natural Resources Business Area in CHF million Q Q % CHF % LC Sales EBITDA before exceptional items margin 16.1 % 15.0 % EBIT before exceptional items margin 13.2 % 11.8 % EBIT Sales in the Natural Resources Business Area grew by 8 % in local currencies and by 1 % in Swiss francs compared to the first quarter of Taking the divestment of parts of the Water Treatment business into account, the underlying sales growth in Natural Resources was 13 % in local currencies. The Oil & Mining Services business achieved double-digit sales growth in local currencies as well as in Swiss francs on a year-on-year basis. Growth was driven by strong demand in Latin America as well as from other regions. All segments of Oil Services, Mining Solutions and Refinery demonstrated strong growth. Sales in Functional Minerals were below the level of the previous year because of the aforementioned effect from the divestment of the Water Treatment business. However, underlying growth continued to be good and particular strength was recorded in North and Latin America. As in the previous quarters there was good growth in the Purification business. The Foundry Additives business was below the level of the previous year even though strong growth in most regions and the introduction of new products like emission-reducing casting additives could not offset current weaknesses in Europe and China. The EBITDA margin before exceptional items of Natural Resources increased to 16.1 % in the first quarter of 2015 from 15.0 % in the same period of the previous year. The increase was due to a better mix effect. For 2015 and beyond, Natural Resources anticipates continued growth. Functional Minerals will focus on accompanying growth in emerging markets with selective investments in these regions, like the acquisition of the remaining 50 % shares of Companhia Brasileira de Bentonita (CBB). Oil & Mining Services expects continued sales growth in local currencies. However, the decline in crude oil prices might somewhat impact short-term growth dynamics, particularly in the exploration business.

8 Page 8 of 9 Plastics & Coatings Business Area in CHF million Q Q % CHF % LC Sales EBITDA before exceptional items margin 13.6 % 15.1 % EBIT before exceptional items margin 10.5 % 12.0 % EBIT Sales in the Plastics & Coatings Business Area increased by 1 % in local currencies and decreased by 4 % in Swiss francs compared to the previous year. Demand started slow in 2015, but continually picked up throughout the quarter and was strong in March. It was particularly strong in Latin America and Asia/Pacific, whereas demand in Europe and North America was below the level of the previous year. In the Pigments business, sales in all business lines were below the same period of last year. This was due to weakness in the mature markets with particular weakness in Coatings in Europe. North America was below last year due to a weak start impacted by the weather conditions which had a negative impact on the construction industry and some destocking, but improved during the quarter. Emerging markets experienced sales growth with particular strength in Latin America. Asia was overall positive, but mixed with good demand in India and Southeast Asia and weakness in China. Sales demand in Masterbatches caught up in March, compensating for a weak start into Sales grew in Packaging and Consumer Goods. Particularly strong sales were seen in Medical Specialties. Regional growth was most pronounced in Latin America and Asia with strong double-digit sales growth driven by India and China. European sales were flat, while North America experienced a slight decline, primarily linked to the cold weather in the first quarter. Additives achieved strong sales growth in Flame Retardants, as demand for halogen-free flame retardants for electrical applications and electronics continued to recover. Waxes and Polymer Additives were slightly below the level of last year. The EBITDA margin before exceptional items of 13.6 % for Plastics & Coatings was below the previous year due to currency volatility, a negative inventory devaluation effect and a sluggish demand at the beginning of the quarter. Profitability is expected to pick up in the second quarter of Going forward, Plastics & Coatings expects accelerated growth as mature markets are expected to improve. Clariant presented a multitude of sustainable and innovative value-creating solutions for the global paints and coatings industry, such as the range of Ecotain -certified sustainable products, at the European Coating Show in Nurnberg, Germany in April, The focus on innovation in Additives has been further recognized for Licocene waxes, which have been nominated for the Innovation Prize of the German Economy 2015 for advancing sustainability in plastics and coatings manufacturing and for improving the environmental profile of a wide range of applications.

9 Page 9 of 9 CORPORATE MEDIA RELATIONS INVESTOR RELATIONS CARSTEN SEUM Phone carsten.seum@clariant.com SIEGFRIED SCHWIRZER Phone siegfried.schwirzer@clariant.com STEFANIE NEHLSEN Phone stefanie.nehlsen@clariant.com MARCO FERRARO Phone marco.ferraro@clariant.com Clariant is a globally leading specialty chemicals company, based in Muttenz near Basel/Switzerland. On 31 December 2014 the company employed a total workforce of In the financial year 2014, Clariant recorded sales of CHF billion for its continuing businesses. The company reports in four business areas: Care Chemicals, Catalysis & Energy, Natural Resources, and Plastics & Coatings. Clariant s corporate strategy is based on five pillars: increase profitability, reposition portfolio, add value with sustainability, foster innovation and R&D, and intensify growth.