07.25.19
Clariant announced first half year 2019 continuing operations sales of CHF 2.229 billion ($2.26 billion) compared to CHF 2.224 billion in the first half year 2018. This corresponds to an organic growth of 4% in local currency. Both higher volumes and pricing contributed to this expansion.
For the first half year, almost all regions contributed to the continuing operations sales growth in local currency. Sales in Latin America grew the strongest by 10%, followed by the Middle East & Africa at 8%. In Asia and Europe, the sales development was a good 5% and 4%, respectively. China, however, was down by 9% while North America reported a slight contraction of 3%.
The improved sales performance in the first half year 2019 resulted from growth in the Business Areas Catalysis and Natural Resources, which both reported strong expansion. Natural Resources newly includes the Business Unit Additives, in addition to Oil & Mining Services and Functional Minerals.
Care Chemicals sales remained unchanged in local currency against a strong comparison base despite temporary raw material supply issues, mainly in the second quarter of 2019. Sales in discontinued operations (Masterbatches and Pigments) declined by 2% in local currency, negatively impacted by the weakened economic environment.
Continuing operations EBITDA after exceptional items was negatively impacted by the one-off provision of CHF 231 million as a result of further developments in an ongoing competition law investigation by the European Commission into the ethylene purchasing market. Therefore, EBITDA decreased significantly to CHF 102 million compared to CHF 341 million in the previous year.
Operating cash flow for the total Group rose by 11% to CHF 113 million from CHF 102 million in the previous year, driven by lower taxes and favorable developments in inventories.
Net debt for the total Group increased to CHF 1.801 billion versus CHF 1.374 billion as of the end of 2018 following the normal seasonal cash flow pattern.
In the second quarter of 2019, sales from continuing operations rose by 3% in local currency to CHF 1.065 billion. This represents a decrease of 1% in Swiss francs year-on-year due to unfavorable currency fluctuations. The sales growth in local currency was driven by Catalysis and Natural Resources, which now includes Additives in addition to Oil & Mining Services and Functional Minerals.
In terms of the operational performance and excluding the effect of this provision, the continuing operations EBITDA after exceptional items decreased by 7% in Swiss francs to CHF 149 million in the second quarter of 2019.
As part of the portfolio upgrade announced in September 2018, Clariant will continue with the divestment of the Pigments business and has decided to also divest the entire Masterbatches business including both, standard and high value Masterbatches. These divestments are expected to be concluded unchanged by end 2020.
The proceeds from the divestments will be used to invest in innovations and technological applications within the core Business Areas, to strengthen Clariant’s balance sheet and to return capital to shareholders.
For the first half year, almost all regions contributed to the continuing operations sales growth in local currency. Sales in Latin America grew the strongest by 10%, followed by the Middle East & Africa at 8%. In Asia and Europe, the sales development was a good 5% and 4%, respectively. China, however, was down by 9% while North America reported a slight contraction of 3%.
The improved sales performance in the first half year 2019 resulted from growth in the Business Areas Catalysis and Natural Resources, which both reported strong expansion. Natural Resources newly includes the Business Unit Additives, in addition to Oil & Mining Services and Functional Minerals.
Care Chemicals sales remained unchanged in local currency against a strong comparison base despite temporary raw material supply issues, mainly in the second quarter of 2019. Sales in discontinued operations (Masterbatches and Pigments) declined by 2% in local currency, negatively impacted by the weakened economic environment.
Continuing operations EBITDA after exceptional items was negatively impacted by the one-off provision of CHF 231 million as a result of further developments in an ongoing competition law investigation by the European Commission into the ethylene purchasing market. Therefore, EBITDA decreased significantly to CHF 102 million compared to CHF 341 million in the previous year.
Operating cash flow for the total Group rose by 11% to CHF 113 million from CHF 102 million in the previous year, driven by lower taxes and favorable developments in inventories.
Net debt for the total Group increased to CHF 1.801 billion versus CHF 1.374 billion as of the end of 2018 following the normal seasonal cash flow pattern.
In the second quarter of 2019, sales from continuing operations rose by 3% in local currency to CHF 1.065 billion. This represents a decrease of 1% in Swiss francs year-on-year due to unfavorable currency fluctuations. The sales growth in local currency was driven by Catalysis and Natural Resources, which now includes Additives in addition to Oil & Mining Services and Functional Minerals.
In terms of the operational performance and excluding the effect of this provision, the continuing operations EBITDA after exceptional items decreased by 7% in Swiss francs to CHF 149 million in the second quarter of 2019.
As part of the portfolio upgrade announced in September 2018, Clariant will continue with the divestment of the Pigments business and has decided to also divest the entire Masterbatches business including both, standard and high value Masterbatches. These divestments are expected to be concluded unchanged by end 2020.
The proceeds from the divestments will be used to invest in innovations and technological applications within the core Business Areas, to strengthen Clariant’s balance sheet and to return capital to shareholders.
