Media Release - Clariant

amortization charges and the cost-savings measures the company initiated in the
second quarter. In addition to the restructuring charges of CHF 142 million
reported in the half-year results, further restructuring charges of CHF 43 million
were incurred in the third quarter for the closure of four agrochemical plants (Life
Science & Electronic Chemicals Division) and one production facility for
hydrosulfite (Textile, Leather & Paper Chemicals Division). After restructuring
charges, EBIT amounted to CHF 297 million.
The net loss year-to-date fell to CHF 11 million because of a net profit of CHF 38
million delivered in the third quarter of 2003.
Positive cash flow trend
Operating cash flow increased by CHF 217 million in the third quarter because of a
reduction in current assets. Following negative operating cash flow of CHF 53
million after six months, operating cash flow was positive after nine months, at CHF
164 million. As a result, Clariant was able to reduce its net debt to below CHF 3.5
billion. Equity remained virtually unchanged compared with June 30, 2003 at CHF
1.015 billion.
CEO Roland Lösser said: "The cash flow and EBIT trends are the first signs that
the measures we have taken are beginning to take effect. The earnings situation
makes it clear, though, that the cost-cutting measures announced as part of the
Transformation Program are absolutely necessary."
Transformation drive on course
As Clariant reported yesterday, the sale of Cellulose Ethers marks a first milestone
in the disposal program it had previously announced. The projects in the first phase
of the Clariant Performance Improvement Program have started up. The aim is to
achieve cost savings in the coming year of at least CHF 100 million. "The
transformation drive is making good progress,” Mr. Lösser said. “We can confirm
our target of reducing net debt by Spring to below CHF 2.5 billion and improving
EBIT by CHF 400 million in the next three to four years. We will thus raise our
return on capital to over 12%."
Cautious outlook
Given the uncertain economic situation, Clariant confirms the cautious outlook for
fiscal 2003. CEO Roland Lösser stated the following guidance: "We expect that our
sales in 2003 will be at about the same level as the previous year in local currencies
and we are projecting a net profit for fiscal 2003."
You can find detailed information on the quarterly result and the divisions, including
tables, on the Internet at www.clariant.com/investors.
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