Clariant International AG
Clariant Achieves Satisfactory 1st Quarter Results
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Clariant Achieves Satisfactory 1st Quarter Results
– Sales up 6% in local currency terms, to CHF 2.206 bn
– Net profit CHF 72 mn, from a loss of CHF 8 mn in Q1 2003
– Operating margin up substantially, to 7.6%, from 5.1% last year
– Cost reductions and asset sales proceeding well
– Growth particularly strong in U.S. and Asia
– Market outlook cautiously positive; European recovery inconclusive
– Net debt reduction target lowered to below CHF 1.5 bn, from CHF 2.5 bn
Key Financial Group Figures (in CHF mn)
First Quarter 2004 % of 2003 2003 1) % of % Change
sales (reported) (like-for- sales vs. like-
like) for-like
CHF LC
Sales 2,206 2,106 2,035 +8 +6
Gross profit 730 33.1% 712 691 34.0% +6 +3
EBITDA 263 11.9% 212 198 9.7% +33 +5
EBIT before restructuring, 199 9.1% 121 111 5.5% +79 +81
impairment, disposals and
amortisation of goodwill
EBIT 167 7.6% 113 103 5.1% +62 +60
Net income/ loss 72 2 -8 – –
as per March 04 Dec 03 March 03
Net debt 2,901 2,905 3,665
Equity 1,293 1,176 947
1) The numbers for 2003 were like-for-like to account for the sales of business
activities in 2003. Sales in 2003: Cellulose Ethers of Division Functional
Chemicals and AP Chemicals, UK, of Division Life Science and Electronic
Chemicals. All activities were sold effective as per the end of 2003.
MUTTENZ, Switzerland – May 4, 2004 – Clariant posted a satisfactory result for
the first quarter of the year, recording sales of CHF 2.206 billion, up from CHF
2.035 billion a year ago, and net profit of CHF 72 million, compared with a
loss on a like-for-like basis of CHF 8 million in the same period in 2003.
The company also reported that its Transformation Program, which includes cost
cutting and asset sales, is progressing well.
Sales Up 6% in Local Currency Terms
Sales in the first quarter were 6% higher in local currency terms compared on a
like-for-like basis with the same quarter in 2003. The results in Swiss franc
terms – up 8% – were helped by positive foreign exchange trends, notably by the
stronger Euro.
On a continuing basis – which excludes sales for Electronic Materials, a
business that is in the process of being sold – sales in the first quarter
increased 5% in local currency terms, to CHF 2.086 billion, from CHF 1.945
billion a year earlier.
Operating profit grew to CHF 167 million, equating to an operating margin of
7.6%, up substantially from 5.1% on a like-for-like basis compared with the
first quarter of 2003. Tight working capital management and the overall strong
operational performance helped operating cash flow, which was CHF 104 million in
the first quarter, an increase from a negative CHF 152 million in the same
period in 2003. Net profit was CHF 72 million.
“We can be satisfied by these results because they demonstrate our ability to
increase the top line even as we cut costs across the group,” said Clariant
Chief Executive Roland Loesser. “While there is still considerably more to be
done on our Transformation Program, it is clear that the hard work started last
year is beginning to pay off.”
U.S. and Asia Particularly Strong
Sales were higher in all five divisions and in nearly all product segments.
Growth was stronger toward the latter part of the quarter, with robust demand
particularly evident in the U.S. and Asia (11% and 12% respectively, in local
currency terms). “These early signs are positive, but caution is still the order
of the day,” Mr. Loesser said. “The recovery in Europe continues to be
inconclusive.”
Transformation Program Proceeding Well
Good progress continued to be made on Clariant’s Transformation Program, which
includes short- and long-term performance improvement measures and the sales of
several businesses no longer central to the company’s strategy.
As announced in March, two manufacturing plants – in Beverley, England and
Knapsack, Germany – will be closed, resulting in the reduction of approximately
200 jobs. The measures are part of a worldwide initiative announced at the full-
year 2003 results on 24 February that will reduce 4,000 jobs by the end of 2005.
Negotiations continue positively on the sale of several businesses. The company
confirmed its overall target to raise approximately CHF 1.5 billion in gross
proceeds from the total sales, amounting to 15% to 20% of total turnover.
Newly Solid Financial Base
The successful increase of the company’s share capital – a transaction completed
on April 26th – has generated gross proceeds of CHF 920 million, leaving
Clariant in a healthy financial position.
“Our improved finances enable us to proceed with the asset sales in a steady and
calm manner,” Mr. Loesser said. “That means ensuring we get a fair price for
these businesses, which are all attractive and have excellent potential in the
hands of the right owner.”
Further details on the asset sales will be provided later in the second quarter.
The company continues to place a priority on lowering debt, announcing a new
target of reducing net debt to below CHF 1.5 billion by the end of the year,
from the previous target of CHF 2.5 billion. At the end of the first quarter,
net debt stood at CHF 2.901 billion.
“Clariant’s transformation will continue to be characterized by tight cost
control, broad-based performance improvements and structural changes to enable
us to focus on our core strengths in value-adding technology, service-driven
businesses and innovation,” Mr. Loesser said.
Hint for editors:
The full Quartely Report including this release, financial discussion, business
discussion and consolidated financial statements is available on
http://www.clariant.com/investors
CALENDAR OF CORPORATE EVENTS
August 5, 2004 First Half Year 2004 Results
November 9, 2004 Third Quarter 2004 Results
March 8, 2005 Full Year 2004 Results
April 7, 2005 AGM
YOUR CLARIANT CONTACTS
Investor Relations Tel. +41 61 469 67 48
Fax +41 61 469 67 67
Holger Schimanke Tel. +41 61 469 67 45
Daniel Leuthardt Tel. +41 61 469 67 49
Media Relations
Rainer Weihofen Tel. +41 61 469 67 42
Fax +41 61 469 69 99
end of ad-hoc-announcement (c)DGAP 04.05.2004
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WKN: 895929; ISIN: CH0012142631; Index: SMI
Listed: Amtlicher Markt in Frankfurt (General Standard); Freiverkehr in Berlin-
Bremen, Düsseldorf, München und Stuttgart; Schweizer Börse (Hauptsegment); SEAQ-
Handel in London
040700 Mai 04
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