Clariant announced sales of CHF 1.865 billion in the third quarter of 2011, compared to CHF 1.709 billion in the previous year. This includes Süd-Chemie (SC) sales of CHF 356 million.
MUTTENZ, Switzerland – Clariant announced sales of CHF 1.865 billion in the third quarter of 2011, compared to CHF 1.709 billion in the previous year. This includes Süd-Chemie (SC) sales of CHF 356 million. In local currencies, sales growth amounted to 25 percent. In Swiss francs, year-on-year sales were only 9 percent higher, as the Swiss franc continued to strengthen against most major currencies especially in the first half of the third quarter.
Sales growth was driven by higher prices and the acquisition of Süd-Chemie. The less cyclical businesses units (Additives, Catalysis & Energy, Functional Materials, Industrial & Consumer Specialties, and Oil & Mining Services), accounting for roughly 50 percent of group sales, showed the most dynamic growth. By contrast, the slowdown in demand in the more cyclical businesses already observed in June spread along the plastics value chain and into the coatings business. Regionally, the traditional markets of Europe and North America outpaced Asia-Pacific, Latin America and the Middle East and Africa. In the emerging markets, a slowdown in the dynamic growth of the last few quarters has been observed. Excluding Süd-Chemie, sales increased by 5 percent, driven by a 9 percent increase in sales prices; volumes decreased 4 percent compared to the previous-year period, a result of a combination of softening demand in some businesses and the deliberate loss of unprofitable contracts.
The gross margin fell to 26.1 percent from 27.9 percent a year ago, mainly due to the negative currency impact and volume effects. In a slower global economic growth environment, commodity prices stabilized during the quarter. As a consequence, raw material costs remained flat compared to the second quarter 2011, but were 13 percent higher than in the previous-year period. As expected, increased raw material costs were fully absorbed by higher sales prices, both year-on-year and sequentially.
In the first full quarter of consolidation into Clariant, the two new Süd-Chemie business units, Catalysis & Energy and Functional Materials, developed according to plan, with the catalysts business picking up in the third quarter as expected.
The integration of Süd-Chemie is progressing as planned, with all project teams fully operational. Based on current insights and integration experience, the anticipated EUR 75-95 million EBITDA improvements to 2013 are confirmed. Integration synergies and functional excellence efforts are expected to lead to redundancy for some 700 FTE worldwide, primarily in G&A functions but also from improvement measures in production. The implementation of the measures is expected in the timeframe from 2012 to 2014 with a focus on 2012/13 once the squeeze-out becomes effective. Going forward, the focus will be on the continued delivery of the business objectives of Süd-Chemie while progressing with the integration and the squeeze-out process.
In the fourth quarter, Clariant expects the general slowdown in economic activity to continue, with clear signs of further weakness in demand in some regions and industries, especially in Europe. Exchange rates for the major currencies are expected to remain volatile. Commodity prices look set to stabilize at the level of the third quarter, leading to an increase in raw material costs in the mid-teens in 2011 compared to 2010.
For 2011, Clariant, including eight months of consolidated Süd-Chemie figures, expects sales in the range of CHF 7.0 to 7.2 billion and an EBITDA margin before exceptional items of 12.8 to 13.2 percent.
Clariant Operationally on Track, Süd-Chemie on Target
November 6, 2011