Clariant Ag · SIX:CLN
Clariant — H1 2005 Earnings Presentation
36 slides from Clariant's earnings presentation, Aug 4, 2005
Slide 1: Clariant – The Way Forward
Clariant – The Way Forward Half-year Results Conference Call – August 4, 2005
Slide 2: Agenda
Agenda Key Factors Half-year 2005 Financial Review Business Review Transformation Program Update Outlook Half-year Results 2005 Slide 2
Slide 3: Half-year 2005 – Sales momentum regained in second quarter
Half-year 2005 – Sales momentum regained in second quarter Key Factors HY 2005 Q Sales up 3% in local currency* Financial Review compared to strong second quarter 2004 Business Review Q Further positive pricing developments Transformation Program Update Q High raw material costs continued to reduce
Slide 4: Transformation Program in implementation phase
Transformation Program in implementation phase Key Factors HY 2005 Q Approximately 5,500 measures in place Financial Review Q Cost savings of CHF 800 mn to CHF 900 mn by 2007 Business Review Transformation Q Cost base reduction of CHF 270 mn already achieved Program Update Outlook Q On-going continu
Slide 5: Key financial group figures Half-year 2005
Key financial group figures Half-year 2005 Key Factors HY 2005 Half-year 2005 2005 % of Sales 2004* % of Sales Change in % Financial Review in mn CHF like-for-like CHF LC Business Review Sales 4,087 4,089 0 1 Transformation Program Update Gross profit 1,252 30.6% 1,342 32.8% -7 -6 Outlook EBITDA 377
Slide 6: Key financial group figures 2nd Quarter 2005
Key financial group figures 2nd Quarter 2005 Key Factors HY 2005 2nd Quarter 2005 % of Sales 2004* % of Sales Change in % Financial Review in mn CHF like-for-like CHF LC Business Review Sales 2,095 2,044 +2 +3 Transformation Program Update Gross profit 639 30.5% 668 32.7% -4 -4 Outlook EBITDA 194 9.
Slide 7: Growth in volume and price
Growth in volume and price Key Factors HY 2005 2nd Quarter 2005 versus 2nd Quarter 2004, like-for-like* Financial Review Business Review Transformation Program Update Outlook Volume Price Sales in LC Currency Sales in CHF +2% +3% -1% +2% +1% Half-year Results 2005 * The numbers for 2004 are like-for
Slide 8: Positive pricing trend continues
Positive pricing trend continues Key Factors HY 2005 1st Quarter Half-year 9 Months Full-year 1st Quarter Half-year Financial Review 2004 2004 2004 2004 2005 2005 Business Review +2% Transformation Program Update Outlook +1% 0% -1% -2% -3% Half-year Results 2005 Slide 8 Price change cumulative, comp
Slide 9: Positive pricing trend across divisions
Positive pricing trend across divisions Key Factors HY 2005 1st Half-year 2005 versus 1st Half-year 2004 Financial Review Business Review Transformation Program Update Functional Chemicals Outlook Textile, Leather & Paper Chemicals Masterbatches Life Science Chemicals Pigments & Additives Half-year
Slide 10: Growth momentum across all regions in 2nd Quarter
Growth momentum across all regions in 2nd Quarter (in CHF mn) Key Factors HY 2005 1st Quarter 2005 2nd Quarter 2005 Financial Review Business Review Asia/Australia/Africa Asia/Australia/Africa Transformation 411 Europe 467 Europe Program Update 1,060 1,079 Outlook +1% +1% -1% -2% +1% -2% Americas Am
Slide 11: Financial result helped by currencies
Financial result helped by currencies Key Factors HY 2005 in mn CHF 1st HY 2005 1st HY 2004* Financial Review Business Review Financial Income 20 15 Transformation Interest Expenses -72 -82 Program Update Outlook Other -16 -16 Financial expenses -88 -98 Currency result, net +37 -15 Total -31 -98 Hal
Slide 12: Cash flow affected by higher inventories
Cash flow affected by higher inventories Key Factors HY 2005 in mn CHF 1st HY 2005 1st HY 2004* Financial Review Business Review Net result 146 131 Transformation Depreciation & amortization 141 158 Program Update Other -52 43 Outlook Operating cash flow before working capital 235 332 Change in work
Slide 13: Debt maturity profile on June 30, 2005
Debt maturity profile on June 30, 2005 Key Factors HY 2005 Liquidity Maturities of financial debt Financial Review 2400 Business Review 2200 Transformation Program Update Committed 750 2000 open lines 1800 Outlook 1600 1400 1200 1000 Cash & 767 equivalents 1,163 800 600 631 400 563 200 284 361 0 179
Slide 14: Divisional sales and margins 2nd Quarter 2005 vs. 2004
Divisional sales and margins 2nd Quarter 2005 vs. 2nd Quarter 2004 (continuing operations*) Key Factors HY 2005 2nd Quarter 2005 Q2 2005 Change EBITDA Margin in %** Financial Review in mn CHF 2005 vs 2004 Business Review Sales LC in % 2005 2004 Transformation Textile, Leather & Paper Chemicals 555 -
Slide 15: Textile, Leather & Paper Chemicals
Textile, Leather & Paper Chemicals Key Factors HY 2005 Q No. 1 worldwide in textile and leather chemicals, sulfur dyes and paper Financial Review optical brighteners Business Review Q Better pricing environment for nearly all businesses Transformation Program Update Q Margins pressure from higher ra
Slide 16: Pigments & Additives
Pigments & Additives Key Factors HY 2005 Q No. 1 worldwide for organic pigments and pigments for coatings Financial Review Q Challenging market conditions due to high raw material costs but slightly Business Review better pricing environment Transformation Program Update Q Weaker sales for automotiv
Slide 17: Masterbatches
Masterbatches Key Factors HY 2005 Q No. 1 worldwide in color masterbatches Financial Review Q Strong local customer service combined with leading technology Q Stable demand for plastic products worldwide Business Review Transformation Program Update Q Regaining growth momentum Outlook Q Moderate inc
Slide 18: Functional Chemicals
Functional Chemicals Key Factors HY 2005 Q No. 2 worldwide for innovative detergent additives Financial Review Q Leading partner for combined product and service solutions for the oil and Business Review gas industry Transformation Program Update Q Higher prices but still pressure from higher raw ma
Slide 19: Life Science Chemicals
Life Science Chemicals Key Factors HY 2005 Q Among Top 3 in agro business Financial Review Q Among top pharma supplier worldwide Q Strong demand for products in speciality fine chemicals, e.g. glyoxal or Business Review Transformation Program Update agrochemicals Outlook Q Significant but already an
Slide 20: Performance improvement measures from 2004 to 2007
Performance improvement measures from 2004 to 2007 Key Factors HY 2005 EBIT impact of measures* Financial Review 800-900 Business Review Transformation Program Update 600-700 Outlook 350-450 150 2004 2005 2006 2007 100 200 300 in mn CHF Half-year Results 2005 performance improvement costs performanc
Slide 21: Distribution of CPIP benefits & costs
Distribution of CPIP benefits & costs Key Factors HY 2005 Cost & impact of measures* Financial Review 70 Business Review 64 Transformation 50 Program Update 38 Outlook 26 22 2004 2005 Q1 Q2 Q3 Q4 Q1 Q2 30 47 46 53 60 75 in mn CHF Half-year Results 2005 performance improvement costs** performance imp
Slide 22: Substantial job cuts to sharply reduce costs
Substantial job cuts to sharply reduce costs Key Factors HY 2005 Financial Review Business Review General Overhead -22% Manufacturing -14% Transformation Program Update 800 Outlook 1,500 1,250 Infrastructure/Services 450 -18% Supply Chain -14% Half-year Results 2005 Slide 22 Total job cuts: 4,000 id
Slide 23: Sustainable reduction in personnel
Sustainable reduction in personnel Key Factors HY 2005 Financial Review Business Review 24,769 324 Transformation Program Update Outlook 409 24,036 31 Dec 2004 Q1 Q2 30 Jun 2005 Half-year Results 2005 Slide 23 Number of employees, reported
Slide 24: Reduction of warehouses, end of June 2005
Reduction of warehouses, end of June 2005 Key Factors HY 2005 Europe –53% Financial Review North America –10% 128 Business Review Transformation 49 44 68 Program Update Asia –19% Outlook Before Planned Before Today 75 61 Before Today Special Markets –15% Latin America –16% 34 29 31 26 Before Planned
Slide 25: On-going continuous improvement processes
On-going continuous improvement processes Key Factors HY 2005 Q Strong execution discipline Financial Review Q Greater performance orientation Business Review Transformation Q Expertise in sales and marketing, purchasing Program Update and supply chain management Outlook Q Consistent cost management
Slide 26: Outlook for 2005
Outlook for 2005 Key Factors HY 2005 Q Improved sales in local currency* Financial Review Q Improved pricing environment, but adverse currency effects and Business Review higher raw material costs expected Transformation Program Update Q Total cost base reduction of approx. CHF 300 mn for 2005 Outlo
Slide 27: Calendar of upcoming corporate events
Calendar of upcoming corporate events November 8, 2005 Nine Month 2005 Results February 28, 2006 Full Year 2005 Results April 7, 2006 Annual General Meeting May 9, 2006 First Quarter 2006 Results August 2, 2006 First Half 2006 Results November 7, 2006 Nine Month 2006 Results Half-year Results 2005 S
Slide 28: Your Investor Relations contacts
Your Investor Relations contacts Dr. Holger Schimanke Head Investor Relations Phone +41 (0) 61 469 67 45 Mobile +41 (0) 79 343 59 83 email [email protected] Fabian Hildbrand, CIIA Investor Relations Officer Phone +41 (0) 61 469 67 49 Mobile +41 (0) 79 763 93 80 email fabian.hildbrand@cla
Slide 29: The way forward
The way forward Backup Information Group & Strategy Strategic focus Business Clariant Performance Q Recognized as a leading Specialty Chemicals Group Improvement Program – World-class customer service skills – Superior innovation and applications capabilities – Leading-edge technologies in synthesis
Slide 30: Current market segments
Current market segments Backup Information Group & Strategy Textile, Pigments & Functional Life Science Masterbatches Business Leather & Paper Additives Chemicals Chemicals Chemicals Clariant Performance Improvement Program Q Textiles Q Coating Q Detergents Q Pharmaceutical Q Europe Industries Fine
Slide 31: Clariant Organization
Clariant Organization Backup Information Chief Executive Officer Group & Strategy Business Human Resources Finance / CFO Clariant Performance Improvement Program Group Communications Services* Group Legal Technology** Corporate Development Textile, Leather & Pigments & Functional Life Science Master
Slide 32: The way forward - refocusing portfolio
The way forward - refocusing portfolio Backup Information Clariant % of Market Competitive Clariant Group & Strategy portfolio Sales attractiveness position strategy Business Clariant Performance Service- Improvement Program driven 60 - 70% High Strong Expand businesses Technology Strong in -driven
Slide 33: Top products in percentage of total raw material costs
Top 5 products in percentage of total raw material costs Backup Information Group & Strategy Business Clariant Performance Improvement Program Ranking Product 1 Ethylene 2 Acetic Acid Group Total 3 Acrylates ~18% 4 Acetic Anhydride 5 Vinylacetate Half-year Results 2005 Slide 33
Slide 34: Sales and cost structure, Half-year 2005
Sales and cost structure, Half-year 2005 Backup Information Global sales distribution in % Global cost distribution in % Group & Strategy Business Clariant Performance CHF CHF 2 Emerging 7 Emerging Improvement Program markets markets 19 15 JPY 3 JPY 3 EUR EUR 43 USD 49 USD 28 21 5 55 GBP GBP GBP Hal
Slide 35: Divisional sales Full-year 2004 in end-user markets
Divisional sales Full-year 2004 in end-user markets* Backup Information Group & Strategy Durables Automotive Paper Business 4% 5% Clariant Performance Agro 4% Improvement Program Electronics 6% Other Healthcare 4% 1% 22% Packaging 11% 19% 14% Textiles Non-durables 10% Construction Half-year Results
Slide 36: Disclaimer
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 ma