Quarterly Results Operationally on track, S

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Clariant International Ltd <strong>Quarterly</strong> <strong>Results</strong> 31 October 2011 Page 6 of 14 BU Masterbatches Third quarter Nine Months in CHF million 2011 2010 % CHF % LC 2011 2010 % CHF % LC Sales 266 315 -16 0 873 981 -11 3 EBITDA before exceptional items 28 39 -28 -12 106 125 -15 -1 - margin 10.5% 12.4% 12.1% 12.7% EBIT before exceptional items 21 32 -34 -16 86 102 -16 -1 - margin 7.9% 10.2% 9.9% 10.4% EBIT 21 27 -22 -3 82 95 -14 2 In the Masterbatches Business Unit, sales were flat in local currencies. In Swiss francs, sales were 16% lower. Weaker underlying demand first experienced in the second quarter continued into the third quarter as plastic converters responded to higher raw material costs and uncertain economic conditions by reducing or delaying orders for masterbatches. Sales growth was strongest in the Middle East region, particularly in Saudi Arabia and Turkey. Additionally, China and Indonesia contributed positively to growth in Asia. Sales were flat in North and Latin America, and were below the previous year’s level in Europe. The latter was particularly impacted by the weak economic environment in Southern Europe. The EBITDA margin declined in the third quarter compared to the same period of the previous year as higher sales prices and improved productivity were not enough to compensate for the negative currency impact and higher idle facility costs. Raw material costs for the business unit remained at a high level but were fully compensated for by higher sales prices. The Business Unit remains focused on growth opportunities in emerging markets. It will benefit from expansion in the region Middle East with new production sites e.g. in Turkey as well as from the expansion of existing sites (Saudi Arabia, Pakistan). Additionally, further capacity was added to serve customers in Asia Pacific (China) and Latin America (Brazil). In Europe, the focus of the Business Unit is on expanding into Eastern Europe and optimizing its existing production network in Western Europe. In North America, two plants were consolidated to create a new state of the art manufacturing facility in Chicago that produces both liquid and granular masterbatches.
Clariant International Ltd <strong>Quarterly</strong> <strong>Results</strong> 31 October 2011 Page 7 of 14 BU Pigments Third quarter Nine Months in CHF million 2011 2010 % CHF % LC 2011 2010 % CHF % LC Sales 230 301 -24 -10 766 907 -16 -3 EBITDA before exceptional items 39 66 -41 -30 159 197 -19 -9 - margin 17.0% 21.9% 20.8% 21.7% EBIT before exceptional items 33 58 -43 -31 139 171 -19 -8 - margin 14.3% 19.3% 18.1% 18.9% EBIT 38 56 -32 -19 127 132 -4 9 Sales in Pigments were down 10% in local currencies and 24% lower in Swiss francs. In addition to a high comparable base in Q3 2010 that was still boosted by the recovery in demand post 2009 recession, the decline is partly due to destocking activities as customers purchased higher quantities in the first half-year ahead of announced price increases and in order to secure supplies. Additionally, a softening in global demand has been seen as customers further adjusted their supply-chain during the summer season to the expected lower demand. Volumes were also impacted by the increased focus on high value-added businesses. At the regional level, sales declined in all regions. Most business lines were impacted by the softening demand, with a more pronounced decline in Printing where the Business Unit continued to de-emphasize the commodity publication inks application. In the high value-added markets such as non-impact printing, customers reduced inventories. Sales in Coatings were down from a high comparable base in 2010 and also impacted by high levels of inventories held by customers. The EBITDA margin declined year-on-year, impacted by lower volumes and unfavorable currency effects, partially compensated by the substantially improved cost structure of the business. The Business Unit cost structure will be further improved by completing the exit from the Huningue site in France in 2012. In addition, Pigments will continue to improve its cost structure and competitiveness by implementing Clariant Excellence measures in its commercial and production processes. The integration of the Italtinto point of sales tinting business into the Coatings segment is progressing according to plan, allowing Pigments to execute its strategy to increase revenues downstream in the value chain. Initial market reactions and incoming orders were promising, with a high degree of interest from several customers in our tinting system technology.
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Quarterly Results Operationally on track, S

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