Clariant AG — Investor Presentation 2001

Jan 1, 2002

2001 Year-End Results

Ready for the Upturn

Analyst Conference – Basle, February 27, 2002

February 27, 2002

2001 Year-End Results

Content overview

• Key Achievements
• Financial results
• Operational Business
• Key factors for Clariant in 2002

2001 Year-End Results

"Ready for the Upturn"

Dr Reinhard Handte, Chief Executive Officer

February 27, 2002

2001 Year-End Results

Content overview

• Key Achievements
• Financial results
• Operational Business
• Key factors for Clariant in 2002

Prepared for the upturn ...

• z Sales position maintained
• z Product pricing sustained
• z Cost base reduced
• z New products introduced

... with a strengthening balance sheet

• z Debt reduced by 30% in 18 months
• z Current assets reduced
• z Ongoing free cash flow

February 27, 2002 – 5

2001 Year-End Results

"Ready for the Upturn"

François Note, Chief Financial Officer

2001 Year-End Results

Content overview Key Achievements Financial results Operational Business Key factors for Clariant in 2002

2001 Year-end results

Successful cash flow management

z Net sales in local currencies –2% z Net debt –17% z Current assets –13% z CAPEX –6% z Workforce reduction –8%

Cash flow continues to be our focus

Please note % figures are compared with year-end 2000 and are rounded

Key financial figures

in m CHF	2001	Full year Margin	Recurring 2001	Margin	CHF	– Change* – LC
Net sales	9 871	–	–	–	–6.7%	–1.9%
EBITDA	1 395	14.1%	1 186	12.0%	–28%	–24%
EBIT Group	460	4.7%	631	6.4%	–44%	–40%
Net loss/income	–1 242	–	140	–	–72%	–
	FY 2001	FY 2000
Net debt	4 282	5 138

–1 226

A dividend of CHF 0.30 is proposed by the Board of Directors to the shareholders

* Compared with 2000 figures

February 27, 2002 – 9

Extraordinary effects

Analysis of sales development1

Prices were maintained

February 27, 2002 – 11

Currency effects

EBIT Analysis*

Development of recurring EBIT

Comparison 2001 versus 2000 in m CHF

Portfolio management

Progress of major restructuring projects

February 27, 2002 – 15

Cash flow

Cash flow 2001 in m CHF

	Recurring	Non recurring	Ebita Total 2001 2001	Ebita Total 2000 2001
Cash flow before changes in working capital	1 042	–259	783	1 106
Cash flow from operating activities	866	–68	796	952
Cash flow from investing activities	–399	556	157	–3 373
Free cash flow before financial activities	467

Tight asset management

Reduction of net current assets by more than CHF 600 m

in m CHF

CAPEX

CAPEX reduced by 6% despite single customer projects

Significant debt reduction

Net debt reduced by more than CHF 1.8 bn from June 2000 until December 2001

• z Unutilized available open long-term credit lines of CHF 1.1 bn
• z No refinancing of long-term debt in

Net debt reduction continues to be our focus

February 27, 2002 – 19

2001 Year-End Results

"Ready for the Upturn"

Dr Reinhard Handte, Chief Executive Officer

February 27, 2002 – 22

Business structure

Divisions:

Proven, lean and efficient business structure

February 27, 2002 – 23

Divisional performance 2001

Division TLP

Strengthening leading position in all segments in 2002

Innovation

• z Clariant develops ~ 100 new products annually to respond to the market, e.g.:
  • z unique trichromic dyes for nylon microfibers
  • z improved water based topcoating for car upholstery leather
  • z new formulations for fast growing ink-jet paper market
• z Tailor made products & technical solutions based on long-term experience makes us to a leading partner in the textile, leather & paper industry

Key Factors in 2002

• z "Following the markets": continuous compensation of business decrease in NAFTA by market development in Asia
• z Rationalization of production sites with selective investments for high margin products
• z Start of additional production capacity of textile and leather chemicals in Tianjin, China

Divisional performance 2001

Pigments & Additives z Global market leader in organic pigments z Well positioned key player in niche markets for specialty polymer additives, waxes and flame retardants Sales in m CHF 1 872 2 108 - 11.2 - 6.8 EBITDA in m CHF 295 407 EBITDA margin in % 15.8 19.3 – Change % – CHF LC – Full year – 2001 2000 Recurring

Division P&A

Qualitative growth through innovations

Innovation

• z Introduction of four new High Performance Pigments achieved to counter lower demand in paints and plastics industry
• z New halogen-free flame retardants for engineering plastics & steel construction
• z New high performance waxes based on a unique metallocen polymerisation technology
• z Non-dusting, free flowing and easy dispersible microgranular pigment grades for plastic coloration (DrizPearls)

Key Factors in 2002

• z Continuous optimization of cost base, e.g. process optimization and more flexibility through the sale of the Cassella/Offenbach site
• z Leverage low-cost manufacturing sites to increase our market share position in ink-pigments, e.g. in Tianjin, China
• z Further dynamic growth in high-tech applications, like electronics and engineering plastics

February 27, 2002 – 27

Divisional performance 2001

Masterbatches

No. 1 world-wide in Color-Masterbatches Sales in m CHF 1 038 1 145 - 9.3 - 5.0 EBITDA in m CHF 106 147 EBITDA margin in % 10.2 12.8 Capital Turnover in % 2.29 2.33 – Change % – CHF LC – Full year – 2001 2000 Recurring

February 27, 2002 – 28

Division MB

Strengthening leader position

Innovation

• z Strengthening position in technical services, e.g. color trend forecast or on-screen color design tools
• z Clear focus in developing customer-focused solutions, e.g. color service for the automotive industry
• z Growing above average by renewals of 35% of product portfolio

Key Factors in 2002

• z Prepared for upswing in US and Europe by improved products & customer service
• z Establishing the newly created technical & design centers in Asia
• z Regional growth in countries like Taiwan, China and India by expanding capabilities into non-traditional resin areas
• z Masterbatches will continuously gain market share by replacing other methods of coloring

February 27, 2002 – 29

Divisional performance 2001

Functional Chemicals z No. 1 for innovative detergent ingredients worldwide z Leading partner with specialty chemicals for oil-field, personal care, de-icing, agro- and biocide applications Sales in m CHF 1 869 1 935 - 3.4 + 1.6 EBITDA in m CHF 201 275 EBITDA margin in % 10.8 14.2 – Change % – CHF LC – Full year – 2001 2000 Recurring

Shift towards specialities

80% of commodities business eliminated

Innovation

• z New polymers for "emulsifier free" cosmetics
• z New specialties for high performance concrete
• z New bleach activators for low temperature laundry
• z New biocides for environmental friendly leather processing

Key Factors in 2002

• z Significant growth in the US with:
  • z launch of new capacity in the detergent business
  • z expansion of oilfield production chemicals supported by Clariant service group (formerly TROS)
• z Further streamlining of manufacturing sites by consolidating sites in Mexico
• z Integration of Cellulose Ether business into Division FUN will allow to expand business into new applications

February 27, 2002 – 31

Divisional performance 2001

Life Science & Electronic Materials

Division LSE

Preparing the future

Innovation

• z Targeted long-term growth from key projects, e.g.
  • z Chiral building blocks
  • z use of microreactor technology and parallel synthesis for speeding up product and process development

Key Factors in 2002

• z Drastic action plan for turnaround in LSM
  • z optimization and restructuring of sites; closure of 5 sites
  • z streamlining of project- and product-portfolio
• z Exploit potential for earnings improvement through supply chain management
• z Light management film production has already started year-end 2001
• z Volume growth expected due to recovery of electronic materials market in 2nd half 2002 – this will overcompensate price pressure

February 27, 2002 – 33

Divisional performance 2001

Cellulose Ethers & Polymerisates

Division CEP

Restructuring finalized by end of 2002

Innovation

• z Selected development in business segments with higher margins, e.g. new emulsions for glass fibers, ink-jet paper or biostable cellulose ethers
• z New optimized production process to improve cost-effectiveness
• z All R&D projects in direct cooperation with customers as "chosen partner"

Key Factors 2002

• z Programs for further cost savings measures in progress, e.g. closing of 4 emulsion sites worldwide
• z Decrease in raw material dependency by shifting product mix towards products with higher value added
• z Integration of BTP/Hodgson's emulsions activities opens up new opportunities
• z Exploiting synergies by integration of Emulsions into TLP Division and Cellulose Ethers into FUN Division

February 27, 2002 – 35

2001 Year-End Results

Content overview

- Financial results

• Operational Business
• Key factors for Clariant in 2002

Outlook 2002

Prepared for the upturn ...

• z Selective diversification with strong positioned product portfolio
• z Financial leverage risk mitigated through cash flow focus
• z Towards best practice process management supported by single ERP platform
• z Committed to R&D
• ... to deliver
• z Improved earnings & operative margins
• z Growth through continuous improvement of innovation rate
• z Further net debt reduction to below 4 bn

February 27, 2002 – 37

Investor relations contact

• Iris M. Welten Phone +41 61 469 67 47 Fax +41 61 469 67 67 Mobile +41 79 292 62 70 iris.welten@clariant.com
• Dr Holger Schimanke Phone +41 61 469 67 45 Fax +41 61 469 67 67 Mobile +41 79 343 59 83 holger.schimanke@clariant.com
• Daniel Leuthardt Phone +41 61 469 67 49 Fax +41 61 469 67 67 Mobile +41 79 763 93 80 daniel.leuthardt@clariant.com

Karine Huttenschmitt Phone +41 61 469 67 48 Fax +41 61 469 67 67 Mobile +41 79 456 63 48 karine.huttenschmitt@clariant.com

Clariant International Ltd Building 907 Rothausstrasse 61 P.O. Box 4132 Muttenz 1 Switzerland

2001 Year-End Results

Disclaimer

This presentation contains certain statements that are neither reported financial results nor other historical information. This presentation also includes forward-looking statements.

Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors that are beyond Clariant's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of governmental regulators and other risk factors such as: the timing and strength of new product offerings; pricing strategies of competitors; the Company's ability to continue to receive adequate products from its vendors on acceptable terms, or at all, and to continue to obtain sufficient financing to meet its liquidity needs; and changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, including currency fluctuations, inflation and consumer confidence, on a global, regional or national basis.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Clariant does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of these materials.

February 27, 2002 – 39

Backup

Business structure

as of January 1, 2002 with 5 instead of 6 divisions

Textile, Leather & Paper Chemicals	Pigments & Additives	Masterbatches	Functional Chemicals	Life Science & Electronic Chemicals
F. Dennefeld	G. Hencken	N. Gontha	R. Meyer	J. Mahler
Textile Dyes	Pigments	Europe	Detergents	Electronic Materials
Textile Chemicals	Ink Pigments	Asia Pacific	Performance Chemicals	Life Science Molecules
Paper	Additives	NAFTA	Process Chemicals	Specialty Fine Chemicals
Leather		Latin America	Biocides
Emulsions			Cellulose Ethers/ Emulsion Powders

February 27, 2002 – 41

Regional sales breakdown in 2001

Sales

Group sales

in m CHF

Total Group: 9 871

February 27, 2002 – 43

Sales

Segment Sales

		Sales	– Change –
	2001	2000	CHF	LC
Textile, Leather & Paper Chemicals	2 383	2 589	–8.0%	–2.4%
Pigments & Additives	1 872	2 108	–11.2%	–6.8%
Masterbatches	1 038	1 145	–9.3%	–5.0%
Functional Chemicals	1 869	1 935	–3.4%	+1.6%
Life Science & Electronic Materials	1 616	1 651	–2.2%	+2.4%
Cellulose Ethers & Polymerisates	1 093	1 155	–5.4%	–0.7%
Group	9 871	10 583	–6.7%	–1.9%

EBITDA

Segment EBITDA

			Margin
	EBITDA 2001 in m CHF	EBITDA 2001	EBITDA Ebita 2000 2001
Textile, Leather & Paper Chemicals	326	13.7%	17.4%
Pigments & Additives	295	15.8%	19.3%
Masterbatches	106	10.2%	12.8%
Functional Chemicals	201	10.8%	14.2%
Life Science & Electronic Materials	75	4.6%	16.4%
Cellulose Ethers & Polymerisates	114	10.4%	12.6%
Group	1 186	12.0%	15.7%

Please note figures are recurring EBITDA

February 27, 2002 – 45

EBIT

Segment EBIT

		Margin
	EBIT 2001 in m CHF	EBIT 2001	EBIT Ebita 2000 2001
Textile, Leather & Paper Chemicals	227	9.5%	13.2%
Pigments & Additives	230	12.3%	15.8%
Masterbatches	81	7.8%	10.5%
Functional Chemicals	149	8.0%	9.9%
Life Science & Electronic Materials	–73	–4.5%	7.6%
Cellulose Ethers & Polymerisates	77	7.0%	9.2%
Group	631	6.4%	9.5%

Please note figures are recurring EBIT

Development of operating profit

Comparison 2001 versus 2000 in m CHF

Portfolio management

Restructuring: Already completed in 2001

• z US: significant capacity adaption in textile dyes
• z France: Lillebonne site closed and transferred to Lamotte
• z Italy: Turin site closed and transferred to Milan-Palazzolo site
• z Germany:
  • z Efficiency program
  • z Project Cassella-Offenbach
    • Sale of Clariant's second biggest site to Allessa Chemie
    • Financing secured on commercial terms
    • Reduces the headcount by a further ~1 500
    • Take or pay contracts

February 27, 2002 – 50

Germany: Efficiency program nearly completed

24-hour access to tailored solutions

Sales 2001

Quarterly Sales per Division

in m CHF

Division	Q1	Q2	Q3	Q4
Textile, Leather & Paper Chemicals	618.5	635.6	576.2	553.2
Pigments & Additives	499.8	502.9	460.6	408.7
Masterbatches	279.3	276.2	256.4	226.2
Functional Chemicals	507.6	459.4	450.5	451.2
Life Science & Electronic Materials	423.4	434.8	351.6	407.2
Cellulose Ethers & Polymerisates	269.0	290.2	288.9	245.3
Total	2 597.6	2 599.1	2 384.2	2 291.8