Letter from the Chairman

Dear Stakeholders,

2024 was a year that demonstrated Clariant’s resilience and agility in navigating significant challenges. While inflation and supply chain issues eased compared to 2023, the chemical industry saw an overall economic slowdown, weak demand coupled with global overcapacities, import competitions, and increasing regulatory demands. With its footprint, Clariant has a balanced exposure to the global market. If the company is exposed to negative factors in one region, it will benefit from positive developments in others. At the same time, the year 2024 showed once again the strategic importance of specialty chemical companies. Their innovative power is crucial to achieve the transition to a low-carbon and circular economy, and to meet the expectations of end-consumers who demand more sustainable products.

In this difficult macroeconomic environment, we delivered on our commitments with both sales and EBITDA margin results in line with our guidance. Based on the financial performance in 2024, the Board of Directors is proposing a distribution of CHF 0.42 per share, thus remaining at the same level for the third year in a row. We aim to deliver a reliable, sustainably growing and funded dividend in Swiss francs on the back of profitable growth, while maintaining an attractive payout ratio.

It goes without saying that we are not happy and not satisfied at all with the development of our share price. Last year, Clariant’s share price decreased in line with the average 18.1 % decline of its European peers’ share prices. Only one of the European peers showed an increase in its share price in 2024, while many others saw more significant declines. Nevertheless, the Executive Steering Committee (ESC) and the Board of Directors are convinced that the actions taken to achieve Clariant’s targets should positively impact the valuation of the company in the capital markets.

We also made substantial progress in our sustainability journey and strategic initiatives. I am particularly pleased to report several significant achievements that underscore our commitment to sustainable value creation. Our greenhouse gas emissions reduction efforts yielded impressive results through concrete actions. This includes further reducing our coal consumption by replacing it with natural gas and sustainable biomass and increasing our share of green electricity.

At the same time, the successful integration of Lucas Meyer Cosmetics and the efficient closure of our sunliquid™ operations are examples of our ability to make and execute strategic decisions effectively. Speaking of strategy: In this report, you will read more about the three newly introduced innovation arenas that Clariant is going to focus on in the coming years, as well as about the differentiated segment steering to make sure we allocate our resources as strategically as possible. Meanwhile, our innovation rate reached 16.9 %, and we are confident that we will increase this value to around 20 % in 2027.

Our improved safety performance places Clariant in the top quartile of the chemical industry for the second year in a row. We intend to remain in this top quartile by continuing to strengthen our safety measures and fostering a zero-accident culture. Our employee Net Promoter Score has improved significantly and is well above the industry median, while our Customer Net Promoter Score remained strong, placing us again well above the industry average. These results reflect our dedication to operational excellence and customer focus.

Looking ahead to 2025, while we anticipate continued macroeconomic challenges, we expect modest growth and improved profitability. Our clear strategic direction focusing on innovation, dedication to customers and people engagement, as well as our commitment to sustainability, will continue to drive value creation for all stakeholders. This specifically includes actions to achieve Clariant’s targets.

2025 will also bring change for me personally: having served as a Board member since 2012 and as Chairman since 2021, I will step down from these positions at the Annual General Meeting on 1 April 2025. Over the past few years, we have successfully reshaped the organization. We have reduced the number of business units from five to three – Care Chemicals, Catalysts, and Adsorbents & Additives – allowing us to be fully focused on our markets and customers, to whom we are closer than ever before. We have established the ESC, which has played a pivotal role in ensuring effective leadership in a period of significant change. This transformation was complemented by the reduction of hierarchical layers and complexity in the organization. We now have a maximum of six management layers between the operative staff and the CEO, which speeds up and improves decision-making.