Clariant has announced its 1Q19 sales of CHF1.715 billion compared to CHF1.722 billion in 1Q18. This corresponds to a good 2% organic growth in local currency, driven by higher pricing in all business areas versus a high comparison base.
On a regional basis, the sales development in Latin America, Europe, and the Middle East and Africa all reflected single-digit growth in local currency. Both North America and Asia reported slightly negative growth of 1%. The continued weaker demand in China negatively influenced the Group sales development in the first quarter.
The improved sales performance in 1Q19 resulted from expansion in the business areas Care Chemicals, Catalysis and Natural Resources. Sales in Care Chemicals increased by 2% in local currency although they were unfavourably impacted by the aviation business due to the mild weather. Excluding Aviation, Care Chemicals sales rose in good mid-single digits in local currency. This growth was primarily driven by a solid Consumer Care development. Catalysis sales grew by 4% in local currency compared to a record first quarter in the previous year. Natural Resources sales accelerated by 10% in local currency, mainly lifted by good Oil and Mining services demand but also solid growth in Functional Minerals.
In Plastics and Coatings, sales declined by 2% in local currency, largely as a result of the weaker than anticipated automotive and plastics markets as well as the further economic slowdown, particularly in China. However, the underlying demand in China remains solid and Clariant expects to see a gradual improvement throughout the remainder of 2019.
The newly reported EBITDA after exceptional items reached CHF236 million with a corresponding margin of 13.8%. The 8% lower absolute EBITDA after exceptional items is the result of weaker profitability in Plastics and Coatings and higher project costs relating to Clariant’s step change into higher value specialties announced in September 2018. The work on the respective projects is progressing well. Care Chemicals and Catalysis both reported a significant positive progression year-on-year, while Natural Resources also delivered a sound profitability improvement quarter-on-quarter as anticipated.
“In the first three months of this year, Clariant delivered continued organic sales growth despite the challenging macroeconomic environment,” said Ernesto Occhiello, CEO of Clariant. “Our focus on customer experience and fast, reliable customer fulfilment is particularly noticeable in the progression of the Business Areas Care Chemicals, Catalysis and Natural Resources. Despite Plastics and Coatings being negatively impacted by the current economic and business environments, we are confident in our ability to progress throughout the year. We will continue to identify and address the next challenges and future demands of our customers, leading to above-market growth, higher profitability and stronger cash generation.”
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