SOLVAY: 2004 net income up 26% to record level of EUR 541 million; 5.6% increase of dividend to EUR 1.90 per share

Paris, FRANCE


BRUSSELS, Feb. 23, 2005 (PRIMEZONE) -- -- Sales up 4% in 2004 (to EUR 7.9 billion), +6% in 4th quarter of 2004;

-- Increase in operating margin(1) of the Group to 10% for the year 2004;

-- Cash flow up 15% from 2003, to nearly EUR 1 billion (EUR 990 million);

-- Strong growth in Plastics results, (up 76%) thanks to Specialty Polymers and Vinyls. Doubling of 4th quarter 2004 results compared to the same period of 2003;

-- Progressive improvement in Chemicals activities; up 31% in 4th quarter 2004 over the same period of 2003;

-- Pharmaceuticals sector results in line with thoseof 2003 thanks to the conclusion of partnerships with major companies (Wyeth, Bristol Myers Squibb, Quintiles). 4th quarter 2004 results down 35% compared to the same period of 2003, due primarily to generic competition for Rowasa(R) medication in the United States and to costs of validation of new production units (in the Netherlands and France).

Sales reached EUR 7,877 million in 2004, up 4% from 2003. At constant exchange rates, they would have increased by 7%. In the 4th quarter 2004, they increased 6% (in EUR), with strong growth in the Plastics sector (up 15%) and Chemicals sector (up 8%).

REBIT (EUR 789 million) grew 17% in 2004 from 2003, 25% excluding "discontinuing operations(2)". In 2004, the Group achieved an operating margin(1) of 10%, up from that of 2003 (8%). Operating results (REBIT) increased 13% from the 4th quarter of 2003 to the 4th quarter of 2004; also 25% excluding " discontinuing operations."

The net income of the Group for the first time exceeded the half billion (EUR 541 million) and grew 26% from 2003 (EUR 430 million). The comparison of net results for the 4th quarter of 2004 (EUR 125 million) with that of the same period of 2003 (EUR 133 million) does not reflect the improvement in performance because the 4th quarter of 2003 benefited from an Italian tax credit (of EUR 40 million).

Cash flow reached nearly EUR 1 billion (EUR 990 million), up 15%. The financial situation of the Group is very healthy with a ratio of net debt to equity of 21% compared to 32% at the end of 2003.

The Board of Directors has decided to propose to the General Shareholders Meeting of June 2, 2005 the payment of a net dividend of EUR 1.90 per share, up 5.6% from 2003. This increase is in line with the Group's dividend policy, which is to increase the dividend whenever feasible and, if possible, not reduce it. For more than 20 years, the dividend has progressively increased and was never cut during this period.

The Pharmaceuticals sector completed the year 2004 with results in line (down 3%) with those of 2003. Operating margin remained stable in 2004 compared to 2003. On the one hand, the sector benefited from the positive impact of agreements with Wyeth and Bristol Myers Squibb and the compensation from Barr. It was accordingly able to increase its research expenditures to EUR 294 million (17% of sales). On the other hand, it suffered from the reduction in American sales following the renegotiation of contracts with its primary distributors, the weakness of the U.S. dollar, the negative impact of debates over female hormone therapy and pressures on European prices. It should also be noted that preparations for the launch of new products required important commercial efforts. The results of the 4th quarter were affected by, in addition to the other elements described above, generic competition for Rowasa(R) in the United States and costs of validation of a new influenza-vaccine production unit in the Netherlands and a new facility in France for solid forms.

(1) Operating margin is REBIT divided by sales (excluding "discontinuing operations")

(2) The "discontinuing operations" are related to the high-density polyethylene activities in joint ventures with BP and salt activities. As a result of their sale, these two activities will not appear in the results beginning in 2005.

The activities of the Chemicals sector experienced progressive improvement during the course of 2004 thanks to recovery of the markets (for soda ash, caustic soda, etc.) and increases in some prices. The sector's operating margin reflected these developments: 8% for the 2nd half of 2004 compared to 7% for the 1st half. In all, the 2004 results were comparable (-1%) to those of 2003. Market conditions are generally favorable at the beginning of 2005.

With an operating margin of 11% in 2004 (compared to 7% in 2003), the results of the Plastics sector (combining the Plastics and Processing sectors) continued to grow (up 76% in 2004) thanks to strong improvement in Specialty Polymers and Vinyls, major contributors to the Group's results, despite an environment of high raw material and utility costs. Within the Plastics sector, the Processing activities have been subject to pressure on margins from higher costs, but the intensification of competitiveness efforts and the launch of new products has enabled the businesses largely to limit the impact of cost increases. Market conditions are also generally favorable at the beginning of 2005.

Finally, in 2004 the Group actively pursued its objective of improving its productivity in all sectors. In this context, restructuring measures have required charges, most of them non-recurring, on the order of EUR 108 million.

The record results achieved in 2004 are the fruit of a change strategy applied with determination that has translated into significant productivity improvement and the launch of new products. The Group overall has had a good beginning to the year 2005, under the influence of favorable market conditions. In addition, innovation and competitiveness efforts implemented in 2004 are bearing fruit and should continue.

SOLVAY Group

- Summary Financial Information (3)



 Millions of EUR
 (except for per-share figures, in EUR)
            2003   2004  2004/ 2003   4th Q     4th Q    4th Q 04/
                            in %        2003      2004    4th Q 03
                                                             %
 Sales         7,557  7,877      +4%     1,87    1,987          +6%
 
 REBIT(4)        673    789     +17%      179      203         +13%

 EBIT            662    756     +14%      175      199         +14%

 Charges on
  net
 indebtedness   -85    -91      +7%      -19      -20          +5%

 Income
  taxes         -114   -129      +13%       1      -42         n.s.

 Equity
  earnings       -48    -10     -79%      -24      -10         -58%

 Income from
  investments     15     15        -        0        0           -

 Net income
  of the Group   430    541     +26%      133      125          -6%

 Net income
 (Solvay share)  396    489     +23%      124      109        -12%

 Depreciation and
  amortization    429    449      +5%      110      113         +3%

 REBITDA(5)     1,101  1,215     +10%

 Cash flow(6)     859    990     +15%      243      239         -2%

 (per share, in EUR)
 Earnings
  per share(7)    4.78   5.92     +24%     1.49     1.33        -11%

 Net dividend     1.80   1.90    +5.6%

 Gross dividend   2.40   2.53    +5.6%

 Net debt to
  equity ratio      32%    21%

(3) Financial statements audited by Deloitte

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

(5) REBITDA : REBIT, including recurring depreciation and amortization

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

(7) Calculated on the basis of the weighted average number of shares outstanding after deducting shares purchased to cover stock option programs, or a total of 82,748,169 shares in 2003 and 82,520,997 shares in 2004.

Notes on Solvay Group summary financial information

Non-recurring items amounted in 2004 to EUR -33 million, including, on the one hand, the capital gain on the sale of SOFINA shares and on the sales of activities (Solvay's interest in the ESCO salt joint venture and Hedwin Corporation, in the field of industrial films) and, on the other hand, a provision for risks relating a.o. to the current proceedings of the European competition authorities concerning hydrogen peroxide as well as significant provisions for restructuring essentially the closing of the soda ash production unit at Ebensee in Austria and of the pharmaceuticals production site of Foch in France).

Charges on net indebtedness increased to EUR 91 million, up 7% from 2003. These charges include interest paid for the recent issue of long-term bonds that allowed to create a strategic financial reserve at historically low rates.

Income taxes were EUR 129 million, including a tax credit of EUR 63 million recorded in the 3rd quarter of 2004 (in Germany).

Income from investments represents the annual dividends paid by Fortis and Sofina in the 2nd quarter.

Equity earnings from the high density polyethylene activities, although negative (EUR -10 million), improved from 2003 (EUR -48 million). It should be noted that Solvay's interest in the high densitiy polyethylene activities was sold to BP on January 6, 2005, for an amount slightly above EUR 1 billion. This sale will be recorded in 2005 accounts.

Net income of Group was EUR 541 million, up 26% from 2003 (EUR 430 million).

Minority interests in 2004 net income were EUR 52 million, of which EUR 24 million represented preferred dividends(8) linked to the financing of 800 million EUR for the acquisition of Ausimont and EUR 28 million reflected, a.o. the 100% consolidation of Solvay Indupa's activities from July 2004.

Net income per share for 2004 amounted to EUR 5.92, compared to EUR 4.78 in 2003, an increase of 24%.

Depreciation and amortization increased 5% from 2003, following non-recurring depreciation primarily related to the halting of soda ash production at Ebensee, Austria. Cash flow was EUR 990 million, up 15%.

Shareholders equity increased to EUR 3,792 million at the end of 2004, up EUR 282 million compared to the end of 2003. The net indebtedness of the Group at 31 December 2004 (EUR 794 million) was down EUR 326 million from that at 31 December 2003.

The ratio of net debt to equity was 21% compared to 32% in 2003.

Investments, Research and Development

2004 Investments increased to EUR 564 million. Research and Development reached EUR 413 million, of which more than 70% was for the Pharmaceuticals sector. This sector's research effort increased to EUR 294 million (17% of sales) in 2004, up 4% from the previous year.

The 2005 investment and R&D budgets were set at EUR 796 million and EUR 481 million respectively. In 2005, the Pharmaceuticals sector research effort should increase to EUR 353 million (73% of the Group's R&D expenses), before deducting partners' contribution to research expenditure in this sector.

This demonstrates the Group's commitment to pursue its efforts in innovation, competitiveness and growth.

(8) The EUR 800 million preferred shares were reimbursed on 7 January 2005 following receipt of the proceeds from the sale of Solvay's interests in the high density polyethylene joint ventures wtih BP.

RESULTS BY SEGMENT(9)



 Millions of EUR
            2003   2004   2004/ 2003   4th Q     4th Q    4th Q 04/
                             in %        2003      2004    4th Q 03
                                                             %
 GROUP
  SALES          7,557  7,877    +4%      1,872     1,987       +6%

 Pharmaceuticals 1,832  1,745    -5%        462       441       -5%

 Chemicals       2,386  2,433    +2%        585       629       +8%

 Plastics(10)    3,215  3,632   +13%        794       915      +15%

 Plastics        1,802  2,198   +22%        448       560      +25%

 Processing      1,413  1,434    +1%        346       355       +3%

 Non allocated
  items          -      -       -            -         -       -

 Discontinuing
  operations       125     67   -46%         32         1      n.s.

 GROUP REBIT       673    789   +17%        180       203      +13%

 Pharmaceuticals   243    236    -3%         75        49      -35%

 Chemicals         182    180    -1%         35        46      +31%

 Plastics(10)      225    397   +76%         50       113     +126%

 Plastics          155    330   +113%        38       103     +171%

 Processing         70     67     -4%        12        10      -17%

 Non allocated
  items            -41    -49    +20%        -7       -15     +114%

 Discontinuing
  operations        63     25    -60%        25         9      -64%

 GROUP
  REBITDA(11)    1.101  1.215    +10%

 Pharmaceuticals   302    299     -1%

 Chemicals         354    339     -4%

 Plastics(10)      400    585    +46%

 Plastics          265    450    +70%

 Processing        135    135      0%

 Non allocated
  items            -24    -33     +38%

 Discontinuing
  operations        68     25     -63%

(9) Results by segment include results of the Group's 4 sectors as well as the "discontinuing operations" related to the high-density polyethylene activities in joint ventures with BP and salt activities. As a result of their sale, these two activities will not appear in the results beginning in 2005.

(10) As of June 1, 2004, the Plastics and Processing sectors were combined into a single new Plastics sector. This gives the Group a more compact structure and more interaction between these activities. Presentation of results in a single sector will begin as of January 1, 2005.

(11) REBITDA : REBIT, including recurring depreciation and amortization

IFRS FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENTS



 In millions of EUR
 (except for per share figures, in EUR)

                            2003    2004  4th quarter  4th quarter
                                             2003         2004

 Sales                   7,557   7,877         1,87        1,987

 Cost of
  goods sold            -5.101  -5.273        -1275        -1358

 Gross margin            2,456   2,604          595          629

 Commercial and
  administrative
  costs                 -1,359   -1,32         -341         -329

 Research and
  development
  costs                   -404    -413          -96          -84

 Other operating
  gains & losses           -42     -54            3          -15

 Other financial
  gains & losses            22     -28           18            2

 REBIT                     673     789          179          203

 Non-recurring
  items                    -11     -33           -4           -6
 
 EBIT                      662     756          175          199

 Charges on
  net indebtedness         -85     -91          -19          -20

 Income taxes             -114    -129            1          -42

 Equity earnings           -48     -10          -24          -10

 Income from
  investments               15      15            0            0

 Net income
  of the Group             430     541          133          125

 Minority interests        -34     -52           -9          -16

 Net income
  (Solvay share)           396     489          124          109

 Earnings per share
  (in EUR)                 4.78    5.92         1.49         1.33

 Diluted income per share
  (*) (in EUR)             4.78    5.90         1.49         1.31

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

CONSOLIDATED CASH FLOW STATEMENT



 in millions of EUR                             2003   2004

 Cash flow from operating activities             870    970

 EBIT                                            662    756

 Depreciation and amortization                   429    449

 Changes in working capital                     -103   -131

 Changes in provisions                            -7    154

 Income taxes paid                              -102   -114

 Other non-cash items                             -9   -144

 Cash flow from investing activities            -369   -310

 Acquisition/sale of investments                 -67    100

 Acquisition/sale of assets                     -494   -431

 Income from investments                          15     15

 Changes in financial receivables                179     16

 Effect of changes in method of consolidation     -2    -10

 Cash flow from financing activities             291   -445

 Increase/Decrease of capital                      0     -4

 Acquisition/sale of own shares                  -18     -3

 Changes in borrowings                           629   -123

 Charges on net indebtedness                     -85    -91

 Dividends                                      -235   -224

 Net change in cash and cash equivalents         792    215

 Currency translation differences                -25    -15

 Opening cash balance                            439  1,206

 Ending cash balance                           1,206  1,406

CONSOLIDATED BALANCE SHEET



 In millions of EUR
                       At the end of 2003 (*)    At the end of 2004
 Non-current assets           5,519                     5,56

 Intangible assets              245                      221

 Consolidation differences      155                      156

 Tangible assets              3,459                    3,453

 Investments -
  equity accounting             312                      293

 Other investments              531                      591

 Deferred tax assets            528                      571

 Financial receivables
  and other
  non-current assets            289                      275

 Current assets               4,185                    4,477

 Inventories                  1,059                    1,132

 Trade receivables             1,39                    1,453

 Income tax receivables        154                       117

 Other receivables             376                       369

 Cash and cash equivalents   1,206                     1,406
 
 TOTAL ASSETS                9,704                    10,037

 Total Shareholders'
  equity                      3,51                     3,792

 Capital and reserves        2,641                     2,882

 Minority interests            869                       910

 Non-current liabilities     3,907                     3,863

 Long-term provisions        1,796                     1,841

 Deferred tax liabilities      163                       136

 Long-term financial debt    1,912                      1,85

 Other non-current
  liabilities                   36                        36

 Current liabilities         2,287                     2,381

 Short-term provisions          67                       180

 Short-term financial debt     414                       350

 Trade liabilities           1,009                      1,05

 Income tax payable            118                       143

 Other current liabilities     679                       658

 TOTAL EQUITY AND
  LIABILITIES                9,704                    10,037

 (*) after minor restatement.

 STATEMENT OF CHANGES IN EQUITY

 in millions of EUR             Capital    Issue  Reserves     Own
                                          premiums            shares
 Book value at the end of
 the previous period              1,269        14    1,.864    -119
 (12/31/2003 (*))

 Income for the period                                  489

 Distribution                                          -198

 Changes in exchange rates

 Acquisition/sale of own
 shares                                                          -3

 Adjustment to market value of
 financial assets

 Other                                                   -8

             Exchange      Direct charges    Share-    Third   Total
             differences        to           holders'  Party  equity
                            shareholders'    equity
                               equity

 Book value at the end of   -422   35      2,.641      869      3,51
  the previous period
  (12/31/2003 (*)                             489       52       541

 Income for the period                       -198      -30      -228

 Distribution                -85              -85       -4       -89

 Changes in exchange rates

 Acquisition/sale of own                        -3                -3
  shares

 Adjustment to
  market value of                  46          46                -46
  financial assets

 Other                                         -8       23        15

 Book value at the end of
  the previous period       -507   81       2,882      910     3,792
  (12/31/2004)

 (*) after minor restatement of total shareholders' equity on
     31 December 2003.

RESULTS BY SEGMENT(12)

The table below gives sales without elimination of inter-sector sales; results by segment include non-recurring items (EBIT).



 In millions of EUR
              2003   2004   04/03   4Q 2003   4Q 2004    4Q 2004/
                              %                            4Q 03
                                                            %
 GROUP
  SALES           8,101   8,44     4%     1,949       2,118      9%

 Pharmaceuticals  1,832  1,745    -5%       462         441     -5%

 Chemicals        2,617  2,693     3%       649         693      7%

 Plastics(13)     3,528  3,935    12%       807         983     22%

 Plastics         2,105  2,485    18%       458         624     36%

 Processing       1,423   1,45     2%       349         359      3%

 Non-allocated
  items            -      -          -            -           -

 Discontinuing
  operations        124     67   -46%        31           1    -97%

 GROUP EBIT         662    756    14%       175         197     13%

 Pharmaceuticals    226    227     0%        63          41    -35%

 Chemicals          186    135   -27%        38          54     42%

 Plastics(13)       217    382    76%        49         106    116%

 Plastics           150    324   116%        38          98    158%

 Processing          67     58   -13%        11           8    -27%
 Non-allocated
  items             -41    -46   12%         -6         -13    117%

 Discontinuing
  operations         75     58  -23%         32           9    -72%

(12) Results by segment include results of the Group's 4 sectors as well as the "discontinuing operations" related to the high-density polyethylene activities in joint ventures with BP and salt activities. As a result of their sale, these two activities will not appear in the results beginning in 2005.

(13) As of June 1, 2004, the Plastics and Processing sectors were combined into a single new Plastics sector. This operation gives the Group a more compact structure and more interaction between these activities.

ANNEX TO PRESS RELEASE: COMMENTS ON 2004 RESULTS OF THE SOLVAY GROUP

PHARMACEUTICALS SECTOR

Strategic developments

-- Acceleration of strategic developments in Pharmaceuticals sector: improvement in growth potential thanks to reinforcement of R&D programs with world-class partners, acquisitions and increased operational autonomy

The Pharmaceuticals sector results entered into a transition period in 2004, awaiting the launch of very promising new products.

Solvay currently has a rich R&D portfolio with some 30 molecules to feed the future growth of the sector. Alliances with world-class partners (Wyeth, Bristol Myers Squibb, Quintiles) were concluded in 2004, while crucial steps were taken successfully in the development of new medicines. Of particular note were the registration of Estrogel(R) in the United States and the filing of registration applications for cilansetron in the United Kingdom (in April 2004) and the United States (in June 2004).

Solvay Pharmaceuticals also is pursuing expansion through two recent acquisitions. In one, the Group acquired Italmex, based in Mexico, which will become the Group's second operational base in Latin America after Brazil. In the other, Solvay Pharmaceuticals materialized its development in the field of Parkinson treatment through the acquisition of Neopharma of Sweden, holder of rights to a new treatment (Duodopa(R)) for advanced cases of Parkinson disease. Solvay Pharmaceuticals has also decided to initiate a Phase III program for SLV 308, a molecule from its research intended for treatment of less advanced stages of the disease.

Finally, in 2004 the Group decided to concentrate the strategic management of all pharmaceutical activities in a single entity, Solvay Pharmaceuticals SARL, 100% owned by the Solvay Group. This decision is intended to simplify and better align the structure to the specific needs of the Pharmaceuticals sector. The increased operational autonomy from which the sector will benefit will permit it to take decisions adapted to its future growth.

Key figures

Sales by major products



   In millions of EUR   (at constant exchange rates)

                  2003     2004       2004/2003        2004/2003
                                  In millions of EUR  (at constant
                                                      exchange rates)
 PHARMACEUTICALS     1,832       1,745        -5%             -2%
  SECTOR

 CARDIOLOGY            209         205        -2%             -1%

 Teveten(R)             68          72        +6%             +7%

 Physiotens(R)          60          58        -3%             -3%

 Aceon(R)               29          19       -34%            -27%

 GASTROENTEROLOGY      536         525        -2%              0%

 Pantoloc(R)           124         139       +12%            +15%

 Creon(R)              137         130        -5%             -3%

 Duphalac(R)            76          78        +3%             +3%

 GYNECOLOGY/ANDROLOGY  682         598       -12%             -7%

 Androgel(R)           250         231        -8%             +1%

 Estratest(R)          131         100       -24%            -16%

 Prometrium(R)          77          59       -23%            -15%

 Influvac(R)            68          76       +12%            +11%

 MENTAL HEALTH         316         319       +1%              +3%

 Serc(R)                86          96      +12%             +12%

 Luvox(R)               80          77       -4%              -4%

 Marinol(R)             70          63      -10%              -1%

Pharmaceuticals sales by region

In % of total pharmaceuticals sales



                         2003  2004
 Europe                    46%   48%
 Nafta                     45%   40%
 Asia-Pacific and others    9%   12%

Comments

-- Sales of the Pharmaceuticals sector fell by 2% at constant exchange rates. Expressed in EUR, they fell 5% in 2004. Aside from the negative impact of exchange rates, the renegotiation of contracts with the primary American distributors held down sales for several months even though prescriptions continued to follow their expected trends. The negative consequences of the debates over female hormone therapy continued to weigh down sales of those products.

Four products experienced significant growth: Pantaloc(R) treatment for heartburn and stomach ulcers (+12%), Influvac(R) influenza vaccine (+12%), Serc(R) anti-vertigo medication (+12%) and Teveten(R) anti-hypertensive (+6%). Androgel(R) male hormone therapy registered the largest sales (EUR 231 million). Sales and prescriptions of Estratest(R), a female hormone therapy, fell.

NAFTA sales decreased by 5% in U.S. dollars. Sales in Europe remained stable (-1%) despite pressure on prices thanks to a marked increase in sales in, among other markets, Central and Eastern Europe. Asia (Japan, China and India), the Middle East and Latin America continued to improve in 2004.

-- The Pharmaceuticals sector finished the year with results in line (-3%) with those of 2003; operating margins remained stable in 2004 compared to 2003. In addition to the factors cited above, the results of the sector benefited from the positive impact of agreements with Wyeth and Bristol Myers Squibb and a compensation from Barr. In parallel, the sector was able to increase its research expenditures to EUR 294 million (+4%, representing 17% of sales). It should also be noted that preparation for the launch of new products required important commercial efforts.

The results for the 4th quarter of 2004 were affected by, in addition to the elements described above, generic competition for Rowasa(R) enema in the United States and the costs of validation of a new influenza-vaccine production unit in the Netherlands and a new unit in France for production of solid forms.

The debates over hormone therapy, and in particular the publication in July 2002 of the Women's Health Initiative (WHI) study, have given rise in the United States to lawsuits against producers of female hormone therapy products. Even though our specialty products do not contain the same hormones as the products included in the WHI study, Solvay Pharmaceuticals has been named in such suits by several hundreds individual plaintiffs. We believe these claims are without merit.

The continuing discussions with the FDA (Food and Drug Administration) concerning the administrative status of Estratest(R) are being pursued constructively; in parallel, Solvay Pharmaceuticals has been named in three collective lawsuits concerning this status, two in California and the other in Minnesota. The company is taking all appropriate steps to oppose these actions, which it deems without merit. Its position prevailed in a similar, now concluded, litigation in Georgia.

CHEMICALS SECTOR

Strategic developments

-- Continued strengthening of competitiveness through restructurings, rationalization, acquisitions or partnerships.

These measures proved important in improving the margins of the Group's chemicals activities -- particularly for essential products -- which were subjected to intense competitive pressures.

Among the principal actions taken in 2004 were:

- the major agreement planned in soda ash with NCI / Sinopec in China, which has entered its final phase;

- the project for an Antwerp hydrogen peroxide mega-plant in partnership with BASF to supply propylene oxide production by BASF and Dow;

- the announced shutdown of soda ash production at Ebensee, Austria, effective in 2005;

- the sale of our non-strategic interest in Esco (salt) to K+S; and

- the mothballing of the American Soda soda ash plant in the United States and the shutdown of perborate production at Torrelavega in Spain.



 Key figures
 (in millions of EUR)              Sales           REBIT
                                2003   2004    2004/2003  change
                                                     %      2004/
                                                            2003
 CHEMICALS                      2.385  2.433        +2%     -1%

 Minerals cluster(14)           1.045  1.105        +6%       -

 Electrochemistry and             914    892        -3%       +
   Fluor chemicals cluster

 Oxygen cluster(15)               426    436        +2%       +

Comments

-- Progressive improvement in Chemicals activities.

The activities of the Chemicals sector experienced progressive improvement during the course of 2004 thanks to recoveries of markets (for soda ash, caustic soda, etc.) and some price increases. The sector's operating margin reflects this development : 8% in the 2nd half of 2004 compared to 7% in the 1st half.

In all, the 2004 results were comparable (-1%) to those of 2003. Market conditions are generally favorable at the beginning of 2005.

(14) including Soda ash and derivatives, Barium and strontium carbonates, Advanced Functional Minerals SBUs

(15) including Hydrogen peroxide, Detergent and Caprolactones SBUs

Minerals cluster

Soda ash

World market conditions gradually improved in 2004, leading to a saturation of capacities at the end of the year. At the same time, soda ash results suffered the impact of significant increases in energy costs (for coke and gas) and transportation costs. The economic environment became more favorable thanks to actions undertaken to restore margins (restructuring, strengthening of competitiveness, price increases, etc.). Specialized derivatives of soda ash, particularly sodium bicarbonate, continued their growth.

Electrochemistry and Fluor chemicals cluster

Electrochemistry

After a beginning of the year characterized by very difficult market conditions, caustic soda experienced a very significant recovery in the second half, with marked price increases after June 2004.

Fluor Chemicals

The results of fluorine products improved in 2004 thanks to increases in sales of Solkane(R) 365mfc, despite the negative effects of the weakness of the US dollar.

Oxygen cluster

Hydrogen peroxide

The hydrogen peroxide activities experienced sustained improvement in most regions thanks to the strength of the pulp and paper industry. Results improved despite very high energy prices.

In the matter of the inquiry by the European competition authorities in the field of hydrogen peroxide, as previously announced in early February, the Solvay Group has received a statement of objections from the European authorities. It will present its defense in the 2nd quarter. Note that attempted class actions have been initiated in the United States; we believe these claims are without merit.

PLASTICS SECTOR

Strategic developments

-- Enrichment of the portfolio and reorganization of forces :

- Specialties: rapid growth and geographic expansion;

- Vinyls cluster: consolidations, growth and geographic expansion

The Plastics and Processing sectors were combined effective 1 June 2004 to form a single enlarged Plastics sector.

It is characterized, on the one hand, by the development of Specialties : Inergy Automotive Systems, a 50/50 joint venture with Plastic Omnium in fuel systems, and Specialty Polymers. Access to rapidly growing markets and high added value, reinforced by the enrichment of its portfolio of activities of Specialty Polymers, have become among the principal contributors to the results of the Group.

On the other hand, a strong leadership position and continued strengthening of competitiveness remain the priorities for the activities in the Vinyls cluster.



 Key figures
 (in millions of EUR)                       Sales         REBIT
                                                          change
                                      2003

 PLASTICS(16)                         3,215  3,632  +13%     76%

 Vinyls cluster(17)                   2,019  2,338  +16%       +

 Specialty Polymers                   1,196  1,294   +8%       +
  and Inergy Automotive Systems

Comments

-- Sustained growth in Specialty Polymers and vinyls in a context of increased raw-material and utility costs.

With a 2004 operating margin of 11% (compared to 7% in 2003), the results of the Plastics sector (combining the Plastics and Processing sectors) continued their growth (+76% in 2004) thanks to the strong improvement in Specialty Polymers and Vinyls, major contributors to the Group's results despite high raw material and utility costs.

Within the Plastics sector, the Processing activities felt the effect on margins of elevated costs but intensification of competitiveness measures and the launch of new products largely limited their impact.

Market conditions are also generally favorable at the beginning of 2005.

(16) As of June 1, 2004, the Plastics and Processing sectors were combined into a single new Plastics sector. This operation gives the Group a more compact structure and more interaction between these activities.

(17) Including the Vinyls, Performance compounds and Industrial films SBUs and Pipelife (pipes and fittings)

Specialties

Specialty Polymers

Specialty Polymers , one of the principal contributors to the Group's results, experienced favorable growth in volumes (+11% in sales), especially in the United States and Asia, for both high-performance polymers and fluorinated polymers. This came not only from increases in certain markets existing applications usage (in particular the semiconductor market and electronics in general) but equally from development of new, high-value­added applications, with an increased number of patents (52) applied for in 2004.

Inergy Automotive Systems (50/50 joint venture with Plastic Omnium in fuel systems)

Volumes increased 6% in 2004, a more rapid increase than that of the automotive market, thanks to geographic expansion in recent years in Eastern Europe, Mercosur and with Asian manufacturers. Globally, margins were maintained thanks to programs to increase competitiveness and industrial redeployment to cope with the strong pressure exerted by the automotive market.

Vinyls cluster

Worldwide demand for PVC recorded 5.4% growth from 2003. On the other hand, the worldwide market has tightened, especially for raw materials (ethylene, EDC, VCM, etc.) and utilities (gas, electricity, etc.). This tension has had different repercussions in the various activities.

The significant increase in PVC prices combined with continued improvement in competitiveness led to achievement of appreciably better results and good profitability in the three regions in which Solvay is active (Europe, Asia and Mercosur), in a context of ethylene-price increases. This trend continued in the beginning of 2005.

The results of Performance Compounds were affected by the significant increases in raw-material prices. Efforts at reducing costs and developing Specialties were intensified.

After a first semester of growth in sales in all activities, Industrial Films experienced a second half marked by the negative impact of raw-material price increases (for PVC, plasticizers, etc.) and a reduction of demand in certain markets, which nevertheless were largely compensated by efforts at competitiveness and structural improvements.

Pipelife (a 50/50 joint venture with Wienerberger in pipes and fittings) experienced a good year, benefiting from the growth of its sales in Central Europe and the Baltic countries, the launch of higher-margin products and the restructuring measures of recent years.

REMARKS

With the agreement of the Banking, Finance and Insurance Commission, 2003 and 2004 statements were recorded and presented in IFRS (International Financial Reporting Standards). Also, Deloitte certified the annual consolidated statements as of December 31, 2004 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 communication

- End of March 2005: annual report 2004 available on Internet

- April 29, 2005: 3-month results 2005 and annual analysts and investors meeting

- June 2, 2005: Ordinary and Extraordinary Shareholders' Meeting

- June 9, 2005: payment of the balance of dividend relating to 2004

- July 29, 2005: 6-month results 2005

- October 28, 2005: 9-month 2005 results

- December 15, 2005: announcement of the interim dividend relating to 2005


        

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