Clariant Lowers 2024 Sales Target: Third Quarter Profits Plummet by 13%!

Clariant (CLN.S), a Swiss maker of specialty chemicals, lowered its 2024 sales target, the company announced in a statement released Tuesday. The decision came after the company reported a lower-than-expected core profit for the third quarter. Clariant said their core profits had been weighed down by a combination of lower sales volumes in the catalysts business and lower restructuring charges.

Specifically, the group's earnings before interest, taxes, depreciation, and amortization fell 13% year over year to 139 million Swiss francs ($160.69 million) in the quarter. The figure was lower than the average estimate of 150 million Swiss francs by analysts in a company-provided survey. Clariant now expects local currency sales to fall by several percentage points this year, while EBITDA margins remain at about 16 per cent. It had previously forecast flat or positive low-single-digit sales growth for the full year.

Chemical companies have been under intense pressure for more than a year. As energy prices have soared, demand from industrial customers has fallen, which has forced them to draw down inventories. Conrad Keijzer, chief executive officer, said in a statement: "While we delivered growth in our adsorbents and additives and care chemicals businesses and maintained pricing discipline across all our businesses, lower-than-expected catalyst volumes negatively impacted the Group's sales, EBITDA margin and full-year sales outlook."

Sales in local currencies fell 1 per cent to 991 million Swiss francs in the third quarter, according to data provided by Clariant. The figure fell short of analyst forecasts of 1.01 billion francs. "Third-quarter sales were slightly better than our expectations but below consensus," Vontobel analyst Sibylle Bischofberger said in a note. He saw the quarterly results as slightly negative.

Sales in the catalysts division, which provides catalytic products in the chemical industry, fell 20 percent in local currency terms to CHF 203 million. The company's shares were down 0.7% in pre-market trading on Julius Baer as of 0720 GMT.

Despite the challenges, the Swiss company reiterated its medium-term targets, expecting an EBITDA margin of 17%-18% and a free cash flow conversion rate of around the target level of 40% by 2025.