Credit Suisse 2015 Global Chemicals and Agriculture Conference LONDON, 23 JUNE 2015

Transcription

1 Credit Suisse 2015 Global Chemicals and Agriculture Conference LONDON, 23 JUNE 2015 Public Investor Relations 23 June 2015

2 Highlights Q Public Investor Relations 23 June 2015

3 3 First quarter Clariant with good start into 2015, delivering on growth and cash flow 4% sales growth in local currencies over the first 3 months - Strong underlying growth in Care Chemicals, Catalysis & Energy and Natural Resources - Plastics & Coatings impacted by weakness in Europe, and at the beginning of the quarter EBITDA* at previous year s level, up 8% in local currencies - Margin stable at 14.1%, despite currency headwind - Negative inventory devaluation effect in Q1 to be reversed in Q2 - Increasing contribution from higher-margin businesses Cash Flow generation significantly increased compared to Q Better net working capital management, particularly inventories Net Income improved to CHF 87 m compared to net loss of CHF 39 m * Before exceptional items

4 4 Sales growth driven by volumes despite slow start and FX volatility all figures continuing operations Sales mix Q Sales growth in local currencies Volume 5% Brazil 87 / +8% Acq./Div. 0% North America 277 / +3% Latin America 239 / +23% Price -1% Currency -6% Organic sales growth in LC driven by 5% higher volumes Germany 173 / 13% Europe 518 / -2% Asia / Pacific 336 / +8% Middle East & Africa 95 / -6% China 106 / -4% Double-digit sales growth in LATAM Good growth in Asia driven by smaller economies Sales Q1 2015: CHF m / +4% NORAM solid, continued weakness in Europe Emerging Markets Mature Markets

5 5 Dynamic sales growth and robust margins in most Business Areas First quarter Sales Change EBITDA* margin EBIT* margin Business Area CHF m % CHF % LC Q1/15 Q1/14 Q1/15 Q1/14 Care Chemicals Catalysis & Energy Natural Resources Plastics & Coatings Total group continuing** * Before exceptional items ** Including corporate costs

6 Focus On Performance, Growth & Innovation Public Investor Relations 23 June 2015

7 7 Priorities 2015 moving along the profitable growth path with focus on performance, growth, innovation 2015 KEY ELEMENTS PERFORMANCE Performance Continued cost reduction and efficiency Clariant Excellence Implementing new ways of doing business 2015 GROWTH Exploit growth markets in Asia Seize opportunities in developed and other emerging markets Innovation Growth INNOVATION Strengthen organization and processes Develop innovation pipeline Promote communication and cooperation Target: Growth, higher EBITDA margin and improved cash flow

8 8 Four Business Areas THE RIGHT PORTFOLIO FOR FUTURE GROWTH SALES BY BUSINESS AREA in CHF m, total 2014: CARE CHEMICALS CATALYSIS & ENERGY CLARIANT'S FOCUSED PORTFOLIO After the successfully executed portfolio optimization in the 2014 reporting year, Clariant possesses a focused portfolio that distinguishes itself by: an above-average growth rate promising future prospects high profitability with upside potential NATURAL RESOURCES PLASTICS & COATINGS SALES BY REGION in CHF m, total 2014: NORTH AMERICA EUROPE ASIA/PACIFIC LATIN AMERICA 984 MIDDLE EAST & AFRICA 461

9 9 Business Area Care Chemicals SALES BY REGION TRENDS & DRIVERS Expansion of market shares for consumer products and crop solutions Increased demand for personal care, home care and convenience products Increased need for sustainable and efficient crop protection products Trend toward chemicals based on renewable raw materials Future market biotechnology KEY FINANCIAL FIGURES 2014 Increased demand for sustainable building materials % 18 19% 4 5% Sales in million CHF EBITDA margin before exceptional items EBITDA margin potential before exceptional items Growth ambition per annum

10 10 Business Area Catalysis SALES BY REGION TRENDS & DRIVERS Expansion of a leading market position in all areas of operation Well positioned for applications based on shale gas in the US and coal in China Continue to foster partnership with leading technology providers Concentration on the portfolio and shifting of the resources towards core activities KEY FINANCIAL FIGURES % 24 26% 6 7% Sales in million CHF EBITDA margin before exceptional items EBITDA margin potential before exceptional items Growth ambition per annum

11 11 Business Area Natural Resources SALES BY REGION TRENDS & DRIVERS Increasing demand triggered by the trends in the oil and gas industry: i.e. deepwater drilling, unconventional oil and gas extraction Expansion of market leadership in the area of ore flotation and opening up new markets through innovations Increase of the profitability at Functional Minerals by improved cost and technology platforms Growth in sediment management and feed additives as well as metal casting and edible oil refinement KEY FINANCIAL FIGURES % 15 17% Sales in million CHF EBITDA margin before exceptional items EBITDA margin potential before exceptional items 6 7% Growth ambition per annum

12 12 Business Area Plastics & Coatings SALES BY REGION TRENDS & DRIVERS Expansion of presence in the emerging markets Development of innovative products with special consideration of the heightened ecological awareness, as well as the increased legal requirements and regulations for plastics, inks, and coatings Continuous improvement of the cost efficiency Specific initiatives with dynamic growth product groups, for example, with flame retardants KEY FINANCIAL FIGURES % 16 19% Global GDP Sales in million CHF EBITDA margin before exceptional items EBITDA margin potential before exceptional items Growth ambition per annum

13 13 Innovation active management of innovation portfolio drives growth and profitability TARGET: 1-2% CONTRIBUTION FROM INNOVATION TO SALES GROWTH Sales at maturity: CHF 1.8 billion increase from CHF 540 million in active projects, thereof 63 prioritized as Class 1 projects (as of June 2014) INNOVATION FIGURES 1050 People in R&D (end of 2014) 8 Global R&D Centers >7 000 > 50 Technical Application Centers 3.5% of Group sales m of R&D expenditures in CHF >130 NEW PRODUCT HIGHLIGHTS FROM CLARIANT Glucamides: sugar-based surfactants, multimarkets applications: Personal Care (Glucotain ); Industrial & Homecare (GlucoPure ); Crop Solutions (Synergen GA); Oil Services Heat Generating Material (HGM) concept developed with technology partner CB&I increases the yield in on-purpose olefin production units by several percent and reduces the carbon emissions by several tons per year Polypropylene Catalyst a new market opportunity for Clariant to be launched in 2016 Sunliquid - integrated process for the production of cellulosic ethanol from agricultural residues, from pre-treatment to product separation Patents Scientific collaborations

14 Outlook Public Investor Relations 23 June 2015

15 15 Outlook 2015 heterogeneous macroeconomic environment Macroeconomic view Clariant expects the challenging environment to continue, which is characterized by an increased volatility in commodity prices and currencies 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 will be fairly neutral in terms of relative margins In the emerging markets the economic environment is expected to remain favorable but at a lower level and with increased volatility; moderate growth is expected in the United States, however, growth in Europe is expected to remain weak

16 16 Outlook confirmed further progress in sales and profitability 2015 Clariant will further progress in local currency and profitability Clariant will focus on profitably growing the four Business Areas and on cost efficiency For full-year 2015, Clariant expects low to mid-single digit sales growth in local currencies, an EBITDA margin before exceptional items above full-year 2014 and an increased cash flow generation and beyond 2015 will mark a further progress towards our mid-term target of becoming a leading company for specialty chemicals, achieving a position in the top tier of the industry. This corresponds to an EBITDA margin range before exceptional items of 16% to 19% and a return on invested capital (ROIC) above peer group average

17 17

18 Back-up slides Public Investor Relations 23 June 2015

19 19 EBITDA* margin at previous year s level despite headwinds all figures continuing operations Gross margin above last year Positive effects like higher volumes, slightly lower raw material costs, cost reclassifications to SG&A Negative effects such as slight price decreases, a negative FX effect and inventory devaluations Gross margin 30.8% 28.9% EBITDA* around prior-year level EBITDA* margin flat EBITDA* margin improvement in Care Chemicals and Natural Resources Catalysis & Energy margin impacted by one-time effects, but on track Plastics & Coatings affected by slow start into 2015 EBITDA m CHF EBITDA margin % 14.1% Net income significantly improved to CHF 87 m from CHF 39 m: Lower restructuring and impairment costs in Q1 15 Improved financial and tax result Net result m CHF * Before exceptional items Q Q1 2014

20 20 Operating cash flow significantly improved all figures continuing operations Operating cash flow improved year-on-year Less cash outflow due to an improved net working capital management NWC at 20.7% of sales (Q1 2014: 21.9%) Operating cash flow m CHF Cash-out for restructuring further reduced to CHF 20 million from CHF 24 million Cost incurred in smaller projects to streamline and optimize the service organization -20 Restructuring -24 cash-out m CHF Net debt at CHF m compared to CHF m at year-end 2014 Net debt m CHF * Net debt of CHF m as of 31 December 2014 Q Q1 2014*

21 21 Key financials first quarter First quarter results CHF m % of sales CHF m % of sales Sales % % Local currency growth (LC) 4% - Organic growth rate* 4% - Acquisitions/Divestments 0% Currencies 6% Gross profit % % EBITDA before exceptionals % % EBITDA % % Operating income before exceptionals % % Operating income % % Net result from continuing operations % % Net income/loss Operating cash flow Sales from discontinued operations 66 Net result from discontinued operations 9 * Organic growth: volume and price effects excluding the impact of changes in foreign currency exchange rates and acquisitions/divestments. 1 Total Group, including discontinued operations.

22 22 Cash flow first quarter First quarter results CHF m CHF m Net income Depreciation, amortization and impairment Other 3 98 Payments for restructuring Operating cash flow before working capital changes Changes in working capital and provisions Operating cash flow Cash flow from investing activities thereof: property, plant and equipment thereof: changes in current financial assets and near cash assets thereof: acquisitions, disposals and other Cash flow before financing 34 33

23 23 Financial result first quarter First quarter results CHF m CHF m Interest income 3 3 Other finance income 1 1 Total finance income 4 4 Interest expenses thereof: interest on non-current provisions 1 1 thereof: interest on post-employment benefit obligations 5 6 Other finance expenses 3 3 Total finance expenses Currency result, net 10 7 Total finance costs thereof reported under discontinued operations 2 Total finance costs (continuing operations) 33 40

24 24 Sales and EBITDA margins by Business Area first quarter First quarter results Business Area: Sales EBITDA* EBITDA margin* CHF m % LC % of total BA Q1/15 Q1/14 Care Chemicals Catalysis & Energy Natural Resources Plastics & Coatings Total continuing Sales in % of Group EBITDA* * Before exceptional items Plastics & Coatings 42% Natural Resources 22% Care Chemicals 27% Catalysis & Energy 9% Plastics & Coatings 37% Natural Resources 22% Care Chemicals 30% Catalysis & Energy 11%

25 25 Business Area performance first quarter Care Chemicals Catalysis & Energy Sales in CHF m EBITDA bef. exc. in CHF m Sales in CHF m EBITDA bef. exc. in CHF m Q Change (LC) Q Q Change (LC) Q Q Change (LC) Q Q Change (LC) Q % % +14% % % % +17% % Natural Resources Plastics & Coatings Sales in CHF m EBITDA bef. exc. in CHF m Sales in CHF m EBITDA bef. exc. in CHF m Q Change (LC) Q Q Change (LC) Q Q Change (LC) Q Q Change (LC) Q % % 16.1% % % % -7% %

26 26 Sales rose in Catalysis & Energy, mix-effect diluted Care Chemicals LC sales growth EBITDA* margin Care Chemicals Underlying sales growth of 4% in local currencies, reported sales lower due to pruning of exposure to low-margin products Good growth in Personal Care, Crop Solutions and Aviation (incl. Aerochem acquisition) EBITDA* margin improved significantly due to a positive mix-effect, with higher contributions from Personal Care, Crop Solutions and Aviation overcompensating for negative inventory devaluation effect 0% 17.9% Catalysis & Energy Strong sales growth in all regions due to good underlying demand and a shift of orders from Q2 into Q1 EBITDA* margin decreased due to several one-time effects Catalysts business expects to achieve targeted profitability in 2015, with more evenly allocated EBITDA contribution +26% 18.1% * Before exceptional items

27 27 Strong demand and increased profitability in Natural Resources; Plastics & Coatings with weak start LC sales growth EBITDA* margin Natural Resources Underlying sales growth of 13% in local currencies, reported sales were lower due to the divestment of Water Treatment Sales growth driven by strength in Oil & Mining Services business as well as Purification business Foundry business below level of previous year due to weaknesses in Europe and China Margin improvement due to growth and a better mix-effect Plastics & Coatings Slow start in 2015, good March. Good growth in Masterbatches and Additives. Pigments below last year Weakness in Europe and China negatively impacted Pigments. Masterbatches with good growth in LATAM and Asia. Additives growth driven by Flame Retardants business Lower EBITDA* margin due to sluggish demand particularly at the beginning of the quarter and an inventory devaluation effect +8% 16.1% +1% 13.6% * Before exceptional items

28 28 Selective investments projects coming on stream in the next 1-2 years PROJECT BUSINESS LOCATION INVESTMENT (M CHF) ON STREAM Polypropylene Catalyst production Catalysts Louisville (KY), USA > Glucamide production Consumer Care Gendorf, Germany Industrial Home Care expansion Ind. & Cons. Spec. Clear Lake, USA Licocene Performance Polymer Additives Höchst, Germany < Industrial Home Care expansion Ind. & Cons. Spec. Dayabay, China < High Performance Pigments Pigments Zhenjiang, China Additives project Additives Zhenjiang, China Focused investments on growth areas based on step-change innovations to avoid overcapacities

29 29 Debt maturity profile as of 31 March 2015 Liquidity Maturities of Financial Debt in CHF million Derivatives Uncommitted & other loans / NWC facilities Long-term loans 700 Certificate of Indebtedness EUR Bond CHF Bond Cash* Cash* * Including near cash assets and financial instruments with positive fair values reported under other current assets. On 17 April 2015, Clariant placed certificates of indebtedness totalling EUR 300 million. The four certificates have a term of 5 years (EUR 150 million) respectively 8 years (EUR 150 million) each with fix or float coupons. The interest costs of the tranches range from 0.9% to 1.6% per year.

30 30 Appreciation of Swiss franc basically a translation impact as transactional effects are fairly neutral TRANSACTIONAL IMPACT OF CURRENCIES Since 2011 Swiss franc cost base reduced by more than 50% through to 4% of cost ~ CHF 250 million Favorable effect of European manufacturing base Remnant risk through volatile emerging market currencies NATURAL HEDGE FURTHER IMPROVED 54% of investments in emerging markets and North America to further improve the natural hedge, i.e: Polypropylene Catalyst facility in USA, Industrial Home Care expansion, USA. Bolt-on acquisitions in Asia etc.

31 31 Top 20 chemicals in percentage of total raw material costs* Approx. 45 chemicals account for 50% of material costs Top 5 Chemicals 1 Ethylene 2 Ethylene oxide 3 Propylen glycol 4 Polyethylene 5 Titanium dioxide Top 6-20 Chemicals 6 Propylene oxide 7 Phthalocyanine copper salt 8 Palladium 9 Tallow fatty acid 10 Acetic acid 11 Naphtha 12 Sodium hydroxide 13 Carbon Black 14 Dichlorobenzidine dihydrochloride 15 Bentonite 16 Alkyl benzene 17 Fatty alcohol 18 Ferric oxide 19 Polypropylene 20 Alkyl dimethyl amines 19% 11% Top 5 Top 6-20 Other 70% *As of 31 December 2014

32 32 Calendar of upcoming corporate events 30 July October February 2016 Half-Year 2015 Results Conference Call Nine Months 2015 Results Conference Call Full-Year 2015 Results Conference Call 21 April 2016 Annual General Meeting

33 33 IR contacts Dr. Siegfried Schwirzer Senior Investor Relations Officer Phone Mobile Marco Ferraro Investor Relations Officer Phone Mobile Edith Schwab Phone Mirjam Grieder Phone

34 34 Our Publications ipad App: Factbook:

35 35 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 forward-looking statements to reflect events or circumstances after the date of these materials.