Clariant Announces Improved Sales and Profitability
MUTTENZ, Switzerland – Specialty chemicals company Clariant announced first-quarter 2016 sales from continuing operations of CHF 1.478 billion compared to CHF 1.465 billion in the first quarter of 2015. This corresponds to an increase of 3 percent in local currencies. Higher volumes drove the sales growth.
Growth in the Americas was good, with sales in local currencies up 11 percent in Latin America and 4 percent in North America. Europe was up 1 percent in local currencies. Sales in the Middle East and Africa grew by 5 percent in local currencies.
Lower growth came from the Asia region. Sales decreased by 1 percent in local currencies and were affected by a weak demand in China, which could not be compensated by the stronger demand of smaller economies in Asia.
The improved sales came primarily from higher growth in the Care Chemicals and Plastics & Coatings business areas.
In Care Chemicals, sales in local currencies were up 7 percent, reaching CHF 411 million. They were driven by strong growth, especially in Latin America, Asia and the Middle East and Africa. North America was behind the previous year’s level due to a weak de-icing business following a mild winter season. Overall, growth in Care Chemicals primarily stemmed from Consumer Care Products.
Sales in Catalysis declined by 4 percent in local currencies to CHF 136 million primarily due to a decline in Asia (mainly in China) and Europe, which could not be compensated by good growth in North America and the Middle East and Africa. Adjusted for the Energy Storage business, which was sold in February 2015, sales in Catalysis were stable year-on-year.
Sales in Natural Resources declined by 2 percent in local currencies to CHF 292 million. There was good growth in Latin America and Asia. However, this could not offset the decline in the other regions. There was a decline in Oil and Mining Services, whereas Functional Minerals continued to grow.
In Plastics & Coatings, sales in local currencies grew by 4 percent to CHF 639 million. The sales increase was experienced across all regions, but was primarily driven by emerging markets.
Clariant expects the uncertain environment, characterized by a high volatility in commodity prices and currencies, to continue. In emerging markets, company executives anticipate the economic environment to remain challenging and with increased volatility; they expect moderate growth in the United States, while growth in Europe is expected to remain stable but weak.
For 2016, in spite of the increasingly challenging economic environment, Clariant is expected to achieve growth in local currencies, as well as progression in operating cash flow and EBITDA margin before exceptional items.
Clariant confirmed its mid-term target of reaching a position in the top tier of the specialty chemicals industry. This corresponds to an EBITDA margin before exceptional items in the range of 16 to 19 percent and a return on invested capital (ROIC) above the peer group average.