16 Feb 2017
Clariant continues to grow in sales and profitability in the first nine months of 2016
• Sales grew by 2 % in local currency to CHF 4.299 billion
• EBITDA margin before exceptional items significantly expands
to 15.2 %
• 2016 outlook confirmed: continued progression in operating
cash flow and EBITDA margin before exceptional items
“Clariant continues to grow both, sales and profitability in the first nine month of 2016,”
said CEO Hariolf Kottmann. “The good performance reflects our excellent execution of
our strategy in all our businesses to foster growth and improve returns despite the
continued challenging economic environment. The advancement in the current year
results from our focus on innovation by delivering more added value to our customers as
well as continued cost discipline. The differentiated business steering in Plastics &
Coatings continued to positively impact the profitability improvement. We are therefore
on track to achieve our targets for the full year 2016.”
NINE MONTHS 2016
27 October 2016
Page 2 of 8
Key Financial Data
Third quarter Nine months
in CHF million 2016 2015 % CHF % LC 2016 2015 % CHF % LC
Sales 1 400 1 410 -1 2 4 299 4 281 0 2
EBITDA before exceptional
items 208 207 0 -3 652 624 4 5
- margin 14.9 % 14.7 % 15.2 % 14.6 %
Nine Months 2016 – Further increase in sales and profitability
Muttenz, October 27, 2016 - Clariant, a world leader in specialty chemicals, today
announced nine months 2016 sales of CHF 4.299 billion compared to CHF 4.281 billion
in 2015. This corresponds to a 2 % growth in local currency driven by higher volumes.
Growth was strongest in Latin America, where sales grew by 7 % in local currency. In the
Middle East & Africa, year-on-year sales were up 3 % in local currency. North America
saw a decline of 3 % stemming from a lower demand in Catalysis and Natural Resources,
while Asia grew at 4 % supported by a pick-up in China and Europe at a stable 1 %
driven by volume increases.
The improved business performance in the first nine months primarily stemmed from
higher growth in Care Chemicals and Plastics & Coatings. In Care Chemicals, sales in
local currency increased by 5 % to CHF 1 087 million. Sales in Catalysis declined by 8 %
in local currency reaching CHF 442 million, due to a lower demand, particularly in
North America which had a high comparable base against the previous year as well as
due to continued soft demand in Asia.
Sales in Natural Resources were stable in local currency and amounted to CHF 839
million despite the very difficult industry environment. There was a slight decline in Oil
and Mining Services, whereas Functional Minerals continued to grow. In Plastics &
Coatings, sales in local currency grew by 5 % to CHF 1.931 billion. The good sales
performance in Plastics & Coatings was seen across all regions.
The EBITDA before exceptional items rose by 5 % in local currency and reached
CHF 652 million, compared to CHF 624 million in the previous year. The major
contributor to the profitability improvement was Plastics & Coatings.
The corresponding EBITDA margin before exceptional items of 15.2 % was significantly
above the previous year’s level of 14.6 %. Plastics & Coatings and Natural Resources
substantially improved EBITDA margins before exceptional items year-on-year.
Catalysis was below the previous year’s level largely due to a weaker demand as some
customers further delayed certain projects as well as portfolio mix effects.
NINE MONTHS 2016
27 October 2016
Page 3 of 8
Third Quarter 2016 – Maintained progress in margin expansion
In the third quarter of 2016, sales grew by 2 % in local currency to CHF 1.400 billion.
Volumes were up by 3 % compared to the same period last year.
On a regional level, sales growth was led by Asia, which recorded an increase of 8 % in
local currency reflecting the improvement in China. Latin America grew 2 % in local
currency. In the Middle East & Africa, sales declined by 4 % in local currency year-on-
year and in North America by 5 %, stemming from the challenging business
environment in Catalysis and Natural Resources. Europe grew at a stable 1 %, driven by
volume increases.
Care Chemicals delivered sales of CHF 337 million with a local currency sales growth of
4 %. In Plastics & Coatings, sales rose by 3 % in local currency to CHF 624 million,
reflecting the good sales performance in each of the three businesses, Masterbatches,
Pigments and Additives. Sales in Natural Resources were CHF 282 million up 1 % in
local currency. Catalysis sales were lower by 8 % in local currency at CHF 157 million
primarily due to a lower demand in North America.
EBITDA before exceptional items was CHF 208 million versus CHF 207 million in the
same time period last year.
The EBITDA margin before exceptional items increased by 20 basis points to 14.9 % in
the third quarter primarily driven by Plastics & Coatings which continued to see the
positive impact from the differentiated business steering.
Outlook – remains unchanged
Clariant expects the uncertain environment, characterized by a high volatility in
commodity prices and currencies, to continue. In emerging markets, we anticipate the
economic environment to remain challenging and with increased volatility; we expect
moderate growth in the United States, while growth in Europe is expected to remain
stable but weak.
For 2016, in spite of the increasingly challenging economic environment, Clariant is
confident to achieve growth in local currency, as well as progression in operating cash
flow and EBITDA margin before exceptional items.
Clariant confirms its mid-term target of reaching 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.
NINE MONTHS 2016
27 October 2016
Page 4 of 8
Business Discussion
Business Area Care Chemicals
Third quarter Nine months
in CHF Million 2016 2015 % CHF % LC 2016 2015 % CHF % LC
Sales 337 348 -3 4 1 087 1 075 1 5
EBITDA before exceptional items 60 67 -10 -15 208 205 1 1
- margin 17.8 % 19.3 % 19.1 % 19.1 %
Nine Months
Sales in Care Chemicals increased by 5 % in local currency and by 1 % in Swiss francs in
the first nine months of 2016.
All regions delivered good sales growth, apart from North America which was still
negatively impacted by the low de-icing business due to the mild weather conditions at
the beginning of the year.
Growth was most pronounced in Consumer Care with strong double digit growth in
Home Care and continued excellent growth in Personal Care. The Industrial Application
business showed ongoing good underlying demand.
The EBITDA margin before exceptional items remained stable at previous year’s level of
19.1 %, which is ahead of margin target.
Third Quarter
Sales in Care Chemicals rose by 4 % in local currency and declined by 3 % in Swiss
francs in the third quarter. The growth was favored by a continuing strong performance
in Consumer Care despite a continuing softening in Crop Solutions. Asia and the Middle
East & Africa delivered double-digit growth in local currency. Europe and North
America reported single-digit growth, while Latin America slowed down significantly
year-on-year against a strong comparable base.
In the third quarter, the EBITDA margin before exceptional items decreased to 17.8 %
from 19.3 %. The decrease was primarily due to costs incurred as a result of the ramp-up
of new capacities and a less favorable product mix effect.
For 2016, Care Chemicals expects continued solid sales growth in both Consumer Care
and Industrial Applications. New innovative products and sustainable solutions like the
GlucoPure® range of innovative sustainable sugar-based detergents is expected to
continue to drive growth. GlucoPure® combines high performance in cleaning with a
strong sustainable profile and enhanced skin compatibility.
NINE MONTHS 2016
27 October 2016
Page 5 of 8
Business Area Catalysis
Third quarter Nine months
in CHF Million 2016 2015 % CHF % LC 2016 2015 % CHF % LC
Sales 157 162 -3 -8 442 463 -5 -8
EBITDA before exceptional items 36 37 -3 -3 89 101 -12 -13
- margin 22.9 % 22.8 % 20.1 % 21.8 %
Nine Months
Sales in the Catalysis Business Area were lower by 8 % in local currency and by 5 % in
Swiss francs in the first nine months of 2016.
The decline in sales was primarily due to the lower demand in North America, as well as
continued soft demand in Asia. The lower demand could not be offset by a positive sales
growth in the Middle East & Africa.
The EBITDA margin before exceptional items of Catalysis decreased to 20.1 % in the
first nine months of 2016 compared to 21.8 % in the same period of the previous year.
The decline was due to portfolio mix effects and a weaker demand following project
delays at the customer level.
Third Quarter
In the third quarter of 2016, Catalysis sales were lower by 8 % in local currency and by
3 % in Swiss francs compared to the previous year. This deterioration was mainly driven
by a weak demand reflecting the challenging market environment, while a number of
customers further delayed new capital expenditure or continued to use current catalysts
longer as plant utilizations are at lower levels. In addition, in the third quarter, demand
in North America was lower due to the strong comparable base in the prior year.
The EBITDA margin before exceptional items was stable at 22.9 % year-on-year. This
development was the result of a good product mix and a higher contribution from
certain catalysts for petrochemicals.
Even though Catalysis at present has a weaker performance as a result of the tough
market environment, fundamentals on the mid- to long-term remain solid based on
Clariant’s portfolio strength, innovation capability, growing partnerships and global
footprint. Partnerships include CB&I’s Lummus Novolen Technology for polypropylene
catalysts. The plant was inaugurated in October 2016 for full operation in 2017. Looking
forward, Clariant remains focused on the further development of its catalysts and on
cost discipline. Clariant therefore is confident on its further business perspectives.
NINE MONTHS 2016
27 October 2016
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Business Area Natural Resources
Third quarter Nine months
in CHF Million 2016 2015 % CHF % LC 2016 2015 % CHF % LC
Sales 282 291 -3 1 839 888 -6 0
EBITDA before exceptional items 47 49 -4 -8 138 139 -1 4
- margin 16.7 % 16.8 % 16.4 % 15.7 %
Nine Months
In the first nine months of the year sales in the Natural Resources Business Area
remained stable in local currency and declined by 6 % in Swiss francs compared to the
same period last year.
The Oil & Mining Services business had, consistent with the industry trend, a negative
sales performance year-on-year which, however, was significantly less pronounced than
the overall market trend. Despite the market headwinds, Latin America continued to
have robust sales growth which could not offset the market decline in the other regions.
Functional Minerals continued the positive sales development in local currency in most
regions.
The EBITDA margin before exceptional items significantly expanded to 16.4 % versus
15.7 % in the previous year, reflecting strict cost control and disciplined margin
management across the business units.
Third Quarter
In the third quarter, sales in Natural Resources increased by 1 % in local currency and
declined by 3 % in Swiss francs compared to the third quarter of 2015.
The difficult market conditions in the Oil & Mining Services businesses as seen in the
first half continued into the third quarter of the current year. However, in Oil & Mining
Services, sales improved quarter-on-quarter.
Functional Minerals continued to deliver a good sales performance in all regions, mainly
supported by emerging markets and North America.
EBITDA margin before exceptional items was 16.7 % which was comparable to the
previous year as a result of strict cost management.
While Functional Minerals is expected to continue to grow particularly in emerging
markets, the decline in oil prices will continue to impact the short-term dynamics in Oil
& Mining Services. However, Clariant is confident that its strategy will enable it to
continue to outperform the market, adding more value to its clients by offering a
broader portfolio of innovative solutions. Overall, Clariant has a healthy pipeline in Oil
& Mining Services and the recent acquisitions in the USA which were closed on
October 1, 2016, were well perceived by customers.
NINE MONTHS 2016
27 October 2016
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Business Area Plastics & Coatings
Third quarter Nine months
in CHF Million 2016 2015 % CHF % LC 2016 2015 % CHF % LC
Sales 624 609 2 3 1 931 1 855 4 5
EBITDA before exceptional items 91 84 8 6 300 260 15 15
- margin 14.6 % 13.8 % 15.5 % 14.0 %
Nine Months
Sales in the Plastics & Coatings Business Area increased by 5 % in local currency and 4 %
in Swiss francs in the first nine months of 2016.
In Masterbatches, sales continued to grow across all regions of which Europe, North
America and Asia contributed most. Across the segments, growth was primarily seen in
the areas of Packaging and Consumer Goods.
Pigments maintained its momentum in emerging markets with continued strength in
India and positive impacts coming from China. The growth in Plastic Applications as
well as in Special Applications contributed to the good development year-on-year.
Additives delivered good sales growth mainly driven by demand in Asia, Europe and
Latin America and was supported by all business lines, i.e. Polymer Additives, Waxes
and Flame Retardants.
The EBITDA before exceptional items grew significantly by 15 % in local currency to
CHF 300 million year-on-year. This rise largely reflects a better product mix, a higher
capacity utilization and the effect of the differentiated business steering in Plastics &
Coatings.
Third Quarter
Sales in the Plastics & Coatings Business Area rose by 3 % in local currency and 2 % in
Swiss francs for the quarter.
The continued good sales performance in Masterbatches was driven by a continued
positive development in Europe, Asia and North America. In Pigments, growth mainly
came from Asia and Europe. In Additives, sales were again strong in the third quarter of
2016 year-on-year reflecting the good development in Asia and Europe.
The EBITDA before exceptional items increased by 6 % in local currency and reached
CHF 91 million in the third quarter.
Plastics & Coatings continues to develop products and solutions for the needs of its end
markets. These in combination with the focus on the differentiated business steering,
are expected to further enhance growth possibilities in the businesses and to further
contribute to the overall performance of Clariant.
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Switzerland
+41 61 469 6742
www.clariant.com