Clariant Ag · SIX:CLN
Clariant — H1 2002 Earnings Presentation
41 slides from Clariant's earnings presentation, Aug 22, 2002
Slide 1: 2002 Half-year results Conference Call „On Track“
2002 Half-year results Conference Call „On Track“ August 22, 2002
Slide 2: „On Track“ – Dr. Reinhard Handte, CEO
2002 Half-year results „On Track“ Dr. Reinhard Handte, Chief Executive Officer August 22, 2002
Slide 3: Content overview
2002 Half-year results Content overview Key achievements Financial results Business progress Outlook August 22, 2002 33
Slide 4: Strong result despite weak environment
Key Achievements Strong result despite weak environment Operating business l Sales recovery confirmed l Operating margins trends positive l Restructuring program delivered Delivering on Financial results promises l Net result strong recovery l Net debt further reduced August 22, 2002 4
Slide 5: Strong net result
Key Achievements Strong net result l Net result +18 % l Net sales in local currencies +1 % l Personnel cost reduction -11 % l Work force reduction -7 % l Free cash flow +109 % Cash flow continues to be our focus Please note % figures are changes versus half-year 2001 figures and are rounded August 2
Slide 6: „On Track“ – Francois Note, CFO
2002 Half-year results „On Track“ Francois Note, Chief Financial Officer August 22, 2002
Slide 7: 2002 Half-Year Results
2002 Half-Year Results Key achievements Financial results Business progress Outlook August 22, 2002 7 7
Slide 8: Delivering on promises
Financial Results Delivering on promises Half year Half year Change in % on reported Pro-forma a comparable base in m CHF 2002 2001 2001 CHF LC Net sales 4 839 5 197 5 076 -5 +1 Gross profit 1 651 1 693 1 680 -2 --- EBITDA 633 573 670 -6 0 EBITA 415 104 434 -4 +2 Net income 145 -1 314 123 +18 --- HY
Slide 9: Margin recovery
Financial Results Margin recovery 5 076 4 839 4 575 4300 4300 Sales in 8.6% 8.6% m CHF EBITA* Margin in % 3100 3.6% 1 HY 2001 2 HY 2001 1 HY 2002 * Pro-forma August 22, 2002 9
Slide 10: Promising volume development
Financial Results Promising volume development 2002 half-year versus 2001 half-year pro-forma figures Pricing Currency +3.2% -2.3% Volume -5.6% Sales pro-forma è Sales Change in %: è HY 2002 HY 2001 (CHF 5 076 m) -4.7 (CHF 4 839 m) Please note % figures in pricing, currency and volume are estimated
Slide 11: EBITA analysis
Financial Results EBITA analysis +45 -28 -42 434 +49 415 -115 +72 in CHF m Pricing Raw Volume Synergies Currency Others** material 0 EBITA* * EBITA pro forma EBITA HY 2001 ** Including significant provision for delay HY 2002 in start up of new plant for Division FUN August 22, 2002 11
Slide 12: Balanced sales and cost structure
Financial Results Balanced sales and cost structure JPY GBP GBP 4.6% 5.3% JPY 5.1% 4.0% USD EUR USD EUR 31.2% 42.3% 26.4% 50.0% Emerging Markets 16.5% Emerging Markets 16.5% Global sales Global cost distribution distribution August 22, 2002 12
Slide 13: Germany: Good contribution to group financial result
Financial Results Germany: Good contribution to group financial result l 100% of cost savings program implemented è leads to significant cost savings l Higher margins due to restructuring measures l Sales development HY 2002 (+2%) above German chemical industry average l Negative price impact on sal
Slide 14: Cost savings program on track
Financial Results Cost savings program on track Cost base reduction in m CHF 250 Restructuring projects: 150 l Projects total 60% implemented l Germany completed 60 FY FY FY 2001 2002 2003 August 22, 2002 14
Slide 15: Increase in free cash flow
Financial Results Increase in free cash flow in CHF m Half year Half year 2002 2001 Cash flow before changes in working capital 469 595 Cash flow from operating activities 227 314 Cash flow from investing activities -60 -234 Free cash flow before financial activities 167 80 August 22, 2002 15
Slide 16: Net debt close to year-end target
Financial Results Net debt close to year-end target Acquisition BTP in m CHF l Not utilized but available open 5 999 long-term credit lines of 5 329 -32% CHF 1.1 bn l No refinancing 5 138 of long-term debt in 2002 4 282 4 078 Jun 00 Dec 00 Jun 01 Dec 01 Jun 02 Net debt reduction continues to be our
Slide 17: „On Track“ – Dr. Reinhard Handte, CEO
2002 Half-year results „On Track“ Dr. Reinhard Handte, Chief Executive Officer August 22, 2002
Slide 18: 2002 Half-year results
2002 Half-year results Key achievements Financial results Business progress Outlook August 22, 2002 18 18
Slide 19: Improved margins for Textiles, Leather & Paper Chemicals
Divisional Perfomance: TLP Improved margins for Textiles, Leather & Paper Chemicals – 1st half – – Change % – 2002 2001* CHF LC Sales in m CHF 1 428 1 550 -8 -2 EBITDA in m CHF 201 182 +10 +17 EBITDA margin in % 14.1 11.7 *Pro-forma l Improved earnings by cost optimisation and softening raw material
Slide 20: Growth in volume - solid margins in Pigments & Additives
Divisional Performance: P&A Growth in volume - solid margins in Pigments & Additives – 1st half – – Change % – 2002 2001 CHF LC Sales in m CHF 951 1 003 -5 0 EBITDA in m CHF 175 186 -6 -2 EBITDA margin in % 18.4 18.5 l Sales in LC slightly above previous year level despite weak environment l Healthy
Slide 21: Masterbatches: strong performance
Divisional Performance: MB Masterbatches: strong performance – 1st half – – Change % – 2002 2001 CHF LC Sales in m CHF 540 556 -3 +2 EBITDA in m CHF 77 66 +17 +23 EBITDA margin in % 14.3 11.9 Capital turnover 2.3 2.1 l Good development in US supported by restructuring measures in 2001 l Good demand
Slide 22: Good sales in Functional Chemicals
Divisional Performance: FUN Good sales in Functional Chemicals – 1st half – – Change % – 2002 2002 2001* 2001 CHF LC Sales in m CHF 1 077 1 114 -3 +3 EBITDA in m CHF 96** 137 -30 -24 EBITDA margin in % 8.9 12.3 * Pro-forma ** Including significant provision for delay in start up of bleach activator
Slide 23: Life Science turnaround action plan on track
Divisional Performacen: LSE Life Science turnaround action plan on track – 1st half – – Change % – 2002 2002 2001* 2001 CHF LC Sales in m CHF 843 853 -1 +4 EBITDA in m CHF 102 92 +11 +17 EBITDA margin in % 12.1 10.7 *Pro-forma l Positive development in LC sales l Acquistion of an active ingredient i
Slide 24: Key measures to becoming effective
Divisional Performance: LSE Key measures to becoming effective l Introduction of new management l Establishment of new organization more market- and customer- focused l Sale of sites while keeping business through transfer to other sites l Realization of restructuring program l Review of sites and p
Slide 25: 2002 Half-year results
2002 Half-year results Key achievements Financial results Business progress Outlook August 22, 2002 25 25
Slide 26: Outlook 2002
Outlook 2002 Focus stays on... l Cash flow management l Cost base reduction l Innovation l Improved capital structure ... to deliver even in a weak business environment l Further net debt reduction below CHF 4 bn l Better operating margin l Higher net result August 22, 2002 26
Slide 27: Disclaimer
Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking statements. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ ma
Slide 28: Investor relations contact
Investor relations contact Iris M. Welten Karine Huttenschmitt Phone +41 61 469 67 47 Phone +41 61 469 67 48 Fax +41 61 469 67 67 Fax +41 61 469 67 67 Mobile +41 79 292 62 70 Mobile +41 79 456 63 48 iris.welten@clariant.com karine.huttenschmitt@ clariant.com Dr. Holger Schimanke Phone +41 61 469 67
Slide 29: Half-year results 2002 Conference call Backup
Half-year results 2002 Conference call Backup August 22, 2002
Slide 30: Financial key figures
Financial key figures Half year discont. Half year Other Restruc- Half year Half year Reported Operations restated adjustments* turing pro forma* Reported in m CHF 2001 (IAS) 2001 2001 2002 Net sales 5 197 -99 5 098 -22 5 076 4 839 EBITDA 573 -24 549 -7 128 670 633 EBITA 104 -18 86 +1 347 434 415 *i
Slide 31: Segment sales
Segment sales Sales 1 HY Change in % Pro-forma* 2002 2001 CHF LC Textile, Leather & Paper Chemicals 1 428 1 550 –7.9% –2.2% Pigments & Additives 951 1 003 –5.2% +0.2% Masterbatches 540 556 –2.8% +2.1% Functional Chemicals 1 077 1 114 –3.3% +2.8% Life Science & Electronic Materials 843 853 –1.2% +4.2
Slide 32: Segment EBITDA
Segment EBITDA EBITDA 1 HY Change in % Pro-forma* 2002 2001 CHF LC Textile, Leather & Paper Chemicals 201 182 +10.4% +16.5% Pigments & Additives 175 186 -5.9% -1.6% Masterbatches 77 66 +16.7% +22.7% Functional Chemicals 96 137 –29.9% -24.1% Life Science & Electronic Materials 102 92 +10.9% +17.4% Gr
Slide 33: Segment EBITA
Segment EBITA EBITA 1 HY Change in % Pro-forma* 2002 2001 CHF LC Textile, Leather & Paper Chemicals 152 141 +7.8% +14.2% Pigments & Additives 139 143 -2.8% +1.4% Masterbatches 62 52 +19.2% +25.0% Functional Chemicals 59 96 -38.5% -32.3% Life Science & Electronic Materials 34 35 -2.9% +8.6% Group 415
Slide 34: Favorable trend of raw material prices
Favorable trend of raw material prices l Full year’s average prices for top 3 raw materials for Clariant -15% -12% -5% 13% Vinylacetate Acetic Acid Ethylene Total bill for raw materials 2001: Prices according to ICIS 2002: Clariant‘s estimate 07/02 l By expected increase in 2nd half, prices still be
Slide 35: Business structure LSE
Business structure LSE as of June 1, 2002 Life Science & Electronic Chemicals J. Mahler Human Resources Controlling & Communications Business Process ESHA Management Technology Business Unit Business Unit Business Unit Business Unit Electronic Materials Pharma Custom Synthesis Specialty Fine Chemica
Slide 36: Business structure
Business structure as of June 1, 2002 Textile, Pigments & Masterbatches Functional Life Science & Leather & Paper Additives Chemicals Electronic Chemicals Chemicals F. Dennefeld G. Hencken N. Gontha R. Meyer J. Mahler Electronic Textile Dyes Pigments Europe Detergents Materials Textile Performance I
Slide 37: TLP: improving leading positions
TLP: improving leading positions Focus on long-term performance l Following the market for textiles and leather l Growing by niche solutions in paper business l Stronger approach to key account management l Continuous optimization of cost base for the whole division Innovation l Awarded for new opti
Slide 38: P&A: focus on efficiency optimization
P&A: focus on efficiency optimization Improving long-term performance l Innovation as key driving force for future growth l Continued process optimisation by focus on low cost sites l Stronger customer focus and back-selling activities l Gain market share in additives Innovation l Great acceptance o
Slide 39: MB: increasing market leader position
MB: increasing market leader position Focus on top-line growth l Strengthening leading position differentiated by full service and technical advantage l Growing in volume selectively l Focus on cash flow generation l Expand in market with actual low market share Innovation l Rolling out of Technolog
Slide 40: FUN: portfolio shift will deliver
FUN: portfolio shift will deliver Improving long-term performance l Cost base reduction by continuous optimization of capacity utilization l Cash contribution by supply chain management l Permanent portfolio optimization Innovation l New bleach activators for low temperature laundry l Gashydratinhib
Slide 41: Divisional sales in end user markets
Divisional sales in end user markets Automotive Other Durable 15% 7% Goods 5% Agro Textile & 6% 20% Clothing Paper 6% 7% Electronics 7% 12% Healthcare 7% 8% Construction Packaging Detergents August 22, 2002 41