Q4 results financial results - Clariant

Quarterly Report
February 17, 2009
Contents Page
News Release 1
Financial Discussion 3
Business Discussion 5
Condensed Financial Statement (unaudited) 10
www.clariant.com
Clariant International Ltd
Rothausstrasse 61
CH-4132 Muttenz 1, Switzerland
quarterly report
CONSOLIDATED FINANCIAL STATEMENTS
OF THE CLARIANT GROUP
1

quarterly report
NEwS RELEASE
Clariant improves operational performanCe and strengthens foCus on Cash
generation and Cost reduCtion
Sales of CHF 8.1 billion in 2008, up 1% in local currencies
– Price increase of 7% compensates for a 15% increase in raw material costs
– Volume erosion in most businesses in Q4
Operating income margin before exceptionals up to 6.6% from 6.3% in 2007
– SG&A costs down to 20.3% from 20.8% of sales
Net loss of CHF 37 million due to CHF 180 million impairment in Textile and Leather Businesses
Operating cash flow at CHF 391 million
Net debt reduced to CHF 1.21 billion from CHF 1.36 billion; solid maturity profile
Outlook: Clariant addresses challenging economic environment by further restructuring and focusing on cash
generation and cost reduction
Ceo hariolf Kottmann commented: “our company achieved an improved operating margin and a solid cash flow from
operations in 2008 against the backdrop of a steep decline in demand in the last quarter. We will adjust for declining
demand in our markets. at the same time we need to accelerate our restructuring efforts in order to catch up with our
competitors. on the foundation of a sustainable operational performance we will manage the company for profitable
growth in 2011 and beyond.”
Full Year Fourth Quarter
Continuing operations: 2008 2007 2008 2007
CHF mn % of sales CHF mn % of sales CHF mn % of sales CHF mn % of sales
Sales 8 071 100.0 8 533 100.0 1 744 100.0 2 086 100.0
local currency growth (lC): 1% –9%
Organic growth 1 1% –9%
Acquisitions/Divestitures 0% 0%
Currencies –6% –7%
Gross profit 2 314 28.7 2 488 29.2 440 25.2 580 27.8
eBItDa before exceptionals 783 9.7 812 9.5 104 6.0 194 9.3
eBItDa* 691 8.6 628 7.4 102 5.8 90 4.3
operating income before exceptionals* 530 6.6 539 6.3 42 2.4 122 5.8
operating income / loss 229 2.8 278 3.3 –148 8.5 7 0.3
Net loss / income from continuing operations –28 0.3 108 1.3 –199 11.4 –21 1.0
Net loss / income –37 0.5 5 0.1 –207 11.9 –17 0.8
operating cash flow (total operations) 391 540 217 220
Discontinued operations:
Sales 0 82 0 1
Net loss from discontinued operations –9 –103 –8 4
Other key figures: 31.12.2008 31.12.2007
Net debt 1 209 1 361
equity (including minorities) 1 987 2 372
Gearing 61% 57%
return on invested capital (roIC)** 9.0% 7.8%
Number of employees 20 102 20 931
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 9.
** Clariant calculates roIC by dividing Noplat before exceptional items by the average net capital employed. Noplat is calculated by taking the operating income before exceptional
items adjusted by the expected tax rate. Net capital employed also considers operating cash and capitalized operating leases.
1

Muttenz, February 17, 2009 – Clariant, a world leader in specialty
chemicals, today announced sales of CHF 8.1 billion for the Full
Year 2008 compared to CHF 8.5 billion in 2007. This translates into
a 1% growth in local currency and a 5% decline in CHF.
Clariant went through two distinct phases during fiscal year 2008. In the
first nine months, the company continued to benefit from a stable demand
and could cope with rising raw material costs and adverse currency
movements by substantially increasing sales prices. In the fourth quarter,
Clariant was significantly impacted by an unprecedented decline in global
economic activity that led to a weaker demand from customer industries
such as textile, leather, automotive and construction. other markets such
as agrochemicals, oil services or de-icing showed resilience against the
downturn. Clariant countered the unfavorable demand development in q4
by reducing temporary employees and overtime as well as extended plant
shutdowns over Christmas.
the company could offset a 15% increase in raw materials costs in 2008
by sales price increases of 7%. Due to low capacity utilization in the fourth
quarter the gross margin was slightly down to 28.7% from last year’s
29.2%. owing to Clariant’s strong focus on SG&a costs reduction, the
operating margin before exceptional items improved to 6.6% from 6.3%
in the previous year. the operating income before exceptionals reached
CHF 530 million compared to CHF 539 million in 2007.
as a result of the deterioration of the leather and textile markets and their
uncertain evolution in 2009, Clariant revised the business plans for these
two businesses, which led to an impairment of CHF 180 million.
By the end of 2008, Clariant had reduced roughly 1,650 job positions out
of the reduction target of approximately 2,200 that was announced in
2006. the activities to reduce SG&a costs as well as the production site
closures that were announced previously – namely in Horsforth, Coventry,
Selby and Naucalpan – proceeded as planned. restructuring and impairment
costs related to those activities amounted to CHF 141 million. total
restructuring and impairment costs were at CHF 321 million. the group
recorded a net loss of CHF 37 million.
the operating cash flow remained solid in 2008 and reached CHF 391
million despite a negative impact from inventories build-up in the first
nine months. this compares to an operating cash flow of CHF 540 million
in the previous year.
the balance sheet of the company remains solid. Clariant was able to
reduce its net debt by 11% to CHF 1.21 billion from CHF 1.36 billion. the
interest expenses also developed favorably, falling to CHF 85 million from
CHF 107 million in 2007. the company will not face maturities in capital
markets for almost three years as all mid- and long-term debt was refinanced
under favorable conditions between april 2006 and July 2008.
therefore the liquidity of the Clariant group is strong and the company is
prepared for a potential further economic downturn.
outlook
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NEwS RELEASE
Currently there is no evidence that the global economy will recover soon
from the depressed levels seen in recent months. However, a differentiated
development among Clariant’s market segments as already observed
in 2008 can be expected as parts of the company’s portfolio are less
exposed to economical developments than others.
In this challenging environment Clariant will accelerate several actions
to address both the unsatisfactory performance and the economic slowdown.
Cash generation through significantly decreasing Net Working
Capital and spending discipline will be the prevailing priority for 2009 in
order to create the financial headroom for decisive restructuring.
Following this approach, Clariant will rapidly and forcefully implement the
announced significant decrease in personnel costs by reducing thousand
job positions in addition to the 2,200 announced in 2006. also, Clariant
will simplify its organization in order to unwind additional cash generation
and cost savings potential – in particular in the SG&a area. restructuring
costs in 2009 will amount to approximately CHF 200–300 million.
reflecting the current uncertainties in the economic environment, the
Board of Directors will recommend to Clariant’s 14th General assembly on
april 2 to suspend dividends, grants or payouts to shareholders for 2008.
For 2010, Clariant confirms its target of an above industry average return
on Invested Capital (roIC).
2

finanCial disCussion fourth Quarter
Economic Environment
the economic environment for the chemicals industry has worsened dramatically
during the fourth quarter as a result of the global financial crisis.
the full magnitude of the crisis became evident during the quarter, resulting
in a steep decline in demand. Despite substantial financial stimulus
packages almost all industrialized countries in the Western world fell into
a recession. While emerging markets economies held up relatively well,
their GDp growth has clearly fallen below potential.
the economic downturn has lowered the demand for most hard commodities.
the prices of these goods collapsed and currently there are no signs
of a sustainable recovery in the near future.
the uS dollar continued to recover against other important currencies
in the first two months of the fourth quarter but devalued significantly
towards year-end. on a year-on-year basis, the average exchange rates of
the uS dollar and the euro were weaker against the Swiss franc.
Sales and Operating Results
Consolidated sales from continuing operations decreased by 16%
in Swiss francs and by 9% in local currency terms. all divisions and businesses
managed to increase sales prices again.
the gross margin was affected by higher idle facility costs caused by
the decline in sales. It decreased to 25.2% in the fourth quarter compared
with 27.8% in the same period a year earlier. a 14% rise in raw material
costs and higher energy costs could be successfully compensated by price
increases. this also helped to mitigate the negative effect of lower sales
volumes on the gross margin.
Marketing, distribution, administration and general overhead
costs accounted for 20.7% of sales compared to 20.2% recorded in the
fourth quarter of 2007. the unfavorable development in percentage of
sales was due to a lower sales figure. In absolute terms, SG&a costs fell
CHF 59 million year-on-year as a result of cost reductions and favorable
foreign exchange rate developments.
Research and development costs of CHF 45 million in the fourth
quarter of 2008 were CHF 8 million below the level recorded in the same
quarter of 2007.
Income from associates decreased to CHF 9 million in the fourth quarter
of 2008. this compares to CHF 16 million in the corresponding period
of the previous year.
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FINANCIAL DISCUSSION
Restructuring costs and impairments in the amount of CHF 208 million
includes a CHF 180 million impairment of goodwill and fixed assets
positions in the textiles and leather businesses. additional restructuring
charges were booked in Germany, the united States, Switzerland, India
and Spain.
Net financial expenses in the fourth quarter of 2008 fell to CHF –40
million, a drop of CHF –31 million compared with the prior-year period.
this was entirely due to foreign exchange rate losses of CHF 18 million
in the fourth quarter of 2008 compared with foreign exchange rate gains
of CHF 12 million in the previous year. the weakening of all major currencies
against the Swiss franc in the fourth quarter of 2008 has led to
substantial unrealized valuation losses of especially intra-Group financing
positions and operation positions. the net financial result before foreign
exchange rate effects is the same in both periods arising from lower interest
expenses through an optimized mix of net debt positions throughout
the last quarters on the one hand and lower average liquidity on the other
hand.
Tax expenses in the fourth quarter of 2008 were negatively influenced
by a non tax-effective goodwill write-off, impairment and restructuring
costs that were only partly tax effective, non tax-effective idle cost and
non tax-effective foreign exchange losses. In turn untaxed profits had a
positive effect on the tax rate.
Net loss from continuing operations amounted to CHF 199 million in
the fourth quarter of 2008. this compares with a loss of CHF 21 million
reported in the same period of 2007. the main reason for this variance
was the unfavorable operating income development, the negative foreign
exchange result as well as the higher restructuring and impairment
charges.
Net loss from discontinued operations amounted to CHF 8 million and
was mainly related to the write-down of a vendor note and to a settlement,
both made in connection with the disposal of the pharmaceutical
intermediates business in 2006.
3

Balance Sheet Key Figures
Total assets decreased to CHF 5.946 billion as of December 31, 2008
from CHF 7.285 billion at the end of 2007. the repayment of financial
debts, a strong increase in the exchange rate of the Swiss franc and an
impairment charge in the amount of CHF 180 million contributed to this
effect.
Cash and cash equivalents decreased to CHF 356 million as of December
31, 2008 from CHF 509 million at the end of 2007. this was the result
of a reduction of financial liabilities and improved net working capital
management in the fourth quarter.
Current financial debt decreased to CHF 268 million as of December 31,
2008 from CHF 728 million at the end of 2007, whereas non-current financial
debt increased to CHF 1.297 billion as of December 31, 2008 from CHF
1.267 billion at the end of 2007. the former is the result of the payback of
a bond in the amount of CHF 384 million in March 2008, while the latter is
the net effect of both the issuance of a certificate of indebtedness in the
amount of eur 100 million and foreign exchange rate differences.
Equity decreased to CHF 1.987 billion as of December 31, 2008 from CHF
2.372 billion at the end of 2007. this was the net effect of a net loss of
CHF 37 million during the reporting period, a negative development of
foreign exchange rates and a capital reduction of CHF 58 million.
Net debt decreased to CHF 1.209 billion as of December 31, 2008 from
CHF 1.361 billion at the end of 2007 as a result of the changes described
above.
Gearing, which reflects net financial debt in relation to equity including
minorities, increased to 61% as of December 31, 2008 from 57% at the
end of 2007.
Cash Flow
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FINANCIAL DISCUSSION
Cash flow from operating activities before changes in working capital
stood at CHF 89 million for the fourth quarter of 2008. this compares to
CHF 66 million in the fourth quarter of 2007.
Working capital decreased by CHF 128 million during the fourth quarter
of 2008, mainly driven by lower trade receivables and lower inventories.
the decrease compares to a decrease of CHF 154 million in the fourth
quarter of 2007.
Cash flow from operating activities stood at CHF 217 million in the
fourth quarter of 2008, compared to CHF 220 million in the fourth quarter
of 2007.
Capital expenditure (PPE) stood at CHF 93 million for the fourth quarter
of 2008, compared to CHF 101 million in the fourth quarter of 2007.
4

Business disCussion fourth Quarter
Textile, Leather & Paper Chemicals
poor demand in all three businesses
Sales in the textile, leather & paper Chemicals Division fell 13% in local
currencies and 22% in Swiss francs. all three businesses have been severely
impacted by falling demand in many of their end markets, especially
towards the end of the quarter. Customers along the value chain have
started to aggressively reduce their inventories. this in turn added to an
already depressed demand situation in all world regions. as a result of the
deterioration of the leather and textile markets and their uncertain evolution
in 2009, Clariant revised the business plans for these two businesses,
which led to an impairment of CHF 180 million. the paper Business held
up relatively well in the third quarter compared to textile and leather. In
the fourth quarter, however, volumes dropped in the same range as for
the two other businesses.
gross margin deteriorating
Substantially higher prices compensated higher raw material costs, but
due to higher idle facility costs the gross margin was weaker compared to
the same quarter 2007. to dampen the gross margin erosion, the division
took several urgent measures such as the immediate alignment of production
to demand and a further optimization of production costs. In addition,
the division continued to massively reduce its cost basis. Despite these
efforts, the operating margin turned negative in one of the worst market
environments the industry has seen in decades.
significant capacity reductions achieved
In the fourth quarter the businesses introduced temporary capacity reductions
and other short-term measures to counter the downturn in demand.
additionally, to structurally adapt to changing markets, textile, leather
& paper had already decided in 2007 to downsize the production capacities.
accordingly the Selby site has been closed as scheduled by the end
of 2008, while closing another plant in the uK in Horsforth is on track to
be completed by the middle of the year. the production of chemicals not
being eliminated from the product portfolio has been successfully transferred
to other sites.
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bUSINESS DISCUSSION
Full Year Fourth Quarter
2008 2007 2008 2007
CHF mn % of sales CHF mn % of sales % CHF % LC CHF mn % of sales CHF mn % of sales % CHF % LC
Sales 2 020 2 332 –13 –6 429 553 –22 –13
eBItDa before exceptionals 152 7.5 217 9.3 –30 –22 11 2.6 52 9.4 –79 –73
operating income before exceptionals 87 4.3 145 6.2 –40 –30 –5 – 34 6.1 – –
operating income –131 – 40 1.7 – – –189 – 25 4.5 – –
See Definitions of terms of Financial Measurements on page 9.
globalization of the crisis in textiles and leather
With the exception of some smaller, less important textile and leather
markets, most countries experienced a double-digit sales volume contraction
in the fourth quarter compared to the same period a year earlier.
the development in the fourth quarter is a continuation of the negative
overall trend already observed during the first nine months of 2008. the
weakness in textiles and leather demand has spread from the Western
world to the emerging markets, with increasing speed towards the end of
the quarter. export-oriented markets in asia and latin america suffered
the most from the industrialized world entering into recession. Besides
spreading into all world regions, the crisis also hit businesses that had
been relatively stable thus far such as footwear or leather fashion. these
customer-oriented markets also started to feel the repercussions of the
global financial crisis.
relatively stable performance in paper
the business unit paper was able to compensate the still rising raw material
prices with higher sales prices. While North america and latin america
achieved a robust sales growth in local currencies, europe and asia
were significantly weaker year-on-year. Sales in Swiss francs have been
negatively impacted by a sharp devaluation of the currencies of some
important emerging markets. In asia, Indonesia stood out with sales in
local currency more than doubling, reflecting its lower dependence on
exports and some new contracts signed. the tight raw material situation
of the last few quarters in optical brighteners has improved in that
specific product line.
5

Pigments & Additives
destocking overshadows operational progress
the slowdown already observed in the third quarter of 2008 accelerated
into the fourth quarter. Sales fell 20% in local currencies and 24% in
Swiss francs. the division suffered from a combination of rapidly deteriorating
market conditions in some of its end markets and pronounced
destocking activities along the value chain. the demand from convertors
such as masterbatches producers, compounders or processors was heavily
impacted by the economic downturn. Sales volumes in latin america
held up well compared to the other regions despite negative local currencies
sales growth. all other regions suffered from double-digit sales
declines on a year-on-year basis.
further cost reductions achieved
the underutilization of production assets resulted in a gross margin that
was roughly two percentage points lower compared to the fourth quarter
2007. a further significant reduction in costs helped to limit the negative
impact on the operating margin to around one percentage point compared
to the fourth quarter 2008.
dick peters B.v. sold to altana
to streamline its portfolio, Clariant sold its Netherlands-based wax emulsions
business Dick peters B.V. to the German specialty chemical group
altana. the transaction worth eur 18 million was announced in November
2008.
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bUSINESS DISCUSSION
Full Year Fourth Quarter
2008 2007 2008 2007
CHF mn % of sales CHF mn % of sales % CHF % LC CHF mn % of sales CHF mn % of sales % CHF % LC
Sales 1 948 2 076 –6 0 370 490 –24 –20
eBItDa before exceptionals 293 15.0 278 13.4 5 12 46 12.4 67 13.7 –31 –27
operating income before exceptionals 216 11.1 192 9.2 13 20 27 7.3 41 8.4 –34 –30
operating income 198 10.2 77 3.7 157 172 31 8.4 –48 – – –
See Definitions of terms of Financial Measurements on page 9.
demand erosion in the Coatings Business
as a result of the abrupt halt in car production and a lower activity in
the housing market, the Coatings Business was very weak in the fourth
quarter. Sales volumes declined in the double-digit percentage range in
all regions, except in eastern europe and some emerging markets such as
India and Mexico. In these countries, volume growth and sales growth
in local currencies were above the prior year period. China, one of the
growth drivers in the third quarter, could not escape from the impact of
the recessionary developments in many other markets.
market-driven reorganization of plastics Business
after showing good resilience to the slowing global economic growth
in the first half of 2008, the plastics Business confirmed the downward
trend that started in the third quarter. Similar to the Coatings Business,
sales in the plastics Business were heavily impacted by rapidly deteriorating
market conditions. to optimize the cost base and to align the structure
to the customer’s needs, the division reacted by adjusting its structure
and reorganizing the business. the Waxes Business was integrated into
the business unit Base products as of January 1, 2009. Base products
is successfully managing commoditized businesses such as printing inks
and polymer additives. all other remaining products and activities will be
transferred to the business unit Specialties.
price increases in specialties and Base products
the Specialties Business saw a sharp drop in demand for its products
supplied to all kinds of specialized industries. Substantially higher sales
prices could by far not compensate a double-digit volume decline. In this
difficult environment Japan stood out with a strong sales growth in local
currency. In the Base products Business, Germany and some smaller
markets in latin america achieved robust sales growth.
6

Masterbatches
steep volume decline towards the end of the year
Masterbatches saw its sales falling 11% in local currencies and 18%
in Swiss francs in the fourth quarter. the slowdown that started in the
united States in 2007 has finally spread to all other world regions. While
business conditions were reasonable in the first part of the quarter, demand
slowed down towards the end of the year. Many of the division’s
end markets were heavily impacted by the consequences of the financial
crisis. Customers in these markets, namely in automotive-, construction-
and consumer goods-related industries, stopped or delayed orders.
packaging applications remained slightly more resilient to the global
downturn. However, this was not enough to compensate the depressed
demand in the other industries. additionally, destocking along the value
chain exacerbated the difficult situation arising from collapsing demand.
Masterbatches reacted quickly to the changing market conditions by
implementing short-time work, reduction of its temporary workforce or
extended production plant shut-downs.
pressure on margins continued
temporary production suspensions resulted in lower capacity utilization
rates. accordingly, the gross margin dropped compared to the fourth quarter
of 2007. the division needed to selectively adapt its sales prices to
compensate for the changing raw material costs. additional cost-cutting
measures helped the division to breakeven in the last three months of
2008.
positive contribution from the us acquisitions
the combined companies of rite Systems, Inc. and ricon Colors, Inc. have
been fully integrated into Clariant. their higher exposure to the more resilient
packaging end markets resulted in a satisfactory performance in
the fourth quarter.
production started successfully in new China plant
In December, Clariant opened its new production plant in Guangzhou,
China, where it produces color and additive masterbatches for the rapidly
growing local markets. With 14000 square meters, Guangzhou is the
largest of the three Masterbatches sites in the country. the new facility
is close to major customers in the pearl river delta region, which also includes
Hong Kong and Macao. other strategically less important projects
have been postponed due to the unfavorable global demand situation.
volumes down in most european and north american
markets
the united States, Canada and most european markets were weak in the
fourth quarter. local currency sales growth was lower in almost every
developed country. the regions suffered from the complete and sudden
production stop, especially in the important automotive industry. this resulted
in a double-digit percentage decline in sales.
.
sales growth in latin america despite lower volumes
although the business in latin american was not immune to the weakening
global economy, the region showed robust local currency sales
growth. Domestic demand in Brazil and some smaller countries remained
solid compared to other world regions. Sales prices have been increased
where necessary to compensate higher raw material costs.
asia weak with some exceptions
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bUSINESS DISCUSSION
Full Year Fourth Quarter
2008 2007 2008 2007
CHF mn % of sales CHF mn % of sales % CHF % LC CHF mn % of sales CHF mn % of sales % CHF % LC
Sales 1 278 1 380 –7 –1 258 315 –18 –11
eBItDa before exceptionals 122 9.5 153 11.1 –20 –14 8 3.1 32 10.2 –75 –67
operating income before exceptionals 89 7.0 124 9.0 –28 –22 0 0.0 28 8.9 – –96
operating income 76 5.9 102 7.4 –25 –19 0 0.0 25 7.9 – –98
See Definitions of terms of Financial Measurements on page 9.
Similar to the other regions, asia had a weak fourth quarter with falling
sales volumes. Despite this unfavorable development, the division was
able to selectively adapt sales prices. In contrast to the general downward
trend, some countries with strong local economies such as Indonesia,
New Zealand and Saudi arabia continued to grow.
7

Functional Chemicals
resilience in functional Chemicals
Sales in the Functional Chemicals Division grew 3% in local currencies
due to a robust demand in many businesses. unfavorable currency developments
led to a sales contraction of 6% in Swiss francs. the sales development
pattern was differentiated within the division. Demand remained
robust in less cyclical businesses. Clariant oil Services, personal Care,
Industrial & Home Care, Crop protection and Detergents & Intermediates
showed a good resilience against the evolving recession in many parts of
the world. In contrast, our businesses in the coatings, construction and
metal working areas were heavily impacted by the slowing demand in
their respective end markets.
effective margin management
as a result of higher sales prices that compensated for lower volumes
and higher raw material costs, the gross margin could be defended compared
to the fourth quarter 2007. once more the division was successful
in reducing its cost base, thereby achieving a higher operating margin
compared to the previous-year period.
Cracker shutdown with expected impact
as announced in the third quarter, the third-party cracker supplying ethylene
to Clariant’s operations in Gendorf, Germany, was temporarily shut
down during the fourth quarter. although the shutdown was longer than
originally planned, the division managed to source enough ethylene from
other suppliers. all orders from customers have been filled in a timely
manner. the financial impact of the outage on the operational result was
within expectations.
oil production still going strong
With the opening of its new headquarters in Houston, texas, the Chemicals
Management Solutions Business strengthened its position in the
important North american oil and gas market. With latin america being
the fastest growing market, sales in local currencies experienced doubledigit
growth in all regions. Several new contracts around the globe helped
to mitigate the negative impact from deferred or cancelled oil sands exploration
projects and from shutdowns of production platforms in the Gulf
of Mexico due to hurricane damages. Mining Services also grew significantly
year-on-year although it was impacted late in the fourth quarter
as a consequence of collapsing commodity prices resulting in a slightly
weaker demand for products and services.
record season for de-icing
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bUSINESS DISCUSSION
Full Year Fourth Quarter
2008 2007 2008 2007
CHF mn % of sales CHF mn % of sales % CHF % LC CHF mn % of sales CHF mn % of sales % CHF % LC
Sales 2 825 2 745 3 9 687 728 –6 3
eBItDa before exceptionals 316 11.2 262 9.5 21 28 80 11.6 78 10.7 3 12
operating income before exceptionals 249 8.8 194 7.1 28 37 64 9.3 61 8.4 5 14
operating income 236 8.4 194 7.1 22 30 59 8.6 60 8.2 –2 7
See Definitions of terms of Financial Measurements on page 9.
Market share gains resulting from successful investments and further
price increases across the product portfolio helped the Industrial & Consumer
Care Business to grow its sales in local currencies. Demand in the
personal Care, Industrial & Home Care and Crop protection businesses
remained solid. De-icing recorded strong sales growth due to the early
start of the winter season. Cold and wet weather in both North america
and europe led to a record quarter for the business. the construction of
the strategically important new multipurpose plant in China is proceeding
as planned. the plant will mainly produce chemicals for the personal
Care, Metal Working and Coatings businesses and is scheduled to go into
operation in summer 2009.
detergents & intermediates robust
the demand for laundry detergents and household cleaning products
in europe – where ninety percent of the business sales are generated –
remained solid despite the reduced economic activity. For the fourth quarter
in a row, the Detergents & Intermediates Business exhibited profitable
growth. the stringent implementation of the new business model
introduced in early 2008 helped to raise the profitability to the expected
level.
8

definition of terms of finanCial measurements (unaudited)
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 (continuing)
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CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
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:
9
Full Year Fourth Quarter
CHF mn 2008 2007 2008 2007
operating income 229 278 –148 7
+ Depreciation of ppe 244 264 60 68
+ Impairment of ppe / Goodwill 209 77 188 11
+ amortization of other intangibles 9 9 2 4
EBITDA 691 628 102 90
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)
Full Year Fourth Quarter
CHF mn 2008 2007 2008 2007
eBItDa 691 628 102 90
+ restructuring and impairment 321 262 208 113
– Impairment of ppe / Goodwill –209 –77 –188 –11
(reported under restructuring and impairment)
– Gain on disposals of subsidiaries and associates –20 –1 –18 2
EBITDA before exceptionals 783 812 104 194
Operating income before exceptional items
– is calculated as operating income plus restructuring and impairment and gain/loss on disposals
Operating income before exceptionals (continuing)
Full Year Fourth Quarter
CHF mn 2008 2007 2008 2007
operating income 229 278 –148 7
+ restructuring and impairment 321 262 208 113
– Gain on disposals of subsidiaries and associates –20 –1 –18 2
Operating income before exceptionals 530 539 42 122
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 31.12.2008 31.12.2007
Non-current financial debt 1 297 1 267
+ Current financial debt 268 728
– Cash and cash equivalents –356 –509
– Current deposits 90 to 365 days 0 –125
Net Debt 1 209 1 361

Condensed finanCial statements of the Clariant group
Consolidated balance sheets (unaudited)
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CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
ASSETS 31.12.2008 31.12.2007
Non-current assets
10
CHF mn % CHF mn %
property, plant and equipment 2 010 2 401
Intangible assets 283 339
Investments in associates 275 294
Financial assets 21 17
prepaid pension assets 119 122
Deferred income tax assets 67 113
Total non-current assets 2 775 46.7 3 286 45.1
Current assets
Inventories 1 373 1 477
trade receivables 1 110 1 449
other current assets 1 300 535
Cash and cash equivalents 356 509
Current income tax receivables 32 29
Total current assets 3 171 53.3 3 999 54.9
Total assets 5 946 100.0 7 285 100.0
EQUITY AND LIABILITIES 31.12.2008 31.12.2007
Equity
CHF mn % CHF mn %
Share capital 921 978
treasury shares (par value) –15 –16
other reserves 364 642
retained earnings 667 709
Total capital and reserves attributable to Clariant shareholders 1 937 2 313
Minority interests 50 59
Total equity 1 987 33.4 2 372 32.6
Liabilities
Non-current liabilities
Financial debts 1 297 1 267
Deferred income tax liabilities 134 179
retirement benefit obligations 478 515
provision for non-current liabilities 191 231
Total non-current liabilities 2 100 35.3 2 192 30.0
Current liabilities
trade payables 1 011 1 321
Financial debts 268 728
Current income tax liabilities 243 244
provision for current liabilities 337 428
Total current liabilities 1 859 31.3 2 721 37.4
Total liabilities 3 959 66.6 4 913 67.4
Total equity and liabilities 5 946 100.0 7 285 100.0
1 Includes short-term deposits of CHF 0 million (2007: CHF 125 million)

Consolidated income statements (unaudited)
quarterly report
CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
11
Full Year Fourth Quarter
2008 2007 2008 2007
CHF mn % CHF mn % CHF mn % CHF mn %
Sales 8 071 100.0 8 533 100.0 1 744 100.0 2 086 100.0
Costs of goods sold –5 757 71.3 –6 045 70.8 –1 304 74.8 –1 506 72.2
Gross profit 2 314 28.7 2 488 29.2 440 25.2 580 27.8
Marketing and distribution –1 216 15.1 –1 384 16.2 –288 16.5 –337 16.2
administration and general overhead costs –421 5.2 –391 4.5 –74 4.2 –84 4.0
research and development –184 2.3 –211 2.5 –45 2.6 –53 2.6
Income from associates 37 0.5 37 0.4 9 0.5 16 0.8
Gain from the disposal of activities not qualifying
as discontinued operations 20 0.2 1 0.0 18 1.0 –2 0.1
restructuring and impairment –321 4.0 –262 3.1 –208 11.9 –113 5.4
Operating income / loss 229 2.8 278 3.3 –148 8.5 7 0.3
Finance income 17 0.2 31 0.3 2 0.1 8 0.4
Finance costs 1 –155 1.9 –102 1.2 –42 2.4 –17 0.8
Income / loss before taxes 91 1.1 207 2.4 –188 10.8 –2 0.1
taxes –119 1.4 –99 1.1 –11 0.6 –19 0.9
Net loss / income from continuing operations –28 0.3 108 1.3 –199 11.4 –21 1.0
Discontinued operations:
loss from discontinued operations –9 –103 –8 4
Net loss / income –37 5 –207 –17
Attributable to:
Shareholders of Clariant ltd –45 –2 –207 –19
Minority interests 8 7 0 2
Net loss / income –37 0.5 5 0.1 –207 11.9 –17 0.8
Basic earnings per share attributable
to the shareholders of Clariant Ltd (CHF/share):
Continuing operations –0.16 0.44 –0.88 –0.10
Discontinued operations –0.04 –0.45 –0.04 0.02
Total –0.20 –0.01 –0.92 –0.08
Diluted earnings per share attributable
to the shareholders of Clariant Ltd (CHF/share):
Continuing operations –0.16 0.44 –0.87 –0.10
Discontinued operations –0.04 –0.45 –0.04 0.02
Total –0.20 –0.01 –0.91 –0.08
1 Currency impact ytD 2008 of CHF -53 mn ytD 2007 of CHF +23 mn.

Consolidated statements of cash flows (unaudited)
quarterly report
CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
12
Full Year Fourth Quarter
CHF mn 2008 2007 2008 2007
Net loss / income –37 5 –207 –17
Adjustment for:
Depreciation of property, plant and equipment (ppe) 244 264 60 68
Impairment 209 84 188 11
amortization of intangible assets 9 9 2 4
Impairment of working capital 70 53 18 15
Income from associates –37 –37 –9 –16
tax expense 119 99 11 18
Net financial income and costs 85 94 22 21
Gain from the disposal of activities not qualifying
as discontinued operations –20 –1 –19 2
loss on disposal of discontinued operations 9 70 10 –4
other non-cash items 50 –20 36 –18
Total reversal of non-cash items 738 615 319 101
Dividends received from associates 34 30 0 1
Interest paid –98 –86 –12 –2
Interest received 15 29 3 6
Income taxes paid –109 –88 –14 –23
Cash flow before changes in working capital and provisions 543 505 89 66
Changes in inventories –136 –39 142 –19
Changes in trade receivables 153 20 245 71
Changes in trade payables –106 76 –94 76
Changes in other current assets and liabilities –43 –69 –100 5
Changes in provisions –20 47 –65 21
Cash flow from operating activities 391 540 217 220
Investments in ppe –270 –312 –93 –101
Investments in financial assets and associates –17 –15 5 –7
Investments in other intangible assets –21 –8 –10 –7
Changes in current financial assets 135 –116 9 –132
Sale of ppe and intangible assets 17 18 7 3
acquisition of companies, businesses and participations –42 –8 –1 –8
proceeds from the disposal of discontinued operations –14 25 0 –12
proceeds from the disposal of subsidiaries and associates 31 23 29 1
Cash flow from investing activities –181 –393 –54 –263
reduction of share capital to shareholders of Clariant ltd –57 –57 0 0
treasury share transactions –6 –8 –6 0
proceeds from financial debts 289 308 8 –14
repayments of financial debts –552 –317 –58 –29
Dividends paid to minority shareholders –5 –9 0 0
Cash flow from financing activities –331 –83 –56 –43
Currency translation effect on cash and cash equivalents –32 2 –21 –4
Net change in cash and cash equivalents –153 66 86 –90
Cash and cash equivalents at the beginning of the period 509 443 270 599
Cash and cash equivalents at the end of the period 356 509 356 509

Consolidated statements of recognized income and expense (unaudited)
quarterly report
CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
13
Full Year
2008 2007
CHF mn CHF mn
Net investment hedge 111 –31
Currency translation differences –401 26
tax on items taken directly to or transferred from equity 0 –3
Net income recognized directly in equity –290 –8
Net loss / income –37 5
Total recognized income and expense for the period –327 –3
Attributable to:
Shareholders of Clariant ltd –323 –11
Minority interests –4 8
this statement shows only changes in equity other than those arising from capital transactions with owners and distributions to owners.

1. Divisional Figures
quarterly report
CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Full Year Sales to 3rd parties EBITDA before exceptionals EBITDA
CHF mn 2008 2007 % CHF % LC 2008 2007 % CHF % LC 2008 2007 % CHF % LC
textile, leather, paper 2 020 2 332 –13 –6 152 217 –30 –22 117 167 –30 –22
pigments & additives 1 948 2 076 –6 0 293 278 5 12 287 180 59 69
Masterbatches 1 278 1 380 –7 –1 122 153 –20 –14 111 136 –18 –12
Functional Chemicals 2 825 2 745 3 9 316 262 21 28 305 261 17 25
Divisions Total 8 071 8 533 883 910 820 744
Corporate 0 0 –100 –98 –129 –116
Total continuing 8 071 8 533 –5 1 783 812 –4 3 691 628 10 17
Operating income before exceptionals Operating income Systematic depreciation of PPE
CHF mn 2008 2007 % CHF % LC 2008 2007 % CHF % LC 2008 2007
textile, leather, paper 87 145 –40 –30 –131 40 – – 65 72
pigments & additives 216 192 13 20 198 77 157 172 75 84
Masterbatches 89 124 –28 –22 76 102 –25 –19 32 29
Functional Chemicals 249 194 28 37 236 194 22 30 66 68
Divisions Total 641 655 379 413 238 253
Corporate –111 –116 –150 –135 6 11
Total continuing 530 539 –2 7 229 278 –18 –6 244 264
Fourth Quarter Sales to 3rd parties EBITDA before exceptionals EBITDA
CHF mn 2008 2007 % CHF % LC 2008 2007 % CHF % LC 2008 2007 % CHF % LC
textile, leather, paper 429 553 –22 –13 11 52 –79 –73 9 43 –79 –73
pigments & additives 370 490 –24 –20 46 67 –31 –27 52 –12 – –
Masterbatches 258 315 –18 –11 8 32 –75 –67 8 30 –73 –69
Functional Chemicals 687 728 –6 3 80 78 3 12 78 77 1 11
Divisions Total 1 744 2 086 145 229 147 138
Corporate 0 0 –41 –35 –45 –48
Total continuing 1 744 2 086 –16 –9 104 194 –46 40 102 90 13 24
Operating income before exceptionals Operating income Systematic depreciation of PPE
CHF mn 2008 2007 % CHF % LC 2008 2007 % CHF % LC 2008 2007
textile, leather, paper –5 34 – – –189 25 – – 17 18
pigments & additives 27 41 –34 –30 31 –48 – – 18 25
Masterbatches 0 28 – –96 0 25 – –98 8 4
Functional Chemicals 64 61 5 14 59 60 –2 7 16 18
Divisions Total 86 164 –99 62 59 65
Corporate –44 –42 –49 –55 1 3
Total continuing 42 122 –66 –60 –148 7 – – 60 68
14

2. Divisional Margins
quarterly report
CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Full Year Sales to 3rd parties EBITDA before EBITDA
exceptionals
in % 2008 2007 2008 2007 2008 2007
textile, leather, paper 25.1 27.3 7.5 9.3 5.8 7.2
pigments & additives 24.1 24.3 15.0 13.4 14.7 8.7
Masterbatches 15.8 16.2 9.5 11.1 8.7 9.9
Functional Chemicals 35.0 32.2 11.2 9.5 10.8 9.5
Total continuing 100.0 100.0 9.7 9.5 8.6 7.4
Operating income Operating income
b. exceptionals
in % 2008 2007 2008 2007
textile, leather, paper 4.3 6.2 –6.5 1.7
pigments & additives 11.1 9.2 10.2 3.7
Masterbatches 7.0 9.0 5.9 7.4
Functional Chemicals 8.8 7.1 8.4 7.1
Total continuing 6.6 6.3 2.8 3.3
Fourth Quarter Sales to 3rd parties EBITDA before EBITDA
exceptionals
in % 2008 2007 2008 2007 2008 2007
textile, leather, paper 24.6 26.5 2.6 9.4 2.1 7.8
pigments & additives 21.2 23.5 12.4 13.7 14.1 –2.4
Masterbatches 14.8 15.1 3.1 10.2 3.1 9.5
Functional Chemicals 39.4 34.9 11.6 10.7 11.4 10.6
Total continuing 100.0 100.0 6.0 9.3 5.8 4.3
Operating income Operating income
b. exceptionals
in % 2008 2007 2008 2007
textile, leather, paper –1.2 6.1 –44.1 4.5
pigments & additives 7.3 8.4 8.4 –9.8
Masterbatches 0.0 8.9 0.0 7.9
Functional Chemicals 9.3 8.4 8.6 8.2
Total continuing 2.4 5.8 –8.5 0.3
15

3. Regional developments
quarterly report
CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
sales Full Year Fourth Quarter
CHF mn 2008 % of sales 2007 % of sales CHF % LC % 2008 % of sales 2007 % of sales CHF % LC %
europe 3 861 47.9 4 155 48.7 –7 –3 771 44.2 1 000 47.9 –23 –14
of which Germany 1 202 1 252 –4 –1 235 312 –25 –18
of which Switzerland 141 147 –4 –1 29 36 –19 –15
americas 2 255 27.9 2 364 27.7 –5 4 540 31.0 588 28.2 –8 1
of which USA 900 995 –10 1 211 232 –9 –10
of which brazil 583 589 –1 2 130 154 –16 5
asia / australia / africa 1 955 24.2 2 014 23.6 –3 7 433 24.8 498 23.9 –13 –8
of which China 366 382 –4 2 67 96 –30 –33
Total continuing operations 8 071 100.0 8 533 100.0 –5 1 1 744 100.0 2 086 100.0 –16 –9
Discontinued operations 0 82 0 1
16

4. Foreign Exchange Rates
quarterly report
CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Rates used to translate the consolidated 31.12.2008 31.12.2007 Change %
balance sheets (closing rate)
1 uSD 1.06 1.13 –6
1 eur 1.49 1.66 –10
1 GBp 1.53 2.25 –32
100 Jpy 1.17 1.01 16
17
Full Year
Average sales-weighted rates used to translate the income 2008 2007 Change %
statements and consolidated statements of cash flows
1 uSD 1.08 1.20 –10
1 eur 1.59 1.64 –3
1 GBp 2.02 2.40 –16
100 Jpy 1.05 1.02 3
5. Condensed Earnings Per Share Data
Full Year
CHF mn 2008 2007
Number of shares outstanding at 31.12.2008 230 160 000 230 160 000
and 31.12.2007 respectively
Weighted average, 226 532 736 227 153 836
number of shares outstanding
Weighted average, diluted 227 643 237 228 367 397
number of shares outstanding
Basic earnings per share attributable
to the shareholders of Clariant ltd (Chf/share):
Continuing operations –0.16 0.44
Discontinued operations –0.04 –0.45
Total –0.20 –0.01
diluted earnings per share attributable
to the shareholders of Clariant ltd (Chf/share):
Continuing operations –0.16 0.44
Discontinued operations –0.04 –0.45
Total –0.20 –0.01

Clariant – exaCtly your Chemistry.
Clariant is a global leader in the field of specialty chemicals. Strong
business relationships, commitment to outstanding service and wideranging
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 20,000 people. Headquartered in Muttenz
near Basel, it generated sales of around CHF 8 billion in 2008.
Clariant’s businesses are organized in four divisions: textile, leather &
paper Chemicals, pigments & additives, Functional Chemicals and Masterbatches.
Calendar of Corporate Events
april 2, 2009 annual General Meeting
May 6, 2009 First quarter 2009 results
July 30, 2009 First Half 2009 results
November 4, 2009 Nine Month 2009 results
Your Clariant Contacts
Investor Relations Fax +41 61 469 67 67
ulrich Steiner tel. +41 61 469 67 45
Jaideep pandya tel. +41 61 469 67 49
Media Relations Fax +41 61 469 69 99
arnd Wagner tel. +41 61 469 61 58
18
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
Disclaimer
this document 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.