RAG's subsidiary Degussa is on a successful course

Dusseldorf (ots) -

- Perceptible volume and price rises
- EBIT up 17 percent year-on-year in the first nine months
- Strong improvement in Group net income
- Outlook for 2006: sales and EBIT should rise more than
10 percent year-on-year

"Degussa's good operating earnings performance has continued in
the third quarter of 2006," commented Dr. Klaus Engel, Chairman of
the Board of Management of Degussa AG and Member of the Board of
Management of RAG Aktiengesellschaft, in Dusseldorf today. Backed by
the good global economic climate, the specialty chemicals company
increased its business in all regions as a result of strong demand.
Moreover, higher raw material costs were increasingly recouped by
raising selling prices.

Degussa lifted sales by 11 percent year-on-year from ¤2,497
million in the third quarter of 2005 to ¤2,776 million in the third
quarter of 2006. Overall, sales increased 14 percent to ¤8,232
million in the first nine months of 2006. 7 percentage points of this
rise came from higher selling prices, 5 percentage points came from
volume growth and a further 2 percentage points were attributable to
changes in consolidation.

In the third quarter, EBIT (earnings before interest and taxes)
was ¤242 million, a perceptible increase compared with both the third
quarter of 2005 (¤211 million) and the first two quarters of 2006
(Q1: ¤219 million; Q2: ¤218 million). EBIT grew by 17 percent to ¤679
million in the first nine months of this year, driven by higher
selling prices, increased volume sales, good capacity utilization and
cost savings.

Nevertheless, earnings were held back by further rises in raw
material and energy costs. In the nine months to September 2006
Degussa's internal raw material cost index was 17 percent
higher than in the first three quarters 2005. Energy costs also rose
17 percent in this period.

Group income before income taxes improved to ¤1,870 million in the
first nine months of 2006. Alongside the improvement in operating
earnings, this was chiefly attributable to book gains on the
divestment of the Construction Chemicals and Food Ingredients
activities. The year-back figure was minus ¤392 million as a result
of an impairment charge for the fine chemicals operations. Group net
income after minority interests thus rose to ¤1,489 million, compared
with a net loss of ¤542 million in the previous year.

Outlook for 2006: sales and EBIT should rise more than
10 percent year-on-year

Dr. Engel: "We assume that the good operating trend will continue
in the fourth quarter. For the year as a whole we anticipate that
sales and EBIT will be more than 10 percent above last year's level."

Key Data for the Degussa-Group
Q3 Q3 Change 9M 9M Change
in ¤ million 2006 2005 in % 2006 2005 in %

Sales 2,776 2,497 11 8,232 7,209 14

EBIT 242 211 15 679 579 17

Group income
before
income taxes 1,345 -682 - 1,870 -392 -

Group net
income after
minorities 1,114 -710 - 1,489 -542 -

Degussa-a wholly owned subsidiary of the RAG Group-is the global
market leader in specialty chemicals. Our business is creating
essentials-innovative products and system solutions that make
indispensable contributions to our customers' success. In fiscal 2005
around 44,000 employees worldwide generated sales of 11.8 billion
euros and operating profits (EBIT) of 940 million euros.

Originaltext: Degussa AG
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ISIN: DE0005421903

Contact:

Hannelore Gantzer
Spokeswoman
Corporate Communications

T +49-211-65041-368
F +49-211-65041-527

hannelore.gantzer@degussa.com

Degussa AG
Bennigsenplatz 1
40474 Dusseldorf
Germany

http://www.degussa.com


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