Clariant Reports Good Sales Growth for the First Half

Clariant (SWX:CLN):

Key Financial Group Figures

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First Half
----------------------------------------------------------------------
Continuing operations:
2007 2006 +/- 2007
CHF % of CHF % of % CHF % of
mn sales mn sales CHF mn sales
------------------------------ ----- ----- ----- ----- --- ----- -----
Sales 4 336 100.0 4 081 100.0 2 180 100.0
------------------------------ ----- ----- ----- ----- --- ----- -----

------------------------------ ----- ----- ----- ----- --- ----- -----
Local currency growth (LC): 5% 4%
------------------------------ ----- ----- ----- ----- --- ----- -----
- Organic growth (1) 4% 3%
------------------------------ ----- ----- ----- ----- --- ----- -----
- Acquisitions/Divestitures 1% 1%
------------------------------ ----- ----- ----- ----- --- ----- -----
Currencies 1% 3%
------------------------------ ----- ----- ----- ----- --- ----- -----

------------------------------ ----- ----- ----- ----- --- ----- -----
Gross profit 1 297 29.9 1 285 31.5 626 28.7
------------------------------ ----- ----- ----- ----- --- ----- -----
EBITDA before exceptionals 430 9.9 426 10.4 +1 211 9.7
------------------------------ ----- ----- ----- ----- --- ----- -----
EBITDA 406 9.4 397 9.7 +2 196 9.0
------------------------------ ----- ----- ----- ----- --- ----- -----
Operating income before
exceptionals 294 6.8 298 7.3 -1 142 6.5
------------------------------ ----- ----- ----- ----- --- ----- -----
Operating income 266 6.1 225 5.5 +18 127 5.8
------------------------------ ----- ----- ----- ----- --- ----- -----
Net income from continuing
operations 174 4.0 122 3.0 +43 88 4.0
------------------------------ ----- ----- ----- ----- --- ----- -----
Operating cash flow (total
operations) 12 53 7
------------------------------ ----- ----- ----- ----- --- ----- -----

------------------------------ ----- ----- ----- ----- --- ----- -----
Discontinued operations:
------------------------------ ----- ----- ----- ----- --- ----- -----
Sales 81 225 35
------------------------------ ----- ----- ----- ----- --- ----- -----
Net loss from discontinued
operations -101 -107 -99
------------------------------ ----- ----- ----- ----- --- ----- -----

Second Quarter
----------------
Continuing operations:
2006
CHF % of +/-%
mn sales CHF
----------------------------------------------------- ----- ----- ----
Sales 2 033 100.0
----------------------------------------------------- ----- ----- ----

----------------------------------------------------- ----- ----- ----
Local currency growth (LC):
----------------------------------------------------- ----- ----- ----
- Organic growth (1)
----------------------------------------------------- ----- ----- ----
- Acquisitions/Divestitures
----------------------------------------------------- ----- ----- ----
Currencies
----------------------------------------------------- ----- ----- ----

----------------------------------------------------- ----- ----- ----
Gross profit 650 32.0
----------------------------------------------------- ----- ----- ----
EBITDA before exceptionals 201 9.9 +5
----------------------------------------------------- ----- ----- ----
EBITDA 178 8.8 +10
----------------------------------------------------- ----- ----- ----
Operating income before exceptionals 138 6.8 +3
----------------------------------------------------- ----- ----- ----
Operating income 71 3.5 +79
----------------------------------------------------- ----- ----- ----
Net income from continuing operations 26 1.3 +238
----------------------------------------------------- ----- ----- ----
Operating cash flow (total operations) 62
----------------------------------------------------- ----- ----- ----

----------------------------------------------------- ----- ----- ----
Discontinued operations:
----------------------------------------------------- ----- ----- ----
Sales 112
----------------------------------------------------- ----- ----- ----
Net loss from discontinued operations -105
----------------------------------------------------- ----- ----- ----

(1) "Organic growth" means volume and price effects excluding the
impacts of changes in FX rates and acquisitions/divestitures.
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Other Key Group Figures
----------------------------------------------------------------------
30.06.07 31.12.06
----------------------------------------------------------------------
Net debt 1 655 1 556
----------------------------------------------------------------------
Equity (including minorities) 2 546 2 433
----------------------------------------------------------------------
Gearing 65% 64%
----------------------------------------------------------------------
Number of employees 21 338 21 748
----------------------------------------------------------------------
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Clariant announced a rise in sales in the First Half of 2007, with
growth of 5% in local currency terms and 6% in Swiss Franc terms,
compared with the first half of 2006. Sales rose to CHF 4.336 billion
from CHF 4.081 billion a year earlier, with continued strong demand
across all divisions.

The gross margin decreased to 29.9% from 31.5 % due to an increase
in energy costs and a 4% rise in raw material prices. While Clariant
managed to increase prices by 1%, the company was adversely affected
by a sharp increase in raw materials costs, which affected the Pigment
& Additives and the Textile, Leather & Paper Chemicals divisions in
particular. Currency effects also negatively impacted Clariant's gross
profit.

The company's efforts to sustainably reduce sales, general and
administrative expenses (SG&A) helped mitigate an erosion in margins.
SG&A costs, as a percentage of sales, were lowered to 20.9% from
22.1%. Operating income before exceptional items reached CHF 294
million and remained stable compared to First Half of 2006 (CHF 298
million). The adverse currency effect on EBIT in the First Half of
2007 was approximately CHF 35 million. The EBIT margin before
exceptionals declined to 6.8% from 7.3%. Net income from continuing
operations increased to CHF 174 from CHF 122 in the same period of
2006.

The focus on cash flow improvement resulted in a decrease of
inventories to 97 days from 106 days over the past 12 months. This had
an effect on profitability as it led to expected lower capacity
utilization. Other measures to decrease net working capital are on
track with further improvements expected for the Second Half of the
year.

STRATEGIC INITIATIVES ON TRACK

In line with the company's short and mid term targets, the
strategic initiatives that were announced in November 2006 have
started to bear fruit. SG&A cost reductions, product pruning and site
review activities are well underway.

-- SG&A cost were decreased mainly thanks to supply chain
improvements and lower corporate project costs. In the
businesses, cost reductions are on track, the benefits of
which will be seen in the Second Half. One example for this
was the closure of 5 out of 7 textile laboratories in Europe
in the First Half.

-- Furthermore, the site restructuring measures that were
announced at the end of 2006 are on track. As one example, two
sites in France were closed and one further closure announced.

-- Clariant's strong focus on prices has resulted in a 1% selling
price increase in the First Half of 2007. Further increases
have been announced and are expected to show results in the
Second Half of the year.

-- The disposal of the Custom Manufacturing Business to
International Chemical Investors Group has been completed.
This highlights Clariant's strategy to focus on its core
competencies in colors, surfaces and performance chemicals. As
announced last quarter, the transaction has led to a book loss
of CHF 79 million in the second quarter.

"We achieved strong top-line growth with increased prices, but
profitability clearly remains disappointing," said Jan Secher,
Clariant's chief executive officer. "At the beginning of 2007 we said
that our priorities for the year would be to reduce our SG&A costs and
our net working capital. It is encouraging to see that the measures
taken in these areas are starting to bear fruit. We expect this to
continue in the Second Half of the year, a clear evidence of our
commitment to deliver both on our short and mid-term targets," Mr.
Secher said.

STEADY GROWTH FOR ALL DIVISIONS

Integration of the Ciba masterbatches business fully completed

Masterbatches generated sales growth of 10%, equivalent to 4%
organic growth. Demand for plastics remained robust, although sales
slowed down in the Second Quarter from the First Quarter. Margins
before exceptionals dropped to 9.3% from 10.0%, due to the now
completed integration of the Ciba masterbatches business. The related
costs were in line with expectations but were realized ahead of
schedule due to the accelerated integration. Consequently,
profitability already began to recover in the Second Quarter. The
business remained resilient in the US and was strong in Latin America.
The division has expanded capacity in Asia and at the same time
tackled non performing units in this region.

Pigments & Additives sees continued growth

The Pigments & Additives Division reported organic growth of 3%
for the First Half. The Coating as well as the Plastics business saw
solid demand whereas the Printing business continued to face a
challenging business climate. Operating margins before exceptionals
fell to 9.2% from 13.0% mainly due to the strongest negative currency
effects within the Group and a sharp increase in raw material prices.
Under the leadership of Okke Koo, who assumed his role as division
head on August 1, Pigments & Additives will implement further measures
to improve performance, raise prices and reduce costs.

Paper Business drives Textile, Leather & Paper Chemicals

The Textile, Leather & Paper Chemicals Division posted organic
growth of 3% in the First Half. The profitability of the division was
strongly impacted by raw material price increases. The Paper business
continued to see strong volume growth with increased demand for paper
dyes and chemicals, while the Textile business saw moderate growth.
The markets for Clariant's Leather business weakened significantly.
Operating margins before exceptionals were steady at a low level of
6.9%. As announced previously, Philippe Royer assumed his role as new
head of the division on July 1. He will have a strong focus on
implementing further price increases and cost reductions.

Functional Chemicals further increases its capabilities in
oilfield services

Functional Chemicals achieved a 5% rise in organic growth in the
First Half, with a strong performance, in particular from oilfields
services and crop protection chemicals. The division was able to
offset higher raw material costs with price increases. However,
operating margins before exceptionals fell to 7.2% from 7.8%, mainly
driven by the low performance in the Specialty Intermediates business
as well as the Detergents business. In line with the Group strategy
these two product driven businesses have been combined effective
August 1, 2007 in an effort to reduce complexity and create a leaner
cost structure.

Strong growth in Asia

Asia continued to post the strongest organic growth, up 9% in the
First Half, driven by a 23% increase from China. Europe achieved a
steady 1% organic growth in the First Half. Germany accounted for 2%
growth, while the southern part of Europe saw a decline. The Americas
posted a 4% increase in First Half growth. While Latin America grew
solidly, the U.S. market - as expected - declined 1% due to continued
lower demand from the housing, automotive and plastic industries.

OUTLOOK FOR FULL YEAR MAINTAINED

Clariant confirmed its outlook for the Full Year. The company
anticipates a broadly stable macroeconomic environment, continued high
raw material and energy costs and a stabilized exchange rate
environment.

Clariant expects higher sales in local currency terms in 2007 with
an increase in operating income before exceptional items from
continuing operations, with margins remaining stable. Clariant also
expects higher cash flow from operations before exceptional items -
driven by further net working capital reduction - as well as an
improvement in recurring net income.

"Our priority for the rest of the year will be to improve the cash
flow, further implement price increases and continue to reduce SG&A
costs," Mr. Secher said. "We are fully committed to delivering on our
2007 goals with a clear focus on reaching our ROIC targets in the
medium term."

Calendar of Corporate Events

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November 7, 2007 Nine Month 2007 Results
February 14, 2008 Full Year 2007 Results
April 10, 2008 Annual General Meeting
May 8, 2008 First Quarter 2008 Results
August 5, 2008 First Half 2008 Results
November 4, 2008 Nine Month 2008 Results
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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 around 21,500 people. Headquartered in
Muttenz near Basel, Switzerland, it generated sales of CHF 8.1 billion
in 2006.

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

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