SOURCE: SOLVAY

February 15, 2007 01:37 ET

2006 : another record year for Solvay, due to strong growth in operating performance - Growth in sales of 10% and in operating results of 21%

BRUSSELS, BELGIUM -- (MARKET WIRE) -- February 15, 2007 -- The full press release (including also IFRS financial statements) and the full report of the Statutory auditor are available on http://www.solvay-investors.com/"

Embargo : Brussels, February 15, 2007 at 7.30 am

- Record sales (EUR 9.4 Bn), operating results (REBIT[1] of EUR 1.1 billion), net income of the Group (EUR 817 million) and cash flow (EUR 1.3 Bn), surpassing those achieved in 2005

- Significant improvement in all three sectors : Pharmaceuticals, Chemicals and Plastics

- Proposed net dividend of 2.10 EUR, up by 5%

Sales in 2006 were up 10%, reaching EUR 9.4 billion. All three sectors showed significant improvement. In the 4th quarter of 2006, sales remained stable (+1%) due to the effect, as previously announced, of one-off items expected in the Pharmaceuticals Sector.

The net income of the Group (EUR 817 million) equaled the 2005 record; it reflects the growth in operating performance and includes non-operating[2] items in 2006 with a negative balance of EUR 40 million, while in 2005, it included a positive balance of non-operating items of EUR 119 million. In the 4th quarter of 2006, the net income of the Group improved by 11% to EUR 146 million.

REBIT improved by 21% compared to 2005 and reached a record of EUR 1.1 billion. The operating margin (REBIT on sales) reached 12%, up from 11% in 2005. Operating results improved in all three sectors. In the 4th quarter of 2006, as expected, operating results dropped by 8%.

Cash flow[3] in 2006 amounted to EUR 1.3 billion and REBITDA[4] to EUR 1,6 billion. This cash flow as well as the income from the sale of assets allowed the Group to achieve a net debt to equity ratio of 28% at the end of 2006 (compared to 43% at the end of 2005) which brings it back at the level comparable to the one achieved before the Fournier acquisition.

The Board of Directors decided to propose to the General Shareholders' Meeting of May 8, 2007, payment of a net dividend of EUR 2.10 per share, up by 5% compared to 2005. This is in line with the Group's dividend policy, which consists of increasing it anytime possible, and if possible not decreasing it. For 25 years, the dividend has increased gradually and has never been reduced.

Pharmaceuticals Sector[5] sales (EUR 2,600 million) increased by 15% in 2006 and operating results by 49% (EUR 451 million). The operating margin improved greatly to 17% in 2006, compared to 13% in 2005. This confirms the significant improvement of Solvay Pharmaceuticals and the successful integration of Fournier in the Group in line with the objectives of the "INSPIRE"[6] project. In addition to the significant growth of Cardiometabolic products, with EUR 413 million in revenues for the blockbuster drug fenofibrate, the sales of the primary products of Solvay Pharmaceuticals were up significantly. Research efforts in 2006, EUR 424 million (16% of sales), were up significantly (+21%) compared to 2005. Sales and results from the 4th quarter, including receipt of two milestone payments after completion of major steps in Research and Development for bifeprunox and SLV319, were down (respectively by 7% and by 20%) due to the effect of one-off items as announced (inventory reduction by American distributors) and the expiration of marketing rights to Pantoloc®.

Chemicals Sector sales improved by 8% in 2006 (+5% in the 4th quarter). REBIT (EUR 315 million) increased by 11% compared to 2005 and by 15% in the 4th quarter. This performance was obtained due to the continued favorable global balance between supply and demand, at a time when energy costs remained at very high levels. Results from the "Minerals" cluster posted strong growth. The "Oxygen" cluster improved, confirming the trend begun in the 3rd quarter. The "Electrochemistry activities (caustic soda) and fluorinated products" trended downward, mainly in fluor chemical commodities.

Plastics Sector sales increased by 8% in 2006 (+4% in the 4th quarter). The increase in the "Specialties" cluster, sustained by Specialty Polymers, and the strong performance of the "Vinyls" cluster permitted results (EUR 409 million) of the Plastics Sector to surpass (+5%) the already strong results of 2005. In the 4th quarter, the sector reproduced (+1%) the good results realized in the 4th quarter of 2005.

"The strong growth of operating performance in 2006 illustrates the implementation of the Group's strategy for sustainable and profitable growth as well as enrichment of the portfolio of activities and the continuous efforts to improve competitiveness. The year 2007 began in a generally favorable business climate."

SOLVAY Group - Summary Financial Information[7]

+-------------------------+------+------+-------+------------+------------+
|Millions EUR             |      |      |2006 / |4th quarter |4th quarter |
+-------------------------+------+------+-------+------------+------------+
|(except for per share    | 2005 | 2006 |  2005 |       2005 |       2006 |
|figures in EUR)          |      |      |       |            |            |
+-------------------------+------+------+-------+------------+------------+
|Sales                    |8,562 |9,399 |   10% |      2,324 |      2,349 |
+-------------------------+------+------+-------+------------+------------+
|REBIT                    |  912 |1,099 |   21% |        236 |        216 |
+-------------------------+------+------+-------+------------+------------+
|REBIT/Sales              |  11% |  12% |     - |            |            |
+-------------------------+------+------+-------+------------+------------+
|Non-recurring items      | -357 | -143 |  -60% |        -62 |        -25 |
+-------------------------+------+------+-------+------------+------------+
|EBIT                     |  555 |  956 |   72% |        174 |        191 |
+-------------------------+------+------+-------+------------+------------+
|Charges on net           |  -85 |  -82 |   -4% |        -25 |        -16 |
|indebtedness             |      |      |       |            |            |
+-------------------------+------+------+-------+------------+------------+
|Income taxes             | -153 | -179 |  +17% |        -38 |        -29 |
+-------------------------+------+------+-------+------------+------------+
|Discontinued operations  | +476 | +103 |  -78% |         22 |          0 |
+-------------------------+------+------+-------+------------+------------+
|Income from investments  |  +23 |  +19 |  -17% |          0 |          0 |
+-------------------------+------+------+-------+------------+------------+
|Net income of the Group  |  816 |  817 |     - |        131 |        146 |
+-------------------------+------+------+-------+------------+------------+
|Net income (Solvay share)|  789 |  791 |     - |        124 |        142 |
+-------------------------+------+------+-------+------------+------------+
|Total depreciation       |  464 |  522 |  +13% |        129 |        139 |
+-------------------------+------+------+-------+------------+------------+
|REBITDA                  |1,339 |1,568 |  +17% |        360 |        339 |
+-------------------------+------+------+-------+------------+------------+
|Cash flow                |1,280 |1,339 |   +5% |        260 |        285 |
+-------------------------+------+------+-------+------------+------------+
|(per share, in EUR)      |      |      |       |            |            |
+-------------------------+------+------+-------+------------+------------+
|Earnings per share[8]    | 9.51 | 9.57 |   +1% |       1.50 |       1.72 |
+-------------------------+------+------+-------+------------+------------+
|Net debt to equity ratio |  43% |  28% |     - |          - |          - |
+-------------------------+------+------+-------+------------+------------+

+-------------------------+------------------+
|Millions EUR             |4th quarter 2006/ |
+-------------------------+------------------+
|(except for per share    | 4th quarter 2005 |
|figures in EUR)          |                  |
+-------------------------+------------------+
|Sales                    |              +1% |
+-------------------------+------------------+
|REBIT                    |              -8% |
+-------------------------+------------------+
|REBIT/Sales              |                  |
+-------------------------+------------------+
|Non-recurring items      |             -61% |
+-------------------------+------------------+
|EBIT                     |             +10% |
+-------------------------+------------------+
|Charges on net           |             -32% |
|indebtedness             |                  |
+-------------------------+------------------+
|Income taxes             |             -24% |
+-------------------------+------------------+
|Discontinued operations  |             n.s. |
+-------------------------+------------------+
|Income from investments  |             n.s. |
+-------------------------+------------------+
|Net income of the Group  |             +11% |
+-------------------------+------------------+
|Net income (Solvay share)|             +15% |
+-------------------------+------------------+
|Total depreciation       |              +8% |
+-------------------------+------------------+
|REBITDA                  |              -6% |
+-------------------------+------------------+
|Cash flow                |             +10% |
+-------------------------+------------------+
|(per share, in EUR)      |                  |
+-------------------------+------------------+
|Earnings per share[8]    |             +15% |
+-------------------------+------------------+
|Net debt to equity ratio |                - |
+-------------------------+------------------+
Notes on Solvay Group summary financial information

Non-recurring items in 2006 showed a negative balance of EUR 143 million. It included:

- The capital gain of EUR 75 million on the second-quarter sale of 49.6% in Financière Keyenveld S.A. (Sofina S.A holding.);

- EUR 133 million of restructuring costs, recorded to meet the 2010 objectives of the Pharmaceuticals ("INSPIRE"9 project);

- EUR 42 million of restructuring costs and additional provisions for miscellaneous litigation, primarily in the chemicals sector, and miscellaneous write-downs;

- EUR 49 million for impairment and reorganization of barium and strontium carbonate activities, which face significant competitive pressures, as well as for impairment of assets (the Zolip project) in the Pharmaceuticals sector following reallocation of priorities to the United States for development of the fenofibrate/statin combination in the framework of the project led by AstraZeneca and Abbott.

Charges on net indebtedness amounted to EUR 82 million. At the end of December 2006, financial debt was totally covered at a fixed rate. This resulted mainly from the issue, in May 2006, of EUR 500 million of a hybrid non-dilutive financial instrument carrying a payment at a fixed interest rate for the first 10 years. This issue allowed the Group to reinforce its financial structure while at the same time benefiting from favorable conditions in the capital market.

Income taxes amounted to EUR 179 million in 2006, or a rate of 20% taking into account the tax credits in the 4th quarter 2006, in addition to those recorded during the previous quarters, as well as the non-taxable capital gain on the 2nd quarter sale of 49.6% in S.A. Financière Keyenveld.

In 2006, results from discontinued operations represented the net income (EUR 103 million) on the sale of industrial foils to Renolit in March 2006. It should be recalled that, in 2005, the results from discontinued operations included a net capital gain (EUR 472 million) on the January 6, 2005 sale to BP of Solvay's American and European interests in the high-density polyethylene activities and the net income of the industrial foils activities.

Income from investments represents the dividends paid by Fortis and Sofina in 2006.

Net income of the Group amounted to a record EUR 817 million compared to EUR 816 million in 2005 after taking into consideration much less significant non- operating items. The net earnings per share in 2006 amounted to EUR 9.57 (EUR 1.72 in the 4th quarter), compared to EUR 9.51 for the same period in 2005 (EUR 1.50 in the 4th quarter 2005).

Depreciation amounted to EUR 522 million, up 13% compared to 2005. Cash flow reached a record level of EUR 1,339 million and was up by 5%. REBITDA amounted to EUR 1,568 million, up by 17%, taking into account the strong growth in operating results.

Stockholders' equity amounted to EUR 4,456 million at the end of December 2006, up by EUR 536 million compared to the end of 2005. Net debt of the Group at the end of 2006 (EUR 1,258 million) was down by EUR 422 million compared to December 31, 2005. The net debt to equity ratio was 28%, sharply down compared to 43% at the end of 2005. Moody's and S&Ps confirmed the long- and short-term ratings for Solvay (respectively A/A2 and A1/P1). This situation reflects the Group policy of maintaining a sound financial situation, in line with the objective of not continuously exceeding a net debt to equity ratio of 45%.

INVESTMENTS and RESEARCH & DEVELOPMENT

Investments in 2006 amounted to EUR 858 million. Research and Development (R&D) costs in 2006 reached EUR 563 million, including 75% for the Pharmaceuticals sector. Research efforts for the latter in 2006 amounted to EUR 424 million (16% of sales), up significantly (+21%) compared to 2005, taking into account the integration of Fournier Pharma since 1 August 2005.

The 2007 investments budget for the Group is EUR 905 million; the budget for R&D expenses is EUR 556 million, 75% of which is for the Pharmaceuticals sector.

This demonstrates the Group's determination of pursuing its strategy of sustainable and profitable growth.

Additionally, the Innovation process, which is at the heart of the Group's strategy, marked the year 2006 with the presentation of the fourth Solvay Innovation Trophy. Eight innovation projects out of 96 in competition, all developed within the Solvay Group, were recognized by a jury composed of distinguished representatives from the world of research and innovation. The achievement, a year earlier than forecast, of the objectives set in the areas of growth, partnership and complete employee involvement, generated the setting of three new Innovation goals for 2009: "new sales" ratio of 30%, 50% of partnerships for innovative projects and full participation by employees (100%).

RESULTS BY SECTOR[10]

+-------------------------+------+------+-------+------------+------------+
|Millions EUR             |      |      |2006 / |4th quarter |4th quarter |
+-------------------------+------+------+-------+------------+------------+
|                         | 2005 | 2006 |  2005 |       2005 |       2006 |
+-------------------------+------+------+-------+------------+------------+
|GROUP SALES              |8,562 |9,399 |  +10% |      2,324 |      2,349 |
+-------------------------+------+------+-------+------------+------------+
|Pharmaceuticals          |2,270 |2,600 |  +15% |        714 |        666 |
+-------------------------+------+------+-------+------------+------------+
|Chemicals                |2,785 |2,998 |   +8% |        708 |        743 |
+-------------------------+------+------+-------+------------+------------+
|Plastics                 |3,507 |3,800 |   +8% |        902 |        940 |
+-------------------------+------+------+-------+------------+------------+
|"Corporate and Business  |    - |    - |     - |          - |          - |
|Support "[11]            |      |      |       |            |            |
+-------------------------+------+------+-------+------------+------------+
|GROUP REBIT              |  912 |1,099 |  +21% |        236 |        216 |
+-------------------------+------+------+-------+------------+------------+
|Pharmaceuticals          |  302 |  451 |  +49% |        108 |         86 |
+-------------------------+------+------+-------+------------+------------+
|Chemicals                |  285 |  315 |  +11% |         53 |         60 |
+-------------------------+------+------+-------+------------+------------+
|Plastics                 |  389 |  409 |   +5% |         93 |         94 |
+-------------------------+------+------+-------+------------+------------+
|"Corporate and Business  |  -63 |  -76 |  +21% |        -17 |        -24 |
|Support"[11]             |      |      |       |            |            |
+-------------------------+------+------+-------+------------+------------+
|GROUP REBITDA            |1,339 |1,568 |  +17% |        360 |        339 |
+-------------------------+------+------+-------+------------+------------+
|Pharmaceuticals          |  376 |  554 |  +47% |        135 |        115 |
+-------------------------+------+------+-------+------------+------------+
|Chemicals                |  448 |  484 |   +8% |         99 |        104 |
+-------------------------+------+------+-------+------------+------------+
|Plastics                 |  565 |  595 |   +5% |        140 |        142 |
+-------------------------+------+------+-------+------------+------------+
|"Corporate and Business  |  -50 |  -65 |  +30% |        -14 |        -22 |
|Support"[11]             |      |      |       |            |            |
+-------------------------+------+------+-------+------------+------------+

+-------------------------+------------------+
|Millions EUR             |4th quarter 2006/ |
+-------------------------+------------------+
|                         | 4th quarter 2005 |
+-------------------------+------------------+
|GROUP SALES              |              +1% |
+-------------------------+------------------+
|Pharmaceuticals          |              -7% |
+-------------------------+------------------+
|Chemicals                |              +5% |
+-------------------------+------------------+
|Plastics                 |              +4% |
+-------------------------+------------------+
|"Corporate and Business  |                - |
|Support "[11]            |                  |
+-------------------------+------------------+
|GROUP REBIT              |              -8% |
+-------------------------+------------------+
|Pharmaceuticals          |             -20% |
+-------------------------+------------------+
|Chemicals                |             +15% |
+-------------------------+------------------+
|Plastics                 |              +1% |
+-------------------------+------------------+
|"Corporate and Business  |             +41% |
|Support"[11]             |                  |
+-------------------------+------------------+
|GROUP REBITDA            |              -6% |
+-------------------------+------------------+
|Pharmaceuticals          |             -15% |
+-------------------------+------------------+
|Chemicals                |              +5% |
+-------------------------+------------------+
|Plastics                 |              +1% |
+-------------------------+------------------+
|"Corporate and Business  |             +57% |
|Support"[11]             |                  |
+-------------------------+------------------+
[1] Operating results, i.e. EBIT before non-recurring items

[2] Non-recurring items and results from discontinued operations

[3] Net income plus total depreciation

[4] REBITDA : REBIT, before recurring depreciation and amortization.

[5] Results from the Pharmaceuticals sector include results from Fournier Pharma since August 1, 2005

[6] See also comments on page 8.

[7] Books were audited by Deloitte

[8] Calculated on the basis of the weighted average of the number of shares outstanding after deducting shares purchased to cover stock options, or a total of 83,020,663 shares in 2005 and 82,669,267 shares in 2006.

[9] See also comments on page 8.

[10] Results by sector include results from the three sectors of the Group as well as the "Corporate and Business Support ".

[11] Non-allocated items

To obtain additional information:

Martial Tardy

Corporate Press Officer

SOLVAY S.A. Tel: 32 2 509 72 30

E-mail : martial.tardy@solvay.com

Internet: www.solvaypress.com

Solvay Investor Relations

SOLVAY S.A.

Tel: 32-2-509.60.16

E-mail : investor.relations@solvay.com

Patrick Verelst

Deputy Investor Relations

SOLVAY S.A.

Tel: 32 2 509 72 43

E-mail : patrick.verelst@solvay.com

Internet: www.solvay-investors.com

SOLVAY is an international chemical and pharmaceutical Group with headquarters in Brussels. It employs some 29,000 people in 50 countries. In 2006, its consolidated sales amounted to EUR 9.4 billion, generated by its three sectors of activity: Chemicals, Plastics and Pharmaceuticals. Solvay (Euronext : SOLB.BE - Bloomberg: SOLB.BB - Reuters: SOLBt.BR) is listed on the Euronext stock exchange in Brussels.

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