Clariant AG

Ladies and gentlemen, good afternoon. My name is Andrea Schwarzweiler, and it's my pleasure to welcome you to this call. Joining me today are Konrad Kaiser, Clarion's CEO, and Oliver Rittgen, Clarion's CFO. Konrad will start today's call by providing an update on the progress we have made on our purpose-led growth strategy and a summary of the full year 2025 financial highlights and savings program, followed by Oliver, who will guide us through the Q4 and business unit results. Konrad will then conclude with the outlook for the full year 2026. 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 risks 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 transcript of the call will be made available on the investor relations sections of the Clariant website. Let me now hand over to Konrad to begin the presentation. Thank you, Andreas.

2025 was a year that demonstrated the success of our transformation journey. The progress we've made over recent years is bearing fruit. with our purpose-led growth strategy, proving its strengths through effective execution. Built on four strategic pillars, customer focus, innovative chemistry, leading in sustainability, and people engagement, the strategy reflects our integrated approach to creating value for all stakeholders. On our first pillar, customer focus, the execution of our commercial excellence programs delivered further improvement in customer satisfaction, as indicated by the Net Customer Promoter Score, CNPS. In 2025, this CNPS increased to 50 versus 45 in 2024. with the company receiving outstanding scores for product quality, technical support, and customer service. Overall, this score placed Clariant in the top quartile amongst peers. Our Local for Local strategy has continued to help us to weather geopolitical challenges and tariffs. We serve our customers to a very high degree based on local manufacturing and local raw material sourcing. We successfully accelerated the rollout of Clarity, the cloud-based service platform designed to optimize catalyst management and performance monitoring. It offers 24-7 real-time operations data so that customers can manage their plants more efficiently. By the end of 2025, clarity utilization has almost doubled to over 220 customer plans and over 800 users in 38 countries. And finally, differentiated steering, which ensures that we allocate resources strategically. Each business segment has its own strategic mandate to optimize value creation. The restructuring and capacity expansion actions taken in our Editus segment resulted in successful turnaround with improved sales growth and better margins. In our second pillar, Innovative Chemistry, we demonstrated a strong improvement in innovation sales. reaching 18.8%, marking a significant step up from the 16.9% recorded in 2024. This trajectory reflects the strengths of Clarion's innovation portfolio and execution. We maintain our commitment to research and development with sustained investments at 3% of revenue in 2025. The products from our innovation pipeline are growing faster than the rest of our portfolio. We will continue to intensify supplier partnerships to co-develop innovations meeting the highest environmental standards. This dedication to innovation resulted in over 30 awards and recognitions received throughout the year from customers like L'Oréal, Unilever and Schneider Electric. and various industry associations. 2025 marked another year of great progress in sustainability leadership. Clarion's greenhouse gas emissions reduction targets that were originally announced at our investor day in November 2024 were reviewed and approved by the science-based targets initiative in 2025. By 2030, Clarion is committed to reducing absolute Scope 1 and 2 greenhouse gas emissions by 47%, and absolute Scope 3 greenhouse gas emissions by 28% from the 2019 base year. In 2025, Scope 1 and 2 total greenhouse gas emissions fell to 0.43 million metric tons in 2025, a decline of 11%. The main driver for the greenhouse gas reduction in 2025 was a further switch to green electricity. The share of renewable electricity increased from 69 to 76%. The total indirect greenhouse gas emissions for purchased goods and services, scope 3.1, were 6% lower to 2.4 million metric tons in the last 12 months. As a result of consistent progress over time, credible targets, verified data and clear accountability, we achieved top leadership level scores across all environmental categories of the Carbon Disclosure Project, CDP, the most widely used environmental disclosure platform globally. Ranking in the top 1% of all companies evaluated worldwide, Clariant was awarded A in Climate Change and Forests and A- in Water Security. We are convinced that the transformation toward more sustainable business models will not reverse. Companies that stay on the course will shape the future and gain enduring competitive advantage. And finally, people engagement, where we increased our employee net promoter score, ENPS, to 37 in 2025, up from 34 in the prior year. I'm particularly pleased that participation rates of our employees further increased to 88%. And our employee engagement came in at 87%, which positions us in the top quartile compared to industry peers. Our safety performance also was top quartile of the chemical industry globally. Clarion recorded a days away restricted or transferred rate of 0.13, down from 0.17 in 2024. This reflects our high awareness and continued commitment to safety, training, and accountability. These achievements are thanks to the hard work of over 10,000 Clarion colleagues across the globe who are committed to our purposeless growth strategy and who delivered strong results in 2025. We delivered sales of 3.9 billion Swiss francs, representing a flat performance in a challenging macroeconomic environment. We improved our EBITDA margin before exceptional items by 180 basis points to 17.8%, driven by the successful execution of our performance improvement progress. This is the third year in a row where we have delivered strong EBITDA improvements, both in absolute and in margins. I'm particularly pleased with the 42% cash conversion rate we achieved in 2025. This represents a 10 percentage point improvement compared to 2024, already exceeding our medium-term target of 40%. Our performance in 2025 enables us to propose a stable distribution to shareholders of 0.42 Swiss francs per share. Now, moving on to more details relating to our financial performance for the full year 2025. We delivered sales of 3.9 billion Swiss francs. This represents a flat performance in local currency. with the reported figure impacted by a 6% negative currency translation effect. We maintained pricing discipline across our portfolio in a slightly deflationary raw material environment, with a year-on-year increase in absorbance and additives, and flat pricing in care chemicals and catalysts. Organic volumes decreased by 1% across the business units. The acquisition of Lucas Meyer Cosmetics had a positive scope impact of 1%. Turning to profitability. We had a strong overall performance with 180 basis point improvement in EBITDA margin before exceptional items versus the full year 2024. driven by our performance improvement programs and cost productivity across all business units and the corporate functions. In absolute terms, EBITDA B4 exceptional items increased by 5% to 679 million Swiss francs. As I mentioned earlier, we recorded a free cash flow conversion rate of 42% in 2025. This represents a 10 percentage point increase versus 2024 and delivers on our medium term target of 40% ahead of schedule. We were able to achieve this through effective cost and margin management, which drove an increase in operating cashflow. Higher net working capital and phasing effects were offset by disciplined CapEx management. In absolute terms, free cash flow increased by 31% to 273 million Swiss francs. Now, turning to our Investor Day savings program. As a reminder, we expect full run rate savings of 80 million Swiss francs from business units and corporate actions to be delivered by the end of 2027. In Q4, we achieved savings of 19 million Swiss francs, which brings the total to 50 million Swiss francs for 2025. This represents 63% of the total savings target, with the remainder largely expected in 2026. The key measures include a headcount reduction of approximately 470 full-time equivalents across the business and corporate functions, and the closure of two production lines and two sites as part of our footprint optimization. Procurement added another 22 million Swiss francs savings related to structural changes in qualifying alternative suppliers and implementing best practice contract management. Cost-efficient execution of the programs and phasing led to restructuring charges of 63 million Swiss francs. This was below the 75 million restructuring charges originally expected for the year. With that, I now hand over to Oliver for further details on our business

Thank you, Conrad, and good afternoon, everyone. In the fourth quarter, we delivered sales of 1 billion Swiss francs, representing an increase of 1% in local currency versus the prior year period. Pricing was overall flat as formula-based price adjustment linked to raw material costs in chemicals were offset by a 1% increase in absorbance and additives and flat pricing in catalysts. Volume increased by 1% as growth in catalyst and chemicals offset a decline in absorbance and additives. The reported figure was affected by a 7% currency headwind. Turning to profitability. Our Q4 EBITDA before exceptional items increased by 10%, corresponding to a margin of 17.1%. This represents a 240 basis point improvement versus the fourth quarter of 2024. Key contributions came from continuous strong execution of the performance improvement program in all business units, effective cost management, a positive mix due to strong growth in catalyst, and operating leverage. Let us now dive into the fourth quarter development by business unit, starting with chemicals. Sales increased by 1% in local currency as 2% volume growth recorded in the quarter more than offset the 1% decline in pricing due to formula-based price adjustments linked to raw material costs. The reported figure was negatively affected by a 7% currency headwind. We recorded low double-digit organic growth in mining solutions, driven entirely by volumes, and in oil services, where higher volumes were supported by slightly positive pricing. Sales in personal and home care increased at a low single-digit rate, also driven by volume growth, and including a continued positive contribution from Lukas Meyer Cosmetics. Base chemicals declined slightly despite volume growth in the seasonal aviation business as pricing declined due to formula-based price adjustments. Sales in industrial applications declined due to lower pricing and volumes. Crop solutions declined driven by lower volumes versus the prior year period when a restocking effect led to strong growth. We recorded an EBITDA before exceptional items of 96 million Swiss francs, representing a 7% increase compared to the prior year. This translated into an EBITDA margin of 18.3%, a 220 basis points improvement, driven by increased operating leverage, and a strong contribution from the performance improvement programs. In catalyst, sales increased by 5% in local currency, a result of materially higher volumes in ethylene versus the prior year period. The reported figure was negatively affected by a 7% currency headwind. Sales in ethylene catalyst recorded the strongest growth at a high double-digit percentage rate, with some first-fill business coming on top of the regular refill cycle, followed by syngas and fuels. This more than offset lower sales in specialties and propylene, which both declined at a double percentage rate against a strong comparison base in the prior year. EBITDA before exceptional items increased by 22% to 62 million Swiss francs, representing an EBITDA margin of 23.4% versus 18.8% in the prior year. This was driven by effective price and cost management, and the contribution from our performance improvement program. Moving to absorbance and additives. Sales decreased by 3% in local currency and by 8% in Swiss francs, as slightly higher pricing was more than offset by lower volumes. In the absorbance segments, sales decreased at a low single-digit percentage rate, as stable volumes in APAC and EMEA were more than offset by a decline in the Americas, which were impacted by delayed U.S. renewable fuel regulation. In the additive segment, sales decreased at a mid-single-digit percentage rate as growth in polymer solutions was more than offset by lower volumes in coating and adhesives, mainly attributable to the construction markets. EBITDA before exceptional items decreased by 9% to 30 million Swiss francs, with an EBITDA margin of 12.6% at a similar level to the prior year. The positive contributions from the performance improvement programs partly offset the impact of low volumes. And with this, I close my remarks and hand it back to Conrad. Thank you, Oliver.