Clariant Delivers Significantly Improved Profitability in Q3 2021 with Double-Digit Sales Growth

● In the third quarter of 2021, sales from continuing operations increased by 23% to CHF 1,096 million in local currencies

● Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations in the third quarter was CHF 180 million

● 3Q21 EBITDA margin improved to 16.
4% from 14.
2% in 3Q20

● Outlook for 2021: Sales growth of 9% - 11% in local currency, EBITDA margin confirmed to be in the range of 16.
0% - 17.
0%

"In the third quarter of 2021, Clariant delivered very high year-over-year revenue growth and successfully improved its performance
.
The completion of Clariant's first sunliquid® cellulosic ethanol commercialization plant is an important milestone for us and part of our ambitious growth strategy.
Conrad Keijzer
, Chief Executive Officer of Clariant, said, “Clariant’s ability to significantly improve profitability is attributable to strong growth in our relevant end markets, as well as our strong pricing offset in part due to higher raw material costs, Impact of logistical constraints and rising energy costs
.
Our outlook for the full year 2021 remains positive
.
Based on the strong first nine months, we will raise our full-year sales growth forecast in local currency and continue to forecast EBITDA profit Rates will rise to higher than pre-coronavirus levels
.
”

key financial data

Q3 2021 : Exceptionally strong double-digit sales growth leading to significantly improved profitability

Moutensz, Switzerland / Shanghai, China, October 28, 2021 – Clariant, a focused, sustainable and innovative specialty chemicals company, today announced sales from continuing operations in local currencies and Swiss francs for the third quarter of 2021 The amount increased by 23% to CHF 1,096 million
.
The increase in sales was attributable to higher volumes and strong pricing across all business areas and all regions
.

Clariant recorded sales growth in nearly all regions in the third quarter of 2021, reflecting a continued, pronounced recovery in demand
.
In Europe, strong demand from industrial and consumer applications underpinned a strong 27% growth in the local currency, with Latin America growing similarly fast
.
Asia and North America followed, with sales up 23% and 22%, respectively
.
The Middle East and Africa region is developing steadily
.

In the third quarter, sales of Care Chemicals increased by 31% in local currency, supported by double-digit organic growth in the Industrial Applications and Consumer Goods Care businesses, as well as the start of the merger of Clariant IGL Specialty Chemicals Pte Ltd ( CISC) performance
.
Catalyst sales rose 5 percent in local currencies, mainly due to strong sales in the Syngas and Emissions Control Catalysts business
.
Natural resources sales increased 25% in local currency, built on strong growth in Additives and Functional Minerals, as well as year-over-year growth and a lower base of comparison in Petroleum and Mining Services
.

Continuing operations EBITDA rose to CHF 180 million, corresponding to a margin of 16.
4%, up from 14.
2% in the third quarter of last year
.
This development was positively impacted by a strong sales lift, improved operating leverage and pricing measures, as well as the continued successful execution of Clariant's efficiency program - which resulted in an additional CHF 8 million in cost reductions for the company in the third quarter
.
Negative impacts on the Group's profitability include continued increases in raw material costs, logistical constraints and increased energy costs
.

First nine months of 2021 : Sales increase in all business areas and profitability further improves

In the first nine months of 2021, sales from continuing operations increased by 12% in local currencies and 10% in Swiss francs to CHF 3.
13 billion, compared to CHF 2.
838 billion in the first nine months of 2020
.

In the first nine months of 2021, sales rose in nearly all regions
.
Growth was particularly strong in Europe and Asia, at 19% and 17%, respectively, with China growing 16% in local currencies
.
Latin America sales rose 12%, followed by the Middle East and Africa, up 2%
.
North America is only 5% below last year's level, and the sales gap is also narrowing
.

In the first nine months, sales of care chemicals increased by 16% in local currencies, mainly due to a recovery in the market for industrial applications
.
Catalysts revenue increased 7% in local currency, driven by higher sales in the Syngas and Emissions Control Catalysts businesses
.
Natural resources sales rose 10% in local currency, driven by double-digit growth in additives and functional minerals
.

EBITDA from continuing operations increased to CHF 517 million as the Group improved margins, supported by sales growth and operating leverage, while continuing to effectively execute efficiency programs, resulting in additional savings in the first nine months of 2021 the cost of 23 million Swiss francs
.
The EBITDA margin increased to 16.
5% from 14.
8% in the previous year due to improved profitability in Care Chemicals and Natural Resources, as well as continued cost constraints across the Group
.

Discontinued business

In the third quarter of 2021, pigment sales increased by 17% in local currencies and 18% in Swiss francs
.
In the first nine months of 2021, sales in discontinued operations (pigments) increased by 12% in local currencies and in Swiss francs (excluding masterbatch sales in the first half of 2020), benefiting from a strong economic environment
.

In the third quarter, the EBITDA margin from discontinued operations increased to 15.
7%, driven by higher sales levels, a corresponding improvement in operating leverage in the Pigments business, and the positive impact of other discontinued operations
.

Clariant has announced the signing of definitive agreements with Heubach Group and SK Capital Partners to divest its pigment business, with the transaction expected to close in early 2022
.

Outlook: Full-Year 2021 Sales Expectations Improved; EBITDA Margin Range Confirmed

Clariant's goal is to achieve higher-than-market growth through sustainability and innovation
.
Through the divestiture of the medical packaging business in 2019, the sale of the masterbatch business in 2020 and the signing of a divestment agreement for the pigment business this year, the group is vigorously reshaping its product portfolio
.

For the fourth quarter of 2021, Clariant expects the Group's sales to continue to grow strongly in local currencies, supported by growth in the Care Chemicals and Natural Resources businesses
.
Clariant aims to offset higher raw material and logistics costs and slightly improve its year-on-year margin level in the fourth quarter of 2021 through sales growth, continued cost constraints and pricing measures
.

Based on the strong performance of the first nine months, Clariant has raised its sales target for the full year 2021 and expects sales from continuing operations to increase by 9%-11% in local currencies (previously: 7%-9%) , while identifying an EBITDA margin range of 16.
0%–17.
0%, supported by sales growth, improved product portfolio profitability, and positive results from efficiency initiatives, taking into account raw material, logistics and energy costs challenge
.
The setting of the above targets is based on the premise of sustained economic recovery, and there is still a high degree of uncertainty
.