Clariant : Analyst Presentation Q3 2023 20231030 EN (2.57 MB)

Clariant agrees to acquire Lucas Meyer Cosmetics

Clariant Third Quarter / Nine Months Figures 2023

Analyst and investor presentation

30.10.2023

2 Acquisition Lucas Meyer Cosmetics and Third Quarter / Nine Months Figures 2023 30.10.2023

Disclaimer

This presentation contains certain statements that are neither reported financial results nor other historical information.

This presentation also includes forward-looking statements. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements.

Many of these risks and uncertainties relate to factors that are beyond Clariant's ability to control or estimate precisely,

such as future market conditions, geopolitical dislocation, currency fluctuations, the behavior of other market participants, the actions of governmental regulators, and other risk factors, such as: the timing and strength of new product offerings; pricing strategies of competitors;

the Company's ability to continue to receive adequate products from its vendors on acceptable terms, or at all, and to continue to obtain sufficient financing to meet its liquidity needs; and changes in the political, social, and regulatory framework in which the Company operates or in economic or technological trends or conditions, including currency fluctuations, inflation, and consumer confidence, on a global, regional, or national basis.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document.

Clariant does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of these materials.

Clariant agrees to acquire Lucas Meyer Cosmetics

4 Acquisition Lucas Meyer Cosmetics and Third Quarter / Nine Months Figures 2023 30.10.2023

Lucas Meyer Cosmetics ("LMC") - proven success story in high value consumer applications

Sizeable, pure-play cosmetic ingredients asset

Highly experienced leadership team with excellent track record

Portfolio backed by science and based on natural ingredients

Differentiated, highly innovative business model

Superior growth, profitability and cash generation

High quality	81 +	~ USD 100 m
2 900 + customers	Countries served	Sales

~ 14 years	~ 195	Direct sales
Average tenure1	Employees globally	In 9 countries

150 +	40 +	5
Products	Patent families	R&D labs

50 +	CMO	High-end brands
Innovation awards	Based production	Solution provider

~ 10 %	Highly attractive	Highly cash
Sales growth2	profitability	generative

1. Average tenure of executive leadership team
2. Sales growth CAGR 2015-2023E

5 Acquisition Lucas Meyer Cosmetics and Third Quarter / Nine Months Figures 2023 30.10.2023

Compelling rationale enhancing Clariant's specialty focus

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Fully aligned with Clariant's purpose-ledgrowth strategy - will strengthen our position as a true specialty chemical company

Highly attractive business with clear competitive edge - asset light business model with proven track record

Accelerating sustainability and innovation agenda - highly innovative business with impeccable sustainability credentials

Increasing exposure to most attractive consumer end-markets - fast-growingluxury cosmetic ingredients segment

Highly complementary businesses, underpins growth and de-risks execution - strong fit across customers, products and regions

Tangible value creation for Clariant shareholders - underpinned by ambition to grow LMC sales to ~ USD 180 m by 2028

6 Acquisition Lucas Meyer Cosmetics and Third Quarter / Nine Months Figures 2023 30.10.2023

Attractive terms proposed, secured financing and rapid path to closing

Attractive terms

Secured financing

Rapid path to closing

• Total consideration: USD 810 m (~ CHF 720 m1) on a cash-free,debt-free basis, payable in cash at closing
• EV/EBITDA multiple: 16.3x2
• EPS accretion: mid-single digit percentage accretive from year 1 onwards3
• Funding structure: fully committed acquisition bridge facility, to be refinanced swiftly after closing
• Financial leverage: expected to increase modestly to ~ 2.8x net debt/EBITDA4
• Credit rating: no change expected in credit rating (investment grade)
• Timing of closing: closing expected in first quarter of 2024
• Conditions precedent: customary closing conditions, inc. antitrust clearance
• Segment reporting: Lucas Meyer Cosmetics will be reported as part of the Business Unit Care Chemicals

1. USDCHF FX of 0.89
2. LTM August 2023; reported
3. On an adjusted basis including full run-rate synergies and excluding non-recurring,transaction-related costs
4. On completion

7 Acquisition Lucas Meyer Cosmetics and Third Quarter / Nine Months Figures 2023 30.10.2023

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Fully aligned with Clariant's purpose-led growth strategy

Purpose-led strategy

CustomerInnovative

focuschemistry

Leading in		People
sustainability		engagement

Clariant's purpose: "Greater chemistry -

between people and planet"

Attractive end markets

Sustainable technologies

Augmenting footprint

Accelerating growth

Accretive financial profile

	Value enhancing M&A
Communicated criteria	Lucas Meyer
Cosmetics
•	Attractive market position	✓
•	Focus on Consumer Care, Catalysts,
	Additives and Purification
•	Complementing Clariant's technologies	✓
•	Positive sustainability impact
•	Revenue synergies	✓
•	Product line extensions
•	New regions
•	M&A contributing ~ 0.75 % p.a. to 2025	✓
	target of 4 - 6 % growth p.a.
•	EPS accretive	✓
• Growth, profitability and cash flow enhancing

8 Acquisition Lucas Meyer Cosmetics and Third Quarter / Nine Months Figures 2023 30.10.2023

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Highly attractive business with clear competitive edge, accelerating sustainability and innovation agenda

Active ingredients

Functional ingredients

Botanicals

Delivery systems

Industry leading product portfolio

• Broad portfolio of peptides, created through synthesis of amino acids and have anti-ageing, moisturizing, firming tightening
• Largely custom-made/ specialized solutions
• Phospholipid based emulsifiers and gelling agents serving as surfactants and texturizers
• Largely custom-made/ specialized solutions
• Botanicals are plant-based extracts
• Includes natural actives and Australian Botanicals
• Inhouse raw material production & manufacturing
• Phospholipid based encapsulations enhancing active ingredients stability & release
• Offering combined with other own products & ingredients

Innovation flywheel

Sustainability

		Design safe,
Source		naturally derived		Foster circular
responsibly		& biodegradable		solutions
		ingredients

9 Acquisition Lucas Meyer Cosmetics and Third Quarter / Nine Months Figures 2023 30.10.2023

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Increasing exposure to most attractive consumer end-markets

Global cosmetic ingredients market size (in USD b)

Premium	Active and	High-end
skin and hair	functional	active and functional
care market	ingredients market	ingredients markets
~ USD 81 b	~ USD 27 b	~ USD 6 b

Market served by LMC

Natural actives

Peptides

Emulsifiers

Gelling agents

Delivery systems

Growth drivers and outlook

Consumers are increasingly seeking natural and eco friendly products across segments

Mega trends like personalization of cosmetics and increasing share of claim-based cosmetics

Essential for enhancing stability and texture in high end and mass cosmetics

Need for texture and viscosity modifiers in cosmetics and the versatility of gelling agents drive growth

Advancements in controlled release technologies increase the performance of cosmetic products and hence boost the market

~ 7 % CAGR expected between 2023-2027E

Source: Euromonitor 07/2023; Expert interviews; Customer survey; Statista; BCG analysis

10 Acquisition Lucas Meyer Cosmetics and Third Quarter / Nine Months Figures 2023 30.10.2023

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Highly complementary and synergistic businesses

Clariant Care Chemicals (2022A Sales)

Other

consumer

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Better positioning in the

• Valuable addition to our own care ingredients portfolio

• Establish market leading position in the active ingredients space

31 %

	CHF
	2,937 m
Home &	Industrial

active ingredients market

• Further strengthens overall Home & Personal Care offering

Personal Care	43 %
26 %

Lucas Meyer Cosmetics (2022A Sales)

Delivery systems

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Complementary business,

offering cross-selling

opportunities

• LMC will offer a complementary fit to our product portfolio and customer portfolio
• Value in growing together, building on Clariant's multi-year track record of integrating bolt-on acquisitions

Botanicals

• CHF 90 m1

Functional

ActiveIngredients ingredients

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Diversified investment with

increased exposure to North American market

• Will improve position in highly attractive end-markets in North America
• Access to LMC's marketing, go-to-market and new-product launch capabilities
• LMC to access Clariant's global footprint and customer base

Ambition to grow LMC sales from ~ USD 100 m to ~ USD 180 m by 2028

1 Converted at USDCHF spot rate of 0.89