MOSCOW (MRC) -- Clariant announced first quarter 2022 continuing operations sales of CHF 1.262 billion, compared to CHF 1.002 billion in the first quarter of 2021, said the company.
This corresponds to a particularly strong increase of 30 % in local currency and 26 % in Swiss francs. The positive pricing impact of 16 % in part addressed continued cost inflation and also slightly outpaced the volume growth of 14 %. Care Chemicals and Natural Resources grew sales at an accelerated pace, which more than compensated for the expected slightly weaker development in Catalysis.
All geographic regions contributed meaningfully to the sales expansion in the first quarter of 2022, reflecting both continued strong demand as well as supply chain shortages. In Europe, the high 27 % local currency growth was underpinned by strong expansion in Care Chemicals as well as Natural Resources. Sales in Asia-Pacific rose by 31 %, underpinned by expansion in all Business Areas and clearly driven by 34 % higher sales in China. The Americas reported compelling growth as North American sales increased by a resounding 37 %, followed closely by Latin America at 31 %. In the Middle East & Africa, sales rose by 26 %.
In the first quarter of 2022, Care Chemicals increased sales by 44 % in local currency. This progress was supported by double-digit expansion in both Consumer Care and Industrial Applications, in particular Personal Care, Crop Solutions, Aviation, and Coatings. The consolidation of the acquired majority share in Clariant IGL Specialty Chemicals (CISC) and the acquisition of the remaining shares in Beraca further supported this positive development with an addition of 4 % local currency volume growth for the Group. Catalysis sales decreased by a slight 1 % in local currency, despite significantly higher Specialty Catalysts sales, which could not entirely counterbalance the weakness in parts of Petrochemicals and Syngas. Natural Resources sales increased by a resounding 31 % in local currency with growth attributable to all three Business Units, especially Additives.
The continuing operations EBITDA increased to CHF 220 million with a corresponding margin of 17.4 %, slightly exceeding the 17.3 % reported in the first quarter of the previous year. The increase was underpinned by operating leverage from higher sales, cost savings (CHF 4 million savings from efficiency programs), and pricing measures, which largely offset raw material price increases, supply chain constraints, and higher energy and logistics cost. The absolute EBITDA increased by a notable 27 %.
Clariant’s Pigments business was divested to a consortium comprising Heubach Group and SK Capital Partners on 3 January 2022, which resulted in a provisional pretax disposal gain of CHF 168 million and an EBITDA of CHF 160 million for discontinued operations. Total Group (continuing operations and discontinued operations) EBITDA was CHF 380 million in the first quarter of 2022.
Clariant aims to grow above the market to achieve higher profitability through sustainability and innovation. The Group concluded the final step in its significant portfolio transformation in January of 2022. Clariant is now a truly specialty chemicals company and confirms its 2025 ambition to deliver profitable growth (4 – 6 % CAGR), a Group EBITDA margin between 19 – 21 %, and a free cash flow conversion of around 40 %.
In the second quarter of 2022, Clariant expects to generate continued strong sales growth in local currency versus the prior year, underpinned by expansion in all Business Areas despite a normalizing growth environment. Sequential sales are expected to decline moderately as a result of seasonal impacts (aviation, refinery) and demand normalization in Care Chemicals and Natural Resources. Clariant expects to improve on its restated year-on-year margin levels in the second quarter of 2022. Sequentially, the Group expects to be broadly in line with its first quarter 2022 margin level, especially via operating leverage from growth, continuing pricing actions, and cost discipline to counter continued inflation in raw materials, logistics, labor, and energy cost.
For the full year 2022, Clariant expects strong growth in local currency for the Group, driven by a particularly strong first half of 2022. The current high level of uncertainty resulting from the geopolitical conflicts, suspension of business with Russia, and the resurgence of COVID-19 in China are expected to continue to impact global economic growth and consumer demand in the second half of the year. Clariant expects the high inflationary environment with regard to raw material, energy, and logistics cost as well as supply chain challenges to persist in the second half of 2022. Clariant aims to improve its year-on-year Group EBITDA margin levels via solid revenue growth driven by pricing and continued cost discipline, despite the increasingly challenging economic environment.
Lummus Technology announced it and its catalyst partner Clariant have been awarded a major contract by Fujian Meide to supply CATOFIN technology and catalysts for a new, world-scale propane dehydrogenation (PDH) unit in Fuzhou, China. Already operating one PDH unit at its Fuzhou petrochemical complex, Fujian Meide is now building one of the largest PDH units in the world and has selected the CATOFIN process and catalysts for the project's second phase. The new unit will produce 900,000 mtons of propylene annually and is scheduled to commence operation in 2023.