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Clariant AG

Investor Presentation • Jan 11, 2008

856_ip_2008-01-11_f0008de8-0c7d-403e-af93-312aefee1331.pdf

Investor Presentation

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Helvea Conference

January 10 - 11, 2008

Table of contents

Clariant 2010

Operational Excellence

Structure

Portfolio

Operational Excellence

Structure

Portfolio

Where we are today – Key financials Nine Months 2007

2
0
0
6
2
0
0
7
G
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+
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a
r
g
n		 %
2
9.
6
3
1.
2
%
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G
A
&		 2
9
4
%
2
1.
5
2
0
9
%
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b
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x		 %
%
6.
5
7.
5
C
h
f
l
a
s
o
w		 3
2
0
1
7
3

All figures continuing operations; in CHF mn

Operational Excellence

Structure

Portfolio

Achieve above peer average ROIC by 2010

from capital market perspective; ROIC calculated on after-tax basis, including net goodwill

Based on current environment

Slide 5

**

How we will get there

Target underperforming businesses Reduction in employees, SG&A, NWC, products, sites; price increases Implement PRIMA system Generate annual cash flow of CHF 600-800 mn Operational Excellence Business StructurePortfolio Reshaping Product-driven businesses: focus on increased efficiency and cost structure Service-driven businesses: apply active sales and marketing strategies and product leadership Divestment of unattractively positioned businesses Active consolidation strategy in core business areas Deliver above average ROIC by 2010 Clariant 2010Operational ExcellenceStructurePortfolio

Operational Excellence

Our commitments on operational excellence in November 2006

  • Increase prices based on our added value
  • Simplify production network and product range
  • Reduce costs aggressively
  • Invest in service-driven segments
  • Increase presence in fast-growing regions
  • Build on our innovation capabilities
  • Create a culture of high performance and accountability Foster leadership and entrepreneurial behavior People

Operational Excellence

Structure

Portfolio

Where are we today?

P
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–

Operational Excellence

Structure

Portfolio

Example: Sizable site closures announced after nine months

  • Product site optimization 4 site closures done in MB
  • 3 sites sold in MB
  • 1 site closed in FUN
  • 1 site closed in TLP
  • 1 TLP site closure in UK announced
  • 1 P&A site closure in US announced
  • 1 MB site closure in Mexico announced
  • CHF 120 mn costs booked
  • Further costs to be booked till year-end

Approx. CHF 250 mn restructucturing costs for 2007 in line with strategic goals

Structure

Operational Excellence

Structure

Portfolio

Where are we today?

  • Reshaping our business structure (PA, TLP and FUN) as either product-driven or service-driven businesses
  • Product-driven businesses: focus on increased efficiency and cost reduction
  • Service-driven businesses: focus on increased efficiency, sales and marketing strategies and product leadership, as well as exploiting value propositions
  • Transformation of corporate strategy now completed, leading to divisional strategies and structures as of Jan 1, 2008

Operational Excellence

Structure

Portfolio

Leverage difference between Product and Service driven business

DivisionPercentage of business by type*

T
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Operational Excellence

Structure

Portfolio

Strategy PA

  • Significant shift towards cost leadership strategy to address ongoing commoditization
  • New low cost business unit "base products" founded for managing the most commoditized products
  • 300 overhead job cuts announced
  • Addressing overcapacity by downsizing of site network
    • Shut down Coventry plant in US announced
    • More closures will be announced in 2008
  • Improving productivity of site network with Lean Six Sigma
  • 3 new business unit managers from outside Clariant appointed
  • Outsourcing close to 3,000 small customers to distributors

Strategy TLP

Clariant 2010

Operational Excellence

Structure

Portfolio

  • Cost leadership strategy - Textiles and Leather
  • Textiles: Streamline organization in Europe and transfer SG&A from Switzerland to low cost countries
  • Leather: Focusing on profitable finishing by downsizing the commodity wet end part
  • Product leadership - Paper
  • Portfolio optimization by addressing non profitable activities
  • Further focus on significant site consolidation
  • Further potential on product pruning and SG&A reduction

Operational Excellence

Structure

Portfolio

Strategy FUN

  • Separate asset base in order to optimize cost structure for product business and provide service/solution business with lever for growth
  • Gain market leadership position with service driven parts of portfolio (~40%) and manage for growth
  • Manage product driven business (~35%) for cost and address business, where market position and profitability are mediocre
  • Approximately CHF 1 bn of business will be managed purely regional in order to reduce complexity and decrease costs
  • Reviewing ~25% of the businesses for proactive repositioning

Operational Excellence

Structure

Portfolio

Drive Businesses in the respective cost structure – Example FUN

Establish tailored business models according to the key success factors of the different businesses

Portfolio

Operational Excellence

Structure

Portfolio

Where are we today?

  • Portfolio review started in July 2007
  • Likely to result in divestments of unattractively positioned businesses
  • Active consolidation strategy in core business areas
  • Criteria for portfolio optimization:
  • – Commoditized business: stay in and manage for cash if have critical mass / good market position. Exit if not
  • – True specialties: Drive consolidation, where market position is strong. If not, divest
  • Finalization of divisional strategies enables proactive portfolio analysis:
  • – Separation of service driven from product driven business and appropriate allocation of resources
  • –Separation of assets where applicable

Operational Excellence

Structure

Portfolio

Conclusion

  • Management fully committed to achieving 2010 targets
  • Good progress being made with operational excellence
  • –1000 jobs cut, 9 sites closed, 20% portfolio pruned
  • Optimal business structure being put in place
  • –Realigned into product driven and service driven businesses
  • Thorough review of portfolio underway
  • –Conclusions to be announced in Q1 2008

Fully committed to strategic goal of an above industry average ROIC in 2010

Calendar of upcoming corporate events

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F
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Your Investor Relations contacts

Dr. Holger Schimanke

Head Investor Relations

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Jaideep Pandya

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Edith Kahlmeier

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Mirjam Grieder

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Clariant International Ltd · Rothausstrasse 61 · 4132 Muttenz · Switzerland · [email protected]

Clariant group overview

  • Clariant is one of the world's pre-eminent specialty chemicals companies
  • Leading market positions
  • Well diversified portfolio by product, geography and customer
  • Solid financial position
  • Strong technology and innovation pipeline
  • Strong global footprint, 130 production sites worldwide
  • Clariant operates through 4 main divisions
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Slide 24

In CHF mn, all figures continuing operations excluding exceptional items as reported end of 2006

Nine Months 2007 – Financial group figures

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Nine Months 2007 – Divisional sales and margins

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7

* Volume and price effect excluding the impacts of changes in FX and acquisitions /divestitures ** before exceptional items

Pricing initiatives showing positive trend in Third Quarter

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Our commitment on business structure in November 2006

Nine Months 2007 – Regional sales

Nine Months 2007 Third Quarter 2007

Slide 29

Nine Months 2007 – Cash flow

i
h
N
M
t
n
e
o
n
s
2
0
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7
C
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2
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C
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2		 7
7
-
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9
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A
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7
-
  • Focus on cash flow generation starts to pay off
  • Lower inventories and trade receivables
  • Further measures to reach industry average net working capital on track
  • The presentation of the cash flow statement was changed to provide additional relevant information. Comparative information was reclassified accordingly.

*

Divisional sales Full Year 2006 in end-user markets

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.

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