Clariant Reports Improved Profitability for 2nd Quarter
Clariant International Ltd., Vienna, Austria, announced second quarter 2015 sales from continuing operations of CHF 1.406 billion compared to CHF 1.531 billion in the second quarter of 2014. This corresponds to a flat growth in local currencies, influenced by 1 % lower volumes and 1 % higher prices.
Growth was focused in the Americas with Clariant posting strong local currency sales growth of 16 % in Latin America and 7 % in North America, the latter led by strong demand in Catalysis as well as continued growth in Oil & Mining Services. Europe was 2 % lower in local currencies but basically continued to be flat if the reduction of the exposure to the low-margin base products business is taken into account.
The lower growth was mostly due to the regions Asia/Pacific and Middle East & Africa. In Asia/Pacific sales in local currencies decreased by 5 %. The decline was due to weak demand in China and to a high base in the Catalyst business, where in addition second quarter orders were shifted into the first quarter of 2015. The strong development in smaller economies in Asia could not compensate for this base effect. In the Middle East & Africa region, sales were 21 % lower year-on-year in local currencies, because of a higher basis in the second quarter of 2014, which still included sales from the Water Treatment business, which was divested in July 2014.
The three high margin Business Areas, Care Chemicals, Catalysis, and Natural Resources experienced strong underlying demand and are all on track to reach their respective yearly guidance. Care Chemicals, Natural Resources, as well as Plastics & Coatings substantially improved EBITDA margins in the second quarter of 2015 in comparison to the previous year. Catalysis delivered a solid 23.9 % EBITDA margin, which was lower than in the previous year, when the comparable base was uncommonly high due to portfolio mix effects.
Separate Subsidiary for Plastics & Coatings to Be Established
Clariant intends to establish a subsidiary for the Business Area Plastics & Coatings comprised of the Business Units Masterbatches, Additives and Pigments, in order to fully leverage their value creation potential for the company. This will enable Plastics & Coatings to be steered towards higher absolute profitability and cash generation. The new subsidiaries across the world will be fully owned by Clariant and will start operating as of 1 January 2016.
“In the last few years our Business Units Masterbatches, Pigments and Additives have established themselves as leaders in their respective markets in terms of profitability and market share. The new Plastics & Coatings subsidiary will further enable differentiated business steering with a clear focus on absolute profitability and cash generation to further safeguard and improve competiveness in already mature markets. This set up will further increase value creation for the Group. That is why, the entity will remain a vital part of the Group,” said CEO Hariolf Kottmann. “This step will also enable us to make appropriate investments in our growth areas”, he added.
The existing business unit structure with Masterbatches, Additives and Pigments, will be maintained with all approximately 7’000 employees, all assets and liabilities. Sales of the Business Area Plastics & Coatings were CHF 2.6 billion in 2014; the reported EBITDA margin before exceptional items was 14.0 %.
Clariant International Ltd.
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