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Operating margin improves at Clariant
Apr '08
Clariant, a world leader in specialty chemicals, posted a 3% sales growth in local currency for the first quarter 2008. Adverse currency effects resulted in a negative sales growth of 2% in CHF. Total sales amounted to CHF 2.112 billion. Clariant increased prices by 4% and was able to fully offset a 9% increase in raw material costs.

The gross margin declined slightly to 30.5% from 31.1% in the strong first quarter of 2007. Compared to the full year 2007 the gross margin improved 1.3 percentage points. The gross margin year-on-year has improved for three quarters in a row despite a steep increase of raw material costs in the same period.

Clariant reduced the number of job positions by 400 in the first quarter as part of the ongoing restructuring measures. Sales, General and Administration (SG&A) costs declined to 20.7% down from 21.8% in the first quarter of 2007.

The operating margin before exceptional improved to 7.9% from last year's 7.1%. This translates into an increased operating income before exceptional of CHF 167 million compared to CHF 152 million in the first quarter of 2007.

The net income from continuing operations declined to CHF 41 million from CHF 86 million as a result of higher restructuring costs and unfavorable currency effects. In the first quarter, foreign exchange effects had a negative impact on the operating income of CHF 36 million and another CHF 44 million on the net result.

Cash flow from operations declined to CHF -6 million from CHF 37 million in the previous year as inventories have been built up before the Easter holidays and trade payables have been reduced.

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