- Third quarter 2021 sales from continuing operations increased by 23 % in local currency to CHF 1.096 billion
- Third quarter continuing operations EBITDA at CHF 180 million
- Third quarter 2021 EBITDA margin increased to 16.4 % versus 14.2 % in the third quarter of 2020
- Outlook 2021: increased local currency sales growth of 9 % – 11 % and a confirmed EBITDA margin range of 16.0 % – 17.0 %
“In the third quarter of 2021, Clariant delivered particularly high year-on-year revenue growth and also successfully increased performance. The completed construction of our first commercial sunliquid® cellulosic ethanol plant represents a major milestone for Clariant and is a further key proof point of our ambitious growth strategy,” said Conrad Keijzer, CEO of Clariant. “Clariant’s ability to clearly increase the profitability level was attributable to strong growth in our relevant end markets and our ability to partially offset the effects of raw material cost inflation, logistics challenges and rising energy cost through strong pricing. Our full year 2021 outlook remains positive. Based on the strong performance in the first nine months, we are increasing our full year local currency sales growth expectation and continue to forecast a step up in EBITDA margins to above pre-COVID-19 pandemic levels.”
Third Quarter 2021 – Particularly strong, double-digit sales growth facilitates significant profitability improvement
Clariant, a focused, sustainable, and innovative specialty chemical company, today announced that the third quarter 2021 sales from continuing operations increased by a lofty 23 % in local currency and in Swiss francs to CHF 1.096 billion. The sales expansion was achieved via higher volumes and strong pricing in all Business Areas and all regions.
Clariant grew sales in almost all regions in the third quarter of 2021, thus reflecting a continuing, clear demand recovery. In Europe, the very strong 27 % growth in local currency was supported by strong demand in industrial and consumer applications, and Latin America grew at the same pace. Asia and North America followed closely with 23 % and 22 % higher sales, respectively. The development in the Middle East & Africa region was flat.
In the third quarter, Care Chemicals increased sales by 31 % in local currency, supported by organic double-digit expansion in Industrial Applications and Consumer Care as well as the first-time consolidation of Clariant IGL Specialty Chemicals Private Limited (CISC). Catalysis sales rose by 5 % in local currency primarily due to the strong sales development in Syngas and the emission-control catalyst businesses. Natural Resources sales increased by a resounding 25 % in local currency due to the strong growth in Additives and Functional Minerals as well as the year-on-year improvement in Oil and Mining Services and the lower comparison base.
The continuing operations EBITDA increased to CHF 180 million and a corresponding margin of 16.4 %, outperforming the 14.2 % reported in the third quarter of the previous year. This development was positively influenced by strong volume expansion, improving operating leverage together with pricing measures, and the continued successful execution of Clariant’s efficiency programs, which resulted in additional cost savings of CHF 8 million in the third quarter. Negative influences on the Group profitability included continuing raw material cost inflation, the difficult logistic situation, as well as increasing energy cost.
First Nine Months 2021 – Higher sales in all Business Areas and over-proportional profitability improvement
In the first nine months of 2021 continuing operations sales increased by 12 % in local currency and by 10 % in Swiss francs to CHF 3.130 billion, compared to CHF 2.838 billion in the first nine months of 2020.
In the first nine months of 2021, sales rose in almost all geographic regions. The developments in Europe and Asia were particularly robust with strong growth of 19 % and 17 %, respectively, whereby China grew by 16 % in local currency. Latin American sales expanded by 12 %, followed by the Middle East & Africa with 2 % growth. The sales gap diminished in North America, and the region is now only 5 % below previous year levels.
In the first nine months, Care Chemicals sales rose by 16 % in local currency primarily due to the market recovery in Industrial Applications. The top-line of Catalysis increased by 7 % in local currency, bolstered by higher sales in Syngas and the emission-control catalyst businesses. Natural Resources sales were 10 % higher in local currency due to double-digit growth in Additives and Functional Minerals.
The continuing operations EBITDA increased to CHF 517 million as the Group improved margins on the back of sales expansion and operating leverage in tandem with the continued effective execution of efficiency improvement programs, which resulted in additional cost savings of CHF 23 million in the first nine months of 2021. The EBITDA margin increased to 16.5 % from 14.8 % in the previous year due to the higher profitability in Care Chemicals and Natural Resources and continued cost discipline across the Group.
In the third quarter of 2021, Pigments sales increased by 17 % in local currency and by 18 % in Swiss francs. In the first nine months of 2021, on a like-for-like basis, excluding Masterbatches sales from the first half of 2020, sales in discontinued operations (Pigments) rose by 12 % in local currency and in Swiss francs, buoyed by the stronger economic environment.
In the third quarter, the underlying EBITDA margin in discontinued operations increased to 15.7 % due to the higher sales levels and the corresponding operating leverage improvement in Pigments as well as positive effects from other discontinued operations.
Clariant announced that definitive agreements have been signed with Heubach Group and SK Capital Partners to divest its Pigments business, with closing expected to take place in the beginning of 2022
Outlook – Full year 2021 sales forecast increased; EBITDA margin range confirmed
Clariant aims to grow above the market to achieve higher profitability through sustainability and innovation. The Group is significantly reshaping its portfolio through the divestment of Healthcare Packaging in 2019, the sale of Masterbatches in 2020, and the signed agreements for the divestment of its Pigments business.
For the fourth quarter of 2021, Clariant expects continued strong growth for the Group in local currency versus the prior year, underpinned by expansion in Care Chemicals and Natural Resources. Clariant aims to slightly improve its year-on-year margin levels in the fourth quarter of 2021 via volume growth, continued cost discipline, and pricing actions to overcome the rise in raw material, logistics, and energy cost.
Based on the strong performance in the first nine months, Clariant has increased the sales guidance for the full year 2021 and expects to achieve local currency sales growth in continuing operations within a range of 9 % – 11 % (previously: 7 % – 9 %), while confirming the EBITDA margin range of 16.0 % – 17.0 % on the back of the sales growth, the improved profitability of its specialty portfolio, and the positive impact of the performance programs, while the challenges regarding raw material, logistics, and energy cost remain. This is based on the assumption of a continued economic recovery, while uncertainty remains unprecedently high.
Clariant will be holding a virtual Capital Markets Day (CMD) on November 23, 2021.