clariant investment story 2019 - swiss equities conference · 2020-01-09 · additive concentrates...
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Clariant Investment Story
January, 2020
January 2020
Disclaimer
This presentation contains certain statements that are neither reported financial results nor other historical information.
This presentation also includes forward-looking statements.
Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ
materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors
that are beyond Clariant’s ability to control or estimate precisely, such as future market conditions, currency fluctuations,
the behavior of other market participants, the actions of governmental regulators and other risk factors such as: the
timing and strength of new product offerings; pricing strategies of competitors; the Company's ability to continue to
receive adequate products from its vendors on acceptable terms, or at all, and to continue to obtain sufficient financing
to meet its liquidity needs; and changes in the political, social and regulatory framework in which the Company operates
or in economic or technological trends or conditions, including currency fluctuations, inflation and consumer confidence,
on a global, regional or national basis.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the
date of this document. Clariant does not undertake any obligation to publicly release any revisions to these forward-
looking statements to reflect events or circumstances after the date of these materials.
Clariant Investment Story 20202
Who We Are
January 2020
Clariant Continuing Operations at a Glance*
Clariant Investment Story 20204
OPERATING
CASH FLOW**368in CHF m
EBITDAbefore exceptional items
in CHF m
739
NET INCOME
in CHF m
213
EBITDAafter exceptional items
in CHF m
607 13.8 %margin
* Full Year 2018 Continuing Operations figures
** Pro-forma figure as Cash Flow is calculated and reported at total company level only
COUNTRIES > 50
BUSINESS
AREAS 3
EMPLOYEES ~ 12 000
SALES
in CHF m
4 404
16.8 %margin
January 2020
LATIN AMERICA
13 %
MEA
8 %
EUROPE
35 %
NORTH AMERICA
20 %
ASIA-PACIFIC
24 %
Clariant - A Focused and Innovative Specialty Chemical Company
Clariant Investment Story 20205
SALES BY REGION* SALES BY BUSINESS AREA
AND IN % OF CONTINUING OPERATIONS Total Continuing Operations sales 2018: 4 404
CARE
CHEMICALS
in CHF m
1 665 (38 %)
CATALYSIS
in CHF m
861 (19 %)
NATURAL
RESOURCES
in CHF m
1 878 (43 %)
* Full Year 2018 Continuing Operations figures
January 2020
A More Focused, High Value Specialty Portfolio
6
CATALYSIS
BA Catalysis comprises the BU Catalysts and
the Business Line Biofuels & Derivatives. It
develops, manufactures, and sells a wide range
of catalyst products for the chemical and fuel
industries which contribute significantly to value
creation in our customers’ operations, ensuring
that finite raw materials and energy are used
efficiently. In addition, Catalysis is in the forefront
of new market developments such as the
commercialization and licensing of bio-ethanol.
NATURAL RESOURCES
BA Natural Resources comprises the BUs Oil &
Mining Services, Functional Minerals and since July
2019 also Additives. It is characterized by high growth
and low cyclicality as well as a strong megatrend
orientation. Main drivers are the rising demand for high
value-added specialty chemicals used in the oil,
mining, food and packaging industries and the
increased consumption of oil, gas and base metals,
driven by the fast-growing economies. Additives
provides highly customized products, technologies and
applications mainly for the plastic and polymer as well
as the electronics industries.
CARE CHEMICALS
BA Care Chemicals comprises the BU
Industrial & Consumer Specialties (ICS)
which includes Consumer Care, Industrial
Applications, Base Products, Food
Ingredients and Encapsulation Technologies.
The BU New Business Development
encompasses Electronic Materials and
Additive Manufacturing/3D Printing. These
businesses demonstrate a clear focus on
highly attractive, high-margin, and low-
cyclicality segments. The BA follows a
lifestyle-driven megatrend and strengthens
Clariant’s position as a supplier of green and
sustainable products. * restated to include Additives
Sales growth
expectation p.a. 5 - 7 %
EBITDA
margin ambition 2021E19 - 21 %
Sales growth
expectation p.a. 6 - 9 %
EBITDA
margin ambition 2021E26 - 30 %
Sales growth
expectation p.a.* 5 - 7 %
EBITDA
margin ambition 2021E*18 - 20 %
Clariant Investment Story 2020
Continuing Operations:
January 2020
Clariant Investment Story 20207
Discontinued Operations:
FY 2018 Sales CHF 135m
Total consideration CHF 308m
Multiple*13.2 x
EBITDA bei
Closed 31. October, 2019
HEALTHCARE PACKAGING
Healthcare Packaging designs and
manufactures proven and innovative
solutions so critical healthcare industries can
protect their products from moisture and
oxygen. Healthcare Packaging is specialized
in moisture, oxygen and odor control
technologies, as well as in primary plastic
packaging.
* Based on Full Year 2018
** Based on last twelve months ending September 2019
MASTERBATCHES
The Masterbatches business offers color and
additive concentrates and performance
solutions for plastics. Masterbatches help to
enhance the market appeal or end-use
performance of plastic products, packaging
or fibers.
PIGMENTS
Pigments is a leading global provider of
quality organic pigments, pigment
preparations and dyes used in the
automotive industry, for industrial and
architectural coatings, for the plastics
industry, to color home and fabric care
products and many other applications
including seed coloration, traditional and
digital printing.
FY 2018 Sales CHF 1.2bn
Total consideration USD 1.6bn
Multiple**12.2 x
EBITDA aei
Closing expected Q2/Q3 2020
FY 2018 Sales CHF 850 - 900m
Total consideration ---
Multiple ---
To be divested by end 2020
January 2020
Our Way Forward
Clariant Investment Story 20208
− By adhering to Clariant’s strategy of focusing on intensifying
growth, operational excellence, innovation and sustainability
we are beginning a new chapter in the Clariant story.
− Clariant will shrink in size and enhance the quality of the
portfolio and earnings by focusing on the three unchanged
core Business Areas: Care Chemicals, Catalysis and Natural
Resources
− The proceeds from the divestments will be used to invest in
innovations and technological applications within the core
Business Areas, to strengthen Clariant’s balance sheet and to
return capital to shareholders in the form of an extraordinary
cash distribution of CHF 3 per share subject to a positive vote
of Clariant’s shareholders at the AGM, conditional to closing.
− With the divestments, some of the complexity and costs will
leave the company. Post-divestments Clariant will be rightsized
and optimized. We are currently reviewing the changes
necessitated by this reduction.
Focus on Innovation and R&D
January 2020
Clariant’s Innovation Chain Links ‘Technology Push’ with ‘Market Pull’
Clariant Investment Story 202010
Application DevelopmentTechnical ServiceMarketing, Production
R&D shaped along Technology Platforms
GROUP TECHNOLOGY & INNOVATION BUSINESS AREAS MARKETS & CUSTOMERS
ENGINEERING
INTELLECTUAL PROPERTY MANAGEMENT
CARE CHEMICALS
NATURAL RESOURCES
CATALYSIS
PLASTICS &
COATINGS
CHEMISTRY & MATERIALS
BIOTECHNOLOGY
CATALYSIS
PROCESS TECHNOLOGY
January 2020
Focus on Innovation and R&D*
11 Clariant Investment Story 2020
Growth through innovation** R&Din % of sales
R&D in CHF m
209 3.2 % > 3 % 6700
R&D
Centres
> 11008People in R&D
Patents
> 125Scientific collaborations
> 50 Technical
Application
Centres
* Full Year 2018 figures for Total Group
** Contains the contribution to growth from both Top Line Innovation as well as Life Cycle Innovation. Potential cannibalization of existing sales caused by Life Cycle Innovation in certain cases has not been excluded from calculation.
ENVIRONMENT
PROTECTION
GLOBALIZATION
& URBANIZATION
RESOURCES
& ENERGY
Add Value with Sustainability
January 2020
− 2025 environmental targets
− Sectoral commitment: Responsible Care® is the
global chemical industry initiative to improve health,
environmental performance, enhance security, and
communicate with stakeholders about products and
processes
− Operational excellence / zero accident goal:
Employee standards / human rights, occupational
safety, people development
− Portfolio Value Program: Reflecting People, Planet
and Performance across the Life Cycle
− Product Stewardship: Ensuring Safety and
Environmental Standards (e.g. Registration,
Evaluation, Authorization and Restriction of Chemical
substances, REACH)
− Collaborations to expand portfolio of natural
ingredients (Personal Care: Beraca, BioSpectrum,
PT Martina Berto, Plant Advanced Technologies)
Clariant proactively engages with suppliers to steer and
ensure sustainability in the choice of raw materials and
their processing, where feasible, and to address
particular environmental and social risks related to raw
materials:
− Supplier assessment and audit programs, supplier code of
conduct (ISO 9001 / 14001 / OHSAS 18001)
− Commitment to sustainability in the supply chain:
Chemical industry initiative “Together for Sustainability”
− Member of RSPO (Roundtable on Sustainable Palm Oil)
− SPOTS initiative: Integrating small local palm oil
producers within the global supply chains
Sustainability Across Different Levels Along the Value Chain
Clariant Investment Story 202013
− Biennial Customer Satisfaction Survey
− Customer approximation / looking ahead:
− sunliquid®
− BeautyForward®
− Essence by Clariant
SUPPLIER CLARIANT MARKET & CUSTOMERS
January 2020
Our Sustainability Acknowledgements
Clariant Investment Story 202014
January 2020
Raw Material and Operational Efficiency – Protecting the Environment, Reducing Costs
15 Clariant Investment Story 2020
CLARIANT’S
ENERGY SAVING
PROGRAM
OPERATIONAL
EXCELLENCE
CERTIFIED
MANAGEMENT
SYSTEM
2025 ENVIRONMENTAL TARGETS* CONTINUOUS IMPROVEMENT SUSTAINABLE RAW MATERIALS
Raw materials contribute significantly
to product life-cycle performance and
are therefore key to Clariant’s
sustainability efforts.
For example, RSPO certification
ensures the sustainability of palm
based materials.
Greenhouse gases Waste
Waste water
Direct CO2
Water use
Electricity
* Based on 2013 values (in % t produced goods)
January 2020
Environmental and Resource Efficiency Achievements and Targets
Clariant Investment Story 202016
ENVIRONMENTAL TARGETS* 2025 ON TRACK
Reduction
of Energy
Consumption
Reduction
of Direct CO2
Emissions
Reduction of
Greenhouse
Gas Emissions
Reduction
of Water
Consumption
Reduction
of Waste Water
Volume
Reduction
of Waste**
Volume
- 35 %
- 40 %- 35 %
- 30 %
2018 achievements
- 30 %
- 35 %
- 20 % - 18 % - 28 %
- 31 % - 37 % + 4 %
2025 targets* Based on 2013 values (in % t produced goods), ** Waste performance mainly affected by non-hazardous waste increase e.g. from gypsum waste
Outlook
January 2020
Outlook 2021: Above-Market Growth, Higher Profitability and Stronger Cash Generation
Clariant Investment Story 202018
− Clariant is a focused and innovative specialty chemical company. We aim to
provide more than just customer-oriented products. We strive to provide the
best customer experience and fast, reliable customer fulfillment in the industry
by setting the right priorities.
− Despite the current challenging environment, Clariant expects its continuing
businesses to achieve above-market growth, higher profitability and stronger
cash generation based on our focused, high value specialty portfolio.
Back-up Slides
January 2020
Quarterly and FY 2018 – Sales and EBITDA b.e.i.1 by Business Area
20
Sales to 3rd parties EBITDA
before exceptionals
in CHF m Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018
Care Chemicals 484 400 385 396 1 665 89 74 83 70 316
margin 18.4 % 18.5 % 21.6 % 17.7 % 19.0 %
Catalysis 197 207 199 258 861 39 49 36 75 199
margin 19.8 % 23.7 % 18.1 % 29.1 % 23.1 %
Natural Resources2 467 469 470 472 1 878 82 68 75 68 293
margin 17.6% 14.5% 16.0% 14.4% 15.6%
Business Areas Total1 148 1 076 1 054 1 126 4 404 210 191 194 213 808
Corporate Costs – -20 -19 -23 -7 -69
Total Continuing 1 148 1 076 1 054 1 126 4 404 190 172 171 206 739
margin 16.6% 16.0% 16.2% 18.3% 16.8%
Discontinued 574 591 551 503 2 219 78 84 70 47 279
Total Group 1 722 1 667 1 605 1 629 6 623 268 256 241 253 1 018
1 b.e.i. = before exceptional items 2 including Additives
Clariant Investment Story 2020
January 2020
Quarterly and FY 2018 – Sales and EBITDA a.e.i.1 by Business Area
21
1 a.e.i. = after exceptional items 2 including Additives
Sales to 3rd parties EBITDA
after exceptionals
in CHF m Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018
Care Chemicals 484 400 385 396 1 665 88 73 83 70 314
margin 18.2 % 18.3 % 21.6 % 17.7 % 18.9 %
Catalysis 197 207 199 258 861 39 48 34 64 185
margin 19.8 % 23.2 % 17.1% 24.8 % 21.5 %
Natural Resources2 467 469 470 472 1 878 79 65 64 63 271
margin 16.9 % 13.9 % 13.6 % 13.3 % 14.4 %
Business Areas Total1 148 1 076 1 054 1 126 4 404 206 186 181 197 770
Corporate Costs – -25 -26 -39 -73 -163
Total Continuing 1 148 1 076 1 054 1 126 4 404 181 160 142 124 607
margin 15.8 % 14.9 % 13.5 % 11.0 % 13.8 %
Discontinued 574 591 551 503 2 219 75 78 68 43 264
Total Group 1 722 1 667 1 605 1 629 6 623 256 238 210 167 871
Clariant Investment Story 2020
January 2020
Consolidated Income Statement FY 2018
22
in CHF m Total Continuing Discontinued
Sales 6 623 4 404 2 219
Costs of goods sold -4 679 -3 032 -1 647
Gross profit 1 944 1 372 572
Selling, general and administrative costs -1 173 -802 -371
Research & development -208 -174 -34
Income from associates and joint ventures 130 84 46
EBIT (before exceptional items) 693 480 213
Exceptional items / disposals -147 -132 -15
EBIT 546 348 198
Finance result -81 -67 -14
Taxes -109 -68 -41
Net result 356 213 143
EBITDA (before exceptional items) 1 018 739 279
EBITDA 871 607 264
Clariant Investment Story 2020
January 2020
The Executive Committee
23 Clariant Investment Story 2020
January 2020
Maria Ivek Phone: +41 61 469 63 73
Senior Investor Relations Officer Email: [email protected]
Alexander Kamb
Investor Relations Officer
Investor Relations Contacts
Clariant Investment Story 202024
January 2020
Download it here:
iPad App: www.clariant.com/IRapp
Our iPad App
Clariant Investment Story 202025