Clariant Plans Profitability Growth as CEO Excludes Big Purchase

Clariant AG (CLN) plans to reach a 2015 profitability target by nurturing growth units such as catalysts and chemicals for personal care, and ruled out another large acquisition.

“At this point we can exclude a transformational acquisition” like the $2.5 billion purchase of catalyst maker Sued-Chemie in 2011, Chief Executive Officer Hariolf Kottmann said at a media briefing in Zurich. Muttenz, Switzerland-based Clariant will be among “the second quartile” of chemical companies for profitability by 2015, matching that of Germany’s Evonik Industries AG (EVK), Kottmann said.

Kottmann is seeking to expand in ingredients for crop chemicals, moisturizers and shampoos, after a restructuring, which will offload five less-profitable units in areas such as paper and leather chemicals this year. Clariant’s base profitability has increased after buying Sued-Chemie, Chief Financial Officer Patrick Jany said.

A second wave of divestments of leather, detergent and intermediates units is “progressing well” with “strong interest from buyers,” Jany said. Clariant is in talks with several buyers for each of the businesses, and expects a signing this year, he said, Clariant will reach a margin of 17 percent by 2015 for earnings before interest, taxes, depreciation and amortization to sales, Jany said.

Clariant had an Ebitda margin of 13.7 percent in the first quarter. The company will make a 2 to 3 percentage-point increase from executing business unit strategies, 1 percentage point with synergies from integrating Sued-Chemie, and 1 to 2 percentage points from cost-cutting and efficiency measures, Jany said.

Evonik had an adjusted Ebitda margin of about 18 percent in the first quarter. For Clariant to reach the profitability of Albemarle Corp. (ALB) by 2015 is “too ambitious,” Kottman said. Albermarle, a maker of oil-refinery catalysts, had a first-quarter Ebitda margin of 22 percent.

Clariant is also selling three commodity-chemical units generating $1.3 billion in sales to buyout firm SK Capital Partners LP. The disposal will be completed by the end of September, Clariant has said.

To contact the reporter on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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