The slow-down in global economic growth and the crisis in Europe did not materially impact the non-cyclical Business Units Catalysis & Energy, Functional Materials, Industrial & Consumer Specialties and Oil & Mining Services. In contrast, the cyclical businesses were impacted by lower volumes, leading to a volume decline of -1% at the group level. Sequentially volumes grew 2% compared to the first quarter 2012. The structurally challenged businesses partly recovered from the weakness in the last few quarters and stabilised at low levels, with Textile Chemicals achieving single-digit sales growth in local currencies after the plant in Switzerland has been closed.
At the regional level, Asia/Pacific and Latin America outperformed the other regions with sales growth of 18% respectively 17%. North America and Europe, Middle East & Africa (EMEA) grew in the low to mid-single digit range. EMEA growth benefitted from strong growth in MEA while Europe was weak, mainly in the southern part of the continent.
Resulting from lower production costs and sales price increases, the gross margin increased to 28.7% compared to 27.5% reported in the prior-year period. The sales price increase of 3% fully compensated for the 1% increase in raw material costs year-on-year. Sequentially sales prices were marginally up, while raw material costs rose 3%.
CEO Hariolf Kottmann: ‘In the first half of 2012 Clariant delivered a solid performance as expected at the beginning of the year, driven by good growth in the non-cyclical part of the portfolio, offsetting lower volumes in the more cyclical businesses. While the future path of the global economy is tainted with a high degree of uncertainty, we continue to implement our strategy. Based on this we confirm our expectation of an increasing profitability in the second half-year compared to the second half of 2011.’
Outlook
The European economy continued to weaken during the second quarter, especially in Southern Europe. However, growth in the rest of the world has fully offset the decrease in Europe so far.
Consequently, Clariant expects further sales growth in local currencies and a sustained profitability for the full-year 2012 compared to 2011, assuming the global economy stabilises at current levels in the second half-year. Raw material costs are expected to increase in the low-single digit range while exchange rates should remain stable compared to the beginning of the year.
