Specialty chemicals major Clariant has delivered a 5.6% increase in third-quarter sales in local currencies to CHF 968.8 million, but profitability came under pressure from volatile raw material costs, an unfavourable product mix and continued disruptions linked to the Middle East conflict.

 

The company’s EBITDA margin before exceptional items fell 230 basis points to 15.6% from 17.9% a year earlier, despite improved performance in its Adsorbents & Additives business. The decline was largely attributed to the normalisation of corporate costs, weaker operating leverage in Catalysts and higher costs associated with raw materials and inventory valuation in Care Chemicals and Catalysts.

 

Despite the margin pressure, Clariant maintained its full-year 2026 guidance, backed by a strong order book, particularly in Catalysts, and continued progress in its performance improvement programmes.

 

“In the third quarter of 2026, Clariant delivered strong local currency sales growth of 5.6 %, demonstrating the effectiveness of our price management and the resilience of our portfolio in a volatile operating environment. Care Chemicals and Adsorbents & Additives recorded pricing-led growth, while Catalysts’ volumes remained impacted by the Middle East conflict. 

 

"Our Group EBITDA margin before exceptional items of 15.6 % reflects an improvement in Adsorbents & Additives, which was more than offset by two effects of broadly similar magnitude: a one-off year-on-year impact from the phasing of provisions in Corporate costs, and the combined impact of a less favorable mix and of volatile raw materials on cost and inventory valuation in Care Chemicals and Catalysts. 

 

"Effective working capital management and disciplined capital expenditure improved free cash flow conversion by 9 percentage points to 48 % for the last twelve months, up from 39 % in the prior year,” said Conrad Keijzer, Chief Executive Officer of Clariant.

 

Clariant's third-quarter performance reflected sharply contrasting trends across its three business units.

 

Care Chemicals led growth, with sales rising 6.6% in local currencies. Excluding portfolio pruning, growth accelerated to 8.7%, supported by higher pricing and improved demand in Industrial Applications, Mining Solutions, Base Chemicals and Personal & Home Care.

 

Adsorbents & Additives recorded a 6.4% increase in local currency sales, driven by 5.4% higher pricing and 1% volume growth. Additives delivered particularly strong performance, benefiting from both pricing and volumes. However, softer demand in Europe and Asia-Pacific weighed on the Adsorbents business.

 

Catalysts remained the weakest performer, with sales increasing just 1.8% in local currencies as a 3.7% improvement in pricing offset a 1.9% decline in volumes. The ongoing Middle East conflict continued to disrupt customer ordering patterns, with customers delaying purchases amid geopolitical uncertainty.

 

Group EBITDA before exceptional items declined 6.5% to CHF 151.5 million during the quarter. Higher raw material prices, up 12%, energy costs, up 9%, and logistics expenses, up 23.7%, added to the pressure, although pricing measures helped offset much of the inflationary impact.

 

For the first nine months of 2026, Clariant reported sales of CHF 2.83 billion, up 1% in local currencies. Excluding portfolio pruning, growth stood at 2.1%, supported by a 2.2% positive pricing contribution. Volumes declined 1.2%, reflecting the impact of the Middle East conflict and portfolio adjustments.

 

The currency impact remained a significant drag, with reported sales in Swiss francs falling 2% compared with the same period last year.

 

EBITDA before exceptional items declined 7.3% to CHF 482.8 million, while the corresponding margin slipped to 17.1% from 18% a year earlier.

 

Care Chemicals and Adsorbents & Additives delivered margin improvements, but these gains were more than offset by weaker Catalysts performance as lower volumes reduced operating leverage.

 

Reported EBITDA fell 1.3% to CHF 444.2 million. However, the reported EBITDA margin improved marginally to 15.7% from 15.6% in the corresponding period last year.

 

Clariant's cost-reduction programme continued to provide some relief against inflationary pressures.

 

The company generated CHF 79 million in cumulative run-rate savings by September 30, 2026, putting it on track to achieve CHF 90 million in savings during 2026 and its full CHF 100 million target by 2027.

 

The programme includes workforce reductions, procurement savings, site closures and production-line rationalisation. Savings of approximately CHF 10 million during the third quarter helped cushion the impact of rising operating costs.

 

Cash generation also improved. Free cash flow conversion for the 12 months ended September 2026 rose to 48%, up from 39% a year earlier, supported by stronger operating cash flow, disciplined capital expenditure and tighter working capital management.

 

Alongside its financial performance, Clariant highlighted several innovation and expansion milestones.

 

Its digital catalyst monitoring platform, CLARITY, and its AI-powered extension, CLARITY Prime, won the Best Digital Innovation award at the ICIS Innovation Awards 2026. The platform provides real-time operational insights and is deployed across more than 250 plants, 100 companies and 800 customers in 42 countries.

 

The company also secured a first-fill contract to supply its CATOFIN™ catalyst and Heat Generating Material for the world's largest licensed propane dehydrogenation unit, being built by Zhejiang Petroleum & Chemical Co. in China. The facility will have an annual capacity of 1.2 million metric tons.

 

In another strategic move, Clariant opened two new research and development laboratories for its Additives business in China, strengthening its local innovation capabilities and expanding its ability to develop products for regional and global markets.

 

Its Lucas Meyer Cosmetics business also launched KanuFresh, a natural-origin active ingredient derived from Australian kanuka leaves, targeting visible signs of perspiration, odour and irritation.

 

Innovation sales accounted for 19% of total sales over the last 12 months, compared with 18.8% for full-year 2025.

 

Clariant also reported progress on sustainability, with Scope 1 and 2 greenhouse gas emissions falling 2.3% to 0.42 million metric tons. Indirect emissions associated with purchased goods and services declined 3.5% to 3.60 million metric tons.

 

Clariant expects challenging market conditions to persist through the remainder of 2026, with geopolitical uncertainty and inflationary pressures continuing to weigh on operations.

 

The Middle East conflict is expected to affect orders in Catalysts and Oil Services, while higher raw material, energy and logistics costs remain key challenges.

 

The company expects full-year sales in local currencies to remain broadly flat, with growth in Adsorbents & Additives and modest underlying growth in Care Chemicals. Catalysts sales are expected to remain below 2025 levels.

 

Clariant is targeting an EBITDA margin before exceptional items of around 18% for 2026, supported by a strong fourth-quarter order book, particularly in Catalysts, and the continued delivery of cost-saving initiatives. Free cash flow conversion is expected to exceed 45%.

 

"Our full year 2026 guidance remains unchanged, supported by a strong order book, particularly in Catalysts, for the fourth quarter and continued momentum in our performance improvement programs, which remain on track to deliver CHF 90 million in run-rate savings for 2026 and the full CHF 100 million by 2027. 

 

"While inflationary pressures in raw materials, energy and logistics remain a challenge, our global production network and proven pricing capabilities position us well to protect margins as we close out the year," Conrad Keijzer added.