Clariant’s 2017 half year sales rose by 9 per cent to CHF 3.13 billion ($3.20bn) compared to CHF 2.89bn ($3.04bn) the previous year, driven by higher volumes and expansion in the Catalysis and Natural Resources segment, which was lifted by the Kel-Tech and X-Chem acquisitions.
Net income also grew by 20 per cent to CHF 153 million ($160m), whilst EBITDA before exceptional items rose by 9 per cent. Meanwhile, the EBITDA margin before exceptional items increased to 15.4 per cent
Operating cash flow was CHF 116m ($121m) from CHF 208m (US$211m) at the same time 12 months ago. The company has put this down to 2016’s ‘strong comparable base’ in which it saw a shift to high-margin specialty products and made changes in its Plastics & Coatings division, where it established a separate subsidiary.
Chief executive Hariolf Kottmann said: “Clariant delivered excellent top-line growth and further expansion in profitability in the first half of the year. Our good business performance was primarily achieved by the recovery in Catalysis and the ongoing impact of the differentiated steering in Plastics & Coatings. For 2017, we are confident that we will achieve our targets, i.e. growth in local currency, progression in operating cash flow, absolute EBITDA and EBITDA margin before exceptional items in spite of a temporarily weaker cash flow in the first half.”
In separate news, the merger between Huntsman Corporation and Clariant is reported to be progressing well and the closing date remains a target for December 2017 or January 2018.
Both companies have agreed on a joint strategic direction for near- and long-term value creation based on a focus on higher growth and higher margin businesses, expansion of strong downstream presence, benefits of complementary product portfolios and breadth of reach to deliver an additional organic sales revenue growth of around two per cent a year. Synergies in excess of $400m are expected as a result of the HuntsmanClariant merged entity.
The merger brings together two strong specialty chemicals businesses with similar EBITDA margins at 17.2 per cent (including synergies). HuntsmanClariant will take advantage of its broad asset base while continuing to move downstream into specialties and more differentiated applications. Plastics & Coatings and Textile Effects will be managed for cash and turnaround while all other businesses will be managed for growth and margins.