JV talks with Sabic temporarily halted / CEO Ernesto Occhiello surprisingly throws in the towel / Pigments and masterbatches up for sale
Speciality chemicals group Clariant (Muttenz / Switzerland; and Sabic (Riyadh / Saudi Arabia; have decided to provisionally halt their negotiations on the creation of a high-performance materials (HPM) business group. Originally, the merger announced in 2018 between the Swiss company’s Plastics and Coatings activities (masterbatches, pigments and additives) with the Saudi company’s high-performance polymers business was to be completed by the end of 2019 (see of 06.05.2019).

According to an announcement by the Swiss company, this last decision was taken in mutual agreement in the interests of the shareholders of both companies and against the background of the current market conditions. In future, Clariant intends to focus on the present core businesses of Care Chemicals, Catalysis and Natural Resources. Efforts to sell the pigment business announced in September 2018 will be continued, and the company is furthermore on the look-out for a buyer for its entire masterbatch operations “in order to maximise the value-adding potential.” The aim is to complete both sales by the end of 2020 and to invest the revenue from the sales in innovations and technological applications within the core business segments, to strengthen the company’s balance sheet and to return capital to the shareholders.

Almost simultaneously, the Swiss group announced that Ernesto Occhiello, who only became CEO of Clariant in October 2018 and was previously head of Sabic’s Specialties division, had decided to leave the company with immediate effect for personal reasons. The board of directors has asked Hariolf Kottmann, president of the board of directors and former long-term CEO of Clariant, to provisionally assume the responsibilities as executive chairman until a successor has been found.
EBITDA collapses due to cartel accusations
Sales from Clariant’s continued operations were virtually constant in the first half of 2019 at CHF 2.229 bn (EUR 2.029 bn) compared with CHF 2.224 bn in the first half of 2018. The development, described as positive, is due to the growth in the Catalysis and Natural Resources divisions. This represents organic growth of 4% in local currencies, but, after adjusting for exchange rate effects, is equivalent to a nearly 0% increase. EBITDA, after one-off effects from continued operations, was negatively affected by a one-off provision of CHF 231m and fell around 70% to CHF 102m. The provision was made against the background of continuing investigations by the European Commission in connection with competition law and related to the procurement market for ethylene. Operating cashflow of the group rose from CHF 102m in the first half of last year by 11% to CHF 113m in the first half of 2019.

In discontinued operations – this now represents the Plastics and Coatings segment – sales in the first six months declined by 2% in local currency and 5% in Swiss francs to CHF 1.109 bn. Clariant puts the blame on the constantly declining global demand for pigments and masterbatches and, above all, the falling demand in China and the weakness of the automotive industry. “This confirms the correctness of our strategic decision to sell off our masterbatches and pigments business,” said Kottmann.
26.07.2019 [243042-0]
Published on 26.07.2019
Clariant: Gespräche mit Sabic auf Eis, CEO Occhiello wirft hinGerman version of this article...

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