Solvay Sa · EURONEXT:SOLB
Solvay Sa — Investor Presentation (November 2004)
50 slides from Solvay Sa's investor presentation, November 2004
Slide 1: Solvay Group Presentation: Sector review
SOLVAY GROUP PRESENTATION Sector review November 2004
Slide 2: Sector review
Sector review 2 © 2004, SOLVAY S.A November 2004
Slide 3: A Group with 3 sectors
a GROUP with 3 sectors w Pharmaceuticals : acceleration of strategy through partnerships with major players and reinforcement of R&D programs w Chemicals : continued reinforcement of leadership and competitiveness through restructuring, rationalizations, acquisitions and partnerships to improve marg
Slide 4: Pharmaceuticals sector
Pharmaceuticals sector Creation of a new wholly-owned entity which will consolidate all of the Group’s pharmaceutical businesses worldwide à Autonomous structure for the Pharmaceuticals activities reflecting the specific nature of these activities (research, product development, marketing, distribut
Slide 5: Chemicals sector
Chemicals sector the chemical integration rationale Minerals « pole » àSoda ash and derivatives àBarium and Strontium carbonates àAdvanced Functional Minerals Electrochemistry and Fluor « pole » à Electrochemistry à Fluor Oxygen « pole » à Hydrogen peroxyde à Detergents à Caprolactones 5 © 2004, SOL
Slide 6: New Plastics Sector
New Plastics Sector grouping the Plastics and Processing Sectors w Balance and competitiveness à to affirm leadership even better by focusing efforts w Compactness and effectiveness à to help to achieve the operating cost savings (more compact structure with less interfaces and simplification of a n
Slide 7: Strategic focus on Pharmaceuticals
PHARMACEUTICALS SECTOR Strategic focus on Pharmaceuticals à Pharmaceuticals has the means to enter into the future with confidence Acceleration of strategy : w Pharmaceuticals pipeline never been this rich (30 molecules) w Alliances with highly skilled partners (Wyeth & Lundbeck, BMS, Quintiles, Zen
Slide 8: 9M04 Pharmaceuticals REBIT
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 9: Flagship products
PHARMACEUTICALS SECTOR Flagship products 9M04 M EUR M EUR 2003 9M03 9M04 vs 9M03 2003 9M03 9M04 • Androgel® 250 186 170 • Estratest® 131 112 76 GYNECOLOGY/ • Prometrium ® 77 59 48 • Influvac 68 51 53 ANDROLOGY 682 521 442 -15% • Creon® 137 101 96 GASTRO- • Pantoloc ® 124 88 97 ENTEROLOGY 536 391 395
Slide 10: Research & Development bearing fruit
PHARMACEUTICALS SECTOR Poised Research & Development bearing fruit 4 Acceleration of R&D programs : à R&D expenses about 18% of Pharma sales (est. 2004) 4 Favorable development of the R&D portfolio 4 More than 30 molecules in development 10 © 2004, SOLVAY S.A November 2004
Slide 11: Transition period for the Pharmaceuticals results
PHARMACEUTICALS SECTOR Transition period for the Pharmaceuticals results w Solvay has a diversified product portfolio, albeit with a number of mature products w The Group’s current pharma development potential will start producing its effects in 18 to 24 months 11 © 2004, SOLVAY S.A November 2004
Slide 12: R&D expenditures
PHARMACEUTICALS SECTOR R&D expenditures Remains well in line with our goal to maximize external/internal expenditures towards clinical development BDG in M E U R 1998 1999 2000 2001 2002 2003 2004 TOTALR&D 175 229 247 222 270 284 336 % SALES 15 17 16 13 14 16 % INT 66 65 62 64 52 48 %EXT 34 35 38 36
Slide 13: Growth through a focused R&D program
PHARMACEUTICALS SECTOR Growth through a focused R&D program Gynecology/andrology Gastroenterology 18% 36% (Women Health, (Irritable Bowel Syndrome, Men Health,) Delayed Gastric Emptying, Functional disorders) Mental health Cardiology 28% (Anxiety & Depression, 18% (Arrhythmias, Psychosis, Parkinson,
Slide 14: Areas of R&D focus
PHARMACEUTICALS SECTOR Areas of R&D focus Gynecology/ Psychiatry Cardiology Gastroenterology Andrology Anxiety & Arrhythmia Motility Hormone Treatments for Depression Disorders Women Congestive Heart Failure Irritable Hormone Psychosis Bowel treatments for Men Hypertension Syndrome Parkinsons Non-ho
Slide 15: 2004: bearing fruit
PHARMACEUTICALS SECTOR 2004 : bearing fruit Gastro- Mental Gynecology Cardiology Enterology Health /andrology Pre-Clinical 321, 323, NASEP 318, 326, 330 316, 322, 327, 328, 329 Phase I 1 3 1 3 317 313, 314, E+P gel 319, 320 =9 MARINOL aerosol tedisamil (oral) Phase II 2 2 1 1 324, 325 310, 308 cetro
Slide 16: Novel agreement with Quintiles
PHARMACEUTICALS SECTOR Novel agreement with Quintiles to accelerate throughput of Pharmaceuticals R&D w QUINTILES will provide USD 25 M in development services for selected SOLVAY clinical phase II projects è bearing around 50% of the normal costs and the uncertainties of the outcomes for these proj
Slide 17: Mental Health: bifeprunox
PHARMACEUTICALS SECTOR Mental Health : bifeprunox w Co-development agreement signed with Lundbeck in Dec. 2000 è Resulted in successful completion of Phase II in psychosis and start of Phase III in Sept. 2003 w Co-development and co-commercialization agreement signed with Wyeth in March 2004 è Scope
Slide 18: Agreement with Wyeth: summary
PHARMACEUTICALS SECTOR Agreement with Wyeth : summary THREE AGREEMENTS: w Co-development and co- commercialisation of bifeprunox in US, Japan, Canada, Mexico w Co-development and co- commercialisation of SLV310, SLV 313, and SLV 314 globally w Co-promotion of WYETH’s antidepressant EFFEXOR® XR in th
Slide 19: Financial impact of the agreement with Wyeth
PHARMACEUTICALS SECTOR Financial impact of the agreement with Wyeth 4 Signing fee of EUR 118 M (USD 145 M) 4 Sharing of development and commercial costs 4 Milestone payments and royalties on sales 4 Opportunity to co-promote Effexor® XR in the USA 19 © 2004, SOLVAY S.A November 2004
Slide 20: Bifeprunox
PHARMACEUTICALS SECTOR Bifeprunox w Bifeprunox = partial dopamine agonist developed as a novel treatment for schizophrenia + potential to be developed in other disorders, i.e. bipolar disorder w Phase II data for bifeprunox has shown efficacy in patients with schizophrenia + expected to provide an i
Slide 21: Gastroenterology: Cilansetron
PHARMACEUTICALS SECTOR Gastroenterology : Cilansetron w Submission of registration dossiers ü in UK for the EU (in April 2004) ü in the USA (in June 2004); Accepted for Priority Review by the FDA (feedback expected in Jan. 05) w Some pivotal clinical data presented at Digestive Disease Week in May 2
Slide 22: Cilansetron: significant symptom relief in Phase III
PHARMACEUTICALS SECTOR Cilansetron : significant symptom relief reported in Phase III clinical trial w significant benefits including overall IBS symptom improvement, relief of abdominal pain/discomfort and abnormal bowel habits (including diarrhea and urgency) in both men and women w after six mont
Slide 23: Agreement with Bristol Myers Squibb for SLV 319
PHARMACEUTICALS SECTOR Joint development/commercialization agreement with Bristol Myers Squibb for SLV 319 w worldwide agreement for the Solvay compound SLV319 (Phase I) - and two back-up compounds – with potential for use in treating obesity and other metabolic disorders w payment of a USD 10 milli
Slide 24: Recent achievements
PHARMACEUTICALS SECTOR Recent achievements REGULATORY APPROVALS ØESTROGEL® USA launched ØLUVOX® USA approvable ØINVIVAC® EU launched (limited) ØTEVETEN® PLUS launched REGULATORY SUBMISSIONS MADE ØLUVOX® SAD JAPAN ØCREON® JAPAN Øcilansetron UK (for European Union) / USA PHASE III ONGOING Øbifeprunox
Slide 25: Upcoming critical milestones
PHARMACEUTICALS SECTOR Upcoming critical milestones REGULATORY SUBMISSIONS Øtedisamil intravenous PHASE III DECISIONS AND STARTS ØCetrorelix (women’s health – endometriosis, men’s health – benign prostate hypertrophy) ØSLV308 (psychiatry, parkinson) PHASE II STARTS ØJAPAN cilansetron, bifeprunox, te
Slide 26: Trends for Pharmaceuticals in 2004
PHARMACEUTICALS SECTOR Trends for Pharmaceuticals in 2004 “For the whole year 2004, the Pharmaceuticals sector should show results in line with those from 2003” Press release of October 29, 2004 26 © 2004, SOLVAY S.A November 2004
Slide 27: Strategic focus on Chemicals
CHEMICALS SECTOR Strategic focus on Chemicals continued reinforcement of leadership and competitiveness through restructuring, rationalizations, acquisitions and partnerships to improve margins e.g. announcement of closure of the soda ash production in Ebensee (A) (effective in 2005) and the electro
Slide 28: The context of the Chemicals sector
CHEMICALS SECTOR The context of the Chemicals à To secure medium and long term competitiveness of the chemicals activities Business Challenges w Demand globalization w Increasing regulatory & social constraints in Europe w Strength of the EUR w Trade flows out of China Opportunities for performance
Slide 29: Chemicals sector: Major markets
CHEMICALS SECTOR CHEMICALS SECTOR : Major markets Soda ash Hydrogen peroxide/Detergents Glass industry, chemicals industry, detergents, paper industry, Chemicals industry, detergents, paper industry, food industry, environmental technologies, pharmaceuticals environmental technologies, pharmaceutica
Slide 30: Major markets in 2003
CHEMICALS SECTOR Major markets in 2003 % of sales Chemicals industry 22 % Glass industry 21 % Detergents 10 % Paper industry 7% Building and architecture 5% Treatment of water and environment 3 % Food industry 3% Automotive industry 2% Electric and electronic industry 1% Human health 1% Other indust
Slide 31: 3 Poles with strong worldwide competitive position
CHEMICALS SECTOR 3 Poles with strong worldwide competitive position % of 2003 Competitive Position Chemicals Essentials Specialties sales* Europe World "MINERALS" POLE SODA ASH 35% Soda ash 1 1 X Sodium bicarbonate 1 1 X BARIUM/STRONTIUM 5% Barium Strontium 1 1 X Ultra-pure barium Strontium 1 2 X AD
Slide 32: 9M04 Chemicals REBIT
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 33: Innovative Megaplant based on Solvay Technology
CHEMICALS SECTOR Innovative Megaplant based on Solvay Technology à to supply H2O2 for the production of propylene oxyde Expected to come on stream in 2008 4 Solvay/BASF finalizing plans to set up a large-scale (more than 200,000 metric tons) H2O2 plant on BASF’s site in Antwerp, based on Solvay’s hi
Slide 34: Strategic focus on Plastics
PLASTICS SECTOR Strategic focus on Plastics w growth in High Tech Polymers, major contributors to the results w strengthening of the Vinyl chain activities w ongoing restructuring measures (e.g. closure of Luwigshafen plant in Vinyls, industrial redeployment of Inergy in France, structural improveme
Slide 35: Single new Plastics Sector
PLASTICS SECTOR Single new Plastics Sector grouping the Plastics and Processing Sectors w Balance and competitiveness à to affirm leadership even better by focusing efforts w Compactness and effectiveness à to help to achieve the operating cost savings (more compact structure with less interfaces an
Slide 36: Plastics portfolio of activities
PLASTICS SECTOR PLASTICS SECTOR a more efficient and compact management structure Portfolio of activities : 4 SPECIALTIES : Specialty Polymers, PVC compounds, Inergy Automotive Systems (JV in fuel systems), industrial films for medical use, decorative laminates, swimming pool liners and technical fl
Slide 37: Major change in Solvay Plastics Portfolio
PLASTICS SECTOR Major change in Solvay Plastics Portfolio HIGHER PROPORTION OF SPECIALTIES (in % of sales) 25% 57% Specialties Essentials 1999 2003 * Plastics and Processing as of June 1, 2004 37 © 2004, SOLVAY S.A November 2004
Slide 38: Portfolio of activities
PLASTICS SECTOR Portfolio of activities Competitive position Europe World Essentials Specialties Vinyls 2 4 X Pipelife (pipes & fittings) 4 - X Industrial films Calendered films 1 3 X Medical film 1 1 X Veener film 1 1 X Swimming pool linings 1 2 X Performance compounds X Specialty polymers X fluori
Slide 39: Major markets
PLASTICS SECTOR Major markets Vinyls Construction and civil engineering (pipes, profiles for window frames and doors), automotive industry, cable insulation and sheathing, medical applications, consumer goods, packaging, … Specialty polymers and Performance Compounds Chemicals and oil industry, elec
Slide 40: Major markets in 2003
PLASTICS SECTOR Major markets in 2003 % of sales* Automotive industry 27 % Building and architecture 25 % Consumer goods 13 % Electric and electronic industry 8% Packaging 7% Water and Environment 7% Chemical industry 6% Human health 3% Other industries 4% TOTAL 100 % * Plastics and Processing as of
Slide 41: 9M04 Plastics REBIT
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 42: 2004 SolVin Awards for PVC innovators
PLASTICS SECTOR 2004 SolVin Awards for PVC innovators 108 innovative customer projects from 14 countries 4 In the following categories : à Competitiveness, Environment, Health, Leisure, New Markets 4 The Jury : 5 representative and highly qualified independent experts à criteria such as contribution
Slide 43: Specialty Polymers: product portfolio
PLASTICS SECTOR Specialty Polymers : product portfolio Fluorinated fluids UHPEP Ultra High Performance Engineering Polymers PAI PFPE PAEK PPSU LCP PES PAA PSO PAMXD6 HPEP PVDF High Performance Engineering Polymers PPS Elastomers ECTFE FKM/FFKM PFA MFA PTFE PVDC MID RANGE ESSENTIALS 43 © 2004, SOLVAY
Slide 44: Specialty polymers: most important locations
PLASTICS SECTOR Specialty polymers : most important locations Specialty Polymers Thorofare/Belle Mead (New Jersey) Marshallton (Delaware) Rheinberg (D) Greenville (South Carolina) Oudenaarde (B) Alpharetta (Georgia) Brussels (B) Orange (Texas) Tavaux (F) Spinetta (I) Bollate (I) Bussi (I) Atlanta (G
Slide 45: Specialty Polymers: main applications
PLASTICS SECTOR Specialty Polymers : main applications Chemical Computer Aircraft Medical Consumer Industry Industry Aerospace goods Tele- Wire Automotive Coatings Fittings and communication and Cables Industry Plumbing 45 © 2004, SOLVAY S.A November 2004
Slide 46: Solvay Plastics Innovative Composition at K2004
PLASTICS SECTOR “Solvay Plastics Innovative Composition” at K2004 International Plastics Trade Fair New TRANSPARENT high-temperature sulfone polymer SUPRADEL™ HTS 4 technological breakthrough : highest heat resistance (temperature of 265°C) of any transparent amorphous thermoplastic polymer 4 other
Slide 47: 9M04 Processing REBIT
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 48: PZEV Demonstrator design: prize-winning fuel system technology
PLASTICS SECTOR PZEV Demonstrator design : prize-winning fuel system technology adopted by General Motors and Nissan à outperforming the world’s most stringent environmental standards INPINCH USCAR “SAE 130” standard INSHELL Lev 2 solution PZEVlines INFILM SNAPIN Internal venting PZEV Canister INPIN
Slide 49: For further information, visit www.solvay.com
For further information, visit also www.solvay.com 49 © 2004, SOLVAY S.A November 2004
Slide 50: Forward-looking statements
“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