Interview with the CEO
Overall, what were the main challenges in 2024, and how did Clariant navigate them?
Let me first say that we are proud of our performance in managing challenges, as demonstrated by our margin improvement, high safety record, and further enhanced employee engagement level. And indeed, the market environment remained challenging throughout 2024. While inflation moderated compared to 2023, which we noticed particularly in lower raw material and energy costs, demand was weaker than expected. We had anticipated a recovery in demand for durable consumer goods, but this has not materialized yet. In addition, new production capacity came online, creating a large oversupply in some markets – especially in China. We responded by maintaining pricing discipline and by delivering our cost savings programs. From our CHF 175 million savings target, which is due in 2025, we have already achieved 96 % or CHF 168 million by the end of 2024.How is that reflected in Clariant’s financial performance?
I am pleased with our strong operational performance, cash generation and the progress in our non-financial targets amidst what continued to be a challenging market environment. In line with our guidance, our sales decreased by 3 % in local currency to CHF 4.152 billion, yet we significantly improved our profitability with an EBITDA margin of 15.8 %, or 16.0 % before exceptional items, compared to 13.9 %, or 14.6 % before exceptional items, in the previous year.A particular highlight, of course, was our successful acquisition of Lucas Meyer Cosmetics in April 2024, which positions us as a leader in the highly attractive cosmetics ingredients market. The integration of the business as well as its performance are well on track. We also efficiently executed the closure and downsizing activities related to sunliquid™, and we do not expect any further negative impacts of this in 2025.
How do you assess the development of the whole sector?
Each of our business units faced different market dynamics in 2024, but all business units demonstrated resilience in managing challenges while advancing strategic initiatives.Care Chemicals, our largest business unit with sales of CHF 2.242 billion, saw a slight revenue decline of 1 % in local currency. While volumes grew by 2 %, pricing was down 3 % due to formula-based price adjustments in the first half of the year. Sales growth was strongest in Mining Solutions, with positive prices and volumes, while increased volumes in Personal & Home Care and Industrial Applications also contributed positively. As already mentioned, the integration of Lucas Meyer Cosmetics is progressing well, also positively contributing to sales and profitability. The business unit’s EBITDA margin decreased to 18.0 % from 19.9 % in 2023, when Care Chemicals had a gain from the Quats disposal. On an underlying basis before exceptional items, however, the margin increased to 18.2 % compared to 17.6 % in the previous year.
Catalysts faced more challenging trading conditions with sales declining 9 % to CHF 883 million, entirely driven by lower volumes, with delayed refill cycles in addition to the anticipated weaker new-build activities in the industry. However, the business showed some recovery signs in the fourth quarter, particularly in Propylene applications with strong sales in China. The EBITDA margin improved to 17.4 % before exceptional items, compared to 16.3 % in the prior year. We continue to be excited about new catalyst demand from blue or green hydrogen or in new applications like sustainable aviation fuels.
Adsorbents & Additives demonstrated stability with sales of CHF 1.027 billion, maintaining flat local currency growth in challenging market conditions, especially for foundry applications in Europe. The business unit achieved a significant improvement in profitability, with the EBITDA margin increasing to 15.8 % before exceptional items, up from 12.4 % in 2023. This was driven by the impact of performance improvement programs and some recovery in key end markets, particularly in Additives.
How is Clariant advancing its sustainability agenda?
We achieved a 9 % reduction in Scope 1 & 2 emissions compared to 2023, and our Scope 3.1 emissions decreased by 5 %. We have upgraded our climate targets and are now supporting a 1.5 degree heating scenario while we had been supporting a 2 degree heating scenario. We have increased our Scope 1 & 2 target to 46.9 % by 2030 (previously 40 %), and we are almost doubling our Scope 3 emissions reduction target to 27.5 % (previously 14 %).In 2024, we significantly upgraded our climate targets. I am particularly proud that we achieved a 35 % reduction in Scope 1 and 2 emissions compared to our 2019 baseline, demonstrating our ability to deliver on ambitious targets. These efforts are also recognized externally: For example, our CDP score for »Climate« improved from B to A-. Our upgraded emission reduction targets will bring about real changes in our operations, from increasing our share of green electricity, to working closely with suppliers to reduce the carbon footprint of our raw materials.
However, we see our commitment to sustainability as two-fold; on the one hand, improving the sustainability of our own operations, and on the other hand, enabling us to drive forward sustainability shifts globally as well as for our customers. In line with this, more than 80 % of our product portfolio now consists of sustainable products, helping our customers achieve their own sustainability goals.
»More than 80 % of our product portfolio now consists of sustainable products, helping our customers achieve their own sustainability goals.«
Conrad Keijzer
Chief Executive Officer (CEO)
What progress has Clariant made on safety initiatives?
I am proud that Clariant for the second year has achieved a top quartile safety performance, measured by the ACC (American Chemistry Council) database which includes the world’s best performing chemical companies in the area of safety. Our DART rate (Days Away, Restricted, or Transferred) decreased from 0.21 in 2023 to 0.17 in 2024. This improvement of 19 % reflects our strong safety culture, enhanced training programs, and the dedication of our employees to maintaining the highest safety standards. We want every employee to return home healthy – that is why we continue with our relentless efforts to further reduce accidents.Clariant also measures the »Net Promoter Score« of employees and customers alike. What can you tell us about these metrics?
A Net Promoter Score (NPS) is a widely-used loyalty metric that measures how likely employees or customers are to recommend a company to others, either as an employer or as a supplier. Our employee Net Promoter Score reached 25, well above the industry median of 21, while our Customer Net Promoter Score remained strong at 45, placing us 5 points above the industry average. These results clearly demonstrate our commitment to the focus dimensions of our purpose-led strategy: »Customer focus,« »Innovative chemistry,« »Leading in sustainability,« and »People engagement.«What progress has Clariant made on diversity initiatives?
Different perspectives drive innovation and better decision-making. Clariant has made steady progress on its DE&I objectives: The share of leaders with national origin outside of Europe increased from 32 % in 2021 to 36 % in 2024, tracking well toward the 2030 objective of over 40 %. Female representation in management has also shown improvement, rising from 16 % in 2021 to 24.5 % in 2024, advancing steadily toward the 2030 objective of exceeding 30 %. These ambitions are supported by specific development programs and inclusive hiring practices to ensure we build a truly diverse and global leadership team.Clariant presented an innovation strategy and three Innovation Arenas during the Investor Day in November 2024. What is the rationale behind this?
Innovation is essential for Clariant’s success. It is part of Clariant’s DNA and the primary source of our company’s success – it is also what »Greater chemistry« in our purpose stands for.Through a systematic analysis, we first examined key global megatrends impacting both our customers and the planet. These include »regional shifts,« »health, wellness and sustainability,« »changing demographics,« »digitalization and automation,« and »decarbonization.« To optimize how our company capitalizes on these global megatrends, we have categorized them into three overarching Innovation Arenas: »Health- and Sustainability-conscious Consumers and Brands,« »Energy Transition,« and »Circularity.« The concept of the Innovation Arenas ensures that we can optimize how we use these megatrends to our advantage across segments and business units. Together, they are set to deliver around 70 % of profitable growth, with the innovation rate expected to reach around 20 % by 2027.
Could you describe these Innovation Arenas and their growth potential?
Our first Innovation Arena focuses on »Health- and Sustainability-conscious Consumers and Brands,« since shifts in consumer behavior towards sustainability and health-conscious products are a key driver of Clariant's future growth. For example, through Lucas Meyer Cosmetics and Clariant’s VitiPure product lines, we are expanding high-performance, sustainable ingredients in cosmetics, personal care, and pharmaceuticals. Our PFAS-free solutions and sustainable actives also build on this demand for safer, more environmentally friendly products. Here, we see strong market dynamics, with sustainable products growing at twice the rate of conventional ones.Our second Innovation Arena is »Energy Transition.« We are actively supporting the global energy transition by providing solutions for biodiesel, sustainable aviation fuel (SAF) and the hydrogen economy. We expect revenues from the latter to exceed CHF 100 million by 2030. Clariant is also developing catalysts for green hydrogen derivatives and other renewable energy applications, which help to decarbonize hard-to-abate industries.
Our third Innovation Arena is »Circularity,« where we are developing solutions like our PFAS-free additives and sustainable materials for recycling. We offer solutions such as Licocene™ for recycling applications and recently launched Hostanox™, a novel natural antioxidant. While health and sustainability-conscious consumers and energy transition will contribute to near-term growth, circularity-related growth is expected to accelerate significantly after 2027.
»Our three Innovation Arenas are aligned with major global trends and will drive around 70 % of our growth by 2027.«
Conrad Keijzer
Chief Executive Officer (CEO)
Clariant has performed a holistic analysis of how its business segments can serve these three Innovation Arenas, which lead to the introduction of a differentiated segment steering. What does this mean?
The business units consist of different business segments. And based on our analysis, each segment has now been assigned one of five strategic mandates: »Boost,« »Outgrow,« »Grow at Market,« »Turnaround,« or »Harvest.« For our »Boost« segment Pharma, Clariant will provide resources to rapidly accelerate its market share. The Cosmetics, Mining, Renewable Fuels Purification, and Syngas & Fuels businesses have »Outgrow« potential, meaning that for these we will leverage their strong competitive position or scale in attractive markets to drive growth. For segments which should »Grow at Market,« the company will secure the long-term market position and therefore ensure sustained value contribution to the Group portfolio. For under-performing areas, the businesses have been assigned the mandate »Turnaround,« aiming to improve profitability through an optimized cost structure. And finally, the »Harvest« category relates to those areas where Clariant will continue capitalizing on the current asset base, while focusing on cash flow generation. Each of these mandates has a tailored strategy that determines the allocation of resources, reshaping the company-wide innovation process to ensure a systematic approach.Does this mean that segments in the »Harvest« category might be candidates for future divestments?
All of our businesses are considered as core to the company. However, they have different strategic mandates to make sure we allocate our resources consistent with their attractiveness and ability to grow. Beyond the segment view, we have identified activities within the segments with promising potential. We aim to realize this with »Strategic Growth Initiatives,« so-called SGIs, that entail targeted investments.We always aimed to grow above market as a company. Now, with our new differentiated segment steering, we are transparent in showing where this growth will come from.
How is Clarita, Clariant’s in-house GenAI tool, supporting the execution of the purpose-led strategy?
Clarita already operates actively across all four purpose dimensions. In innovation, our R&D solution analyzes laboratory data, internal documents, and patents to optimize product performance and streamline our innovation process. For customer focus, we have implemented the Clarita Sales solution that empowers our sales teams with detailed customer insights and cross-selling opportunities. On the sustainability front, Clarita is already providing real-time optimization recommendations that lead to a 10 % reduction in gas consumption at an Indonesian facility and 2 % steam savings at a German plant. Clarita has also become an integral part of our people engagement. Through initiatives like our »Coffee with Clarita« sessions, we are fostering a culture of digital adoption and knowledge sharing. Today, around 30 % of our employees use Clarita regularly already.This comprehensive approach has enabled us to be frontrunners in the adoption of AI in the DACH region, as recognized by Amazon Web Services in 2024, enabling faster innovation, stronger customer relationships, and more sustainable operations – all while empowering our people to work more effectively.
Looking ahead to 2025, what are your key priorities?
Macroeconomic challenges, uncertainties, and risks are likely here to stay at an elevated level throughout 2025. This includes potential trade tensions and tariffs. While we anticipate a moderation in general inflation, we do not expect a significant economic recovery. However, we remain firmly committed to navigating the current challenging environment with agility. For 2025, we expect modest sales growth of 3 % to 5 % in local currency, with the current state of the economic environment likely to result in a growth rate toward the bottom end of this range. We expect Care Chemicals and Adsorbents & Additives to see topline growth, while Catalysts sales are expected to be at similar levels to 2024. We are targeting an EBITDA margin improvement to 17 % to 18 % before exceptional items. We also expect to make further progress toward our targeted 40 % free cash flow conversion. We will also further advance our sustainability agenda.We are excited to celebrate Clariant's 30th anniversary in 2025 – it is a milestone that encourages us to take stock of the many things we have achieved on our journey from a Sandoz spin-off to a sustainability-focused specialty chemical company, and that renews our focus on achieving the goals that we have set for ourselves in the coming years.
And looking beyond 2025?
We remain on track to achieve our medium-term targets: 4 % to 6 % local currency sales growth, 19 % to 21 % reported EBITDA margin, and around 40 % free cash flow conversion by 2027 at the latest. Our confidence is based on several factors. First, our three Innovation Arenas are aligned with major global trends and will drive about 70 % of our growth. Second, we have a clear path to improve profitability through both growth and self-help measures. We have announced a new savings program targeting CHF 80 million in run-rate savings by 2027. Third, our strong international footprint and leading positions in key growth regions position us well for expansion. Finally, our proven ability to execute cost programs while maintaining innovation momentum demonstrates that we can deliver on our commitments.
