Clariant AG — Earnings Release 2003

Aug 5, 2003

News Details

Ad-hoc | 5 August 2003 07:38

Clariant AG part 1

Clariant AG: Part 1 of 3 Ad-hoc-announcement processed and transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Clariant AG: Part 1 of 3 Clariant Unveils Wide-Reaching Corporate Transformation Program Muttenz, Switzerland, August 5, 2003 – Roland Lösser, Clariant’s new chief executive, announced today a wide-reaching corporate transformation program that will significantly reduce debt, cut costs, and re-establish the group as one of the leading specialty chemicals companies. The program, which is the result of an extensive internal review, includes the sale of the Cellulose Ethers and Electronic Materials businesses and the closure of four agrochemicals plants. Overall, the program targets more than CHF 1.5 billion in proceeds from asset sales and aims to increase the pre-tax return on invested capital (ROIC 1) within the next three to four years to at least 12%, up from the current level of around 7%. Stable Financial Situation Clariant today also reported operating results for the first half year. Cost reduction measures launched at the beginning of the quarter resulted in savings of approximately CHF 60 million including management bonus cuts. These measures will have further positive effect over the next 18 months. Amid a challenging market environment, sales grew 2% in local currencies, but declined 7% in Swiss franc terms to CHF 4.3 billion. After an exceptional charge of CHF 142 million relating to a previously announced plant closure, the company reported a net loss for the second half of CHF 49 million, compared with a net income of CHF 145 million in the year earlier period. “We are not satisfied with these results and they underline our determination to refocus the company and significantly improve our performance over both the short and long term,” Mr. Lösser said. The Clariant chief executive confirmed that the company’s financial situation is stable. “We have successfully completed negotiations with lending banks on amended credit lines and we have sufficient liquidity,” he said. Furthermore, measures are underway to reduce net debt to below CHF 2.5 billion within 9 months, down from CHF 3.7 billion at present. Mr. Lösser explicitly ruled out any new issuance of equity over the short and medium term. “We will strengthen our balance sheet primarily through asset sales,” he said. ——————————————————————————- 1 ROIC. A measure of how effectively a company uses the money (borrowed or owned) invested in its operations. Calculated by: Operating income before impairments and amortization of goodwill divided by (net working capital plus fixed assets plus cash). end of ad-hoc-announcement (c)DGAP 05.08.2003 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: Key financial group figures 1st half-year 2003 (in m CHF) 1st half 1st half 2003 1st half 1st half Change in % 2003 2002 2002 (2003 reported reported * excl reported continuing compared with restructuring operations 2002 restated) and (restated)3 impairment CHF LC Sales 4273 4273 4839 4584 -7 +2 Gross profit 1412 1412 1651 1564 -10 -3 EBITDA 513 549 633 592 -13 -8 EBIT 213 355 374 343 -38 -40 Net income -49 93 145 114 – – As per June 2003 March 2003 Net debt 3 686 3 665 Equity 1 061 947 3 The numbers for 2002 were restated to account for the disposals of business activities in 2002. Disposals in 2002: Emulsion Business of Division Textile, Leather & Paper Hydrosulfite North America of Division Textile, Leather & Paper Emulsion Business Portugal of Division Textile, Leather & Paper All activities were sold effective as per the end of 2002. 4 EBITDA – operating income before interest, taxes, depreciation of tangible fixed assets and amortization of intangible assets – is a standard value used to analyze the ability of a company to generate cash from its operations. Interest and taxes are considered to be non-operating expenses and therefore excluded from this calculation. BIOGRAPHIES OF CLARIANT TOP MANAGEMENT Roland Lösser Chief Executive Officer Roland Lösser was named CEO of Clariant in March 2003. He served as CFO of Clariant from its initial public offering in 1995 until 2000. Mr. Lösser thereafter remained closely connected with Clariant as a member of the Board of Directors and has been a Vice Chairman of the Board since 2002. Mr. Lösser was born in Germany in 1942 and earned a diploma in business administration. He is married and has one daughter. François Note Chief Financial Officer François Note has been Chief Financial Officer of Clariant since 2001. For the previous two years, Mr. Note served as Head of Corporate Human Resources and was responsible for all HR activities in the Clariant Group world-wide. Born in France in 1959, Mr. Note holds a business administration degree from ESSEC and a master’s degree in applied economics from the Paris-Dauphine University. He is married and has two children. Peter Brandenberg Head of Corporate Human Resources Chief Communications Officer Head of Regions Peter Brandenberg was appointed to the position of Head of Corporate Human Resources and Head of Regions in April 2003. He has served in several positions with Clariant since 1995, including Head of Division Textile, Leather & Paper Chemicals and CEO of Clariant in Germany. Born in Switzerland in 1947, Mr. Brandenberg studied business administration in Switzerland and the USA. He is married and has two children. Nico Gontha Head of Textile, Leather & Paper Chemicals Division Nico Gontha was appointed Head of Clariant’s TLP Division effective April 2003. From 2001 to 2003, he was Head of the Masterbatches Division. From 1996 to 2001, while based in Singapore, he served as Regional President of Clariant’s ASEAN/Pacific Rim area and Regional Head India/ASEAN/ Pacific Rim for the Pigments & Additives Division. Born in 1948 in Indonesia, Mr. Gontha earned a degree in business administration and economics from the University of St Gallen (Switzerland). He is married and has one child. ——————————————————————————– WKN: 895929; ISIN: CH0012142631; Index: SMI Listed: Amtlicher Markt in Frankfurt (General Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, München und Stuttgart; Schweizer Börse (Hauptsegment); SEAQ- Handel in London 050738 Aug 03