Solvay Sa · EURONEXT:SOLB
Solvay Sa — H1 2004 Earnings Presentation
19 slides from Solvay Sa's earnings presentation, August 2004
Slide 1: Solvay Group presentation Financial review
Solvay Group presentation Financial review August 2004
Slide 2: Financial review
Financial review 2 © 2004, SOLVAY S.A August 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
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: H1/04 highlights
H1/04 highlights ü Growth of H1/04 Group net result : +19% ü Strong growth in Specialty Polymers and Vinyls ü Pharmaceuticals : 4 Acceleration of strategy : major positive impact of recent partnerships and parallel strengthening of research programs 4 Temporary negative effect, mainly in Q2/04, of t
Slide 6: Key figures
Key figures M EUR H1/2004 vs H1/2003 H1/2004 H1/2003 Sales* 3,790 3,831 +1% REBIT 342 367 +7% EBIT 328 367 +12% Charges on net indebtedness -41 -47 +15% Income taxes -75 -92 +23% Equity earnings -29 -8 -72% Income from investments +15 +16 +7% Net income of the Group 198 236 +19% Net income (Solvay s
Slide 7: Sound balance sheet
Sound balance sheet ü Net indebtedness = EUR 1,263 million ü Shareholders’ equity = EUR 3,685 million è Net debt to equity ratio : 34% (June 30, 2004) (compared to 41% as of June 30, 2003) thanks to : w strong cash flow (EUR 453 M) : +11% w control of working capital needs 7 © 2004, SOLVAY S.A Augus
Slide 8: 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* (exclusive of EUR 38 M provision) 1600 1,172 R&D expenses 1,086 1,024 95
Slide 9: Performance (REBIT) by sector
PERFORMANCE (REBIT) by SECTOR PHARMACEUTICALS CHEMICALS PLASTICS* PROCESSING* +25% -19% +45% +5% • Acceleration of strategy : Volume growth à major positive impact Improvement Growth in Specialty • Temporary negative effects month by month Polymers and in fuel systems mainly in Q2 Vinyls and improve
Slide 10: Pharmaceuticals sector
PHARMACEUTICALS SECTOR H1/04 Pharmaceuticals REBIT (EUR 111 M) : +25% w Major positive effect of the agreements with Wyeth and Bristol Myers Squibb allowed to increase R&D by +24% (to EUR 166 million) w Again negatively affected by the weak USD (total sales -8% in EUR, -5% at constant exchange rates
Slide 11: Chemicals sector
CHEMICALS SECTOR H1/04 Chemicals REBIT (EUR 79 M) : -19% 4 Improvement in volumes and prices month by month (+32% in Q2/04 vs Q1/04) 4 Soda ash w results affected by the increase of energy and transportation costs, softening recently w improving market conditions in Europe and in the US 4 Electroche
Slide 12: Plastics sector
PLASTICS SECTOR H1/04 Plastics REBIT (EUR 136 M) : +45% 4 Specialty Polymers : w major contributors to the results w strong volumes recovery, mainly in semi- conductor and electronic 4 Vinyls : sustained demand and increase in PVC prices in Europe, Asia and Mercosur 12 © 2004, SOLVAY S.A August 2004
Slide 13: Plastics sector: Processing
PLASTICS SECTOR H1/04 Processing REBIT (EUR 43 M) : +5% 4Inergy Automotive Systems w volume growth (to 6.5 millions fuel systems) : +6% à above the global performance of the automotive market w results integrate the launch costs of a new plant in Japan and margins pressures from the automobile marke
Slide 14: Information on Solvay shares
Information on Solvay shares 14 © 2004, SOLVAY S.A August 2004
Slide 15: 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 15 © 2004, SOLVAY S.A August 2004
Slide 16: 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 16 © 2004, SOLVAY S.A August 2004
Slide 17: 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% 17 © 2004, SOLVAY S.A August 2004
Slide 18: Visit our Internet site specifically designed for Investors
Visit our Internet site specifically designed for Investors www.solvay-investors.com and become member of our Shareholders’ Club 18 © 2004, SOLVAY S.A August 2004
Slide 19: 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--looking statements contained in this presentation is subject to risks and uncertaintie