Clariant AG

Reshaped Clariant increases profitability in the fourth quarter - Seite 3

Full-year operating cash flow was strong with CHF 468 million compared to CHF 314 million one year ago, following the normal seasonality with a build-up in inventories in the first half of the year followed by a reduction in inventories and therefore cash flow generation in the second half-year.

Net debt stood at CHF 1.789 billion and was therefore lower compared to the CHF 1.934 billion recorded at the end of the third quarter 2012, but close to the CHF 1.740 billion reported at year-end 2011. Consequently, the gearing, reflecting net financial debt in relation to equity, improved to 59% from 64% at the end of the third quarter 2012, and was only marginally higher compared to the 58% recorded at year-end 2011.

Event Subsequent to FY 2012: Early Redemption of Convertible Bond

Clariant has decided on February 6, 2013, to early redeem the 3% Convertible Bond 2009-2014 of CHF 300 million with conversion rights into Clariant registered shares with a nominal value of CHF 3.70 based on the terms of the bond. As far as the conversion rights are exercised, Clariant will reduce its net debt and increase its equity.

Q4 2012 Performance

In the fourth quarter, Clariant reported 2% sales growth in local currencies on the back of 3% higher volumes and 1% lower prices. In Swiss francs, sales were 1% higher, at CHF 1.509 billion compared to CHF 1.491 billion a year ago. Compared to the third quarter of 2012, both sales prices and raw material costs decreased 1%. Sales growth in the fourth quarter was driven by strength in Oil & Mining Services and Catalysis & Energy with growth of 15% respectively 9%. While Functional Materials, Industrial & Consumer Specialties, Masterbatches and Pigments developed stable year-on-year, Additives was adversely impacted by the ongoing weakness in the electronics industry. At the regional level, Latin America grew double-digit in local currencies while North America and Asia/Pacific were slightly above previous-year's level. EMEA was flat with good growth in the Middle East compensating for the weakness in Europe.

The gross margin was higher year-on-year, at 29.3% compared to 27.0%^[1] in the previous-year period. This was mainly due to stringent margin management and lower idle facility costs year-on-year. The EBITDA margin before exceptional items climbed to 14.9% from 14.3% in the fourth quarter of 2011 as a result of almost stable or better margins in five of the seven Business Units.