“Clariant continues to consistently and successfully deliver on its strategy. With an excellent 10 percent growth in both sales and profitability in the first nine months of the year we are well on track to achieve our targets,” said CEO Hariolf Kottmann. “Our achievements are based on innovation, sustainability and on the endless commitment of our employees. Leveraging innovation throughout our portfolio is also exemplified by today’s announcement of the commercialization of bio-ethanol with the related licenses and enzymes. We expect mid double-digit million sales potential from the sunliquid cellulosic ethanol production alone, a clear illustration of our innovation competence in biotechnology. For 2017, we are confident that we will achieve our targets, i.e. growth in local currency, progression in operating cash flow, absolute EBITDA and EBITDA margin before exceptional items in spite of a temporarily weaker cash flow in the first half.”
Growth was strongest in North America and in the Middle East & Africa, where sales in both regions rose by 16 percent in local currency. In Asia, sales increased by 12 percent. Sales in Europe increased by eight percent. Latin America had a growth of 1 percent, due to the still challenging macroeconomic environment, per Clariant.
Care Chemicals and Catalysis both reflected ongoing strong expansion. Sales in Care Chemicals rose by nine percent in local currency with strong Consumer Care and Industrial Applications businesses. Catalysis sales advanced by 19 percent, with organic sales growth of 14 percent.
Natural Resources sales climbed by 18 percent, mainly influenced by the 2016 Kel-Tech and X-Chem acquisitions in North America. Organic sales in Natural Resources grew by three percent, driven by growth in Functional Minerals. In Plastics & Coatings, sales advanced by five percent with continuing expansion in all three Business Units particularly in China.
EBITDA before exceptional items climbed by 10 percent in Swiss francs and reached CHF 717 million, compared to CHF 652 million in the previous year. The enhanced profitability was primarily attributable to the upswing in Catalysis and the continuing positive development in Plastics & Coatings.
As a result, the corresponding 15.3 percent EBITDA margin before exceptional items further advanced compared to the previous year’s 15.2 %.
In the third quarter of 2017, sales growth accelerated by 12 percent in local currency to CHF 1.566 billion. Organic sales growth, excluding the impact of the acquisitions and the full consolidation of the Süd-Chemie India Pvt Ltd joint venture, was up nine percent in local currency.
From a regional perspective, sales in North America grew by 22 percent in local currency. Excluding acquisitions, North American sales improved significantly by eight percent. Sales in Asia advanced by 15 percent in local currency, in the Middle East & Africa by 25 percent and in Europe by six percent in local currency. Latin American sales increased by 3 percent.
Care Chemicals delivered a sales growth of 10 percent in local currency driven by higher volumes. Catalysis sales soared by 33 percent with 27 percent organic growth. Natural Resources sales rose by 16 percent, lifted by acquisitions while organic sales increased by 3 percent despite the one-time negative impact from tropical storm Harvey. Plastics & Coatings improved by seven percent on the back of strong Additives and Masterbatches.
EBITDA before exceptional items rose by 13 percent in Swiss francs to CHF 235 million driven by the upswing in Catalysis, the increase in Care Chemicals and the contribution from Plastics & Coatings. The EBITDA margin before exceptional items on a Group level increased accordingly to 15.0 percent from 14.9 percent in the previous year.
Clariant expects the uncertain environment, characterized by a high volatility in commodity prices, currencies as well as political uncertainties, to continue. In emerging markets, the company anticipates the economic environment to remain unchanged; we expect growth in the United States and in Europe to continue.
For 2017, in spite of a continued challenging economic environment, Clariant is confident it will 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 16-19 percent and a return on invested capital (ROIC) above the peer group average.