Solvay group «Profitable & Sustainable Growth: strategy and execution»

Transcription

1 Solvay group «Profitable & Sustainable Growth: strategy and execution» November 2007

2 MOVING FORWARD TOGETHER Table of contents PROFITABLE & SUSTAINABLE GROWTH: strategy and execution FURTHER GROWTH OUTLOOK Background information 2

3 Our strategic choices MOVING FORWARD TOGETHER Grow faster than the industry in Pharmaceuticals Expand our reach in emerging markets Grow the relative size of the Specialties Permanent review our portfolio to remain at the leading edge of competitiveness 3

4 Pharmaceuticals growth factors and challenges MOVING FORWARD TOGETHER Growth Factors Emerging markets In-line products: Pantoloc USD/EUR Challenges Androgel Price pressures EU (F) + Creon Generics + Fenofibrate HRT market + Influenza vaccines Emerging markets bifeprunox delay In-line products USD/EUR + Duodopa Price pressures + Fenofibrate Generics Creon 4 + Androgel R&D pipeline + SLV348 + Influenza vaccines + pardoprunox (SLV308)

5 Pharmaceuticals New 2010 financial targets MOVING FORWARD TOGETHER REVENUES EUR 3.2 Bn considering : bifeprunox delay: 340 MEUR lower sales in 2010 partly compensated by growth elsewhere lower USD lower expected growth of the industry REBIT MARGIN confirmed at 20% REBIT/SALES by 2010 INSPIRE PROJECT confirmed to deliver the planned 300 MEUR efficiency improvements by 2010 increase R&D/sales ratio 5

6 bifeprunox FDA action letter in the US MOVING FORWARD TOGETHER Effective in the long-term maintenance setting Phase III results presented in October 2006 (Solvay Investors days) And at specialist symposia December 2006 (ACNP) and March 2007 (ICSR) A 2 nd positive maintenance study would support a maintenance claim Additional information regarding human metabolism and a complex death case - no other questions on safety Submission of data package for maintenance claim to take 24 additional months, pending FDA interaction Further actions to be defined with partner Wyeth after FDA interaction 6

7 Strengths in Essentials : leaderships, energy, raw materials MOVING FORWARD TOGETHER Leadership in essentials soda ash, hydrogen peroxide, caustic soda, vinyls, Vertical integration largely integrated in Chemicals, partially in ethylene, fluorine monomers Energy management very stable energy expenses/sales over the last years Europe World Soda ash 1 1 Hydrogen peroxide 1 1 Detergent (Persalts) 1 1 Caustic soda 1 3 Vinyls 2 3 Pipelife (Pipes and fittings) 4 - Evolution of Solvay energy expenses and prices of energy sources 7.1% 6.8% Gas Z eeb Gas US E lect r icit y Ger man y 7.3% 8% 8.1% e Energy sources index 12 % 10 % 8% 6% 4% Solvay Energy costs as % of sales 7

8 MOVING FORWARD TOGETHER Growth in Specialty Polymers Upgrade the existing product portfolio to meet growing demand and penetrate new markets : expansion Fluorinated polymers (Algoflon and Hyflon ) PES/PPSU Radel Polyvinyledene fluoride (PVDF) Perfluoropolyether (PFPE) polymers PVDC Broaden the current polymer / technology portfolio through R&D and acquisitions : Mississippi Polymer Technologies (USA) : PrimoSpire TM SolviCore (50/50 joint venture Solvay/Umicore) : R&D, production and sales of Membrane Electrode Assemblies for application in Fuel Cells Accelerate investments in fast growing markets : Development center in China / strengthening of local marketing organization Polymers Division of Gharda (India) : access to ultra high performance polymers, PEEK : construction of a commercial-scale unit in India Construction (by 2007) of a world-class plant for micronized polytetrafluoroethylene (PTFE) powder in China 8

9 Industrial bridgeheads in emerging regions to deploy expansion (Asia, Mercosur, Russia) MOVING FORWARD TOGETHER Asia Mercosur THAILAND : fully integrated & competitive position in Essentials further expansion in Vinyls new developments (Inergy, Epicerol, Hydrogen peroxide for Propylene Oxyde) Progress in the region : specialties India (Specialty Polymers, Pharma), China (Ultra pure H2O2, specialty polymers, Pharma), South Korea (Fluor) BRAZIL/ARGENTINA : fully integrated & competitive position in Essentials further expansion in Vinyls development of Pharmaceuticals development of specialties (Inergy, specialty polymers) Russia 9 GROWING PRESENCE : Industrial projects in Vinyls and Inergy Representative office since 1997 Commercial entities Pharma (2000), Chemicals & Plastics (2005) Pharma : >500 staff, sales X3 over past 5 years JV in Vinyl compounds Pipelife : production plant (pipe systems for water distribution, sewer networks and domestic applications)

10 CAPEX & R&D investments to support future growth of results MOVING FORWARD TOGETHER In M EUR , Major strategic initiatives 2001 : Ausimont/BP high performance polymers 2005 : Fournier Pharma (EUR 1.2 Bn) Sustained R&D investments in Pharma , , ,421 1, budget Growth of the business Pharmaceuticals & Specialties Focused growth in Essentials (Chemicals and Vinyls) R&D : 75% in Pharma, 15% in Specialty Polymers and Inergy Maintenance and upgrade Capital expenditures & Acquisitions R&D expenses 10

11 Sustainable and profitable growth : improved margin quality MOVING FORWARD TOGETHER 15% topline & bottomline growth higher REBIT/sales by 2010 in the current business climate 10% 10% 9% 10% 11% 12% 5% AVG REBIT/sales : 10% (annual growth : sales +4%, REBIT +7%) 0% Solvay Investors Day of September 26, 2007

12 9M07 : further growth in operating results MOVING FORWARD TOGETHER REVENUE : +2% to EUR 7.2bn (+4% in Q3/07) negative impact from currencies (9M07 sales : +4% at constant exchange rates) REBIT : +5% to EUR 925m (+8% in Q3/07) continued growth in Chemicals and Plastics; improved results in Pharma: +7% in Q3/07 partly compensating the weak results in Q2 margin of 12.8% (vs 12.5% in 9M06) GROUP NET PROFIT : EUR 646m (Q3/07 : EUR 233m; +23%) on balance EUR 34m additional non operating items but more taxes (+EUR 111m) compared to 9M06 NET DEBT TO EQUITY RATIO : 33% (= 9M06) NET INTERIM DIVIDEND : 0.85 EUR / share 12

13 9M07 Results: comments Press release of October 26, 2007 MOVING FORWARD TOGETHER 2007 : guidance for the Group confirmed Overall for 2007, we confirm that we can achieve the excellent operating results of last year. Obviously, we remain attentive to the evolution of global macroeconomic conditions, energy costs and the EUR/USD exchange rate. Pharmaceuticals : guidance confirmed for 2007 Chemicals : Continued favorable conditions / High energy costs Excellent results in «Minerals», in «Oxygens» and in «Electrochemistry»(causticsoda) Lower results in fluor chemical commodities (restructuring ongoing) Plastics : Specialty Polymers: strong demand in high value added markets, sales growth in Asia; higher results Strong growth in Vinyls : Europe : higher prices during the summer to match ethylene price increase, good demand, despite the seasonal slowdown. Mercosur : good demand but energy cost. Situation in Asia improving. 13

14 BACKGROUND INFORMATION

15 SOLVAY A Chemical and Pharmaceutical group MOVING FORWARD TOGETHER Record results in 2006 : 15 Sales : EUR 9.4 Bn (+10%) REBITDA: EUR 1.6 Bn (+17%) REBIT : EUR 1.1Bn(+21%) Balance Sheet : EUR 11 Bn International presence in more than 50 countries with some 29,000 employees Three profitable & cash generating sectors, with specific strategy for growth : Pharmaceuticals, Chemicals and Plastics Sustainable and profitable growth through Innovation and Competitiveness Listed on Euronext Brussels

16 MOVING FORWARD TOGETHER Record FY06 results REVENUE +10% to EUR 9.4 bn REBIT +21% to EUR 1.1 bn Revenue REBIT Pharma +15% (EUR 2.6 Bn) +49% (EUR 451 m) Chemicals +8% (EUR 3.0 Bn) +11% (EUR 315 m) Plastics +8% (EUR 3.8 Bn) +5% (EUR 409 m) GROUP NET PROFIT: EUR 817 m quality of results (significantly less non operating items) NET DEBT TO EQUITY RATIO : 28% (vs. 43% end of 05) DIVIDEND UP to 2.10 EUR (+5%) margin of 12% (vs 11% in 2005) 16

17 MOVING FORWARD TOGETHER Group targets Sustainable and profitable growth Topline & bottomline growth acceleration of geographic expansion Financial 17 Net profit growth (part of the group) +10% Return on equity (RoE) 15% Net debt to equity Not to exceed durably 45% Dividend policy Increasing our dividend whenever possible, and if possible, never reducing it Innovation Growth (new sales ratio) 30% Partnerships 50% People Engagement 100%

18 MOVING FORWARD TOGETHER Delivering on financial targets NET PROFIT Objective: average annual growth of 10% 800 M EUR RETURN ON EQUITY Objective: to achieve 15% 23% 22% % 14% 15% 19% % +12% +1% -7% +23% -13% +26% +51% record 13% 11% 11% 12% 11% 10% 12% % NET DEBT TO EQUITY Objective: not to exceed durably 45% M EUR Net debt Net debt to equity 55% 50% 45% 40% 35% 30% 25% 20% 15% DIVIDEND POLICY Increasing our dividend whenever possible, and if possible, never reducing it EUR/share 3,20 2,80 2,40 2,00 1,60 1,20 0,80 0,40 0,00 1,98 1,49 1,55 2,07 2,20 2,27 1,65 1,70 1,70 2,27 2,40 2,40 1,80 1, Net dividend 1,90 2,53 2,00 Gross dividend 2,67 2,10 2,80

19 MOVING FORWARD TOGETHER Management compensation Bonus linked to : Achievement of strategic targets RoE > 15% Individual performance targets Other executive specific targets as approved by the Board 60% of total cash pay for Top management is performancebased Long Term Incentives : Share options with 3 year vesting period Total awarded to Top management in 06: 499k options Total eligible population: 300 executives 19

20 MOVING FORWARD TOGETHER Shareholders & Board Total issued capital 84,701,133 shares Solvac 30.0% (holding company of the founding families, listed on NYSE Euronext) Solvay (to cover option program) 2.2% 16 Board Members Nationalities: 9 Belgian, 1 Dutch, 3 French, 2 German, 1 US Executives: 2 (CEO & CFO), Chairman is the previous CEO Independent Directors: 13 of whom 9 members of the founding families 20

21 MOVING FORWARD TOGETHER Driving Innovation Growth Partnerships People Group revenue from new products, technologies, markets and applications created over the past five years. Innovative projects with external partners People engagement through individual innovation objectives % 48% 83% 2009 Target 30% Target 50% Target 100% 21

22 MOVING FORWARD TOGETHER Diversified customer base in % of 2006 Sales = EUR 9,399 M 22 Pharmaceutical industry Automotive industry Construction and architecture Chemical industry Glass industry Water and Environment Electricity and Electronics Paper Detergents, cleaning and Hygiene products 30% of Group sales SBUs : Pharmaceuticals 12% of Group sales SBUs : Inergy Automotive Systems, Specialty Polymers 11% of Group sales SBUs : Vinyls, Specialty Polymers, Fluor 10% of Group sales SBUs : Electrochemistry, Vinyls, Soda Ash, Fluor 6% of Group sales SBUs : Soda ash 5% of Group sales SBUs : Pipelife, Soda ash, Electrochemistry 4% of Group sales SBUs : Specialty Polymers, Vinyls 4% of Group sales SBUs : Hydrogen peroxide, Electrochemistry 3% of Group sales SBUs : Soda ash, Electrochemistry

23 BUILDING THE NEXT SOLVAY PHARMACEUTICALS Performance goals 20% REBIT/sales EUR 3.2 Bn Revenues Portfolio Focus Key focus areas Specific medical needs Marketing excellence Global Organisation 300 MEUR of stepwise efficiency improvements Complete integration and transformation by 2010

24 300 MEUR of stepwise efficiency improvements P H A R M A C E U T I C A LS 24 On track! Sales & Marketing full integration completed General & Administration: the same Globalization of R&D functions and production is underway, in line with selection of the priority therapeutic areas expected achieved in M EUR One-time costs Cumulative annual savings 5 Sales & Marketing Manufacturing General & Administration est

25 Pharma 9M07 results Stable revenue, REBIT -8% (EUR 336m) P H A R M A C E U T I C A LS Revenues Expiration of Pantoloc marketing rights (sales impact : -4%; EUR -70m) Lower USD/EUR rate impacting US revenues (-3%; EUR -59m) Sustained underlying growth of TriCor sales (in the US*) = USD 826 m (+14%) Strong growth of flu vaccines (+60%) : earlier sales than in 2006 Price pressure in Europe, in particular in France (-2%; EUR -33m) Results recovering : Q3/07 : +7% partly compensating the weak results in Q2 R&D efforts : increase in Q3/07 (up by 28% to 17% of sales) Projects in neuroscience / cardiometabolic (including fenofibrate) 16% of sales in 9M07 (as expected for FY07) «Inspire» project on track (*) booked by Abbott 25

26 P H A R M A C E U T I C A LS Growth in major products Revenue (EUR m) M/07 9M/07 vs 9M/06 9M07 vs 9M06 (constant exchange rates) PHARMACEUTICALS 2,601 1, % Cardiometabolic Fenofibrates Women s and Men s health Androgel Pancreatic enzymes Creon % +2% +4% +19% +4% Neuroscience Influenza vaccines Serc Influvac % +60% +3% +60% Neuroscience Marinol % +18% Cardiometabolic Teveten % +12% Gastroenterology Duphalac % +12% Neuroscience Gastroenterology Luvox Pantoloc (2) 60-6% - +4% (1) TriCor sales in the US in 9M07 : USD m (+ %) 26 (2) 5 months only

27 P H A R M A C E U T I C A LS Pharma R&D developments Cardiometabolic : treatment of dyslipidemia : fenofibrate franchise expansion : SLV348 1 in Phase III; US regulatory submission expected in Q4/07; fixed dose combinations (Abbott/Astra-Zeneca collaboration, Synordia, zolip) US co-promotion agreement with Abbott on Simcor 2 Pulzium : PDUFA date extended by 3 months (January 2008) SLV 319 (developed with BMS); SLV320 : Phase II ongoing Neuroscience : bifeprunox : (US with Wyeth) interaction with FDA after the «action letter» (Aug. 2007); (Europe with Lundbeck) development ongoing pardoprunox (SLV308) : phase III ongoing Pancreatic enzymes : Creon : FDA «approvable» letter (Aug. 2007) Influenza vaccines : validation of cell culture based production throughout 2008; commercialization from season 09 onwards; clinical trials in preparation in the US (in the framework of the milestonebased award from the US Department of HHS 3 ) * developed with Abbott (ABT 335) **Abbott's investigational fixed-dose combination lipid therapy (Niaspan /simvastatin), currently awaiting U.S. FDA approval *** HHS : Health and Human Services 27

28 Outlook Pharma for 2007 confirmed P H A R M A C E U T I C A LS The outlook for FY07 for the Pharmaceuticals Sector remains consistent with the one presented in the first half of Solvay Pharmaceuticals is anticipating operating results in line with those of 2006, because of the impact of the USD on conversion to EUR in American sales, the loss of marketing rights for Pantoloc and pressures on the European pharmaceutical market. Press release of October 26,

29 P H A R M A C E U T I C A LS R&D pipeline New molecules / change since last year Preclinical Phase I Phase II Phase III Filed/Approved SLV316, SLV329, Cardiometabolic SLV337, SLV338, SLV341, SLV342, SLV344, SLV345, SLV319 daglutril SLV320 SLV348 Zolip SYNORDIA PULZIUM intravenous SLV346 dronabinol MDI bifeprunox US Neuroscience SLV347, SLV338 SLV351 SLV330 SLV314 SLV 313 SLV 334 bifeprunox EU pardoprunox (308) fluvoxamine CR US fluvoxamine IR US anatibant+ Xytis DUODOPA US Influenza vaccines Adjuvants H5N1 egg Seasonal TC US GRIPPOL TC INFLUVAC TC EU Pancreatic enzymes SLV340 SLV339 CREON JPN CREON US ANDROGEL low Women s & Men s Health Phased out Phased out EE/MT US volume FEMOSTON low ANDROGEL pediatric US dose 29

30 Active partnership strategy P H A R M A C E U T I C A LS Key Partners Nature of cooperation Scope Fenofibrate franchise co-promotion and co-development Bifeprunox licensee Co-marketing/ promotion US Europe, Row, Brazil, Argentina Bifeprunox co-development and co-marketing Effexor XR co-promotion Co-development SLV 313 and SLV 314 Early discovery joint program Cannabinoid SLV 319 co-development and co-commercialisation Luvox co-promotion Nafta & Japan US Global Global Global Japan Creon co-development Japan Fenofibrate co-promotion and co-development Bioengineered enzymes Early compound risk sharing (POP studies) Japan Global Global 30

31 P H A R M A C E U T I C A L S Cardiometabolic Strategic investments in all phases, research, development and marketed products 2006 sales : EUR 686 M fenofibrate (TriCor, LIPANTHYL ) 2006 R&D investments : EUR 153 M (36% of total Pharma R&D) CARDIOMETABOLIC R&D FENOFIBRATE + STATIN FENOFIBRATE + GLUCOSE CONTROL EU+ 09 FENOFIBRATE + STATIN US NEXT GENERATION FENOFIBRATE US Q4 07 Launch Regulatory Proof-of-principle Proof-of-concept OBESITY + DIABETES 400 ABBOTT/ASTRAZENECA SYNORDIA Zolip SLV348 SLV319+BMS 500 TEVETEN PHYSIOTENS CHF + HYPERTENTION daglutril PRECLINICAL CRE A TION + TESTING OMACOR ACEON Others Others includes, Omacor, Olicard, Gilurytmal, Inocar, Angiodrox CHF + RENAL FAILURE US +EU ATRIAL ARRHYTHMIAS SLV320 PULZIUM intravenous

32 Our fenofibrate franchise and other projects P H A R M A C E U T I C A L S METABOLIC SYNDROME DIABETES DYSLIPIDEMIA CARDIO-VASCULAR PREVENTION fenofibrate & statin fixed dose combinations ABBOTT & ASTRAZENECA co-develop for USA SOLVAY project ZOLIP for rest of world SYNORDIA fenofibrate & metformin fixed dose combination for diabetes type 2 SLV348/ABT335 next generation fenofibrate SLV319 obese diabetics TriCoR /LIPANTHYL NFE No food-effect fenofibrate SLV320 renal failure diabetics LIPANTHYL fenofibrate 32

33 Success factors of our fenofibrate franchise Positive long term use well established Addresses residual cardiovascular risk on statins Current flagship product : important clinical benefits of 145 mg NFE being introduced in all major markets by 2008 (incl. Russia) IP formulation protection until Jan in US and Europe Next generation fenofibrate (SLV348) & fixed combination products Supportive studies FIELD study demonstrates positive effects on both macro- and micro-angiopathies (retinopathy; amputation risk) PRIME cohort study (ESC abstract) demonstrated mortality reduction M USD TriCor sales * evolution in the US +35% P H A R M A C E U T I C A L S * booked by Abbott 33

34 P H A R M A C E U T I C A L S SLV348 (ABT335) Next generation fenofibrate Regulatory exclusivity & IP Specifically developed for combination with statins Phase III completed and supports US submission target Q4/07 EU/ROW Solvay TBD Improved Therapeutic Benefit clinical programs ongoing Submission date : 2007 Q4 US 34

35 P H A R M A C E U T I C A L S fenofibrate & rosuvastatin Fixed dose combination for US Fastest growing US statin, rosuvastatin (CRESTOR /Astra Zeneca) With SLV348/ABT335 drug substance Convenient single pill for comprehensive lipid treatment US today already 5% of statin users get co-prescribed a fibrate, further growth potential for fixed combination IP protected Launch date : 2010 US 35

36 P H A R M A C E U T I C A L S SLV 319 (BMS ) Cannabinoid 1 receptor antagonist Inhibits both central and peripheral CB1 receptors Preclinical profile supports further development Phase II POP study ongoing BMS co-development & cocommercialization Phase II 36

37 P H A R M A C E U T I C A L S Neuroscience Strategic investments in all phases, research, development and marketed products 2006 sales : EUR 430 M 2006 R&D investments : EUR 138 M (33% of total Pharma R&D) 0 Launch Regulatory SCHIZOPHRENIA EU+US SCHIZOPHRENIA NEUROSCIENCE R&D SERC PARKINSONS MARINOL Proof-of-principle Proof-of-concept bifeprunox SLV313 SLV314 DUODOPA US pardoprunox PARKINSONS TRAUMATIC BRAIN INJURY 300 LUVOX 400 Others PRECLINICAL CRE ATION + TESTING SLV 334 fluvoxamine CR (+ JAZZ) ANATIBANT (+XYTIS) US SOCIAL ANXIETY 37 Others includes, Lamaline, Baldrian, Difmetre, Xanax

38 Bifeprunox with Lundbeck & Wyeth P H A R M A C E U T I C A L S Partial dopamine agonist + additional serotonin 1A activity Schizophrenia & bipolar disorder Partnership with Lundbeck from 2000; co-development and exclusive commercialization except for US, Can, Mex, Japan Partnership with Wyeth from 2004; co-development and cocommercialization US, Can & Mexico FDA action letter (August 2007) IP y (US) and 10y (EU) dossier protection Phase III 38

39 P H A R M A C E U T I C A L S Bifeprunox: overall conclusions from clinical program Bifeprunox is a valuable treatment for stable patients with schizophrenia Effective at maintaining stability in chronic patients Metabolic effects similar to placebo, superior to comparators Bifeprunox is best suited for chronic stable patients with metabolic derangement from other medications 39

40 Bifeprunox potential P H A R M A C E U T I C A L S PRESENTED IN OCTOBER 2006 market $11 Billion US Atypical Market Acute Care $1 Billion bifeprunox Improved side effect profile No weight gain Favorable lipid profile Minimal risk for glucose dysregulation Lack of hyperprolactinemia $10 Billion Maintenance ~30-40% of Patients which have Metabolic Syndrome Estimated Peak Sales $500M to $1Bn in US 40

41 Building our Parkinson s franchise P H A R M A C E U T I C A L S Disease progression Dyskinesia Freedom from symptoms The good years Increased symptom variation On-off SLV308 SLV308 DUODOPA DUODOPA 41

42 P H A R M A C E U T I C A L S DUODOPA Levodopa & carbidopa combination Novel, microprocessor controlled administration system, delivering through indwelling tube directly into small bowel Programmable external pump under patient control Registered 32 countries, already launched 15 countries USA phase III planned start H1/2008 IP 2013 and orphan status EU 10 years and US 7 years Launch date 2004 Peak sales potential 100 to 250 MEUR 42

43 Other Therapeutic Areas R&D P H A R M A C E U T I C A LS Strategic investments in all phases, research, development and marketed products 2006 Women/Men Enzymes Vaccines EUR 599 M EUR 191 M EUR 151 M R&D investments Vaccines : Pancreatic enzymes : Women s & Men s Health : EUR 17 M (4% of total Pharma R&D) EUR 34 M (8% of total Pharma R&D) EUR 64 M (15% of total Pharma R&D) AndroGel PROMETRIUM ESTRATEST DUPHASTON FEMOSTON PRESOMEN Others* CREON Influenza vaccines Others * Others includes, ESTROGEL, ZUMENON, ALVITYL, ANADROL 43 us PATIENT CONVENIENCE CREATION PRECLINICAL PRECLINICAL CREATION + TESTING ANDROGEL LOW VOLUME us ADOLESCENT HYPOGONADISM WOMEN S & MEN S HEALTH Other Therapeutic Areas R&D ANDROGEL PEDIATRIC PRECLINICAL CREATION + TESTING SLV339 CREON JPN Japan pand egg CELL US CREON US US Proof-of-concept BIOENGINEERED ENZYMES Proof-of-principle INFLUVAC TC GRIPPOL TC EU Regulatory Launch CELL-BASED SEASONAL VACCINE CELL-BASED ADJUVANTED SEASONAL VACCINE US CELL-BASED SEASONAL/PANDEMIC VACCINES R/CIS EU+ROW H5N1 EGG-BASED VACCINE VACCINES

44 INFLUVAC growth (egg-based) P H A R M A C E U T I C A L S INFLUVAC First launch in 1950 Launched in 68 countries Subunit influenza vaccine Market share Europe ~ 20% Further capacity increase mio doses

45 P H A R M A C E U T I C A L S Solvay s growth strategy Capacity increases Egg-based Cell-based Differentiation Novel production technology cell culture Virosomal vaccine Invivac for the elderly Adjuvanted vaccine GRIPPOL Alternative routes of administration Geographical expansion Brazil, Russia, India, China US Pandemic Preparedness Pandemic vaccine / Insurance contracts 45

46 CREON -Strategy: Growth and market expansion P H A R M A C E U T I C A L S Established product in EU and US since many years Global market leader All enzyme class progressing towards formal FDA approval in the United States Solvay receipt of an approvable letter in Aug. 2007; Federal Register due date April 28, 2008 Working towards submission in Japan (2009), one of the largest markets for pancreatic enzymes First prescription high dose pancreatic enzyme replacement therapy in that market Strong growth in emerging markets Creon M EUR

47 P H A R M A C E U T I C A L S AndroGel : US progress Continuing strong success of AndroGel in US WATSON & PAR US copromote Additional Presentation:AndroGel Flexible Dosing Pump successfully launched in late 2004 Pediatric exclusivity obtained in August 2007, PDUFA date December 2007 AndroGel low volume, submission H1/2008 IP 2020 on formulation + 6 months for pediatric AndroGel (US) M USD

48 Anticipated Solvay Product Submissions P H A R M A C E U T I C A LS ANDROGEL paediatric US Influenza Pandemic egg EU Influenza GRIPPOL TC (Russia) INFLUVAC TC EU INFLUVAC TC US Influenza Pandemic TC fluvoxamine IR+ER US* ANDROGEL low volume US LUVOX 75 Japan CREON JPN FEMOSTON low dose LUVOX melt Japan pardoprunox SLV308 DUODOPA US SLV348 US SYNORDIA US ZOLIP EU bifeprunox US & EU PULZIUM IV EU * Licensed to JAZZ

49 P H A R M A C E U T I C A LS Conclusion Confirm 2007 guidance operating results for 2007 in line with 2006 Confirm strategy of therapeutic focus Inspire project continues and will deliver, with further increase in R&D spending R&D/sales ratio increase by 2010 New 2010 financial targets : EUR 3.2 Bn 20% profitability 49

50 CHEMICALS : EARNING THE RIGHT TO GROWTH Intensification of geographic expansion Technological innovation Growth in specialties Consolidation in Essentials

51 CHEMICALS Our positioning In % of 2006 sales = EUR 2,998 M Electroch emistry and fluor products cluster, 38% 67% Oxygens cluster, 16% 7% 26% Organic, 2% Minerals cluster, 44% Exploit growth opportunities in emergent regions Continuous review of business portfolio 51 19% 11% 11% Glass Paper Detergents 18% Chemicals 5% Construction

52 Work on selective leadership C H E M I C A L S Main Products Europe World Soda ash 1 1 Hydrogen peroxide 1 1 Sodium bicarbonate 1 1 Caustic soda 1 3 Fluorinated products 1 2 SODA ASH 230 (2008) Solvay Degussa Arkema FMC EKA Kemira Zhong Cheng Mitsubishi DC Chemical kt / year Kingboard 7 5,5 3 2,8 2,5 2,2 2,1 2 1,6 1,5 HYDROGEN PEROXIDE Solvay FMC Tata OCI General Chemical Shandong Sterlitamak Tangshan Sisecam Ciech Mton/y

53 C H E M I C A L S Growth in Chemicals Revenue +2%, REBIT +8% (to EUR 276m) REVENUE [1] REBIT evolution Comments M EUR CHEMICALS ,99 8 9M06 2,255 9M07 2,28 9 9M07 vs 9M06 +2% +8% Continued favorable conditions High energy costs Minerals cluster [2] Electrochemistr y and Fluor chemicals cluster Oxygen cluster [3] 1,304 1, % -2% +8% Excellent results in «Minerals», in «Oxygens» and in «Electrochemistry» (caustic soda) Lower results in fluor chemical commodities (restructuring ongoing) [1] including SBU Molecular Solutions [2] including SBUs Soda ash and related specialties and Advanced Functional Minerals. As of January 1, 2007, SBUs Barium Strontium and Advaned Functional Minerals were regrouped in one SBU «Advanced Functional Minerals». [3] including SBUs Hydrogen peroxide, Detergent and Caprolactones 53

54 C H E M I C A L S Growth in Chemicals in 9M07 Revenue +2%, REBIT +8% (to EUR 276m) Growth in Soda ash Global market conditions and prices remain favorable Steady growth in bicarbonate : product mix/geographic expansion Good volumes and price in caustic soda Sustained global demand and low inventories Stable prices expected by the end of the year after Q3 increase Fluor commodities under pressure Difficult year for refrigerants (Solkane 134a) More favorable evolution of specialties Global improvement study in progress Good results in Hydrogen Peroxide Volume growth in all regions Energy costs under control 54

55 C H E M I C A L S Strategy Drivers Globalization SODA ASH of manufacturing operations expanding presence in emerging economies (Asia, Eastern Europe) Strengthen Bicarbonate R&D, commercial development and extend production capacity Exploit opportunities for reduction of energy dependence SODA ASH Geographic expansion of manufacturing operations in emerging economies (Mercosur, Asia, East Europe) Intensified R&D efforts on current production processes and breakthrough technologies Further development of HPPO partnership concept 55 PEROXIDE

56 C H E M I C A L S Strategy Drivers SODA ASH Capitalize on new EPICEROL process to extend business in Asia Optimization of EU plant network and gradual conversion to membrane technology EDS Electricity sourcing Development of 365mfc market for foams and solvents Development of inorganic specialties in Asian semiconductor and electronic industries FLUOR Be a competitive and innovative player. Reduce exposure to refrigerant market. 56

57 C H E M I C A L S CAPEX allocation Medium term capital expenditures (incl. acquisitions) Maintenance Geographic expansion Soda ash Bulgaria +300kT/y Hydrogen peroxide HPPO projects : Belgium 230 kt/y Thailand 330kT/y Electrochemistry Epicerol Thailand 100 kt/y Growth in specialties MEUR sales by

58 Sustainable and profitable growth C H E M I C A L S 15% Secure LT margins higher REBIT/sales by 2010 in the current business climate 10% 10% 10% 11% 8% 7% 5% AVG REBIT/sales : 9% (annual growth : sales +3%, REBIT +5%) 0% Solvay Investors Day of September 26, 2007

59 SOLVAY SODI Investments for sustainable growth C H E M I C A L S Largest European operation (1.2 Mt/y) Optimal access to large raw material resources Excellent logistics with direct connection to Black Sea via Port of Varna West 2007 : EUR 50 M investment to expand capacity to 1.5 mt/y (by 2008) : to support growth in the dynamic markets of the Balkans, the Community of Independent States (CIS) and the Middle East EUR 70 M Investment to upgrade the site s power supply (by 2008) CIS+Baltic Soda Ash Consumption (Mt/y) 2,7 3,6 CAGR= 4,1%/y 4,4 Source: CMAI

60 The Epicerol process From lab to market C H E M I C A L S Targeting the growing Asian market, investment in a 100kT/y capacity in Map Ta Phut (TH), startup expected by the end of 2009 Represents 25% of the market growth from 2007 to 2012 TAVAUX, France Other projects under study in various parts of the world First lab trials in Bruxelles (B) Pilot Plant in Tavaux (F) April 2007, startup of a 1st industrial unit of 10kT/year of Epicerol in Tavaux (F) 60 New Epicerol line Average line size in the world 22 patent applications

61 H 2 O 2 MEGA PLANTS value for Solvay C H E M I C A L S ECONOMIES OF SCALE Mega H2O2 plants reach a new level of economies of scale SYNERGIES The mega H2O2 plants will benefit from synergies of large integrated sites SOLVAY WILL REINFORCE ITS LEADERSHIP BY Doubling production capacity within 4 years Building a strong position in Asia First HPPO plant under construction at Zandvleit (B) Zandvleit 230kT/y, Thailand 330kT/y The two plants add 76% to Solvay s current capacity 330 H2O2 Average Plant Size (kt/y) Ind AVG Today AVG Zandvleit Thailand Solvay 2010

62 PLASTICS : EXTENDING OUR PRODUCT PORTFOLIO & LEVERAGING OUR STRENGTHS Specialty Polymers & Inergy Automotive Systems : product leadership and geographic globalization Vinyls & Pipelife : regional leadership and geographic diversification

63 P L A S T I C S Our positioning in % of 2006 sales = EUR 3,800 M Inergy 17% Vinyls cluster 55% Vinyls 45% 32% 58% 9% Specialty polymers 28% Pipelife 10% Specialties cluster 45% Growth opportunities in emergent markets 27% Automotive 63 25% Construction and Building 10% Chemicals 9% Electricity & Electronics 9% Water & environment

64 Work on selective leadership P L A S T I C S Main Products Europe World Fluorinated polymers - 3 Other Specialty polymers among the leaders Inergy (fuel systems) 1 1 PVC 2 3 Pipelife (pipes and fittings) 4 - Mio tons/year VINYLS Shin-Etsu 64 Formosa Plastics Solvay Oxyvinyls Georgia Gulf Ineos LG Group Arkema TPC Tayio-Vinyls

65 Margin upgrade P L A S T I C S Acquisitions in Specialty Polymers (Ausimont, BP specialty polymers ) Vinyls : global competitive multi-regional leadership (Europe; Mercosur, Thailand, Russia) Global leading position of Inergy Turnaround of Pipelife Exit of PP, Decoration, Air Intake Systems, HDPE, Industrial foils (M EUR) Sales AVERAGE REBIT/sales AVERAGE % 12% 10% 8% 6% 4% 2% 0% 65

66 P L A S T I C S Strong growth in Plastics Revenue +4%, REBIT +11% (EUR 349m) M EUR REVENUE REBIT evolutio n Comments PLASTICS ,800 9M0 6 2,86 0 9M07 2,983 9M07 vs 9M06 +4% +11% 9M07 results outperform excellent 9M06 results Specialties cluster [1] Vinyls cluster [2] 1,712 2,088 1,30 0 1,56 0 1,304 1, % Growth in «Specialties» Continued strong growth in «Vinyls»cluster [1] Including SBUs Specialty Polymers and Inergy Automotive Systems (fuel systems) [2] Including SBUs Vinyls and Pipelife (pipes & fittings) 66

67 P L A S T I C S Strong growth in Plastics in 9M07 Revenue +4%, REBIT +11% (EUR 349m) Growth in Specialties Specialty Polymers : Continued growth in market segments with higher added value and in Asia Results increase despite significant R&D investments and unfavorable USD & JPY Inergy Automotive Systems Lower volumes (-3%) Higher results thanks to cost savings Continued strong growth of the world demand in Vinyls Vinyls : Higher spreads overall Europe : increase in results; Q3 price increase to match higher ethylene prices; sustained demand despite seasonal slowdown Mercosur : strong growth of demand (+10% on average); energy costs Asia : improving market conditions and results Pipelife : very good performance 67

68 P L A S T I C S Strategy Drivers Specialty Polymers * Growth of/at the top of the "polymers pyramid" * Product differentiation (R&D, IP) and cost/quality * Globalization, capacity expansions, acquisitions Inergy Automotive Systems * Technological leadership and R&D * Extended scope of the product (e.g. denoxification) * Geographical growth (Asia, ) and customer base * Operational excellence (cost and quality) SPECIALTIES Fluorofluids Continuous-use Temperature Performances Prices Vinyls * Regional leaderships * Competitiveness (industrial efficiency, raw material integration, technological innovation, ) * Focused growth Pipelife * European leadership * Product Innovation * Geographic presence/extension in EU new neighbours VINYLS SBU Vinyls REBIT evolution by region across the cycles Europe Mercosur Asie 68

69 P L A S T I C S CAPEX allocation Medium term capital expenditures (incl. acquisitions) Maintenance Vinyls : projects in Russia, South America and Asia, expansions Specialty polymers: capacity expansions, new grades, Pipelife : selective acquisitions; development of new products and geographic expansion (Russia, Eastern Europe) Inergy Automotive Systems: deployment in BRIC countries; new green products (e.g. green diesel) MEUR sales by 2010

70 Sustainable and profitable growth P L A S T I C S 15% Margin upgrade higher REBIT/sales by 2010 in the current business climate 12% 11% 11% 10% 10% 7% 5% AVG REBIT/sales : 10% (annual growth : sales +3%, REBIT +6%) 0% Solvay Investors Day of September 26, 2007

71 High performance polymers - the players P L A S T I C S Limited number of world scale players in each product Solvay has the broadest range of High Performance Polymers PVDC PPS LCP HPPA PEEK PAI PEI PI PSU PES PPSU PTFE PVDF FEP/ PFA FKM/ FFKM PFPE OTHERS Solvay x x x x x x x x x x x x x SOLVAY Trade Marks Arkema Ixan Diofan Primef (*) Xydar IXEF Amodel x Ketaspire Avaspire Torlon Udel Radel A Radel R Epispire Acudel (*) Mindel (*) Algoflon Polymist Solef Hylar x Hyflon Tecnoflon Fomblin Galden Fluorolink ECTFE Primospire Kadel (*) BASF x Daikin x x x (1) x DuPont x x x x x x (1) x Dyneon x x x x (1) x EMS x GE plastics x Ticona x x Victrex x (*) = Blends/compounds (1) : Marketing some functional equivalent products 71

72 Leading role in high margin applications P L A S T I C S GROWTH DRIVERS Advance in technology Metal replacement (weight / cost reduction) Improvement of product properties enabling new uses Development of new products addressing unmet needs Construction and Architecture: Coatings provide protection against UV radiation, pollution, and severe weather Medical: Medical trays and instruments withstand the rigors of repeated sterilization Automotive: solvents and high temperature resistance in air induction, fuel systems, electrical connectors, powertrain, lighting Electricity and electronics: fiber optic connectors, components for metering devices, wire coating, mobile phones, microchips fabrication and testing, hard disk drivers, seals Solvay s Specialty Polymers 2006 sales by application Pharma : blister packaging Construction and architecture Automotive industry Packaging Consumer goods Chemical industry Water and environment Detergents, cleaning and hygiene products Electricity and electronics Medical Other industry 72

73 Strategy: a multi-regional leader in Vinyls P L A S T I C S Worldwide competitiveness, regional leadership, and expansion in selected fast growing markets Solvay is N 2 in EUROPE (with better average plant size) and N 3 WORLDWIDE (with complete integration in Chloralkali) Europe : SolVin : 4 world-class plants (Belgium, Germany, France & Spain) CIS: RusVinyl in Russia (2010) South East Asia: Vinythai in Thailand Mercosur : Solvay Indupa in Argentina, Brazil Focus on world-scale, highly integrated plants to maximize COMPETITIVENESS Europe : cost and size optimization of remaining sites Thailand : capacity doubled in Map Ta Phut; acquisition of APEX under negociation Mercosur : expansion and upgrade in Santo Andre For plants not connected to ethylene grid, supply is secured at competitive price through: Cracker integration (Feyzin in France) Long term supply contract in Northern Europe Leading partner agreements (Rusvinyl, Mercosur, Thailand) Alternative technologies (ethanol based ethylene in Brasil, to be decided) 73

74 Competitive position & Growth in Europe P L A S T I C S Demand growth : Western Europe (15) : +0.5 to 1% Central/Eastern Europe : > 10% Ongoing capacity increases in existing sites to maintain market share and reach world class size Ongoing measures to keep Solvin s cost leadership Open to innovative partnerships (example: production JV) Average SolVin Plant 50 Average European Plant excluding SolVin Solvin fixed cost evolution in current Euro (2006 = 100%) 130% 125% 120% 115% 110% 105% 100% 95% 90%

75 Competitive position & Growth in Mercosur P L A S T I C S Market growth (~ 5%/y during the last 5 years), mainly driven by construction. High potential: in Latin America, 120 million people don t have drinking water and sewers Ongoing and future investments in Brazil to create a world class plant (350 kt PVC fully integrated) and maintain market share New PVC production with ethanol (sugar cane) based ethylene under study 75

76 P L A S T I C S Competitive position & Growth in South East Asia Market growth remains high (around 5%) in SEA SEA remains the major importer of EDC in the world Competitiveness based on vinyl chain integration, size, logistic network, trade agreements between SEA countries Reduced impact of China (reduction of export incentives, technology issues, costs of imported raw materials & energy,, ) Stepping up of the competitive position of Vinythai with world class chloralkali-vcm plant (400 kt/year). Development of PVC integration: potential purchase of APEX (120 kt) and further capacity expansion. Synergies with the new Epicerol plant to be exploited 76

77 REBIT evolution by region across the cycles P L A S T I C S RusVinyl 2012 (50%) Europe Mercosur Asie Russia 77

78 To the extent that any statements made in this presentation contain information that is not historical, these statements are essentially forward-looking. The achievement of forward-looking statements contained in this presentation is subject to risks and uncertainties because of a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations; changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals; regulatory approval processes, all-in scenario of R&D projects and other unusual items. Consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements can be identified by the use of words such as "expects," "plans," "will," "believes," "may," "could" "estimates," "intends", "goals", "targets", "objectives", "potential", and other words of similar meaning. Should known or unknown risks or uncertainties materialize, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly update any forward-looking statements"