Clariant Ag · SIX:CLN
Clariant — Credit Suisse Swiss Equities Conference 2008
44 slides from Clariant's conference presentation, Sep 23, 2008
Slide 1: Clariant Fall 2008 Roadshow
Clariant Fall 2008 Roadshow Credit Suisse Swiss Equities Conference New York, September 23, 2008 Patrick Jany, CFO Credit Suisse Swiss Equities Conference, September 23, 2008 Slide 1
Slide 2: Agenda
Agenda First half highlights Financial results second quarter Business review & trends Strategy update Outlook Credit Suisse Swiss Equities Conference, September 23, 2008 Slide 2
Slide 3: First half 2008 – highlights
First half 2008 – highlights Price increases of 5% fully compensate for an 11% increase in raw material costs Implementation of strategic action plans in the divisions delivering results Acquisition of Rite Systems/Ricon Colors strengthens Masterbatches Closure of TLP site in Horsforth, UK,
Slide 4: Second quarter 2008 financials
Second quarter 2008 financials Q2/08 Q2/07 Sales in CHF million 2,121 2,180 Sales growth in local currencies +5% +4% Gross margin 28.9% 28.7% EBIT margin before exceptionals 6.7% 6.5% Operating cash flow in CHF million 33 17 Net income in CHF million 51 -11 Credit Suisse Swiss Equities Conference, S
Slide 5: Strong sales growth in Asia
Strong sales growth in Asia Q2/08 Q2/07 Sales growth in local currencies +5% +4% Sales CHF 2.121 billion, +5% in Asia / Australia Europe local currencies Africa 1,036 532 +15% +1% Prices up 6%, volume down 1% including China 115 +27% Currency impact equivalent to 8% of sales mainly from weak U
Slide 6: Gross margin improving
Gross margin improving 13% 9% 7% 5% 4% Q2/07 Q3/07 Q4/07 Q1/08 Q2/08 to to to to to Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 +0.2% -0.6% -1.8% -1.3% -3.3% Delta gross margin Raw material costs increase Credit Suisse Swiss Equities Conference, September 23, 2008 Slide 6
Slide 7: Cash flow and financial result
Cash flow and financial result Q2/08 Q2/07 Operating cash flow in CHF million 33 17 Cash flow impacted by inventories build–up, driven by tight supply markets Financial result in CHF million -24 1 Financial result influenced by FX losses of CHF 4 million vs. gain of CHF 25 million in Q2/07 Net
Slide 8: Debt maturity profile on July 17, 2008 (pro forma)
Debt maturity profile on July 17, 2008 (pro forma) Liquidity Maturities of financial debt Syndicated Loans Bonds & Private Placements 1200 Uncommitted & other loans 1000 ABS Committed 750 open lines 800 960 600 * as of June 30, 2008 400 349* 1 274 67 Cash** 200 247 250 215* 51 161 12 0 1 0* 2008 200
Slide 9: Business Review & Trends
Business Review & Trends Credit Suisse Swiss Equities Conference, September 23, 2008 Slide 9
Slide 10: Textile, Leather & Paper Chemicals
Textile, Leather & Paper Chemicals Second quarter 2008 2008 2007 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 554 618 -10% -1% EBITDA before exceptionals 55 9.9% 67 10.8% -18% -9% Operating income before exceptionals 39 7.0% 49 7.9% -21% -10% Operating income 34 6.1% 41 6.6%
Slide 11: Pigments & Additives
Pigments & Additives Second quarter 2008 2008 2007 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 541 538 1% 8% EBITDA before exceptionals 74 13.7% 59 11.0% 25% 35% Operating income before exceptionals 55 10.2% 39 7.2% 41% 54% Operating income 42 7.8% 38 7.1% 11% 24% Business
Slide 12: Functional Chemicals
Functional Chemicals Second quarter 2008 2008 2007 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 685 661 4% 11% EBITDA before exceptionals 66 9.6% 56 8.5% 18% 27% Operating income before exceptionals 48 7.0% 39 5.9% 23% 36% Operating income 46 6.7% 37 5.6% 24% 37% Business tr
Slide 13: Masterbatches
Masterbatches Second quarter 2008 2008 2007 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 341 363 -6% 1% EBITDA before exceptionals 38 11.1% 43 11.8% -12% -5% Operating income before exceptionals 29 8.5% 35 9.6% -17% -7% Operating income 29 8.5% 32 8.8% -9% -3% Business trend
Slide 14: Rite Systems/Ricon Colors – competence in liquid colors
Rite Systems/Ricon Colors – competence in liquid colors Rite Systems/Ricon Colors – no. 2 US suppliers of liquid color masterbatches with annual sales of USD 50 million Liquid colors are masterbatches dispersed in a liquid carrier WEST CHICAGO, Ill. Market size liquid colors approx. 3% of the
Slide 15: Strategy Update
Strategy Update Credit Suisse Swiss Equities Conference, September 23, 2008 Slide 15
Slide 16: Our view of Clariant in 2006
Our view of Clariant in 2006 Credit Suisse Swiss Equities Conference, September 23, 2008 Slide 16
Slide 17: Key target – achieving above peer average ROIC by end of 2010
Key target – achieving above peer average ROIC by end of 2010 ROIC composition End 2010 targets* Sales 3-4% p.a. Operating margin EBIT ~9% ROIC Asset Fixed invest 4-5% turns assets of sales p.a. Net working reduction by 3-4% capital of sales Operating CHF 600-800 cash flow mn p.a. ROIC calculated on
Slide 18: How to get there – strategy defined in 2006
How to get there – strategy defined in 2006 Increase prices to offset raw materials impact Operational Excellence Manage gross margin (PRIMA, Value Based Selling) Reduction in SG&A by approx. 2%, 2200 employees Product pruning -25% Closure of sites (10% of 130) Reduction of net working c
Slide 19: Implementing change – action plan for 2008
Implementing change – action plan for 2008 2008 – significant price increases PRICE Price over volume Enforcement – small volume losses Management changes – new divisional structures PEOPLE Implementation Decentralization – improved operating efficiency – strategic options evaluated PORTFOLIO Detail
Slide 20: Implementing change – creating sustainable profitability
Implementing change – creating sustainable profitability 2008 2009 2010 € Price ++ + + d d People d ++ + = ) Plants = + ++ Portfolio = + ++ Expected impact on profitability in each year: + + major + minor = unchanged Credit Suisse Swiss Equities Conference, September 23, 2008 Slide 20
Slide 21: Outlook
Outlook Credit Suisse Swiss Equities Conference, September 23, 2008 Slide 21
Slide 22: Outlook for 2008
Outlook for 2008 Environment Further increasingly uncertain economic outlook Continuing increases in raw material and energy costs Clariant Improving operating margin before exceptional items compared to 2007 Continuing strong cash flow generation Period of active portfolio reshaping Credi
Slide 23: Backup Slides
Backup Slides Credit Suisse Swiss Equities Conference, September 23, 2008 Slide 23
Slide 24: Customer structure – serving a broad range of end users
Customer structure – serving a broad range of end users Textile industry Textile, Leather & Leather industry Paper Chemicals Paper industry Coating Business: manufacturer of automotive, industrial and powder coatings, and decorative paints Pigments & Plastic industry Additives Printing i
Slide 25: First half 2008 – Key financial group figures
First half 2008 – Key financial group figures First half 2008 2008 2007 CHF million % of sales CHF million % of sales Sales 4,233 100% 4,336 100% Local currency growth (LC) 4% - Organic growth rate* 4% - Acquisitions/Divestitures 0% Currencies -6% Gross profit 1,259 29.7% 1,297 29.9% EBITDA before e
Slide 26: Sales and EBITDA margins by divisions – first half 2008
Sales and EBITDA margins by divisions – first half 2008 First half 2008 Sales EBITDA Margin in %* CHF million % LC 2008 2007 Textile, Leather & Paper Chemicals 1,070 -3% 9.2 9.9 Pigments & Additives 1,068 +7% 14.6 13.0 Masterbatches 682 +1% 11.3 11.6 Functional Chemicals 1,413 +10% 10.7 9.7 Total Gr
Slide 27: Cash flow first half 2008
Cash flow first half 2008 First half 2008 2008 2007* CHF million CHF million Net income 92 73 Depreciation, amortization & impairment 133 147 Other 66 118 Operating cash flow before working capital 291 338 Changes in working capital and provisions -264 -284 Operating cash flow 27 54 Capital expendit
Slide 28: Financial result first half 2008
Financial result first half 2008 First half 2008 2008 2007 CHF million CHF million Interest income 8 11 Interest expenses -40 -54 Other financial income & expenses -6 -6 Net interest result -38 -49 Currency result, net -48 30 Total financial result -86 -19 Credit Suisse Swiss Equities Conference, Se
Slide 29: Textile, Leather & Paper Chemicals – first half results
Textile, Leather & Paper Chemicals – first half results First half 2008 2008 2007 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 1,070 1,198 -11% -3% EBITDA before exceptionals 98 9.2% 119 9.9% -18% -12% Operating income before exceptionals 66 6.2% 83 6.9% -20% -14% Operating
Slide 30: Pigments & Additives – first half results
Pigments & Additives – first half results First half 2008 2008 2007 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 1,068 1,061 1% 7% EBITDA before exceptionals 156 14.6% 138 13.0% 13% 19% Operating income before exceptionals 118 11.0% 98 9.2% 20% 27% Operating income 101 9.5%
Slide 31: Functional Chemicals – first half results
Functional Chemicals – first half results First half 2008 2008 2007 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 1,413 1,355 4% 10% EBITDA before exceptionals 152 10.7% 132 9.7% 15% 22% Operating income before exceptionals 118 8.4% 98 7.2% 20% 27% Operating income 111 7.9% 9
Slide 32: Masterbatches – first half results
Masterbatches – first half results First half 2008 2008 2007 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 682 722 -6% 1% EBITDA before exceptionals 77 11.3% 84 11.6% -8% -2% Operating income before exceptionals 61 9.0% 67 9.3% -9% -3% Operating income 59 8.7% 49 6.8% 21% 28%
Slide 33: Second quarter 2008 – Key financial group figures
Second quarter 2008 – Key financial group figures Second quarter 2008 2008 2007 CHF million % of sales CHF million % of sales Sales 2,121 100% 2,180 100% Local currency growth (LC) 5% - Organic growth rate* 5% - Acquisitions/Divestitures 0% Currencies -8% Gross profit 614 28.9% 626 28.7% EBITDA befo
Slide 34: Sales and EBITDA margins by divisions – Second quarter 2008
Sales and EBITDA margins by divisions – Second quarter 2008 Second quarter 2008 Sales EBITDA Margin in %* CHF million % LC 2008 2007 Textile, Leather & Paper Chemicals 554 -1% 9.9 10.8 Pigments & Additives 541 +8% 13.7 11.0 Masterbatches 341 +1% 11.1 11.8 Functional Chemicals 685 +11% 9.6 8.5 Total
Slide 35: Cash flow second quarter 2008
Cash flow second quarter 2008 Second quarter 2008 2008 2007* CHF million CHF million Net income 51 -11 Depreciation, amortization & impairment 66 72 Other -18 86 Operating cash flow before working capital 99 147 Changes in working capital and provisions -66 -130 Operating cash flow 33 17 Capital exp
Slide 36: Financial result second quarter 2008
Financial result second quarter 2008 Second quarter 2008 2008 2007 CHF million CHF million Interest income 2 6 Interest expenses -19 -29 Other financial income & expenses -3 -1 Net interest result -20 -24 Currency result, net -4 25 Total financial result -24 1 Credit Suisse Swiss Equities Conference
Slide 37: Sales and cost structure
Sales and cost structure Global sales distribution in % Global cost distribution in % Emerging Emerging CHF 0 Markets CHF 5 Markets 18 JPY 3 16 JPY 1 CHF 6 USD 29 USD 24 EUR 48 EUR 52 GBP 2 GBP 2 per June 30, 2008 These distributions represent an approximation to total cash in- and outflows and are
Slide 38: Divisional sales Full-Year 2007 in end-user markets
Divisional sales Full-Year 2007 in end-user markets Healthcare Automotive Agro Electronics Construction 5% 1% 4% Paper 2% 9% 6% Packaging 10% Non-durables 15% 6% Textiles 22% Durables 20% Other Continuing operations Credit Suisse Swiss Equities Conference, September 23, 2008 Slide 38
Slide 39: Top products in percentage of total raw material costs
Top 5 products in percentage of total raw material costs Ranking Product 1 Ethylene & -Oxide 2 Polyethylene Group Total 3 Vinyl acetate ~15% 4 Acetic Acid 5 Acrylates Credit Suisse Swiss Equities Conference, September 23, 2008 Slide 39
Slide 40: Businesses and market segments
Businesses and market segments Textile, Leather & Pigments & Masterbatches Functional Paper Chemicals Additives Chemicals Textile Business Unit Packaging Chemical Coatings Management Leather Consumer Solutions Business Unit Goods Paper Industrial & Plastics Textiles Consumer Care
Slide 41: Key targets: to achieve above peer average ROIC by end of 2010
Key targets: to achieve above peer average ROIC by end of 2010 ROIC composition End 2010 targets* Sales 3-4% p.a. Operating margin EBIT ~9% ROIC Asset Fixed invest 4-5% turns assets of sales p.a. Net working reduction by 3-4% capital of sales Operating CHF 600-800 cash flow mn p.a. ROIC calculated o
Slide 42: Calendar of upcoming corporate events
Calendar of upcoming corporate events November 4, 2008 Nine Months 2008 Results February 17, 2009 Full-Year 2008 Results April 2, 2009 Annual General Meeting, Basel May 6, 2009 First Quarter 2009 Results July 30, 2009 Half Year 2009 Results November 4, 2009 Nine Months 2009 Results Credit Suisse Swi
Slide 43: IR contacts
IR contacts Dr. Ulrich Steiner Head of Investor Relations Phone +41 (0) 61 469 67 45 Mobile +41 (0) 79 297 27 07 email ulrich.steiner@clariant.com Jaideep Pandya Investor Relations Officer Phone +41 (0) 61 469 67 49 Mobile +41 (0) 79 702 97 41 email jaideep.pandya@clariant.com Edith Kahlmeier Phone
Slide 44: Disclaimer
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 ma
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