Clariant Sales Hit by Weak Currencies
30 April 2014 Clariant said its sales in the first quarter were hit by unfavorable currency translations in emerging markets and in North America.
The Swiss specialty chemicals company posted first-quarter sales from continuing operations was $1.70 billion compared to $1.73 billion in the year-ago period. This corresponds to an increase of 5% in local currencies. The 5% organic sales growth was driven by 4% higher volumes and an increase in prices of 1%.
“Clariant had a promising start to the year with good volume growth and an increase in operating profitability,” said CEO Hariolf Kottmann. “Overall, our businesses performed well in an improving but still mixed economic environment. The picture has been somewhat clouded by unfavorable currency developments, a mild winter in Europe and an impairment charge related to the divestment of the ASK Chemicals joint venture. However, after the first three months, Clariant is well on course to meet its full-year targets.”
The adverse currency environment implied a sales growth of –2% in Swiss francs, mainly due to the year-on-year weakness of the Brazilian real, Indian rupee, Japanese yen and U.S. dollar.
Clariant posted strong local currency sales growth of 15% in Latin America. Sales in Asia/Pacific increased 11% in local currencies, driven by 33% higher sales in both China and India. In the Middle East & Africa region, sales were 10% higher year on year in local currencies as all areas recorded growth in the region. In North America, a strong de-icing season offset the winter-related softness in other businesses, leading to 1% sales growth in local currencies. Europe was 1% lower due to unfavorable weather conditions, which particularly impacted Northern and Central Europe. Southern Europe, on the other hand, showed growth from a low base.
For 2014, Clariant expects the business environment to remain challenging with “heterogeneous global economic developments and volatile currency markets.” The general economic environment in the emerging markets is expected to remain favorable but mixed, while moderate growth should continue in the advanced economies, in particular in the United States, according to the company.
For full-year 2014, Clariant expects low to mid single-digit sales growth in local currencies and an EBITDA margin before exceptional items above full-year 2013.
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