Higher Volumes Drive Clariant’s Growth for First Nine Months of 2016
MUTTENZ, Switzerland – Specialty chemicals company Clariant announced sales for the first nine months of 2016 at CHF 4,299 billion compared to CHF 4,281 billion in 2015. This corresponds to 2% growth in local currency, driven by higher volumes.
Growth was strongest in Latin America, where sales grew by 7% in local currency. In the Middle East and Africa, year-on-year sales were up 3% in local currency. North America saw a decline of 3%, stemming from a lower demand in Catalysis and Natural Resources, while Asia grew at 4%, supported by a pick-up in China. Europe saw a stable 1% growth rate, driven by volume increases.
The improved business performance in the first nine months came primarily from higher growth in Care Chemicals and Plastics & Coatings. In Care Chemicals, sales in local currency increased by 5% to CHF 1,087 million. Sales in Catalysis declined by 8% in local currency reaching CHF 442 million, due to a lower demand, particularly in North America, which had a high comparable base against the previous year, as well as continued soft demand in Asia.
Sales in Natural Resources were stable in local currency and amounted to CHF 839 million despite the very difficult industry environment. There was a slight decline in Oil and Mining Services, whereas Functional Minerals continued to grow. In Plastics & Coatings, sales in local currency grew by 5% to CHF 1,931 billion. The good sales performance in Plastics & Coatings was seen across all regions.
In the third quarter of 2016, sales grew by 2% in local currency to CHF 1,400 billion. Volumes were up by 3% compared to the same period last year.
On a regional level, sales growth was led by Asia, which recorded an increase of 8% in local currency, reflecting the improvement in China. Latin America grew 2% in local currency. In the Middle East and Africa, sales declined by 4% in local currency year-on-year and in North America by 5%, stemming from the challenging business environment in Catalysis and Natural Resources. Europe grew at a stable 1%, driven by volume increases.
Care Chemicals delivered sales of CHF 337 million with a local currency sales growth of 4%. In Plastics & Coatings, sales rose by 3% in local currency to CHF 624 million, reflecting good sales performance in each of the three businesses, Masterbatches, Pigments and Additives. Sales in Natural Resources were CHF 282 million, up 1% in local currency. Catalysis sales were lower by 8% in local currency at CHF 157 million, primarily due to lower demand in North America.
Clariant expects the uncertain environment, characterized by a high volatility in commodity prices and currencies, to continue. In emerging markets, the company anticipates the economic environment to remain challenging and with increased volatility; it expects 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 confident to achieve growth in local currency, as well as progression in operating cash flow and EBITDA margin before exceptional items.
Clariant confirms 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% and a return on invested capital (ROIC) above the peer group average.