Home / Knowledge / News / Textiles / Clariant sales drop; to optimize Resende textile plant
Clariant sales drop; to optimize Resende textile plant
16
Feb '10
Clariant announced sales of CHF 6.614 billion in the full-year 2009, compared to CHF 8.071 billion in 2008. This represents a decline of 18% in Swiss francs or 14% in local currency.

The significant drop in sales reflected the severe economic crisis that affected all businesses across all regions. At the beginning of the year, sales were severely impacted by lower demand levels, resulting in significant capacity underutilization and leading to a depressed gross margin in the first quarter.

As the year progressed, capacity utilizations rose as sales volumes improved quarter-by-quarter, therefore reducing capacity underutilization costs. In addition, the company took decisive measures to address production overcapacity such as temporary shutdowns, short time work or involuntary vacation. Through strong price management, Clariant was able to maintain sales prices at 2008 levels, while on the other hand raw material prices were lower. As a result, the gross margin for the full year was 28.2%, only slightly lower compared to the 2008 margin of 28.7%.

In 2009, Clariant focused on the reduction of Sales, General & Administration (SG&A) costs. In absolute terms, SG&A costs decreased to CHF 1.47 billion from CHF 1.64 billion in the previous year. The SG&A cost in percentage of sales increased to 22.2% from 20.3% as a result of lower sales. Consequently the operating income (EBIT) before exceptional items reached CHF 270 million compared to CHF 530 million in the previous year leading to an EBIT margin of 4.1% compared to 6.6% in 2008. Throughout 2009 the operating income before exceptional items improved quarter-by-quarter.

All divisions saw a slight recovery in demand in the second half of the year, although to varying degrees. Based on their decisive restructuring and cost cutting measures, they all contributed positively to the operational income before exceptional items.

Restructuring and impairment costs amounted to CHF 298 million, mainly related to the first phase of site closures within the global asset network optimization program (GANO), and a reduction in headcount. The number of job positions was reduced to 17,536 from 20,102 at year-end 2008. The combination of the restructuring costs and the lower operating income led to a net loss of CHF 194 million compared to a net loss of CHF 37 million in the previous year.

Cash flow from operations amounted to CHF 757 million. This was largely due to the stringent focus on net working capital – mainly inventory reduction and accounts receivable management. In the second half of the year, the progressive improvement of operating income before exceptionals increasingly contributed to the strong cash generation.

Clariant significantly strengthened its balance sheet by increasing its cash position to CHF 1,140 million compared to CHF 356 million in 2008. This included the proceeds of the CHF 300 million convertible bond launched in July. At the same time, net debt was reduced to CHF 545 million from CHF 1,209 million at the end of 2008. The company's gearing – net debt divided by equity – was at 29% by the end of 2009, significantly lower than the 61% at the end of 2008.

Must ReadView All

Apparel/Garments | On 27th Apr 2017

Boohoo's revenue increases 51% to reach £294.6 mn

Fashion e-commerce marketplace Boohoo has recorded a 51 per cent...

Apparel/Garments | On 27th Apr 2017

Amazon catching up with Flipkart in India: RedSeer

Online marketplace Amazon India has caught up with its biggest rival...

Textiles | On 27th Apr 2017

Seven new organisations join ZDHC Programme

The Zero Discharge of Hazardous Chemicals (ZDHC) Programme from...

Interviews View All

Amrit Sethia
SOIE

‘The intimatewear category in India is slowly becoming trend-sensitive.’

Priyanka
Studio Priyanka Rajiv

‘To reinvent the age-old tradition of embroidery to suit demographics and...

Siddharth Biyani
Mangalam Industries Pvt Ltd

‘The manufacturing sector is improving day-by-day, becoming better in...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
April 2017

April 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search