Clariant Announces Improved Q3 Results
Clariant International Ltd., Muttenz, Switzerland, announced third quarter 2015 sales of CHF 1.410 billion compared to CHF 1.507 billion in the third quarter of 2014. This corresponds to a 2% growth in local currencies, with volumes up 1% and prices up 1%. Due to the strong currency headwind of 8%, sales decreased by 6% in Swiss francs. This was due to the ongoing strong volatility of currencies in the third quarter of 2015, in particular of the Brazilian real.
After a good first half year, growth in the Americas continued to be strong in the third quarter, with sales in local currencies up 20% in Latin America and 2% in North America. Europe was 1% lower in local currencies impacted by a weaker end-market demand.
Lower growth came from the regions Asia-Pacific and Middle East & Africa. Sales in Asia-Pacific decreased by 3% in local currencies and were affected by a weak demand in China, which could not be compensated for the stronger demand of smaller economies in Asia. In the Middle East & Africa region, sales were down 2% year-on-year in local currencies.
The improved business performance stemmed primarily from the higher growth Business Areas Care Chemicals, Catalysis and Natural Resources. In Care Chemicals third quarter 2015 sales in local currencies were up 12% after an already strong start to the year, reaching CHF 348 million.
Sales in Catalysis rose by 1% in local currencies to CHF 162 million. Sales growth year-on-year was impacted by a weaker demand in China as well as by the divestment of the Energy Storage business to Johnson Matthey in February 2015.
Despite the difficult market environment, sales in Natural Resources remained stable in local currencies compared to a very strong third quarter 2014, reaching sales of CHF 291 million.
In Plastics & Coatings, sales in local currencies declined slightly by 1% to CHF 609 million. Plastic & Coatings were impacted by a challenging environment in Pigments as well as by weaknesses in Europe and China.
The gross margin of 31.6% was above the previous year’s level of 28.8%, benefiting from a positive mix effect and lower raw material costs.
The EBITDA before exceptional items from continuing operations rose 8% in local currencies and reached CHF 207 million, compared to CHF 211 million in the previous year. The EBITDA margin was strengthened by 70 basis points to 14.7% above the previous year’s level. The margin expansion came predominantly from the Business Areas Care Chemicals, Catalysis, as well as Natural Resources, which all significantly increased the EBITDA margins in the third quarter of 2015 compared to the previous year. In Plastic & Coatings margins decreased marginally due to the challenging markets.
Exceptional items including restructuring, impairment, and transaction-related costs increased to CHF 27 million from CHF 17 million in the third quarter of 2014.
Net income from continuing operations augmented to CHF 60 million compared to CHF 58 million in the previous year as the lower tax charge did offset higher finance cost.
Operating cash flow slightly rose to CHF 131 million versus CHF 126 million year-on-year stemming from a sustainable net working capital management. Given the advancement in the first nine months of 2015, Clariant expects to accomplish a continued improvement for its full-year 2015 operating cash flow.
Net debt was CHF 1.398 billion compared to CHF 1.263 billion recorded at year-end 2014. At the end of September, gearing was 56% versus 46% at the end of 2014.
Clariant International Ltd.
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