Rhodia_Q4_and_FY10_Results_Presentation_EN_ 4_3

8/7/2019 Rhodia_Q4_and_FY10_Results_Presentation_EN_ 4_3

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Paris - February 23, 2011

Q4 & FY '10 Results


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2 Rhodia Q4 & FY '10 Results Presentation

Forward looking statements

The presentation today may includethe display of some company data

that do not directly conform to generallyacceptable accounting principles, or GAAP.

Management believes that the presentationof some non-GAAP data provides investors

with additional insight into the ongoingoperations of the business.

These measures should not be viewedas an alternative to GAAP measures

of performance.

Furthermore, these measures may not beconsistent with similar measures provided

by other companies.

This presentation contains elements that arenot historical facts, including, without limitation,

certain statements on future expectationsand other forward-looking statements.

Such statements are based on managementscurrent views and assumptions and involve known

and unknown risks and uncertainties that couldcause actual results, performance or eventsto differ materially from those anticipated.

Rhodia does not undertake to provide updatesof these statements.

Copies of all recent filings, and additionalinformation about Rhodia, are available through

our web site :

http://www.rhodia.com

Forenote:The expressions Rec. EBITDA or EBITDA included hereby in this presentation refer tothe period Recurring EBITDA before restructuing and other operating income and expenses.


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2010 HighlightsJean-Pierre Clamadieu Chairman and CEO


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2010 dividend at 0.5 per share (+100% vs. prior year)

Breakthrough step-up in profitability Record Ebitda

Strong Free Cash Flow generation

Growth, a strategic priority

Redesigned management model to drive growth

Growth strategy well underway Acquisition of Feixiang Chemicals in China

Reinforcement of business positions in fast-growing economies

2010, a year of far-reaching transformationtowards profitable growth



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555

Record Net Profit

Excellent profitability

Group share

259m

(1) yoy change in net sales volume (at constant scope and currency conversion)

Rec. EBITDA

905m

Strong business dynamics

FY 2010

Rhodia Q4 & FY '10 Results Presentation

Solid cash generation

Free Cash Flow

240m

Volume

14%(1)

Strong financial performance


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(*) Restated for perimeter changes(**) As published

Inm

Rec. EBITDA CFROI**

9.7%

5.4%

8.2%

2005 2007 2010

WACC

905

480

758

2005* 2007* 2010

Pre-crisis level


A confirmed step-up in profitability and value creation

636664

487

6.6%

5.6%

2006 2008 2009200920082006*

CFROI: [Recurring EBITDA - Tax - Maintenance Capex] /[Tangible plus Intangible Gross Assets + Working Capital]

Pre-crisis level

7.6%

Crisis Crisis


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Q4 & FY '10 ResultsPascal Bouchiat Executive Vice President & CFO


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Sustained favorable business dynamics


FY 10Q4 10

FY 10Net Sales

Volume& mix

1,083

1,360

Scope& Forex

Q4 '09Net Sales

Q4 '10Net Sales

116

Forextransaction

(19) Price

1,172

89

91

Net Sales inm

Volume& mix4,031

5,226

Scope& Forex

411

Forextransaction

(120) Price

4,321

290

61410%

8%

10%

14%

Q4 '09Net Sales(1)

FY 09Net Sales

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

FY '09Net Sales(1)


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Excellent profitability driven by strong business dynamicsand pricing power


Rec. EBITDA(1) inm

FY 10

(1) Recurring: before restructuring and other operating income and expenses

Q4 10

(140)

Volume& mix

254

487

905

FY 09EBITDA(1)

FY 10EBITDA(1)

Scope& Forex

(30)

411

Price

Rawmaterial

& energy Fixed

costs

(77)

271mVolume& mix

36

200223

Scope& Forex

Q4 '09EBITDA(1)

Q4 '10EBITDA(1)

116

(5) Price

(92)

Fixedcosts

(33)

Rawmaterial

& energy

24m


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Q4 '10 performance by Enterprise

Volumes remained strong across segments and regions(overall +18% yoy). Sequentially down due to normal seasonality

Highest growth at : Oil & Gas and Agro markets, both ~30% up yoy

Industrial segments driven by solid demand and new businessdevelopments

Feixiang fully consolidated for one month

Continued solid market demand, particularly in EngineeringPlastics +10% yoy

Force Majeure in December limited Intermediates production=> (7)m adverse EBITDA impact

Strong pricing power partly offset by unfavorable exchangerates

Inm

Recurring EBITDA(1) and margins

13% 13% 13%

3627 31

Note: Activity evolution yoy expressed in terms of volumes

6977 77

15%16%

14%

Polyamide

Q4 '09

Q4 '09Like-for-like(2) Q4 '10

Novecare

(1) Recurring: before restructuring and other operating income and expenses(2) Like-for-like: at constant scope and currency conversion



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Silcea

EnergyServices

Profit increase in Q4 10 from higher CER/ERU volumes,

partially offset by lower selling price

FY 10 average price @ 13.7/T

Solid business performance (+7% yoy overall) acrosssegments and particularly in Silica

Strong pricing

Inm

5746 46

53

35 37

23%

20% 20%


Q4 '09


(1) Recurring: before restructuring and other operating income and expenses(2) Like-for-like: at constant scope and currency conversion Note: Activity evolution yoy expressed in terms of volumes



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Acetow

EcoServices

Good demand leading to +13% yoy volume growth

Usual low season in Q4

Performance maintained at good levels

Volumes slightly down by (4)% yoy followingrationalization of industrial footprint. Impact compensatedby lower fixed costs

Inm

(1) Recurring: before restructuring and other operating income and expenses(2) Like-for-like: at constant scope and currency conversion

24% 18%

23% 22%23%

24%


12

10 11

303331

Q4 '09


Note: Activity evolution yoy expressed in terms of volumes



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Inm

FY10

Polyamide

Novecare

Silcea

EnergyServices

Acetow

EcoServices


FY07

317280

Recurring EBITDAFrom758m in 2007 to905m in 2010

Strong improvement in profitability vs. pre-crisis levels

166

109

197

138

169181

127

83

6770

FY07

FY10

+ 13%

+ 52%

+ 43%

(7)%

+ 53%

(4)%


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Q4 '09 Q4 '10 FY '09 FY '10

Net SalesOther Revenue 1,083116 1,36088 4,031446 5,226383

Recurring EBITDA*Recurring EBITDAmargin on Net Sales

20018.5%

22316.4%

48712.1%

90517.3%

Depreciation & amortization

Other gains and lossesRestructuring costs

(70)

(19)(2)

(71)

94

(271)

(23)(33)

(274)

(24)(5)

Operating Profit 109 165 160 602

Net financial chargesShare of Profit/(Loss) of associatesIncome tax

(47)1

(35)

(45)1

(29)

(190)0

(71)

(207)0

(128)

Profit/(Loss) from continuing operations 28 92 (101) 267

Profit/(Loss) from discontinued operations 0 0 (31) (5)

Net Profit/(Loss) Group Share 28 91 (132) 259

Earnings Per Share, basic (in) 0.28 0.89 (1.32) 2.55

(*) Recurring: before restructuring and other operating income and expenses

Inm

Income Statement


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Best-in-class working capital management

(1) Average quarterly actual

Operating working capital(1)

% of Total Sales

2005 2006 2007 2008 2010

9.0% 9.0% 8.6%10.3%

Q2 Q3 Q4

2010

9.2%

Q1

13.7% 13.4%

12.4%

12.3%

9.6%

2009

Continuous discipline going forwardAnnual target


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Solid Free Cash Flow generation

FY '10 FCF

240m

(1,194)

Operatingcash flow

Restructuringcash costs

Capex

Changein working

capital

(1,029)

(29)(108)

647

(270)

Acquisitions

(36)

Net DebtDecember 31, 2010


(369)

Dividendand others

inm


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17

2018 20202013 2014

500

Long term maturity*Sharp debt deleveraging

230

Inm

300


2010

2005 2006 2007 2008 2009 2010

2.8x

1.9x2.0x

3.5x

2.1x

1.3x

Leverage Net Debt / Rec EBITDA 2005 2010

670

Sound capital structure and financial flexibility

* Bond-related outflows at maturity


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Growth ambition2011 Priorities & Perspectives

Jean-Pierre Clamadieu Chairman and CEO


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Rhodias growth ambition

1bn+Pre-CER EBITDA by 2013/15While maintaining strong

financial discipline

50m+~ 750min 2010

Pre-CERRec. EBITDA

Innovation

Externalgrowth

Organic

growth



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2011 Priorities

Quick take-off of the new organization

Mobilizing all levers for growth:

Maintain financial and operational discipline

Execute our profitable growth agenda


Organic growth External growthInnovation


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Decentralized and simplified management model

to foster growth dynamics

Fostering entrepreneurial culture

Improving responsiveness,decision making and execution speed

Streamlined Executive Committee

Strong international management team

Empowered Global Business Units with enhanced market & customer focus

Organizational structure


New management model geared toward growth


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Leverage sound market & geographical dynamics

Sound growth driven by eco-megatrends

Consumer Goods 5%Automotive >20%

Industry


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Capital Expenditures

2008 20102007 2009

Consumer Chemicals 2 new

surfactants & guar sites in China and

debottlenecking in USA & Europe

PA 6.6 polymerization capacity

extension in Korea and polyamide

compounding in India

Silica capacity extension in USA

& Europe

Energy Climate Care developments

in Brazil & Asia

282

[330-350]

324

270

191

Inm

2011

Organic growth Innovation External growth

Increase selectively growth capex supporting organic growth


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Acquisitions to fuel growth

Organic growth Innovation External growth

Set the grounds towards Rhodias objective to increase market share

in Indian polyamide compound market to more than 15% by 2015

Feixiang Chemicals in China

Confirmed objective to double Feixiang business by 2015

Seeking further bolt-on acquisitions

PI Industries Engineering Plastics in India*

Strong 2010 operating results. Consolidation since Nov 30th, 2010

Integration well on track

New site at Zhuhai operational in H2 11 (surfactant capacity in China up ~30%)


* Signing announced December 20th, 2010


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Sound business momentum across segments

Acetow & Eco Services

Consumer Chemicals

Sustained momentum acrosssegments driven by economicgrowth and eco-megatrends

Polyamide Materials

Ongoing solid demand

Currently, good margins prevail

Force Majeure limits Q1 11HMDA & downstream production

Advanced Materials

Strong demand for Silica andRare Earths

Energy Services

14mT CER/ERU production capacity c. 40% hedged at 13.5/T

Manage stretched production

capacity for intermediates

Leverage significant Silicacapacity expansion inQingdao (+30% ww)

Capitalize on unique

positioning in Rare Earthsformulation to reinforcesupplier of choice status

Manage new innovativelaunches and capture market

share gain opportunities Leverage Feixiang growth

platform

Progress in the developmentof renewable energy Climate

Care business

Maximize production to meetdemand

Good level of demand


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2011 Outlook

Portfolio benefiting from

eco-megatrends

2011 Rec. EBITDA objective

5% to 10% higher than in 2010On track towards our 2013/15 profitable growth ambition*

Strong global economic growth

driven by fast-growing countries

Upward trend in raw materials

& energy costs

Economic environment

(*) Pre-CER Recurring EBITDA, to exceed 1bn by 2013/15

Enjoying satisfactory

pricing power

Strong exposure to fast

growing countries


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Appendices


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Inm



Net DebtSeptember 30, 2010

Q4 '10 FCF generation

Operatingcash flow

Restructuringcash costs

Capex

Changein working

capital

(368)

(9)(84)183

Others(21)

(794)

(1,194)

(11)m

(101)

Feixiangacquisitions


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New reporting as from Jan 1st 2011

Novecare Polyamide Silcea AcetowEco

Services

Energy

Services

Polyamide

Materials

Advanced

Materials

Acetow &

Eco Services

(AES)

Energy

Services

Consumer

Chemicals

SALES

Corporate

& Others

Corporate

& Others

EBITDA

SALES

EBITDA

1,094 2,145 851 540 251 203 142

166 317 197 127 67 169 (138)

1,883 1,701 539 790 203 110

276 253 114 188 179 (105)


2010 inm

Restated figures as per new organization

Market & customer focused new management model


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* Polymers & Intermediates

Market & customer-focused new management modelgeared toward growth

Markets & Customers

1,7011,089 449 345 313 226 539 251 203

33

SALES

P&I * FibrasNovecare Coatis

Rare

Earth

Systems

SilicaEco

ServicesAcetow

Energy

ServicesAroma

Performance

Engineering

Plastics

Advanced

Materials

Acetow & Eco

Services

Energy

Services

Polyamide

Materials

Business Clusters

1,701 539 790 203SALES

Consumer

Chemicals

1,883

Global Business Units

2010 in m


Restated figures as per new organisation


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2006 2007 2008 2009 2010

Net deficit* 1,325 1,246 1,248 1,553 1,510

Discountinterest rate

4.92% 5.55% 5.84% 5.11% 4.93%

Cash out 98 116 110 109 111

Inm

(1,510)France & Germany (1,138)Pension schemesnot fundedU.K. (250)

North America (110)

Other countries (12)As of Dec 31, 2010

(*) Pension and other employee benefits

No exceptional cash contributions anticipated in 2011

Pension assets portfolio

45% Equities / Alternative Funds

55% Bonds / LDI/ Real Estate


Stable well-managed pension situation


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Upcoming IR events

2011

Q1 2011 Earnings

May 5th, 2011

Annual Shareholders Meeting

May 18h, 2011

Q2 2011 EarningsJuly 28th, 2011



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Q4 & FY '10 ResultsInvestors & Analyst Meeting

Documents

Rhodia_Q4_and_FY10_Results_Presentation_EN_ 4_3