Financial Review NINE MONTHS / THIRD QUARTER CLARIANT INTERNATIONAL LTD Rothausstrasse 61 4132 Muttenz Switzerland
Page 1 of 21 Key Financial Group Figures Continuing operations: Nine Months Third Quarter CHF m 2015 % of sales CHF m 2014 % of sales CHF m 2015 % of sales CHF m 2014 % of sales Sales 4 281 100.0 4530 100.0 1 410 100.0 1 507 100.0 Local currency growth (LC): 2% 2% Organic growth 1 2% 2% Acquisitions/divestitures 0% 0% Currencies 7% 8% Gross profit 1329 31.0 1 316 29.1 446 31.6 434 28.8 EBITDA before exceptional items* 624 14.6 635 14.0 207 14.7 211 14.0 EBITDA* 590 13.8 587 13.0 191 13.5 192 12.7 Operating income before exceptional items* 433 10.1 426 9.4 143 10.1 141 9.4 Operating income 392 9.2 291 6.4 120 8.5 122 8.1 Net result from continuing operations 203 4.7 102 2.3 60 4.3 58 3.8 Basic earnings per share (CHF/share) 0.61 0.30 0.18 0.18 Adjusted earnings per share (CHF/share)* 0.75 0.82 0.22 0.28 Net income total 2 211 85 68 59 Operating cash flow 196 13 131 126 Discontinued operations: Sales 98 Net result from discontinued operations 8 17 8 1 Other key figures total Group: 30.09.2015 31.12.2014 Net debt 1398 1263 Equity (including non-controlling interests) 2497 2733 Gearing 56% 46% Number of employees 17 296 17 003 1 Throughout this statement the term organic growth is used to mean volume and price effects excluding the impacts of changes in FX rates and acquisitions/divestitures. 2 Total Group, including discontinued operations * See Definitions of Terms of Financial Measurement on pages 5 and 6.
Page 2 of 21 FINANCIAL DISCUSSION THIRD QUARTER Economic Environment The growth rate of the global economy has slowed down in the third quarter of 2015 with deteriorating economic dynamics in most of the emerging economies. The US economy continued its healthy expansion reflected by increasing employment rates and increases in average wages. However, the strong US dollar and the less favorable development in the emerging markets are limiting the further potential for improved growth. The eurozone continued to register its slow recovery. Economic growth in China, although still higher than in the US and Europe, continued to feel the effects from increased excess capacities in housing and construction industries. The economies of Russia and Brazil were in recession. High inflation development especially in Venezuela and to a lesser extent in Argentina and Brazil had a negative influence on the main economies of Latin America. Crude oil prices and commodity prices continued their volatile development compared to the previous quarters. Compared to the end of the third quarter of 2014, the Swiss franc depreciated against the US dollar, while it appreciated strongly against the euro, the Brazilian real, the Japanese yen and, to a lesser extent, the Indian rupee and the Chinese yuan. Sales and Operating Results Third Quarter 2015 Sales from continuing operations increased by 2 % in local currency but decreased 6 % in Swiss francs, compared to the third quarter of the previous year. The gross margin in the third quarter of 2015 was 31.6 % compared to 28.8 % recorded in the prior-year period, benefitting from positive effects of slightly lower raw material costs, slight price increases and cost reclassifications to SG&A. These effects were partially offset by a negative currency effect. Selling, general and administrative costs accounted for 18.9 % of sales and were above the 17.5 % level of the previous year period. The variance is mainly due to reclassification of costs previously reported under cost of goods sold. Income from associates and joint ventures of CHF 15 million in the third quarter of 2015 is below the level of CHF 26 million in the prior-year period. Restructuring, impairment and transaction-related costs amounted to CHF 27 million, reflecting a goodwill impairment charge of CHF 7 million and costs related to streamlining and optimizing the service organization within the Group. Gain from disposals not qualifying as discontinuing operations of CHF 4 million mainly refers to booking adjustments related to the disposal of Energy Storage which took place in the first quarter of this year. Additionally a further payment from the disposal of the ASK participation was registered in the third quarter of 2015. The net financial result was CHF -54 million in the third quarter of 2015. The financial result before foreign currency impacts improved to CHF -28 million in the third quarter of 2015 from CHF -31 million in the third quarter of 2014. Changes in the debt profile, including the repayment of a EUR 267 million German Certificate of Indebtedness in October 2014 and the issuance of a EUR 300 million German Certificate of Indebtedness in April 2015, together with a one-time currency effect on the euro bond interests were the main drivers for the improvement in financial expenses. The deviation to the prior-year quarter in the net currency result is mainly driven by the stronger euro and weaker US dollar against the Swiss franc development during Q3 2015 compared with Q3 2014 as well as by high inflation accounting for the Venezuelan entity. Tax expense of CHF 6 million for the continuing business was incurred compared to a tax expense of CHF 33 million in Q3 2014. The tax expense is extraordinarily low due to positive onetime events. Net result from continuing operations amounted to CHF 60 million in the third quarter of 2015, which was above the CHF 58 million net result reported in the same period of 2014. Research and development costs of CHF 51 million in the third quarter of 2015 were below the level recorded in the same quarter of the previous year (CHF 55 million). Currency translation effects offset the slight increase in local currency terms. Net result from discontinued operations was CHF 8 million in the third quarter of 2015 due to closing account adjustments related to the disposal of the Textile, Paper and Emulsions Business in 2013.
Page 3 of 21 Balance Sheet Key Figures September 2015 Total assets decreased to CHF 7.617 billion as of 30 September 2015 from CHF 7.915 billion at the end of 2014 mainly due to the appreciation of the Swiss franc against the euro. This occurred following the announcement made by the Swiss National Bank on 15 January 2015 to discontinue the exchange rate floor of 1.20 Swiss franc per euro. Investments in associates and joint ventures decreased to CHF 566 million from CHF 635 million mainly due to the depreciation of the euro against the Swiss franc. Near-cash assets increased to CHF 364 million from CHF 180 million. They include short-term deposits with an original maturity between 90 and 365 days. Assets held for sale sharply decreased at the end of September 2015 compared with end of December 2014 due to the sale of the Energy Storage activities in February 2015. Non-current financial debts increased to CHF 1.871 billion at the end of September 2015 from CHF 1.761 million at the end of December 2014, and current financial debts increased to CHF 635 million at the end of September 2015 from CHF 430 million at the end of December 2014. The increase in non-current financial debts and in current financial debts is mainly due to combined effects of the new Certificates of Indebtedness totaling EUR 300 million launched in April 2015 with a term of 5 years (EUR 150 million) and 8 years (EUR 150 million) respectively, and to the reclassification to current financial debts of Certificates of Indebtedness totaling EUR 123 million maturing in April 2016 offsetting the favorable effect of the euro/ Swiss franc exchange rate on the EUR 500 million straight bond maturing in January 2017. Equity decreased to CHF 2.497 billion at the end of September 2015 from CHF 2.733 billion at the end of 2014. This was due to the negative currency translation differences amounting to CHF 375 million mainly associated with change in the euro/swiss franc exchange rate, to a distribution from capital contribution reserves of CHF 129 million and to CHF 31 million dividends to non-controlling interests. This was also due to the combined effect of actuarial losses on retirement benefit obligations and a positive return on pension plan assets amounting to a negative CHF 15 million, net of deferred tax. The positive impact of net investment hedges amounting to CHF 59 million, the net profit for the period amounting to CHF 211 million, treasury shares transactions amounting to CHF 33 million and the effects of employee services amounting to CHF 11 million partially offset the negative effects on equity as of end of September 2015. Net debt increased to CHF 1.398 billion at the end of September 2015, from CHF 1.263 billion at the end of 2014. This figure includes current and non-current financial debts, cash and cash equivalents, near-cash assets and financial instruments with positive fair values. Gearing, which reflects net financial debt in relation to equity, including non-controlling interests, increased to 56 % at the end of September 2015, from 46 % at the end of December 2014.
Page 4 of 21 Cash Flow Cash flow from operating activities before changes in working capital and provisions amounted to CHF 172 million for the third quarter of 2015, compared to CHF 157 million for the third quarter of the previous year. The cash flow from operating activities before changes in working capital and provisions for the first nine months of 2015 was CHF 469 million compared to CHF 483 million for the first nine months of 2014. Working capital increased by CHF 41 million in the third quarter of 2015, compared to an increase of CHF 31 million during the third quarter of 2014. In the first nine months of 2015, working capital increased by CHF 273 million, compared with an increase of CHF 470 million in the first nine months of 2014. Cash flow from operating activities was a positive CHF 131 million for the third quarter of 2015, compared to CHF 126 million for the third quarter of the previous year. For the first nine months of 2015 cash flow from operating activities was CHF 196 million, compared with CHF 13 million for the first nine months of 2014. Capital expenditures (PPE) were CHF 95 million for the third quarter of 2015, compared with CHF 70 million for the third quarter of the previous year. For the first nine months of 2015, capital expenditures increased to CHF 211 million from CHF 175 million for the first nine months of 2014. Proceeds from disposals of activities not qualifying as discontinued operations for the first nine months mainly include cash proceeds from the disposal of the Energy Storage activities. Financing activities mainly include the sale of treasury shares, proceeds from and repayments of financial debt, dividends paid to the shareholders of Clariant and to non-controlling interests and the related interests paid and received.
Page 5 of 21 DEFINITION OF TERMS OF FINANCIAL MEASUREMENTS (UNAUDITED) The following financial measurements are supplementary financial indicators. They should be considered in addition to, not as a substitute for, operating income, net income, operating cash flow and other measures of financial performance and liquidity reported in accordance with International Financial Reporting Standards (IFRS). EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is calculated as operating income plus depreciation of PPE, plus impairment and amortization of intangible assets, and can be reconciled from the Condensed Financial Statements as follows: EBITDA (Continuing) Nine Months Third Quarter CHF m 2 015 2 014 2 015 2 014 Operating income 392 291 120 122 + Depreciation of PPE 150 163 50 54 + Impairment 7 87 7 + Amortization of intangible assets 41 46 14 16 EBITDA 590 587 191 192 EBITDA before exceptional items is calculated as EBITDA plus expenses for restructuring, impairment and transaction-related costs less impairment and gain/loss on disposals. EBITDA before exceptional items (Continuing) Nine Months Third Quarter CHF m 2 015 2 014 2 015 2 014 EBITDA 590 587 191 192 + Restructuring, impairment and transaction-related costs 56 139 27 17 Impairment (reported under Restructuring and impairment) 7 87 7 Gain from the disposal of activities not qualifying as discontinued operations 15 4 4 2 EBITDA before exceptional items 624 635 207 211 Operating income before exceptional items is calculated as operating income plus restructuring, impairment and transaction-related costs and gain/loss on disposals. Operating income before exceptional items (Continuing) Nine Months Third Quarter CHF m 2 015 2 014 2 015 2 014 Operating income 392 291 120 122 + Restructuring, impairment and transaction-related costs 56 139 27 17 Gain from the disposal of activities not qualifying as discontinued operations 15 4 4 2 Operating income before exceptional items 433 426 143 141
Page 6 of 21 Adjusted earnings per share is the earnings per share adjusted for the impact of exceptional items, assuming an adjusted income tax rate of 26% for the period. Adjusted earnings per share (Continuing) Nine Months Third Quarter CHF m 2 015 2 014 2 015 2 014 Operating income before exceptional items 433 426 143 141 + Amortization of intangible assets 41 46 14 16 + Finance income 11 11 4 3 Finance costs 145 117 58 34 Adjusted income before taxes 340 366 103 126 Adjusted income taxes 88 95 26 33 Adjusted net result from continuing operations 252 271 77 93 Thereof attributable to non-controlling interests 9 8 3 4 Thereof attributable to shareholders of Clariant Ltd. 243 263 74 89 Weighted average number of shares outstanding 322 026 300 319 634 583 Adjusted earnings per share attributable to shareholders of Clariant Ltd (CHF/share) 0.75 0.82 0.22 0.28 Net debt is the sum of current and non-current financial debt less cash and cash equivalents, near-cash assets and financial instruments with positive fair values. Net debt CHF m 30.09.2015 31.12.2014 Non-current financial debt 1 871 1 761 + Current financial debt 635 430 Cash and cash equivalents 744 748 Near-cash assets 364 180 Financial instruments with positive fair values Net debt 1398 1263
Page 7 of 21 CONDENSED FINANCIAL STATEMENTS OF THE CLARIANT GROUP Consolidated balance sheets ASSETS 30.09.2015 31.12.2014 CHF m % CHF m % Non-current assets Property, plant and equipment 1995 2 104 Intangible assets 1 342 1487 Investments in associates and joint ventures 566 635 Financial assets 39 44 Prepaid pension assets 25 18 Deferred income tax assets 253 271 Total non-current assets 4220 55.4 4559 57.6 Current assets Inventories 899 930 Trade receivables 969 985 Other current assets 372 385 Current income tax receivables 44 56 Near-cash assets 364 180 Cash and cash equivalents 744 748 Total current assets 3392 44.5 3284 41.5 Assets held for sale 5 0.1 72 0.9 Total assets 7 617 100.0 7 915 100.0 EQUITY AND LIABILITIES 30.09.2015 31.12.2014 CHF m % CHF m % Equity Share capital 1228 1228 Treasury shares (par value) 34 45 Other reserves 414 852 Retained earnings 794 574 Total capital and reserves attributable to Clariant shareholders 2 402 2 609 Non-controlling interests 95 124 Total equity 2497 32.8 2733 34.5 Liabilities Non-current liabilities Financial debts 1 871 1 761 Deferred income tax liabilities 63 72 Retirement benefit obligations 831 924 Provision for non-current liabilities 160 210 Total non-current liabilities 2925 38.4 2967 37.5 Current liabilities Trade and other payables 987 1 147 Financial debts 635 430 Current income tax liabilities 275 313 Provision for current liabilities 298 315 Total current liabilities 2 195 28.8 2 205 27.9 Liabilities directly associated with assets held for sale 10 0.1 Total liabilities 5 120 67.2 5 182 65.5 Total equity and liabilities 7 617 100.0 7 915 100.0
Page 8 of 21 Consolidated income statements Nine Months Third Quarter 2 015 2 014 2 015 2 014 CHF m % CHF m % CHF m % CHF m % Sales 4 281 100.0 4530 100.0 1 410 100.0 1 507 100.0 Costs of goods sold 2952 69.0 3214 70.9 964 68.4 1073 71.2 Gross profit 1 329 31.0 1 316 29.1 446 31.6 434 28.8 Selling, general and administrative costs 801 18.7 790 17.4 267 18.9 264 17.5 Research and development 144 3.4 158 3.5 51 3.7 55 3.7 Income from associates and joint ventures 49 1.1 58 1.3 15 1.1 26 1.7 Gain from the disposal of activities not qualifying 15 0.4 4 0.1 4 0.3 2 0.1 as discontinued operations Restructuring, impairment and transaction-related costs 56 1.3 139 3.2 27 1.9 17 1.1 Operating income 392 9.1 291 6.4 120 8.5 122 8.1 Finance income 11 0.3 11 0.2 4 0.3 3 0.2 Finance costs 145 3.4 117 2.5 58 4.1 34 2.3 Income before taxes 258 6.0 185 4.1 66 4.7 91 6.0 Taxes 55 1.3 83 1.8 6 0.4 33 2.2 Net result from continuing operations 203 4.7 102 2.3 60 4.3 58 3.8 Attributable to: Shareholders of Clariant Ltd 194 94 57 54 Non-controlling interests 9 8 3 4 Net result from discontinued operations 8 17 8 1 Attributable to: Shareholders of Clariant Ltd 8 22 8 1 Non-controlling interests 5 Net income 211 85 68 59 Attributable to: Shareholders of Clariant Ltd 202 72 65 55 Non-controlling interests 9 13 3 4 Basic earnings per share attributable to the shareholders of Clariant Ltd (CHF/share): Continuing operations 0.61 0.30 0.18 0.18 Discontinued operations 0.02 0.07 0.02 Total 0.63 0.23 0.20 0.18 Diluted earnings per share attributable to the shareholders of Clariant Ltd (CHF/share): Continuing operations 0.60 0.29 0.18 0.17 Discontinued operations 0.02 0.07 0.02 Total 0.62 0.22 0.20 0.17
Page 9 of 21 Consolidated statements of comprehensive income Nine Months Third Quarter CHF m 2 015 2 014 2 015 2 014 Net income 211 85 68 59 Other comprehensive income: Remeasurements: Actuarial gain/loss on retirement benefit obligations 43 296 89 140 Return on retirement benefit plan assets, excluding amount included in interest expense 53 64 59 20 Total items that will not be reclassified subsequently to the income statement, 10 232 30 120 gross Deferred tax on remeasurements 5 58 7 31 Total items that will not be reclassified subsequently to the income statement, net 15 174 23 89 Net investment hedge 59 18 41 8 Currency translation differences 366 57 126 55 Share of other comprehensive income of associates and joint ventures Effect of the reclassification of foreign exchange differences on previously held net 9 2 investments in foreign entities Total items that may be reclassified subsequently to profit and loss 316 77 85 63 Deferred tax effect Total items that will be reclassified subsequently to the income statement, net 316 77 85 63 Other comprehensive income for the period, net of tax 331 97 108 26 Total comprehensive income for the period 120 12 176 33 Attributable to: Shareholders of Clariant Ltd 122 30 171 26 Non-controlling interests 2 18 5 7 Total comprehensive income for the period 120 12 176 33 Total comprehensive income attributable to shareholders of Clariant Ltd arising from: Continuing operations 122 11 171 26 Discontinued operations 19 Total comprehensive income attributable to shareholders of Clariant Ltd 122 30 171 26
Page 10 of 21 Consolidated statement of changes in equity Other reserves Nine Months CHF m Total share capital Treasury shares (par value) Share premium reserves Cumulative translation reserves Total other reserves Retained earnings Total attributable to equity holders Noncontrolling interests Total equity Balance 31 December 2013 1 228 49 1 692 811 881 654 2 714 66 2 780 Net income 72 72 13 85 Net investment hedge 18 18 18 18 Remeasurements: Actuarial loss on retirement benefit obligations 296 296 296 Return on retirement benefit plan assets, excluding 64 64 64 amount included in interest expense Deferred tax on remeasurements 58 58 58 Currency translation differences 52 52 52 5 57 Effect of the reclassification of foreign exchange 2 2 2 2 differences on previously held net investments in foreign entities Total comprehensive income for the period 72 72 102 30 18 12 Distributions 115 115 115 115 Dividends to non-controlling interest 18 18 Employee share & option scheme: Effect of employee services 14 14 14 Treasury share transactions 4 10 14 14 Balance 30 September 2014 1 228 45 1 577 739 838 576 2 597 66 2 663 Balance 31 December 2014 1 228 45 1 577 725 852 574 2 609 124 2 733 Net income 202 202 9 211 Net investment hedge 59 59 59 59 Remeasurements: Actuarial gain retirement benefit obligations 43 43 43 Return on retirement benefit plan assets, excluding 53 53 53 amount included in interest expense Deferred tax on remeasurements 5 5 5 Currency translation differences 359 359 359 7 366 Effect of the reclassification of foreign exchange 9 9 9 9 differences on previously held net investments in foreign entities Total comprehensive income for the period 309 309 187 122 2 120 Distributions 129 129 129 129 Dividends to non-controlling interest 31 31 Employee share & option scheme: Effect of employee services 11 11 11 Treasury share transactions 11 22 33 33 Balance 30 September 2015 1 228 34 1 448 1 034 414 794 2 402 95 2 497
Page 11 of 21 Consolidated statements of cash flows Nine Months Third Quarter CHF m 2 015 2 014 2 015 2 014 Net income 211 85 68 59 Adjustment for: Depreciation of property, plant and equipment (PPE) 150 163 50 54 Impairment and reversal of impairment 7 87 7 Amortization of intangible assets 41 46 14 16 Impairment of working capital 42 39 10 13 Income from associates and joint ventures 49 58 15 26 Tax expense 54 87 5 34 Net financial income and costs 73 92 28 30 Gain from the disposal of activities not qualifying as discontinued 15 4 4 2 operations Loss on disposal of discontinued operations 2 13 2 1 Other non-cash items 43 23 29 9 Total reversal of non-cash items 348 488 126 131 Dividends received from associates and joint ventures 50 44 9 8 Income taxes paid 82 69 17 23 Payments for restructuring 58 65 14 18 Cash flow before changes in working capital and provisions 469 483 172 157 Changes in inventories 90 198 43 36 Changes in trade receivables 90 107 13 14 Changes in trade payables 76 136 7 38 Changes in other current assets and liabilities 6 11 4 30 Changes in provisions (excluding payments for restructuring) 11 18 18 27 Cash flow from operating activities 196 13 131 126 Investments in PPE 211 175 95 70 Investments in financial assets, associates and joint ventures 2 1 Investments in intangible assets 13 8 3 4 Changes in current financial assets and near-cash assets 203 39 19 66 Sale of PPE and intangible assets 4 21 1 Acquisition of companies, businesses and participations 17 19 15 4 Proceeds from the disposal of discontinued operations 1 127 3 Proceeds from the disposal of activities not qualifying as discontinued operations 73 112 1 1 Cash flow from investing activities 368 17 89 144 Purchase of treasury shares 21 20 10 Sale of treasury shares 54 28 10 Proceeds from financial debts 501 98 111 6 Repayments of financial debts 111 99 63 50 Distributions from the reserves to the shareholders of Clariant 129 115 Ltd Dividends paid to non-controlling interest 31 18 8 Interest paid 74 76 19 16 Interest received 10 9 3 2 Cash flow from financing activities 199 193 32 66 Currency translation effect on cash and cash equivalents 31 8 4 7 Net change in cash and cash equivalents 4 155 78 77 Cash and cash equivalents at the beginning of the period 748 770 666 692 Cash and cash equivalents at the end of the period 744 615 744 615
Page 12 of 21 NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of preparation of financial statements These financial statements are the interim condensed consolidated financial statements (hereafter the interim consolidated financial statements ) of Clariant Ltd, a company registered in Switzerland, and its subsidiaries (hereafter the Group ) for the nine-month period ended on 30 September 2015. They are prepared in accordance with the International Accounting Standard 34 (IAS 34 Interim Financial Reporting ) and were approved on 28 October 2015 by the Board of Directors. These interim consolidated financial statements should be read in conjunction with the Consolidated Financial Statements for the year ended 31 December 2014 (hereafter the annual financial statements ) as they provide an update of previously reported information. The accounting policies applied are consistent with the ones applied at year-end 2014. The preparation of the interim consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, and disclosure of contingent liabilities at the date of the interim consolidated financial statements. If, in the future, such estimates and assumptions, which are based on the management s best judgment at the date of the interim consolidated financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change. 2. Seasonality of operations The Group operates in industries where significant seasonal or cyclical variations in total sales are not experienced during the financial year. 3. Fair value measurement All derivative financial instruments held by the Group at the end of September 2015 are classified as Level 2 as defined by IFRS 13, Fair Value Measurement. 4. Disposal activities 4.1 Disposal of Energy Storage activities On 28 February 2015, Clariant sold its Energy Storage activities pertaining to the Business Area Catalysis & Energy to British-based Johnson Matthey. Assets and liabilities pertaining to the Energy Storage activities, presented as held for sale in the balance sheet at the end of 2014, were deconsolidated. The following table shows the calculation of the result realized by Clariant in 2015 on the sale of its Energy Storage activities. CHF, in million Total consideration for the sale 73 Net assets transferred, after impairment recorded in 2014, including disposal-related expenses -62 Result on the disposal before taxes 11 Taxes 1 After tax profit on the disposal 12 This disposal result is subject to adjustments until the final determination of the selling price and of the values of the net assets disposed of. This is expected to occur in the fourth quarter of this year. 5. Restructuring, impairment and transactionrelated costs During the first nine months of 2015, Clariant recorded restructuring expenses in the amount of CHF 33 million, mainly pertaining to projects in Europe, impairment of goodwill in Italy in the amount of CHF 7 million and transaction-related costs in the amount of CHF 16 million. During the same period in the previous year, restructuring, impairment and transaction-related costs totaled CHF 139 million, mainly pertaining to the impairment expense recorded in the context of the sale of the participation in ASK Chemicals. 6. Distribution from reserves On 31 March 2015, the General Meeting approved a distribution of CHF 0.40 per registered share from capital contribution reserves. On 8 April 2015, a distribution totaling CHF 129 million was made to Clariant shareholders. 7. Launch of a new certificate of indebtedness On 17 April 2015, Clariant issued four certificates of indebtedness with a total sum of EUR 300 million. These certificates have a term of 5 years (EUR 150 million) and 8 years (EUR 150 million) respectively, each with fixed (based on mid-swap) or floating (based on six months Euribor) coupons. The interest costs of the tranches range from 0.9 % to 1.6 % per year.
Page 13 of 21 8. Business Area figures Nine Months Sales to third parties EBITDA before exceptionals EBITDA CHF m 2 015 2 014 % CHF % LC 2 015 2 014 % CHF % LC 2 015 2 014 % CHF % LC Care Chemicals 1 075 1 118 4 4 205 179 15 25 202 177 14 25 Catalysis* 463 491 6 3 101 112 10 1 112 112 9 Natural Resources 888 951 7 3 139 138 1 10 142 136 4 14 Plastics & Coatings 1855 1970 6 260 283 8 2 256 282 9 3 Business Areas total 4 281 4530 705 712 712 707 Corporate 81 77 122 120 Total 4 281 4530 5 2 624 635 2 8 590 587 1 11 Operating income before exceptionals Operating income Systematic depreciation of PPE CHF m 2 015 2 014 % CHF % LC 2 015 2 014 % CHF % LC 2 015 2 014 Care Chemicals 171 144 19 30 168 142 18 29 31 32 Catalysis* 63 68 7 5 74 68 9 20 25 28 Natural Resources 113 109 4 13 116 20 480 527 18 20 Plastics & Coatings 201 220 9 3 190 219 13 8 51 55 Business Areas total 548 541 548 449 125 135 Corporate 115 115 156 158 25 28 Total 433 426 2 13 392 291 35 49 150 163 Third Quarter Sales to third parties EBITDA before exceptionals EBITDA CHF m 2 015 2 014 % CHF % LC 2 015 2 014 % CHF % LC 2 015 2 014 % CHF % LC Care Chemicals 348 343 1 12 67 57 18 31 66 55 20 31 Catalysis* 162 176 8 1 37 33 12 24 40 34 18 28 Natural Resources 291 330 12 49 52 6 8 50 50 14 Plastics & Coatings 609 658 7 1 84 92 9 4 82 91 10 6 Business Areas total 1 410 1507 237 234 238 230 Corporate 30 23 47 38 Total 1 410 1507 6 2 207 211 2 8 191 192 1 10 Operating income before exceptionals Operating income Systematic depreciation of PPE CHF m 2 015 2 014 % CHF % LC 2 015 2 014 % CHF % LC 2 015 2 014 Care Chemicals 56 45 24 37 55 43 28 37 10 11 Catalysis* 24 18 33 53 27 19 42 54 8 9 Natural Resources 40 42 5 9 41 40 3 15 6 7 Plastics & Coatings 64 70 9 6 55 69 20 19 17 19 Business Areas total 184 175 178 171 41 46 Corporate 41 34 58 49 9 8 Total 143 141 1 12 120 122 2 8 50 54 * Catalysis & Energy was renamed into Catalysis after the Energy Storage business was sold to UK-based Johnson Matthey. The transaction closed on 28 February 2015.
Page 14 of 21 9. Business Area margins Nine Months Sales to third parties EBITDA before exceptionals EBITDA in % 2 015 2 014 2 015 2 014 2 015 2 014 Care Chemicals 25.1 24.7 19.1 16.0 18.8 15.8 Catalysis* 10.8 10.8 21.8 22.8 24.2 22.8 Natural Resources 20.8 21.0 15.7 14.5 16.0 14.3 Plastics & Coatings 43.3 43.5 14.0 14.4 13.8 14.3 Total 100.0 100.0 14.6 14.0 13.8 13.0 Operating income Operating income before exceptionals in % 2 015 2 014 2 015 2 014 Care Chemicals 15.9 12.9 15.6 12.7 Catalysis* 13.6 13.8 16.0 13.8 Natural Resources 12.7 11.5 13.1 2.1 Plastics & Coatings 10.8 11.2 10.2 11.1 Total 10.1 9.4 9.2 6.4 Third Quarter Sales to third parties EBITDA before exceptionals EBITDA in % 2 015 2 014 2 015 2 014 2 015 2 014 Care Chemicals 24.7 22.8 19.3 16.6 19.0 16.0 Catalysis* 11.5 11.7 22.8 18.8 24.7 19.3 Natural Resources 20.6 21.9 16.8 15.8 17.2 15.2 Plastics & Coatings 43.2 43.6 13.8 14.0 13.5 13.8 Total 100.0 100.0 14.7 14.0 13.5 12.7 Operating income Operating income before exceptionals in % 2 015 2 014 2 015 2 014 Care Chemicals 16.1 13.1 15.8 12.5 Catalysis* 14.8 10.2 16.7 10.8 Natural Resources 13.7 12.7 14.1 12.1 Plastics & Coatings 10.5 10.6 9.0 10.5 Total 10.1 9.4 8.5 8.1 * Catalysis & Energy was renamed into Catalysis after the Energy Storage business was sold to UK-based Johnson Matthey. The transaction closed on 28 February 2015.
Page 15 of 21 10. Operating income EBITDA bridge Nine Months Care Chemicals Catalysis* Natural Resources Plastics & Coatings Total Business Areas Corporate Total Continuing CHF m 2 015 2 014 2 015 2 014 2 015 2 014 2 015 2 014 2 015 2 014 2 015 2 014 2 015 2 014 Operating income / loss 168 142 74 68 116 20 190 219 548 449 156 158 392 291 + Depreciation of PPE 31 32 25 28 18 20 51 55 125 135 25 28 150 163 + Impairment 87 7 7 87 7 87 + Amortization of 3 3 13 16 8 9 8 8 32 36 9 10 41 46 intangible assets EBITDA 202 177 112 112 142 136 256 282 712 707 122 120 590 587 + Restructuring, impairment and 3 2 1 93 11 1 15 96 41 43 56 139 transaction-related costs Impairment 87 7 7 87 7 87 (reported under Restructuring and impairment) Gain from the disposal of 11 4 4 15 4 15 4 activities not qualifying as discontinued operations EBITDA before exceptional items 205 179 101 112 139 138 260 283 705 712 81 77 624 635 Operating income / loss 171 144 63 68 113 109 201 220 548 541 115 115 433 426 before exceptional items - Restructuring, impairment and 3 2 1 93 11 1 15 96 41 43 56 139 transaction-related costs + Gain from the disposal of 11 4 4 15 4 15 4 activities not qualifying as discontinued operations Operating income / loss 168 142 74 68 116 20 190 219 548 449 156 158 392 291 Finance income 11 11 Finance costs 145 117 Income before taxes 258 185 * Catalysis & Energy was renamed into Catalysis after the Energy Storage business was sold to UK-based Johnson Matthey. The transaction closed on 28 February 2015.
Page 16 of 21 Third Quarter Care Chemicals Catalysis* Natural Resources Plastics & Coatings Total Business Areas Corporate Total Continuing CHF m 2 015 2 014 2 015 2 014 2 015 2 014 2 015 2 014 2 015 2 014 2 015 2 014 2 015 2 014 Operating income/loss 55 43 27 19 41 40 55 69 178 171 58 49 120 122 + Depreciation of PPE 10 11 8 9 6 7 17 19 41 46 9 8 50 54 + Impairment 7 7 7 + Amortization of intangible 1 1 5 6 3 3 3 3 12 13 2 3 14 16 assets EBITDA 66 55 40 34 50 50 82 91 238 230 47 38 191 192 + Restructuring, impairment and 1 2 1 9 1 10 2 17 15 27 17 transaction-related costs Impairment 7 7 7 (reported under Restructuring and impairment) Gain from the disposal of 3 1 2 4 2 4 2 activities not qualifying as discontinued operations EBITDA before exceptional items 67 57 37 33 49 52 84 92 237 234 30 23 207 211 Operating income/loss 56 45 24 18 40 42 64 70 184 175 41 34 143 141 before exceptional items Restructuring, impairment and 1 2 1 9 1 10 2 17 15 27 17 transaction-related costs + Gain from the disposal of 3 1 2 4 2 4 2 activities not qualifying as discontinued operations Operating income/loss 55 43 27 19 41 40 55 69 178 171 58 49 120 122 Finance income 4 3 Finance costs 58 34 Income before taxes 66 91 * Catalysis & Energy was renamed into Catalysis after the Energy Storage business was sold to UK-based Johnson Matthey. The transaction closed on 28 February 2015.
Page 17 of 21 11. Geographic information Sales Nine Months Third Quarter CHF m 2015 % of sales 2 014 % of sales CHF % LC % 2015 % of sales 2 014 % of sales CHF % LC % EMEA 1 749 40.9 2059 45.5 15 3 568 40.3 648 43.0 12 1 of which Europe 1454 1 708 15 2 465 535 13 1 of which Germany 494 617 20 8 161 186 13 3 of which Switzerland 30 40 25 12 9 11 18 9 of which MEA 295 351 16 10 103 113 9 2 North America 783 18.3 720 15.9 9 4 249 17.7 235 15.6 6 2 of which USA 711 642 11 5 224 209 7 2 Latin America 742 17.3 707 15.6 5 20 258 18.3 259 17.2 20 of which Brazil 255 302 16 8 82 108 24 10 Asia - Pacific 1 007 23.5 1044 23.0 4 1 335 23.7 365 24.2 8 3 of which China 319 383 17 18 100 130 23 25 of which India 105 105 1 37 37 3 Total 4 281 100.0 4 530 100.0 5 2 1 410 100.0 1 507 100.0 6 2 Discontinued operations 98
Page 18 of 21 12. Condensed earnings per share data Nine Months 2 015 2 014 Net income attributable to shareholders of Clariant Ltd (CHF m) Continuing operations 194 94 Discontinued operations 8 22 Total 202 72 Shares Number of registered shares at 30.09.2015 and 30.09.2014 respectively 331 939 199 331 939 199 Weighted average number of shares outstanding 322 026 300 319 634 583 Adjustment for granted Clariant shares 1999702 1924315 Adjustment for dilutive share options 97054 187 420 Weighted average diluted number of shares outstanding 324 123 056 321 746 318 Basic earnings per share attributable to shareholders of Clariant Ltd (CHF/share) Continuing operations 0.61 0.30 Discontinued operations 0.02 0.07 Total 0.63 0.23 Diluted earnings per share attributable to shareholders of Clariant Ltd (CHF/share) Continuing operations 0.60 0.29 Discontinued operations 0.02 0.07 Total 0.62 0.22
Page 19 of 21 13. Finance income and costs Finance income Nine Months Third Quarter in CHF m 2015 2014 2015 2014 Interest income 8 9 3 3 Other financial income 3 2 1 Total finance income 11 11 4 3 Finance costs in CHF m 2015 2014 2015 2014 Interest costs 77 98 30 33 thereof effect of discounting of non-current provisions 3 3 1 1 thereof interest component of pension provisions 15 18 6 6 Other financial expenses 7 5 2 1 Currency result, net 61 16 26 Total finance costs 145 119 58 34 thereof reported under discontinued operations 2 Total finance costs continuing operations 145 117 58 34
Page 20 of 21 14. Foreign exchange rates Rates used to translate the consolidated balance sheets (closing rate) 30.09.2015 31.12.2014 Change % 1 USD 0.97 0.99 2 1 EUR 1.09 1.20 9 1 BRL 0.24 0.37 35 1 CNY 0.15 0.16 6 100 INR 1.48 1.57 6 100 JPY 0.81 0.83 2 Nine Months Average sales-weighted rates used to translate the consolidated income 2 015 2 014 Change % statements and consolidated statements of cash flows 1 USD 0.95 0.90 6 1 EUR 1.06 1.22 13 1 BRL 0.30 0.39 24 1 CNY 0.15 0.15 100 INR 1.50 1.48 1 100 JPY 0.79 0.87 9
Page 21 of 21 CLARIANT WHAT IS PRECIOUS TO YOU? 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 17 003. In the financial year 2014, Clariant recorded sales of CHF 6.116 billion for its continuing businesses. 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. The company reports in four Business Areas: Care Chemicals, Catalysis, Natural Resources, and Plastics & Coatings. www.clariant.com Calendar of Corporate Events Your Clariant Contacts 17 February 2016 Full Year 2015 Results 21 April 2016 Annual General Meeting 28 April 2016 First Quarter 2016 Results 28 July 2016 First Half 2016 Results 27 October 2016 Nine Months 2016 Results Investor Relations Fax +41 61 469 67 67 Anja Pomrehn Tel. +41 61 469 67 45 Siegfried Schwirzer Tel. +41 61 469 67 49 Marco Ferraro Tel. +41 61 469 64 11 Media Relations Fax +41 61 469 69 99 Carsten Seum Tel. +41 61 469 63 63 Claudia Camensky Tel. +41 61 469 63 63 Disclaimer This document 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 forwardlooking statements, which pertain 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.