SOLVAY GROUP results for the first nine months of 2003


BELGIUM, Oct. 31, 2003 (PRIMEZONE) -- SOLVAY GROUP:


 -- Pharmaceuticals Sector: 14% increase in results in third
    quarter of 2003; positive developments in R&D : forthcoming
    introduction of registration dossiers for cilansetron and move
    to Phase III trials for bifeprunox

 -- Plastics Sector: results down 71% in the third quarter of 2003,
    primarily due to vinyls in Europe

Sales of the Solvay group for the first nine months of 2003 were EUR 5,685 million, down 5% compared to the same period of 2002. At constant exchange rates, they would have increased by 1%.

Consolidated net income (EUR 297 million) was down 25% compared to the very good first nine months of 2002 (EUR 396 million). Third quarter 2003 income was at a level comparable to that of the two preceding quarters and was lower than that for the third quarter of 2002, which was the best quarter of that year.

The result for the first nine months of 2003 were recorded in a very difficult economic context, marked by the effect on prices of the significant destocking from the second quarter of 2003 in vinyls and in the chlor-alkali chain and by the strengthening of the EUR, which weighed down both margins on exports and the conversion into EUR of results recorded in USD.

However, in the past several weeks, some signs of improvements going for price increases were achieved in PVC and caustic soda.

In this difficult context, the Group has nevertheless been able to rely on the competitiveness of its activities and the continued strength of results of the Pharmaceuticals Sector (up 14% in the third quarter of 2003). It has also monitored carefully the selection of its capital investments and has carried out a series of restructurings aimed at improving its cost structure. Strict measures to control working capital have also been taken. Net debt to equity ratio remained stable.

Regarding trends, the results of the Group for the fourth quarter of 2003 should be close to those of the fourth quarter of 2002. For the whole of 2003, it has been confirmed that the Group's results will be down from the record year 2002 and should be in line with the 2001 results.

KEY FIGURES


 Millions of EUR    9 months 2002  9 months 2003  9 months 2003/
                                                  9 months 2002
                                                           Var%

 Sales                     6,014          5,685             -5%

 REBIT(1)                    623            493            -21%

 EBIT                        598            487            -19%

 Charges on net
 indebtedness                -69            -66             -4%

 Income taxes               -129           -115            -11%

 Equity earnings             -19            -24             26%

 Income from investments      15             15               -

 Net income of the Group     396            297            -25%

 Net income (Solvay share)   375            272            -27%

 Depreciation &
 Amortization                384            319            -17%

 Recurring depreciation
 & amortization              331            321             -3%

 Cash flow(2)                780            616            -21%

 EUR

 Net earning per share (3)  4.51           3.29            -27%

 Millions of EUR
                          3rdQ 2002    3Q 2003   3rd quarter 2003/
                                                 3rd quarter 2002
                                                           Var%
 Sales                      1,965             1,895         -4%

 REBIT(1)                     204               151        -26%

 EBIT                         211               159        -25%

 Charges on net
 indebtedness                 -25               -25          -

 Income taxes                 -27               -40         48%

 Equity earnings               -4                 5         n.s.

 Income from investments        -                 -          -

 Net income of the Group      155                98         -37%

 Net income (Solvay share)    143                91         -36%

 Depreciation &
 Amortization                 105               111           6%

 Recurring depreciation
 & amortization               106               111           5%

 Cash flow(2)                 260               209         -20%

 EUR

 Net earning per share (3)   1.72              1.10         -36%

(1) REBIT: Recurrent Earnings Before Interests and Taxes, recurring operational results

(2) Cash flow is the sum of the net income of the Group and the depreciation and amortization

(3) Calculated on the basis of the weighted average number of shares outstanding during the quarter, after deducting shares purchased to cover stock option programs, or a total of 83,056,229 shares for the nine months of 2002 and 82,760,311 shares for the nine months of 2003.

COMMENTS ON KEY FIGURES for the nine months of 2003 and BALANCE SHEET

Non-recurring items for the first nine months of 2003 amounted to -- EUR 6 million, including, on the one hand, significant provisions for restructuring (among others the shutdown of the VCM and PVC units at Ludwigshafen) and a charge linked to internal transfer of a pharmaceutical product and, on the other hand, the reversal of reserves no longer needed. In addition, there have been no new developments in the ongoing inquiry by European competition authorities in the area of hydrogen peroxide activities. The possible impact of this inquiry was not taken into account in these results.

Charges on net indebtedness amounted to EUR 66 million, down 4% compared to the first nine months of 2002.

Income taxes were EUR 115 million, with an average tax rate of about 27%.

Income from Investments represent annual dividends paid by Fortis and Sofina in the second quarter.

Equity earnings of the joint ventures with BP in high-density polyethylene remained negative (-EUR 24 million). Improvement was noted in the third quarter of 2003, which translated into improvement in market conditions and margins in the United States and Europe.

The net income of the Group was EUR 297 million, down 25% compared to the first nine months of 2002. Minority interests were EUR 25 million, of which EUR 20 million represents preferred dividends linked to the financing of EUR 800 million for the Ausimont acquisition. Net earnings per share fell 27% to EUR 3.29.

Depreciation and amortization fell by EUR 65 million compared to the first nine months of 2002, due to recording of significant non-recurring depreciation (EUR 58 million) in the first quarter of 2002, linked to the sublicense of Teveten(r) anti-hypertensive in the US to Biovail and the voluntary withdrawal of Luvox(r) from the American market. Cash flow was EUR 616 million for the first nine months of 2003, down 21%. It more than covered the increase of the working capital requirements and the industrial investments, leading to the Group's policy of rigorously controlling the levels of both.

Net indebtedness of the Group at 30 September 2003 amounted to EUR 1,376 million, slightly up from 31 December 2002. The net debt to equity ratio at the end of the third quarter of 2003 amounted to 38%, compared to 37% at the end of 2002.

RECURRING RESULTS BY SEGMENT

The results by segment include the results of the four sectors of the Group and 'Discontinuing operation' relating to the high density polyethylene activities in joint ventures with BP. As required by IFRS, elements not allocated by sector, which include primarily general expenses and non-sectoral research as well as miscellaneous income and expenses not directly linked to the activities of the Group, are presented separately.

REBIT by segment is operational results before non-recurring items. For the four sectors, REBIT is comparable to EBIT presented in annual and half-year results in prior years, without unallocated items. Sales are reflected after elimination of sales between the sectors.


 Millions of EUR        9 months 2002  9 months 2003  9 months 2003/
                                                      9 months 2002
                                                           Var%
 Group Sales                 6,014          5,685           -5%

 Pharmaceuticals             1,393          1,370           -2%

 Chemicals                   1,998          1,892           -5%

 Plastics                    1,482          1,354           -9%

 Processing                  1,138          1,067           -6%

 Unallocated items              -              -             -

 Discontinuing operation         3              2          -33%

 REBIT Group                   623            493          -21%

 Pharmaceuticals               179            168           -6%

 Chemicals                     195            154          -21%

 Plastics                      200            117          -42%

 Processing                     72             58          -19%

 Unallocated items             -52            -34          -35%

 Discontinuing operation        28             31           11%


 Millions of EUR 3rd quarter  3rd quarter  3rd quarter 2003/
                       2002          2003  3rd quarter 2002
                                                       Var%

 Group Sales           1,965        1,895               -4%

 Pharmaceuticals          471         488                3%

 Chemicals                651         619               -5%

 Plastics                 486         446               -8%

 Processing               356         341               -4%

 Unallocated items         -           -                  -

 Discontinuing operation    1           1                 -

 REBIT Group              204         151               -26%

 Pharmaceuticals           69          79                14%

 Chemicals                 57          48               -16%

 Plastics                  78          23               -71%

 Processing                17          17                 -

 Unallocated items        -26          13               -50%

 Discontinuing operation    9          -2               n.s.

Pharmaceuticals Sector


 -- 14% increase in results in the third quarter of 2003; positive
    developments in R&D: forthcoming introduction of registration
    dossiers for cilansetron and move to Phase III trials for
    bifeprunox.

 -- Current forecasts indicate that the Pharmaceuticals Sector results
    for the second half of 2003 should be above those for the second
    half of 2002.

The Pharmaceuticals Sector's sales, expressed in EUR, fell by 2% for the first nine months 2003 but were up 3% from the third quarter of 2002 to the third quarter of 2003. At constant exchange rates, they were up 7% for the first nine months 2003.

Sales in Cardiology increased 13% compared to the first nine months of 2002, thanks to the growth in sales (+30%) of Teveten(r) anti-hypertensive medication. Influvac(r) anti-influenza vaccine experienced a very successful third quarter of 2003 and an equally strong showing for the first nine months of the year (up 15%). Mental health products grew 1% while Gynecology/Andrology and Gastroenterology were down 3% and 2% respectively.

American sales increased 18% in USD (-1% in EUR) under the influence of the growth in sales of the drug Androgel(r)(up 56% in USD), Promertrium(r) (up 34% in USD) and Marinol (up 89% in USD). Sales of Estratest(r) declined 19% in USD under competitive pressure, the effect of the debates on hormone treatments and the reduction of distributor inventories. Discussions in progress with the FDA (Food and Drug Administration) on the administrative status of Estratest(r) are being pursued constructively but at the same time that status generated two lawsuits in the United States. In addition the Women's Health Initiative (WHI) study gave rise to private suits in the US against producers of female hormone treatments, including Solvay Pharmaceuticals, Inc., even though our products do not contain the same hormones as those included in the WHI study.

European sales and results continued to experience significant pressures on prescription pricing and volumes.

The Group has intensified its R&D program (up 12% for the first nine months of 2003 compared to the same period in 2002). R&D expenses represent about 16% of sector sales, as a result of the intensification of research efforts and the large number of R&D projects. Worth noting was the move into Phase III trials for bifeprunox, a treatment for psychosis and schizophrenia co-developed with Lunbeck. Furthermore, as announced on October 29, 2003, it has been decided to expedite the preparation of the registration dossiers of cilansetron (treatment of irritable bowel syndrome) following the positive results of first two of three Phase III clinical trials. Submission of these dossiers is scheduled for the beginning of 2004.

The results of the Pharmaceuticals Sector (EUR 168 million) for the first nine months of 2003 are down 6% - at constant exchange rates they would have been up 7%- compared to the first nine months of 2002. It should be noted that the results of the third quarter of 2003 are up 14% from the same period of the previous year, despite the drop in the USD.

Chemicals Sector


 -- Weakness in the chlor-alkali chain and impact of the strengthening
    of the EUR on exports, particularly of soda ash and fluorinated
    gases.

The results of the Chemicals Sector were down 21% for the first nine months of 2003 compared to the same period of the previous year as a result of weakening of activities, among others in the chlor-alkali chain, as well as the competitive pressures resulting from the impact of a stronger EUR, particularly on our exports of soda ash and fluorinated gases. Other activities such as the Hydrogen Peroxide SBU recorded improvement. The increase in caustic soda prices beginning in October 2003, the improvement in results noted in the third quarter of 2003 in fluorinated gases, thanks to the increasing contribution of Solkane(r) 365 mfc HFC, and the continued good performance of hydrogen peroxide, should have a favorable influence on the performance of the Chemicals Sector in the fourth quarter of 2003.

Plastics Sector


 -- A significant decline in the third quarter of 2003 in vinyls
    activities and performance compounds compared to a very good
    third quarter in 2002.  Specialty polymers were unable to
    reproduce in the third quarter of 2003 the excellent
    performance of the third quarter of 2002, influenced by the
    weakness in volumes in certain markets and the negative
    impact of the strengthening of the EUR.

The Plastics Sector recorded a decline of 42% in its results for the first nine months of 2003 and 71% for the third quarter. Vinyls in Europe experienced a significant drop beginning in June 2003. However, price increases have been achieved recently. Asian and South American vinyl activities posted satisfactory results. Specialty Polymers suffered from weaknesses in volumes in certain segments of the market (e.g. telecommunications and electronics) and the negative impact of exchange rates between the USD and the EUR, particularly in fluorinated polymers. Worthy of note was the good performance of fluorinated fluids and elastomers and of certain high-performance polymers. Overall, selling prices of specialty polymers remained constant. These products remain major contributors to the results of the Group.

Processing Sector


 -- Sluggishness of the economic context lessened by deployment and
    restructuring initiatives.

Even though the results of the Processing Sector for the third quarter of 2003 were equal to those for the third quarter of 2002, cumulative results for the first nine months of 2003 were down 19%. Inergy Automotive Systems (fuel systems) continued its volume growth, thanks to the growth of the Asian market and despite the reduction in volumes experienced by the main American and European automobile manufacturers. Its results were nevertheless affected by the weakness of the USD and strong pressure on selling prices. Results of Industrial Films and Pipelife (pipes and fittings) were affected by a less favorable global economic environment. The impact was lessened, for pipes and fittings, by the effect of restructuring measures and improvement in the product mix, and for industrial films, by the improved performance of certain specialties applications, such as laminates and technical films.

With the agreement from the Banking and Finance Commission, the 2003 accounts are being drawn up and presented in IFRS (International Financial Reporting Standards). The 2002 accounts are presented on a pro forma IFRS basis as a means of comparison.

Deloitte et Touche conducted a limited review of the consolidated financial situation as of 30 September 2003. This primarily consisted of analyzing, comparing and discussing financial information and therefore was less extensive than a review intended for the audit of annual statements. This review did not reveal factors that would have required significant correction of the intermediate figures.

Key dates for financial communication in 2003


 -- 18 December 2003:  press release about the payment of the interim
    dividend relating to 2003 (payment on 15 January 2004).

 -- 13 February 2004:  results of the fourth quarter of 2003 and the
    year 2003

 -- 26 March 2004:  consolidated financial statements for 2003 and
    announcement of the dividend relating to 2003.

IFRS FINANCIAL STATEMENTS

(Statements have been subjected to a limited review by the external auditors, Deloitte & Touche)


 in millions of EUR                   9 months 2002   9 months 2003

 Sales                                        6,014           5,685

 Cost of goods sold                          -4,008          -3,824

 Gross margin                                 2,006           1,862

 Commercial and administrative costs         -1,055          -1,019

 Research and development costs                -289            -308

 Other operating gains & losses                 -53             -44

 Other financial gains & losses                  14               4

 REBIT                                          623             493

 Non-recurring items                            -25              -6

 EBIT                                           598             487

 Charges on net indebtedness                    -69             -66

 Income taxes                                  -129            -115

 Equity earnings                                -19             -24

 Income from investments                         15              15

 Net income of the Group                        396             297

 Minority interests                             -21             -25

 Net income (Solvay share)                      375             272

 Net earnings per share                        4.51            3.29

 Diluted net earnings per share  (1)            4.5            3.29

   in millions of EUR            3rd quarter 2002  3rd quarter 2003

 Sales                                    1,965             1,896

 Cost of goods sold                      -1,307            -1,269

 Gross margin                               658               627

 Commercial and administrative costs       -343              -333

 Research and development costs             -94              -111

 Other operating gains & losses             -22               -16

 Other financial gains & losses               5               -15

 REBIT                                      204               151

 Non-recurring items                          7                 7

 EBIT                                       211               159

 Charges on net indebtedness                -25               -25

 Income taxes                               -27               -40

 Equity earnings                             -4                 5

 Income from investments                      0                 0

 Net income of the Group                    155                98

 Minority interests                         -12                -8

 Net income (Solvay share)                  143                91

 Net earnings per share                    1.72              1.10

 Diluted net earnings per share  (1)       1.72              1.10

(1)calculated based on the number of shares diluted by the stock options issued.

Consolidated statement of sources of funds


 in millions of EUR                             9 months   9 months
                                                    2002       2003

 Cash flow from operating activities               494        458

 EBIT                                              598        487

 Depreciation and amortization                     384        319

 Changes in working capital                       -447       -274

 Changes in provisions                              24        -16

 Income taxes paid                                 -23        -69

 Other non-cash items                              -41         11

 Cash flow from investing activities              -270       -224

 Acquisition/sale of investments                    26        -72

 Acquisition/sale of assets                       -199       -293

 Income from investments                            20         19

 Changes in financial receivables                 -113        123

 Effect of changes in method of consolidation       -5         -2

 Cash flow from financing activities              -439       -126

 Increase/Decrease of capital                        8          0

 Acquisition/sale of own shares                      0        -16

 Changes in borrowings                            -190        178

 Charges on net indebtedness                       -69        -66

 Dividends                                        -188       -222

 Net change in cash and cash equivalents          -215        108

 Currency translation differences                  -26        -14

 Opening cash balance                              630        444

 Ending cash balance                               388        538


              Consolidated balance sheet

 in millions of EUR                   At the end   At the end of
                                         of 2002   the 3rd quarter
                                                         2003
 ASSETS
 Non-current assets                       5,738             5,503

 Intangible assets                          264               250

 Consolidation differences                  178               160

 Tangible assets                          3,589             3,481

 Investments -- equity accounting           318               280

 Other investments                          466               501

 Deferred tax assets                        477               419

 Financial receivables and
 other non-current assets                   446               412

 Current assets                           3,688             3,726

 Inventories                              1,095             1,089

 Trade receivables                        1,543             1,496

 Other receivables                          606               603

 Cash and cash equivalents                  444               538

 TOTAL ASSETS                             9,426             9,229

 EQUITY AND LIABILITIES

 Total Shareholders' equity               3,573             3,575

 Capital and reserves                     2,695             2,706

 Minority interests                         878               869

 Non-current liabilities                  3,256             3,432

 Long-term provisions                     1,775             1,787

 Deferred tax liabilities                   228               155

 Long-term financial debt                 1,198             1,467

 Other non-current liabilities               55                22

 Current liabilities                      2,597             2,222

 Short-term provisions                       96                59

 Short-term financial debt                  565               447

 Trade liabilities                        1,141               923

 Income tax payable                          31               118

 Other current liabilities                  764               676

 TOTAL EQUITY AND LIABILITIES             9,426             9,229

Statement of changes in stockholders' equity


 in millions of EUR
                       Capital       Issue  Reserves      Own
                                         premiums        shares

 Book value at the end of the previous
  period  (12/31/2002)       1,269         14      1,627    -102

 Income for the period                               272

 Distribution                                       -121

 Changes in exchange
  rates

 Acquisition/sale of own shares                              -15

 Adjustment to market value of financial
 assets

  Book value at the end of
   the period (30/09/2003)   1,269         14      1,778    -117

 in millions of EUR
                     Exchange      Direct charges    Stockholders'
                    differences    to stockholders'     equity
                                        equity

 Book value at the end of                                   2,695
 the previous period
 (12/31/2002)             -117                 4

 Income for the period                                        272

 Distribution                                                -121

 Changes in exchange
 rates                    -116                               -116

 Acquisition/sale of own shares                               -15

 Adjustment to market value
  of financial assets                          -9              -9 

 Book value at the end of
  the period (30/09/2003) -233                -5           2,706

RESULTS BY SEGMENT

This table indicates sales without elimination of sales between sectors as well as the results by sector including non-recurring elements (EBIT).

Millions of EUR


                                9 months   9 months  9 months 2003/
                                   2002       2003   9 months 2002
                                                             Var%

 Group sales                      6,448      6,152             -5%

 Pharmaceuticals                  1,393      1,370             -2%

 Chemicals                        2,161      2,059             -5%

 Plastics                         1,745      1,647             -6%

 Processing                       1,146      1,074             -6%

 Unallocated items                    -          -               -

 Discontinuing operation              3          2            -28%

 Group EBIT                         598        487            -19%

 Pharmaceuticals                    156        163              4%

 Chemicals                          175        156            -11%

 Plastics                           215        112            -48%

 Processing                          76         56            -26%

 Unallocated items                  -54        -35            -35%

 Discontinuing operation             30         35             13%


                       3rd quarter  3rd quarter  3rd quarter 2003/
                             2002         2003   3rd quarter 2002
                                                          Var%
 Group sales                2,112        2,038                -3%

 Pharmaceuticals              471          488                 3%

 Chemicals                    707          670                -5%

 Plastics                     572          535                -6%

 Processing                   361          344                -5%

 Unallocated items             -            -                  -

 Discontinuing operation        1            1                 0%

 Group EBIT                   211          159               -25%

 Pharmaceuticals               48           77                60%

 Chemicals                     58           53                -9%

 Plastics                      96           23               -76%

 Processing                    25           17               -33%

 Unallocated items            -24          -13               -45%

 Discontinuing operation        8            2               -74%

            

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