In the first quarter, local currency sales growth was strong in Europe at 12 %, Asia at 11 % and the Middle East & Africa at 7 %, while North America grew by 11 % driven by acquisitions. The growth in Asia was supported by China and Southeast Asia. In Latin America, demand declined by 5 % in local currency against a strong comparable base and as a result of the weaker economic environment mainly in Brazil.
Care Chemicals and Plastics & Coatings continued their robust growth trends. Care Chemicals sales rose by 9 % in local currency to CHF 440 million supported by growth in both the Consumer Care and the Industrial Applications businesses. Sales in Plastics & Coatings increased by 6 % in local currency to CHF 673 million with a particularly strong regional development in Europe.
Natural Resources sales grew by 17 % in local currency and reached CHF 347 million, bolstered by acquisitions. In the difficult industry environment, the underlying Oil and Mining Services sales were slightly negative, but were helped by acquisitions. Functional Minerals continued its solid growth development. Sales in Catalysis were up by 2 % in local currency to CHF 142 million with a soft demand recovery in the Asian and European markets.
The EBITDA before exceptional items significantly increased by 10 % in local currency and reached CHF 250 million, compared to CHF 229 million in the previous year. This absolute profitability improvement was driven by all Business Areas.
As a result, the corresponding EBITDA margin before exceptional items increased to 15.6 % versus the previous year’s level of 15.5 %. All Business Areas delivered EBITDA margins in-line with expectations. Most Business Areas matched a strong previous year despite the lower contribution from the seasonal Refinery and Aviation businesses due to the milder winter.
Clariant expects the uncertain environment, characterised by a high volatility in commodity prices, currencies as well as political uncertainties, to continue. In emerging markets, we anticipate the economic environment to remain challenging and volatile; we expect moderate growth in the United States, while growth in Europe is expected to remain stable.
For 2017, in spite of a continued challenging economic environment, Clariant is confident to be able to achieve growth in local currency, as well as progression in operating cash flow, absolute EBITDA and EBITDA margin before exceptional items.
Clariant confirms its mid-term target of reaching a position in the top tier of the specialty chemicals industry. This corresponds to an EBITDA margin before exceptional items in the range of 16 % to 19 % and a return on invested capital (ROIC) above the peer group average.