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Investing.com -- Clariant AG’s (SIX:CLN) stock dropped over 9% on Friday following a disappointing fourth-quarter earnings report and a 2025 outlook that failed to reassure investors.
The company reported adjusted EBITDA of CHF 160 million, missing consensus expectations of CHF 180 million.
Morgan Stanley (NYSE:MS) and Barclays (LON:BARC) both attributed the shortfall to weaker performance across all divisions, with Care Chemicals seeing the sharpest decline.
Despite sales in the segment aligning with forecasts, EBITDA came in 20% below consensus due to weaker margins in the aviation and refinery businesses, which typically provide a seasonal boost in winter.
Clariant’s 2025 guidance of CHF 700-760 million in adjusted EBITDA fell about 5% short of consensus expectations, which were already at the upper end of the range.
The company projected local currency sales growth of 3-5%, but with macroeconomic challenges, trade tensions, and tariffs weighing on demand, Barclays expressed skepticism that even the lower end of this range is achievable.
The Catalysts segment showed some resilience, with Q4 sales rising 7%, largely driven by strong demand for propylene dehydrogenation (PDH) catalysts in China, where sales jumped over 60% year-over-year.
However, full-year sales remained weak due to sluggish new build activity. Meanwhile, the Adsorbents and Additives division underperformed, with adjusted EBITDA coming in 13% below consensus, weighed down by lower volumes in Adsorbents, particularly in the European automotive sector.
Despite near-term headwinds, Clariant reaffirmed its long-term 2027 targets, aiming for 4-6% local currency sales growth, adjusted EBITDA margins of 19-21%, and 40% free cash flow conversion.
The company expects top-line growth, efficiencies from the Lucas Meyer acquisition, pricing adjustments, and cost-cutting initiatives to support margin expansion.
However, both Morgan Stanley and Barclays warn that if revenue growth falls short, Clariant may struggle to meet its profitability targets.