Clariant Ag · SIX:CLN
Clariant — 9M 2006 Earnings Presentation
31 slides from Clariant's earnings presentation, Nov 7, 2006
Slide 1: Clariant – The Way Forward: Nine Month Results
Clariant – The Way Forward Nine Month Results Conference Call – November 7, 2006
Slide 2: Content
Content Key Factors – Nine Month Results 2006 Financial Review Business Review Outlook Nine Months 2006 Slide 2
Slide 3: Nine Months 2006 – Key factors
Nine Months 2006 – Key factors Key Factors Nine Month Results Q Strong demand boosts organic growth by 5% Financial Review Q Selling prices stable across most businesses, with positive Business Review momentum in Q3 Outlook Q Gross margin increased to 31.2% Q Raw material (+2%) and energy costs (+15
Slide 4: Third Quarter 2006 – Business achievements
Third Quarter 2006 – Business achievements Key Factors Nine Month Results Q Functional Chemicals achieved strong growth, supported by strong Financial Review volumes and higher selling prices Business Review Q Masterbatches continued to build on strong First Half, with robust Outlook growth in packa
Slide 5: Specialty Fine Chemicals Review
Specialty Fine Chemicals Review Q All options studied with view to maximizing value Q Custom Manufacturing (CM) to be sold Q Impairment charge of CHF 79 million taken for CM Q Speciality Intermediates Business (Silicone and glyoxylic acid- derivative products) has good long-term prospects: − Unique
Slide 6: Impairment in Leather Business
Impairment in Leather Business Q Reassessment of medium-term growth prospects carried out Q Goodwill written down by CHF 100 million due to over-valuation Q Positive trend continued in Third Quarter Q Strongest growth in wet-end chemicals and dyes; finishing products stable Q Sales in Europe well ab
Slide 7: Nine Months 2006 – Key financial group figures
Nine Months 2006 – Key financial group figures Key Factors Nine Months Nine Month Results 2006 2005** Financial Review Continuing operations: CHF mn % of sales CHF mn % of sales Business Review Sales 6,090 100% 5,770 100% Outlook Local currency growth (LC) +3% - Organic growth +5% - Acquisitions/Div
Slide 8: Third Quarter 2006 – Key financial group figures
Third Quarter 2006 – Key financial group figures Key Factors Third Quarter Nine Month Results 2006 2005** Financial Review Continuing operations: CHF mn % of sales CHF mn % of sales Business Review Sales 2,009 100% 1,906 100% Outlook Local currency growth (LC) +6% - Organic growth +7% - Acquisitions
Slide 9: Sales growth driven by strong volume
Sales growth driven by strong volume Key Factors Nine Month Results Nine Months 2006 versus Nine Months 2005* Financial Review Business Review +3% 8% Outlook +3% Currencies +5% +0% 5% +2% Divestments** +3% Local currency growth Volume Price Organic growth Currencies Sales in CHF & Mix Nine Months 20
Slide 10: Regional sales Nine Months 2006
Regional sales Nine Months 2006 Key Factors Nine Month Results Nine Months 2006 Third Quarter 2006 Financial Review Asia/Australia/Africa Europe Asia/Australia/Africa Europe Business Review 1,398 2,966 488 952 Outlook including +6% including +11% China +21% China +32% +7% +6% 246 90 +5% +3% includin
Slide 11: Performance improvements to deliver
Performance improvements to deliver Key Factors Nine Month Results EBIT impact of measures* Financial Review +250 Business Review 800-900 710 Outlook Nine Months 460 656 150 2004 2005 2006 2007 200 585 465 Nine Months 610 610 in mn CHF performance improvement measures Nine Months 2006 performance im
Slide 12: Key drivers of operating income before exceptionals
Key drivers of operating income before exceptionals in Nine Months 2006 Key Factors Nine Month Results Price Volume Divestments FX Raw Energy Other Financial Review +9 & mix -9 +9 Material -37 0 +104 -46 Business Review Outlook 428 458 EBIT* ― Price +40 million EBIT* 9M 2005 9M 2006 ― Volume +74 mil
Slide 13: Financial result Nine Months 2006
Financial result Nine Months 2006 Key Factors Nine Month Results Financial Review Nine Months Business Review 2006 2005* CHF mn CHF mn Outlook Interest expense -86 -104 Other financial expenses -15 -22 Financial income +26 +36 Currency result, net -5 +44 Other financial income and expenses +6 +58 To
Slide 14: Cash flow Nine Months 2006
Cash flow Nine Months 2006 Key Factors Nine Month Results Financial Review Nine Months Business Review 2006 2005 CHF mn CHF mn Outlook Net result -77 222 Depreciation & amortization 434 226 Other 124 -95 Operating cash flow before working capital 481 353 Change in working capital -340 -158 Operating
Slide 15: Debt maturity profile on Sep 30, 2006
Debt maturity profile on Sep 30, 2006 Liquidity Maturities of financial debt Key Factors 1600 Nine Month Results Financial Review 1400 Business Review 1200 Outlook Committed open lines 750 1000 21 800 557 600 Cash* 684 534 953 400 8 200 384 159 175 8 0 0 1 0 2006 2007 2008 2009 2010 2011 2012 2013 N
Slide 16: Divisional sales and margins – Third Quarter 2006
Divisional sales and margins – Third Quarter 2006 Key Factors Nine Month Results Third Quarter Financial Review Sales EBITDA Margin in %** % Organic Business Review CHF mn Growth* % LC 2006 2005*** Outlook Textile, Leather & Paper Chemicals 578 +4 +4 10.7 12.1 Pigments & Additives 498 +7 +7 15.9 14.
Slide 17: Textile, Leather & Paper Chemicals
Textile, Leather & Paper Chemicals Key Factors Nine Month Results Q Performance driven by solid volume growth Financial Review Q Challenging environment for textiles in North America and South- Business Review east Asia weighed on Textile business Outlook Q Paper showed continued improvement trend;
Slide 18: Pigments & Additives
Pigments & Additives Key Factors Nine Month Results Q Coating, Plastics and Specialties continued their strong Financial Review performance Business Review Q Margins supported by economies of scale and efficiency Outlook improvements Q Printing ink pigments remained resilient Q Increased demand for
Slide 19: Masterbatches
Masterbatches Key Factors Nine Month Results Q Continued growth momentum in the Third Quarter Financial Review Q Price increases more than offset rising raw material costs Business Review Q Continued focus on market segments with high differentiation Outlook potential such as packaging and consumer
Slide 20: Functional Chemicals
Functional Chemicals Key Factors Nine Month Results Q Increased demand in several businesses, notably Oil Service, Financial Review Construction Chemical and Personal Care products Business Review Q Strong quarter for Detergents compensated for a weak First Half Outlook Q Margins strengthened by vol
Slide 21: Life Science Chemicals
Life Science Chemicals Key Factors Nine Month Results Q Business environment remained competitive Financial Review Q Silicone, Glyoxal and Glyoxylic acid derivative products were weaker Business Review Q Deterioration of Custom Manufacturing business accelerated in the Outlook Third Quarter amid dep
Slide 22: Outlook for 2006
Outlook for 2006 Key Factors Nine Month Results Q Robust sales growth in local currency terms above last year Financial Review Q Raw material and energy prices to remain at high levels Business Review Q EBIT before exceptionals from continuing operations of Outlook approximately CHF 575 million for
Slide 23: Calendar of upcoming corporate events
Calendar of upcoming corporate events November 14-15, 2006 “Clariant meets Investors,” Basel November 30, 2006 Merrill Lynch Conference, London January 18-20, 2007 UBS Conference, Gstaad February 20, 2007 Full Year 2006 Results April 2, 2007 Annual General Meeting, Basel May 8, 2007 First Quarter 20
Slide 24: Your Investor Relations contacts
Your Investor Relations contacts Dr. Holger Schimanke Head Investor Relations Phone +41 (0) 61 469 67 45 Mobile +41 (0) 79 343 59 83 email holger.schimanke@clariant.com Fabian Hildbrand, CIIA Investor Relations Officer Phone +41 (0) 61 469 67 49 Mobile +41 (0) 79 763 93 80 email fabian.hildbrand@cla
Slide 25: 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 26: High growth momentum in Third Quarter 2006
High growth momentum in Third Quarter 2006 Backup Information Third Quarter 2006 versus Third Quarter 2005* +1% 7% -1% Divestments** +6% 6% +1% -1% Currencies Local +6% currency growth Volume Price Organic Currencies Sales in CHF & Mix growth Nine Months 2006 * Continued operations Slide 26 **Divest
Slide 27: Divisional sales and margins – Nine Months 2006
Divisional sales and margins – Nine Months 2006 Key Factors Nine Month Results Nine Months Financial Review Sales EBITDA Margin in %** % Organic Business Review CHF mn Growth* % LC 2006 2005*** Outlook Textile, Leather & Paper Chemicals 1,733 +4 +4 10.1 11.0 Pigments & Additives 1,514 +5 +5 16.6 14.
Slide 28: Personnel reduction
Personnel reduction Backup Information 27,008 23,383 607 598 22,178 493 21,685 Dec 31, 2003 Dec 31, 2005 Reduction Sep 30, 2006 Custom Continuing 9 months, 2006 Manufacturing Operations Nine Months 2006 business Slide 28 Number of employees, total operations Reduction Disposals and consolidation in
Slide 29: Top products in percentage of total raw material costs
Top 5 products in percentage of total raw material costs Backup Information Ranking Product 1 Ethylene & -Oxide Group 2 Vinylacetate Total ~17% 3 Polyethylene 4 Titanium Dioxide 5 Acrylates Nine Months 2006 Slide 29
Slide 30: Sales and cost structure – Full Year 2005
Sales and cost structure – Full Year 2005 Backup Information Global sales distribution in % Global cost distribution in % CHF Emerging CHF Emerging markets markets 2 8 20 JPY 3 16 JPY 2 EUR EUR USD 42 46 23 USD 29 5 4 GBP GBP in CHF mn Nine Months 2006 Slide 30 These distributions represent an appro
Slide 31: Divisional sales Full Year 2005 in end-user markets
Divisional sales Full Year 2005 in end-user markets Backup Information Healthcare Agro Automotive Construction Electronics 4% 4% 6% 1% 10% Paper 5% 15% Non-durables Packaging 10% 5% Durables 21% Textiles 19% Other Nine Months 2006 Slide 31