Clariant AG ((CH:CLN)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Clariant AG presented a mixed sentiment, reflecting a balance between strong profitability improvements and challenges such as currency impacts and revised sales guidance. Despite these hurdles, the company expressed confidence in its ability to sustain profitability improvements and execute strategic initiatives effectively.
Improved Profitability
Clariant reported a notable improvement in profitability, with an EBITDA margin increase of 200 basis points, reaching 17.5% in Q2 2025. This was primarily driven by enhanced profitability in the Catalysts, Adsorbents, and Additives segments.
Cost Savings Program
The company’s cost savings program is on track to deliver CHF 80 million by 2027, with CHF 12 million already realized in the first half of 2025. This initiative is significantly supporting Clariant’s performance.
Positive Free Cash Flow Conversion
Clariant achieved a positive shift in free cash flow conversion, which improved to 37% over the past 12 months, up from 32% at the end of 2024, indicating stronger cash generation capabilities.
Catalyst Segment Performance
The Catalyst segment experienced a 5% increase in sales in local currency, driven by a significant order. This contributed to a 20% increase in EBITDA for the segment, with a margin improvement to 22.5%.
Greenhouse Gas Reduction Targets
Clariant’s commitment to sustainability was highlighted by the approval of its new greenhouse gas emissions reduction targets by the Science Based Targets Initiative, aiming for substantial reductions by 2030.
CLARITY Digital Platform Expansion
The CLARITY digital service platform saw accelerated rollout, now operational at over 185 plants and utilized by more than 700 users across 35 countries, enhancing Clariant’s digital capabilities.
Currency Translation Impact
An 8% negative currency translation effect impacted Clariant’s reported sales figures for Q2 2025, posing a challenge to the company’s financial performance.
Sales Guidance Revision
Clariant revised its 2025 sales growth guidance to a range of 1% to 3% in local currency, reflecting ongoing weak industrial production and uncertainty in end markets.
Care Chemicals Volume Decline
The Care Chemicals segment recorded a 2% organic decline in local currency sales, primarily due to lower volumes in Oil Services and Base Chemicals.
Reported EBITDA Decline
Reported EBITDA fell by 16% to CHF 139 million, influenced by CHF 22 million in restructuring charges, resulting in a margin of 14.4%.
Net Income Decline
Net income for the first half of 2025 was CHF 44 million, a significant drop from CHF 176 million in the previous year, impacted by restructuring costs and impairments.
Forward-Looking Guidance
Clariant maintained its 2025 sales growth guidance in local currency at 1% to 3%, despite market challenges. The company confirmed its full-year profitability guidance of a 17% to 18% EBITDA margin before exceptional items. Progress in safety performance and greenhouse gas emissions reduction targets was also reported, underscoring Clariant’s commitment to sustainability.
In summary, Clariant AG’s earnings call highlighted a mixed performance with notable profitability improvements and strategic initiatives, despite facing challenges such as currency impacts and revised sales guidance. The company’s focus on cost savings, digital expansion, and sustainability initiatives positions it well for future growth.