Clariant looks at 2014 results and towards 2015

Clariant has said that last year it delivered strong growth and improved its operating margins in an adverse environment highlighting:

• Full year sales growth from continuing operations at 5% in local currencies.
• EBITDA margin before exceptional items reached 14.2%.
• Net result from continuing operations at CHF235 million compared to CHF 323 million.
• Dividend increase to CHF0.40 per share proposed.
• For 2015, Clariant expects low to mid single digit sales growth in local currency, an increased cash flow generation and an EBITDA margin before exceptional items above 2014.

Full year 2014

Clariant announced 2014 full year sales from continuing operations of CHF6.116 billion compared to CHF6.076 billion in full year 2013, an increase of 5% in local currencies, mainly driven by higher volumes. The regional sales performance in local currencies was mostly positive. Clariant posted strong growth of 18% in local currencies in Latin America despite a slow down in growth in Brazil. Sales in Asia increased by 9% in local currencies driven by strong demand from Southeast Asia and India, the latter growing 24% in local currencies. Sales in North America increased by 3% as a slower at the beginning of the year was compensated by a recovery of industrial demand during the year. Sales in Europe decreased by 2% given a slow business environment and a reduction of exposure to lower margin products. Sales in Middle East and Africa increased by 7% in local currencies.

In an overall challenging business climate, three out of four business areas achieved good sales growth in local currencies in a range of 6 – 8%. Care Chemicals recorded an underlying growth of 3%. Catalysts and Energy posted good growth fuelled by all major businesses and a good change out cycle in the Petrochemicals business. The sales improvement in Natural Resources was largely based on strength in Oil Services and Mining Services. In Plastics & Coatings all businesses contributed with mid single digit growth, with Pigments contributing most to year on year progression.

Outlook 2015

Clariant expects an ongoing challenging environment characterised by an increased volatility in commodity prices and currencies. In emerging markets, the economic environment is expected to remain favourable but at a lower level and with increased volatility. Moderate growth should continue in the US. However, growth in Europe is expected to remain weak. The combined effect of the appreciation of the Swiss franc with the weakening of the Euro will impact Clariant’s sales and profitability in absolute terms but will be fairly neutral in terms of relative margins.

In 2015 Clariant will improve its operational efficiency by implementing a lean service organisation; it will further improve its marketing excellence and will continue to launch innovations that generate value for its customers.

For 2015 the company expects low to mid single digit in local currencies. In light of the volatile economic conditions, Clariant currently does not anticipate achieving its midterm EBITDA margin target in 2015. However, the company will further increase its EBITDA margin before exceptional items above full year 2014 and increase cash flow generation.

Comments

CEO Hariolf Kottmann said, “in 2014 Clariant grew above average once more, even though the economic environment was challenging and characterised by a continued lack of growth in Europe. Clariant increased its sales particularly in attractive high margin markets, and was again able to improve its profitability, though some parts of the progress were masked by a negative currency effect.

“In 2015, we will continue on our successful path to transform our company into a leading specialty chemical company. We will improve operational efficiency by implementing a lean service organisation and continue to focus on consumers and innovation. For 2015 we expect continued sales growth, further progress of our EBITDA margin and an improved cash flow, despite an increasingly volatile economic environment.”

Edited from press release by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/refining/18022015/clariant-2014-2015/