Clariant to cut more jobs
31/07/2009
Specialty chemicals provider Clariant has announced sales of CHF 1.6 billion in the second quarter of 2009, compared to CHF 2.1 billion in the same period of the previous year. This represents a decline of 24% in Swiss Francs, and 21% in local currency.
The company said its second quarter was characterised by "continuous weak demand in most businesses".
It also said that "decisive cost-saving measures in the textile, leather and paper chemicals division" positively impacted the profitability of all three businesses. The previously announced reduction of job positions was completed with 1423 job positions reduced. An additional 500 job positions to be made redundant in 2009 were identified and implementation has begun. It said further reductions in 2009 and 2010 will follow in line with the company’s goal "to close the performance gap to its peers" and to adjust the company’s structure to the global recession.
Clariant said it assumes that the global economy will recover only slowly. Consequently, its sales in local currencies are predicted to remain weak until the end of the year, approximately in the range of 16%-20% below the previous year.
The company will maintain its focus on cash generation by decreasing its net working capital. At the same time, the cost-saving and restructuring measures will continue to impact the operational result, which will then also increasingly contribute to cash generation. Based on this scenario, Clariant anticipates a further improved operating income before exceptional items for the full year compared to the first half of 2009.
Going forward Clariant will continue its restructuring efforts with estimated restructuring costs of CHF 200-300 million in 2009 and further job reductions in 2009 and 2010.
Chief executive, Hariolf Kottmann, commented: “Our focus on generating cash, decreasing costs and reducing complexity has shown results, both in terms of cash flow that remained strong and operating income. However, we are still challenged by unprecedented low demand and don’t expect a quick recovery. Hence, we are continuing with our efforts to reduce costs, generate cash and simplify our operating structure in order to close the performance gap to our peers and gain further operational and strategic flexibility.”
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