Bloomberg News

Clariant Says 2012 Goals Intact, Even With Lagging Businesses

May 03, 2012

Clariant AG (CLN), which acquired catalyst- maker Sued-Chemie for $2.7 billion last year, said its full-year goals remain achievable, even while unprofitable textile- and paper-chemical businesses are still part of the company.

Profitability levels will hold steady this year, driven by growth in non-cyclical businesses like oil and mining chemicals, Chief Financial Officer Patrick Jany said on a call. Earnings before interest, taxes, depreciation and amortization before one-time items fell 15 percent to 236 million Swiss francs ($258 million), the Muttenz-based company said today. Analysts predicted 240.5 million francs.

“The result was not as bad as everyone was expecting,” Martin Schreiber, an analyst at Zuercher Kantonalbank, said by telephone. Investors were braced for more pronounced declines from seasonal businesses like de-icing chemicals and refinery additives due to unfavorable weather, he said.

Clariant is refocusing on higher margin catalysts, additives for the oil industry and ingredients for personal-care products. The Swiss chemicals maker said in February that it is looking for ways to exit “structurally challenged businesses” such as paper and textile operations.

The company could take “months or quarters” before declaring its intentions for the businesses, and whether they will be divested or a joint-venture partner sought, Jany said.

Clariant shares traded 1.6 percent higher at 11.9 francs in Zurich as of 10:46 a.m.

The Ebitda margin excluding one-time items narrowed to 12.1 percent, missing the company’s guidance of “sustained profitability” at 13.2 percent for the year. Clariant had forecast a sluggish start to 2012.

Oil & Mining Growth

Sales in the first quarter rose 13 percent to 1.95 billion francs. Analysts estimated 2 billion francs. Sales growth was driven by the Oil & Mining unit and by demand at the two units formed from the acquisition of Sued Chemie: Functional Materials and Catalysis & Energy. Sales in the remaining six units declined.

Clariant is in the midst of carving out the businesses earmarked for a potential exit. The units generate a total of about 1 billion francs in revenue.

“Once they get rid of these units, the whole perception of Clariant will be different,” Patrick Rafaisz, an analyst at Bank Vontobel, said yesterday. “The management know that paper and textiles are weighing on their valuation. I would expect an announcement in the next 12 months.”

To contact the reporter on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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