September 18, 2018 - Clariant, the world's leading specialty chemicals manufacturer, today announced its upgraded strategic and financial outlook, as well as its significant cooperation with Saudi Basic Industries (SABIC) in the field of high performance materials. Memorandum of Opportunity. The Group plans to focus more on custom products and solutions to achieve good growth prospects and value potential above average.
By 2021, by creating a high-performance materials business segment and divesting the rest of the plastics and coatings business, Clariant expects a significant increase in sales to approximately 9 billion Swiss francs, with special interest, interest, taxes, depreciation and amortization The former profit margin (EBITDA) increased to approximately 20%, and the cash flow from operating activities exceeded CHF 1.2 billion.
'The upgrade of the product portfolio, combined with the continuation of Clariant's strategy, will enable the Group to achieve a significant step towards the goal of higher value specialty chemical manufacturers, and will also enable the Group to create even greater benefits for all of our stakeholders. Value. 'Crainian CEO Hariolf Kottmann said.
The merger of Clariant additives and high-value masterbatch (color masterbatch, high temperature resin and healthcare) and some Saudi basic industrial specialty products business will create a business area of 'High Performance Materials'. This business area will become highly A unique positioning supplier of customized high performance materials and solutions.
This new business area will provide customized, professional technology-oriented and competitive product lines, including high-performance thermoplastics for thermo-electric-optical and mechanical environments, as well as excellent additives and masterbatches. Global composites platform. Key applications include smart electronics, medical, aerospace, automotive, robotics, additive manufacturing, renewable energy and electric vehicles. These applications can only meet the demanding customization needs of customers through exclusive technology and formulation know-how. .
High-performance materials have the ability to meet customer technical requirements and provide technological advantages, and will also create the foundation for accelerating profitable growth. The cost synergy and improved operational efficiency closely linked to this foundation will drive substantial profitability and release Greater value creation. By 2021, the high performance materials business will grow to approximately 4 billion Swiss francs based on a sales statement of 3 billion Swiss francs in 2017, including EBITDA margins including synergies from 19.4 in 2017. % increased to 24-25%.
Through the merger of Clariant and Saudi Basic Industries, Clariant will achieve significant synergy with an annual operating rate of CHF 100 million over three years after the transaction is completed. The implementation cost is expected to be CHF 80 million. The merger will achieve significant EPS (EPS) appreciation in the first year.
Clariant will hold a majority stake in the planned merger. The two parties will decide on the valuation to be determined in the coming months, and based on this, Clarian will offer equal consideration to Saudi Basic Industries. But this will not lead to Section Ryan’s net debt (including pension)/ EBITDA leverage ratio in the expected statement at the end of 2019 is more than 2.4 times (including the Saudi Basic Industrial Specialty Products business, but based on Clariant’s current product portfolio before the divestiture), and does not have current investment grades. The assessment will have an impact. In the coming months, Clariant and Saudi Basic Industries will split the relevant business, conduct peer-to-peer due diligence, and continue to discuss the transaction, with a view to signing the final agreement in the first half of 2019. Next, the transaction is expected to be completed by the end of 2019 and will take effect on January 1, 2020.
Stripping the rest of the plastics and coatings business
In addition, Clariant announced plans to divest pigments, standard masterbatches and specialty medical businesses that were not included in the newly established high performance materials business by 2020. This decision underscores Clariant's shifting its product portfolio to the higher end. Commitment in the field of specialty products, and to ensure the best ownership of each business. Although the divested business has a favorable market position and significant profitability in the past few years, it does not meet the group's standards, that is, through higher Innovation and innovation in the field of higher profitability to achieve differentiation.
Clariant's strategic direction
After a strategic assessment, Clariant announced new goals for each business area in 2021. Rely on sustainable innovation and professional customer solutions to meet the needs of convenience, safety, sustainability and energy efficiency will further drive profitable growth. With the strategic update and the resulting higher quality profitability, Clariant also changed the EBITDA margin target from the previous 'deduction of special items' to 'after deducting special items'. Therefore, Clariant's financial report Will change accordingly from 2019.
The Care Chemicals business area is expected to continue to outpace market growth at a faster rate. This additional growth will meet the growing market demand for convenient, renewable and natural products by offering more innovative and sustainable solutions. Entering new market segments will also support this above-average growth. Consumer care products, consisting of personal care, home care, crop solutions and healthcare, will be the main drivers of expansion strategies in this business area. Consumer Care The high degree of professionalism and the provision of more professional solutions not only promote growth, but also raise profitability to new heights.
In the catalyst business area, Clariant's goal is to continue to achieve higher than market growth rates by maintaining and leveraging its innovative leadership and strong licensing partners. In the catalyst sector, the introduction of highly innovative and customized catalysts is the future Key drivers. Sustainable solutions, such as reducing harmful materials to provide greatly improved toxicological characteristics, also promote growth. The biofuels and derivatives business chain will contribute to growth acceleration, thanks to global More climate-friendly energy exploration and legal frameworks in Europe, the US and China. Clariant expects to receive at least 100 million Swiss francs in sales from sunliquid® technology and bioethanol sales licenses at Romanian production plants. Biofuels The contribution of the derivatives and new custom catalysts will be significantly expanded to the profitability of the catalyst business in 2021.
In the natural resources business, oil and mining services are expected to usher in growth as a result of overall demand and a rebound in the oil market. According to the changing business environment, combined with technology and innovation, differentiated business guidance will take Sustained strong growth. The growth of functional minerals will be driven by entering new regional markets and moving to new applications through innovations such as feed and smart and active packaging in agriculture. With the growth of two business units, nature The profitability of resources will be further improved.
The remaining plastics and coatings business areas, including pigments, standard masterbatches and specialty medicines, will continue to be managed using differentiated business guidance. The expected growth of pigments and standard masterbatches is in line with gross domestic product (GDP), while special Healthcare is expected to grow faster based on its potential end-market in healthcare packaging. Through strict cost management, the profitability of pigments and standard masterbatches is expected to increase significantly, while specialty medicines will benefit from innovation. Profitable growth.
to sum up
Relying on Clariant's new high-performance materials business area and strong development prospects for care chemicals, catalysts and natural resources businesses, Clariant Group will provide enhanced product portfolios and solutions. This will help the Group to better utilize its Full potential, faster growth and profitability. The resulting quality of earnings and increased cash flow from operations will enable the Group to continue to maintain an attractive dividend policy that increases or at least maintains the Swiss Franc every year. The absolute value of dividends. Clariant is a professional, strong partner dedicated to providing innovative, professional solutions to achieve profitable growth and a sustainable future.
Clariant goes further to higher value specialty chemical manufacturers*
New, stronger Clariant
