Clariant Reports Growth in Sales and Increased Profitability
MUTTENZ, Switzerland – Specialty chemicals company Clariant announced nine months 2017 sales of CHF 4.698 billion, compared to CHF 4.299 billion in 2016. This corresponds to a 10% growth in local currency driven by contributions from all business areas, with notable double-digit gains from Catalysis and Natural Resources. Organic sales rose by 6% in local currency, as a result of higher volumes.
Growth was strongest in North America and in the Middle East and Africa, where sales in both regions rose by 16% in local currency. In Asia, sales increased by 12% supported by brisk growth in China and Southeast Asia. Sales in Europe increased by a solid 8%. Latin America had a slight negative growth of 1%, due to the still challenging macroeconomic environment which, however, shows signs of improvement.
Care Chemicals and Catalysis both reflected ongoing strong expansion. Sales in Care Chemicals rose by 9% in local currency with strong Consumer Care and Industrial Applications businesses. Catalysis sales advanced by 19%, with organic sales growth of 14%.
Natural Resources sales climbed by 18%, mainly influenced by the 2016 Kel-Tech and X-Chem acquisitions in North America. Organic sales in Natural Resources grew by 3%, driven by growth in Functional Minerals. In Plastics & Coatings, sales advanced by 5% with continuing expansion in all three business units, particularly in China.
EBITDA before exceptional items climbed by 10% in Swiss francs and reached CHF 717 million, compared to CHF 652 million in the previous year. The enhanced profitability was primarily attributable to the upswing in Catalysis and the continuing positive development in Plastics & Coatings. As a result, the corresponding 15.3% EBITDA margin before exceptional items further advanced compared to the previous year's 15.2%.
In the third quarter of 2017, sales growth accelerated by 12% in local currency to CHF 1.566 billion. Organic sales growth, excluding the impact of the acquisitions and the full consolidation of the Süd-Chemie India Pvt Ltd joint venture, was up 9% in local currency. Higher volumes drove this sales advancement.
From a regional perspective, sales in North America grew by 22% in local currency. Excluding acquisitions, North American sales improved significantly by 8%. Sales in Asia advanced by 15% in local currency, in the Middle East and Africa by 25% and in Europe by 6% in local currency. Latin American sales increased by 3% despite the continued challenging economic environment.
Care Chemicals delivered a sales growth of 10% in local currency driven by higher volumes. Catalysis sales soared by 33% with strong 27% organic growth. Natural Resources sales rose by 16% lifted by acquisitions while organic sales increased by 3% despite the one-time negative impact from tropical storm Harvey. Plastics & Coatings improved by 7% on the back of strong Additives and Masterbatches.
EBITDA before exceptional items rose by 13% in Swiss francs to CHF 235 million driven by the upswing in Catalysis, the increase in Care Chemicals and the contribution from Plastics & Coatings. The EBITDA margin before exceptional items on a group level increased accordingly to 15.0% from 14.9% in the previous year.
Looking forward, Clariant expects the uncertain environment, characterized by a high volatility in commodity prices, currencies as well as political uncertainties, to continue. In emerging markets, it anticipates the economic environment to remain unchanged; the company expects growth in the United States and in Europe to continue.
"Clariant continues to consistently and successfully deliver on its strategy. With an excellent 10 % growth in both sales and profitability in the first nine months of the year we are well on track to achieve our targets," said CEO Hariolf Kottmann. "Our achievements are based on innovation, sustainability and on the endless commitment of our employees. Leveraging innovation throughout our portfolio is also exemplified by today’s announcement of the commercialization of bio-ethanol with the related licenses and enzymes. We expect mid double-digit million sales potential from the sunliquid® cellulosic ethanol production alone, a clear illustration of our innovation competence in biotechnology. For 2017, we are confident that we will achieve our targets, i.e. growth in local currency, progression in operating cash flow, absolute EBITDA and EBITDA margin before exceptional items in spite of a temporarily weaker cash flow in the first half."