Clariant AG

Quarterly Report • Nov 7, 2007

Quarterly Report November 7, 2007

Contents	Page
News Release	1
Financial Review	4
Financial Discussion	4
Business Discussion	6
Condensed Financial Statement (unaudited)	11

Clariant International Ltd Rothausstrasse 61 CH-4132 Muttenz 1, Switzerland

Clariant posts continuing sales growth and significant cash flow improvement for the first 9 months 2007 - Strategy implementation gathering speed

• > Sales up 4% in local currency and 6% in Swiss Francs
• > Operating cash flow almost doubled compared to the first nine months 2006 and reaches 320 million Swiss Francs
• > Net income from continuing operations increased to 129 million Swiss Francs
• > Profitability impacted by rising raw material and energy costs as well as unfavorable currency exchange rates
• > Price increases could not offset unfavorable raw material cost development expected full year 2007 EBIT around CHF 530 million
• > Strategy implementation gathering speed:
• • Site network optimization on track 120 million Swiss Francs restructuring costs booked in the third quarter
• • Pigments & Additives Division adopts cost leadership strategy
• Company adjusts operational structure in order to accelerate execution as a consequence approximately 100 headcounts at Headquarters to be cut
• > Pigments & Additives, Functional Chemicals and Textile, Leather & Paper Chemicals divisions are reviewing strategic options for selective units

Key Financial Group Figures

	Nine Months Third Quarter
Continuing operations:		2007		2006		2007		2006
		CHF mn % of sales		CHF mn % of sales	CHF mn	% of sales	CHF mn	% of sales
Sales	6 447	100.0	6 090	100.0	2 111	100.0	2009	100.0
Local currency growth (LC):	4%				2%
Organic growth1	3%				1%
Acquisitions/Divestitures	1%				1%
Currencies	2%				3%
Gross profit	1 908	29.6	1 901	31.2	611	28.9	616	30.7
EBITDA before exceptionals*	618	9.6	653	10.7	188	8.9	227	11.3
EBITDA*	538	8.3	616	10.1	132	6.3	219	10.9
Operating income before exceptionals*	417	6.5	458	7.5	123	5.8	160	8.0
Operating income	271	4.2	273	4.5	5	0.2	48	2.4
Net income from continuing operations	129	2.0	108	1.8	- 45	2.1	- 14	0.7
Operating cash flow (total operations)	320		173		266		95
Discontinued operations:
Sales	81		270		0		45
Net loss from discontinued operations	- 107		- 185		- 6		- 78
Other key figures:		30.09.2007		31.12.2006
Net debt	1 455		1 556
Equity (including minorities)	2 442		2 433
Gearing	60%		64%
Number of employees	21 244		21 748

¹ Throughout this statement the term "organic growth" is being used. It means volume and price effects excluding the impacts of changes in FX rates and acquisitions/divestitures.

* See Definitions of Terms of Financial Measurement on page 11.

MUTTENZ, Switzerland – November 7, 2007

Clariant announced a rise in 9-month sales with growth of 4% in local currencies and 6% in Swiss Francs, compared to the first three quarters of 2006. In absolute terms, sales rose to CHF 6.447 billion from CHF 6.090 billion a year earlier.

A raw material cost increase of 4%, higher energy costs and unfavorable currency exchange effects resulted in enduring pressure on the gross profit that could not be compensated by 1% price increase. The gross margin decreased to 29.6% from 31.2% in the previous year. In particular, the Functional Chemicals Division was impacted by these adverse effects.

The encouraging decrease of SG&A expenses to 20.9 % of total sales from 21.5% in the previous year helped mitigate the impact of these unfavorable developments on operating income before exceptionals that declined to CHF 417 million from CHF 458 million (margin declined to 6.5% from 7.5%). The net income from continuing operations rose to CHF 129 million from CHF 108 million in the first 9 months of 2006.

Continuous demand for all division but slowdown in third quarter

There was good demand for Clariant products with a retreating momentum in the third quarter and a differentiated development across businesses. Some parts of the business – e.g. Coatings and Crop Protection – showed favorable volume increases whereas others – e.g. the Leather business – were challenged by declining demand. Also, the regional sales split showed a mixed picture. Europe remained stable, whereas Asia overall showed good growth with some slowdown the third quarter, in particular in China and India. Sales in the USA were more resilient.

Price increase initiatives across all divisions have started bearing fruit. In particular the divisions Pigments & Additives as well as Textile, Leather and Paper Chemicals managed to resist further price pressure. These efforts were accompanied by a negative impact on volume as a consequence of a strong focus on qualitative growth. Nevertheless, the increasing momentum in pricing – in particular in the third quarter – could not offset rising raw material and energy costs. Only the Masterbatches Division was able to offset rising raw material and energy costs.

Strong 2007 focus on cash flow improvement pays off

Clariant substantially increased the operational cash flow to CHF 320 million compared to CHF 173 million in the first 3 quarters of 2006. This achievement resulted from the company's previously announced 2007 focus on net working capital improvement - specifically driven by inventory reduction. In the third quarter, operating cash flow was improved to CHF 266 million from 95 million.

"In line with our strategic priorities for 2007 we have significantly improved our cash flow", said Jan Secher, Chief Executive Officer. "In order to compensate for the delay in EBIT improvement we will increase the pressure on executing our strategic initiatives focusing on site network reduction, reducing complexity, increasing prices and reducing SG&A costs. This will enable us to deliver an above-industry average ROIC in 2010."

Sizable sites announced for closure

In line with the "Clariant 2010" strategy and the embedded strategic site optimization, the company booked CHF 120 million of restructuring costs in the third quarter, mainly in order to close the Textile, Leather & Paper Chemicals site at Selby in the UK. The closure is still subject to consultation with employee representatives. In addition the closure of the Pigments & Additives site Coventry, Rhode Island and the Masterbatches site in Naucalpan, Mexico, have been decided. Further restructuring costs will be booked in the 4th quarter of 2007 - total restructuring costs for 2007 will amount to approximately 250 million Swiss Francs.

Transformation of Clariant 2010 strategy into the divisions is gathering speed

The Pigments & Additives division will implement a revised strategy striving for cost leadership in all businesses. Recognizing a trend of commoditization in parts of the portfolio, product- and service-driven businesses will be clearly separated and managed differently. As a first step, the business unit "Base Products" will be created to decrease SG&A costs. Strategic options – including divestments - for selective units are being evaluated.

Similar initiatives are well progresses in the divisions Functional Chemicals and Textile, Leather & Paper Chemicals.

Strategic initiatives in the divisions are proceeding and gathering speed. As one result the product portfolio could be decreased by 20% in the first nine months of 2007 enabling the company to further reduce complexity. This has also led to an additional write off of inventory of approximately CHF 20 million compared to previous year.

Closer to the customers - Clariant will streamline structure to accelerate execution

In order to reduce complexity and enhance flexibility at regional market levels, Clariant decided to streamline its structure. The accountability for the business will be shifted closer to customers and markets. More operational decisions will be made at regional and local levels. As a consequence, a headcount reduction of approximately 100 employees will be made at corporate headquarters, not being replaced in the regions.

Outlook for full year 2007

Clariant will not be able to fully compensate for high level of raw material and energy costs as well as for continued unfavorable exchange rates by price increases for the remainder of the year.

Clariant confirms higher sales in local currency terms in 2007. The operating income before exceptional items from continuing operations is expected to be in the range of CHF 530 million. The cash flow from operations before exceptional items will be significantly improved compared to full year 2006 – driven by working capital reduction. Recurring net income is expected on full year 2006 level.

-ends-

Financial Review Financial Discussion Third Quarter

Economic Environment

The credit market crisis in the US and rising oil prices are affecting the global economic outlook which became more uncertain than anticipated in June, especially in the developed economies. The interest rate cuts by the Fed should, however, impede a further downturn in the US and in Europe. Economic growth in Brazil, Russia and China remains at high levels. Strong demand for energy has pushed oil prices to record levels with no sign that this situation will ease in the near future.

Currency trends exhibited in the first two quarters continue. Compared to the average exchange rate of the Third Quarter of 2006, the euro and pound sterling appreciated against the Swiss franc. On the other hand the US dollar strongly depreciated against the Swiss currency. Also the Japanese yen fell against the Swiss franc.

Sales and Operating Results

Consolidated sales from continuing operations recorded a solid increase of 5% in Swiss franc terms and 2% in local currency terms compared to the Third Quarter of the previous year. There was organic sales growth (excluding the effect of the MB unit acquired from CIBA) of 1%.

The gross margin dropped to 28.9% in the Third Quarter of 2007 compared to 30.7% of sales during the prior-year quarter. Most businesses implemented price increases during this quarter. But price increases were more than offset by a 5% rise in raw material costs, higher energy costs, and unfavorable currency movements. Only Masterbatches was able to offset the further rise in raw material,energy and logistic costs. The product portfolio could be decreased by 20 percent in the first nine months of 2007. This has led to write-down on inventory of approximately CHF 15 million in the Third Quarter compared to previous year.

Marketing, distribution, administration, and general overhead costs accounted for 21.1% of sales compared to 20.3% of sales recorded in the Third Quarter of 2006. The development was influenced by retroactive VAT payments in Germany. The comparable base was also quite low due to one time effects in the Third Quarter 2006.

Research and development costs of CHF 51 million in the Third Quarter of 2007 were stable compared with CHF 52 million in the previous year.

Income from associates climbed to CHF 9 million in the Third Quarter of 2007. This compares to CHF 4 million during the prior-year quarter.

Restructuring costs and impairments in the amount of CHF 120 million include primarily a provision and a writeoff for the closure of the Selby plant in the UK as well as restructuring activities in Germany and India.

Net financial result in the Third Quarter of 2007 decreased to CHF 43 million, a drop of CHF 19 million compared to the prior-year period. This was mainly due to foreign exchange losses totalling CHF 19 million in the Third Quarter of 2007 compared to exchange rate gains worth CHF 3 million in the previous year. The net interest result improved by CHF 3 million year on year despite higher interest rates globally. This improvement is attributable to an optimized mix of net debt in the first three quarters of 2007.

Tax expenses in the Third Quarter of 2007 were influenced by the following factors: the declining proportion of profits generated in low-tax countries, impairment and restructuring costs that were only partly tax-effective, and the positive one-time effect of the imminent tax reform measures in Germany.

Net loss from continuing operations amounted to CHF 45 million in the Third Quarter of 2007. This compares with a loss of CHF 14 million reported in the same period of 2006.

The loss from discontinued operations of CHF 6 million in the Third Quarter of 2007 relates to adjustments for the disposal of the custom manufacturing business. The corresponding period of the previous year included impairments booked in the custom manufacturing business.

Balance Sheet Key Figures

Total assets increased from CHF 7.188 billion at the end of 2006 to CHF 7.373 billion as of September 30, 2007. Whereas inventories remained stable, moderate increases in trade receivables, a payment to the pension fund, and a substantial increase in cash and cash equivalents contributed to this effect.

Cash and cash equivalents increased from CHF 443 million at the end of 2006 to CHF 599 million as of September 30, 2007. This was the result of improved net working capital management in the Third Quarter, the repayment of a CHF 48 million vendor loan note received as part of the sale price for the disposal of the Electronic Materials business, which was sold in 2004, and additional borrowings, the latter two occurring in the first half of 2007.

Current financial debt increased from CHF 623 million at the end of 2006 to CHF 786 billion as of September 30, 2007, whereas non-current financial debt decreased from CHF 1.376 billion at the end of 2006 to CHF 1.268 billion as of September 30, 2007. This primarily due to two transactions: First, a bond worth CHF 384 million, which will fall due in March 2008, was reclassified from non-current to current financial debt. Second, a new bond in the amount of CHF 250 million was issued in April 2007 maturing in 2012.

Equity increased from CHF 2.433 billion at the end of 2006 to CHF 2.442 billion as of September 30, 2007. This was the net effect of a net profit of CHF 22 million during the reporting period, the positive impact of FX movements, and a capital reduction of CHF 57 million.

Net debt decreased from CHF 1.556 billion at the end of 2006 to CHF 1.455 billion as of September 30, 2007, as a result of the changes described above.

Gearing, which reflects net financial debt in relation to equity including minorities, decreased from 64% at the end of 2006 to 60% as of September 30, 2007.

Cash Flow

The presentation of the cash flow statement was changed to provide additional relevant information. Comparative information was reclassified accordingly.

In the new cash flow statement presentation, all non-cash expenses have again been added to the net result, including interest and tax expenses. The receipts and payments of interest and payments of taxes are reported separately, as they are in operating activities, too. Dividends received from associates are classified as cash flows from operating activities, as investments in associates are strictly for operating purposes. In the prior version of the cash flow statement, dividends received were classified as cash flows from investment activities.

Cash flow from operating activities before changes in working capital stood at CHF 101 million for the Third Quarter of 2007. This compares to CHF 224 million in the Third Quarter of 2006, mainly driven by the lower quality of earnings.

Working capital decreased by CHF 165 million during the Third Quarter of 2007, mainly due to lower inventories and trade receivables, but also to higher trade payables and provisions. This CHF 165 million drop compares to an increase of CHF 129 million in the Third Quarter of 2006.

Cash flow from operating activities stood at CHF 266 million for the Third Quarter of 2007, compared to CHF 95 million in the Third Quarter of 2006. This substantial improvement in operating cash flow was achieved despite strong volume growth and increases in raw material prices.

Capital expenditure (PPE) stood at CHF 79 million for the Third Quarter of 2007, compared to CHF 88 million in the Third Quarter of 2006.

Business Discussion Third Quarter

Textile, Leather & Paper Chemicals

				Nine Months				Third Quarter
		2007		2006		2007		2006
		CHF mn % of sales		CHF mn % of sales	CHF mn	% of sales	CHF mn	% of sales
Sales	1 779		1 733		581		578
EBITDA before exceptionals	165	9.3	175	10.1	46	7.9	62	10.7
Operating income before exceptionals	111	6.2	122	7.0	28	4.8	44	7.6
Operating income	15	0.8	14	0.8	- 59	- 10.2	- 64	- 11.1

See Definitions of Terms of Financial Measurements on page 11.

In the Third Quarter, sales of business operations in the Textile, Leather & Paper Chemicals division declined by 2% year on year in local currency terms. Product prices have stabilized, whereas the division accepted lower sales rather than bow to pressures on selling prices.

Whereas demand remained stable in the textile sector, the paper business was sluggish. The decline in sales in the Division is largely due to weakness in the market for leather chemicals, which was already evident in the preceding quarter. By region, Latin America in particular continued to grow, whereas sales in Europe declined, but continued growth in the main European market Germany was achieved. Asia recorded a slight increase in sales with a mixed trend across the countries - the major countries India and China slowed. Sales in the US fell.

Quarterly profitability for the Division slipped on the back of rising prices for raw materials and lower sales volumes. Currency developments also had a negative influence on the operating result. The operating result after exceptional items was mainly impacted by the closure of the Leather site in the UK.

Price increases in the Textile Business are beginning to take effect. Sales remained flat on the back of good demand, in particular for technical textiles and for dying & printing products. Sales of emulsions and pretreatment products declined. Latin America reported the strongest sales increases, whereas demand fell in Europe, partly as a result of the decision to raise prices. In Asia the good sales growth of the region was mainly slowed by lower sales in India. A cooperation agreement was signed with Schöller, a Swiss company, to market a globally unique nano-finishing technology.

After very rapid expansion in the preceding quarters, growth in the market for optical brighteners in the Paper Business started to ease. In the US, the largest market for these products, the company raised prices again, accepting that sales volumes would decline. Demand for coating chemicals continued to grow, and dyes managed to maintain the previous year's level. Growth in Asia and Europe held up well.

Despite successful implementation of price increases across the market, revenues for chemicals in the Leather Business declined once again. The main reason for this development was a general slowdown in demand for wet end chemicals, but the closure of production sites by customers also impacted sales negatively. Solid growth in the finishing business was not enough to offset this development.

Pigments & Additives

				Nine Months				Third Quarter
		2007		2006		2007		2006
		CHF mn % of sales		CHF mn % of sales	CHF mn	% of sales	CHF mn	% of sales
Sales	1 586		1 514		525		498
EBITDA before exceptionals	211	13.3	251	16.6	73	13.9	79	15.9
Operating income before exceptionals	151	9.5	194	12.8	53	10.1	62	12.4
Operating income	125	7.9	190	12.5	28	5.3	60	12.0

See Definitions of Terms of Financial Measurements on page 11.

The Pigments & Additives division continued to grow in the Third Quarter of the year, with organic growth of 3% year on year. Initiatives to raise prices compensated the continued price pressures experienced by the Division. Overall stable prices with increased volumes were achieved.

Coatings achieved positive growth in a competitive environment, whereas printing and plastics declined. Asia and Latin America recorded strong growth, whereas Europe maintained the high levels of the previous year. The steps taken in North America to improve the top line have started to bear fruit.

Profitability continues to be hampered by higher raw material costs and unfavorable currency effects. Restructuring measures impacted the operating profit after exceptional items mainly due to the closure of underperforming activities in Germany and India

The Coating Industry continues to grow strongly across all regions and market segments, i.e. the automotive, construction, and paint industries. Europe was very stable, while China and Latin America produced double-digit growth rates. North America also experienced positive growth after several difficult quarters.

In the Plastics Industry sales declined in a difficult environment. Demand in various end user industries started to weaken, but sales, particular for waxes held up well. Solid progress continues to be made in Asia, and especially in China.

Competition in the Printing Industry remains challenging, particularly in the case of publication ink products. Despite the challenges of the competitive landscape, price declines were contained with a slight decline in volumes. Special inks and non-impact printing recovered after a slow start beginning of the year.

In the Specialty Industries, the solid growth rates of previous quarters were maintained by successfully implemented price increases and higher volumes. Regionally sales growth was driven by strong demand in Asia, Latin America and the US. The Division's range of flame retardants contributed to this good performance.

Masterbatches

				Nine Months				Third Quarter
		2007		2006		2007		2006
		CHF mn % of sales		CHF mn % of sales	CHF mn	% of sales	CHF mn	% of sales
Sales	1 065		958		343		315
EBITDA before exceptionals	121	11.4	120	12.5	37	10.8	40	12.7
Operating income before exceptionals	96	9.0	96	10.0	29	8.5	32	10.2
Operating income	77	7.2	92	9.6	28	8.2	31	9.8

See Definitions of Terms of Financial Measurements on page 11.

As measured in local currency, the Masterbatches Division achieved solid growth of 3% with an organic growth rate of 3% in local currencies. Slowing demand across the plastics industry cut organic growth to 0%. As in previous quarters, prices for color concentrates were raised again. Weaker demand affected all regions and business segments. The sale of the Masterbatch activities in Australia accounted for about 2% of the drop in sales in the Third Quarter.

Prices for several raw materials such as certain pigments and commodity resins increased during the Third Quarter. The division has adjusted selling prices to compensate for the expected higher costs. The slight drop in the operating result was primarily due to higher operating costs incurred in integrating the Masterbatches business acquired from Ciba.

In North America, positive developments in packaging and consumer goods could not offset the continued weakness in the construction and automotive industries. Sales remained at the previous year's levels.

Demand in Europe started to slow down after very good sales developments earlier in the year, in particular towards the end of the quarter. Despite this trend, stable sales growth was achieved, particularly driven by double digit growth rates in Eastern Europe.

Excluding the effect of consolidation in the Australian operations, growth in Asia was solid; China, where the Division is well positioned with three manufacturing plants, recorded double-digit growth. In Thailand a new facility came on stream with expanded capacity and technical capability to serve local and regional markets.

Operations in Latin America continued to expand well, but at a slower pace. Much of this development can be attributed to the decision to exit non-core activities in Brazil. An acquisition to expand the local business was made in Colombia.

Functional Chemicals

				Nine Months			Third Quarter
		2007		2006**		2007		2006**
		CHF mn % of sales		CHF mn % of sales	CHF mn	% of sales	CHF mn	% of sales
Sales	2 017		1 885		662		618
EBITDA before exceptionals	184	9.1	207	11.0	52	7.9	77	12.5
Operating income before exceptionals	133	6.6	159	8.4	35	5.3	60	9.7
Operating income	134	6.6	135	7.2	35	5.3	58	9.4

** Restated to include Life Science Chemicals Division, a separate division in 2006, which has become a part of Functional Chemical Division in 2007. See Definitions of Terms of Financial Measurements on page 11.

Organic growth of 4% in local currency terms in the Functional Chemicals Division was achieved in the Third Quarter. Strong demand across most businesses made it possible to introduce further price rises.

Whereas demand for Detergents declined slightly, Process Chemicals reported the strongest sales growth. By region, Asia and America were once again the main growth drivers, whereas sales in Europe rose at a slower pace.

The decrease in the operating result before exceptional items is largely accounted for by the significant and ongoing rise in raw material prices, which higher sales prices in the Division were unable to fully offset.

In the Third Quarter, the Detergents business reported slowing sales across all product lines with absolute priority given to further price increases. Sales declined, particularly in the largest market in Europe. In contrast sales held up well in the US on the back of stable demand in the Consumer Goods segment.

The announced set-up of a product driven business Detergents & Intermediates business with the goal of further reducing complexity is progressing on schedule. The business unit will commence operations in its new organizational form on January 1, 2008.

Performance Chemicals reported good demand across all businesses except the products for specialty intermediates. Good growth in chemicals in the Crop Protection Business was primarily due to higher demand for raw materials for renewable energies. Despite the slowdown in the construction sector and the housing crisis in the US, the business in raw materials for the production of superplasticizers for concrete continued to report rising sales. Although it was the seasonally weak quarter for the Personal Care Business, the market for consumer products remained stable. Sales for Specialty Intermediates declined as demand for products such as glyoxylic acid and derivative products continued to weaken.

Sales of Process Chemicals continued to rise on the back of strong demand for Clariant Oil Services, Metal Working and Refinery Chemicals. With the acquisition of Toschem, a leading supplier of chemicals and services to the oil & gas and industrial water treatment markets in Colombia, the Division will contribute to further expanding the market share held by Clariant Oil Services.

Regions

Sales						Nine Months						Third Quarter
CHF mn	2007	% of sales	2006	% of sales	CHF %	LC %		2007 % of sales		2006 % of sales	CHF %	LC %
Europe	3 155	48.9	2 966	48.7	6	2	1 004	47.6	952	47.4	5	1
of which Germany	940		878		7	3	310		289		7	3
of which Switzerland	111		105		6	1	36		29		24	17
Americas	1 776	27.6	1 726	28.3	3	4	594	28.1	569	28.3	4	3
of which USA	763		792		- 4	- 1	240		245		- 2	1
Asia / Australia / Africa	1 516	23.5	1 398	23.0	8	9	513	24.3	488	24.3	5	4
Total continuing operations	6 447	100.0	6 090	100.0	6	4	2 111	100.0	2009	100.0	5	2
Discontinued operations	81		270				–		45

Europe

European sales accounted for 48% of the Group total in the Third Quarter of 2007. Organic growth (excluding the impact of the acquisition of Ciba's Masterbatches business) was flat in the Third Quarter of 2007 compared to the prior-year quarter. A strong performance in Eastern European countries (+12%) compensated for the negative development in Southern Europe (Spain -8%, Italy -5%). Germany – by far the most important market for Clariant – reported a solid 3% increase, mainly due to above-average improvements in the Textile, Paper, Plastics, Performance Chemicals, and Process Chemicals segments. In France, the integration of Ciba's Masterbatches business is at an advanced stage.

Americas

Sales in the Americas accounted for 28% of the Group total. This region achieved organic growth of 3%, fuelled mainly by positive performances in Argentina (+16%), Mexico (+7%), Venezuela (+7%), and Brazil (3%). The US recorded a stable performance with a 1% sales increase (in organic terms) thanks to strong upturns in the Detergents, Performance Chemicals, and Process Chemicals segments.

Asia, Africa, Australia

In the Third Quarter of 2007, this region – which accounts for 24% of Group sales – delivered 2% organic growth. China (+8%) continued to be the main contributor. Positive performances were also recorded in South Korea (+12%), Pakistan (+8%), Indonesia (+7%), and Japan (+4%). Divestiture of the Masterbatches businesses is the main reasons for the sharp sales drop in sales in Australia (-28%) compared to the prioryear quarter.

Condensed Financial Statements (unaudited)

Definition of Terms of Financial Measurements

The following financial measurements are supplementary financial indicators. They should be considered in addition to, not as a substitute for, operating income, net income, operating cash flow and other measures of financial performance and liquidity reported in accordance with International Financial Reporting Standards (IFRS).

EBITDA – (Earnings Before Interest, Taxes, Depreciation and Amortization) is calculated as operating income plus depreciation of PPE, plus impairment of PPE/Goodwill and amortization of intangibles and can be reconciled from the Condensed Financial Statements as follows:

EBITDA (Continuing)

		Nine Months		Third Quarter
CHF mn	2007	2006	2007	2006
Operating income	271	273	5	48
+ Depreciation of PPE	196	190	63	65
+ Impairment of PPE / Goodwill	66	148	62	104
+ Amortization of other intangibles	5	5	2	2
EBITDA	538	616	132	219

EBITDA before exceptional items

– is calculated as EBITDA plus expenses for restructuring and impairment less impairment of PPE/goodwill and gain/ loss on disposals.

EBITDA before exceptionals (Continuing)

		Nine Months		Third Quarter
CHF mn	2007	2006	2007	2006
EBITDA	538	616	132	219
+ Restructuring and impairment	149	189	120	116
- Impairment of PPE / Goodwill	- 66	- 148	- 62	- 104
(reported under Restructuring and impairment)
- Gain on disposals of subsidiaries and associates	- 3	- 4	- 2	- 4
EBITDA before exceptionals	618	653	188	227

Operating income before exceptional items

– is calculated as operating income plus restructuring and impairment and gain/loss on disposals

Operating income before exceptionals (Continuing)

		Nine Months		Third Quarter
CHF mn	2007	2006	2007	2006
Operating income	271	273	5	48
+ Restructuring and Impairment	149	189	120	116
- Gain on disposals of subsidiaries and associates	- 3	- 4	- 2	- 4
Operating income before exceptionals	417	458	123	160

Net debt

– is the sum of current and non-current financial debt less cash and cash equivalents and current deposits reported in other current assets.

Net Debt

CHF mn	30.09.2007	31.12.2006
Non-current financial debt	1 268	1 376
+ Current financial debt	786	623
- Cash and cash equivalents	- 599	- 443
- Current deposits 90 to 365 days	–	–
Net Debt	1 455	1 556

Condensed Financial Statement of the Clariant Group

at September 30, 2007

Consolidated balance sheets (unaudited)

Assets Property, plant and equipment Intangible assets Investments in associates Financial assets Prepaid pension assets Deferred income tax assets		30.09.2007		31.12.2006
	CHF mn	%	CHF mn	%
Non-current assets
	2 406		2 422
	336		335
	279		288
	55		63
	132		90
	83		89
Total non-current assets	3 291	44.6	3 287	45.7
Current assets
Inventories	1 513		1 513
Trade receivables	1 545		1 446
Other current assets	387		378
Cash and cash equivalents	599		443
Current income tax receivables	33		24
Total current assets	4 077	55.3	3 804	52.9
Non-current assets held for sale	5	0.1	97	1.4
Total assets	7 373	100.0	7 188	100.0
Equity and liabilities		30.09.2007		31.12.2006
	CHF mn	%	CHF mn	%
Capital and reserves attributable to Clariant shareholders
Share capital	978		1 035
Treasury shares (par value)	- 16		- 16
Other reserves	693		648
Retained earnings	727		706
	2 382		2 373
Minority interests	60		60
Total equity	2 442	33.1	2 433	33.8
Liabilities
Non-current liabilities
Financial debts	1 268		1 376
Deferred income tax liabilities	176		183
Retirement benefit obligations	522		495
Provision for non-current liabilities	317		244
Total non-current liabilities	2 283	31.0	2 298	32.0
Current liabilities
Trade payables	1 268		1 207
Financial debts	786		623
Current income tax liabilities	229		215
Provision for current liabilities	365		351
Total current liabilities	2 648	35.9	2 396	33.3
Liabilities directly associated with non-current
assets held for sale	–	0.0	61	0.9
Total liabilities	4 931	66.9	4 755	66.2
Total equity and liabilities	7 373	100.0	7 188	100.0

Consolidated income statements (unaudited)

			Nine Months		Third Quarter
		2007		2006		2007		2006
	CHF mn	%	CHF mn	%	CHF mn	%	CHF mn	%
Sales	6 447	100.0	6 090	100.0	2 111	100.0	2009	100.0
Costs of goods sold	- 4 539	70.4	- 4 189	68.8	- 1 500	71.1	- 1 393	69.3
Gross profit	1 908	29.6	1 901	31.2	611	28.9	616	30.7
Marketing and distribution	- 1 047	16.2	- 986	16.2	- 339	16.0	- 324	16.1
Administration and general overhead costs	- 307	4.7	- 323	5.3	- 107	5.1	- 84	4.2
Research and development	- 158	2.5	- 154	2.5	- 51	2.4	- 52	2.6
Income from associates	21	0.3	20	0.3	9	0.4	4	0.2
Gain from the disposal of subsidiaries and associates	3	0.0	4	0.1	2	0.1	4	0.2
Restructuring and impairment	- 149	2.3	- 189	3.1	- 120	5.7	- 116	5.8
Operating income	271	4.2	273	4.5	5	0.2	48	2.4
Finance income	23	0.3	27	0.4	10	0.5	13	0.6
Finance costs1	- 85	1.3	- 107	1.7	- 53	2.5	- 37	1.8
Income before taxes	209	3.2	193	3.2	- 38	1.8	24	1.2
Taxes	- 80	1.2	- 85	1.4	- 7	0.3	- 38	1.9
Net income from continuing operations	129	2.0	108	1.8	- 45	2.1	- 14	0.7
Discontinued operations:
Income from discontinued operations	- 107		- 185		- 6		- 78
Net income	22		- 77		- 51		- 92
Attributable to:
Shareholders of Clariant Ltd	17		- 83		- 51		- 94
Minority interests	5		6		–		2
Net income	22	0.3	- 77	1.3	- 51	2.4	- 92	4.6
Basic earnings per share attributable to the shareholders of Clariant Ltd (CHF/share):
Continuing operations	0.54		0.45		- 0.20		- 0.07
Discontinued operations	- 0.47		- 0.82		- 0.03		- 0.35
Total	0.07		- 0.37		- 0.23		- 0.42
Diluted earnings per share attributable
to the shareholders of Clariant Ltd (CHF/share):
Continuing operations	0.54		0.45		- 0.20		- 0.07
Discontinued operations	- 0.47		- 0.81		- 0.03		- 0.34
Total	0.07		- 0.36		- 0.23		- 0.41

¹ Currency impact YTD 2007 of 11 mn vs YTD September 2006 of CHF -5 mn.

Consolidated statements of cash flows (unaudited)*

				Nine Months		Third Quarter
CHF mn		2007		2006	2007		2006
Net income		22		- 77		- 51	- 92
Reversal of:
Depreciation of property, plant and equipment (PPE)	196		202		63		67
Impairment	73		227		62		183
Amortization of intangible assets	5		5		2		2
Impairment of working capital	38		40		–		7
Income /loss from financial fixed assets	- 21		- 20		- 9		- 4
Tax expense	74		70		8		26
Net financial income and costs	73		75		24		27
Gain before taxes from the disposal of					–		–
subsidiaries and associates	- 3		- 4		- 2		- 4
Loss on disposal of discontinued operations	81		93		6		1
Other non-cash items	- 2		45		14		38
Total reversal of non-cash items		514		733		168	343
Dividends received from associates		29		20		3	1
Interest paid		- 84		- 54		- 10	- 18
Interest received		23		12		7	6
Income taxes paid		- 65		- 28		- 16	- 16
Cash flow before changes in working capital and provisions		439		606		101	224
Changes in inventories		- 20		- 199		18	- 40
Changes in trade receivables		- 51		- 88		45	- 1
Changes in trade payables		–		- 94		25	- 30
Changes in other current assets and liabilities		- 74		- 61		18	- 67
Changes in provisions		26		9		59	9
Cash flow from operating activities		320		173		266	95
Investments in PPE	- 211		- 252		- 79		- 88
Investments in financial assets and associates	- 8		- 2		- 1		2
Investments in other intangible assets	- 1		- 6		–		- 5
Sale of PPE and intangible assets	15		4		10		3
Acquisition of companies, businesses and participations	–		- 16		–		2
Proceeds from the disposal of discontinued operations	- 3		54		6		–
Proceeds from the disposal of subsidiaries and associates	22		28		8		28
Cash flow from investing activities		- 186		- 190		- 56	- 58
Reduction of share capital to shareholders of Clariant Ltd	- 57		- 58		–		–
Treasury share transactions	- 8		7		- 26		1
Proceeds from financial debts	378		1 064		212		48
Repayments of financial debts	- 288		- 528		- 257		- 76
Dividends paid to minority shareholders	- 9		- 7		–		- 5
Cash flow from financing activities		16		478		- 71	- 32
Currency translation effect on cash and cash equivalents		6		–		- 1	1
Net change in cash and cash equivalents		156		461		138	6
Cash and cash equivalents at the beginning of the period		443		223		461	678
Cash and cash equivalents at the end of the period		599		684		599	684

* Presentation of this statement has been changed and the comparitives have been reclassified, see Note 2.

Consolidated statements of recognized income and expense (unaudited)

		Nine Months
	2007	2006
	CHF mn	CHF mn
Cash flow hedges: Transferred to net income
Net investment hedge	- 32	5
Currency translation differences	81	- 10
Net income recognized directly in equity	49	- 5
Profit for the period	22	- 77
Total recognized income and expense for the period	71	- 82
Attributable to:
Shareholders of Clariant Ltd	62	- 80
Minority interests	9	- 2
	71	- 82

This statement shows only changes in equity other than those arising from capital transactions with owners and distributions to owners. For a comprehensive presentation on equity, see note 13.

Notes to the condensed financial statements (unaudited)

1. Basis of preparation of financial statements

These financial statements are the interim condensed financial statements of Clariant Ltd (hereafter "the interim financial statements"), a company registered in Switzerland, and its subsidiaries for the six-month period ended on 30 September 2007 (hereafter "the Group"). They are prepared in accordance with the International Accounting Standard 34 (IAS 34 "Interim Financial Reporting") and were approved on 01 November 2007 by the Board of Directors. These interim financial statements should be read in conjunction with the Consolidated Financial Statements for the year ended 31 December 2006 (hereafter "the annual financial statements") as they provide an update of previously reported information.

The accounting policies used are consistent with those used in the annual financial statements. Where necessary, the comparatives have been reclassified or extended from the previously reported interim results to take into account any presentational changes made in the annual financial statements or in these interim financial statements.

The preparation of the interim financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and disclosure of contingent liabilities at the date of the interim financial statements. If in the future such estimates and assumptions, which are based on management's best judgment at the date of the interim financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change.

2. Change in presentation of Cash Flow Statement

The presentation of cash flow statement was changed to provide more relevant information. Comparative information was reclassified accordingly.

In the new cash flow statement presentation, all non-cash expenses are added back to the net result, including interest and tax expenses. The receipts and payments of interests and payments of taxes are reported separately, also in operating activities. Dividends received from associates are classified as cash flows from operating activities, as investments in associates are of a strictly operating nature. In the prior version of the cash flow statement dividends received were classified cash flows from investing activities.

3. Seasonality of Operations

The Group operates in industries where significant seasonal or cyclical variations in total sales are not experienced during the financial year.

4. Restructuring and Impairment

During the reporting period, Clariant Group recorded expenses for restructuring and impairment in the amount of CHF 149 million in Continuing operations. This included restructuring and impairment in the amount of CHF 78 million in Leather business in Great Britain. Other restructuring projects were recorded for the Textile business in India, the US and Portugal and for the Masterbatch division in Australia and France.

5. Bond Issue

On 21 March 2007 Clariant announced the launch of a fiveyear CHF 250 million CHF-bond. The bond pays a coupon of 3.125% and was issued at a price of 100.354%. The main purpose of this bond is to refinance financial liabilities with upcoming maturities.

6. Discontinued Operations

In September 2006 Clariant launched a project to sell its Custom Manufacturing Business. On June 29, 2007 these activities were transferred to International Chemical Investors Group (ICIG). As a result these activities are now reported as discontinued operations in accordance with IFRS 5, Noncurrent Assets Held for Sale and Discontinued Operations. Consideration for the disposal is given in the form of Vendor Loan Note in the amount of CHF 11 million. Clariant will also extend a Loan Note to the buyer in the amount of CHF 15 million for restructuring expenses. The transaction resulted in a provisional book loss of CHF 81 million net of tax.

Discontinued Operations in the nine months of 2007 also contain the gain on the disposal of the DMS business in Germany in the amount of CHF 8 million net of tax. This activity had been part of Custom Manufacturing and was sold in March 2007.

Sales and operating result of the Custom Manufacturing business for the first six months of 2007 and nine months of 2006 were as follows:

CHF million	2007	2006
Sales	81	156
Operating loss before
restructuring and impairment	-29	-22
Net income/loss	-33	-90
Systematic depreciation	0	7

For the first six months in 2006, Discontinued Operations additionally comprised the activities of the Pharmaceutical Fine Chemicals business, which was sold on 30 June 2006.

Sales and operating result of the Pharmaceutical Fine Chemicals business for 2007 and 2006 were as follows:

CHF million	2007	2006
Sales	0	114
Operating result before restructuring and impairment	0	2
Net loss	0	-2
Systematic depreciation	0	5

7. Non-current Assets Held for Sale

On October 1, 2007 Clariant sold off its TLP business in Australia. The assets pertaining to this business are reported in non-current assets held for sale.

8. Nominal Value Reduction

On 2 April 2007 the ordinary General Meeting of shareholders approved the repayment of CHF 0.25 of the nominal value of each registered share, resulting in the reduction of the nominal value from CHF 4.50 to 4.25 per registered share. The pay-out reduced the share capital by CHF 57 540 000 and took place on 14 June 2007.

9. Contingencies

In 2006 Clariant sold its Pharmaceutical Fine Chemicals Business to Archimica, a company pertaining to Towerbrook Capital Partners. On October 25, 2007 Archimica Group Holdings B.V. filed a request for arbitration against Clariant before the Zurich Chamber of Commerce raising various claims under the purchase agreement in an amount of EUR 42 million. Clariant fully contests such claims. Based on current information no provisions have been booked for these claims.

10. Divisional Figures

Nine Months			Sales to 3rd parties				EBITDA before exceptionals			EBITDA
CHF mn	2007	2006	% CHF	% LC	2007	2006	% CHF	% LC	2007	2006	% CHF	% LC
Textile, Leather, Paper	1 779	1 733	3	1	165	175	- 6	- 8	124	171	- 27	- 29
Pigments & Additives	1 586	1 514	5	3	211	251	- 16	- 18	192	247	- 22	- 24
Masterbatches	1 065	958	11	9	121	120	1	- 2	106	115	- 8	- 11
Functional Chemicals**	2 017	1 885	7	4	184	207	- 11	- 14	184	185	- 1	- 4
Divisions Total	6 447	6 090			681	753			606	718
Corporate	–	–			- 63	- 100			- 68	- 102
Total continuing	6 447	6 090	6	4	618	653	- 5	- 8	538	616	- 13	- 17

		Operating income before exceptionals						Operating Income			Systematic Depreciation of PPE
CHF mn	2007	2006	% CHF	% LC	2007	2006	% CHF	% LC	2007	2006
Textile, Leather, Paper	111	122	- 9	- 11	15	14	7	- 6	54	54
Pigments & Additives	151	194	- 22	- 23	125	190	- 34	- 35	59	57
Masterbatches	96	96	–	- 4	77	92	- 16	- 19	25	23
Functional Chemicals **	133	159	- 16	- 19	134	135	- 1	- 4	50	48
Divisions Total	491	571			351	431			188	182
Corporate	- 74	- 113			- 80	- 158			8	8
Total continuing	417	458	- 9	- 11	271	273	- 1	- 8	196	190

Third Quarter	Sales to 3rd parties						EBITDA before exceptionals		EBITDA
CHF mn	2007	2006	% CHF	% LC	2007	2006	% CHF	% LC	2007	2006	% CHF	% LC
Textile, Leather, Paper	581	578	1	- 2	46	62	- 26	- 30	14	57	- 75	- 80
Pigments & Additives	525	498	5	3	73	79	- 8	- 12	55	77	- 29	- 32
Masterbatches	343	315	9	5	37	40	- 8	- 12	36	39	- 8	- 11
Functional Chemicals**	662	618	7	4	52	77	- 32	- 35	52	74	- 30	- 34
Divisions Total	2 111	2009			208	258			157	247
Corporate	–	–			- 20	- 31			- 25	- 28
Total continuing	2 111	2009	5	2	188	227	- 17	- 21	132	219	- 40	- 43

		Operating income before exceptionals						Operating Income			Systematic Depreciation of PPE
CHF mn	2007	2006	% CHF	% LC	2007	2006	% CHF	% LC	2007	2006
Textile, Leather, Paper	28	44	- 36	- 40	- 59	- 64	8	6	18	18
Pigments & Additives	53	62	- 15	- 17	28	60	- 53	- 55	19	18
Masterbatches	29	32	- 9	- 16	28	31	- 10	- 15	9	8
Functional Chemicals **	35	60	- 42	- 45	35	58	- 40	- 43	17	17
Divisions Total	145	198			32	85			63	61
Corporate	- 22	- 38			- 27	- 37			0	4
Total continuing	123	160	- 23	- 27	5	48	- 90	- 97	63	65

** Restated to include Life Science Chemicals Division, a separate division in 2006, which has become a part of Functional Chemical Division in 2007.

11. Divisional Margins

Nine Months		Sales to 3rd parties		EBITDA before exceptionals	EBITDA
in %	2007	2006	2007	2006	2007	2006
Textile, Leather, Paper	27.6	28.5	9.3	10.1	7.0	9.9
Pigments & Additives	24.6	24.9	13.3	16.6	12.1	16.3
Masterbatches	16.5	15.7	11.4	12.5	10.0	12.0
Functional Chemicals **	31.3	30.9	9.1	11.0	9.1	9.8
Total continuing	100.0	100.0	9.6	10.7	8.3	10.1

		Operating income b. exceptionals		Operating Income
in %	2007	2006	2007	2006
Textile, Leather, Paper	6.2	7.0	0.8	0.8
Pigments & Additives	9.5	12.8	7.9	12.5
Masterbatches	9.0	10.0	7.2	9.6
Functional Chemicals **	6.6	8.4	6.6	7.2
Total continuing	6.5	7.5	4.2	4.5

** Restated to include Life Science Chemicals Division, a separate division in 2006, which has become a part of Functional Chemical Division in 2007.

Third Quarter	Sales to 3rd parties			EBITDA before exceptionals	EBITDA
in %	2007	2006	2007	2006	2007	2006
Textile, Leather, Paper	27.5	28.8	7.9	10.7	2.4	9.9
Pigments & Additives	24.9	24.8	13.9	15.9	10.5	15.5
Masterbatches	16.2	15.7	10.8	12.7	10.5	12.4
Functional Chemicals **	31.4	30.7	7.9	12.5	7.9	12.0
Total continuing	100.0	100.0	8.9	11.3	6.3	10.9

		Operating income b. exceptionals		Operating Income
in %	2007	2006	2007	2006
Textile, Leather, Paper	4.8	7.6	- 10.2	- 11.1
Pigments & Additives	10.1	12.4	5.3	12.0
Masterbatches	8.5	10.2	8.2	9.8
Functional Chemicals **	5.3	9.7	5.3	9.4
Total continuing	5.8	8.0	0.2	2.4

** Restated to include Life Science Chemicals Division, a separate division in 2006, which has become a part of Functional Chemical Division in 2007.

12. Regional developments

Sales		Nine Months									Third Quarter
CHF mn	2007	% of sales	2006	% of sales	CHF %	LC %		2007 % of sales		2006 % of sales	CHF %	LC %
Europe	3 155	48.9	2 966	48.7	6	2	1 004	47.6	952	47.4	5	1
of which Germany	940		878		7	3	310		289		7	3
of which Switzerland	111		105		6	1	36		29		24	17
Americas	1 776	27.6	1 726	28.3	3	4	594	28.1	569	28.3	4	3
of which USA	763		792		- 4	- 1	240		245		- 2	1
Asia / Australia / Africa	1 516	23.5	1 398	23.0	8	9	513	24.3	488	24.3	5	4
Total continuing operations	6 447	100.0	6 090	100.0	6	4	2 111	100.0	2009	100.0	5	2
Discontinued operations	81		270				–		45

13. Consolidated statement of changes in equity

										Nine Months
					Other reserves
	Total share	Treasury capital (par value) reserves	Share shares premium		Hedging Cumulative reserves translation reserves	reserves	Total Retained	Total other earnings attributable to equity	Minority interests	Total equity
CHF mn								holders
Balance 31 December 2005 Total recognized income and expense for the period	1 093	- 18	767	–	- 104 3	663 3	793 - 83	2 531 - 80	60 - 2	2 591 - 82
Dividends to third parties
Share capital reduction	- 58							- 58		- 58
Treasury share transactions and share based payments		3						3		3
Balance 30 September 2006	1 035	- 15	767	–	- 101	666	710	2 396	58	2 454
Balance 31 December 2006	1 035	- 16	767	–	- 119	648	706	2 373	60	2 433
Total recognized income and expense for the period					45	45	17	62	9	71
Dividends to third parties									- 9	- 9
Share capital reduction	- 57							- 57		- 57
Treasury share transactions and share based payments						–	4	4		4
Balance 30 September 2007	978	- 16	767	–	- 74	693	727	2 382	60	2 442

14. Foreign Exchange Rates

Rates used to translate the consolidated	30.09.2007	31.12.2006	Change %
balance sheets (closing rate)
1 USD	1.17	1.22	- 4
1 EUR	1.66	1.61	3
1 GBP	2.37	2.39	- 1
100 JPY	1.01	1.02	- 1

Nine Months

Average sales-weighted rates used to translate the income statements and consolidated statements of cash flows	2007	2006	Change %
1 USD	1.22	1.26	- 3
1 EUR	1.64	1.57	4
1 GBP	2.42	2.29	6
100 JPY	1.02	1.09	- 6

15. Condensed Earnings Per Share Data

		Nine Months
CHF mn	2007	2006
Number of shares outstanding at 30.09.2007	230 160 000	230 160 000
and 30.09.2006 respectively
Weighted average,	227 419 036	226 807 738
number of shares outstanding
Weighted average, diluted	228 534 062	228 287 554
number of shares outstanding *
Basic earnings per share attributable
to the shareholders of Clariant Ltd (CHF/share):
Continuing operations	0.54	0.45
Discontinued operations	- 0.47	- 0.82
Total	0.07	- 0.37
Diluted earnings per share attributable
to the shareholders of Clariant Ltd (CHF/share):
Continuing operations	0.54	0.45
Discontinued operations	- 0.47	- 0.81
Total	0.07	- 0.36

* Restated for shares for members of management as at 30 September 2006 of 206 000 shares issued as part of a relocation program in 2005, which were accidentally not reported in this presentation.

Clariant – Exactly your chemistry.

Clariant is a global leader in the field of specialty chemicals. Strong business relationships, commitment to outstanding service and wide-ranging application know-how make Clariant a preferred partner for its customers.

Clariant, which is represented on five continents with over 100 group companies, employs about 21,000 people. Headquartered in Muttenz near Basel, it generated sales of around CHF 8.1 billion in 2006.

Clariant's businesses are organized in four divisions: Textile, Leather & Paper Chemicals, Pigments & Additives, Functional Chemicals and Masterbatches.

Clariant is committed to sustainable growth springing from its own innovative strength. Clariant's innovative products play a key role in its customers' manufacturing and treatment processes or else add value to their end products. The company's success is based on the know-how of its people and their ability to identify new customer needs at an early stage and to work together with customers to develop innovative, efficient solutions.

www.clariant.com

Calendar of Corporate Events		Your Clariant Contacts
February 14, 2008	Full Year 2007 Results	Investor Relations	Fax +41 61 469 67 67
April 10, 2008	Annual General Meeting	Holger Schimanke	Tel. +41 61 469 67 45
April 30, 2008	First Quarter 2008 Results	Jaideep Pandya	Tel. +41 61 469 67 49
July 29, 2008	First Half 2008 Results
		Media Relations	Fax +41 61 469 69 99
		Arnd Wagner	Tel. +41 61 469 61 58