Clariant Ag · SIX:CLN

Clariant — Helvea Swiss Equities Conference 2010

54 slides from Clariant's conference presentation, Jan 14, 2010

  1. Slide 1: Helvea Swiss Equities Conference 2010

    Public Bad Ragaz, 14 January 2010 Helvea Swiss Equities Conference 2010 Bad Ragaz, 14 January Hariolf Kottmann, CEO

  2. Slide 2: Agenda

    Agenda Review on nine months / third quarter results Business review third quarter Strategy update Outlook Public Helvea, Swiss Equities Conference 2010, Bad Ragaz, 14 January 2010 (Copyright Clariant. All rights reserved.) Slide 2 / 54

  3. Slide 3: Nine months 2009 – financial highlights

    Nine months 2009 – financial highlights „ Sales down 18% in local currencies and 22% in CHF „ Demand bottomed out in the second quarter, modest recovery in the third quarter „ Quarter-on-quarter improvement in EBIT before exceptional items: Q1: CHF –13 million; Q2: CHF 69 million; Q3: CHF 107 millio

  4. Slide 4: Resilience in Latin America – Europe and the United States stabilizing

    Resilience in Latin America – Europe and the United States stabilizing Q3/09 Q3/08 Sales growth in local currencies –14% +5% „ Sales mix: Asia / Australia Total sales Q3/09: CHF 1 691 million – Volume –11% Africa 461 – Price –3% Europe – Acq./div. 0% 726 -8% – Currency –5% -20% including China 102 +

  5. Slide 5: Idle facility costs and inventory devaluation effect on gross margin further reduced

    Idle facility costs and inventory devaluation effect on gross margin further reduced Q1/09: –6.3% Q3/09 Q3/08 33.5% –2.4% Q1/09: –3.6% Q2/09: –3.9% –1.0% Q2/09: –1.2% 30.1% +3.4% 29.4% 28.1% –2.1% Gross margin before inventory Idle facility Inventory Gross margin valuation and capacity costs devalua

  6. Slide 6: Increased focus on sales prices as raw material costs rise

    Increased focus on sales prices as raw material costs rise „ Raw material costs were 16% lower 15% Raw material costs change, quarter-on-quarter compared to Q3 2008, but 1% higher 10% compared to Q2 2009 5% 0% „ Continued positive contribution of lower -5% raw material costs to gross margin, but -10

  7. Slide 7: Agenda

    Agenda Review on nine months / third quarter results Business review third quarter Strategy update Outlook Public Helvea, Swiss Equities Conference 2010, Bad Ragaz, 14 January 2010 (Copyright Clariant. All rights reserved.) Slide 7 / 54

  8. Slide 8: Functional Chemicals stable sequentially, broad-based recovery in Masterbatches

    Functional Chemicals stable sequentially, broad-based recovery in Masterbatches Functional Chemicals „ Overall stable sequentially, with slightly higher volumes but lower sales prices „ Consumer-related businesses stabilizing „ Moderate recovery in the Industrial businesses from through first half–y

  9. Slide 9: Destocking ongoing in P&A, improved profitability in TLP

    Destocking ongoing in P&A, improved profitability in TLP Pigments & Additives „ Generally weak demand for pigments and additives, but recovering from trough Q2 levels (sales –30% in LC) „ No significant improvement of business conditions in Europe and North America „ Destocking in the value chain no

  10. Slide 10: Agenda

    Agenda Review on nine months / third quarter results Business review Strategy update Outlook Public Helvea, Swiss Equities Conference 2010, Bad Ragaz, 14 January 2010 (Copyright Clariant. All rights reserved.) Slide 10 / 54

  11. Slide 11: Our roadmap – three steps to build a solid platform for profitable growth

    Our roadmap – three steps to build a solid platform for profitable growth Timeline < 2009 > 2010 Restructuring Continuous Focus Restructuring Long-term growth improvement Actions Project Clariant Clariant excellence Growth & Opportunities „ Cash generation „ People Excellence „ Innovation Excellence

  12. Slide 12: 2009/10 – stringent focus on restructuring to prepare for profitable growth

    2009/10 – stringent focus on restructuring to prepare for profitable growth „ aggressive reduction of working capital to generate cash „ elimination of more than 2’000 redundant job positions in the first nine months to reduce costs and improve productivity „ new corporate structure as of 1 Jan 2010

  13. Slide 13: New organization is based on simple guiding principles and actions

    New organization is based on simple guiding principles and actions Design Principles Consequences for the setup of Business Units „ Take out the divisional management layer Accountability is key „ Eliminate matrix structure to measure people only against what they really control „ Operationally lead

  14. Slide 14: Strategic rationale for the Global Asset Network Optimization project (GANO)

    Strategic rationale for the “Global Asset Network Optimization” project (GANO) „ Clariant has production overcapacities in some product areas, not only in an economic crisis „ increasing capacity underutilization during the economic crisis, not compensated by temporary measures „ structural disadvan

  15. Slide 15: Focus on sites and plants in Europe

    Focus on sites and plants in Europe site / plant action divisions concerned Huningue / France proposed site closure Pigments & Additives, MB Pontypridd / UK proposed site closure Functional Chemicals CIVAC Cuernavaca / Mexico site closure Functional Chemicals Gendorf / Germany partial plant closure

  16. Slide 16: The first six projects will lead to structural improvement of site network

    The first six projects will lead to structural improvement of site network Under Closure Partial closure Transfers evaluation intended intended Europe North Pontypridd Frankfurt Höchst America Huningue Asia Gendorf Onsan CIVAC Latin America Public Helvea, Swiss Equities Conference 2010, Bad Ragaz, 1

  17. Slide 17: Agenda

    Agenda Review on nine months / third quarter results Business review Strategy update Outlook Public Helvea, Swiss Equities Conference 2010, Bad Ragaz, 14 January 2010 (Copyright Clariant. All rights reserved.) Slide 17 / 54

  18. Slide 18: Outlook – business conditions

    Outlook – business conditions Environment „ Global economy will recover slowly „ No sustained recovery in demand expected in 2010 „ Raw material costs to rise on slightly higher and volatile commodity prices Public Helvea, Swiss Equities Conference 2010, Bad Ragaz, 14 January 2010 (Copyright Clarian

  19. Slide 19: Outlook – Clariant

    Outlook – Clariant „ Cash generation and further cost reductions remain top priorities to: – address the unsatisfactory performance relative to peers – weather the global economic crisis – build a sustainable platform for continuous improvement and profitable growth after 2010 2009 guidance: „ Sales

  20. Slide 20: Calendar of upcoming corporate events

    Calendar of upcoming corporate events 16 February 2010 Full-Year Results 2009 29 March 2010 Annual General Meeting, Basel 29 April 2010 First Quarter Results 2010 29 July 2010 Second Quarter Results 2010 03 November 2010 Third Quarter Results 2010 Public Helvea, Swiss Equities Conference 2010, Bad R

  21. Slide 21: Backup Slides

    Backup Slides Public Helvea, Swiss Equities Conference 2010, Bad Ragaz, 14 January 2010 (Copyright Clariant. All rights reserved.) Slide 21 / 54

  22. Slide 22: Nine months – key financials

    Nine months – key financials Nine months 2009 2008 CHF million % of sales CHF million % of sales Sales 4 904 6 327 Local currency growth (LC) -18% - Organic growth rate* -18% - Acquisitions/Divestments 0% Currencies -4% Gross profit 1 359 27.7% 1 874 29.6% EBITDA before exceptionals 331 6.7% 679 10.

  23. Slide 23: Sales – nine months

    Sales – nine months 9M/09 9M/08 Sales growth in local currencies –18% +5% „ Sales mix: Asia / Australia Total sales 9M/09: CHF 4 904 million – Volume –20% Africa 1 283 – Price +2% Europe – Acq./div. 0% 2 175 -14% – Currency –4% including -24% China 259 -17% -23% including US -28% 550 including -10%

  24. Slide 24: Sales and EBITDA margins by divisions – nine months

    Sales and EBITDA margins by divisions – nine months Nine months 2009 Sales EBITDA* EBITDA Margin in %* CHF million % LC in % of Group 2009 2008 Textile, Leather & Paper Chemicals 1 217 -18% 14 4.9 8.9 Pigments & Additives 1 080 -29% 20 7.5 15.7 Masterbatches 842 -13% 20 9.6 11.2 Functional Chemicals

  25. Slide 25: Cash flow – nine months

    Cash flow – nine months Nine months 2009 2008 CHF million CHF million Net loss / income -127 170 Depreciation, amortization and impairment 203 212 Other 53 72 Payments for restructuring -131 -62 Operating cash flow before working capital changes -2 392 Changes in working capital and provisions 535 -

  26. Slide 26: Financial result – nine months

    Financial result – nine months Nine months 2009 2008 CHF million CHF million Interest income 5 11 Other financial income 2 4 Total financial income 7 15 Interest expenses -61 -64 Other financial expenses -11 -14 Currency result, net -18 -35 Total financial expenses -90 -113 Total financial result -8

  27. Slide 27: Textile, Leather & Paper Chemicals – nine months

    Textile, Leather & Paper Chemicals – nine months Nine months 2009 2008 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 1 217 1 591 -24 -18 EBITDA before exceptionals 60 4.9 141 8.9 -57 -49 Operating income before exceptionals 24 2.0 92 5.8 -74 -63 Operating income 4 0.3 58 3.6

  28. Slide 28: Pigments & Additives – nine months

    Pigments & Additives – nine months Nine months 2009 2008 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 1 080 1 578 -32 -29 EBITDA before exceptionals 81 7.5 247 15.7 -67 -65 Operating income before exceptionals 32 3.0 189 12.0 -83 -82 Operating income -3 – 167 10.6 – – Busine

  29. Slide 29: Masterbatches – nine months

    Masterbatches – nine months Nine months 2009 2008 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 842 1 020 -17 -13 EBITDA before exceptionals 81 9.6 114 11.2 -29 -22 Operating income before exceptionals 56 6.7 89 8.7 -37 -31 Operating income 25 3.0 76 7.5 -67 -63 Business tren

  30. Slide 30: Functional Chemicals – nine months

    Functional Chemicals – nine months Nine months 2009 2008 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 1 765 2 138 -17 -12 EBITDA before exceptionals 187 10.6 236 11.0 -21 -12 Operating income before exceptionals 139 7.9 185 8.7 -25 -15 Operating income 130 7.4 177 8.3 -27 -1

  31. Slide 31: Third quarter – key financials

    Third quarter – key financials Third quarter 2009 2008 CHF million % of sales CHF million % of sales Sales 1 691 2 094 Local currency growth (LC) -14% - Organic growth rate* -14% - Acquisitions/Divestments 0% Currencies -5% Gross profit 509 30.1% 615 29.4% EBITDA before exceptionals 163 9.6% 242 11.

  32. Slide 32: Sales and EBITDA margins by divisions – third quarter

    Sales and EBITDA margins by divisions – third quarter Third quarter 2009 Sales EBITDA* EBITDA Margin in %* CHF million % LC in % of Group 2009 2008 Textile, Leather & Paper Chemicals 425 -12% 19 8.7 8.3 Pigments & Additives 384 -21% 28 14.3 17.8 Masterbatches 305 -4% 19 12.1 10.9 Functional Chemical

  33. Slide 33: Cash flow – third quarter

    Cash flow – third quarter Third quarter 2009 2008 CHF million CHF million Net income 25 78 Depreciation, amortization and impairment 61 79 Other 37 6 Payments for restructuring -45 -20 Operating cash flow before working capital changes 78 143 Changes in working capital and provisions 115 4 Operating

  34. Slide 34: Financial result – third quarter

    Financial result – third quarter Third quarter 2009 2008 CHF million CHF million Interest income 1 3 Other financial income 1 3 Total financial income 2 6 Interest expenses -21 -24 Other financial expenses -5 -7 Currency result, net -4 13 Total financial expenses -30 -18 Total financial result -28 -

  35. Slide 35: Textile, Leather & Paper Chemicals

    Textile, Leather & Paper Chemicals Third quarter 2009 2008 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 425 521 -18 -12 EBITDA before exceptionals 37 8.7 43 8.3 -14 -4 Operating income before exceptionals 25 5.9 26 5.0 -4 9 Operating income 27 6.4 7 1.3 -- -- Business trends

  36. Slide 36: Pigments & Additives

    Pigments & Additives Third quarter 2009 2008 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 384 510 -25 -21 EBITDA before exceptionals 55 14.3 91 17.8 -40 -38 Operating income before exceptionals 39 10.2 71 13.9 -45 -45 Operating income 34 8.9 66 12.9 -48 -47 Business trends „

  37. Slide 37: Masterbatches

    Masterbatches Third quarter 2009 2008 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 305 338 -10 -4 EBITDA before exceptionals 37 12.1 37 10.9 0 12 Operating income before exceptionals 29 9.5 28 8.3 4 13 Operating income 10 3.3 17 5.0 -41 -36 Business trends „ Broad-based dema

  38. Slide 38: Functional Chemicals

    Functional Chemicals Third quarter 2009 2008 Change CHF million % of sales CHF million % of sales % CHF % LC Sales 577 725 -20 -15 EBITDA before exceptionals 68 11.8 84 11.6 -19 -13 Operating income before exceptionals 51 8.8 67 9.2 -24 -16 Operating income 54 9.4 66 9.1 -18 -11 Business trends „ Ov

  39. Slide 39: Ample liquidity headroom available

    Ample liquidity headroom available > CHF 2.3 bn financial CHF 995 million cash and cash headroom available at „ 995 headquarters and in the equivalents as of end Q3/09, up from countries CHF 545 million as of end Q2/09 „ Syndicated bank facility, maturing June ‘10; 400 undrawn; no intention to draw,

  40. Slide 40: Debt maturity profile as of 30 Sept. 2009

    Debt maturity profile as of 30 Sept. 2009 Liquidity headroom Maturities of financial debt Bonds & Private Placements 2500 1000 Uncommitted & other loans 800 Open undrawn 800 credit facilities 2000 889 at local affiliates Open undrawn credit facilities 600 in Switzerland 1500 200 Backstop facility, 4

  41. Slide 41: Well diversified product portfolio

    Well diversified product portfolio Divisions Textile, Leather & Paper Pigments & Additives Masterbatches Functional Chemicals Textile: 14% Leather: 5% Chemical Management Solutions: 8% Paper: 6% - oil services, mining services Coatings Business: 7% Industrial & Consumer Care: 17% - personal care, in

  42. Slide 42: Sales and cost structure – nine months

    Sales and cost structure – nine months Global sales distribution in % Global cost distribution in % Emerging Emerging CHF 0 Markets CHF 6 Markets JPY 1 20 JPY 3 17 CHF 6 USD 31 USD 24 EUR 44 EUR 50 GBP 2 GBP 2 These distributions represent an approximation to total cash in- and outflows and are clos

  43. Slide 43: Top five products in percentage of total raw material costs – nine months 2009

    Top five products in percentage of total raw material costs – nine months 2009 Ranking Product 1 Ethylene and -oxide 2 Acetic anhydride Group ~17% Total 3 Polyethylene 4 Caustic soda 5 Propylene glycol Public Helvea, Swiss Equities Conference 2010, Bad Ragaz, 14 January 2010 (Copyright Clariant. All

  44. Slide 44: New organization as of 1 January 2010

    New organization as of 1 January 2010 Executive Committee Corporate Center Business Units Business Services Group Technology Services BU Industrial & BU Paper Group Finance Consumer Group IT Services Specialties Services Specialties Group Technology Services Group HR Regional Logistics BU Pigments B

  45. Slide 45: Ten Business Units as from 1 January 2010

    Ten Business Units as from 1 January 2010 From a Divisional structure… …to a new Business Unit structure Pigments & Additives BU Pigments 22% of sales* BU Additives BU Paper Specialties Textile, Leather & Paper BU Leather Services Chemicals BU Textile Chemicals 25% of sales* BU Emulsions BU Industri

  46. Slide 46: Ten Business Units as from 1 January 2010

    Ten Business Units as from 1 January 2010 Business Unit % of group sales 2008 selected competitors Industrial & Consumer Specialties 22% BASF, Cognis, Croda, Evonik Pigments 18% BASF, DIC/SUN Masterbatches 16% Ampacet, PolyOne, Schulman Textile Chemicals 11% BASF, Dystar, Huntsman, Long Shen Oil & M

  47. Slide 47: Business Unit profiles and markets (1)

    Business Unit profiles and markets (1) Industrial & Consumer Profile: Specialities The Industrial & Consumer Specialties (ICS) Business Unit is a global leader in ethylene oxide derivatives and specialty chemicals for a large variety of applications in the consumer and industrial markets Markets: au

  48. Slide 48: Business Unit profiles and markets (2)

    Business Unit profiles and markets (2) Masterbatches Profile: The Business Unit Masterbatches is a world leader in color and additive concentrates, and technical compounds for the plastics industry Markets: automotive / consumer goods / electrical / medical / packaging / textiles and fibers Textile

  49. Slide 49: Business Unit profiles and markets (3)

    Business Unit profiles and markets (3) Oil & Mining Services Profile: The Oil & Mining Services Business Unit is a leading provider of products and services to the oil, refinery and mining industries Markets: Oil: exploration additives / upstream / production markets / pipeline / refinery additives

  50. Slide 50: Business Unit profiles and markets (4)

    Business Unit profiles and markets (4) Additives Profile: Clariant’s Additives Business Unit is a major supplier of functional effects for plastics, coatings and printing inks Markets: coatings / plastics / printing inks / specialized applications such as cosmetics, agriculture and adhesives Deterge

  51. Slide 51: Business Unit profiles and markets (5)

    Business Unit profiles and markets (5) Leather Services Profile: The Business Unit Leather Services is a leading supplier of leather chemicals and services. The BU offers chemical and technical solutions for the complete leather manufacturing process, from beamhouse to finishing Markets: automotive

  52. Slide 52: Roles of main organization units in overall setup of new corporate structure

    Roles of main organization units in overall setup of new corporate structure „ Strategically and operationally manage the Group Executive Committee (EC) „ Ensure interests of customers, employees and shareholders „ Provide leadership; ensure implementation „ Act as staff to EC and Board of Directors

  53. Slide 53: 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 Jaideep Pandya Investor Relations Officer Phone +41 (0) 61 469 67 49 Mobile +41 (0) 79 702 97 41 email jaideep.pandya@clariant.com Edith Schwab Phone +41

  54. Slide 54: 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

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