LEVERKUSEN, Germany — February 18, 2015 — Bayer MaterialScience and the International Apparel Federation (IAF) have entered into a collaboration aiming at significantly improving the innovation and sustainability in the apparel and footwear industry. As an important first step, both partners have recently run a number of INSQIN^® series workshops which took place across three continents. Under the theme of “Setting New Standards for Material Innovation and Sustainability”, the workshops proved to be essential events for footwear and apparel brand owners that use polyurethane (PU) coated fabrics, for example PU synthetic leather. Textile coating experts from Bayer MaterialScience took the opportunity to introduce INSQIN – a novel turnkey solution for brand owners and manufacturers looking to achieve ambitious goals related to innovation and sustainability.
 
“With pure waterborne PU technology and rich textile coating application expertise, Bayer MaterialScience wants to inspire brand owners and manufacturers to explore new possibilities in the design and creation of ´magical´ PU-coated fabrics with INSQIN technology and related services”, says Nick Smith, Global Head of Textile Coating at Bayer MaterialScience. “And we wish to introduce our brand to the apparel and footwear industry through the collaboration with IAF and its members.”  
 
Waterborne PU technology for sustainable material innovation
Offering design freedom, durability and economy when compared to genuine leather, PU leather is increasingly becoming the material of choice for footwear, apparel and accessories. Whilst brand owners turn to PU technology for its unique combination of properties, they face challenges in dealing with the environmental side effects of mainstream PU technology. Large amounts of solvent are used in the current PU coating process, creating occupational hazards and environmental pollution risks.

INSQIN pure waterborne PU technology enables PU leather to be manufactured according to a new process that does not require the use of any solvents, and therefore eliminates all negative issues associated with their use. The technology presents a wide range of possibilities to enhance and transform fabrics, be it luxurious hand feel or unique textures and finishes for the fashion industry, or high performance materials required by sporting goods manufacturers, in applications as diverse as PU leather, functional fabrics or high-performance printing, to name just a few.
 
“Bayer’s presentation was very informative. Waterborne PU eliminates the problems associated with solvents once and for all, and it is the solution that we need in the long term. We will follow the industry’s adoption of the technology closely,” says Larry Lang, Senior Fabric Manager, Hermes-Otto International.
 
Secure supply chain transparency
The other hot topic covered during the INSQIN series workshop is how to secure supply chain transparency. The textiles industry is extremely complex and sometimes for manufacturers it is difficult to get visibility and direct access to brand owners interested in sourcing more sustainable materials. Also for brand owners, transparency about the origin and quality of fabric materials is often difficult to achieve.
 
Addressing these unmet needs, Bayer MaterialScience has also developed the INSQIN Partner Manufacturer Program that through professional third party audit verifies the management system and production processes of manufacturers using the technology.
 
Certified partner manufacturers of INSQIN benefit from technical support from Bayer MaterialScience for the implementation of waterborne PU technology in their units in order to speed up the commercial scale-up of the new materials. For footwear and apparel brands wanting to source new sustainable materials, the scheme provides them with manufacturers with proven credentials in sustainable manufacturing. Brand owners can easily identify textile materials produced with the technology via clear INSQIN labelling on packagings. Increasing supply chain transparency is a real source of peace of mind for brand owners in the footwear and apparel industries.

Posted February 24, 2015

Source: Bayer MaterialScience
 

MUTTENZ, Switzerland — February 18, 2015 — Clariant, a world leader in specialty chemicals, today announced 2014 full-year sales from continuing operations of CHF 6.116 billion compared to CHF 6.076 billion in full-year 2013, an increase of 5% in local currencies, mainly driven by higher volumes (+4%). In Swiss francs sales increased by 1%.

The regional sales performance in local currencies was mostly positive. Clariant posted strong growth of 18% in local currencies in Latin America despite a slow-down in growth in Brazil. Sales in Asia increased 9% in local currencies driven by strong demand from Southeast Asia and India, the latter growing 24% in local currencies. Sales in North America increased by 3% as a slower start at the beginning of the year was compensated by a recovery of industrial demand during the year. Sales in Europe decreased by 2% given a slow business environment and a reduction of exposure to lower margin products. Sales in Middle East & Africa increased by 7% in local currencies.

In an overall challenging business climate, three out of four Business Areas achieved good sales growth in local currencies in a range of 6% to 8%. Care Chemicals recorded an underlying growth of 3% given the strength in Personal Care and Crop Solutions, despite a weak de-icing business. Reported growth was 1% given the pruning of lowmargin base products business. Catalysis & Energy posted good growth fueled by all major businesses and a good change-out cycle in the Petrochemical business. The sales improvement in Natural Resources was largely based on strength in Oil Services and Mining Services. In Plastics & Coatings all businesses contributed with mid-single digit growth, with Pigments contributing most to year-on-year progression.

At 29.0%, the gross margin was slightly up from the 28.7% recorded in the previous year. A favorable volume mix development and an improved operational efficiency offset the negative currency impact. Year-on-year, sales prices were marginally higher while raw material costs were slightly lower.

The EBITDA before exceptional items from continuing operations increased by 6% in local currencies, reaching CHF 867 million, up from CHF 858 million in the previous year (+1% in Swiss francs). The corresponding EBITDA margin improved to 14.2%, compared to 14.1% for the full-year 2013.

Exceptional items decreased to CHF 60 million versus CHF 104 million in the previous year. Exceptional items included a gain from a land sale in India, impairments linked to the divestment of the ASK Participation and the planned sale of Energy Storage as well as costs for implementing a lean service organization.

The net result from continuing operations decreased to CHF 235 million compared to CHF 323 million in the previous year. This was driven by higher tax expenditures compared to a lower base in 2013 which was positively impacted by divestment linked one-time effects.

Full-year operating cash flow increased to CHF 334 million compared to CHF 301 million in 2013. As expected, a strong cash flow generation in the second half-year reversed the cash outflow recorded in the first six months of 2014.

Net debt was reduced to CHF 1.263 billion from CHF 1.500 billion recorded at year-end 2013 and therefore below the targeted CHF 1.300 billion. The gearing, reflecting net financial debt in relation to equity, improved to 46% from 54% at the end of 2013.

The solid result allows the board of directors to propose to the Annual General Meeting an increased dividend of CHF 0.40 per share compared to CHF 0.36 per share in the previous year. The distribution is proposed to be made from the capital contribution reserve that is exempt from Swiss withholding tax.

Fourth quarter 2014 – Good underlying sales growth
In the fourth quarter of 2014, Clariant increased sales to CHF 1.586 billion up from the strong fourth quarter 2013 with CHF 1.563 billion. This corresponds to a growth of 2% in local currencies, driven by price increases. Despite some portfolio pruning, volumes matched the high base of the previous year period. In Swiss francs, growth reached 1%, as currency developments still had a slight adverse impact of 1 percentage point on sales.

Care Chemicals reported 1% higher sales in local currencies. On a like-for-like basis Care Chemicals grew 6% in local currencies, reflecting strong growth in Consumer Care, predominantly in Crop Solutions and Personal Care. Catalysis & Energy sales were flat in local currencies and decreased by 3% in Swiss francs compared to the high base of the same period in 2013, which was due to a rebalancing of orders between the third and fourth quarter of 2014. Sales in the Natural Resources Business Area grew 3% in local currencies and 1% in Swiss francs in the fourth quarter 2014. Sales in Plastics & Coatings increased 4% in local currencies and 5% in Swiss francs with all three businesses, Pigments, Masterbatches, and Additives, contributing to growth in local currencies.

At the regional level, Latin America achieved double-digit growth in local currencies. Asia/Pacific and North America increased sales, whereas Europe and the Middle East & Africa were below the levels observed one year ago.

The gross margin was slightly higher year-on-year, at 28.8% compared to 28.2% in the previous-year period. This was due to improved operational efficiency and a tempering negative currency effect. The EBITDA margin before exceptional items was at 14.6%, compared to 15.0% in the fourth quarter of 2013. This decline was due to a base effect in Natural Resources, mostly attributable to a positive contribution from the ASK Joint Venture in the fourth quarter of 2013. All other Business Areas experienced flat or higher EBITDA margins compared to the same period of the previous year.

Operating cash flow amounted to CHF 321 million, compared to CHF 261 million in the fourth quarter of 2013, reflecting the usual seasonal pattern with a strong cash flow generation in the second half-year.

Outlook 2015 – 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 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. In light of the volatile economic conditions, Clariant currently does not anticipate achieving its mid-term EBITDA margin target in 2015. However, 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 margin before exceptional items range of 16% to 19% and a return on invested capital (ROIC) above peer group average in 2015 and beyond.

“In 2014 Clariant grew above average once more, even though the economic environment was challenging and characterized by a continued lack of growth in Europe. Clariant increased its sales particularly in attractive high-margin markets, and was again able to improve its profitability, though some parts of the progress were masked by a negative currency effect,” said CEO Hariolf Kottmann.

“In 2015, we will continue on our successful path to transform our company into a leading specialty chemical company. We will improve operational efficiency by implementing a lean service organization and continue to focus on customers and innovation. For 2015 we expect continued sales growth, further progress of our EBITDA margin and an improved cash flow, despite an increasingly volatile economic environment.”

Posted February 18, 2015

Source: Clariant