MUTTENZ, Switzerland – Clariant has reported a 4-percent increase in sales in local currency for the first half of 2008, equivalent to a decrease of 2 percent in Swiss francs as a result of strong adverse currency effects. Total sales amounted to CHF 4.233 billion.
Jan Secher commented, “Clariant had a solid first-half year despite an
increasingly difficult environment. We were able to compensate for an
unprecedented 11-percent hike in raw material costs with price increases and to
improve our operating margin. Looking forward we expect an even more difficult
environment marked by an unbroken trend of raw material cost increases, a
weakening macro economic environment and unfavorable foreign exchange rates.
Based on our achievements, the momentum we have gained on improving operational
excellence and further efforts, we leave our full-year outlook unchanged.”
dynamics in the raw material markets as well as supply shortages of some
chemical feedstock have led to an 11 percent increase in raw material costs. At
the same time, Clariant’s price-over-volume approach in all divisions led to a
5 percent price increase that compensated for the raw material cost hike. While
the reported gross margin remained stable at 29.7 percent (29.9 percent in H1
2007), it has improved on a year-on-year basis for four quarters in a row
despite the steep increase in raw material costs in the same period. This led
to an improvement of 0.5 percentage points compared to full-year 2007 gross
income before exceptionals amounted to CHF 310 million. On the back of a
decline in Sales, General and Administrative (SG&A) costs to 20.6 percent
from 20.9 percent, the operating margin improved to 7.3 percent from last
year’s 6.8 percent. Net income rose to CHF 92 million from CHF 73 mil-lion year
on year. The results were strongly affected by adverse currency dynamics that
accounted for a negative impact of CHF 59 million on operating income,
translating into 1.4 percent of sales, and an additional CHF 48 million on the
net income line.
Pigments & Additives Division grew 7 percent in local currency (1 percent
in Swiss francs) and the Functional Chemicals Division showed strong growth in
terms of both price and volume, with sales growth in local currency at 10
percent (4 percent in Swiss francs).
implementation of the previously announced restructuring measures has resulted
in a reduction of 750 job positions in the first half of 2008. Restructuring
and impairment expenses amounted to CHF 53 million. Since November 2006,
Clariant has reduced about 1,800 out of the 2,200 job positions that were
planned for reduction in the Clariant 2010 strategy.
Against a backdrop of an uncertain global
macro-economic outlook, Clariant’s focus during the remainder of the year will
be on the continuing implementation of price increases and cost leadership,
which will further help offset expected continuing increases in raw material
and energy costs. With the benefits of the operational performance improvements
already underway, Clariant expects an improved operating margin before
exceptional items and continuing strong cash flow from operations in 2008.