Clariant sets new financial targets for 2025, announces accelerated growth, improved profitability

● Based on a new purpose-led strategy, Clariant is committed to creating shareholder value and achieving leading performance above its peers in the specialty chemicals industry

● New financial targets for 2025: compound annual sales growth of 4-6%, group earnings before interest, tax, depreciation and amortization (EBITDA) rate of 19-21%, free cash flow conversion rate of around 40%

● Significantly higher than gross domestic product (GDP) earnings growth through sustainable-driven innovation, regional expansion and selective reinforcement acquisitions

● Identify non-financial targets to maintain sustainability leadership: 40% reduction in Scope 1 and Scope 2 emissions and 14% reduction in Scope 3 emissions by 2030

● Vigorously promote efficiency enhancement plan, and further save 60 million Swiss francs from continuing operations

Clariant, a dedicated, sustainable and innovative specialty chemical company, announced new financial targets for 2025 and a new purpose-led corporate strategy at its recently held Capital Markets Day
.
With a high-growth, high-margin specialty product portfolio, Clariant has taken strategic steps to accelerate sustainable-driven innovation, expand its global footprint with a focus on China, and make potentially bolstering acquisitions while ensuring compliance, To create value and achieve profitable growth
.
With this, Clariant expects sales to grow at an annual rate of 4-6% through 2025, earnings before interest, tax, depreciation and amortization (EBITDA) rates of 19-21%, and free cash flow conversion rates of around 40%
.

"Our newly proposed 'innovative chemistry achieves harmony between man and nature' is at the core of everything we do
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Our leadership in sustainability, as well as our customer-centric philosophy and sustainability-focused approach Our pipeline of innovation has made us the undisputed leader in specialty chemicals
," said Conrad Keijzer, CEO of Clariant.
It can surpass the market level and further improve the company's profitability
.
"

Above-market growth with sustainable-driven innovation pipeline and regional expansion

Sustainability and innovation are Clariant's two strategic engines
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Clariant's average annual growth of around 1% is attributable to sustainability-driven innovations, especially in the areas of bio-based products, decarbonization and recycling
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One of the key drivers of this growth is Clariant's EcoTain® label, which is awarded to products with market-leading sustainable properties
.

The company reaffirmed its emissions reduction targets by 2030 to reduce Scope 1 and 2 greenhouse gas emissions by 40% and Scope 3 emissions by 14%
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To this end, Clariant will increase its investment, investing around 30 million Swiss francs per year in sustainable development, with a focus on reducing greenhouse gases
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Focused investments in bio-based products and enabling decarbonization and recycling will create above-market growth for the company in the coming years
.

Following increased investment in projects such as the sunliquid® second-generation bioethanol plant, Clariant's capital expenditure will return to CHF 280-320 million by 2025, with a focus on supporting growth and expansion in China
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The group will spend more than one-third of its growth capital expenditures in China to promote sustainable solutions in the world's largest and fastest-growing specialty chemicals market
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With a new plant for the production of catalysts and halogen-free flame retardants, as well as a state-of-the-art innovation center in Shanghai, Clariant will increase the proportion of local production from 35% to more than 50%, with the goal of creating approximately 14% of sales
.

New group financial targets: substantial increase in sales, group EBITDA and free cash flow conversion ratio by 2025, thereby increasing shareholder value - strengthening earnings growth and efficiency programs

Clariant Chief Financial Officer Stephan Lynen said: “Based on our transformed and highly attractive specialty product portfolio, sustainable-led differentiation strategy, innovation-driven growth, and further efficiency programs, We have set new financial targets of 4-6% CAGR and 19-21% EBITDA margin by 2025.

Given our earnings growth and capital constraints, free cash flow conversion rate targets to around 40%
.
”

Growth will boost EBITDA margins by about two-thirds, while efficiency gains will contribute about one-third
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Clariant is currently undertaking one of the largest and most comprehensive efficiency enhancement projects in history
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In total, these projects have reduced costs by CHF 240 million
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Excluding redundancy costs and savings from discontinued operations, continuing operations saved approximately CHF 110 million, including further savings of CHF 60 million over the next few years, which should contribute to the expected EBITDA improvement
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Following a substantial expansion investment phase, Clariant will achieve its new financial goals through sales growth, cost control, efficiency improvements and normalization of capital expenditures
.