Clariant FY Results: Good Sales Growth and Substantially Increased Cash Flow.* Sales up 4% in local currency and 5% in Swiss Francs Noun 1. Swiss franc - the basic unit of money in Switzerland franc - the basic monetary unit in many countries; equal to 100 centimes centime - a fractional monetary unit of several countries: France and Algeria and Belgium and Burkina Faso and Burundi and , with prices up 1% * Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. significantly improved to CHF CHF In currencies, this is the abbreviation for the Swiss Franc. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 540 million (2006: CHF 328 million) * Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. before exceptional items reached CHF 539 million * Net income of CHF 5 million (2006: loss of CHF 78 million) * Outlook - Improved operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: before exceptionals and continued strong cash generation MUTTENZ, Switzerland -- Clariant International Ltd (SWX SWX Swiss Exchange (trademark of SWX Swiss Exchange) SWX SolidWorks (3D solid modeling CAD software) SWX Splitter / Wave Division Multiplexer :CLN CLN Clean CLN Community Learning Network CLN Colon CLN Celsion Corporation CLN Class Library for Numbers CLN Credit Linked Note CLN Comitato di Liberazione Nazionale (Committee of National Liberation) CLN Corn Lethal Necrosis ): [TABLE OMITTED] Jan Secher, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Clariant, commented: "We have progressed in building momentum in operational performance and we have significantly improved our cash flow, although profitability was impacted by higher raw material and energy costs as well as unfavorable currency movements. We expect our continuing initiatives in increasing prices and striving for cost leadership to deliver improved profitability in 2008. Moving ahead, we will focus on businesses where we can optimize optimize - optimisation value through leveraging strong market positions and selectively participate in the consolidation of these market segments. This will result in a period of active portfolio re-shaping." Clariant posted sales growth of 4% in local currencies (5% in Swiss Francs) for Full-Year 2007. Sales in 2007 amounted to CHF 8.533 billion compared to CHF 8.100 billion in the previous year. Although sales in the second half of the year were not as strong as in the first half, sales in the fourth quarter recovered after a slower third quarter. In 2007 Clariant was able to raise its prices by more than 1%, with increasing momentum towards year-end. However, higher selling prices were not sufficient to offset a 5% rise in raw material costs. Consequently, the gross margin decreased to 29.2% from 30.7% in 2006. Clariant's focus on cost reduction delivered results. Sales, General & Administrative (SG&A) costs expressed as a percentage of sales improved to 20.8 % in 2007 from 21.3% in 2006, partly mitigating the decline in gross margin. Furthermore, unfavorable currency effects adversely impacted Clariant's profitability by CHF 68 million, which led to an operating income before exceptionals of CHF 539 million compared to CHF 592 million in 2006. Operating margin decreased to 6.3%. from 7.3% in 2006. Net income (after exceptional items) increased to CHF 5 million from CHF -78 million in 2006, also due to lower taxes and improved financial results. During 2007 Clariant benefited from the stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders of the supply chain and its strong focus on net working capital reduction. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses rose substantially to CHF 540 million compared to CHF 328 million in 2006, mainly driven by inventory reduction and lower trade receivables. Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). efforts progressing Restructuring efforts progressed in line with Clariant's 2010 goals, with restructuring costs reaching CHF 262 million in 2007. Nine smaller sites have been closed and three larger ones have been announced for closure. Approximately 800 job positions have been reduced and a further 600 have been announced. This totals more than half of the previously announced reduction of 2,200 job positions. In addition, more than 20% of the product portfolio has been pruned in order to reduce complexity, and has thus nearly reached the 2010 target of 25%. The company implemented a number of senior management changes during 2007 with the objective of driving a performance-oriented culture at Clariant. These external appointments and internal promotions are already having an impact across the group and the company expects to see the benefits of this fresh approach through the coming years. Profitable growth in service-driven businesses and strong focus on pricing improvements across all divisions Overall, the service-driven businesses at Clariant saw profitable growth. For example, the Oil Service Business increased sales and profitability, benefiting from strong demand for crude oil. The Coatings Business was able to offset weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. market development in Europe by
good sales and profitability growth in Asia and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. .
Masterbatches also performed well in 2007. The Leather Business, on the
other hand, suffered from declining demand and overcapacity o·ver·ca·pac·i·ty n. Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. . Within the product-driven businesses, the Detergents and Specialty Intermediates Business had a difficult year due to increasing raw material costs. The efforts on price increases have started to pay off in all divisions, with increasing momentum towards the end of the year. The Pigments and Additives Division, as well as Textile, Leather and Paper Chemicals, reversed the negative trend of declining prices of recent years and achieved higher selling prices towards the end of the year. Price increases in the Functional Chemicals Division also mitigated the margin squeeze towards year-end. The Masterbatches Division was able to fully compensate the rising raw material and energy costs by price increases. Strong growth in Asia and Latin America Asian markets saw the strongest growth for Clariant in 2007, with growth of 9% in local currencies. Decreasing momentum in the third quarter was partially counterbalanced coun·ter·bal·ance n. 1. A force or influence equally counteracting another. 2. A weight that acts to balance another; a counterpoise or counterweight. tr.v. by increased growth in the fourth quarter. China remained the strongest growth contributor in Asia, while growth in India was affected by a slowdown in the export-driven industries. A 4% rise (local currencies) in sales in the Americas was mainly driven by strong growth in Latin America (+9%). Sales in the US remained firm at +1%, with a strong fourth quarter that offset weak demand amongst some of Clariant's customer industries in the first nine months. European sales were up 1%, positively influenced by the good economic development in Germany that compensated for the weaker demand development in Southern Europe Southern Europe or sometimes Mediterranean Europe is a region of the European continent. There is no clear definition of the term which can vary depending on whether geographic, cultural, linguistic or historical factors are taken into account. . Annual General Meeting 2008 Based on the reported full-year results, at the 13th Annual General Meeting on April 10, 2008 Clariant's Board of Directors will propose a payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. of CHF 0.25 per share by reducing nominal value Nominal Value The stated value of an issued security that remains fixed, as opposed to its market value, which fluctuates. Notes: When referring to fixed-income securities, the nominal value is also the face value. from CHF 4.25 to CHF 4.00. The proposed payout remains unchanged from the previous year. Roland Losser, Chairman of the Board of Directors, has decided for personal reasons not to stand for re-election as Board member at the Annual General Meeting. The Board of Directors plans to appoint Jurg Witmer as Chairman following the Annual General Meeting on April 10. Jurg Witmer joined the Board in April 2007. Outlook: Improved operating margins before exceptional items and continued strong cash generation Against a backdrop of an increasingly uncertain global macro-economic outlook, Clariant's focus during the coming year will be on the continuing implementation of price increases and cost leadership which will help offset expected further increases in raw material and energy costs. With the benefits of the operational performance improvements already underway, Clariant expects to an improved operating margin before exceptional items and continuing strong cash flow from operations in 2008. Going forward, the company will focus on businesses where it will be able to leverage strong market positions in attractive markets, and thus proactively manage its portfolio. Clariant - Exactly your chemistry. Clariant is a global leader in the field of specialty chemicals A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. . Strong business relationships, commitment to outstanding service and wide-ranging application know-how make Clariant a preferred partner for its customers. Clariant, which is represented on five continents with over 100 group companies, employs around 21,000 people. Headquartered in Muttenz near Basel, Switzerland, it generated sales of CHF 8.5 billion in 2007. Clariant's businesses are organized in four divisions: Textile, Leather & Paper Chemicals, Pigments & Additives, Masterbatches and Functional Chemicals. Clariant is committed to sustainable growth springing from its own innovative strength. Clariant's innovative products play a key role in its customers' manufacturing and treatment processes or else add value to their end products. The company's success is based on the knowhow of its people and their ability to identify new customer needs at an early stage and to work together with customers to develop innovative, efficient solutions. www.clariant.com |
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