Clariant Confirms Outlook on Solid Q2 Results
Clariant International Ltd. announced second quarter 2014 sales from continuing operations of CHF 1.531 billion compared to CHF 1.544 billion in the second quarter of 2013, equivalent to sales growth of 6% in local currencies. The organic sales growth of 6% was the result of 5% higher volumes and average sales price increases of 1%.
Robust sales growth of 6% in local currencies was heavily impacted by the unfavorable development of the US dollar and the Japanese yen, as well as important emerging market currencies – predominantly the Brazilian real, and the Indian rupee. The negative effect from those currencies translated into sales growth of -1% in Swiss francs.
At 29.5%, the gross margin slightly improved from the 29.3% recorded in the prior-year period. Better capacity utilization and 1% higher sales prices more than offset a negative currency impact.
Clariant achieved local currency growth in all of its regions, led by Latin America with 13% higher sales due to robust development in all four Business Areas and despite a weakening trend in Brazil. Asia/Pacific gained 9% in local currencies, driven by sales increases of 16% in China and 15% in India. Sales growth in North America recovered from the impact of a harsh winter in the first quarter and grew 6% in local currencies. Europe, Middle East & Africa (EMEA) returned to growth in the second quarter, adding 2%. Within EMEA, the Middle East & Africa region developed in-line with the other emerging markets and added 15%, while Europe dragged down sales growth, decreasing 1%. Europe lost steam in the second quarter, indicating that the recovery of the European economy remains fragile.
All Business Areas achieved mid- to high single-digit sales growth in local currencies in the second quarter. Care Chemicals reported 3% growth in local currencies on the back of solid growth in both Consumer Care and Industrial Applications. Catalysis & Energy continued to grow with 5% higher sales, also due to an improvement in the Energy Storage business. In Natural Resources, both the Oil & Mining Services and Functional Minerals businesses contributed to a 9% sales increase. In the Plastics & Coatings Business Area, solid growth was realized in all three businesses Additives, Masterbatches, and Pigments, resulting in sales growth of 6% in local currencies.
For 2014, Clariant expects the business environment to remain challenging with heterogeneous global economic developments and volatile currency markets. The general economic environment in the emerging markets is expected to remain mixed but overall favorable, while moderate growth should continue in the advanced economies, in particular in the United States. Hence, Clariant will focus on profitably growing the four Business Areas, cost efficiency and strengthening innovation.
Clariant International Ltd.
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