Clariant AG / Clariant AG: Clariant delivers solid Q2 with improved
profitability and cash flow . Processed and transmitted by NASDAQ OMX
Corporate Solutions. The issuer is solely responsible for the content of
this announcement.
-- Second quarter 2015 sales from continuing operations
remained stable in local currencies. In Swiss francs,
sales decreased 8 % to CHF 1.406 billion from CHF
1.531 billion compared to last year
-- EBITDA margin before exceptional items improved
significantly to 15.0 % from 14.0 %
-- Cash flow clearly improved to CHF 51 million compared
to CHF -62 million in second quarter 2014
-- Net result from continuing operations at CHF 56
million compared to CHF 83 million
-- 2015 outlook confirmed
"Clariant continued the strong development of the first into the second
quarter," said CEO Hariolf Kottmann. "We have significantly improved our
operating profitability and our cash flow. This is in-line with our
objectives for 2015 and we expect cash generation to continue to
increase in the second half of the year. Clariant is well on track to
achieve its growth and profitability targets, despite a continued mixed
economic environment particularly in Asia and very volatile currencies."
Key Financial Data
Continuing
operations: Second quarter First half-year
in CHF million 2015 2014 % CHF % LC 2015 2014 % CHF % LC
Sales 1'406 1'531 -8 0 2'871 3'023 -5 2
EBITDA before
exceptional items 211 214 -1 9 417 424 -2 9
- margin 15.0 % 14.0 % 14.5 % 14.0 %
EBIT before
exceptional items 148 145 2 15 290 285 2 14
- margin 10.5 % 9.5 % 10.1 % 9.4 %
EBIT 133 128 4 17 272 169 61 79
Net result from
continuing
operations 56 83 143 44
Net income(1) 56 74 143 26
Operating cash
flow(1) 51 -62 65 -113
Number of
employees(1) 17 030 17 003*
Discontinued
operations
Sales 0 32 0 98
Net result from
discontinued
operations 0 -9 0 -18
(1) Total group including discontinued operations
* as of 31 December 2014
Second quarter 2015 -Significantly improved EBITDA margin and better
cash flow
Muttenz, 30 July 2015 - Clariant, a world leader in specialty chemicals,
today announced second quarter 2015 sales from continuing operations of
CHF 1.406 billion compared to CHF 1.531 billion in the second quarter of
2014. This corresponds to a flat growth in local currencies, influenced
by 1 % lower volumes and 1 % higher prices.
Given the continuing strong volatility of currencies in the second
quarter of 2015, in particular the year-on-year weaknesses of the euro,
Brazilian real, and the Japanese yen, the flat sales development in
local currencies translated into an 8 % sales reduction in Swiss francs.
Growth was focused in the Americas with Clariant posting strong local
currency sales growth of 16 % in Latin America and 7 % in North America,
the latter led by strong demand in Catalysis as well as continued growth
in Oil & Mining Services. Europe was 2 % lower in local currencies but
basically continued to be flat if the reduction of the exposure to the
low-margin base products business is taken into account.
The lower growth was mostly due to the regions Asia/Pacific and Middle
East & Africa. In Asia/Pacific sales in local currencies decreased by 5
%. The decline was due to weak demand in China and to a high base in the
Catalyst business, where in addition second quarter orders were shifted
into the first quarter of 2015. The strong development in smaller
economies in Asia could not compensate for this base effect. In the
Middle East & Africa region, sales were 21 % lower year-on-year in local
currencies, because of a higher basis in the second quarter of 2014,
which still included sales from the Water Treatment business, which was
divested in July 2014.
The three high margin Business Areas, Care Chemicals, Catalysis, and
Natural Resources experienced strong underlying demand and are all on
track to reach their respective yearly guidance.
Care Chemicals recorded a like-for-like growth of 9 %. Reported growth
was 3 %, exclusively due to the reduction of exposure to the low-margin
base products in 2014. Sales in Catalysis decreased by 9 % in local
currencies as expected, due to a high base in the second quarter of 2014
and the shift of orders from the second into the first quarter of 2015.
Natural Resources revenues increased by 1 % with an underlying growth of
6 % in local currencies when accounting for the sale of the Water
Treatment business. Growth continued to be driven by Oil & Mining
Services. In Plastics & Coatings, however, sales remained flat, as
stable growth in the Masterbatches business could not compensate for the
weakness in Pigments.
At 30.7 %, the gross margin was above previous year's level (29.5 %)
benefitting from higher pricing. The increased gross margin was the main
driver for the strong EBITDA margin before exceptional items
improvement.
The EBITDA before exceptional items from continuing operations rose 9 %
in local currencies and reached CHF 211 million, compared to CHF 214
million recorded in the previous year. The corresponding EBITDA margin
of 15.0 % was clearly above the previous year's level of 14.0 %.
Care Chemicals, Natural Resources, as well as Plastics & Coatings
substantially improved EBITDA margins in the second quarter of 2015 in
comparison to the previous year. Catalysis delivered a solid 23.9 %
EBITDA margin, which was lower than in the previous year, when the
comparable base was uncommonly high due to portfolio mix effects.
Exceptional items including restructuring, impairment, and
transaction-related costs decreased significantly to CHF 16 million
compared to CHF 23 million in the second quarter of 2014. This was due
to lower restructuring costs in the second quarter of 2015.
Net income from continuing operations amounted to CHF 56 million
compared to CHF 83 million in the previous year. This decline was
basically due to extraordinarily low tax expenses in the second quarter
of 2014 that were driven by one-time events.
Operating cash flow improved to CHF 51 million versus CHF -62 million
one year ago, on lower build-up of net working capital. This is a clear
reflection on Clariant's priority to increase cash flow in 2015. Cash
generation is expected to continue to increase in the second half of the
year.
Net debt was CHF 1.347 billion compared to CHF 1.263 billion recorded at
year-end 2014. The gearing, reflecting net financial debt in relation to
total equity rose to 58 % from 46 % at the end of 2014.
Separate subsidiary for Business Area Plastics & Coatings to be
established
Clariant intends to establish a subsidiary for the Business Area
Plastics & Coatings comprised of the Business Units Masterbatches,
Additives and Pigments, in order to fully leverage their value creation
potential for the company. This will enable Plastics & Coatings to be
steered towards higher absolute profitability and cash generation. The
new subsidiaries across the world will be fully owned by Clariant and
will start operating as of 1 January 2016.
"In the last few years our Business Units Masterbatches, Pigments and
Additives have established themselves as leaders in their respective
markets in terms of profitability and market share. The new Plastics &
Coatings subsidiary will further enable differentiated business steering
with a clear focus on absolute profitability and cash generation to
further safeguard and improve competiveness in already mature markets.
This set up will further increase value creation for the Group. That is
why, the entity will remain a vital part of the Group," said CEO Hariolf
Kottmann. "This step will also enable us to make appropriate investments
in our growth areas", he added.
The existing business unit structure with Masterbatches, Additives and
Pigments, will be maintained with all approximately 7'000 employees, all
assets and liabilities. Sales of the Business Area Plastics & Coatings
were CHF 2.6 billion in 2014; the reported EBITDA margin before
exceptional items was 14.0 %.
Outlook 2015 confirmed - Further progress in sales, profitability and
cash
Clariant expects the challenging environment characterized by an
increased volatility in commodity prices and currencies, to continue.
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 continue to be fairly neutral in terms of
relative margins.
In 2015, Clariant is continuing to improve its operational efficiency by
implementing a lean service organization; it is further improving its
marketing excellence and continues 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 full-year 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
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