Nine Months / Third Quarter 2020
29 OCTOBER 2020
2 Nine Months / Third Quarter 2020 29 October 2020
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, 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.
3 Nine Months / Third Quarter 2020 29 October 2020
First Nine Months & Third Quarter 2020 - Highlights
9M 2020 vs. 9M 2019, figures from continuing operationsQ3 2020 vs. Q3 2019, figures from continuing operations
SALES | 2 838 | - 6 % | SALES | 893 | - 7 % | ||||
in CHF m | in LC* y-o-y | in CHF m | in LC* y-o-y | ||||||
+ 66 %** 14.8 % | 127 | - 16 % | 14.2 % | ||||||
EBITDA | 419 | EBITDA | |||||||
in CHF m | in CHF y-o-y | margin | in CHF m | in CHF y-o-y | margin | ||||
446 | - 15 % | 15.7 % | 137 | - 19 % | 15.3 % | ||||
EBITDA | EBITDA | ||||||||
before exceptional items | before exceptional items | ||||||||
in CHF m | in CHF y-o-y | margin | in CHF m | in CHF y-o-y | margin |
Profitability preserved with EBITDA margin at 14.8 % in 2020 at 2019 levels (7.7 % reported incl. CHF 231m provision) after 9 months
despite 6 % LC* sales decline in a difficult economic environment
*in local currency **incl. CHF 231 million provision in Q2 2019 for a competition law investigation by the European Commission
4 Nine Months / Third Quarter 2020 29 October 2020
Sales Development & Mix
All figures continuing operations
-
9M 2020 sales declined by 6 % in LC* and by
13 % in Swiss francs due to unfavorable currency developments of - 7 % - Weaker volume development in all Business Areas primarily due to continued softer demand environment amid the COVID-19pandemic while price levels could be defended
- As expected, Q3 2020 was the lowest sales quarter in nine months with a decline of
7 % in LC*, resulting from lower volume demand despite good price management - Resilient sales development in Care Chemicals and Catalysis but softer sales in Natural
Resources
9M 2020 SALES
in CHF m
3 272 | - 8 % | ||||
+ 2 % | + 0 % | - 7 % | |||
2 838 | |||||
9M 2019 | Volume | Price | M&A | FX | 9M 2020 |
Q3 2020 SALES
in CHF m
1 043 - 10 %
+ 3 % + 0 % - 7 %
893
Q3 2019 Volume | Price | M&A | FX | Q3 2020 |
*in local currency
5 Nine Months / Third Quarter 2020 29 October 2020
Sales Distribution by Region
All figures continuing operations
− In 9M 2020, sales in Asia improved in LC*, with |
China and India reporting strong growth; sales |
in Latin America also increased in LC* |
Emerging markets
Mature markets
9M 2020 SALES CHF 2 838 m
in CHF m
− | Sales in North America, Europe and the Middle |
East & Africa softened due to demand declines | |
in most Business Areas | |
− | In Q3 2020, sales in Asia rose in LC*, |
ASIA-PACIFIC 804 / + 2 %*
China 292 / + 10 %*
MEA
213 / - 5 %*
LATIN AMERICA 351 / + 7 %*
Brazil 142 / + 6 %*
EUROPE 949 / - 12 %*
Germany 316 / - 16 %*
NORTH AMERICA 521 / - 14 %*
underpinned by very strong growth in |
China and India |
Q3 2020 SALES CHF 893 m
in CHF m
− | Sales in Latin America decreased slightly, |
followed by Europe and Middle East & Africa | |
− | More notable decrease in North America |
ascribable to lower volumes in Natural Resources |
*in local currency
ASIA-PACIFIC 278 / + 7 %*
China 104 / + 27 %*
MEA
74 / - 12 %*
LATIN AMERICA 108 / - 2 %*
Brazil 44 / + 1 %*
EUROPE 297 / - 9 %*
Germany 95 / - 16 %*
NORTH AMERICA 136 / - 24 %*
6 Nine Months / Third Quarter 2020 29 October 2020
Care Chemicals
- 9M 2020 sales decreased by 5 % in LC* due to lower Industrial Applications demand amid COVID-19,while Consumer Care sales rose, underpinned by Personal Care and Crop Solutions growth
- 9M 2020 EBITDA margin increased to 18.0 % due to stringent margin and cost management as well as a more attractive product mix with a higher proportion of growth from Consumer Care
- Q3 2020 Care Chemicals sales declined only 1 % in LC* as a result of growth in Consumer Care, albeit softer than in Q2, and sequentially improved Industrial Applications sales
- Q3 2020 EBITDA margin rose to 21.8 % due to performance measures and more favorable product mix
9M 2020 | 9M 2019 | % CHF | % LC* | |
Sales in CHF m | 1 064 | 1 212 | - 12 % | - 5 % |
EBITDA in CHF m | 192 | 212 | - 9 % | |
EBITDA margin | 18.0 % | 17.5 % | ||
EBITDA b.e.i.** in CHF m | 196 | 215 | - 9 % | |
EBITDA b.e.i.** margin | 18.4 % | 17.7 % | ||
Q3 2020 | Q3 2019 | % CHF | % LC* | |
Sales in CHF m | 330 | 362 | - 9 % | - 1 % |
EBITDA in CHF m | 72 | 62 | 16 % | |
EBITDA margin | 21.8 % | 17.1 % | ||
EBITDA b.e.i.** in CHF m | 63 | 61 | 3 % | |
EBITDA b.e.i.** margin | 19.1 % | 16.9 % | ||
*in local currency **before exceptional items
7 Nine Months / Third Quarter 2020 29 October 2020
Catalysis
- 9M 2020 sales declined by 3 % in LC* against a strong comparison base; Petrochemicals sales development outpaced Syngas and Specialty Catalysts
- 9M 2020 EBITDA margin weakened to 18.4 % due to the efficiency program provision, lower volumes and a less favorable product mix in Q1 2020; underlying EBITDA margin was closer to previous year levels
- Q3 2020 sales softened only 1 % in LC* compared to a particularly strong previous year
- Q3 2020 EBITDA margin increased to 20.3 % due to cost mitigation and efficiency improvement
9M 2020 | 9M 2019 | % CHF | % LC* | |
Sales in CHF m | 599 | 659 | - 9 % | - 3 % |
EBITDA in CHF m | 110 | 128 | - 14 % | |
EBITDA margin | 18.4 % | 19.4 % | ||
EBITDA b.e.i.** in CHF m | 118 | 133 | - 11 % | |
EBITDA b.e.i.** margin | 19.7 % | 20.2 % | ||
Q3 2020 | Q3 2019 | % CHF | % LC* | |
Sales in CHF m | 207 | 227 | - 9 % | - 1 % |
EBITDA in CHF m | 42 | 44 | - 5 % | |
EBITDA margin | 20.3 % | 19.4 % | ||
EBITDA b.e.i.** in CHF m | 43 | 45 | - 4 % | |
EBITDA b.e.i.** margin | 20.8 % | 19.8 % | ||
*in local currency **before exceptional items
8 Nine Months / Third Quarter 2020 29 October 2020
Natural Resources
- 9M 2020 sales decreased by 8 % in LC*
- Sales in Oil and Mining Services (OMS) hampered by lower oil production due to weakened demand. Oil Services sales decreased with stable, but weakening, Mining Solutions sales
- Functional Minerals sales declined due to the weak Foundry business, while Additives sales decreased due to the weak fibers, coatings and automotive sectors
- 9M 2020 EBITDA margin decreased to 13.6 % Excluding the efficiency program provision in Q2 2020, the underlying EBITDA margin remained largely unchanged due to stringent cost management in all Business Units
- Q3 2020 sales declined 14 % in LC* due to continued feeble demand in all three Business Units amid COVID-19- esp. in oil, which was amplified by hurricanes in the Gulf of Mexico
- Q3 2020 EBITDA margin fell to 12.4 % due to lower volumes resulting from the weaker demand, esp. in oil
9M 2020 | 9M 2019 | % CHF | % LC* | |
Sales in CHF m | 1 175 | 1 401 | - 16 % | - 8 % |
EBITDA in CHF m | 160 | 219 | - 27 % | |
EBITDA margin | 13.6 % | 15.6 % | ||
EBITDA b.e.i.** in CHF m | 183 | 221 | - 17 % | |
EBITDA b.e.i.** margin | 15.6 % | 15.8 % | ||
Q3 2020 | Q3 2019 | % CHF | % LC* | |
Sales in CHF m | 356 | 454 | - 22 % | - 14 % |
EBITDA in CHF m | 44 | 71 | - 38 % | |
EBITDA margin | 12.4 % | 15.6 % | ||
EBITDA b.e.i.** in CHF m | 45 | 72 | - 38 % | |
EBITDA b.e.i.** margin | 12.6 % | 15.9 % | ||
*in local currency **before exceptional items
9 Nine Months / Third Quarter 2020 29 October 2020
Nine Months 2020 - EBITDA Development
All figures continuing operations
9M EBITDA / margin
in CHF m / in % of sales
14.8 % | 14.8 % |
484 | |
231* | |
7.7 %** | |
253 | 419 |
9M 2019 | 9M 2020 |
EBITDA | EBITDA margin | |
9M EBITDA by Business Area
in % of total Business Areas
CATALYSIS 24 %
-
9M 2020 EBITDA declined to CHF 419 m compared to an EBITDA of CHF 484 m in
9M 2019 (excluding the one-off CHF 231 m provision booked in the second quarter of 2019) due to volume reduction and currency effects - The corresponding EBITDA margin of 14.8 % was successfully defended versus 14.8 % in 2019 (7.7 % reported) despite the negative
COVID-19pandemic-related impact, on the back of the stringent execution of performance measures
CARE CHEMICALS | NATURAL RESOURCES | |
41 % | 35 % | |
*CHF 231 million provision for a competition law investigation by the European Commission **including the above-mentioned provision of CHF 231 million
10 Nine Months / Third Quarter 2020 29 October 2020
Third Quarter 2020 - EBITDA Development
All figures continuing operations
Q3 EBITDA / margin
in CHF m / in % of sales
14.5 % | 14.2 % |
151 | |
127 | |
Q3 2019 | Q3 2020 |
EBITDA | EBITDA margin | |
Q3 EBITDA by Business Area
in % of total Business Areas
NATURAL RESOURCES
CATALYSIS28 % 27 %
CARE CHEMICALS 45 %
- Q3 2020 EBITDA declined to CHF 127 m from CHF 151 m in Q3 2019
- The corresponding EBITDA margin declined to 14.2 % from 14.5 %
- Profitability advanced in both Care Chemicals and Catalysis due to more favorable product mixes
- Natural Resources margin reduction attributable to lower volumes amid COVID-19 and in particular the oversupply in the oil market
*CHF 231 million provision for a competition law investigation by the European Commission
Outlook
12 Nine Months / Third Quarter 2020 29 October 2020
Continued, but slightly less negative COVID-19 impact in Q4 while performance measures and the transformation program are progressed
- Sales declined by 6 % in LC* in 9M 2020 impacted by the weaker demand environment as a result of the COVID-19 pandemic, decline in oil demand and a weak winter
− EBITDA margin preserved at 14.8 % in 9M 2020 at 2019 level (7.7 % reported**) due to the specialty character of the portfolio and continued stringent cost and margin management
- Measures to minimize COVID-19 impact are fully in place as the Group continues to ensure the safety of our people and business continuity to our customers while executing cash and cost programs
- Clariant anticipates a continued, but slightly less negative impact on sales and profitability from the COVID-19 pandemic in Q4 2020 versus Q3 2020
- Clariant continues to maintain stringent cost and cash management measures in addition to the resumption of its efficiency program leading to a cost-basereduction in excess of CHF 50 m - this will demonstrate resilience in 2021 and will underpin Clariant's progress to its mid-termtargets
- Clariant continues its transformation program with the successful completion of the sale of Masterbatches in July 2020, by relaunching the Pigments divestment process and preparing the rightsizing of the organization
*in local currency ** 7.7 % reported, incl. CHF 231 million provision in Q2 2019 for a competition law investigation by the European Commission
Back-up Slides
14 Nine Months / Third Quarter 2020 29 October 2020
A More Focused, High Value Specialty Portfolio Continuing Operations:
Sales growth | 5 - 7 % |
expectation p.a. | |
EBITDA | 19 - 21 % |
margin ambition | |
CARE CHEMICALS
BA Care Chemicals comprises the BU Industrial & Consumer Specialties (ICS), which includes Consumer Care, Industrial Applications, Base Products, Food Ingredients and Encapsulation Technologies. These businesses demonstrate a clear focus on highly attractive, high-margin, and low- cyclicality segments. The BA follows a lifestyle-driven megatrend and strengthens Clariant's position as a supplier of green and sustainable products.
Sales growth | 6 - 9 % |
expectation p.a. | |
EBITDA | 26 - 30 % |
margin ambition | |
CATALYSIS
BA Catalysis comprises the BU Catalysts and the Business Line Biofuels & Derivatives. It develops, manufactures, and sells a wide range of catalyst products for the chemical and fuel industries, which contribute significantly to value creation in our customers' operations, ensuring that finite raw materials and energy are used efficiently. In addition, Catalysis is at the forefront of new market developments such as the commercialization and licensing of cellulosic ethanol technology.
Sales growth | 5 - 7 % |
expectation p.a. | |
EBITDA | 18 - 20 % |
margin ambition | |
NATURAL RESOURCES
BA Natural Resources comprises the BUs Oil and Mining Services, Functional Minerals and since July 2019, also Additives. It is characterized by high growth and low cyclicality as well as a strong megatrend orientation. Main drivers are the rising demand for high value-added specialty chemicals used in the oil, mining, food and packaging industries and the increased consumption of oil, gas and base metals, driven by the fast-growing economies. Additives provides highly customized products, technologies and applications mainly for the plastic and polymer as well as the electronics industries.
15 Nine Months / Third Quarter 2020 29 October 2020
Discontinued Operations (Masterbatches and Pigments)
- In 9M 2020, sales decreased by 25 % in LC* and 31 % in Swiss francs
- On a like-for-likebasis (excl. Healthcare Packaging in 9M 2019 and Masterbatches in Q3 2019), 9M 2020 sales weakened by 4 % in LC*
- In 9M 2020, the EBITDA was positively impacted by the gain on the disposal of the Masterbatches business in Q3 2020
- In Q3 2020, Clariant successfully completed the sale of Masterbatches and shared its success with shareholders via the distribution of an extraordinary dividend
9M 2020 | 9M 2019 | % CHF | % LC* | |
Sales in CHF m | 1 130 | 1 637 | - 31 % | - 25 % |
EBITDA in CHF m | 829 | 115 | n.m. | |
EBITDA margin | n.m. | 7.0 % | ||
EBITDA b.e.i.** in CHF m | 128 | 176 | - 27 % | |
EBITDA b.e.i.** margin | 11.3 % | 10.8 % | ||
Q3 2020 | Q3 2019 | % CHF | % LC* | |
Sales in CHF m | 189 | 528 | n.m. | n.m. |
EBITDA in CHF m | 762 | 24 | n.m. | |
EBITDA margin | n.m. | 4.5 % | ||
EBITDA b.e.i.** in CHF m | 11 | 59 | n.m. | |
EBITDA b.e.i.** margin | 5.8 % | 11.2 % | ||
On 1 July 2020, Clariant completed the sale of its entire Masterbatches business
*in local currency **before exceptional items
16 Nine Months / Third Quarter 2020 29 October 2020
Nine Months 2020 - Sales and EBITDA by Business Area
Nine Months 2020 | Sales to 3rd parties | EBITDA | |||||
in CHF m | 2020 | 2019 | % LC* | 2020*** | 2019 | % CHF | |
Care Chemicals | 1 064 | 1 212 | - 5 % | 192 | 212 | - 9 % | |
margin | 18.0 % | 17.5 % | |||||
Catalysis | 599 | 659 | - 3 % | 110 | 128 | - 14 % | |
margin | 18.4 % | 19.4 % | |||||
Natural Resources | 1 175 | 1 401 | - 8 % | 160 | 219 | - 27 % | |
margin | 13.6 % | 15.6 % | |||||
Business Areas Total | 2 838 | 3 272 | - 6 % | 462 | 559 | ||
Corporate | - | - | - 43 | - 75 | |||
Total Continuing Operations | 2 838 | 3 272 | - 6 % | 419 | 484 | - 13 % | |
margin | 14.8 % | 14.8 % | |||||
Provision** | - 231 | ||||||
Total Continuing | 2 838 | 3 272 | 419 | 253 | 66 % | ||
margin | 14.8 % | 7.7 % | |||||
Discontinued | 1 130 | 1 637 | - 25 % | 829 | 115 | n.m. | |
Total Group | 3 968 | 4 909 | - 12 % | 1 248 | 368 | n.m. | |
*in local currency **CHF 231 million provision for a competition law investigation by the European Commission (EC) ***2020 EBITDA figures include a total of CHF 55 million reversal for a competition law investigation by the EC (in Corporate) and CHF 58 million provision for the efficiency program (CHF 13 million to Care Chemicals, CHF 5 million to Catalysis, CHF 21 million to Natural Resources and CHF 19 million to Corporate) in the second quarter
17 Nine Months / Third Quarter 2020 29 October 2020
Full Year 2019 - Sales and EBITDA by Business Area
Full Year 2019 | Sales to 3rd parties | EBITDA | |||||
in CHF m | 2019 | 2018 | % LC* | 2019 | 2018 | % CHF | |
Care Chemicals | 1 600 | 1 665 | - 1 % | 282 | 314 | - 10 % | |
margin | 17.6 % | 18.9 % | |||||
Catalysis | 925 | 861 | + 9 % | 212 | 185 | + 15 % | |
margin | 22.9 % | 21.5 % | |||||
Natural Resources | 1 874 | 1 878 | + 4 % | 305 | 271 | + 13 % | |
margin | 16.3 % | 14.4 % | |||||
Business Areas Total | 4 399 | 4 404 | + 3 % | 799 | 770 | ||
Corporate | - | - | - 107 | - 163 | |||
Total Continuing Operations | 692 | 607 | + 14 % | ||||
margin | 15.7 % | 13.8 % | |||||
Provision** | - 231 | ||||||
Total Continuing | 4 399 | 4 404 | + 3 % | 461 | 607 | - 24 % | |
margin | 10.5 % | 13.8 % | |||||
Discontinued | 2 127 | 2 219 | - 2 % | 158 | 264 | - 40 % | |
Total Group | 6 526 | 6 623 | + 1 % | 619 | 871 | - 29 % | |
*in local currency **CHF 231 million provision for a competition law investigation by the European Commission
18 Nine Months / Third Quarter 2020 29 October 2020
Update on COVID-19 mitigation measures
- Safety of our employees - resurgence of COVID-19 triggered Clariant's GEM organization to return to stricter rules on socialdistancing, home office arrangements and travel bans similar to the Q2 2020 lockdown phase
- Support to our communities and stakeholders - distribution of face masks to all employees; production of disinfectants in Gendorf, Germany
- Business continuity to our customers- only minimaldisruption caused by temporary production site closures while maintaining a close collaboration withcustomers and key suppliers
- Performance improvement - ongoing centrallyrun programsto optimize cash and reduce cost
- Working capitaloptimization, especially inventory and close creditcontrol
• Spend avoidance, travel reduction and operationalflexibilization
• Capex reduction of non-strategic and non-safety-related projects
Resumption of efficiency program- reduction of approx. 600 positions for approx. CHF 50 m savings in continuing operations over the next two years - and the preparation of a rightsizing program
Based on a strong balance sheet and financial flexibility
19 Nine Months / Third Quarter 2020 29 October 2020
Calendar of Upcoming Corporate Events
11 February 2021 | Full Year 2020 Reporting |
07 April 2021 | Annual General Meeting |
20 Nine Months / Third Quarter 2020 29 October 2020
IR Contacts
Maria Ivek | Phone: +41 61 469 63 73 |
Senior Investor Relations Officer | Email:investor-relations@clariant.com |
Alexander Kamb | |
Investor Relations Officer |
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Clariant AG published this content on 29 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2020 16:49:01 UTC