“In the first nine months of the year, Clariant has delivered strong sales and EBITDA,” CEO Ernesto Occhiello said. “Going forward, we will focus on growth and cost awareness, while emphasizing to an even greater extent customer-specific, technologically advanced applications and enhancing operating efficiencies. In addition, the implementation of the recently announced portfolio changes will further fuel substantial profitability progression.”
Most regions contributed to the sales growth. Latin America reported the strongest growth of 13 percent in local currency. In Asia, sales rose by a robust nine percent mainly driven by China and India. Sales in North America grew by 6 percent on the heels of strong expansion during the same time period in 2017. In Europe, sales advanced by a solid four percent. Only the Middle East & Africa, the Group’s smallest geographic region, reported a slight sales decrease of three percent.
Care Chemicals and Catalysis both reported continued brisk demand momentum. Sales in Care Chemicals advanced by nine percent in local currency driven by both Consumer Care and Industrial Applications. Despite a high comparable bar, Catalysis sales climbed significantly by 12 percent in local currency with a good organic sales growth of eight percent.
Natural Resources reported seven percent higher sales in local currency which reflects the improving oil environment. In Plastics & Coatings, sales progressed by three percent in local currency despite a strong comparable base. All three Business Units contributed to this progression.
EBITDA before exceptional items rose by seven percent and reached CHF 765 million compared to CHF 717 million in the previous year. This improvement was driven by the positive development in Care Chemicals and Plastics & Coatings.
The corresponding EBITDA margin before exceptional items remained robust at 15.3 percent.
In the third quarter of 2018, sales rose by five percent in local currency to CHF 1.605 billion mainly due to price increases. Sales growth in Swiss francs was two percent given the adverse currency impact in the quarter. The strong sales progression in Care Chemicals and Natural Resources contributed most to this advancement.
Most geographic regions added to the growth. Sales in Latin America progressed by 14 percent, while North America and Europe both grew sales by five percent. Sales in Asia improved three percent in local currency year-on-year. China softened in the third quarter but continued to develop well against a strong comparable base in the third quarter of 2017. Only the smallest region, Middle East & Africa, reported a minor sales contraction of one percent.
Sales in Natural Resources climbed by 14 percent supported by a notable demand uptake in the Oil & Mining Services business and an ongoing positive development in Functional Minerals. In Care Chemicals, sales rose by eight percent in local currency while Plastics & Coatings grew sales by two percent underpinned primarily by the Pigments and Additives Business Units. Sales in Catalysis decreased by four percent against a record quarter in the same period in the previous year.
EBITDA before exceptional items rose by three percent to CHF 241 million primarily due to the strong contributions from Care Chemicals and Plastics & Coatings. The corresponding EBITDA margin before exceptional items remained at a solid 15 percent.
Clariant expects the economic environment in mature markets, which represent a high comparable base, to remain solid, albeit growing at a slower pace. Emerging markets are expected to remain broadly supportive.
For 2018, 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.
Going forward, as announced in September, Clariant expects to improve its performance as a result of further operational progression and the accelerated reshaping of its portfolio through the divestment of Pigments, standard Masterbatches and Medical Specialties as well as the creation of the new Business Area High Performance Materials.