Clariant Ag · SIX:CLN
Clariant — Q1 2010 Earnings Presentation
45 slides from Clariant's earnings presentation, Apr 29, 2010
Slide 1: First Quarter 2010 Results
Strictly confidential 29 April 2010 First Quarter 2010 Results 29 April 2010
Slide 2: Agenda
Agenda Highlights – first quarter 2010 Financial results first quarter Business review Outlook First Quarter 2010, Analysts Presentation, 29 April 2010 (Copyright Clariant. All rights reserved.) Slide 2 / 45
Slide 3: Highlights – first quarter 2010
Highlights – first quarter 2010 Double-digit sales growth on strong rebound of volumes, but sales still clearly below pre-crisis levels of 2008 Successful gross margin management despite a slightly negative impact from unfavorable development of sales prices/raw material costs Improved operati
Slide 4: Financial results first quarter
Financial results first quarter Q1/10 Q1/09 in CHF in LC Sales in CHF mn 1 817 1 604 +13% +16% Gross Margin* 28.7% 18.9% EBIT before exceptionals in CHF mn 183 28.7% 29.2% –13 EBIT margin before exceptionals 10.1% –0.8% Net income / loss in CHF mn 10 –91 Operating cash flow in CHF mn 159 156 *restat
Slide 5: Double-digit volume growth in all regions
Double-digit volume growth in all regions Q1/10 Q1/09 Sales growth in local currencies 16% –19% Sales mix: Total sales Q1/10: CHF 1 817 mn – Volume +20% incl. China incl. Germany – Price –4% 96 / +65% 277 / +24% – Acq./div. 0% Asia/ – Currency –3% +28% Pacific 351 Europe, Middle +15% East & Africa
Slide 6: Gross margin improved on lower idle facility costs
Gross margin improved on lower idle facility costs Q1/10 Q1/09 Gross margin 28.7% 18.9% Gross margin, if reported in 2009 classification 33.6% 23.6% Reclassification of freight costs: as of 1 January 2010 included in the costs of goods sold line and therefore in gross profit; previously in SG&A
Slide 7: Significantly higher operating income
Significantly higher operating income Q1/10 Q1/09 EBIT before exceptionals in CHF mn 183 –13 EBIT margin before exceptionals 10.1% –0.8% Operating income before exceptional items improved significantly compared to the previous-year quarter (CHF –13 million) and compared to the 3rd and 4th quarters
Slide 8: Strong cash flow resulting from improved operational performance
Strong cash flow resulting from improved operational performance Q1/10 Q1/09 Operating cash flow in CHF mn 159 156 Cash flow from operations at around the same level as for an already strong first quarter 2009, driven by operating result: CF before changes in WC CHF 85 million in first quarter 201
Slide 9: Financial result – net debt further reduced
Financial result – net debt further reduced Q1/10 Q1/09 Financial result in CHF mn -34 -8 Lower financial result almost fully triggered by FX losses of CHF –11 million compared to FX gains of CHF 14 million in first quarter 2009 as the EUR weakened against the CHF Reduced interest expense of CHF
Slide 10: Agenda
Agenda Highlights – first quarter 2010 Financial results first quarter Business review Outlook First Quarter 2010, Analysts Presentation, 29 April 2010 (Copyright Clariant. All rights reserved.) Slide 10 / 45
Slide 11: Business unit sales, EBITDA and EBIT margins
Business unit sales, EBITDA and EBIT margins First quarter 2010 EBITDA** EBIT** Sales Change margin margin Business Unit / Reporting Segment: CHF mn % CHF % LC % % BU Industrial & Consumer Specialties 420 11 14 18.1 16.0 BU Masterbatches 321 23 26 12.5 10.0 BU Pigments 281 17 19 19.2 16.0 BU Textile
Slide 12: EBIT before exceptionals rises in ICS, Masterbatches with continued strength
EBIT before exceptionals rises in ICS, Masterbatches with continued strength Industrial & Consumer Specialties Sales in CHF mn Strong demand in most business segments EBIT before exc. in CHF mn Q1 Change Q1 Favorable weather conditions for de-icing across Q1 Change Q1 2010 (LC) 2009 2010 (LC) 20
Slide 13: Volumes in Pigments recover, Textile Chemicals remains subdued
Volumes in Pigments recover, Textile Chemicals remains subdued Pigments Sales in CHF mn De-stocking has come to an end with some replenish- EBIT before exc. in CHF mn Q1 Change Q1 ment of stocks observed Q1 Change Q1 2010 (LC) 2009 2010 (LC) 2009 Sales growth driven by recovery in automotive, de
Slide 14: Focus on margins in OMS, strong rebound in Leather Services
Focus on margins in OMS, strong rebound in Leather Services Oil & Mining Services Sales in CHF mn Slow start into 2010, acceleration towards end of Q1 EBIT before exc. in CHF mn Q1 Change Q1 Higher metal prices positively impacted demand from Q1 Change Q1 2010 (LC) 2009 2010 (LC) 2009 the mining
Slide 15: Performance Chemicals with strong growth in Additives sales
Performance Chemicals with strong growth in Additives sales Performance Chemicals* Sales in CHF mn Additives with significantly higher sales EBIT before exc. in CHF mn Q1 Change Q1 Higher volumes in Detergents & Intermediates Q1 Change Q1 2010 (LC) 2009 2010 (LC) 2009 Emulsions business stable
Slide 16: Agenda
Agenda Highlights – first quarter 2010 Financial results first quarter Business review Outlook First Quarter 2010, Analysts Presentation, 29 April 2010 (Copyright Clariant. All rights reserved.) Slide 16 / 45
Slide 17: Outlook – business conditions
Outlook – business conditions Environment No evidence of a sustained recovery of the global economy Positive impulses from Asia and Latin America Business activity stabilized in Europe and North America Raw material costs to further rise heading into the seasonally weaker second half of the
Slide 18: Outlook – Clariant
Outlook – Clariant 2009 and 2010 are years of restructuring Cash generation, cost reduction, complexity reduction remain top priorities 2010 guidance: Mid single-digit sales growth in local currency compared to 2009 Operating income margin before exceptional items above FY 2008 level of 6.6%
Slide 19: Calendar of upcoming corporate events
Calendar of upcoming corporate events 29 July 2010 Second Quarter Results 2010 03 November 2010 Third Quarter Results 2010 16 February 2011 Full-year Results 2010 31 March 2011 Annual General Meeting, Basel First Quarter 2010, Analysts Presentation, 29 April 2010 (Copyright Clariant. All rights rese
Slide 20: 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 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
Slide 21: Backup Slides first quarter results 2010
Backup Slides first quarter results 2010 First Quarter 2010, Analysts Presentation, 29 April 2010 (Copyright Clariant. All rights reserved.) Slide 21 / 45
Slide 22: Peer group ROIC
Peer group ROIC Measuring performance 2009 average based on relative ROIC* 7.0% Ems-Chemie 20,8 Lubrizol 18,5 Cognis 15,9 Croda 12,9 PolyOne 11,5 Rhodia 9,6 Altana 7,7 Nalco 7,6 BASF 7,5 Akzo Nobel 7,3 Albemarle 7,1 Evonik 6,2 Kemira 5,8 CLARIANT 5,7 (2008: 9.0%) Dow Chemical 5,5 DSM 5,0 Lanxess 4,2
Slide 23: Restated group gross profit and SG&A
Restated group gross profit and SG&A 2009 Starting 1 January 2010, Clariant reports freight costs 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 s
Slide 24: Key financials – first quarter
Key financials – first quarter First quarter 2010 2009 CHF mn % of sales CHF mn % of sales Sales 1 817 100% 1 604 100% Local currency growth (LC) 16% - Organic growth rate* 16% - Acquisitions/Divestments 0% Currencies –3% Gross profit** 521 28.7% 303 18.9% EBITDA before exceptionals 235 12.9% 43 2.7
Slide 25: Cash flow – first quarter
Cash flow – first quarter First quarter 2010 2009 CHF mn CHF mn Net income / loss 10 –91 Depreciation, amortization and impairment 61 60 Other 52 14 Payments for restructuring –38 –37 Operating cash flow before working capital changes 85 –54 Changes in working capital and provisions 74 210 Operating
Slide 26: Financial result – first quarter
Financial result – first quarter First quarter 2010 2009 CHF mn CHF mn Interest income 2 1 Other financial income 1 1 Total financial income 3 2 Interest expenses –17 –21 Other financial expenses –9 –3 Currency result, net –11 14 Total financial expenses –37 –10 Total financial result –34 –8 First Q
Slide 27: Clariant's products and services are delivered through Business Units (1)
Clariant’s products and services are delivered through 10 Business Units (1) Additives Detergents & Emulsions Industrial & Leather Services Intermediates Consumer Specialties A leading provider of A leading supplier of A supplier of water- A leading provider of A leading supplier of flame retardants
Slide 28: Clariant's products and services are delivered through Business Units (2)
Clariant’s products and services are delivered through 10 Business Units (2) Masterbatches Oil & Mining Paper Specialties Pigments Textile Chemicals Services A leader in coloration A leading provider of A leading provider of A leading global A leading producer of and functionality of products and se
Slide 29: Sales and EBITDA margins by business unit – first quarter
Sales and EBITDA margins by business unit – first quarter First quarter 2010 Sales EBITDA** EBITDA margin** Business Unit / Segment: CHF mn % LC % of Group % 2010 % 2009 BU Industrial & Consumer Specialties 420 +14 28 18.1 8.9 BU Masterbatches 321 +26 15 12.5 5.8 BU Pigments 281 +19 20 19.2 –2.1 BU
Slide 30: Industrial & Consumer Specialties
Industrial & Consumer Specialties First quarter 2010 2009 Change CHF mn % of sales CHF mn % of sales % CHF % LC Sales 420 380 11 14 EBITDA before exceptionals 76 18.1 34 8.9 124 131 Operating income before exceptionals 67 16.0 24 6.3 179 191 Operating income 64 15.2 17 4.5 276 286 Business trends
Slide 31: Masterbatches
Masterbatches First quarter 2010 2009 Change CHF mn % of sales CHF mn % of sales % CHF % LC Sales 321 260 23 26 EBITDA before exceptionals 40 12.5 15 5.8 167 186 Operating income before exceptionals 32 10.0 6 2.3 433 427 Operating income 32 10.0 –4 –1.5 – – Business trends Broad recovery starting
Slide 32: Pigments
Pigments First quarter 2010 2009 Change CHF mn % of sales CHF mn % of sales % CHF % LC Sales 281 240 17 19 EBITDA before exceptionals 54 19.2 –5 –2.1 – – Operating income before exceptionals 45 16.0 –14 –5.8 – – Operating income 40 14.2 –25 –10.4 – – Business trends De-stocking has come to an end
Slide 33: Textile Chemicals
Textile Chemicals First quarter 2010 2009 Change CHF mn % of sales CHF mn % of sales % CHF % LC Sales 204 180 13 15 EBITDA before exceptionals 15 7.4 –3 –1.7 – – Operating income before exceptionals 9 4.4 –9 –5.0 – – Operating income –53 –26.0 –21 –11.7 – – Business trends Further stabilization in
Slide 34: Oil & Mining Services
Oil & Mining Services First quarter 2010 2009 Change CHF mn % of sales CHF mn % of sales % CHF % LC Sales 148 156 –5 –5 EBITDA before exceptionals 22 14.9 18 11.5 22 21 Operating income before exceptionals 21 14.2 17 10.9 24 23 Operating income 21 14.2 16 10.3 31 26 Business trends Slow start into
Slide 35: Leather Services
Leather Services First quarter 2010 2009 Change CHF mn % of sales CHF mn % of sales % CHF % LC Sales 84 51 65 66 EBITDA before exceptionals 11 13.1 –8 –15.7 – – Operating income before exceptionals 10 11.9 –9 –17.6 – – Operating income 14 16.7 –10 –19.6 – – Business trends Major beneficiary of rec
Slide 36: Performance Chemicals
Performance Chemicals * First quarter 2010 2009 Change CHF mn % of sales CHF mn % of sales % CHF % LC Sales 359 337 7 10 EBITDA before exceptionals 52 14.5 2 0.6 – – Operating income before exceptionals 41 11.4 –10 –3.0 – – Operating income 42 11.7 –16 –4.7 – – Business trends Additives with signi
Slide 37: Quarterly Business Unit sales and EBIT before exceptional items 2009 (1)
Quarterly Business Unit sales and EBIT before exceptional items 2009 (1) Sales EBIT bef. exceptionals EBIT bef. exceptionals – margin Industrial & Consumer Specialties Quarterly figures* 2009 & 2010 – in CHF mn 500 100 Q1 Q2 Q3 Q4 FY/09 Q1/10 400 80 Sales 380 324 348 373 1 425 420 420 380 373 EBITDA
Slide 38: Quarterly Business Unit sales and EBIT before exceptional items 2009 (2)
Quarterly Business Unit sales and EBIT before exceptional items 2009 (2) Sales EBIT bef. exceptionals EBIT bef. exceptionals – margin Pigments Quarterly figures* 2009 & 2010 – in CHF mn 300 Q1 Q2 Q3 Q4 FY/09 Q1/10 273 284 275 281 Sales 240 273 284 275 1 072 281 60 200 240 40 EBITDA bef. exceptionals
Slide 39: Quarterly Business Unit sales and EBIT before exceptional items 2009 (3)
Quarterly Business Unit sales and EBIT before exceptional items 2009 (3) Sales EBIT bef. exceptionals EBIT bef. exceptionals – margin Oil & Mining Services Quarterly figures* 2009 & 2010 – in CHF mn 30 Q1 Q2 Q3 Q4 FY/09 Q1/10 150 156 155 148 Sales 156 131 136 155 578 148 136 20 131 22 21 100 EBITDA
Slide 40: Quarterly Business Unit sales and EBIT before exceptional items 2009 (4)
Quarterly Business Unit sales and EBIT before exceptional items 2009 (4) Sales EBIT bef. exceptionals EBIT bef. exceptionals – margin Performance Chemicals Quarterly figures* 2009 & 2010 – in CHF mn 400 Q1 Q2 Q3 Q4 FY/09 Q1/10 50 300 343 346 359 Sales 337 335 343 346 1 361 359 337 335 41 EBITDA bef.
Slide 41: Debt maturity profile as of 31 March 2010
Debt maturity profile as of 31 March 2010 Liquidity headroom Maturities of financial debt Bonds & private placements Uncommitted & other loans 2500 900 800 842 Open undrawn credit facilities 2000 700 at local affiliates 800 600 Open undrawn credit facilities 1500 Local rollover loans for in Switzerl
Slide 42: Sales and cost structure – full-year 2009
Sales and cost structure – full-year 2009 Global sales distribution in % Global cost distribution in % Emerging Emerging CHF 0 markets CHF 6 markets JPY 1 20 JPY 3 16 CHF 6 USD 31 USD 24 EUR 44 EUR 51 GBP 2 GBP 2 These distributions represent an approximation to total cash in- and outflows and are c
Slide 43: Top 20 products in percentage of total raw material costs
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 15% 9 Vinyl acetate 10 11 Titanium dioxide Propylene oxide 69% 12 Ethylenediamine
Slide 44: Raw material classification and dependence on oil price
Raw material classification and dependence on oil price Dependence on oil price Product groups Independent Specialty chemicals incl. aromatics and oleochemicals 50% 40% Base 20% chemicals 15% 35% Directly 40% dependent Indirectly dependent Petrochemicals via feedstock (e.g. benzene, phenol) First Qu
Slide 45: 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