annual report - . what makes clariant special? we have a balanced company portfolio with high...
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Annual Report2013Annual Report2013
SALES BY REGION in CHF m
Total 2013: 6076
Europe 2321 38.2%
Asia/Pacifi c 1376 22.6%
Middle East & Africa 452 7.5%
Latin America 931 15.3%
North America 996 16.4%
SALES BY BUSINESS AREA in CHF m
Total 2013: 6076
Care Chemicals 1561 25.7%
Catalysis & Energy 713 11.7%
Natural Resources 1281 21.1%
Plastics & Coatings 2521 41.5%
KEY FIGURES in CHF m
2013 20121Sales2 6076 6038EBITDA before exceptionals2 858 817EBITDA margin before exceptionals2 (%) 14.1 13.5EBIT before exceptionals2 574 546Net income2 323 203Basic earnings per share2 0.98 0.68Operating cash fl ow 301 468Investment in property, plant and equipment 292 311Research & Development costs2 199 175Total assets 8174 9467Equity 2780 2666Equity ratio (%) 34.0 28.2Net debt 1500 1789Gearing ratio (%) 54 67Employees 18099 212021Restated (see note 1.03 in the Financial Report) 2Continuing operations
Performance.Growth.Innovation.WHAT MAKES CLARIANT SPECIAL?
WE HAVE A BALANCED COMPANY PORTFOLIO WITH HIGH PROFITABILITY, LOW CYCLICALITY, AND SIGNIFICANT GROWTH POTENTIAL
WE APPLY A VALUE SYSTEM WITH A FOCUS ON PERFORMANCE, PEOPLE, AND PLANET
Sustainable company successes and value generation can only be realized in a corporate culture that is embraced by everyone involved, and which achieves a balance between business per-formance, social interests, and environmental targets.
WHERE WE WANT TO GO OUR VISIONWe aim to be the global leading company for specialty chemicals and to stand out through above-average value creation for all of our stakeholders.
HOW WE AIM TO GET THERE OUR MISSIONWe build leading positions in the businesses we are active in, and we adopt functional excellence as part of our culture. We create value through appreciating the needs of: our customers by providing competitive and innovative
solutions our employees by adhering to our corporate values our shareholders by achieving above-average returns our environment by acting sustainably
Sales 2013 in CHF m 1561 Growth potential +45% p.a.EBITDA* margin 2013 16.8%
CATALYSIS & ENERGY
Sales 2013 in CHF m 713 Growth potential +67% p.a.EBITDA* margin 2013 22.3%
Sales 2013 in CHF m 1281 Growth potential +67% p.a.EBITDA* margin 2013 15.2%
PLASTICS & COATINGS
Sales 2013 in CHF m 2521Growth potential global GDPEBITDA* margin 2013 14.1%
* before exceptional items
WE HAVE A CLEARLY DEFINED CORPORATE STRATEGY BASED ON FOUR CENTRAL PILLARS
BUILDING A GLOBAL LEADER
3.WE MEASURE OUR PROGRESS BASED ON SPECIFIC TARGETS FOR THE FUTUREClariants key performance indicators (KPIs):
Our aim is to make Clariant one of the most profi table specialty chemicals companies by continuously improving the EBITDA margin.
Organic sales growth > global GDP growth EBITDA* margin 1619% (2015 and beyond)ROIC >peer group average
*before exceptional items
FROM AVERAGE TO THE TOP ADVANCING INTO THE TOP TIER IN SPECIALTY CHEMICALS
EBITDA* 20012009 20102014 2015 and beyond
* before exceptional items, as reported
2 The Clariant Story is a Story of Values
2 Interview with Rudolf Wehrli and Hariolf Kottmann
7 One Clariant
7 One womans path
37 The Clariant Story
37 The Clariant story has only just begun 37 What does Clariant stand for today? 41 Strategy and goals: Performance.Growth.Innovation.
50 Operational Implementation in the Four Business Areas
52 Care Chemicals 58 Catalysis & Energy 64 Natural Resources 70 Plastics & Coatings
76 Financial Review
78 Results of operations, financial positions, and net assets 82 Segment analysis 86 Consolidated balance sheets 89 Cash flow statement 92 Risk management 93 Outlook 95 The Executive Committee
96 Corporate Governance
114 Compensation Report
128 Financial Report
CONSOLIDATED FINANCIAL STATEMENTS OF THE CLARIANT GROUP
129 Consolidated balance sheets 130 Consolidated income statements 131 Consolidated statements of comprehensive income 132 Consolidated statements of changes in equity 133 Consolidated statements of cash flows 134 Notes to the consolidated financial statements 192 Report of the statutory auditor
REVIEW OF TRENDS 193 Five-year Group overview
FINANCIAL STATEMENTS OF CLARIANT LTD, MUTTENZ
194 Clariant Ltd balance sheets 195 Clariant Ltd income statements 196 Notes to the financial statements of Clariant Ltd 204 Appropriation of available earnings 205 Report of the statutory auditor 206 Forward-looking statements
207 Financial Calendar
209 Five-year Group Overview
Index ANNUAL REPORT 2013
CLARIANT ANNUAL REPORT 2013 1
Mr. Kottmann, in last years annual report you said: Well deliv-er on our promises. Whats your assessment of the 2013 finan-cial year in view of this statement? HARIOLF KOTTMANN We have done exactly what we set out to do. Our EBITDA margin is at its highest level in ten years. We have made progress in all areas of strategic importance and we now rival the worlds biggest specialty chemical companies. RUDOLF WEHRLI ... and not many would have expected that of Clariant a few years ago, especially since the economic conditions during this period were anything but ideal. Given that this was also the case in 2013, we can be pleased with our results.
You mentioned progress in areas of strategic importance. What exactly are you referring to?RUDOLF WEHRLI We are achieving our goal of creating a new Clariant, as is already evident in the modern way in which we pres-ent ourselves to the public. We have laid the foundations for a new corporate culture that is pointing the way forward for everyone. A process of renewal is underway at Clariant, based on clearly defined corporate values, and nothing is taboo. This process, which centers on the three key values of performance, people and planet, is increasingly bearing fruit.HARIOLF KOTTMANN May I just add here that, as regards Perfor-mance, the EBITDA margin increased to 14.1% in 2013. Thanks to Clariant Excellence, we have established a culture of continual improvement, with all parts of the Excellence program interacting efficiently with one another. As regards People i.e. our employ-ees we have successfully and as planned put the right people with the right skills in the right places, worldwide. Our employees are proud of what they do and Clariant is considered to be a very
attrac tive employer in the industry, which was not always the case. Our customers have also noticed the change and are increasingly realizing that, not just on paper but through the increased imple-mentation of our Commercial Excellence project, Clariant has moved from a focus on products to become a provider of tailored solutions for customers and markets.RUDOLF WEHRLI And everyone in the company has learned that success and profitability do not come without a sustained and active focus on the environment in other words the Planet. We assess ourselves against clearly defined environmental targets for 2020 and our efforts in this area have not gone unnoticed: We reached an important milestone in September 2013 when we were included in the prestigious Dow Jones Sustainability Index. This was a great success for all of us.
In addition to the cultural transformation, have you also extensively restructured your portfolio over the last few years?HARIOLF KOTTMANN A key strategic pillar for Clariants further development is active portfolio management with the goal of target-ing those markets in which we are growing and where we can shape prices. In February 2012 we announced our intention to stra-tegically review five businesses. Less than two years later, we have successfully completed four of the five announced divestments; the fifth will take place this year. The rationale behind these transac-tions is clear: we want to achieve excellent results in everything we do. This is why we are selling units with sales of more than CHF 1.8 billion they were making returns of less than 8%. In their place, we have acquired a real treasure in the form of Sd-Chemie, which generates turnover of over CHF 1.4 billion and a return of over 17%.
The Clariant Story IS A STORY OF VALUES
RUDOLF WEHRLIChairman Board of Directors
HARIOLF KOTTMANNChief Executive Officer
CLARIANT ANNUAL REPORT 2013 3
RUDOLF WEHRLI Moreover, we have also been able to significant-ly reduce our sensitivity to economic swings as well as to swap moderate development opportunities thanks to the additional in-novative strength and sustainability achieved for above-average growth potential. We have performed very well in this respect. In this regard, we cannot ignore our small and selective acquisitions in growth areas and regions; in 2013 alone there were five such acquisitions.
You seem to be extremely confident. What can we expect in the future?HARIOLF KOTTMANN Of course we can be confident, but we must not become complacent. As mentioned, we have made great progress: We have built a firm foundation for sustainable, profitable
growth. Nevertheless, in all our efforts,