Clariant AG

Ladies and gentlemen, welcome to the Clarion First Quarter Figures 2026 conference call and live webcast. I am Valentina, the call school operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. 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, Valentina, and ladies and gentlemen, good afternoon. Andreas Schwarzwälder, it's my pleasure to welcome you to our Q1 conference call. Joining me today are Conrad Kaiser, Clarion CEO, and Oliver Rittgen, Clarion CFO. Conrad will start today's call by providing a summary of the first quarter developments and the Middle East situation. followed by Oliver, who will guide us through the business unit's results. Conrad 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. The replay and transcript of this call will be available in the investor relations sections of the Clariantic website. Let me now head over to Conrad to begin the presentation. Thank you, Andreas.

In the first quarter of 2026, we delivered sales of 918 million Swiss francs, representing a 2% decrease in local currencies, and almost flat when excluding our portfolio pruning actions in a challenging macroeconomics Our EBITDA margin before exceptional items decreased by 130 basis points year-on-year against a strong comparison base, reflecting the impact of the Middle East conflict and a diluted one-off precious metal sale in our catalyst business. We increased our cash conversion rate by 12 percentage points on a last 12 months basis to 54% due to effective networking capital management, and disciplined capital expenditure. Our overall expectations for the group remain unchanged. We continue to expect sales in local currency to be around flat as pricing offsets lower volumes. We expect an EBITDA margin before exceptional items of around 18% in 2026, supported by value-based pricing savings from our performance improvement program, and continuous active cost management. We also expect free cash flow conversion of over 40% for the year. Before turning to our first quarter developments in more detail, I would like to provide an assessment of the situation in the Middle East and what we're doing to mitigate its effects. Our first priority is the safety of our people. I'm pleased to confirm that all of our around 150 employees across our Middle East sites are safe. There has been no damage to any of our facilities, and all sites are back in operation. The Middle East and Africa region represents approximately 10% of group sales, with the directly affected areas accounting for around 5% of group sales. Of our total raw materials, around 37% are fossil-based. We're carefully managing our own raw material supply in Asia, especially in China and India, across our catalyst and care chemical business. On direct business impact, our catalyst business is most affected. Of 88 force majeure declarations or shutdowns globally, Driven by feedstock shortages, logistics constraints, and infrastructure damages, 44 involve Clariant customers, predominantly in the Middle East and Asia. Turning to the effects we're managing and the actions we are taking, the situation remains volatile, and supply security is the primary concern for our customers. We are responding by leveraging our global production footprint and proactive logistics management to ensure continuity of supply. On cost, we are seeing material inflationary pressure across the board for 2026. Raw material and energy costs are both expected to increase at a mid to high single-digit percentage rate, while logistics costs are expected to increase at the low double-digit percentage rate. We're executing value-based price management to counter these effects consistent with our approach in prior cycles. On volumes, we're seeing refill-facing impacts in catalysts across the Middle East and Asia, some pre-buying in-care chemicals, and softer industrial and consumer demand across absorbents and additives and care chemicals. We're proactively managing our cost base across our businesses in a lower demand environment. With that, let me now turn to our first quarter financial performance in more detail. In the first quarter, we delivered sales of 918 million Swiss francs. representing a decrease of 2% in local currency versus the prior year period, and almost flat underlying sales, excluding the effects of our proactive portfolio pruning measures. Pricing decreased by 1.5%, mainly driven by formula-based pricing, adjusting to lower raw material prices, recorded until the start of the conflict in the Middle East. We expect the deflationary environment for raw materials in the first quarter to turn inflationary from Q2 onwards. Volumes decreased by half a percent, impacted by the Middle East conflict. Our portfolio pruning measures and a softer start of the absorbance business. The reported figure was affected by a 7.4% currency headwind. Turning to profitability, EBITDA, before exceptional items, decreased by 16% to 160 million Swiss francs, corresponding to a 17.5% EBITDA margin. The 130 basis points decrease was the result of a significant impact from the Middle East conflict on catalyst volume, reducing operating leverage and a dilutive one-off precious metal sale. Unfavorable mix in catalysts and care chemicals, as well as an infantry refill effect in care chemicals, weighed on profitability, despite continued contribution from our performance improvement programs. Looking at the savings program in more detail, we now expect to achieve the full run rate savings of 80 million Swiss francs already by the end of 2026. This is one year ahead of our original commitment. In Q1, we achieved savings of 9 million Swiss francs, which brings the total to 59 million Swiss francs. The execution of the program resulted in total restructuring charges of 64 million Swiss francs. The key measures in 2026 include a headcount reduction of approximately 60 full-time equivalents increasing the total FBE reduction to around 530 positions. In the current weakening demand environment, we maintain our focus on active cost initiatives. With that, I now hand over to Oliver for further details on our business performance in the first quarter.