Clariant Ag · SIX:CLN
Clariant — FY2004 Earnings Presentation
43 slides from Clariant's earnings presentation, Mar 8, 2005
Slide 1: Clariant – The Way Forward
Clariant – The Way Forward Full-year Results 2004 Analyst Conference - Zurich, March 8, 2005
Slide 2: 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
Slide 3: Agenda
Agenda Key Factors 2004 Financial Review Business Review Transformation Program Update Outlook Full-year Results 2004 Slide 3
Slide 4: Key Factors 2004
Key Factors 2004 Roland Lösser, CEO Full-year Results 2004 Slide 4
Slide 5: Substantial achievements in 2004
Substantial achievements in 2004 Key Factors 2004 Q Financial basis secured and strengthened Financial Review Q Transformation Program shifted into high gear Business Review Transformation Q Good sales growth recorded despite restructuring initiatives Program Update Outlook Q CHF 150 mn cost base re
Slide 6: Full-year 2004 – Strong growth and excellent Cash Flow generation
Full-year 2004 – Strong growth and excellent Cash Flow generation Key Factors 2004 Q Strong sales increased 7% in LC terms, to CHF 8.530 bn*, Financial Review strong volume growth, up 9%* Business Review Q Significant price increases achieved in several product lines Transformation Program Update Q
Slide 7: Financial Review
Financial Review François Note, CFO Full-year Results 2004 Slide 7
Slide 8: Key financial group figures Full-year 2004
Key financial group figures Full-year 2004 Key Factors 2004 Full-year 2004 2004 % of Sales 2003* % of Sales Change in % Financial Review in mn CHF like-for-like CHF LC Business Review Sales 8,530 8,075 +6 +7 Transformation Program Update Gross profit 2,707 31.7% 2,585 32.0% +5 +6 Outlook EBITDA 915
Slide 9: Key financial group figures 4th Quarter 2004
Key financial group figures 4th Quarter 2004 Key Factors 2004 4th Quarter 2004 % of Sales 2003* % of Sales Change in % Financial Review in mn CHF like-for-like CHF LC Business Review Sales 1,980 1,916 +3 +8 Transformation Program Update Gross profit 601 30.4% 601 31.4% +0 -4 Outlook EBITDA 169 8.5%
Slide 10: Positive volume development in Full-year 2004
Positive volume development in Full-year 2004 Key Factors 2004 Full-year 2004 versus Full-year 2003, continuing operations* Financial Review Business Review Transformation Program Update Outlook Volume Price Sales in LC Currency Sales in CHF +8% -2% +6% -1% +5% Full-year Results 2004 * Continuing Op
Slide 11: Positive price trend continues
Positive price trend continues Key Factors 2004 1st Quarter Half-Year 9 Months FY 2004 Financial Review 0% Business Review Transformation Program Update Outlook -1% -2% -3% Full-year Results 2004 Price change 2004 cumulative, compared with 2003 Slide 11 not rounded reported
Slide 12: Group sales, Full-year 2004 by region
Group sales, Full-year 2004 by region (continuing operations*) Key Factors 2004 Americas Financial Review 2,191 Business Review Transformation Program Update Outlook Europe +4% +10% 4,154 +5% +3% +4% +8% Asia / Australia / Africa 1,799 in mn CHF Sales Full-year 2004: 8,144 Changes in CHF / in LC Ful
Slide 13: Divisional sales and margins 4th Quarter 2004 vs. 2003
Divisional sales and margins 4th Quarter 2004 vs. 4th Quarter 2003 (continuing operations*) Key Factors 2004 Q4 2004 Q4 2004 Change EBITDA Margin in %** Financial Review in mn CHF 2004 vs 2003 Business Review Sales LC in % 2004 2003 Transformation Textile, Leather & Paper Chemicals 531 0 9.0 12.6 Pr
Slide 14: Financial result
Financial result Key Factors 2004 in mn CHF FY 2004 FY 2003 Financial Review Business Review Financial Income 34 26 Transformation Interest Expenses -161 -164 Program Update Outlook Other -31 -42 Financial expenses -192 -206 Currency result, net -75 -95 Total -233 -275 Full-year Results 2004 Slide 1
Slide 15: Cash flow significantly improved in Full-year 2004
Cash flow significantly improved in Full-year 2004 Key Factors 2004 Financial Review in mn CHF 1st HY 2nd HY FY 2004 FY 2003 Business Review Net result 126 24 150 161 Transformation Program Update Depreciation & amortization 184 201 385 560 Outlook Other 83 -149 -66 -482 Operating cash flow before w
Slide 16: Net debt cut to CHF 1,090 mn
Net debt cut to CHF 1,090 mn Key Factors 2004 in mn CHF Financial Review 3,476 Business Review Transformation 2,905 Program Update Outlook 1,090 12/02 12/03 12/04 Gearing 380% 234% 48% Full-year Results 2004 Slide 16
Slide 17: Debt maturity profile on Dec 31, 2004
Debt maturity profile on Dec 31, 2004 Key Factors 2004 Liquidity Headroom Maturities of Financial Debt Financial Review Business Review 2400 Transformation 2200 Program Update Committed open lines 2000 Outlook 750 1800 1600 1400 1200 1000 Cash & 1,564 800 333 equivalents 600 623 622 400 555 200 325
Slide 18: Business Review
Business Review Roland Lösser, CEO Full-year Results 2004 Slide 18
Slide 19: The way forward
The way forward Key Factors 2004 Financial Review Strategic focus Business Review Transformation Q Recognized as a service-driven specialty chemicals Group Program Update Outlook – World-class customer service skills – Superior innovation and applications capabilities – Leading-edge technologies in
Slide 20: Textile, Leather & Paper Chemicals
Textile, Leather & Paper Chemicals Key Factors 2004 Q No. 1 worldwide in textile and leather chemicals, sulfur dyes and paper Financial Review optical brighteners Business Review Q High demand for technical textiles Transformation Program Update Q Good performance for leather finishing products Outl
Slide 21: Pigments & Additives
Pigments & Additives Key Factors 2004 Q No. 1 worldwide for organic pigments and pigments for coatings Financial Review Q Strong demand for decorative and industrial paints Q Increased demand for more colorful products Business Review Transformation Program Update Q Innovation: New production plants
Slide 22: Functional Chemicals
Functional Chemicals Key Factors 2004 Q No. 2 worldwide for innovative detergent additives Financial Review Q Leading partner for combined product and service solutions for the oil and Business Review gas industry Transformation Program Update Q Robust volume growth across all business lines, especi
Slide 23: Life Science Chemicals
Life Science Chemicals Key Factors 2004 Q Among top pharma supplier worldwide Financial Review Q No. 1 in agro business Q Solid sales in speciality fine chemicals, e.g. Glyoxal derivates Business Review Transformation Program Update Q Continued price pressure and over-capacity Outlook Q Innovation:
Slide 24: Masterbatches
Masterbatches Key Factors 2004 Q No. 1 worldwide in color masterbatches Financial Review Q Strong local customer service combined with leading technology Q Strengthened presence in Asia – capacity expanded in Guangzhou, Business Review Transformation Program Update Shanghai and Taiwan Outlook Q Inno
Slide 25: Transformation Program Update
Transformation Program Update Roland Lösser, CEO Full-year Results 2004 Slide 25
Slide 26: Performance improvement measures from 2004 to 2007
Performance improvement measures from 2004 to 2007 Key Factors 2004 EBIT impact of measures* Financial Review in mn CHF 700-900 Business Review Transformation Program Update 600-700 Outlook 350-450 100-120 2004 2005 2006 2007 100 200 300 Full-year Results 2004 performance improvement costs operation
Slide 27: Performance improvements making excellent progress
Performance improvements making excellent progress Q Net Working Capital reduction target of CHF 600 mn Key Factors 2004 nearly achieved Financial Review Business Review Transformation Q Total cost-base cut by CHF 150 mn in 2004 Program Update Q Further cost base reduction of approx. CHF 300 mn Outl
Slide 28: Significant reduction in personnel
Significant reduction in personnel Key Factors 2004 Financial Review 27,008 1,008 Business Review Transformation 1,231 Program Update Outlook 24,769 31 Dec 2003 Asset Sales Other 31 Dec 2004 Full-year Results 2004 reductions Slide 28 Number of employees, reported
Slide 29: Outlook for 2005
Outlook for 2005 Key Factors 2004 Q Improved sales in local currency* Financial Review Q Improved pricing environment, but adverse FX and raw material Business Review impacts expected Transformation Program Update Q Further cost base reduction of approx. CHF 300 mn by end 2005 Outlook Q Improved ope
Slide 30: Calendar of upcoming corporate events
Calendar of upcoming corporate events April 7, 2005 Annual General Meeting May 10, 2005 1st Quarter 2005 Results August 4, 2005 Half-year 2005 Results November 9, 2005 9-Month 2005 Results Full-year Results 2004 Slide 30
Slide 31: Your Investor Relations contacts
Your Investor Relations contacts Holger Schimanke holger.schimanke@clariant.com Head Investor Phone +41 61 469 67 45 Relations Mobile +41 79 343 59 83 Daniel Leuthardt daniel.leuthardt@clariant.com Phone +41 61 469 67 49 Mobile +41 79 763 93 80 To be added to the mailing list of Clariant and Clarian
Slide 32: Current market segments
Current market segments Backup Information Group & Strategy Textile, Pigments & Functional Life Science Masterbatches Leather & Paper Additives Chemicals Chemicals Clariant Performance Chemicals Improvement Program Q Textiles Q Coating Q Detergents Q Pharmaceutical Q Europe Business Industries Fine
Slide 33: Clariant Organization
Clariant Organization Backup Information Chief Executive Officer Group & Strategy Clariant Performance Human Resources Finance / CFO Improvement Program Business Group Communications Services* Group Legal Technology** Corporate Development Textile, Leather & Pigments & Functional Life Science Master
Slide 34: Method of Divisional Organization
Method of Divisional Organization Backup Information Group & Strategy Division Clariant Performance Improvement Program Business Business Production& Business Regions Sourcing Business Controlling (one or several) Technology (one or several) Support (one or several) Marketing Key Account Management
Slide 35: The way forward - refocusing portfolio
The way forward - refocusing portfolio Backup Information Clariant % of Market Competitive Clariant Group & Strategy portfolio Sales attractiveness position strategy Clariant Performance Improvement Program Service- Business driven 60 - 70% High Strong Expand businesses Technology Strong in -driven
Slide 36: Break-down of CPIP costs
Break-down of CPIP costs Backup Information in mn CHF Group & Strategy Clariant Performance Improvement Program Expected timing ~ 130 Business 500-600 Q CHF 200 mn ~ 60 in 2004 ~ 350 Q ~ CHF 300 mn in 2005 Q Rest in 2006 Personnel IT costs Other one- Total related costs time costs restructuring cost
Slide 37: Substantial job cuts to sharply reduce costs
Substantial job cuts to sharply reduce costs Backup Information General Overhead Group & Strategy -22% Manufacturing Clariant Performance -14% Improvement Program 800 Business 1,500 1,250 Infrastructure/Services 450 -18% Supply Chain -14% Full-year Results 2004 Slide 37 Total job cuts: 4,000 by end
Slide 38: Divisional sales and margins Full-year 2004 vs. 2003
Divisional sales and margins Full-year 2004 vs. Full-year 2003 (continuing operations*) Backup Information Full-year 2004 FY 2004 Change EBITDA Margin in %** Group & Strategy in mn CHF 2004 vs 2003 Clariant Performance Sales LC in % 2004 2003 Improvement Program Textile, Leather & Paper Chemicals 2,
Slide 39: Stable gross margin even at high oil prices
Stable gross margin even at high oil prices Backup Information 50 Group & Strategy 45 40 Clariant Performance 35 Improvement Program 30 Business 25 20 15 10 5 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 00 01 02 03 04 Crude Oil Brent USD / bbl Gross margin in % Full-year R
Slide 40: Raw material dependency reduced
Raw material dependency reduced Backup Information Percent of top 10 raw materials of total costs Group & Strategy Clariant Performance 34% 23% Improvement Program Business 2001 2004 Percent of VAM1 of raw materials of total costs 1% 12% Q Sale of PVA/PVB business unit Q Sale of European emulsions a
Slide 41: Top 5 products in percentage of total raw material costs
Top 5 products in percentage of total raw material costs Backup Information Group & Strategy Clariant Performance Improvement Program Business Ranking Product 1 Ethylene 2 Acetic Acid Group Total 3 Acrylates ~18% 4 Acetic Anhydride 5 Vinylacetate Full-year Results 2004 Slide 41
Slide 42: Sales and cost structure, Full-year 2004
Sales and cost structure, Full-year 2004 Backup Information Global sales distribution in % Global cost distribution in % Group & Strategy Clariant Performance Improvement Program JPY JPY Business Emerging 5 Emerging 5 markets markets 20 16 CHF2 USD CHF 6 USD 28 22 5 GBP 41 46 EUR 4 EUR GBP in mn CHF
Slide 43: Divisional sales Full-year 2004 in end-user markets
Divisional sales Full-year 2004 in end-user markets* Backup Information Group & Strategy Durables Automotive Paper Clariant Performance 4% 5% Improvement Program Agro 4% Business Electronics 6% Other Healthcare 4% 1% 22% Packaging 11% 19% 14% Textiles Non-durables 10% Full-year Results 2004 Construc