Clariant AG : Clariant with positive sales momentum and sustained profitability

26 juli 2012 Clariant AG / Clariant AG : Clariant with positive sales momentum and sustained profitability . Processed and transmitted by Thomson Reuters ONE. The issuer is solely responsible for the content of this announcement. * Robust Q2 2012 result in a difficult environment, first half-year performance as expected * Q2 2012 sales increased 8% in local currencies and 6% in CHF, to CHF 1.978 billion from CHF 1.870 billion in Q2 2011 * EBITDA before exceptionals at CHF 233 million vs. CHF 241 million in Q2 2011, up 2% in local currencies and down 3% in Swiss francs; EBITDA margin before exceptionals at 11.8%, on sustainably good level despite difficult market conditions, especially in Europe * Net income of CHF 70 million compared to CHF 40 million in Q2 2011 * Guidance confirmed: Clariant expects further sales growth in local currencies and a sustained profitability for the full-year 2012 compared to 2011, assuming the global economy stabilizes at current levels in the second half-year CEO Hariolf Kottmann: "In the first half of 2012 Clariant delivered a solid performance as expected at the beginning of the year, driven by good growth in the non-cyclical part of the portfolio, offsetting lower volumes in the more cyclical businesses. While the future path of the global economy is tainted with a high degree of uncertainty, we continue to implement our strategy. Based on this we confirm our expectation of an increasing profitability in the second half-year compared to the second half of 2011." Key Financial Data -------------------------------------------------------------------------------   Second quarter First half-year ------------------------------------------------------------------------------- In CHF Million 2012 2011 %CHF %LC 2012 2011 %CHF %LC Sales 1'978 1'870 6 8 3'923 3'587 9 13 EBITDA before exceptional 233 241 -3 2 469 518 -9 -4 items - margin 11.8% 12.9%     12.0% 14.4% EBIT before exceptional 158 178 -11 -5 318 408 -22 -16 items - margin 8.0% 9.5%     8.1% 11.4% EBIT 125 163 -23 -17 248 364 -32 -26 Net income 70 40     90 160 Operating cash flow* -3 -35     3 -13 Number of employees 21 536(1) 22 149(2) ------------------------------------------------------------------------------- * Starting 2012 interest paid and interest received are reported as part of financing cash flow. Prior year information has been reclassified accordingly. (1 )as of June 30, 2012                              (2) as of December 31, 2011 Clariant Q2 2012 Performance Muttenz, July 26, 2012 - Clariant, a world leader in specialty chemicals, today announced sales of CHF 1.978 billion in the second quarter 2012, up 6% compared to CHF 1.870 billion in the previous-year period. Sales in local currencies were 8% higher as reported and rose 2% excluding acquisitions. Overall, the performance of the company is as expected at the beginning of the year. The slow-down in global economic growth and the crisis in Europe did not materially impact the non-cyclical Business Units Catalysis & Energy, Functional Materials, Industrial & Consumer Specialties and Oil & Mining Services. In contrast, the cyclical businesses were impacted by lower volumes, leading to a volume decline of -1% at the group level. Sequentially volumes grew 2% compared to the first quarter 2012. The structurally challenged businesses partly recovered from the weakness in the last few quarters and stabilized at low levels, with Textile Chemicals achieving single-digit sales growth in local currencies after the plant in Switzerland has been closed. At the regional level, Asia/Pacific and Latin America outperformed the other regions with sales growth of 18% respectively 17%. North America and Europe, Middle East & Africa (EMEA) grew in the low to mid-single digit range. EMEA growth benefitted from strong growth in MEA while Europe was weak, mainly in the southern part of the continent. Resulting from lower production costs and sales price increases, the gross margin increased to 28.7% compared to 27.5% reported in the prior-year period. The sales price increase of 3% fully compensated for the 1% increase in raw material costs year-on-year. Sequentially sales prices were marginally up, while raw material costs rose 3%. The EBITDA before exceptional items rose 2% in local currencies but fell 3% to CHF 233 million from CHF 241 million in Q2 2011, resulting in an EBITDA margin before exceptionals of 11.8% compared to 12.9% in the previous-year period. The lower margin was the result of higher SG&A costs for the Business Units Catalysis & Energy and Functional Materials, higher project-related Corporate Costs as well as the absence of a one-time benefit from a land sale in the previous-year quarter. Restructuring and impairment costs of CHF 33 million versus CHF 15 million were almost exclusively related to the integration of Süd- Chemie and the site closure in Switzerland. Net income rose to CHF 70 from CHF 40 million in the second quarter of 2011. This reflects a lower negative currency impact on the financial result and lower taxes. Operating cash flow was minus CHF 3 million in the quarter but improved from the minus CHF 35 million one year-ago. The normal seasonality in cash flow is due to a build-up in inventories in the first half of the year followed by a reduction in inventories and therefore cash flow generation in the second half-year. Net debt increased to CHF 1.984 billion from CHF 1.740 billion at year-end 2011. The gearing, which reflects net financial debt in relation to equity, increased to 67% as of 30 June 2012, from 58% at the end of 2011. Süd-Chemie integration As of 2 July 2012 the legal integration of the largest former Süd-Chemie entity - Süd-Chemie AG in Germany - has been completed. The accelerated integration is progressing ahead of schedule, resulting in a headcount reduction at headquarters and also in some production entities. Until end 2013, an EBITDA improvement of CHF 90-115 million from synergies is confirmed. The acquisition is expected to be accretive in 2013, i.e. in the second year after the acquisition. Outlook The European economy continued to weaken during the second quarter, especially in Southern Europe. However, growth in the rest of the world has fully offset the decrease in Europe so far. In this challenging market environment, profitability in the second half-year will be supported by cost benefits from the finalization of the GANO projects in Switzerland and the UK, the integration of Süd-Chemie, as well as by additional sales from new production capacities in growing segments. Consequently, Clariant expects further sales growth in local currencies and a sustained profitability for the full-year 2012 compared to 2011, assuming the global economy stabilizes at current levels in the second half-year. Raw material costs are expected to increase in the low-single digit range while exchange rates should remain stable compared to the beginning of the year. -END- CORPORATE MEDIA RELATIONS INVESTOR RELATIONS Kai Rolker Ulrich Steiner Phone +41 61 469 6363 Phone +41 61 469 6745 kai.rolker@clariant.com ulrich.steiner@clariant.com Stefanie Nehlsen Siegfried Schwirzer Phone +41 61 469 6363 Phone +41 61 469 6749 stefanie.nehlsen@clariant.com siegfried.schwirzer@clariant.com www.clariant.com Clariant is an internationally active specialty chemical company, based in Muttenz near Basel. The group owns over 100 companies worldwide and employed 22 149 employees on December 31, 2011. In the financial year 2011, Clariant produced a turnover of CHF 7.4 billion. Clariant is divided into eleven business units: Additives; Catalysis & Energy; Emulsions, Detergents & Intermediates; Functional Materials; Industrial & Consumer Specialties; Leather Services; Masterbatches; Oil & Mining Services; Paper Specialties; Pigments; Textile Chemicals. Clariant focuses on creating value by investing in future profitable and sustainable growth, which is based on four strategic pillars: Improving profitability, innovation as well as research and development, dynamic growth in emerging markets, and optimizing the portfolio through complementary acquisitions or divestments. Press Release english: http://hugin.info/100166/R/1629460/521920.pdf Press Release deutsch: http://hugin.info/100166/R/1629460/521921.pdf Financial Review Q2: http://hugin.info/100166/R/1629460/521922.pdf This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Clariant AG via Thomson Reuters ONE [HUG#1629460]