Clariant Well on Course to Meet Full-Year Targets
Clariant International Ltd., Muttenz, Switzerland, announced first quarter 2014 sales from continuing operations of CHF 1.492 billion compared to CHF 1.526 billion in the first quarter of 2013. This corresponds to an increase of 5% in local currencies. The 5% organic sales growth was driven by 4% higher volumes and an increase in prices of 1%.
Good sales growth in local currencies was strongly impacted by unfavorable currency developments in the emerging markets as well as in North America. The adverse currency environment implied a sales growth of -2% in Swiss francs, mainly due to the year on year weakness of the Brazilian real, Indian rupee, Japanese yen, and US dollar.
Clariant posted strong local currency sales growth of 15% in Latin America. Sales in Asia/Pacific increased 11% in local currencies, driven by 33% higher sales in both China and India. In the Middle East & Africa region, sales were 10% higher year on year in local currencies as all Business Areas recorded growth in the region. In North America, a strong de-icing season offset the winter-related softness in other businesses, leading to 1% sales growth in local currencies. Europe was 1% lower due to unfavorable weather conditions, which particularly impacted Northern and Central Europe. Southern Europe, on the other hand, showed growth from a low base.
All Business Areas with the exception of Care Chemicals achieved mid to high single-digit sales growth. Care Chemicals was flat year on year, exclusively due to a virtually non-existent de-icing season in Europe. Excluding de-icing, growth in Care Chemicals was on a par with the other Business Areas. Catalysis & Energy opened the year on a positive note and confirmed the expected recovery in 2014. Natural Resources achieved good growth in both the Oil & Mining Services and Functional Minerals businesses. In the Plastics & Coatings Business Area, solid growth was accomplished in all areas, particularly in Pigments.
At 28.9%, the gross margin was down from 29.2% in the prior-year period due to an unfavorable sales mix and a negative currency impact. This was partially compensated by lower costs for the underutilization of production capacities and 1% higher sales prices. The EBITDA before exceptional items from continuing operations rose 8% in local currencies and reached CHF 210 million, on a par with the CHF 209 million recorded in the previous year. The corresponding EBITDA margin improved to 14.1%, compared to 13.7% in the first quarter of 2013. The increase in margin was supported by ongoing cost discipline and higher income from associates and joint ventures compared to the previous year.
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 favorable but mixed, while moderate growth should continue in the advanced economies, in particular in the United States. In this scenario, Clariant will focus on profitably growing the four Business Areas and on cost efficiency. For full-year 2014, Clariant expects low to mid single-digit sales growth in local currencies and an EBITDA margin before exceptional items above full-year 2013.
Clariant International Ltd.
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