Quarterly Report November 7, 2006

www.clariant.com

Clariant International Ltd Rothausstrasse 61 CH-4132 Muttenz 1, Switzerland

Clariant Reports Healthy Rise in 9-Month Sales Positive Pricing Trend; Charges Recorded

• Organic growth of 5% plus 3% positive currency effect, totalling 8% in CHF
• EBIT margin before exceptionals rises year-on-year to 7.5%
• Selling prices stable across most businesses, with positive momentum in the Third Quarter
• Raw material and energy costs still at high level
• Custom Manufacturing (CM) to be sold
• One-off charges relating to CM and Leather totalling CHF 179 million
• Full Year EBIT before exceptionals expected to be approximately CHF 575 million

Key Financial Group Figures

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.

• 2 Acquisitions/Divestitures in 2005 included Clariant Acetyl Building Blocks, Germany, of the Life Science Chemicals Division, sold in July 2005.
• * See Defi nitions of Terms of Financial Measurment on page 10.
• ** 2005 is restated to exclude the Discontinued operations of the Pharmaceutical Fine Chemicals business, sold in June 2006. In addition, as a result of the decision of the Board of Directors to sell the business Custom Manufacturing, these activities were also reclassifi ed to Discontinued operations.

MUTTENZ, Switzerland – November 7, 2006

Clariant posted a rise in sales for the first nine months of the year, with organic growth of 5% in local currency terms and 8% in Swiss franc terms compared with the same period a year earlier. Sales on a continuing basis reached CHF 6.090 billion during the period from CHF 5.770 billion a year earlier.

Prices remained stable over the year-to-date with positive momentum in the Third Quarter. Gross profit rose to CHF 1.901 billion from CHF 1.779 billion year-on-year. Gross margins increased to 31.2% from 30.8% a year earlier, despite the continued rise in raw material and energy costs during the period. EBIT before exceptionals increased by CHF 30 million to CHF 458 million from CHF 428 million in the same period of 2005. The EBIT margin rose to 7.5% from 7.4%, despite continued high sales and distribution costs.

Jan Secher, Chief Executive of Clariant, said: "Our top-line growth remains solid and our focus on pricing as a priority continues to be strong. We have seen a positive trend in pricing negotiations, enabling us to raise our prices by over half a percentage point in the Third Quarter."

Addressing underperformance

A review of the strategic options for the underperforming Life Science Chemicals (LSC) Division, started in August, has led to a series of actions, including initiating the process to sell the Custom Manufacturing business, which is now reported under Discontinued operations. The company posted a CHF 79 million impairment charge. As of January 1, 2007, the remaining Speciality Intermediate Business will be integrated into the Functional Chemicals Division and the LSC Division will cease to exist.

Furthermore, a reassessment of growth expectations of the Leather Business has led the company to record a goodwill impairment charge of CHF 100 million, correcting an over-valuation of the business. The company emphasized that Leather is performing satisfactorily and continued its positive trend in the Third Quarter.

"The decision to sell Custom Manufacturing and taking a charge in the Leather Business close the chapter on a very challenging period for Clariant over the past six years since the BTP acquisition," Mr. Secher said.

Net working capital stabilizing

As a consequence of the impairment charge in the Leather business and further restructuring costs, net income from continuing operations declined to CHF 108 million from CHF 246 million. An additional factor was the currency impact, which amounted to a negative CHF 5 million from positive CHF 44 million a year earlier.

Although net working capital levels continued to be negatively affected by the implementation of the new supply chain system, a stabilization occurred in the Third Quarter, creating an improvement in cash flow of CHF 88 million from the Half Year. Nevertheless, the year-to-date operating cash flow was CHF 141 million, down from CHF 195 million in the same period a year earlier.

Continued Growth Across Divisions

Increased demand drove top-line growth across most businesses. Functional Chemicals achieved strong organic growth of 8%, helped in part by significantly higher prices. Notably, the division saw continued robust demand for oil chemicals and oil field services, construction chemicals and personal care products. A solid quarter in Detergents with strong volumes and higher prices compensated for a weak first half.

Masterbatches continued to build on a strong first half with 8% organic growth fuelled by good performances in packaging and consumer goods. The business was also supported by higher prices, more than offsetting higher raw material costs. The agreed acquisition of Ciba Specialty Chemicals' masterbatches business – announced in October – is expected to reinforce the division's global market leadership position.

Organic growth across the Pigment & Additives Division was 5% in the first nine months compared to the same period a year earlier. Margins in the business grew strongly, supported in particular by high performance applications and specialties, as well as by increased demand for innovative halogen-free flame retardant and wax products.

The Textile, Leather & Paper Division benefited from relative strength in paper and leather chemicals. After a weak start early in the year, the Leather Business met satisfactory demand during the Third Quarter, particularly for wet-end chemicals. Good growth for optical brighteners continued, while colorants and surface & coating paper chemicals were the subject of strong demand in the Americas and Asia, boosting sales and margins. Textiles suffered from the continued challenging market environments in North America and south-east Asia. The company has appointed a new head of the Division in North America, and will increasingly focus on improving underperforming areas such as carpet, automotive and technical textiles.

Performance in the Life Science Chemicals Division continued to deteriorate significantly. Custom Manufacturing declined further due to the depressed agrochemical environment. The Specialty Intermediates businesses (silicone, glyoxal and glyoxilic acid derivative products) also posted lower results compared to a year earlier, with notably weaker demand than in the same period a year earlier.

Looking at the regional picture during the first nine months of the year, organic sales growth in the Asia Pacific region was 6%, including 21% in Greater China and 12% in India. In the Americas, sales grew 4%, including 5% in the United States, while in Europe sales increased 6%, including 8% in Germany.

Outlook for Full Year

In the context of a stable macro-economic environment, Clariant confirmed that sales growth in local currency terms will continue to be robust for the Full Year. The company anticipates operating income before excep tional items from continuing operations of approximately CHF 575 million for the Full Year. Raw material and energy prices are expected to remain at high levels. Mr. Secher said: "Clariant is doing well on top-line line growth and our gross margins are competitive. We are taking decisive actions with our under-performing units. The core businesses are showing improvements and we are taking further measures to improve the company's overall performance."

Financial Review Financial Discussion Third Quarter

Economic Environment

The general macroeconomic environment and outlook for 2007 remains stable, although growth figures are expected to be slightly weaker than for 2006. At a regional level, the U.S. housing market is expected to cool. Europe's economic momentum is likely to be sustained, but the German VAT increase due at the beginning of 2007 constitutes a risk factor. Meanwhile, emerging markets and developing countries should continue to enjoy strong growth. While oil prices have recently been receding, they are still at a high level and remain vulnerable to renewed upward pressure in the event of geopolitical volatility.

Sales and Operating Results

In the Third Quarter, consolidated sales from continuing operations showed a robust performance, with an increase of 6% in local currencies and 5% in Swiss franc terms compared to the previous year. Currency movements are starting to exert a slightly negative impact on sales. Organic growth – which excludes the CABB business sold in 2005 – totalled 7% in local currency terms. Positive effects from the Clariant Performance Improvement Program and higher fixed costs absorption due to higher sales volume overcompensated for the adverse effects from higher material costs of 3% and increased energy expenses.

The gross margin consequently improved to 30.7% of sales in the Third Quarter of 2006 from 29.9% in the same period of 2005.

Marketing, distribution, administration and general overhead costs amounted to 20.3% of sales, a slight increase on the Third Quarter of 2005 (20.2%). This is mainly due to ongoing costs relating to supply chain and process improvements.

Research and development costs rose to CHF 52 million in the Third Quarter of 2006 from CHF 48 million in the previous year.

Income from associates decreased to CHF 4 million in the Third Quarter of 2006. This compares to CHF 11 million in the corresponding period of the previous year.

Restructuring costs and impairment in the amount of CHF 116 million include a goodwill write down of CHF 100 million in the Leather business as well as restructuring activities in UK, Germany and the U.S..

Gains before taxes from the sale of subsidiaries of CHF 4 million relate to the disposal of the infrastructure service unit in the Gersthofen site, Germany.

Net financial expenses increased to CHF 24 million in the Third Quarter of 2006 from CHF 15 million in the Third Quarter of the previous year. This was mainly due to exchange-rate differences, which amounted to a positive CHF 3 million in the Third Quarter of 2006 versus a positive CHF 9 million in the prior-year period. At CHF 27 million, the financial result before exchange rate differences was almost unchanged in Third Quarter 2006 from its Second-Quarter level (CHF 28 million). However, it was slightly higher than the CHF 24 million figure for Third Quarter 2005, which was positively impacted by one-off items. Average gross financial debt amounted to CHF 2.2 billion on September 30, 2006, compared to CHF 2.7 billion a year earlier.

Tax expenses in the Third Quarter were positively influenced by a substantial proportion of profits generated in low-tax countries. However restructuring costs and impairments that are mostly tax-ineffective negatively impacted the tax rate.

Net loss from Continuing operations for the quarter was CHF 14 million, down from net income of CHF 110 million reported for the same period of the previous year.

The loss from Discontinued operations amounted to CHF 78 million and contains a CHF 79 million impairment charge on the Custom Manufacturing fixed assets.

Balance Sheet Key Figures

Total assets increased to CHF 7.650 billion from CHF 7.324 billion in December 2005 (June 2006: CHF 7.738 billion). The main factor was an increase in cash and cash equivalents. Non-current financial debt and cash, cash equivalents increased as a result of the launch of the EUR 600 million Eurobond in April.

Equity fell to CHF 2.454 billion at the end of the Third Quarter from CHF 2.591 billion at the end of 2005. This was a result of the net loss and the CHF 58 million reduction in the share capital in June.

Net debt amounted to CHF 1.558 billion on September 30, 2006, compared to CHF 1.508 billion on December 31, 2005. The increase was mainly due to higher net working capital and capital expenditure. On June 30, 2006, net debt stood at CHF 1.574 billion.

Gearing, which reflects net financial debt in relation to equity including minorities, increased to 63% on September 30, 2006, from 58% on December 30, 2005.

Cash Flow

Cash flow from operating activities before changes in working capital was CHF 166 million for the Third Quarter of 2006. This compares to CHF 186 million for the Second Quarter, and CHF 118 million for the Third Quarter of 2005. The operating cash flow for the first nine months of 2006 was CHF 481 million, compared to CHF 353 million for the first nine months of 2005.

Working capital increased by CHF 78 million during the Third Quarter of 2006, compared to a decrease of CHF 105 million for the same period of 2005. In the first nine months of 2006, working capital increased to CHF 340 million from the CHF 158 million figure for the same period of the prior year. Negative effects related to the implementation of the new supply chain system stabilized in the Third Quarter.

Cash flow from operating activities was CHF 88 million in the Third Quarter of 2006, compared to CHF 223 million for the same period a year earlier. For the first nine months of 2006, cash flow from operating activities amounted to CHF 141 million. This compares to CHF 195 million for the same period in the prior year.

Capital expenditure (PPE) was CHF 88 million for the Third Quarter of 2006, compared to the CHF 87 million reported for the same period of the previous year. For the first nine months of 2006, capital expenditure amounted to CHF 252 million. This compares to CHF 238 million for the first nine months of 2005.

Textile, Leather & Paper Chemicals

See Defi nitions of Terms of Financial Measurements on page 10

The Division Textile, Leather & Paper Chemicals showed a rise in sales versus the same quarter in 2005, on substantial growth in volumes. Organic growth amounted to 4% and proved strongest in paper and leather chemicals. A negative currency effect of -1% reduced the growth in revenues to 3% in Swiss francs. Prices showed a general stabilization versus the prior quarter, and are slightly negative in year-on-year terms. Operating margins were adversely affected by the change in product mix, coupled with negative currency influences. At a regional level, the strongest growth was recorded in Asia, Latin America and countries such as Turkey, India and Pakistan. By contrast, the level of business in Europe performed moderately. Capacity utilization of production sites was high.

Sales in the Textile Business were slightly down on last year's level. The pressure on prices in textile dyes and textile chemicals continues unabated. The market situation in North America and South-east Asia remained under strain compared with the previous year. Cost-cutting measures were introduced in response to this trend. The encouraging growth in Greater China was mitigated by declining sales in other key Asian markets. Adverse currency influences led important production countries such as Indonesia to lose some of their competitiveness. Nevertheless the Textiles Business was successful in increasing sales of dyes in the Third Quarter compared with the Third Quarter of 2005. This increase was in spite of a reduction in the size of its product portfolio during the first half of the year.

In Paper Chemicals, the highly positive momentum in optical brighteners continued. Furthermore, all business areas contributed to the impressive sales growth amid stable prices. Optical brighteners, colorants and surface & coating paper chemicals were the subject of strong demand in the Americas and Asia in particular. In the special coatings business, an important milestone was achieved with the FDA approval for "Cartafluor", a food-packaging coating.

Business conditions in the Leather Business continued to show an increasingly positive trend in the Third Quarter. A significant expansion of sales in South America and Asia was especially pleasing to note. In a competitive pricing context, prices were held at the previous year's level. Sales in Europe matched the level of the prior year. The growth was most marked in wet-end chemicals and dyes. The market for finishing products proved stable. However as a result of the critical review of the growth prospects, the goodwill pertaining to this business was written off for impairment by the amount of CHF 100 million.

Pigments & Additives

See Defi nitions of Terms of Financial Measurements on page 10

The Pigments & Additives Division reported high single-digit growth rates for the Third Quarter. This encouraging business trend was primarily attributable to strong demand for most of our product lines. Organic growth amounted to 7% on slightly negative currency movements. A notable development was the comparatively solid performance in August, which traditionally suffers from the annual maintenance work that is carried out. However, the competitive environment remains a challenge in an attractive market. Despite the pressure on prices, the operating result improved considerably. This stemmed primarily from improvements in the efficiency of production processes, together with strong scale effects. In regional terms, the division experienced good growth rates in Asia and a stable trend in the highly developed European market.

The Coating Industry continued to increase its share of overall sales with strong volume growth. High Performance Applications and Specialties turned in a particularly pleasing performance.

The Plastics Industry remained on a growth trajectory, though initial signs of a slowdown in momentum manifested themselves around the end of the quarter. The market pressure on price levels was more than compensated by higher volumes. The importance of Wood Coating, High-Quality Pigments and Antioxidants was further underpinned by constant growth rates.

To meet increasing demand, Clariant in September signed an agreement with a group of Asian industrialists to co-operate in the production and distribution of standard antioxidants.

Business Printing Industry stabilized, during what has been a period of intensifying competition, enabling it to post moderate growth in the Third Quarter. As in previous quarters, the technologically sophisticated niche of Non-impact Printing was the primary value driver.

The Specialties Business significantly increased its revenue year on year. Innovations such as the Exolit® flame retardant product range and Licocene® wax product family further improved their market penetration.

Masterbatches

See Defi nitions of Terms of Financial Measurements on page 10

The Masterbatches Division showed continued growth momentum in the Third Quarter. The comparable sales growth of 7% was clearly above last year's level, while currency movements had a slightly negative effect. Higher sales prices in a competitive environment and robust volumes contributed to a 6% growth in Swiss francs. The EBIT margin improved in the Third Quarter to 10.2% compared to 8.4% the year before thanks to the division's ability to drive through price increases that more than offset rising raw material costs.

Growth in plastic consumption is being driven by the substitution of plastics for other materials (such as glass, metal and wood) because of cost, functionality, and recyclability features. Masterbatches' growth results from the strength of the global plastics market, in combination with gains in market share.

The Masterbatches business grew strongly in the packaging (personal care, cosmetics and food & beverage) and consumer goods (electronics, appliances and sports & leisure) segments. Business was particularly strong in both North and Latin America, as well as in core European markets including Germany and Italy. Growth was especially strong in China. However growth in Asian countries excluding China was adversely impacted by strong domestic currencies.

Clariant continues to grow by focusing on market segments with high differentiation potential and key multinational customers. At the beginning of October, Clariant signed an agreement with Ciba Specialty Chemicals to purchase its masterbatches business with sales of CHF 80 million. The business has production facilities in France, Saudi Arabia, and Malaysia. The acquisition will help the division optimize its service capabilities to European countries and enhance its presence in the fastgrowing Middle Eastern and Asia-Pacific markets. The acquisition is on track to close by year end.

Functional Chemicals

See Defi nitions of Terms of Financial Measurements on page 10

The Functional Chemicals Division recorded strong demand across all Businesses. In the quarter under review, the division posted revenues of CHF 550 million, representing organic growth of 13%. This increase was driven by prices as well as volumes, and in particular by the Process Chemicals Business. Currency movements were mildly positive. Significantly higher raw material prices exerted downward pressure on margins. Substantially higher selling prices and greater capacity utilization nevertheless led to an improved result.

Higher price levels and double-digit volume growth allowed Detergents to compensate for the weak business levels of the prior quarter. Growth was driven by the high level of orders in North and South America, together with a comparatively strong mid-quarter performance. Following a period of weakness, the detergents industry experienced a backlog of demand in the Third Quarter. Fresh rises in prices for raw materials and energy put downward pressure on the operating result. In structural terms, the industry remains characterized by a high degree of cost awareness. The announced closure of the surfactant facility in Knapsack, Germany, was concluded successfully at the end of September.

As in the previous quarter, Process Chemicals showed excellent growth within the division. Volume expansion coupled with significant price improvements, led to broad-based, double-digit growth in revenues. Clariant Oil Services enjoyed strong demand in Asia and North America. Functional Fluids met with strong sales in Europe, especially in heat transfer fluids and specialty solvents.

Further price increases and strong demand combined to produce growth in revenues for Performance Chemicals. Growth was driven in particular by a positive business trend for Personal Care and Construction Chemicals. Precursors for specialty plasticizers continued to be well received, and benefited from the favorable situation in the construction sector. To further boost demand for this product category and heighten market penetration in North America, an additional production unit was commissioned in Mexico in July. The key regions of Europe and North America improved relative to the previous year, while Latin America showed a normalization again after a difficult start to the year.

Clariant Acetyl Building Blocks (CABB), part of the Life Science Chemicals Division, was sold effective end of July 2005. Under IFRS, the disposal did not qualify for reporting as Discontinued operations. On June 30, 2006, the Pharmaceutical Fine Chemicals unit was sold, and is consequently shown under Discontinued activities. Clariant has started the process to dispose of its Custom Manufacturing business. With immediate effect Custom Manufacturing is reported as a Discontinued operation.

Life Science Chemicals

** Restated for Discontinued operations (see Note 6)

See Defi nitions of Terms of Financial Measurements on page 10

The competitive environment for Life Science Chemicals remained difficult. The Specialty Intermediates Businesses (silicone, glyoxal and glyoxylic acid derivative products) posted lower resutls and the Custom Manufacturing business deteriorated further due to the depressed agrochemical environment. Organic growth – adjusted for the disposal of the CABB business on July 31, 2005 – was negative 9% compared with the Third Quarter of 2005. This, combined with a neutral currency effect, led to reduced sales in the Third Quarter.

Higher selling prices in Specialty Intermediates were achieved. However, increased input cost for the glyoxylic acid downstream products as well as reduced volumes, weighed on the business performance. Routes to a new class of nutraceuticals (polyhydroxphenols) were established using our unique 2-carbon chemistry.

The decline of Custom Manufacturing accelerated, due to very weak demand for agrochemical intermediates, especially fungicides, as a result of overstocking along the entire value chain. The resulting drop in capacity utilization at German and American production sites could not be compensated by other industrial chemical segments and cost savings. Additional restructuring measures to improve efficiency were defined.

Regions

** Restated for Discontinued operations (see Note 6)

Europe

European sales accounted for 47% of the group total in the Third Quarter of 2006, and showed an increase to CHF 952 million from CHF 889 million in the same period of 2005. After accounting for the disposal of the CABB business, organic growth in Europe was 7% in local currency and 9% in Swiss francs in the quarter under review.

Sales increased throughout Europe, with Germany seeing organic growth of 11% in local currency and 13% in Swiss francs. France and Eastern Europe also grew strongly, at a rate well above the European average. However, they were outperformed by Turkey, which was one of the top-ranking countries in terms of local growth in the Third Quarter. An exception was the UK, which showed another quarter of negative growth in local currency.

Americas

Sales in the Americas amounted to 28% of the group total. The U.S. recorded sales of CHF 245 million, unchanged from the same period of the previous year, after stripping out the effect of the CABB disposal. The region matched the previous quarter's trend of 3% organic growth in local currency terms.

Most countries in Latin America once again recorded growth in sales. Argentina confirmed its leading growth status, heading the regional table with a 24% growth rate compared to the same period of the previous year. Despite Brazil's economy being jeopardized by a strengthening local currency, there was a continuation of the positive trend - if at a low rate.

Asia, Africa, Australia

The Asia, Africa, Australia region – contributing 24% of group sales – showed robust, double-digit growth in the Third Quarter. The region was led by China and India, with local-currency growth rates of 32% and 13% respectively. Japan also reinforced the regional trend with growth of 7% in local currency. However growth in Taiwan, Malaysia and Indonesia lagged behind the regional average.

Definition of Terms of Financial Measurements

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 – (Earnings Before Interest, Taxes, Depreciation and Amortization) is calculated as operating income plus depreciation of PPE, impairment of PPE/goodwill and amortization of intangibles, and can be reconciled from the Condensed Financial Statements as follows:

EBITDA (Continuing)

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)

Operating income before exceptional items

– is calculated as operating income before restructuring and impairment and gain/loss on disposals

Operating income before exceptionals (Continuing)

Net debt

– is the sum of current and non-current fi nancial debt less cash and cash equivalents and current deposits reported in other current assets.

Net Debt

** Restated for Discontinued operations (see Note 6)

Condensed Financial Statement of the Clariant Group

at September 30, 2006

Consolidated balance sheets (unaudited)

1 Includes short-term deposits of 0 (2005: CHF 5 million)

Currency impact YTD 2006 of CHF -5 mn vs YTD Sep 2005 of CHF +44 mn.

** Restated for Discontinued operations (see Note 6)

Consolidated statements of cash fl ows (unaudited)

Consolidated statement of changes in equity (unaudited)

1. Basis of preparation of financial statements

These financial statements are the interim condensed financial statements of Clariant Ltd (hereafter "the interim financial statements"), a company registered in Switzerland, and its subsidiaries for the ninemonth period ended on 30 September 2006 (hereafter "the Group"). They are prepared in accordance with the International Accounting Standard 34 (IAS 34 "Interim Financial Reporting") and were approved on November 3 2006 by the Board of Directors. These interim financial statements should be read in conjunction with the Consolidated Financial Statements for the year ended 31 December 2005 (hereafter "the annual financial statements") as they provide an update of previously reported information.

The accounting policies used are consistent with those used in the annual financial statements. Where necessary, the comparatives have been reclassified or extended from the previously reported interim results to take into account any presentational changes made in the annual financial statements or in these interim financial statements.

The preparation of the interim financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and disclosure of contingent liabilities at the date of the interim financial statements. If in the future such estimates and assumptions, which are based on management's best judgment at the date of the interim financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change.

2. Seasonality of Operations

The Group operates in industries where significant seasonal or cyclical variations in total sales are not experienced during the financial year.

3. Restructuring and Impairment

During the reporting period, the Clariant Group recorded expenses for restructuring and impairment in the amount of CHF 189 million in Continuing operations. After performing impairment tests and as a result of a review of the business and the future outlook, goodwill of the Leather Business was impaired by CHF 100 million. The remaining impairment mainly concerned projects in Germany and smaller projects in France and the UK, where the headcount is being further reduced and fixed assets that were made redundant were written off.

4. Nominal Value Reduction

On April 7, 2006 the ordinary General Meeting of shareholders approved the repayment of CHF 0.25 of the nominal value of each registered share, resulting in the reduction of the nominal value from CHF 4.75 to CHF 4.50 per registered share. The pay-out reduced the share capital by CHF 57 540 000 and took place on June 22 2006.

5. Bond Issue

On April 6, 2006 Clariant launched a seven-year EUR 600 million Eurobond. The bond pays a coupon of 4.375% and was issued at a price of 99.628%. The main purpose of this bond is to refinance financial liabilities with maturities of a shorter term and less favorable conditions.

6. Discontinued Operations

On June 30, 2006 Clariant sold its Pharmaceutical Fine Chemicals business to TowerBrook Capital Partners. As a result, these activities are now reported as Discontinued operations in accordance with IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations". The transaction resulted in cash proceeds of CHF 54 million and a book loss of CHF 93 million net of tax. The deal comprised the sale of companies in Germany, France, England and the US and an asset deal in Italy.

Sales and operating result of the Pharmaceutical Fine Chemicals business for the first six months of 2006 and nine months of 2005 were as follows:

In September 2006 Clariant launched a project to sell its Custom Manufacturing Business pertaining to the division Life Science Chemicals. The business comprises sites in Germany and in the US. It is assumed that it will be sold in its present condition within the next twelve months. As a result, these activities are now reported as Discontinued operations in accordance with IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations". The related assets and liabilities were reclassified to Assets Held for Sale and associated liabilities in the balance sheet. Based on the sale price expected to be realized on the disposal of this business, the assets were depreciated for impairment by the amount of CHF 79 million.

Sales and operating result of the Custom Manufacturing Business for the first nine months of 2006 and 2005 were as follows:

The line Income from Discontinued operations in the Income Statement comprises the net result of the Pharmaceutical Fine Chemicals business and the Custom Manufacturing business for the reporting period. As Pharmaceutical Fine Chemicals was sold on June 30, 2006, only six months' activities are reported in 2006. For 2005 this line comprises the net result of Pharmaceutical Fine Chemicals and Custom Manufacturing, as well as a final settlement amount of CHF 2 million resulting from the disposal of Electronic Materials which took place in 2004.

7. Non-current Assets Held for Sale

In non-current assets held for sale Clariant reports assets and associated liabilities of the Custom Manufacturing activities. The previously reported assets held for sale and related liabilities, pertaining to Site Services, Energy Supply, ESHA Services and Enterprise Functions of the subsidiary Industriepark Gersthofen Servicegesellschaft in Germany were sold on September 30, 2006 at approximately book value. On May 15 2006 Group Management had announced its intention to sell these activities. On reclassification to non-current assets held for sale these balance sheet items were revalued to the lower of book value or fair value less costs to sell. This revaluation caused an impairment devaluation of CHF 43 million, which is reported in the Income Statement line Restructuring and Impairment.

8. Events after the balance sheet date

On October 4, 2006 Clariant announced its intention to acquire the Masterbatch business from Ciba Specialty Chemicals. The activities comprise production facilities in France, Malaysia and Saudi Arabia with around 300 employees and sales of approximately CHF 80 million. The transaction is subject to approval of the relevant authorities and is expected to be closed before the end of the year.

9. Divisional Figures

** Restated for Discontinued operations (see Note 6)

10. Divisional Margins

** Restated for Discontinued operations (see Note 6)

11. Regional developments

** Restated for Discontinued operations (see Note 6)

12. Foreign Exchange Rates

13. Condensed Earnings Per Share Data

Consolidated income statements (unaudited)

1 Currency impact YTD 2006 of CHF -11 mn vs YTD Mar 2005 of CHF +14 mn.

** All numbers have been restated to report as Discontinued operations Pharmaceutical Fine Chemicals, sold in June 2006, and Custom Manufacturing, reclassifi ed to Discontinued operations in September 2006.

Consolidated income statements (unaudited)

Currency impact YTD 2006 of CHF -8 mn vs YTD Jun 2005 of CHF +35 mn.

** All numbers have been restated to report as Discontinued operations Pharmaceutical Fine Chemicals, sold in June 2006, and Custom Manufacturing, reclassifi ed to Discontinued operations in September 2006.

Regional developments

Regional developments

Divisional Figures

Divisional Margins

Divisional Figures

Divisional Margins

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 22,500 people. Headquartered in Muttenz near Basel, it generated sales of around CHF 8.2 billion in 2005.

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

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 knowhow 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

Calendar of Corporate Events

November 14-15, 2006 Clariant meets Investors, Basel November 30, 2006 Merrill Lynch Conference, London January 18-20, 2007 UBS Conference, Gstaad February 20, 2007 Full Year 2006 Results

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