Final 2003 Results of the SOLVAY GROUP

Paris, FRANCE


BELGIQUE, March 26, 2004 (PRIMEZONE) -- Solvay Group (Other OTC:SVYSF) (Other OTC:SVYSY) announces earnings:

Resilient 2003 results (EUR 430 million)

- Despite a very strong EUR and a weak economic environment, the Solvay Group ends 2003 with a net income decrease of only 13% compared to record 2002 results

- 2003 dividend maintained (EUR 1.80 per share)

Final results

The Solvay group confirmed its preliminary consolidated results announced on February 13, 2004 and finished 2003 with results of EUR 430 million, or a decline limited to 13% from the record level of 2002 (EUR 494 million). Results from the parent company SOLVAY S.A amounted to EUR 212 million in 2003, compared to EUR 220 million in 2002.

Perspectives

As indicated on February 13, 2004, the year 2003 was characterized by an uncertain and difficult economic environment which generated stocking and destocking as well as oil prices volatility. In 2004, the lack of visible growth in Europe and the risk of a persistently very strong EUR are factors that must be taken into account, especially during the 1st quarter. The significant contribution of Pharmaceuticals and pecialties, combined with all efforts to increase competitiveness, and the continuing improvement of the product portfolio, should allow the Solvay group to face these pressures on an annual basis. In this context, the Group is accelerating a series of restructuring and cost-reduction measures.

Balance Sheet

Shareholders' equity amounted to EUR 3,532 million at the end of 2003, down EUR 32 million compared to the end of 2002, mainly due to the impact of exchange-rate fluctuations. Cash flow generation and rigorous screening of capital investments have permitted the Group, despite difficult conditions, to improve its already very healthy financial situation. The Group's net indebtedness was thus reduced by EUR 198 million and amounted to EUR 1,120 million.The net debt to equity ratio at the end of 2003 amounted to 32%, down from 37% in 2002.

Investment, Research and Development

2003 capital expenditures amounted to EUR 555 million, as a result of a selective policy. R&D expenses were EUR 404 million. This includes EUR 284 million for the Pharmaceuticals Sector, up 6% from 2002. The 2004 capital investment and R&D budgets are EUR 620 million and EUR 411 million respectively. In 2004, the Pharmaceuticals Sector research effort should represent 68% of the Group's R&D expenses.

Dividend

The Board of Directors decided to propose to the General Shareholders' meeting on June 3, 2004 payment of a net dividend of EUR 1.80 per share, stable compared to the 2002 dividend. Considering the prepayment of the dividend paid on January 15, 2004 (EUR 0.70 net per share), the balance (which is EUR 1.10 net per share) will be paid on June 10, 2004 (coupon no. 74). This evolution is consistent with the Group's dividend policy which consists of increasing the dividend whenever possible and if possible, not decreasing it. For over more than 20 years, the Group has never decreased the dividend.


 Performance per share

 In EUR/share              2002  2003  2003/2002  

                                           Var.%  

 Cash flow per share (1)  12.26  9.91       -19%  
 Earnings per share (1)    5.59  4.78       -15%  
 Net dividend              1.80  1.80          -  
 Gross dividend            2.40  2.40          -  

 (1) Calculated on the basis of the weighted average number of shares
     outstanding during the quarter, after deducting shares purchased
     by Solvay to cover stock options; this amounted to 83,059,168
     shares in 2002 and 82,748,169 shares in 2003.


            SUMMARY CONSOLIDATED FINAL RESULTS

 Millions of EUR                         2002   2003  2003/2002  

                                                             D%  

 Sales                                  7,919  7,557        -5%  
 REBIT (2)                                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)                464    396       -15%  
 Depreciation and amortization            554    429       -23%  
 Recurring Depreciation & Amortization    440    429        -3%  
 Cash flow (3)                          1,048    859       -18%  


 (2) REBIT: Recurring Earnings Before Interests and Taxes, results of
     ongoing operations.

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

RECURRING RESULTS BY SEGMENT

The weakening of the US dollar greatly affected results in the Pharmaceuticals sector (-8% in EUR, +2% at constant exchange rates). Its 2003 sales, in EUR, dropped 2% compared to 2002, whereas they would have been up 6% at constant exchange rates. Note however the significant growth in American sales (+15% in USD), and intensification of R&D efforts (+6% compared to 2002) which represents about 16% of sales. As for the Chemicals sector, maintaining market shares and volumes in the context of a very weak US dollar, led to a drop in results of 25%. Impacted by a significant decline in vinyls in Europe, the Plastics sector saw a large drop in results. Vinyls recovered at the end of the year, and the primary specialty polymers markets are recovering In the Processing sector, results were also down, but the fourth quarter was better than that of last year.


 Millions of EUR                 2002   2003  2003/2002  

                                                   Var%  

 Group Sales                    7,919  7,557        -5%  
 Pharmaceuticals                1,863  1,832        -2%  
 Chemicals                      2,636  2,508        -5%  
 Plastics                       1,937  1,802        -7%  
 Processing                     1,479  1,413        -5%  
 Unallocated items                  0      0       n.s.  
   Discontinuing operations         4      2       -25%  

 Group REBIT                      844    673       -20%  
 Pharmaceuticals                  263    243        -8%  
 Chemicals                        259    195       -25%  
 Plastics                         247    155       -37%  
 Processing                        80     70       -12%  
 Unallocated items                -50    -41       -18%  
   Discontinuing operations        45     50        11%  

 SUMMARY CONSOLIDATED BALANCE SHEET

 Millions of EUR            December 31,  December 31,  

                                    2002          2003  

 Non-current assets                4,025         3,859  
 Current assets                    1,309         1,132  
 Net deferred tax assets  
  & current income taxes             378           385  
 Net working capital               1,128         1,177  
 TOTAL                             6,840         6,553  

 Shareholders' equity              3,564         3,532  
 Provisions                        1,880         1,823  
 Dividends                            78            78  
 Net indebtedness                  1,318         1,120  
 TOTAL                             6,840         6,553  

 Net debt to equity ratio            37%           32%  

 FINAL RESULTS OF THE PARENT COMPANY SOLVAY S.A.

 Millions of EUR                 2002  2003  

 Net income of the period         220   212  
 Transfers to tax-free reserves     -    -9  
 Income to be distributed         220   203  

With the agreement of the Banking, Finance and Insurance Commission, the 2003 statements were recorded and presented in IFRS (International Financial Reporting Standards). The 2002 books were restated in IFRS. Also, Deloitte & Touche certified the annual consolidated statements as of December 31, 2003 as well as those of the parent company Solvay S.A. without reservation and confirmed that the accounting information shown in this press release does not call for any comments on its part and concurs with the annual consolidated accounts.

Key dates for financial communications in 2004:

The 2003 annual report will be published on the Internet at the beginning of April 2004.

- April 29, 2004: 3-month results 2004

- July 30, 2004: 6-month results 2004

- October 29, 2004: 9-month results 2004


 IFRS FULL FINANCIAL STATEMENTS

 (Statements audited by Deloitte & Touche)

 Consolidated income statement

 in millions of EUR                     2002    2003  

 Sales                                 7,919   7,557  
 Cost of goods sold                   -5,240  -5,101  
 Gross margin                          2,679   2,456  
 Commercial and administrative costs  -1,412  -1,359  
 Research and development costs         -399    -404  
 Other operating gains & losses          -69     -42  
 Other financial gains & losses           45      22  
 REBIT                                   844     673  
 Non-recurring items                     -87     -11  
 EBIT                                    757     662  
 Charges on net indebtedness             -88     -85  
 Income taxes                           -151    -114  
 Equity earnings                         -39     -48  
 Income from investments                  15      15  
 Net income of the Group                 494     430  
 Minority interests                      -30     -34  
 Net income (Solvay share)               464     396  
 Net earnings per share                 5.59    4.78  
 Diluted net earnings per share (1)     5.58    4.78  


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

 Consolidated statement of sources of funds

 in millions of EUR                            2002   2003  

 Cash flow from operating activities            848    870  
 EBIT                                           757    662  
 Depreciation and amortization                  554    429  
 Changes in working capital                    -245   -103  
 Changes in provisions                          -45     -7  
 Income taxes paid                              -85   -102  
 Other non-cash items                           -88     -9  
 Cash flow from investing activities           -510   -369  
 Acquisition/sale of investments                 13    -67  
 Acquisition/sale of assets                    -376   -494  
 Income from investments                         15     15  
 Changes in financial receivables              -221    179  
 Effect of changes in method of consolidation    59     -2  
 Cash flow from financing activities           -489    291  
 Increase/Decrease of capital                     9      0  
 Acquisition/sale of own shares                  -9    -18  
 Changes in borrowings                         -182    629  
 Charges on net indebtedness                    -88    -85  
 Dividends                                     -219   -235  
 Net change in cash and cash equivalents       -151    792  
 Currency translation differences               -41    -25  
 Opening cash balance                           631    439  
 Ending cash balance                            439  1,206  

 Consolidated balance sheet

 in millions of EUR                At the end   At the end  
                                      of 2002      of 2003  

 ASSETS                                                     
 Non-current assets                     5,919        5,502  
 Intangible assets                        265          245  
 Consolidation differences                180          155  
 Tangible assets                        3,580        3,459  
 Investments - equity accounting          322          312  
 Other investments                        471          531  
 Deferred tax assets                      585          511  
 Financial receivables                                      
  and other non-current assets            516          289  
 Current assets                         3,545        4,185  
 Inventories                            1,086        1,059  
 Trade receivables                      1,494        1,390  
 Income tax receivables                   141          154  
 Other receivables                        385          376  
 Cash and cash equivalents                439        1,206  
 TOTAL ASSETS                           9,464        9,687  

 EQUITY AND LIABILITIES                                     
 Total Shareholders' equity             3,564        3,532  
 Capital and reserves                   2,686        2,666  
 Minority interests                       878          866  
 Non-current liabilities                3,346        3,869  
 Long-term provisions                   1,823        1,759  
 Deferred tax liabilities                 275          162  
 Long-term financial debt               1,192        1,912  
 Other non-current liabilities             56           36  
 Current liabilities                    2,554        2,286  
 Short-term provisions                     57           64  
 Short-term financial debt                565          414  
 Trade liabilities                      1,141        1,009  
 Income tax payable                        73          118  
 Other current liabilities                718          681  
 TOTAL EQUITY                                               
  AND LIABILITIES                       9,464        9,687  


 Statement of changes in shareholders' equity

 in millions of EUR                Capital     Issue  Reserves  
 Book value at the end of                   premiums            
  the previous period (12/31/2002)   1,269        14     1,692  
 Income for the period                                     396  
 Distribution                                             -199  
 Changes in exchange rates                                      
 Acquisition/sale of own shares                                 
 Net gains and losses not                                       
  shown in the Income Statement    
 Increase in capital                                            
 Other                                                          

 Book value at the end of the                                   
 previous period (12/31/2003)        1,269        14     1,889  

 in millions of EUR                   Own     Exchange         Direct
                                                           charges to
                                                        shareholders'

 Book value at the end of          shares  differences         equity
  the previous period (12/31/2002)   -101         -211             23
 Income for the period                                               
 Distribution                                                        
 Changes in exchange rates                        -211               
 Acquisition/sale of own shares       -18                            
 Net gains and losses not                                            
  shown in the Income Statement                                    12
 Increase in capital                                                 
 Other                                                               

 Book value at the end of the                                        
  previous period (12/31/2003)       -119         -422             35

 in millions of EUR                 Shareholders'   Third   Total  
 Book value at the end of                  equity   Party  equity  
  the previous period (12/31/2002)          2,686     878   3,564  
 Income for the period                        396      34     430  
 Distribution                                -199     -36    -235  
 Changes in exchange rates                   -211     -10    -221  
 Acquisition/sale of own shares               -18             -18  
 Net gains and losses not                                          
  shown in the Income Statement                12              12  
 Increase in capital                            0               0  
 Other                                          0               0  
 Book value at the end of the                                      
  previous period (12/31/2003)              2,666     866   3,532  

 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                 2002   2003  2003/2002  
                                                  Var.%  

 Group Sales                    8,514  8,101        -5%  
 Pharmaceuticals                1,863  1,832        -2%  
 Chemicals                      2,851  2,739        -4%  
 Plastics                       2,309  2,105        -9%  
 Processing                     1,487  1,423        -4%  
 Unallocated items                  -      -          -  
  Discontinuing operations          4      2       -50%  

 Group EBIT                       757    662       -13%  
 Pharmaceuticals                  222    226         2%  
 Chemicals                        241    204       -15%  
 Plastics                         251    150       -40%  
 Processing                        50     67        34%  
 Unallocated items                -52    -41       -21%  
   Discontinuing operations        45     56        24%  

        

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