Q3 2010 Analyst Presentation

Nine Months / Third Quarter 2010 Results 

03 November 2010

Agenda 

Highlights and key figures first nine months 

Financial results third quarter 

Business review 

Outlook 

9M 2010 / Q3 2010, Analysts Presentation, 3 November 2010 (Copyright Clariant. All rights reserved.) 

Slide 2 / 55

Highlights and key figures first nine 

months 

Success of the restructuring program leveraged by the favorable and robust economic 

environment in the first nine months: 

– Local currency sales grew 14% year-on-year 

– Gross profit margin improved to 28.5% from 23.1% in 9M 2009 

– EBIT before exceptionals rose 253% to CHF 576 million from CHF 163 million 

– EBIT margin before exceptionals at 10.6% vs. 3.3% 

– Net income CHF 144 million compared to net loss CHF 127 million 

Sales price increases fully compensated for higher raw material costs at the end of the period 

– Focus on further selective sales price increases where necessary 

Final decisions to optimize production footprint within the Global Network Optimization 

Program (GANO) taken in October 

– Savings of at least CHF 100 million annually by 2013 expected 


Highlights and key figures first nine months 

Slide 3 / 55

Agenda 

Highlights and financial results nine months 



Outlook 


Slide 4 / 55

Key figures third quarter 

Sales in CHF mn 1 709 1 691 

Gross margin* 27.9% 25.3% 

EBIT before exceptionals in CHF mn 28.7% 182 29.2% 107 

EBIT margin before exceptionals 10.6% 6.3% 

Net income in CHF mn 109** 25 

Operating cash flow in CHF mn 173 193 


Q3/10 Q3/09 in CHF in LC 

* restated gross margin includes freight costs as of 1 January 2010 / reported gross margin in Q3 2009 was 30.1% 

** includes a one-time benefit from the capitalization of tax assets of CHF 45 mn 

+1% 


+8% 

Slide 5 / 55

Single- to double-digit sales growth in all 

regions despite more challenging base 

Sales growth in local currencies 

Sales mix: 

– Volume +5% 

– Price +3% 

– Acq./div. 0% 

– Currency –7% 

Single-digit to double-digit sales growth in 

local currency in all regions 

Significant currency impact on top-line 

growth due to Swiss franc appreciation 

Close to 50% of sales generated in the 

emerging markets of Asia, Latam, MEA 


Q3/10 

+8% 

Total sales Q3/10: CHF 1 709 mn 

incl. China 

105 / +5% 

+6% 

+9% 

incl. Brazil 

149 / 0% 

+11% 



–14% 


incl. Germany 

223 / +13% 

Asia/ 

Pacific 

383 Europe, Middle 

Latin 

America 

308 

North 

America 

216 

East & Africa 

802 

+9% 

Middle East & Africa 

135 / +9% 

Slide 6 / 55

Gross margin management successful 

Gross margin significantly higher versus year-ago 

period 

Gross margin remained close to first half-year 

level despite seasonally higher idle facility costs 

Sales price increases of 1% fully offset rising raw 

material costs of less than 2% sequentially 


Q3/10 Q3/09* 

Gross margin 27.9% 25.3% 

* restated gross margin includes freight costs as of 1 January 2010 / reported gross margin in Q3 2009 was 30.1% 


sales price increases 

RM cost increases (sales-weighted) 

2008 2009 2010 

Slide 7 / 55

Operating margin before exceptionals 

rises on lower SG&A costs 

EBIT before exceptionals in CHF mn 182 107 

EBIT margin before exceptionals 10.6% 6.3% 

Operating income before exceptionals items up 70% compared to the same quarter 

of the previous year 

Operating income before exceptionals margin at the level of H1 2010 despite the 

normal seasonal pattern in demand and seasonally higher idle facility costs 

SG&A costs lower in absolute numbers due to restructuring benefits and a favorable 

FX impact 

SG&A costs in percent of sales down to 15.6% in Q3 2010 from 17.3% in Q3 2009 





Slide 8 / 55

Solid cash flow generation driven by 

operating result 

Operating cash flow in CHF mn 



Cash flow before changes in working capital rose to CHF 116 million in Q3 2010 

compared to CHF 78 million in Q3 2009 as operating income improved 

Cash flow also driven by lower impact from inventories build-up compared to H1 2010 

and continuation of strict net working capital management 

NWC in % of sales down to 19.7% as of end Q3 2010 from 23.2% as of Q3 2009 

Restructuring and impairment costs of CHF 45 million, cash-out CHF 37 million 

Ramp-up of capex to CHF 55 million vs. CHF 26 million in the year-ago period, driven 

by investments in China and relocation of production within the context of GANO 

173 


193 


Slide 9 / 55

Financial result – net debt further reduced 

Financial result in CHF mn 



Financial result nearly flat at CHF –27 million versus CHF –28 million in Q3 2009, as 

lower financial and interest expenses more than offset the negative currency result 

Slightly lower interest expenses of CHF –19 million vs. CHF –21 million in Q3 2009 

Cash and cash equivalents – including short-term deposits of CHF 643 million – 

improved to CHF 1 272 million from CHF 1 140 million at year-end 2009 and 

CHF 1 221 million at end Q2 2010 

Net debt down to CHF 302 million from CHF 545 million at year-end 2009 and 

CHF 379 million at the end of Q2 2010 

Gearing improved to 16% from 29% at year-end 2009 and from 20% at end Q2 2010 

–27 


–28 


Slide 10 / 55

Agenda 




Outlook 


Slide 11 / 55

Business unit sales, EBITDA and EBIT 

margins 

Third quarter 2010 

Business Unit / Reporting Segment: 

BU Industrial & Consumer Specialties 

BU Masterbatches 

BU Pigments 

BU Textile Chemicals 

BU Oil & Mining Services 

BU Leather Services 

Performance Chemicals* 

Group total 

Sales 

CHF mn 

341 

315 

301 

199 

142 

1 709 


76 

335 

% CHF 

–2 

3 

6 

–1 

4 

1 

–2 

1 

Change 

% LC 

* includes the four business units Additives, Detergents & Intermediates, Emulsions, Paper Specialties 

** before exceptional items 

9 

11 

11 

3 

10 

5 

6 

8 

EBITDA** 

margin 

% 

15.8 

12.4 

21.9 

9.5 

11.3 

13.2 

13.1 

13.6 


EBIT** 

margin 

% 

13.5 

10.2 

19.3 

6.0 

11.3 

11.8 

10.1 

10.6 

Slide 12 / 55

ICS with improved margins, favorable 

demand situation in Masterbatches 

Industrial & Consumer Specialties 

Sales in CHF mn 

Q3 

2010 

341 



315 

Change 

(LC) 

Masterbatches 



2009 

46 

+9% 348 

+93% 

13.5% 

Change 

(LC) 


2009 

Good demand across the whole portfolio 

32 

+11% 305 

+22% 

10.2% 


Demand driven by the Industrial Applications segment: 

construction, paints & coatings, lubricants 

Agrochemicals continued to recover in-line with market, 

demand in Consumer Care segment remained high 

Demand from all end markets including automotive, 

packaging, and textiles remained at good levels 

Impact from replenishment of inventories in some end 

markets softened 

Further optimization of production network initiated 


EBIT before exc. in CHF mn 





Change 

(LC) 

Change 

(LC) 


2009 

27 

7.8% 



2009 

28 

9.2% 

Slide 13 / 55

Pigments with excellent performance, 

Textile Chemicals with good growth in Asia 

Pigments 




301 



199 

Change 

(LC) 

Textile Chemicals 



2009 

58 

+11% 284 

+115% 

19.3% 

Change 

(LC) 


2009 

No sign of weakness in demand 

12 

+3% 200 

+47% 

6.0% 


Coatings: demand from decorative segment and from 

automotive industry remained strong 

Printing: good demand for pigments used in packaging 

inks and in non-impact printing applications 

Demand from the textile industry remained solid 

Relocation of BU headquarters to Singapore mid 2011 

Transfer of production to Asia proceeding well: 

production started in other plants, inventories build-up 

to guarantee supply during transition phase 







Change 

(LC) 

Change 

(LC) 


2009 

28 

9.9% 



2009 

8 

4.0% 

Slide 14 / 55

OMS strengthened market position, Leather 

Services benefited from luxury car boom 

Oil & Mining Services 




142 



76 

Change 

(LC) 

Leather Services 



2009 

16 

+10% 136 

–6% 

11.3% 

Change 

(LC) 


2009 

Strength in global oil drilling activity 

9 

+5% 75 

+56% 

11.8% 


Mining Services: upward trend continuing, but at 

a slower pace than in H1 2010 

BU further strengthened market positions in the Middle 

East and in Latin America 

Continuing good demand from the premium car 

segment 

More moderate growth in the upholstery and shoe 

segment 

Market share gains in Latin America 







Change 

(LC) 

Change 

(LC) 


2009 

16 

11.8% 



2009 

6 

8.0% 

Slide 15 / 55

Performance Chemicals – increased sales 

prices offset higher raw material costs 





335 

* the Performance Chemicals segment includes the business units: 

- Additives 

Change 

(LC) 

- Detergents & Intermediates 

- Emulsions 

- Paper Specialties 


2009 

34 

+6% 343 demand for paper chemicals and dyes stable 

+49% 

10.1% 


Additives: continued good demand in all businesses 

D&I: good demand and high capacity utilization 

Emulsion: flat sales in lc versus year-ago quarter 





Change 

(LC) 


2009 

26 

7.6% 

Slide 16 / 55

Agenda 




Outlook 


Slide 17 / 55

Our roadmap – restructuring program 

completed in 2010, ready to shift our focus 

Timeline 

Focus 

Actions 

< 2009 > 2010 

Restructuring 

Project Clariant 

Cash generation 

Cost cutting 

Complexity 

reduction 


Continuous improvement 

Clariant Excellence 

People Excellence 

Operational Excellence 

Commercial Excellence 

Profitable growth 

Growth & Opportunities 

Innovation Excellence 

Portfolio management 

Outlook 

Slide 18 / 55

Making progress to achieve our full-year 

2010 targets 

11% 

10% 

9% 

8% 

7% 

6% 

5% 

4% 

Operating margin 

before exceptionals 

6.3% 

10.6% 

Q3 2009 Q3 2010 

EBIT before exceptional 

items above 9% 

18.0% 

17.5% 

17.0% 

16.5% 

16.0% 

15.5% 

15.0% 


SG&A in % of sales 

17.3% 

15.6% 


SG&A costs in-line with 

peer group companies 

24% 

23% 

22% 

21% 

20% 

19% 

18% 

Outlook 

NWC in % of sales 

23.2% 

19.7% 


Net working capital down 

to 19.7%, FY target of 20% 

Slide 19 / 55

GANO project finalized – execution 

until 2013 

Business Unit 

Industrial & Consumer 

Specialties 

Masterbatches 

Paper Specialties 

Pigments 


FTE reduction 


Pontypridd (UK) 

CIVAC (MX) 

Muttenz (CH) 

Muttenz (CH) 

approx. 1 100 – 1 200 

Estimated GANO-related impact on P&L and Cash-flow statement 2010-2013: 

P&L effect (Restr. & Imp.) 

Cash–out (excl. capex) 

Site closure 

Plant / production line closure 

Lachine (CA) 

Milford (US) 

Guatemala City 

site consolidation 

Resende (BR) 

Thane (IN) 

Onsan (KR) 

2010 – 2013 

Gendorf (DE) 

Sefakoy (TR) 

Delta (CA) 

McHenry (US) 

Huningue (FR) 

Hoechst (DE) 

Tianjin (CN) 

Huningue (FR) 

Roha (IN) 

Shizuoka (JP) 

2009/10: ~ CHF 290 mn 2011–13: < CHF 100 mn 

2009/10: ~ CHF 50 mn 2011–13: ~ CHF 180 mn 

→ Total net annual savings realized after 2013: ≥ CHF 100 million 

→ Nanterre (FR): move of France headquarters to Lamotte (FR) 

Outlook 

Reinach (CH) 

Reinach (CH) 

Slide 20 / 55

Outlook – business conditions for the 

fourth quarter 

Environment 

For the remainder of the year, Clariant expects stable trading conditions 

Clariant expects a return to normal seasonality, with a traditionally weaker 

fourth quarter 

Raw material costs are expected to rise further but at a slower pace than in 

the first nine months of the year 


Outlook 

Slide 21 / 55

Outlook – Clariant 

Ongoing restructuring program will be finalized by the end of 2010, company will 

then be managed for profitable growth as of 2011 

Some of the measures – in particular related to the GANO activities – will not be 

completely implemented before 2013 

2010 guidance: 

High single-digit sales growth in local currency compared to 2009 

Operating income margin before exceptional items above 9%, raised from above 8% 

Operating cash flow will remain strong 

Return on invested capital (ROIC) above industry average by the end of 2010 


Outlook 

Slide 22 / 55

Calendar of upcoming corporate events 

16 February 2011 Full-year Results 2010 

31 March 2011 Annual General Meeting, Basel 

02 May 2011 First Quarter Results 2011 

27 July 2011 Second Quarter Results 2011 

31 October 2011 Third Quarter Results 2011 


Slide 23 / 55

IR contacts 

Dr. Ulrich Steiner 

Head Investor Relations 

Phone +41 (0) 61 469 67 45 

Mobile +41 (0) 79 297 27 07 

email ulrich.steiner@clariant.com 

Dr. Siegfried Schwirzer 

Investor Relations Officer 

Phone +41 (0) 61 469 67 49 

Mobile +41 (0) 79 718 45 98 

email siegfried.schwirzer@clariant.com 

Edith Schwab 

Phone +41 (0) 61 469 67 48 

Fax +41 (0) 61 469 67 67 

email edith.schwab@clariant.com 

Mirjam Grieder 

Phone +41 (0) 61 469 67 66 

Fax +41 (0) 61 469 67 67 

email mirjam.grieder@clariant.com 

Clariant International Ltd Hardstrasse 61 4133 Pratteln Switzerland investor-relations@clariant.com 


Slide 24 / 55

Backup Slides – 

Nine Months / Third Quarter 2010 Results 


Slide 25 / 55

Clariant’s products and services are 

delivered through 10 Business Units (1) 

Additives 

A leading provider of 

flame retardants, 

waxes and polymer 

additives 

for effects in plastics, 

coatings and other 

applications. 

Detergents & 

Intermediates 

A leading supplier of 

key raw materials and 

intermediates to the 

detergents, agro and 

pharmaceutical 

industries. 

Emulsions 


A supplier of waterbased 

emulsions/polymer 

dispersions for paints, 

coatings, adhesives, 

construction, sealants 

and for the textile, 

leather and paper 

industries. 

Industrial & 

Consumer Specialties 


specialty chemicals and 

application solutions 

for the consumer care 

and industrial markets. 

Backup slides 


A leading supplier of 

chemicals and services 

to the leather industry. 

Slide 26 / 55

Clariant’s products and services are 

delivered through 10 Business Units (2) 

Masterbatches 

A leader in coloration 

and functionality of 

plastics, supplying the 

packaging, consumer 

goods, medical, textile 

and automotive 

sectors. 

Oil & Mining 

Services 


products and services 

to the oil, refinery and 

mining industries. 


Paper Specialties 


optical brighteners, 

colorants and 

functional chemicals 

for paper and 

packaging applications. 

Pigments 

A leading global 

provider of organic 

pigments and dyes for 

coatings,paints, 

printing, plastics and 

special applications. 

Backup slides 


A leading producer of 

dyes and chemicals for 

the textile industry 

including apparel, 

upholstery, fabrics and 

carpets. 

Slide 27 / 55

Peer group ROIC 

Measuring performance 

based on relative ROIC* 

Ems-Chemie 

Lubrizol 

Croda 

PolyOne 

Rhodia 

Nalco 

BASF 

Akzo Nobel 

Albemarle 

Evonik 

Kemira 

CLARIANT 

Dow Chemical 

DSM 

Lanxess 

Celanese 

Rockwood 

Solvay 

Cytec 

Wacker 

Huntsman 

Arkema 

Mitsubishi Chemical 

0.1 

1.0 

0.9 

2.1 

2.1 

2.6 

* source: calculated from annual reports 


3.7 

4.2 

4.1 

2009 average 

6.6% 

5.0 

5.7 

5.5 

5.8 

6.2 

7.3 

7.1 

7.6 

7.5 

9.6 

11.5 

0 5 10 15 20 25 

12.9 

18.5 

Backup slides 

20.8 

Slide 28 / 55

Restated group gross profit and 

SG&A 2009 

Starting 1 January 2010, Clariant reports freight costs as included in the costs of goods 

sold line (before: in selling, general & administrative costs) 

This change affects line items as follows: 

Lower gross profit and gross profit margin 

Lower absolute selling, general & administrative costs and lower SG&A costs in 

percentage of sales 

All other figures remain unchanged. 


Backup slides 

Slide 29 / 55

Restated group gross profit 2009 

Group gross profit margin 2009 & 2010 – in CHF mn 

Gross profit reported 

- margin 

Gross profit restated 

- margin 

Quarterly figures 

600 

400 

200 

0 

379 

303 

471 

399 

Q1 

379 

23.6% 

303 

18.9% 

Q2 

471 

29.3% 

399 

24.8% 

509 506 

428 427 



509 

30.1% 

428 

25.3% 

Q4 

506 

29.6% 

427 

25.0% 

FY/09 

1 865 

28.2% 

1 557 

23.5% 

Q1/10 

– 

– 

521 

28.7% 

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 

reported restated margin reported / in % of sales reported margin restated / in % of sales restated 

n/a 

521 

n/a 

547 

Backup slides 

n/a 

477 

Q2/10 

– 

– 

547 

28.9% 


– 

– 

477 

27.9% 

Slide 30 / 55

Restated group SG&A 2009 

Group SG&A costs 2009 & 2010 – in CHF mn 

SG&A costs reported 

- in % of sales 

SG&A costs restated 

- in % of sales 

Quarterly figures 

400 

300 

200 

100 

0 

reported restated 

Q1 

357 

22.2 

281 

17.5 

Q2 

371 

23.1 

299 

18.6 

357 371 373 369 

281 



373 

22.0 

292 

17.3 

369 

21.6 

290 

17.0 

FY/09 

1 470 

22.2 

1 162 

17.6 

299 292 290 307 309 

Q1/10 


– 

– 

307 

16.9 

margin reported / in % of sales reported margin restated / in % of sales restated 

n/a 

Q4 

n/a 

Backup slides 

n/a 

267 

Q2/10 

– 

– 

309 

16.3 


– 

– 

267 

15.6 

Slide 31 / 55

Key financials – nine months 

Nine months 

Sales 

Local currency growth (LC) 

- Organic growth rate* 

- Acquisitions/Divestments 

Currencies 

Gross profit** 

EBITDA before exceptionals 

EBITDA 

Operating income before exceptionals 

Operating income 

Net income / loss 

Operating cash flow 


CHF mn 

5 420 

14% 

14% 

0% 

–3% 

1 545 

731 

541 

576 

335 

144 

365 


% of sales 

100% 

28.5% 

13.5% 

10.0% 

10.6% 

6.2% 

2.7% 

CHF mn 

4 904 

1 130 

331 

–127 

533 

2009 

% of sales 

* organic growth: volume and price effects excluding the impact of changes in foreign currency exchange rates and acquisitions/divestments 

** gross profit includes freight costs as of first quarter 2010. Reported gross profit in 9M 2009 was CHF 1 359 million, gross margin 27.7% 

206 

163 

3 

Backup slides 

100% 

23.1% 

6.7% 

4.2% 

3.3% 

0.1% 

2.6% 

Slide 32 / 55

Sales – nine months 


Sales mix: 

– Volume 14% 

– Price 0% 

– Acq./div. 0% 

– Currency –3% 


9M/10 

+14% 

Total sales 9M/10: CHF 5 420 mn 

+17% 

+12% 

incl. Brazil 

446 / +3% 

incl. China 

321 / +28% 


Backup slides 

9M/09 

–18% 

incl. Germany 

738 / +22% 

Asia/ 

Pacific 

1 154 Europe, Middle 

Latin 

America 

920 

North 

America 

669 

+14% 

East & Africa 

2 677 

+15% 

Middle East & Africa 

426 / +15% 

Slide 33 / 55

Business unit sales, EBITDA and EBIT 

margins – nine months 

Nine months 2010 

Business Unit / Reporting Segment: 



BU Pigments 





Group total 

Sales 

CHF mn 

1 128 

981 

907 

634 

438 

251 

1 081 

5 420 


% CHF 

7 

17 

14 

10 

4 

27 

7 

11 

Change 

% LC 

* includes the four business units Additives, Detergents & Intermediates, Emulsions, Paper Specialties 

** before exceptional items 

14 

21 

17 

11 

5 

30 

11 

14 

EBITDA** 

margin 

16.5 

12.7 

21.7 

9.6 

12.1 

13.5 

14.8 

13.5 

Backup slides 

% 

EBIT** 

margin 

% 

14.0 

10.4 

18.9 

6.8 

11.4 

12.0 

11.9 

10.6 

Slide 34 / 55

Cash flow – nine months 

Nine months 

Net income / loss 

Depreciation, amortization and impairment 

Other 

Payments for restructuring 

Operating cash flow before working capital changes 

Changes in working capital and provisions 


Cash flow from investing activities 

thereof: property, plant & equipment 

thereof: changes in current financial assets 

thereof: acquisitions, disposals and other 

Cash flow before financing 



CHF mn 

144 

206 

22 

–106 

266 

99 

365 

–783 

–118 

–665 

0 

-418 

Backup slides 

2009 

CHF mn 

–127 

203 

53 

–131 

–2 

535 

533 

–75 

–96 

5 

16 

458 

Slide 35 / 55

Financial result – nine months 

Nine months 

Interest income 

Other financial income 

Total financial income 

Interest expenses 

Other financial expenses 

Currency result, net 

Total financial expenses 

Total financial result 



CHF mn 

6 

2 

8 

–56 

–14 

–50 

–120 

2009 

CHF mn 

5 

2 

7 

–61 

–11 

–18 

–90 

– 112 –83 

Backup slides 

Slide 36 / 55

Sales and EBITDA margins by business 

unit – nine months 

Nine months 2010 

Business Unit / Segment: 



BU Pigments 





Group total 

Sales in % of group 

Industrial & 


Performance 

Chemicals* 

20% 


21% 18% 

4% 

8% 

12% 

Masterbatches 

17% 


CHF mn 

1 128 

981 

907 

634 

438 

251 

1 081 

5 420 

Pigments 



Sales 

% LC 

+14 

+21 

+17 

+11 

+5 

+30 

+11 

+14 

EBITDA** 

EBITDA** 

% of Group 

23 

15 

24 

7 

6 

4 

21 

100 

Industrial & 


Performance 

Chemicals* 

EBITDA margin** 

% 2010 % 2009 

16.5 

9.4 

12.7 

9.4 

21.7 

6.9 

9.6 

2.9 

12.1 

10.9 

13.5 

1.0 

14.8 

7.7 

13.5 

6.7 

* includes the four business units Additives, Detergents & Intermediates, Emulsions, Paper Specialties; ** before exceptional items 

21% 

23% 

4% 6% 

15% 

7% 



Backup slides 

24% 

Masterbatches 

Pigments 


Slide 37 / 55

Business Unit sales and EBIT before 

exceptional items – nine months (1) 

Industrial & Consumer Specialties Masterbatches 


9M 


1 128 

Pigments 

Change 

(LC) 


9M 


907 

9M 

2009 


9M 


Change 

(LC) 

9M 

2009 

158 

69 

102 

+14% 1 052 

+148% 981 +21% 842 

14.0% 

6.6% 

10.4% 

+97% 

Change 

(LC) 

9M 

2009 


9M 


Change 

(LC) 

171 

+17% 797 

+530% 

18.9% 

9M 

2009 

28 

3.5% 



9M 


Change 

(LC) 



9M 


634 

Change 

(LC) 

9M 

2009 

9M 

2009 


9M 


Backup slides 

Change 

(LC) 

43 

+11% 578 

– 

6.8% 

9M 

2009 

54 

6.4% 


9M 


Change 

(LC) 

9M 

2009 

0 

0.0% 

Slide 38 / 55

Business Unit sales and EBIT before 

exceptional items – nine months (2) 

Oil & Mining Services Leather Services 


9M 


438 

Change 

(LC) 

9M 

2009 


9M 


Change 

(LC) 

9M 

2009 

50 

43 

30 

+5% 423 

+17% 251 +30% 197 

11.4% 

10.2% 

12.0% 

– 



9M 


1 081 

Change 

(LC) 

9M 

2009 


9M 


Change 

(LC) 

129 

+11% 1 015 

+227% 

11.9% 

9M 

2009 

42 

4.1% 



9M 


Change 

(LC) 

9M 

2009 


9M 


Backup slides 

Change 

(LC) 

9M 

2009 

–2 

–1.0% 

* the Performance Chemicals segment includes the business units: 

- Additives 

- Detergents & Intermediates 

- Emulsions 

- Paper Specialties 

Slide 39 / 55

Key financials – third quarter 

Third quarter 

Sales 

Local currency growth (LC) 

Net income 

- Organic growth rate* 

- Acquisitions/Divestments 

Currencies 

Gross profit** 

EBITDA before exceptionals 

EBITDA 

Operating income before exceptionals 

Operating income 



CHF mn 

1 709 

8% 

8% 

0% 

–7% 

477 

232 

206 

182 

137 

109 

173 


% of sales 

100% 

27.9% 

13.6% 

12.1% 

10.6% 

8.0% 

6.4% 

CHF mn 

1 691 

428 

163 

25 

193 

2009 

% of sales 

* organic growth: volume and price effects excluding the impact of changes in foreign currency exchange rates and acquisitions/divestments 

** gross profit incl. freight costs as of first quarter 2010. Reported gross profit in third quarter 2009 was CHF 509 million, gross margin 30.1% 

132 

107 

71 

Backup slides 

100% 

25.3% 

9.6% 

7.8% 

6.3% 

4.2% 

1.5% 

Slide 40 / 55

Cash flow – third quarter 

Third quarter 

Net income 

Depreciation, amortization and impairment 

Other 

Payments for restructuring 

Operating cash flow before working capital changes 

Changes in working capital and provisions 


Cash flow from investing activities 

thereof: property, plant & equipment 

thereof: changes in current financial assets 

thereof: acquisitions, disposals and other 

Cash flow before financing 



CHF mn 

109 

69 

–25 

–37 

116 

57 

173 

–339 

–55 

–282 

–2 

–166 

Backup slides 

2009 

CHF mn 

25 

61 

37 

–45 

78 

115 

193 

8 

–26 

2 

32 

201 

Slide 41 / 55

Financial result – third quarter 

Third quarter 

Interest income 

Other financial income 

Total financial income 

Interest expenses 

Other financial expenses 

Currency result, net 

Total financial expenses 

Total financial result 



CHF mn 

2 

0 

2 

–19 

–1 

–9 

–29 

2009 

CHF mn 

1 

1 

2 

–21 

–5 

–4 

–30 

–27 –28 

Backup slides 

Slide 42 / 55

Sales and EBITDA margins by business 

unit – third quarter 

Third quarter 2010 

Business Unit / Segment: 



BU Pigments 





Group total 

Sales in % of group Masterbatches 

Industrial & 


Performance 

Chemicals* 

20% 

20% 


4% 

8% 

18% 

12% 

18% 


CHF mn 

341 

315 

301 

199 

142 

76 

335 

1 709 

Pigments 



Sales 

% LC 

+9 

+11 

+11 

+3 

+10 

+5 

+6 

+8 

EBITDA** 

EBITDA** 

% of Group 

22 

16 

26 

8 

6 

4 

18 

100 

Industrial & 


Performance 

Chemicals* 


EBITDA margin** 

% 2010 % 2009 

15.8 

10.6 

12.4 

11.8 

21.9 

13.0 

9.5 

7.0 

11.3 

12.5 

13.2 

9.3 

13.1 

11.1 

13.6 

9.6 


* includes the four business units Additives, Detergents & Intermediates, Emulsions, Paper Specialties; **before exceptional items 

22% 

18% 

16% 

4% 6% 

Backup slides 

8% 

Masterbatches 

26% 

Pigments 


Slide 43 / 55

Quarterly Business Unit sales and EBIT 

before exceptional items 2009/2010 (1) 

Industrial & Consumer Specialties 

500 

400 

300 

200 

100 

0 

Sales 

380 

- margin 

EBIT bef. exceptionals 

- margin 

24 

324 

18 

EBITDA bef. exceptionals 

348 

Quarterly figures* 2009 & 2010 – in CHF mn 

27 

373 


46 

Q1 

380 

34 

8.9% 

24 

6.3% 

420 

67 

Q2 

324 

28 

8.6% 

18 

5.6% 

367 


348 

37 

10.6% 

27 

7.8% 

341 

45 46 


Q4 

373 

57 

15.3% 

46 

100 

80 

60 

40 

20 

0 

12.3% 

FY/09 

1 425 

156 

10.9% 

115 

8.1% 

Sales EBIT bef. 

exceptionals 

Q1/10 

420 

76 

18.1% 

67 

16.0% 

Backup slides 

Q2/10 

367 

56 

15.3% 

45 

12.3% 

EBIT bef. 

exceptionals – margin 


341 

54 

15.8% 

46 

13.5% 

* unaudited 

Slide 44 / 55



Masterbatches 

400 

300 

200 

100 

0 

Sales 

260 

- margin 


- margin 

6 

277 

20 


305 


28 

280 


18 


Q1 

260 

15 

5.8% 

6 

2.3% 

321 

32 

Q2 

277 

28 

10.1% 

20 

7.2% 

345 

38 


305 

36 

11.8% 

28 

9.2% 

315 

32 

Q4 

280 

26 

9.3% 

18 

50 

40 

30 

20 

10 

0 

6.4% 

FY/09 

1 122 

105 

9.4% 

72 

6.4% 


exceptionals 

Q1/10 

321 

40 

12.5% 

32 

10.0% 

Backup slides 

Q2/10 

345 

46 

13.3% 

38 

11.0% 

EBIT bef. 



315 

39 

12.4% 

32 

10.2% 

* unaudited 

Slide 45 / 55



Pigments 

400 

300 

200 

100 

0 

Sales 

240 


- margin 


- margin 

273 284 275 281 

14 


28 

–14 


20 

Q1 2009 

-14 

Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 

Q1 

240 

–5 

–2.1% 

–5.8% 

45 

Q2 

273 

23 

8.4% 

14 

5.1% 

325 

68 


284 

37 

13.0% 

28 

9.9% 

301 

58 

Q4 

275 

28 

10.2% 

20 

80 

60 

40 

20 

0 

-20 

7.3% 

FY/09 

1 072 

83 

7.7% 

48 

4.5% 


exceptionals 

Q1/10 

281 

54 

19.2% 

45 

16.0% 

Backup slides 

Q2/10 

325 

77 

23.7% 

68 

20.9% 

EBIT bef. 



301 

66 

21.9% 

58 

19.3% 

* unaudited 

Slide 46 / 55




250 

200 

150 

100 

50 

0 

Sales 

180 

- margin 


- margin 

-9 


198 200 199 204 

1 


8 



–3 

–9 

0 

Q1 

180 

–1.7% 

–5.0% 

9 

Q2 

198 

6 

3.0% 

1 

0.5% 

231 

22 


200 

14 

7.0% 

8 

4.0% 

199 

12 

Q4 

199 

6 

3.0% 

0 

30 

20 

10 

0 

-10 

0.0% 

FY/09 

777 

23 

3.0% 

0 

0.0% 


exceptionals 

Q1/10 

204 

15 

7.4% 

9 

4.4% 

Backup slides 

Q2/10 

231 

27 

11.7% 

22 

9.5% 

EBIT bef. 



199 

19 

9.5% 

12 

6.0% 

* unaudited 

Slide 47 / 55




160 

120 

80 

40 

0 

Sales 

156 

- margin 


- margin 

131 


136 

17 16 

10 


155 148 148 142 

22 21 



Q1 

156 

18 

11.5% 

17 

10.9% 

Q2 

131 

11 

8.4% 

10 

7.6% 

13 


136 

17 

12.5% 

16 

11.8% 

16 

Q4 

155 

24 

15.5% 

22 

30 

20 

10 

0 

14.2% 

FY/09 

578 

70 

12.1% 

65 

11.2% 


exceptionals 

Q1/10 

148 

22 

14.9% 

21 

14.2% 

Backup slides 

Q2/10 

148 

15 

10.1% 

13 

8.8% 

EBIT bef. 



142 

16 

11.3% 

16 

11.3% 

* unaudited 

Slide 48 / 55




100 

80 

60 

40 

20 

0 

Sales 

51 

- margin 


- margin 

-9 

71 


1 


75 

6 


82 

7 


Q1 

51 

–8 

–15.7% 

–9 

–17.6% 

84 

10 

Q2 

71 

3 

4.2% 

1 

1.4% 

91 

11 


75 

7 

9.3% 

6 

8.0% 

76 

9 

Q4 

82 

8 

9.8% 

7 

15 

10 

5 

0 

-5 

8.5% 

FY/09 

279 

10 

3.6% 

5 

1.8% 


exceptionals 

Q1/10 

84 

11 

13.1% 

10 

11.9% 

Backup slides 

Q2/10 

91 

13 

14.3% 

11 

12.1% 

EBIT bef. 



76 

10 

13.2% 

9 

11.8% 

* unaudited 

Slide 49 / 55



Performance Chemicals (including Additives, Detergents & Intermediates, Emulsions, Paper Specialties) 

400 

300 

200 

100 

0 

Sales 

- margin 


- margin 

337 335 343 346 359 

26 


26 23 

Q1 2009 

-10 

Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 


–10 


Q1 

337 

2 

0.6% 

–3.0% 

41 

Q2 

335 

38 

11.3% 

26 

7.8% 

387 

54 


343 

38 

11.1% 

26 

7.6% 

335 

34 

Q4 

346 

35 

10.1% 

23 

60 

40 

20 

0 

-20 

6.6% 

FY/09 

1 361 

113 

8.3% 

65 

4.8% 


exceptionals 

Q1/10 

359 

52 

14.5% 

41 

11.4% 

Backup slides 

Q2/10 

387 

64 

16.5% 

54 

14.0% 

EBIT bef. 



335 

44 

13.1% 

34 

10.1% 

* unaudited 

Slide 50 / 55

Debt maturity profile as of 30 Sept 2010 

Liquidity headroom 

Open undrawn 

credit facilities 

at local affiliates 

Open undrawn 

credit facilities 

in Switzerland 

Cash* 

2500 

2000 

1500 

1000 

500 

in CHF mn 

* incl. short-term deposits >94d 

0 

800 

200 

1 272 


Maturities of financial debt 

800 

700 

600 

500 

400 

300 

200 

100 

0 

Local rollover loans for 

net working capital 

financing 

33 

249 

783 

269 

Backup slides 

Bonds & private placements 

Uncommitted & other loans 

105 

133 

0 

2 

2010 2011 2012 2013 2014 2015 2016 

Slide 51 / 55

Sales and cost structure – nine months 

Global sales distribution in % Global cost distribution in % 

EUR 

43 

CHF 

0 

Emerging 

markets 

28 

GBP 

2 

USD 

23 

JPY 

4 

These distributions represent an approximation to total cash in- and outflows and are closely linked to transaction exposures 


CHF 

7 

EUR 

51 

Emerging 

markets 

17 

Backup slides 

JPY 

2 

USD 

22 

GBP 

1 

Slide 52 / 55

Top 20 products in percentage of total 

raw material costs 

Ranking Product 

1 Ethylene 

2 Polyethylene 

3 Ethylene oxide 

4 Acetic anhydride 

5 Propyleneglycol 

6 Sodium hydroxide 

7 N-Paraffin C14-C17 

8 Cetyl/dodecyl alcohol 

9 Vinyl acetate 

10 Titanium dioxide 

11 Propylene oxide 

12 Ethylenediamine 

13 29H,31H-Phthalocyanine copper salt 

14 Butyl acrylate 

15 Tallow fatty acid 

16 Amsonic acid (DAST) 

17 Acetic acid 

18 Acetaldehyde 

19 3,3'-Dichlorobenzidine dihydrochloride 

20 Phosphorus white 

Over 15 300 products in total 

Approx. 190 products account for 50% of raw material costs 

Approx. 3 000 products account for 90% of raw material costs 


15% 

16% 

Backup slides 

69% 

Top 5 Top 6 - 20 Others 

Slide 53 / 55

Raw material classification and dependence 

on oil price 

Dependence on oil price Product groups 

Independent 

35% 

Indirectly dependent 

via feedstock 

(e.g. benzene, phenol) 

50% 

15% 

Directly 

dependent 


Specialty chemicals 

incl. aromatics and 

oleochemicals 

Petrochemicals 

40% 

40% 

Backup slides 

20% 

Base 

chemicals 

Slide 54 / 55

Disclaimer 

This presentation contains certain statements that are neither reported financial results nor other 

historical information. This presentation 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. Clariant does not undertake any obligation to publicly 

release any revisions to these forward-looking statements to reflect events or circumstances 

after the date of these materials. 


Slide 55 / 55

Q3 2010 Analyst Presentation

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