First Quarter 2012 results

First Quarter 2012 results 

03 May 2012 

Confidential

Agenda 

Highlights first quarter 

Financial results 

Business performance 

Outlook 

Q1 2012, Analysts Presentation, 03 May 2012 (Copyright Clariant. All rights reserved.) 

Slide 2 / 35

Resilient performance in the first quarter 

� Double-digit sales growth driven by acquisitions 

► Non-cyclical Business Units with mid-single digit sales growth, Oil & Mining Services with 

double-digit growth in LC 

► Cyclical growth BUs and structurally challenged BUs with ongoing weakness but 

improvement towards the end of the quarter 

► Solid growth in all regions except Europe where weakness continues 

� Robust margins as non-cyclical businesses continued to perform well, despite soft economic 

conditions especially in Europe 

► EBITDA margin before exceptional items at 12.1% compared to an extraordinarily high 

16.1% one year ago, as seasonal businesses were weaker, leading to higher SG&A costs 

in percentage of sales 

► Catalysis & Energy with very strong order book and order backlog 

� Outlook for 2012 confirmed 

► Progressive improvement in trading conditions expected as the year moves on 


Highlights first quarter Slide 3 / 35

Agenda 




Outlook 


Slide 4 / 35

Key figures first quarter 

Sales in CHF mn 1 945 1 717 

Gross margin in % of sales 28.2 29.8 

EBITDA before exceptionals in CHF mn 28.7% 236 29.2% 277 

– margin in % of sales 


16.1 

Net income in CHF mn 20 120 

Operating cash flow* in CHF mn 6 22 

Q1/12 Q1/11 in CHF in LC 

12.1 

EBIT before exceptionals in CHF mn 28.7% 160 29.2% 230 

– margin in % of sales 

8.2 

13.4 

+13% 

* starting from 2012 interest paid and interest received are reported as part of financing cash flow; prior year information has been reclassified accordingly 

Financial results first quarter 

+18% 

–15% –9% 

–30% –25% 

Slide 5 / 35

Double-digit sales growth in local 

currencies 

Sales growth in local currencies 

� Sales mix: 

– Volume –6% 

– Price +4% 

– Acq./div. +20% 

– Currency –5% 

� Double-digit sales growth in LC driven by 

Süd-Chemie acquisition 

� Organic LC sales growth –2%, mainly due 

to lower volumes in the cyclical part of the 

portfolio and weakness in Europe 

� Sequentially improving volumes: 

–6% in Q1/12 vs. –12% in Q4/11 


Q1/12 

+18% 

Total sales Q1 2012: CHF 1 945 mn 

incl. China 

114 / +16% 

+23% 

+21% 

incl. Brazil 

146/ +20% 

Sales growth in local currencies 

Q1/11 

+5% 

incl. Germany 

254 / +4% 

Asia/ 

Pacific 

421 Europe, Middle 

Latin 

America 

311 

North 

America 

283 

+39% 

East & Africa 

930 

+11% 

Middle East & Africa 

168 / +43% 

Financial results first quarter Slide 6 / 35

Decent margins in challenging environment 

Gross margin 

EBITDA margin before exceptionals 

� Lower gross margin year-on-year due to unfavorable volume/mix effect and lower 

absorption of production costs 

� Positive margin contribution from dynamics of sales prices vs. raw material costs 

� Sequential recovery in gross margin from underlying 26.0%* in Q4 2011 

� SG&A costs at 18.1% in Q1 2012 compared to 15.0% in Q1 2011, resulting from 

one-time gains in Q1 2011 and the seasonality of catalysts business with lower sales 

in the first half-year compared to the second half-year 

* excluding an additional charge of CHF 43 mn as a result of the sale of Süd-Chemie inventories revalued to fair value less cost to sell 


Q1/12 

28.2% 

12.1% 

Q1/11 

29.8% 

16.1% 


Operating cash flow and Financial result 

Operating cash flow* in CHF mn 

Financial result in CHF mn 

� Lower Operating Cash Flow on normal seasonal inventory build-up and in anticipation 

of improving demand 

� Cash out for restructuring at CHF 38 million, mainly for the integration of Süd-Chemie 

and the closure of the Textiles production plant in Muttenz (CH) 

� Net financial result at CHF –55 million vs. CHF –24 million in Q1 2011, due to higher 

gross debt and CHF –19 million impact from currencies vs. CHF –4 million in Q1 2011 

� Net debt flat at CHF 1.754 bn vs. CHF 1.740 bn at year-end 2011, gearing of 59% 

* starting from 2012 interest paid and interest received are reported as part of financing cash flow; prior year information has been reclassified accordingly 


Q1/12 

6 

–55 

Q1/11 

22 

–24 


Agenda 




Outlook 


Slide 9 / 35

BU sales, EBITDA / EBIT margins 

First quarter 2012 


Sales Change EBITDA* margin EBIT* margin 

Business Unit / Reporting Segment: CHF mn % CHF % LC Q1/12 Q1/11 Q1/12 Q1/11 

BU Industrial & Consumer Specialties 392 –2 +3 16.1 19.8 13.8 17.5 

BU Masterbatches 296 –4 0 13.5 14.2 11.1 12.0 

BU Pigments 230 –11 –7 17.4 24.7 14.8 22.0 

BU Textile Chemicals 162 –14 –9 3.7 10.1 0.6 7.4 

BU Oil & Mining Services 173 +17 +24 11.6 12.2 11.0 11.5 

BU Leather Services 62 –14 –9 6.5 12.5 4.8 11.1 

Performance Chemicals** 321 –6 –1 14.3 17.4 11.5 14.7 

BU Functional Materials 178 – – 16.9 – 10.7 – 

BU Catalysis & Energy 131 – – 13.7 – 0.8 – 

Group total 1 945 +13 +18 12.1 16.1 8.2 13.4 

* before exceptional items ** the Performance Chemicals segment includes the three Business Units: Additives; Emulsions Detergents & Intermediates; and Paper Specialties 

Business performance Slide 10 / 35

Non-cyclical growth businesses – resilient 

Q1 2012 (approx. 60% of EBITDA*) 

Industrial & Consumer 

Specialties 


� Personal Care, Construction Chemicals and Crop Protection 

experienced good growth 

� Weak de-icing business impacted by unfavorable weather 

conditions with a mild winter in North America and a cold 

but dry winter in Europe 

Oil & Mining Services � Particularly strong demand from the Middle East, Latin 

America and North America 

� Sales growth was driven by Oil Services and by Mining 

Services; the refinery business was adversely impacted by 

unfavorable weather conditions 

Additives � Additives benefitted from good demand for waxes and 

continued solid business in the non-halogenated flame 

retardants business from Asia 

Catalysis & Energy � Normal seasonality with lower demand in the first two 

quarters compared to the second half-year 

� Order intake and backlog above previous year 

Functional Materials � Growing demand, strength in Performance Packaging, 

strong demand for Food and Feed Additives and 

a recovery in the Water business compared to Q4 2011 

* in percent of Group EBITDA, before exceptional items 


Cyclical growth BUs impacted by softening 

demand (approx. 30% of EBITDA*) 

Pigments � Most business lines were impacted by softening of demand, 

however, strong rebound for pigments for decorative 

coatings in the United States and recovery in demand for 

Plastics has started in all major regions 

� Demand in the Printing segment continued to be weak 

Masterbatches � Sales in most of the regions slightly improved 

� North America, MEA and Asia/Pacific contributed 

positively to the result, the latter supported by strong growth 

in China and Indonesia 

Leather Services � Demand was very weak at the beginning of Q1 2012 but 

improved throughout the quarter 

� Luxury goods and the relevant automotive segment 

remained robust 

� Growing interest for chrome free tanning system EasyWhite Tan 




Structurally challenged BUs with a mixed 

performance (approx. 10% of EBITDA*) 

Textile Chemicals � Demand for technical textiles particularly in the automotive 

sector remained robust, orders from the apparel sector 

continued to be sluggish 

� Production of Textile Chemicals and Dyes in Muttenz 

(Switzerland) has been stopped during Q1 2012 

Paper � Demand in Paper Specialties was lower as customers have 

reduced their output due to weaker paper consumption 

and the industry still faces excess capacity 

� Slow recovery begun in Q4 2011 continues in Q1 2012 

ED&I* 

The Business Units Emulsions 

Detergents & Intermediates have 

been combined to the BU ED&I, 

effective February 1, 2012 



� In Emulsions Detergents & Intermediates (ED&I) 

underlying demand in all business but TAED was good 

� D&I continued with good demand in the Intermediates 

business for Agrochemicals and Pharmaceuticals 


Agenda 




Outlook 


Slide 14 / 35

2012 – further steps to increase quality, 

growth potential and profitability of portfolio 

Focusing on… 

markets with high future perspectives 

markets with strong growth rates 

businesses with competitive positions 

businesses with strong pricing power 

Process to implement one of the strategic options in the mid- to long-term has been initiated: 

BUs are currently prepared to operate independently from the Clariant Group. 


… results in 

�� Evaluation of strategic options for Business 

Units Emulsions Detergents & Intermediates, 

Paper Specialties and Textile Chemicals 

to be implemented in the mid- to long-term 

�� Bolt-on acquisitions to strengthen Business 

Units with above average growth potential 

and a high profitability 

Outlook Slide 15 / 35

Outlook 2012 

Environment 

� Base case scenario assumptions: 

► After a weak start into 2012, the global economy will progressively strengthen 

in the course of the year 

► Raw material costs are expected to rise in the mid single-digit range 

► Exchange rates should remain stable compared to the beginning of 2012 

Clariant – guidance 2012 confirmed 

For the full-year 2012, Clariant expects further sales growth in local currency and a sustained 

profitability. Results for the first half-year are expected to be lower compared to the high base of 

the first half of 2011, with an improvement in the second half-year 2012. 


Outlook Slide 16 / 35

Calendar of upcoming corporate events 

21/22 June 2012 Capital Markets & Media Day, Munich 

26 July 2012 Half Year 2012 Results 

31 October 2012 Nine Months 2012 Results 


Slide 17 / 35

IR contacts 

Dr. Ulrich Steiner 

Head Group Communications & IR 

Phone +41 (0) 61 469 67 45 

Mobile +41 (0) 79 297 27 07 

E-mail ulrich.steiner@clariant.com 

Dr. Siegfried Schwirzer 

Investor Relations Officer 

Phone +41 (0) 61 469 67 49 

Mobile +41 (0) 79 718 45 98 

E-mail siegfried.schwirzer@clariant.com 

Edith Schwab 

Phone +41 (0) 61 469 67 48 

Fax +41 (0) 61 469 67 67 

E-mail edith.schwab@clariant.com 

Mirjam Grieder 

Phone +41 (0) 61 469 67 66 

Fax +41 (0) 61 469 67 67 

E-mail mirjam.grieder@clariant.com 

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


Slide 18 / 35

Backup Slides – 

First Quarter 2012 Results 

Q1 2012, Analysts Presentation, 03 May 2012 (Copyright Clariant. All rights reserved.)

Clariant’s products and services are 

delivered through 11 Business Units 

Additives 

A leading provider of 

flame retardants, waxes 

and polymer additives for 

effects in plastics, 

coatings and other 

applications. 

Catalysis & Energy 


catalysts for chemical, 

petrochemical, polymer, 

refinery and automotive 

industries as well as 

materials for 

environmental markets 

and solutions for energy 

efficiency and energy 

storage. 


Emulsions Detergents & 

Intermediates* 

A leading supplier of key 

raw materials and 

intermediates to the 

detergents, agro and 

pharmaceutical industries; 

water-based emulsions/ 

polymer dispersions for 

paints, coatings, 

adhesives, construction, 

sealants and for textile, 

leather & paper industries 

* the Business Units Emulsions and Detergents & Intermediates have been combined to the BU ED&I, effective February 1, 2012 

Backup slides 

Functional Materials 


specialty products and 

solutions to enhance 

products and processes in 

various industries. 

Slide 20 / 35




Specialties 


specialty chemicals and 

application solutions 

for consumer care and 

industrial markets. 

Leather Services 

A leading supplier of 

chemicals and services to 

the leather industry. 


Masterbatches 

A leader in coloration and 

functionality of plastics, 

supplying the packaging, 

consumer goods, medical, 

textile and automotive 

sectors. 

Backup slides 

Oil and Mining Services 


products and services to 

the oil, refinery and mining 

industries. 

Slide 21 / 35



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. 


Textile Chemicals 

A leading producer of 

dyes and chemicals for 

the textile industry 

including apparel, 

upholstery, fabrics and 

carpets. 

Backup slides 

Slide 22 / 35

Peer group ROIC 2011 

Measuring performance 

based on relative ROIC* 

Croda 

Albemarle 

Wacker 

Arkema 

BASF 

Evonik 

Lanxess 

Celanese 

CLARIANT 

Rockwood 

Altana 

DSM 

Cytec 

Huntsman 

Dow… 

Chemtura 

Ecolab 

Akzo Nobel 

Solvay 

Kemira 

PolyOne 

9.5 

9.5 

8.6 

8.3 

7.8 

7.1 

6.7 

6.5 

5.9 

5.5 

10.9 

2011 average 

12.4% 

13.1 

12.4 


17.9 

16.9 

16.2 

15.2 

14.9 

14.6 

0 5 10 15 20 25 30 35 

* source: calculated from company results based on FY 2011 data; Clariant: excluding Süd-Chemie ROIC: 17.1% 

23.4 

29.2 

Backup slides 

Slide 23 / 35

Key financials – first quarter 2012 

First quarter 


2012 2011 

CHF mn % of sales CHF mn % of sales 

Sales 1 945 100% 1 717 100% 

Local currency growth (LC) 18% 

- Organic growth rate* –2% 

- Acquisitions/Divestments 20% 

Currencies –5% 

Gross profit 548 28.2% 511 29.8% 

EBITDA before exceptionals 236 12.1% 277 16.1% 

EBITDA 206 10.6% 259 15.1% 

Operating income before exceptionals 160 8.2% 230 13.4% 

Operating income 123 6.3% 201 11.7% 

Net income 20 1.0% 120 7.0% 

Operating cash flow** 6 22 

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

** starting from 2012 interest paid and interest received are reported as part of financing cash flow; prior year information has been reclassified accordingly 

Backup slides 

Slide 24 / 35

Cash flow – first quarter 2012 




CHF mn CHF mn 

Net income 20 120 

Depreciation, amortization and impairment 83 58 

Other 30 62 

Payments for restructuring –38 –35 

Operating cash flow before working capital changes 95 205 

Changes in working capital and provisions –89 –183 

Operating cash flow* 6 22 

Cash flow from investing activities –45 250 

thereof: property, plant & equipment –54 –47 

thereof: changes in current financial assets 13 329 

thereof: acquisitions, disposals and other –4 –32 

Cash flow before financing –39 272 

* starting from 2012 interest paid and interest received are reported as part of financing cash flow; prior year information has been reclassified accordingly. 

Backup slides 

Slide 25 / 35

Financial result – first quarter 2012 




CHF mn CHF mn 

Interest income 5 4 

Other financial income 2 1 

Total financial income 7 5 

Interest expenses –36 –21 

Other financial expenses –7 –4 

Currency result, net –19 –4 

Total financial expenses –62 –29 

Total financial result –55 –24 

Backup slides 

Slide 26 / 35

Sales and EBITDA margins by business 

unit – first quarter 2012 


Business Unit / Segment: 

CHF mn 

Sales 

% LC 

EBITDA** 

% of Group 

EBITDA margin** 

% 2012 % 2011 

BU Industrial & Consumer Specialties 392 +3 24 16.1 19.8 

BU Masterbatches 296 0 15 13.5 14.2 

BU Pigments 230 –7 15 17.4 24.7 

BU Textile Chemicals 162 –9 2 3.7 10.1 

BU Oil & Mining Services 173 +24 8 11.6 12.2 

BU Leather Services 62 –9 1 6.5 12.5 

Performance Chemicals* 321 –1 17 14.3 17.4 

Functional Materials 178 – 11 16.9 – 

Catalysis & Energy 131 – 7 13.7 – 

Group total 1 945 +18 100 12.1 16.1 

Sales in % of group 


Specialties 

20% 

15% 

Masterbatches 

12% 

Pigments 


EBITDA** 


Specialties 

Backup slides 

Masterbatches 

Catalysis & Energy 7% 

9% 


17% 3% 

8% Textile Chemicals 

9% 

Oil & Mining Services 

Catalysis & Energy 7% 

11% 


17% 

15% Pigments 

2% 


8% 

1% Oil & Mining Services 

Performance Chemicals* 




* the Performance Chemicals segment includes the three Business Units: Additives; Emulsions Detergents & Intermediates; and Paper Specialties 

** before exceptional items 

24% 

15% 

Slide 27 / 35

ICS, Masterbatches, Pigments, Textile 

Chemicals – first quarter 2012 

Industrial & Consumer Specialties 

Sales in CHF mn 

Q1 

2012 

Change 

(LC) 

Q1 

2011 

63 

392 +3% 400 

–15% 

16.1% 

Masterbatches 


Q1 


Change 

(LC) 

Q1 

2011 

296 0% 309 

EBITDA bef. exc. in CHF mn 

Q1 


Change 

(LC) 


Q1 

2011 

79 

19.8% 


Q1 


40 

13.5% 

Change 

(LC) 

–4% 

Q1 

2011 

44 

14.2% 

Pigments 


Q1 


Change 

(LC) 

Q1 

2011 

230 –7% 259 



Q1 


Change 

(LC) 

Q1 

2011 

162 –9% 189 


Q1 


40 

17.4% 


Q1 


6 

3.7% 

Backup slides 

Change 

(LC) 

–34% 

Change 

(LC) 

–67% 

Q1 

2011 

64 

24.7% 

Q1 

2011 

19 

10.1% 

Slide 28 / 35

Oil & Mining Services, Leather Services, 

Performance Chemicals – first quarter 2012 

Oil & Mining Services 


Q1 


Change 

(LC) 

Q1 

2011 

173 +24% 148 



Q1 


Change 

(LC) 

Q1 

2011 


Q1 


20 

11.6% 

Change 

(LC) 

4 

62 –9% 72 

–57% 

6.5% 


Q1 

2011 

18 

12.2% 


Q1 


+19% 

Change 

(LC) 

Q1 

2011 

9 

12.5% 



Q1 


Change 

(LC) 

Q1 

2011 


Q1 


Change 

(LC) 

46 

321 -1% 340 –18% 

14.3% 

* the Performance Chemicals segment includes the three Business Units: Additives; Emulsions; Detergents & Intermediates; and Paper Specialties 

Backup slides 

Q1 

2011 

59 

17.4% 

Slide 29 / 35

Functional Materials, Catalysis & Energy – 

first quarter 



Q1 


Change 

(LC) 

Q1 

2011 

178 – – 

Catalysis & Energy 


Q1 


Change 

(LC) 

Q1 

2011 


Q1 


30 

16.9% 

Change 

(LC) 

18 

131 – – 

– 

13.7% 


Q1 

2011 


Q1 


– 

Change 

(LC) 

– 

Q1 

2011 

– 

Backup slides Slide 30 / 35

Debt maturity profile as of 31 March 2012 

Liquidity headroom 

Cash* 

1400 

1200 

1000 

800 

600 

400 

200 

in CHF mn 

* incl. near cash assets 

0 

1280 


Maturities of financial debt 

1400 

1200 

1000 

800 

600 

400 

200 

0 

318 

250 

98 

710 1 

280 

322 1 

199 

1 

149 

Uncommitted & other loans 

CHF bond 

Convertible bond 

EUR bond 

Certificate of indebtedness 

2012 2013 2014 2015 2016 2017 2018 

Backup slides 

598 

99 

8 

Slide 31 / 35

Sales and cost structure* 

Global sales distribution in % Global cost distribution in % 

JPY 

4% 

CHF 

0% 

Emerging 

Markets 

20% 

USD 

32% 

EUR 

44% 


JPY 

2% 

CHF 

7% 

Emerging 

Markets 

17% 

These distributions represent an approximation to total cash in- and out-flows and are closely linked to transaction exposures * excluding Süd-Chemie, FY 2011 

USD 

25% 

Backup slides 

EUR 

49% 

Slide 32 / 35

Top 20 products in percentage of total 

raw material costs* 

Ranking Product 

1 Ethylene 

2 Propyleneglycol 

3 Ethylene oxide 

4 Polyethylene 

5 N-Paraffin 

6 Cetyl/dodecyl alcohol 

7 Titanium dioxide 

8 Acetic anhydride 

9 Propylene oxide 

10 Sodium hydroxide 

11 Vinyl acetate 

12 Acetaldehyde 

13 Butyl acrylate 

14 Phthalocyaninecopper salt 

15 Tallow fatty acid 

16 Acetic Acid 

17 Ethylenediamine 

18 Phosphorus white 

19 Amsonic Acid (DAST) 

20 Carbon black 

� Over 16 400 products in total 

� Approx. 180 products account for 50% of 

material costs 

� Approx. 2 800 products account for 90% of material costs 

* excluding Süd-Chemie, FY 2011 


18 % 

14% 

68 % 

Top 5 Top 6 - 20 Others 

Backup slides Slide 33 / 35

Raw material classification – dependence 

on oil price decreased 

Dependence on oil price* 

“Old Clariant” vs. Clariant incl. 

Süd-Chemie 

Independent Directly 

dependent 

57% 

52% 

* FY 2011 ** excluding Süd-Chemie 

17% 

15% 

31% 28% 


Indirectly 

dependent 

via feedstock 

(e.g. benzene, 

phenol) 

Specialty 

Chemicals 

33% 

Product groups** 

Base Chemicals 

15% 

Backup slides 

10% 

42% 

Natural & 

Renewable 

Chemicals 

Petro Chemicals 

Slide 34 / 35

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 35 / 35

First Quarter 2012 results

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