Clariant reports sales decrease in Care Chemicals amid macroeconomic uncertainties
28 Aug 2023 --- Swiss chemical company Clariant has released its financial report for the year’s first half. The company’s second-quarter 2023 sales were CHF 1,084 billion (US$1.226 billion), compared to CHF 1.301 billion (US$1.471 billion) in the same period last year. It states this corresponds to a 7% decrease in local currency and 17% lower sales in Swiss francs.
From a macroeconomic perspective, Clariant expects no substantial economic recovery in the second half of 2023 while uncertainties and risks related to the economic environment remain.
For 2023, Clariant expects to achieve sales between CHF 4.55 to 4.65 billion (US$5.14 to 5.26 billion), including net divestments and acquisition impact of around CHF -150 million (US$168 million).
Care Chemicals segment sales, in particular, decreased by 9% in local currency in the first half year 2023 versus a “challenging comparison base.” The prolonged destocking cycle continued to impact demand in key end markets in Care Chemicals as well as Additives.
In the year’s second quarter, Care Chemicals sales decreased by 17% in local currency. Meanwhile, Care Chemicals and Adsorbents & Additives sales weakened in the Middle East, while Catalysts were strong.
Strong sales try to compensate
This year’s reported EBITDA is expected to be between CHF 650 to 700 million (US$735 to 791 million).
Clariant reports sales decrease for its Care Chemicals (Image credit: Clariant). Sales in the Americas decreased by 11%. Clariant attributed this to the improvement in Adsorbents & Additives integration of the US Attapulgite business. However, this could not offset lower Care Chemicals sales (due in part to the disposal of the North American Land Oil business).
Sales growth was “strong” in the Business Unit Catalysts, which partially compensated for the weakness in the Care Chemicals and Adsorbents & Additives Business Units. The sales in the Asia-Pacific were stable, despite an 8% decline in China, as growth in Catalysts balanced out lower prices and volumes at Care Chemicals and Adsorbents & Additives.
Group EBITDA decreased by 19% to CHF 175 million (US$198 million), and the corresponding 16.1% margin was below the 16.6% reported in the previous year’s second quarter.
Positive profitability impacts included pricing measures in Catalysts and Adsorbents & Additives and the preliminary CHF 62 million (US$70 million) gain from the Quats disposal in Care Chemicals.
Clariant says it is committed to its 2025 ambition to deliver profitable sales growth (4 to 6 % CAGR), a group EBITDA margin between 19 to 21%, and a free cash flow conversion of around 40%.
In line with the growing market for clean label ingredients, Clariant has been innovating in the space of plant-based formulations and solutions that promote inner wellness. The supplier recently released its Feel-Good Magic Stick and Forget-It-All Relaxing Mask as part of its new “The Joyologist” concept, focused on delivering a multi-sensory experience to consumers for mood enhancement and relaxation.
Edited by Sabine Waldeck
