Clariant (CLN) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached CHF 1.056 billion, a 3% organic decrease year-over-year, mainly due to a decline in Catalysts, offset by growth in Care Chemicals and Adsorbents & Additives.

• H1 2024 sales were CHF 2.07 billion, down 5–7% in local currency; EBITDA margin improved to 16.4% for H1 despite a 1% decline in absolute EBITDA year-over-year.

• Net result for H1 2024 decreased by 23% due to prior year gains and tax income, while operating cash flow increased to CHF 112 million.

• Integration of Lucas Meyer Cosmetics is on track, contributing CHF 23 million in Q2 sales; acquisition closed in April and refinancing completed at lower interest rates.

• sunliquidⓇ restructuring and asset sales are ahead of plan, with financial impact now CHF 20 million lower than anticipated.

Financial highlights

• Q2 2024 EBITDA was CHF 166 million (15.7% margin); H1 2024 EBITDA CHF 339 million (16.4% margin), with underlying margin up over 500 bps year-over-year.

• Free cash flow conversion (LTM) at 42%, up from 36% at end of 2023; operating cash flow for H1 2024 was CHF 112 million.

• Net debt increased to CHF 1.644 billion, net debt/EBITDA at 2.7x, mainly due to Lucas Meyer Cosmetics acquisition.

• Gross profit margin improved to 30.7% in H1 2024, driven by higher volumes and easing raw material/energy costs.

• H1 2024 net result from continuing operations: CHF 176 million, down 23% year-over-year due to prior year gains.

Outlook and guidance

• 2024 sales expected to be flat to low single-digit percent growth in local currency, with Care Chemicals and Adsorbents & Additives offsetting Catalysts uncertainty.

• Full-year reported EBITDA margin guidance raised by 100 bps to around 16%, supported by strong H1 and reduced sunliquidⓇ impact.

• Medium-term targets reaffirmed: 17–18% EBITDA margin and 3–5% sales growth expected by 2025, with FCF conversion around 40%.

• Cost savings of CHF 32 million targeted for 2024, with total savings of CHF 175 million by 2025.