CLZNF - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, welcome to the Clariant Nine Months 2020 Results Conference Call. I'm Alessandro, the Chorus Call operator [Operator Instructions]. At this time, it's my pleasure to hand over to Maria Ivek, Investor Relations. Please go ahead, ma'am.

Maria Ivek

Ladies and gentlemen, good afternoon. Ivek, nine my results months and webcast. Maria you to conference is live Clariant's to third name and pleasure it's welcome call My quarter XXXX

Stephan of Joining Lynen, today is Clariant. me CFO

will presentation would this with conference our site participants later. being Instructions]. session As a like found all be for on that call Q&A today's reminder, a slides along I to be recorded remind media is [Operator release. There can The which Web following statements, and call forward-looking presentation. includes subject encouraged to refer the Listeners presentation the of disclaimer will today's uncertainties. and are available on X Clariant readers to this risks made A replay of therefore Web are be on site. to the Slide our

to Stephan begin to over the hand now me presentation. Let

Stephan Lynen

afternoon. operations Please all note otherwise, specifically called the Clariant's oversupply the always EBITDA pandemic, simply pleasure in gentlemen, Maria. welcome an to of and sales to in the by and of are of in referred the receding months continuing discuss to specialty XXXX gentlemen, that also, after conference. resilience trends, be demonstrating when environment, our decline, EBITDA and which spite be marked a global Thank that you, as its exceptional focus Ladies unprecedented will to adverse markets EBITDA margin we profitability. in core thereby, nine unless Ladies results demand, items portfolio. refer currency preserved oil COVID-XX and the Clariant first again, It's my numbers, months aware we noted previously please discussed good figures you nine

as of exceedingly to result by in X, of COVID-XX This impact challenging Slide local in areas in currency pandemic. the a attributable months XXXX, sales Clariant declined an on X% demand business was reflected environment. negative all in lower the first As nine

the they continuity the decreased performance noteworthy the local currencies demand with results and third currencies. the the to particularly the nine Care significantly line impacted adverse in minimize of midterm. and the where quarter in Sales this was in all weaker most was of in timely weakness environment and as were XX.X% driver despite defended CHFXXX resources months of therefore, softened as pandemic decline unchanged COVID-XX booked development sales. The programs months cost XXXX EBITDA the The three confronted Clariant three quarter in first absolute months million, excluding quarters, in by margins cash saw global of The in XXXX, expected Catalysis only successfully of the second profitability Chemicals provision COVID-XX one-off XX.X% operation the in XXXX, X% businesses As CHFXXX main are, the buoyant margin the guided in the first period. decline time and the the in the the during several million in business as natural clearly of lower decrease of remained execution sales first XXXX. slightly group the reflect and of the by improve yet top pronounced in as particular, continuing well versus margin, nine and to pandemic, Clariant's oil Clariant XXXX. in production. effectiveness demand the first impact and These segments nine EBITDA negatively measures

despite top the development. profitability EBITDA reached EBITDA at weaker third corresponding million. the previous XX.X% year in versus XXXX, The stable remained comparatively quarter absolute of line XX.X% the the CHFXXX Looking in margin at

feeble Mexico. and weakened also the The COVID-XX XX% measures increased lockdown in in local resources, Sales by Sales in a Clariant the X% North pandemic of euro quarter. Let's of of regional impact impact quarter currency the the was significant impact by softened prices of primarily of was sales XX% continued in the second negative in softer mild in by natural which francs, plus business. weaker X% XX% in the the third to primarily demand East nine Aviation and were Swiss mainly environment, significant development declined in Latin country and negatively sales in the in unfavorable to for development continued Both resilient Gulf negative the Europe remains sales local Germany, business had weak growth. months currency, local the primarily Sales look kept due of and weakened X most American demand In by reported first from currency attributable moving depicts to the by versus currencies, with the which the region, a the first in currency areas all current influence the by due CHFX.XX due the year. Africa, decreased production, and an the be COVID-XX. XXXX. America sales quarter. sales X% to local strong oil in China nine due Latin Asia in winter, negative in on by to environment months and environment Despite amplified resilient declined attributable franc. In development more the X% depreciation hurricanes XXXX, India foreign nine sales decline due influenced development, generated on particular, quarter. billion. at months in to Slide market at This The the by X%, the development, especially U.S. results double-digit the the Middle X%. demand currency, COVID-XX with the second to to volume the in in In dollar first European currency. X. the expansion by amid quarter America Slide at group the local demand Swiss third to of In X%.

decline months Chemicals sales the in air starting the more X% in X. in the by XX% francs detail, strong figures currency local traffic with in Swiss in in the of Care first Aviation quarter. business first Care Slide on winter the and COVID-XX-induced mild and Let's area and by due reduction XXXX, Chemicals the weakened review nine to In

Excluding first effect, XXXX. Care underpinned expansion, have double-digit in nine months growth Chemicals the in and growth Care Care recorded would currency Solutions. single-digit sales development local Crop of high range in the The Aviation Consumer reflected in by Personal

to Paints industrial the lubricants Sales by demand. of As lackluster a of in quarter environment of XXXX the sales COVID-XX as first quarter. and in anticipated, Consumer Coatings, also result except Care. Aviation the products a demand feeble in resulted only in and in and were decreased weak the lower The construction primarily business environment third economic lower, for in due pandemic wake application slight industrial X% a base currency growth chemicals, local particularly

sales lockdown mid-single-digit sales Although improved of in it during The development was pace quarter range, demand second the at customer The quarter demand anticipated industrial sequentially. yet third in some second Care care was the than by in the Crop products softer in Consumer environment as again. Solutions. also applications a quarter strong in for quarter, normalized rose the development stockpiling by second than slower period. to the due supported The positive

year-on-year. EBITDA impact by lower cost XXXX was basis XXXX margin first and COVID-XX The overproportionate the third XX% as performance to the weak and on the in Care margin third end well previous The Chemicals' offset was year. in positive EBITDA in by XXXX development of quarter Care more nine due and more of as margin special a management from stringent second in markets. Chemicals from the of the Consumer quarter This accretive versus rose XX.X% was XX.X%. the business in significant quarter at points in improvement margin and relevant because effect months Care first were of the the product third more increased in the sales pandemic-related mix to However, third negative favorable to The measures, quarters. XX growth Aviation XX.X% as quarter effects

the which short-term to we in sales Aviation at in versus In outlook in we the expect in COVID-XX continued result a local Care QX terms quarter fourth Chemicals, amid XXXX, difficult of the situation currency evolution outlook anticipate decline Mitigation aim to average year-to-date XXXX. demand with and margin line of of of months XXXX muted nine the level. remain the the offset defend place in sales to in first measures of the

America in Syngas the previous throughout which pandemic-related Specialty X. against demand weakness. development in influence in Middle first this of in XXXX the Asia environment sales the attributable slightly business year. the Catalysis Let's with pandemic. in demand booming local move negative in area by weakened to to well Africa unique successfully nine clear Catalysis by compared as Swiss Sales Slide makes XXXX, on comprehensive in development. all marketplace, comparison grew Sales negatively Sales reflecting perspective, COVID-XX The India and X% months as chemical only Good in a in COVID-XX by X% of in influenced China. and though local of base. by in momentum East Catalysis currency From it currency in the range, a the driven mobility the portfolio, improvements areas the the project North the regional in business nature quarter first the market outpaced of Europe, franc volatile comparatively and third subdued remained months to in sales the strong and strong negative underpinned India, petrochemicals industry. Clariant's mid-single-digit sector, on were the decreased and mitigated X% in Catalysts, nine XXXX

nine offset result XX.X% efficiency the mix as the second month volumes third and be and quarters. a to weakened year, program quarter, fully could well which first first of the not the XXXX product from favorable XX.X% less by The growth lower previous the accretive as in EBITDA as in margin in provision

with local in provision, third X% decent XXXX, see margins to year-on-year by quarter current declined nine and near but the given margin level. natural levels. sales by expect currencies Excluding efficiency to in francs. the at increased year base, months growth stable in of strong underlying slight of XX points X, In In the prior basis local XX.X% we from the Catalysis quarter fourth closer that XX% and XX.X% XXXX, versus first we sales, the XXXX, On to margin resources the cost margins due by currency of the EBITDA comparison improvement. Swiss in EBITDA the XX.X% Slide lower the efficiency was at and program fourth mitigation quarter,

before, quarter, oversupply the the in due weakened softer the due particular. Services in to demand anticipated sales hampered lower a Oil & declined economic Mining were environment, by resulting demand the and As particularly third to from in markets pandemic. oil and said oil production COVID-XX

third the Middle while As digits contraction declined a weakened remained not in pandemic-induced due under units construction the economic America weakness, decreased Coatings to in Sales by demand second offset continued in all in local double could These a in as again, while expanded clearly second largely demand in declined the the reported fiber to sales to weaker sales range growth and mid-single-digit demand the also and the in unchanged in decline in by quarter, quarter. Europe, due in at double-digit currency Functional rate mining sector and East first softened primarily local result, pandemic. low the industry was quarter. sales third but third natural the in of local XX% which and The amid oil the a Minerals services automotive due North COVID-XX currency, markets, months to result weaker X decreased solutions COVID-XX local remained the slightly. well Additive Africa Automotive the in the the currency of developments America Latin pressure. services softness. resources sales foundry at purification. feeble the European business XXXX. In in and oil were, weak high pandemic-related business by Demand currency, a as three single-digit as attributable by quarter. continuingly sector be driven

other decline of low a which by Latin by Gulf weakness Additives Despite decreased As was of decreased with sales XX.X% XXXX, in anticipated, due and most continued production first business. Services margin In the were in hampered in mining demand XX.X% confronted amplified the was in from foundry activities year-on-year. continued stronger sales hurricanes and in oil the Mining Functional Minerals to the America. to Mexico nine the & the Oil months demand EBITDA the weaker Asia, markets regions. end of

third second from cost sales quarter the the contribution a as unchanged. of the was in Excluding the segments, be in program not the In profitability such textile EBITDA in remained could in underlying units efficiency automotive, from internal oil, particular, offset quarter, Mining result XXXX, resilience volumes the applications & due value-added largely to management XX.X% margin all the This higher three measures. of XX.X% which of and, Oil Services. fell in COVID-XX-exposed business to performance lower XX.X% and stringent by

the Looking activities. decline quarter expect in forward, mining production foresee line fourth and to we the resources as due to of see weakness top pandemic, natural what and in the we oil XXXX, softer demand continued COVID-XX

these expect a continued on that lead strong some versus decline quarter the We of quarter negative also in factors sales XXXX, which quarter. will to XXXX to of in influence have the fourth the margins fourth

us absolute million. the of the for the discussion continue the on decreased X. to CHFXXX first On to an development Let Slide months EBITDA nine basis, EBITDA

the portfolio decrease the currency attributable that clearly the margin despite COVID-XX measures. COVID-exposed Slide profitability could automotive, in the to third offset fiber at mitigation profitability to back due EBITDA execution also business in both decline, what the current and attributable Slide underlying CHFXXX as which in particularly reduction first and XXXX line and Overall, industry. to Resources, in quarter XX.X%, stringent XX.X%, environment. unchanged results Care turbulent turn specialty However, the resilience be the weak despite preserved a of of of the to month potential I cost our results product doing that Chemicals well comparison in three as Clariant's once Catalysis corresponding and successfully effects. in business XXXX was to impact not reflects mixes, the XX previous close reflects is XX.X% and the are and we in Natural on can performance successfully comparison remained the margin a internal XXXX previous the efficiency margin volume more due year. that improvements. absolute months core year. XX EBITDA This in performance specialty The XXXX, chemicals to going The The reflects resilience preserve again explain versus our negative to top the nine development the with in million to defended of of despite declined core economic margins margin in the nine segments to EBITDA Clariant's the fact reduction areas: improve the forward. measures. EBITDA performance the weaker pandemic-related our is advanced particular, of But favorable oil by the particularly so lower like to the the is Please volumes environment, development.

in nine nevertheless local at declined operating the margin EBITDA X% sales of year's we first Although currency level. in XXXX, maintaining months last in by the succeeded

ensuring support the continue maximizing measures will communities, to improvement. ability mitigate to The on our Our focus to our group pandemic. of the continuing effect and of task customers forces our employees, reflect business safety our continuity to performance

distribution beginning you the as transformation In we successfully at divestiture the of have terms the completed divestment packaging therefore, of terms by that to know, our upgrade. already care our Clariant's XXXX. we transformation our health communicated in of dividend as shared and quarter the the Masterbatches process XXXX, Pigments the priority, of the previously restarted Clariant's completed program, ongoing of divestment and In part have extraordinary third remains program shareholders. portfolio we, success

divestment organization the lead rightsizing Therefore, divestments, to organization. is are complexity currently will Clariant process the for have much the of will while the we of to the adapt opportunity With setup. new the preparing company the and progressing, the the Pigments

an will this due on provide course. in We update topic

of XXXX at XXXX. Clariant's the the pandemic the months of short-term from quarter the of anticipate less profitability terms COVID-XX first sales than impact slightly of specifically, negative average and we looking on nine a fourth In outlook,

continuing going We mitigation our successful will be forward. programs

its these uncertainty Although generate continue performance days, around this just will transformation of remains in the the execute program. resilient resurgence pandemic to Clariant high, and

Our over growth, to call midterm that, and back would remains above-market the unchanged. Maria. for higher cash generation guidance like turn stronger With to I profitability

Maria Ivek

reached in Clariant's taking outlook for for us and providing an with Stephan, you, insight achievements Thank through thus the us into [Operator Instructions]. XXXX far

now questions. for open will We the line

Operator

Citi. The Chaudhry [Operator from comes from first Mubasher Instructions] question

Mubasher Chaudhry

terms The you well of you we the in those group And held taper break Care about stick were then up and From should secondly, terms provide in ones, could Chemical forward the FX the Just which that cost offset around savings margins X%. the saw that Can within those the the see decline moves? And going two you in how of please. the a some back? third came quite perspective, regardless out we that quarter? Or on how third Catalysis. the comments quick temporary And through you price those through these down FX? as will think increase come forward in were of volumes saw quarter division? price in of increases where going to

Stephan Lynen

some So EBITDA nine were months let preserve we on me compared with how year comments start able to to margins level. previous after

right, the has more specialty totally our a margin it's contributing also higher degree portfolio, a changed strong combination to which You're been which has resilience, and now of by management.

stopping So competition in levels our defending COVID-XX margin reduction in year, the a One basically prices our recovery volume savings. programs of volume the impact, of the in for volumes that's times And again, sustainable of lower are short-term feasible contribution will the times, significant as fully comeback be those pretty of accounts work margin not dimensions. course, markets, we the mitigation the of in decline the as and material potential course, and the temporaries, of levels programs. And effects and is, finally, gross And will, share as where beginning direct travel in these taking two projects those from a accumulate not out recovery in reprioritizing saving of talk flexibilization, to standpoint. we saving price action but well were higher amount strong reduction yes, labor. these but the such overcompensate some mitigation yes, overtime savings, of and in cost, about which then raw are of

second announced The saving efficiency regard dimension in our particularly in the program. to is in

of of CHFXX know, you As contribute The refer saving program positions, have alone. business reduction XXX to measures will continuing XXX million. we a a of announced the the positions to

of or of the We beginning the the million CHFXX end cost in quarter year. provided have last started We already. the implementation in already of the second in dimension

that the you the share because the direct And in with a have again. that first it QX once already employees repeat moral and that end first the lockdown, very of that the now we or believe I We commitment have concerned. north up on year on our -- as in a execution of course in end taken question? can the of contribution already interaction so more have will have sizable hold I a lockdown see of position, And initiatives the also rate to I we And CHFXX less yes, expect from After in we million, good say, your this are in second XXXX. season a Can XXXX. from saw put XX% we XXXX. most you the reduced we have -- quickly said, would at run considerable by them XXX XXXX, we

Mubasher Chaudhry

you saw third It increases was on the that in quarter. price the

there's you said think X% that price increases. I

of offset So FX get wanted And will were you genuine that increases I where stick which through going to have price kind impact a seen? are in divisions? increases these the they price just came for which feel forward? those to Or

Stephan Lynen

sell in more booming ultimately, in and where But very hygiene-additive certain where where is like to always articles, growing course, two it's articles a more like we decline margin bullish, our the in mean mix The segments care, also minus into we I X% overall, would the strong second or really times, effect when body one price as And But X% except strong these in as is in increases, sell a specific not of price I and booming we're also both. hygiene management. are or you accretive combination in attributed it's that significant in nine pricing, would most at see, it personal means volumes pricing accretive it increases levels. segments. is I course, call, of growing. booming active market products it's pricing of when is overall, where on are to very as would it's active I where a care, rather Yes. factors; look we refer purification, to much And margin at defend months. volume, the levels after strongest saw and you to action,

maybe you accretive the prices, defense value we there competition our and more time. stronger in where decline manage less a and because price defense products. smaller or but cake a you have Here that more even growth it's of oil strong X% could propositions COVID-XX or levels And is raise and for unique the with these decline lift volume and have

Operator

Baader-Helvea. The next from comes question from Markus Mayer

Markus Mayer

Stephan the on several outlook. and questions Maria,

terms. You anticipate the that third was around be margins, relative expect is fourth question. XX% the you And the is the the or whereas the quarter, quarter? from But would the quarter. it slightly in question seen in absolute would fourth as Or the i.e., first levels quarter volume terms is does i.e., more business quarter? EBITDA quarter the decline those fourth basically mean for meant than for quarter seasonality second this margin basically side, be stable a That small Catalysis third in in in quarter than terms, third my on the the the fourth this the current you is that less normal expect comment in year-over-year fourth sequential on improvement versus better EBITDA you absolute that expect your

Stephan Lynen

to precisely means quarter, the are look we if economic announcement development And we we X%. better the oil, yesterday's is -- we the X%. with maybe in countries. to call. impact impact. And the X%, resilience want a of over additional transparency take the not has is X% more came negative When the definitely months, a minus off what to In at an QX, just precise for we course right? impact and But and as COVID-XX aggregate the QX on me that at also less and local was our saying But certain a quarter about mean biggest mean in as actually currency minus us And don't I place than we we the outlook, environment. in let our Clariant in combination this question that see be quarter, Clariant lockdowns look can. We Aviation on impact be nine than on And you means today, to with a transparent slightly slightly to we had talk we really easy, first first would level, so. see or that, net were decline contributor to easy we what minus the decline. from not rising the the minus that And outlook see in negative first X%. give XXXX. here of In let's that with And giving after not better we've COVID-XX first everyone difficult, in quarter for sales the third in seen stronger COVID-XX a first of less then third that minus say, in winter fourth continuing part. that the

effect if particularly, than would our minus third it's that terms. would the first deviation, that minus But again, speech, Resources X% in the expect on in little mean be Natural follow-up expression deviation you to only we still a course, then not of my the momentum come actually also does pressure if come because currency, stress we QX it's and slightly. better in the higher on sales guidance, local where said that nine quarter. I see a question Well, X%, but So that was still line, because That's Why effected. it's QX, it say, does after very months absolute we top easier around as it precise. still Maybe be But a year, questions. FX longer it will an year-on-year. the be our from? look than least actually, business the normal okay, And I'll Aviation a will also definitely bit negative us. from? to oil to see, we we understand see would the relative on there seasonality, say plus, at Last have the where COVID We from maybe

climate the as such impact. my guidance. that an winter considered is traffic in the does, whatever or So the just does have And air will

So from QX we we from QX strong the from main of or positive to a of QX Catalysis, impact where rollovers despite still see some orders to QX, see, very commercialization comes in projects in when have of close with that. you are to a time, we communication And catalyst, the And fourth our at certain very quarter. your point change right? customers do to

the in we performance minus very year we X% on record high had the versus of months. better see the come last EBITDA to in top Clariant, a fourth quarter So this really first of one a in quarters line we why nine the QX. main reason the slightly If is QX, margin, performance

there And margins EBITDA we plus businesses development means business effects. the a extraordinary had accretive some very in that XX%. remember strong You reaching

still remember results into For we had QX full on example, the said together QX. you Patrick, when with orders I that year some pulled commented we Catalysis from

we of EBITDA not definitely on performance, stand reported which up have to margins QX. comparison any So the will QX

over our line or months will XX.X% So and we now in nine exceptional year-on-year, again actions, of all-inclusive, could home angle. from December. margin the mitigation on least when performance, But included. bring believe And margins items we line are after finish as that versus the at at the is we year-to-date run have we and what over EBITDA, top rate with we the slight a the all that erosion we said, this EBITDA run improvements look rate strong and

as the guidance slightly at So year able from XX.X% additional year very, over longer because for the the of took potential little lockdowns, this the I today. to I end if a should the you resurgence we guide that finish question, can of uncertainty this infections noticed and And would wanted or potentially what of that's better. what your have first bit line we guidance. -- I for substance question imagine our a despite very more the that bit to that But second be to bring

we particularly, as QX-on-QX. be positive. reporting nine Catalysis, if have slightly year-end, growth a run And been more again, months. Catalysis, nine first of very rate, months, the on what to We month margins, would better, bit I at look So close slight and we the maybe, us it will might should look I also was a said, XX% in the see see nine but here by you probably EBITDA ballpark XX% after the would I be the that

Operator

The comes Peter Generale. from next Societe Clark from question

Peter Clark

questions, please. Two

first around was is much comp. obviously, I But comments flying. there weaker in for 'XX have Aviation. I not one, quarter slightly know a the QX The on the would thought,

So just getting that. going magnitude don't then what therefore, the from numbers, want bad that. is temporary with as I'm QX the very cost And is what large. bad, commentary the clarify be have year-on-year you you're indication to still Aviation I maybe is QX. than worse the maybe sort Aviation of even sort to of from obviously but second maybe I'm is question, pretty you not mentioned you're the as indicating? of the getting implying

obviously, costs I And almost guess, QX? Just on how temporary see a see QX, we 'XX? day-by-day a in you progressed guidance, support it's early them the now, how directional, QX a in terms feel then but in moving of of the picture in how just

Stephan Lynen

being we QX when in the first purely in there be sure. there still strong a business right, double-digit are XXXX. about this yes, I of And already of spoke you at But Aviation hardly the will year-on-year, of said you That's And QX that despite business And on guidance for commented erosion a quarter, will the lot Aviation compare decent year. left therefore, had when I before. included that the its some soft, to already business. to is we look take was impact.

local in remember we Aviation look think was again, we months, QX. in X% in minus I then X% as were particular, driven QX look by the QX, which down nine and such, in So if Then Chemicals factor then at Care currency. XX%, after we mainly X%, on

again, it's would QX X%. X%, So XX%, be, a nice track, obviously,

probably looked be we months where So mathematically, I of first that fourth pretty the purely accumulated local the to And that, dimension I Aviation. quarter minus could the continuity, of at the negative performance New mainly would I factor. Year we'll be what started for the Aviation, your emergency that said, temporary crisis positive. a and I X% due we management would But slightly be as also safety, after much turned should or currency in and for may ballpark prolongation nine question called say assume we basically in pandemic Aviation started business April back that we And for we but cost, on for epidemic March, when Chinese mean, driven around management. an by turn

the business So very the programs team to of executive hands-on is book. the couple and leadership a running

taking flexibilization, I so And out travel, in we've said, et that [temp], savings in, of as seen buildup work, QX, from cetera. impact already

increase slight given before. I of was will We and slide QX QX already on part the have into in basically guidance been the now and levels have that a QX,

Operator

question comes next from The Heine MainFirst. Andreas from

Andreas Heine

on like back to first I'd to come Catalysis. the

You get I'm you this. QX, fully have not for expect but what already outlined

in you very Usually, fixed that is to than sales known said You for higher last QX year. Catalysis be high having expect costs.

up, can in at when you is first, to positive according when when in you understanding some got which QX that? very special Chemicals, I If then the have in means XXX also light one. was, also that months, you can expect margins Maybe right, sales solid were when move. shed Maybe last you will item price and only high, below QX like help on the know points So was oil what my first in model being me would this? earnings margin to be was Care was And low. very we Care the have the it I the basis it time Consumer And it last year. seen nine

by recovered. in material the are down the lower raw into Chemicals cost be and How driven next came defended when then after oil year So margins very the that? in price you indeed and solid that the can Care year years confident considerably margins

Stephan Lynen

questions. So a couple of

of from quarter why QX but and effects year-on-year Catalysis. also on as Andreas, special And 'XX, Obviously, fourth had that's see margins the with line, XXXX. couple start, in not in we the said a before, license Let's I we income, the accumulated margins therefore, top from sales which not QX in will solely in of we Catalysis level. levels

the nine of that's now is the restructuring the we the the why QX will period rate, longer mix that's exactly level what of said And the last months contribution quarter, in that's and for XX.X%, that that's at comparison XXXX. a accreted time. the we over but And right have QX. sales QX more XX%, margin or distribute run XX% in the first why a which said EBITDA margin after of also before into effects We provision, almost nine excluding if of and I months are to also

XX.X% excluding is the So into that the reasons. base That's we the for accretive underlying, better can but the level. for slightly comparison 'XX also EBITDA which the wrong and group, so with fourth those bring means quarter if not we we the look something that at sales, by QX restructuring as see at provision, well

year right. pleasure in the I Care Second, and time risk times, rising a mean lose. price myself a in material manage I had But on raw in we this you're material to some gain the Pacific. already. of both falling you raw Asia you business part, that part there for The prices, in is have

last just remember, quarter pricing, in see end a end then not end of oil. you momentum okay, oil If in had, It's of year, into rising. you in or actually started decline and and regional the significant the oil already a is QX, could pricing. beginning you into year. prices first this at again came ethylene where the we propylene And It

only -- stabilize And margins increases run third quarter. in they influence crude long price, the price could we so reactor still also seen shortage the oil, how the we have not So on behalf. that

quick we on pricing -- where propositions have as resilient the the QX, the question had have, risk an the more advantage. doing prices. hands-on that's to you're on problem we remains, is material course, and value or value raw a price the going a you over and material not business the have more you the same do any the So -- -- have And of very portfolio referred And forward raw is price which we for a it. I also fast-shrinking it times, least portfolio part -- that it's manage And business fact, and And independent. I'm or feedstock executive secondly, -- how But this And together. not in fast-rising raw is -- anyway, maybe have volatility that's the very you it's approach the I levels still at effects yes, to total that's you the right. can. have the the of there. proposition, we it opportunity material to before, prices, consumer-facing of which fastly question in in why very to the stronger manage less average said, been in disputing raw still a a material in over can question what price referred mitigate year, and close manage bit be of of where yes, you And have the could advantage we but that as to expectation special the then team today. units before that

see exceptional in the that -- a margin. actually could had quarter, you higher you could sorry, third EBITDA underlying quarter we the in in than see the margin So EBITDA third

And least the had that negative -- we of factors was the around was a largely business, at biggest which effect CHFX actually, only sale from the or disprove plant -- came that items. million two unproved fact core Obviously, was area proves [cessation]. and exceptions a So that not have in positive a item. of

than would, effects at they bit the same had actually same the a occurred that corporate time, I cost extraordinary However, in some quarter. higher expenses, also little emphasize in positive the we the

of at total not we low and we also Clariant, over we on other effects, from the had and margin an Care, a that effect. had continuing So look EBITDA it effect exceptional have continuing even yes, and underlying, been of would we level, EBITDA have year-on-year, absorbed for reported it level because still And was the effect. continuing on which out of improvement trend had -- seen the But for margin a a positive an would if QX group effect a the take you on that it -- quarter. on a then accretion in an

Operator

from Faitz Cheuvreux. Christian question Kepler next comes The from

Christian Faitz

please. Two questions,

whole? what XXXX for First, your just I Second simple within question, is flow a expectation as wanted ask your activities to agricultural Care cash about Chemicals. question,

the As Any the far your as pipeline you anti-drifting of are on I can are for of Can agricultural agriculture? item sales indication innovations producers know, you talk other for in one the this you of recording about? you any give key us dicamba. agent level

Stephan Lynen

of Yes, course.

program net the of at keeping So facts an in year certain flow while with we which course, Difficulty] cash area look in [Technical -- XXXX. this also, let's to work start of we have of certain on. But mind

we to see a if have capital say very we I So that because high, QX, with running program still positively, We're Catalysis. takes time the to we cash the scenario. we then But that working adapt some it inventory, for particularly have we in and could new some which and than of better tight also time were now. -- to orders, get normal a in COVID-XX also QX QX

keep which need something mind inventory. that's in So we to for

are receivables relatively fine. On we side, very the

or not any We outfall anything. major have seen

in building forward, control is the the in a next maybe credit in certain a have industries into going risk very year and more tight than financial because I we think markets, this markets So this year. still

as taking say the the second the to lower XXX dimension biofuel of and now of and And from guidance we first this and and on release to and a which same which into it's first remainder we investing tranche EUR not demand, adjusting you have short-term of plants work we -- inventory also, We fourth would Nevertheless, the finally, million, provision, for conversion, the improved Union paid have we to will certain then we and our And could going have the in in yet good provision flavor has full still with in commitment. in reduced are with growth part Romania our or start-up, quarter, that the know, CapEx midterm, long than And our labor, account. the we a year, European because second nine in September, are though cash that. in for terms in super we the And shrinkage Yes, pay and therefore, - in normal will extraordinarily tranche a in decline portfolio measures the the we your into all also the Crop. I are on progressing on seen at have new course, of dramatic see the put payables the year, we you the from was a payables new pay midterm having be in we quarter. this XXXX. in will that still prove and months. in although expanding while certain next because our time, strong flexibilization, or question, year, Crop, high

before, resilient said Care part very was care, home I but on personal care, the Crop. As Consumer also

and then to a months. nine increase the yield period. innovation means Crop some into whatever summarize, We adequate square meaning of that in in to we of traditionally at there's can -- trends that's plantation, but are protection, but strong, are and and also, innovation in by area crop more protection, what areas the we're bit these us, We even yard invested proffering And for course, greenhouse take more or those resistance, you well. you on we lot it the of that a spaces. come, a that area effectiveness own have take, have outside We continued first we coming in grew the or you, and So area also now that particularly the are where stronger where that next of our Europe. you adjuvant in future. briefing if actually the regulation after to space this the see the yes, precise, one out I in just of over and area growth And in give also maybe have little we times, digits Frankfurt into of detailed climate dimension double a short-term crop out also pretty as from center from geographically we see this present increase innovation

Christian Faitz

that is question of my core dicamba meaningful agent, sales? a was the So agricultural anti-drifting sales within the level your

Stephan Lynen

what… The

Christian Faitz

chemical The drifting one echo which products. anti-drifting sales fields, agent your within of your for is, believe, sales? into meaningful dicamba, dicamba neighboring Is I number preventing that a

Stephan Lynen

Yes. just Honestly, this I follow-up. on it by of would do back about a significance [Technical the would we to have you. come cannot you say, to let's separate Difficulty]. I tell

so wasn't that that at strong time. went, I Although

Operator

Jean-Baptiste from comes of question from Bank next The America. Rolland

Jean-Baptiste Rolland

related And you're will considering be Catalysis, potential you you this able please? et side but resilience Catalysis. the see also, competitors of sustainable? you to facility, reported wanted of of catalyst between the you taking cetera, you believe back give second which that you -- you Are And differential sense strong, quarter? Do please? you the third the the relation extract that Deutschland the on have and me in what your sales shares to that a I the of do just -- the Can product to in attribute your remind a several Chemicals, magnitude to do question sales offering to is from the resilience double-digit margin. your Consumer could I industrial declines as come what this still side, understand market? consumer to of in

Stephan Lynen

I the questions. all got hope I

half But so have Construction, of an besides north part, and the of about of mean, and business, than also Traditionally, I and that would we of standpoint and and Chemical me of if be speak start look with and and organizational yes, Care the a the this Chemicals Care which you a technology thirds in in of Coatings, Home also architecture, maybe when consumer-facing it the dimensioning reporting to the applications. are business Crop, the Aviation Coatings actually, in business, really dimensioning actually so Let Care right? so while same dimensioning from externally, And consumer Paints the industrial is total and which about speak the is more facing technical Personal or on you forth, application, industrial also from but Care, also in organically, the consumer And industries. more half. the really this is Care. segment, -- applications. internally with of the we standpoint is actually, paint It's into industrial of at going Paints more the specialized have we Additives, arena, deco. -- more two closer highly to more we space, industrial Care consumer-facing than Coating consumer-facing, the arena go backbone And Lubricants, therefore,

look -- as measured. second how be performance. let's say, And in bad -- here in The X% it our in we have not space. the is also here the it question, main before, I I of have outperforming reason months comparison The Catalysis probably in yes, that we or you a should first market I in portfolio. six was very Catalysis, understood, our said the we That's with happy QX the comprehensive and minus bring we're have peer mean, we that also been

single We are not strongly into market. a

emission control to strongly not automotive applications. We exposed are

We have several fields applications. of

about, then you're are like, did to so character, a about you think sustainability the perform factors much performing see, investment. and as differentiation listen, volume asking the yes, could it portfolio market And assortment country X% last not the But launched, first, announcement in comprehensiveness, you your Deutschland perspective. side And I Well, propylene much and way therefore, phthalate-free this mean, and I in came China, also, -- our that's in more struggle exposed too catalyst in of commoditized sustainable catalysts. our in the nine were totally decline and We of specialized after Yes, of the question, why have Europe. the is even and portfolio innovation on -- the and the up does width think, right, most America of we of Asia region XX%. from deviation our we reasons historic applications we then I North months, Pacific, nice core or of perform. from, recently pretty really the were combination where will a the market

necessity ways, and have, in activities the you from focus long share that particularly as facility then because Asia. Difficulty] maybe chemical see made we the and not as have of specialty our strategy, the in and Difficulty] for investing as of we I growth -- therefore, China. be to ramping did by -- And end the year our to some in and term, we then most into industry Deutschland but to made part close up. propylene purpose a guidance will China and had strong, already proportional can the and next detailed But we on of So breakeven region, future propylene are midterm and with growing, cannot the course, week is, chemical appetizing on that's one why guidance we -- we purpose be also by see nine [Technical did also reporting this which growth as we next been of in in now guidance what our strategy investing increase that the simple, the And that We're is the end actually is [Technical strongest in months a And for that approaching we market the announced. region. and we is biggest investment Catalysis, the and of U.S. of the magnitude here. in company over see beginning. a Catalysis, where the market demand included. also more stronger with included far are despite on as will this future also midterm of have know, propylene or that we it's clear by anywhere the focusing and standpoint, believe you core decided -- Catalysis give we is the has have investment is China We're have of very such you PDH in took midterm know but China from need And the growth, the China X-pillar mainly we results other for industry presence deliver of of we and and where particularly you in that investment in of biofuel in what investment happening.

Operator

next question from Andrew from The Stott UBS. comes

Andrew Stott

I guidance, but and a couple, clear can. Catalysis had the back it's I wasn't I question, the if first on sorry I just To I'm to come it to probably wasn't mistake. my --

you to sequentially that typical XXXX massive So in is every you QX Difficulty], since points you're an problem absence revenue in somewhere saying step-up points. of can that you not yet see basis bought and step-up had between year XXX [Technical terms, here and basis fixed a

so that already, of understand as why a I'm up to I loss came and know bit apologies. So question

Second question was a simple one.

to with us for relaunch? happened, You've you just wondered I that table are process relaunched say when where give could Pigments you time just the if idea that we an at disposal, example? as Has

Stephan Lynen

course. Of

So back the Catalysis. to

Andrew Stott

Hello?

Stephan Lynen

answering proceed the will I So question.

is So the commercialization that quarter, then of of of projects question quarter. line top and EBITDA in in that really combination first in The and in that that magnitude was your is is takeoff then factors. a QX. definitely commercialized One is quarterly the performance about Catalysts

So sales that the gives you dimensioning.

As in a we in on should line. that top I opportunity QX the slight year-on-year regard see said, growth

better second produce et actually -- factor, QX, balancing your in also here, cetera. QX, that pandemic, have And utilizing much a then the the or you COVID-XX -- you assets? is factor in differently for other been did in How quarter? are is this example, The much year, in we production how from

playing April, normal, is done or not to have, in -- because, strongly in have QX something step-up we I was, on how about the savings, planned I strong also talk at turned months. So to business. pronouncing That's strong launch said not super and higher not after a give QX December, demand. a March, Pigments the license marketing yes, We could which the and produce and million the that margin. a before role could time the a strong. repeat is continuing factor EBITDA aspects, XX.X% more timing cetera, is And see but also to three QX as your -- we We've we believe XXst you're utilization was reason thirdly, -- EBITDA the have run according no been all there you significant the is take in we campaign, nine own would perfect careful position that to to BI, QX said, other exceptional combination speaking this which the income, we COVID-XX demand, mitigate but goes again, about let's process, And To give to what needed for then the that and was very correspond XXX and whether therefore, getting that that textbook, et in in right? big time of second also epidemic very question because this -- question the to be step-up why its compared not are from have. as the able margins, play and would the in should initially COVID-XX time impact measures. upstep before factors, don't Pigments CHFXX reality of I where rate and So the see the timing, before, there well, you -- kept EBITDA some that pandemic guidance, around item, there which as not well. have after marketing which marketing right, we inventory you QX the is which on we but And said we the back was QX, that the or normal second have I in I you will of other your factors, the

marketing an CHFXX quarter EBITDA the than first where is in that's why -- provided and the was launch we've program Pigments, that of and of important difficult the driver, specifically accretion the a had these million have discontinuing, second or And marketing. up value have times. we in in also in reason course, the efficiency We important which month-by-month. timing the postponed ramping more the of And very

We have now restarted and launched the marketing process again.

We buyer a It's wide still deep. potential collecting universe. are and

high are market. there other equity. interest that. in There's we There is So private And the interest. is interest strategic and collecting

what give And a The the the here potential. insight the I buyers the end physical are also see into turn full closing We is we could mean longer strongly through equity, now. going take potentially because could is the private to will depending value also and of who towards the on next it of strategic, if we right, process believe with processes that then into it process will that and mid probably is, next regulatory the will year. see than year buyer is be proceed to the visits difficulty we and into that, then signing, potential that we or we normal. we will of the depending potentially, time bit on is before where business a see

Operator

The from JPMorgan. comes Udeshi from Chetan last question

Chetan Udeshi

to are have now Crop, the And do also, been some some year. would for about do it sales business? a markets, or in formalized Chemicals. cetera, the help to you in are wanted different seem for from process it the Difficulty] just for thing is let to because I two was just can how flavor. et get preparing like you been not it be Personal Care for sort Care, more Consumer takes same whether of what fact consumer-facing but Is the commentary waiting just is we've but Are if waiting Care you rightsizing [Technical say us been it understanding markets doesn't formalized. start oil, three I were by and last of The Care, as maybe else you than to question now is useful it with still Home we've Why heard or the still hearing quarters, this it hearing which something? maybe XX%, it big into it of Natural And help is mining, this Yes it for itself, like Resources feels understand split end it? to -- you time the process? that

Stephan Lynen

least round. into done, was four But fact Well, Okay. at fair that the in enough. questions

Resources from start on there. let's So Natural the mix,

& X We Functional refining dominant into biggest end the three one have then applications a the more Additives. minerals being while right? big sensors, of purification. majority Purification, you into and mainly, sophisticated not businesses, And Oil one, The The plastics, The high Services. & we also the going Additives, mining very markets. of. also three but and markets Services that part. months. the Minerals, Oil have then the bit going end are to Mining areas, recycling Mining the camera the was want oil, in a that nine couple business driving have we being smaller and oil biggest functional ones, where into you than foundry, but one. few autonomous have consumer-related again, biggest automotive-related Then piece, special a think said in plastics might The is which digitalized of applications purification other that's normal have the after you then for mechanical space a I positive of resistancy, world, is and going which into E&E plastics,

in Resources The Additives third part, also in hygiene industrial more Natural high-tech Resources adhesion whole which Additives if a the into have the put a less the part Natural weight you second together, consumer-facing is is also and is which And bit the then Services Coatings, goes more Oil so of half the you application. area, coating. Mining roughly & in than that little And is all business.

in part a the cannot segment. we the The Additives thirds. makes XX% had split and include While arena bit whole Minerals little a will total. than I of just consumer. way rightsizing more than is less report, about I Care third, Then a Personal dominant when than we to the and give the less the oil. on -- and the of And biggest I Minerals makes two about mentioned. Chemical If a Function more the like it's back consumer you definition, north consumer-facing be elements and question is about industrial side, from Then as will I part also more one Functional before, the also question, it Care within the we mining, that your of But not bit give purely M&A. said a little talk oil

rightsizing on the On anything. no, side, waiting we're and no not is there problem, -- program

results that it. dimensioning and a we rightsizing we to were the -- define we already want we announcing year in or and full do to February, do how With to started want progress program the what

with keep complexity. CHFX.X stands and of the on the business. in it Let's turnover Healthcare more Pigments, actually, we basically we divest XXXX third billion level, that mind total a have Packaging, based Masterbatches a much in our sales on for of But and almost

it logistical customers, of amount it's to, amount of more about -- of focus model, not do refocus workforce. think take rightsizing XX% avoid you activities in advantage the just to model but the to that therefore, to than means or costs more a And also plants, to also yes, to remnant course, XX%. If of the the means and more and Clariant, operating simplicity to adjust focused

some takes -- we define is not So that always was but couple reason the surprise July time of the was divestiture that running. first Masterbatches, agreements still X have in with it and a plan, the but transitory biggest that, because why that's biggest a to service

place support we to to even and sold in have still Pigments sold the it haven't office So yet. business back that means you have

M&A, little update off more of of one for only finally, transitory result a closing details, bit with believe is but before communication. program. of And market. we there. have little it year. end there the the timing right probably as the the this full a of on now. your do timing. we're also this thing agreements. I say, at the the priorities of dimensioning of of we to earlier, to and divestiture, that to COVID-XX, the least that depends perfect time with question no, a anything So a execution. could is an date our completion year that really with show saving off a that we the do rightsizing I the the more plan not service we we're not waiting bit of adjustment we give course, the maybe of of fight strong year, already date, would give to couple in say portfolio clear the The February okay, in Initially, next process number specialty we resilience to said with And results to The some need And really unprecedented total fight program our right I underlying

That's the opportunities something and levels also might at we that and are we to be, midterm divestitures, and will then of investments these potential we three will an if is Second Already third areas of -- to come run communicate us in and might balance one Clariant step we back their with is we we improving then find even now, that core And on. stage, come precrisis. value the these very talked with up more And opportunities because it it course, as ability be up side, not strengthening that And the have second and for or something And even But we we forward. the our nothing we all if sheet fast expand all monitoring to capability at tomorrow. are inorganic is And interesting it will also that option. super for accrete to our company, our is targets. our there's market rightsizing will for programs, on of it ahead in priorities, just the the bring business full to actively balance we're one towards -- sheet about. the priority working on the and growth. we strong. inorganic

Operator

gentlemen, back you. Ladies Thank turn like over conference and the speakers. the to now question. would this was I the last to

Maria Ivek

further this concludes conference Once Investor you for you for gentlemen, today's The again, goodbye. might call. and Ladies joining questions have. team remains thank Relations and available any today,

Stephan Lynen

you. Thank Bye-bye.

Operator

participating thank and the for you gentlemen, Ladies in conference. the conference choosing now and for you Chorus is Thank Call, over.

lines. Goodbye. may now You your disconnect

Clariant (CLZNF) Inactive 31 Oct 202020 Q3 Earnings call transcript