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Clariant preserves profitability in first nine months of 2020 despite difficult economic environment

  • Sales from continuing operations decreased by 6 % in local currency to CHF 2.838 billion
  • Continuing operations EBITDA at CHF 419 million
  • EBITDA margin resilient at 14.8 % compared to an operational performance of 14.8 % in the first nine months of 2019
  • Outlook: in a continued difficult environment amid COVID-19 resurgence, focus on impact mitigation and performance improvement in 2020

“Over the first nine months of 2020, we successfully upheld the profitability of our continuing operations despite an exceedingly challenging environment. Although the COVID-19 pandemic had a significant negative impact on several of Clariant’s key end markets in the third quarter, the performance resilience clearly validates the success of our strategic focus on the three core specialty Business Areas,” said Hariolf Kottmann, Executive Chairman ad interim of Clariant. “The growth profile of our core portfolio remains intact despite the current economic environment and uncertain outlook. We will continue to focus on both mitigating the impact of this pandemic as well as executing our transformation program. We therefore continue to anticipate above-market growth, higher profitability and stronger cash generation.”

Key Financial Data

Continuing operations       Third Quarter           Nine Months
in CHF million 2020 2019 % CHF % LC 2020 2019 % CHF % LC
Sales 893 1 043 -14 -7 2 838 3 272 -13 -6
EBITDA 127 151 -16   419 253 (1) 66  
- margin 14.2 % 14.5 %     14.8 % 7.7 %    
EBITDA before exceptional items 137 169 -19   446 524 -15 
- margin 15.3 % 16.2 %     15.7 % 16.0 %  

 (1) Including a provision of CHF 231 million for a competition law investigation by the European Commission

Excluding provision: EBITDA after exceptional items at CHF 484 million, EBITDA margin 14.8 %

Nine Months 2020 – Steady EBITDA margin development despite notably softer environment

Muttenz, October 29, 2020 - Clariant, a focused, sustainable and innovative specialty chemical company, today announced continuing operations sales of CHF 2.838 billion in the first nine months of 2020, compared to CHF 3.272 billion in the first nine months of 2019. This corresponds to a decrease of 6 % in local currency due to lower demand and 13 % in Swiss francs attributable to unfavorable currency developments.

As a result of the COVID-19 pandemic, the Group was confronted with a significantly lower demand environment in several segments in the first nine months of 2020. These buoyant profitability results are therefore noteworthy, as they clearly reflect the effectiveness of Clariant’s business continuity programs, as well as cash and cost measures, which have been implemented to minimize the impact of this pandemic and improve the performance in the midterm.

In the first nine months, Asia remained resilient, with China and India reporting double-digit growth. Sales in Latin America increased in local currency, while sales in Europe, North America and the Middle East & Africa softened due to demand declines in most Business Areas.

In the first nine months of 2020, Care Chemicals sales declined by 5 % in local currency due to weather-related weak Aviation demand in the first quarter and lower Industrial Applications sales amid the COVID-19 pandemic in the second and third quarters, which could not be offset by the growth in Consumer Care. The Catalysis Business Area’s top line declined by a modest 3 % in local currency due to both the strong comparison base as well as the subdued environment in the chemical industry. Natural Resources sales decreased by 8 % in local currency, impacted by the notably softer economic environment resulting from the decline in oil demand and the COVID-19 pandemic.

The nine months 2020 continuing operations EBITDA reached CHF 419 million and the Group successfully defended margins despite a weaker top-line development. The 14.8 % EBITDA margin remained unchanged versus 14.8 % (reported 7.7 %) in the previous year when excluding the one-off CHF 231 million provision, which was booked in the second quarter of 2019. Care Chemicals profitability improved due to growth in Consumer Care sales and stringent margin and cost management. The Catalysis EBITDA margin declined as a result of lower volumes, a less favorable product mix and the efficiency program provision. Excluding the efficiency program provision in Natural Resources in the second quarter, the underlying profitability remained largely unchanged, underpinned by stringent cost management in all three Business Units.

Third Quarter 2020 – Comparatively stable profitability despite weaker
top-line development

As expected, the third quarter 2020 saw the most pronounced sales decline of the first three quarters in 2020 with a 7 % decrease in local currency in continuing operations sales to CHF 893 million. This corresponds to a 14 % decline in Swiss francs due to unfavorable currency effects. The main driver was the sales decline in Natural Resources, where all three businesses were negatively impacted by the oversupply in the oil markets and the global COVID-19 pandemic, while sales in Care Chemicals and Catalysis softened only slightly.

On a regional basis, the positive development in Asia in local currency was underpinned by very strong sales growth in China and India in the third quarter of 2020. Sales in Latin America decreased slightly, while Europe declined in high single digits, followed by the Middle East & Africa. The more notable decrease in North America is ascribable to lower volumes in Natural Resources.

In the third quarter, Care Chemicals sales softened by a mere 1 % in local currency, supported by higher Consumer Care sale...

Författare Clariant AG

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