Clariant AG — Earnings Release 2004

May 4, 2004

News Details

Ad-hoc | 4 May 2004 07:00

Clariant Achieves Satisfactory 1st Quarter Results

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The issuer is solely responsible for the content of this announcement. ——————————————————————————– Clariant Achieves Satisfactory 1st Quarter Results – Sales up 6% in local currency terms, to CHF 2.206 bn – Net profit CHF 72 mn, from a loss of CHF 8 mn in Q1 2003 – Operating margin up substantially, to 7.6%, from 5.1% last year – Cost reductions and asset sales proceeding well – Growth particularly strong in U.S. and Asia – Market outlook cautiously positive; European recovery inconclusive – Net debt reduction target lowered to below CHF 1.5 bn, from CHF 2.5 bn Key Financial Group Figures (in CHF mn) First Quarter 2004 % of 2003 2003 1) % of % Change sales (reported) (like-for- sales vs. like- like) for-like CHF LC Sales 2,206 2,106 2,035 +8 +6 Gross profit 730 33.1% 712 691 34.0% +6 +3 EBITDA 263 11.9% 212 198 9.7% +33 +5 EBIT before restructuring, 199 9.1% 121 111 5.5% +79 +81 impairment, disposals and amortisation of goodwill EBIT 167 7.6% 113 103 5.1% +62 +60 Net income/ loss 72 2 -8 – – as per March 04 Dec 03 March 03 Net debt 2,901 2,905 3,665 Equity 1,293 1,176 947 1) The numbers for 2003 were like-for-like to account for the sales of business activities in 2003. Sales in 2003: Cellulose Ethers of Division Functional Chemicals and AP Chemicals, UK, of Division Life Science and Electronic Chemicals. All activities were sold effective as per the end of 2003. MUTTENZ, Switzerland – May 4, 2004 – Clariant posted a satisfactory result for the first quarter of the year, recording sales of CHF 2.206 billion, up from CHF 2.035 billion a year ago, and net profit of CHF 72 million, compared with a loss on a like-for-like basis of CHF 8 million in the same period in 2003. The company also reported that its Transformation Program, which includes cost cutting and asset sales, is progressing well. Sales Up 6% in Local Currency Terms Sales in the first quarter were 6% higher in local currency terms compared on a like-for-like basis with the same quarter in 2003. The results in Swiss franc terms – up 8% – were helped by positive foreign exchange trends, notably by the stronger Euro. On a continuing basis – which excludes sales for Electronic Materials, a business that is in the process of being sold – sales in the first quarter increased 5% in local currency terms, to CHF 2.086 billion, from CHF 1.945 billion a year earlier. Operating profit grew to CHF 167 million, equating to an operating margin of 7.6%, up substantially from 5.1% on a like-for-like basis compared with the first quarter of 2003. Tight working capital management and the overall strong operational performance helped operating cash flow, which was CHF 104 million in the first quarter, an increase from a negative CHF 152 million in the same period in 2003. Net profit was CHF 72 million. “We can be satisfied by these results because they demonstrate our ability to increase the top line even as we cut costs across the group,” said Clariant Chief Executive Roland Loesser. “While there is still considerably more to be done on our Transformation Program, it is clear that the hard work started last year is beginning to pay off.” U.S. and Asia Particularly Strong Sales were higher in all five divisions and in nearly all product segments. Growth was stronger toward the latter part of the quarter, with robust demand particularly evident in the U.S. and Asia (11% and 12% respectively, in local currency terms). “These early signs are positive, but caution is still the order of the day,” Mr. Loesser said. “The recovery in Europe continues to be inconclusive.” Transformation Program Proceeding Well Good progress continued to be made on Clariant’s Transformation Program, which includes short- and long-term performance improvement measures and the sales of several businesses no longer central to the company’s strategy. As announced in March, two manufacturing plants – in Beverley, England and Knapsack, Germany – will be closed, resulting in the reduction of approximately 200 jobs. The measures are part of a worldwide initiative announced at the full- year 2003 results on 24 February that will reduce 4,000 jobs by the end of 2005. Negotiations continue positively on the sale of several businesses. The company confirmed its overall target to raise approximately CHF 1.5 billion in gross proceeds from the total sales, amounting to 15% to 20% of total turnover. Newly Solid Financial Base The successful increase of the company’s share capital – a transaction completed on April 26th – has generated gross proceeds of CHF 920 million, leaving Clariant in a healthy financial position. “Our improved finances enable us to proceed with the asset sales in a steady and calm manner,” Mr. Loesser said. “That means ensuring we get a fair price for these businesses, which are all attractive and have excellent potential in the hands of the right owner.” Further details on the asset sales will be provided later in the second quarter. The company continues to place a priority on lowering debt, announcing a new target of reducing net debt to below CHF 1.5 billion by the end of the year, from the previous target of CHF 2.5 billion. At the end of the first quarter, net debt stood at CHF 2.901 billion. “Clariant’s transformation will continue to be characterized by tight cost control, broad-based performance improvements and structural changes to enable us to focus on our core strengths in value-adding technology, service-driven businesses and innovation,” Mr. Loesser said. Hint for editors: The full Quartely Report including this release, financial discussion, business discussion and consolidated financial statements is available on http://www.clariant.com/investors CALENDAR OF CORPORATE EVENTS August 5, 2004 First Half Year 2004 Results November 9, 2004 Third Quarter 2004 Results March 8, 2005 Full Year 2004 Results April 7, 2005 AGM YOUR CLARIANT CONTACTS Investor Relations Tel. +41 61 469 67 48 Fax +41 61 469 67 67 Holger Schimanke Tel. +41 61 469 67 45 Daniel Leuthardt Tel. +41 61 469 67 49 Media Relations Rainer Weihofen Tel. +41 61 469 67 42 Fax +41 61 469 69 99 end of ad-hoc-announcement (c)DGAP 04.05.2004 ——————————————————————————– 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 040700 Mai 04