Clariant rides on cost cuts to maintain annual targets amid weak demand (updated)
30/10/2025 06:36
Clariant maintains annual targets despite weak demand Cost cuts include job reductions and facility closures AI drives growth in new formulations and flame retardants Adds shares in paragraph 2, outlook in paragraph 3 and CEO comment in paragraphs 5-7 By Maria Rugamer Oct 30 (Reuters) - Swiss specialty chemicals maker Clariant CLN.S stuck to its annual targets on Thursday as cost cuts helped offset pressure from persistently weak demand and customer uncertainty caused by global trade friction. Shares of the company, whose chemicals are used in smartphone and electric vehicle production, opened 3% higher, cutting their year-to-date loss to 26%, while the sector .SX4P was down 4%. The company confirmed its full-year and medium-term targets, but said it expects local currency sales growth at the lower end of the 1%-3% forecast range. Clariant grew its third-quarter core profit margin before exceptional items to 17.9%, beating a company-provided consensus estimate of 16.2%. Sales declined by 3% in local currencies. The Muttenz-based company is navigating "a weaker industrial production outlook and consumer sentiment," CEO Conrad Keijzer said. "Overall industrial production is lagging clearly behind GDP," Keijzer told Reuters in a press call, pointing to flat growth in Europe and only slight gains in the U.S. "Durable goods spending is further slowed by tariffs," he said, adding that global chemical production growth was expected to drop to 1.5% in 2026 from 2.5%. The European chemicals industry has been battling a slowdown in the global economy and uncertainty linked to trade friction, with Covestro 1COVG.DE and Wacker Chemie WCHG.DE cutting forecasts on Thursday. PROFITABILITY THROUGH COST CUTS Clariant is reducing spending through job cuts, production facility closures and procurement reductions to bolster its margins as it waits for a meaningful rebound in demand. It said its cost-savings programme to cut 80 million Swiss francs ($100.87 million) by 2027 was on track, with 31 million francs already saved this year. The company has cut 340 full-time jobs across its production and corporate operations this year and closed two of its 38 production facilities. SEES GROWTH IN AI Keijzer said Clariant is seeing "tremendous" internal gains from artificial intelligence. "Generative AI truly comes up with new formulations," he said, noting that the company had deployed such tools for more than a year. Flame retardants used in high-voltage cables for data centres and electric vehicles are also seeing double-digit growth, driven by AI-linked demand. ($1 = 0.7931 Swiss francs) (Reporting by Maria Rugamer; Editing by Subhranshu Sahu) ((maria.rugamer@thomsonreuters.com;))