Clariant Significantly Increases Growth And Further Improves Profitability In 2017

MUTTENZ, Switzerland — February 14, 2018 — Clariant today announced full year 2017 sales of 6.377 billion Swiss francs compared to 5.847 billion Swiss francs in 2016. This corresponds to 9-percent growth in local currency driven by double-digit gains in Catalysis and Natural Resources. The strong organic growth amounted to 6 percent, driven by higher volume contributions by all Business Areas.

For the full year, sales growth in local currency was strongest in Asia, the Middle East & Africa and Europe. Sales in Asia rose by 12 percent, lifted by a remarkable sales development in China, Southeast Asia and Japan. Sales growth in the Middle East & Africa was 15 percent and in Europe 7 percent. Sales in North America also increased by 11 percent mainly driven by acquisitions. Latin American sales were flat, however, showing signs of improvement in the second half of the year in an ongoing challenging macroeconomic environment.

The improved sales performance for the full year resulted from growth in all Business Areas. Both Care Chemicals and Catalysis reported particularly strong expansion. Sales in Care Chemicals rose by 8 percent in local currency supported by vigorous Consumer Care and Industrial Applications businesses. Catalysis sales improved by an excellent 13 percent with positive contributions from all Business Lines.

Natural Resources sales accelerated by 14 percent, mainly lifted by the Kel-Tech and X-Chem acquisitions in North America. Organic sales in Natural Resources grew by 3 percent, driven by the solid growth in Functional Minerals and the beginning recovery of the Oil & Mining Services business. In Plastics & Coatings, sales rose by 5 percent with sales expansion in all three Business Units and particular strength in China.

EBITDA before exceptional items rose by 10 percent in Swiss francs and reached 974 million Swiss francs, compared to 887 million Swiss francs in the previous year. The absolute profitability improvement was attributable to the positive developments in all Business Areas.

The corresponding EBITDA margin before exceptional items advanced to 15.3 percent.

Net income climbed by 15 percent in Swiss francs to 302 million Swiss francs from 263 million Swiss francs in the previous year. This increase was supported by the improvement in absolute EBITDA before exceptional items as well as lower finance costs which could offset the one-off costs and higher tax expenses.

Operating cash flow declined to 428 million Swiss francs due to temporarily higher cash out for one-off costs and higher net working capital as a result of brisk demand late in the fourth quarter of 2017 and the anticipated strong demand in the first quarter of 2018, especially in Catalysis.

Net debt remained stable at 1.539 billion Swiss francs versus 1.540 billion Swiss francs recorded at year-end 2016.

The continued improvement in performance allows the Board of Directors to propose a dividend of 0.50 Swiss francs per share to the Annual General Meeting. This sum reflects an increase of 11 percent compared to the previous year. This distribution is proposed to be made from the capital contribution reserve which is exempt from Swiss withholding tax.

Fourth Quarter 2017 – Further expansion in sales and profitability

In the fourth quarter of 2017, sales rose by 6 percent in local currency to 1.679 billion Swiss francs. This expansion resulted from sales improvements in all Business Areas. Organic sales growth was 5 percent in local currency.

Almost all regions contributed to the growth. In Asia, sales in local currency grew by 10 percent with a continuous strong development in China. Sales in Europe increased by 6 percent in local currency and in the Middle East & Africa by 11 percent in local currency. In the Americas, the picture was mixed. Though North America was slightly negative, Latin America showed a notable recovery and rose by a solid 7 percent in local currency.

Sales in Care Chemicals climbed by 7 percent in local currency mainly as a result of higher volumes which were supported by some pricing improvements. Catalysis sales moved up by 1 percent due to forward product shifts from the fourth to the third quarter. Natural Resources sales increased by 5 percent in local currency with positive contributions from both Functional Minerals and the Oil & Mining Services businesses. Plastics & Coatings sales accelerated by a good 8 percent with all three Business Units contributing to the growth.

EBITDA before exceptional items climbed by 9 percent in Swiss francs to 257 million from 235 million Swiss francs in the previous year driven by the improvement in Care Chemicals and Natural Resources as well as by a continuing solid contribution from Plastics & Coatings. As a result, the EBITDA margin before exceptional items on Group level increased further to 15.3 percent from 15.2 percent in the previous year.

Outlook – Continued progression in growth, profitability improvement and operating cash flow generation

Clariant expects the good economic environment in mature markets, which represent a high comparable base, to continue. Emerging markets are expected to be supportive with Latin America showing signs of a recovery.

For 2018, Clariant is confident to be able to achieve growth in local currency, as well as progression in operating cash flow, absolute EBITDA 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 percent and a return on invested capital (ROIC) above the peer group average.

Posted February 14, 2018

Source: Clariant