Clariant improves profitability and cash flow
(Thomson Reuters ONE) -
Clariant AG / Clariant improves profitability and cash flow processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement.
* Sales up 16% in local currencies and 13% in CHF on the back of improved
demand
* Operating income before exceptional items rose to CHF 183 million compared
to CHF -13 million a year ago on higher capacity utilization and lower
costs
* Operating income margin before exceptional items reached 10.1%
* Cash flow from operations reached CHF 159 million after CHF 156 million in
the first quarter 2009
* Outlook: For the full-year, Clariant expects sales in local currencies to
increase in the mid single-digit range and an operating margin before
exceptional items above the 2008 level of 6.6%. Cash flow from operations
will remain strong.
CEO Hariolf Kottmann commented: "We have made good progress in our restructuring
efforts and continued to deliver solid results on the back of lower costs,
higher capacity utilization and an improved demand due to an economic
environment that developed more favorably than expected. Going forward, we
expect the economic recovery to remain fragile and raw material costs to further
rise heading into the seasonally weaker second half of the year. Consequently,
we do not anticipate an operating performance at the same strong level of the
first quarter. As we have stated previously, 2009 and 2010 are restructuring
years and our goal is to close the performance gap to our peers. Hence we will
decisively focus on managing our margins and vigorously continue our
restructuring efforts in 2010. Under the current business conditions, the EBIT
margin before exceptional items for the full-year is expected to be above the
6.6% achieved in 2008."
Key Financial Data
+---------------------------------+---------------------------------+
| First quarter | |
+---------------------------------+--------+---------+-------+------+
| in CHF million | 2010 | 2009 | % CHF | % LC |
+---------------------------------+--------+---------+-------+------+
| Sales | 1'817 | 1'604 | 13 | 16 |
+---------------------------------+--------+---------+-------+------+
| EBITDA before exceptional items | 235 | 43 | 447 | - |
+---------------------------------+--------+---------+-------+------+
| - margin | 12.9% | 2.7% | | |
+---------------------------------+--------+---------+-------+------+
| EBIT before exceptional items | 183 | -13 | - | - |
+---------------------------------+--------+---------+-------+------+
| - margin | 10.1% | -0.8% | | |
+---------------------------------+--------+---------+-------+------+
| EBIT | 74 | -68 | - | - |
+---------------------------------+--------+---------+-------+------+
| Net income / loss | 10 | -91 | | |
+---------------------------------+--------+---------+-------+------+
| Operating cash flow | 159 | 156 | | |
+---------------------------------+--------+---------+-------+------+
| Number of employees | 17'331 | 17'536* | | |
+---------------------------------+--------+---------+-------+------+
()
*) as of 31(st) December 2009
Clariant Q1, 2010 Performance
Muttenz, April 29, 2010 - Clariant, a world leader in specialty chemicals, today
announced sales of CHF 1.817 billion in the first quarter 2010, compared to CHF
1.604 billion in the previous year, an improvement of 13% in Swiss Francs and
16% in local currency. However, sales were still clearly behind pre-crisis
levels.
Sales improved significantly compared to the low base a year ago and also
strengthened on a quarter-on-quarter basis. Especially in the business units
(BU) Pigments, Additives, Leather and Masterbatches, sales growth was above the
average group level. At the regional level, growth in Asia - and particularly in
China with local currency sales growth of +65% - outperformed the other regions
compared to the first quarter of 2009. Europe and North America showed
double-digit sales growth while Latin America remained slightly behind as the
region had showed resilience against the downturn in the previous year.
The gross margin improved to 28.7% from 18.9% a year ago. This positive
development was a result of mainly three effects. Firstly, 20% higher sales
volumes that led to improved capacity utilization rates and therefore
significantly lower idle facility costs. Secondly, a favorable business /
product mix with higher margin businesses recovering from trough
levels seen in the previous year. And thirdly, the absence of any material
inventory de- or revaluation effects. While sales prices dropped 4%, raw
material costs fell 1% compared to the first quarter 2009, resulting in a
negative squeeze at the gross margin level. However, sales prices increased from
the fourth quarter 2009, as a result of the stringent focus on managing the
gross margin by adapting sales prices where appropriate. Clariant will continue
to increase sales prices in order to react to higher raw material costs.
Mainly as a result of some project-related one-time costs, SG&A increased to CHF
307 million compared to CHF 281 million during the same period a year ago. In
percentage of sales SG&A costs fell to 16.9% from 17.5%.
Resulting from a higher gross margin and the positive impact of the decisive
implementation of restructuring measures, the operating income (EBIT) before
exceptional items reached CHF 183 million and improved significantly - not only
compared to the previous year quarter (CHF -13 million) - but also compared to
the third and fourth quarter of 2009. The EBIT margin before exceptional items
improved to 10.1% from -0.8% a year ago.
Restructuring and impairment costs amounted to CHF 110 million. The number of
job positions was reduced to 17'331 from 17'536 during the quarter. However,
despite these restructuring expenses, Clariant reported a net profit of CHF 10
million compared to a net loss of CHF 91 million a year ago based on the
favorable development of the operating income.
Cash flow from operations amounted to CHF 159 million and was at about the same
level as in the previous year period (CHF 156 million). Contrary to a year ago
when the reduction of net working capital was the main driver, cash flow
generation in the first quarter this year was mainly driven by the improved
operational performance. Net working capital as a percentage of sales was lower
at 20.2% and in reach of our below 20% target at the end of 2010.
Clariant continued to strengthen its balance sheet by increasing its cash
position to CHF 1,241 million compared to CHF 1,140 million at the end of 2009.
Net debt was further reduced to CHF 378 million and the company's gearing - net
debt divided by equity - further improved to 20%.
Outlook
In spite of a better than expected economic environment in the first quarter the
global economy will recover only slowly. Based on this scenario and giving
reference to the fact that the second half of the year is normally weaker than
the first half, Clariant expects mid single digit sales growth compared to
2009. Operating cash flow will remain strong.
As announced previously, 2009 and 2010 are restructuring years. The continuation
of the restructuring efforts will result in a further reduction of job positions
as well as further site and plant consolidation. Restructuring and impairment
costs will amount to CHF 250 - 300 million in 2010.
Clariant will continue to focus on generating cash, reducing costs and reducing
complexity, resulting in a positive impact on the operating result. First
quarter operating income must not be taken as a basis for the full-year result
due to the still fragile economic environment. The EBIT margin before
exceptional items is expected to be above the 2008 level of 6.6%.
Clariant confirms its target of an above industry average return on invested
capital (ROIC) by the end of 2010.
Contacts
Media Relations
Mark Hengel Phone: +41 61 469 66 53
E-Mail: mark.hengel(at)clariant.com
Arnd Wagner Phone: +41 61 469 61 58
E-Mail: arnd.wagner(at)clariant.com
Investor Relations
Ulrich Steiner Phone: +41 61 469 67 45
E-Mail: ulrich.steiner(at)clariant.com
Clariant - Exactly your chemistry.
Clariant is a global leader in the field of specialty chemicals. Strong business
relationships, commitment to outstanding service and wide-ranging application
know-how make Clariant a preferred partner for its customers.
Clariant, which is represented on five continents with over 100 group companies,
employs around 17,500 people. Head-quartered in Muttenz near Basel, Switzerland,
it generated sales of CHF 6.6 billion in 2009. Clariant is organized into ten
Business Units: Additives; Detergents & Intermediates; Emulsions; Industrial &
Consumer Specialties; Leather Services; Masterbatches; Oil & Mining Services;
Paper Specialties; Pigments; and Textile Chemicals.
Clariant is committed to sustainable growth, which is derived from its own
innovative strength. Clariant's world-class products and services play a key
role in its customers' manufacturing processes and add value to their end
products. The company's success is based on the know-how of its people and their
ability to identify new customer needs at an early stage and to work together
with customers to develop innovative, efficient solutions.
www.clariant.com
[HUG#1409508]
--- End of Message ---
Clariant AG
Rothausstrasse 61 Muttenz 1 Switzerland
ISIN: CH0012142631;
Media Release Deutsch: http://hugin.info/100166/R/1409508/362047.pdf
Media Release English: http://hugin.info/100166/R/1409508/362044.pdf
Financial Review Q1 2010: http://hugin.info/100166/R/1409508/362048.pdf
Unternehmensinformation / Kurzprofil:
Datum: 29.04.2010 - 07:00 Uhr
Sprache: Deutsch
News-ID 19900
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contact information:
Town:
Muttenz 1
Kategorie:
Business News
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