Clariant Ag · SIX:CLN
Clariant — H1 2006 Earnings Presentation
31 slides from Clariant's earnings presentation, Aug 2, 2006
Slide 1: Clariant – The Way Forward: First Half Results
Clariant – The Way Forward First Half Results August 2, 2006
Slide 2: Content
Content Key Factors – First Half Results 2006 Financial Review Business Review Outlook First Half Results 2006 Slide 2
Slide 3: First Half 2006 – Key factors
First Half 2006 – Key factors Key Factors First Half Results Q Good organic growth of 4%, driven by solid demand Financial Review Q Prices steady compared to a year earlier Business Review Q Raw material costs rose modestly (1% y-on-y) Outlook Q Significant rise in energy costs (17% y-on-y) Q Gross
Slide 4: First Half 2006 – Business achievements
First Half 2006 – Business achievements Key Factors First Half Results Q Masterbatches achieved excellent growth, particularly in the U.S. Financial Review Q Pigments & Additives grew strongly in volumes with strongest margin Business Review improvement in the Group Outlook Q Textile, Leather & Pape
Slide 5: Challenges and actions
Challenges and actions Key Factors First Half Results Challenges Actions Financial Review Business Review Strategic price management initiative Outlook Q Higher raw material and energy launched costs continue to weigh on results Improved sourcing, increased efficiency Q Performance erosion in Specia
Slide 6: Additional initiatives launched
Additional initiatives launched Key Factors First Half Results Q Proactive cost reduction measures in place across the company Financial Review Q Operational effectiveness review underway Business Review Q Shift from CPIP to Continuous Improvement Process (CIP) Outlook Q Clariant Academy focusing on
Slide 7: First Half 2006 – Key financial group figures
First Half 2006 – Key financial group figures Key Factors First Half First Half Results 2006 2005** Financial Review Continuing operations: CHF mn % of sales CHF mn % of sales Business Review Sales 4,192 100% 3,991 100% Outlook Local currency growth (LC) 1% - Organic growth 4% - Acquisitions/Divesti
Slide 8: Second Quarter 2006 – Key financial group figures
Second Quarter 2006 – Key financial group figures Key Factors 2nd Quarter First Half Results 2006 2005** Financial Review Continuing operations: CHF mn % of sales CHF mn % of sales Business Review Sales 2,083 100% 2,040 100% Outlook Local currency growth (LC) 0% - Organic growth 2% - Acquisitions/Di
Slide 9: Sales growth driven by strong volume
Sales growth driven by strong volume Key Factors First Half Results First Half 2006 versus First Half 2005* Financial Review +4% +8% Business Review Outlook 3% Divestments** +4% +0% +4% 4% Currencies Local currency 1% growth Volume Price Organic growth Currencies Sales in CHF & Mix First Half Result
Slide 10: Regional sales First Half 2006
Regional sales First Half 2006 Key Factors First Half Results First Half 2006 Second Quarter 2006 Financial Review Asia/Australia/Africa Europe Asia/Australia/Africa Europe Business Review 926 2,090 480 1,035 Outlook including +4% including +5% China China 156 +14% +3% 84 +15% +1% including +7% incl
Slide 11: Performance improvements to deliver strongly in 2006
Performance improvements to deliver strongly in 2006 Key Factors First Half Results EBIT impact of measures* Financial Review +250 Business Review 800-900 710 Outlook First Half 460 590 150 2004 2005 2006 2007 200 560 465 First Half 610 610 in mn CHF performance improvement measures First Half Resul
Slide 12: Key drivers of operating income before exceptionals
Key drivers of operating income before exceptionals in First Half 2006 Key Factors First Half Results Price Volume Divestments FX Raw Energy Other Financial Review 0 & mix -10 +15 Material -25 -30 +70 -20 Business Review Outlook 286 286 EBIT* ― Price + 25 million EBIT* HY 2005 HY 2006 ― Volume + 50
Slide 13: Financial result First Half 2006
Financial result First Half 2006 Key Factors First Half Results Financial Review First Half Business Review 2006 2005* CHF mn CHF mn Outlook Interest expense -50 -72 Other financial expenses -12 -15 Financial income +14 +21 Currency result, net -8 +35 Other financial income and expenses -6 +41 Total
Slide 14: Cash flow First Half 2006
Cash flow First Half 2006 Key Factors First Half Results Financial Review First Half Business Review 2006 2005 CHF mn CHF mn Outlook Net result 15 146 Depreciation & amortization 182 154 Other 118 -65 Operating cash flow before working capital 315 235 Change in working capital -262 -278 Operating ca
Slide 15: Debt maturity profile on June 30, 2006
Debt maturity profile on June 30, 2006 Liquidity Maturities of financial debt Key Factors 1600 First Half Results Financial Review 1400 Business Review 1200 Outlook Committed 750 open lines 1000 21 940 800 557 600 Cash* 678 400 7 384 200 2 159 175 6 0 0 1 0 2006 2007 2008 2009 2010 2011 2012 2013 Fi
Slide 16: Divisional sales and margins – First Half 2006
Divisional sales and margins – First Half 2006 Key Factors First Half Results First Half Financial Review Sales EBITDA Margin in %** % Organic % LC Business Review CHF mn Growth* 2006 2005*** Outlook Textile, Leather & Paper Chemicals 1,155 +4 +4 9.8 10.5 Pigments & Additives 1,016 +3 +3 16.9 13.9 M
Slide 17: Textile, Leather & Paper Chemicals
Textile, Leather & Paper Chemicals Key Factors First Half Results Q Good growth across the division mainly from increased volumes Financial Review Q Competitive environment prevented price increases Business Review Q Optical brighteners continued to drive excellent Paper results Outlook Q Textile gr
Slide 18: Pigments & Additives
Pigments & Additives Key Factors First Half Results Q Increased overall demand for colorants as well as additives Financial Review Q Volume growth led to significant margin improvement Business Review Q High volumes, but pressure on prices in challenging market conditions Outlook Q Satisfactory prin
Slide 19: Masterbatches
Masterbatches Key Factors First Half Results Q Continued strong growth with price increases achieved in a highly competitive environment Financial Review Q Raw material costs remain volatile Business Review Q Overall excellent performance in the plastic markets Outlook Q Further robust growth in Nor
Slide 20: Functional Chemicals
Functional Chemicals Key Factors First Half Results Q Solid demand across most businesses Financial Review Q Lower profitability; higher prices unable to offset increased raw material costs Business Review Q Higher volumes in personal care, oilfield services and construction chemicals Outlook Q Incr
Slide 21: Life Science Chemicals
Life Science Chemicals Key Factors First Half Results Q Pharmaceutical Fine Chemical Business: – Sale to TowerBrook Capital Partners completed Financial Review – Good continued growth in volumes and prices Business Review – Expected sales in 2006 of approx. CHF 250 million and positive EBIT Outlook
Slide 22: Personnel reduction
Personnel reduction Key Factors First Half Results 27,008 Financial Review Business Review 24,769 Outlook 23,383 337 598 22,448 Dec 31, 2003 Dec 31, 2004 Dec 31, 2005 Reduction Jun 30, 2006 First Half Results 2006 First Half 2006 Slide 22 Number of employees, reported Reduction Disposals and consoli
Slide 23: Outlook for 2006
Outlook for 2006 Key Factors First Half Results Q Good 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 Limited scope to raise prices Outlook Q EBIT before exceptional items for continuing operations to
Slide 24: Calendar of upcoming corporate events
Calendar of upcoming corporate events November 7, 2006 Nine Month 2006 Results November 14-15, 2006 “Clariant meets Investors,” Basel November 29-30, 2006 Merrill Lynch Conference, London February 20, 2007 Full Year 2006 Results April 2, 2007 Annual General Meeting, Basel First Half Results 2006 Sli
Slide 25: 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 26: Lower growth momentum in Second Quarter 2006
Lower growth momentum in Second Quarter 2006 Backup Information 2nd Quarter 2006 versus 2nd Quarter 2005* +2% +4% 2% Divestments** +2% +0% +2% 0% Local currency growth 2% Currencies Volume Price Organic growth Currencies Sales in CHF & Mix First Half Results 2006 * Continued operations Slide 26 **Di
Slide 27: Divisional sales and margins – Second Quarter 2006
Divisional sales and margins – Second Quarter 2006 Backup Information 2nd Quarter Sales EBITDA Margin in %** % Organic % LC CHF mn Growth* 2006 2005*** Textile, Leather & Paper Chemicals 591 +4 +4 10.3 10.5 Pigments & Additives 517 +3 +3 16.4 14.7 Masterbatches 319 +8 +8 11.6 9.7 Functional Chemical
Slide 28: Top 5 products in percentage of total raw material costs
Top 5 products in percentage of total raw material costs Backup Information Ranking Product 1 Ethylene & Ethylenoxide Group 2 Vinylacetate Total ~17% 3 Polyethylene 4 Titanium Dioxide 5 Acrylates First Half Results 2006 Slide 28
Slide 29: 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 mn CHF First Half Results 2006 Slide 29 These distributions represent a
Slide 30: 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 First Half Results 2006 Slide 30
Slide 31: 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