Clariant AG

Ladies and gentlemen, welcome to the Clarion second quarter first half year results 2025 conference call and live webcast. I am Sandra, the chorus call operator. I would like to remind you that all participants have been listened only mode and the conference has been recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Andreas Schwarzwälder, Head of Investor Relations. Please go ahead, sir.

Thank you, Sandra, and welcome, ladies and gentlemen. My name is Andreas Schwarzwälder, and it's my pleasure to welcome you to this call. Joining me today are Konrad Kaiser, Clarion CEO, and Bill Collins, Clarion CFO. Conrad will start today's call by providing a summary of the second quarter developments, followed by Bill, who will guide us through the business unit results and savings program. Conrad will then conclude with the outlook for the full year 2025. There will be a Q&A session following our presentation. At this time, all participants are in listen-only mode. I would like to remind all participants that the presentation includes forward-looking statements, which are subject to risk and uncertainties. Listeners and readers are therefore encouraged to refer to the disclaimer on slide two of today's presentation. As a reminder, this conference call is being recorded. A replay and a transcript of this call will be available in the investor relations section of the Clariant website. Let me now hand over to Conrad to begin the presentation.

Thank you, Andreas. I'm pleased to report that Clariant delivered strong profitability in the second quarter of 2025. demonstrating resilience against a challenging environment for our sector. Let me start by highlighting some of our key achievements. We delivered sales of 968 million Swiss francs. This represents a flat result in local currencies and an 8% decrease in Swiss francs. Our EBITDA, before exceptional items, increased by 3% in absolute terms to 169 million Swiss francs. We delivered a significant margin improvement of 200 basis points to 17.5%, driven by a strong profitability increase in catalysts and in absorbents and additives. Our savings program supported our performance in Q2 and H1, This program is set to deliver 80 million Swiss francs by 2027, with a significant contribution expected this year. In H1, we achieved savings of 12 million Swiss francs and booked 60 million Swiss francs of restructuring charges. As a reminder, we expect to book the total 75 million Swiss francs of restructuring charges related to this program in 2025. I'm also pleased with the improved cash generation in the first half of the year. The 130 basis point improvement of EBITDA margin before exceptional items to 18.1% resulted in operating cash flow of 116 million Swiss francs compared to 112 million Swiss francs in H1 2024. We achieved free cash flow conversion of 37% for the last 12 months, up from 32% reported at the end of 2024. In safety performance, we have achieved two accident-free months this year. This helped to lower our days away, restricted or transferred rate, to an industry-leading top quartile level of 0.16 for the last 12 months compared to 0.17 reported at year-end 2024. Clarion's new greenhouse gas emissions reduction targets were originally announced at our investor day in November last year, and these upgraded targets have now been reviewed and approved by the Science-Based Targets Initiative . By 2030, Clarion is committed to reducing absolute Scope 1 and 2 greenhouse gas emissions by 46.9% and absolute Scope 3 greenhouse gas emissions by 27.5% from a 2019 base year. We have accelerated the rollout of clarity. our digital service platform in the Business Unit Catalyst, which is designed to optimize catalyst management and performance monitoring for our customers. Clarity is now operational at over 185 plants and has over 700 users in 35 countries. Now turning to our 2025 guidance. While we remain focused on driving growth, we have revised our 2025 sales guidance to a range of 1 to 3% in local currency, reflecting the continued weak industrial production outlook and uncertainty in our end markets. At the same time, we confirm our full year profitability guidance of 17 to 18% EBITDA margin before exceptional items, underscoring our confidence in sustaining our improved level of profitability. Despite ongoing market challenges and macroeconomic uncertainties, we remain committed to delivering our medium-term targets, supported by the continued execution of our targeted growth and profitability initiatives. Now, moving on to more details relating to our financial performance in the second quarter of 2025. We delivered sales of 968 million Swiss francs. In local currency, this is a flat result with a reported figure impacted by an 8% negative currency translation effect. We maintained pricing discipline across our portfolio with a year-on-year increase in adsorbents and additives, and flat pricing in care chemicals and catalysts. Our volumes were flat as growth in catalysts offset a slight decline in care chemicals, with a flat performance in adsorbents and additives. Turning to profitability, as I already noted, we had a strong overall performance with a 200 basis point improvement in EBITDA before exceptional items versus the second quarter of 2024. In Care Chemicals, profitability from Lucas Meyer Cosmetics partly compensated for the 2% volume decline we recorded in the second quarter. In Catalyst, the 5% increase in volumes positively impacted operating leverage. Margin management and one-time effects also positively contributed to margin improvement. In adsorbents and additives, profitability was positively impacted mainly by our performance improvement programs, lower input costs and mix effects. At the group level, our performance improvement programs and cost discipline also positively contributed to profitability. Reported EBITDA decreased by 16% to 139 million Swiss francs, representing a reported margin of 14.4%, including the 22 million Swiss francs restructuring charges booked in the quarter. With that, I now hand over to Bill for further details on our business performance in the second quarter.