21 August 2006 - The global specialty chemicals supplier Cognis reports net external sales of 1,715 million euros for the six months to June 30, 2006, a 7.0 percent increase compared to the same period in 2005. Adjusted EBITDA (earnings before net financial result, income taxes, depreciation, amortization and exceptional items) also grew by 7.0 percent to 214 million euros, and the company's overall profit margin was 12.5 percent. Furthermore, the company announces that the process of reviewing the strategic options for Cognis has now been completed: The shareholders decided to continue their investment for the next couple of years.

The Strategic Business Units (SBUs) Care Chemicals, Nutrition & Health, Functional Products, and Process Chemicals all posted sales that exceeded the 2005 figures, while Oleochemicals’ sales remained stable. All regions contributed to this positive development. The growth in the company’s Adjusted EBITDA reflects this improvement in sales, and also the fact that despite increased raw material and energy costs, the company has been able to reduce its overall costs by further improving operational efficiency. Adjusted for the effects of currency fluctuations, sales increased by 4.5 percent and Adjusted EBITDA by 5.5 percent. Comments Antonio Trius, CEO of Cognis: “We are satisfied with the business’s development over the first six months. Our innovative product offering and branded ingredients have made a particular contribution to achieving this result.”

Sales by Strategic Business Unit (SBU)
With sales up 6.0 percent to 682 million euros, Care Chemicals, Cognis’ largest SBU, achieved significant growth. The main drivers were strong sales of surfactants and performance ingredients, with demand for innovative concepts rising substantially in this segment.

Sales in the Nutrition & Health SBU increased by 5.4 percent to 164 million euros. This is largely due to the growth of sterols, reflecting significant gains with international customers, as well as Cognis’ major investment in new esterification capacity at Illertissen last year. Sales growth of other branded ingredients, in particular Tonalin conjugated linoleic acid (CLA), as well as products in the pharmaceuticals and healthcare business, contributed to the strong results.

Functional Products reported the highest growth of any SBU, with a rise of 11.8 percent to 431 million euros. All market segments contributed to this development.

Sales of Process Chemicals totaled 130 million euros, up 5.3 percent. This SBU benefited particularly from strong demand in the Asia-Pacific region, where Cognis has seen double-digit sales growth in both its textile technology and leather technology businesses.

With 282 million euros, Oleochemicals’ sales remained stable compared with the same period in 2005.

Review of strategic options for Cognis completed
Cognis Holding Luxembourg S.àr.l., which is majority owned by the Permira Funds and GS Capital Partners, has completed the exploration of various strategic options for Cognis, started in April. After a thorough review, Cognis Holding Luxembourg S.àr.l. has decided not to pursue any of those options, but instead to continue its investment for the next couple of years. This is the most attractive option for the shareholders. With its clear focus on innovation-driven growth markets around the wellness and sustainability megatrends, Cognis offers high growth potential and has good prospects for the future.

Overview of results for the first half-year 2006

Sales in millions of euros	First half-year 2005*	First half-year 2006	Change
Cognis Group	1,602	1,715	+7.0%
Care Chemicals	643	682	+6.0%
Nutrition & Health	156	164	+5.4%
Functional Products	385	431	+11.8%
Process Chemicals	124	130	+5.3%
Oleochemicals	282	282	–
Earnings in millions of euros (Cognis Group)	First half-year 2005	First half-year 2006	Change
Adjusted EBITDA	200	214	+7.0%

*The 2005 figures have been amended to reflect the new SBU composition, which has been in place since January 1, 2006.