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Introduction & Market Context
Clariant AG (SIX:CLN) reported its second quarter and first half 2025 results on July 31, 2025, showcasing improved profitability despite flat sales in a challenging market environment. The specialty chemicals company’s stock rose 4.24% following the announcement, reflecting investor confidence in the company’s operational efficiency and strategic direction.
The Swiss chemical maker maintained stable sales in local currency terms while improving its EBITDA margin by 200 basis points to 17.5% in Q2 2025. However, significant currency headwinds resulted in an 8% decline in Swiss franc-denominated sales.
Quarterly Performance Highlights
Clariant’s Q2 2025 sales remained flat in local currency at 968 million Swiss francs, with pricing contributing 3% growth offset by a 3% volume decline. Currency effects had a significant negative impact of 8%, primarily driving the overall sales decrease in Swiss franc terms.
As shown in the following breakdown of Q2 sales performance:
Despite the flat sales, Clariant achieved notable improvement in profitability. The EBITDA before exceptional items reached 169 million Swiss francs, representing a margin of 17.5% - a 200 basis point increase from the prior year’s 15.5%. This improvement was primarily driven by the Catalysts and Adsorbents & Additives business units.
The following chart illustrates the EBITDA margin improvement factors:
For the first half of 2025, Clariant reported sales of 1,981 million Swiss francs and an EBITDA before exceptional items of 359 million Swiss francs, corresponding to a margin of 18.1% - up 130 basis points from 16.8% in H1 2024.
Business Segment Performance
The company’s three business segments delivered mixed results in the second quarter:
Care Chemicals, which represents Clariant’s largest segment, saw sales decline by 12% to 497 million Swiss francs (-2% in local currency). Despite the sales decrease, the segment maintained a flat EBITDA margin before exceptional items at 17.7%. The reported EBITDA was impacted by 17 million Swiss francs in restructuring charges.
The following slide details Care Chemicals’ performance:
Catalysts demonstrated the strongest performance with a 5% sales increase in local currency, though this translated to a 2% decrease in Swiss franc terms to 218 million Swiss francs. The segment achieved a significant EBITDA margin improvement of 400 basis points to 22.5%, driven by higher volumes, cost control, and effective margin management.
As shown in the Catalysts segment breakdown:
Adsorbents & Additives reported a 6% sales decrease to 253 million Swiss francs, though sales increased by 1% in local currency. The segment’s EBITDA margin before exceptional items improved significantly by 380 basis points to 19.8%, benefiting from continued improvement in Additives, lower raw material and energy costs, and savings programs.
Strategic Initiatives
Clariant continues to execute its cost savings program announced at its Investor Day 2024, targeting 80 million Swiss francs in savings by 2027. The company has already achieved 12 million Swiss francs in savings during the first half of 2025 (3 million in Q1, 9 million in Q2).
Key measures include headcount reduction of approximately 200 full-time employees, footprint optimization with two site and two production line closures, and procurement savings of 4 million Swiss francs. The company has booked 60 million Swiss francs in restructuring charges in H1 2025, out of an expected total of 75 million Swiss francs for the full year.
The following chart illustrates the progress of the savings program:
Clariant is strategically shifting its portfolio toward higher-margin specialty chemicals and consumer markets. The share of consumer end markets has increased from 36% in 2021 to 44% in Q2 LTM 2025, while industrial exposure has decreased from 47% to 35% during the same period.
As demonstrated in this end market exposure analysis:
Sustainability Performance
Sustainability remains a core focus for Clariant, with the company making significant progress in reducing its environmental footprint. The company has achieved a 46.9% reduction in Scope 1 & 2 emissions since 2019 and a 27.5% reduction in Scope 3.1 emissions during the same period.
The following slide highlights Clariant’s sustainability transformation commitment:
Clariant has received recognition for its sustainability efforts through various ratings and rankings, including an AA rating from MSCI, A- from CDP, and placement in the 99th percentile by EcoVadis.
Forward-Looking Statements
Clariant has adjusted its 2025 sales growth guidance to 1-3% in local currency, down from the previous range of 3-5%, citing a continued weak industrial production outlook. However, the company maintained its profitability guidance at 17-18% EBITDA margin before exceptional items.
The company confirmed its medium-term targets to be delivered by 2027 at the latest, including:
- 4-6% CAGR profitable sales growth
- Group EBITDA margin between 19-21%
- Free cash flow conversion of around 40%
As outlined in the company’s outlook:
CEO Konrad Keiser emphasized the company’s strategic shift toward specialty chemicals during the earnings call, stating, "We are repositioning the company towards more specialty chemicals." He also highlighted the robust performance in the cosmetics segment, noting, "The upper segment [of cosmetics] is still solidly around a 10% growth year on year."
Clariant’s current assessment of global tariffs indicates manageable direct impacts due to the company’s global footprint and local-for-local strategy, which provides manufacturing flexibility across regions.
Financial Position
Clariant’s return on invested capital (ROIC) stands at 9.2% for the last twelve months as of H1 2025, comfortably above its cost of capital of 6.6%.
As illustrated in this ROIC comparison:
The company’s net debt position was 1,596 million Swiss francs as of June 30, 2025, representing a net debt to EBITDA ratio of 2.6x. The group’s net debt declined by 48 million Swiss francs during the first half of 2025.
Operating cash flow for H1 2025 increased slightly to 116 million Swiss francs, compared to 112 million Swiss francs in the same period of 2024. The free cash flow conversion rate reached 37% for the last twelve months.
In conclusion, Clariant’s Q2 2025 results demonstrate the company’s ability to improve profitability despite challenging market conditions. The ongoing strategic shift toward specialty chemicals and consumer markets, combined with effective cost management and sustainability initiatives, positions the company to achieve its medium-term targets despite the adjusted sales growth outlook for 2025.
Full presentation:
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