The economic environment remained challenging and basically unchanged compared to the first six months. In this environment, all business areas with the exception of Catalysis & Energy achieved local currency sales growth in the low to mid single-digit range. Care Chemicals outperformed the other Business Areas, adding 5% in sales year-on-year, with all segments and regions contributing to growth. Natural Resources managed to increase sales by 3%.
Good growth in Adsorbents, Mining Services and Refinery Services outweighed a weaker Water Treatment and a temporarily softer Oil Services business. In Catalysis & Energy, Catalysts experienced some delays in the realization of new customer projects, mainly in Asia. The situation is expected to gradually improve during the fourth quarter. The startup business Energy Storage did not improve compared to the previous quarters. Sales in Plastics & Coatings recovered from the weak prior-year period, achieving 4% growth.
On a regional basis, local currency sales growth in Latin America continued at a high level with an 11% increase year-on-year. A heterogeneous development has been observed in the other regions. North America and Europe grew 2% in local currencies while Asia/Pacific lost 2%. Robust growth of 2% in China was more than offset by weakness in India and Japan. Middle East & Africa continued at a low level.
The gross margin improved to 28.1% from 27.6% in the prior-year period. An improved volume/mix effect and a stable sales price development were the main causes for the higher gross margin. Compared to the third quarter of 2012, sales prices were unchanged while raw material costs were 1% higher. Sequentially, i.e. compared to the second quarter of 2013, sales prices were equally flat and raw material costs were 1% lower.
Year-on-year, the EBITDA before exceptional items from continuing operations improved 24% in local currencies and 14% in Swiss francs to CHF 203 million from CHF 178 million. Lower SG&A costs and a one-time gain related to the valuation of acquired assets over-compensated the currency impact on EBITDA. The EBITDA margin rose to 14.1% compared to 12.0% for the continuing operations in the previous-year period.
Operating cash flow was CHF 267 million versus CHF 181 million in Q3 2012. As expected, the cash outflow from the first two quarters 2013 has been for the most part reversed as the operating result improved and net working capital followed the normal seasonal pattern. For the remainder of the year, cash generation continues to be a priority of the Group with a further improvement in the fourth quarter expected.
The repositioning of the portfolio in 2011 and 2012 has lifted Clariant to a sustainably higher level of profitability, reflected in an increase in EBITDA margin in the first nine months of the year and the third quarter of 2013 compared to the corresponding previous-year periods.
The environment in which Clariant operates has not significantly changed over the past few months. Although a further stabilization has been observed in the mature markets, a broad-based economic recovery is not expected. In addition, uncertainties remain high in the emerging economies. Going into the fourth quarter, Clariant expects an overall stable but mixed business environment.
In this scenario, Clariant will focus on innovation, growth and cost efficiency. This will lead to further top-line growth in local currencies and an improved profitability in 2013. For the mid-term, Clariant confirms its 2015 targets of an EBITDA margin of above 17% and a return on invested capital (ROIC) above the peer-group