Clariant, a world leader in specialty chemicals, announced first quarter sales of CHF 1.945 billion, compared to CHF 1.717 billion in the previous-year period. Sales grew 18% in local currencies and 13% in Swiss francs, mainly driven by the acquisition of Süd-Chemie. On a like-for-like basis, sales declined 2% in local currencies year-on-year.
The first quarter was a continuation of the trend seen in the fourth quarter of 2011. Sequentially, Catalysis & Energy weakened as it entered its low season while the seasonally strong businesses like de-icing and refinery had a weak performance due to unfavorable weather conditions.
This was compensated by a solid growth in the noncyclical Business Units and a pick-up in demand, particularly in Masterbatches, towards the end of the quarter.
In a year-on-year comparison, however, the quarter was weaker due to economic headwinds, an unfavorable currency development and the absence of restocking activities. In this environment, ongoing robust demand was observed in the non-cyclical Additives, Catalysis & Energy, Functional Materials, Industrial & Consumer Specialties, and Oil & Mining Services Business Units, contributing around 50% to total sales and 60% to EBITDA.
CEO Hariolf Kottmann commented: “As expected, Clariant had a soft start into the year as the global economy stabilized. While the non-cyclical parts of the portfolio continued to perform well, the more cyclical businesses faced ongoing challenges in the current uncertain environment, especially in Europe.
“This is reflected in lower margins for the Group compared to an extraordinarily strong quarter one year ago. Going forward, we anticipate a gradual improvement in business conditions throughout the remainder of the year, which combined with further efficiency gains, will lead to an improved performance in the second half-year.”
Oil & Mining Services achieved the highest growth with local currency sales up in the 20 percent range. Sales in the other non-cyclical BUs grew more moderately. Due to a mild winter in North America and a cold but dry winter in Europe, the seasonal de-icing and refinery businesses recorded low demand.
Although seasonally weaker compared to the third and fourth quarter, Catalysis & Energy achieved a very strong order intake above previous years in the first three months, confirming ongoing strength in this business. Business activity in the mature BUs Textile Chemicals, Paper Specialties, Leather Services, and Emulsions Detergents & Intermediates remained subdued.
All regions showed double-digit growth in local currencies with the exception of Europe which was heavily impacted by the euro crisis, mainly in Southern areas.
The double-digit increase in sales was the result of a 14% volume increase and 4% higher sales prices year-on-year. On a comparable basis, i.e. excluding acquisitions, volumes were 6% lower, reflecting both weaker demand in some Business Units and a deliberate loss of less profitable businesses. Compared to the first quarter 2011, the negative effect from currency movements softened somewhat but still impacted the top-line by 5%.