Solvay: 2008 Results
Group sales for 2008 (EUR 9,490 million) of Solvay S.A., Brussels, Belgium, declined slightly compared to 2007 (-1%); in the fourth quarter, they were down by 4%. The demand for our principal products, which held steady for the first nine months of the year, contracted sharply during the fourth quarter, following the global economic crisis that led, especially in December, to a quasi-paralysis of certain activities of our customers. Additionally, exchange rates weighed on the evolution of sales. At constant exchange rates, sales would have increased by 1% compared to 2007.
Group operating result (REBIT1; EUR 965 million) declined by 19% compared to 2007. In the Chemicals and Plastics Sectors, the significant increase in costs of energy and raw materials observed during the first half became more pronounced in the second half and were only partially compensated by increases in selling price for certain products. Besides, operating result for the fourth quarter declined importantly (-53% compared to 2007) due to the significantly degraded global economic context. The operating margin for 2008 (REBIT on sales) was 10.2% compared to 12.5% in 2007.
The net income of the Group (EUR 449 million) declined by 46% compared to 2007. This result was impacted by adjustments in book value (non cash), positive for US soda ash and negative for holdings in Fortis, for a total net amount of EUR -243 million, including EUR -51 million in the fourth quarter.
REBITDA2 was EUR 1,436 million (-14%). It amounted to EUR 252 million in the fourth quarter.
The net debt to equity ratio reached 34% at the end of 2008 compared to 29% at the end of 2007, reflecting the Group’s policy of rigorous balance sheet management.
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