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Clariant to form separate TLP business unit

08 May '09
5 min read

In the short term, Clariant will focus its restructuring efforts on the unprofitable divisions. The Pigments & Additives Division will continue to implement cost saving measures and optimize production in order to adjust its capacity to the lower demand. In order to sustainably improve the operating performance of the Textile, Leather & Paper Chemicals Division, the three Business Units will be separated by the end of the year. This will enhance the operational and strategic flexibility to tackle the performance issues according to the individual needs of the particular Business Unit.

In the first quarter, restructuring costs amounted to CHF 51 million compared to CHF 23 million in the previous year. Since the beginning of the year, job positions have been reduced by roughly 540. Personnel costs excluding currency effects decreased by 8%.

The Group recorded a net loss of CHF 91 million compared to a net income of CHF 41 million in the previous year. The better financial result, due to a beneficial foreign exchange rate development, mitigated the negative effect from the lower operating income on the net result.

Operating cash flow reached CHF 156 million compared to CHF -6 million in the first quarter of the previous year. A stringent focus on inventory reduction and trade receivables were the main drivers of the favorable cash flow development. The cash position of the group improved to CHF 438 million from CHF 356 million.

Clariant further strengthened its balance sheet by reducing net debt by CHF 73 million to CHF 1.14 billion since year end 2008. The company has no refinancing needs before mid 2011.

Outlook
Currently there is no evidence that the global economy will recover soon from the depressed levels seen in recent months. However, some markets stabilized during the first quarter. The first signs of a partial demand improvement were noted in some Asian and Latin American countries. Based on this scenario Clariant anticipates a continuing weak development in sales during the coming months.

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Clariant International Ltd

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