Clariant Reports Improved Performance for 2014
Clariant International Ltd., Muttenz, Switzerland, 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.
“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.
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.
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.
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 International Ltd.
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