Operating an Integrated Business Model
Clariant’s business model illustrates how the company transforms various resources into innovative, sustainable solutions. As expressed by Clariant’s brand values – Performance, People, and Planet – the achieved outcomes benefit all stakeholders, and their feedback helps Clariant continuously improve value creation.
Performance
209
R&D spend in CHF m
2 948
Raw material procurement in CHF m
> 375
Active innovation projects
> 125
Scientific collaborations
125
Production facilities
3.57
Raw material procured in m t
People
2 142
New employees hired
234 240
Training hours
538
Client interviews
74 %
Raw material supply base by spend covered by sustainability evaluation
Planet
3 2093
Energy consumption in m kWh
493
Water consumption in m m3
3 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2017. In interim years, including 2018, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
Performance
6 623
Sales in CHF m
15.4 %
EBITDA margin before exceptional items
> 3 %1
Growth through innovation
6 700
Patents at year end
4.342
Production volume in m t
24
Products awarded with the EcoTain® label
1 Contains the contribution to growth from both Top Line Innovation as well as Life Cycle Innovation. Potential cannibalization of existing sales caused by Life Cycle Innovation in certain cases has not been excluded from calculation.
2 For 2018, the production volume is based on a reduced reporting scope, which includes sites that are responsible for 95 % of total production.
People
17 901
Staff in FTE at year end
0.15
Lost time accident rate (LTAR)
Planet
0.933
Greenhouse gas emissions (scope 1 & 2) in m t
133
Waste water in m m3
3 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2017. In interim years, including 2018, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
Performance
211
R&D spend in CHF m (3.3 % of Group sales)
> 125
Scientific Collaborations
> 370
Active Innovation Projects (Class 1 and 2)
8
R&D Centers
> 50
Technical Centers
People
~ 1 100
Employees in R&D
9 522
Training hours in Group Technology & Innovation
Planet
Performance
6 600
Patents at year end
2.5 %
Growth through Innovation 1
People
272
Employees with Innovation Belts (250 Green Belts, 17 Black Belts and 5 Master Black Belts)
Planet
Performance
34
Marketing Excellence projects
People
515
Customer interviews in Marketing Excellence initiatives
80
Sales managers participated in a specific sales training
59
Industry experts interviewed
Planet
Performance
12.3
Additional margin in CHF m from Marketing Excellence projects
169
EcoTain® products at the end of 2017
People
Planet
Performance
248
Investments in property, plant and equipment in CHF m
2 674
Raw material procurement in CHF m
125
Production facilities
3.14
Raw materials procured in m t
People
7 000
Suppliers of raw material
65 %
Raw material supply base by spend covered by sustainability evaluations
Planet
3 245
Energy consumption in m kWh
49
Water consumption in m m3
Performance
6 377
Sales in CHF m
15.3 %
EBITDA margin before exceptional items
428
Operating cash flow in CHF m
4.60
Production volume in m t
People
0.20
Lost time accident rate (LTAR, accidents with at least 1 day lost/200 000 work hours)
Planet
13
Waste water in m m3
198
Waste in thousand t
0.97
Greenhouse gas emissions (scope 1 & 2) in m t
Performance
2.1 %
R&D spend of sales
463
Raw material procured
in CHF m
> 90
Active innovation projects
36
Production sites
2 713
Number of raw materials procured
People
30 232
Training hours
1 680
Raw material suppliers
Planet
8572
Energy consumption in m kWh
2 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2017. In interim years, including 2018, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
Performance
1 394
Sales in CHF m
8 %
Growth in local currencies
12.8 %
EBITDA margin before exceptional items
2.91
Production volume in m t
People
3 276
Staff in FTE at year end
(2016: 3 235)
Planet
1092
Waste in thousand t
942
Greenhouse gas emissions
in kg/t production
1 For 2018, the production volume is based on a reduced reporting scope, which includes sites that are responsible for 95 % of total production.
2 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2017. In interim years, including 2018, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
Performance
6.6 %
R&D spend of sales
263
Raw material procured
in CHF m
> 110
Active innovation projects
14
Production sites (50:50 or
968
Number of raw materials procured
People
27 726
Training hours
538
Raw material suppliers
Planet
5882
Energy consumption in m kWh
2 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2017. In interim years, including 2018, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
Performance
861
Sales in CHF m
11 %
Growth in local currencies
23.1 %
EBITDA margin before exceptional items
0.061
Production volume in m t
People
2 061
Staff in FTE at year end
(2017: 1 970)
Planet
152
Waste in thousand t
2 7092
Greenhouse gas emissions
in kg/t production
1 For 2018, the production volume is based on a reduced reporting scope, which includes sites that are responsible for 95 % of total production.
2 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2017. In interim years, including 2018, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
Performance
1.4 %
R&D spend of sales
1 149
Raw material procured
in CHF m
> 105
Active innovation projects
62
Production sites
15 305
Number of raw materials procured
People
28 459
Training hours
4 746
Raw material suppliers
Planet
9522
Energy consumption in m kWh
2 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2017. In interim years, including 2018, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
Performance
2 703
Sales in CHF m
1 %
Growth in local currencies
15.2 %
EBITDA margin before exceptional items
0.361
Production volume in m t
People
6 793
Staff in FTE at year end
(2017: 6 759)
Planet
482
Waste in thousand t
7742
Greenhouse gas emissions
in kg/t production
1 For 2018, the production volume is based on a reduced reporting scope, which includes sites that are responsible for 95 % of total production.
2 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2017. In interim years, including 2018, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
Performance
2.8 %
R&D spend of sales
965
Raw material procured
in CHF m
> 70
Active innovation projects
13
Production sites
2 988
Number of raw materials procured
People
32 019
Training hours
1 710
Raw material suppliers
Planet
8062
Energy consumption in m kWh
2 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2017. In interim years, including 2018, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
Performance
1 665
Sales in CHF m
7 %
Growth in local currencies
19 %
EBITDA margin before exceptional items
0.981
Production volume in m t
People
2 541
Staff in FTE at year end
(2017: 2 582)
Planet
602
Waste in thousand t
2172
Greenhouse gas emissions
in kg/t production
1 For 2018, the production volume is based on a reduced reporting scope, which includes sites that are responsible for 95 % of total production.
2 Every three years, Clariant validates environmental data from all production sites. The last full reporting campaign was in 2017. In interim years, including 2018, the reduced reporting scope comprises the larger sites responsible for 95 % of production.
The Integrated Report 2018 can be explored not only through the subsequent layers of Clariant’s business model, but also along three thematic »focus routes«. They shed light on value creation from the perspective of the Group as well as the Business Areas along the main threads of innovation, customer experience, and operational excellence, providing shortcuts between the respective parts of the report. For simple orientation and guidance, the content of each focus route is highlighted with a colored icon and vertical line.
Idea to Market
The Idea to Market focus route covers the innovation-related parts of the Integrated Report. After the overview in the »Idea to Market« chapter, this focus route elaborates on the Business Areas’ innovation endeavors and discusses the results achieved with respect to the innovation-related material topics.
Value Creation, Idea to MarketMarket to Customer
The Market to Customer focus route includes report sections that illustrate Clariant’s approach to customer-centricity. Starting with the »Market to Customer« chapter, this focus route sheds light on the Business Areas’ efforts to develop their marketing and sales processes toward true customer-centricity, and reveals the results regarding the customer-related material topics.
Value Creation, Market to CustomerCustomer to Cash
The Customer to Cash focus route encompasses the parts of the Integrated Report that center around Clariant’s efforts to ensure safe, reliable, and efficient operations. Beginning with the »Customer to Cash« chapter, this focus route illustrates the Business Areas’ actions to optimize procurement, planning, production, and delivery, and presents the results achieved for the operations-related material topics.
Value Creation, Customer to Cash1. Building on a strong foundation
Clariant’s business model is based on a focused vision and mission, and strong corporate values, all of which are operationalized through its five-pillar strategy and overall corporate objectives and financial targets.
Clariant recognizes global challenges as business opportunities and relies on an entrepreneurial leadership culture and dedicated employees who contribute their knowledge and skills to make Clariant a high-performing organization.
2. Transforming capitals to create value for all stakeholders
Clariant draws on six kinds of capital to fuel the value creation process: financial, intellectual, manufactured, human, relationship, and natural. Clariant converts these capitals into valuable outputs, such as products and services, which benefit customers, employees, shareholders, and the environment.
- Financial Capital refers to the pool of funds available to the company for use in the production of goods or the provision of services. This can include funds obtained through financing, such as debt, equity, or grants, and funds generated by the company, for example through sales or investments. In Clariant’s business model, presented overleaf, these are, for example, R&D spend as an input and sales as an output.
- Intellectual Capital is the knowledge-based intangibles used and created by the company, often in collaboration with partners. This can include intellectual property, such as patents, trademarks, copyrights, software, rights, and licenses, and »organizational capital« such as tacit knowledge, systems, procedures, and protocols. For Clariant, examples include scientific collaborations as an input and patents at year end as an output.
- Manufactured Capital includes manufactured physical objects such as buildings, equipment, and products. These can include objects that are available to the company for use in the production of goods or the provision of services, or that the company produces for sale to customers or for its own use. In Clariant’s business model, examples are raw material procured as an input and production volume as an output.
- Human Capital is the company’s staff and its composition, competencies, capabilities, experience, and motivation to innovate. This can include employees’ alignment with corporate values and their ability to understand and implement the company’s strategy. In the case of Clariant, inputs include training hours and outputs are, for example, employee health and safety.
- Relationship Capital refers to key relationships, including those with significant groups of stakeholders and other networks. This can include shared values, the trust and willingness to engage, and related intangibles associated with its brand and reputation. For Clariant, examples are client interviews as an input and customer satisfaction as an output.
- Natural Capital includes the renewable and nonrenewable environmental resources and processes that support the past, current, or future prosperity of the company or are affected by it. Examples can include resources related to air, water, and land that are utilized or impacted by emissions. In the Clariant business model, energy consumption is one input and greenhouse gas emissions are an output.
Clariant categorizes these six capitals under its brand values Performance (encompassing financial, intellectual and manufactured capital), People (encompassing human and relationship capital), and Planet (encompassing natural capital).
3. Fueling growth and profitability with three value creation phases
Clariant’s Business Areas are guided by three value creation phases that ensure excellence in execution throughout the company’s activities:
Idea to Market encompasses all processes that contribute to a well-filled and high-performing innovation pipeline. Market to Customer includes all steps of a truly customer-experience-centered marketing and sales process. Customer to Cash covers Clariant’s efforts to ensure safe, efficient production and reliable delivery.
The pool of funds available to the company for use in the production of goods or the provision of services. This can include funds obtained through financing, such as debt, equity, or grants, and funds generated by the company, for example through sales or investments. View entire glossary
Knowledge-based intangibles used and created by the company, often in collaboration with partners. This can include intellectual property, such as patents, trademarks, copyrights, software, rights, and licenses, and »organizational capital« such as tacit knowledge, systems, procedures, and protocols. View entire glossary
Manufactured physical objects such as buildings, equipment, and products. These can include objects that are available to the company for use in the production of goods or the provision of services, or that the company produces for sale to customers or for its own use. View entire glossary
The company’s staff and its composition, competencies, capabilities, experience, and motivation to innovate. This can include employees’ alignment with corporate values and their ability to understand and implement the company’s strategy. View entire glossary
Key relationships including those with significant groups of stakeholders and other networks. This can include shared values, the trust and willingness to engage that the company has developed, and related intangibles associated with its brand and reputation. View entire glossary
Renewable and nonrenewable environmental resources and processes that support the past, current, or future prosperity of the company or are affected by it. Examples can include resources related to air, water, and land that are utilized or impacted for example by emissions. View entire glossary
Core business activities that create additional value are structured into three value creation phases at Clariant. Idea to Market encompasses scouting global trends and ideas, scoping out customer needs, executing product development and commercializing, and monitoring product performance. View entire glossary
Core business activities that create additional value are structured into three value creation phases at Clariant. Market to Customer includes identifying market attractiveness, developing a clear value proposition and articulating it to the customers, and capturing the value created through relationship building and the sales process. View entire glossary
Core business activities that create additional value are structured into three value creation phases at Clariant. Customer to Cash encompasses planning to balance demand and supply, optimizing sourcing for spend effectiveness, constantly monitoring production for high efficiency, and delivering finished goods on-time and in-full as required by the customer. View entire glossary
The pool of funds available to the company for use in the production of goods or the provision of services. This can include funds obtained through financing, such as debt, equity, or grants, and funds generated by the company, for example through sales or investments. View entire glossary
Knowledge-based intangibles used and created by the company, often in collaboration with partners. This can include intellectual property, such as patents, trademarks, copyrights, software, rights, and licenses, and »organizational capital« such as tacit knowledge, systems, procedures, and protocols. View entire glossary
Manufactured physical objects such as buildings, equipment, and products. These can include objects that are available to the company for use in the production of goods or the provision of services, or that the company produces for sale to customers or for its own use. View entire glossary
The company’s staff and its composition, competencies, capabilities, experience, and motivation to innovate. This can include employees’ alignment with corporate values and their ability to understand and implement the company’s strategy. View entire glossary
Key relationships including those with significant groups of stakeholders and other networks. This can include shared values, the trust and willingness to engage that the company has developed, and related intangibles associated with its brand and reputation. View entire glossary
Renewable and nonrenewable environmental resources and processes that support the past, current, or future prosperity of the company or are affected by it. Examples can include resources related to air, water, and land that are utilized or impacted for example by emissions. View entire glossary