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Clariant delivers improved operating cash flow

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Oilfield Technology,


  • Sales increased by 3% in local currency to CHF 2.899 billion.
  • EBITDA margin before exceptional items expanded to 15.3 % from 14.5%.
  • Operating cash flow significantly improved to CHF 208 million compared to CHF 65 million in the first half of 2015.
  • Net income was CHF 128 million.
  • 2016 outlook confirmed.

“Clariant has considerably expanded operating cash flow and also significantly improved its profitability in the first half of the year,” said CEO Hariolf Kottmann. ”Our good business performance was primarily achieved by means of a continued shift to high margin specialities, the impact of the differentiated steering in Plastics & Coatings as well as good cost management. For 2016, we are on track to achieve our targets despite the continued challenging economic environment.”

First Half 2016 - Significant increase in operating cash flow and continued improvement in margins

Muttenz, July 28, 2016 - Clariant, a world leader in specialty chemicals, today announced first half 2016 sales of CHF 2.899 billion compared to CHF 2.871 billion in 2015. This corresponds to a 3% growth in local currency driven by higher volumes.

Growth was strongest in Latin America, where sales grew by 10% in local currency. In the Middle East & Africa, year-on-year sales were up 7% in local currency. North America saw a small decline of 2% coming from a lower demand in Catalysis and Natural Resources, while Asia grew at 2%, with more stability in China, and Europe at 1% driven by volume increases.

The improved business performance in the first half year primarily stemmed from higher growth in Care Chemicals and Plastics & Coatings. In Care Chemicals, sales in local currency increased by 5% to CHF 750 million. Sales in Catalysis showed a decline of 9% in local currency, reaching CHF 285 million due to a lower demand in different regions particularly in China.

Despite the difficult market environment, sales in Natural Resources were stable in local currency and amounted to CHF 557 million. There was a slight decline in Oil and Mining Services, whereas Functional Minerals continued to grow. In Plastics & Coatings, sales in local currency grew by 5% to CHF 1.307 billion. The good sales performance in Plastics & Coatings was seen across all regions. The EBITDA before exceptional items increased by 9% in local currency and reached CHF 444 million, compared to CHF 417 million in the previous year. Major contributors to the profitability improvement were Care Chemicals and Plastics & Coatings.

The corresponding EBITDA margin before exceptional items of 15.3% was significantly above the previous year’s level of 14.5%. Care Chemicals, Natural Resources and Plastics & Coatings all substantially improved EBITDA margins before exceptional items year-on-year. Catalysis was below the previous year’s level largely due to portfolio mix effects.

Net income amounted to CHF 128 million compared to CHF 143 million in the previous year mainly reflecting higher restructuring costs. When adjusted for the proceeds from the sale of the energy storage business in the first half of 2015, net income was comparable to the previous year figure.

Operating cash flow significantly improved to CHF 208 million versus CHF 65 million in the previous year reflecting Clariant’s priority to increase operating cash flow in 2016.

Net debt was CHF 1.526 billion compared to CHF 1.312 billion recorded at year-end 2015. The gearing increased to 65 % from 53 % at the end of 2015 mirroring the usual seasonal increase in the first half of the year.

Second quarter 2016 - Maintained progress in margin expansion 

In the second quarter of 2016, sales grew by 2% in local currency to CHF 1.421 billion. Volumes were up by 2% compared to the same period last year.

On a regional level, sales growth was led by Latin America, which recorded an increase of 8% in local currency. Asia grew at 5% in local currency with some improvement in China. In the Middle East & Africa, sales were up 8% in local currency year-on-year. North America saw a decline of 7% stemming from a lower demand in Catalysis and Natural Resources. Europe, however, grew at 2% driven by volume increases.

Care Chemicals reported sales of CHF 339 million with a local currency sales growth of 4%. In Plastics & Coatings, sales rose by 6% in local currency to CHF 668 million, with a strong sales performance in each of the three businesses, Masterbatches, Pigments and Additives. Sales in Natural Resources were CHF 265 million up 1% in local currency. This growth was driven by Functional Minerals. Catalysis sales were lower by 13% in local currency to CHF 149 million.

EBITDA before exceptional items rose by 2% in local currency to CHF 215 million.

The EBITDA margin before exceptional items expanded 10 basis points to 15.1% in the second quarter driven by a favorable product mix and good cost management primarily in Care Chemicals, Natural Resources and Plastics & Coatings.

Outlook 2016 – to progress EBITDA margin and operating cash flow

Clariant expects the uncertain environment, characterised by a high volatility in commodity prices and currencies, to continue. In emerging markets, we anticipate the economic environment to remain challenging and with increased volatility; we expect moderate growth in the United States, while growth in Europe is expected to remain stable but weak.

For 2016, in spite of the increasingly challenging economic environment, Clariant is confident to achieve growth in local currency, as well as progression in operating cash flow and EBITDA margin before exceptional items.

Clariant confirms its mid-term target of reaching a position in the top tier of the specialty chemicals industry. This corresponds to an EBITDA margin before exceptional items in the range of 16% to 19% and a return on invested capital (ROIC) above the peer group average. 


Adapted from a press release by David Bizley

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/28072016/clariant-delivers-improved-operating-cash-flow/

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