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    Third quarter 2008 results logoNews release

    Paris, November 6, 2008

    PDF version

    Third quarter 2008 results

    Rhodia confirms its strong pricing power

    and full year objectives

    Key highlights

    · Another quarter of strong pricing power: +14% fully offsetting record raw material and energy inflation as well as a negative forex impact

    · Good level of demand across businesses compensating for first signs of slowdown in Polyamide

    · Recurring EBITDA(1) at €168 million driven by strong performance in Novecare, Silcea, Eco Services and Acetow

    · Net Profit Group Share up 24% year-on-year to €56 million

    · Net Debt reduction reflecting completion of Isocyanates divestment

    · Long-dated maturity financial resources

    · Confirmation of 2008 guidance

    “In the third quarter, Rhodia confirmed once again its strong pricing power which allowed the Group to offset not only record raw material and energy cost increases, but also the negative foreign exchange impact," commented Rhodia Chairman and Chief Executive Officer Jean-Pierre Clamadieu.

    “We are continuously deliveringon our commitments.Our leading competitive positions supported by our focused portfolio strategy, our balanced geographical presence, the diversity of the markets we serve and our healthy financials, give us confidence in the potential of our businesses going forward. We therefore confirm our 2008 financial objectives."

    Summary income statement

    In € million

    Q3 2007

    Q3 2007


    like for like(2)

    Q3 2008

    Variation


    like for like(2)

    Net Sales

    1,187

    1,152

    1,224

    6,3%

    Recurring EBITDA(1)

    179

    174

    168

    (3.4)%

    Operating Profit

    105

    104

    87

    (16.3)%

    Profit from continuing operations

    36

    22

    Profit/(loss) from discontinued operations

    8

    34

    Net Profit/ Group Share

    45

    56

    Earnings per Share (in €)

    0.44

    0.55

    Free Cash Flow(3)

    58

    (69)

    (1) Before restructuring and other operating income and expenses

    (2) Like for like: at constant scope and currency conversion

    (3) Defined as “net cash provided by operating activities” before margin call plus “non recurring refinancing cash costs” minus Capital Expenditure




    1. Strong pricing fully offset cost rises and negative transactional forex impact

    Net Sales rose by 6.3%(1) to €1,224 million, driven by a 13.7% positive impact from price increases in local currencies. A sustained good level of demand was registered across businesses compensating for first signs of slowdown in Polyamide. As anticipated, volumes were also affected by Q3-Q4 CER phasing. The transactional foreign exchange impact was (2.6)%.

    RecurringEBITDA(1) stood at €168 million versus €174 million in Q3 2007. The (3.4)% decline was mainly due to volume phasing impact of CERs, while negative effect from lower volumes in Polyamide were mostly offset by good performance in other Enterprises, particularly Novecare. Price increases of €158 million fully offset both a €(139) million increase in raw material and energy costs as well as a transactional foreign exchange impact of €(17) million. Fixed costs were under control and decreased by €9 million.

    Operating Profit(1) amounted to €87 million versus €104 million in the third quarter of 2007, essentially reflecting the change in recurring EBITDA.

    The Financial Result was stable at €(44) million compared to the third quarter 2007.

    The Net Profit Group Share increased 24% from €45 million in the third quarter of 2007 to €56 million in the third quarter of 2008, reflecting the capital gains from the Isocyanates divestment.

    Earnings per Share rose 25% to €0.55 from €0.44 a year earlier.

    (1) Like for like: at constant scope and currency conversion

    2.Free Cash Flow affected by temporarily negative Working Capital variance

    Working Capital stood at 14.6% of total sales versus 13.6% a year earlier. The €87 million increase in Working Capital versus the end of the second quarter of 2008 can be attributed to the strong price rises impacting both receivables and inventories, as well as the continued effect of the deployment of the SAP based system in Rhodia’s USA operations which should be normalized by end of 2008.

    Due to the continuous selective investment policy, Capital Expenditure decreased from €83 million in the third quarter of 2007 to €71 million in the third quarter of 2008.

    The temporary increase in Working Capital weighed on the Free Cash Flow, which amounted to

    €(69) million.

    Consolidated Net Debt decreased to €1,451 million on September 30, 2008 versus €1,570 million on June 30, 2008, benefiting from €224 million of proceeds from divestments completed in the third quarter of 2008.

    3. Overview by Enterprise

    Polyamide

    Rhodia Polyamide serves the automotive, electricals, electronic components, sportswear and leisure markets. Its expertise in the polyamide chain has allowed it to develop activities upstream in intermediates and polymers and downstream in engineering plastics.

    In € million

    Q3 2007

    Q3 2007

    Like for like

    Q3 2008

    Net Sales

    494

    482

    465

    Recurring EBITDA

    68

    68

    38

    Rhodia Polyamide continued its price-over-volume strategy. While volumes in Europe were impacted by the slowdown in the automotive and textile markets, the Enterprise implemented further price increase initiatives: those offset close to 90 % of rises in raw material and energy costs, in particular for Butadiene. US competitors holding available volumes due to the slowdown in their domestic market benefited from favorable currency and natural gas costs.

    The decline in the US Dollar against the Brazilian Real and the Euro led to a negative transactional forex impact of €(11) million year-on-year.

    In October, Rhodia Polyamide launched plans to optimize its European production and research & development resources, as first step of a broader program aimed at cutting costs by about €40 million per year by 2010.

    Novecare

    Rhodia Novecare provides high-performance products and solutions to a wide range of industries including cosmetics, detergents, agrochemicals and oil, as well as industrial applications.

    In € million

    Q3 2007

    Q3 2007

    Like for like

    Q3 2008

    Net Sales

    227

    211

    260

    Recurring EBITDA

    25

    22

    43

    Rhodia Novecare, nearly doubled its EBITDA year-on-year. This record quarter reflects the Enterprise’s reinforced pricing power and a strong growth momentum in the oilfield and agro markets.

    Silcea

    Rhodia Silcea produces high performance silicas, rare earth-based materials and diphenols to serve the automotive emissions reduction, tire, lighting, electronics, flavours & fragrances markets.

    In € million

    Q3 2007

    Q3 2007

    Like for like

    Q3 2008

    Net Sales

    179

    176

    193

    Recurring EBITDA

    33

    31

    30

    Rhodia Silcea registered overall good volumes. This was particularly true for silicas for low rolling resistance tires. The Enterprise demonstrated that its pricing power could offset most raw material and energy cost increases.

    Silcea was impacted by a €(2) million negative transactional forex effect.

    Energy Services

    Rhodia Energy Services is in charge of the Group’s energy supply and the management of Rhodia’s projects related to the reduction of greenhouse gas emissions.

    In € million

    Q3 2007

    Q3 2007

    Like for like

    Q3 2008

    Net Sales

    60

    60

    43

    Recurring EBITDA

    41

    42

    35

    Carbon Emission Reduction (CER) sales reflected the expected Q3-Q4 phasing. Recurring EBITDA of €28 million was generated from CERs, versus €39 million in the third quarter of 2007.

    The cogeneration business is traditionally slow in the third quarter.

    Rhodia expects to generate slightly more than 13 million tons of CERs for the full year 2008.



    Acetow

    Rhodia Acetow is a global producer of filter tow, mainly used for making cigarette filters.

    In € million

    Q3 2007

    Q3 2007

    Like for like

    Q3 2008

    Net Sales

    112

    110

    112

    Recurring EBITDA

    20

    21

    20

    Rhodia Acetow was able to increase its selling prices and thus, offset rises in raw material and energy costs.

    Acetow confirms its target to decrease its forex transactional exposure by 50 % by the end of 2008.

    The Enterprise’s ongoing cost competitiveness program, launched in the fourth quarter of 2007, has also started to record progress.

    Eco Services

    Rhodia Eco Services offers sulphuric acid regeneration services to chemical manufacturers and oil refiners in North America.

    In € million

    Q3 2007

    Q3 2007

    Like for like

    Q3 2008

    Net Sales

    57

    52

    90

    Recurring EBITDA

    22

    19

    19

    Rhodia Eco Services enjoyed good pricing power. This allowed the Enterprise to offset the €(5) million impact on EBITDA resulting from the hurricanes in the USA. The non cash negative forex conversion impact amounted to €(3) million.

    In the coming months, Rhodia Eco Services’ strong pricing power should continue.

    4. Outlook

    The Group is pro-actively adjusting to the challenging economic environment with aggressive cost competitiveness plans and a strong focus on cash management.

    Combined with those actions, its performance year-to-date and the proven resilience of its portfolio allow the Group to confirm its 2008 full year objectives:

    · Recurring EBITDA should be within 5% of the level achieved in 2007

    · Earnings per Share should increase versus 2007

    · Net Debt should be further reduced compared to the end of 2007, supported by a solid Free Cash Flow generation in the fourth quarter of 2008.

    After the massive impact of raw material and energy inflation as well as adverse currency fluctuations on the Group’s EBITDA over the last nine months, Rhodia is observing a favorable inflexion point at the end of the third quarter 2008. This structurally positive effect should gradually materialize in the Group’s accounts, starting early 2009.

    Safe Harbor for forward looking statements

    This press release contains elements that are not historical facts including, without limitation, certain statements on future expectations and other forward-looking statements. Such statements are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated.



    Rhodiais an international chemical company resolutely committed to sustainable development.As a leader in its businesses, the Group aims to improve its customers’ performance through the pursuit of operational excellence and its ability to innovate. Structured around six Enterprises, Rhodia is the partner of major players in the automotive, tire, electronics, perfume, health & beauty and home care markets.The Group employs around 15,000 people worldwide and generated sales of €4.8billion in 2007.Rhodia is listed on Euronext Paris.

    Upcoming events

    Rhodia’s fourth quarter and annual 2008 results will be published onFebruary 25, 2009.

    Contacts

    Media Relations

    Rita Hillig +33 (0)1 53 56 64 04

    Lamia Narcisse +33 (0)1 53 56 59 62



    Investor Relations

    Maria Alcon +33 (0)1 53 56 64 89

    Loic Harrari +33 (0)1 53 56 64 80



    Results Fact Sheet : Q3 & YTD Sept '08

    Income Statement

    € million

    Q3*

    ‘07

    Q3*

    ‘08

    Variation

    YTD

    Sept*

    ‘07

    YTD

    Sept*

    ‘08

    Variation

    Net Sales

    1,187

    1,224

    3.1%

    3,595

    3,637

    1.2%

    Other revenue

    83

    122

    318

    380

    Recurring EBITDA

    179

    168

    (6.1)%

    571

    523

    (8.4)%

    Recurring EBITDA Margin(1)

    15.1%

    13.7%

    15.9%

    14.4%

    Depreciation & Amortization

    excl. Amos restr

    (71)

    (79)

    (208)

    (218)

    Other Gains and Losses

    3

    (2)

    10

    (4)

    Restructuring Costs

    (6)

    -

    (28)

    (6)

    Operating Profit

    105

    87

    (17.1)%

    345

    295

    (14.5)%

    Financial Results

    (44)

    (44)

    (246)

    (142)

    Share of profit (loss) of associates

    -

    -

    -

    1

    Profit/(loss) before income tax

    61

    43

    (29.5)%

    99

    154

    55.6%

    Income tax

    (25)

    (21)

    (75)

    (58)

    Profit/(loss)



    from continuing operations

    36

    22

    24

    96

    Profit/(loss)

    from discontinued operations

    8

    34

    84

    38

    Net Profit/(loss)

    44

    56

    108

    134

    Net Profit/(loss) (Group Share)

    45

    56

    24.4%

    107

    133

    24.3%

    Earnings per share €

    0.44

    0.55

    1.06

    1.31

    Average number of shares outstanding

    100,361,373

    101,087,068

    100,353,883

    101,027,219

    (1) Recurring EBITDA margin excluding CERs 11.8% vs 12.4% in Q3 ‘07 and 12.1% vs 13.6% in YTD Sept ‘07

    Net Sales

    Recurring EBITDA

    Operating Profit

    € million

    Q3* ‘07

    Q3* ‘08

    Variation

    Q3* ‘07

    Q3* ‘08

    Variation

    Q3* ‘07

    Q3* ‘08

    RHODIA

    1,187

    1,224

    3.1%

    179

    168

    (6.1)%

    105

    87

    POLYAMIDE

    494

    465

    (5.9)%

    68

    38

    (44.1)%

    43

    11

    NOVECARE

    227

    260

    14.5%

    25

    43

    72.0%

    14

    31

    SILCEA

    179

    193

    7.8%

    33

    30

    (9.1)%

    20

    19

    ENERGY SERVICES

    60

    43

    (28.3)%

    41

    35

    (14.6)%

    40

    27

    ACETOW

    112

    112

    -

    20

    20

    -

    13

    12

    ECO SERVICES

    57

    90

    57.9%

    22

    19

    (13.6)%

    18

    16

    CORPORATE & Others

    58(1)

    61(1)

    5.2%

    (30)

    (17)

    43.3%

    (43)

    (29)

    Net Sales

    Recurring EBITDA

    Operating Profit

    € million

    YTD* Sept ‘07

    YTD* Sept ‘08

    Variation

    YTD* Sept ‘07

    YTD* Sept ‘08

    Variation

    YTD* Sept ‘07

    YTD* Sept ‘08

    RHODIA

    3,595

    3,637

    1.2%

    571

    523

    (8.4)%

    345

    295

    POLYAMIDE

    1,484

    1,436

    (3.2)%

    210

    150

    (28.6)%

    111

    74

    NOVECARE

    717

    735

    2.5%

    88

    101

    14.8%

    60

    71

    SILCEA

    547

    577

    5.5%

    109

    92

    (15.6)%

    77

    60

    ENERGY SERVICES

    144

    147

    2.1%

    124

    126

    1.6%

    117

    113

    ACETOW

    327

    338

    3.4%

    62

    57

    (8.1)%

    40

    35

    ECO SERVICES

    165

    217

    31.5%

    58

    52

    (10.3)%

    46

    42

    CORPORATE & Others

    211(1)

    187(1)

    (11.4)%

    (80)

    (55)

    31.3%

    (106)

    (100)

    (1) including intercompany sales elimination

    Net Financial Debt

    December 31, 2007

    June 30, 2008

    September 30, 2008

    1,484

    1,570

    1,451

    Confirmation of 2008 objectives

    • Recurring EBITDA within 5% of 2007 level

    • EPS increase YoY

    • Further reduction in Net Debt vs year-end ’07, supported by solid Free Cash Flow generation in Q4

    * Unaudited



    Results Fact Sheet : Q3 ‘08

    Enterprise

    POLYAMIDE

    • "Price over Volume" strategy maintained

    • Further price increases effectively compensating for continued raw material cost increases

    • Volumes impacted by slowdown in auto and textile / fibers markets, particularly inEurope

    • Significant €(11)m net transaction forex impact

    • Competitiveness enhancement plans launched

    NOVECARE

    • Record quarter with EBITDA almost doubled like for like:

    • Reinforced pricing power

    • Strong growth momentum in oilfield and agro markets

    SILCEA

    • Confirmation of good volume overall, including automotive tire market driven by ongoing substitution

    • Proven pricing power offsetting most raw material and energy cost increases

    • €(2)m negative net transaction forex impact

    ENERGY SERVICES

    • Volumes reflecting Q3-Q4 CERs sales phasing as anticipated

    • €28m rec. EBITDA generated from CERs vs €39m in Q3 ‘07

    • International Transaction Log (ITL) successfully implemented in October

    • Full year volume expectations slightly over 13mT

    ACETOW

    • Raw material cost inflation successfully compensated for by selling price increases

    • On track with plan to decrease by 50% forex (transaction) exposure by the end of the year

    • Initial progress in cost competitiveness program

    ECO SERVICES

    • Good pricing power allowing to offset raw material rises as well as the €(5)m EBITDA impact from US hurricanes

    • €(3)m negative non-cash forex conversion

    € million

    Net Sales

    Q3* ‘07

    Scope

    Foreign
    Exchange
    conversion

    Net Sales Q3* ‘07 like for like

    Foreign Exchange transaction

    Volume & mix

    Selling Price

    Net Sales

    Q3* ‘08

    Variation Q3 ’08 -Q3 ‘07

    Variation Q3* ‘08 – Q3* ‘07 like for like

    RHODIA

    1,187

    (3)

    (32)

    1,152

    (30)

    (56)

    158

    1,224

    3.1%

    6.3%

    POLYAMIDE

    494

    (7)

    (5)

    482

    (21)

    (35)

    39

    465

    (5.9)%

    (3.5)%

    NOVECARE

    227

    (2)

    (14)

    211

    0

    5

    44

    260

    14.5%

    23.2%

    SILCEA

    179

    2

    (5)

    176

    (2)

    4

    15

    193

    7.8%

    9.7%

    ENERGY

    SERVICES

    60

    0

    0

    60

    0

    (20)

    3

    43

    (28.3)%

    (28.3)%

    ACETOW

    112

    0

    (2)

    110

    (6)

    0

    8

    112

    0.0%

    1.8%

    ECO SERVICES

    57

    0

    (5)

    52

    0

    (4)

    42

    90

    57.9%

    73.1%

    CORPORATE

    & Others

    including intercompany
    sales elimination

    58

    4

    (1)

    61

    (1)

    (6)

    7

    61

    5.2%

    0.0%

    € million

    Rec. EBITDA

    Q3*

    ‘07

    Scope

    Forex conversion

    Rec. EBITDA

    Q3*

    ‘07

    like for like

    Volume & mix

    Selling
    Price

    Raw materials

    & Energy

    Forex transaction

    Fixed
    Costs

    Rec. EBITDA

    Q3*

    ‘08

    Rec. EBITDA Margin

    Q3*

    ‘08

    RHODIA

    179

    0

    (5)

    174

    (17)

    158

    (139)

    (17)

    9

    168

    13.7%

    POLYAMIDE

    68

    0

    0

    68

    (9)

    39

    (44)

    (11)

    (5)

    38

    8.2%

    NOVECARE

    25

    (1)

    (2)

    22

    6

    44

    (30)

    1

    0

    43

    16.5%

    SILCEA

    33

    (1)

    (1)

    31

    3

    15

    (19)

    (2)

    2

    30

    15.5%

    ENERGY

    SERVICES

    41

    1

    0

    42

    (11)

    3

    2

    0

    (1)

    35

    n.m.

    ACETOW

    20

    0

    1

    21

    0

    8

    (7)

    (3)

    1

    20

    17.9%

    ECO SERVICES

    22

    0

    (3)

    19

    (3)

    42

    (36)

    0

    (3)

    19

    21.1%

    CORPORATE

    & Others

    (30)

    1

    0

    (29)

    (3)

    7

    (5)

    (2)

    15

    (17)

    n.m.

    * Unaudited

    Results Fact Sheet : YTD Sept ‘08

    € million

    Net Sales

    YTD* Sept ‘07

    Scope

    Foreign
    Exchange
    conversion

    Net Sales YTD* Sept ‘07 like for like

    Foreign Exchange transaction

    Volume & mix

    Selling Price

    Net Sales

    YTD* Sept ‘08

    Variation YTD

    Sept ‘08- YTD*

    Sept ‘07

    Variation YTD*

    Sept ‘08 – YTD*

    Sept ‘07 like for like

    RHODIA

    3,595

    (4)

    (127)

    3,464

    (110)

    (25)

    308

    3,637

    1.2%

    5.0%

    POLYAMIDE

    1,484

    (10)

    (18)

    1,456

    (75)

    (14)

    69

    1,436

    (3.2)%

    (1.4)%

    NOVECARE

    717

    (3)

    (56)

    658

    (1)

    2

    76

    735

    2.5%

    11.7%

    SILCEA

    547

    12

    (24)

    535

    (8)

    13

    37

    577

    5.5%

    7.9%

    ENERGY

    SERVICES

    144

    0

    0

    144

    0

    (9)

    12

    147

    2.1%

    2.1%

    ACETOW

    327

    0

    (7)

    320

    (23)

    18

    23

    338

    3.4%

    5.6%

    ECO SERVICES

    165

    0

    (19)

    146

    0

    (5)

    76

    217

    31.5%

    48.6%

    CORPORATE

    & Others
    including intercompany
    sales elimination

    211

    (3)

    (3)

    205

    (3)

    (30)

    15

    187

    (11.4)%

    (8.8)%

    € million

    Rec. EBITDA

    YTD* Sept ‘07

    Scope

    Forex conversion

    Rec. EBITDA

    YTD* Sept ‘07

    like for like

    Volume & mix

    Selling
    Price

    Raw materials

    & Energy

    Forex transaction

    Fixed
    Costs

    Rec. EBITDA

    YTD* Sept ‘08

    Rec. EBITDA Margin

    YTD*

    Sept ‘08

    RHODIA

    571

    (1)

    (22)

    548

    (8)

    308

    (274)

    (59)

    8

    523

    14.4%

    POLYAMIDE

    210

    (1)

    (1)

    208

    (6)

    69

    (78)

    (36)

    (7)

    150

    10.4%

    NOVECARE

    88

    0

    (11)

    77

    8

    76

    (55)

    0

    (5)

    101

    13.7%

    SILCEA

    109

    1

    (5)

    105

    0

    37

    (43)

    (7)

    0

    92

    15.9%

    ENERGY

    SERVICES

    124

    2

    0

    126

    (1)

    12

    (2)

    0

    (9)

    126

    n.m.

    ACETOW

    62

    1

    0

    63

    5

    23

    (21)

    (13)

    0

    57

    16.9%

    ECO SERVICES

    58

    0

    (9)

    49

    (2)

    76

    (65)

    0

    (6)

    52

    24.0%

    CORPORATE

    & Others

    (80)

    (4)

    4

    (80)

    (12)

    15

    (10)

    (3)

    35

    (55)

    n.m.

    * Unaudited



    Results Fact Sheet : Quarterly results

    €m

    Q1* ‘07

    Q1* ‘08

    Q2* ‘07

    Q2* ‘08

    H1** ‘07

    H1** ‘08

    Q3* ‘07

    Q3* ‘08

    Q4* ‘07

    H2* ‘07

    FY* ‘07

    RHODIA

    Net Sales

    1,186

    1,186

    1,222

    1,227

    2,408

    2,413

    1,187

    1,224

    1,186

    2,373

    4,781

    Recurring EBITDA

    196

    168

    196

    187

    392

    355

    179

    168

    187

    366

    758

    Rec. EBITDA margin

    16.5%

    14.2%

    16.0%

    15.2%

    16.3%

    14.7%

    15.1%

    13.7%

    15.8%

    15.4%

    15.9%

    Operating Profit

    125

    93

    115

    115

    240

    208

    105

    87

    77

    182

    422

    POLYAMIDE

    Net Sales

    481

    476

    509

    495

    990

    971

    494

    465

    491

    985

    1,975

    Recurring EBITDA

    67

    52

    75

    60

    142

    112

    68

    38

    70

    138

    280

    Rec. EBITDA margin

    13.9%

    10.9%

    14.7%

    12.1%

    14.3%

    11.5%

    13.8%

    8.2%

    14.3%

    14.0%

    14.2%

    Operating Profit

    42

    29

    26

    34

    68

    63

    43

    11

    45

    88

    156

    NOVECARE

    Net Sales

    243

    235

    247

    240

    490

    475

    227

    260

    214

    441

    931

    Recurring EBITDA

    30

    28

    33

    30

    63

    58

    25

    43

    21

    46

    109

    Rec. EBITDA margin

    12.3%

    11.9%

    13.4%

    12.5%

    12.9%

    12.2%

    11.0%

    16.5%

    9.8%

    10.4%

    11.7%

    Operating Profit

    23

    19

    23

    21

    46

    40

    14

    31

    11

    25

    71

    SILCEA

    Net Sales

    185

    189

    183

    195

    368

    384

    179

    193

    189

    368

    736

    Recurring EBITDA

    36

    27

    40

    35

    76

    62

    33

    30

    29

    62

    138

    Rec. EBITDA margin

    19.5%

    14.3%

    21.9%

    17.9%

    20.7%

    16.1%

    18.4%

    15.5%

    15.3%

    16.8%

    18.8%

    Operating Profit

    26

    16

    31

    25

    57

    41

    20

    19

    16

    36

    93

    ENERGY SERVICES

    Net Sales

    43

    52

    41

    52

    84

    104

    60

    43

    58

    118

    202

    Recurring EBITDA

    52

    53

    31

    38

    83

    91

    41

    35

    57

    98

    181

    Operating Profit

    47

    50

    30

    36

    77

    86

    40

    27

    48

    88

    165

    ACETOW

    Net Sales

    102

    113

    113

    113

    215

    226

    112

    112

    114

    226

    441

    Recurring EBITDA

    20

    20

    22

    17

    42

    37

    20

    20

    21

    41

    83

    Rec. EBITDA margin

    19.6%

    17.7%

    19.5%

    15.0%

    19.5%

    16.4%

    17.9%

    17.9%

    18.4%

    18.1%

    18.8%

    Operating Profit

    12

    13

    15

    10

    27

    23

    13

    12

    2

    15

    42

    ECO SERVICES

    Net Sales

    52

    57

    56

    70

    108

    127

    57

    90

    53

    110

    218

    Recurring EBITDA

    14

    13

    22

    20

    36

    33

    22

    19

    12

    34

    70

    Rec. EBITDA margin

    26.9%

    22.8%

    39.3%

    28.6%

    33.3%

    26.0%

    38.6%

    21.1%

    22.6%

    30.9%

    32.1%

    Operating Profit

    10

    9

    18

    17

    28

    26

    18

    16

    8

    26

    54

    CORPORATE & OTHERS

    Sales & intercompany sales eliminations

    80

    64

    73

    62

    153

    126

    58

    61

    67

    125

    278

    Recurring EBITDA

    (23)

    (25)

    (27)

    (13)

    (50)

    (38)

    (30)

    (17)

    (23)

    (53)

    (103)

    Operating Profit

    (35)

    (43)

    (28)

    (28)

    (63)

    (71)

    (43)

    (29)

    (53)

    (96)

    (159)

    * Unaudited

    ** Reviewed by auditors



    Consolidated income statements as of September 30, 2008

    (in millions of euros)

    Quarter ended September 30, (*)

    Nine months ended September 30, (*)

    2008

    2007

    2008

    2007

    Net sales

    1,224

    1,187

    3,637

    3,595

    Other revenue

    122

    83

    380

    318

    Cost of sales

    (1,124)

    (1,017)

    (3,286)

    (3,101)

    Administrative and selling expenses

    (118)

    (124)

    (374)

    (384)

    Research and development expenditure

    (15)

    (21)

    (52)

    (65)

    Restructuring costs

    -

    (6)

    (6)

    (28)

    Other operating income / (expenses)

    (2)

    3

    (4)

    10

    Operating profit/(loss)

    87

    105

    295

    345

    Finance income

    20

    37

    90

    103

    Finance costs

    (66)

    (79)

    (236)

    (348)

    Foreign exchange gains/(losses)

    2

    (2)

    4

    (1)

    Share of profit/(loss) of associates

    -

    -

    1

    -

    Profit/(loss) before income tax

    43

    61

    154

    99

    Income tax expense

    (21)

    (25)

    (58)

    (75)

    Profit/(loss) from continuing operations

    22

    36

    96

    24

    Profit/(loss) from discontinued operations

    34

    8

    38

    84

    Net profit for the period

    56

    44

    134

    108

    Attributable to:

    Equity holders of Rhodia S.A.

    56

    45

    133

    107

    Minority interests

    -

    (1)

    1

    1

    Earnings per share (in euros)

    Continuing and discontinued operations

    - Basic

    - Diluted

    0.55

    0.54

    0.44

    0.44

    1.31

    1.30

    1.06

    1.06

    Continuing operations

    - Basic

    - Diluted

    0.21

    0.21

    0.39

    0.38

    0.94

    0.93

    0.25

    0.25

    Weighted average number of shares before dilution

    101,087,068

    100,361,373

    101,027,219

    100,353,883

    Weighted average number of shares after dilution

    102,220,450

    101,474,774

    101,866,560

    101,525,667

    * Unaudited



    Consolidated balance sheets as of September 30, 2008

    Assets

    (in millions of euros)

    AtSeptember 30, 2008(*)

    AtDecember 31, 2007

    Property, plant & equipment

    1,546

    1,686

    Goodwill

    203

    207

    Other intangible assets

    206

    183

    Investments in associates

    14

    13

    Other non-current financial assets

    98

    113

    Deferred tax assets

    158

    161

    Non-current assets

    2,225

    2,363

    Inventories

    729

    583

    Income tax receivable

    10

    12

    Trade and other receivables

    1,061

    965

    Derivative financial instruments

    75

    96

    Other current financial assets

    27

    19

    Cash and cash equivalents

    498

    415

    Assets classified as held for sale

    1

    25

    Current assets

    2,401

    2,115

    TOTAL ASSETS

    4,626

    4,478

    * Unaudited



    Liabilities and shareholders’ equity

    (in millions of euros)

    AtSeptember 30, 2008(*)

    AtDecember 31, 2007

    Share capital

    1,213

    1,204

    Additional paid-in capital

    138

    147

    Other reserves

    89

    123

    Deficit

    (1,704)

    (1,863)

    Equity deficit attributable to equity holders of Rhodia S.A.

    (264)

    (389)

    Minority interests

    21

    21

    Total equity deficit

    (243)

    (368)

    Borrowings

    1,643

    1,675

    Retirement benefits and similar obligations

    1,076

    1,154

    Provisions

    282

    318

    Deferred tax liabilities

    44

    43

    Other non-current liabilities

    37

    29

    Non-current liabilities

    3,082

    3,219

    Borrowings

    333

    243

    Derivative financial instruments

    106

    68

    Retirement benefits and similar obligations

    89

    92

    Provisions

    150

    138

    Income tax payable

    18

    8

    Trade and other payables

    1,091

    1,071

    Liabilities associated with assets classified as held for sale

    -

    7

    Current liabilities

    1,787

    1,627

    TOTAL EQUITY AND LIABILITIES

    4,626

    4,478

    * Unaudited



    Consolidated statements of cash flows as of September 30, 2008

    Quarterended

    September 30, (*)

    Nine monthsendedSeptember 30, (*)

    (in millions of euros)

    2008

    2007

    2008

    2007

    Net Profit/(loss) attributable to equity holders of RhodiaS.A.

    56

    45

    133

    107

    Adjustments for :

    Minority interests

    -

    (1)

    1

    1

    Depreciation, amortization and impairment of non-current assets

    79

    75

    222

    220

    Net increase/(decrease) in provisions and employee benefits

    (3)

    (28)

    (40)

    (47)

    Net increase/(decrease) in financial provisions

    -

    (2)

    -

    (1)

    Share of profit/(loss) of associates

    -

    -

    (1)

    -

    Other income and expense

    12

    9

    34

    52

    (Gain)/loss on disposal of non-current assets

    (70)

    (1)

    (68)

    (104)

    Deferred tax expense/(income)

    10

    8

    12

    18

    Foreign exchange losses/(gains)

    5

    1

    29

    7

    Cash flow from operating activities before changes in working capital

    89

    106

    322

    253

    Changes in working capital

    - (Increase)/decrease in inventories

    (88)

    5

    (180)

    16

    - (Increase)/decrease in trade and other receivables

    15

    (1)

    (77)

    10

    - Increase/(decrease) in trade and other payables

    (37)

    17

    17

    (83)

    - (Increase)/decrease in other current assets and liabilities

    23

    14

    (4)

    (5)

    Net cash from operating activities before margin call

    2

    141

    78

    191

    Margin call (1)

    8

    (5)

    8

    19

    Net cash from operating activities

    10

    136

    86

    210

    Purchases of property, plant and equipment

    (63)

    (69)

    (174)

    (199)

    Purchases of other non-current assets

    (8)

    (14)

    (35)

    (42)

    Proceeds on disposal of entities, net of cash transferred, and non-current assets

    215

    (4)

    213

    265

    Purchase of entities, net of cash acquired

    -

    (17)

    -

    (17)

    (Purchases of)/repayments of loans and financial investments

    (7)

    -

    (3)

    (1)

    Net cash from / (used by) investing activities

    137

    (104)

    1

    6

    Proceeds from issue of shares, net of costs

    -

    (1)

    -

    (1)

    Dividends paid

    (2)

    -

    (27)

    (3)

    New non-current borrowings, net of costs

    3

    1

    3

    632

    Repayments of non-current borrowings, net of costs

    (4)

    (5)

    (12)

    (911)

    Net increase/(decrease) in current borrowings

    (30)

    (32)

    33

    (40)

    Net cash from / (used by) financing activities

    (33)

    (37)

    (3)

    (323)

    Effect of foreign exchange rate changes

    (3)

    (6)

    (1)

    1

    Net increase/(decrease) in cash and cash equivalents

    111

    (11)

    83

    (106)

    Cash and cash equivalents at the beginning of the period

    387

    372

    415

    467

    Cash and cash equivalents at the end of the period

    498

    361

    498

    361

    * Unaudited

    (1) The margin call agreements are standardised credit risk reduction contracts, which are concluded with the clearing house of an organised market or bilaterally by private contract with a counterparty

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