Quarterly Results Operationally on track, S

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Clariant International Ltd <strong>Quarterly</strong> <strong>Results</strong> 31 October 2011 Page 10 of 14 BU Leather Services Third quarter Nine Months in CHF million 2011 2010 % CHF % LC 2011 2010 % CHF % LC Sales 63 76 -17 -1 208 251 -17 -3 EBITDA before exceptional items 6 10 -40 -28 22 34 -35 -25 - margin 9.5% 13.2% 10.6% 13.5% EBIT before exceptional items 5 9 -44 -31 19 30 -37 -28 - margin 7.9% 11.8% 9.1% 12.0% EBIT 5 9 -44 -31 19 34 -44 -37 Leather Services sales declined 1% in local currencies and 17% in Swiss francs compared to the previous-year period. Demand from the automotive and luxury goods industry remained robust. However, in the upholstery sector the trend for using alternative materials instead of leather continued as raw hide costs remained high. From a regional standpoint, sales growth in local currencies was robust in Europe and slightly reduced in the Americas despite strong growth in the main market, i.e. Brazil. Sales in Asia were down, still suffering from high raw hide prices. Sales to tanneries working for the Japanese automotive sector have recovered to close to pre-earthquake levels. Leather Services was successful in increasing sales prices and was able to compensate for higher raw material costs. However, the Business Unit continues to be affected by adverse currency effects and lower volumes due to the impact of high raw hide prices. As a consequence, the EBITDA margin declined compared to the previous year’s level. For the fourth quarter, Leather Services expects demand to stabilize and a less negative impact from currency. The Business Unit will continue to focus on high value segments and on the introduction of new services and value-added products such as the new chromium-free tanning technology (Easy WhiteTan). In the future, Leather Service will focus its innovation activities and broaden its product offering in this range of ecofriendly products in particular.
Clariant International Ltd <strong>Quarterly</strong> <strong>Results</strong> 31 October 2011 Page 11 of 14 Performance Chemicals - includes the Additives, Detergents & Intermediates, Emulsions and Paper Specialties Business Units Third quarter Nine Months in CHF million 2011 2010 % CHF % LC 2011 2010 % CHF % LC Sales 307 335 -8 8 982 1 081 -9 5 EBITDA before exceptional items 35 44 -20 3 144 160 -10 4 - margin 11.4% 13.1% 14.7% 14.8% EBIT before exceptional items 27 34 -21 4 118 129 -9 5 - margin 8.8% 10.1% 12.0% 11.9% EBIT 27 29 -7 21 118 114 4 19 Sales in Performance Chemicals were 8% higher in local currencies than in the previous-year period and 8% lower in Swiss francs. As in the previous quarters sales growth was driven by Additives, which continued to contribute double-digit sales growth thanks to strong demand for non-halogenated flame retardants and waxes. Detergents & Intermediates and Emulsions contributed single-digit sales growth while sales in Paper Specialties were below previous-year levels. Additives, Detergents & Intermediates and Emulsions were successful in increasing their sales prices and fully compensating for higher raw material costs. Profitability in all four Business Units was again negatively impacted by the strong appreciation of the Swiss franc. The business environment for Additives was good with particularly strong growth in Asia/Pacific and North America. Demand for non-halogenated flame-retardants continued to be very strong; future demand will be addressed with a new production plant that will come into operation in mid- 2012. Detergents & Intermediates experienced solid demand in its intermediates business for Agrochemicals and Pharmaceuticals, compensating for some softening in demand in Household and Cleaning. Demand in Paper Specialties was lower compared to the second quarter of 2011 as customers have reduced their output due to lower paper consumption. Additionally, profitability was adversely affected by currency effects of the strong Swiss franc as well as by the high cost base in Switzerland. Relocation of production from Switzerland to Spain and the United States has therefore been accelerated and will be finalized by the end of 2011. Emulsions was able to compensate for high raw material prices. Sales growth was quite strong in Latin America with recovering demand in Brazil, whereas demand in the Middle East was weaker.
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Quarterly Results Operationally on track, S

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