MUTTENZ, Switzerland – Clariant announced that 2010 sales totaled CHF 7.120 billion, compared to CHF 6.614 billion in 2009. This represents an increase of 13 percent in local currency and eight percent in Swiss francs.

The double-digit sales growth in local currency was the result of robust global economic growth supported by restocking activities in the first half of the year. All regions reported double-digit sales growth in local currencies. In the course of the year, demand returned to normal seasonal patterns, with lighter demand during the summer months and a slowdown in industrial production towards the end of the year. Lower idle facility costs, successful price management and lower production costs resulting a restructuring program pushed the gross margin from 23.5 percent in the year-ago period to 27.9 percent.

During the reporting period, Clariant continued to focus on reducing its selling, general and administration (SG&A) costs. As a percentage of sales, SG&A costs made further progress and decreased substantially from 17.6 percent to 16.5 percent in comparison to the prior-year period. As a result of the improved gross margin and the lower cost base, operating income (EBIT) before exceptional items increased to CHF 696 million, compared to CHF 270 million in the previous year. The corresponding margin rose from 4.1 percent in 2009 to 9.8 percent. This year marked the end of the restructuring program, with all business units contributing to the strong operating profits by reducing cost levels and optimizing structures and processes. Restructuring and impairment costs amounted to CHF 331 million, mainly due to site closures within the global asset network optimization program (GANO), and a further reduction in headcount. In the reporting period, Clariant returned to a net income of CHF 191 million compared to a net loss of CHF 194 million in the previous year.

Clariant’s ability to generate cash remained strong despite a double-digit year-on-year increase in sales volumes. Cash flow from operations reached CHF 642 million, driven by a combination of better operating results and tight management of net working capital.

Clariant further strengthened its balance sheet by increasing its cash position to CHF 1,419 million, compared to CHF 1,140 million in 2009. At the same time, net debt was reduced to CHF 126 million, from CHF 545 million at the end of 2009. The company’s gearing (net debt divided by equity) was seven percent at the end of 2010, significantly lower than the 29 percent recorded at the end of 2009.

Clariant reported eight-percent sales growth in local currency in the fourth quarter. In Swiss francs, sales were slightly lower, at CHF 1,700 million compared to CHF 1,710 million a year ago. Sales volume increased by four percent, and sales prices were up four percent year-on-year. Sequentially, sales prices increased by one percent, while raw material costs remained unchanged. Most business units experienced solid underlying demand for their products and services, with Industrial & Consumer Specialties and Oil & Mining Services outperforming the rest of the group. At regional levels, the highest growth rates were in Europe and North America. Due to the higher comparable base, Asia-Pacific and Latin America grew slower, but still at single-digit rates.

Clariant expects 2011 sales growth in local currencies in the low-single-digit range. Additional benefits from the restructuring measures taken during the last two years will improve the company’s cost position, resulting in a positive impact on the operating result. The EBITDA margin before exceptional items is therefore expected to rise above the 2010 level.