Clariant Reports Solid Third Quarter
Clariant International Ltd., Muttenz, Switzerland, has published their third quarter results. They announced third quarter 2013 sales from continuing operations of CHF 1.443 billion compared to CHF 1.489 billion in the prior-year period. This corresponds to a 2% sales growth in local currencies that was almost entirely the result of higher sales volumes. In Swiss francs, sales decreased 3%, due to the pronounced weakness of the Brazilian real, the Japanese yen and the Indian rupee against the Swiss franc.
The economic environment remained challenging and basically unchanged compared to the first six months. In this environment, all Business Areas with the exception of Catalysis & Energy achieved local currency sales growth in the low to mid single-digit range. Sales in Plastics & Coatings recovered from the weak prior-year period, achieving 4% growth.
The gross margin improved to 28.1% from 27.6% in the prior-year period. An improved volume/mix effect and a stable sales price development were the main causes for the higher gross margin. Compared to the third quarter of 2012, sales prices were unchanged while raw material costs were 1% higher. Sequentially, i.e. compared to the second quarter of 2013, sales prices were equally flat and raw material costs were 1% lower.
Year-on-year, the EBITDA before exceptional items from continuing operations improved 24% in local currencies and 14% in Swiss francs to CHF 203 million from CHF 178 million. Lower SG&A costs and a one-time gain related to the valuation of acquired assets over-compensated the currency impact on EBITDA. The EBITDA margin rose to 14.1% compared to 12.0% for the continuing operations in the previous-year period.
The repositioning of the portfolio in 2011 and 2012 has lifted Clariant to a sustainably higher level of profitability, reflected in an increase in EBITDA margin in the first nine months of the year and the third quarter of 2013 compared to the corresponding previous-year periods.
The most recent step in repositioning their portfolio is the planned divestment of the Leather Services business to Stahl. Stahl Holdings B.V. In the proposed transaction, Clariant would receive 23% of the shares of Stahl and a cash payment of approximately CHF 85 million in exchange for the sale of its business to Stahl, valuing Clariant’s Leather Services business at approximately 7.5 times estimated EBITDA. Subject to the necessary regulatory approvals and employees consultations, the transaction could be finalized in 2014.
Clariant International Ltd.
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