AD HOC ANNOUNCEMENT PURSUANT TO ART. 53 LR
- Q2 2023 sales decreased by 7 % in local currency, down 17 % in Swiss francs to CHF 1.084 billion
- Q2 2023 reported EBITDA margin at 16.1 % from 16.6 % in Q2 2022
- H1 2023 sales decreased by 3 % in local currency, down 11 % in Swiss francs to CHF 2.284 billion
- H1 2023 reported EBITDA margin at 15.0 % from 17.0 % in H1 2022
- H1 2023 Operating Cash Flow at CHF 78 million compared to CHF - 17 million in H1 2022
- Full Year 2023 Outlook: Full year sales between CHF 4.55 – 4.65 billion and reported EBITDA expected between CHF 650 – 700 million (14.3 % – 15.1 % reported EBITDA margin)
“As indicated in early July, the challenging economic conditions affected the specialty chemicals sector and also impacted Clariant’s first-half year results. Our customers continued to bring their inventories down, and demand was weak in Care Chemicals and Additives, which impacted our profitability. We are pleased with our continued improvements in the Catalysts business, and we achieved further progress in reducing the negative sunliquid® impact on our results in the second quarter. Our stronger results in Catalysts partially offset the weaker trading results in the other business units. We implemented additional actions to align our cost base to a low volume environment, thereby increasing our 2025 targeted savings by CHF 10 million to a revised goal of CHF 170 million. We also continued our strong focus on cash, resulting in an improved operating cash flow by almost CHF 100 million compared to last year,” said
Business Summary
Second Quarter | First Half Year | |||||||
in CHF million | 2023 | 2022 | % CHF | % LC | 2023 | 2022 | % CHF | % LC |
Sales | 1 084 | 1 301 | - 17 | - 7 | 2 284 | 2 563 | - 11 | - 3 |
EBITDA | 175 | 216 | - 19 | 342 | 436 | - 22 | ||
- margin | 16.1 % | 16.6 % | 15.0 % | 17.0 % |
Second Quarter 2023 Group Discussion
MUTTENZ,
In the second quarter, local currency sales were down 10 % in the
Care Chemicals sales decreased by 17 % in local currency in the second quarter of 2023. This development was primarily driven by a volume decline with lower sales in both Consumer and Industrial Applications versus a challenging comparison base. Catalysts sales rose by 30 % in local currency with growth in all business segments. Adsorbents & Additives sales decreased by 12 % in local currency due to weaker demand for Additives in particular, against a very strong second quarter in 2022.
Group EBITDA decreased by 19 % to CHF 175 million, and the corresponding 16.1 % margin was below the 16.6 % reported in the second quarter of the previous year which included a CHF 22 million gain from the Scientific Design divestment. Positive profitability impacts included pricing measures in Catalysts and Adsorbents & Additives, as well as the preliminary CHF 62 million gain from the Quats disposal in Care Chemicals. Performance programs cost savings of approximately CHF 14 million addressed remnant cost from divested businesses and contributed positively to offset inflation. However, these factors did not offset the impact from lower volumes that negatively affected production utilization in certain businesses, together with restructuring charges of CHF 18 million, and a CHF 10 million negative operational impact from sunliquid®. Inventory devaluation resulting from lower raw material prices (- 12 %) in the second quarter of 2023 weighed on the profitability as well.
First Half Year 2023 Group Discussion
In the first half year 2023, sales were CHF 2.284 billion, compared to CHF 2.563 billion in the first half year 2022. This corresponds to a decrease of 3 % in local currency (- 2 % organic in local currency) and a decrease of 11 % in Swiss francs. Pricing had a positive impact on the Group of 4 % while volumes were down 6 %, scope (arising from divestments and an acquisition) was net - 1 %, and the currency impact was - 8 %.
In the first half year 2023, sales decreased by 5 % in the
Care Chemicals sales decreased by 9 % in local currency in the first half year 2023 versus a challenging comparison base. The prolonged destocking cycle continued to impact demand in key end markets in Care Chemicals as well as Additives. In Catalysts, the top line was up by 25 % in local currency, propelled by Propylene and Syngas & Fuels. Adsorbents & Additives sales decreased by 8 % in local currency due to weaker demand for Additives, against a particularly strong first half year in 2022.
Group EBITDA decreased by 22 % to CHF 342 million as profitability was negatively impacted by lower volumes, a CHF - 23 million impact from sunliquid® (excluding restructuring charges in the second quarter), the CHF - 11 million fair value adjustment of the
In the first half year 2023, the total Group net result was CHF 232 million versus CHF 386 million in the previous year. The result was lifted by the strong business performance in Catalysts, the preliminary CHF 62 million gain from the Quats disposal, as well as the positive impact on the tax rate from the reassessment of provisions related to prior years. In the first half year 2022, the net result had been lifted by the gain on the disposal of the Pigments Business Unit in discontinued operations.
Cash generated from operating activities for the total Group increased significantly to CHF 78 million from CHF - 17 million in the first half of 2022. This notable improvement was mainly attributable to the disposals and Clariant’s active working capital management.
Net debt for the total Group increased to CHF 908 million versus CHF 750 million recorded at the end of 2022. This development is largely attributable to reduced liquidity due to the payment of dividends.
ESG Update – Leading in Sustainability
Clariant’s Scope 1 and 2 total greenhouse gas emissions fell to 0.57 million tons in the last twelve months (
Outlook – Full Year 2023
From a macroeconomic perspective,
The Group has become a true specialty chemical company and remains committed toward its 2025 ambition to deliver profitable sales growth (4 – 6 % CAGR), a Group EBITDA margin between 19 – 21 %, and a free cash flow conversion of around 40 %.
Extraction from Key Financial Group Figures
Second Quarter | First Half Year | |||||||
in CHF million | 2023 | 2022 | % CHF | % LC | 2023 | 2022 | % CHF | % LC |
Sales | 1 084 | 1 301 | - 17 | - 7 | 2 284 | 2 563 | - 11 | - 3 |
EBITDA | 175 | 216 | - 19 | 342 | 436 | - 22 | ||
- margin | 16.1 % | 16.6 % | 15.0 % | 17.0 % | ||||
EBITDA before exceptional items | 135 | 210 | - 36 | 319 | 448 | - 29 | ||
- margin | 12.5 % | 16.1 % | 14.0 % | 17.5 % | ||||
EBIT | 222 | 290 | ||||||
Return on | 0.1 % | 10.9 % | ||||||
Net result from continuing operations | 230 | 189 | ||||||
Net result (1) | 232 | 386 | ||||||
Operating cashflow (1) | 78 | - 17 | ||||||
Number of employees (1) | 10 690 | 11 148 (3) | ||||||
Discontinued operations (2) | ||||||||
Net result from discontinued operations | 2 | 197 |
Total Group , including discontinued operations- Pigments divested on
3 January 2022 - As of
31 December 2022
Q2/H1 2023 Media Release
H1 2023 Financial Review
CORPORATE MEDIA RELATIONS Phone +41 61 469 63 63 jochen.dubiel@clariant.com Anne Schäfer Phone +41 61 469 63 63 anne.schaefer@clariant.com Phone +41 61 469 63 63 ellese.caruana@clariant.com Follow us on Twitter, Facebook, LinkedIn, Instagram. | INVESTOR RELATIONS Andreas Schwarzwälder Phone +41 61 469 63 73 andreas.schwarzwaelder@clariant.com Maria Ivek Phone +41 61 469 63 73 maria.ivek@clariant.com Phone +41 61 469 63 73 thijs.bouwens@clariant.com |
This media release contains certain statements that are neither reported financial results nor other historical information. This document also includes forward-looking statements. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors that are beyond Clariant’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of governmental regulators and other risk factors such as: the timing and strength of new product offerings; pricing strategies of competitors; the Company’s ability to continue to receive adequate products from its vendors on acceptable terms, or at all, and to continue to obtain sufficient financing to meet its liquidity needs; and changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, including currency fluctuations, inflation and consumer confidence, on a global, regional or national basis. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. www.clariant.com |
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