Solvay Sa · EURONEXT:SOLB
Solvay Sa — 9M 2004 Earnings Presentation
21 slides from Solvay Sa's earnings presentation, November 2004
Slide 1: Solvay Group Presentation: Financial review
SOLVAY GROUP PRESENTATION Financial review November 2004
Slide 2: Financial review
Financial review 2 © 2004, SOLVAY S.A November 2004
Slide 3: 2003 Highlights
2003 Highlights In an uncertain and difficult economic environment : w Resilient 2003 results : net income decrease of only 13% compared to record 2002 results despite a very strong EUR and a weak economic environment w Restructurings and cost-reduction measures w Cash flow (EUR 859 M) covered more
Slide 4: Key figures 2003
Key figures M EUR 2003 vs 2002 2003 2002 Sales* 7,919 7,557 -5% REBIT 844 673 -20% EBIT 757 662 -13% Charges on net indebtedness -88 -85 -3% Income taxes -151 -114 -25% Equity earnings -39 -48 +26% Income from investments +15 +15 n.s. Net income of the Group 494 430 -13% Net income (Solvay share) 46
Slide 5: 9-month 2004 highlights
9-month 2004 highlights ü Group net result : +40% ü Sales : +4% 4 +9% in Q3/04 vs Q3/03 with improvement in all sectors ü Pharmaceuticals results : +11% 4 Acceleration of strategy : major positive impact of recent partnerships 4 Agreements with the majority of US distributors à US sales reduction li
Slide 6: Key figures 9M2004
Key figures M EUR 9M2004 vs 9M2003 9M2004 9M2003 Sales 5,685 5,890 +4% * REBIT 493 586 +19% EBIT 487 558 +15% Charges on net indebtedness -66 -71 +8% Income taxes -115 -87 -24% Equity earnings -24 -1 -96% Income from investments +15 +16 +7% Net income of the Group 297 415 +40% Net income (Solvay sha
Slide 7: Financial items
Financial items üNon-recurring items : - EUR 28 M 4Provisions for restructuring (e.g. closure of soda ash production in Austria) 4Capital gain on the sale of participations (e.g. Esco joint venture in salt, Hedwin in industrial films) üIncome tax : -24% 4EUR 63 M tax credit in Germany in Q3/04 üMino
Slide 8: Sound balance sheet
Sound balance sheet ü Net indebtedness = EUR 1,089 million ü Shareholders’ equity = EUR 3,894 million è Net debt to equity ratio : 28% (end Q3/04) (compared to 38% as of end Q3/03) thanks to : w strong cash flow (EUR 751 M) : +22% w control of working capital needs 8 © 2004, SOLVAY S.A November 2004
Slide 9: Expenditures for the future
Expenditures for the future w Investments selectivity M EUR w HDPE recorded according to the equity 3200 2,968 method w Increased R&D efforts in Pharma 341 2002 + 22% 2400 2003 + 6% 2004 increased budget after Wyeth deal 1,300* (inclusive of EUR 38 M provision) 1600 1,172 R&D expenses 1,086 1,024 95
Slide 10: Performance (REBIT) by Sector
Performance (REBIT) by Sector PHARMACEUTICALS CHEMICALS PLASTICS* PROCESSING* +11% -9% +94% -1% • Acceleration of strategy : • Pressures on margins à major positive impact of Marked Growth in recent partnerships month-to-month Specialty Polymers • Inergy: volume growth • Increase of R&D charges • Im
Slide 11: Pharmaceuticals Sector
PHARMACEUTICALS SECTOR 9M04 Pharmaceuticals REBIT (EUR 187 M) : +11% 4 Major positive impact of the agreements with Wyeth and Bristol Myers Squibb 4 Increased R&D : +11% (to EUR 241 million, 18% of Pharma sales) 4 Still negatively affected by the weak USD (total sales -5% in EUR, -1% at constant exc
Slide 12: Chemicals Sector
CHEMICALS SECTOR 9M04 Chemicals REBIT (EUR 134 M) : -9% 4 Month-to-month Improvement (+22% in Q3/04 vs Q2/04) à prospects are encouraging 4 Soda ash w results suffered from the significant increases of energy costs and transportation costs w improving market conditions in Europe and in the US 4 Elec
Slide 13: Plastics Sector
PLASTICS SECTOR 9M04 Plastics REBIT (EUR 227 M) : +94% 4Specialty Polymers : major contributors to the results àstrong recovery in volumes w Existing applications (in particular for use in semi- conductors, electronics) w Development of new applications 4Vinyls : sustained demand and increase in PVC
Slide 14: Processing Sector
PLASTICS SECTOR 9M04 Processing REBIT (EUR 57 M) : -1% 4Raw material prices increase 4Inergy Automotive Systems w volume growth : +6.5% w margins pressures from the automotive market w geographical expansion in Asia 4Growth of Industrial films Specialties (for swimming pools, decorative laminates, m
Slide 15: Outlook for 2004
Outlook for 2004 “Although Group results for the 4th quarter 2004 should be lower than those for the 3rd quarter 2004, we confirm that the results for the full year 2004 should reflect good growth compared to those of 2003” Press release of October 29, 2004 15 © 2004, SOLVAY S.A November 2004
Slide 16: Information on Solvay shares
Information on Solvay shares 16 © 2004, SOLVAY S.A November 2004
Slide 17: Net dividend
Net dividend to increase dividend whenever possible and, if possible, not to decrease it à no dividend decrease since 20 years EUR/share + 10 % 2,0 1,80 1,80 1,65 1,70 1,70 1,6 1,2 0,8 0,4 0,0 1999 2000 2001 2002 2003 17 © 2004, SOLVAY S.A November 2004
Slide 18: Solvay shares
Solvay shares w Listed in EURONEXT BRUSSELS àincluded in Euronext 100 w Available in the US in the form of sponsored AMERICAN DEPOSITARY RECEIPTS traded over-the-counter 18 © 2004, SOLVAY S.A November 2004
Slide 19: Shareholding structure
Shareholding structure December 31, 2003 73 % free float, Solvac 27% stable shareholder Market capitalization : about EUR 5.7 Bn (April 2004) Individual Investors 49% Institutional Investors 51% * Solvac : 27% * Others : 24% 19 © 2004, SOLVAY S.A November 2004
Slide 20: Visit our Internet site
Visit our Internet site specifically designed for Investors www.solvay-investors.com and become member of our Shareholders’ Club 20 © 2004, SOLVAY S.A November 2004
Slide 21: Forward-looking statements disclaimer
“To the extent that any statements made in this presentation contain contain information that is not historical, these statements are essentially essentially forward- forward-looking. The achievement of forward- forward-looking statements contained in this presentation is subject to risks and uncert