Clariant Reports First Half Rise in Sales; Cash Flow Improves, Gross Margin Maintained.MUTTENZ Muttenz is a municipality with a population of approximately 17,000 in the canton of Basel-Country in Switzerland. It is located in the district of Arlesheim. , Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. -- Clariant Clariant (SWX: [1]) is a Swiss speciality chemical company which was formed in 1995 as a spin off from Sandoz. The company expanded by the incorporation of the speciality chemicals business of Hoechst (Germany) in 1997 and the acquisition of BTP plc (UK) in 2000. International Ltd: --Organic growth of 4% plus 4% positive currency effect, totaling to 8% in Swiss Franc 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 terms --Excellent performances in Masterbatches, Pigment pigment, substance that imparts color to other materials. In paint, the pigment is a powdered substance which, when mixed in the liquid vehicle, imparts color to a painted surface. & Additives; Good recovery in Textile, Leather & Paper --Higher energy, logistics and raw material costs weighed on profitability --Strategic options for Specialty Fine Chemicals business unit being studied --Review of strategic focus and updated targets to be presented in November November: see month.
Key Financial Group Figures
----------------------------------------------------------------------
First Half
----------------------------------------------------------------------
Continuing operations: 2006 % of 2005* % of +/-%
CHF mn sales CHF mn sales CHF
----------------------------------------------------------------------
Sales 4 192 100.0 3 991 100.0
----------------------------------------------------------------------
Local currency growth (LC): 1%
----------------------------------------------------------------------
- Organic growth (1) 4%
----------------------------------------------------------------------
- Acquisitions/Divestitures (2) -3%
----------------------------------------------------------------------
Currencies 4%
----------------------------------------------------------------------
Gross profit 1 292 30.8 1 233 30.9 +5
----------------------------------------------------------------------
EBITDA before exceptionals 419 10.0 421 10.5 0
----------------------------------------------------------------------
EBITDA 390 9.3 375 9.4 +4
----------------------------------------------------------------------
Operating income before exceptionals 286 6.8 286 7.2 0
----------------------------------------------------------------------
Operating income 213 5.1 227 5.7 -6
----------------------------------------------------------------------
Net income/loss from continuing
operations 109 2.6 144 3.6 -24
----------------------------------------------------------------------
Operating cash flow (total operations) 53 -43
----------------------------------------------------------------------
Discontinued operations:
----------------------------------------------------------------------
Sales 114 96
----------------------------------------------------------------------
Net income/loss from discontinuing
operations -94 -82.5 2 2.1
----------------------------------------------------------------------
Second Quarter
----------------------------------------------------------------------
Continuing operations: 2006 % of 2005* % of +/-%
CHF mn sales CHF mn sales CHF
----------------------------------------------------------------------
Sales 2 083 100.0 2 040 100.0
----------------------------------------------------------------------
Local currency growth (LC): 0%
----------------------------------------------------------------------
- Organic growth (1) 2%
----------------------------------------------------------------------
- Acquisitions/Divestitures (2) -2%
----------------------------------------------------------------------
Currencies 2%
----------------------------------------------------------------------
Gross profit 650 31.2 628 30.8 +4
----------------------------------------------------------------------
EBITDA before exceptionals 195 9.4 214 10.5 -9
----------------------------------------------------------------------
EBITDA 172 8.3 193 9.5 -11
----------------------------------------------------------------------
Operating income before exceptionals 129 6.2 145 7.1 -11
----------------------------------------------------------------------
Operating income 62 3.0 115 5.6 -46
----------------------------------------------------------------------
Net income/loss from continuing
operations 16 0.8 71 3.5 -77
----------------------------------------------------------------------
Operating cash flow (total operations) 62 -65
----------------------------------------------------------------------
Discontinued operations:
----------------------------------------------------------------------
Sales 62 55
----------------------------------------------------------------------
Net income/loss from discontinuing
operations -95 - 3 5.5
----------------------------------------------------------------------
Key Financial Group Figures (cont.)
-----------------------------------------------------------
30.06.06 31.12.05
-----------------------------------------------------------
Net debt 1 574 1 508
-----------------------------------------------------------
Equity (including minorities) 2 520 2 591
-----------------------------------------------------------
Gearing 62% 58%
-----------------------------------------------------------
Number of employees* 22 448 22 623
-----------------------------------------------------------
(1) The term "organic growth" means volume and price effects excluding
the impacts of changes in FX rates and acquisitions/divestitures
(2) Acquisitions/divestitures in 2005 included Clariant Acetyl
Building Blocks, Germany, of the Life Science Chemicals Division
sold in July 2005
*2005 is restated to exclude the Discontinued operations of the
Pharmaceutical Fine Chemicals business, disposed in June 2006
Clariant posted a rise in sales in the first half of 2006, with organic growth of 4% in local currency terms and 8% in Swiss franc terms compared with the first half of 2005. A combination of higher costs for raw materials, energy and logistics as well as unchanged average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. weighed on results. Net income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the declined 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. 109 million from CHF 144 million in the corresponding period last year mainly due to higher restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . 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. rose to CHF 53 million compared to a negative CHF 43 million in the first half of 2005. Jan Secher, Chief Executive of Clariant said: "Our top-line growth is good and the majority of businesses are performing well, but overall profitability is unsatisfactory. The company has already made a lot of progress in our Transformation Program although there is much more work to be done. We have to increase our focus on implementation and execution to achieve our goal of strong and sustainable profitability." Raw materials rose 1% year-on-year, while energy increased 17% over the same period. Nevertheless, the gross margin was maintained around last year's level, at 30.8%, partially benefiting from the Clariant Performance Improvement Program delivering cost savings across the Group of approximately CHF 130 million. The EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). (earnings before interest and tax) margin before exceptional items declined to 6.8%, from 7.2%. This margin decrease was driven mainly by higher costs in two areas: selling, general and administrative expenses, which were incurred because of continued investment in improving the supply chain, and higher volumes. Good Growth Across the Group Solid demand drove good growth across most businesses. Masterbatches delivered excellent results, particularly in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Pigments & Additives grew strongly in volumes and showed very good performance with increased demand across all business areas, especially plastics. Textile, Leather & Paper posted solid sales growth compared to the previous year with strong growth in paper and encouraging developments in leather and textiles. Functional Chemicals achieved strong volumes, but results were affected by a significant downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the agro For the video game character, see . Agro is a puppet character on Australian television, who describes himself as a 'talking bathmat'. He is operated by comedian Jamie Dunn. industry and unsatisfactory results for detergents. A reduction in the cost base in detergents was initiated during the Second Quarter, including the closure of a plant in Knapsack, Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). . In the Life Science Chemicals Division, Specialty Fine Chemicals (SFC SFC abbr. sergeant first class ) continued to experience very difficult market conditions, particularly in the crop protection area. The company recently appointed an investment bank to explore strategic options for the SFC business unit. Pharmaceutical Fine Chemicals, which is qualified during the period as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. recorded excellent growth, continuing the positive trend since the start of the year. The business was sold to TowerBrook Capital Partners, effective June June: see month. 30. Looking at the regional picture during the first half of the year, organic sales growth in Asia was 4%, including 14% in China. In the Americas A·mer·i·cas , the See America. , sales grew 5%, including 7% in the United States, while in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). sales increased 3%, including 3% in Germany.
Sharper Focus "Delivering shareholder value is and will remain our absolute priority, meaning that all of Clariant's activities are ultimately aimed at increasing return on invested capital," Mr. Secher said. "An important way for us to achieve this goal is to continue reducing costs on a permanent basis." "Previous forecasts underestimated the persistence (1) In a CRT, the time a phosphor dot remains illuminated after being energized. Long-persistence phosphors reduce flicker, but generate ghost-like images that linger on screen for a fraction of a second. of high raw material prices, the amount of change required to transform Clariant as well as the rate we would be able to achieve that change," Mr. Secher added. "We are dedicated to fully delivering the potential of the Transformation Program, but more time is needed." "Many measures to increase efficiency and productivity are already in place, but the speed at which the results are coming through is not yet satisfactory," Mr. Secher said. "We must strengthen the focus and drive harder to make sure that we have sufficient improvements on an ongoing basis." The company is currently engaged in a review of its operational effectiveness and strategic focus, the results of which will be presented in November. Pigments Facility Opens in China A new facility to produce high performance red and yellow pigments opened in the Second Quarter in Hangzhou Hangzhou (hang`jō`) or Hangchow (hăng`chou), city (1994 est. pop. 1,184,300), capital of Zhejiang prov., E China. , southwest of Shanghai Shanghai (shăng`hī`, shäng`hī`), city (1994 est. pop. 12,980,000), in, but independent of, Jiangsu prov., E China, on the Huangpu (Whangpoo) River where it flows into the Chang (Yangtze) estuary. . The facility is the result of a joint venture between Clariant's Pigments & Additives Division and Hangzhou Baihe Chemical Co. Ltd, a privately owned company with a turnover of approximately USD USD In currencies, this is the abbreviation for the U.S. Dollar. 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. 60 million. Production will meet growing demand from both international customers with facilities in China and local Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. customers. The Second Quarter also saw the opening of a ColorWorks center in Merate, near the international design capital Milan. The center, part of the Masterbatches Division, is the seventh of its type, specializing in integrating color into early design stages, accelerating new products to market and encouraging more effective use of color not of the white race; - commonly meaning, esp. in the United States, of negro blood, pure or mixed. See also: Color to increase customers' brand recognition. There are other ColorWorks centers in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Sao Paulo and Singapore. Value-Based Pricing Value-Based Pricing A pricing strategy in which a product's price is actively dependant upon its demand. Notes: This method of pricing allows companies to take advantage of highly demanded products by charging more. Initiatives Launched In the Second Quarter, the company began wide-ranging initiatives to improve its pricing capabilities. These initiatives will be implemented over the next 16 months, with positive results expected over the medium- to long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. . The company is also preparing to launch the Clariant Academy, a dedicated center in Switzerland focused on leadership development and building excellence across the company in the areas of sales, marketing and continuous improvement processes. Outlook for 2006 Taking into account a broadly stable macro-economic environment, the company anticipates for its continuing operations for the full year: Good sales growth in local currency terms; a total of CHF 250 million in cost base reductions; raw material and energy prices to remain at high levels; an improvement of approximately CHF 60 million in 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 exceptionals, from CHF 100 million expected previously, and a satisfactory net income. Calendar of Corporate Events November 7, 2006 Nine Month 2006 Results February 20, 2007 Full Year 2006 Results; Annual Media Conference April 2, 2007 Annual General Meeting 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 22,500 people. Headquartered in Muttenz near Basel, Switzerland, it generated sales of around CHF 8.2 billion in 2005. Clariant's businesses are organized in five divisions: Textile, Leather & Paper Chemicals, Pigments & Additives, Functional Chemicals, Life Science Chemicals and Masterbatches. 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 know-how 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 |
|
||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion