Clariant AG

Clariant achieves 8 % sales growth in a softening economic environment - Seite 3

At 28.8 %, the gross margin improved from the 28.1 % recorded in the prior-year period. Improved capacity utilization and slightly higher sales prices more than offset a negative currency impact.

EBITDA before exceptional items from continuing operations rose 8 % in local currencies, reaching CHF 211 million in Swiss francs compared to CHF 203 million in the third quarter of 2013. This was entirely due to higher volumes that more than compensated for the positive one-time effect from the acquisition of the deep-water assets in the Gulf of Mexico one-year ago. This one-time item together with higher volumes but an unfavorable mix and a still adverse currency impact resulted in a slightly lower EBITDA margin before exceptional items of 14.0 % versus 14.1 % in the year-ago period. The unfavorable mix was mainly due to the Plastics & Coatings Business Area in which Clariant has selectively put more emphasis on volumes and cash generation.

Exceptional items including restructuring, impairment, and transaction-related costs increased to CHF 17 million from CHF 4 million one year ago. Those items were primarily related to measures to streamline operations within the Group.

Net income from continuing operations of CHF 58 million was recorded, compared to CHF 129 million in the previous year. The decrease was entirely caused by higher tax charges compared to the year-ago period and a one-time gain from the joint venture transaction with Wilmar in the previous year.

Following the normal seasonal pattern, operating cash flow turned positive in the third quarter and reached CHF 126 million compared to CHF 153 million in the third quarter of 2013. After nine months, cash flow stood at CHF 13 million compared to CHF 40 million one year ago. A strong cash generation is expected in the fourth quarter.

Net debt stood at CHF 1.608 billion and was therefore higher than the CHF 1.500 billion recorded at year-end 2013. Gearing, reflecting net financial debt in relation to equity, rose to 60 % from 54 % at the end of 2013. Compared to the end of the first half-year of 2014, net debt and gearing were slightly lower at the end of the quarter.

Outlook 2014 - Focus on performance, growth and innovation

In the last few months the optimism in the market concerning the further path of the global economy has deteriorated, mainly with regard to the outlook for Europe.

Clariant expects the business environment to remain challenging with heterogeneous global economic developments and volatile currency markets. While the general economic environment in the emerging markets is expected to remain mixed but overall favorable, moderate growth should continue in the United States. In contrast, Europe is expected to remain flat at best. Hence, Clariant will focus on profitably growing the four Business Areas, cost efficiency and strengthening innovation.