Clariant Reports Progress in Sales and EBITDA for First Nine Months of 2018
MUTTENZ, Switzerland — Specialty chemicals provider Clariant announced sales for the first nine months of 2018 of CHF 4.994 billion compared to CHF 4.698 billion in 2017. This corresponds to 6% growth in local currency and in Swiss francs, which was supported by both higher volumes and pricing. Contributions from all business areas bolstered the 6% organic sales growth in local currency.
Most regions contributed to the sales growth. Latin America reported the strongest growth of 13% in local currency. In Asia, sales rose by a robust 9%, mainly driven by China and India. Sales in North America grew by 6% on the heels of strong expansion during the same time period in 2017. In Europe, sales advanced by a solid 4%. Only the Middle East & Africa, the group’s smallest geographic region, reported a slight sales decrease of 3%.
Care Chemicals and Catalysis both reported continued brisk demand momentum. Sales in Care Chemicals advanced by 9% in local currency, driven by both Consumer Care and Industrial Applications. Despite a high comparable bar, Catalysis sales climbed significantly by 12% in local currency with a good organic sales growth of 8%.
Natural Resources reported 7% higher sales in local currency, which reflects the improving oil environment. In Plastics & Coatings, sales progressed by 3% in local currency despite a strong comparable base. All three business units contributed to this progression.
EBITDA before exceptional items rose by 7% and reached CHF 765 million compared to CHF 717 million in the previous year. This improvement was driven by the positive development in Care Chemicals and Plastics & Coatings.
The corresponding EBITDA margin before exceptional items remained robust at 15.3%.
In the third quarter of 2018, sales rose by 5% in local currency to CHF 1.605 billion mainly due to price increases. Sales growth in Swiss francs was 2%, given the adverse currency impact in the quarter. The strong sales progression in Care Chemicals and Natural Resources contributed most to this advancement.
Most geographic regions added to the growth. Sales in Latin America progressed by 14%, while North America and Europe both grew sales by 5%. Sales in Asia improved 3% in local currency year-on-year. China softened in the third quarter, but continued to develop well against a strong comparable base in the third quarter of 2017. Only the smallest region, Middle East & Africa, reported a minor sales contraction of 1%.
Sales in Natural Resources climbed by 14% supported by a notable demand uptake in the Oil & Mining Services business and an ongoing positive development in Functional Minerals. In Care Chemicals, sales rose by 8% in local currency while Plastics & Coatings grew sales by 2%, underpinned primarily by the Pigments and Additives Business Units. Sales in Catalysis decreased by 4% against a record quarter in the same period in the previous year.
EBITDA before exceptional items rose by 3% to CHF 241 million primarily due to the strong contributions from Care Chemicals and Plastics & Coatings. The corresponding EBITDA margin before exceptional items remained at a solid 15%.
Clariant expects the economic environment in mature markets, which represent a high comparable base, to remain solid, albeit grow at a slower pace. Emerging markets are expected to remain broadly supportive.
For 2018, Clariant is confident to be able to achieve growth in local currency, as well as progression in operating cash flow, absolute EBITDA and EBITDA margin before exceptional items.
Going forward, as announced in September, Clariant expects to improve its performance as a result of further operational progression and the accelerated reshaping of its portfolio through the divestment of Pigments, standard Masterbatches and Medical Specialties as well as the creation of the new business area, High Performance Materials.